This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:
- a ruling from the U.S. District Court for the District of Massachusetts ordering terminating sanctions of a default judgment against certain Defendants for committing repeated and unexcused discovery misconduct by failing to produce relevant Slack messages and Google Suite documents in response to multiple court orders and for repeatedly certifying that all relevant documents had been produced
- an order from the U.S. District Court for the Western District of Washington compelling Plaintiffs to apply search terms and produce electronically stored information (ESI) with load files containing metadata, where Plaintiffs had refused to forensically collect their documents or apply Defendant’s requested search terms to locate responsive documents
- a decision from the U.S. District Court for the Middle District of Pennsylvania granting a request to conduct an independent forensic examination of Defendants’ computer server after a subpoena to a third party unearthed documents that Plaintiff claimed should have been produced by Defendants
- an order from the U.S. District Court for the Northern District of Florida denying a motion to compel collection of health data from mobile devices, finding that it would not be proportional to the needs of the case in light of the burdens of collection as compared to the reliability and potential utility of the data collected
1. A ruling from the U.S. District Court for the District of Massachusetts ordering terminating sanctions of a default judgment against certain Defendants for committing repeated and unexcused discovery misconduct by failing to produce relevant Slack messages and Google Suite documents in response to multiple court orders and for repeatedly certifying that all relevant documents had been produced.
In Red Wolf Energy Trading, LLC v. Bia Capital Management, LLC, --- F. Supp. 3d ----, 2022 WL 4112081 (Sept. 8, 2022), U.S. District Judge Mark L. Wolf resolved the Plaintiff’s motion for sanctions against certain Defendants that had failed to produce relevant Slack messages and Google Suite documents despite multiple court orders requiring production.
Plaintiff Red Wolf Energy Trading, LLC, a firm trading virtual electricity products, filed this action for alleged misappropriation of its trade secrets and violations of the Massachusetts statute prohibiting unfair and deceptive trade practices, claiming that Defendants had schemed to steal its software and algorithms to start a competing business. Id. at *3. Red Wolf alleged that Defendant Christopher Jylkka, a former Red Wolf employee, took confidential information and trade secrets and disclosed them to other Defendants, who were improperly using them at various companies including Defendants Bia Capital Management, LLC, and GrowthWorks, LLC.
With its complaint, Red Wolf filed a motion for a temporary restraining order and preliminary injunction, seeking to enjoin Defendants from using or disclosing any of Red Wolf’s confidential information, including Red Wolf’s proprietary trading strategies. Id. at *4. Defendants opposed the motion and submitted affidavits from Defendants Gregory Moeller, the founder and managing director of both Bia and GrowthWorks, and Michael Harradon, who worked on the development of Bia’s trading algorithm. Among other things, the affidavits stated that Jylkka was involved with Bia and GrowthWorks only as a “potential customer,” that he did not assist in developing Bia’s software, and that Bia’s trading was accomplished exclusively with Bia-developed software and public data.
Judge Wolf had denied Red Wolf’s motion for a temporary restraining order and preliminary injunction, relying in part on Moeller’s and Harradon’s representations. Judge Wolf had found, based on those representations, that Red Wolf was not likely to prove that it had been or would be irreparably harmed during the pendency of the litigation by any misuse of its trade secrets.
During discovery, Red Wolf requested various categories of documents, including communications concerning whether Jylkka had misappropriated Red Wolf’s confidential information and whether the other Defendants had unlawfully used such confidential information in developing Bia’s competing business. Id. at *5. Although Defendants produced some documents in response to Red Wolf’s requests, Red Wolf ultimately filed a motion to compel on the grounds that it had not received, among other things, all requested communications with Jylkka between January 8, 2019, and January 31, 2019 (the period between when the litigation was threatened and filed), and “Google Suite” documents that were linked to other documents that had been produced.
Judge Wolf had granted Red Wolf’s motion to compel additional communications because “the fact that there was a . . . threat of a complaint [being filed] on January 8th doesn’t mean there’s not relevant evidence afterwards.” Id. at *6. He had also required Defendants to see if any additional documents from the Google Suite had not been produced. At the same time, he warned Defendants that they would be sanctioned if they did not produce all required documents and information and ordered Defendants to review the discovery that had been produced carefully to determine whether the prior productions were incomplete and needed to be supplemented. Judge Wolf had instructed Defendants to file an affidavit stating either that the review had been conducted and additional documents had been disclosed or that there were no additional documents to be produced.
Defendant Moeller later filed an affidavit affirming Defendants’ compliance with the order, including that he had, “with counsel, worked to gather documents responsive to [Red Wolf’s document] requests in the past” and that he had “reviewed our Slack communications and provided all Slack channel communications where Mr. Jylkka was a participant for the January 17, 2019 through January 31, 2019 period to counsel.” Id. at *7.
