Notable Cases and Events in eDiscovery

This Sidley Update addresses the following recent developments and court decisions involving eDiscovery issues:

1. a decision from the U.S. District Court for the Southern District of Texas compelling production of structured data in its native form, finding that a prior production of the data in Excel format was not reasonably usable
   
   
2. an order from the U.S. District Court for the District of Utah finding that Defendant’s production of individual responsive Teams messages was not reasonably usable or complete without production of surrounding messages for context
   
   
3. a ruling from the U.S. District Court for the Western District of Washington finding that Plaintiff had waived the attorney-client privilege and work product protection when producing electronically stored information (ESI) by failing to take reasonable steps to prevent disclosure of privileged material
   
   
4. an opinion from the U.S. District Court for the Southern District of New York granting a motion for spoliation sanctions where the Plaintiff had failed to download and preserve data stored by a third-party service after it learned the service would be discontinued and the data would no longer be available

1. In In re Concho Resources, Inc. Securities Litigation, No. 21-cv-2473, 2025 WL 2899518 (S.D. Tex. Oct. 10, 2025), U.S. District Judge Andrew S. Hanen applied the standards for determining whether production of dynamic structured data in Excel form was reasonably usable.

In this securities fraud class action, Plaintiffs alleged that Defendants (Concho and certain of its executives) misrepresented the effectiveness of a purportedly “state-of-the-art” drilling method by concealing that the technology was unproven and that projects were underperforming. Id. at *1.

In discovery, Concho produced hundreds of thousands of documents, including millions of pages of Excel spreadsheets derived from its main data system, the ARIES database. Plaintiffs argued that these “unlabeled, disorganized, and unmalleable” Excel spreadsheets were unusable — preventing their experts from understanding how the data related to key budgets, forecasts, and the assumptions underlying Defendants’ public statements. Plaintiffs requested that Concho produce native versions of portions of the ARIES database, but Concho refused. Plaintiffs moved to compel. Id. at *2.

Judge Hanen began his analysis with a brief survey of the relevant Federal Rules of Civil Procedure, including Rule 37(a)(1), which permits parties to move for an order compelling disclosure or discovery. He also quoted from Rule 26(b)(1), which permits parties to obtain discovery regarding “any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs to the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to the relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”

Next, Judge Hanen addressed limits relevant to discovery of ESI, including Rules 34(a)(1)(A) and (b)(1)(A)-(C) permitting parties to request ESI with “reasonable particularity” and “specify the form or forms in which electronically stored information is to be produced.” He explained that Rule 34(b)(2)(E)(i) requires a party to produce the ESI documents “as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request.” Id.

Finally, Judge Hanen noted that “ESI may exist in dynamic databases and other forms far different from fixed expression on paper,” and production of such ESI “should be subject to comparable requirements to protect against deliberate or inadvertent production in ways that raise unnecessary obstacles for the requesting party.” Id. (quoting from the Advisory Committee Notes to the 2006 Amendments to Rule 34). In particular, he explained that “while many types of ESI can be exported into different formats (such as the export from native format to an excel spreadsheet), the option to produce in a reasonably usable form does not mean that a responding party is free to convert ESI from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for the requesting party to use the information efficiently in the litigation.”

Applying the proportionality factors under Rule 26(b)(1), Judge Hanen held that production of the native ARIES databases was warranted. He found that the issues at stake in a multibillion-dollar securities fraud action strongly favored broad discovery, that Concho had exclusive access to the requested data, and that its corporate resources weighed against claims of undue burden.

Judge Hanen rejected Concho’s argument that its spreadsheet productions satisfied its obligations. Citing the Advisory Committee Notes to Rule 34, he clarified that ESI may be produced in a reasonably usable form but a producing party may not “create unnecessary obstacles by exporting data into a more difficult or burdensome format for the requesting party.” Id. at *5. The court found that exporting ARIES data into spreadsheets stripped the information of key functionality, such as the ability to link datasets and perform calculations, thereby creating “unnecessary obstacles” to discovery. Id. at *4.

Judge Hanen also discounted Concho’s burden arguments, including claims that the ARIES system was dynamic (i.e., constantly changing) and that knowledgeable employees were no longer available following Concho’s acquisition by another company. He noted that Concho could not rely on self-created difficulties to avoid production, particularly where similar data had previously been shared with third-party auditors.

Accordingly, Judge Hanen ordered Concho to produce the relevant ARIES databases and associated tie-in settings in native format for the specified years.

