No Shirt, No Complaint, No Subpoena

A self-identified “Plaintiff” filed subpoenas in the Northern District of California directed to Google, MSN Hotnail, CableVision, AOL, Charter Communications, Verizon, Performanceix, and Yahoo!. Mission Trading Co. v. Doe, 2011 U.S. Dist. LEXIS 52681, 1-2 (N.D. Cal. May 16, 2011).

The subpoena to Yahoo! sought the identity, IP addresses and access logs associated with four email addresses.  The subpoena further requested, “copies of all electronic messages sent and received from said email addresses and any other email addresses associated with the IP addresses used to access these accounts.”  Mission Trading Co. v. Doe, at *1-2.

One small procedural issue: No complaint had been filed.  Mission Trading Co. v. Doe, at *1.

Despite this procedural omission, the subpoena was given a case number. Id.

Yahoo alerted one of the email address owners of the pending subpoena.  The new Opposing Party filed an Objection, which the Court treated as a motion to quash.  Mission Trading Co. v. Doe, at *2.

The Opposing Party argued the following:

1) No complaint is on file and no defendants have been named, so the subpoena is vague, ambiguous, overbroad, burdensome, oppressive and harassing;

2) The Opposing Party was not served with a copy of the subpoena and therefore cannot determine the purpose or scope of the subpoena;

3) The subpoena purports to impose requirements beyond those permitted by the Federal Rules of Civil Procedure; and 

4) The subpoena violates the Opposing Party’ right to privacy, could cause production of privileged documents or proprietary and confidential business records or trade secrets, and is overbroad to the extent it contains no time limits or subject matter limitations.

Mission Trading Co. v. Doe, at *2-3.

The Requesting Party admitted there was no pending litigation, but argued its subpoena equated to an “early discovery request” to identify a defendant.  Mission Trading Co. v. Doe, at *3-4.

There was no case authority for the Requesting Party’s position.  Moreover, cases that allow for early discovery actually have a complaint on file.  Mission Trading Co. v. Doe, at *4.

The Court granted the Opposing Party’s motion to quash, reasoning that without a complaint, it could not determine if it had jurisdiction or even if the complaint would survive a motion to dismiss. Mission Trading Co. v. Doe, at *4.

Bow Tie Thoughts

There are very valid times for early discovery to identity a Doe Defendant with ISP or other data, however, filing a complaint is a condition precedent before any subpoenas can be issued.

Once subpoenas are issued, a propounding party would need to contend with the Stored Communications Act, which is a barrier to production to the contents of email messages and other stored ESI.  While the information to identify a party is one thing to produce, the contents of messages are an entirely separate issue that are better suited for a request for production on a party.

CEIC 2011

Guidance’s 2011 CEIC showcased another great conference complete with excellent eDiscovery and computer forensic speakers, a dedicated staff of organizers and a wonderful venue by Universal Studios in Orlando.

Endeavour entering the clouds shortly after liftoff

I have a confession: I missed the keynote for the first time in four years. My reasons were just; I went to see the launch of the Space Shuttle Endeavour.

I presented on Privacy and conducted a mock deposition of a forensic collection expert. Both sessions well attended. My session attendees were a mix of lawyers, law enforcement, forensic experts and eDiscovery professionals.

Defending the mock deponent during the questioning by the Defense.

I also tried something new and presented off my iPad. For those interested in how, I used a VGA adaptor that connects to the iPad, prepared my presentations in PowerPoint and then uploaded them with Keynote.

The exhibit hall was very well attended. Many of the exhibitors said they were pleased with their booth traffic and considered the event a success.

I look forward to CEIC 2012 and congratulate Guidance on another great show.

The $1.9 Million Price Tag on Undue Burden

The Plaintiffs in Thermal Design, Inc. v. Guardian Bldg. Prods., brought a motion to compel the Defendants “Defendants to search all archived e-mail accounts and shared network drives, without any restriction as to custodian or individual.”  Thermal Design, Inc. v. Guardian Bldg. Prods., 2011 U.S. Dist. LEXIS 50108 (E.D. Wis. Apr. 20, 2011).

