Top Twenty-Two e-Discovery Opinions of 2016: Number Three

Here is the e-Discovery Team’s third most interesting e-discovery opinion of 2016. In re Takata Airbag Prods. Liab. Litig., No. 15-02599-CIV-Moreno, MDL No. 5-2599 (S.D. Fla. Mar. 1, 2016).

THIRD – In re Takata Airbag

11/03/11-- Miami-- Federico A. Moreno, Chief Judge, United States District Court for the Southern District of Florida.

The number three ranked case is primarily interesting because it adds the voice of the U.S. Supreme Court concerning the new scope of relevance specified in Rule 26(b)(1) and other revisions contained in the 2015 Amendments. In re Takata Airbag Prods. Liab. Litig., No. 15-02599-CIV-Moreno, MDL No. 5-2599 (S.D. Fla. Mar. 1, 2016). The Takata Airbag case is one of the largest multi-district class actions in the country. Chief District Court Judge Federico A. Moreno of the Southern District of Florida in Miami was overseeing the Takata Airbag multi-district litigation when he authored this e-discovery order pertaining to the new relevancy rule. Fortunately, Judge Moreno had previously made time to read Chief Justice Roberts 2015 Year-End Report on the Federal Judiciary. He cited to and quoted Justice Roberts on discovery in his Takata opinion.

On March 1, 2016 Judge Moreno considered a recommendation of a Special Master to accept the defendants’ proposal to withhold or redact irrelevant parent documents from responsive families. This is an issue that can arise in any case involving the production of emails. It is often known informally in the trade as the Orphan Child issue. It arises when an email attachment is relevant and so must be produced, but the email transmitting the attachment, called the “parent,” is not relevant. In other words, the parent is irrelevant on its face, but the child attachment is relevant.  Typically such parent transmittal emails are produced to help place the relevant attachments (children) into context.

The defendants in Takata proposed to redact information on irrelevant parent emails pertaining to seven categories of irrelevance. This request to withhold or redact was made to protect irrelevant trade secrets from disclosure, while at the same time avoiding orphan child production; in other words, avoiding production of attachments without also producing and identifying the transmittal emails.

The Plaintiffs had objected to, in Judge Moreno’s words:

… redacting information pertaining to seven proposed categories and argue the [special master’s] report is based on an inaccurate premise that Plaintiffs consented to irrelevance redactions in responsive documents, is inconsistent with the Federal Rules of Civil Procedure in allowing irrelevance redactions that will potentially allow redaction of highly relevant information from responsive documents, will impair Plaintiffs’ discovery efforts; and will lead to unnecessary litigation over the redactions.

Judge Moreno reviewed the Special Master’s recommendation de novo and agreed in part with the plaintiffs that the redactions allowed by the Master were too broad. Judge Moreno allowed redaction of the parent emails, but limited the categories of information that could be redacted. Judge Moreno reached this result by interpreting the language of amended Rule 26(b)(1).

justice_john_robertsJudge Moreno quoted Chief Justice John Roberts’ comments in the 2015 Year-End Report that the newly amended Fed.R.Civ.Pro. 26 “crystalizes the concept of reasonable limits in discovery through increased reliance on the common-sense concept of proportionality.” 2015 Year-End Report on the Federal Judiciary. Here are additional excerpts of the Supreme Court’s 2015 Year-End Report:

The amendments may not look like a big deal at first glance, but they are. That is one reason I have chosen to highlight them in this report. For example, Rule 1 of the Federal Rules of Civil Procedure has been expanded  by a mere eight words, but those are words that judges and practitioners must take to heart. Rule 1 directs that the Federal Rules “should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.” The underscored words make express the obligation of judges and lawyers to work cooperatively in controlling the expense and time demands of litigation—an obligation given effect in the amendments that follow. The new passage highlights the point that lawyers—though representing adverse parties—have an affirmative duty to work together, and with the court, to achieve prompt and efficient resolutions of disputes.

rule_26b1Rule 26(b)(1) crystalizes the concept of reasonable limits on discovery through increased reliance on the common-sense concept of proportionality:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, 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.”

The amended rule states, as a fundamental principle, that lawyers must size and shape their discovery requests to the requisites of a case. Specifically, the pretrial process must provide parties with efficient access to what is needed to prove a claim or defense, but eliminate unnecessary or wasteful discovery. The key here is careful and realistic assessment of actual need. That assessment may, as a practical matter, require the active involvement of a neutral arbiter—the federal judge—to guide decisions respecting the scope of discovery.

The amended rules accordingly emphasize the crucial role of federal judges in engaging in early and effective case management. The prior rules—specifically Rule 16—already required that the judge meet with the lawyers after the complaint is filed, confer about the needs of the case, and develop a case management plan. The amended rules have shortened the deadline for that meeting and express a preference for a face-to-face encounter to enhance communication between the judge and lawyers. The amendments also identify techniques to expedite resolution of pretrial discovery disputes, including conferences with the judge before filing formal motions in aid of discovery. Such conferences can often obviate the need for a formal motion—a well-timed scowl from a trial judge can go a long way in moving things along crisply.