Red Wolf subsequently took depositions of Jylkka, Moeller, and Harradon. Based on those depositions, Red Wolf claimed in a court filing that Defendants had not produced all relevant Slack messages. In response, Judge Wolf had once again ordered Defendants to supplement their productions and provide an affidavit confirming that everything had been produced. Id. at *8. In response, Defendant Moeller filed another affidavit stating that Defendants had “conducted a good faith search for relevant, responsive documents” and that he did not believe that “there is any further supplementation required under Rule 26(e).”
Red Wolf then filed a new motion to compel production of the entirety of Slack communications “sent or received between January 1, 2015 and January 31, 2020 between Jylkka” and various individuals. Defendants opposed the motion, arguing that the parties had agreed to narrow Red Wolf’s request for Slack messages to ones that corresponded to an agreed-on list of topics or search terms. Defendant Moeller filed yet another affidavit with the opposition to Red Wolf’s new motion, in which he explained that “there was no ready mechanism to search and produce Slack messages” and that he had worked with a consultant to write a program to search and produce Slack messages in a readable format.
Around this time, Defendants produced documents to Red Wolf that had not been produced before, explaining that “additional documents responsive to Red Wolf’s requests were discovered during the process of identifying and providing information to Bia’s expert witness in late November 2021.” Id. at *9. Among these were 47 documents found in Bia’s Google Vault drive, including a PowerPoint presentation Jylkka prepared and provided to Moeller and Harradon containing screenshots of Red Wolf’s proprietary software and user interface. Judge Wolf had noted at that time that the PowerPoint was “important evidence that undermine[d] the credibility of Moeller’s sworn statement that information provided by Jylkka was ‘not needed or used in development in any way,’ and Harradon’s sworn statement that Jylkka ‘did not assist’ in developing Bia’s algorithm ‘in any way.’ ” Moeller claimed that this PowerPoint and other documents were not provided earlier because of an error in Bia’s original search that resulted in Bia conducting a search of only Gmail and not Bia’s other electronic records stored in Google Vault.
Red Wolf then filed a motion for sanctions, requesting that the court order Bia, Moeller, and their attorneys to (1) conduct a final and thorough search of Bia’s files and produce any relevant documents they find; (2) produce Moeller, Harradon, and Jylkka for additional depositions and pay associated attorneys’ fees and costs to Red Wolf; (3) pay for the costs associated with revision and supplementation of Red Wolf’s expert reports related to the belatedly produced documents; and (4) pay Red Wolf reasonable attorneys’ fees associated with its motion for sanctions. Id. at *10.
In response to Red Wolf’s motion, Judge Wolf had ordered Defendants to produce all Slack communications with Jylkka from January 1, 2015, to January 31, 2019, but he stated that he gave Defendants “the benefit of great doubt with regard to the Slacks . . . . I said there was a failure of meeting of the minds. I could have reasonably decided that the other way.” Judge Wolf also ordered sanctions for Defendants’ failure to produce Google Vault documents in response to his prior orders but “acted with restraint” to award only the costs of the sanctions motion. Id. at *10-11. He also ordered the reopening of the depositions of Jylkka, Moeller, and Harradon to allow Red Wolf to question them concerning the 47 Google Vault documents produced after the discovery deadline and any additional Slack communications Red Wolf was to receive. Id. at *11.
Defendants then provided Red Wolf with additional Slack communications involving Jylkka, including Slack messages containing agreed-on search terms that had not been previously produced. During a subsequent deposition, Moeller testified that the exclusion of these Slack messages had been inadvertent as a result of a “mistake” by the programmer who wrote the program to search the Slack messages and that Defendants had experienced difficulty finding anyone with expertise in restoring and searching Slack messages. In particular, Moeller testified that he had consulted Eric Brown, who had conducted the electronic searches of Bia’s systems, and Brown had told him that “he was not aware of any tools that could be used to search Slack messages.” However, Brown contradicted this testimony, testifying himself that he had informed Moeller that he was not familiar with Slack and could not provide any guidance on how to search Slack. Moeller also testified that he had only “done some spot checking” of Slack messages in response to the court’s prior orders.
Red Wolf filed a second motion for sanctions, arguing that Defendants’ recent productions of Slack communications revealed further failures to produce required documents, including “hundreds of ‘new’ Slack messages that contained the search terms initially applied by Defendants.” Id. at *12. Red Wolf requested entry of default judgment on all counts against Bia and Moeller, among other sanctions. During briefing on the second motion for sanctions, Defendants produced additional Slack messages, including messages that Red Wolf claimed again contained relevant search terms. Id. at *13. Red Wolf also claimed that these new Slack messages were “relevant and b[ore] directly on one of the more contested issues in this case: whether or not Jylkka provided meaningful assistance to Greg Moeller and Michael Harradon in developing and refining the Bia database.”
