United States: Octobers Notable Cases And Events In E-Discovery

This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:

1. a ruling from the U.S. District Court for the District of Kansas denying the petitioners' motion for spoliation sanctions against the government for deletion of metadata from two hard drives that government employees had reformatted, because the petitioners failed to establish that the metadata actually existed on the hard drives prior to the deletion of data as a result of the reformatting
2. an order from the U.S. District Court for the Eastern District of Missouri denying the plaintiffs' motion to compel the defendant to re-produce all of its document productions with additional metadata, because the parties had not agreed to a protocol requiring that such metadata be produced and the plaintiffs had not specified the format for production in its document requests to include such metadata
3. a decision from the U.S. District Court for the Eastern District of Texas granting in part a motion to compel the plaintiff to produce sales information from an Oracle database, where the plaintiff did not substantiate its claims of undue burden with any specific information regarding the cost of production or the time and resources it would take to comply with the request
4. an opinion from the U.S. District Court for the Eastern District of New York denying a motion to compel the plaintiffs to use additional search methodologies to find responsive materials, where the defendants failed to substantiate their claims that the plaintiffs' search methodologies were inadequate or that plaintiffs productions were made in bad faith

1. A ruling from the District of Kansas denying the petitioners' motion for spoliation sanctions against the government for deletion of metadata from two hard drives that government employees had reformatted, because the petitioners failed to establish that the metadata actually existed on the hard drives prior to the deletion of data on the drives as a result of the reformatting.

In In re: CCA Recordings 2255 Litigation, Petitioners, v. United States of America, 2021 WL 2212758 (D. Kan. June 1, 2021), Chief U.S. District Judge Julie A. Robinson denied the Petitioners' motion for spoliation sanctions against the government for deletion of metadata that was alleged to have existed on a computer hard drive and that would contain logging information about who, when, and how government employees viewed recordings of the Petitioners' meetings with their counsel on the grounds that Petitioners failed to show that the metadata actually existed prior to the deletion. 

This litigation involved claims that the government violated Petitioners' Sixth Amendment rights by viewing video recordings of meetings between Petitioners' and their counsel that the government received from the corrections facility where Petitioners were detained. Id. at *2 and n.14. In a prior proceeding brought by federal public defenders, Chief Judge Robinson had found that the government failed to preserve evidence from two hard drives on a computer (the AVPC) on which government staff could view the video recordings obtained from the detention center. She had also found that any metadata electronically stored information (ESI) identifying who accessed the video viewing software, when they accessed, and how the software was used to view the videos would have resided on one of the two AVPC hard drives but that a government employee had reformatted the hard drives on September 6, 2016, as part of a scheduled PC refresh project of computers used by the government, which had the effect of wiping the hard drives.

In the prior proceeding, Chief Judge Robinson had also addressed the existence of the specific logging metadata ESI at issue in the instant case. Chief Judge Robinson described the testimony of the public defenders' expert there, who had opined that the AVPC had two hard drives, one for the operating system and one to store data, and the fact that both hard drives were reformatted and had the operating system installed suggested that the government's objective was to destroy data that existed on the drives. Id. at *3. But the expert had not opined as to how much data, if any, was deleted or overwritten on the AVPC drives after they were reformatted and had not conducted a forensic examination of the AVPC and could not opine that the data, including any logging information that may have existed, was completely lost. Chief Judge Robinson ultimately denied the earlier public defenders' request for spoliation sanctions, concluding that "[t]here is no evidence that establishes whether metadata resided on the AVPC hard drive showing information about users' access to the" video software.

In support of Petitioners' instant motion, Petitioners relied on a report from the same expert that issued the report in the prior proceeding. The expert opined that viewing the videos from the detention center with the video software on the AVPC "would have left behind forensic evidence in numerous locations on the AVPC that should have been recoverable with forensic tools" and that the lack of forensic evidence of such activity suggested that the data was either wiped or overwritten by the continued use of the computer. The expert also opined that she would have expected that use of the AVPC to log in and view the detention center videos would have generated system log files. In particular, the expert opined that the video software was a web browser plugin that should have left behind certain forensic artifacts within the internet history on the AVPC prior to the operating system upgrade. That internet history should have existed in the unallocated space after the formatting and the upgrade had the hard drives not been wiped or otherwise overwritten. However, the expert did not find any relevant data in the unallocated and allocated space of both hard drives on the AVPC.

