eDiscovery Does Not Mean Esoteric Discovery

News Am. Mktg. In-Store Servs., is a breach of contract case involving multiple eDiscovery disputes.  According to the Plaintiff, the Defendant did the following:

Destroyed relevant email evidence, including an email server;

Failed to produce responsive documents in discovery due to the above failure; and

Failed to run appropriate ESI searches on Defendants’ computers.

News Am. Mktg. In-Store Servs. v. Floorgraphics, Inc., 2012 U.S. Dist. LEXIS 76543, at *3 (D.N.J. May 30, 2012).

The Plaintiffs further argued the Defendants needed to produce additional discovery and sanctions were warranted. Additionally, the Plaintiffs sought a neutral computer forensic expert to conduct an evaluation of Defendants’ computer systems. Id.

e-Discovery Mea Culpa

The Defendants countered that no discovery had been destroyed, but admitted that their discovery production was deficient.  News Am. Mktg. In-Store Servs., at *3-4.

The Defendants explained [conceded] that they searched the wrong computers and applied the wrong search terms. News Am. Mktg. In-Store Servs., at *4.

However, the Defendants stated they attempted to correct every deficiency and would continue to do so. Id.

Regarding the “destroyed” email server, the Defendants stated it was a “pass-through” server that had been reformatted.  Id. The Defendants explained the server would push incoming emails through the server to individual computers. Id. According to the Defendants, there was no ESI on this pass-through server. Id.

As part of their mea culpa, the Defendants proclaimed they would make witnesses available to be re-deposed and pay the reasonable attorneys fees for the depositions. Id. Moreover, any motions to compel were premature, because they were producing hundreds of thousands of documents. News Am. Mktg. In-Store Servs., at *5.

The Court’s Findings

The case should be about the merits not some esoteric electronic discovery issue.

Magistrate Judge Mark Falk

The Court’s conclusions on the dispute were direct and to the point:

One, the request to compel discovery is premature. Defendants admit that they used incorrect ESI search terms and did not search all of the appropriate avenues of electronic information. They have represented to the Court that 230,000 documents are in the process of being produced and that the production is being checked and re-checked by Defendants’ computer experts to ensure its accuracy. Thus, there is no basis for an order compelling the production of documents until, at least, Defendants’ production is complete.

Two, it appears that Defendants failed to meet their Federal Rule of Civil Procedure 26(f) ESI obligations at the outset of the case. See Fed. R. Civ. P. 26(f)(3)(C). The briefing discloses that Defendants’ counsel was not aware of the structure of Defendants’ computer systems until recently. It is inappropriate for Defendants to only now—three years after the case was filed and after discovery has closed—investigate their electronic systems.

Three, the Court is unable to determine whether information was contained on Defendants’ “reformatted,” “pass through” server. The parties’ positions on this are diametrically different and consist of unsupported conclusions laced with hyperbole.

Four, it is unclear whether ESI allegedly destroyed (or “passed through” Defendants’ server) may be recovered and, if so, the cost of doing so. This important issue is not adequately addressed in the papers.

Five, it is unclear whether the burden and expense of conducting the electronic discovery outweighs the benefit of doing so. See Fed. R. Civ. P. 26(b)(2)(C)(iii). The Court cannot discern from the papers whether a deep forensic search is justified.

Six, the appointment of a neutral computer expert is not called for at this time. In effect, it would transfer the ESI obligations of the parties to the Court. Stated another way, the issues are not sufficiently articulated for the Court to appoint an expert to embark on an unlimited search.

Seven, there is no basis for the Court to consider spoilation sanctions (or any sanctions) until, at least, Defendants complete their discovery production and the questions raised above are answered.

News Am. Mktg. In-Store Servs., at *5-7, (emphasis added).

The Court allowed the Plaintiff to take the 30(b)(6) deposition of the Defendants’ eDiscovery PMK that would be binding on the Defendant. The parties were directed to meet and confer on the deponent. Additionally, the PMK needed to be able to address whether any ESI could be recovered and the specific cost to do so. News Am. Mktg. In-Store Servs., at *7.

In the event there were still eDiscovery disputes after the deposition, the Court stated:

[T]he parties may simultaneously submit letters (double spaced, not to exceed ten pages) explaining the relevance and importance of the discovery and the benefits and burdens associated with the discovery—e.g., whether the costs and effort of securing the discovery is proportional to the expected result. Any letter from counsel must be accompanied by an affidavit from the party’s ESI expert which addresses the technical aspects of the dispute. The ESI expert’s affidavit must discuss the projected costs of proceeding with as much specificity as possible. General, conclusory statements—e.g., “it will be prohibitively expensive”—are unacceptable.

News Am. Mktg. In-Store Servs., at *7-8.

