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FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018
NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018
BEFORE FINRA OFFICE OF DISPUTE RESOLUTION
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In theMatter ofArbitration between :
ILAN PREIS, BRIGHT LAKE MANAGEMENT LLC, :
BRIGHT LAKE L.P., : No. 16-01877
Claimants, :
- against- :
CONCEPT CAPITAL TRADING LLC, MERRILL :
LYNCH, PIERCE, FENNER & SMITH INC, :
COWEN PRIME SERVICES LLC, MERILL :
LYNCH PROFESSIONAL CLEARING CORP, :
BROADCORT CAPITAL CORP, JACK SEIBALD, :
MICHAEL ROSEN and ROBERT MOORE, :
Respondents. :
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NOTICE OF MOTIONS, RESPONSE TO CHAIRS REOUEST, MOTION FOR PROTECTIVE RELIEF
MOTION FOR COST SHIFTING, MOTION FOR UNDUE BURDEB, MOTION IN LIMINE, MOTION
FOR SANCTIONS, MOTION TO COMPEL, MOTION TO FURTHER COMPEL, MEMORANDUM OF
LAW, AND REOUESTED INFORMATION TO BE FORWARDED TO THE FULL PANEL.
Pursuant to Rule 12503 of theFINRA Code ofArbitration Procedure, Claimants submit these documents in
Reply to thechair'srequest, and for review by the fullpanel.
Respondent's Responses and motions are filledwith lies,deception, are shockingly deflecting and engaging
in theact of disinformation, fabrication,misrepresentation, intentionally misleading and dissembling. Claimant will
brieflyaddress these factsso the matter ison the officialrecord.
Respondents continue to engage in the aforementioned intentional acts of deception
"multiple"
Contrary to theirRepresentations, Claimant did attempt to contact counsel times in respect to
call,"
the InitialPrehearing Conference ("IPHC"). Albeit Respondent's represent they are aware of a "singlephone
that statement couldn't be further from the truth. In addition to the multiple calls,which Respondents refused to
answer, and the messages leftwith receptionists,Respondents refused to returnhis attempted calls.In addition to
these calls, an email is provided as exhibit A. This email which was transmit on March 10th at 9:03 AM, was
requesting a conference calland to work together to provide the panel with dates.In addition to information being
provided pre IPHC. Respondents refused torespond or return contact in any way or form, including email and/or
via telephonic means.1 The call at 9:572 as referenced in their originalrepresentations are clearly inaccurate,
Respondents'
misleading, and intentionallyacting to provide disinformation and mislead the panel. The fact that Respondents
counsel refused to pick up the phone multiple times, respond to emails, callback
1 Itisclearthrough the letter
of thelaw as shown via multiple legalcases provided within thislegal briefand memo.
Respondents'
Itis under the responsibilityto attempt to work together to some sortof degree to resolve issues. act
of ignoring Claimant and not responding isa sanctionable event and frowned upon by the court.
2 Respondents acknowledge one of the calls that refused toanswer and/ laterrefused to respond to.Their lack
they
of response to the email earlierthat day, themessages leftwith receptionistsand allother callsor means of contact,
isin no way orform allowed and or allowable to mitigate any other misrepresentations
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Claimants, or respond to any message leftby Claimant, does not absolve their requirement to work together to
address discovery and the IPHC requirements.
As one of the most striking lies,and misrepresentations, is apparent from the very beginning of thiscase.
Respondents'
and their counsel colluded to lieand alterthe truth and work together to intentionallymislead the
panel. Besides their blatantdisregard for therules and regulations of thisforum, theirrespect for thearbitratorsand
allparties involved. Claimants were properly served on October 19th not as they say October 24th. From the first
day all ofRespondents have liedand continue to do so throughout the past several months. Included for review is
Exhibit B - A notice from FINRA as to proper service as of October 19th. An email from Claimant to all of
Respondents, FINRA, NEPROCESSING, and Samantha Denny, acknowledging the factthat therewere phone calls
and discussions as previously disclosed.
Respondents'
clearly do not take this forum seriously, the allegations, and have been in violation of
timelines and dates.To furthershow theircontinued behavior, included are screenshots of the portaland dates of
submission related to required documents which were allproduced late.This items are referenced as Exhibit C.4
Claimants firstreached out to FINRA and not Claimant the evening before these documents were due. They then
delivered some of the required documents days and others weeks ifnot months late.5These actions and events
late,
in factwarrant serious sanctions.In theleast thepanel must be made aware of theactual events and the that
falsities
Respondents continue to representand intentionally deceive the panel.
The chair made respondents aware multiple times that they can be sanctioned for theirlate submission
agreements. This in turnput Respondents on the defensive and forced them intoa defensive position.This brought
forth theircurrenttactic of deception and lies.
Many of these factswhich add up toa significantrecord of Respondents, deception, liesand failureto abide by the
Arbitration procedure and code will be referenced in the accompanying Motion forSanctions, Motion to Compel,
Motion to Further Compel, Motion in Limine, and relevant legaldocuments.
Fees and costs should be awarded
Respondents'
This repeated conduct and sheer tenacity of flagrantlying isunacceptable. have continuously
lied,presented falsefacts, liedabout the events and facts ofthis arbitration.The have consistentlyfailed to abide by
the code of conduct and procedure of arbitration.They have been deficient and still
stand deficient yet point the
finger to tryand absolve theirfaults and continue their tricksand schemes to misrepresent and alter thetrue nature
and facts. The claimants respectfully request that thepanel award fees and costs in addition to the reliefsought in
the following motions. Claimants also requestthat the panel review the true events as reported in this briefand
motion, which are accompanied by evidence and exhibitsand have Respondents held liableas to their violations,
lies,deception and mere blatantviolation of therequirements including those still
not sufficientlycured.
3 These facts articulateClaimants statements as true and honest. Respondents continue to lieand
clearly being
misrepresent facts.As the email states,"As per discussed with FINRA's dispute resolution office thismorning and
with Samantha Denny, Iwould like to make allparties aware that service was properly executed by Claimants and
FINRA. Ido not agree tothe extension of the required answer and submission agreements. The claim was filedand
served properly. Over the past two months since proper service on October 19th respondents did not contact
time."
claimants for a requestof additional
4 of these documents which are pulled from the FINRA and FINRA NOTICES served upon
Many PORTAL,
Respondents clearly stateOctober 19th not October 24th which Respondents repeatedly represent and statethat
FINRA has recorded.
5 Taken Respondents' Claimants'
from Reply to Response to Motion and notice of Motion dated April 13th. Taken
directly from the 3rd page, "The Answer was Timely Served As FINRA records will confirm, allfilingsby the
Concept Respondents were timely. The Statement of Claim was served on the Concept Respondents on October
2016."
24th, This complete paragraph, representation couldn't be further from the truth. I complete lie,and a
reference to FINRA records a complete Sham which Claimant is now presenting as itisuncovered.