The cost estimate:  $1.9 million, plus another 13 weeks of document review with an estimated cost of $600,000. Thermal Design, Inc., at *3.

The Defendants had already produced 91 Gigabytes of data (approximately 1.46 million pages) at a cost of $600,000 and seven months of work.  Thermal Design, Inc., at *2.

Federal Rule of Civil Rule 26(b)(2)(B) provides that a party “need not provide discovery of electronically discovered information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” Thermal Design, Inc., at *3.

The Court looked at the $1.9 million price tag and held the additional searches of all “all archived e-mail accounts and shared network drives, without any restriction as to custodian or individual” to be unduly burdensome.  Thermal Design, Inc., at *3.

The Court also cited Federal Rule of Civil Procedure Rule 26(b)(2)(C), which allows for the production of ESI that is not reasonably accessible for good cause.  Thermal Design, Inc., at *4.  The production of discovery can be limited under Federal Rule of Civil Procedure Rule 26(b)(2)(C)(i-iii), which states a court must limit discovery “if it is unreasonably cumulative or duplicative, if the party seeking discovery has had ample opportunity to obtain the information by discovery in the action, or if the burden or expense of the proposed discovery outweighs its likely benefit.” Id.

The Plaintiffs argued more ESI needed to be produced because of the parties’ agreement on electronic discovery.  Thermal Design, Inc., at *4.  The Plaintiff also dismissed the Defendants’ undue burden arguments, claiming the Defendants had “considerable resources.” Id.

The Court bluntly rejected the “big checkbook” argument, stating:

This is simply not enough to establish good cause under the Federal Rules. Even if the information sought is relevant or reasonably calculated to lead to the discovery of admissible evidence, Thermal Design doesn’t explain why the extensive amount of information it seeks is of such importance that it justifies imposing an extreme burden on the Guardian Defendants… Courts should not countenance fishing expeditions simply because the party resisting discovery can afford to comply.

Thermal Design, Inc., at *4-5.

Bow Tie Thoughts

Civil litigation will always have cases of overreaching in discovery.  The idea of searching all archived data, without any regard to custodians or date ranges, from a large corporation would seem extremely daunting.  Moreover, who would want to review millions of email messages, PowerPoints and other files?  The cost for such review can turn the merits of the lawsuit into a sideshow as the parties instead fight over discovery.

Additionally, if parties need to show good cause to overcome undue burden arguments, they need a detailed offer of proof to support their request.  In addition to arguing why the ESI is needed, countering the cost estimate is a good practice, especially if there are more cost effective ways to control the discovery costs.

The Meet & Confer Condition Precedent

In the absence of any actual discovery dispute, I cannot see any benefit from my creating an Electronic Discovery Order for the parties from whole cloth, when they know better than I what information they have and what information they need.

United States District Court Judge Catherine Perry

Process Controls Int’l, Inc. v. Emerson Process Mgmt., 2011 U.S. Dist. LEXIS 49876 at *29 (E.D. Mo. May 10, 2011)

In a business dispute involving false advertising, defamation, and tortious interference claims, the Plaintiff brought a motion to enter an Electronic Discovery Order. The Court denied the order, because the parties had not yet held a Rule 26(f) meet and confer on electronically stored information. Process Controls Int’l, Inc. v. Emerson Process Mgmt., 2011 U.S. Dist. LEXIS 49876, 27-29 (E.D. Mo. May 10, 2011).

The Plaintiffs argued that the electronically stored information in the case would be “voluminous,” thus an order was “necessary to organize and accommodate that discovery.” Process Controls Int’l, Inc. at *28.

The Defendants countered no order was necessarily, because the Defendants claimed that there were no discovery disputes and they were willing produce all of their electronically stored information. Moreover, they argued the proposed order was “unduly burdensome.” Process Controls Int’l, Inc. at *28.

The Court denied the order with the ominous phrase “at this time.” Process Controls Int’l, Inc. at *28.

