Arteria Prop. Pty Ltd. v. Universal Funding V.T.O., Inc., 2008 WL 4513696 (D.N.J. Oct. 1, 2008) (Not for Publication)

In this case arising from failed negotiations for a long term development loan, the plaintiff filed a motion for spoliation sanctions and sought an adverse inference in its favor.  Specifically, plaintiff alleged spoliation of the contents of the defendants� website as it existed at the time the dispute between the parties arose, and of a particular letter from the Bank of New York.

Regarding defendants� website, plaintiff sought �electronic snapshots or paper copies of the website� indicating the content of the website at the time of the negotiations, specifically, statements that Universal was �one of the leading lenders serving the real estate market� with more than �50 years of Commercial Mortgage Banking experience.�  Defendants advised that they had requested their own copies of the site and that they would provide the same to the plaintiff.  Although defendant O�Hara confirmed during his deposition testimony that statements cited by the plaintiff were indeed present on the website at the time of the negotiations, the defendant did not produce the requested snapshots.

At a hearing on January 3, 2007, the Honorable Ronald J. Hedges heard arguments and entered an order that as of December 18, 2023 defendants were �deemed to have admitted that�they do not have within their possession, custody, or control� the two categories of evidence sought by the plaintiff.  Judge Hedges�s order also permitted plaintiff to file a motion for spoliation in conjunction with the final pretrial order.

In the meantime, defendants� counsel withdrew and defendant O�Hara sought and received several extensions of time while he attempted to retain counsel.  In a belated submission to the Court on September 3, 2008, defendant O�Hara�s response to the motion for spoliation was simply:  �Universal-Funding VTO, Inc. disagrees on �The Motion for Spoliation�[.]  This never happened.�

Analyzing the issue of spoliation as to Universal�s website, the court noted that there �seemed to be no dispute� that the website was in existence when the plaintiff filed suit and that defendants were therefore required to maintain the website.  According to the court, the only remaining issue was the question of control:

The only question is whether or not the website was under the control of Defendants.  This Court sees no reason to treat websites differently than other electronic files.  Where, as here, Defendants had control over the content posted on its website, then it follows a fortiori that it had the power to delete such content.  Although Defendants do not so posit, it may be argued that the website was maintained by a third party, perhaps a web design company who posted content on behalf of Defendants.  But this is irrelevant, just as it'd be irrelevant if the website was maintained on a third party server rather than Defendant's own server (as is likely the case here).  Despite the inevitable presence of an intermediary when posting content on the Web, the Court finds that Defendants still had the ultimate authority, and thus control, to add, delete, or modify the website's content.  There is no evidence to the contrary.

Accordingly, the court found that an adverse inference was warranted where the defendants failed to produce the relevant content from the website.

Koosharem Corp. v. Spec Personnel, LLC, 2008 WL 4458864 (D.S.C. Sept. 29, 2008)

In this breach of contract case, plaintiffs alleged that defendants wrongfully obtained and used confidential information from former employee, Kenneth Fuston, who went to work for the defendants.  Specifically, plaintiffs alleged that defendants used the information to hire approximately 20 of plaintiffs� employees, open new offices in eight cities, and embark upon a new line of business in competition with plaintiffs.  Plaintiffs moved to compel production of computers believed to contain information related to those claims.  The court had previously granted a motion to compel and ordered defendants to produce emails to or from any current or former employee or customer of the plaintiff found on Fuston�s home computer and documents reflecting communication with the defendant and certain former employees of the plaintiff. Defendants produced 1,936 pages of email.  Believing the production was incomplete, plaintiffs brought a second motion to compel. 

Plaintiffs noted several problems with defendants� original production.  Notably, all of the emails produced reflected the date compiled rather than the date received or sent, several emails allegedly retrieved from Trevor Doyle did not have Doyle listed as a sender or recipient, and many emails were missing their attachments.  These irregularities, plaintiffs argued, called the authenticity of the documents into question.  Plaintiffs also argued that documents were modified even after notice of litigation and that defendants made no document retention efforts after the lawsuit was filed.  Specifically in support of production of home computers, plaintiffs argued that defendants� new hires were not immediately provided with a company email account and thus conducted work from home computers and personal email accounts.  Also, according to the plaintiffs, former employees emailed confidential information to their homes before going to work for defendants.

The court rejected defendants� argument that the inspection be denied based upon relevance objections to the underlying requests.  Relying upon the prior order compelling production, the court stated that the only issue before it was whether forensic analysis should be allowed in light of defendants� failure to produce documents and because of relevant information stored on the computers.  Finding that forensic analysis was appropriate, the court issued a lengthy and detailed protocol for the forensic examination:

(1) Defendants will make available for forensic analysis and data recovery to be conducted by an expert forensics firm (�Expert�) any business computers and/or any personal computers used to conduct business, correspond in any way regarding business, Spec and/or its current or employees, and/or plaintiffs and/or their current or former employees, for Steve Arnold, Walter Chudowsky, Benita Dillard, Trevor Doyle, Ken Fuston, Kevin Moore, Steve Roberson, and Jude Tallman.

(2) The time frame for the forensic analysis and data recovery will encompass the period September 1, 2007, to present.

(3) The parties will jointly agree within five (5) calendar days after entry of this order on an Expert that will be used to conduct the data recovery and forensic analysis.

(4) Defendants will produce to the Expert within ten (10) calendar days after entry of this order the computers identified in paragraph 1.

(5) The Expert will recover only the documents and email account or accounts used by individuals identified in paragraph 1 (or those accounts and documents accessed remotely using another computer).

(6) The Expert also will conduct a search or run other appropriate programs to determine whether any emails or documents have been deleted, destroyed, altered, or otherwise compromised since January 25, 2008, and whether any programs have been installed that would alter, destroy, erase, modify, or otherwise compromise any portion of each computer or its contents as of January 25, 2008.  The Expert also will be permitted to conduct such search efforts as are necessary to form an opinion as to whether any procedures were put into place to preserve emails and documents as of January 25, 2008.

(7) The recovery of emails will include all emails in any form whatsoever including, but not limited to, deleted emails, forwarded emails, copied (�cc�) and blind-copied (�bcc�) emails and draft emails.  The recovery of documents will include all documents including drafts, multiple versions, and final versions.

(8) The Expert will securely maintain the original data recovered in order to establish a chain of custody.

(9) The Expert will produce a copy of the recovered data to defendants' local counsel of record attorney John Glancy (�defendants' counsel�).

(10) Defendants' counsel will review the data to identify any privileged or personal emails that it seeks to withhold from document production.

(11) Within ten (10) business days of obtaining the recovered data from the Expert, defendants' counsel will prepare and provide to counsel for plaintiffs:  (I) a log of privileged emails (�Privileged Email Log�) protected against disclosure by a relevant legal privilege and include the identity of the email, the sender and recipient (and any individuals identified in the �cc� and �bcc� fields), the date sent, the nature of the privilege, a general description of the email and the basis for asserting the privilege; and (ii) a log of personal emails (�Personal Email Log�) and include the identity of the email, the sender and recipient (and any individuals identified in the �cc� and �bcc� fields), the date sent, a general description of the email and the basis for claiming it is a personal email.  To the extent that defendants' counsel asserts privilege as to any documents obtained from the forensic analysis, such documents also must be set forth on a document privilege log (�Privileged Document Log�) and be produced within ten (10) business days of obtaining the recovered data.

(12) Together with the Privileged Email Log, Personal Email Log, and Privileged Document Log, defendants shall produce (within 10 business days after obtaining the recovered data from the Expert) all emails and documents recovered by the Expert, which are not identified on the Logs.

(13) For purposes of the procedure described herein, a personal email is one that does not relate to or in any way concern:  defendants' employment, whether it deals with past, present, future or prospective employment; plaintiffs' business; plaintiffs' customers and former customers (including contacts at customers and former customers); plaintiffs' employees and former employees; defendants' drivers or plaintiffs' former drivers; plaintiffs and any of its employees; or Spec Personnel and any of its employees, including but not limited to, communications regarding Spec's closing of offices staffed by plaintiffs' former employees or efforts to have anyone take over, purchase or otherwise assume responsibility for any Spec office staffed by plaintiffs' former employees.