The Court’s opinion sent a very strong message on the discovery disputes between the parties: The case should be about the merits not some esoteric electronic discovery issue. News Am. Mktg. In-Store Servs., at *8 (emphasis added).

The Court was blunt in advising the parties it was “wary of the use of broad and ambiguous electronic discovery requests as a litigation tactic or as a ‘fishing expedition.’” Id. Moreover, the Court stated it was “troubling” for this level of discovery dispute to surface after 18 months of discovery.  Id. Additionally, the Court effectively sent an ethical message to the parties to “proceed in good faith, take reasonable positions, and attempt to resolve their dispute in accordance with the Guidelines For Litigation Conduct.”  News Am. Mktg. In-Store Servs., at *7-8.

The opinion concludes with the warning the Court “not hesitate to award substantial fees to the non-prevailing party or any party found to be proceeding in bad faith.”  News Am. Mktg. In-Store Servs., at *8-9.

Bow Tie Thoughts

I was impressed with Judge Mark Falk’s outlining of case issues and his order. Additionally, the Defendants attempts to correct their mistakes were very respectable.

This opinion highlights multiple eDiscovery issues that are taking place all over the United States: 1) The Duty of Competency in eDiscovery; 2) Providing the Court adequate information to make rulings; and 3) Do not forget the merits of the lawsuit with electronic discovery issues.

The Duty of Competency and eDiscovery has been slowly developing issue since December 2006. There are many attorneys who outright admit they do not understand preservation, review methodologies or discovery productions. One friend recently told me his firm just asks for paper productions because of the lack of knowledge in what to request.

In the current case, the Court stated, “It is inappropriate for Defendants to only now—three years after the case was filed and after discovery has closed—investigate their electronic systems.”  News Am. Mktg. In-Store Servs., at *5-6. Moreover, the Court it was “troubling” to have this sort of discovery dispute after 18 months of discovery. News Am. Mktg. In-Store Servs., at *8.

How can attorneys best meet their duty of competency in eDiscovery? While every client is different, it is important to have a discovery plan from the inception of the case. This may include in-depth client interviews with the parties, custodians, and IT staff (to name a few), to learn how the client uses technology. How does their email system work? Do they text or iMessage?  What sorts of computers do they use? Any tablets? Voicemail? Any personal devices used for business?

I believe the Duty of Competency requires attorneys to either understand their client’s technology themselves or at a minimum, hire a consultant to help the attorneys navigate the issues. Without such investigation, it is difficult to meet one’s ethical duty of candor to the court on the facts of the lawsuit and provide competent representation of their clients.

As to the second issue, lawyers cannot simply walk into court and tell a judge, “Your Honor, it’s expensive.”  The first questions from the Court will be “why and how much.” The answer cannot simply be “Because it is.”

Attorneys need to argue ESI is not reasonably accessible because of undue burden or cost (Fed. R. Civ. P. 26(b)(2)(B)) or that the burden and expense of conducting the electronic discovery outweighs the benefit of doing so (Fed. R. Civ. P. 26(b)(2)(C)(iii)), with specific information, most likely from an eDiscovery expert or IT professional.

The unofficial standard for demonstrating undue burden or expense might be from Judge Facciola’s United States ex rel. McBride v. Halliburton Co., 2011 U.S. Dist. LEXIS 6412, 1-2 (D.D.C. Jan. 24, 2011) opinion: “In excruciating, but highly educational and useful, detail.”

Judges want to have enough information that they can make the right decision. While there will be attorneys simply proclaiming searching a hard drive is expensive, the better litigation practice is to have a well documented affidavit outlining the process and cost to search for specific ESI.

Finally, Judge Falk’s statement The case should be about the merits not some esoteric electronic discovery issue,” should go on t-shirts at e-Discovery conferences. It is easy to become enamored with search technology, collection methodologies and every other eDiscovery issue. However, every eDiscovery issue should be framed around the facts of the lawsuit, the causes of action and be relevant to competently move the case forward. The technology exists to enable lawyers to practice law, not to overshadow the merits of the case.


Writ of Mandamus & Search of Personal Hard Drive

A Plaintiff sought a writ of mandamus after a trial court ordered the production of the Plaintiff’s personal computer and email accounts. The Court of Appeals of Texas granted the writ. In re Jordan, 364 S.W.3d 425 (Tex. App. Dallas 2012).

The case involved claims of a sexually hostile work environment and wrongful termination.

The basic factual allegations involved the Plaintiff’s seeing sexually graphic content on a work computer that was offensive to her.  The Plaintiff prepared a memorandum on the incident on her work computer for her supervisor.  In re Jordan, at *1.

The Plaintiff stated at her deposition she had never viewed pornography before the work incident. In re Jordan, at *1.

