Federal Court Incentivizes Narrow e-Discovery Through Cost Shifting

            A case does not have to involve complex commercial litigation or technical patent disputes to create serious electronic discovery problems. An excellent example of just how messy e-Discovery can get, even with age-old claims, is found in Cannata, et al. v. Wyndham Worldwide Corp., et al.. There, employee plaintiffs brought claims against employer defendants, alleging sexual discrimination, sexual harassment, hostile work environment, constructive discharge, and retaliation.  In an order issued February 17, 2012, Magistrate Judge Cam Ferenbach of the United States District Court of Nevada took charge of an ongoing ESI back-and-forth between plaintiffs and defendants in this case.

            Over the course of the litigation, plaintiffs sought to broaden the scope of e-Discovery by increasing the number of search terms and custodians, while the defendants insisted on strictly adhering to a prior court order requiring narrow search terms. The prior order permitted only 10 search terms and avoided using “or” within the context of the searches if at all possible. Defendants further objected to including sexual terms in the searches, claiming that they were irrelevant because they had not been mentioned in any facts asserted by plaintiffs or in any depositions.

            Plaintiffs insisted that such an approach would not yield all of the evidence relevant to their case. Plaintiffs instead proposed that the parties jointly engage in a process by which the plaintiffs supply an initial list of 100 search terms and 50 email custodians. Defendants would then run the search terms through the custodians’ files and provide a search term “hit” report to the plaintiffs. Plaintiffs would then work with defendants to determine whether the searches were yielding too many duplicate items or irrelevant documents.

         Not surprisingly, this joint approach did not work and the court decided that it must appoint an e-Discovery Special Master to oversee the process. The court got even more specific though, stating that the process would include only narrowly tailored search terms. “Indiscriminate terms, such as a defendant’s name, are inappropriate unless combined with narrowing search criteria that sufficiently reduce the risk of overproduction.” The court went on to even provide the methods for conducting the searches (e.g. “Each disjunctive combination of analogous words shall be delimited by parentheses”).

To incentivize a narrowly tailored process, the court ordered that plaintiffs would be required to reimburse defendants for the e-Discovery costs incurred in complying with the order if the final set of combined search terms and sites searched exceeded 40. For each term over 40, plaintiffs would reimburse defendants 5% of their e-Discovery compliance costs from the date of the February 17, 2012 order through the end of discovery. 

As the Cannata v. Wyndham court recognized, the e-discovery process can be expensive and burdensome, even when narrowly tailored to address the parties’ claims. Just because a claim seems straightforward and grounded in the real world, rather than electronic data, that does not mean that parties should not begin planning and budgeting for e-Discovery as early as possible.   

           

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