This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:
- a decision from the U.S. District Court for the District of Connecticut holding that the defendant violated Federal Rules of Civil Procedure 26 and 37 by failing to produce the time-stamped electronic version of a Google spreadsheet because it was a separate document from a version produced without the timestamp
- an order from the U.S. District Court for the Western District of Pennsylvania finding that cost and confidentiality considerations did not relieve the defendants from complying with the provisions of a protocol for the production of electronically stored information (ESI) because neither consideration was unknown to the defendants when they agreed to the protocol
- a ruling from the U.S. District Court for the District of Kansas denying a motion for a protective order permitting the defendants to redact nonresponsive and nonprivileged material in otherwise responsive documents
- an opinion from the U.S. District Court for the District of Minnesota declining to order the defendants to reproduce PDF documents in searchable form where the documents were not produced in a manner that was any less searchable than they were as kept in the ordinary course of the defendants’ business
Plaintiff sued his former employee under the Family Medical Leave Act. Id. at *1. After a trial, the jury returned a verdict in his favor, and the court entered judgment in the amount of $770,006.06 plus postjudgment interest.
Defendant filed a motion for a new trial, citing among other reasons an evidentiary ruling during the testimony of Defendant’s president, Maite Tristan. Id. at *5. During direct examination, Defendant’s counsel entered as an exhibit a Google spreadsheet that included the description “Staff Replacement — Facility Mgr with Maintenance Agent” and asked Tristan about the spreadsheet, which she explained had been prepared “as part of an effort to reduce costs.” Although the Google spreadsheet did not display a date on its face, Tristan testified that Google “automatically records and dates each time the spreadsheet is edited” and that she knew the spreadsheet was edited on April 28, 2020, because she “recall[ed] editing it that week.”
Defendant’s counsel later showed Tristan a different Google spreadsheet that again included the phrase “Staff Replacement — Facility Mgr with Maintenance Agent.” Id. at *6. Tristan testified that this was a “September 15 version” of the same spreadsheet she previously testified about, which she knew because “there’s a time stamp on the live document in Google.... If anybody wanted to check ... me, it’s information that we have available.”
On cross-examination, Tristan clarified that she knew the spreadsheet was edited on September 15 because Defendant’s counsel had “the electronic document where he can show the time stamps.” The court instructed the jury to disregard this testimony and excluded the unproduced electronic version of the spreadsheet from evidence. Defendant argued after trial that excluding this testimony and the spreadsheet necessitated a new trial.
Judge Hall began her analysis of this evidentiary issue with a description of the relevant rules, including Rule 26(e)(1)(A) requiring a party “to supplement answers to interrogatories in a timely manner 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.” She next explained that Rule 37(c)(1) provides that if a party fails to provide information as required by Rule 26(a) or (e), the party is not allowed to use that information at a trial unless the failure was substantially justified or is harmless.
Applying these rules, Judge Hall first considered “whether the electronic version of the spreadsheet that Tristan described as being present in the courtroom was a separate document from the spreadsheets produced by [Defendant], thereby requiring a separate production.” She found that it was a separate document, and should have been produced pursuant to Rule 26(e), because the electronic version contained “material information not in the spreadsheets that were produced.”
Judge Hall next considered whether Defendant’s failure to produce the electronic version of the spreadsheet was substantially justified or harmless.” Id. at *7. Defendant argued that Tristan had testified at her pretrial deposition that “dates the spreadsheet at issue was edited could be seen on the electronic version of the document,” and it was therefore Plaintiff’s burden to request the electronic version. Judge Hall disagreed, finding that it was Defendant’s “burden to supplement its production” once it “learned of the existence of another version of the document at issue.”
Judge Hall rejected Defendant’s argument that the date information at issue was “metadata, not a separate version of the spreadsheet.” She explained that “information about the date a document was created or edited may, ordinarily, be considered metadata,” but she caveated that “[m]etadata is typically not visible to the naked eye, instead, it is usually information hidden within a document that must be extracted to be viewable.”
But Judge Hall noted that for the electronic version of the spreadsheet at issue, Tristan had described it as “the document ... [with a] time stamp by Google” that allowed a user to “open the software and say ... show me what [the spreadsheet] looked like on this date and the software will show me what it looked like.” Judge Hall further explained her understanding that “[w]hen a user selects the version of the document they wish to view, the date is prominently displayed on the electronic version of the spreadsheet.”
Accordingly, Judge Hall concluded that Google Sheets offered “users a version control function that allows them to view iterations of a document on command.” Based on this, Judge Hall found that Defendant “was not substantially justified in withholding the electronic version of the spreadsheet” because Plaintiff requested ESI, and that included the electronic version of the spreadsheet at issue.