The Defendant generally requested the production of the Plaintiff’s home computer.  Id. The Trial Court signed an order permitting the Defendant’s “forensic computer examiner” to access the Plaintiff’s personal computer for the following:

1) Determine Plaintiff’s Internet history for content of a pornographic or sexual nature from 2009 to present;

2) Examine relator’s email accounts to see if any emails with pornographic or sexual content were sent or received from 2009 to present; and

3) Attempt to locate the memoranda relator claimed she prepared on her work computer.

In re Jordan, at *2.

Texas law requires a party seeking another party’s personal computer to “make a specific request for [the] information and specify the form of production.” In re Jordan, at *2, citing In re Weekley Homes, L.P., 295 S.W.3d 309 (Tex. 2009).

The Court of Appeals explained the following defects of the Defendant’s discovery requests:

Here, Gajekse’s written requests merely asked for the hard drives of relator’s computers without informing relator of the exact nature of the information sought.n2 Gajekse also failed to demonstrate “the particular characteristics of the electronic storage devices involved, the familiarity of its experts with those characteristics, or a reasonable likelihood that the proposed search methodology would yield the information sought.” In re Weekley Homes, L.P., at 311. In fact, the record before us does not reflect any attempt by Gajekse to explain its search methodology or its expert’s credentials.

In re Jordan, at *2-3.

The Court of Appeals further cited that Texas law “specifically cautioned trial courts to be sensitive to the highly intrusive nature of computer storage search.”  In re Jordan, at *3.

Furthermore, trial courts should consider issuing a protective order when a personal computer is searched, especially in cases where the requesting party employs the person conducting the search. Id.

While the trial court did attempt to limit the scope of the computer search, there was nothing in the record that showed a protective order was considered. In re Jordan, at *4.

The Court of Appeals held the trial court abused its discretion in its order to search the Plaintiff’s personal computer.  In re Jordan, at *4.

Bow Tie Thoughts

The Court of Appeals was right to grant mandamus relief.

It is said the power to tax is the power to destroy. A corollary is the power to conduct an unrestricted search of an opposing party’s personal computer is the power to harass, embarrass and destroy. Despite the fact computers literally surround us, courts are still developing the legal safe guards to prohibit a digital vivisection of individuals in litigation.

With the current case, the Plaintiff is effectively being challenged to prove a negative (that she never saw pornography before the lawsuit) as the justification to search her personal computer and thus discredit her deposition testimony.

While truthfulness is always an issue in a lawsuit, compelled searches of an opposing party’s computer normally require some showing of discovery irregularities such as production gaps or IP/trade secret allegations.

As to the ancillary issue of finding the memo reporting the incident, the more logical place to search is the Plaintiff’s work computer (in theory under the control of the Defendant) or her supervisor’s computer if the memo was emailed to the supervisor.

There are several options if a search needs to be conducted to contradict the Plaintiff’s deposition testimony, including:

1)    Court appointed expert conducts search of Plaintiff’s computer for specifically identified content.  The Plaintiff has the right to review the findings for any privileged information before it is produced to the requesting party

2)    A Court appointed or an expert employed by the Plaintiff uses a device such as the Paraben Porn Detection Stick to scan the computer for pornographic content. The Paraben Porn Detection Stick searches images based on the amount of flesh visible in images and generates a report of suspected pornographic images (there is more to the technology, but that is my understanding). The cost for the device is $99.

Given the amount of Supreme Court case law on the subject of pornography, the Court and parties also have the challenge of defining what to actually search for on the computer at issue.  To meet the requirement that there is a reasonable likelihood that the proposed search methodology would yield the information sought, the search cannot be Justice Stewart’s “I know it when I see it” standard from the concurring opinion in Jacobellis v. Ohio, 378 U.S. 184, 197 (U.S. 1964). Such a meet and confer might address what areas of the computer will be searched, file types and perhaps specifically determining a percentage of visible flesh to meet the legal definition of “pornography.”

Courts should guard against a party searching an opposing party’s computers at will. To be blunt, there are gigabytes of non-responsive and privileged information on computers, such as tax information, banking data and other data completely not relevant to a lawsuit.

When searches must be conducted of an opposing party’s personal computer, there should be protective orders, clear and specific requests for the information sought to deter digital fishing expeditions, a selection process for who is to search the information and an opportunity for the responding party to conduct a privilege review.

(Disclosure: I have many friends at Paraben and will be speaking at their 2012 conference).

Reasonable Particularity in Requesting ESI

In an age discrimination suit, a Plaintiff’s motion to compel discovery was denied by a Magistrate Judge on the grounds the requests were overboard.  The Plaintiff challenged Magistrate’s order.  The District Court found the requests were also overboard. Doubt v. NCR Corp., 2011 U.S. Dist. LEXIS 95518, 11-12 (N.D. Cal. Aug. 22, 2011).

