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

December 31, 2016

Here is the e-Discovery Team’s second most interesting e-discovery opinion of 2016: Dynamo Holdings Ltd. P’ship v. Comm’r of Internal Revenue, No. 2685-11, 8393-12, 2016 WL 4204067 (T.C. July 13, 2016). It was written by Ronald L. Buch, Judge of the United States Tax Court.

SECOND –  Dynamo Holdings Ltd. P’ship v. Comm’r of Internal Revenue

judge_ronald_-buchThe Dynamo Holdings case is of great interest to the e-Discovery Team because it is all about our favorite topic, the thing we do best, Predictive CodingDynamo Holdings Ltd. P’ship v. Comm’r of Internal Revenue, No. 2685-11, 8393-12, 2016 WL 4204067 (T.C. July 13, 2016). Judge Ronald Buch’s opinion contains an excellent discussion of the law and application of predictive coding.

Recall that this is the second opinion by Judge Buch on predictive coding in this case. In 2014 the Court approved the use of predictive coding. It was one of the first courts to do so after Judge Peck’s Da Silva Moore. Dynamo Holdings Limited P’ship v. Commissioner, 143 T.C. 183 (2014). In Dynamo One, Judge Buch first stated his views on predictive coding:

Predictive coding is an expedited and efficient form of computer-assisted review that allows parties in litigation to avoid the time and costs associated with the traditional, manual review of large volumes of documents.

Id. at 190. In Dynamo One Judge Buch granted the Commissioner’s motion and compelled the plaintiffs to produce the backup tapes, but also granted the plaintiffs’ request for permission to use predictive coding. Id. at 194. In Dynamo Two Judge Buch considered objections to the plaintiff’s predictive coding work and rejected the Commissioner’s motion for the plaintiff to redo the document review using keyword search. Dynamo Holdings Ltd. P’ship v. Comm’r of Internal Revenue, No. 2685-11, 8393-12, 2016 WL 4204067 (T.C. July 13, 2016).

With this background Dynamo Holdings Two had a good chance at the top ranked case of 2016 but for two things. One, the top of the opinion contains this statement: Pursuant to Tax Court Rule 50(f), orders shall not be treated as precedent, except as otherwise provided. Not the kind of statement you want to see on a great opinion like this, but there it is.

The second reason Dynamo Two has to settle for number two is the fact that the predictive coding methodology used by the parties in Dynamo was totally bonkers.  This is not the judge’s fault, of course. Indeed, the author of second most interesting e-Discovery opinion of 2016, did a good job of explaining the crazy, random based predictive coding protocol the attorneys in this case came up with. Also see Judge Buch’s Order Concerning ESI Discovery (Dec. 11, 2015) that sets forth more detail of their ill-informed, compromise protocol.

The e-Discovery Team’s interest in Dynamo Holdings is in spite of our misgivings concerning the way predictive coding was used in this case back in 2014. We cannot get past the pathetic random based methods for training document selection, not to mention the old-fashioned version 1.0 methods they used. Suffice it to say that predictive coding can be done far, far better than it was here, and that the Team, like the Defendant in Dynamo Holdings, has serious misgivings as to the predictive coding based document review done by the Plaintiffs. So to do many others. See: Tredennick & Gricks, Discussion About Dynamo Holdings: Is 43% Recall Enough?.

Our objection is not to the predictive coding software, or the idea of predictive coding, it is an objection as to the specific method of use. The Dynamo Holdings method had very little in common with today’s state of the art methodology. See PREDICTIVE CODING 4.0. (method shown in diagram below.) Still, putting this objection aside, it is the second most interesting e-discovery opinion of 2016.


The Plaintiffs in this case, called in Tax Court lingo, the Petitioners, did the document production using a predictive coding method that the Defendant, the Commissioner of the Internal Revenue Service, obviously had a had in developing in a semi-cooperative fashion. (Reminds me of the explanation of the Camel, a Horse designed by a committee.) The attorneys for both sides were obviously responsible for the mess of a compromise method they came up with. If they had any actual predictive coding experts to advise them, and I assume they did, it is obvious that their advice was not followed. See eg: Predictive Coding 3.0 article, part one and part two (part one describes the history and part two describes the method. Superseded by Predictive Coding 4.0 article, but still good background); Latest Grossman and Cormack Study Proves Folly of Using Random Search For Machine Training – Part One,  Part Two,  Part Three, and Part Four.

When the Petitioners completed the document review with predictive coding, the Defendant basically objected to the work and said it was bad, unreasonably inadequate, and the result was “incomplete.” They argued that the Petitioner’s attorneys should keep on looking for relevant documents, but this time use keyword search, not predictive coding (as if they were mutually exclusive, which they are not). We agree with the defense that the Petitioner’s work was bad, due to poor choice of method. It probably was an incomplete response, as the Commissioner defendant put it. But we also agree with Judge Buch’s refusal to order the Petitioner to redo or supplement the project. The Commissioner’s attorney helped create this error, so we think some estoppel applies here. But the main reason we agree with Judge Buch’s denial of any relief is the Commissioner’s failure to provide proof of the inadequacy of the review, nor an alternative method that would be better.

judge_ronald_buchHere is how Judge Ronald Buch, obviously a very intelligent, well-informed judge, described the dispute resolved by this opinion:

The quality of that response (by Petitioner) is now before us. Using a process described in more detail below, petitioners responded to the discovery requests by using predictive coding. The Commissioner, believing the response to be incomplete, served petitioners with a new discovery request asking for all documents containing any of a series of search terms. (Those same search terms had been used in a Boolean search during the predictive coding process to identify how many documents in the electronic records had each term.) Petitioners objected to this new discovery request as duplicative of the previous discovery responses made through the use of predictive coding. On June 17, 2016, the Commissioner filed a motion under Tax Court Rules 72(b)(2)¹ to compel the production of documents responsive to the Boolean search that were not produced through the use of predictive coding. The petitioners object.

Now we get into the excellent language used by Judge Buch to describe the new technology, language that we fully endorse, but with a caveat that methods differ and some, as we see in Dynamo Holdings, are downright defective.

When responding to a document request, technology has rendered the traditional approach to document review impracticable. The traditional method is labor intensive, with people reviewing documents to discern what is (or is not) responsive, with the responsive documents then reviewed for privilege, and with the responsive and non-privileged documents being produced. When reviewing documents in the dozens, hundreds, or low thousands, this worked fine. But with the advent of electronic recordkeeping, documents no longer number in the mere thousands, and various electronic search methods have developed.

When electronic records are involved, perhaps the most common technique that is employed is to begin with keyword searches or Boolean searches to a defined universe of documents. Then, the responding party typically reviews the results of those searches to identify what, in fact, is responsive to the request.
Implicit in this approach is the fact that some of the documents that are responsive to the word or Boolean search are responsive, while others are not.

An emerging approach, and the approach authorized in this case in our Opinion at 143 T.C. 183, is to use predictive coding to identify those documents that are responsive. A few key points of that Opinion are worth highlighting.

First, the Court authorized the responding party (petitioners) to use predictive coding, but the Court did not, in either its Opinion or its subsequent Order of September 17, 2014, mandate how the parties proceed from that point. …

Second, the Court held open the issue of whether the resulting document production would be sufficient, expressly stating “If, after reviewing the results, respondent believes that the response to the discovery request is incomplete, he may file a motion to compel at that time.” hl. at 189, 194. To state the obvious, (1) it is the obligation of the responding party to respond to the discovery, and (2) if the requesting party can articulate a meaningful shortcoming in that response, then the requesting party can seek relief. We turn now to those two points.

