United States: U.S. Magistrate Judge Directs Appointment Of Third-Party Forensic Examiner To Search Records Of Party That Failed To Implement Proper Litigation Hold

In a decision that is a cautionary tale for parties to U.S. litigation that fail to implement a proper litigation hold procedure to guarantee the preservation and eventual production of discoverable hard-copy and electronically stored information ("ESI"), a U.S. magistrate judge in the Southern District of Florida issued an order appointing a third-party vendor to search and identify the potentially-discoverable records/ESI of the offending party. The plaintiff, Procaps S.A. ("Procaps"), had filed a federal antitrust suit seeking more than $350 million in damages against Patheon, Inc. ("Patheon"). During discovery, including depositions of Procaps executives, it became apparent that Procaps' counsel "permitted its client to self-collect ESI and documents, allowed some of its client's executives to use a single search term to collect emails, and failed to realize that its client never actually implemented the litigation hold mentioned in [an] attachment to [counsel's] engagement letter." The court concluded that Procaps' ESI and document searches were inadequate and that many documents responsive to Patheon's demands probably had not been located. As a remedy, among other directives, the magistrate judge issued an order that appointed a third-party forensic examiner to conduct an extensive search of Procaps' documents/ESI, identified Procaps personnel that are custodians of records whose paper and electronic files would be searched by the forensic examiner, directed Procaps' counsel to interview each custodian and identify potential sources of hard copy documents and ESI reasonably likely to contain relevant information, directed the forensic examiner to interview Procaps' head of IT to understand the architecture and procedure of Procaps' computer system and retention procedures, and directed Procaps to make all sources of its documents and ESI available to the forensic examiner to be searched, imaged and/or recovered. Additionally, the Court awarded Patheon $24,115 in attorney's fees. Procaps S.A. v. Patheon Inc., 2014 WL 800468 (S.D. Fla. Feb. 28, 2014)

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