Finally, Judge Hall held that even if exclusion of the electronic version of the spreadsheet was error, it did not necessitate a new trial. She noted that the jury was free to consider Tristan’s other testimony regarding the date the September 15 version of the spreadsheet was edited, undermining that Defendant was prejudiced such that a new trial was warranted. Accordingly, Judge Hall denied Defendant’s motion seeking a new trial based on exclusion of Tristan’s testimony and the electronic version of the spreadsheet.
In this action for misappropriation of proprietary information and trade secrets, the parties agreed to an ESI protocol that required the parties to select “a mutually agreed upon vendor to investigate devices, accounts, and networks potentially containing [Plaintiff’s] information” in Defendants’ possession and required Defendants to “deliver all devices and provide access to all accounts and networks to the vendor for collection and processing of ESI.” Id. at *1. The ESI protocol provided that the parties would negotiate search terms for Defendants’ ESI and the selected vendor would conduct the search of the devices, accounts, and networks for an agreed date range.
Consistent with this protocol, Defendants identified laptops, email inboxes, external hard drives, mobile phones, and network shared folders, and the parties agreed to use Precise Discovery as the e-discovery vendor. Defendants later objected to the quote provided by Precise, and the parties agreed that ArcherHall would be used as the e-discovery vendor instead. A month later, however, Defendants objected that ArcherHall’s costs were also too high and took the position that Plaintiff was responsible for the entire cost of the ESI search required by the parties’ protocol.
After the court ordered Defendants to pay for the services of the vendor, Plaintiff provided Defendants with search terms pursuant to the ESI protocol. Although the parties engaged in negotiations regarding the search terms, they did not come to an agreement. Id. at *2.
At a later court conference, Defendants raised a new argument that following the ESI protocol and allowing a vendor to access their ESI would violate preexisting confidentiality provisions in contracts they had with third parties. As a result, Defendants proposed that certain email accounts and network shared folders be searched internally by Defendants rather than by ArcherHall. Defendants further argued that the ESI protocol applied only to relevant ESI, not to all of the ESI on Defendants’ devices and networks. Plaintiff rejected Defendants’ proposals and filed a motion to compel compliance with the ESI protocol.
With respect to Defendants’ argument that an external vendor would be too costly, Magistrate Judge Dodge noted that “[w]hen Defendants entered into the ESI Protocol, they agreed that it would be conducted by an outside vendor” and Defendants “were made aware of the cost estimates before selecting the vendor.” Id. at *3. She found that having agreed to use an external vendor, Defendants “cannot now object to the costs.”
Magistrate Judge Dodge similarly overruled Defendants’ separate objection that they needed to conduct the searches internally to avoid violating contractual confidentiality obligations. Id. at *4. She pointed out that Defendants “acknowledged in the protocol” that “they understood that the ESI search could yield confidential documents.” She therefore reasoned that Defendants would have “considered their business practices, including the existence of contracts with third parties, as well as their methods of storing ESI, before agreeing to the protocol.” Magistrate Judge Dodge also found that both the parties’ ESI protocol and a separate protective order had “certain protections in place for confidential information” although “these protections may or may not completely satisfy whatever agreements Defendants may have made with third parties about protecting disclosure of confidential information.”
Accordingly, Magistrate Judge Dodge ordered that ESI discovery would “proceed forthwith pursuant to the terms of the ESI Protocol” and that Defendants were required to “make available their devices, accounts, and network locations notwithstanding the existence of a contractual provision with a third party that otherwise limits or precludes the search contemplated” in the protocol.
In this consolidated action brought by purchasers of natural gas, Plaintiffs alleged that Defendants violated the Kansas Consumer Protection Act by unlawfully raising the price of natural gas sold to Plaintiffs though distributors during Winter Storm Uri in February 2021. Id. at *1. During discovery, two Defendants served initial disclosures identifying certain invoices for natural gas, and Plaintiffs served Defendants with a document request seeking production of the invoices. In response, Defendants produced heavily redacted copies of the invoices and designated them “Attorneys Eyes Only.” The redactions involved Defendants’ sales of natural gas delivered outside of Kansas.
After Plaintiffs challenged Defendants’ redactions, Defendants filed a motion for a protective order permitting them to maintain the redactions to the invoices.
Magistrate Judge Mitchell began his analysis by noting the general rule that “a party may not unilaterally redact information from documents it produces in litigation simply because the redacted information is irrelevant or non-responsive.” Id. at *2. He reasoned that “[p]ermitting indiscriminate redactions inserts another step in the process, that would invite additional discovery disputes and undermine Fed. R. Civ. P. 1’s directive to construe the Rules to advance the just, speedy, and inexpensive determination of cases.” He also stated that the Defendants’ redactions were “both unnecessary and potentially disruptive to the orderly resolution of the case” because parties are not ordinarily harmed by producing irrelevant or sensitive information that is already subject to a protective order restricting its dissemination and use.
