By: Philip Favro, Presa Consulting
With the New Year upon us, it is worth looking back at some of the top eDiscovery cases and trends from 2022 and exploring the lessons they offer going forward in 2023.
1. Proactive Information Governance Leads to Better Results in eDiscovery
Cases: In re Pork Antitrust Litig., No. 18-CV-1776 (JRT/HB), 2022 WL 972401 (D. Minn. Mar. 31, 2022).
Summary: The court denied plaintiffs’ motion to compel defendant Hormel Foods to produce relevant text messages from its custodian employees and held that Hormel did not have possession, custody, or control over their text messages. Plaintiffs had argued that Hormel’s “bring your own device” (“BYOD”) policy provided the company with the “legal right” to obtain employee text messages because Hormel could remotely wipe employee personal devices. Plaintiffs additionally asserted that Hormel had the practical ability to obtain text messages from its employees since several had already agreed to have their phones imaged for preservation. The court rejected these arguments, finding that Hormel did not have control over its employee text messages under the legal right test because the BYOD policy did not provide Hormel with express ownership rights over employee text messages and Hormel did not require or expect its employees to use text messages at work. In addition, the court determined that Hormel did not have the “practical ability” to require its employees to turn over relevant text messages. While Hormel could “ask” its employees to preserve and disclose relevant text messages, it could not “demand” that employees do so given the terms of the BYOD policy.
Lessons for 2023: It’s been recognized for some time now that upstream, proactive IG policies lead to better downstream practices in the reactive environment of discovery. However, Pork takes this point one step further. By deferring to defendant’s BYOD policy, Pork demonstrates that courts may very well credit parties whose reasonable information policies advance legitimate business objectives. The impact in Pork was that Hormel was not responsible for preserving, collecting, or producing text messages its employees exchanged. Pork ultimately spotlights the value that reasonable information governance policies can yield for organizations in litigation.
Honorable Mention: In re Keurig Green Mountain Single-Serve Coffee Antitrust Litig., 341 F.R.D. 474 (S.D.N.Y. 2022); La Belle v. Barclays Cap. Inc., 340 F.R.D. 74 (S.D.N.Y. 2022).
2. Getting a Grip on Newer Sources of ESI
Case: Fast v. GoDaddy.com LLC, 340 F.R.D. 326 (D. Ariz. Feb. 3, 2022).
Summary: Plaintiff exchanged hundreds of relevant messages with a former colleague on Facebook Messenger and Telegram regarding plaintiff’s strategy for pursuing her discrimination claims against defendants, without producing those messages in discovery. In response to a subpoena defendant served on plaintiff’s former colleague, plaintiff used Facebook Messenger’s “unsend” feature to recall 109 messages plaintiff previously sent to her colleague. While plaintiff eventually produced 108 of the 109 “unsent” messages, she permanently deleted a message memorializing her analysis of the strength of her claims. Plaintiff also eliminated all of the messages she exchanged with the former colleague on Telegram through the application’s automated disposition feature. The court found that plaintiff’s deletion of relevant Facebook Messenger and Telegram messages satisfied Rule 37(e)(2)’s intent-to-deprive standard and issued, among other sanctions, an adverse inference instruction against her. The court additionally found plaintiff’s actions prejudiced defendant and that Rule 37(e)(1) sanctions were likewise appropriate to remedy that harm.
Lessons for 2023: Fast is instructive on the need for clients and counsel to take decisive steps to identify and preserve digital age communication applications that have relevant information. Because these applications offer dynamic features that allow users either manually, or through automated means, to delete information, lawyers should work with their clients to develop a plan for both identifying and preserving such information. In addition, attorneys should not assume users will exchange relevant communications using only one application or device. As Fast observed, plaintiff and her former colleague regularly switched between messaging platforms, including text, email, phone, Slack, and Facebook, rather than using one platform exclusively.” Given this reality, counsel should work to identify apps, platforms, and devices where relevant information may be found and then make reasonable and proportional preservation decisions from there.
Honorable Mention: Red Wolf Energy Trading, LLC v. Bia Cap. Mgmt., LLC, No. CV 19-10119-MLW, 2022 WL 4112081 (D. Mass. Sept. 8, 2022).
3. Scrutinizing ESI Protocol Provisions
Case: In re Keurig Green Mountain Single-Serve Coffee Antitrust Litig., 341 F.R.D. 474 (S.D.N.Y. 2022).
Summary: The court in Keurig entered a stipulated ESI protocol as an order. Pursuant to the ESI protocol, the parties agreed to take various steps toward preserving relevant ESI. Among other things, the parties confirmed: (1) they would “take reasonable steps in good faith to prevent the loss [or] destruction” of ESI; (2) “they had ‘implemented a data preservation plan [and] issued preservation memoranda to relevant employees;’” and (3) they would ask their custodians if they kept relevant information “at the custodian’s office, home, or online.” Despite these representations, defendant Keurig issued legal holds to only 89 percent of the agreed-upon list of custodians (48 of 54) and conducted only 80 percent of its custodian interviews (43 of 54) on a “timely” basis. The court found that such shortcomings constituted violations (albeit negligent) of the court-ordered ESI protocol and merited sanctions under Federal Rule of Civil Procedure 37(b)(2)(A).
