Requiring defendant to restore backup tapes would have violated proportionality standard

Madere v. Compass Bank, 2011 WL 5155643 (W.D.Tex. October 28, 2011)

Plaintiff sued her former employer for violation of the Family and Medical Leave Act. She requested defendant produce emails from 2007 and 2008 concerning her FMLA leave and termination. Defendant produced only those emails that someone had printed out and which had not been deleted under defendant’s email retention policy. Plaintiff moved to compel defendant to restore backup tapes to get the deleted email messages. The court denied the motion, based on proportionality.

The court looked to Fed. R. Civ. P. 26(b)(2)(C)(iii), which provides that a court is required to limit discovery if “the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.”

The parties presented conflicting expert declarations concerning the cost to restore the backup tapes. Defendant’s expert claimed it would cost $270,000, while plaintiff’s expert said it would cost less.

The court declined to resolve the conflicting expert assertions. It noted that the amount of controversy in the matter was much less than $270,000, and found that “even if the actual cost of restoring the backup tapes was only a fraction of that amount, it would still outweigh the amount [plaintiff sought] to recover.”

The unwillingness to order production from backup tapes showed the court’s preference for efficient ediscovery, especially in relation to the technological feasibility of the work to be done and the amount in controversy. Though the court does not cite to the Sedona Principles [PDF], the decision comports with the philosophy contained therein.

Sedona Principle no. 2 provides that:

When balancing the cost, burden, and need for electronically stored information, courts and parties should apply the proportionality standard embodied in Fed. R. Civ. P. 26(b)(2)(C) and its state equivalents, which require consideration of the technological feasibility and realistic costs of preserving, retrieving, reviewing, and producing electronically stored information, as well as the nature of the litigation and the amount in controversy.

Sedona Principle no. 8 expresses a disdain for going to backup tapes:

The primary source of electronically stored information for production should be active data and information. Resort to disaster recovery backup tapes and other sources of electronically stored information that are not reasonably accessible requires the requesting party to demonstrate need and relevance that outweigh the costs and burdens of retrieving and processing the electronically stored information from such sources, including the disruption of business and information management activities.

The decision likewise comports with several principles set forth in the Seventh Circuit’s Electronic Discovery Pilot Program [PDF]. First, Principle 1.03 provides that “[t]he proportionality standard set forth in Fed. R. Civ. P. 26(b)(2)(C) should be applied in each case when formulating a discovery plan.” Principle 2.04(d) further provides that backup data that is substantially duplicative of data that is more accessible elsewhere is generally not discoverable in most cases.

For other posts on proportionality from Practical Ediscovery, see:

• Court orders phased discovery under Rule 26′s proportionality principles pending resolution of dismissal motion
• Proportionality — don’t overlook Rule 26(b)(2)(C) when attempting to control your e-discovery costs
• Rule 26(b)(2)(c)’s proportionality standard triggers protective order

Model order for ediscovery is not just for patent troll cases

DCG Systems, Inc. v. Checkpoint Technologies, LLC, 2011 WL 5244356 (N.D. Cal. November 2, 2011)

In September 2011, the Federal Circuit promulgated a model order for courts to use in managing the high costs of ediscovery in patent cases. A key feature of the model order is restrictions on email production: requests to produce email must focus on particular issues. And the requesting party must further limit the requests by using a limited set of search terms, with production coming from a limited set of people (custodians).

Defendant Checkpoint asked the court to enter a version of the model order. (The proposed version differed from the model order in the number of keywords and custodians and on an issue of metadata.) The court granted defendant’s motion.

Plaintiff DCG objected to the entry of the order. It argued that since this was a case between competitors, and not a case brought by a nonpracticing entity (an “NPE,” or sometimes called a “patent troll”), the discovery would be improperly impeded by the model order’s limitations on email discovery.

NPE or patent troll cases often involve asymmetrical discovery – the plaintiff has few documents but the defendant has many. And some commentators have proposed that the model ediscovery order seeks to reduce the ill-effects of this asymmetry. In this case plaintiff argued that it would need discovery on legitimate issues that may have arisen with an actual competitor, e.g., whether defendant copied plaintiff’s technology and whether plaintiff was entitled to an injunction. Plaintiff’s argument presupposed that the model order’s limitations would cut into the scope of that purported legitimate discovery.