Chief Judge Robinson began her analysis in the instant case with a review of the relevant standards under Federal Rule of Civil Procedure 37(e) and Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004). Zubulake defined spoliation as "the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation." Id. at *5. She then described the two tracks for imposing spoliation sanctions under Rule 37(e), depending on whether there is a finding of prejudice to another party from loss of the information, based on which the court "may order measures no greater than necessary to cure the prejudice" or whether there is a finding that the spoliating party intended to deprive another party of the information's use in the litigation. Based on that, the court could presume that the lost information was unfavorable to the party, or instruct the jury that it may or must presume the information was unfavorable to the party, or dismiss the action or enter a default judgment. Id. at *6.

Chief Judge Robinson noted that a finding of intent was required in this case because Petitioners requested the sanction of an adverse inference or a presumption that government prosecutors intentionally watched the video recordings listed in petitioners' privilege logs. Before concluding that such a sanction is warranted, the court must find that four prerequisites are met: (1) ESI was lost; (2) a party had a duty to preserve the lost ESI; (3) the party failed to take reasonable steps to discharge its duty; and (4) the lost ESI cannot be restored or replaced. Once these requirements are met, the court may go on to determine whether there has been a requisite showing of bad-faith intent necessary to impose sanctions under subsection 37(e)(2).

Chief Judge Robinson next addressed whether Petitioners' motion for spoliation sanctions under Rule 37(e) was moot because she already intended to impose an essentially identical sanction under Rule 37(b)(2). Petitioners argued that given the government's position that the existing record was insufficient to warrant the taken-as-established privy to element under Rule 37(b)(2), proceeding on the request for spoliation sanctions may both bolster the court's existing Rule 37(b)(2) analysis or provide an alternative basis for entering the privy-to adverse inference. Chief Judge Robinson agreed with Petitioners, finding that although the requested spoliation sanction under Rule 37(e) mirrors the sanction that the court intended to impose under Rule 37(b)(2), the grounds for the sanction are alternative and distinct. Id. at *7.

Chief Judge Robinson then turned to the prerequisites for finding sanctions under Rule 37(e), starting with whether any ESI was lost. The government argued that Petitioners had failed to show that any relevant metadata would have been created on the AVPC hard drive if anyone viewed videos using the video software and that Petitioners had therefore failed to show that any relevant data was lost in September 2016 when the AVPC's hard drives were reformatted for purposes of installing a new operating system as part of a regularly scheduled upgrade. Id. at *7. In response, Petitioners argued that they did not need to show the specific metadata ESI that existed on the AVPC at the time of the deletion, but only that the government deleted ESI with the requisite intent to deprive Petitioners of the ESI's use in litigation. Id. at *8. In this context, Chief Judge Robinson noted that there was no dispute that some ESI on the AVPC existed, but the question was whether the particular logging metadata relevant to Petitioners' Sixth Amendment video claims existed. Id. at *9. She also noted that Petitioners were not claiming that they lost the ability to determine if that metadata existed at all, and in fact Petitioners' expert had the ability to test whether such metadata was generated by the government's system but did not do so.

Chief Judge Robinson agreed with the government that Petitioners had failed to present evidence that the logging metadata that was the subject of Petitioners' spoliation motion ever existed, including that Petitioners' expert had failed to conduct tests to determine whether the logging metadata ESI existed. Chief Judge Robinson explained that the court must determine whether and what ESI was lost before addressing any other requirements under Rule 37(e). "In addition to the threshold requirements under Rule 37(e), there is the obvious requirement that the evidence must have existed. ... A successful claim for spoliation of evidence cannot be premised on mere speculation on the existence of such evidence." Id. at *8 (quotations omitted). Chief Judge Robinson found that Petitioners' argument that relevant logging metadata ESI was overwritten as a result of the government's conduct presupposed that the logging metadata actually existed in the first place prior to being destroyed. Id. at *9.

Chief Judge Robinson ultimately concluded that if there was no evidence that logging metadata ever existed, it could not have been intentionally destroyed to deprive Petitioners of its use, and there could be no spoliation as it relates to that specific ESI relevant to Petitioners' claims. She also found that absent any evidence that such ESI existed and was destroyed, she did not need to engage in a substantive spoliation analysis. For these reasons, she denied Petitioners' motion for spoliation sanctions.

2. An order from the Eastern District of Missouri denying the plaintiffs' motion to compel the defendant to re-produce all of its document productions with additional metadata because the parties had not agreed to a protocol requiring that such metadata be produced and the plaintiffs had not specified the format for production in its document requests to include such metadata.