Recognizing the evolving role of information technology in virtually every detail of life, the amended rules specifically address the issue of “electronically stored information,” which has given birth to a new acronym—“ESI.” Rules 16 and 26(f) now require the parties to reach agreement on the preservation and discovery of ESI in their case management plan and discovery conferences.

rule_37eredAmendments to Rule 37(e) effect a further refinement by specifying the consequences if a party fails to observe the generally recognized obligation to preserve ESI in the face of foreseeable litigation. If the failure to take reasonable precautions results in a loss of discoverable ESI, the courts must first focus on whether the information can be restored or replaced through alternative discovery efforts. If not, the courts may order additional measures “no greater than necessary” to cure the resulting prejudice. And if the loss of ESI is the result of one party’s intent to deprive the other of the information’s use in litigation, the court may impose prescribed sanctions, ranging from an adverse jury instruction to dismissal of the action or entry of a default judgment. …

The 2015 civil rules amendments are a major stride toward a better federal court system. But they will achieve the goal of Rule 1—“the just, speedy, and inexpensive determination of every action and proceeding”— only if the entire legal community, including the bench, bar, and legal academy, step up to the challenge of making real change. …

Chief Justice John G. RobertsJudges must be willing to take on a stewardship role, managing their cases from the outset rather than allowing parties alone to dictate the scope of discovery and the pace of litigation. Faced with crushing dockets, judges can be tempted to postpone engagement in pretrial activities. Experience has shown, however, that judges who are knowledgeable, actively engaged, and accessible early in the process are far more effective in resolving cases fairly and efficiently, because they can identify the critical issues, determine the appropriate breadth of discovery, and curtail dilatory tactics, gamesmanship, and procedural posturing.

As for the lawyers, most will readily agree—in the abstract—that they have an obligation to their clients, and to the justice system, to avoid antagonistic tactics, wasteful procedural maneuvers, and teetering
brinksmanship. I cannot believe that many members of the bar went to law school because of a burning desire to spend their professional life wearing down opponents with creatively burdensome discovery requests or evading legitimate requests through dilatory tactics. The test for plaintiffs’ and defendants’ counsel alike is whether they will affirmatively search out cooperative solutions, chart a cost-effective course of litigation, and assume shared responsibility with opposing counsel to achieve just results.

Judge Moreno’s opinion also quoted Chief Justice Robert’s comment that “a party is not entitled to receive every piece of relevant information,” and concluded that “it is only logical” that “a party is similarly not entitled to receive every piece of irrelevant information in responsive documents if the producing party has a persuasive reason for why such information should be withheld.” Here is the full quote from Judge Moreno, one that you are likely to see in memorandums, at least in part:

‘l’he recently amended Rule 26(b)( 1 ) of the Federal Rules of Civil Procedure crystalizes the concept of reasonable limits on discovery through increased reliance on the common-sense concept of proportionality.” Chief Justice John Roberts, 2015 Year-End Report on the Federal Judiciary 6 (2015). Specifically, Rule 26(b)( 1 ) states:

Parties may obtain discovery regarding any nonprivileged matter that is relevant any party’s claim or defense and proportional to the needs of the case, 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.

Fed. R. Civ. P. 26(b)(1). As the Chief Justice’s comments highlight, a party is not entitled to receive every piece of relevant information. lt is only logical, then, that a party is similarly not entitled to receive every piece of irrelevant information in responsive documents if the producing party has a persuasive reason for why such information should be withheld.

Judge Moreno disagreed with all of the categories the Special Master allowed to be redacted because he found they could contain “highly relevant” information. Still, Judge Moreno agreed with the defendants’ overall point about the confidentiality and sensitivity of some of the irrelevant information. To balance the parties’ “desire to protect their competitively sensitive information” against “the importance of the issues at stake in this action and the importance of the discovery in resolving the issues at hand,” Judge Moreno accepted seven categories of information that could be redacted, but he also added a caveat that the defendants would not be permitted to redact any information in those seven categories that related to airbags.

The Court modifies the Report’s recommendation as to irrelevance redactions, such that a producing party may redact only information pertaining to the above-mentioned seven categories, so long as that information does not concern airbags.

Judge Moreno also held “it would make little difference if the producing party provides a fully redacted document or does not provide the document at all.” Therefore, the court accepted the Special Master’s recommendation and permitted the parties to withhold parent documents, with the requirement that the defendants produce a list or slip sheet for the removed documents and share the context of any withheld parent document.

The reliance in part of Judge Moreno’s Order on the 2015 Year-End Report on the Federal Judiciary by Chief Justice Roberts makes this the third most interesting opinion of the year. In re Takata Airbag Prods. Liab. Litig., No. 15-02599-CIV-Moreno, MDL No. 5-2599 (S.D. Fla. Mar. 1, 2016). Both the Opinion and Report should be considered and cited henceforth. What the Supreme Court says on discovery, especially e-discovery, is always of great interest. The same goes for Judge Moreno.

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