Below are three examples of the discovery requests at issue in the motion:

REQUEST FOR PRODUCTION NO. 128:Each and every document, whether piece of electronically stored information, email, including attachments thereto, memorandum, text message, or piece of correspondence emanating from someone, rather than being part of a manual, that inquired in 2008 about the earnings of, and/or overtime worked by, a Customer Engineer whom NCR was considering to be either put on PIP, scheduled for termination, or terminated.

REQUEST FOR PRODUCTION NO. 133:Each and every document, whether piece of electronically stored information, email, including attachments thereto, memorandum, text message, or piece of correspondence emanating from someone, rather than being part of a manual, that prior to September 15, 2008 reflects NCR employees or consultants discussing, reflecting upon, or speculating as to, any amounts that might have to be paid to Customer Engineer 2s and a group as a result of the Teeter v. NCR class action, ED CV 08-00297-SGL.

REQUEST FOR PRODUCTION NO. 141 []: Each and every document, whether piece of electronically stored information, email, including attachments thereto, memorandum, text message, or piece of correspondence emanating from someone, rather than being part of a manual, that was sent to or from, or circulated among NCR management that reflects NCR management awareness in 2008 of, and/or discussion of, the amount of overtime being worked by Customer Engineers in 2008.

Doubt, at *8-9, 10-11.

A discovery request must both be relevant to a party’s claims or defenses and “reasonably calculated to lead to admissible evidence.”  Doubt, at *11, citing Federal Rule of Civil Procedure Rule 26(b).

Federal Rule of Civil Procedure Rule 34 states that a discovery “must describe with reasonable particularity each item or category of items.” Doubt, at *11, citing Federal Rule of Civil Procedure Rule 34.

The Court explained that the requests were not limited in scope as to sender, recipients or subject matter, even through the requests were limited to 2007 and 2008.  Doubt, at *11.

The Court held the discovery requests were overbroad and failed to describe with “reasonable particularity” the ESI to be produced.  The Court stated the request’s “expansive sweep” would include information that would be not relevant to the lawsuit and be unduly burdensome.  Doubt, at *11.

The Court described the requests would require the Defendant to search all of their administrative records regarding customer engineers from all of the employees about general topics.  Doubt, at *11-12.

The Plaintiff argued the requests were relevant to the pretext element of his age discrimination, however, the Court explained that such evidence would need to relate to managers, not every employee in a company.  Doubt, at *12.  Since the requests were not limited to correspondence between management and limited to specific subject matter, the discovery requests were overbroad.  Id.

Bow Tie Thoughts

Drafting discovery requests is an art.

Drafting discovery requests in the age of email, text message and social media requires an attorney to have the hands of a surgeon to request specifically what is relevant to his client’s claims or defenses with “reasonable particularity.”

A surgeon’s skill is not simply needed to comply with Federal Rule of Civil Procedure Rules 26 and 34, but to avoid actually having to review a nightmare amount of data.

If a party actually produced email and attachments after searching an entire corporate exchange server of only 100 people, there would be potentially an extreme amount of data to review.

Just imagine how much email you get in one hour. Multiple it by 100. Now imagine that amount over two years to get an idea of the volume.

For both a requesting or producing party, technology such as “early case [data] assessment” can be extremely helpful in identifying relevant discovery.  However, ECDA cannot limit ESI for identification without first determining what is being searched with “reasonable particularity.”

In identifying ESI with “reasonable particularity” at a minimum includes the type of ESI (email, Excel, text message), the author of the ESI (Email Sender or who drafted a file), Recipients of messages, date ranges and keywords designed to identify ESI relevant to a party’s claims or defenses.

There can be many other factors for attorneys and e-Discovery consultants to consider, but thinking in these terms would be a good starting point in drafting discovery requests by first considering how data would be searched for production.

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Arguing $2,630 is Undue Burden to Search ESI

A Defendant refused to produce ESI claiming the estimated $2,630.00 to search the data was unduly burdensome under Federal Rule of Civil Procedure Rules 26(b)(2)(C)(iii) and 26(b)(2)(B).  Hudson v. AIH Receivable Mgmt. Servs., 2011 U.S. Dist. LEXIS 39993 (D. Kan. Apr. 13, 2011).

The Defendant was a company of 13 people that represented it was not doing well financially. Hudson, at *2.

The Defendant’s purported undue burden was based on an estimated 24 hours for a technician at $95 an hour to review the ESI, plus $350 to purchase software to read the archived data. Hudson, at *2.

Rule Summary

A Court will limit discovery pursuant to Federal Rule of Civil Procedure Rule 26(b)(2)(C)(iii) if:

[T]he expense of the proposed production outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.

Hudson, at *2.

Additionally, a court may limited discovery of ESI that is “not reasonably accessible because of undue burden of cost.”  Hudson, at *2, citing Federal Rule of Civil Procedure Rule 26(b)(2)(B).