In Cody v. City of St. Louis, 2021 WL 2454215 (E.D. Mo. June 16, 2021), U.S. District Judge Audrey Fleissig denied a motion to compel the Defendant to re-produce all of its document productions with additional ESI in the form of metadata for the documents because the parties had not agreed that such metadata would be produced and Plaintiffs had not specified the format for production in its document requests.

In this action, where Plaintiffs sought damages and injunctive relief for various alleged dangerous, unsanitary, and inhumane conditions inside the a medium security facility in which they were incarcerated, the court was faced with several motions, including a motion to compel the re-production of the city's metadata. Id. at *1.

Early in discovery, the parties had agreed that "the initial production of [ESI] can be accomplished with PDF files, paper photocopies, or screen prints. Should the need to produce other [ESI] arise, the parties will confer in an effort to facilitate production in a mutually agreeable format." Thereafter, the parties engaged in extensive discovery and motion practice regarding that discovery. However, none of Plaintiffs' discovery specified the format in which ESI should be produced, nor did Plaintiffs raise the issue of format in any of their discovery motions prior to the instant motion.

Plaintiffs sought an order compelling the city to reproduce prior ESI productions and to produce all future ESI productions in either native format or accompanied by requisite metadata that identified the custodians, recipient, and date of the document. Plaintiffs argued that where no party agreement or court order exists specifying the form of production, ESI must be produced in a reasonably usable form, which requires metadata (and the need for metadata is inherent in any request for ESI). Id. at *3. The city responded that the parties had agreed at the outset of discovery that ESI would be produced in PDF files, paper photocopies, or screen prints, that if the need arose, they would confer regarding other mutually agreeable formats, and that the parties had proceeded pursuant to this agreement for years without complaint. Id. at *4. The city further argued that Plaintiffs had not specified in their numerous requests for production of documents their desire for metadata. The city contended that its past productions of ESI were in a reasonably usable form and that forcing it to reproduce its voluminous prior productions, years later, in native format or with metadata would be unduly burdensome.

Judge Fleissig began her analysis with a discussion of the relevant Federal Rules of Civil Procedure. She described that both Rule 26(f) and one of her prior orders required the parties to discuss issues relating to discovery of ESI, including the form or forms in which it should be produced. Id. at *6. She noted that the parties had agreed to a format of ESI production that did not require production in native format or with metadata and to confer on a mutually agreeable format, as needed. However, the parties never reached a final agreement as to the format of ESI production, nor did Plaintiffs specify a format in any of their requests for production or in any of their discovery motions. Id. at *7. In this context, she noted that Rule 34(b) permits parties to specify the form or forms in which ESI is to be produced and provides that "[i]f a request does not specify a form for producing [ESI], a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms." The Rule further specifies that "[a] party need not produce the same [ESI] in more than one form." Finally, Judge Fleissig noted that "absent a specific request to the contrary or special circumstances not at issue here, courts regularly find that searchable PDF documents constitute a reasonably usable form." Id. (citing cases).

Judge Fleissig concluded that the city would not be required to re-produce its document productions because the city had produced ESI in the format reflected by the parties' initial agreement without objection by Plaintiffs, and Plaintiffs did not raise the format of the city's productions with the court or specify the form of production in any of their prior discovery. However, Judge Fleissig directed Plaintiffs to provide the city with a limited list of particular documents that Plaintiffs believed are critical to this litigation and for which Plaintiffs were unable to identify the date, author, and/or recipient and required the parties to meet and confer regarding production of metadata for those documents. Judge Fleissig concluded by stating that she may require Plaintiffs to bear some or all of the cost of any reproduction of ESI in a different format, depending on the volume and importance of such documents that are at issue.

3. A decision from the Eastern District of Texas granting in part a motion to compel the plaintiff to produce sales information from an Oracle database where the plaintiff did not substantiate its claims of undue burden with any specific information regarding the cost of production or the time and resources it would take to comply with the request.

In TIGI Linea Corp. v. Professional Products Group, LLC, 2021 WL 1947341 (E.D. Tex. May 14, 2021), U.S. Magistrate Judge Kimberly C. Johnson granted in part a motion to compel Plaintiff to produce sales information from an Oracle database where Plaintiff had not substantiated its claims of undue burden with any specific information regarding the cost of production, how many employees would be required to work on the production, how much time the production would consume, or the volume of the information that Plaintiff would be required to review in order to comply.

