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The Federal E-Discovery Rules: Top 10 Cases from the Second Year

January 1, 0001

The electronic discovery-related amendments to the Federal Rules of Civil Procedure, which took effect in December 2006, have now seen their second full year of application and interpretation by courts. Over 100 opinions addressed these rules in 2008. Below are ten of the year's most significant cases:

Extent of Production, FRCP 26(b)(2)(B)

10. Petcou v. C.H. Robinson Worldwide, Inc., 1:06-CV-2157-HTW-GGB, 2008 WL 542684 (N.D. Ga. Feb. 25, 2008) (Judge Brill).

Plaintiff in this employment-discrimination suit served discovery requests seeking an eight-year period of email from defendant. Defendant presented evidence that email responsive to plaintiff’s requests was likely no longer located on defendant’s live email servers. Rather, it was located on backup tapes, each of which captured three to five days of email. Defendant presented declarations that the cost of restoring two years of email from backup tapes for a single employee would be approximately $79,300. Defendant estimated that the email of 5,300 employees would need to be restored in order to respond fully to plaintiff’s requests. The court applied FRCP 26(b)(2)(B) and ruled that defendant had “met its burden of showing that deleted e-mails from the period relevant to the lawsuit are not reasonably accessible because of undue burden and cost.” The court ordered that defendant did not have to restore backup tapes, but instead only had to produce responsive email from (1) live email servers and (2) any email defendant retained from certain former employees.

9. AIU Ins. Co. v. TIG Ins. Co., No. 07 Civ. 7052, 2008 WL 5062030 (S.D.N.Y. Nov. 25, 2008) (Judge Pitman).

As part of its motion to compel plaintiff to produce documents, defendant argued that plaintiff had failed to search adequately for electronically stored information because plaintiff limited its search of email to individuals it designated in its interrogatory responses. Plaintiff defended its limited search by arguing that many of the individuals for whom it did not search for responsive email were named in documents created before the ubiquity of email. The court ordered plaintiff to search for additional responsive email, finding that plaintiff’s argument “misses the point. If these individuals did not use email, the search may be fruitless but this does not excuse [plaintiff] from its obligation to conduct such a search.”

Cost-Shifting

8. Peskoff v. Faber, 251 F.R.D. 59 (D.D.C. 2008) (Judge Facciola).

This opinion is the latest in a series of e-discovery decisions from the Peskoff v. Faber litigation. In a previous opinion, Judge Facciola determined that Faber’s incomplete search for and production of responsive emails—which contained gaps where no email was produced for certain relevant years—warranted the parties’ submitting a joint bid proposal to hire a forensic specialist to search defendant’s systems for additional responsive email. The judge submitted the bid to several e-discovery vendors, and the estimated cost to conduct the search came to $33,000. Judge Facciola ordered Faber to hire the forensic expert and ruled that shifting this cost to plaintiff was inappropriate because defendant’s own “acts and omissions” in conducting an inadequate search for email “shatter any argument that the burden or expense of that forensic examination, if incurred by Mr. Faber, would be ‘undue.’”

Form of Production, FRCP 34

7. Covad Communications Co. v. Revonet, Inc., Civ. No. 06-1892, 2008 WL 5377698 (D.D.C. Dec. 24, 2008) (Judge Facciola).

In response to plaintiff’s document requests—which did not specify the form in which email should be produced—defendants offered to make available for inspection and copying 35,000 pages of email in hard-copy form. Plaintiff objected, claiming the email should be produced in native form. Defendant responded that it would produce in TIFF form but only if plaintiff agreed to pay the costs of a paralegal’s manually deleting the non-responsive and privileged TIFFs that had been already redacted from the hard-copy production. Judge Facciola found that defendant’s plan to produce email in hard-copy form did not comply with FRCP 34, as defendant did not maintain email in hard-copy form in the ordinary course of business and hard-copy was not a “reasonably usable form.” The judge also found, however, that plaintiff was partially to blame because it failed to specify a form in its document requests and it had previously produced email to defendant in hard-copy form. The judge ordered defendant to produce the email in native form, but ordered both parties to split the costs of the paralegal’s time to delete the privileged files, reasoning that “[s]ince both parties went through the same stop sign . . . both should pay for the crash.”

