July’s Notable Cases and Events in E-Discovery

This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:

1. an order from the U.S. District Court for the Southern District of New York declining to compel the Defendant to remove all redactions it had made on the basis of relevance in otherwise responsive documents but ordering certain redactions to be removed
2. a ruling from the U.S. District Court for the District of Columbia compelling Defendant to produce portions of its legal hold memoranda and reminder notices where Defendant relied on the existence and content of the notices to defend against a motion for sanctions, finding that the notices were privileged but Defendant had waived the privilege by putting the notices at issue
3. a decision from the U.S. District Court for the Southern District of New York awarding sanctions against Plaintiffs for using unreasonably narrow search terms, despite the fact that Defendant had refused to negotiate specific search terms with Plaintiffs during discovery, because Plaintiffs had an independent obligation to craft appropriate search terms
4. an opinion from the U.S. District Court for the Middle District of Florida denying a motion to compel a forensic examination of Defendants’ personal and business electronic devices because Plaintiffs did not request affirmative discovery of the relevant information and did not substantiate the need for such examination
5. an order from the U.S. District Court for the Western District of Washington declining to prohibit Defendants from using technology-assisted review as part of its process to respond to Plaintiffs’ discovery requests

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1. An order from the U.S. District Court for the Southern District of New York declining to compel the Defendant to remove all redactions it had made on the basis of relevance in otherwise responsive documents but ordering certain redactions to be removed.

In Kaiser Aluminum Warrick, LLC v. US Magnesium LLC, 22-CV-3105 (JGK) (KHP), 2023 WL 2482933 (S.D.N.Y. Feb. 27, 2023), U.S. Magistrate Judge Katharine H. Parker addressed whether Defendant’s redactions for relevance in otherwise responsive documents were appropriate.

In this breach-of-contract litigation related to a magnesium supply contract, Plaintiff objected to Defendant’s production of certain documents in redacted form where Defendant had applied the redactions to material it claimed was not relevant and moved to compel Defendant to reproduce the documents in unredacted form. Id. at *1. Plaintiff argued that redactions for relevance are “disfavored when there is a protective order in place.” Defendant responded that the information redacted was irrelevant and competitively sensitive and therefore should not be produced. After Plaintiff filed its motion to compel, the court reviewed in camera samples of the redacted documents, which consisted of monthly reports containing detailed financial information, results of research on competitors in the market, and reports on segments of the business unrelated to magnesium operations.

Magistrate Judge Parker began her analysis by noting that Federal Rule of Civil Procedure 26 allows parties to obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case and that irrelevant information “falls outside of the scope of information that is discoverable under the express language of the rule.”

But Magistrate Judge Parker noted that courts have disallowed relevancy redactions from otherwise responsive documents because (1) a party should not be permitted to determine whether portions of a document being produced are irrelevant; (2) relevance redactions may eliminate context needed for an adversary to understand the unredacted portions of a document; (3) where a stipulated protective order is in place, the producing party’s information is protected; and (4) redactions take time and are expensive and therefore inconsistent with Rule 1’s mandate that cases be administered so as to promote a “just, speedy, and inexpensive” resolution of the case.

Magistrate Judge Parker concluded that relevancy redactions can be appropriate in some cases. Id. at *2. She explained that a party regularly makes relevancy determinations when it reviews its own documents, and parties must sign discovery responses certifying that they have made a reasonable inquiry for responsive and relevant documents and that they have fulfilled their production obligations subject to proper objections. She found “no reason ... to find that a party is less able to make good faith relevance determinations as to portions of documents than as to whole documents.”

Magistrate Judge Parker next noted that even though redactions may be time consuming and expensive, if a party wishes to undertake the expense voluntarily and it can do so in a timely manner without affecting the discovery schedule or prejudicing the other party, then such redactions would be consistent with Rule 26(b)(3) and Rule 1, which is designed to “discourage over-use, misuse, and abuse of procedural tools that increase cost and result in delay” and instead encourage cooperation of counsel and a proportional use of discovery tools when seeking information from and producing information to an adversary.

Magistrate Judge Parker also noted that redactions may “breed suspicions” or deprive the other party of needed context, but she found that if a party is clear about the reason for the redactions and is conservative in the number of redactions, the other party would not be stripped of necessary context. Moreover, motion practice could be minimized if a producing party discusses its desire to make such redactions with its adversary in advance of its production and seeks advance permission from the court to make them.

