This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:
- a U.S. District Court for the Northern District of Illinois order 1) determining that in the wake of the COVID-19 pandemic, depositions would need to be taken by remote means to move the case forward and 2) setting forth certain rules to govern such remote depositions
- a U.S. District Court for the Southern District of Ohio ruling directing the parties to use defendants’ suggested confidentiality language, rejecting plaintiffs’ efforts to require defendants to preserve file types such as backup data and server logs, and allowing plaintiffs to pursue Fed. R. Civ. P. 30(b)(6) depositions to determine the file types that might require preservation
- a U.S. District Court for the District of Oregon decision finding after in camera review that the attorney-client privilege applied to emails exchanged between nonattorney employees containing information to be provided to a lawyer for the purpose of obtaining legal advice
- a U.S. District Court for the Eastern District of California order denying defendant’s request for a protective order in a putative class action, finding that precertification discovery was appropriate, the electronically stored information (ESI) at issue was relevant to the plaintiffs’ claims, good cause existed in any event that outweighed any burden, and the defendant’s privacy concerns could be addressed through a confidentiality protective order
1. In In re Broiler Chicken Antitrust Litigation, 2020 WL 3469166 (N.D. Ill. June 25, 2020), United States Magistrate Judge Jeffrey T. Gilbert 1) determined that in the wake of the COVID-19 pandemic, depositions would need to be taken by remote means in order to move the case forward and 2) discussed issues that should govern such remote depositions.
In this antitrust class action, the class and direct action plaintiffs sought to take depositions by remote means in accordance with Fed. R. Civ. P. 30(b)(4) amidst the COVID-19 pandemic. Defendants objected to being required to prepare or present their witnesses under the circumstances. Magistrate Judge Gilbert overruled these objections, finding them insufficient to prevent remote depositions given the legitimate reasons for the depositions and the available methods to remedy the possible obstacles. Id. at *1–*2.
Defendants raised a host of objections to the proposed remote depositions. They expressed concern for certain defendants who had health issues and might be especially vulnerable to COVID-19. The magistrate judge found that the threat of COVID-19 should inspire the parties to feel even more urgency to memorialize these witnesses’ testimony. Furthermore, the remote depositions would allow more flexibility to accommodate the health issues of these individuals.
The defendants also argued that “essential employees” of entities in an industry denominated as essential to national security could not be spared during the pandemic. In addition, defendants claimed that individuals working from home and contending with related distractions should not be deposed at the present time under the present circumstances. The court observed, however, that “it is a rare witness who really wants to make time to be deposed or prepare for a deposition at any time.” Id. at *3. The court rejected both these claims, noting that plaintiffs had expressed a willingness to work with defendants on scheduling the depositions.
The defendants also raised concerns related to internet connectivity and the potential that some of the witnesses would be uncomfortable with the technology necessary to conduct remote depositions. Magistrate Judge Gilbert found the defendants had not taken the necessary steps to establish whether these were only notional concerns and had offered no solutions. He noted, for example, the parties could update some deponents’ internet services, leaving long-lasting benefits for the deponents. Furthermore, the plaintiffs’ protocol would not allow depositions to proceed if any involved individuals were having difficulty hearing or understanding any other participants. The possibility of technological challenges alone was not a reason to prevent the remote depositions from taking place. Id. at *2–*4.
As for the concern that the deponents would be unable to use the technology, the magistrate judge noted that the deponents were current or former high-level executives in large companies and would be able to deal with the technology used in a remote deposition. Id. at *3. Finally, the defendants argued that because travel was unsafe, they could not prepare witnesses in person, which, they argued, prejudiced their case. The magistrate judge clarified that he was not requiring that defendants not be in the same room as the witness. It was possible that safeguards could allow for in-person preparation if the defendants preferred. Furthermore, to the extent in-person preparation was not possible, remote preparation may be more difficult, but it would not be impossible. The magistrate judge refused to indefinitely stay all depositions pending a cure, vaccine, or herd immunity. “The parties and their counsel are going to have to have to adapt, make some choices, be creative, and compromise.” Id. at *5. “Courts are beginning to recognize that a ‘new normal’ has taken hold throughout the country in the wake of the Covid-19 pandemic that may necessitate the taking of remote depositions unless litigation is going to come to an indefinite halt until there is a cure or a vaccine.” Id. at *5. He indicated that Rule 30(b)(4) requires that leave be liberally granted to hold remote depositions and does not require good cause to do so but instead involves a careful weighing of the proponent’s reasons for seeking a remote deposition and the claims of prejudice and hardship set forth by the opposing party. Id. at *5–*6. Magistrate Judge Gilbert agreed with the plaintiffs that “these depositions will need to be taken at some point so they should start down that path now.” Id. at *8. The matter had already experienced several delays, including a yearlong stay while the Department of Justice conducted a parallel investigation. Furthermore, the court had already limited the plaintiffs’ ability to take unnecessary depositions by limiting the total number of depositions the plaintiffs could take. Finally, contrary to the defendants’ position, there was no indication from health experts that the situation presented by COVID-19 would be materially different in the coming months. Id. at *7–*8.