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Negative inference should be imposed
Additional Misrepresentations of importance
As shown in Exhibit E6, ExhibitF (which pertains to evidence of the which
retainer, details were provided
in greatdetail on the phone), Exhibit 6 ( which verifiesthe correspondence with Claimant and FINRA staffrelated
to notice and discussions of thebankruptcy)7. Are clear intheir intentionand detailof notifying Respondents of the
underway."
Bankruptcy which, "is Respondents represented as they continued todo so incorrectlyintentionally to
deceive the Panel and Chair. Respondents have been unforgiving in theiraggressive tacticsto disinform, fabricate,
and alterthe facts.To thisdate theirunethical, and improper mechanics have been successful.These factsshould end
theirpresent unrelenting actions of liento thepanel and bring the truefacts tothe light.
Respondents Motion to Dismiss for failure to comply with Discovery Obligations and in the alternative to
compel Discovery
Although theirmotion to Dismiss should be denied in itsentirety,ifthe panel believes ithas merit which it
does not, their request in the alternativeto Compel Discovery ismoot. As claimant was notifiedthat they did not
have the original flash drive he immediately sent three separate flash drives to Respondents. Itis clear that
Respondents did not choose to communicate with Claimant or return of his contacts.8IfRespondents were in
any
contact (which was not at the faultof Claimant as he attempted as shown through this brief) they would have
received a second copy sooner.As soon as Claimant was made aware he resent additional Flash drives. In essence
theirrequest for the alternativewas produced and confirmed as received.In addition, a new stipulationwas signed
and sent via email atthe same time Claimant was made aware of the originalflash drive. As referenced in Exhibit
the countersigned and executed documents were not deliveredto Claimant untilseveral weeks after.9
after. In
H, addition,
Exhibit J shows a FedEx printout which was Sent toClaimant in Maryland on June 22nd 2017. 10
Nature of Action
6 The actual email related to Respondents of stateas follows,"You will receive notice
notifying Bankruptcy clearly
underway."
relatedto a bankruptcy filingwhich is This was notifying Respondents of thebankruptcy and iftaken as
they are,under way means inprocess not complete. Claimant did notrepresent itwas completed. Respondents went
on to statewhat Claimant did not allege which was, "Renewing a reference to a counsel who he does not identify
appeared."
and who has not There was no renewal of reference and that counsel was not required to provide a notice
of appearance inthis case as theyare not representingme inthis case,nor has claimant made thatrepresentation.
7 Include isseveral emails which also referenceadditional callsover the span of severalmonths
8 Case law is provided within thisbrief as tothe importance of communication and the Requirement of Respondents.
Respondents clearly violated the letter
of thelaw and clearlyare inviolation. Case law is provided.
9 The dates and emails are provided within thisexhibit.In addition the reason Respondents decided to produce
only
the required document isbecause Claimant elected toabide by theIPHC and request a discovery Conference call as
was inthe originalorder. Respondents failedto abide by thisorder inthe IPHC and senta generic email to FINRA in
hopes of altering the fact that they were just sending these items to circumvent Claimants request and proper
procedure of adhering to the IPHC.
10 The relevance and importance of this document it shows Respondents flagrant lies as to completion and
production of items. It also shows their consistent intentto deflect the inconsistencies and falsitiesto Claimant
which clearly fall to their When
irresponsibility. they sent these items this tilldid not produce the completed
stipulationand Confidentiality Agreement. They were not produced untilClaimant requested theDiscovery callas
per IPHC and Respondents realized they were significantlydeficient.They tried tocure their apparent violation of
the Chairs order,and requiredproduction by simply sending itand hoping thepanel would not know.
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As statedprior, Respondents are pleading the case and are attestingto improper facts.The merits of the
case are solid and supported by tremendous amounts of evidence. There is no question to the liabilityof
Respondents. Respondents are clearlyaware of theirresponsibility and liabilityand are aggressively attempting to
avoid the hearing by allcosts. Including, deception,trickery,lying and deception. The claims are truein natureand
emails."
nothing has been destroyed as Respondents stated by "contemporaneous Factually the sheer amount of
evidence thatwillbe presented isoverwhelming.
Respondents have failed to Adequately fulfill
their discovery obligations
Respondents have failed to fulfilltheir obligations as they have repeatedly done throughout this
hearing.MLPRO, MLFPS and Brodcoart were requiredto produce the discovery obligations in accordance with List
1 of FINRA's Discovery guide, and those requests are still
currently outstanding. Add that tothe listmultiple late
submission agreements, Late filingof the Statement of Answer, and all otherrelated missing items not received to
date.12
E-DISCOVERY
KEY FACTS
Electronic Discovery
Electronic discovery (also e-discovery or ediscovery) refers to discovery in legalproceedings such as
litigation,government investigations, or Freedom of Information Act requests,where the information sought is in
electronic format (often referred to as electronicallystored information or ESI). Electronic discovery is subjectto
rules of civilprocedure and agreed-upon processes, often involving review for privilege and relevance before data
are turned over to therequesting party.
Electronic information is considered differentfrom paper information because of itsintangible form,
volume, transience and persistence. Electronic information isusually accompanied by metadata that isnot found in
paper documents and that can play an important part as evidence (for example the date and time a document was
written could be useful in a copyright case).The preservation of metadata from electronicdocuments createsspecial
challenges to prevent spoliation.In the United States,electronic discovery was the subject of amendments to the
Federal Rules of Civil Procedure (FRCP), effective December 1, 2006, as amended to December 1, 2015. In
addition, statelaw now frequently also addresses issues relatingto electronicdiscovery. Other jurisdictionsaround
the world also have rules relatingto electronic discovery, including Part 31 of the CivilProcedure Rules in England
and Wales.
11 Although thisisnot the forum to plead the merits of the Claimant is to provide Exhibits
case, willing verifying
Claimants knew as tothe underlying claims and proactively lied intheir answer tothe Statement of Claim. Besides
the tremendous documented information that Claimant has provided as discovery, there isan overwhelming amount
of documents which Claimant received as discovery which clearly show in emails between the Respondents that
they knew, were aware, and are liable.There is even mention of many other parties potentiallybeing affectedby
some of theirsystems which were reportingincorrectly.
12 Included in Exhibit I isscreenshots of the FINRA the late submission of multiple Submission
portal,showing
Agreements including one on March 6th, and a few latein February. This is an additionto the missing List 1 and
documents required tobe produced by February 6th.
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The nature of digital
data makes itextremely well-suited to investigation.For one thing, digitaldata can be
searched with whereas paper documents must be scrutinized manually.¹³
munuully. digital
electronically ease, Furthermore,
data is difficult
or impossible to completely destroy,particularly ifit getsinto a network. This isbecause the data
appears on multiple hard drives and because digital even
files, if deleted, can be undeleted. In fact,the only reliable
way todestroy a computer fileis tophysically destroy every hard drive where the filehas been stored.