In this action for fraud and breach of fiduciary duty, Plaintiff, a manufacturer of cosmetic products, alleged that Defendant, one of its distributors, conspired with one of Plaintiff's former employees to enter into a backdated exclusive distribution agreement that Plaintiff was never made aware of. Id. at *1. Defendant counterclaimed, alleging breach of the exclusive distribution agreement, among other claims.

Among other requests, Defendant sought from Plaintiff disclosure of ESI from Plaintiff's sales transactions databases with all complete, detailed sales information for all direct or indirect sales of Plaintiff's product in the "North American Retail Market" from 2008 to the present. Id. at *4. Plaintiff objected to this request on the grounds that the request was "a harassing attempt to force [Plaintiff] to provide even more irrelevant and duplicative information" and "blatantly overbroad and hopelessly vague." Plaintiff also objected on the ground that the request would require Plaintiff "to create information that does not exist in the ordinary course of [Plaintiff's] business."

Magistrate Judge Johnson began her analysis by describing the applicable standards in Federal Rule of Civil Procedure 26(b), under which "discoverable matter must be both relevant and proportional to the needs of the case — which are related but distinct requirements." Id. at *3 (quoting Samsung Elecs. Am., Inc. v. Chung, 321 F.R.D. 250, 279 (N.D. Tex. 2017)). "To be relevant under Rule 26(b)(1), a document or information need not, by itself, prove or disprove a claim or defense or have strong probative force or value. If it were otherwise, it would make little sense for Rule 26(b)(1) to direct courts to consider whether discovery that is relevant to any party's claim or defense is also important in resolving the issues." ... Proportionality is determined by "considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to 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." Id. (citing Rule 26(b)(1)). "Thus, the primary inquiries in discovery disputes are relevance and proportionality, not admissibility." Id. (citing cases).

Starting with the issue of relevance, Magistrate Judge Johnson found that Defendant's request for the sales information "clearly encompasses documents relevant to [Defendant's] counterclaims." Id. at *4. She noted that the exclusive distribution agreement at issue granted Defendant an exclusive right to sell Plaintiff's products to distributors and wholesalers and that Defendant claimed this contractual right was breached. Therefore, "[t]o determine whether [Plaintiff] is, in fact, in breach of the Exclusive Agreement, it is necessary for Defendant to obtain information regarding direct and indirect sales of [Plaintiff's] products ... to prove or disprove its counterclaims."

Turning to the issue of proportionality, Magistrate Judge Johnson first agreed with Plaintiff's argument that producing all sales information falling under the umbrella of the "North American Retail Market" was not proportional to the needs of the case. Id. at *5. She noted that the exclusive distribution agreement to a market referred to as the "North American Mass Retail Market," not the general "North American Retail Market." Accordingly, the production would be limited to the "North American Mass Retail Market."

Magistrate Judge Johnson then turned to Plaintiff's argument that producing the requested sales information would be unduly burdensome. She described the general rule that a "party resisting discovery must show how the requested discovery is overly broad, unduly burdensome, or oppressive by submitting affidavits or offering evidence revealing the nature of the burden." She noted that summary or broad-based nonspecific objections usually fall short of meeting an objector's burden. "The failure to submit affidavits or other evidentiary proof, as a general matter, makes such an unsupported objection nothing more than unsustainable boilerplate." In this context, Magistrate Judge Johnson noted that Plaintiff had not submitted any "affidavits or otherwise illuminating information to show the burdensome nature of producing these materials," leaving her with no indication of "how much money it would cost for [Plaintiff] to comply with [Defendant's] request, how many employees would be required to work on this production request, how much time production would consume, or the volume of the information through which [Plaintiff] would be required to wade." Id. at *6 (citing cases).

Magistrate Judge Johnson further found that the record suggested production of the requested sales information would, in fact, be "relatively easy." She noted that Defendant's request asked only for sales information "created in the ordinary course of business" and would not require Plaintiff to generate materials outside of its usual practice. She also noted that deposition testimony in the case reflected that Plaintiff maintains sales information in an Oracle database and that Plaintiff's employees routinely retrieve the requested information. Magistrate Judge Johnson found that this testimony belied Plaintiff's argument that compliance would be unduly burdensome.

4. An opinion from the Eastern District of New York denying a motion to compel the plaintiffs to use additional search methodologies to find responsive materials where the defendants failed to substantiate their claims that the plaintiffs' search methodologies were inadequate or that plaintiffs productions were made in bad faith.