2. In Soqui v. England Logistics, Inc., No. 24-cv-00261, 2025 WL 3080571 (D. Utah Nov. 4, 2025), U.S. Magistrate Judge Daphne A. Oberg addressed the standards for determining whether chat messages were produced in a reasonably usable form.

Plaintiff, a former employee of Defendant England Logistics, Inc., alleged that England Logistics violated the Americans With Disabilities Act by terminating him after he requested an accommodation to work from home. Id. at *1.

In discovery, Plaintiff requested “all documents” and “all communications” concerning his accommodation request, the communications underlying his termination, and all communications between his supervisor and other employees regarding Plaintiff. In response, England Logistics objected on various grounds (not including proportionality) but agreed to produce certain communications. Id. at *2. England Logistics thereafter produced more than 100 Microsoft Teams messages identified through keyword searching, compiled in chronological order but without the surrounding conversation threads.

Plaintiff objected to this form of production and asked England Logistics to supplement its response, requesting the conversation surrounding 105 specifically identified messages. England Logistics agreed to produce certain additional messages but refused to produce others because “additional supplementation would be unduly burdensome.”

Plaintiff moved to compel, arguing that England Logistics’ production of individual Teams messages was incomplete and did not comply with Rule 34’s requirement to provide ESI “in a reasonably usable form.” England Logistics opposed Plaintiff’s motion, asserting that it produced the individual messages in a standard .MSG format, but would need to convert the messages to an HTML format to produce a larger set of messages. England Logistics contended that this would be unduly burdensome and disproportionate to the needs of the case because its IT manager left and it would take the new IT manager “at least fifty or sixty hours” to search for and produce the request messages.

At the outset, Judge Oberg quoted from the relevant legal standards under Rules 26 and 34. She explained that Rule 26 permits “discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” She then listed the proportionality factors under Rule 26 before outlining the procedures under Rule 34 for producing ESI, which include that a party must “produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request” or, if the request does not specify a form for producing ESI, “produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.”

Applying these standards, Judge Oberg rejected England Logistics’ attempt to frame the dispute as a file-format issue. As she explained, Plaintiff “has not moved to compel production of messages in any specific file format” but instead challenged the completeness of the production. Id. at *3.

Judge Oberg held that England Logistics’ approach — producing only “individual Teams messages containing a search term, without any surrounding messages” — was not fully responsive to requests seeking “all documents” and “all communications” on the relevant topics. She concluded that the lack of context rendered the production unusable. Noting examples submitted by the parties, she observed that “in most instances, it would be impossible to determine what the messages are about or their potential relevance to this case without the surrounding conversation.”

Turning to proportionality, Judge Oberg held that requiring England Logistics to produce the surrounding messages was not unduly burdensome. Although England Logistics presented evidence that identifying and exporting full Teams conversations would require time and effort, she found that this burden was “largely a problem of England Logistics’ own making” because England Logistics had “chose[n] to produce only individual, isolated messages in the first place — an incomplete production that also rendered the individual messages unusable.” She also rejected England Logistics’ reliance on changes in IT personnel, noting that “the fact that a change in IT personnel has added to the difficulty of a renewed search does not excuse the need for a fulsome response.”

Applying Rule 26(b)(1), Judge Oberg distinguished between narrowly targeted and overbroad requests. Requests focused on Plaintiff’s accommodation request and the communications underlying his termination were “narrowly targeted toward central issues in this case,” and the “likely benefit of this discovery outweighs the burden required to produce the surrounding messages.” Id. at *4. By contrast, she found that the request seeking “all communications” between Plaintiff’s supervisor and any other employee was overbroad and required narrowing through further meet-and-confer efforts.

To provide clarity on what surrounding messages England Logistics needed to produce, Judge Oberg adopted a protocol from a prior case, ordering England Logistics to produce “the entirety of any Teams conversation containing twenty or fewer total messages that ha[d] at least one responsive message,” and for longer conversations, “the ten messages preceding or following any responsive Teams message.” Id. at *4 -5.

Finally, Judge Oberg denied Plaintiff’s request for attorney’s fees under Rule 37, finding that England Logistics’ position was “substantially justified where it presented evidence that producing the surrounding messages would require significant time and effort.”