A Court may order cost-shifting for producing discovery under the following factors:

(1) The specificity of the discovery request,

(2) The quantity of information available from other and more easily accessed sources,

(3) The failure to produce relevant information that seems likely to have existed,

(4) The likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources,

(5) Predictions as to the importance and usefulness of the further information,

(6) The importance of issues at stake in the litigation and

(7) The parties’ resources.

Hudson, at *3-4, citing Fed.R.Civ.P. 26(b)(2), advisory committee’s notes (2006); see also Semsroth v. City of Wichita, 239 F.R.D. 630 (D. Kan. 2006).

The Court’s Analysis 

The Court quickly dismissed the idea of cost-shifting, citing that this element of the litigation was “not disproportionate to the importance of much of the discovery in resolving the issues.”  Hudson, at *4.

The Court reviewed each discovery request to determine whether they were unduly burdensome or costly. Hudson, at *4.

The ESI at issue centered on email, with the parties having reached an agreement on “documents” and the Plaintiff withdrawing their request for Internet search history.  Hudson, at *4-5.

The email was stored in two formats: one format which could be viewed in an available email application and the other a data storage format requiring special software.  Hudson, at *5.

The Court gave the parties two options:

Option 1:

1)    Defendant could produce unedited, unreviewed, and unredacted data files of all data in its possession, together with the name of the software needed to read the storage data.

2)    Plaintiff could then purchase the software and conduct her own searches.

Option 2:

Due to concerns of over producing unresponsive or privileged information, the Defendants would bear the cost of searching the data and purchasing any software.

Hudson, at *5.

The Court further ordered the parties to meet and confer on search terms so the email searched was limited to specific topics. Hudson, at *6.

The Court reviewed each discovery request.  One request called for a list of ESI that “mentioned” the Plaintiff in any “diary, notes and calendar-type” files.  Hudson, at *7.

The Court held the Defendants did not adequately support their objections that the ESI was overly broad or unduly burdensome and overruled their objection.  Hudson, at *7.

Another objection against a request for ESI that “pertain[ed] to or reflect[ed] any statements of any person or witness pertaining to any claim or allegation made by the plaintiff in this lawsuit,” was unduly burdensome and overly broad was also overruled, because the objection were not sufficiently supported. Hudson, at *8.

An objection to a request that purportedly sought information protected by the attorney-client privileged was found to have the privilege waived and the objection overruled, because the Defendants did not produce a privilege log.  Hudson, at *8.

The Court did limit another request for email by date range, narrowed to email that were either sent or received by the Plaintiff, identified her by name, and other specifically named individuals on specific subject matter.  Hudson, at *11.

In summation, while several requests were limited or denied in part, the Defendant still had to search and produce electronically stored information.

Bow Tie Thoughts

As a preliminary matter, most service providers would not think an estimate of $2,600 for e-Discovery services is “unduly burdensome.”

There is reportedly one e-Discovery service provider that does not take any project for under $5,000.  However, this “nothing under $5,000” view is one many service providers think is very shortsighted and jeopardizes relationships with clients.

The tone of the opinion gives the impression the Defendant was attempting to conduct their own e-Discovery work.   These situations can result in using a non-e-Discovery tool for unintended purposes, when software designed for data reduction and identification could allow the party to meet their discovery production obligations.

For example, the “early case assessment” (ECA) products on the market represent they effectively allow a party to identify responsive, non-responsive or privileged ESI for production to an opposing party (Note, always ask about the defensibility of any software you consider using).

While a party might argue such an engagement with a service provider to use an ECA product is “expensive,” so is motion practice that still results with a court order to review, identify and produce electronically stored information.

It is arguably more cost effective to cut out the middle man (in such a dispute, the Court, legal research and drafting motions) and leverage the skills of a service provider with products like Nuix, OcraTech, Access Data or Lexis to identify ESI for production.  Moreover, the reporting features of these products enable a lawyer to generate the information needed for creating a privilege log for ESI that is confidential.

Motion practice is unavoidable if an opposing party is completely unreasonable. However, some disputes can be avoided, saving both time and money, if e-Discovery technology is leveraged to identify, reduce and produce responsive electronically stored information.

Disclosure: I have friends and professional relations with all of the companies named above.  

A Standard for Undue Burden: Excruciating, But Highly Educational and Useful, Detail

Discovery Balancing Acts in a War Zone

United States ex rel. McBride v. Halliburton Co., is a qui tam action over alleged fraudulent billing for services provided to the US military in Iraq.  The case involved inflated headcounts in Morale, Welfare and Recreation (“MWR”) facilities and fraudulent billing for those costs to the United States government.  United States ex rel. McBride v. Halliburton Co., 2011 U.S. Dist. LEXIS 6412, 1-2 (D.D.C. Jan. 24, 2011).

Balancing Search Terms and Undue Burden

The discovery disputes were numerous, and in his trademark detailed fashion, Magistrate Judge Facciola addressed each one in turn. 