In theprocess of electronicdiscovery, data of alltypescan serve as evidence. This can include text,images,
calendar files,databases, spreadsheets, audio files,animation, Web sitesand computer programs. Even malware
such as viruses, trojansand spyware can be secured and investigated. Email can be an especially valuable source of
evidence in civilor criminal because
litigation, people are often less carefulin these exchanges than in hard copy
correspondence such as written memos and postal letters.
One toknow rightoff the bat isthat isnot a singleaction - like a deposition or
thing e-discovery taking
a motion - rather - is a process comprised of linked actions thatstarts from the time a
filing e-discovery many
lawsuit isreasonably foreseeable allthe way until documents are presented in court (in theevent the case actually
goes to trial).
The e-discovery process isset in motion as soon as the litigationisreasonably foreseeable, which triggers
the legal duty to preserve potentially relevant ESI. Attorneys from both sides determine the scope of e-discovery,
identify and preserve (lockdown) the relevant ESI, and make e-discovery requests and challenges. Once parameters
are set,ESI is then collected,analyzed, and formatted for use incourt. Don't letthis simplifieddescription fool you.
E-Discovery isa dynamic, complex process thatchallenges even the most experienced legal and technical minds.
Due to the complexities of producing documents in the digitalage, the Federal Rules of Civil Procedure
(FRCP) were amended in 2006 to address the topic.Several statecourts have followed suitand amended their rules.
According to the FRCP, litigantsare required toproduce electronically stored information (ESI) inthe form in
form."
which itisordinarily maintained (oftenreferred to as "nativeformat") on in a "reasonably usable Standard
non-native production formats include the Tagged Image File Format (TIFF) and Portable Document Format
(PDF).
Preservation
A duty to preserve begins upon the reasonable anticipationof litigation.
During preservation, data identified
as potentiallyrelevant isplaced in a legalhold. This ensures that data cannot be destroyed. Care is taken to ensure
thisprocess isdefensible, while the end-goal isto reduce the possibilityof data spoliationor destruction.Failure to
preserve can leadto sanctions. Even if the court ruled the failure to preserve as negligence, they can force the
defense."
accused to pay finesifthe lostdata puts thedefense "atan undue disadvantage in establishingtheir
Collection
Once documents have been preserved, collection can begin. Collection is the transfer of data from a
company to their legalcounsel, who willdetermine relevance and dispositionof data. Some companies that deal
with frequent litigationhave software in place to quickly place legal holds on certain custodians when an event
(such as legalnotice) is triggeredand begin the collectionprocess immediately. Other companies may need to callin
a digitalforensics expert to prevent the spoliationof data.The size and scale ofthis collectionisdetermined by the
identificationphase.
Sometimes nativefiles willbe converted to a petrified,
paper-likeformat (such as PDF or TIFF)
Electronic messages
13 As shown Respondents request has no factualbasis and is In
illogical. theirrequest isso obvious
throughout, fact,
to itsnature to harm and harass Claimants. The request to print 20,000-40,000 documents forreview isillogicalin
any sense. Itiseasier tosort through digitalform then sortthrough thatnumber of pages.
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In 2006, the U.S. Supreme Court's amendments to theFederal Rules of Civil Procedure created a category
for electronicrecords that, for the first
time, explicitlynamed emails and instant message chats as likelyrecords to
be archived and produced when relevant. One type of preservation problem arose during the Zubulake v. UBS
Warburg LLC lawsuit.Throughout the case,the plaintiffclaimed thatthe evidence needed to prove the case existed
UBS'
in emails stored on own computer systems. Because the emails requested were either never found or
destroyed, the court found that itwas more likely that they existed than not. The court found that while the
corporation's counsel directed that allpotentialdiscovery evidence, including emails, be preserved, the staffthatthe
directiveapplied to didnot follow through. This resultedin significantsanctions against UBS.
The formalized changes to theFederal Rules of Civil Procedure in December 2006 and in 2007 effectively
forced civillitigantsinto a compliance mode with respectto theirproper retention and management of electronically
stored information (ESI). Improper management of ESI can result in a finding of spoliation of evidence and the
imposition of one or more sanctions including an adverse inference jury instructions,summary judgment, monetary
fines,and other sanctions.In some cases, such as Qualcomm v Broadcom, attorneys can be brought before the bar
and risk theirlivelihood.
Although petri(vingdocuments to static
image formats & jpeg)
(tiff are acceptable.
Petrificationinvolves the conversion of native filesinto an image format that does not require use of the
native applications. This isuseful in the redaction of privileged or sensitive information, since redaction tools for
images are traditionally more mature, and easier to apply on uniform image types. Efforts to redact similarly
petrifiedPDF fileshave resultedin the removal of redacted layers and exposure of redacted information, such as
social securitynumbers and other private information.
Traditionally,electronic discovery vendors had been contracted to convert native filesinto TIFF images
(for example 10 images for a 10-page Microsoft Word document) with a loadfile for use inimage-based discovery
review database applications. Increasingly, database review applications have embedded native fileviewers with
TIFF-capabilities. With both native and image file capabilities,it could eitherincrease or decrease the total
necessary storage, since there may be multiple formats and filesassociated with each individual native file.
Deployment, storage, and best practices are becoming especially criticaland necessary to maintain cost-effective
strategies.
Structured data are most often produced in delimited text format. When the number of tables subject to
discovery islarge or relationships between the tablesare of essence,the data areproduced in nativedatabase format
or as a databasebackup file.
American Law RESTATEMENT
Institute, (THIRD) OF THE LAW: THE LAW GOVERNING LAWYERS
§ 118(2) (2000). The comment to the section clarifiesthat "evidence is usuallydefined as documentary or other
physical material (including material stored in electronically retrievable form) that a reasonable lawyer would
proceeding."
understand may be relevantto an official Id.at cmt. a (emphasis added).
("
Trevino, 969 S.W.2d at 957 (Baker, J.,concurring) ("While a litigantisunder no duty to keep or retain
every document in itspossession . .. itisunder a duty to preserve what itknows, or reasonably should know is
relevant in theaction,is reasonably calculated to leadto the discovery of admissible evidence, is reasonably likelyto
be requested during discovery, [or]isthe subject of a pending discovery sanction.") (quoting Wm. T. Thompson Co.
v.General Nutrition Corp., 593 F. Supp. 1443, 1445 (C.D. Cal. 1984)).
Although courts vary in how they describe the temporal aspect of a duty to preserve, the common themes
are actualnotice and foreseeability.No duty topreserve evidence arisesunless the partypossessing the evidence has
notice of itsrelevance. Akiona v.United States,938 F.2d 158, 161 (9th Cir. 1991); Turner v.Hudson Transit Lines,
Inc., 142 F.R.D. 68, 72-73 (S.D.N.Y. 1991). The complaint may alertthe party that certaininformation isrelevant
and likely to be sought in discovery.A party is certainlyon notice once ithas received a discovery request.Id.at 73.