The opinion then goes into the tedious task of describing the was predictive coding was used here. As mentioned, there is no educational value in reviewing that, except to say, do not use this so called method. It was all wrong and the discussion by both sides on recall and precision is incorrect and does not follow bona fide statistical analysis. See eg: Predictive Coding 3.0 article, part one and part two (part one describes the history and part two describes the method. Superseded by Predictive Coding 4.0 article, but still good background); Introducing “ei-Recall” – A New Gold Standard for Recall Calculations in Legal SearchPart One, Part Two and Part ThreeIn Legal Search Exact Recall Can Never Be KnownConcept Drift and Consistency: Two Keys To Document Review Quality, part one, part two and part three.

Judge Buch’s bottom line on the argument in Dynamo Two was correct, and in line with that of the e-Discovery Team, when he assumed that the predictive coding done in this case was “flawed,” but held that “the question remains whether any relief should be afforded.” It was a flawed method alright, but the Defendant failed to provide good cause to justify the relief sought of an expensive do-over using keyword search.

Judge Buch correctly surmised that the Defendant’s request for relief was predicate upon two false premises, which he colorfully calls “myths.”

Respondent’s motion is predicated on two myths.

The first is the myth of human review. As noted in The Sedona Conference Best Practices Commentary on the Use of Search & Information Retrieval Methods in E-Discovery: “It is not possible to discuss this issue without noting that there appears to be a myth that manual review by humans of large amounts of information is as accurate and complete as possible – perhaps even perfect – and constitutes the gold standard by which all searches should be measured.” 15 Sedona Conf. J. 214, 230 (2014). This myth of human review is exactly that: a myth. Research shows that human review is far from perfect. Several studies are summarized in Nicholas M. Pace & Laura Zakaras, RAND Corp., Where the Money Goes: Understanding Litigant Expenditures for Producing Electronic Discovery (2012) at 55. To summarize even further, if two sets of human reviewers review the same set of documents to identify what is responsive, research shows that those reviewers will disagree with each on more than half of the responsiveness claims. As the RAND report concludes:

Taken together, this body of research shows that groups of human reviewers exhibit significant inconsistency when examining the same set of documents for responsiveness under conditions similar to those in large-scale reviews. Is the high level of disagreement among reviewers with similar backgrounds and training reported in all of these studies simply a function of the fact that determinations of responsiveness or relevance are so subjective that reasonable and informed people can be expected to disagree on a routine basis? Evidence suggests that this is not the case. Human error in applying the criteria for inclusion, not a lack of clarity in the document’s meaning or ambiguity in how the scope of the production demand should be interpreted, appears to be the primary culprit. In other words, people make mistakes, and, according to the evidence, they make them regularly when it comes to judging relevance and responsiveness.

Id. at 58. (Indeed, even keyword searches are flawed. One study summarized in Moore v. Publicis Groupe & MSL Grp., 287 F.R.D. 182, 191 (S.D.N.Y. 2012), found that the average recall rate based on a keyword review was only 20%.)

The second myth is the myth of a perfect response. The Commissioner is seeking a perfect response to his discovery request, but our Rules do not require a perfect response. Instead, the Tax Court Rules require that the responding party make a “reasonable inquiry” before submitting the response. Specifically, Rule 70(f) requires the attorney to certify, to the best of their knowledge formed after a “reasonable inquiry,” that the response is consistent with our Rules, not made for an improper purpose, and not unreasonable or unduly burdensome given the needs of the case. Rule 104(d) provides that “an evasive or incomplete * * * response is to be treated as a failure to * * * respond.” But when the responding party is signing the response to a discovery demand, he is not certifying that he turned over everything, he is certifying that he made a reasonable inquiry and to the best of his knowledge, his response is complete.

Likewise, “the Federal Rules of Civil Procedure do not require perfection.” Moore, 287 F.R.D. at 191. Like the Tax Court Rules, the Federal Rule of Civil – 9 – Procedure 26(g) only requires a party to make a “reasonable inquiry” when making discovery responses.

The fact that a responding party uses predictive coding to respond to a request for production does not change the standard for measuring the completeness of the response. Here, the words of Judge Peck, a leader in the area of e-discovery, are worth noting:

One point must be stressed – it is inappropriate to hold TAR [technology assisted review] to a higher standard than keywords or manual review. Doing so discourages parties from using TAR for fear of spending more in motion practice than the savings from using from using TAR for review.

Rio Tinto PLC v. Vale S.A., 306 F.R.D. 125, 129 (S.D.N.Y. 2015).

We agree with this holding in Dynamo Two and the black letter rule that only reasonable efforts are required, not perfection. That applies to all human endeavors, including every duty imposed by the law. The real issue is whether the predictive coding method was so bad here that is use was per se unreasonable. The proof of unreasonable efforts in any document review project requires proof that actual relevant documents were overlooked and not produced. The defenses did not do that, they just said there were documents with keywords in them that were missed. They did not go on to say that these documents were highly relevant. Apparently the defense here did not grasp a basic fact, that the mere presence of a keyword in a document does not automatically make that document relevant.

The defense also failed to use experts to attack the dreadful method used here to incorporate active machine learning into the document search. We suspect that is because the IRS Commissioner attorneys were part of the problem. It was a practical estoppel.

The opinion by Judge Buch in Dynamo Two is important, and very interesting, because it shows that any method used, be it one that uses predictive coding or keywords, or a method like the e-Discovery Team uses where all methods – multimodal – are employed, including active machine learning (predictive coding), will be presumed reasonable until the challenging party proves otherwise. Again, the proof of unreasonability would, in our view, require proof of both relevant documents missed, namely highly relevant documents where the omission would matter, and proof by experts that the method used was flawed, including statistical evidence, with suggestions for a reasonable effort. None of this evidence and testimony was provided in Dynamo Holdings.

That argument is an outgrowth of what specialists living in the Sedona bubble sometimes call the “dancing ponies” argument. Relevant documents could be chosen by any method, even by a system where every document that dancing ponies happen to step on are considered relevant. (The related image is one where a large stack of paper documents, typically exams, are tossed in the air at a stairway and the papers that reach the bottom of the stair are relevant (or if an exam, graded with an “A”). Many students today suspect their professors of using this grading method.) Dancing ponies, or stair tossing, are truly ridiculous methods, irrational in the extreme, but if they works, so the argument goes, then the method does not matter. The argument of the dancing ponies than goes on to assume that whether a method works, or not, can be determined by statistical methods. Tredennick & Gricks, Discussion About Dynamo Holdings: Is 43% Recall Enough? (Gricks: “As long as validation evinces (sic – I think he meant evidences) a reasonable production, that should be the end of the inquiry.”). The later assumption is, however, predicated by the proper use of statistics for validation, which requires recall to be stated as a probability range, not a point, and is anyway suspect. In Legal Search Exact Recall Can Never Be Known (e-Discovery Team, Dec. 2014).