(14) If any document attachment to an email is identified through the discovery of an email, and such document was opened, saved from, detached or otherwise transferred or reproduced on the hard-drive of defendants' computers, such attachment shall be produced or the Expert shall be given access to defendants' computer to conduct further data recovery in order to obtain such document(s).

(15) If any document is identified by the Expert as being opened, saved, altered, transferred or reproduced and it falls within the scope of the request, such document must be produced by the Expert and handled by defendants' counsel in the same manner as though it was an email communication.

(16) If plaintiffs disagree with the assertion of any privileges, the parties shall submit to the court the disputed documents and Logs for the court to view in camera and determine whether the documents must be produced.

(17) Defendants are responsible for any and all fees, costs and expenses associated with gathering the computers and transmitting them to the Expert.

(18) At this time, the parties will share equally the fees, costs and expenses charged by the Expert. When the Expert is retained, the Expert will be jointly informed that any billing or retainer must be split evenly between the parties.  If any retainer is required, the parties are obligated to provide the retainer within three (3) business days of the Expert's request so that the process is not delayed in any way.  Neither party waives its right to seek reimbursement or payment of any fees, costs and expenses charged by the Expert if it is determined that award of such is appropriate pursuant to the Federal Rules of Civil Procedure, Local Rules or case law.

(19) By agreeing to this order, no party waives its rights or objections to the discovery sought herein.

(20) The parties understand and agree that this order addresses the preliminary scope for the computer production and forensic analysis.  If the initial production and analysis determines that additional searches are necessary, either party may petition the court to revisit the scope of this order.

Pass & Seymour, Inc. v. Hubbell Inc., 2008 WL 4240490 (N.D.N.Y. Sept. 12, 2008)

In this patent infringement case, the court addressed the issue of whether, in response to 72 separate document requests, the plaintiff's production in digital format of 405,367 pages of documents, apportioned among 202 unlabeled folders and which through application of litigation support software could be made text searchable, but was otherwise neither organized to correlate to the document demands nor in any fashion indexed or labeled to reflect how they were maintained in the ordinary course of plaintiff's business, satisfied the responding party's obligations under Rule 34 of the Federal Rules of Civil Procedure.  Plaintiff asserted that, pursuant to FRCP 34, it had produced the documents in the manner in which they were maintained in the ordinary course of business and therefore need not indicate to which request the documents were responsive.  In support of its position, plaintiff offered only the statement of an attorney indicating that the documents had been assembled as they had been maintained.

Defendant countered that the production did not comport with the letter or spirit of the rule, and sought an order compelling plaintiff to organize the documents produced and to disclose which were responsive to each of the 72 document requests.  Agreeing in part with defendant, the court ordered plaintiff to provide some additional information regarding the organization of the documents in the ordinary course of its business.

The court began its analysis by observing that the issue was governed by Rule 34(b)(2), �which provides, in relevant part, that unless otherwise stipulated or ordered a party responding to a demand by a federal court litigant for the production of documents �must produce [them] as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request; . . .�� 2008 WL 4240490, *2 (citing Rule 34(b)((2)(E)(i), relating to production of paper documents).

The court acknowledged that Rule 34 allowed for production of information in the manner it was ordinarily maintained.  However, the court went on to note that �more in the way of organization is required in order to make the document production meaningful, and thus proper� and pointed out that �the rule contemplates that a party selecting this option disclose information to the requesting party regarding how the documents are organized in the party�s ordinary course of business.�

The court held that the plaintiff failed to fulfill its discovery obligations by producing the documents with no attendant information regarding how the documents had been maintained.  In so deciding, the court indicated the minimum requirements for compliance:

As the foregoing reflects, a party who in response to a discovery demand has chosen to produce documents as they are ordinarily maintained must do just that � produce the documents organized as they are maintained in the ordinary course of producing party's business, with at least some modicum of information regarding how they are ordinarily kept in order to allow the requesting party to make meaningful use of the documents.  At a minimum, that means that the disclosing party should provide information about each document which ideally would include, in some fashion, the identity of the custodian or person from whom the documents were obtained, an indication of whether they are retained in hard copy or digital format, assurance that the documents have been produced in the order in which they are maintained, and a general description of the filing system from which they were recovered.

The court then ordered plaintiff to provide additional information regarding the organization of the documents in the ordinary course of its business, but declined to require plaintiffs to organize the documents to correspond with the 72 requests, as defendant had requested.  In so holding, the court made an interesting comment about the potential impact of electronic discovery and its attendant tools and processes on the rule�s requirements:

The court appreciates the burden associated with attempting to organize and collate 405,367 pages of documents, and further recognizes with the advent and increased use of digitized information and litigation support software, large quantities of documents can be rendered both manageable and text searchable.  Accordingly, it can be argued that less by way of organizational information should be required than historically may have been the case in order to permit informed use of documents produced by an opponent.

Kipperman v. Onex Corp., 2008 WL 4372005 (N.D. Ga. Sept. 19, 2008)

In this case, Onex presented several motions to the court, including a motion for a protective order and for relief from the need to produce all documents identified after searching several backup tapes.  The court denied in part and granted in part Onex�s motion, and ordered Onex to produce all identified documents, except for two specific categories deemed unlikely to contain relevant information.

Previously, Onex had been ordered to produce email from two electronic backup tapes selected by Kipperman, using search terms provided by Kipperman.  However, Onex only searched the mailboxes of seven people whose depositions Kipperman sought.  Kipperman argued Onex should have searched all mailboxes on the tapes, and the court issued a second order directing Onex to search all mailboxes on the two tapes plus an additional tape selected by Kipperman.  The court did suggest, however, that Kipperman be more �artful� with its search terms, and that Kipperman use a list of individuals, to be provided by Onex, to determine the need to search each mailbox.  The court also granted Onex the opportunity to narrow the search terms.  Onex did not provide this list of individuals, and did not narrow the search terms, and essentially agreed to search and restore all of the mailboxes with the search terms provided by Kipperman.

After it conducted the search, Onex sought relief from having to review and produce all of the results from that search.  Specifically, Onex sought relief from producing documents it deemed to be irrelevant, documents identified by the term �Armtec,� and documents captured from mailboxes belonging to its subsidiary, ONCAP.  Onex argued that Kipperman�s search terms were overly broad and resulted in thousands of irrelevant hits.  Onex also argued that Armtec had not been addressed by Kipperman�s initial or amended complaint and that documents from ONCAP were irrelevant because ONCAP was not a party and Kipperman had not requested ONCAP documents.

The court denied the request for relief as to documents deemed irrelevant by Onex, noting its failure to take advantage of the court�s suggestions for reducing its burden:

Despite all of this, the court is not unsympathetic to the massive amount of discovery involved in this matter, the considerable burden of working with it, and the overproduction that often comes with e-mail production.  Therefore, the court gave Defendants numerous tools by which to reduce the burden of e-mail discovery, including an opportunity to limit Plaintiff's search terms and an opportunity to provide a list by which the number of peoples and the number of boxes being searched could be reduced.  Defendants did not take advantage of these opportunities.  Defendants must now lie in the bed that they have made.  Thus, Defendants' objections on the basis of relevancy and volume are DENIED.

The court granted Onex�s request for relief from production of documents related to Armtec and ONCAP, however, stating:

The court could deny Defendants' requests with respect to Armtec and ONCAP for these reasons as well.  However, the court finds it highly unlikely that these search terms and mailboxes will garner relevant, useful information and finds the parties' and the court's burden in working with this information to outweigh its relative usefulness.  On these grounds, the court will GRANT Defendants' request for relief with respect to these search terms and these mailboxes.

Dong Ah Tire & Rubber Co., Ltd. v. Glasforms, Inc., 2008 WL 4298331 (N.D. Cal. Sept. 19, 2008)

In this breach of contract litigation over allegedly non-conforming goods, Glasforms moved for sanctions against third-party defendant Taishan Fiberglass for the spoliation and destruction of documents.  Taishan had previously been ordered to produce a knowledgeable and fully prepared witness or witnesses to testify about ten topics not adequately addressed in the prior Rule 30(b)(6) deposition.  In addition, Taishan was ordered to search for and produce all documents responsive to Glasform�s requests for production, including relevant internal email communications. 

