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?