“A litigant cannot keep its own system secret and then refuse to gather the information itself.”

Labrier v. State Farm Fire & Cas. Co., No. 2:15-cv-04093-NKL, 2016 WL 2689513 (W.D. Mo. May 9, 2016)

Upon Defendant’s refusal to provide Plaintiff with a list of data fields from two proprietary databases or to allow remote access, the Special Master ordered Defendant to respond to written interrogatories meant to provide the information sought by Plaintiff regarding putative class members and damages.  Addressing Defendant’s objection that the discovery (i.e., responding to written interrogatories) was not proportional to the case, the District Court determined that the Special Master had not abused his discretion, reasoning in part that “[a] litigant cannot keep its own system secret and then refuse to gather the information itself.”

Following six in-person and telephone hearings, a Special Master determined that the at-issue interrogatories sought relevant information and were proportional to the needs of the case and ordered Defendant to respond. Defendant objected, arguing that it could not do so without “complex inquiries in multiple databases” and evaluating estimates one at a time.  Notably, however, testimony of Defendant’s employee indicated that Defendant had utilized the at-issue systems to identify putative class members and estimate potential damages at the outset of litigation—a fact the District Court relied upon in reaching its conclusions.

Rejecting Defendant’s objections, the court concluded that the Special Master had not abused his discretion in deciding that the benefit of the requested discovery outweighed its burden or expense for a number of reasons, including:

• that the need to undertake “computer programming” not “normally” required was justified where Defendant sought to keep its systems secret;
• that the information at-issue was relevant to Defendant’s affirmative defenses and that by placing the burden on Defendant to provide information in support of those defenses, Defendant would be “judicious in identifying those affirmative defenses that are sufficiently viable to justify the cost of discovery;”
• that Defendant largely failed to provide evidence “about the databases, describing and estimating the hours and costs of obtaining class-wide data reports needed to respond to the interrogatories, and detailing the manner in which they would be required to analyze the data” and that reliance on “an extrapolation of hours and costs based on materials filed in another case” was insufficient to establish the Special Master abused his discretion;
• and that Defendant had been ordered to respond to interrogatories to protect alleged highly confidential and trade secret information and that “[a] litigant cannot keep its own system secret and then refuse to gather the information itself.”

The court also noted that Defendant’s “intransigent approach” to discovery, i.e., refusing all alternatives proposed by the Special Master, had created much of the burden it faced in responding to the court-ordered interrogatories.

Regarding the question of whether the discovery was proportional to the needs of the case, the court again determined that the Special Master had not abused his discretion where the “issues at stake [we]re at the very heart of this litigation,” where Plaintiff had no alternative way to access the information, where Plaintiff was “an individual” and Defendant a “corporation with a national presence” and “sophisticated access to data” and where, as discussed above, the benefit of the discovery outweighed the burden “particularly in light of [Defendant’s] refusal to permit an outsider to access its computer system or even provide complete lists of its data fields.”

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