The court found that the record regarding Taishan�s discovery conduct presented �a troubling picture,� as �[l]ikely relevant materials appear to be either missing or not the subject of an appropriate search.� At the same time, the court found that the record did not answer the question of whether intentional and improper spoliation of evidence had occurred.  First, the court found it �difficult to peg who knew what when,� in terms of anticipating litigation.  Second, there appeared to be a discrepancy between Taishan�s document destruction policy and what was preserved.  For instance, a Taishan witness admitted that certain records had been destroyed, but the document destruction policy required that those records be preserved until at least the second half of 2006.  Further, the witness could not confirm whether the records were destroyed before or after litigation began because the records authorizing destruction had also been destroyed.  The court observed:  �Taishan has not explained why selective documents that just so happen to be important to the present litigation were destroyed in violation of Taishan's document destruction policy.�

As a result, the court concluded that further information was required in order to determine what, if any, sanctions should be assessed against Taishan.  The court stated that the parties would need to address �specifically by declaration or other admissible evidence� the following questions:

(1)  Why was the document destruction policy not followed?
(2)  Who was responsible for not following the document destruction policy?
(3)  When were the items identified above destroyed, and when were they
supposed to be destroyed under the document destruction policy?
(4)  When did Taishan and CTG select their counsel for events relating to this
litigation?
(5)  What further facts and dates can be added to the general timeline noted
above based on evidence submitted after this Court's August 25, 2024 Order?  Such evidence would come from, but is not limited to, documents that were found, lost/destroyed documents that were found, and the new Rule 30(b)(6) deposition(s).
(6)  Explain why should the letter from Calvin Li, in which he admitted
graphite contamination, should/should not be the date of �anticipated litigation� for purposes of determining sanctions.
(7)  Explain why the seventeen point report should/should not be the date of
�anticipated litigation� for purposes of determining sanctions.
(8)  How does the destroyed/lost evidence relate to the party's respective claim
or defense?

The court ordered the parties to file supplemental briefing to address the questions:  �(1) what was destroyed; (2) when it was destroyed; and (3) when Taishan could have reasonably anticipated litigation.�  The court stated it would determine the need for additional hearings regarding sanctions upon receipt of the parties� supplemental materials

Goodbys Creek, LLC v. Arch Ins. Co., 2008 WL 4279693 (M.D. Fla. Sept. 15, 2008)

In this case involving the alleged breach of a performance bond, the court considered plaintiff�s motion to compel and for sanctions.  Among other things, plaintiff requested that defendant be ordered to re-produce, in native format, documents previously produced as TIFF images.  The court granted only that portion of the motion, and gave the defendant three options for its re-production:  (1) provide any documents previously supplied as TIFF images in their native format, (2) provide the documents in another comparably searchable format, or (3) supply plaintiff with software for searching the TIFF images.

Plaintiff had initially failed to specify any desired format of production in its request for production to defendant.  Because of such failure, defendant chose, of its own accord, to produce the requested documents �via TIFF images� rather than in their native format.  Plaintiff argued that, by converting the documents to Tagged Image File Format (TIFF), defendant failed to comply with Rule 34(b)(2)(E)(ii), which states �[i]f a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms[.]�

Defendant argued that Rule 34 �permits a party responding to a request for production to produce documents in a reasonably usable form if the party seeking discovery does not specify the form in which the information is to be produced.�  Defendant further argued that �TIFF images are a reasonably usable form of electronic production.�

In reaching its decision, the court quoted the commentary accompanying the 2006 amendments to Rule 34:

However, the responding party's choice of form is limited to the extent the option to produce in a reasonably usable form does not mean that a responding party is free to convert electronically stored information from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for the requesting party to use the information efficiently in the litigation.  If the responding party ordinarily maintains the information it is producing in a way that makes it searchable by electronic means, the information should not be produced in a form that removes or significantly degrades this feature.

Rule 34 advisory committee's note (2006 Amends.) (Note) (emphasis added); see also In re Seroquel Prods. Liab. Litig., 244 F.R.D. 650, 655 (M.D.Fla.2007) (highlighting the importance of searching functions and the utility of native formats); Hagenbuch v. 3B6 Sistemi Elettronici Industriali S.R.L., No. 04 C 3109, 2006 WL 665005, at *3-*4 (N.D.Ill. Mar.8, 2006) (finding TIFF images inadequate).

The court noted that plaintiff�s central complaint regarding defendant's conversion of the requested documents into TIFF files appeared to be that the conversion made searching the numerous documents much more difficult � �the very concern the Note addresses.�

Accordingly, the court determined that, to the extent defendant maintained the requested documents in a form that made them �searchable by electronic means,� its decision to convert the documents to a format alleged to be much more difficult to search was "impermissible."  The court gave defendant three options for re-producing the material, and denied plaintiff�s remaining requests for relief and for sanctions.

Metrokane, Inc. v. Built NY, Inc., 2008 WL 4185865 (S.D.N.Y. Sept. 3, 2008)

In this patent infringement litigation, BNY sought sanctions on the grounds that Metrokane failed to produce a series of emails said to be highly damaging to Metrokane's case.  BNY argued that the recent discovery of the existence of these emails through production by a non-party came too late to permit BNY to pursue otherwise crucial discovery concerning these communications.  Metrokane contended that BNY failed to comply with various procedural requirements before filing the motion, and that it had not demonstrated any misconduct by Metrokane or any prejudice.  Magistrate Judge Michael H. Dolinger rejected Metrokane�s procedural defense, and concluded that BNY sufficiently demonstrated discovery misconduct by Metrokane and resulting prejudice.  Accordingly, the court granted a variety of remedies, including an adverse inference instruction.

Discovery in the case closed in June 2007, but disputes about Metrokane�s performance let to additional motion practice, including the enforcement of a deposition subpoena to the alleged designer of the infringing handbags (Mr. Kilduff).  The court granted BNY�s motion to compel the deposition of Mr. Kilduff in October 2007, and his deposition and production of documents occurred in November 2007.

Mr. Kilduff produced, among other documents, a series of emails that he had sent to, and received from, various representatives of Metrokane, including its corporate principal, Riki Kane.  Those emails, which � with one partial, if significant exception � Metrokane had never produced, were potentially damaging to several aspects of Metrokane's case.  The emails referred to an order by one of Metrokane's principal customers, the department store chain Kohls, which wanted one line of the Metrokane totes supplied to it to be in one solid color, like the equivalent totes designed by BNY.  The emails also contained comments by Mr. Kilduff implying his understanding that the solid-color Metrokane totes were likely to be confusingly similar to the BNY totes and explicitly stating his belief that Kohl's was seeking the solid-color version to take advantage of that confusion with BNY's product.  This statement was inconsistent with Metrokane's contention that the bags were not so similar.

During discovery, Metrokane had produced one partially redacted page reflecting two of these emails between Kilduff and Metrokane.  The portion provided by Metrokane contained the statement by Kilduff that the order by Kohl's of a solid-color bag reflected that Kohls "obviously want[ed] to knock ... off� BNY's bag.  The redaction by Metrokane, however, concealed a follow-up exchange between Kane and Kilduff, in which Kane appeared to state that Metrokane had agreed to indemnify Kohls for such infringement.  The court observed that the statement by Kilduff was potentially helpful to BNY, since it dramatically reinforced the notion that Kilduff was aware of confusing similarity between the two lines of totes, and it highlighted the fact that Kane knew of the similarity and the problem.

Other emails produced by Kilduff, but not by Metrokane, reflected that Kane had been clearly insisting before the Kohl's order that the Metrokane totes be multi-colored.  BNY argued that this indicated that Kane was aware that a solid-color tote would potentially infringe on BNY's intellectual property rights.  In addition, the emails produced by Kilduff contained a statement by Ms. Kane � not previously disclosed by Metrokane � that "Kohls is 100% indemnified," thus indicating that Metrokane had fully indemnified Kohl's by that time.  That statement, if true, was inconsistent with representations made by Metrokane relating to its claim for tortious interference with Metrokane's business relationship with Kohl's.

