This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:
- A ruling from the Supreme Court of New York requiring a defendant to produce its document hold notices and related material based on the plaintiff’s showing that the defendant had spoliated responsive materials.
- An order from the U.S. District Court for the Northern District of Indiana granting in part a plaintiff’s motion to compel production of documents and metadata where the defendant’s production evidenced inconsistencies and raised questions as to what emails and documents it maintained in the regular course of business and whether it conducted a reasonable search for responsive documents.
- Two decisions from the U.S. District Court for the Eastern District of Michigan addressing competing proposals from the parties regarding particular search terms for the defendant to use to search for responsive material within its electronically stored information (ESI).
- An opinion from the U.S. District Court for the Northern District of California approving of a defendant’s proposal to use a phased approach to discovery including the use of both search terms and technology-assisted review.
1. A ruling from the Supreme Court of New York requiring a defendant to produce its document hold notices and related material based on the plaintiff’s showing that the defendant had spoliated responsive materials.
In Radiation Oncology Servs. of Cent. New York, P.C. v. Our Lady of Lourdes Mem’l Hosp., Inc., 69 Misc. 3d 209 (N.Y. Sup. Ct. Cortland Co. June 9, 2020), New York Supreme Court Justice Mark G. Masler ordered the Defendants to produce their litigation document hold notices and related information because the Plaintiffs made a preliminary showing of spoliation as to certain documents, which Defendants failed to rebut as a matter of law, but held in abeyance Plaintiffs’ request for spoliation sanctions until after production of the document hold materials.
In this breach-of-contract litigation, Plaintiffs moved to compel production of Defendants’ litigation hold and all related ESI as well as for sanctions based on alleged spoliation. Id. at 210. Plaintiffs claimed seven instances of spoliation, but Justice Masler addressed only two, both of which involved instances in which Defendants produced a printed copy of a document but failed to produce electronic copies or any associated ESI. Id. at 211-12.
Justice Masler explained that “[l]itigation holds are generally protected from disclosure by the attorney-client privilege or as attorney work product unless a preliminary showing of spoliation is made.” Id. at 210. Where a preliminary showing of spoliation has been made, production of a litigation hold may be ordered “because its scope and effect bear directly on the state of mind of the party with control of the destroyed evidence, which is a critical element in determining whether spoliation sanctions are warranted, and, if so, in assessing an appropriate sanction.” A party seeking “sanctions for spoliation of evidence must show that the party having control over the evidence possessed an obligation to preserve it at the time of its destruction, that the evidence was destroyed with a ‘culpable state of mind,’ and ‘that the destroyed evidence was relevant to the party’s claim or defense such that the trier of fact could find that the evidence would support that claim or defense.’ ” Id. at 211 (quoting VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 93 A.D.3d 33, 45 (1st Dept 2012)).
Justice Masler found that Plaintiff established a preliminary showing of spoliation. With respect to the two emails at issue, he noted that Defendants produced printed hard copies of the emails but no electronic versions or ESI associated with them. Id. at 211-12. Justice Masler then found that Defendants failed to rebut Plaintiffs’ preliminary showing of spoliation by arguing that the hardcopy versions of the documents contained their content. Justice Masler concluded that this did not resolve the spoliation issue as “printing paper copies of the emails and permanently deleting the associated ESI potentially deprived the emails of significant evidentiary value.” Nor did Defendants establish, “as a matter of law ... (1) that they had no obligation to preserve the evidence at the time of its destruction; (2) that the evidence was destroyed through no fault or wrongdoing whatsoever, even negligence; or (3) that the missing evidence was not relevant to Plaintiffs’ claims.” Id. at 212-13.
Because Defendants failed to rebut Plaintiffs’ preliminary showing of spoliation, Justice Masler ordered Defendants to produce all litigation hold notices and associated ESI. Id. at 213. But Justice Masler held Plaintiffs’ motion for sanctions in abeyance until the parties had a “full and fair opportunity to litigate the issue of spoliation” using the litigation hold materials.