But notice need not come in the form of a complaint. The duty to preserve could ariseprior to the time a plaintiff
filesitscomplaint ifa party ison notice of pending litigation.Turner, 142 F.R.D. at73; see also Lewy v.Remington
Arms Co., 836 F.2d 1104 (8th Cir.1988) (holding the duty to preserve arises where the information islikely to be
relevant to foreseeablelitigation).
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Indeed, a party should not be able to subvert the discovery process and the fair administration of justice
simply by destroying evidence before a claim isactually filed.
A number of courtsrecognize the need for a dutyto preserve evidence before a claim isactually filed.See,
e.g.,Blinzler v. Marriott Int'lInc., 81 F.3d 1148, 1158-59 (1st Cir. 1996) (holding duty to preserve arose before
litigationwhere defendant hotel destroyed telephone log thatwould have pinpointed operator's emergency callwhen
defendant knew that guest'sspouse had diedand that guest had repeatedly attempted to discover when emergency
callwas placed); Dillon v.Nissan Motor Co., 986 F.2d 263, 267 (8th Cir.1993) (imposing sanctions where plaintiff
destroyed vehicle relevant to litigation
in products suit);
liability Welsh v. United States, 844 F.2d 1239, 1241-42,
1246-48 (6th Cir.1988) (allowing adverse inference)
National Tank Co. v. Brotherton, 851 S.W.2d 193 (Tex. 1993), as a reference for an objective test to
litigation"
determine when litigationmay reasonably be anticipated. National Tank defines "anticipation of in the
context of whether a party should be allowed to assert an investigativeprivilege. Instead of using an actual
knowledge standard, National Tank recognizes that "common sense dictatesthat a partymay reasonably anticipate
sue."
suitbeing filed. . . before
the plaintiffmanifests an intentto Id.at 204. Consequently, the courtheld that trial
courts must consider the of
totality thecircumstances and decide whether a reasonable person in theparty's position
would have (or actually) anticipated litigationin order to determine whether the party reasonably anticipated
litigation.
Id.at 207.
JusticeBaker articulatedthisin hisconcurrence in Trevino v.Ortega, statingthat:
[A] party should be found on notice of potential litigation
when, afterviewing the totalityof the circumstances, the
party either actually anticipated litigationor a reasonable person in the party's position would have anticipated
litigation.While in certaincircumstances a party may not reasonably foresee litigationuntilthe party is actually
notified of theopposing party'sintent to file
suit,theremay be times when certainindependent factswill put a party
on notice of thepotential for Whether
litigation. a party actuallydid or reasonably should have anticipated litigation
issimply a factissue forthe trial
court to decide by viewing the of
totality thecircumstances.
Trevino v.Ortego, 969 S.W.2d 950, 956 (Tex. 1998) (Baker, J. concurring).
Litigant's Preservation Obligations
hold"
Once a party reasonably anticipateslitigation,itmust implement a "litigation to suspend itsroutine
document retention/destruction and thereby ensure thatrelevant documents are preserved.
Once the party implements the litigationhold, counsel must then oversee compliance, monitoring the
party's efforts to retain and produce the relevant documents. Doing so ensures that all relevant sources of
information are discovered, that relevant information is retained on an basis, and that relevant non-
ongoing
privileged information is produced to theopposing party.
Form
In contrast to conventional discovery, in which paper can only be produced as paper, electronicdiscovery
presents various options. Information can be produced not only in paper or electronic form, but in different
electronic formats. The amendments to Federal Rules 16(b) and 26(f)(3) and to Form 35 directthe parties to
consider, and the court to include in the scheduling order, provisions for discovery of electronically stored
information.
"documents"
The new amendments to Rule 34 account for theambiguity and limitationsof theword by specifically
information."
adding "electronicallystored This distinctionmeans that lawyers should frame discovery requests to
specify whether they seek discovery of documents, electronicallystored information, or both.
See, e.g.,Crown Life Ins.Co. v. Craig, 995 F.2d 1376 (7th Cir.1993) (upholding sanctions againsta party thatfailed
"document"
to produce electronic data on the grounds that information in thedatabase was not in form, and holding
"document"
that includes computer data).
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Furthermore, the amendments to Rule 34(b) authorize the requesting party to specify the form in which
electronicallystored information should be produced39 and set up a framework for resolvingdisputes over the form
of producing such information.
Texas Rule of Civil Procedure 196.4 already addresses thisissue. Itprovides thatparties must specifically
request electronicdata where itisdesired and must designate the form inwhich itis tobe produced.
Ifthe interrogating party does not request that electronicallystored information be produced in a specific
form, and in the absence of party agreement or court order as to form, the producing party has two options:(1) to
produce information in a form in which itisordinarily maintained, or (2)to produce information in a formor forms
that are usable.14 As the Committee Note to the Rule points these choices are analogous to the
reasonably out,
choices presented when producing paper documents: the form in which they are keptin theusual course of business
or organized and labeled to correspond to thecategories in therequest.
See, e.g.,Sattarv. Motorola, Inc.,138 F.3d 1164 (7th Cir. 1997) (ordering defendant to equip plaintiffwith
the means to read itse-mail filesor pay half the costs ofproduction when itproduced tapes on four-inch tapes that
plaintiffwas unableto read).
Two other clarificationsin the new rules are useful: One, absent court order or party agreement, the
responding party need only produce the information in one form. Also, the obligation to produce for testingand
sampling applies to electronically stored information and documents, as well as tangible things and land or other
property.1516
'5'6
property
Critical Case law reference is provided between Oracle vs Google.17
of
The September 27, 2016 Order by District
Judge William
Alsup, Northern of California,
District Inc. v Google Inc., No. C 10-
in Oracle America
03561 WHA (ND Ca., Sept. 27, 2016) is an e- discovery standard.
The case law teaches us and is clearlyarticulatedin theopinion by Judge Alsup again shows theimportance of
qualityelectronicdocument review.Oracle America Inc.v Google .Inc No.
Inc., ,NoC 10-03561 .WHA
WHA (ND Ca.,Sept. 27,2016). This
case law shows thatyou arerequired to produce relevantevidence.You are notrequired tohighlight the hotdocuments you
produced. Itis up to the receiving
party to dotheirown due diligence.
Cost Bearing
The finalarea thatcomplicates production of electronicallystored information isthe issue of cost shifting.
Under the discovery rules, it ispresumed that the responding party must bear the expense of complying with
discovery requests. Oppenheimer Fund, Inc. v.Sanders, 437 U.S. 340, 358 (1978).Discovery rules, such as Federal
Rules of CivilProcedure 34 and 26 and Texas Rule of Civil Procedure 192.7(b), limitthe universe of materialthat
the producing party must generate to thingsthat arein itspossession, custody, or control in the ordinary course of
business. Because producing parties cannot be compelled to bear the cost of producing material outside their
14 These factsare criticalas both were provided and both prongs were established.
clearly
15See also Playboy Enters., Inc.v. Welles, 60 F. Supp. 1050, 1052-53 (S.D. Cal. 1999) (ordering Welles to make her
computer hard drive availablefor inspection,as Rule 34 contemplates access to datacompilations).