Magistrate Judge Gilbert agreed that certain rules should govern the remote depositions. He stated that a protocol agreed by the parties was appropriate and had observations on various issues raised by the parties:
The parties should consider any deponent’s designation as an “essential employee” in responding to the COVID-19 pandemic in deciding whether such person should have an in-person or remote deposition.
A videotape of a deponent to be used at trial does not need to show both the witness and his or her lawyer.
Counsel wanting to use electronic exhibits with a remote witness should provide hard copies of the exhibits (or in the form requested by the witness and counsel) prior to the deposition, with instructions that the exhibits should not be reviewed by the deponent until the deposition starts. The deponent can be asked under oath if the deponent looked at the exhibits prior to the start of the deposition, and if provided in an envelope to the deponent, the envelope can be opened during the deposition on screen.
Plaintiffs and defendants should agree on the remote video deposition platform, with the court resolving any issue left unresolved by the parties. Remote depositions may have to be conducted over portions of multiple deposition days to accommodate the needs of the deponent and deposition participants with respect to home, child or other responsibilities. Remote depositions may take longer than in-person depositions, and it may be necessary to extend the length of time provided for by the Federal Rules of Civil Procedure in the case of remote depositions and to consider how to account for time lost to technology glitches.
It would be preferable, if possible, to have the witness, the witness’s attorney, and the questioning attorney on the video screen at all times.
There should be no unrecorded or at least unnoted conversations between the witness and witness’s counsel while on the record of a remote deposition.
An objection by one aligned party should be deemed an objection by all aligned parties at a remote deposition, a rule that Magistrate Judge Gilbert stated he would consider adopting for in-person depositions as well.
Magistrate Judge Gilbert set a date for a hearing to address the remote deposition protocol.
Taking into account all the circumstances and argument by the parties, Magistrate Judge Gilbert ruled that the plaintiffs could move forward with the requested remote depositions. However, he made clear that this was not “a blanket ruling that the Covid-19 pandemic alone justifies the taking of remote depositions in all cases and under all circumstances.” Id. at *8. The court could address fact-specific difficulties as they arose. Id. at *9.
2. In related cases M.A. v. Wyndham Hotels & Resorts, Inc., and H.H. v. G6 Hospitality LLC, 2020 WL 1983069 (S.D. Ohio Apr. 27, 2020), Chief District Judge Algenon Marbley ordered the parties to use defendants’ suggested confidentiality language, rejected plaintiffs’ efforts to require defendants to preserve file types such as backup data and server logs, and allowed plaintiffs to pursue Fed. R. Civ. P. 30(b)(6) depositions to determine the file types that required preservation.
In March 2019, plaintiffs filed complaints against various hotel locations and their parent companies alleging civil violations of the Trafficking Victims Protection Reauthorization Act. Id. at *1. On April 18, 2019, after discovery had commenced, plaintiffs sent preservation letters to the defendants requesting that they place litigation holds on potentially discoverable ESI. On September 10, 2019, the parties moved to enter orders regarding confidentiality and discovery of ESI.
Because the parties were unable to agree on terms regarding the use of confidential and highly confidential documents during depositions and certain excluded file types from the defendants’ obligations to preserve potentially discoverable information, the magistrate judge scheduled a series of telephonic conferences to promote resolution. At an October 7, 2019, conference, the magistrate judge issued an oral ruling denying a request that some of the defendants preserve certain temporary internet data. On October 21, 2019, the plaintiffs filed objections to this ruling, which the district court overruled on March 25, 2020.
On October 18, 2019, the magistrate judge held another telephonic status conference, during which she rejected the plaintiffs’ proposed language regarding “the use of confidential information in depositions and other excluded ESI file types from preservation.” On November 2, 2019, the plaintiffs filed objections to aspects of the magistrate judge’s October 18 order, which the parties briefed.