2. An order from the Northern District of Indiana granting in part a plaintiff’s motion to compel production of documents and metadata where the defendant’s production evidenced inconsistencies and raised questions as to what emails and documents it maintained in the regular course of business and whether it conducted a reasonable search for responsive documents.
In Axis Ins. Co. v. American Specialty Ins. & Risk Servs., Inc., 2021 WL 2910814 (N.D. Ind. July 12, 2021), U.S. Magistrate Judge Susan Collins granted in part with the Plaintiff’s motion to compel production of documents and metadata where the Defendant’s production evidenced inconsistencies and raised questions as to what emails and documents it maintained in the regular course of business, and whether it conducted a reasonable search for responsive documents.
Plaintiff brought this matter asserting a single claim for breach of contract with respect to its agreement with Defendant to promote, underwrite, bind, and deliver its insurance policies to customers. Id. at *1. During discovery, Plaintiff claimed that Defendant’s responses omitted or included incorrect metadata, including missing “family” data and emails with altered subject lines and message content, and that responsive documents were omitted. Id. at *2. After unsuccessful attempts to meet and confer, Plaintiff filed a motion to compel.
Magistrate Judge Collins first addressed Plaintiff’s contention that Defendant failed to produce a number of internal documents and communications. Id. at *4. Defendant responded that the discovery sought was overly burdensome or duplicative and that Plaintiff had “unfettered access” to certain of the documents outside of the discovery process. But Magistrate Judge Collins found that Defendant failed to raise these objections in its initial responses to the discovery, and Defendant had therefore waived them under Federal Rule of Civil Procedure 34. Id. at *5. She also rejected the argument that the discovery would be duplicative or overly burdensome and found the claim that Plaintiff had “unfettered access” to these documents undercut by a cease-and-desist letter to Plaintiff asking it to stop efforts to obtain documents or evidence from Defendant outside of the discovery process. On that basis, Magistrate Judge Collins granted Plaintiff’s motion to compel with respect to these document requests and ordered Defendant to produce all responsive documents and file an affidavit detailing its steps to identify responsive documents and certifying that all responsive nonprivileged documents were produced.
Magistrate Judge Collins next addressed Plaintiff’s contention that Defendant wrongfully refused to produce certain documents, including communications between the parties and internal documents relevant to the dispute. Id. at *6. Defendant claimed to have produced all responsive, nonprivileged emails, but Plaintiff argued that Defendant failed to produce certain emails and attachments referenced by later emails and produced emails that appeared to have their subjects or text edited and that the subject line of certain emails were either changed when the email was forwarded and Defendant failed to produce any other emails in the chain or that the emails’ metadata was altered at a later point. In response, Defendant asserted that it had produced all responsive documents it identified, save for unnecessary duplicates, and that any changes to subject lines resulted only from employees forwarding or responding to the emails. Id. at *7. Defendant also asserted that it saved only certain threads rather than individual emails, so emails with edited texts or subjects were the only responsive documents in its possession.
Magistrate Judge Collins noted that Federal Rule of Civil Procedure 34(b)(2)(E) requires a party to produce documents as they are kept in the usual course of business, but if a document does not exist, “[i]t is sufficient that the discovered party respond by saying that a document ... is not in existence.” Id. (quoting Hagemeyer N. Am., Inc. v. Gateway Data Scis. Corp., 222 F.R.D. 594, 598 (E.D. Wis. 2004)). Magistrate Judge Collins also noted, however, that the producing party has the obligation to search available electronic systems for the information demanded and, if it is not reasonably accessible because of undue burden or cost, it is the responding party’s burden to identify and articulate the burden of production. Id. (quoting Federal Rule of Civil Procedure 26(b)(2)(C)).
