A recent case from the Northern District of California raises the importance of actively engaging with employees to coordinate the search for documents and electronically-stored information to comply with the employer’s discovery obligations. At the same time, the Court ruled that an employer cannot be compelled to produce business-related emails from the personal email accounts of its employees.
In Matthew Enterprise, Inc. v. Chrysler Group, LLC, the plaintiff, Stevens Creek – a car dealership – sued Chrysler for price discrimination in violation of the Robinson-Patman Act. During discovery, Chrysler sought emails from Stevens Creek’s employees’ corporate Gmail accounts as well as emails from the employees’ personal email accounts which, at times, were used for business purposes.
As to the emails from employees’ corporate accounts, Chrysler argued that Stevens Creek used inadequate search parameters, failed to provide employees with a copy of the discovery requests, did not provide any meaningful direction to the employees on how to identify requested ESI and did not ask all relevant custodians to search for documents. In opposition, Stevens Creek argued it had undertaken reasonable efforts in good faith to comply with the requests for production.
With regard to emails from employees’ personal accounts, Stevens Creek argued that the emails were outside its “possession, custody, or control,” and, therefore, beyond the scope of discovery from Stevens Creek Chrysler responded that Stevens Creek has control over company information regardless of whether it is stored on personal email accounts and pointed to plaintiff’s employee handbooks instructing employees to keep “internal information” in the “sole possession” of Stevens Creek.
Magistrate Judge Paul S. Grewal, applying the recent amendments to the Federal Rules of Civil Procedure, found Stevens Creek’s ESI search efforts to be lacking, citing as a specific examples, the suggestion by Stevens Creek to its employees to merely pull any email with the word “Chrysler” in it and Stevens Creek’s limitation of the relevant custodians to sales employees. Accordingly, Judge Grewal ordered Stevens Creek to ask both salespeople and all other employees who may have relevant documents to cooperate with the search and for Stevens Creek to coordinate the search for documents by telling those employees exactly what Chrysler had asked for and suggesting broad sets of search terms.
However, Judge Grewal found that Chrysler had failed to show that any contract existed between Stevens Creek and its employees requiring its employees to provide information stored in their personal accounts despite language in Stevens Creek’s handbook instructing employees to keep “internal information” in the “sole possession” of Stevens Creek. The court noted that the handbook language did not create a legal right and there was no “authority under which Stevens Creek could force employees to turn them over.”
Judge Grewal’s ruling has two important implications for employers. First, when responding to requests for electronically stored information, employers must take an active role in assisting employee-custodians in their search for responsive documents. Second, Judge Grewal’s ruling indicates that employers should have strong agreements in place with employees who may be storing company information in personal email accounts, such as Gmail, for otherwise they may be prevented from recovering them when needed. Instead, these employees may be subject to direct, third party discovery of relevant information in their custody and control under Rule 45. This can complicate the employer’s defense and overall increase the cost of electronic discovery.