BNY pointed out that the production by Kilduff took place many months after the conclusion of discovery and thereby deprived BNY of the opportunity to explore these matters with Ms. Kane and other Metrokane representatives.  BNY asserted it was irremediably prejudiced, and sought dismissal of Metrokane's claims.

Opposing the motion, Metrokane offered no evidence to explain its failure to produce the cited emails.  Rather, it made a vague assertion in its attorney's memorandum of law that the company had no written policy regarding the retention of documents.  The court observed that the implication was that Metrokane did not produce the emails in question because they were no longer in its system � although Metrokane made no direct assertion to this effect, either by competent testimony or even by the assertion of its attorneys.  Further, Metrokane vaguely argued that the emails that it failed to produce might be construed as favorable to it, and that in any event BNY was lax in not pursuing the question of Metrokane's document-retention policies during discovery.

The court found that the emails were highly relevant and responsive to BNY's discovery requests, and that there was no question that, had BNY received them in a timely fashion from Metrokane, it would have pursued questioning about them with one or more of Metrokane's representatives, including Ms. Kane.  The court was unpersuaded by Metrokane�s arguments.  First, in the absence of any evidence from Metrokane, the court could not find that Metrokane did not have possession or control of the subject emails when called upon to produce relevant documents.  �Plainly the knowledge of whether the company had access to those emails at the pertinent time rests solely with Metrokane, and its failure to proffer any evidence pertinent to that question impels an inference that it cannot demonstrate non-possession.�

Second, that inference was further strengthened by Metrokane's production of a fragment of the emails.  If Metrokane�s employees had been systematically purging emails from their computer files, the court would not expect the company to be able to produce the two emails that it did disclose, albeit in redacted form.  Third, the court noted �the very careful avoidance by Metrokane of any direct representation � even in the form of a non-admissible attorney's assertion � that the company did not have the unproduced emails in its possession.�  Fourth, the court observed that, by the time the subject email exchanges occurred, Metrokane was �manifestly aware of the potential for litigation with BNY.�  It continued:  �If Metrokane destroyed the emails in question at some time thereafter it was in evident violation of its obligation of preservation, and may thus be charged with the consequences of its spoliation.

Given the evidentiary record, including the complete silence of Metrokane as to why it failed to produce the emails in question, the court found that Metrokane, at a minimum, was negligent either in failing to produce documents available to it or in failing to preserve documents that it was obliged to safeguard.  However, the court also found that BNY had substantially overstated the impact of the non-production, which the court found was, in large measure, remediable.  As a result, the court granted the following remedies:

� For purposes of pending summary-judgment motions, the court deemed Ms. Kane's statement in her email about the indemnified status of Kohl's to be binding and included within the summary-judgment record

� If the tortious-interference claim survived summary judgment, Metrokane would be required to make Ms. Kane and any other Metrokane witness competent to testify about the indemnification of Kohls available for deposition by BNY, with the costs of deposition, as well as reasonable attorney's fees incurred in preparing for it and conducting it to be borne by Metrokane

� At trial, BNY would be permitted to offer evidence as to Metrokane's concealment of email and would be entitled to a jury instruction as to the possible inferences that the jurors may draw from the concealment

� Metrokane ordered to pay BNY�s expenses, including reasonable attorney's fees, incurred in preparing and briefing the sanctions motion

Infinite Energy, Inc. v. Thai Heng Chang, 2008 WL 4098329 (N.D. Fla. Aug. 29, 2008)

In this breach of employment agreement and misappropriation of trade secrets case, plaintiff moved to compel production of emails from defendant�s personal Yahoo! account.  Plaintiff contended that it only recently learned of the account, and that defendant should have disclosed the account in response to an earlier discovery request.  Plaintiff argued that emails from the account contained highly relevant information crucial to the issues in the case.

Although defendant claimed he could not produce the emails because they had been destroyed by Yahoo!, he offered only a copy of a generic response from Yahoo! about deactivating accounts.  The court observed that Yahoo! may have a process for obtaining emails from deactivated accounts, and declined to accept defendant�s explanation that production was �impossible,� particularly given the important evidentiary value of the emails and the �feeble offering� by defendant in support of the contention.

The court ordered defendant to immediately make all possible efforts to obtain the emails in his personal Yahoo! account, and to produce all documents in the account without further objection or delay.  The court further ordered defendant to file a Notice of Compliance with the court, detailing the efforts taken.  The court continued:

The Court will not accept Defendant's position that he cannot produce these emails until assurance is given from an executive at Yahoo! responsible for such tasks that this request is indeed impossible.  If a subpoena or other court assistance is necessary to achieve this end, then the parties shall take such necessary action, but the burden shall initially be upon Defendant to retrieve these documents and produce them as soon as possible.

In addition, the court found that defendant's representation that he was being �completely truthful� when he did not identify the account because he knew it would be impossible to ultimately produce these emails, to be sanctionable.  �It will figure largely into the sanctions ultimately awarded in this matter if it is learned that Defendant's failure to identify this account earlier is the cause of the alleged impossibility.�  The court stated the particular sanctions awarded would depend on the outcome of defendant's efforts to obtain the documents, and what was revealed by these efforts as to defendant's actions, if any, that resulted in spoilation of evidence or other more serious discovery violations.

Atlantic Recording Corp. v. Howell, 2008 WL 4080008 (D. Ariz. Aug. 29, 2008)

In this copyright infringement litigation, seven major recording companies alleged that defendant Howell had used the KaZaA file-sharing program to download their sound recordings and distribute them to other users of the network.  Howell had previously resisted plaintiffs� efforts to conduct a forensic examination of his computer hard drive, and the court had granted plaintiffs� motion to compel and granted leave to take additional discovery.  With the benefit of this additional discovery, plaintiffs moved for terminating sanctions based on Howell's willful spoliation of material evidence.

Based on the evidence presented, the court found that:

�  Defendant removed the KaZaA program from his computer and deleted the contents of the shared folder shortly after receiving notice of the lawsuit

�  The �backup� DVDs that defendant claimed he created did not preserve the substantial amount of material evidence that he destroyed by uninstalling KaZaA, and appeared to be created well after he removed KaZaA from his computer

�  Defendant reinstalled his computer's operating system after he had received plaintiffs� requests for copies of various files on his computer

�  Defendant downloaded a program called Aevita Wipe & Delete shortly after he filed his answer in the case, then, in the middle of the discovery period, used that program to permanently delete all traces of certain files on his computer

The court rejected defendant�s explanation that he was only trying to ensure that KaZaA would no longer function on his computer:

But Howell had the means to prevent KaZaA from continuing to function and also preserve the evidence.  Given the serious claims he was confronting, he would have done so if that evidence was as powerfully exonerating as he describes.  It is implausible that Howell would destroy the only evidence that could exonerate him simply to remove KaZaA from his computer.  It is entirely incredible that his systematic and pervasive destruction of every last bit of evidence pertaining to the claims against him was simply an effort to tidy up his computer.  The timing and character of Howell's actions show that they were deliberately calculated to conceal the truth and that he willfully destroyed evidence to deceive the court.

The court found that defendant�s �brazen destruction of evidence� had wholly undermined the integrity of the proceedings and made it impossible to decide the case on the merits.  It concluded that the prejudice to the court and to the recording companies was irretrievable, and that default judgment was the only appropriate sanction, both for its deterrent effect and to remedy the prejudice inflicted on plaintiffs and on the court.

Accordingly, the court struck defendant�s answer and entered default judgment against defendant for $40,500 in statutory damages.

Gippetti v. UPS, Inc., 2008 WL 3264483 (N.D. Cal. Aug. 6, 2008)

In this case, plaintiff alleged that UPS fired him because of his age (reportedly, he was about 44 years old at the time).  UPS contended that Gippetti's termination had nothing to do with his age.  It maintained that he was fired for �stealing time� (i.e., sleeping on the job during periods he claimed to be working, taking excessive rest breaks and inaccurately recording meal and rest breaks) and because he did not properly complete truck safety inspections required by UPS and government regulations.