Even when the range and uncertainties inherent in random sampling are understood, the use of statistics alone to verify reasonability of efforts is questionable. There is just too much uncertainty, especially when low prevalence datasets are involved. Examination of the exact methods used must be included in any defense of process. Dancing pony methods must be attacked and shown for what they are, pseudoscience. At the same time, proof of missing key or highly relevant documents should be shown. That is true, or should be, for all methods, including keyword search and linear review, and also predictive coding. Judge Peck and Judge Buch are right, “it is inappropriate to hold TAR [technology assisted review] to a higher standard than keywords or manual review.” Dynamo Holdings Ltd. P’ship v. Comm’r of Internal Revenue, No. 2685-11, 8393-12, 2016 WL 4204067 (T.C. July 13, 2016).

Still, inherent in this equality statement is the underlying premise that all document review methods should be held to a standard of reasonable efforts. In an important case, where proportionality factors favor it, the standard of care should be high. The courts have, in general, been somewhat lax in this department so far, but we think that Dynamo Two is a herald of things to come. In the future we will see predictive coding cases, along with keyword and linear review cases, where the court holds the standard of proportional, reasonable efforts has not been met.

Document review is the essence of all e-discovery. It must be done right for the truth, the whole truth and nothing but the truth to be found. Just because you use some predictive coding in your document review does not mean that the review was done right. There are just as many ways to screw up predictive coding as there are to screw up keyword search or linear review. We conclude our review of Dynamo Holdings Two with the inverse statement to the one made by Judge Andrew Peck and approved by Judge Buch:

It is inappropriate to hold TAR [technology assisted review] to a lower standard than keywords or manual review. Doing so discourages parties from using TAR properly, with expert advice, active machine learning training methods that have been proven to be effective, and statistically correct sample verifications.

Predictive coding is not a magic pill. It is a powerful algorithm that brings active machine learning, a form of artificial intelligence, into legal document review. This requires a high degree of skill to be done properly. Some day this point will be made in a case like Dynamo Holdings where unreasonable, unskilled predictive coding methods are used. We foresee that the objecting party will not complain about the use of predictive coding, but rather HOW it was used. They will likely suggest an alternative predictive coding method, such as the e-Discovery Team’s Predictive Coding 4.0, including quality control and quality assurance tests, sampling and statistical analysis or Recall, Precision and F1. If they make this argument, and buttress it with a showing that important ESI was missed by the first amateur attempt, then we think the objection will be sustained and a redo required.

We suspect that such a ruling is still a few years down the road. In the meantime we should all exercise constant vigilance against bad science and even worse methods. When opposing counsel says they plan to use predictive coding, the appropriate response is great, what type of method will you use? When I am asked that, I hand them my 97 page description, Predictive Coding 4.0 – Nine Key Points of Legal Document Review and an Updated Statement of Our Workflow. Others may use that as well. You can call it the standard e-Discovery Team method. Sligh variations are expected to fit the particular assignment. In the future I expect many experts will come up with explanations and detailed description of the method they use. Right now I am the only one putting it out there. Still, I talk to lots these folks, and if they ever do get around to writing it up, it will not be very different from our Hybrid Multimodal method. Among the top experts in the field, including scientists and professors, there is wide spread agreement on basic methods.

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

December 30, 2016

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.

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

December 30, 2016

Here is the e-Discovery Team’s fourth most interesting e-discovery opinion of 2016. In re Bard IVC Filters Prods. Liab. Litig., D. Ariz., No. MDL 15-02641-PHX DGC, 2016 U.S. Dist. LEXIS 126448 (D. Ariz. Sept. 16, 2016).

FOURTH – In re Bard IVC Filters Prods. Liab. Litig.

judge_david_campbellIn Re Bard is a very helpful case on limiting discovery and the intent of the new rules, especially Rule 26(b)(1) on scope of discovery and proportionality. In re Bard IVC Filters Prods. Liab. Litig., D. Ariz., No. MDL 15-02641-PHX DGC, 2016 U.S. Dist. LEXIS 126448 (D. Ariz. Sept. 16, 2016). The primary source of our interest in this case, and why we rank it thirteenth, is the author himself. The opinion was written by the one judge who should really know the intent of the new rules, U.S. District Court Judge David G. Campbell. Judge Campbell was the chair of the Rules Committee when the 2015 amendments were passed.

You may want to use some of the language in this decision by Judge Campbell in your briefs going forward. Here is the main language explaining the new rule and commenting on how many judges are not yet following it yet and still operating under the old rules with more expansive discovery:

rule_26b1I. New Legal Standards Governing the Scope of Discovery.

Rule 26(b)(1) of the Federal Rules of Civil Procedure was amended on December 1, 2015. The new rule defines the scope of permissible discovery as follows:

Parties may obtain discovery regarding any non-privileged 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 party’s access to relevant information, the party’s resources, the importance of the discovery in resolving the issues, and whether the burden and expense of the proposed discovery outweighs its likely benefit.

Fed. R. Civ. P. 26(b)(1).

A. Relevancy.

To be discoverable under the first part of this test, information must be “relevant to any party’s claim or defense.” Id. This language has not changed from the previous version of Rule 26(b)(1). 

Before the 2015 amendments, Rule 26(b)(1) also provided that inadmissible evidence was discoverable if it “appears reasonably calculated to lead to the discovery of admissible evidence.” Some courts – and many lawyers – used this language to define the scope of discovery. See, e.g., Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005) (“Relevant information for purposes of discovery is information ‘reasonably calculated to lead to the discovery of admissible evidence.’”) (quoting Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir. 1992)).

This phrase was eliminated by the 2015 amendments and replaced with a more direct declaration of the phrase’s original intent: “Information within this scope of discovery need not be admissible in evidence to be discoverable.” Fed. R. Civ. P. 26(b)(1). The Advisory Committee on the Federal Rules of Civil Procedure provided this explanation for the deletion:

The former provision for discovery of relevant but inadmissible information that appears “reasonably calculated to lead to the discovery of admissible evidence” is also deleted. The phrase has been used by some, incorrectly, to define the scope of discovery. As the Committee Note to the 2000 amendments observed, use of the “reasonably calculated” phrase to define the scope of discovery “might swallow any other limitation on the scope of discovery.” The 2000 amendments sought to prevent such misuse by adding the word “relevant” at the beginning of the sentence, making clear that “relevant” means within the scope of discovery as defined in this subdivision . . . .” The “reasonably calculated” phrase has continued to create problems, however, and is removed by these amendments.

Rule 26, Advis. Comm. Notes for 2015 Amends.

The 2015 amendments thus eliminated the “reasonably calculated” phrase as a definition for the scope of permissible discovery. Despite this clear change, many courts  continue to use the phrase. Old habits die hard.1 In this circuit, courts cite two Ninth Circuit cases – Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005), and Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir. 1992) – for the proposition that information is relevant for purposes of Rule 26(b)(1) if it is “reasonably calculated to lead to the discovery of admissible evidence.”2 But these cases, and others like them, simply applied the earlier version of Rule 26(b)(1).