But Magistrate Judge Mitchell noted that a party may seek a protective order authorizing redactions under Rule 26(c)(1), including an order that trade secrets or other confidential commercial information “not be revealed or be revealed in a specified way.” Id. (quoting Rule 26(c)(1)(G)). He explained that a producing party may justify its burden to demonstrate good cause to support “narrowly tailored redactions of limited information” not relevant to the issues in the case “by establishing specific, significant competitive harm that would result from disclosure.”
Magistrate Judge Mitchell quickly disposed of Defendants’ first argument that the redacted information was not relevant to Plaintiffs’ claims. He explained that relevance is “construed broadly” at the discovery stage “to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” Magistrate Judge Mitchell concluded that there was “no question” that the invoices were relevant because they showed the source and cost of the natural gas Defendants bought and the price at which they then sold the gas, allowing a calculation of the cost-price disparity at issue in plaintiffs’ unconscionability claims.” He also pointed out that Defendants identified the invoices in their initial disclosures as documents they intended to use to support their claims and defenses. Id. at *3.
Repeating the general rule that “a party may not redact information from otherwise relevant documents,” Magistrate Judge Mitchell considered whether Defendants had demonstrated that there was good cause for entry of a protective order permitting the redactions.
In this regard, Magistrate Judge Mitchell first considered whether Defendants’ proposed redactions were “narrowly tailored to cover only information that is not relevant.” He concluded that they were not because the redactions were “extensive, covering most of each of the [d]ocuments,” sometimes interfering with the “reader’s ability to understand unredacted information in context.” Moreover, Magistrate Judge Mitchell concluded that information for sales outside Kansas were relevant to Plaintiffs’ claims of unconscionability because it allowed comparison with the Kansas sales.
Magistrate Judge Mitchell also found that Defendants had failed to demonstrate that they would suffer a concrete, specific competitive harm if unredacted copies of the invoices were produced under the Attorneys Eyes Only provision of the protective order in the case. He noted that a finding of harm required Defendants to show that the disclosure of the information would “result in a clearly defined and very serious injury, such as showing the competitive harm that would befall it by virtue of the disclosure of the trade secrets or other highly-confidential proprietary information.”
Defendants argued that the redacted out-of-state sales information would provide competitive information to their competitors that were also defendants in the litigation, but Magistrate Judge Mitchell rejected this argument. Id. at *4. He found that the sales information was for a limited time period and the Attorneys Eyes Only provision of the protective order in the case was adequate protection against Defendants’ competitive concerns. Finally, Magistrate Judge Mitchell found that at least some of the pricing information Defendants redacted was publicly available, further undermining their argument that it was confidential.
Ultimately, Magistrate Judge Mitchell held that Defendants had “not submitted a record from which the court can conclude that the redacted information is so highly proprietary or sensitive that redaction is warranted despite the availability of the Attorneys Eyes Only provision of the protective order,” and he therefore denied Defendants’ motion for a protective order.
Plaintiff brought this lawsuit against the Minnesota Department of Human Services and other defendants alleging that his post-traumatic stress disorder went undiagnosed for many years while he was committed by the state. In discovery, Plaintiff moved to compel Defendants to “produce all discovery documents in copyable, searchable PDF format.” Id. at *1. Plaintiff claimed to have required Defendants to produce in this format, but Defendants disclaimed any such obligation.
Magistrate Judge Foster denied Plaintiff’s motion to compel, finding that Defendants had “complied with their discovery obligation to produce documents in a reasonably usable form.” She noted that the parties had not filed any stipulated ESI protocol or brought any disputes regarding such a protocol to her attention. As a result, she concluded that Plaintiff’s production request was “subject to the minimum requirements of Rule 34 of the Federal Rules of Civil Procedure.” She also noted that PDFs are generally “deemed a reasonably usable format under the requirements of Rule 34.”
Citing to the Advisory Committee’s notes to 2006 amendments to Rule 34(b), Magistrate Judge Foster explained that “production of documents in a nonsearchable PDF format is impermissible if the documents were previously searchable,” but she noted that Defendants did not make the documents they produced “any less searchable than they originally were.” Rather, “[t]he documents produced were either PDF documents created and kept in the ordinary course of business, or paper documents that had been scanned and converted to PDF.”
Accordingly, Magistrate Judge Foster denied Plaintiff’s motion to compel Defendants “to make their documents more searchable than they were in their native format.” Magistrate Judge Foster denied the motion for the additional reason that Plaintiff did not meet and confer with Defendants’ attorneys before filing, as required by a local rule.
Information on past notable cases and events in e-discovery can be found here.
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