1. 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

2. 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

3. 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

4. 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

5. 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?

6. Issue # 1 What 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

7. Issue # 1 What 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 policy  Destroyed short term storage in 90 days  Kept long term backup tapes indefinitely  Cache La Poudre letter from 2002  Cache La Poudre letter from 2003  Cache La Poudre filed suit In 2004

8. Issue # 1 What triggers the duty to preserve evidence? _____________________________________________________________________ Specific facts for this issue (Cont’d):  Cache La Poudre sent a preservation letter  Land O’Lakes had been destroying files in the usual course of business  Janzen, Land O’Lakes Attorney, Issued a litigation hold Cache La Poudre’s argument  Litigation hold should have been issued in 2002 Land O’Lakes Argument  Litigation hold was properly issued at the beginning of the suit in 2004

9. Issue # 1 What 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 sufficient  The 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

10. 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?

11. Issue #2 Scope 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

12. Issue #2 Scope of the Discovery Search __________________________________________________________________________ Cache La Poudre’s second argument:  Land O’Lakes failed to conduct system wide key word searches The court disagreed  Reasonable investigation standard  No affirmative duty to search system wide  However, counsel must do more than issue a litigation hold  Counsel must also take affirmative steps to ensure compliance with the hold

13. Issue #2 Scope of the Discovery Search _______________________________________________________________________ Sanctions The court found that sanctions were appropriate  LOL’s Conduct was not intentional  LOL’s Conduct did not substantially prejudice the Plaintiff’s case  LOL’s Conduct did cost the Plaintiff money  Therefore, the court ordered payment of attorney’s fees as sanctions

14. 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

15. Question #1 Were the sanctions imposed by the court appropriate? Why or why not?

16. “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.”

17. 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?