Availability of Clawback Order Thwarts Claim of Undue Burden Based on Cost to Review

In re Coventry Healthcare, Inc. ERISA Litig., No. AW 09-2661, 2013 WL 1187909 (D. Md. Mar. 21, 2013)

In this brief opinion, the court considered Defendants’ claim that the burden of producing the requested ESI outweighed its potential benefit to the class action plaintiffs and granted Plaintiffs’ motion to compel.  Specifically, Defendants claimed that Plaintiffs’ search terms, as applied to the ESI of selected custodians from the relevant discovery time frame, “hit” on approximately 200,000 documents and that it would cost approximately $388,000 “to process host and review the data for responsiveness and privilege.”  Defendants did not, however, suggest alternative measures to accommodate Plaintiffs’ discovery needs “other than negotiating more refined search terms.” 

Addressing Defendants’ claim, the court first noted that Plaintiffs had agreed to shorten the discovery period in an effort to reduce Defendants’ burden.  The court then turned to a discussion of the case of Adair v. EQT Prod. Co., 2012 WL 1965880 (W.D. Va. May 31, 2012), in which the court contemplated the question of “whether production of accessible documents should not be ordered because of the high cost of reviewing those documents for privileged or responsive information” and relied (in part) upon then-Magistrate Judge Grimm’s rationale in yet another case that “the more practical approach is to avoid the necessity of an expensive and time-consuming privilege review by entry of a court order with a clawback provision that protects against a claim of waiver by production of a privileged document.”  In Adair, the court entered an order that stated that “any production made without a privilege review ‘shall not be deemed to have waived any privilege . . . .’ ” The Adair court also emphasized the producing party’s ability to filter its ESI by date or custodian, for example, and to conduct keyword searches (to ensure responsiveness).

In the present case, the court reasoned as follows:

In this case, Defendants’ claimed cost to review the requested ESI for responsiveness and privilege will be somewhat reduced now that Plaintiffs have narrowed the discovery time period by approximately three months.  More importantly, however, a clawback order can protect Defendants against a claim of waiver, such that Defendants need no longer bear the cost of reviewing the ESI for responsiveness and privilege. FN8 To further reduce any undue burden, Plaintiffs may need to refine their proposed search terms to narrow the pool of potentially relevant documents. FN9 In light of these options, Defendants have not shown that producing the requested ESI will be unduly burdensome.

(Emphasis added.)  Accordingly, the court granted Plaintiffs’ motion to compel the at-issue discovery noting that “[i]f the Defendants choose to seek a clawback order, they may confer with Plaintiffs and submit one for court approval.”