The “Practical Ability” Standard for “Control” in Maryland

In Equal Employment Opportunity Comm’n. v. MVM, Inc., 2020 WL 6482193 (D. Md. Nov. 2, 2020), the Court again followed a “practical ability” plus notification standard for determining when ESI is within a party’s possession, custody, or control, and what should be done if it is not.  Maryland State courts appear to be in accord.

While litigants may be required to preserve or produce ESI that is within their “possession, custody, or control,” those words are not defined in the procedural rules.  See The Sedona Conference, “Commentary on Rule 34 and 45 ‘Possession, Custody, or Control,” 17 Sed.Conf.J. 470, 475, 482 (2016).  The Sedona Conference notes that the meanings of “possession” and “custody” are straightforward; however, it describes three different standards that are used to define “control.”  Id. at 479, 482-83.

• First, under the “legal right standard,” a party has “control” over documents and ESI if it has the legal right to obtain them.
• Second, under the “legal right plus notification” standard, if a party does not have the legal right to obtain documents and ESI, but knows where they are, it must notify the requesting party.
• Third, under the “practical ability” standard, a party has “control” over documents and ESI if it has the “practical ability” to obtain the information.

The Sedona Conference argues that the “practical ability” test is inequitable and should be abandoned.  Id. at 476.  In Principle 1, it recommends that the test for “control” be “actual possession or the legal right to obtain” requested documents and ESI.  Id. at 477.  It also recommends a notification requirement in Principle 5.  Id. at 478.

However, in MVM, 2020 WL 6482193 at *1, the Court followed the practical ability test enunciated in Goodman v. Praxair Svcs., Inc., 632 F.Supp.2d 494 (D. Md. 2009).  MVM had a contract to provide security services to the Social Security Administration.  The EEOC filed a class action suit against MVM alleging a violation of Title VII arising, in part, out of an alleged sexual assault.  A key video and access card reader evidence were in the possession and custody of SSA, not MVM.  That ESI was destroyed after MVM’s duty to preserve was triggered.

In response to the EEOC’s motion for sanctions, MVM argued that it did not have legal control of, or practical ability to produce, the SSA data.  The MVM Court held that the applicable standard was disjunctive – the “right, authority, or practical ability to obtain the documents from a non-party….”  [emphasis added]. Further, on the facts presented, the Court held that MVM had the necessary practical ability because SSA had cooperated with MVM’s oral requests and MVM had obtained an excerpt of the video.

MVM demonstrates how choice of the applicable test could impact the outcome of a preservation, production, or spoliation issue.  MVM was a contractor for SSA.  It did not have the “legal right” to demand that SSA provide it with video or card reader evidence that SSA owned.  However, it had the “practical ability” to obtain the evidence as demonstrated by the fact that SSA cooperated with requests from MVM.

Similarly, a wholly owned subsidiary may not have the legal ability to demand ESI from its parent; however, as a practical matter, it may in fact have the ability to obtain it.  The Sedona Conference provides additional examples.  It notes that, under the practical ability standard, a sister company was required to obtain documents from a non-party sister company because they were under common ownership, even though the sister lacked the “legal right” to demand the information.   Sedona Commentary, 17 Sed.Conf.J. at 507.  Additionally, individuals who partly own a non-party company have been directed to provide discovery from the non-party under the practical ability standard, even though the individuals lacked the legal right to obtain the data because they held only a minority interest in the nonparty.  Id. at 510.  Courts have required production from former officers under a practical ability test while another court has refused to do so under the legal right standard.  Id. at 511.  Sedona also points to business text messages on an employee’s BYOD cell phone as leading to a different result under the two tests. Id. The employer may not have a legal right to preserve or obtain data from an employee’s private phone; however, it may have the practical ability to do so.

The MVM Court relied in part on Silvestri v. General Motors Corp., 217 F.3d 583 (4^th Cir. 2001), which recognized a duty to notify the opponent when a litigant does not have possession, custody, or control of, and cannot preserve, responsive information.  Thus, MVM’s holding is that, if a party has the “practical ability” to preserve or produce ESI, that ESI is within its “control.”  If the party does not have that practical ability, but knows where the ESI is, it has a duty to notify the opponent.

At least one Maryland State court has cited Silvestri for that principle.  Zorzit v. Comptroller, 225 Md. App. 158, 180, 123 A.3d 627 (2015), as discussed in M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), 166.  Citing Silvestri, the Zorzit Court wrote: “These cases all stand for the unremarkable proposition that a party with possession or access to discoverable evidence bears the burden of notifying its opponent before allowing the evidence to be destroyed.”  Zorzit, 225 Md. App. at 180, 123 A.3d at 640 (emphasis added).

The term “access” appears to be closer to “practical ability” than “legal right.”  Similarly, in Pleasant v. Pleasant, 97 Md.App. 711, 632 A.2d 202 (1993), a litigant in a family law dispute argued that sanctions were wrongly imposed for failing to timely produce his tax and pension documents.  He asserted that they were not in his possession.  The Court wrote that Maryland’s “possession, custody, or control” Rule is interpreted in tandem with the Federal Rules of Civil Procedure.  In rejecting the “possession” argument, it wrote:

It is clear from such decisions that control is not synonymous with possession, but refers to the “right, authority, or ability to obtain upon demand.” Scott v. Arex, Inc., 124 F.R.D. 39 (D.Conn.1989); see also Haseotes v. Abacab Internat’l Computers, Inc., 120 F.R.D. 12 (D.Mass.1988) (control includes legal right to obtain); Biben v. Card, 119 F.R.D. 421 (W.D.Mo.1987) (whether party retained copy of documents or whether documents are beyond jurisdiction of court are not factors relevant to issue of control). Appellant’s tax and pension records were no doubt in his control and thus properly the subject of a request for production of documents.

Id. at 732, 632 A.2d at 213 (emphasis added).  The “practical ability” aspect of Pleasant is made clearer when one of the precedents it relied on is reviewed.  In Scott, a decision cited in Pleasant, the court directed the litigant to either produce the requested documents or “or to provide plaintiff’s counsel with an affidavit detailing what precisely attempts Miller made to obtain those documents, when he made them, and to whom his demands were addressed.”  Scott, 124 F.R.D. at 41.  That information is important to a practical ability analysis, but not to the legal right standard.

While “access,” the word used in Zorzit, and “ability,” the word used in Pleasant, are not precisely the same as “practical ability,” the term used in MVM and Praxair, they appear to be very similar.  Thus, it would appear that Maryland would follow a practical ability with duty to notify standard.