One dispute centered on the collection and searching of additional custodians who were “cc-ed” on relevant emails was justified or unduly burdensome on the producing party. McBride, at *12-22. 

The Defendants initially searched 20 custodians for responsive electronically stored information.  McBride, at *12.  The Defendants voluntarily searched the data a second time with expanded keywords.  McBride, at *13-14. 

The Plaintiff demanded additional information, which promoted the Defendants to run another expanded search.  McBride, at *14-15.  The Defendants searched 230 custodians, which included all custodians in all litigation involving the Defendants.  McBride, at *15.  The uber-search of did not result any hits for the desired custodian the Plaintiff wanted in their request.  Id.  The Defendant took the position that since the emails were not found in the custodians the parties agreed to search; the Defendants did not need to conduct any more searches.  Id. 

The Plaintiff demanded the Defendants conduct additional searches of anyone who had been “cc-ed” on the already relevant email messages with the relevant reports.  McBride, at *15. 

The Defendants objected, claiming that search would add another 35 custodians.  Moreover, the Defendants estimated the search process would take months.  McBride, at *15-16. 

Judge Facciola stated a phrase that will cast a shadow of what must be demonstrated for an effective undue burden argument: “In excruciating, but highly educational and useful, detail.”

The Defendants’ manager for the e-Discovery group submitted a declaration that explained process of how data is collected from employees, which might include the following sources of ESI:

 (1) The employee’s hard disk drive, which can include the original disk drive, a “ghosted” image of the drive, and self-collected copies of the drive, of which [the Defendants] may possess none, one, or several collections for each identified custodian;

(2) Copies of current or former employees’ electronic data made at different points in time in response to various audits, inquiries, and litigation, which copies may include information no longer on the employees’ hard drive today (or was not on the hard drive at the time of his or her departure); and

(3) The employee’s mailbox or “homeshare” (personal network folder), with the possibility that there could be multiple existent copies of both the mailbox and homeshare if the employee was a custodian in other matters; indeed, there are multiple sources of such data, and it is not usual for more than a dozen to exist.

McBride, at *16-17. 

The Court explained that after the data was found, it was then copied in “a forensically appropriate manner to preserve its metadata and prevent its alteration.” McBride, at *17. 

The collection of data in the US involved data being sent to a service provider from storage; however, things would be a little trickier for the data in Iraq.  McBride, at *17. 

The overseas ESI would need to be shipped back to the United States or harvested over network connections.  Id.  The collection over a network would take days from just one custodian.  The Defendants’ e-Discovery manager estimated that each custodian had 15 to 20 gigabytes of data.  Collecting the data could take two to ten days for each custodian.  McBride, at *17-18. 

The workflow would then include processing the data and de-duplication for review.  McBride, at *18.   The data would then be searched for relevance and privileged.  Id.

Utility vs. Cost of Searches

The Court gave a very succinct summary of discovery cost analysis: 

All discovery, even if otherwise permitted by the Federal Rules of Civil Procedure because it is likely to yield relevant evidence, is subject to the court’s obligation to balance its utility against its cost. Fed. R. Civ. P. 26(b)(2)(C). More specifically, the court is obliged to consider whether (1) the discovery sought is unreasonably cumulative or duplicative, or obtainable from a cheaper and more convenient source; (2) the party seeking the discovery has had ample opportunity to obtain the sought information by earlier discovery; or (3) the burden of the discovery outweighs its utility. Id. The latter requires the court to consider (1) the needs of the case; (2) the amount in controversy; (3) the parties’ resources; (4) the importance of the issues at stake in the action; and (5) the importance of the discovery in resolving the issues. Fed. R. Civ. P. 26(b)(2)(C)(iii).

McBride, at *18-19.   

The Court recognized a significant factor in favor of production: “Claims of fraud in providing services to military personnel raise important, vital issues of governmental supervision and public trust.” McBride, at *19.

However, the parties had spent $650,000 in discovery.  The “king’s ransom” in Judge Facciola’s words did not include attorneys’ fees. McBride, at *19.

The discovery already produced included two million paper documents, thousands of spreadsheets and half a million emails.  Id.

The Court denied the Plaintiff’s motion, because the Plaintiff had not demonstrated that the email messages not already produced were “critical to her proof.” McBride, at *19-20.  As such, the cost of the collection and search outweighed its utility. McBride, at *20.  In the words of the Court, “there is no showing whatsoever from what has been produced that those emails not produced will make the existence of some crucial fact more likely than not.”  Id.

The Federal Rules of Civil Procedure vs. Common Law Spoliation

The Plaintiff argued that the Defendants would violate a preservation order if they could not produce email messages from a specific custodian and should be sanctioned accordingly.  McBride, at *21.    The Court began its analysis with the following: 

It is important to keep separate, and not conflate, two distinct concepts: whether an additional search for certain information should be conducted, and whether or not the inability to find certain information should be sanctioned. The first is a question of interpreting the Federal Rules of Civil Procedure, while the second is a matter of the application of the common law principle of spoliation.

