This Sidley Update addresses the following recent developments and court decisions involving eDiscovery issues:
Plaintiffs, a small Muslim congregation located in Bethpage, New York, and two of its leaders, were denied approval to build a mosque by the Town of Oyster Bay and sued for alleged violations of the Religious Land Use and Institutional Persons Act, the First and 14th Amendments to the United States Constitution, and the New York State Constitution. Id. at *1.
In discovery, Plaintiffs requested that the town produce responsive ESI from the mobile devices of members of the Oyster Bay Planning Advisor Board (PAB) who voted against the Plaintiffs’ application as well as the mobile devices of the town’s other document custodians. The town claimed that its board members were not issued phones and refused multiple requests from Plaintiffs to search the board members’ personal devices for responsive messages and communications. Id. at *2.
Plaintiffs filed a motion to compel the town to search the personal cellphones of the board members, arguing that it was “more likely that they had conversations about [Plaintiffs’] application on their personal devices” and that “statements of religious discrimination and religious animus are not likely to be sent through ‘official mediums’ like Town-owned email accounts.”
Defendant opposed the motion, arguing in response that “the absence of Town-issued cell phone[s] does not justify blanket access to personal devices” and that there was “no reasonable likelihood that any responsive communications not already being produced as a result of the production from the Town’s server exist on their cell phones.” Nevertheless, the town offered to have its custodians review their own cellphones with the town’s counsel and provide a copy “by screenshot or other means” of any responsive communications.
Magistrate Judge Wicks began his analysis with a survey of the relevant rules, including Rule 26(b)(1) of the Federal Rules of Civil Procedure, which provides that a party is entitled to discovery on “any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” He noted that relevance is “construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on any party’s claim or defense.”
Magistrate Judge Wicks further explained that Rule 34 permits a party to “serve on any other party a request to produce documents and ESI within the party’s possession, custody, or control,” and a party is deemed to “control” documents that it has “the legal right or the practical ability to obtain — even where those documents are in the physical possession of non-parties.” But he noted that the party seeking discovery has the burden of showing that the documents are within the other party’s control. And, once the party seeking discovery has made a sufficient showing of “control” necessary for producing responsive ESI from a personal device, that party must provide “some justification for its suspicion that relevant messages may be contained on the employees’ personal devices.”
Turning to the merits of Plaintiffs’ motion to compel, Magistrate Judge Wicks quickly rejected Plaintiffs’ two arguments that the town’s custodians were more likely to use their personal phones because they did not have town-issued phones and that “explicit statements of religious animus are less likely to be shared through official mediums than through informal channels, like text messages.” He found that Plaintiffs had offered no “proof or plausible explanation for the grounds behind this hypothetical justification.” Id. at *4. Moreover, Magistrate Judge Wicks explained that prior court decisions had required a party to set forth “specific, prior incidents or examples where the employee’s personal accounts or mobile devices were used for work purposes,” but “[n]o such circumstances have been proffered here.”
In particular, Magistrate Judge Wicks concluded that Plaintiffs’ unsubstantiated request could lead to “unfettered discovery over personal devices and fishing expeditions into employees’ personal messages,” and he declined to direct their production “[w]ithout some indicia that these personal devices were in fact used for business purposes.”
Magistrate Judge Wicks also noted the evidence contrary to Plaintiffs’ arguments, including that the town board members claimed not to possess one another’s phone numbers, did not ever communicate “over text messages, group chats, or any other electronic medium,” and never received messages concerning Plaintiffs’ application. Each board member also claimed that they did not recall sending or receiving any text messages concerning the Plaintiffs’ application. Id. at *5. Based on these statements, Magistrate Judge Wicks concluded that Plaintiffs could not carry their burden to prove a “justified suspicion” that relevant messages “may be found within these individuals’ personal devices.”
Accordingly, Magistrate Judge Wicks denied Plaintiffs’ motion to compel, but “without prejudice and with leave to renew should any evidence later reveal that personal mobile devices were used.” Magistrate Judge Wicks also ordered counsel for the town “to obtain independent declarations” from the town’s custodians “setting forth whether, if at all, their personal devices were used for business purposes and, if so, detail what those messages or communications pertained to.”
In this action alleging racketeering violations under 18 U.S.C. § 1962(c) among other causes of action, Plaintiff was interviewed for a podcast after the litigation was filed. Id. at *1. The podcaster sent Plaintiff an email containing a link to the recording of the podcast for her feedback. At the time she received it, Plaintiff forwarded this email to her attorney, and both she and her attorney viewed the recording. Plaintiffs’ counsel then emailed Plaintiff, writing that “a certain four-minute segment should not be broadcast,” and Plaintiff forwarded that email to the podcaster. The podcaster edited the recording as requested.