FN 1 – Last month alone, seven cases relied on the “reasonably calculated” language to define the scope of permissible discovery. See Fastvdo LLC v. AT&T Mobility LLC, No. 16-CV-385-H (WVG), 2016 WL 4542747, at *2 (S.D. Cal. Aug. 31, 2016); Sierra Club v. BNSF Ry. Co., No. C13-0967-JCC, 2016 WL 4528452, at *1 (W.D. Wash. Aug. 30, 2016); Shell v. Ohio Family Rights, No. 1:15-CV-1757, 2016 WL 4523830, at *2 (N.D. Ohio Aug. 29, 2016); Arrow Enter. Computing Sols., Inc. v. BlueAlly, LLC, No. 5:15-CV-00037-FL, 2016 WL 4287929, at *1 (E.D.N.C. Aug. 15, 2016); Ecomission Sols., LLC v. CTS Holdings, Inc., No. MISC. 16-1793 (EGS), 2016 WL 4506974, at *1 (D.D.C. Aug. 26, 2016); Clouser v. Golden Gate Nat’l Senior Care, LLC, No. CV 3:15-33, 2016 WL 4223755, at *4 (W.D. Pa. Aug. 9, 2016); Scott Hutchinson Enters., Inc. v. Cranberry Pipeline Corp., No. 3:15-CV-13415, 2016 WL 4203555, at *2 (S.D.W. Va. Aug. 9, 2016). Several other cases cited the language as though it were still part of Rule 26(b)(1). See Fairley v. Wal-Mart Stores, Inc., No. CV 15-462, 2016 WL 4418799, at *2 (E.D. La. Aug. 19, 2016); Kuczak v. City of Trotwood, Ohio, No. 3:13-CV-101, 2016 WL 4500715, at *1 (S.D. Ohio Aug. 26, 2016); Kubik v. Cent. Michigan Univ. Bd. of Trustees, No. 15-CV-12055, 2016 WL 4425174, at *2 (E.D. Mich. Aug. 22, 2016).

FN 2 – See Fastvdo, 2016 WL 4542747, at *2 (quoting Surfvivor Media, 406 F.3d at 635); Sierra Club, 2016 WL 4528452, at *1 (quoting Brown Bag, 960 F.2d at 1470).


Amended Rule 26(b)(1) was adopted pursuant to the Rules Enabling Act, 28 U.S.C. § 2072, et. seq. That statute provides that “[a]ll laws in conflict with such rules shall be of no further force or effect after such rules have taken effect.” Id., § 2072(b). Thus, just as a statute could effectively overrule cases applying a former legal standard, the 2015 amendment effectively abrogated cases applying a prior version of Rule 26(b)(1). The test going forward is whether evidence is “relevant to any party’s claim or defense,” not whether it is “reasonably calculated to lead to admissible evidence.”

B. Proportionality.

The 2015 amendments also added proportionality as a requirement for permissible discovery. Relevancy alone is no longer sufficient – discovery must also be proportional to the needs of the case. The Advisory Committee Note makes clear, however, that the amendment does not place the burden of proving proportionality on the party seeking discovery. The amendment “does not change the existing responsibilities of the court and the parties to consider proportionality, and the change does not place on the party seeking discovery the burden addressing all proportionality considerations.” Rule 26, Advis. Comm. Notes for 2015 Amends. Rather, “[t]he parties and the court have a collective responsibility to consider the proportionality of all discovery and consider it in resolving discovery disputes.” Id. (emphasis added)

The inquiry to be conducted under the proportionality requirement, therefore, requires input from both sides. As the Advisory Committee explained:

A party claiming undue burden or expense ordinarily has far better information – perhaps the only information – with respect to that part of the determination. A party claiming that a request is important to resolve the issues should be able to explain the ways in which the underlying information bears on the issues as that party understands them. The court’s responsibility, using all the information provided by the parties, is to consider these and all the other factors in reaching a case-specific determination of the appropriate scope of discovery. 

Id. The Court therefore will look to evidence and arguments from both sides in deciding whether discovery from the Bard foreign entities is permitted under Rule 26.

ronald-hedgesOur friend, retired Judge Ron Hedges, publicly commented on this case and said the “collective responsibility” language is vague. “If there is no allocation of burden for showing discovery is proportional, and the committee note refers to a ‘collective responsibility,’ then maybe the burden should fall on the judge, as opposed to both parties.” You probably do not want to make that comment to the judge hearing your case, but you should argue that the burden is not upon you (assuming you are opposing the discovery).

It is interesting to see how many attorneys and judges alike just do not get it. As Judge Campbell said – Old habits die hard. Also remember that the other side may be citing to cases in their discovery briefs that are no longer valid since the change of the rules. Judge Campbell makes a good point on that: “the 2015 amendment effectively abrogated cases applying a prior version of Rule 26(b)(1).” You may need to make this important point in all discovery briefs going forward. Look out for the old phrases in cases Plaintiff’s counsel cites, especially “reasonably calculated.”

It is interesting to note how harshly some judges will react when an attorney before them does not cite to the new rules. Fulton v. Livingston Fin., LLC, No. C15-0574JLR, 2016 WL 3976558 (W.D. Wash. July 25, 2016). In Fulton an attorney at a prominent firm in Seattle cited the old rule and related case law in a memorandum filed with the court pertaining to relevance. The judge called the mistake “inexcusable” and imposed harsh sanctions on the attorney, including requiring him to personally pay opposing counsel fees and costs and to provide a copy of the sanctions order and “offending briefing to senior members of Mr. Ryan’s law firm.” Ouch. 

judge_david_g-_campbellBack to In Re Bard, Judge Campbell went on to deny the discovery request under Rule 26(b)(1) primarily because the requesting party had not shown how the information sought would be of any importance to the case. Here is the operative language from pg. 6 of the opinion:

Courts generally recognize that relevancy for purposes of discovery is broader than relevancy for purposes of trial. Even still, the Court concludes that the discovery sought by Plaintiffs is only marginally relevant. With no foreign-based Plaintiffs, and mere conjecture that communications between foreign entities and foreign regulators might be inconsistent with Defendants’ communications with American regulators, the discovery appears to be only potentially relevant – more hope than likelihood.

I especially like that phrase – “more hope than likelihood.” We see so much of that from opposing counsel.

Judge Campbell went on to analyze the benefit/burden factors in 26(b)(1), some “pro” the discovery sought, and concluded the opinion with the following:

The Court concludes that the burden and expense of searching ESI from 18 foreign entities over a 13-year period outweighs the benefit of the proposed discovery – a mere possibility of finding a foreign communications inconsistent with United States communication.

Because the proposed discovery is not proportional to the needs of the case considering the factors set forth in Rule 26(b)(1), the Court concludes that Defendants need not search the ESI of foreign Bard entities for communications with foreign regulators.

Again, note his use of the phrase “a mere possibility of finding” relevant evidence. That kind of language is appropriate in many discovery disputes we now see. 

This fourth most interesting case of 2016 is one that should be in all court memorandums. It provides a persuasive, authoritative discussion of the new rules, especially scope of relevance under 26(b)(1). In re Bard IVC Filters Prods. Liab. Litig., D. Ariz., No. MDL 15-02641-PHX DGC, 2016 U.S. Dist. LEXIS 126448 (D. Ariz. Sept. 16, 2016).


Top Twenty-Two e-Discovery Opinions of 2016 – 6th and 5th

December 29, 2016

This is the ninth in a twelve-part installment on the twenty-two cases that were the most interesting in 2016. This installment covers the sixth and fifth most interesting. Hespe v. City of Chicago, No. 13 C 7998, 2016 BL 417422 (N.D. Ill. Dec. 15, 2016) and Cohn v. Guaranteed Rate, Inc., N.D. Ill., No. 1:14-cv-9369, (N.D. Ill. Dec. 8, 2016).