The Court reasoned from the different moving papers the parties had not met and conferred in good faith, pursuant to Federal Rule of Civil Procedure Rule 26(f). In the words of the Court, Rule 26(f) “anticipates and encourages parties’ good faith attempts to come to their own agreements for the discovery of electronic data.” Id.

Instead of issuing an electronic discovery order, the Court ordered the parties to meet and confer in person and “make all reasonable attempts to resolve this issue on their own.” Process Controls Int’l, Inc. at *29.

The Court agreed that the discovery would be great, however, that was not a reason to enter a discovery order before the parties held a Rule 26(f) meet and confer. Process Controls Int’l, Inc. at *29.

Bow Tie Thoughts

The concept of parties being “frenemies” is alien to most litigators. Attorneys are used to an adversarial process and the idea of cooperating over discovery is difficult for many long time litigators.

With that said, a Rule 26(f) conference is not a beach bond fire with singing songs about metadata production. Attorneys must vindicate their client’s case, set rational collection procedures, propose form of production protocols that expedite the efficient review of discovery, address issues of privilege, and many other litigation concerns.

More importantly, courts want to see parties attempt to resolve their disputes without opinions being issued at every turn. As United States District Court Judge Catherine Perry highlighted in this case, there is little benefit (and probably risk) to a court blindly issuing a discovery order without a dispute.

JurisdictionBook

An Illinois-based start-up founded a social networking site named “Techbook” for teachers.  As one can imagine, Facebook sued for trademark infringement.  Facebook, Inc. v. Teachbook.com, LLC, 2011 U.S. Dist. LEXIS 48590, 6-7 (N.D. Cal. May 2, 2011).

Facebook sued in the Northern District of California, where they are headquartered.  Teachbook.com, LLC, at *3.

The Defendants filed a motion to dismiss, arguing personal jurisdiction was not proper in California.

A plaintiff must show jurisdiction is proper when a defendant challenges personal jurisdiction in a motion to dismiss under Federal Rule of Civil Procedure Rule 12(b)(2). Teachbook.com, LLC, at *3-4.

The test for specific jurisdiction in the Ninth Circuit is defined as follows:

(1) The non-resident defendant must purposefully direct activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protection of its laws;

(2) The claim must be one which arises out of or is related to the defendant’s forum-related activities; and

(3) The exercise of jurisdiction must comport with fair play and substantial justice.

Teachbook.com, LLC, at *5, citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004).

The Court quickly found Facebook made a prima facie showing that the Defendant intentionally selected a similar trademark.  Moreover, the Defendant knew that the harm would be suffered in the Northern District of California.  Teachbook.com, LLC, at *6.

However, the Court marshaled a substantial amount of judicial understatement with its use of “nonetheless” in finding the Plaintiff failed to meet the “effects” test because they failed to show the Defendants’ conduct was “expressly aimed” at the Northern District of California.  Teachbook.com, LLC, at *6.

Quoting precedent, “a foreign act with foreseeable effects in the forum state always gives rise to specific [personal] jurisdiction.” Id.  As such, the Defendant did not engage in “something more” than having foreseeable effects in California.  Teachbook.com, LLC, at *6-7.

As the Court explained:

Here, Teachbook’s alleged intentional act-adopting an infringing trademark-was expressly aimed at potential users of Teachbook’s website. Teachbook does not register users in California. Thus, even if Teachbook intended to compete with a California company, it intended to compete for users who were not in California. The fact that an essentially passive Internet advertisement may be accessible in the plaintiff’s home state without “something more” is not enough to support personal jurisdiction in a trademark infringement suit brought in the plaintiff’s home state.

Teachbook.com, LLC, at *7.

The Court further explained that none of the Defendant’s actions was purposefully directed at California.  Moreover, the Defendant tried to avoid the California market.  Teachbook.com, LLC, at *10.  Not finding “something more,” the Court found for the Defendant.

