Court Focuses on Cooperation & Proportionality to Resolve Discovery Disputes

Kleen Prods. LLC v. Packaging Corp. of Am., No. 10 C 5711, 2012 WL 4498465 (N.D. Ill. Sept. 28, 2012)

In this multi-defendant litigation, Plaintiffs sought additional discovery, including the identification of additional custodians and the restoration and review of Defendants’ backup tapes.  In resolving these discovery disputes, the court focused on the need for cooperation and proper consideration and application of the principle of proportionality (Fed. R. Civ. P. 26(b)(2)(C)).

Illustrative of the court’s preference for cooperation between the parties, the opinion opened with a quotation from the Sedona Conference’s Cooperation Proclamation:

Lawyers have twin duties of loyalty: While they are retained to be zealous advocates for their clients, they bear a professional obligation to conduct discovery in a diligent and candid manner.  Their combined duty is to strive in the best interests of their clients to achieve the best results at a reasonable cost, with integrity and candor as officers of the court.  Cooperation does not conflict with the advancement of their clients’ interests—it enhances it.  Only when lawyers confuse advocacy with adversarial conduct are these twin duties in conflict.

Thereafter, following recitation of several of the issues already resolved between the parties (including a brief discussion of the stipulation that ended the parties’ dispute regarding whether the use of predictive coding should be compelled, previously discussed on this blog here), the court turned to the substantive issues before it.

First, the court addressed one defendant’s motion for a protective order in light of Plaintiffs’ request that it produce “various background information over an eight year period for each of the approximately 400 persons on the [defendant’s] litigation-hold list.”  The recipients of the hold were identified by the defendant "in the interests of cooperation and compromise" upon the suggestion of the court at an informal “brainstorming discussion” with the parties to address Plaintiffs’ desire for additional information regarding the defendant’s corporate structure—information the defendant had indicated it did not maintain.  Following the defendant’s identification of the litigation hold recipients, however, Plaintiffs served the interrogatory seeking the above-mentioned “background information.”  In an effort to accommodate that request, Defendant’s 30(b)(6) designee attended his deposition prepared to answer any questions about the relevant corporate structure.  At that deposition, Plaintiffs’ counsel indicated that the relevant questions had been satisfied and ended the deposition before the expiration of the allotted time allowed.  Despite this, Plaintiffs refused to withdraw the discovery request.

Considering the defendant’s motion, the court indicated that it had not intended its suggestion (to identify those that had received the litigation hold) to generate additional discovery obligations for the defendant and stated its belief that Plaintiff’s issuance of a follow up request for information following Defendant’s disclosure of the recipients of its litigation hold “violated the spirit of cooperation” that the court had encouraged.  Using the information received to request the additional discovery, the court cautioned, “could have a chilling effect on both litigants and courts to engage in candid discussions.”  Moreover, the court found that Defendant had established that providing the requested information was an undue burden, pursuant to the proportionality considerations identified in Fed. R. Civ. P. 26(b)(2)(C), which the court went on to discuss in greater detail.  Accordingly, the court quashed the request and granted Defendant’s Motion for a Protective Order.

Second, the court addressed Plaintiffs’ request for the identification of additional custodians by two defendants (after successfully reaching agreement with the others).  One defendant had already identified 75 custodians and the other 28. Reasoning that “the selection of custodians is more than a mathematical count,” the court once again applied the standards of Rule 26(b)(2)(C) to resolve the question before it.  Where the court found the factors did not “overwhelmingly favor” either party (after noting the defendants’ failure to provide evidence in support of their burdensome arguments) the court reasoned that “because Plaintiffs had no input on the initial custodian determinations and the case is still in the early stages of discovery,” they should be allowed to select a small number of additional custodians: 8 from each defendant.  The court also rejected the defendants’ efforts to restrict further custodian requests.

Finally, the court addressed Plaintiffs’ motion to compel defendants to search “all reasonably accessible sources that potentially contain nonduplicative responsive documents or data, including backup tapes.”  Following its recitation of how to handle inaccessible data pursuant to Rule 26(b)(2)(B), the court noted that “[c]ourts generally agree that backup tapes are presumptively inaccessible.”  Moreover, in light of the defendants representations that restoration could cost each defendant “at least $200,000 with some estimates well over $1,000,000,” the court concluded that “Defendants ha[d] demonstrated a cost burden to restoring the backup media.”  “In any event,” the court went on to find that “Plaintiffs’ request to produce the backup tapes is premature.”  Noting that there was no discovery cutoff date in the case and that Plaintiffs were only 20% through their first level of review, the court counseled that Plaintiffs should complete their review before seeking to have the backup tapes restored.  The court went on to state that if Plaintiffs later decided, “at the appropriate time” to pursue the backup tapes, “the parties and their experts are urged to work together in a cooperative manner” and to pursue sampling if it is “feasible and cost efficient.”

Echoing its introduction, the court closed the opinion by once again discussion the Cooperation Proclamation and other discovery resources and summarized “some lessons learned” in pursuing a collaborative approach:

First, the approach should be started early in the case. It is difficult or impossible to unwind procedures that have already been implemented.  Second, in multiple party cases represented by separate counsel, it may be beneficial for liaisons to be assigned to each party.  Finally, to the extent possible, discovery phases should be discussed and agreed to at the onset of discovery.

A copy of the court’s full opinion is available here.