Maine Evidence and Electronic Discovery

Supreme Court Set to Resolve Dispute About Appealability of Discovery Orders Finding Waiver of Attorney-Client Privilege

The Supreme Court is set to hear oral arguments next month in an interesting matter that will resolve a split on whether a district court's order allowing discovery over an attorney-client privilege objection is immediately appealable under an exception to the finality requirements that normally govern appeals.

In Mohawk Industries, Inc. v. Carpenter, No. 08-678, argument is scheduled for October 5, 2009.  The appeal is from a decision of the Eleventh Circuit in August 2008, dismissing an appeal from Mowhawk arising from the district court's order allowing discovery over Mowhawk's assertion of the attorney-client privilege. 

The case arose after Carpenter reported to Mohawk that several temporary employees actually were illegal aliens. In the course of its investigation, Mohawk required Carpenter to talk to Mohawk's outside counsel.  Mohawk later terminated Carpenter, causing Carpenter to file this lawsuit in which he alleged that he had been terminated in connection with his refusal to withdraw his report about illegal aliens.

During the litigation, Carpenter sought to obtain through discovery information about his interview with Mohawk’s outside counsel that had occurred at Mowhawk's insistence.  Mohawk declined to provide any information, arguing that the interview and entire investigation were protected by the attorney-client privilege.  The district court ruled that Mohawk had waived the privilege by putting the communications themselves in play during a separate class action lawsuit that was pending at the same time. 

Mohawk appealed to the Eleventh Circuit, asserting that the district court's order allowing the discovery was immediately appealable under the collateral order doctrine providing an exception to the finality requirement of 28 U.S.C. § 1291.  The Eleventh Circuit dismissed the appeal, rejecting Mowhak's argument that the collateral order doctrine applied, holding that the discovery order would not be “unreviewable” on appeal from the district court’s final judgment.  See Carpenter v. Mowhawk Indus., Inc., 541 F.3d 1048 (11th Cir. 2008).

The Supreme Court court granted certiorari to resolve a circuit split on whether the collateral order doctrine permits an immediate appeal of a discovery order permitting discovery based on a finding of a waiver of the attorney-client privilege.

This will be an interesting one to see resolved.

Another Rare Appellate Decision Vacating E-Discovery

It's always nice, although rare, to see an appellate court reverse a lower court's decision to permit some form of electronic discovery.  It doesn't happen often at all, and usually when it does it's because the trial court clearly went overboard.  An essential ingredient in getting an appellate court to vacate an electronic discovery order is to show that the producing party has taken reasonable steps to produce likely sources of relevant documents already, and that the requesting party has failed to make a showing that more e-discovery (in the form ordered by the lower court) is likely to lead to relevant documents for which the need is significant enough to overcome the burdens being imposed.

The Texas Supreme Court recently issued such a decision under its state court rules that mirror the federal e-discovery rules.  In In re Weekley Homes, L.P., No. 08-0836 (Tex. Aug. 28, 2009), a mandamus proceeding, the court held that the trial court abused its discretion by ordering four of defendant’s employees to turn over their computer hard drives for a forensic examination.  In that case, the plaintiff served discovery requests that included requests for a variety of emails.  The defendant produced only thirty-one responsive emails, which the plaintiff did not believe was a sufficient or complete production.  The plaintiff filed a motion to compel additional searching, based on its assumption that more emails must have existed.  In response, the defendant asserted to the trial court that its employees’ inboxes were of limited size and were emptied by the users manually deleting messages once the inboxes became full.  The defendant reported that emails were saved only if manually saved by an individual employee to his personal hard drive.  All deleted emails, in contrast, were saved on computer backup tapes for only thirty days.  Based on that evidence, and in the absence of any evidence to the contrary or any indication that emails had been intentionally deleted to thwart discovery, the trial court initially denied plaintiff's motion.

The plaintiff then moved for "limited access” to certain of defendant's employees’ hard drives specifically to search for deleted emails.  The plaintiff proposed a search methodology under which a forensic expert would search for deleted emails on the hard drives, extract any located deleted emails, and provide all of those emails to defendant for its review and production to plaintiff.  not surprisingly, the defendant objected to that proposal, arguing that the proposed method was intrusive, would take the hard drives out of commission when needed by the employees, and that plaintiff had not even made a showing about either the need or the feasibility of obtaining the deleted data.  Nevertheless, the second time around the trial court granted plaintiff's motion.  The defendant initially sought mandamus relief from the court of appeals, which was denied, then seeking mandamus review in the state supreme court.

In analyzing the issue, the state court relied heavily on reported federal caselaw involving e-discovery, as there were few reported state court decisions under the analogous rules.  The court noted that, under the rules, a party ordinarily is only required to produce responsive electronic information that is “reasonably available to the responding party in its ordinary course of business.”  A party may be ordered to produce information that is not reasonably available “upon a showing … that the benefits of ordering the production outweigh the costs.” 