In discovery, plaintiff sought production of �tachograph records,� which were records that showed a vehicle's speed and the length of time it is moving or stationary.  UPS produced tachographs from 2007 and 2008, and agreed to produce the records on an ongoing basis.  However, UPS stated it was not able to locate any other responsive tachographs because its practice is, and since 2002 has been, to preserve such records for only 37 days due to the large volume of the data.

Plaintiff moved for spoliation sanctions, arguing that the destroyed tachograph records �would support that Plaintiff did not drive Route SU09 any differently than employees who were under the age of 40 years old.�  UPS responded that, until recently in this litigation, it had no reason to believe that all tachographs had any bearing on plaintiff's age discrimination claim before those records were destroyed years ago in accordance with the company's retention policy.

The court observed that the destruction of evidence need not be in �bad faith� to warrant the imposition of sanctions, but that a party�s motive or degree of fault is relevant to what sanction, if any, is imposed, citing Fed. R. Civ. P. 37(e) (�Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.�).

The court denied plaintiff�s motion for sanctions.  First, the court stated it was �hard pressed to understand how those records have any bearing on [plaintiff�s] age discrimination claims.�  Gippetti did not dispute that the tachographs themselves show nothing more than whether the truck's engine is on and, if the truck is moving, how fast it is moving.

Second, even assuming the requested tachographs were relevant, the court found that Gippetti had not presented evidence demonstrating that UPS had notice that the records should have been preserved before they were destroyed in accordance with its normal retention policy.  The court found that, in sum, the record presented showed only that the tachographs were maintained and then destroyed several years ago in the normal course of UPS's business in accordance with the company's retention policy.

Third, the court found that plaintiff had suffered little, if any, prejudice as a result of the destroyed tachographs.  UPS had produced the time cards for other drivers which reportedly showed (a) the start and ending time for each task (e.g., starting work (�SW�), leaving a facility (�LV�), turnaround (�TA�), taking a meal (�M�), taking a break (�B�) and finishing work (�FW�).  UPS argued that, if Gippetti wanted to compare his route time with the other drivers, he had the information he needed from the time cards.  The court concluded that Gippetti was not seriously prejudiced by the destruction of records that had no apparent bearing on his age discrimination claims in the first instance.

Tierno v. Rite Aid Corp., 2008 WL 3287035 (N.D. Cal. July 31, 2024)

In this wage and hour employment case, plaintiff sought documents about class members' employment and salary history, terminations, performance evaluations, discipline, certain communications, and personnel files.  Rite Aid had demanded that plaintiff either travel to its various district office locations throughout California and copy the documents, or pay the copying expenses, which it estimated at $104,178.84.  The dispute was presented to the magistrate judge.  After weighing the factors set out in Zubulake v. UBS Warburg, L.L.C., 217 F.R.D. 309, 322 (S.D.N.Y. 2003), the magistrate judge required Rite Aid to produce the documents at its own expense.

Rite Aid objected to the magistrate's ruling, arguing that Fed. R. Civ. Pro. 34 requires plaintiff, not Rite Aid, to bear the costs of photocopying.  The district judge agreed, concluding that the magistrate judge had �clearly erred� by analyzing the dispute under Zubulake:

Rite Aid correctly argues that the seven-factor Zubulake test which Judge Larson applied is intended solely for electronic discovery, not for discovery of paper documents.  The Zubulake opinion sought to refine a set of factors which had been set out in an earlier case, which had "become the gold standard for courts resolving electronic discovery disputes."  217 F.R.D. at 320. The seven-factor framework developed in Zubulake clearly applies solely to electronic discovery.  See, e.g., Semsroth v. City of Wichita, 239 F.R.D. 630, 636 (D. Kan. 2006) (Zubulake is the leading case on "cost-shifting of electronic discovery"); Quinby v. WestLB AG, 245 F.R.D. 94, 101 (S.D.N.Y. 2006) (Zubulake sets forth "an analytical framework for determining whether it is appropriate to shift the costs of electronic discovery"); Wiginton v. CB Richard Ellis, Inc., 229 F.R.D. 568, 572 (N.D. Ill. 2004) (Zubulake is one of three tests "[i]n the electronic arena" to determine when shifting costs of production in response to "e-discovery" requests is appropriate); OpenTV v. Liberate Technologies, 219 F.R.D. 474, 476 (N.D. Cal. 2003) ("[i]n the context of discovery of electronic documents" Zubulake standard applies).

The rule for paper documents, on the other hand, is that "[a] party producing documents will ordinarily not be put to the expense of making copies for the requesting party."  7 Moore's Federal Practice � 34.13[5] at 34-92 (2008); Schwarzer et al, Federal Civil Procedure Before Trial � 11:1932, citing Continental Ill. National Bank and Trust Co. of Chicago v. Caton, 136 F.R.D. 682, 690 (D. Kan. 1991) and Bills v. Kennecott Corp. 108 F.R.D. 459, 462 (D. Utah 1985) ("Ordinarily, the producing party bears the costs of reviewing and gathering documents while the requesting party pays for the costs of the copies only"); Clever View Investments, Ltd. v. Oshatz, 233 F.R.D. 393, 394 (S.D.N.Y. 2006) ("[A] party need only make requested documents available for inspection and copying; it need not pay copying costs").

However, the district judge noted that other grounds may exist for shifting the costs of copying to Rite Aid.  It concluded that plaintiff should be granted the opportunity to argue that Rite Aid should pay for copying or otherwise bear or share the cost of the paper production.

White v. Graceland Coll. Ctr. for Prof�l Dev. & Lifelong Learning, Inc., 2008 WL 3271924 (D. Kan. Aug. 7, 2008)

In this wrongful termination case, plaintiff moved for an order compelling defendants to, among other things, provide complete information on defendants' document retention policy and how such policy may have affected ESI responsive to certain discovery requests, and re-produce certain electronic documents in their native format.  The court denied the former, but granted the latter request.

Information on Defendants� Document Retention Policy

Plaintiff�s discovery requests had asked defendants to identify any computer or electronic devices used by its management or human resources department in the years 2003 or 2004, and whether the device had been search or analyzed to determine if any files, notes, or documents related to plaintiff were contained on the device.  Plaintiff also asked that defendants identify and produce any documents related to plaintiff found on the device.

Defendants asserted numerous objections, but responded as follows:  "The individual Defendants did not utilize any PDAs in 2003 or 2004.  The individual Defendants did utilize computers provided by Defendant SkillPath Seminars in 2003 and 2004.  The network servers used by Defendant SkillPath Seminars were searched for responsive documents."  A supplemental answer explained defendants' procedure when it received a new computer, identified computers and networks that were searched for responsive documents, and explained why some old computers and "loaner" computers were not searched.  In response to plaintiff�s request for production, defendants objected but also stated they would produce non-privileged, responsive documents, and referenced a document by Bates number range.  In addition, defendants produced an affidavit authored by its Director of Information Systems to show they conducted an adequate search of their electronic systems to find documents pertaining to Plaintiff.

Plaintiff argued that the affidavit did not indicate when he conducted his searches, how he conducted the searches, or whether he found any documents as a result of his searches.  Additionally, while it indicated that he "searched the hard drives" of several employees, it failed to indicate whether the hard drives were in use in 2004 or contained information or documents from 2004.

Rejecting plaintiff�s various criticisms, the court found that defendants had provided sufficient responses to these discovery requests and denied that portion of plaintiff�s motion.

Re-production of Documents in Native Format

Plaintiff asked that defendants be compelled to produce certain listed documents, primarily emails and email attachments, in their native format, which had previously been produced by defendants in paper form.  Defendants objected to producing the documents again in native format, arguing that plaintiff had failed to request that ESI be produced in its native format and could not raise this argument in her second motion to compel.  They argued that they produced emails and other electronic information in a "reasonably usable form," as contemplated by Fed. R. Civ. P. 34(b)(2)(E)(ii).  Defendants further argued that plaintiff had failed to make a particularized showing of why she needed access to these emails in their native format.