16 Cf.TEX. R. CIV. P. 196.6.
17 This case is further explained in de
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FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018 BEFORE FINRA OFFICE OF DISPUTE RESOLUTION --------------------------------------------------------------------- X In theMatter ofArbitration between : ILAN PREIS, BRIGHT LAKE MANAGEMENT LLC, : BRIGHT LAKE L.P., : No. 16-01877 Claimants, : - against- : CONCEPT CAPITAL TRADING LLC, MERRILL : LYNCH, PIERCE, FENNER & SMITH INC, : COWEN PRIME SERVICES LLC, MERILL : LYNCH PROFESSIONAL CLEARING CORP, : BROADCORT CAPITAL CORP, JACK SEIBALD, : MICHAEL ROSEN and ROBERT MOORE, : Respondents. : -------------------------------------------------------------------- X NOTICE OF MOTIONS, RESPONSE TO CHAIRS REOUEST, MOTION FOR PROTECTIVE RELIEF MOTION FOR COST SHIFTING, MOTION FOR UNDUE BURDEB, MOTION IN LIMINE, MOTION FOR SANCTIONS, MOTION TO COMPEL, MOTION TO FURTHER COMPEL, MEMORANDUM OF LAW, AND REOUESTED INFORMATION TO BE FORWARDED TO THE FULL PANEL. Pursuant to Rule 12503 of theFINRA Code ofArbitration Procedure, Claimants submit these documents in Reply to thechair'srequest, and for review by the fullpanel. Respondent's Responses and motions are filledwith lies,deception, are shockingly deflecting and engaging in theact of disinformation, fabrication,misrepresentation, intentionally misleading and dissembling. Claimant will brieflyaddress these factsso the matter ison the officialrecord. Respondents continue to engage in the aforementioned intentional acts of deception "multiple" Contrary to theirRepresentations, Claimant did attempt to contact counsel times in respect to call," the InitialPrehearing Conference ("IPHC"). Albeit Respondent's represent they are aware of a "singlephone that statement couldn't be further from the truth. In addition to the multiple calls,which Respondents refused to answer, and the messages leftwith receptionists,Respondents refused to returnhis attempted calls.In addition to these calls, an email is provided as exhibit A. This email which was transmit on March 10th at 9:03 AM, was requesting a conference calland to work together to provide the panel with dates.In addition to information being provided pre IPHC. Respondents refused torespond or return contact in any way or form, including email and/or via telephonic means.1 The call at 9:572 as referenced in their originalrepresentations are clearly inaccurate, Respondents' misleading, and intentionallyacting to provide disinformation and mislead the panel. The fact that Respondents counsel refused to pick up the phone multiple times, respond to emails, callback 1 Itisclearthrough the letter of thelaw as shown via multiple legalcases provided within thislegal briefand memo. Respondents' Itis under the responsibilityto attempt to work together to some sortof degree to resolve issues. act of ignoring Claimant and not responding isa sanctionable event and frowned upon by the court. 2 Respondents acknowledge one of the calls that refused toanswer and/ laterrefused to respond to.Their lack they of response to the email earlierthat day, themessages leftwith receptionistsand allother callsor means of contact, isin no way orform allowed and or allowable to mitigate any other misrepresentations FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018 Claimants, or respond to any message leftby Claimant, does not absolve their requirement to work together to address discovery and the IPHC requirements. As one of the most striking lies,and misrepresentations, is apparent from the very beginning of thiscase. Respondents' and their counsel colluded to lieand alterthe truth and work together to intentionallymislead the panel. Besides their blatantdisregard for therules and regulations of thisforum, theirrespect for thearbitratorsand allparties involved. Claimants were properly served on October 19th not as they say October 24th. From the first day all ofRespondents have liedand continue to do so throughout the past several months. Included for review is Exhibit B - A notice from FINRA as to proper service as of October 19th. An email from Claimant to all of Respondents, FINRA, NEPROCESSING, and Samantha Denny, acknowledging the factthat therewere phone calls and discussions as previously disclosed. Respondents' clearly do not take this forum seriously, the allegations, and have been in violation of timelines and dates.To furthershow theircontinued behavior, included are screenshots of the portaland dates of submission related to required documents which were allproduced late.This items are referenced as Exhibit C.4 Claimants firstreached out to FINRA and not Claimant the evening before these documents were due. They then delivered some of the required documents days and others weeks ifnot months late.5These actions and events late, in factwarrant serious sanctions.In theleast thepanel must be made aware of theactual events and the that falsities Respondents continue to representand intentionally deceive the panel. The chair made respondents aware multiple times that they can be sanctioned for theirlate submission agreements. This in turnput Respondents on the defensive and forced them intoa defensive position.This brought forth theircurrenttactic of deception and lies. Many of these factswhich add up toa significantrecord of Respondents, deception, liesand failureto abide by the Arbitration procedure and code will be referenced in the accompanying Motion forSanctions, Motion to Compel, Motion to Further Compel, Motion in Limine, and relevant legaldocuments. Fees and costs should be awarded Respondents' This repeated conduct and sheer tenacity of flagrantlying isunacceptable. have continuously lied,presented falsefacts, liedabout the events and facts ofthis arbitration.The have consistentlyfailed to abide by the code of conduct and procedure of arbitration.They have been deficient and still stand deficient yet point the finger to tryand absolve theirfaults and continue their tricksand schemes to misrepresent and alter thetrue nature and facts. The claimants respectfully request that thepanel award fees and costs in addition to the reliefsought in the following motions. Claimants also requestthat the panel review the true events as reported in this briefand motion, which are accompanied by evidence and exhibitsand have Respondents held liableas to their violations, lies,deception and mere blatantviolation of therequirements including those still not sufficientlycured. 3 These facts articulateClaimants statements as true and honest. Respondents continue to lieand clearly being misrepresent facts.As the email states,"As per discussed with FINRA's dispute resolution office thismorning and with Samantha Denny, Iwould like to make allparties aware that service was properly executed by Claimants and FINRA. Ido not agree tothe extension of the required answer and submission agreements. The claim was filedand served properly. Over the past two months since proper service on October 19th respondents did not contact time." claimants for a requestof additional 4 of these documents which are pulled from the FINRA and FINRA NOTICES served upon Many PORTAL, Respondents clearly stateOctober 19th not October 24th which Respondents repeatedly represent and statethat FINRA has recorded. 5 Taken Respondents' Claimants' from Reply to Response to Motion and notice of Motion dated April 13th. Taken directly from the 3rd page, "The Answer was Timely Served As FINRA records will confirm, allfilingsby the Concept Respondents were timely. The Statement of Claim was served on the Concept Respondents on October 2016." 