Here, Magistrate Judge Collins found that the “inconsistencies in [Defendant’s] production raise[d] questions as to what emails and documents it maintained in the regular course of business.” She found unpersuasive Defendant’s claims as to why certain inclusive emails, but not earlier individual emails and attachments, were saved. Magistrate Judge Collins also was unconvinced that Defendant took “reasonable” and “diligent” steps to identify responsive emails and raised concern that Defendant did not use a sufficiently broad research methodology to encompass all responsive documents. Id. at *8. Granting Plaintiff’s motion to compel, she ordered Defendant to “conduct a search of all depositories of electronic information in which one may reasonably expect to find” responsive documents. Defendant was again ordered to file an affidavit detailing the steps it took to identify the responsive documents and certifying that all responsive, nonprivileged documents had been produced.
Magistrate Judge Collins next addressed Plaintiff’s contention that Defendant improperly failed to include metadata requested in conjunction with its requests. Although it eventually produced a .cvs overlay file containing metadata, Defendant initially objected to the requested metadata field, arguing it had agreed only to produce responsive documents as PDFs and the parties had not agreed to a protocol for ESI. Id. at *9. Plaintiff alleged that Defendant still omitted basic metadata such as custodian information, produced ESI with errant or altered family metadata that linked unrelated documents as family members while failing to link related documents, and produced documents modified from their original form without explanation or metadata enabling Plaintiff to ascertain information regarding the modifications. Plaintiff supported its claim with communications with members of Defendant’s “technology team” confirming issues with the production of metadata. Defendant maintained that it produced documents in the format they were maintained in the ordinary course of business and that Plaintiff had failed to show particular need for the ESI.
Magistrate Judge Collins rejected Defendant’s argument relating to the lack of an agreed-on ESI protocol, as this was not a requirement under Rule 34. She emphasized that Plaintiff specifically requested the metadata at issue and that once the request was made, Defendant was not free to simply ignore it. Id. at *10. Defendant’s objection that Plaintiff sought irrelevant information was considered waived as Defendant failed to raise it in a timely manner. Magistrate Judge Collins additionally found the metadata relevant, both in assisting Plaintiff in properly linking family members and to Plaintiff’s substantive claim, and stated that producing the requested metadata was not unduly burdensome or disproportionate to the needs of the case. As a result, Magistrate Judge Collins granted Plaintiff’s motion to compel ESI metadata and ordered Defendant to file an affidavit detailing the steps it took to ensure that the metadata was produced as it was maintained in the ordinary course of business and not purposefully altered, and if it was altered, an explanation as to how.
Magistrate Judge Collins found that awarding Plaintiff its fees and expenses associated with its motion to compel was appropriate. But because Plaintiff was not successful on the entirety of its motion, she required Plaintiff to submit an affidavit setting forth the fees relating to the successful portions of its motion. She determined that Plaintiff attempted to resolve the discovery disputes in good faith and noted that it had prevailed in its position with respect to certain requests and metadata. She further determined that there was little to suggest that Defendant’s position was substantially justified or that an award of fees would be unjust, and its objections to the requests were “largely undeveloped.” She stated that Defendant’s position as to the allegedly missing documents was not substantially justified because Plaintiff had raised legitimate concerns regarding the completeness of Defendant’s production.
3. Two decisions from the Eastern District of Michigan addressing competing proposals from the parties regarding particular search terms to be used by the defendant to search for responsive material within its ESI.
In two decisions from the Eastern District of Michigan, McMaster v. Kohl’s Department Stores, Inc., 2020 WL 4251342 (E.D. Mich. July 24, 2020), and Murray v. City of Warren, 2020 WL 4783297 (E.D. Mich. Aug. 17, 2020), U.S. Magistrate Judge R. Steven Whalen addressed applications by the Plaintiffs seeking to require that the Defendants use certain search terms to search for documents responsive to the Plaintiffs’ discovery requests.