Plaintiff countered that defendants' discovery responses had failed to indicate the form in which responsive ESI would be produced.  Instead, defendants had converted the ESI prior to producing them by forwarding them to an administrative assistant, who then converted them to PDF, printed them, and produced the paper printouts to plaintiff.  Plaintiff argued that defendants' method of producing documents changed the form of the documents from the way they were kept in the ordinary course of defendants' business, and that the paper production was not a �reasonable usable form.�  She asserted that without electronic and native copies of the paper documents produced by defendants, which were documents are all connected to events leading up to, and following plaintiff's termination, she was unable to confirm or contradict that the documents were prepared at the time defendants said they were prepared.  Plaintiff explained that the timing, of when the decision to terminate plaintiff was made by defendants, was a critical issue in the case.  Additionally, without electronic copies, plaintiff could not be sure that, when prepared, the documents reflected what the documents now reflect.  Plaintiff also wanted to ensure that two particular documents had not been modified.

The court observed that Fed. R. Civ. P. 34(b)(2)(E)(ii) 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," and that "[a] party need not produce the same [ESI] in more than one form."  The court further observed that the advisory committee notes to the 2006 amendments to Rule 34 provided that the producing party's "option to produce in a reasonably usable form does not mean that a responding party is free to convert [ESI] from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for the requesting party to use the information efficiently in the litigation," and that "[i]f the responding party ordinarily maintains the information it is producing in a way that makes it searchable by electronic means, the information should not be produced in a form that removes or significantly degrades this feature."

The court stated that, because plaintiff failed to specify a form for producing the electronically stored emails and attachments, defendants were required under Rule 34(b)(2)(E)(ii) either to produce the emails and attachments in the form (1) in which they are ordinarily maintained, or (2) in a reasonably usable form.  The court found that defendants� paper production of ESI did not comply with Rule 34:

The Court finds that Defendants failed to produce the emails and attachments in either the form in which they are ordinarily maintained, or in a "reasonably usable form," as required by Rule 34(b)(2)(E)(ii).  Defendants' conversion of the emails and attachments to PDF documents and production of the PDF documents in paper format does not comply with the option to produce them in a reasonable usable form.  The advisory committee notes for the 2006 amendments to Rule 34 provide guidance that Defendants' option to produce in a reasonably usable form does not mean that they are free to convert electronically stored information from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for Plaintiff to use the information efficiently in the litigation.  As Defendants have not produced the emails and attachments in a "reasonably usable form," Plaintiff is entitled to have the emails and attachments produced in their native format.  She has further explained the critical importance of obtaining them in their native format with metadata intact.

The Court notes that this discovery dispute is an example of one which the re-production of discovery could have been altogether avoided had the parties adequately conferred at their Fed. R. Civ. P. 26(f) conference regarding production of electronically stored information ("ESI").  While not all disputes regarding discovery of ESI can be prevented by early efforts by counsel to investigate and consider the possible forms discovery may be produced, many disputes could be managed and avoided altogether by discussing the issue before requests for production are served.  Guideline 4(f) of the Guidelines of Discovery of Electronically Stored Information, available on the District of Kansas' website, specifically mentions that during the Fed. R. Civ. P. 26(f) conference, counsel should attempt to agree on the format and media to be used in the production of the ESI.

Thus, the court granted plaintiff�s motion as to her request to compel defendants to produce certain emails and email attachments in their native format, notwithstanding the previous production in paper form.

Young v. Pleasant Valley Sch. Dist., 2008 WL 2857912 (M.D. Pa. July 21, 2024)

In this case, plaintiffs had requested that they be allowed to search the defendants' backup tapes in an attempt to discover whether other complaints were made to the district about the teacher who was at the center of the case.  After examining the relevant case law, the court concluded that it lacked sufficient information on the process of recovering deleted emails, the time required to do so, and the potential costs of that recovery.  As a result, the court ordered defendants to supply the information and delayed a decision on plaintiffs' motion until it had the information.

Defendants complied with the court�s request, and provided the following information:

(1) the district already possessed the equipment necessary to gain access to materials preserved on the backup tapes;
(2) the cost of the search would be a minimum of $10,000;
(3) a week would be needed to rebuild and restore the e-mail program, and additional time would be needed to access the emails;
(4) there were easily millions of emails stored on the server, and a precise number could not be reported until the server was rebuilt; and
(5) once the emails were restored, they could be searched by date, recipient, sender, subject or keywords.

The court concluded that the burden and expense of rebuilding the district's email system in order to provide the requested discovery, along with the additional and less expensive means available for plaintiffs to get this material, made the plaintiffs' discovery request impractical.  Accordingly, the court denied plaintiffs' motion.

The court rejected plaintiffs� offer to have their own expert search the tapes: 

The court finds this request unduly burdensome to the school district, impractical and contrary to the spirit of the Federal Rules of Civil Procedure, and will deny it.  See, e.g., Committee Note to 2006 amendment to Federal Rule of Civil Procedure 34(a) (finding that the rules related to electronic discovery were �not meant to create a routine right of direct access to a party's electronic information system, although such access may be justified in some circumstances.�)  Given that an unrestricted search of the back-up tapes would likely implicate a wide variety of privacy concerns for the school district, children in the district and the parents of those students, the school district would undoubtedly need to supervise closely the discovery.  This close supervision would cause great time and expense to the district, essentially creating added and unnecessary costs for any search.  If the court were to order the production of material from the backup tapes, the most efficient and least costly procedure would be one that relies on the defendants to produce the requested material.  The court would rely on the defendants to produce all of the discoverable material contained on those tapes.

The court went on to find that the factors laid out in Rule 26(b) (2), and in particular the third factor, counseled against requiring production of material from the back-up tapes.  The court explained:

First, we find that the burden and expense of the proposed discovery outweighs its likely benefit.  The court accepts the district's representation of the cost of reproducing the deleted e-mails by rebuilding a discontinued server.  Though the court is skeptical about the time and expense required to search the e-mail system once it is restored, the court recognizes that $5,000 represents a significant burden to a public school system.  Searching the millions of e-mails, even with an efficient key-word system, would undoubtedly place a burden on the district staff and defense counsel charged with weeding out clearly irrelevant or privileged documents.  Second, the needs of the case also limit the usefulness of the data sought.  While complaints about Mr. Smith contained in e-mails would undoubtedly be relevant to the question of whether the district was aware of problems with the teacher, parents' complaints about Mr. Smith could be accessed in a more cost-efficient and less burdensome way.  E-mails from other parents would be helpful to this claim, but perhaps simply cumulative.  Third, the resources of the parties involved and the amount in controversy in this case are relatively small.  This case does not involve a billionaire multi-national corporation that could produce the material in question using a minuscule fraction of its budget, and the plaintiff's do not have a large financial interest in the case which could only be realized with information on the tapes.  Thus, the third of the factors stated in Rule 26(b)(2) counsels against allowing the discovery.

Further, the first factor stated in the rule also makes discovery unnecessary here.  The material sought is most likely obtainable from another source that is more convenient, less burdensome or less expensive.  Thus, the request is � �overly broad in scope, duplicative of prior requests and unduly burdensome.��  Cummings v. General Motors Corp., 365 F.3d 944, 954 (10th Cir. 2004).  In this matter, the question is not whether the district received e-mails about a teacher, but whether it received complaints about that teacher.  Under the circumstances here presented plaintiffs seek perhaps the most expensive and burdensome method for discovering whether such complaints existed.  Plaintiffs have other options for obtaining this information.  They could, for instance, take the relatively cost-efficient step of sending written questions to parents who had students in Mr. Smith's classes, asking if they ever made complaints to the school about him in any form.  Those parents may have preserved copies of e-mails to the school, or they may be able to testify that they sent such documents to the district.  Indeed, even in today's wired and connected society, e-mails are not the only way that parents complain about teachers:  depositions of school officials could provide information about telephone calls, conferences, or conversations in hallways, offices, or supermarkets that would provide the type of material sought with this request.