24th, This complete paragraph, representation couldn't be further from the truth. I complete lie,and a reference to FINRA records a complete Sham which Claimant is now presenting as itisuncovered. FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018 Negative inference should be imposed Additional Misrepresentations of importance As shown in Exhibit E6, ExhibitF (which pertains to evidence of the which retainer, details were provided in greatdetail on the phone), Exhibit 6 ( which verifiesthe correspondence with Claimant and FINRA staffrelated to notice and discussions of thebankruptcy)7. Are clear intheir intentionand detailof notifying Respondents of the underway." Bankruptcy which, "is Respondents represented as they continued todo so incorrectlyintentionally to deceive the Panel and Chair. Respondents have been unforgiving in theiraggressive tacticsto disinform, fabricate, and alterthe facts.To thisdate theirunethical, and improper mechanics have been successful.These factsshould end theirpresent unrelenting actions of liento thepanel and bring the truefacts tothe light. Respondents Motion to Dismiss for failure to comply with Discovery Obligations and in the alternative to compel Discovery Although theirmotion to Dismiss should be denied in itsentirety,ifthe panel believes ithas merit which it does not, their request in the alternativeto Compel Discovery ismoot. As claimant was notifiedthat they did not have the original flash drive he immediately sent three separate flash drives to Respondents. Itis clear that Respondents did not choose to communicate with Claimant or return of his contacts.8IfRespondents were in any contact (which was not at the faultof Claimant as he attempted as shown through this brief) they would have received a second copy sooner.As soon as Claimant was made aware he resent additional Flash drives. In essence theirrequest for the alternativewas produced and confirmed as received.In addition, a new stipulationwas signed and sent via email atthe same time Claimant was made aware of the originalflash drive. As referenced in Exhibit the countersigned and executed documents were not deliveredto Claimant untilseveral weeks after.9 after. In H, addition, Exhibit J shows a FedEx printout which was Sent toClaimant in Maryland on June 22nd 2017. 10 Nature of Action 6 The actual email related to Respondents of stateas follows,"You will receive notice notifying Bankruptcy clearly underway." relatedto a bankruptcy filingwhich is This was notifying Respondents of thebankruptcy and iftaken as they are,under way means inprocess not complete. Claimant did notrepresent itwas completed. Respondents went on to statewhat Claimant did not allege which was, "Renewing a reference to a counsel who he does not identify appeared." and who has not There was no renewal of reference and that counsel was not required to provide a notice of appearance inthis case as theyare not representingme inthis case,nor has claimant made thatrepresentation. 7 Include isseveral emails which also referenceadditional callsover the span of severalmonths 8 Case law is provided within thisbrief as tothe importance of communication and the Requirement of Respondents. Respondents clearly violated the letter of thelaw and clearlyare inviolation. Case law is provided. 9 The dates and emails are provided within thisexhibit.In addition the reason Respondents decided to produce only the required document isbecause Claimant elected toabide by theIPHC and request a discovery Conference call as was inthe originalorder. Respondents failedto abide by thisorder inthe IPHC and senta generic email to FINRA in hopes of altering the fact that they were just sending these items to circumvent Claimants request and proper procedure of adhering to the IPHC. 10 The relevance and importance of this document it shows Respondents flagrant lies as to completion and production of items. It also shows their consistent intentto deflect the inconsistencies and falsitiesto Claimant which clearly fall to their When irresponsibility. they sent these items this tilldid not produce the completed stipulationand Confidentiality Agreement. They were not produced untilClaimant requested theDiscovery callas per IPHC and Respondents realized they were significantlydeficient.They tried tocure their apparent violation of the Chairs order,and requiredproduction by simply sending itand hoping thepanel would not know. FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018 As statedprior, Respondents are pleading the case and are attestingto improper facts.The merits of the case are solid and supported by tremendous amounts of evidence. There is no question to the liabilityof Respondents. Respondents are clearlyaware of theirresponsibility and liabilityand are aggressively attempting to avoid the hearing by allcosts. Including, deception,trickery,lying and deception. The claims are truein natureand emails." nothing has been destroyed as Respondents stated by "contemporaneous Factually the sheer amount of evidence thatwillbe presented isoverwhelming. Respondents have failed to Adequately fulfill their discovery obligations Respondents have failed to fulfilltheir obligations as they have repeatedly done throughout this hearing.MLPRO, MLFPS and Brodcoart were requiredto produce the discovery obligations in accordance with List 1 of FINRA's Discovery guide, and those requests are still currently outstanding. Add that tothe listmultiple late submission agreements, Late filingof the Statement of Answer, and all otherrelated missing items not received to date.12 E-DISCOVERY KEY FACTS Electronic Discovery Electronic discovery (also e-discovery or ediscovery) refers to discovery in legalproceedings such as litigation,government investigations, or Freedom of Information Act requests,where the information sought is in electronic format (often referred to as electronicallystored information or ESI). Electronic discovery is subjectto rules of civilprocedure and agreed-upon processes, often involving review for privilege and relevance before data are turned over to therequesting party. Electronic information is considered differentfrom paper information because of itsintangible form, volume, transience and persistence. Electronic information isusually accompanied by metadata that isnot found in paper documents and that can play an important part as evidence (for example the date and time a document was written could be useful in a copyright case).The preservation of metadata from electronicdocuments createsspecial challenges to prevent spoliation.In the United States,electronic discovery was the subject of amendments to the Federal Rules of Civil Procedure (FRCP), effective December 1, 2006, as amended to December 1, 2015. In addition, statelaw now frequently also addresses issues relatingto electronicdiscovery. Other jurisdictionsaround the world also have rules relatingto electronic discovery, including Part 31 of the CivilProcedure Rules in England and Wales. 11 Although thisisnot the forum to plead the merits of the Claimant is to provide Exhibits case, willing verifying Claimants knew as tothe underlying claims and proactively lied intheir answer tothe Statement of Claim. Besides the tremendous documented information that Claimant has provided as discovery, there isan overwhelming amount of documents which Claimant received as discovery which clearly show in emails between the Respondents that they knew, were aware, and are liable.There is even mention of many other parties potentiallybeing affectedby some of theirsystems which were reportingincorrectly. 12 Included in Exhibit I isscreenshots of the FINRA the late submission of multiple Submission portal,showing Agreements including one on March 6th, and a few latein February. This is an additionto the missing List 1 and documents required tobe produced by February 6th. FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018 The nature of digital data makes itextremely well-suited to investigation.For one thing, digitaldata can be searched with whereas paper documents must be scrutinized manually.