In discovery, Plaintiff produced a copy of the email from the podcaster to Plaintiff with the hyperlink to the original version of the podcast recording but not a copy of the recording itself. At the time the email was produced in discovery, the hyperlink in the email was no longer active. As a result, only the edited version of the podcast was publicly available. Defendant filed a motion for an adverse inference instruction because of alleged spoliation of the original unedited version of the podcast.
Magistrate Judge Chestney began her analysis by noting that Defendant’s motion for sanctions was governed by Rule 7(e), which provides for two levels of sanctions available depending on whether Defendant could show that the failure to take reasonable steps to preserve ESI was merely negligent (in which case 37(e)(1) would apply) or intentional (in which case 37(e)(2) would apply). She added that a showing under either section would require Defendant to prove that the ESI was within Plaintiff’s “possession, custody, or control” and “cannot be restored or replaced.”
Turning to the merits of Defendant’s motion, Magistrate Judge Chestney identified “two obstacles” to Defendant obtaining Rule 37(e) relief. First, she noted it was unclear that the requested ESI “was not replaceable or restorable.” Magistrate Judge Chestney explained that the podcaster or her company may still have had a copy of the original recording.
Magistrate Judge Chestney identified the second obstacle as “whether the podcast recording was ever in Plaintiffs’ possession, custody, and control” and noted that this fact was “also in dispute.” In this regard, she explained that “[h]yperlinked files present vexing challenges in the discovery context.” Magistrate Judge Chestney reasoned that while “the recording may have remained in the custody of the podcaster and merely streamed by Plaintiff” and her attorney, by asking the podcaster to delete a portion of it, Plaintiff “arguably exercised control over the file.” She added that “[b]ut for [Plaintiff’s] request to cut a portion of the recording, the entire recording would be available instead of the publicly available version, which is the edited version.”
Magistrate Judge Chestney rejected Plaintiff’s argument that she did not have control over the podcast file as a result of asking that a portion of the podcast not be aired because Plaintiff’s email to the podcaster referred to making “cuts” and was not phrased in terms of what should broadcast. For this reason, Magistrate Judge Chestney concluded that Plaintiff’s “alternative reading is not the most plausible one.”
Accordingly, Magistrate Judge Chestney denied Defendant’s request for Rule 37(e) sanctions without prejudice and noted that she “may revisit the issue depending on whether the ESI is able to be procured through alternative means.” She ordered Plaintiff “to contact the podcaster to see whether it is possible to obtain the original version of the file.”
In this action alleging violations of the Racketeer Influenced and Corrupt Organizations Act and various state tort claims, various disputes arose during discovery after Defendants sought to compel Plaintiff to produce financial documents and data relating to its damages theory. Id. at *1. After the court ordered Plaintiff to produce the discovery, Plaintiff claimed that it produced “annual, audited financials” but redacted from those documents “irrelevant, non-responsive financial information” about Plaintiff’s other corporate entities that were not “the subject of this lawsuit.” Id. at *4.
Defendants filed a motion to compel Plaintiff to produce unredacted copies of the documents, arguing that Plaintiff “improperly redacted huge portions of financial documents, further obscuring the limited financial information provided.”
Magistrate Judge Rutherford began her analysis by explaining that “[o]ther courts in this District have repeatedly held that redactions based on relevance are disfavored under the discovery rules.” She further explained that redaction is “an alteration of potential evidence, and a party should not take it upon him, her or itself to decide unilaterally what context is necessary for the non-redacted part disclosed, and what might be useless to the case.”
Quoting from a prior decision in TNA Australia Pty Ltd. v. PPM Techs., LLC, 2018 WL 2010277, at *15 (N.D. Tex. Apr. 30, 2018), Magistrate Judge Rutherford noted that “three themes pervade decisions on the propriety of redactions,” including that (1) that redaction of otherwise discoverable documents is the exception rather than the rule; (2) that ordinarily, the fact that the producing party is not harmed by producing irrelevant information or by producing sensitive information subject to a protective order restricting its dissemination and use renders redaction both unnecessary and potentially disruptive to the orderly resolution of the case; and (3) that the court should not be burdened with an in camera inspection of redacted documents merely to confirm the relevance or irrelevance of redacted information, but only when necessary to protect privileged material whose production might waive the privilege. Id. at *5.