In McMaster v. Kohl’s Department Stores, Inc., 2020 WL 4251342 (E.D. Mich. July 24, 2020), the parties disputed the search terms that Defendant would apply to its collection of ESI. In addressing this dispute, Magistrate Judge Whalen began by quoting from United States v. O’Keefe, 537 F. Supp. 2d 14, 23-24 (D.D.C. 2008), in which the court observed: “Whether search terms or ‘keywords’ will yield the information sought is a complicated question involving the interplay, at least, of the sciences of computer technology, statistics and linguistics.” Finding that the resolution of such questions was “beyond the ken of laymen” and should require the assistance of experts, the court in O’Keefe continued: “Given this complexity, for lawyers and judges to dare opine that a certain search term or terms would be more likely to produce information than the terms that were used is truly to go where angels fear to tread.” 2020 WL 4251342 at *3.
Magistrate Judge Whalen directed the parties to one of his prior decisions, Webasto Thermo & Comfort North America, Inc. v. BesTop, Inc., 326 F.R.D. 465, 469 (E.D. Mich. 2018), in which he noted that “[a]dversarial discovery practice, particularly in the context of ESI, is anathema to the principles underlying the Federal Rules, particularly Fed. R. Civ. P. 1, which directs that the Rules ‘be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.’ ” That opinion continued by noting that the Sedona Conference Cooperation Proclamation stated that “all stakeholders in the system — judges, lawyers, clients, and the general public — have an interest in establishing a culture of cooperation in the discovery process. Over-contentious discovery is a cost that has outstripped any advantage in the face of ESI and the data deluge. It 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.’ ”
Noting that he had no interest in going where angels fear to tread, Magistrate Judge Whalen therefore directed that if the parties could not agree on appropriately limited search terms, they would share the cost of retaining an expert to assist them. If they still could not agree, Magistrate Judge Whalen directed the Plaintiff to renew his motion regarding the search terms and provide the court with an expert report substantiating his position.
Magistrate Judge Whalen addressed a similar dispute regarding search terms in Murray v. City of Warren, 2020 WL 4783297 (E.D. Mich. Aug. 17, 2020), an employment discrimination case brought under Title VII of the Civil Rights Act of 1964. In Murray, the Plaintiff proposed certain search terms to apply to the emails of three custodians who were alleged to have made racially disparaging and insulting comments.
Referring to his opinion in McMaster, Magistrate Judge Whalen noted that “[g]enerally, the choice of search terms is a matter appropriately left to the parties, with the assistance of experts when necessary.” Id. at *4. However, he provided some guidance as to appropriate search terms, including that Defendants should use terms for the Plaintiff’s name as well as certain other terms related to the discrimination claim such as “harass!”. Magistrate Judge Whalen directed Defendants to apply those search terms and produce any emails containing the terms, subject to claims of privilege and production of a privilege log. As to any other terms, Magistrate Judge Whalen directed the parties to follow the procedure he had set forth in McMaster, including sharing in the cost of an expert to assist them.
4. An opinion from the Northern District of California approving of a defendant’s proposal to use a phased approach to discovery including the use of both search terms and technology-assisted review.
In Huntsman v. Southwest Airlines Co., 2021 WL 3504154 (N.D. Cal. August 10, 2021), U.S. Magistrate Judge Phyllis J. Hamilton approved the Defendant’s proposed approach to discovery using keyword searches and technology-assisted review in tandem.
In this class action brought under the Uniformed Services Employment and Reemployment Rights Act of 1994, the parties submitted to the court a number of disputes regarding Plaintiff’s document requests to Southwest. Among other disputes, Plaintiff sought a broad category of communications related to Southwest’s participation in Military Review Board meetings, or with any other government office or agency, regarding Southwest employees’ military leaves. Plaintiff contended that these requests related to Southwest’s practice for verifying leaves through communications with the military. Southwest objected to this request as overbroad and not proportional to the needs of the case but still agreed to conduct a phased search of its custodians’ data for responsive documents. Id. at *2.
Magistrate Judge Hamilton agreed with Southwest’s proposed phased approach to responding to this discovery. She further noted that the parties disagreed regarding the use of search terms to limit the scope of ESI review. In this regard, she approved of Southwest’s proposed approach to use keyword searches and technology-assisted review in tandem, finding that the approach “does not offend the court’s expectation that the parties conduct a reasonable inquiry as required by the rules.” Id. at *3.
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