McBride, at *21.    

The Plaintiff’s sanction argument effectively would have a producing lose their right to argue against additional searches under Federal Rule of Civil Procedure Rule 26(b)(2)(C)(iii) if the producing party could not produce data they were asserted to preserve.  McBride, at *21-22.    

As the Court stated:

If that were true…then even an entirely innocent loss of information would deprive the party who occasioned the loss of reliance upon the balancing of the factors in Rule 26(b)(2)(C)(iii) to argue against an additional search. There is nothing in the Federal Rules that could possibly justify such an extraordinary sanction, and thereby rob Rule 26(b)(2)(C)(iii) of its intended universal application.

McBride, at *22.    

Bow Tie Thoughts

Proving undue burden requires specific documentation of the process used to collect data; where the data is location; time involved in collecting the ESI; and estimated cost.  While judges across the country will not be applying an “excruciating detail” test, parties need to demonstrate undue burden with evidence.

A Civil Procedure Car Crash

A short Civil Procedure Overview: 1) A protective order must correspond to a discovery request; and 2) A motion to compel needs to have an underlying request. 

In an auto-recall case, the Plaintiff had produced 1.79 million pages of documents in discovery, plus an additional 84,000 pages of documents from the Japanese non-party parent company.  Nissan N. Am. v. Johnson Elec. N. Am., 2011 U.S. Dist. LEXIS 16022 ( E.D. Mich. Feb. 17, 2011).

For the tone of the opinion, discovery sounded as smooth as a student driver learning to drive a manual transmission up a hill.  On ice.

As we go into first gear, the Plaintiff was initially ordered to supplement its discovery responses to 1) identify the sources of ESI it did not search because of undue burden; 2) why the ESI was not reasonably accessible due to undue burden and cost; and 3) an estimated of costs and associated effort in retrieving the electronically stored information.   Nissan N. Am., at *2. 

Shifting to second gear, the Defendant claimed the Plaintiff’s supplemental discovery contained misstatements that undercut the sufficiency of the Plaintiff’s preservation and production of ESI.  Nissan N. Am., at *2-3.

Seeking a tune up to the Plaintiff’s production, the Defendant tried to informally communicate with the Plaintiff to cure the alleged discovery defects.  The Defendant asked (not in a discovery request) to produce the following to comply with the earlier Court order:

(a) A data map to show what data is stored on each of Plaintiff’s systems, who uses the systems, the retention of the data stored and where and how the data is backed up or archived;

(b) Document retention policies;

(c) Tracking records and/or requests for restores; and

(d) Backup policies.

Nissan N. Am., at *2-3.

In what conceptually could be making a right hand turn from the far left lane, the Plaintiff filed a Motion for Protective Order, claiming the Defendant’s informal request 1) sought discovery from “not readily accessible” systems and 2) demanded “broad and duplicative searches” of custodians whose data had already been collected.  Nissan N. Am., at *3. 

Plaintiff’s Motion for Protective would deny the Defendant the discovery of the following:

(1) Discovery of system-wide searches of Plaintiff’s systems and custodians beyond what Plaintiff has already provided;

(2) Plaintiff’s “not readily accessible” sources identified by Plaintiff, including backups;

(3) Plaintiff’s record retention practices or disaster recovery backup policies;

(4) Plaintiff’s tracking records and requests for computer restores to IT and vendors; and

(5) A “data map” to provide information on all of Plaintiff’s systems.

Nissan N. Am., at *3-4. 

The Red Light on Additional Searches

The Defendant argued they did not request the Plaintiff conduct additional searches, but wanted confirmation that custodians were searched involved in the recall or identified in the Rule 26(a)(1) initial disclosures.  Nissan N. Am., at *4. 

The Court held that since the Defendants were not seeking additional searches, but only confirmation, the Plaintiff’s motion for protective was denied on this issue. Nissan N. Am., at *5.  In the words of the Court: 

Since Plaintiff claims to have searched the documents of its key custodians and states that it has already produced all relevant documents for all readily-accessible sources, it should be able to provide this confirmation without significant effort. Presumably if Plaintiff did not search the computer systems of all or some of these forty-one individuals it can provide justification for its decision.

Nissan N. Am., at *5. 

Back-Up on the Back-Up Tape Argument

As for the back-up tapes, the Court agreed they were not reasonably accessible; however that was not the issue.  The Defendant asked for the Plaintiff’s back-up policies, tracking orders and requests for restores.  Nissan N. Am., at *8.

The Court found no basis to issue a protective order of the Plaintiff’s back-up systems when there was no request for the information.  Nissan N. Am., at *9.  Moreover, there was not good cause for a protective order over the Plaintiff’s policies.  Nissan N. Am., at *8-9.

