Texas Supreme Court Finds Abuse of Discretion in Grant of Access to Defendant’s Computers, Summarizes Proper Procedure under Tex. R. Civ. P. 196.4

In re Weekley Homes, L.P., 295 S.W.3d 309 (Tex. 2009)

In this mandamus proceeding, the Supreme Court of Texas found that the trial court abused its discretion by ordering four of defendant’s employees to turn over their computer hard drives for forensic examination.

In 2007, after adding Weekley Homes, L.P. (“Weekley”) to an already pending breach of contract suit, plaintiff HFG Enclave Land Interests, Ltd. (“HFG”) served requests for production, including requests for “a broad variety of emails.”  Weekley produced thirty-one responsive emails.  Unconvinced that more correspondence did not exist, HFG filed a motion to compel additional searching.  At hearing on the issue, Weekley explained that the employees’ inboxes were limited in size and, when full, had to be emptied by manual deletion of the messages therein.  Accordingly, Weekley’s employees were “force[d]” to clear out their inboxes regularly.  Emails would be saved only if backed up by an employee to his or her hard drive.  The deleted emails were saved on backup tapes for thirty days.  The trial court denied HFG’s motion.

Undeterred, HFG moved for “limited access” to certain of Weekley’s employees’ hard drives to search for deleted emails from 2004.  HFG proposed a search protocol by which a forensic expert would search for, extract, and provide the emails to Weekley for its review and subsequent production to HFG.  Opposing the motion, Weekley complained about the intrusiveness of such a search, that the search would take the employees’ hard drive “out of commission” and that HFG had failed to show the “feasibility ‘of obtain[ing] data that may have been deleted in 2004.  The trial court granted HFG’s motion.  Thereafter, Weekley sought mandamus relief from the court of appeals and was denied.  However, the Supreme Court of Texas granted oral argument on the issue.

Addressing the question of whether the trial court had abused its discretion, the court first turned to Tex. R. Civ. P. 196.4.  Under the rule, a party is required to produce responsive electronic information that is “reasonably available to the responding party in its ordinary course of business.”  If information is shown to be not reasonably available, the court may nonetheless order targeted production “upon a showing…that the benefits of ordering the production outweigh the costs.”  Finding that the trial court’s decision “implie[d] a finding that the deleted emails were not reasonably available and required extraordinary steps for their retrieval and production,” the court identified its task as deciding “whether the measures of the trial court…were proper under the circumstances presented.”  Because Rule 196.4 does not provide guidelines for the manner or means by which information that is not reasonably available may be produced, the court looked to the federal rules and courts for “guidance.”

First, the court recognized the need to balance the benefit and burden of production and noted that the federal rules warned against “undue intrusiveness.”  Discussing federal case law, the court cited a myriad of cases to establish “some basic principles regarding access to party’s electronic storage device” including the need for a showing that the responding party had defaulted in its obligations and that additional searching could recover the deleted materials.  The court also cited federal case law to establish the need for a forensic expert to accomplish the requested access “only when there is some indication that retrieval of the data sought is feasible” and that, in granting such access, a court must address issues of privilege and privacy.  Finally, the court established that direct access is more likely “when there is some direct relationship between the electronic storage device and the claim itself.”

Having established the “basic principles” the court determined that “because plaintiff failed to demonstrate the particular characteristics of the electronic storage devices involved, the familiarity of its experts with those characteristics, or a reasonable likelihood that the proposed search methodology would yield the information sought, and considering the highly intrusive nature of computer storage search and the sensitivity of the subject matter…the trial court abused its discretion.”

Following a discussion in which the court distinguished a prior, similar case in which forensic investigation was allowed, the court summarized the proper procedure for electronic discovery under Rule 196.4:

[T]he party seeking to discover electronic information must make a specific request for that information and specify the form of production.  Tex.R. Civ. P. 196.4.
The responding party must then produce any electronic information that is "responsive to the request and … reasonably available to the responding party in its ordinary course of business."  Id.
If "the responding party cannot–through reasonable efforts–retrieve the data or information requested or produce it in the form requested," the responding party must object on those grounds.  Id.
The parties should make reasonable efforts to resolve the dispute without court intervention.  Tex.R. Civ. P. 191.2.
If the parties are unable to resolve the dispute, either party may request a hearing on the objection, Tex.R. Civ. P. 193.4(a), at which the responding party must demonstrate that the requested information is not reasonably available because of undue burden or cost, Tex.R. Civ. P. 192.4(b).
If the trial court determines the requested information is not reasonably available, the court may nevertheless order production upon a showing by the requesting party that the benefits of production outweigh the burdens imposed, again subject to Rule 192.4’s discovery limitations.
If the benefits are shown to outweigh the burdens of production and the trial court orders production of information that is not reasonably available, sensitive information should be protected and the least intrusive means should be employed.  Tex.R. Civ. P. 192.6(b). The requesting party must also pay the reasonable expenses of any extraordinary steps required to retrieve and produce the information.  Tex.R. Civ. P. 196.4.
Finally, when determining the means by which the sources should be searched and information produced, direct access to another party’s electronic storage devices is discouraged, and courts should be extremely cautious to guard against undue intrusion.