Cason-Merenda v. Detroit Med. Ctr., 2008 WL 2714239 (E.D. Mich. July 7, 2024)

In this class action litigation, defendant moved, pursuant to Fed. R. Civ. P. 26(c), for an order requiring plaintiffs to pay at least 50 percent of its third party vendor electronic discovery costs.

The court first observed that the parties had entered a Stipulated Order for Discovery of Electronically Stored Information, which noted that the parties held several discussions regarding the possibility of limiting the scope and extent of discovery and that future agreements might be reached.  The Stipulated Order also reserved to the parties the right to petition the court to limit the scope and burden of discovery and to request that the opposing party share the costs.

The court then cited Fed. R. Civ. P. 26(b)(2)(B) and stated that, among the measures available to the court is the apportionment (or shifting) of costs between the requesting and the producing parties.  However, the court observed that defendant had not identified any form of ESI �as not reasonably accessible because of undue burden or cost,� nor did it file a motion for an order protecting it from the obligation of production.  Rather, defendant produced the information requested of it and sought, after the fact, an order imposing 50 percent of its costs upon plaintiffs.

The court found that the motion was untimely in two respects.  First, the court�s Scheduling Order provided, in pertinent part, that �[a]ll motions ... for protective orders ... must be filed within 14 days of receipt or notice of such disputed discovery.�  Second, the court found that the provisions of Fed. R. Civ. P. 26(b)(2)(B) and 26(c) �plainly contemplate that a motion for protective relief (including cost shifting) is to be brought before the court in advance of the undue burden, cost or expense from which protection is sought.�

The court rejected defendant�s argument that Federal Rules do not envision a ruling on cost sharing early in the case.  The court explained:

DMC's counsel argued at the hearing that the �issue� raised by the instant Motion is whether its discovery compliance involved �undue burden or expense.�  �Undue burden or cost� is precisely the basis upon which Rule 26(b)(2)(B) permits a party to refuse production �of electronically stored information from sources that the party identifies as not reasonably accessible ....�  On a Motion to Compel Discovery or for a Protective Order, the non-producing party must show that the information is not reasonably accessible because of undue burden or cost.  If that showing is made, the court may only order the discovery from such sources �if the requesting party shows good cause ...,� in which case the court may specify conditions for discovery (including cost sharing).  Implicit in the grant of authority to impose such conditions is the proposition that the requesting party may elect either to:  (a) meet the conditions, or (b) not obtain the disputed discovery (thus avoiding undue burden or cost to the producing party).  It offends common sense, in my view, to read the rule in a way that requires (or permits) the producing party to suffer �undue burden or cost� before raising the issue with the court.  Under such a reading, a court would be powerless to avoid unnecessary expense or to specify any meaningful �conditions� for the discovery other than cost sharing.  Furthermore, the requesting party would be stripped of its implicit right to elect either to meet the conditions or forego the requested information.  The Rule, if it is to be sensible and useful, must be read as a means of avoiding undue burden or cost, rather than simply distributing it.  Indeed, Fed. R. Civ. P. 1 provides that the Rules are to be �construed and administered to secure the just, speedy and inexpensive determination of every action and proceeding.�  (Emphasis added).

This interpretation is further reinforced by Fed. R. Civ. P. 26(b) (2)(C)(iii) which provides that the court must limit the frequency or extent of discovery otherwise allowed by the rules if it determines that �the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the party's resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.�  (Emphasis added).  Again the clear objective is the avoidance of undue cost rather than merely the apportionment of it.

DMC surely was, or should have been, aware of the substantial cost of responding to Plaintiffs' discovery requests before it undertook to do so.  Rather than raising the issue of undue burden and cost before they were incurred, when there would have been an opportunity for the court to demand a showing of good cause by the requesting party, explore alternatives, impose conditions or otherwise encourage compromise, DMC elected to suffer the expense and only then seek contribution from the Plaintiffs.  I conclude that the movant has failed to make timely resort to Rule 26(b)(2) (B).

The court rejected defendant�s argument that the parties� stipulation expressly reserved the right to seek cost-shifting, again referencing the court�s Scheduling Order which required that motions for protective orders be brought within 14 days of receipt of notice of a discovery dispute.  The court stated:  "Simply put, the parties are not at liberty to stipulate away their scheduling obligations, and nothing in their Stipulated Order can be fairly read to do so.�

In addition, the court was unpersuaded by defendant�s argument that the ESI addressed in the instant motion may be viewed as �accessible� for purposes of Rule 26(b), and that neither the Federal Rules of Civil Procedure nor the reported case law restricted cost sharing to �inaccessible data.�  The court noted that there is authority that �[a] court should consider cost shifting only when electronic data is relatively inaccessible, such as in back up tapes.�  Citing Zubulake v. U.B.S. Warburg LLC, 217 F.R.D. 309, 324 (S.D.N.Y.2003).  Thus, the court concluded that, to the extent that defendant maintained that the information produced was "accessible," court-ordered cost shifting was inappropriate.  The court noted that �[t]he highly respected Sedona Principles are in accord," and quoted Principle 13:

Absent a specific objection, party agreement or court order, the reasonable costs of retrieving and reviewing electronically stored information should be born by the responding party, unless the information sought is not reasonably available to the responding party in the ordinary course of business.  If the information sought is not reasonably available to the responding party in the ordinary course of business, then, absent special circumstances, the costs of retrieving and reviewing such electronic information may be shared or shifted to the requesting party.

Finally, the court declined to invoke its broad authority under Rule 26(c) to protect defendant from �undue burden or expense.�  It found that the provisions of that rule simply underscore the untimeliness of defendant's motion:

The clear import of the language employed is that the court has wide discretion to prevent undue burden or expense.  But for Defendant's delay, the court would have been in a position to select from a range of alternative actions.  In addition, had the court determined to impose conditions upon DMC's production, Plaintiffs presumably would have been in a position to elect either (a) to accept the conditions or (b) to forego the discovery and save DMC the burden and expense of producing it.  Unfortunately, DMC's tardy filing has deprived this court of its most valuable prerogatives.  Having elected to martyr itself rather than to seek relief in a timely fashion, DMC seeks an order imposing the cost of its choice upon its opponents.  I find neither substantive merit nor equity in its request.

Peskoff v. Faber, 251 F.R.D. 59 (D.D.C. 2008)

In a previous decision, Magistrate Judge John M. Facciola addressed the sufficiency of the search done by defendant Michael Faber for emails and other ESI in response to plaintiff�s discovery requests, and determined that it was "appropriate to ascertain the cost of forensic testing of the computers and server at issue to see if it justifies a forensic search of them."  Peskoff v. Faber, 244 F.R.D. 54, 63 (D.D.C. 2007).  The parties submitted a joint bid proposal, which the court distributed to numerous vendors.  Three bids were received, the lowest of which was $33,000.  When the parties failed to reach agreement on how to share that cost, the matter was submitted again to Judge Facciola for resolution.

The court noted it had already determined that the Rule 26(b)(2)(C) factors weighed strongly in favor of the discovery, since the information sought was highly relevant, not duplicative, and could not be obtained from other sources.  The court then addressed the cost of the forensic search, and observed that it was not a situation �where the anticipated cost of doing the forensic search will dwarf the final recovery,� given that Mr. Peskoff was demanding $2.5 million.  The court concluded that, when balancing the cost of the forensic examination against the factors favoring the discovery, good cause existed to compel the forensic examination.

The court next observed that the need for a forensic examination was directly attributable to what was and was not done by Mr. Faber to preserve ESI.  The court found that, taken together, those acts and omissions "shattered" any argument that the burden or expense of that forensic examination, if incurred by Mr. Faber, would be "undue."

