S.D. Cal.: Request for Production from Backup Tapes Denied

In 2015, Magistrate Judge William V. Gallo, in United States ex rel. Carter v. Bridgepoint Educ., Inc., 305 F.R.D. 225 (S.D. Cal. 2015), ruled on a dispute over the production of data from backup tapes, and the format used for email productions.

The Plaintiffs contended that the Defendants were responsible for intentionally altering data transferred to backup tapes because litigation was anticipated, and this transfer constituted a form of intentional spoliation. The Defendants in turn asserted that the data was inaccessible and so the cost of production should shift to the Plaintiffs. The requested data was matrices used by the Defendants to track the their performance as enrollment advisors to the Plaintiffs, which in turn was used to determine how much employees were paid. The Plainiffs contended this is a violation of the Higher Education Act's prohibition against incentive payments.

The backup tapes in question were used for disaster recovery. The encrypted tapes could be used to store more than 1 TB of data. The Defendants stated that it was only possible to restore one tape per day, and that the full restoration process would take several months and cost more than $2.2 million for the data for all of the relevant custodians to be converted to native format. These facts would make the production unduly burdensome. The Defendants had been transferring data to backup tapes for a long time, prior to the suit's unsealing. (This is a qui tam action, which the Defendants only received notice of when the government chose not to intervene.)

The Plaintiffs argued that the Defendants as a large 'billion dollar' public company which emphasizes its technologcal capabilities should have the resources to handle the production, and noted that their suit concerned more than $2 billion in damages. They faulted the Defendants for failing to disclose how their backup tape system worked.

In his decision, Judge Gallo citing Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003)), acknowledged that a party is not entitled to cost shifting if it converts data into an inaccessible format when it's reasonably foreseeable that it will be discoverable in anticipated litigation. But he emphasized that the litigation must be probable not merely possible.

In rejecting the contention that the Defendants' deliberately made data inaccessible, the Court notes that, "[e]ven in making this accusation, Plaintiff acknowledge that this ESI has been placed onto 'backup tapes,' , thereby accepting Defendants' own description of the relevant ESI as 'inaccessible.' Dangerously, Plaintiffs have chosen to describe this storage system as adopted 'under the pretext or excuse of a business purpose,' , even though the use of backup tapes for non-active ESI has become standard business practice." Bridgepoint Educ., Inc., 305 F.R.D. at 241. The opinion cites dozens of holdings that ESI stored on backup tapes is inaccessible from a technological standpoint.

The Defendants did restore one backup tape to its native format which contained all of the emails between the relevant employee custodians and their superiors. This gives the Plaintiffs "an unfettered ability to examine almost every potentially relevant quantum of ESI" Id. at 242. The Defendants made a production in TIFF images of other less relevant emails. The Plaintiffs only offered their own attorneys' estimates of the cost of production, while the Defendants filed a declaration prepared by an expert. The Court also noted the Plaintiffs' failure to specify the exact data they were requesting. "If a party fails to identify

the form or forms in which it wishes ESI to be produced and any particular fields or types of metadata sought, the non-requesting party may rightly provide the ESI sought in the form in which it is regularly maintained. With Plaintiffs' request ambiguous as to form and format, Defendants were certainly reasonable in refusing to provide reasonably inaccessible ESI." Id. at 243. Judge Gallo rejected the claim of intentional spoliation because the Plaintiffs did not explain why the Defendants' storage process was unusual.

The Court also rejected that Plaintiffs' request for the production of emails from active storage in native format. It regarded a TIFF image production as a proper response to a "generic request for original documents". Id. at 245.

Microsoft's Electronic Discovery Reference Model

A schematic posted here on docs.microsoft.com does an excellent job of showing how Microsoft 365 can be used at each stage of the EDRM.

Legal hold notifications are distributed to custodians, and their activity is audited.

Data from multiple locations can be transferred to a central repository for review.

The Advanced eDiscovery tools which come with Microsoft 365 facilitate the preservation of data with the goal of retaining it for processing and review in legal matters.