SIXTH – Hespe v. City of Chicago

judg_jorge_alonsoThis is another interesting case out of Chicago where an employer Defendant’s request for a forensic inspection of employee Plaintiff’s electronic devices was denied. Hespe v. City of Chicago, No. 13 C 7998, 2016 BL 417422 (N.D. Ill. Dec. 15, 2016). This sixth most interesting opinion of 2016  was authored by District Judge Jorge L. Alonso in Chicago. Unlike the fifth ranked Cohn case to be discussed next, the Defendant’s motion in Hespe was not based on spoliation sanctions. It was instead based on an allegations of incompetent, unreasonable review and production of documents by Plaintiff. We have all been there, so what happened in this case is very interesting to the e-Discovery Team.

The case itself is a charge of sex discrimination and hostile work environment by a female police officer under Title VII. This is a bread and butter type of case for my law firm, so I know all about them. The Plaintiff alleges, in the words of Judge Alonso, that her supervisor, in the Chicago Police Dept., defendant Gerald Breimon:

“sexually harassed her by pursuing a romantic relationship with her for over three years, . . . the City created a hostile work environment by failing to take prompt action to protect her, and . . . [defendant Sarah] McDermott threatened to harm plaintiff, in part, because she rebuffed Breimon’s attention.” (Apr. 27, 2016 Order, ECF No. 147, at 1.) The defendants’ position is that Breimon and plaintiff were in a fully consensual, romantic relationship, and there was no unwelcome harassment or discrimination.

Judge Alonso’s opinion considers the objection of the Defendant employer to the April 27th 2016 ruling of Magistrate Judge Mason on Defendant’s Motion To Compel production. The Defendant asked to inspect Plaintiff’s electronic devices for unproduced electronic communications between the Plaintiff and the alleged harasser, her supervisor, Gerald Breimon.

judge_jorge_alonsoHere, in the Judge Alonso words, is the procedural, factual background that led to Defendant’s Motion To Compel Production of Plaintiff’s computers:

In response to discovery requests, plaintiff produced numerous photographs, voice mail messages, emails and text messages that she had received from Breimon. Defendants learned during the October 22, 2015 deposition of plaintiff’s mother, Susan McKay, that McKay was in possession of thousands of additional voice mail and text messages. At plaintiff’s November 30, 2015 deposition, plaintiff confirmed that she had sent these materials to her mother for safekeeping because she was running out of space on her computer.

On December 30, 2015, pursuant to subpoena, McKay produced to defendants all the electronically stored information (“ESI”) concerning plaintiff and Breimon that was in her possession. In particular, she produced 5,748 text messages, a number that dwarfed the 850 plaintiff had initially produced in this case. Based in part on the discovery of this additional information, defendants filed a motion to extend the discovery deadline and [*2] compel plaintiff to submit to an extension of her deposition. Magistrate Judge Mason, who supervised discovery in this case (see ECF No. 67), granted the motion in part, extending the discovery deadline to March 16, 2016, and granting defendants leave to depose plaintiff for three and a half additional hours. (See Jan. 7, 2016 Order, ECF No. 118; Feb. 17, 2016 Order, ECF No. 131.) Judge Mason warned that no further discovery extensions would be granted. (ECF No. 131, at 5.)

Defendants deposed plaintiff again on March 2, 2016. At the conclusion of the deposition, defense counsel informed plaintiff that she “would like an opportunity to inspect plaintiff’s computer . . . and her cell phone” to search for any unproduced communications with Breimon. (Excerpts of Pl.’s Dep., 516:3-7 , ECF No. 133-2, at 96.) Plaintiff’s counsel stated that he opposed the request.

After attempting to confer with plaintiff, as required under Rule 37(a)(1) , defendants filed a motion to extend discovery and compel plaintiff to produce her electronic devices for inspection, arguing that they could not rely on plaintiff’s representation that she had produced all the ESI documenting her correspondence with Breimon because, at her March 2, 2016 deposition, she had made ambiguous statements about the manner and completeness of her production. According to defendants, plaintiff admitted at the March 2 deposition that “the McKay text messages were saved on her (Plaintiff’s) home computer,” although McKay produced them to defendants and plaintiff did not; plaintiff gave her attorneys “some” of the McKay text messages at one point, but she was unsure when or whether she gave them all of them; and plaintiff took no specific steps to preserve electronically stored information (“ESI”), although she did not intentionally delete anything other than “dirty” pictures Breimon had sent her. (Mot. ¶ 18, ECF No. 133; Mot., Ex. 3, Excerpts of Pl.’s Dep., 501:16-503:22 , 506:6-510:21, 512:4-516:9, ECF No. 133-2, at 84-96.) Defendants sought to perform a forensic inspection of plaintiff’s devices to search for unproduced ESI and attempt to recover any relevant ESI that may have been deleted.

As usual in discovery disputes the facts are critical. Under these facts Magistrate Judge Mason denied the motion to compel. He explained that “the requested forensic inspection of plaintiff’s electronic devices was not proportional to the needs of the case, especially considering plaintiff’s privacy and confidentiality interests in her personal devices.”

rule_26b1On appeal of the Magistrate’s order to District Judge Alonso he considered Rules 26(b)(1) on scope of relevance, 26(b)(2)(B) on inaccessible ESI, 26(b)(2)(C) on limiting discovery, and Rule 34 on production. Judge Alonso decided that the key basis of the magistrate’s ruling was proportionality under Rule 26. Here is Judge Alonso’s discussion on the Magistrate’s ruling and the proportionality factors in Rule 26(b)(1):

Rule 26(b)(2)(C)(iii) incorporates by reference Rule 26(b)(1), which, as Judge Mason explained, requires discovery to be “proportional to the needs of the case.” Judge Mason explained that defendants’ request to perform a forensic inspection of plaintiff’s electronic devices for ESI was not proportional to the needs of the case because plaintiff had turned over all the ESI defendants had requested, which was presumably all the ESI she possessed, and in any case “the burden and expense of inspecting plaintiff’s devices and online accounts likely outweigh any benefit because copies of the documents and communications are sufficient to defend [against] plaintiff’s claims in this discrimination case.” (Apr. 27, 2016 Order, ECF No. 147, at 3.) Moreover, Judge Mason explained, inspection of plaintiff’s electronic devices is not “proportional to the needs of this case” because any benefit the inspection might provide is “outweighed by plaintiff’s privacy and confidentiality interests.” ( Id.)

It is important to understand that forensic inspection is an extraordinary remedy and not a routine right of discovery. It requires good cause to obtain such relief. It is surprising how many lawyers still do not know this. Here is Judge Alonso’s good explanation of the law governing forensic inspections.

The discovery process is designed to be extrajudicial, and it relies on responding parties to search their own records and produce documents or other data. See Powers v. Thomas M. Cooley Law Sch., No. 5:05-CV-117, 2006 U.S. Dist. LEXIS 67706 , [2006 BL 100203], 2006 WL 2711512 , at *5 (W.D. Mich. Sept. 21, 2006). The Advisory Committee Notes to Rule 34 recognize that courts must use caution in evaluating requests to inspect an opposing party’s electronic devices or systems for ESI, in order [*5] to avoid unduly impinging on a party’s privacy interests:

Inspection or testing of certain types of electronically stored information or of a responding party’s electronic information system may raise issues of confidentiality or privacy. The addition of testing and sampling to Rule 34(a) with regard to documents and electronically stored information is not meant to create a routine right of direct access to a party’s electronic information system, although such access might be justified in some circumstances. Courts should guard against undue intrusiveness resulting from inspecting or testing such systems.