Ultimately, Magistrate Judge Parker concluded that relevancy redactions must be evaluated on a case-by-case basis, must be consistent with Rule 1 and Rule 26, and must not deprive the other party of context.

Applying these concepts, Magistrate Judge Parker found that certain of Defendant’s redactions were not appropriate. Id. at *3. In particular, she concluded that Defendant should not have redacted financial tables that included information about magnesium production, nor should Defendant have redacted headings and column/row descriptions (because absent the column and row descriptors, Plaintiff was unable to appreciate what was redacted and could not know that information on magnesium inventory and purchases also was redacted). She also concluded that Defendant should not have redacted graphs and their titles.

Magistrate Judge Parker declined to order Defendant to reproduce all of the documents in unredacted form (although she noted that she would be fully within her discretion to do so) because that would run contrary to her prior conclusion that some of the redacted information was not relevant.

2. A ruling from the U.S. District Court for the District of Columbia compelling Defendant to produce portions of its legal hold memoranda and reminder notices where Defendant relied on the existence and content of the notices to defend against a motion for sanctions, finding that the notices were privileged but Defendant had waived the privilege by putting the notices at issue.

In United States v. Google LLC, Case No. 20-cv-3010 (APM), Slip Copy (D. Columbia June 28, 2023), U.S. District Judge Amit P. Mehta addressed a motion to compel production of document hold memoranda on the grounds that Google waived the privilege protecting such documents.

Plaintiffs in this case contended that Google engaged in spoilation of evidence by failing to preserve relevant Google Chat messages. Id. at 1. In response, Google referred to the initial litigation hold memorandum and subsequent reminder memoranda Google had sent to various document custodians, which “explicitly instructed” custodians “to not use messaging apps going forward, including Google Chat, to discuss topics covered by the legal hold” and to ensure “that the messages were preserved” if they did use chats to discuss relevant matters. Plaintiffs moved to compel Google to produce these hold memoranda.

Judge Mehta first found that Google’s hold memoranda were protected by the attorney-client privilege. He rejected Plaintiff’s argument that the hold memoranda were merely “forceful instructions about what employees must do, rather than advice about what they might do,” concluding that the hold memoranda contained actual legal advice that was subject to the privilege.

Judge Mehta then turned to Plaintiff’s argument that Google waived objections to discovery of its litigation hold procedures by arguing that it took “reasonable steps to preserve relevant documents.” Plaintiffs contended that Google put at issue “the detail of its legal hold with regard to ‘chats specifically,’ the contents of its legal hold, and the instructions given to custodians.” Id. at 2. Judge Mehta noted that “[u]nder the common-law doctrine of implied waiver, the attorney-client privilege is waived when the client places otherwise privileged matters in controversy” in order to “prevent an abuse of the privilege, that is, to prevent the confidentiality protected by the privilege from being used as a tool for manipulation of the truth-seeking process.”

Judge Mehta found that Google placed portions of the hold memoranda at issue by arguing that it took “reasonable steps” to preserve evidence by “issuing written preservation notices to document custodians,” “explicitly instructing its employees on legal hold to not use message apps going forward, including Google Chat, to discuss topics covered by the legal hold — and additionally instructing them, if they did still use such apps, to ensure that the messages were preserved.” He concluded that Plaintiffs were entitled to see these instructions and that Google could not “be allowed, after disclosing as much as it pleases, to withhold the remainder.”

Judge Mehta rejected Google’s argument that the privilege was not waived because Google discussed the hold memoranda “only to respond to Plaintiffs’ inquiries about its preservation practices and the briefing on this motion.” Id. at 4. He found that an essential component of Google’s defense against sanctions was that it acted in good faith by instructing its employees how to use and preserve potentially relevant Google Chats. He held that Google could not “shield those instructions from Plaintiffs when it has put them directly at issue.” However, he limited the required disclosure to only the portions of the communications where chats preservation was discussed, finding that under Federal Rule of Evidence 502(a), voluntary disclosure generally results in a waiver only of the communication or information disclosed.

3. A decision from the U.S. District Court for the Southern District of New York awarding sanctions against Plaintiffs for using unreasonably narrow search terms, despite the fact that Defendant had refused to negotiate specific search terms with Plaintiffs during discovery, because Plaintiffs had an independent obligation to craft appropriate search terms.