Steve Donziger's Failure to Submit a Privilege Log Basis for Forensic Inspection Protocol

Steven Donziger's legal disputes with Chevron have received a lot of news coverage this year. The American attorney obtained a $9.5 billion judgment against Chevron in an Ecuadorian court for Texaco's (which merged with Chevron in 2001) pollution of rivers near its drilling sites in the South American country. Donziger was imprisoned for contempt of court In October, and was released to serve the remainder of his sentence at home this month. Tonight's post is a summary of a decision issued by Judge Lewis Kaplan, Chevron Corporation v. Donziger, 425 F. Supp. 3d 297 (S.D.N.Y. 2019) which approved a forensic inspection protocol for the imaging and examination of devices by a neutral expert. Donziger was convicted of contempt for his refusal to comply with this and other court orders.

After Donziger was found by the S.D.N.Y. to have committed fraud in obtaining the judgment in Ecuador, he was taxed for $800,000 in costs. The forensic inspection protocol was issued so Chevron could conduct discovery to locate Donziger's assets, after he refused to make a good faith effort to produce relevant documents. Judge Kaplan noted that while Donziger had responded to a previous order to conduct a search of his electronic media using search terms chosen by Chevron and made a production of 90,000 documents, it was apparent that he did not produce some responsive documents. The Court ordered that hard drives belonging to Donziger be imaged and searched, and 151,000 additional responsive documents were uncovered.

Judge Kaplan also criticized Donziger for a "specious ad hominem attack on Chevron's forensic expert". Id. at 305.

The protocol that was the subject of this 2019 decision required that electronic media be imaged by a neutral court appointed expert that would also generate reports listing persons and entities named in the data that the parties could review, look for signs of data spoliation, and try to recover deleted files. The Chevron expert was to search the culled documents. The decision states that:

"First, the neutral expert will isolate the documents that are responsive to the search terms and potentially relevant to the document requests. Second, the neutral expert will provide the Chevron forensic expert with the greater of 100 or 10 percent of those documents for review by counsel for Chevron. Counsel will code this sample set of documents as 'relevant' or 'not relevant' to the document requests. Third, Chevron's forensic expert, under the supervision of the neutral expert, will create, refine, and use technical search tools, including but not limited to predictive coding and concept clustering, to search the documents that are responsive to the search terms and potentially relevant and to identify those that indeed are relevant to the document requests.

Thus, the process limits the roles of Chevron's forensic expert and counsel for Chevron to protect Donziger's privacy interests without hamstringing Chevron's efforts to obtain the discovery to which it is entitled." Id. at 303.

Donziger contended that the protocol would allow Chevron to review privileged communications, but Judge Kaplan noted that Donziger had forfeited this privilege, referring to a 2018 order that found that, "Danziger [sic] has failed to comply with Fed. R. Civ. P. 26(b)(5) and S.D.N.Y. Civ. R. 26.2 - and as (a) this is not the first time that he has ignored the requirements of those rules, e.g., In re Chevron Corp., 749 F. Supp. 2d 170 (S.D.N.Y. 2010), aff'd sub nom. Lago Agrio Plaintiffs v. Chevron Corp., 409 Fed. App'x 393 (2d Cir. 2010), and (b) Danziger [sic] failed to comply even after Chevron asserted that his prior failure should result in waiver of any otherwise applicable privileges - the Court holds that Danziger [sic] has waived or forfeited any claim of privilege to responsive documents and information that otherwise might have applied. Accordingly, Danziger [sic] shall comply fully with the outstanding discovery requests forthwith without withholding any responsive documents or information on privilege grounds." D.I. 2108, Chevron Corporation v. Donziger, No. 1:11-cv-00691-LAK-RWL (S.D.N.Y. Oct. 18, 2018). Fed. R. Civ. P. 26(b)(5) requiries parties withholding privileged documents to disclose information about the documents so that other parties can assess the basis for the privileged claim. S.D.N.Y. Civ. R. 26.2 specifies the information to be included in a privilege log - the document type; general subject matter, date, author and recipients.

Judge Kaplan concluded that, "Donziger unjustifiably has refused to comply with his discovery obligations. Had he done so — i.e., had he produced responsive documents as to which there was no colorable claim of privilege, submitted a privilege log as to responsive documents as to which there was such a colorable claim, and submitted any disputes for judicial resolution – there would be no need to examine his ESI. " Id. at 306.