Bow Tie Thoughts

Personal jurisdiction has made caselaw for over 150 years.  The age of social media, Tweets or status comments from GPS specific location, will only continue to fuel judicial opinions and law school exams for years to come.

 

Cost-Shifting Discovery and Third-Parties

There are different standards for cost-shifting when the producing party is not a party in the lawsuit.  EEOC v. Kronos Inc., 2011 U.S. Dist. LEXIS 47350, 3-4 (W.D. Pa. May 3, 2011).

EEOC v. Kronos Inc., involved the EEOC seeking discovery from a nonparty with a production estimate of $75,000.  Kronos Inc., at *6.

The production of electronically stored information from third-parties is controlled by Federal Rule of Civil Procedure Rule 45(d)(1)(D).  As prior case authority on the production from third-parties states:

Although party witnesses must generally bear the burden of discovery costs, the rationale for the general rule is inapplicable where the discovery demands are made on nonparties. Nonparty witnesses are powerless to control the scope of litigation and discovery, and should not be forced to subsidize an unreasonable share of the costs of a litigation to which they are not a party. Although we decline to curtail district courts’ discretion over the discovery process by adopting the formal guidelines favoring nonparty reimbursement advocated by the studios, we nevertheless emphasize that a witness’s nonparty status is an important factor to be considered in determining whether to allocate discovery costs on the demanding or producing party.

EEOC v. Kronos Inc., at *3-4, citing United States v. CBS, 666 F.2d 364, 371-72 (9th Cir. 1982)

The Court ultimately found the requesting party and producing nonparty would split the costs 50%-50%.  Kronos Inc., at *6.

The Court based its decision on the “magnitude” of the discovery ordered for production and cost estimate.  Kronos Inc., at *6. The Court’s logic was that the nonparty should not bear the significant production costs alone.  Id.

In the words of the Court, “[T]he Court finds that a 50/50 cost share is fair and equitable, and would lessen the burden on non-party Kronos.” Kronos Inc., at *6.

Bow Tie Thoughts

There was an old joke in law school: It all boils down to equity.

In this case, the Court recognized the EEOC’s need for the electronically stored information and the nonparty’s financial burden in producing $75,000 worth of discovery

California Subpoenas: Invitation to Comment on ESI

California’s Electronic Discovery Act changed the Rules of Civil Procedure in 2009 to include electronically stored information, in addition to provisions on the forms of production and issues with undue burden.

The California Judicial Council has an invitation to comment on a proposed modification to the subpoena forms to include electronically stored information, so the forms reflect the changes in the Code of Civil Procedure.

To see the proposal and draft subpoena forms, click here. Comments are due by June 20, 2011 and the proposed effective date is January 1, 2012.

California Code of Civil Procedure section 1985.8 governs requests to third-parties.  The proposed Civil Subpoena (Duces Tecum) forms contain the following updated language:

The witness has possession or control of the documents, electronically stored information, or other things listed below, and shall produce them at the time and place specified in the Civil Subpoena for Personal Appearance and Production of Records at Trial or Hearing on page one of this form (specify the exact documents or other things to be produced; if electronically stored information is demanded, the form or forms in which each type of information is to be produced may be specified):

A total of four forms are being updated to include electronically stored information, including the Deposition Subpoena for Production of Business Records; Subpoena for Production of Business Records in Action Pending Outside California; and Deposition Subpoena for Personal Appearance and Production of Records in Action Pending Outside of California.

I think these modifications are a very good proactive change to reflect the Electronic Discovery Act.  More importantly, the proposed changes reflect the real world that business records are most likely going to be electronically stored information. Simply put, the California forms need to reflect reality. However, I would make one addition to the language so the form states the following: “…if electronically stored information is demanded, the form or forms in which each type of information and associated metadata that is to be produced may be specified.”

My hope is by adding metadata to the form it will limit problems with third-party demands that state the form of production, but are silent on metadata. Whether a requesting party wants embedded metadata or specific email fields for their review platform, those issues should be considered long before a witness appears pursuant to a civil subpoena.