On the issue of confidentiality, the district judge adopted the magistrate judge’s ruling. Id. *3. At the status conference, the magistrate judge accepted the defendants’ proposal requiring deponents to sign an acknowledgement before being shown documents designated as “confidential.” She similarly accepted the defendants’ proposed language for “highly confidential” information, which limited showing this information to employees, former employees, and contractors to address the defendants’ concerns about disclosing trade secrets to their competitors. According to the plaintiffs, these restrictions would “hinder the Parties’ collective ability to effectively and meaningfully complete depositions.” Specifically, the plaintiffs argued that they wanted to depose other guests of the hotels and the trafficker regarding defendants’ adherence to various hotel procedures, the known risks of sex trafficking in the hospitality industry, and prevention measures the defendants failed to disclose to staff and guests. The plaintiffs further argued that these depositions would “likely require the Plaintiff to show the respective Defendants’ policies and procedures and guest safety protocols to witnesses who are not employed by an entity affiliated with the designating party.”
With respect to the defendants’ proposal to require deponents to sign an acknowledgement, District Judge Marbley noted that he had approved similar language in other cases and that “[o]ther than speculative assertions that such a process would hinder their ability to conduct depositions, Plaintiffs provide no support for their claim that requiring deponents to sign a confidentiality acknowledgement is contrary to law.” On the limits regarding “highly confidential” information, the district judge focused on the magistrate judge’s conclusion that “we do need to protect the intellectual property of the defendants in the course of this multiple-defendant case.” Indeed, Rule 26(c) specifically contemplates protective orders “requiring that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a specified way.” District Judge Marbley therefore overruled the plaintiffs’ objections and adopted the magistrate judge’s ruling on the confidentiality issues. Id. at *4.
On the issue of exclusion of certain file types from preservation requirements, the district judge began by explaining that courts in the Sixth Circuit have relied on the Sedona Principles to inform their analysis of ESI discovery requests. Like Rule 26 itself, the Sedona Principles emphasize that proportionality should guide the scope of ESI discovery. The plaintiffs objected to the magistrate judge’s ruling accepting the defendants’ proposal to exclude certain file types from the defendants’ obligations to preserve ESI including (1) data maintained in electronic backup systems; (2) server, system, and backup logs; and (3) calendar entries and contacts from mobile devices. In response, the defendants contended that the magistrate judge’s order accepting these excluded file types is not contrary to law and follows models from other jurisdictions. The defendants also argued that the plaintiffs waived objections at least to backup data and cell phone data because they agreed to the language during the status conference.
The district judge concluded that the plaintiffs’ objections lacked merit. In particular, the status conference transcript reflected that the plaintiffs were largely in agreement with the magistrate judge’s oral rulings on the ESI discovery issues. For example, the proposed language, with respect to excluded file types, was based on standard language of another court and only excluded backup data that was “substantially duplicative” of data more accessible elsewhere, and this language was approved by both parties at the conference after the word “substantially” was deleted. Id. at *5. Even if there was an issue as to the agreement, the district judge found that the ruling excluding certain file types from preservation was not clearly erroneous or contrary to law, and the approach taken by the magistrate judge was supported by the Sedona Principles.
As a final matter, the plaintiffs requested that District Judge Marbley allow Rule 30(b)(6) depositions to proceed to assist the parties to determine, through factual inquiry, what file types do and do not exist and what file types do and do not need to be preserved as potentially discoverable information. The magistrate judge had disallowed this request, stating it was too early to allow “discovery on discovery.” District Judge Marbley ruled in favor of the plaintiffs’ request to proceed with Rule 30(b)(6) depositions. The district judge noted that he had permitted depositions regarding the adequacy and scope of document production in other cases, that the magistrate judge gave no legal basis for rejecting the plaintiffs’ proposal other than her opinion that it was “too early” to proceed with such depositions, that such depositions did not amount to “discovery on discovery,” that the scope of discovery is “traditionally quite broad,” and that plaintiffs’ contentions regarding the purpose of the proposed Rule 30(b)(6) depositions demonstrated “a need for such discovery in order to prosecute their case.” Accordingly, the district judge sustained the plaintiffs’ objection and reversed the portion of the magistrate judge’s order prohibiting Rule 30(b)(6) depositions to go forward. Id. at *5-*6.
3. In Ozgur v. Daimler Trucks N. Am. LLC, 2020 WL 2522024 (D. Or. May 18, 2020), Judge Michael W. Mosman held after an in camera review that the attorney-client privilege applied to emails exchanged between nonattorney employees containing information to be provided to a lawyer for the purpose of obtaining legal advice.