Fed. R. Civ. P. 34 , Advisory Committee Notes—2006 Amendment (emphasis added). Numerous courts have also recognized this need to “guard against undue intrusiveness” and to be “cautious in requiring” the forensic inspection of electronic devices, in order to protect privacy interests. See John B. v. Goetz, 531 F.3d 448 , 459-60 (6th Cir. 2008) (citing cases and concluding that the “compelled forensic imaging orders here fail[ed] to account properly for . . . significant privacy and confidentiality concerns”). “Mere suspicion” or speculation that an opposing party may be withholding discoverable information is insufficient to support an “intrusive examination” of the opposing party’s electronic devices or information systems. Scotts Co. LLC v. Liberty Mut. Ins. Co., No. 2:06-CV-899, 2007 U.S. Dist. LEXIS 43005 , [2007 BL 297417], 2007 WL 1723509 , at *2 (S.D. Ohio June 12, 2007). In particular, a court must be cautious “where the request is overly broad in nature and where the connection between the party’s claims and the [electronic device] is unproven.” A.M. Castle & Co. v. Byrne, 123 F. Supp. 3d 895 , 900-01 (S.D. Tex. 2015) (collecting cases); see also Kickapoo Tribe of Indians of Kickapoo Reservation in Kan. v. Nemaha Brown Watershed Joint Dist. No. 7, 294 F.R.D. 610 , 619 (D. Kan. 2013) (denying a request to inspect personally-owned devices of defendant’s employees in part because “the Court [had] significant concerns regarding the intrusiveness of the request and the privacy rights of the individuals to be affected”).

Judge Alonso then went on to discuss the case law where a forensic exam is sometimes still ordered:

… when the requesting party is able to demonstrate that “the responding party has failed in its obligation to search its records and produce the requested information,” Midwest Feeders, Inc. v. Bank of Franklin, No. 5:14CV78, 2016 U.S. Dist. LEXIS 93994 , [2016 BL 232120], 2016 WL 3945676 , at *2 (S.D. Miss. July 19, 2016), an inspection of the responding party’s electronic devices may be appropriate. See, e.g., Kilpatrick v. Breg, Inc., No. 08-10052-CIV, 2009 U.S. Dist. LEXIS 52723 , [2009 BL 292853], 2009 WL 1764829 , at *3 (S.D. Fla. June 22, 2009); Jacobson v. Starbucks Coffee Co., No. 05-1338, 2006 U.S. Dist. LEXIS 98174 , [2006 BL 113725], 2006 WL 3146349 , at *6-7 (D. Kan. Oct. 31, 2006). Further, courts may be somewhat less wary of requests to inspect electronic devices when there is a substantiated connection between the device the requesting party seeks to inspect and the claims in the case, or, as one court put it, where the “contents of the [device] go to the heart of the case.” Hedenburg v. Aramark Am. Food Servs., No. C06-5267, 2007 U.S. Dist. LEXIS 3443 , [2007 BL 322260], 2007 WL 162716 , at *2 (W.D. Wash. Jan. 17, 2007); see Wynmoor Cmty. Council, Inc. v. QBE Ins. Corp., 280 F.R.D. 681 , 686 (S.D. Fla. 2012) (forensic search of responding party’s information systems might reveal maintenance records and work orders that responding party appeared to have attempted to hide by shredding hard-copy records, and that might reveal [*6] critical facts concerning when the claimed damage to the responding party’s property occurred); Townsend v. Ohio Dep’t of Transp., 2012-Ohio-2945 , ¶¶ 24-25 , 2012 WL 2467047 , at *7-8 (Ohio Ct. App. 10th Dist. 2012) (court permitted plaintiff to search defendant’s email system for emails that two witnesses recalled exchanging but could not produce and that, if found, would prove notice to defendant of clogged drain that caused the flooding that resulted in plaintiff’s injury); cf. Kickapoo Tribe, 294 F.R.D. at 618-19 (citing and distinguishing cases).

This law is important to follow at all times, but especially when seeking a forensic exam. There are many cases on this issue and the law itself is fairly uniform. Look for local cases in your jurisdiction before you decide whether you have good grounds to seek this extraordinary relief.

Judge Alonso explained that the Defendant employer in Hespe v. City of Chicago failed to provide the necessary evidence to show good cause for a forensic exam. Here is where we can all learn a lesson from the mistakes of the City of Chicago.

Defendants have not demonstrated that the contents of plaintiff’s devices are likely to go to the heart of this case. This case is similar to Hedenburg, an employment discrimination case in which the defendant sought forensic imaging of the plaintiff’s personal home computer, seeking correspondence plaintiff might have sent that might be inconsistent with her testimony in the case. The plaintiff objected to the discovery as a fishing expedition. The court recognized that it had permitted forensic imaging of computers in cases where the “contents of the computer go to the heart of the case,” such as in trade secret cases, where “one party demonstrate[d] the likelihood that trade secrets were forwarded to or sent by [the computer].” Hedenburg, 2007 U.S. Dist. LEXIS 3443 , [2007 BL 322260], 2007 WL 162716 , at *2; see also Byrne, 123 F. Supp. 3d at 900-01 , 908-09 . But in Hedenburg, an employment discrimination case, “the central claims in the case [were] wholly unrelated to the contents of plaintiff’s computer.” 2007 U.S. Dist. LEXIS 3443 , [2007 BL 322260], 2007 WL 162716 , at *2 …

In this case, as in Hedenburg, defendants essentially seek a warrant to search plaintiff’s devices for statements with which to impeach her.3 Their request to search plaintiff’s devices is closer to a “blind” attempt to “find something useful [for their] impeachment of the plaintiff” than to a request to search devices that have been shown to contain information going to “the heart of the case.” See id. True, plaintiff’s complaint does specifically refer to text messaging in describing some of the harassment plaintiff suffered in 2012, so there is a limited sense in which text messaging is at the “heart” of this case—but there is no dispute that McKay produced to defendants several thousand text messages from that time period, and defendants have not provided any compelling reason to believe that this production is incomplete.

This is the key statement and main failure of defense counsel in this case: “defendants have not provided any compelling reason to believe that this production is incomplete.” The reasons they provided were dismissed by Judge Alonso as follows:

The reason defendants give for seeking a forensic search of plaintiff’s devices is to find ESI to support their position that Breimon and plaintiff were in a consensual, romantic relationship (see Defs.’ Objections, ECF No. 151-1, at 6), but plaintiff all but conceded that point in her brief in opposition to defendants’ [*7] motion to compel before Judge Mason, in which she admitted testifying that she had been in a sexual relationship with Breimon, she believed she loved Breimon at one time, and she told Breimon she loved him in 2009. (Pl.’s Resp. Opp. Mot. Compel, ¶ 82, ECF No. 137.) Importantly, defendants do not request to search for any specifically identified text message or messages with particular content that they have shown to have existed at one point and that, if found, will conclusively resolve a contested issue in the case.