During the hearing on Red Wolf’s second motion for sanctions, Red Wolf requested that the court order Defendants to provide a copy of Bia’s original Slack data archive so that it could be searched by Red Wolf’s vendor and compared with the documents Defendants had produced. Id. at *14. Defendants’ counsel agreed with the request, and Judge Wolf ordered the production and further ordered Red Wolf to report its findings to the court. In addition, the parties were ordered to file supplemental memoranda concerning the prejudicial effect, if any, of the delayed disclosure of Slack messages containing relevant search terms that should have been produced earlier. Red Wolf later reported, “Bia failed to produce at least 128 relevant messages that contained a search hit.” Id. at *15. Included among these messages, according to Red Wolf, was “a proverbial smoking gun” Slack message from days after Red Wolf’s suit was filed in which Moeller and Harradon discussed creating a new algorithm to hide the fact that the original algorithm was derived from Red Wolf intellectual property.
An affidavit from Red Wolf’s vendor claimed that Defendants could have used “a standard eDiscovery processing tool” to search and produce Slack messages for a cost of about $10,000, that Slack had “a built-in search function that would allow a user to search channels and direct message conversations for certain search terms,” and that Defendants’ searches of the Slack archive “was outside of universally accepted standards and best practices for legally defensible data collection, preservation and production” and was “not technologically sound.” Id. at *16. Red Wolf’s vendor also claimed that Defendants’ flawed search of the Slack communications may have been done deliberately to withhold potentially relevant data during discovery and that numerous “empty folders” in the Slack archive supported an inference that deletion of channel data occurred after export from Slack but prior to transfer to Red Wolf.
The parties also submitted briefing regarding the prejudicial effect of the delayed disclosure of Slack messages. Red Wolf argued that the belatedly produced Slack messages proved that Defendants’ prior statements were false, including the statements that Defendants (1) did not rely on Jylkka’s help, (2) did not use Red Wolf’s confidential and proprietary systems and software, and (3) did not conspire to cover up their wrongdoing after Red Wolf brought the lawsuit. Defendants argued in response that these Slack messages were “not new in whole or substance” because similar messages were produced in 2019. Defendants also denied that data may have been deleted from the Slack archive before it was provided to Red Wolf, arguing that empty Slack channels could have been caused by a Slack participant starting a message without sending it (although Slack stated that channels could be empty because of deletion of data). Id. at *17.
Judge Wolf began his analysis with a discussion of Federal Rule of Civil Procedure 26, noting that Rule 26(e)(1) requires a party to supplement or correct a response to a discovery request either “if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing,” or as ordered by the court. Judge Wolf suggested that both of these scenarios under Rule 26(e)(1) were relevant here. He found that Defendants were required to produce all documents relevant to Red Wolf’s claims if they were requested and the request was not subsequently narrowed by agreement. Id. at *18. Defendants were also required to review their initial responses and supplement them if requested documents were not initially produced, as Judge Wolf twice ordered and as Moeller in two affidavits claimed to have done (but did not do).
Judge Wolf next surveyed his “broad authority to issue sanctions in response to a party’s failure to obey discovery orders,” noting that under Federal Rule of Civil Procedure 37(b)(2), sanctions must be both “just” and “specifically related to the particular ‘claim’ which was at issue in the order to provide discovery.” He noted that there “are no mechanical rules for determining whether sanctions should be imposed and, if so, which are appropriate” and that it is necessary to consider the totality of the circumstances, focusing on factors including, but not limited to, “the severity of the discovery violations, legitimacy of the party’s excuse for failing to comply, repetition of violations, deliberateness of the misconduct, mitigating excuses, prejudice to the other party and to the operations of the court, and adequacy of lesser sanctions.” Id. at *19.
Judge Wolf cited to First Circuit precedent that “a party’s disregard of a court order is a paradigmatic example of extreme misconduct” but also noted that default judgment is generally disfavored and is considered a “drastic” sanction to be used only in “extreme” situations. However, he further explained that Rule 37(b)(2)(vi) provides, and puts parties on notice, that a default judgment may be entered against them if they disobey discovery orders. Judge Wolf noted that in this case, “despite repeated orders to review, and supplement if necessary, their production of documents, and repeated warnings that severe sanctions could be imposed if they failed to do so, Bia and Moeller violated” the court’s discovery orders. Judge Wolf characterized Defendants’ violations as “serious,” resulting from at least “reckless disregard of their obligations to produce documents and obey court orders.” He also noted that “there is reason to be concerned that the misconduct may have been deliberate.”
Judge Wolf next found that Red Wolf was “seriously prejudiced by [D]efendants’ misconduct,” which “also seriously injured the court’s ability to manage this case and others on its docket.” He stated that default judgments were “justified” and, indeed, “the only viable Rule 37(b)(2) sanction.”
Judge Wolf noted in particular that in response to Red Wolf’s first motion to compel, Moeller had filed a sworn affidavit asserting that all five Defendants had complied with the court’s order and their obligations to supplement discovery under Rule 26(e), but that was not true. Id. at *20. Red Wolf conducted depositions in reliance on the belief that it had all of the documents necessary to prepare properly for the depositions. After Red Wolf filed a second motion to compel, Defendants certified in response that “no further supplementation of the prior production of documents was required under Rule 26(e),” but that statement was also untrue.