Magistrate Judge Rutherford found these themes to be “persuasive and well-reasoned.” She therefore concluded that Plaintiff “was not entitled to unilaterally redact information it believed to be irrelevant or non-responsive” to Defendants’ document requests. She further held that “any concerns regarding proprietary information and confidentiality are sufficiently addressed by the Protective Order to which the parties agreed … as it provides protections for the responsive information that [Plaintiff] must produce.”
Accordingly, Magistrate Judge Rutherford ordered Plaintiff to provide Defendants with unredacted copies of all documents it had produced in redacted form.
This purported class action involved claims by one of Defendants’ employees who participated in the Defendant’s Health and Welfare Benefit Plan and were required to pay a “tobacco surcharge” that she alleged violated various provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Id. at *1. Defendant filed a motion to dismiss Plaintiff’s complaint and requested that discovery be stayed until the court ruled on the motion.
Magistrate Judge Chung started by noting that while the Federal Rules of Civil Procedure do not expressly provide for a stay of proceedings, Rule 26(c) permits the court, upon a showing of good cause, to “protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense,” and Rule 1 instructs that the rules of procedure “shall be construed and administered to secure the just, speedy, and inexpensive determination of every action.” He therefore concluded that an order staying discovery would be “an appropriate exercise of this Court’s discretion.”
Magistrate Judge Chung next described the factors relevant to a motion to stay discovery, relying on five factors from a prior decision in String Cheese Incident, LLC v. Stylus Shows, Inc., No. 02-cv-01934-LTB-PAC, 2006 WL 894955 at *2 (D. Colo. Mar. 30, 2006): (1) plaintiff’s interests in proceeding expeditiously with the civil action and the potential prejudice to plaintiff of a delay, (2) the burden on the defendant, (3) the convenience to the court, (4) the interests of persons not parties to the civil litigation, and (5) the public interest. Id. at *2. He noted that “stays of the normal proceedings of a court matter should be the exception rather than the rule,” but “a court may decide that in a particular case it would be wise to stay discovery on the merits until challenges to jurisdiction have been resolved.” Id. (quoting 8A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2040 (3d ed. 2024)).
Turning to the merits of the five String Cheese factors, Magistrate Judge Chung first concluded that the first factor, the potential prejudice to Plaintiff of a delay, weighed in favor of a stay. Plaintiff argued that a stay would delay putative class members’ potential recovery, but Magistrate Judge Chung noted that this consideration “is similar to any plaintiff who seeks monetary damages.” He also rejected as “overstated” Plaintiff’s argument that a stay could result in “a dec[r]ease in evidentiary quality and witness availability.”
Magistrate Judge Chung next concluded that the second factor, the burden on Defendant, strongly weighed in favor of a stay. Id. at *3. Plaintiff argued that its requested discovery was “simply the ordinary burden any defendant faces in a class action litigation,” but Defendant argued that discovery in this purported ERISA class action on behalf of a class of “tens of thousands of class members” would impose a significant burden. Defendant also argued that the discovery requests Plaintiff had already served on it were “sweeping.” Magistrate Judge Chung agreed with Defendant that “the breadth of class action discovery is likely to be significant in this action, and thus [Defendant] would be subject to an elevated burden if the stay were not granted.” He also agreed that Plaintiff’s existing discovery requests “exemplify the breadth of the requests to which the defendant might be required to respond” in the absence of a stay.
Next, Magistrate Judge Chung found that a stay would serve the court’s interest by “avoiding the unnecessary expenditure of the Court’s time and resources while a motion is pending that could resolve this matter in its entirety.” He found that the fourth String Cheese factor, the interests of other parties, was neutral because the only nonparties identified by Plaintiff were absent class members and it would be “premature” for the court “to address the interests of potential class members.”
Finally, Magistrate Judge Chung found that the fifth String Cheese factor, the public’s interest, weighed in favor of a stay. Id. at *4. He rejected as “broad and unspecific” Plaintiff’s argument that the public has an interest in the enforcement of ERISA’s provisions, finding instead that the “public’s interest in this case is in an efficient and just resolution,” which would “not be facilitated by this Court’s diverting limited resources to the management of possibly unnecessary discovery disputes in a matter that portends the need for significant court involvement.”
Accordingly, Magistrate Judge Chung held that the balance of the String Cheese factors weighed in favor of finding that “good cause exists to impose a stay of discovery in this case until the District Judge rules on the pending motion to dismiss.”
Information on past notable cases and events in eDiscovery can be found here.
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