cache la poudre feeds, llc v. land o’lakes, inc. motion hearing before a magistrate judge in...
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Cache La Poudre Feeds, LLC v.
Land O’Lakes, Inc. Motion Hearing before a Magistrate Judge in Federal Court
District of Colorado
Decided in 2007
Parties to the Suit_________________________________________________________________
Plaintiff:- Cache La Poudre Feeds, LLC
Defendants:
- Land O’Lakes Farmland Feed LLC
- Land O’Lakes, Inc.A very large corporation
Facts_________________________________________________________________
This action is an intellectual property dispute
Cache La Poudre created the product line PROFILE
Land O’Lakes allegedly began using the same name
Cache La Poudre sued
The parties engaged in several discovery disputes
Facts (continued)_________________________________________________________________
Cache La Poudre moved for sanctions and alleged spoliation
Cache La Poudre makes two separate allegations:
First, Land O’Lakes destroyed documents that were discoverable after it should have known about this suit
Second, Land O’Lakes destroyed relevant emails after the suit was filed
eDiscovery Issues
This motion raises two important discovery issues
(1) What event or conduct triggers a party’s duty to place a litigation hold on its records and
(2) What is the scope of a party’s duty to investigate the electronic records in its possession during the discovery process?
Issue # 1What triggers the duty to preserve
evidence?_____________________________________________________________________
In General The filing of a lawsuit triggers the duty to preserve evidence
In some cases Notice of a lawsuit may be enough Must be more than the mere possibility of litigation
Issue # 1What triggers the duty to preserve
evidence?_____________________________________________________________________
Specific facts for this issue:
Land O’Lakes began shipping PROFILE products in January 2002
May 2002 – New Land O’Lakes document storage policyDestroyed short term storage in 90 daysKept long term backup tapes indefinitely
Cache La Poudre letter from 2002Cache La Poudre letter from 2003Cache La Poudre filed suit In 2004
Issue # 1What triggers the duty to preserve
evidence?_____________________________________________________________________
Specific facts for this issue (Cont’d):
Cache La Poudre sent a preservation letterLand O’Lakes had been destroying files in the usual course of businessJanzen, Land O’Lakes Attorney, Issued a litigation hold
Cache La Poudre’s argumentLitigation hold should have been issued in 2002
Land O’Lakes ArgumentLitigation hold was properly issued at the beginning of the suit in 2004
Issue # 1What triggers the duty to preserve
evidence?_____________________________________________________________________
The court’s holding
A demand letter may be sufficient to trigger the duty to preserve evidence
In this case, the letters were not sufficientThe letters looked more like a negotiation than a threat of litigation
No bright line rule
Bottom Line – the duty to preserve was triggered by the filing of the suit, not the letters
No sanctions
Issue #2
Now that the court has set a trigger date
What was the scope of Land O’Lakes’ duty to search the documents in its possession?
Issue #2Scope of the Discovery Search_____________________________________________________________________________________________
Land O’Lakes produced a large number of documents
Cache La Poudre alleged that important emails were missing
The court found Mr. Janzen’s conduct questionable because
(1) He failed to adequately examine Land O’Lakes’ computer system
(2) He failed to enforce the litigation hold
Issue #2Scope of the Discovery Search__________________________________________________________________________
Cache La Poudre’s second argument:Land O’Lakes failed to conduct system wide key word searches
The court disagreedReasonable investigation standardNo affirmative duty to search system wideHowever, counsel must do more than issue a litigation holdCounsel must also take affirmative steps to ensure compliance with the hold
Issue #2Scope of the Discovery Search_______________________________________________________________________
Sanctions
The court found that sanctions were appropriate
LOL’s Conduct was not intentionalLOL’s Conduct did not substantially prejudice the Plaintiff’s caseLOL’s Conduct did cost the Plaintiff moneyTherefore, the court ordered payment of attorney’s fees as sanctions
Observations about the Holding______________________________________________________________________
(1) The court recognized that discovery is expensive and that a bright line rule is not appropriate
(2) The parties to a lawsuit have an incentive to cooperate in discovery matters because discovery is expensive and the court may become annoyed if it must referee every dispute
(3) The court was particularly intolerant of counsel’s failure to proactively manage Land O’ Lakes’ discovery process
Question #1
Were the sanctions imposed by the court appropriate? Why or why not?
“Cache La Poudre waited nearly two years after [the letters were sent] to bring the instant lawsuit. That delay, coupled with the less-than adamant tone of [the letters] belies Plaintiff’s contention that Land O’Lakes should have anticipated litigation as early as April 2, 2002.”
Question #2
Since Land O’Lakes had no way of knowing when Cache La Poudre would file suit, how can the proximity of the suit to the dates that the letters were sent have any impact on what Land O’Lakes thought the letters meant at the time they received them? Is the court allowing hindsight to affect its judgment? If so, is that fair?
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