Judge Wolf repeated that “a party’s disregard of a court order is a paradigmatic example of extreme misconduct” and added that “disregard of a prior warning from the court exacerbates the offense.” He noted that “[r]epeated violations of court orders following increasingly strong warnings is alone enough to justify default judgment as a sanction.”
Judge Wolf then detailed at length those aspects of Defendants’ conduct that justified default judgment as a sanction. First, in response to Red Wolf’s first motion to compel, Judge Wolf had informed Defendants of their obligation to supplement their discovery responses and ordered Defendants to ensure that their production was complete. Id. at *21. Moeller filed an affidavit claiming to have complied with this order, but that “representation proved to be untrue as additional documents that should have previously produced were repeatedly discovered.”
Second, after Red Wolf had taken depositions and discovered potential additional documents that had not been produced, Judge Wolf again ordered defendants to supplement the production of documents if necessary. “Evidently, without doing any further review of defendants’ production of documents, Moeller filed another affidavit claiming to have complied with” that order. That representation was also untrue.
Third, in response to Red Wolf’s first motion for sanctions, Judge Wolf ordered Defendants to pay attorneys’ fees because Defendants had failed to produce Google Suite documents. But Judge Wolf did not know at that time that Defendants had also failed to produce numerous Slack messages, including messages that contained relevant search terms and that should have been produced earlier. And while Judge Wolf ordered Defendants to produce additional Slack messages, he also gave Defendants “the benefit of great doubt” and found that additional sanctions were not appropriate at that time because “there was not a meeting of the minds between the parties on what was required to be produced.” Id. at *22.
Fourth, Judge Wolf ordered additional depositions in light of the discovery failures and warned Defendants that “there could be severe consequences if more documents that should have been produced were discovered in the future.” Judge Wolf had added that if his orders were violated “and I find it’s willful, they can be punished by contempt. Then you’re not talking about paying money. It can be criminal contempt if there’s clear and convincing evidence that it’s willful. Somebody can get locked up.” But Defendants did not provide all of the required Slack messages before the reopened depositions and later produced additional Slack messages.
Judge Wolf found that Defendants’ discovery conduct could not be excused, first pointing to Moeller’s “changing, unconvincing explanations for why Bia did not employ an experienced vendor to search the Slack messages.” Id. at *23. In this regard, he noted that Red Wolf’s expert had testified that Defendants could have used “a standard eDiscovery processing tool” to search and produce Slack messages for a cost of about $10,000 and that Slack had a built-in search functionality that could be used to verify the accuracy of a Slack production based on search terms. Judge Wolf also noted discrepancies in the testimony of Moeller and Brown regarding the advice Moeller received about searching Slack messages. Finally, Judge Wolf pointed to Moeller’s changing testimony about why Bia used “an unpaid novice in Kazakhstan to conduct its search for Slack messages, rather than an experienced vendor in the United States at a modest cost.”
Judge Wolf also discussed the evidence that Bia and Moeller may have deliberately failed to produce some Slack messages. Red Wolf’s expert had identified Slack “channels” that contained no data, meaning content, which could mean that messages were deleted. Judge Wolf stated that “[a]ny deliberate deletion of messages would be an especially serious form of misconduct. However, litigating whether that occurred would be time-consuming for the court and expensive for Red Wolf.” However, he concluded that whether Defendants’ repeated failure to produce documents in violation of his orders and “stern warnings” was deliberate or reckless was not material to his conclusion that Defendants’ misconduct was “extreme.”
Judge Wolf found that Defendants’ discovery misconduct was prejudicial to Red Wolf. Judge Wolf first noted the additional time and expense caused by documents’ not being available for depositions and that “[i]t would be expensive to order that defendants and possibly others be deposed a third time.” Judge Wolf also noted that Red Wolf appeared to be suffering continuing competitive injury during the pendency of this case. Id. at *24. He stated that “it appears likely that Red Wolf would be able to prove at trial that Jylkka, Bia, Moeller, and Harradon, at least, misappropriated Red Wolf’s trade secrets” and that “Defendants’ failure to produce documents required by the Federal Rules of Civil Procedure and the court’s orders deprived Red Wolf of the opportunity to a file a fully informed motion for summary judgment that may have been meritorious and ended this case long ago.” Judge Wolf also noted that “[b]y engaging in misconduct that has delayed resolution of this case, defendants have prolonged their opportunity to profit from the misappropriation of Red Wolf’s trade secrets and other unfair practices that Red Wolf alleges and appears likely to be able to prove.”
Judge Wolf also found that Defendants’ misconduct had “severely injured the court’s ability to manage this case and the many other cases on its docket,” delaying the completion of the case and “consuming judicial time that could and should be devoted to many other cases deserving attention.”
In sum, Judge Wolf concluded that Defendants’ repeated violations of their duty to produce documents was “severe” and prejudiced Red Wolf because Red Wolf “was long deprived of documents that are evidence of the merit of its claim and could have led to the discovery of more such evidence” and that Defendants’ “misconduct [was] exacerbated because defendants continued their misconduct despite multiple, increasingly severe warnings that any further failure to supplement their incomplete production of documents would be severely sanctioned.”