In Sidman v. Concord Arena Parking, LLC, 2021 WL 1940255 (E.D.N.Y. May 11, 2021), U.S. Magistrate Judge Sanket Bulsara denied the Defendants' motion to compel production of additional documents from the Plaintiffs, finding that Defendants failed to establish that Plaintiffs' search methodology was inadequate or that Plaintiffs' productions were deficient or made in bad faith.

Earlier in discovery in this case, Defendants had brought a motion claiming that Plaintiffs had acted in bad faith by producing a limited quantity of documents, producing documents without explaining their origin, and refusing to describe the methods used to collect and produce documents. Id. at *1. The magistrate judge overseeing discovery at that time had declined to compel additional production but permitted the parties to exchange interrogatories inquiring as to the methods undertaken with respect to their respective searches for discoverable information. After additional discovery, Defendants renewed their motion to compel, claiming that Plaintiffs' additional production of four documents was deficient and that discovery from third parties suggested that Plaintiffs had failed to produce responsive documents. However, Magistrate Judge Bulsara found that nothing had changed from the prior motion practice that would suggest that Plaintiffs were not acting in good faith, and therefore denied Defendants' motion to compel. Id. at *2.

Magistrate Judge Bulsara began his analysis by noting that "[t]he burden is on the party seeking to compel discovery to cast doubt on the responding party's assertion that it does not have the requested information." Id. (quoting Gary Friedrich Enters., LLC v. Marvel Enters., Inc., No. 2011 WL 2623458, at *1 (S.D.N.Y. June 21, 2011)). He stated that Defendants had not met that burden by arguing that it was "inconceivable" that there were not more documents in Plaintiffs' production. He noted that "parties will often find an adversary's search methodology lacking. As a result, a party's assertion that its adversaries' search methodology was unreasonable is virtually always insufficient absent some concrete evidence pointing to the existence of missing documents." Id. (quoting Winn-Dixie Stores, Inc. v. E. Mushroom Mktg. Coop., 2020 WL 3498161, at *4 (E.D. Pa. June 29, 2020)). He found that Defendants did not point to any concrete evidence of missing documents or any discovery from Plaintiffs that suggested documents were missing. Nor did Defendants cite to any provision of an electronic discovery protocol that Plaintiffs were alleged to have breached in conducting their search for electronic documents.

Magistrate Judge Bulsara also took issue with the procedure Defendants followed to challenge Plaintiffs' document production. He stated that if a party asserts that it has produced all responsive documents — as Plaintiffs did here — and the adversary believes the production is incomplete, the remedy is not to ask the court to order additional production because a court cannot order a party to produce documents that do not exist. Id.  at *3. Instead, the remedy is to ask for a declaration (or deposition) that outlines the practices and procedures used to collect and produce documents in order to outline to the court the steps not taken and identify with specificity the categories and types of documents that should have been, but were not, produced.

Magistrate Judge Bulsara found that Defendants had not taken the necessary predicate steps to challenge Plaintiffs' document production. In particular, Magistrate Judge Bulsara highlighted that Defendants failed to take any affirmative steps after seeking discovery regarding Plaintiffs' document collection and production to identify with specificity the categories of documents that were allegedly missing.

Moreover, Magistrate Judge Bulsara found that the evidence Defendants pointed to did not establish either that documents were missing from Plaintiffs' productions or that Plaintiffs acted in bad faith, including a letter produced by a third party that Defendants claimed should have been produced by Plaintiffs. Defendants provided no explanation for why a copy of the letter should have been in Plaintiffs' files. Magistrate Judge Bulsara noted that just because Plaintiffs have not produced certain documents does not mean that they possess them but are refusing to produce them. Nor did one witness's inability to recall various aspects of the document collection or production lead to a conclusion of bad faith. Magistrate Judge Bulsara noted that "[u]nder ordinary circumstances, a party's good faith averment that the items sought simply do not exist, or are not in his possession, custody or control, should resolve the issue of failure of production." Id. (quoting Bank of New York v. Meridien BIAO Bank Tanz. Ltd., 171 F.R.D. 135, 152 (S.D.N.Y. 1997)). 

Magistrate Judge Bulsara stated that Defendants "fail to offer anything more than hypothetical inferences in support of their claim that [Plaintiffs] have engaged in the sort of misconduct that would merit discovery on discovery" and denied Defendants' motion to compel.