Canada: Records Management @ Gowlings: October 18, 2012 - Volume 3, Number 9

In this issue:

  • Legal Technology
  • News and Articles

LEGAL TECHNOLOGY

Case Law

Boeynaems v. LA Fitness International, LLC, No. 10-2326, 2012.

This is a decision of the District Court of Pennsylvania mainly focusing on the issue of cost allocation of discovery before a decision on class certification, as well as addressing the issue of a discovery "fence".

This was a typical case of asymmetrical discovery where the plaintiffs had very few documents in contrast to the defendant who possessed millions of documents and millions of items of electronically stored information ("ESI").  The central question was therefore the question of who should bear the cost of discovery.

The court commenced its analysis by referencing the binding Supreme Court direction that "the presumption is that the responding party must bear the expense of complying with discovery requests, but he may invoke the district court's discretion under Rule 26(c) to grant orders protecting him from 'undue burden or expense' in doing so, including orders conditioning discovery on the requesting party's payment of the costs of discovery." (Oppenheimer Fund, Inc v Sanders, 437 US 340, 358 (1978)) 

The court then recognized that while the shifting of the cost burden of discovery is no longer rare, no prior case had dealt with allocation of cost as part of a substantial discovery dispute prior to the class certification decision.

Ultimately, the court held that "where (1) class certification is pending and (2) the plaintiffs have asked for very extensive discovery, compliance with which will be very extensive, absent compelling equitable circumstances to the contrary, the plaintiffs should pay for the discovery they seek. If the plaintiffs have confidence in their contention that the Court should certify the class, then the plaintiffs should have no objection to making an investment. Where the burden of discovery expense is almost entirely on the defendant, principally because the plaintiffs seek class certification, then the plaintiffs should share the costs."

The court pointed out that "[p]laintiffs have already amassed, mostly at Defendant's expense, a very large set of documents that may be probative as to the class action issue." The court is persuaded "that the cost burdens must now shift to Plaintiffs, if Plaintiffs believe that they need additional discovery."

It is noteworthy to point out that the court noted Plaintiffs were represented by "the very successful and well-regarded Philadelphia firm of Berger & Montague. . . . If the Berger & Montague firm believes that this case is meritorious, it has the financial ability to make the investment in discovery." Unsurprisingly, the court granted the order in favor of the defendant in this regard.

S2 Automation LLC v. Micron Technology, Inc., No. CIV 11-0884 JB/WDS, (D.N.M. Aug. 9, 2012).

Regarding several e-discovery matters in this case, the court decided largely in favour of Micron Technology, Inc. (Micron), the plaintiff seeking to compel production of documents by the defendant, S2 Automation LLC (S2 Automation).  The primary issues considered in this case included: (1) whether the electronically stored information (ESI) sought must be produced in the format requested by Micron; (2) whether metadata must separately be produced for ESI; (3) whether the search strategy used by S2 Automation in providing the discovery documents must be identified; and (4) whether S2 Automation adequately responded to Micron Technology's first requests for production (RFP).

  1. Produce ESI in either Native or TIFF format requested

    Analysis of this issue formed the bulk of the court's decision in which it ultimately held that electronically stored information must be produced in either the format requested by Micron or in the native format.  Rule 34(b)(2)(E)(ii) permitted the party to produce documents either as they are kept in the "usual course of business" or to organize and label them according to the categories in the request.  In this instance, because S2 Automation had not objected to Micron's earlier request that documents be in TIFF format along with extracted text files, and because Micron later assented to receiving the documents in the native format, Micron was entitled to receive the documents in either of the formats requested. 

    In rejecting S2 Automation's argument that the PDF format it had earlier provided was one used in the "usual course of business", the court stated that "S2 Automation may commonly transfer the contents of its electronic mail transmissions into PDF files as part of its business, but that does not mean that the native format for its electronic mail transmissions is PDF format."  The court adopted from an earlier case the definition of native file format as the "file structure defined by the original creating application."  With the knowledge that "no major electronic mail service...stores electronic mail transmissions in PDF format", the court rejected that the PDF format constituted a native format.  The court further directed that in keeping with the Rules and the relevant advisory committee's notes, the attachments corresponding to the electronic mail transmissions should be included since separation makes it "more difficult or burdensome for the requesting party to use the information efficiently in litigation." 

    Finally, the court directed that S2 Automation "err on the side of producing all messages that are part of a given electronic-mail-transmission chain" since "every part of a conversation can become admissible upon the admission of other portions of the conversation."
  2. Metadata linked to ESI format

    With respect to the issue of metadata, the court linked its answer to the delivery format chosen by S2 Automation.  First, the court used the Sedona Glossary to define metadata as data that "describe how, when, and by whom ESI was collected, created, accessed, modified, and how it was formatted."  It further used the Tenth Circuit's description of metadata as "data about data."  Second, the court stated that if S2 chose to produce the documents in the TIFF format requested by Micron, then it would not be automatically required to separately produce metadata.  However, recognizing that metadata could be potentially useful and relevant, it stated its inclination towards granting any reasonable request from Micron to obtain metadata.
  3. Search strategy must be identified

    In deciding this issue, the court required identification of the search strategy employed by S2 Automation in gathering the relevant discovery documents.  It ordered the identification of the search strategy in order to determine its adequacy and ultimately the adequacy of the discovery responses.  The court based its concern regarding the adequacy of S2 Automation's strategy in responding to discovery respects on evidence that counsel and client failed to work closely together during the document production process.  In particular, the court required the search strategy disclose how documents were identified as pertinent, the procedures used in identification, and how S2 Automation interacted with its counsel to facilitate the production process.
  4. Adequacy of Response to Requests for Production

    For the final issue, the court first directed S2 Automation to respond separately to each request for production. Although the S2 Automation argued that many of the requests were redundant and answering the first answered the subsequent requests, the court required that each request be addressed separately providing clarity to the discovery process.

    The court also articulated the standard for production required of S2 Automation requiring it to "produce all unprivileged and unprotected responsive documents in its possession or control."  In this case, control contemplated "not only possession, ' but also the right, authority, or ability to obtain documents'" [citation omitted].  A legal right, authority, or practical ability to obtain evidence constituted control.  Additionally, where control was not present, the court required S2 Automation to file an affidavit from a corporate official to that effect.

    Finally, the court granted several specific requests for production though limiting them in scope.  In doing so, it used the principles highlighted above regarding the scope of discovery and control over documents.  In addition, it stated, "[a]s a general matter, parties cannot avoid their discovery obligations by stating that 'the discovery sought...can be obtained from another source'" [citation omitted].  An objection of this sort is "generally improper absent a showing of undue burden."

Conclusion

The effect of the rulings in this case were to force S2 Automation's compliance with its discovery obligations.  In doing so, discovery was construed broadly to "achieve full disclosure of potentially relevant information."

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