Judge Wolf next repeated that default judgment was the appropriate sanction, noting that the documents that Defendants failed to produce related directly to Red Wolf’s misappropriation of trade secrets and unfair trade practices claims and that Defendants’ excuses for their repeated misconduct were unconvincing. Judge Wolf found that there were “no other available appropriate sanctions” and that sanctions such as precluding Defendants from offering evidence on those issues would “merely prolong litigation in which Red Wolf would inevitably prevail.” In addition, he found that “conducting civil and/or criminal proceedings to decide whether Moeller and Bia should be held in contempt for violating the court’s two discovery orders would also prolong this case without providing any benefit to Red Wolf.” Finally, he found that entering a default judgment was justified “in order to deter others from emulating defendants’ misconduct.” Id. at *25.
In addition to the default judgment, Judge Wolf found that Bia and Moeller must pay Red Wolf’s reasonable attorneys’ fees and expenses concerning Red Wolf’s second motion for sanctions. Id. at *26. He noted that Rule 37(c)(2)(C) provides that “the court must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney’s fees, caused by the failure [to produce documents], unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Judge Wolf found that Defendants violated his court orders and that the failure was not substantially justified.
2. An order from the U.S. District Court for the Western District of Washington compelling Plaintiffs to apply search terms and produce electronically stored information (ESI) with load files containing metadata, where Plaintiffs had refused to forensically collect their documents or apply Defendant’s requested search terms to locate responsive documents.
In Benanav v. Healthy Paws Pet Ins., LLC, 2022 WL 3587982, at *1 (W.D. Wash. Aug. 22, 2022), U.S. District Judge Lauren King compelled Plaintiffs to apply search terms and produce ESI with load files containing metadata in accordance with the court-ordered ESI protocol, where Plaintiffs had refused to forensically collect their documents or apply Defendant’s requested search terms to locate documents.
Judge King began by providing background on the discovery requests at issue. In response to being served discovery requests in October 2021, Plaintiffs searched emails and files for responsive documents and information. Id. at *1. In addition, Plaintiffs’ counsel met with each Plaintiff to review and discuss the requests and what responsive documents they might have.
The court entered a stipulation as to discovery of ESI (ESI Protocol) in January 2022. Defendant proposed search terms for Plaintiffs’ production of ESI the following month, to which Plaintiffs responded that they would have edits. Nonetheless, Plaintiffs made their first production a week after receiving the proposed search terms without indicating whether they had used Defendant’s search terms or complied with the ESI Protocol. On March 29, 2022, Plaintiffs told Defendant they did not agree with the proposed search terms and had self-searched and produced “all responsive documents in their possession.”
Defendant objected to Plaintiffs’ self-search and asked Plaintiffs to continue to negotiate search terms and to produce documents with metadata. In the negotiations that followed, Plaintiffs proposed an alternative set of search terms, which they described as broader than those Defendant proposed to account for limitations in the Plaintiffs’ search capabilities. Plaintiffs also described their objections to Defendant’s proposed search terms and production format and later provided information requested by Defendant about specific documents and missing family members.
Defendant objected to Plaintiffs’ proposed alternative search terms and continued failure to produce metadata or a load file, but Plaintiffs reiterated that they would not forensically collect their emails to conduct searches. Plaintiffs also acknowledged that they did not follow the ESI Protocol as to the metadata and load file requirements because of the “burden, expense, and lack of proportionality with the needs of the case.” When Defendants objected, Plaintiffs stated that they “are unable to run [Defendant’s] suggested terms because Plaintiffs did not do a collection of their entire email accounts that would allow such searches to be r[u]n, and instead conducted self-searches with the assistance of counsel to find documents that each Plaintiff knew existed.” Id. at *2.
When Defendant did not accept Plaintiffs’ position, the parties reached an impasse and Defendant moved to compel Plaintiffs 1) to use Defendant’s proposed search terms or broader search terms encompassing what Defendant sought and 2) to comply with the ESI Protocol by producing documents with the required metadata and load files.
Turning to her analysis, Judge King first laid out the standards under Rules 26 and 37 for compelling discovery, including the rule for ESI discovery under Rule 26(b)(2)(B). Judge King next discussed the parties’ positions. Plaintiffs objected to Defendant’s requested relief on the grounds that it was unduly burdensome and disproportionate to the likely benefit because Plaintiffs had already searched for and produced all responsive documents through a manual search of their own inboxes, supervised by counsel. Further, Plaintiffs stated that because emails were not forensically collected, Defendant’s search terms could not be run and metadata and load files could not reasonably be produced. Defendant responded that Plaintiffs’ manual self-search and failure to produce metadata violated the ESI Protocol and that the self-search produced flawed and incomplete results.