Lessons for 2023: Keurig exemplifies the need for counsel to be wary of preservation-related provisions in ESI protocols as noncompliance could expose parties to severe sanctions under Rule 37(b) that would otherwise be unavailable under Rule 37(e). While the court refused to impose harsh sanctions against defendant in Keurig, the fact remains that such sanctions could issue in certain jurisdictions based on a finding of negligence. This is a low bar, one which the framers of Rule 37(e) specifically eliminated in 2015 when they rejected authorities that would permit the issuance of an adverse inference instruction on the basis of negligence. With Rule 37(e) offering safeguards against severe sanctions in the absence of a finding of a specific intent to deprive, individuals and organizations should carefully consider the potential impact of stipulating to an ESI protocol with aspirational preservation provisions that they may not be able to satisfy.
Honorable Mention: Equal Employment Opportunity Commission v. Scottsdale Healthcare Hospitals, No. CV-20-01894-PHX-MTL, 2022 WL 3593699 (D. Ariz. Aug. 23, 2022).
4. Database Discovery Requires Structured Data Experts
Case: In re Blair, No. 08-21-00167-CV, 2022 WL 3135357 (Tex. App. Aug. 5, 2022).
Summary: In this action where the parties disputed whether relators had paid the real parties in interest (“real parties”) proceeds from relators’ sale of water on a Texas ranch, real parties sought discovery of certain accounting records that they argued would substantiate their claims of nonpayment. While agreeing to produce accounting files in native format from their relational database (the “WolfePak” database), the relators ended up producing those records in Excel because, they argued, the native format did not allow them to redact certain confidential and privileged information from the records. The Texas Court of Appeals found these concerns were outweighed by several other considerations and affirmed a trial court order requiring a native file production of the accounting records. In particular, the appellate court relied on expert testimony from real parties’ structured data expert who explained that the accounting records at issue were maintained in a “relational database,” which preserves “relationships or links between different types of data such as invoices and payments.” The court adopted the explanation of the expert that the produced Excels “did not link the data in the same way” and thereby made the information more burdensome for real parties to analyze and review. Accordingly, the court affirmed the trial court order mandating that relators produce the requested information in native format.
Lessons for 2023: Structured data is an increasingly important source of relevant information in discovery. Found in standalone or relational databases, or other complex repositories, the discovery of structured data requires far more than just a broadly worded FRCP 34 “produce all documents” request. Given the uniquely complex issues surrounding the discovery of structured data, requesting and responding parties should consider engaging structured data experts to help substantiate their respective positions. Structured data experts can help fashion reasonable search queries, determine the appropriate export format from the structured database for production, and educate the court on the issues through expert testimony in motion practice.
Honorable Mention: Famulare v. Gannett Co., No. 2:20-CV-13991(WJM), 2022 WL 815818 (D.N.J. Mar. 17, 2022).
5. Privacy Objections Rarely Survive Judicial Scrutiny
Case: Freitag v. La Jolla Bridge, LLC, No. 3:21-cv-01642, 2022 WL 2079447 (S.D. Cal. June 9, 2022).
Summary: Defendants objected on the basis of privacy to certain interrogatories the plaintiff receiver propounded to obtain the identities of members and investors (“transferees”) in one of the defendant entities. In their opposition to the receiver’s motion to compel, the defendants argued that the California constitution’s right to privacy forbade them from disclosing the transferees’ identities without their consent. The court rejected this argument, holding first that defendants’ privacy objection must be analyzed under the federal right to privacy since the action arose under federal question jurisdiction. Under federal privacy law, the court determined that there was nothing “particularly private or sensitive” about the transferees’ identities. Moreover, even when analyzed under the “much more protective ‘compelling need’ standard in cases involving the California constitutional right to privacy,” the court likewise held that the transferees’ identities did not merit protection from discovery on privacy grounds.
Lessons for 2023: Privacy is an increasingly important issue, with countries around the world implementing data protection and privacy statutes designed to enhance individual privacy rights. As part of this trend, many U.S. states have considered and, in some instances, passed privacy legislation. Despite the international and domestic emphasis on privacy, companies and their counsel should be aware that U.S. courts generally follow the lead of Freitag and reject objections from litigants to written discovery requests on privacy grounds. Despite arguments to the contrary, federal and state courts generally point to protective orders as providing sufficient safeguards for privacy rights. In addition, those courts emphasize that privacy—unlike the attorney-client privilege—does not foreclose discovery of otherwise relevant information.
Honorable Mention: Drips Holdings, LLC v. Teledrip LLC, No. 5:19-CV-02789-JRA, 2022 WL 3282676 (N.D. Ohio Apr. 5, 2022), report and recommendation adopted in part, rejected in part sub nom. 2022 WL 4545233 (N.D. Ohio Sept. 29, 2022); Kashef v. BNP Paribas S.A., No. 16-cv-3228(AKH)(JW), 2022 WL 1617489 (S.D.N.Y. May 23, 2022); Porter v. Equinox Holdings, Inc., No. RG19009052, 2022 WL 887242 (Cal. Super. Mar. 17, 2022).