¹³ munuully. digital electronically ease, Furthermore, data is difficult or impossible to completely destroy,particularly ifit getsinto a network. This isbecause the data appears on multiple hard drives and because digital even files, if deleted, can be undeleted. In fact,the only reliable way todestroy a computer fileis tophysically destroy every hard drive where the filehas been stored. In theprocess of electronicdiscovery, data of alltypescan serve as evidence. This can include text,images, calendar files,databases, spreadsheets, audio files,animation, Web sitesand computer programs. Even malware such as viruses, trojansand spyware can be secured and investigated. Email can be an especially valuable source of evidence in civilor criminal because litigation, people are often less carefulin these exchanges than in hard copy correspondence such as written memos and postal letters. One toknow rightoff the bat isthat isnot a singleaction - like a deposition or thing e-discovery taking a motion - rather - is a process comprised of linked actions thatstarts from the time a filing e-discovery many lawsuit isreasonably foreseeable allthe way until documents are presented in court (in theevent the case actually goes to trial). The e-discovery process isset in motion as soon as the litigationisreasonably foreseeable, which triggers the legal duty to preserve potentially relevant ESI. Attorneys from both sides determine the scope of e-discovery, identify and preserve (lockdown) the relevant ESI, and make e-discovery requests and challenges. Once parameters are set,ESI is then collected,analyzed, and formatted for use incourt. Don't letthis simplifieddescription fool you. E-Discovery isa dynamic, complex process thatchallenges even the most experienced legal and technical minds. Due to the complexities of producing documents in the digitalage, the Federal Rules of Civil Procedure (FRCP) were amended in 2006 to address the topic.Several statecourts have followed suitand amended their rules. According to the FRCP, litigantsare required toproduce electronically stored information (ESI) inthe form in form." which itisordinarily maintained (oftenreferred to as "nativeformat") on in a "reasonably usable Standard non-native production formats include the Tagged Image File Format (TIFF) and Portable Document Format (PDF). Preservation A duty to preserve begins upon the reasonable anticipationof litigation. During preservation, data identified as potentiallyrelevant isplaced in a legalhold. This ensures that data cannot be destroyed. Care is taken to ensure thisprocess isdefensible, while the end-goal isto reduce the possibilityof data spoliationor destruction.Failure to preserve can leadto sanctions. Even if the court ruled the failure to preserve as negligence, they can force the defense." accused to pay finesifthe lostdata puts thedefense "atan undue disadvantage in establishingtheir Collection Once documents have been preserved, collection can begin. Collection is the transfer of data from a company to their legalcounsel, who willdetermine relevance and dispositionof data. Some companies that deal with frequent litigationhave software in place to quickly place legal holds on certain custodians when an event (such as legalnotice) is triggeredand begin the collectionprocess immediately. Other companies may need to callin a digitalforensics expert to prevent the spoliationof data.The size and scale ofthis collectionisdetermined by the identificationphase. Sometimes nativefiles willbe converted to a petrified, paper-likeformat (such as PDF or TIFF) Electronic messages 13 As shown Respondents request has no factualbasis and is In illogical. theirrequest isso obvious throughout, fact, to itsnature to harm and harass Claimants. The request to print 20,000-40,000 documents forreview isillogicalin any sense. Itiseasier tosort through digitalform then sortthrough thatnumber of pages. FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018 In 2006, the U.S. Supreme Court's amendments to theFederal Rules of Civil Procedure created a category for electronicrecords that, for the first time, explicitlynamed emails and instant message chats as likelyrecords to be archived and produced when relevant. One type of preservation problem arose during the Zubulake v. UBS Warburg LLC lawsuit.Throughout the case,the plaintiffclaimed thatthe evidence needed to prove the case existed UBS' in emails stored on own computer systems. Because the emails requested were either never found or destroyed, the court found that itwas more likely that they existed than not. The court found that while the corporation's counsel directed that allpotentialdiscovery evidence, including emails, be preserved, the staffthatthe directiveapplied to didnot follow through. This resultedin significantsanctions against UBS. The formalized changes to theFederal Rules of Civil Procedure in December 2006 and in 2007 effectively forced civillitigantsinto a compliance mode with respectto theirproper retention and management of electronically stored information (ESI). Improper management of ESI can result in a finding of spoliation of evidence and the imposition of one or more sanctions including an adverse inference jury instructions,summary judgment, monetary fines,and other sanctions.In some cases, such as Qualcomm v Broadcom, attorneys can be brought before the bar and risk theirlivelihood. Although petri(vingdocuments to static image formats & jpeg) (tiff are acceptable. Petrificationinvolves the conversion of native filesinto an image format that does not require use of the native applications. This isuseful in the redaction of privileged or sensitive information, since redaction tools for images are traditionally more mature, and easier to apply on uniform image types. Efforts to redact similarly petrifiedPDF fileshave resultedin the removal of redacted layers and exposure of redacted information, such as social securitynumbers and other private information. Traditionally,electronic discovery vendors had been contracted to convert native filesinto TIFF images (for example 10 images for a 10-page Microsoft Word document) with a loadfile for use inimage-based discovery review database applications. Increasingly, database review applications have embedded native fileviewers with TIFF-capabilities. With both native and image file capabilities,it could eitherincrease or decrease the total necessary storage, since there may be multiple formats and filesassociated with each individual native file. Deployment, storage, and best practices are becoming especially criticaland necessary to maintain cost-effective strategies. Structured data are most often produced in delimited text format. When the number of tables subject to discovery islarge or relationships between the tablesare of essence,the data areproduced in nativedatabase format or as a databasebackup file. American Law RESTATEMENT Institute, (THIRD) OF THE LAW: THE LAW GOVERNING LAWYERS § 118(2) (2000). The comment to the section clarifiesthat "evidence is usuallydefined as documentary or other physical material (including material stored in electronically retrievable form) that a reasonable lawyer would proceeding." understand may be relevantto an official Id.at cmt. a (emphasis added). (" Trevino, 969 S.W.2d at 957 (Baker, J.,concurring) ("While a litigantisunder no duty to keep or retain every document in itspossession . .. itisunder a duty to preserve what itknows, or reasonably should know is relevant in theaction,is reasonably calculated to leadto the discovery of admissible evidence, is reasonably likelyto be requested during discovery, [or]isthe subject of a pending discovery sanction.") (quoting Wm. T. Thompson Co. v.General Nutrition Corp., 593 F. Supp. 1443, 1445 (C.D. Cal. 1984)). Although courts vary in how they describe the temporal aspect of a duty to preserve, the common themes are actualnotice and foreseeability.No duty topreserve evidence arisesunless the partypossessing the evidence has notice of itsrelevance. Akiona v.United States,938 F.2d 158, 161 (9th Cir. 1991); Turner v.Hudson Transit Lines, Inc., 142 F.R.D. 68, 72-73 (S.D.N.Y. 1991). The complaint may alertthe party that certaininformation isrelevant and likely to be sought in discovery.A party is certainlyon notice once ithas received a discovery request.Id.at 73. But notice need not come in the form of a complaint. The