August's Notable Cases and Events in E-Discovery

1. In Zamora v. Stellar Management Group, Inc., 2017 WL 1362688 (W.D. Mo. April 11, 2017), Judge Roseann A. Ketchmark found that plaintiff had destroyed discoverable information but ruled that a decision on sanctions was premature and ordered instead additional discovery on the prejudice issue to determine whether the destroyed material was available through other means.

In this wrongful retaliation and discharge case, defendant moved to impose sanctions pursuant to Federal Rule of Civil Procedure 37(e) on plaintiff claiming that plaintiff had deleted everything on her work phone, including relevant text messages, and destroyed various personal phones after filing suit. Defendant also contended plaintiff was aware that defendant had requested her correspondence with current or former employees of defendant’s organization, yet she deliberately deleted a Facebook message with former employees. Defendant sought dismissal or an instruction that the jury presume that the lost information was unfavorable to plaintiff. Plaintiff denied that the messages were deleted intentionally and argued that the destruction did not prejudice defendant. Id. at *2.

The court concluded that plaintiff had destroyed discoverable information, but it was unable to make a finding of prejudice because of the possibility that the destroyed material was available through other means of discovery. Id. at *3. As a result, the court held that a finding of prejudice was premature and that until prejudice could be established, determination of intent was unnecessary. Based on this reasoning, the court denied defendant’s motion for the sanctions under Rule 37(e) as premature.

At the same time, the court noted that plaintiff could not be relied on to disclose all relevant communications:

It is clear that Plaintiff’s memory cannot be relied upon with respect to her communications with former or current QSI Defendants’ employees. Moreover, under the circumstances, Plaintiff’s continued use of the auto-delete feature on all of her phones despite the discovery rulings for the production of information contained on phones shows a low regard for the necessity of preserving evidence in this case. Id.

Given this finding, the court granted defendant’s request for access to additional discovery, including the work phones of former employees now serving as nonparty witnesses, to assist in obtaining the relevant information. Id. at *4. In addition, the court established a protocol for review of plaintiff’s cellphone provided by her current employer, which had previously been excluded from review.

2. In Elhannon LLC v. F.A. Bartlett Tree Expert Co., 2017 WL 1382024 (D. Vt. April 18, 2017), Judge William K. Sessions III granted plaintiffs’ renewed motion to compel in part after concluding that certain documents had not been produced, required the parties to meet and confer to resolve several outstanding discovery scope and search term issues, and found that sanctions were not appropriate either for plaintiffs’ failure to meet and confer prior to filing the renewed motion or for defendant’s failure to produce the documents.

In this contract and consumer fraud dispute, plaintiffs alleged that they contracted for defendant to design and execute an integrated pest management program for plaintiffs’ tree nursery. Defendant’s alleged negligence and breach of contract caused a massive pest problem, and plaintiffs had to destroy trees valued at several million dollars. Id. at *1. During discovery, plaintiffs filed a motion to compel “complete discovery responses and document production,” but Judge Sessions denied that motion because defendant represented that its discovery responses were complete.

During subsequent depositions of several of defendant’s employees, plaintiffs allegedly uncovered several deficiencies in defendant’s discovery production. Specifically, plaintiffs argued that defendant had failed to produce (1) complete information on plaintiffs’ account from one of defendant’s databases; (2) all internal correspondence related to plaintiffs; (3) internal analyses pertaining to plaintiffs; (4) all compensation and personnel files for two employees who worked on plaintiffs’ account; and (5) documents from defendant’s other electronic systems. Id. at *2.

Plaintiffs moved to compel production of the documents and for discovery sanctions. In response, defendant argued that it had produced all relevant discovery, though it did admit that it had recently recovered certain responsive email communications due to a “gap in technology” used to perform the email searches. Defendant cross-moved for sanctions based on plaintiffs’ failure to meet and confer before filing its renewed motion to compel in violation of Fed. R. Civ. P. 37(a)(1) and local rules. Id. at *5.

Judge Sessions ruled that several of the documents plaintiffs identified through the depositions likely contained information responsive to plaintiffs’ original discovery requests, though several factual questions remained unresolved. For example, plaintiffs identified “price sheets” that were likely responsive to a request for all documents related to the anticipated profits from plaintiffs’ contract. Id. at *6. Judge Sessions ordered the parties to engage in further meet-and-confer efforts to reach a common understanding of whether these price sheets contained any information related to plaintiffs’ contract. Similarly, plaintiffs identified an employee assessment database that contained information responsive to a request for personnel records, and Judge Sessions ordered defendant to produce any relevant information from this system relating to the plaintiffs’ contract period.