3. In Wilson Aerospace LLC v. The Boeing Company Inc., No. 23-cv-00847-JHC, 2026 WL 497083 (W.D. Wash. Feb. 23, 2026), U.S. District Judge John H. Chun addressed whether Plaintiff had waived claims of attorney-client and work product privilege by not taking reasonable steps to prevent disclosure of the material.

In this action involving claims that Defendant misappropriated Plaintiff’s intellectual property, Plaintiff produced ESI from a hard drive that “contained tens of thousands of collected documents.” Id. at *1. A week after making the production, Defendant informed Plaintiff that it had discovered 181 documents containing “indica of privilege.” Plaintiff agreed some of the documents were privileged and informed Defendant that additional documents in the production may be privileged. Defendant filed a motion seeking an order that Plaintiff had waived any privilege in connection with its production, arguing that Plaintiff failed to take reasonable steps to prevent or rectify the disclosure of the privileged documents. Plaintiff opposed the motion and filed with its opposition a privilege log listing 576 documents that Plaintiff claimed require clawback, including 141 documents of the 181 originally identified by Defendant.

Judge Chun began his analysis by noting the general rule that “a party waives privilege with respect to a document if they produce it.” Id. at *2. He explained that Federal Rule of Evidence 502(b) provides an exception if “(1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B).” Judge Chun continued that “Courts look at the overall context of production when determining whether the disclosing party took reasonable steps to prevent disclosure” and the party alleging the privilege must offer specific facts and details to show that the procedures were reasonable.

Plaintiff argued that it took reasonable measures to prevent disclosure of privileged information by applying search terms designed to capture privileged material, including attorney names, attorney email addresses, law-firm domains, and other indicators associated with privileged information, and excluding from the production population. Id. at *3.

Judge Chun found that Plaintiff’s position with respect to its reasonable efforts — although made “in briefing without citation to the record” — were insufficient. He noted that a search targeting “attorney names, attorney email addresses, [or] law-firm domains” might capture some privileged materials, but “it is not reasonable to assume it alone would prevent inadvertent disclosure.” In addition, he found that documents Plaintiff produced contained terms such as “attorney client” or “privilege,” which should have been excluded from the production.

Judge Chun also found that Plaintiff’s proffered explanation lacked specificity. For example, a declaration by Plaintiff’s counsel alleged that a manual review excluded 1,500 documents, including privileged materials, but the declaration referred only to “proprietary drawings, documents, diagrams and other trade secret materials” and contained no reference to any steps Plaintiff took to prevent disclosure of privileged materials.

Judge Chun expressed sympathy “regarding the difficulties associated with a high-volume ESI disclosure,” but he noted that it took Defendant only five days to discover that Plaintiff’s production contained privileged documents. Id. at *4. He found that Plaintiffs’ failure to exclude from its production “documents warning of attorney-client privilege on the first page, dozens of files with names indicating that they were draft litigation materials, and documents authored by counsel, is not a responsible practice.”

Because Plaintiff failed to make a showing that it took reasonable steps to prevent disclosure of privileged material, Judge Chun held that Plaintiff failed the second element of Rule 502(b) and waived any claim to attorney-client privilege or work product protection as it related to the hard-drive materials. As a result of his holding, Judge Chun found that he need not address whether the disclosure was inadvertent or whether Plaintiff took reasonable steps to rectify the error.

4. In PharmacyChecker.com LLC v. National Association of Boards of Pharmacy et al., No. 19-cv-7577-KMK-VR, 2025 WL 2731508 (S.D.N.Y. Sept. 25, 2025), U.S. Magistrate Judge Victoria Reznik addressed whether Plaintiff took reasonable steps to preserve website traffic data after learning that the third-party source for such information would be shut down.

Plaintiff operated a website providing consumers with comparative drug pricing information and brought Sherman Act claims alleging that Defendants conspired to exclude it from the marketplace through “shadow regulation.” Id. at *1. Central to Plaintiff’s claims was the allegation that it was placed on Defendant’s list of “Not Recommended Sites,” which allegedly caused a decline in organic web traffic from search engines.

During earlier discovery, Plaintiff had produced reports from Google’s Universal Analytics platform showing monthly organic traffic broken down by search engine source for certain periods. In March 2022, Plaintiff learned that Universal Analytics would be discontinued and that its data would no longer be accessible after July 1, 2024. One of Plaintiff’s IT employees, without direction from counsel, downloaded what he believed to be relevant data from the platform. While overall traffic data was preserved, granular traffic data by search engine source for a 19-month period (September 2021 through May 2023) was not downloaded and was ultimately lost when the platform went offline.