Again, the court points to a key failure of proof by defense counsel: “defendants do not request to search for any specifically identified text message or messages with particular content that they have shown to have existed at one point and that, if found, will conclusively resolve a contested issue in the case.” Admittedly, this is hard to prove without access to the original data, but apparently defense counsel made little effort to offer such proof. The judges clearly thought that the Defendant was just fishing and the exercise was disproportionate. In Judge Alonso’s words:

The search defendants want to perform does not go to the “heart” of this case because it does not seek evidence that will conclusively resolve critical factual issues, and even if defendants find evidence they do not already have, they have not demonstrated that the evidence is likely to be more probative than the admissions they do have.

The defense tried to add a spoliation sanction component to their argument by pointing to the Plaintiff’s poor preservation. Here is how the court dealt with that weak argument:

Defendants also argue that plaintiff had a duty to preserve any ESI bearing on her relationship with Breimon, and when asked what steps she took to preserve ESI, she answered that she never deleted anything other than nude pictures Breimon sent her, but took no other steps to preserve evidence. (Excerpts of Pl.’s Dep., at 501:16-503:22, ECF No. 133-2, at 84-86.) Again, the Court fails to see any evidence of misconduct or any reason to conclude that plaintiff is hiding any ESI. Plaintiff often seemed confused about how many text messages, voice mails and other electronically stored communications she had, when she had them, and when and to whom she produced them, but this does not strike the Court as surprising, considering there were thousands of electronic communications and this case has been going on for years. At worst, plaintiff may have failed to prevent some relevant ESI from being unintentionally deleted from her devices due to her unsophisticated grasp of how her iPhone and associated software applications (such as iTunes) store data. But defendants have not shown that this failure was anything but accidental, nor have they shown the importance of any lost ESI, which, even if recovered, will apparently do little more than duplicate admissions plaintiff made during her deposition. (See Pl.’s Resp. Opp. Mot. Compel, ¶ 82, ECF No. 137.) Further, whether the forensic inspection might recover any lost or deleted ESI appears to be little more than speculative. …

The evidence of fault is sparse at best, and, when this evidence is weighed against (1) plaintiff’s interest in protecting her privacy rather than allowing unfettered access to her personal devices and (2) the generic and apparently inconclusive nature of the unspecified ESI for which defendants [*9] want to search, it is insufficient to justify a forensic inspection. Judge Mason did not clearly err in ruling that the inspection defendants seek is not proportional to the needs of the case.

SUMMARY: You have to show good cause to get a forensic exam of all information on a person’s digital device, instead of their just producing the information that their own review determines is relevant. Good cause can come from intentional spoliation wherein the remedy is part of a sanction. This was shown in the next case, Cohn v. Guaranteed Rate, Inc., N.D. Ill., No. 1:14-cv-9369, (N.D. Ill. Dec. 8, 2016). Good cause can also be established by evidence that the search already done was unreasonable and critical information was not produced. This is what the defense attempted to do in Hespe v. City of Chicago, No. 13 C 7998, 2016 BL 417422 (N.D. Ill. Dec. 15, 2016).

The defense failed to show that any ESI existed that, if found, “will conclusively resolve a contested issue in the case.” Instead, they made it seem like they were just seeking redundant information, namely the fact that the sex between Plaintiff and Defendant was once consensual. The Plaintiff admitted that fact. It was uncontested. The request for such an invasion of privacy to review all contents on a computer was burdensome, and yet “the importance of the discovery in resolving the issues,” a proportionality requirement under Rule 26(b)(1), was little or nothing. For this reason the two federal judges in Chicago denied the request for inspection as disproportionate under Rule 26(b)(1) and thus outside of the scope of discovery.

PRACTICE POINTER: The defense here made a serious strategic error. They would have done much better, and probably would have obtained useful information, if they had immediately moved to compel the Plaintiff, under the supervision of her attorney, to search the computer with the additional information. Plaintiff’s counsel had a duty to supervise this review all along and it is apparent from the decision that counsel did not do so. Instead, the P. herself, who was clearly incompetent, did everything. The defense should have pointed this out, and cited to Rule 26(g) case law. They should have sought a re-do of the prior production, this time under the direct supervision of Plaintiff’s counsel as the rules require, instead of a production of the entire computer. They got greedy and paid the price.


FIFTH – Cohn v. Guaranteed Rate, Inc.

judge_blakeyThis case is the counter point to Hespe v. City of Chicago, and is slightly more interesting, because the Defendant employer was allowed full access to the employee’s personal Gmail account. Cohn v. Guaranteed Rate, Inc., N.D. Ill., No. 1:14-cv-9369, (N.D. Ill. Dec. 8, 2016). This type of forensic inspection was allowed in Cohn as part of a sanction for spoliation, namely the employee’s deletion of relevant emails before she filed suit. The fifth most interesting e-discovery opinion of the year was written by District Court Judge John Robert Blakey of the Northern District of Illinois. Yes, Chicago again.

In Cohn the Defendant employer’s motion for sanctions against Plaintiff employee was granted in part after the court found that the employee, a former Vice President, intentionally destroyed ESI. As a sanction the Defendant was allowed full access to the employee’s personal Gmail account.

rule_37eThe opinion is by Judge John Blakey contains a good analysis of Rule 37, especially 37(e) and general spoliation law. Judge Blakey’s section on the early pre-litigation trigger of a Plaintiff’s duty to preserve is especially helpful to defense lawyers:

Federal courts across the country have recognized that a “plaintiff’s duty [to preserve] is more often triggered before litigation commences, in large part because plaintiffs control the timing of litigation.” Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456, 466 (S.D.N.Y. 2010), abrogated on other grounds by Chin v. Port Auth. of N.Y. &  N.J., 685 F.3d 135 (2d Cir. 2012); see also Innis Arden Golf Club v. Pitney Bowes, Inc., 257 F.R.D. 334, 340 (D. Conn. 2009) (duty to preserve arose when plaintiff retained counsel in connection with potential legal action); Cyntegra, Inc. v. Idexx Labs., Inc., No. 06-cv-4170, 2007 U.S. Dist. LEXIS 97417, 2007 WL 5193736, at *3 (C.D. Cal. Sept. 21, 2007) (“Unlike defendants, plaintiffs may be imputed notice of the duty to preserve potentially relevant evidence prior to the filing of the complaint. Plaintiffs are in control of when the litigation is to be commenced and must necessarily anticipate litigation before the complaint is filed.”) (internal citation omitted).         

In this case the Defendant employer requested production of documents, including emails from Plaintiff’s personal “Gmail” account and LinkedIn account, that pertained to Plaintiff’s communications with any of Defendant’s competitors. After some haggling the Plaintiff admitted that she had deleted all such emails, but had done so well before she filed suit. She never produced any such emails. Still, the Defendant employer was able to obtain some copies of these emails by third party discovery requests of its competitors. 

The Defendant’s efforts at third party discovery is an important point. It is a necessary step, but also somewhat dangerous. You need to conduct this kind of remedial third party discovery to buttress your case against the spoliator. Still, you should expect that these actions will, if successful, be used against you, as seen in this case. Nevertheless, you are required to perform such third party discovery because Rule 37(e) requires proof that the data lost – spoliated – “cannot be restored or replaced through additional discovery.”

judge_john_blakeyHere in Judge Blakey’s words are how these facts played out in Cohn to trigger the Plaintiff’s pre-litigation preservation duty and lay the grounds for this spoliation sanction.