Judge King had “little difficulty in concluding that Plaintiffs are required to produce documents in accordance with the ESI Protocol, including conducting a reasonable search after conferring in good faith on reasonable search terms and other parameters.” Id. at *3. She noted that Plaintiffs admitted that they had failed to produce documents in accordance with the ESI Protocol and that Plaintiffs’ “unilateral ‘self-search’ is inconsistent with Plaintiffs’ commitment, undertaken in the ESI Protocol, to ‘work in good faith to agree on the use of reasonable search terms . . . along with any other relevant search parameters.’ ” Id. (emphasis in original).
Judge King stated that Plaintiffs’ argument against running searches on their email accounts lacked merit, explaining that she had previously rejected the argument that it was duplicative to require two ESI searches, one to gather “low-hanging fruit” and one to “later perform a more comprehensive search based on negotiated search terms.” She noted that if Plaintiffs believed they should be excepted from this process, “they should have timely informed [Defendant] rather than making a production without any accompanying explanation of the self-imposed limits on their search.” Judge King cited the Sedona Conference Cooperation Proclamation, which stated that “[i]t is not in anyone’s interest to waste resources on unnecessary disputes, and the legal system is strained by ‘gamesmanship’ or ‘hiding the ball,’ to no practical effect.” Id. (citing 10 Sedona Conf. J. 331 (2009)).
Judge King described the requirements under Rule 26(b)(1) for the court to consider whether the burden of proposed discovery outweighs its likely benefit and found that Plaintiffs’ self-search was clearly inadequate as demonstrated by their “repeated supplementation of their productions in response to deficiencies discovered by [Defendant]” despite having made numerous representations that additional documents did not exist, including missing attachments to emails. Id. at *4. Judge King also took issue with Plaintiffs’ vague explanations as to how counsel supervised and directed them in searching for and identifying responsive documents. Judge King considered these defects in the self-search “sufficient to highlight the risks of such self-search processes,” including “the client’s failure (1) to identify all sources of responsive information, (2) to preserve evidence, (3) to find or provide to counsel all responsive documents and ESI, or (4) to fully document how they conducted their searches.” Id. (quoting DR Distributors, LLC v. 21 Century Smoking, Inc., 513 F. Supp. 3d 839, 935-37 (N.D. Ill. 2021)).
Judge King rejected Plaintiffs’ argument as to the burden of the searches of approximately $1,000 to collect each email account to store the data for a month, with at least eight email accounts to collect. Judge King reasoned that it was “way too late in the day” to raise this concern considering Plaintiffs had filed a nationwide class action. Id. (quoting DR Distributors, 513 F. Supp. 3d at 942). Additionally, Plaintiffs had already agreed to a number of custodians equal to the number of named Plaintiffs, and Plaintiffs were not disproportionately burdened in comparison to Defendant; in fact, Plaintiffs had produced only 490 pages compared with the over 105,000 pages produced by Defendant.
Judge King noted that Plaintiffs were willing to negotiate on search terms despite their arguments surrounding burden. Id. at *5. Defendant had also expressed willingness to accommodate Plaintiffs’ concerns surrounding the limitations of running searches on email platforms as opposed to document review platforms. Judge King therefore ordered the parties to “meet and confer in good faith to negotiate search terms that are designed to capture documents that are responsive to [Defendant’s] discovery request.” Judge King also stated that the searches should not be limited to email accounts used to communicate with Defendant, but the parties should discuss the scope in this regard so as to stay within the requirements that discovery be proportional.
Judge King similarly ordered Plaintiffs to comply with the ESI Protocol by producing documents with a load file containing the required metadata and in single-page TIFF-image format with extracted or optical character recognition text. She stated that if Plaintiffs were unable to auto-populate metadata fields, they would have to manually populate an enumerated set of fields. Judge King further stated that metadata was available and reasonable to collect and produce despite Plaintiffs’ protestations that they had not forensically collected the emails. She chastised Plaintiffs for seeking to avoid their obligation to produce reasonably accessible metadata and shift the burden to Defendant to ask in depositions where they collected the documents.
Judge King granted Defendant’s motion to compel, ordered the parties to meet in good faith surrounding the negotiation of search terms designed to capture responsive documents, and ordered Plaintiffs to produce the ESI in accordance with the ESI Protocol. Id. at *6.
3. A decision from the U.S. District Court for the Middle District of Pennsylvania granting a request to conduct an independent forensic examination of Defendants’ computer server after a subpoena to a third party unearthed documents that Plaintiff claimed should have been produced by Defendants.
In Stevens v. Sullum, 2022 WL 4122195 (M.D. Pa. Sept. 9, 2022), Chief U.S. Magistrate Judge Karoline Mehalchick granted a request to conduct an independent forensic examination of Defendants’ computer server after a subpoena to a third party unearthed documents that Plaintiff claimed should have been produced by Defendants.
Plaintiff in this case brought pursuant to 42 U.S.C. § 1983 filed a letter motion seeking “the opportunity to have an independent forensic computer expert conduct a search of Defendants’ server using the same terms previously propounded” earlier in discovery. Id. at *8. Defendants objected to the request.