The court rejected plaintiff’s arguments. It found that: (1) nothing in the model order or the Chief Judge of the Federal Circuit’s speech unveiling the order suggested that it was intended only for NPE cases, and (2) there was no reason to believe that non-NPE (competitor) cases presented less compelling circumstances in which to impose reasonable restrictions on the timing and scope of email discovery.

The court also addressed the notion that the model order would help only in NPE cases or cases involving asymmetrical ediscovery. It observed that the model order could have double the benefit in competitor cases. If using the model order to relieve the burden on the producing party in an NPE case was a good thing, then using it in a suit between competitors benefit both sides and be twice as good.

Making the case for uniform culpability standards for ediscovery sanctions

Victor Stanley, Inc., v. Creative Pipe, Inc., 2010 U.S. Dist. LEXIS 93644 (D.Md., Sept. 9, 2010), (“Victor Stanley II“)

The sanctions entered in Victory Stanley II, which included a civil contempt finding and potentially up to two years of jail time for egregious ediscovery violations, obscure the decision’s deeper significance. In Victor Stanley II, Judge Paul Grimm establishes the need for uniform federal standards for spoliation sanctions.

In what he described as “the single most egregious example of spoliation” encountered in nearly 14 years on the bench, Judge Grimm concluded that the defendant’s “pervasive and willful” acts of spoliation should be treated as contempt of court. He entered an uncontested default judgment on the plaintiff’s copyright infringement claim, and further directed the defendant be imprisoned for a period not to exceed two years, “unless and until” the defendant pays the plaintiff’s attorneys fees and costs “with respect to all efforts expended throughout the case to demonstrate the nature and extent of the defendant’s spoliation.” Judge Grimm explained that the sanction of civil contempt with the specter of jail time was “absolutely essential” because without it, the defendant would do everything possible to avoid paying any money judgment or fee award entered as a result of the defendant’s discovery misconduct.
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Proportionality — don’t overlook Rule 26(b)(2)(C) when attempting to control your e-discovery costs

Bellinger v. Astrue, 2010 WL 1268063 (E.D.N.Y. April 2, 2010)

Some lawyers take a “Turkish Bazaar” approach to discovery requests, seeking more than they really need while willing to negotiate down to what they want. Other lawyers lace their otherwise reasonable discovery requests with magnifying terms such as “any and all,” “touching upon,” or “relating to” a particular topic or subject matter.

Lawyers responding to these types of requests will typically, and rightfully, object to the requests as being overbroad and unduly burdensome. Principle 1.03 of the Seventh Circuit’s Electronic Discovery Pilot Program further provides that requests for production of electronic information should be “reasonably targeted, clear and as specific as practicable.” That principle provides another basis to object to burdensome discovery requests.

But how many lawyers think to raise Rule 26(b)(2)(C)’s proportionality standard when addressing a burdensome discovery request? Rule 26 applies to all discovery, not just to inaccessible information. Attorneys who fail to consider Rule 26’s proportionality standard are overlooking an important tool in controlling ediscovery costs, as the decision in today’s post explains.

Bellinger involved a Title VII claim in which plaintiff alleged that she was denied a promotion and received unequal pay because of her gender. In discovery, plaintiff sought “detailed information about the job status and career histories” of various groups of other employees. The district court sustained the defendant’s objection, noting that the burden of complying with the interrogatory seeking this information was “substantial” and that “[t]he likely benefit of the discovery . . . is slight or non-existent, particularly in light of the narrow scope of plaintiff’s claims and the broad range of discovery that has already been produced.”

Additionally, plaintiff in Bellinger sought “detailed and technically complex” information about the defendant’s electronically stored information. Again, notions of proportionality prevailed. The court concluded that responding to those interrogatories would be “extremely burdensome” and that the information sought in those interrogatories was “unlikely to be of significant value, especially in light of the discovery that the defendant has already provided.”
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