After Defendant successfully moved to compel production of granular traffic data in April 2025, Plaintiff produced a report that omitted the 19-month period. Defendant then moved for spoliation sanctions under Rule 37(e), seeking preclusion of Plaintiff’s evidence relating to Google and Bing traffic for that period, permission to present evidence of spoliation, a special jury instruction about the traffic data that was allegedly destroyed, and attorneys’ fees associated with the Rule 37(e) motion for sanctions and the earlier motion to compel.

Judge Reznik began her analysis with the Rule 37(e) framework, noting that spoliation sanctions are discretionary. Id. at *3. Citing Rule 37(e)(1), she explained that spoliation sanctions require a finding that “(1) the information lost was ESI, (2) the lost ESI should have been preserved by the party opposing sanctions, (3) the party who lost the ESI ‘failed to take reasonable steps to preserve it,’ (4) the lost ESI ‘cannot be restored or replaced through additional discovery,’ and (5) the party seeking spoliation was prejudiced by the ESI’s loss.” Here, the parties disputed whether Plaintiff took reasonable steps to preserve the ESI and whether Defendant was prejudiced by the ESI’s loss.

Addressing the first disputed element, Judge Reznik concluded that Plaintiff failed to take reasonable steps to preserve the granular traffic data. Id. at *4. She explained that “[w]hether a party took reasonable steps to preserve lost ESI is equivalent to a negligence inquiry, i.e., did the party do what a reasonable person would have done in a similar situation” and is “heavily dependent on the facts, circumstances, and context of the litigation.” She noted that Plaintiff’s complaint specifically alleged traffic losses from Google and Bing, and Plaintiff had previously produced reports broken down by search engine. Therefore, she concluded, “it was reasonable to expect that website traffic data broken down by search engine would remain relevant and necessary to Plaintiff’s ability to prove its claims (and Defendant’s ability to rebut them) ….” Judge Reznik was particularly critical of Plaintiff’s preservation efforts once it became aware of Universal Analytics’ going offline. She noted that Plaintiff’s IT employee unilaterally decided what data to download, and “no attorney worked with the employee to determine what was necessary.” She highlighted that “[n]o affirmative steps were taken to strategize, develop, and execute an initial assessment of what must be downloaded,” nor were steps taken to coordinate with opposing counsel or to follow up periodically on preservation.

Addressing the second disputed element, Judge Reznik concluded that Defendant was prejudiced by the loss of the granular data. Id. at *6. She found that the missing data was “relevant to Plaintiff’s claims and would have helped [Defendant] in defending against them,” particularly because Defendant could not determine which portion of overall traffic was attributable to Google and Bing during the missing period. Although Plaintiff argued that the missing data represented only a small subset of the overall dataset, Judge Reznik explained that prejudice exists where lost ESI would have supported a party’s defenses even if other evidence remains available.

Turning to remedies, Judge Reznik stressed that Rule 37(e)(1) limits sanctions to “measures no greater than necessary to cure the prejudice.” While preclusion of specific evidence may be appropriate, she declined to adopt Defendant’s request to bar Plaintiff from presenting any evidence or argument concerning Google and Bing traffic during the 19-month period. Id. at *7. Such a sanction “would be greater than necessary to cure the prejudice,” particularly given that more than eight years of granular traffic data had been produced and that trends in that data showed Google traffic dominated organic search results. Instead, Judge Reznik imposed a more tailored limitation, ordering that Plaintiff could present evidence and argument concerning Google and Bing traffic during the missing period, but “must make clear that any Google and Bing search engine traffic and related damages for this missing period are an approximation or estimate derived from the data available ….”

Judge Reznik also granted Defendant’s request to present evidence of the loss of data at summary judgment and trial. Relying on remedies ordered in prior cases, she explained that this remedy “ensure[s] that the finder of fact will have the full context for the evidentiary imbalance that will become apparent at trial.” Id. at *8. She further ordered that if the case proceeded to a jury trial, Defendant could seek an appropriate jury instruction regarding the lost data, with the precise wording left to the court.

Finally, Judge Reznik awarded Defendant its attorneys’ fees and costs associated with bringing the spoliation motion and a related pre-motion letter, finding that such fees were warranted to address the prejudice caused. However, she declined to award fees associated with Defendant’s earlier motion to compel, concluding that doing so would impose a sanction “greater than necessary to cure the prejudice to” Defendant.