Chief Magistrate Judge Mehalchick first surveyed the applicable rules regarding the proper scope of discovery, which she noted are consigned to the court’s “far-reaching discretion” that extends to rulings by United States magistrate judges. Id. at *1. But she noted that the exercise of this discretion is guided by certain basic principles, including Rules 26 and 37 of the Federal Rules of Civil Procedure. Id. at *1-2.
Chief Magistrate Judge Mehalchick began her analysis by noting that while federal courts have broad discretion in managing discovery, a “forensic investigation of a litigant’s computer is a non-routine intrusion that may be ordered as a sanction after a litigant has failed to preserve evidence, equivocally responded to discovery or otherwise resisted discovery.” Id. at *8. She noted that courts have ordered forensic investigations to be performed to determine whether ESI was deleted or withheld.
Plaintiff argued that a forensic examination was appropriate because Defendants produced only a single email in response to a request for certain communications sent to or from two of the Defendants (the district attorney and assistant district attorney) that referenced the Plaintiff. The single email Defendants produced was with a public relations firm, and when Plaintiff subpoenaed the public relations firm, he obtained additional responsive emails. Plaintiff argued that this revealed that Defendants had intentionally withheld emails and that the district attorney used his private email account in connection with Plaintiff’s case.
Defendants claimed in response that “a formal electronic search for the documents was performed in good faith and completed utilizing the search ‘terms’ that were selected by [Plaintiff]. All of the documents that were found were produced to counsel.”
Based on the fact that additional emails were acquired pertaining to Plaintiff’s prior discovery requests only after the public relations firm was subpoenaed, Chief Magistrate Judge Mehalchick granted Plaintiff’s request to obtain an independent forensic computer expert to conduct a search of Defendants’ server to search and produce emails from all accounts used in connection with Plaintiff’s case. Id. at *9. However, she also ruled that Plaintiff must limit the temporal and term scope of the independent expert’s search to maintain privacy and confidentiality and that Plaintiff was responsible for payment of the fees and costs charged by the independent computer forensics expert.
4. An order from the U.S. District Court for the Northern District of Florida denying a motion to compel collection of health data from mobile devices, finding that it would not be proportional to the needs of the case in light of the burdens of collection as compared to the reliability and potential utility of the data collected.
In In re: 3M Combat Arms Earplug Products Liability Litigation, 2022 WL 4448917 (N.D. Fla. September 23, 2022), U.S. Magistrate Judge Gary R. Jones denied a motion to compel collection of health data from Apple and other devices, finding that collection of the data would not be proportional to the needs of the case in light of the burdens of collection as compared to the reliability and potential utility of the data collected.
In discovery, Defendants requested that certain Plaintiffs produce “All data and electronically stored information regarding your hearing and hearing health from Any and All smartphones, tablets, Apple Watches, hearing aids, or other electronic devices.” Id. at *1. To facilitate production of this data, Defendants provided Plaintiffs with written instructions on how to locate information stored by the operating system (iOS) for Apple smart devices as well as how to capture the information by taking a screenshot.
When certain Plaintiffs refused to produce “noise exposure data automatically recorded by the operating systems for Plaintiffs’ smartphones and smartwatches,” Defendants moved to compel, claiming that noise exposure data was highly relevant to Plaintiffs’ hearing injury claims and could be collected with minimal burden on Plaintiffs. Plaintiffs opposed the motion, primarily on proportionality and timeliness grounds, arguing that Defendants had not shown Plaintiffs used or possessed any post-2019 iOS devices where such data might be stored and that the request invaded the privacy of Plaintiffs and their families by intruding unnecessarily into sensitive health areas outside of the scope of discovery.
Magistrate Judge Jones first addressed the nature of iOS Apple health data, noting that “[c]entral to the issue of whether production of the data is proportional is to first define the nature and scope of the data and what information the data provides and what information the data does not provide.” Id. at *2. He explained that on devices where Apple Health Data is enabled, the devices have the capability to record “Environmental Sound Levels,” which Apple describes as “sounds in your environment measured in A-Weighted decibels (dB)” recorded when the Noise App on an Apple Watch is synched to the iOS device. Apple devices also capture “Headphone Audio Levels” data representing the “volume of your headphone audio measured in A-Weighted decibels (dB).”
Magistrate Judge Jones noted that “these measurements are most accurate when using Apple or Beats headphones” and “[a]udio played through other headphones or speakers connected via a wire can [only] be estimated based on the volume of your device.” In addition to the limitation on the accuracy of the data where headphones other than Apple or Beats are used, the iOS system captures Headphone Audio Levels decibel data only when the device is connected to an external output device, such as headphones, Bluetooth speakers, built-in automobile speakers, or home audio speaker systems. Importantly, the data does not distinguish which external source registered the decibel reading when the data is collected and viewed through industry standard collection and review tools such as Cellebrite and Elcomsoft Phone Breaker.