First, the court found that Mr. Faber's efforts to search for responsive ESI was, at best, inadequate.  The court previously described numerous searches that might yield responsive information, yet Mr. Faber apparently did not conduct any of these possible searches.  Second, Mr. Faber failed to deactivate network maintenance tools that automatically delete ESI.  Mr. Faber did not have Mr. Peskoff's e-mails archived until April 2004, and at no point did he have the relevant back-up tapes preserved.  Finally, Mr. Faber, who did not appear at the court�s evidentiary hearing on the matter, provided no explanation for these failings or for the peculiar temporal gaps in his production, and he refused to provide details of the search he purportedly conducted of his own email.  The court concluded:  �That he has at this late stage not fully explained his actions provides an additional reason why the costs should not be shifted from him.�

In light of these facts, the court found no reason to deviate from the traditional rule that a responding party bears the costs of production.  �This is a problem of Mr. Faber's own making and, consequently, the expense and burden of the forensic examination can hardly be described as �undue.�"

Accordingly, the court ordered plaintiff to pay $33,000 into the registry of the court, so that the court could dispense payments to the vendor as the invoices were received.

Daimler Truck N. Am. LLC v. Younessi, 2008 WL 2519845 (W.D. Wash. June 20, 2024)

In this case, Daimler sued its former employee in Oregon district court for breach of his duty of loyalty, his confidentiality contract, and his common law duty not to convert confidential and proprietary information, based upon the employee�s departure and subsequent employment by a competitor, Cascadia.  As part of that suit, Daimler served Cascadia with the third-party discovery requests at issue.  The parties resolved most of their disagreements, but were unable to resolve Daimler's request to search Cascadia's computers for communications between Younessi and Jim Hebe (a former CEO of Daimler who was subsequently employed by Cascadia) and between Hebe and other Daimler employees.  Cascadia moved to quash the subpoena and for a protective order because Daimler's subpoena was both unduly burdensome and would require disclosing confidential trade secrets to a competitor.

Trade Secrets

Cascadia claimed that production of its hard drives would necessarily reveal its trade secrets.  The court recognized Cascadia's interest in keeping its trade secrets out of the public eye, and particularly away from its competitors.  However, the court determined that the requested communications were highly relevant to the case.  Since Daimler had shown sufficient good cause for the discovery, the court denied the motion to quash.  However, the court also found that some form of protective order was appropriate.  It discussed the manner in which the production should occur, and concluded that Cascadia should be allowed to conduct the search for responsive documents itself:

The Federal Rules provide for discovery of electronically stored information either in its original state, i.e. actual production and copying of hard drives, or in a reasonably usable form, i.e. print outs.  Fed. R. Civ. P. 34(a)(1)(A).  While this is consistent with the general scope of the Rules allowing broad discovery, it is inconsistent with the adversarial aspect of trial practice and discovery because it contemplates granting opposing counsel, and opposing parties, direct access to information beyond the scope of discovery.  That is, the Rule allows for a subpoena of an entire hard drive for the limited purpose of finding a few documents which may be stored therein.  See Fed. R. Civ. P. 34(a)(1)(A) (requesting party may obtain information stored in any medium); Fed. R. Civ. P. 34(b)(1)(C) (requesting party "may specify the form or forms in which electronically stored information is to be produced").  This would be analogous to allowing the search of a party's entire collection of file drawers for the purpose of finding a single class of documents.

In situations involving information which is appropriately kept private, the Court may fashion restrictions on the form and method of disclosure.  See Playboy Enterprises, Inc. v. Welles, 60 F. Supp. 2d 1050 (S.D. Cal.1999).  In the interest of protecting private information such as trade secrets or privileged documents, the Court can order the responding party's attorneys to search for all documents consistent with the subpoena and to produce only those which are relevant, responsive, and do not disclose trade secrets.  See, e.g., id.  The Court finds in Playboy an appropriate model for this case.  There, the plaintiff sought to copy the defendant's hard drives after it learned she may have deleted emails which could potentially prove the knowledge element of plaintiff's infringement claims.  Id. at 1051.  Defendant responded with concerns that privileged communications would also be recoverable under such a procedure.  Id. at 1054.  The court ordered the copying, but directed defense counsel to search the copy for responsive materials instead of turning over the copied drives themselves.  Id. at 1055.

Here, Daimler also requests to copy Cascadia's hard drives, a process which might reveal not just privileged, but also trade secret information.  Having Cascadia search its own computers is an appropriate compromise here because of the unique status of Daimler as a direct competitor and of Cascadia as a nonparty to the underlying suit.  The elaborate copying which took place in Playboy is not necessary because there are no allegations of documents being destroyed and Cascadia has shown that it is responsive and willing to cooperate with Daimler's reasonable requests.

The Rules and case law support this solution.  See In re Ford Motor Co., 345 F.3d 1315 (11th Cir. 2003); Comment to 1970 Amendment of Fed R. Civ. P. 34(a) ("[W]hen the data can as a practical matter be made usable by the discovering party only through respondent's devices, respondent may be required to use his devices to translate the data into usable form. In many instances, this means that respondent will have to supply a print-out of computer data."); Comment to 1993 Amendment to Fed. R. Civ. P. 34(a) (the rule "is not meant to create a routine right of direct access to a party's electronic information system").  Fortunately, Cascadia has demonstrated it is willing to cooperate with Daimler in seeking discovery and the Court has confidence that Cascadia's counsel will adequately and appropriately screen all discovered materials and remove only those documents which are beyond the scope of this order.

Undue Burden

The court next considered Cascadia�s arguments that the discovery requests were overly broad because of Cascadia's wide-ranging collection of locations and computers.  It stated that Hebe was involved in a wide range of activities while heading Cascadia and had access to a variety of computers.  Cascadia further argued that the broad scope of Daimler's request further complicated production.

The court found some merit in Cascadia�s position:

When the Federal Rules were amended, the drafters were well aware that the scope of electronic discovery could be both broad and burdensome. GAP Report to the 2006 Amendment to Fed. R. Civ. P. 26(b)(2).  "Information systems are designed to provide ready access to information used in regular and ongoing activities," however, and this makes large scale production of documents stored in this way much less burdensome than it otherwise would be.  Id.  The very nature of electronically stored information makes it easier to search, and "[i]n many circumstances the requesting party should obtain and evaluate the information from such sources before insisting that the responding party search and produce information contained on sources that are not reasonably accessible."  Id.

The Court is aware that the parties have conferred to some extent to discuss this request and that Cascadia has voluntarily complied with the subpoena to some extent.  That being said, neither party has briefed with the specificity required how burdensome further production might be or what likelihood there is that the resulting documents might be relevant.

The requesting party, Daimler, has the burden of showing a need for further discovery outweighs the burden placed on Cascadia in producing it, and not all of Daimler's requested documents meet that burden.  See GAP Report to the 2006 Amendment to Fed. R. Civ. P. 26(b)(2) ("The requesting party has the burden of showing that its need for the discovery outweighs the burdens and costs of locating, retrieving, and producing the information.").  Under the showing Daimler has made thus far, it would unduly burden Cascadia to produce information regarding contacts between Hebe and Daimler employees when no effective way has been presented to distinguish such contacts from the wide range of contacts any businessman undertakes.  There is no evidence before this Court that Daimler has performed a search of its own records and documents for such contacts.  If it has not, it would be unduly burdensome and potentially cumulative to require Cascadia to perform such a search in its records when Daimler, by failure to do such a search on its own, has implied that the costs of such a search outweigh the potential benefits.  If Daimler has performed such a search and revealed no evidence to support the need for such a broad ranging search then the likelihood of Cascadia's similar search being sufficiently beneficial to outweigh the costs is low.  Without such a showing, Daimler has not met its burden of showing "good cause."

Accordingly, the court ordered Cascadia to perform its own search to determine what documents could be produced without violating its trade secret and privilege concerns.  It directed Cascadia to identify all potentially responsive sources that it did not search and all potentially responsive documents that it did not produce, providing enough detail to enable the requesting party to evaluate the burdens and costs of providing the discovery and the likelihood of finding responsive information on the identified sources.  The court limited production to documents regarding communications on hard drives, Blackberries, lap tops and calendars used by Hebe, between Hebe and Younessi or between Hebe and another third party regarding Younessi during the 14 months laid out in the subpoena.  Finally, the court quashed the subpoena to the extent it required Cascadia to produce documents regarding contacts between Hebe and Daimler or Daimler employees.