In this age discrimination litigation, plaintiff had sought and been rejected for a position defendant posted. Defendant had posted the position to comply with Labor Department requirements requiring a showing that there were no qualified U.S. citizens willing and able to perform that position before a company could hire a foreign national sponsored by the company for an H1B1 visa. Defendant had retained counsel to assist it in complying with the Labor Department requirements and immigration laws related to the H1B1 process. Plaintiff sought discovery of emails sent between defendant’s recruiting and hiring manager as well as a few other employees. Defendant claimed that these emails were privileged because they were sent for the purpose of obtaining legal advice, even though no counsel appeared on some of the communications. Id. at *1.
Judge Mosman stated that counsel need not be copied for the attorney-client privilege to shield emails from discovery: “In the corporate realm, the privilege can also protect communications between non-attorney corporate employees when the communications are made for the purposes of obtaining legal advice from an attorney.” The privilege extends to both the counseling and planning role of an attorney “as well as when lawyers represent their clients in litigation.” Id. at *2.
After conducting an in camera review, Judge Mosman found that the emails at issue were sent for the purpose of gathering information to present to defendant’s counsel and were, therefore, privileged. Judge Mosman observed that “the attorney-client privilege squarely covers communications between corporate employees who are discussing the types of things they need to discuss in order [to] present a question or information to a lawyer for the purpose of obtaining legal advice.”
Judge Mosman also held that emails sent prior to counsel’s involvement were privileged. Although these emails were sent before counsel became involved, “the information sought ... in the initial emails [was] the exact information that was required to obtain the legal advice from [counsel]. In other words, the context suggests that [the recruiting manager] initiated the conversation with [the hiring manager] for at least the partial purpose of seeking legal advice from [counsel].”
Accordingly, these various communications were protected from discovery by the attorney-client privilege.
4. In Sung Gon Kang v. Credit Bureau Connection, Inc., 2020 WL 1689708 (E.D. Cal. Apr. 7, 2020), Magistrate Judge Sheila K. Oberto denied a defendant’s request for a protective order in a putative class action, finding that precertification discovery was appropriate, the ESI was relevant, good cause existed for production that outweighed any burden, and the defendant’s privacy concerns could be addressed through a confidentiality protective order.
In October 2018, the plaintiff filed this putative class action against the defendant alleging violations of the Fair Credit Reporting Act and the California Consumer Credit Reporting Agencies Act. Id. at *1. In particular, the plaintiff alleged that the defendant provided business with consumer credit information, which may include whether a consumer is included on the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) list. A consumer included on the OFAC list is ineligible for credit in the United States. According to the plaintiff, the defendant provided to businesses inaccurate information that certain consumers, including plaintiff and the putative class, were included on the OFAC list.
On March 19, 2019, the defendant served answers and objections to the plaintiff’s first set of written discovery requests. Relevant here were two interrogatories and two requests for production of documents that sought the identity of all persons about whom defendant provided an OFAC hit and the identity of the party that was so informed, along with all documents relating to such OFAC hits and the defendant’s policies and procedures regarding the accuracy of defendant’s OFAC hits. Defendant objected to these discovery requests as “unduly burdensome” and seeking information “which is privileged against discovery on the basis of individual privacy rights[.]” Id. at *2.
The magistrate judge held an informal discovery dispute conference on September 20, 2019, after which she found that the information requested was relevant, granted the plaintiff’s request for further responses to the discovery requests, and directed the parties to meet and confer regarding whether the ESI was reasonably accessible and obtainable without undue burden or cost. Pursuant to Fed. R. Civ. P. 72(a), the defendant filed objections to the magistrate judge’s order, which the district judge subsequently overruled. Later, after a second discovery dispute, Magistrate Judge Oberto directed the defendant to produce its chief technology officer for a deposition and deferred ruling on the ESI’s accessibility until after that deposition. Thereafter, on February 10, 2020, defendant filed a motion for a protective order.
At the outset, Magistrate Judge Oberto explained that “[a] party seeking a protective order has the burden to show the requested information should not be produced.” Id. (citing Fed. R. Civ. P. 26(c)(1) and (b)(2)(B)). In the class action context, determinations on whether precertification discovery is permissible are “within the sound discretion of the trial court.” The Ninth Circuit has advised that the “advisable practice” in the context of precertification discovery is for district courts “to afford litigants an opportunity to present evidence as to whether a class action was maintainable. And the necessary antecedent to the presentation of evidence is, in most cases, enough discovery to obtain the material, especially when the information is within the sole possession of the defendant.” Plaintiffs are not required to make a prima facie showing under Rule 23 to obtain precertification discovery. The magistrate judge explained that regarding the identities and contact information of the putative class members, district courts in the Ninth Circuit have often found that “[a]s a general rule, before class certification has taken place, all parties are entitled to equal access to persons who potentially have an interest in or relevant knowledge of the subject of the action, but who are not yet parties.” Id. at *3. As such, “discovery of the putative class members’ identities and contact information is routinely allowed.”