Asking for Directions: Data Map & Rule 26(a)(1)

The Plaintiff’s request for a protective order to not produce a data map was an argument that could not be jump started.  

The Defendant’s request for a data map included identifying what data was located on different systems, who used the systems, data renention, and back-up information. Nissan N. Am., at *9.

The Court denied the protective order on Rule 26(a)(1) grounds.  As the Court explained

In order to comply with this mandatory disclosure counsel must become knowledgeable about their client’s computer systems and ESI at the onset of litigation. Hence, Plaintiff’s counsel should have access to information from which it could readily discern what data is stored on each of Plaintiff’s systems, who uses the systems, the retention of the data stored and where and how the data is backed up or archived. Plaintiff has not shown that it is in need of an order protecting it from annoyance, embarrassment, oppression, or undue burden or expense related to Defendant’s request for this information. The Court will therefore deny Plaintiff’s motion as to this request.

Nissan N. Am., at *9-10.

Spinning Out on at the Finish Line

Both parties essentially lost the race over the motion for protective order and the production of discovery.

First, the Court found the Defendant’s accusations of spoliation and unethical discovery practices to be unsubstantiated.  Nissan N. Am., at *10. 

Secondly, the Court found the informal discovery requests were separate from the prior Court order.  As such, the Plaintiff did not need to produce any of the informally requested information, which was only before the Court on a Protective Order Motion.  Id.

Bow Tie Thoughts

Effective pleading and motion practice are extremely important to e-Discovery.  A party must be sure to specifically request the desired information before bringing a motion to compel for that information.  Additionally, a party opposing production and seeking a protective order must actually oppose the specific request, not go on a related, but not requested, tangent.

Production of Litigation Hold Letters & Imaging Hard Drives

In an action initiated by an insurance company, the Defendant sought various discovery from the Plaintiff.  Am. Gen. Life Ins. Co. v. Billard, 2010 U.S. Dist. LEXIS 138570 (N.D. Iowa Dec. 29, 2010).  Two issues pertained to the production of litigation hold letters and forensically imaging hard drives.

Litigation Hold Letters

The Defendant sought information regarding the Plaintiff’s obligation to enact a litigation hold.  Am. Gen. Life Ins. Co., at *17.

The Plaintiff objected at first on relevance and privilege, however, admitted someone might have deleted “an email” (which implies a single message).   Am. Gen. Life Ins. Co., at *18.

The Plaintiff’s attorney made several representations at the hearing:

1)    The Plaintiff would produce any non-privileged and responsive documents that exist.

2)    The attorney received and had not reviewed the Plaintiff’s document retention protocols prior to the hearing.

3)    The Plaintiff had such a “comprehensive method” for preserving ESI, a litigation hold letter might not have been needed. 

Am. Gen. Life Ins. Co., at *18.

The Court did not address the representation that a litigation hold letter was not needed because of a “comprehensive” preservation method.  However, the Court did order the Plaintiff to produce any litigation hold letters or state no preservation notices were sent to the Plaintiff’s employees.  Am. Gen. Life Ins. Co., at *18.

Forensic Imaging a Hard Drive

The Defendant sought the forensic imaging of all hard drives/storage devices used by two of Plaintiff’s employees.  Am. Gen. Life Ins. Co., at *19.

The Plaintiff (rightly) objected on privilege and relevancy grounds.  Am. Gen. Life Ins. Co., at *19.  The Plaintiffs also argued the hard drives contained “commercially sensitive information.” Am. Gen. Life Ins. Co., at *19. 

The Defendant did not cite any authority for the forensic imagining of the Plaintiffs’ hard drives.  As such, the Court held that without some proof that the “mirror imaging” would produce additional responsive ESI, the motion to compel was denied.  Am. Gen. Life Ins. Co., at *19. 

Bow Tie Thoughts

Letter writing might be a dying art, but sending a litigation hold is not.

It is a novel argument that a “comprehensive” data preservation system would eliminate the need to communicate the duty to preserve to a client.  While it is certainly plausible a corporate party could capture and archive all employee’s computer generated content, it is a hard sell such technology eliminates the obligation to inform a party to preserve evidence.  To be blunt, a party needs to be told of their duty to preserve relevant ESI to avoid “an email might have been deleted” situation. 

As for the forensic imaging of hard drives, there is no rule all preservation of data must be a full forensic image.  Data preservation must be done in a forensically defensible sound manner, which goes to the process, not a bit for bit image of a hard drive.  Technology continues to improve for targeted collections, in which selected folders and files are copied in a forensically defensible  process. For example, see products from PinPoint Labs, Paraben or Guidance, plus others, who sell such software and hardware.  Such collections reduce time to review ESI and avoid the imaging of non-responsive or otherwise protected information.