6. Autotech Indust. Ltd. v. Automationdirect.com, Inc., 248 F.R.D. 556 (N.D. Ill. 2008) (Judge Cole).

Defendant moved to compel plaintiff to produce the native version of a document created in Microsoft Word. In response to defendant’s document requests, plaintiff produced the document in PDF format and in hard copy. Defendant argued that plaintiff’s production was inadequate because PDF was not the way in which plaintiff maintained the file in the ordinary course of business and because it did not include the original file’s metadata, which defendant believed would show when the document was created, modified, and first designated “confidential.” The court found defendant’s argument that it needed the metadata unpersuasive because plaintiff produced in hard-copy format several pages detailing the changes made to the document throughout its 7-year existence. In addition, the court ruled that defendant only had itself to blame because it not specify in its document requests that it wanted metadata included in plaintiff’s production. The court looked to the Sedona Conference Principles for guidance and found that “[o]rdinarily, courts will not compel the production of metadata when a party did not make that a part of its request. . . . ‘Absent a special request for metadata (or any reasonable basis to conclude the metadata was relevant to the claims and defenses in the litigation), and a prior order of the court based on a showing of need, [a] production of documents [without metadata] complies with the ordinary meaning of Rule 34.’”

Protection of Privileged Materials, FRCP 26(b)(5)(B)

5. Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251 (D. Md. 2008) (Judge Grimm).

The court in this copyright-infringement case ruled that defendants had waived the attorney-client privilege concerning 165 privileged documents that they inadvertently produced to plaintiff. The parties had agreed to an extensive list of keyword/phrase search terms that would be used to identify electronically stored information responsive to plaintiff’s document requests. Because of time constraints, defendants initially did not plan to conduct a document-by-document review for privileged materials; instead they provided to their electronic-discovery vendor a second list of search terms intended to identify potentially privileged information. Defendants also sought to enter into a non-waiver “claw back” agreement with plaintiff so that any production of privileged materials that slipped past the second search-term filter would not be deemed a waiver. When the discovery deadline was extended by several months, however, defendants abandoned their pursuit of a claw back agreement and indicated that they would conduct a document-by-document privilege review. Unfortunately, defendants had underestimated the time that would be required to review the entire population of documents, so they decided to rely on the second search-term filter for all documents that were text-searchable. For documents that were not text-searchable, defendants reviewed only the titles of documents. After defendants produced their documents, plaintiff notified defendants that it had found several privileged emails in defendants’ production. The court ruled that defendants had waived the privilege concerning the 165 documents because defendants “failed to demonstrate that the keyword search they performed on the text-searchable ESI was reasonable. Defendants neither identified the keywords selected nor the qualifications of the persons who selected them to design a proper search; they failed to demonstrate that there was quality-assurance testing; and when their production was challenged by the Plaintiff, they failed to carry their burden of explaining what they had done and why it was sufficient. . . . The Plaintiff is blameless, but the Defendants are not, having failed to take reasonable precautions to prevent the disclosure of privileged information, including the voluntary abandonment of the non-waiver agreement that the Plaintiff was willing to sign.”

Early Discovery

4. Allcare Dental Management, LLC v. Zrinyi, No. CV-08-407-S-BLW, 2008 WL 4649131 (D. Id. Oct. 20, 2008) (Judge Winmill).