Magistrate Judge Oberto first addressed the defendant’s contention that the requested information was not relevant because defendant is not a credit reporting agency. She rejected the defendant’s argument, noting that the district judge previously denied the defendant’s motion to dismiss on this basis because the allegations in plaintiff’s complaint sufficiently pleaded that the defendant is a credit reporting agency. Id. at *3 n.3. Moreover, she had previously found the requested information relevant to plaintiff’s certification efforts in that it was “reasonably calculated to lead to relevant information regarding class certification, as it [was] necessary for [the plaintiff] to obtain evidence supporting numerosity, commonality, and typicality.” Therefore, Magistrate Judge Oberto concluded, the requested information was discoverable.
Turning to the accessibility question, Magistrate Judge Oberto specified that to obtain a protective order, the defendant “must demonstrate that production of the ESI at issue would be unduly burdensome or costly” and, to satisfy this burden, the defendant “must provide sufficient detail regarding the time, money and procedures required to produce the requested documents.” Id. at *5 (citation, internal quotation marks omitted). Moreover, “[t]he fact that production will be time consuming and expensive is usually not enough to grant a protective order if the requested information is relevant and necessary to the discovery of admissible evidence.”
Ultimately, Magistrate Judge Oberto concluded the defendant had not met its burden. Id. at *5. First, she described the defendant’s representations that the procedures required to produce the requested documents would take four to seven weeks, involve writing two programs, and cost between $28,000 and $49,000 as “conclusory,” “unsupported,” and insufficient to meet its burden. The magistrate judge also noted that even accepting the defendant’s representations as true, the procedures it described were “common in litigation and [were] not unduly burdensome or costly under the circumstances.” Second, in the magistrate judge’s view, the defendant had not “proved that manually reviewing every single transaction w[ould] actually be necessary, and, if it is necessary, that it w[ould] be as arduous as Defendant claim[ed].” Id. at *6 (internal quotation marks omitted). For example, the defendant was able to conduct a “specific search” to find the plaintiff’s file in the database, and the defendant did not demonstrate that similar searches could not be conducted to find the requested files. The defendant also failed to refute the plaintiff’s argument that the defendant could conduct an automated, rather than a manual, review to locate OFAC hit reports. In sum, the magistrate judge found that “although [Defendant] repeatedly thr[ew] out figures exceeding three million dollars to create the appearance that the review process will be costly, it [was] unable to provide any supportable estimate of the number of files that w[ould] need to be reviewed or the cost of reviewing a file — which comprise the bases for the exorbitant cost estimate.” And even if some of the defendant’s representations were supportable, the existence of numerous files maintained in an unorganized manner does not excuse the requirement to produce relevant information and documents.
Magistrate Judge Oberto then considered whether, even assuming the defendant could show that the ESI at issue was not reasonably accessible, the plaintiff had nonetheless shown good cause for production. Id. at *7. In considering whether good cause exists under Rule 26(b)(2)(B), courts consider the following factors: “(1) the specificity of the discovery request; (2) the quantity of information available from other and more easily accessed sources; (3) the failure to produce relevant information that seems likely to have existed, but is no longer available on more easily accessed sources; (4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources; (5) predictions as to the importance and usefulness of further information; (6) the importance of the issues at stake in the litigation; and (7) the parties’ resources.” Id. (citation omitted). In this case, the magistrate judge concluded that the plaintiff’s requests were specific, the information appeared to be in the sole possession of the defendant and not available from any other source, it was highly likely that relevant and responsive information would be found in the defendant’s database, and the information would be useful, even essential, to the plaintiff’s forthcoming certification motion. Accordingly, Magistrate Judge Oberto concluded that the plaintiff had demonstrated good cause for production, regardless of accessibility concerns.
Finally, the Magistrate Judge addressed the defendant’s privacy concerns. Magistrate Judge Oberto overruled these objections because the requested information was highly relevant to the plaintiff’s claims, the plaintiff’s need for the information significantly outweighed any privacy concerns, and, in any case, the defendant’s privacy concerns could be adequately addressed by a confidentiality protective order.