Judge Sessions next considered plaintiffs’ arguments regarding electronically stored information that defendant had allegedly not produced. Plaintiffs focused on a database they inspected during a deposition that they claimed had not been produced. Id. at *7. Defendant responded that this database was coextensive with another database that was already queried and claimed that it had satisfied its discovery obligation by permitting plaintiffs to inspect the database during the deposition. The court noted that a party “need not produce the same electronically stored information in more than one form” but cited defendant’s contradictory deposition testimony in concluding that the databases were not coextensive. Judge Sessions also determined that defendant had not shown an undue burden or cost that might justify a protective order. As to the inspection issue, he ruled that permitting plaintiffs to inspect the database during a deposition was insufficient to satisfy defendant’s discovery obligations where defendant had not expressly stated that the inspection constituted a response to a discovery request. Id. at *8 (citing Fed. R. Civ. P. 34(b)(2)(B) (“[T]he response must either state that inspection and related activities will be permitted as requested or state with specificity the grounds for objecting to the request ....”)). Accordingly, the court ordered defendant to produce relevant, responsive data from both databases to the extent that relevant documents in one database were not available in the other database.

Regarding defendant’s email production, plaintiffs argued that defendant should have used other search terms, but Judge Sessions noted that the Federal Rules do not provide a mechanism for the requesting party to dictate search terms. Id. at *9. Rather, he ordered the parties to meet and confer in hopes of agreeing on the scope of search terms.

Finally, Judge Sessions denied the parties’ cross-motions for sanctions. Defendant argued that plaintiffs had failed to satisfy its meet-and-confer obligations before filing the renewed motion to compel, while plaintiffs responded that they had already engaged in meet-and-confer efforts before filing their original motion to compel and that those efforts were sufficient for filing a renewed motion. Judge Sessions noted that district courts maintain discretion to waive the meet-and-confer requirements but found plaintiffs’ meet-and-confer efforts to be insufficient, although he determined that this failure did not warrant sanctions. Regarding plaintiffs’ request for sanctions for defendant’s failure to produce complete discovery responses, Judge Sessions said he was not persuaded that plaintiffs had provided sufficient reasons to justify sanctions. Id. at *10.

3. In Engurasoff v. Coca-Cola Refreshments USA, Inc., 2017 WL 2181104 (N.D. Cal. May 3, 2017), Magistrate Judge Maria-Elena James held that defendants had demonstrated that certain redacted information in discovery was privileged and not discoverable under Rule 26(b)(1).

Defendant had redacted information from email communications with third parties, claiming that the redacted information contained legal advice and was thus protected by the attorney-client privilege. Id. at *1. The plaintiffs claimed that the disclosure to third parties constituted a waiver of privilege. Defendant responded that the third parties were outside agencies hired to develop label designs for defendant’s products, and defendant submitted declarations from three employees explaining how defendant provided legal advice from in-house counsel to the outside agencies as part of the label design process. Id. at *2.

Applying California law (California Evidence Code § 952) to the determination of the attorney-client privilege issue, Magistrate Judge James found that the redacted information contained legal advice disclosed to a third party where disclosure was reasonably necessary to ensure that finalized labels reflected the advice of in-house counsel. Based on this finding that the third party had a reasonable need to know the disclosed legal advice, the magistrate judge ruled there was no waiver of the attorney-client privilege based on disclosure to the outside agencies. She therefore concluded the redacted information was privileged and not discoverable under Rule 26(b)(1).

4. In Rockwell Medical, Inc. v. Richmond Brothers, Inc., 2017 WL 1361129 (E.D. Mich. April 14, 2017), Judge Robert Cleland denied plaintiff’s request for expedited document discovery and depositions in advance of a preliminary injunction hearing, finding that the requested discovery was “patently overbroad” and not proportional.

Plaintiff Rockwell Medical, Inc. appealed a magistrate judge’s order denying plaintiff’s motion for expedited discovery and a temporary injunction. Id. at *1. The injunction sought to require the defendants to undergo four depositions and respond to five document requests within 15 days, in advance of an annual shareholders meeting. The magistrate judge found that the requests were not proportional, as they were not limited to relevant documents, and the 15-day deadline was “vexatious and harassing.” Plaintiffs appealed this ruling, arguing that discovery is routinely granted prior to preliminary injunction hearings to allow the parties a fair chance to argue the merits and that the requests were not overbroad.

Judge Cleland overruled the plaintiffs’ objections to the magistrate judge’s order, focusing on the Fed. R. Civ. P. 26(b)(1) proportionality requirements and the factors that courts must weigh in considering discovery requests. Citing the Advisory Committee’s Note to the 2015 Amendment to Rule 26(b)(1), the court noted that the burden and expense of plaintiff’s discovery were “immense and doubtlessly outweighs [the] likely benefit, even assuming that all other factors favor Plaintiff — and it is not obvious that they do.” Id. at *2. He set forth the five requests in full, highlighted the lengthy definition of “document” and concluded that the requests were “unduly burdensome,” pointing out that the requests would encompass records of any telephone call during which a defendant discussed Rockwell and “every document or communication relating to [Securities and Exchange Commission] filings unbound by any time period. Id. at *3 (emphasis in original). The court concluded that an expedited timetable did not entitle a party to disregard the Federal Rules of Civil Procedure.