Plaintiffs filed a motion seeking expedited discovery before the mandatory FRCP 26(f) conference. Plaintiffs requested an order compelling defendants to provide plaintiffs’ computer-forensics experts with access to defendants’ computers for the purposes of taking mirror images of the hard drives. Plaintiffs argued that without preserving immediately the data on the hard drives, relevant information was likely to be deleted before regular discovery commenced. Plaintiffs cited to defendants’ evasion of service in other litigation as evidence of defendants’ lack of respect for the legal process, which made it more likely they would ignore their data-preservation duties. Plaintiff also offered in its motion to pay for all costs associated with the imaging and to agree to procedures that would prevent the inadvertent disclosure of privileged information contained on the hard drives. The court agreed with plaintiffs and ordered defendants to preserve all data on their hard drives and make their computers available to plaintiffs’ experts for hard-drive imaging. The court further ordered that once the imaging was complete, plaintiffs may not access the images in any way and plaintiffs’ experts must immediately deliver the images to the court clerk for safekeeping until further stipulation of the parties or order of the court.

Sanctions, FRCP 37

3. L.H. v. Schwarzenegger, No. CIV S-06-2042, 2008 WL 2073958 (E.D. Cal. May 14, 2008) (Judge Hollows).

Plaintiffs moved for sanctions after defendants missed several deadlines for producing responsive documents. In addition, defendants’ belated production included information from databases that they converted into PDF files, which rendered the information neither searchable nor sortable. The court found that the defendants’ production of PDFs violated FRCP 34 because the PDFs were not a “reasonably usable form.” The court granted plaintiffs’ motion, ordering defendants to produce the information in a reasonably useable form and to pay plaintiffs’ fees and costs associated with bringing the motion.

2. Keithley v. The Home Store.com, Inc., No. C-03-04447 (N.D. Cal. Aug. 12, 2008) (Judge LaPorte).

In a case involving discovery misconduct “among the most egregious this Court has seen,” the Court imposed large monetary penalties and an adverse-inference jury instruction as sanctions for defendants’ “reckless and frivolous” behavior during discovery. In a lengthy opinion, the court detailed numerous missteps by defendants, including their failure to implement a litigation hold after being served with the complaint, their lack of care in transferring responsive data from one system to another without taking adequate precautions to ensure that the data was not deleted, allowing backup tapes to be overwritten when those backup tapes could have been used to remediate data that had been deleted, and making misrepresentations to opposing counsel and to the court.

Ethical Obligations of Counsel During Discovery, FRCP 26(g)

1. Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354 (D. Md. 2008) (Judge Grimm).

In this wage-and-hour class action, defendants responded to plaintiffs’ broad document requests with “boilerplate, non-particularized objections.” While acknowledging that plaintiffs’ requests were overbroad, the court found that defendants’ failure to make specific objections suggested that either (1) defendants made the objections without a factual basis, in violation of FRCP 26(g) (requiring counsel to make a reasonable inquiry before serving or objecting to discovery requests), or (2) defendants complied with FRCP 26(g) by making a reasonable inquiry and discovering facts that would support legitimate objections, but then waived their objections by failing to specify them. The court noted that either of these two courses of action “would justify a ruling requiring that the Defendants provide the requested discovery regardless of cost or burden, because proper grounds for objecting have not been established.” Given plaintiffs’ overly broad discovery requests, however, the court ordered the parties to meet and confer to provide the court the facts necessary for it to make a determination under FRCP 26(b)(2)(C) regarding overbreadth and burden, including whether plaintiffs’ document requests could be “fulfilled from non-duplicative, more convenient, less burdensome, or less expensive sources than those currently sought by the Plaintiffs.” The court emphasized that FRCP 26(g) imposes an “affirmative duty” on lawyers “to behave responsibly during discovery, and to ensure that it is conducted in a way that is consistent ‘with the spirit and purposes’ of the discovery rules.” This duty requires lawyers to cooperate and communicate with each other “to fulfill legitimate discovery needs, yet avoid seeking discovery the cost and burden of which is disproportionally large to what is at stake in the litigation.” The court noted that had the parties cooperated and communicated at the outset of the discovery, as contemplated by the FRCP discovery rules, the court would not have been involved in resolving the parties’ discovery dispute.