In Gardner-Alfred v. Federal Reserve Bank of New York, No. 22-CV-01585 (LJL), 2023 WL 3495091 (S.D.N.Y. May 17, 2023), U.S. District Judge Lewis J. Liman addressed a motion for sanctions against Plaintiffs for failing to run “reasonable” search terms on its documents during discovery.

This litigation was brought by employees of the Federal Reserve Bank of New York who claimed they were denied religious accommodations in connection with the COVID-19 vaccines. Id. at *1. After the case entered discovery, “[a]lmost from the start, Plaintiffs delayed producing documents and information in response to Defendant’s discovery requests.” Id. at *3. After a contentious history involving multiple orders from Judge Liman for Plaintiffs to complete productions on time, Plaintiffs repeatedly failed to meet discovery deadlines. Despite repeated representations that Plaintiffs’ discovery was substantially complete, they “produced a staggering 1,082 additional pages of documents” a month after the close of the fact discovery deadline, more than twice what they had produced during the discovery period. Id. at *3-6. After the close of fact discovery, Defendant moved for sanctions.

Judge Liman granted the motion for sanctions, finding that Plaintiffs’ counsel abused the discovery process. He noted that Plaintiffs “blame[d] their plainly inadequate” production on the lack of guidance from Defendant on which search terms to use. Id. at *15. Plaintiffs represented that they had reached out to Defendant about which search terms to use, and Defendant repeatedly told Plaintiffs to “run search terms on its own determination.” Rebuffed in this way, Plaintiffs ran extremely narrow search terms, which resulted in the small production to which Defendant objected.

Judge Liman made clear that “even absent agreement or discussion about the appropriate terms, [a producing party] still has an independent obligation to craft search terms to fulfill the requirements of Rules 26 and 34.” Parties have an “affirmative obligation to search for documents” and must “conduct a reasonable search.” Although Judge Liman noted that “courts are generally loath to second guess search terms,” he found that there was “little question that Plaintiffs’ search terms were not reasonably calculated to lead to production of documents relevant to their claims or Defendant’s defenses.” Defendant’s document requests, which had been the subject of a motion to compel, called for broad categories of documents, but Plaintiffs only searched their own emails among themselves and a total of five other custodians. Judge Liman noted that the search terms applied to this narrow set of documents were also quite narrow. For instance, in response to a document request for documents concerning COVID-19, Plaintiffs produced only “documents with the terms ‘covid’ or ‘covid-19’ or ‘coronavirus’ ... if one of those words was within ten words of either ‘immune!’ or ‘natural’ or ‘CDC.’”

Thus, Judge Liman granted Defendant’s motion and awarded it reasonable expenses and attorneys’ fees for much of Defendant’s dealings with Plaintiffs in discovery as well as adverse inference instructions that Plaintiffs withheld relevant documents and what those documents would have shown. However, he declined to instruct the jury that it should draw any particular inference based on the lack of production, explaining that “courts in this circuit have not gone so far as to direct that a jury should draw a certain inference from a party’s spoliation or withholding of evidence, instead opting to allow the jury to draw such inferences as it sees fit, from the facts presented.”

4. An opinion from the U.S. District Court for the Middle District of Florida denying a motion to compel a forensic examination of Defendants’ personal and business electronic devices because Plaintiffs did not request affirmative discovery of the relevant information and did not substantiate the need for such examination.

In Partners Insight, LLC v. Gill, No. 22-cv-739-SPC-KCD, 2023 WL 2864375 (M.D. Fla. Apr. 10, 2023), U.S. Magistrate Judge Kyle C. Dudek addressed whether Plaintiffs could compel forensic examination of Defendants’ personal and business devices.

In this action for alleged misappropriation of trade secrets, Plaintiffs requested that each Defendant produce any cell phones, computers, and other electronic storage devices for forensic inspection and imaging. Id. at *1. Defendants objected, and Plaintiffs moved to compel.

Magistrate Judge Dudek began his analysis by explaining that “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” under Federal Rule of Evidence 26. He noted that discovery into electronically stored information, including forensic examinations, is subject to this general scope of discovery.

Magistrate Judge Dudek further explained that when determining whether a forensic examination is warranted, a court must weigh the utility of the proposed examination against inherent privacy concerns: “Mere speculation that electronic discovery must exist is insufficient to permit forensic examination of a party’s personal computer or cellphone.” 