The Court finds that Cohn had a duty to preserve her communications with GRI’s competitors by at least November 30, 2013. By that point Cohn was making explicit references to legal action against GRI and its officers, and she had retained the attorney who represents her in this lawsuit. [64], Ex. 1. She was also making overtures to certain of GRI’s competitors by that time. See supra at 3-4. In light of those facts and her clear obligations under the APA and BMA, Cohn and her counsel should have been able to “foresee” by November of 2013 that her communications with GRI’s competitors “would be material (and thus relevant) to a potential legal action.” Jones, 2010 U.S. Dist. LEXIS 51312, 2010 WL 2106640, at *6.
B. Breach
As discussed above, Cohn admits that she “deleted the subject emails with third-parties from her personal Gmail account in November of 2013, April-June of 2014, and July of 2014.” [68] at 2. These deletions are an obvious breach of her duty to preserve those same materials.

The legal argument that ensued was whether the Defendant moving party would have to prove prejudice from the spoliation, or not. Remember Rule 37(e) reads as follows:

If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

The Defendant movant here was seeking sanctions under subsection two, and so did not have to provide evidence of prejudice. Such evidence is only required in subsection one where there is no proof of intent to deprive another party of the information’s use in the litigation. In Cohn the intent was proven and so there was no need to prove prejudice. With intent such prejudice is presumed and the only remaining issues are remedies under subsection two: (A), (B) or (C). 

Here is Judge Blakey’s ruling on this issue, including an explanation of the facts upon which he found intent:

C. Harm/Bad Faith

Cohn insists that GRI cannot demonstrate the requisite harm here, as “GRI is in possession of the emails at issue” by virtue of its third party discovery practice. [68] at 12.

GRI conversely argues that no demonstration of harm is required, as “harm or prejudice is presumed where, as here, the moving party has shown bad faith.” [69] at 13 (internal citation omitted); see also Fuery v. City of Chicago, No. 07-cv-5428, 2016 U.S. Dist. LEXIS 135086, 2016 WL 5719442, at *11 (N.D. Ill. Sept. 29, 2016) (The “Court may still impose sanctions even where there is no prejudice but the actions of the party exhibit such flagrant contempt for the court and its processes that to allow the offending party to continue to invoke the judicial mechanism for its own benefit would raise concerns about the integrity and credibility of the civil justice system that transcend the interests of the parties immediately before the court.”) (internal quotation omitted). 1

GRI’s argument best reflects contemporary Seventh Circuit precedent. Indeed, the “prevailing rule is that bad faith destruction of a document relevant to proof of an issue at trial gives rise to a strong inference that production of the document would have been unfavorable to the party responsible for its destruction.” Crabtree v. Nat’l Steel Corp., 261 F.3d 715, 721 (7th Cir. 2001). A document is destroyed in bad faith if it was done “for the purpose of hiding adverse information.” Faas v. Sears, Roebuck &  Co., 532 F.3d 633, 644 (7th Cir. 2008) (internal citation omitted); see also Norman-Nunnery v. Madison Area Tech. College, 625 F.3d 422, 428 (7th Cir. 2010) (“The crucial element in a spoliation claim is not the fact that the documents were destroyed but that they were destroyed for the purpose of hiding adverse information.”).

In this case, Cohn moved her conversations with GRI’s competitors to her Gmail account, and then asked those same competitors to “hide the info” she sent because “it was the max that [her] atty will allow—actually more. [She] simply cannot put more in writing.” See supra at 3. She acknowledged that her conversations with GRI’s competitors over Gmail were undertaken “against all advise [sic].” Id. She sent data to GRI’s competitors over Gmail that she herself labelled “CONFIDENTIAL.” Id. at 4. Worse yet, she instructed a subordinate at GRI to “delete our grate [Guaranteed Rate] emails to permanent tras[h].” Id.

The explicit language of these communications belies any suggestion that Cohn’s deletion of the subject emails was simply part of her regular business practice. The Court finds that Cohn deleted the subject emails to, in her own words, “hide” adverse information. Deleting material “for the purpose of hiding adverse information” compels a finding of bad faith. Norman-Nunnery, 625 F.3d at 428. This bad faith determination in turn gives “rise to a strong inference that production of the [subject emails] would have been unfavorable” to Cohn. Crabtree, 261 F.3d at 721.

The only part of the Cohn opinion I do not like is the remedy. It was pretty weak, just accessing Plaintiff’s personal Gmail account. The apparent reason for this remedy at this point is that the parties, or at least Judge Blakey, did not know whether or not the emails had actually been deleted as Plaintiff claimed. They wanted to provide Defendant’s experts an opportunity to examine the account and contents to verify that claim. Maybe there was relevant email remaining that she never found to delete.

Based on experience it is quite possible that they will find powerful evidence in this large collection of mails to support the Defendant’s case. If so, they may obtain a summary judgment and not need a sanction remedy to prevail. Still, since according to Plaintiff’s vague testimony there may well be several hundred thousand emails in Plaintiff’s Gmail account, it will take considerable attorney skill, time and expense to find these emails.

ghostsFurther, if the inspection shows that emails were spoliated, at least most of them, as she alleged, then the Defendant’s lawyers stated that they wanted to determine whether the deleted email could be retrieved. They should have known better. All they needed to do was contact Google where they would learn that they are not recoverable, especially at this late date, over two years after the alleged deletion. They are now ghosts, never to be found, in near infinite array of cloud-hosted anonymity.

Judge Blakey’s Order is, in our reading of it, still open as to the award of additional remedies for the defense, including fee awards, inferences and testimony allowance. We predict there will be another ruling after this one after they inspect Plaintiff’s Gmail account. 

Here is how Judge Blakey explained the remedy granted to date in this case:

GRI’s request for an adverse inference instruction is denied without prejudice. Hopefully, the production of Cohn’s full Gmail account will obviate the need for such instructions.2 If, at the time pretrial submissions come due, GRI nevertheless remains convinced that such instructions are appropriate, it is invited to renew its motion with specific proposals regarding the same.

Although it is a close call, I personally think that Judge Blakey erred on this final ruling. Since the judge held that intent had been proven under subsection two, then one of the three remedies listed under subsection two should have been granted. The judge did not do that, instead he invented a lesser remedy (“no greater than necessary”) of the kind that is only talked about in subsection one.

I recognize that the rule in subsection two refers to remedies which the court “may” impose, not must, but I think the court should have exercised its discretion with these facts to impose remedy under (2)(B): “instruct the jury that it may or must presume the information was unfavorable to the party.” The court may well reverse its position after it hears all of the facts, especially the fact that the deleted Gmail cannot be recovered. If it does, it should limit it remedies to one of the three listed in subsection two. This rule interpretation issue is one reason we find this case so interesting.

Bottom Line: The takeaway is how preservation is now both a sword and a shield. It is not only a problem faced by corporate clients defending their preservation efforts, but it is also sometimes an opportunity to attack where the plaintiff has failed to preserve. Cohn is important precedent to provide an example of a Plaintiff’s early, pre-litigation duty to preserve. It also shows the importance and dangers of third party discovery in sanctions cases.

Practice Pointer: Be sure to confront Plaintiff’s counsel with questions on his or her client’s pre-litigation preservation at your Rule 26(f) conference or other early opportunity. Be ready with your own response to the same questions (boomerang effect).

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