In this instance, the court concluded that the plaintiff had failed to meet its burden of showing that the benefits of the intrusive search it proposed outweighed the costs and burdens involved for the defendant.  As the court observed, the plaintiff's argument boiled down to a complaint that the defendant had only produced "a handful of emails," which the plaintiff assumed must have been incomplete.  The court agreed that the trial court "could have concluded that [plaintiff] made a showing that [defendant] did not search for relevant deleted emails that [plaintiff] requested.  But it does not follow that a search of the Employees’ hard drives would likely reveal deleted emails or, if it would, that they would be reasonably capable of recovery."

The court found that the plaintiff's "conclusory statements that the deleted emails it seeks 'must exist' and that deleted emails are in some cases recoverable is not enough to justify the highly intrusive method of discovery the trial court ordered, which afforded the forensic experts 'complete access to all data stored on [the Employees’] computers.'"

The missing step is a demonstration that the particularities of [defendant's] electronic information storage methodology will allow retrieval of emails that have been deleted or overwritten, and what that retrieval will entail.  A complicating factor is the some two-and-a-half years that passed between the time any responsive emails would have been created and the time [plaintiff] requested them.  Under these circumstances, it is impossible to determine whether the benefit of the forensic examination the trial court ordered outweighs the burden that such an invasive method of discovery imposed.

Therefore the court held that the trial court abused its discretion in ordering the intrusive discovery.

Be Reasonable and Specific in Objecting to ESI Production

Another recent decision highlights the importance of providing specific evidence to the court on the burdens of electronic production, if you hope to have the court cut back on what the other side is requesting.

In Speiker v. Quest Cherokee, LLC, Docket No. 07-1225-EFM (D. Kan. July 21, 2009) (click here), the class action plaintiffs sued the defendant for unpaid royalties related to oil and gas leases.  The plaintiffs filed an initial motion to compel production of ESI, which was denied by the court without prejudice, based on the defendant's estimated compliance costs of between $82,000 and $375,000, with an estimated cost for privilege reviews of $250,000.  See id. at 2-3.  The parties were directed to confer in an attempt to reach an agreeable resolution, but were unable to do so.  The plaintiffs renewed their motion to compel.

The court did not elaborate on the specific nature of the ESI requests, but generally found that the discovery requests (which presumably covered both hard copy documents and ESI) were relevant.  See id.at 4.  In addressing the costs for ESI production, the defendant offered estimates from Kroll Ontrack that it would cost "approximately $82,500 to process the volume of requested email files and an additional $38,000 charge to copy the ESI information in TIFF format."  Id.at 5.  The estimated $250,000 for privilege review was on top of those amounts.  The defendant argued that it could not have in-house IT staff utilize recently installed computer software to run searches on its own, without involving Kroll, because "the new software is untested and in-house IT staff have no internal experience in producing ESI in litigation," and "this process would need to be completed on nights and weekends.”  Id. at 6. 

The court dismissed the defendant's "pessimistic arguments concerning its ability to generate the requested ESI," finding the arguments "not persuasive."  The court specifically found that the "defendant’s assertions that its IT employees have no experience producing discovery in litigation carries no weight. This court is aware of no case where a party has been excused from producing discovery because its employees have not previously been asked to search for and/or produce discovery materials."  Id. 

The court also found that the defendant's $250,000 privilege review estimate was excessive and over-stated.  The court agreed that the defendant could not simply produce all ESI materials without conducting any review, as "turning over the ESI material without taking any steps to preserve privileged materials would not satisfy Rule 502(b)," resulting in potential privilege waiver.  Id. at 7.  But the court noted that the "defendant is the party most familiar with its own records and responsible for preparing search requests that gather information responsive to plaintiffs’ discovery requests," and so was in the best position to suggest a more reasonable approach.  Id. at 7-8.  Because the defendant had not revised its estimate at all since the filing of the original motion to compel, the court found it unpersuasive and rejected it out of hand.  The court therefore granted the motion to compel.

The lessons here are once again that if a party fails to adequately support its cost arguments, or appears to be offering inflated assessments that are not perceived as reflecting reality, the party runs the risk of the court ordering full production instead of a lesser production if the party had appeared more willing to compromise.

Admissibility of Your Own Expert's Words Against You

I recently had an article published in the summer 2009 issue of a pretrial practice newsletter of the ABA Section on Litigation entitled Is Your Expert Your Ally or Your Enemy.  The article addresses the somewhat unique issue of whether one party can use an opposing party's own expert against the opposing party. 

The situation may arise where, for instance, a party designates an expert, produces an expert report, maybe even lets the expert be deposed, and then at some point before trial opts to "de-designate" the expert and not call him or her as a trial witness.  If there's something useful to the other party in the expert's report, or if the other party managed to get some helpful testimony from the expert during a deposition, can that other party call the opponent's "de-designated" expert at trial or offer part of the expert's deposition testimony into evidence?  And if so, when during the trial should that be permitted, if at all?  Read the article to find out more.