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.