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Class Action Attorney Requests $24 Million in Fees but Deleted Electronic Data…What is a Court to Do?

Posted on August 19th, 2013

In an order handed down August 7, 2013, a California Court of Appeals considered a class action attorney fee request of $24 million. The case is Ellis v. Toshiba, Nos. B220286, B227078 (Cal. Ct. App. 2013), and it has a very long history. The basic issue on appeal is whether attorney Lori J. Sklar is entitled to attorney fees stemming from the underlying case.

Attorney Sklar first noticed attorney fees of $24 million as a percentage of the settlement, but she later voluntarily reduced the amount requested to around $12 million by using a lodestar calculation. Defendant Toshiba sought Sklar’s electronic data of her billing records in native format. Sklar delivered PDF files of her time records, but PDF files do not contain metadata. (Click here to read our newsletter explaining more about native files and metadata!)

Additionally, Sklar testified at a deposition that she deleted the native files and used a software “Wipe and Delete” program to eliminate metadata. It was therefore not possible to tell when the files were originally made or edited. Toshiba also sought a computer forensics examination of her laptop, which Sklar objected to and defied two court orders that she produce the laptop for forensic inspection.

This dispute went on for several years in the courts. The trial court eventually denied Sklar’s attorney fee request in its entirety. Calling her produced time records “grossly exaggerated,” the trial court cited case law that allows it to completely deny attorney fees if the request is overinflated.  The court entered fees for the time sheets of Sklar’s staff, but also entered sanctions for her spoliation of electronic evidence that offset this award. “The record in this case is one of obfuscation and delay by [Sklar].”

This is but a short summary of the long history and details of this case. The moral of the story? Failure to comply with ESI obligations by either side of the litigation can have significant consequences.

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