There are battles that do not make sense. This is one of those cases.
In a civil dispute over fraudulent investments, the Plaintiff brought a motion to compel the Defendant to “Bates Label” electronically stored information in native file format, because the local Discovery Practices Handbook required Bates numbering of ESI. U.S. Holdings, Inc. v. Suntrust Bank, 2011 U.S. Dist. LEXIS 29956, at 13-14 (S.D. Fla. Mar. 23, 2011).
The Defendant countered that to “Bates Label” their prior discovery produced in native file format, they would need to re-produce it as TIFF’s for branding of Bates Labels. U.S. Holdings, Inc. at *13. Moreover, the conversion costs would be between $16,000 to $75,000. Id.
The Plaintiff’s counter argument was $16,000 was not overly expensive given the claims in the lawsuit (notice no mention of $75,000). U.S. Holdings, Inc. at *13.
The Court stated that the local “Discovery Practices Handbook” required ESI to be produced with Bates Labels. U.S. Holdings, Inc. at *13.
However, the Court denied the Plaintiff’s motion to compel, but ordered all future ESI productions to be Bates Labeled (and by default converted to a static image and therefore driving up the costs of discovery). U.S. Holdings, Inc. at *13-14.
The Court explained that the Plaintiff did not counter the Defendant’s argument that Bates Labeling of ESI requires conversion of native files to TIFF or PDF. Id.
The Court specifically held:
It appears that there was no objection to the production of ESI in native format; and, it appears that the vast majority of the ESI produced is not directly relevant to the claims and defenses in the case at bar. Therefore, at this stage of the litigation, and under the circumstances of this case, Defendants are not be required to Bates label the ESI already produced. However, any future production of ESI shall be Bates labeled.
U.S. Holdings, Inc. at *13-14.
Bow Tie Thoughts
Any default local “discovery handbook” requiring ESI to be converted to a static image for “Bates Labeling” needs a date with a recycle bin.
First, Federal Rule of Civil Procedure Rule 1 states the following, in relevant part:
These rules govern the procedure in all civil actions and proceedings in the United States district courts… They should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding. (As amended Dec. 29, 1948, eff. Oct. 20, 1949; Feb. 28, 1966, eff. July 1, 1966; Apr. 22, 1993, eff. Dec. 1, 1993; Apr. 30, 2007, eff. Dec. 1, 2007.)
Any interpretation of a “Discovery Handbook” that can increase the cost of litigation $16,000 to $75,000 clearly violates the first rule of the Federal Rules of Civil Procedure that cases be “administered to secure the just, speedy, and inexpensive determination of every action and proceeding.”
Second, Federal Rule of Civil Procedure Rule 34(b)(2)(E) states, in relevant part:
(i) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;
(ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms; and
(iii) A party need not produce the same electronically stored information in more than one form.
Jannx Med. Sys. v. Methodist Hosps., Inc., 2010 U.S. Dist. LEXIS 122574, at *8 (N.D. Ind. Nov. 17, 2010).
The above interpretation of the “Discovery Handbook” stands directly opposed to Federal Rule of Civil Procedure Rule 34(b)(2)(E).
The issue of “Bates Labeling” electronically stored information is understandable given the decades of legal assistants stamping paper documents. However, that dogmatic practice has come to an end with electronically stored information. Data cannot be forced into a paper model of production that 1) drives up the cost of discovery and 2) violates the Federal Rules of Civil Procedure. Just imagine converting an Excel file with multiple tabs and fields to a static image solely for the sake of branding a number on it.
The issue of “Bates Labeling” is solved with 1) Assigning records control numbers and 2) Producing MD5 or SHA5 hash numbers as production fields with metadata. These digital fingerprints are the 21st Century way to address these issues, not compounding the cost of discovery by converting searchable native files to static images for the sake of branding them with a number.
Parties should discuss at a meet and confer how ESI should be produced. There is nothing that should stop parties from determining that “Bates Labeling” of ESI is producing a hash value, reported to the Court in a joint statement, which can be codified as a court order at a Federal Rule of Civil Procedure Rule 16(b) conference.
The future is now. We should not limit discovery “Bates numbers” to paper productions of the 1950s with the technology available today.