Magistrate Judge Jones further explained that although the Headphone Audio Levels visible on the iPhone identify the connected device by the name associated with the device—so arguably the data may exist on the iPhone somewhere else—the instructions Defendants provided to Plaintiffs for the self-collection of the data did not provide instructions to click on any links that would provide this information and did not instruct Plaintiffs to screenshot the information. According to Magistrate Judge Jones, the “bottom line is that the accuracy of the data is suspect if headphones other than Apple or Beats are used and the data collected and reviewed using industry standard collection and review tools do not identify whether the data was generated by car speakers, headphones, or connected [Bluetooth] speakers.”
Magistrate Judge Jones also noted that there are significant problems when collecting the health data when using industry standard tools, such as Cellebrite and Elcomsoft. Id. at *3. Notably, when collecting the data, the tools collect all health data and not just hearing data. So, when collecting, the data collection tools also collect the following health data stored in the iOS devices: (1) Activity, which includes exercise tracker and step count; (2) Body Measurements; (3) Menstrual Cycle Tracking; (4) Heart, including blood pressure and heart rate; (5) Mindfulness; (6) Nutrition; (7) Respiratory; and (8) Sleep, symptoms and other data manually inputted by the iOS user.
Magistrate Judge Jones identified several other issues with collecting health data, including that Defendants’ instructions applied only to iOS devices (not hearing aids or Android devices), that the instructions require knowledge of the Settings and Health Application features in the iPhone, that the data produced through a screenshot is limited, and that Apple iPhones have automatically recorded and stored data related to sound levels only since the release of iOS 13 in 2019. As a result of these and other issues, Magistrate Judge Jones concluded that the cost of collecting and reviewing the data would likely be much more than the cost of the limited self-collection proposed by Defendants.
Magistrate Judge Jones next turned to the applicable legal standards, particularly Rule 26(b)(1) of the Federal Rules of Civil Procedure, under which parties may obtain discovery “regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” Id. at *4. Rule 26 provides six factors to consider regarding proportionality: (1) the importance of the issues at stake in the action; (2) the amount in controversy; (3) the parties’ relative access to relevant information; (4) the parties’ resources; (5) the importance of the discovery in resolving the issues; and (6) whether the burden or expense of the proposed discovery outweighs its likely benefit. This analysis often means “that the burden of responding to discovery lies heavier on the party who has more information, and properly so.” Id. (quoting Fed. R. Civ. P. 26(b) advisory committee’s note (2015 amendment)).
Under these standards, Magistrate Judge Jones concluded that Defendants had failed to establish that the noise exposure data would be important to resolving the issues in this case and that the burden and expense of collecting and reviewing the hearing data outweighed the likely benefit. Therefore, Defendants’ motion to compel failed on proportionality grounds.
Magistrate Judge Jones noted several issues with respect to the utility of the requested data. First, he found that Defendants had not shown that the relevant Plaintiffs possessed an Apple device capable of storing the information they sought. He noted that Defendants did not request an interrogatory that each Plaintiff disclose the year and model of their iPhone or other electronic device, and therefore it was “highly speculative as to how many Plaintiffs, if any, currently have post[-]2019 iOS devices.” Second, Magistrate Judge Jones found that even if a Plaintiff possessed a post-2019 iOS device, collection and review of the data with industry-standard tools would result in the production of other private health data of the user and potentially of nonparties with whom the user shared a phone or other device, such as family members. Third, Magistrate Judge Jones found that none of the requested hearing data would identify who was using the device when hearing data registered, how the device was being used, or where the device was located in relation to the user when the hearing data registered. Id. at *5.
Magistrate Judge Jones also focused on the fact that the reliability and usefulness of the hearing data was further diluted because the requested data did not disclose whether the user was using headphones, a Bluetooth speaker, an automobile speaker through use of Carplay, or some other connected device. This information would be critical because the difference between hearing data registered while using Apple earplugs and hearing data registered while the device was connected to speakers outside “are worlds apart.” In addition, the noise alert data Defendants sought did not provide evidence of exposure to hazardous noise, only of instances when the iOS device automatically reduced noise that may have exceeded 85 dB.
Magistrate Judge Jones also found issues with the reliability of the requested data, noting that the quality and accuracy of the recording of the data by the device depends on the age and wear and tear of the device and on how the device is held and positioned. And because built-in microphones have limited dynamic range and low frequency response, there is a significant variance across devices and apps, even in iOS devices.
Turning to burden, Magistrate Judge Jones found that the burden and expense of producing the data far outweighed any likely benefit. Id. at *6. He “strongly doubt[ed] that any of the Plaintiffs—most of whom are not forensically familiar with iOS devices—would be able to navigate the self-collection protocol without expert assistance.” And while forensic collection of an iOS device can be accomplished remotely, review of the data, including removal of any nonhearing health data, would increase the expense and burden. Thus, even remote collection would involve the same time and expense that is typically involved in collecting, reviewing, and producing text messages and photos from an iOS device.
Magistrate Judge Jones denied Defendants’ motion to compel as disproportional in light of the burdens associated with collecting the data because it would reflect, at best, data about the device itself and not data about how the Plaintiffs were affected by noise generated by the device.
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