duty to preserve could ariseprior to the time a plaintiff filesitscomplaint ifa party ison notice of pending litigation.Turner, 142 F.R.D. at73; see also Lewy v.Remington Arms Co., 836 F.2d 1104 (8th Cir.1988) (holding the duty to preserve arises where the information islikely to be relevant to foreseeablelitigation). FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018 Indeed, a party should not be able to subvert the discovery process and the fair administration of justice simply by destroying evidence before a claim isactually filed. A number of courtsrecognize the need for a dutyto preserve evidence before a claim isactually filed.See, e.g.,Blinzler v. Marriott Int'lInc., 81 F.3d 1148, 1158-59 (1st Cir. 1996) (holding duty to preserve arose before litigationwhere defendant hotel destroyed telephone log thatwould have pinpointed operator's emergency callwhen defendant knew that guest'sspouse had diedand that guest had repeatedly attempted to discover when emergency callwas placed); Dillon v.Nissan Motor Co., 986 F.2d 263, 267 (8th Cir.1993) (imposing sanctions where plaintiff destroyed vehicle relevant to litigation in products suit); liability Welsh v. United States, 844 F.2d 1239, 1241-42, 1246-48 (6th Cir.1988) (allowing adverse inference) National Tank Co. v. Brotherton, 851 S.W.2d 193 (Tex. 1993), as a reference for an objective test to litigation" determine when litigationmay reasonably be anticipated. National Tank defines "anticipation of in the context of whether a party should be allowed to assert an investigativeprivilege. Instead of using an actual knowledge standard, National Tank recognizes that "common sense dictatesthat a partymay reasonably anticipate sue." suitbeing filed. . . before the plaintiffmanifests an intentto Id.at 204. Consequently, the courtheld that trial courts must consider the of totality thecircumstances and decide whether a reasonable person in theparty's position would have (or actually) anticipated litigationin order to determine whether the party reasonably anticipated litigation. Id.at 207. JusticeBaker articulatedthisin hisconcurrence in Trevino v.Ortega, statingthat: [A] party should be found on notice of potential litigation when, afterviewing the totalityof the circumstances, the party either actually anticipated litigationor a reasonable person in the party's position would have anticipated litigation.While in certaincircumstances a party may not reasonably foresee litigationuntilthe party is actually notified of theopposing party'sintent to file suit,theremay be times when certainindependent factswill put a party on notice of thepotential for Whether litigation. a party actuallydid or reasonably should have anticipated litigation issimply a factissue forthe trial court to decide by viewing the of totality thecircumstances. Trevino v.Ortego, 969 S.W.2d 950, 956 (Tex. 1998) (Baker, J. concurring). Litigant's Preservation Obligations hold" Once a party reasonably anticipateslitigation,itmust implement a "litigation to suspend itsroutine document retention/destruction and thereby ensure thatrelevant documents are preserved. Once the party implements the litigationhold, counsel must then oversee compliance, monitoring the party's efforts to retain and produce the relevant documents. Doing so ensures that all relevant sources of information are discovered, that relevant information is retained on an basis, and that relevant non- ongoing privileged information is produced to theopposing party. Form In contrast to conventional discovery, in which paper can only be produced as paper, electronicdiscovery presents various options. Information can be produced not only in paper or electronic form, but in different electronic formats. The amendments to Federal Rules 16(b) and 26(f)(3) and to Form 35 directthe parties to consider, and the court to include in the scheduling order, provisions for discovery of electronically stored information. "documents" The new amendments to Rule 34 account for theambiguity and limitationsof theword by specifically information." adding "electronicallystored This distinctionmeans that lawyers should frame discovery requests to specify whether they seek discovery of documents, electronicallystored information, or both. See, e.g.,Crown Life Ins.Co. v. Craig, 995 F.2d 1376 (7th Cir.1993) (upholding sanctions againsta party thatfailed "document" to produce electronic data on the grounds that information in thedatabase was not in form, and holding "document" that includes computer data). FILED: NEW YORK COUNTY CLERK 04/20/2018 03:58 PM INDEX NO. 651929/2018 NYSCEF DOC. NO. 51 RECEIVED NYSCEF: 04/20/2018 Furthermore, the amendments to Rule 34(b) authorize the requesting party to specify the form in which electronicallystored information should be produced39 and set up a framework for resolvingdisputes over the form of producing such information. Texas Rule of Civil Procedure 196.4 already addresses thisissue. Itprovides thatparties must specifically request electronicdata where itisdesired and must designate the form inwhich itis tobe produced. Ifthe interrogating party does not request that electronicallystored information be produced in a specific form, and in the absence of party agreement or court order as to form, the producing party has two options:(1) to produce information in a form in which itisordinarily maintained, or (2)to produce information in a formor forms that are usable.14 As the Committee Note to the Rule points these choices are analogous to the reasonably out, choices presented when producing paper documents: the form in which they are keptin theusual course of business or organized and labeled to correspond to thecategories in therequest. See, e.g.,Sattarv. Motorola, Inc.,138 F.3d 1164 (7th Cir. 1997) (ordering defendant to equip plaintiffwith the means to read itse-mail filesor pay half the costs ofproduction when itproduced tapes on four-inch tapes that plaintiffwas unableto read). Two other clarificationsin the new rules are useful: One, absent court order or party agreement, the responding party need only produce the information in one form. Also, the obligation to produce for testingand sampling applies to electronically stored information and documents, as well as tangible things and land or other property.1516 '5'6 property Critical Case law reference is provided between Oracle vs Google.17 of The September 27, 2016 Order by District Judge William Alsup, Northern of California, District Inc. v Google Inc., No. C 10- in Oracle America 03561 WHA (ND Ca., Sept. 27, 2016) is an e- discovery standard. The case law teaches us and is clearlyarticulatedin theopinion by Judge Alsup again shows theimportance of qualityelectronicdocument review.Oracle America Inc.v Google .Inc No. Inc., ,NoC 10-03561 .WHA WHA (ND Ca.,Sept. 27,2016). This case law shows thatyou arerequired to produce relevantevidence.You are notrequired tohighlight the hotdocuments you produced. Itis up to the receiving party to dotheirown due diligence. Cost Bearing The finalarea thatcomplicates production of electronicallystored information isthe issue of cost shifting. Under the discovery rules, it ispresumed that the responding party must bear the expense of complying with discovery requests. Oppenheimer Fund, Inc. v.Sanders, 437 U.S. 340, 358 (1978).Discovery rules, such as Federal Rules of CivilProcedure 34 and 26 and Texas Rule of Civil Procedure 192.7(b), limitthe universe of materialthat the producing party must generate to thingsthat arein itspossession, custody, or control in the ordinary course of business. Because producing parties cannot be compelled to bear the cost of producing material outside their 14 These factsare criticalas both were provided and both prongs were established. clearly 15See also Playboy Enters., Inc.v. Welles, 60 F. Supp. 1050, 1052-53 (S.D. Cal. 1999) (ordering Welles to make her computer hard drive availablefor inspection,as Rule 34 contemplates access to datacompilations). 16 Cf.TEX. R. CIV. P. 196.6. 17 This case is further explained in de