ESI Protocols: Courts Hold Parties to Account for Failing to Comply with the Protocols They Negotiated

To resolve electronic discovery issues early in legal proceedings, parties often negotiate ESI protocols that define the required formats of production, outline the scope of record preservation required for the matter, and address key issues regarding privilege, confidentiality, and other key discovery considerations.  But what happens when parties establish requirements in their ESI protocols that they later cannot fulfill?  Three recent case opinions reflect how courts can react negatively to such situations.

McCormick & Co. v. Ryder Integrated Logistics, Inc., No. JKB-22-0115, 2023 WL 2433902 (D. Md. March 08, 2023)

The ESI Protocol adopted by the parties in this case stated that (i) “a party’s obligation to conduct a reasonable search for documents in response to discovery requests shall be deemed to be satisfied by reviewing documents that are captured by utilizing the methodology provided for in this Protocol,” and (ii) “[t]he fact that a document is captured by a search pursuant to this protocol does not mean that such document is responsive to a discovery request or otherwise relevant to this litigation and Parties may exclude such nonresponsive documents from production.”

The plaintiff then found that, while a record preservation hold had been issued, certain files maintained by “a key custodian and witness” were deleted when she departed the company.  To mitigate the loss of these documents, the plaintiff collected electronic records from six additional custodians and searched them using the name of this “key custodian and witness” as a means of identifying potentially-relevant communications of this individual.  The identified records were voluminous and reflected about one-third of the potentially-relevant documents identified for review.

Plaintiff filed a motion with the court to enter the ESI protocol as a court order and to declare that the ESI Protocol did not require manual review of documents identified by search terms.  The Defendant opposed this motion for purposes of this sought declaration.

The magistrate judge entered the ESI Protocol as a court order, but denied it with regard to the sought declaration that the ESI Protocol did not require manual review of documents identified by search terms.  The magistrate judge also rejected the plaintiff’s argument that the potential costs of such manual review were disproportionate to the case under Federal Rule of Civil Procedure 26(b).

The district court rejected the plaintiff’s objections to the magistrate judge’s order.  In doing so, the district court pointed out how “the parties agreed to this review [of the documents] by the plain language of the ESI Protocol” and that the parties “clearly took [the proportionality factors under Federal Rule of Civil Procedure 26(b)] into account, finding that the costs of the review were proportional to the needs of the case.”  The court also noted that “this conclusion is particularly appropriate where, as here, there appears to be a large volume of potentially responsive documents due to an error by [the plaintiff] whereby the documents of a key custodian were deleted despite a litigation hold.”

Carl Zeiss Meditec, Inc. v. Topcon Med. Sys., Inc., No. 19-cv-04162-SBA(LB), 2022 WL 2394815 (N.D. Cal. July 1, 2022)

The ESI Protocol adopted in this case required production of “all metadata, including family files.”

As part of a search protocol for the plaintiff’s proprietary confidential information within Defendant Topcon’s systems, the plaintiff’s e-discovery vendor identified specific source files and metadata to Defendant Topcon’s counsel, which then reviewed the files for privilege and produced the non-privileged documents with their metadata to the plaintiff.

Following that production, the plaintiff identified thousands of these source files that were e-mail attachments and sought the production of the e-mail messages to which these source files were attached.  Contending that the plaintiff’s e-discovery vendor failed to note the associated between the produced source files and the e-mail messages to which they were attached when it identified files for production, Defendant Topcon objected to the supplemental production of the e-mail messages unless the plaintiff paid for the additional privilege review and production costs, estimated at $40,000.

The magistrate judge ordered Defendant Topcon to review and produce the files and denied its request for attorney fees related to this supplemental production.  In doing so, the magistrate judge pointed to the ESI Protocol’s requirement for document productions to include “all metadata, including family files.”  The magistrate judge also noted the lack of evidence in the records regarding how the plaintiff could have acted to avoid the supplemental production’s additional costs or whether such costs were duplicative.

In the Matter of In Re Skanska USA Civil Southeast Inc., No. 3:20-CV-05980-LC/HTC, 2021 WL 2515645 (N.D. Fla. Aug. 23, 2021)

In this case, the parties adopted an ESI Protocol that provided for the production of relevant text messages.  The claimants included a request for relevant text messages in its first requests for production of documents, and Skanska identified thirteen custodians for the purposes of collecting and producing mobile device data, including such text messages.

After identifying these thirteen custodians, however, Skanska notified the claimants and the court that mobile device data was no longer available for five of these custodians.  Skanska reported that another of these thirteen custodians did not have a mobile device, but it was later found that this custodian did have a personal mobile device from which available text messages were then produced, but also from which some text messages may have been deleted.  Finally, the claimants argued that, while mobile device data was produced from the remaining seven identified custodians’ mobile devices, there was some evidence that at least thirteen text messages had been deleted from these devices.

In its order issuing sanctions, the magistrate judge found this situation to be “a text book case of spoliation.”  The magistrate judge noted Skanska’s failure to preserve mobile device data and text messages even as the case proceeded through significant events, including Skanska’s designation of in-house counsel to address the issues in this case, the claimants’ initial filing of suit, and the receipt of claimants’ first requests for production of documents.

Noting the seven months that lapsed between Skanska’s issuance of a related litigation hold and the start of its collection of mobile device data from the identified custodians, the magistrate judge found that “the lack of any cogent explanation for these failures, other than ‘oops,’ points to one answer – Skanska acted in bad faith.”  However, the magistrate judge declined to order terminating sanctions against Skanska, instead finding “the lesser sanctions of an adverse inference and monetary sanctions to be appropriate.”