Court Orders Defendant Tennessee State Agencies to Produce Responsive ESI, Including All Metadata and Deleted Information; Potentially Shifts Costs to Defendants as Sanction for Failure to Implement Effective Litigation Hold and Other Discovery Miscues

John B. v. Goetz, 2007 WL 3012808 (M.D. Tenn. Oct. 10, 2007)

This case is a class action on behalf of roughly 550,000 children who are entitled under federal law to medical services that include early and periodic screenings for their physical well being, including their dental and behavioral health needs, along with any necessary follow-up medical services.  Through this action, plaintiffs seek to enforce their rights to such services under various federal statutes.  Defendants in the case include Tennessee state officials who are in charge of the state programs for these services.  To assist it in providing these services, the State enters into contracts with a number of Managed Care Contractors (“MCCs”).  The MCCs are not parties in the suit.

Contemporaneous with the filing of the complaint, plaintiffs requested class certification and the parties agreed to entry of a Consent Decree to remedy plaintiff’s complaints and to certify the class.  Lengthy and complex proceedings followed, including several show cause and contempt hearings.

In the latter half of 2006 and in early 2007, the court held a series of hearings and conferences on the parties’ discovery disputes, and ordered the production of certain electronically stored information (“ESI”) from the defendants.  The court also held that the MCCs’ responsive records and ESI were within the possession, custody, and control of defendants, and required the defendants to obtain such information from the MCCs and produce it as well.

The defendants asserted numerous objections to the scope of the plaintiffs’ discovery and to the costs of the requested production.  The MCCs, who, as noted above, were not and are not parties to the action, also objected on jurisdictional and cost/burden grounds to the court’s discovery orders, which orders the court had applied, through the defendants, to the MCCs.  Plaintiffs contended that the ESI was necessary to assess the defendants’ contention that they were in compliance with the Consent Decree.  Plaintiffs asked the court to compel the defendants’ compliance with the court’s earlier ESI production orders and to require certain key custodians to certify that documents covered by the discovery requests had not been removed or destroyed.

In April 2007, the court ordered the plaintiffs and defendants, as well as the MCCs, to attend an in-person discovery conference in his courtroom.  The court also ordered that IT representatives of the parties and the MCCs attend.  In an unusual move, once the parties, the MCCs, and their counsel arrived for the discovery conference, the court required all counsel to leave the courtroom, and had the IT personnel, without counsel present, hold an all-day on-the-record conference to try to resolve electronic discovery issues.  When issues still remained, including cost/burden issues, the court ordered an evidentiary hearing on the costs of the requested electronic discovery, which hearing was held in June 2007 and lasted approximately one week.

The court’s October 9, 2007 Memorandum and October 10, 2007 Order contains the court’s rulings from the evidentiary hearing.  The court granted plaintiffs’ motion and ordered defendants to provide responses to the plaintiffs’ discovery requests for ESI with the agreed search terms, the designated key custodians, and for the time period specified.  It rejected defendants’ claims of undue burden and privilege, faulted the defendants’ preservation and production methods, and ordered that responsive ESI to be produced “shall include all metadata as well as all deleted information on any computer of any of the Defendants’ designated key custodians.”  The court further ordered that plaintiffs’ computer expert “shall be present for the Defendants’ ESI production and shall provide such other services to the Defendants as are necessary to produce the metadata, as ordered by the Court.”

The court also held that the MCCs’ responsive records and ESI were in the possession, custody and control of defendants, that the MCCs were agents of the defendants, and that the MCCs’ contracts with the defendants required the MCCs to make available their responsive records.  For these reasons, the court required the MCCs to produce certain responsive records and ESI.  However, the court substantially narrowed the plaintiffs’ proposed search terms and custodian lists, and indicated its intent to shift the costs of such production, including the attorneys’ fees’ of MCCs’ counsel, to the defendants.  The court also indicated its intent to shift to the defendants the costs and fees incurred by the plaintiffs in filing and pursuing its motion to compel.  The court did allow defendants eleven days from the date of the Order to present its objection to such cost shifting.  That objection has been filed, and the court has not yet ruled on it.

The 187-page memorandum opinion that accompanied the court’s order is not yet on Westlaw but is available here (in four parts):  part 1, part 2, part 3, part 4.  Among other e-discovery topics, the court discusses the duty to preserve, the role of counsel, the undue burden analysis, paper versus electronic format for production, metadata and the use of search terms.