Magistrate Judge Dudek referred to the Middle District of Florida Discovery handbook, which provides that “[i]nspection of an opponent’s computer system is the exception, not the rule and the creation of forensic image backups of computers should only be sought in exceptional circumstances which warrant the burden and cost.” Id. at *2. The Discovery handbook further provided that “[a] request to image an opponent’s computer should include a proposal for the protection of privacy rights, protection of privileged information, and the need to separate out and ignore non-relevant information.” Magistrate Judge Dudek found that Plaintiffs’ motion did not include what is required under the Discovery handbook because there was no proposal for the protection of privacy rights or privileged information. 

Magistrate Judge Dudek also found that Plaintiffs’ motion was premature because Plaintiffs sought to discover whether Defendants “downloaded files onto a storage device” or “sent confidential information to their personal mail accounts,” but never requested that Defendants produce such information. He explained that “[c]ourts in this circuit permit forensic examinations where clear evidence exists that the party responding to discovery defaulted on its discovery obligations” and noted that there are no “facts or information suggesting Defendants altered or tampered with” their personal electronic devices. He found that Plaintiffs’ allegations “upon information and belief” that Defendants transferred confidential files were based on “mere speculation,” which is not enough. Magistrate Judge Dudek identified other issues with Plaintiffs’ motion, including that it did not identify the expert who would conduct the forensic imaging and “put the onus on Defendants to provide a list of negative search terms.”

Magistrate Judge Dudek concluded by ordering that Plaintiffs could refile their motion to compel, if necessary, after further discovery had taken place.

5. An order from the U.S. District Court for the Western District of Washington declining to prohibit Defendants from using technology-assisted review (TAR) as part of its process to respond to Plaintiffs’ discovery requests.

In Garner v. Amazon.com, Inc., No. 21-CV-00750-RSL, 2023 WL 3568055 (W.D. Wash. May 19, 2023), U.S. District Judge Robert S. Lasnik addressed a motion to prevent the unilateral use of technology-assisted review.

This litigation concerned the alleged passive data collection and retention by Defendant’s digital assistant, which Plaintiffs alleged violated various consumer protection and wiretapping laws. During discovery, Defendants notified Plaintiffs that they intended to use TAR tools to prepare their productions. TAR, Judge Lasik explained, allows for predictive coding: “Reviewers typically code a set of documents as responsive or unresponsive to ‘train’ the TAR software, which then uses the coded documents to generate algorithms for reviewing all other documents in the selected universe for responsiveness.” Id. at *1 n.2. Specifically, Defendants proposed the use of “predictive coding” to cull documents. Id. at *3. Defendants maintained that the large number of documents identified with Plaintiffs’ terms necessitated further culling, but Plaintiffs categorically refused to discuss the use of TAR and moved to compel discovery consistent with the court’s prior discovery orders and without the use of TAR. Id. at *1.

Judge Lasnik noted that the presumption in the Western District of Washington is that “technology-assisted review is a reasonable option for locating or filtering” electronically stored information (ESI). He explained that the “producing party” bears the burden of making “an initial, detailed proposal about the technology and methodologies it intends to use.” Id. at *2. The producing party must do this first because it “is best situated to evaluate the various options for reviewing and producing its own ESI.” The “requesting party” then can “intelligently respond and the parties can move toward an agreed protocol for the use of TAR,” after consultation with its ESI discovery experts. However, Plaintiffs refused to discuss the use of TAR at all, “improperly short-circuit[ing] this process.”

Plaintiffs argued that the court had already ordered production according to specific search terms, and thus it would be improper to cull the results further. But Judge Lasnik stated that this objection was counter to the ESI order entered previously in the case, which provided for “technology-aided methodologies” to be discussed among parties. Furthermore, Judge Lasnik rejected Plaintiffs’ argument that agreement on search terms categorically barred the use of TAR: “[T]he use of search terms is not, standing alone, a bar to using technology to further refine the production.” He then noted that Plaintiffs’ objection to TAR was incoherent because Plaintiffs had not disputed that Defendants could conduct a responsiveness or privilege review of the two million documents — instead, they just objected to the use of “predictive coding” or other technological methods to complete that review. Id. at *3. Thus, Judge Lasnik denied Plaintiffs’ motion to compel Defendants to proceed with discovery without the use of TAR.