Peskoff v. Faber, Case No. 04-526 (D.D.C. August 27, 2007)

In an ongoing battle over missing emails between two former venture capital partners, punctuated by a New York Law Journal article suggesting the court’s analysis in an earlier order was incorrect, Magistrate Judge John Facciola has ordered an RFP for forensic analysis of defendant’s computers, accepted the premise of the article, while dismissing its criticism as misapprehension, and ordered counsel for both parties to explain sworn statements that appear inconsistent with the evidence offered at a hearing to explain the search performed on defendant’s computers. The court, obviously frustrated at the defendant’s apparent refusal to conduct the search previously ordered, made worse by his unexplained absence from the hearing, unequivocally held that a party must search accessible data for relevant information absent an objection that the search is not justified by the potential relevance of the data.

In a previous order [discussed here] Judge Facciola had set forth a series of specific searches that the defendant must conduct on his computers to satisfy the court that large amounts of emails that should have been present were in fact nowhere to be found. In making this order, the court had commented on the fact that the cost to produce the data is borne by the producing party, cost shifting is not an issue unless there is first a showing of inaccessibility. This comment was challenged by the Boehning and Toal in their article, Peskoff, Cost-Shifting and Accessible Data (N.Y.L.J. June 26, 2007). The authors argued that the court had set forth a per se rule that a party must search accessible data, irrespective of whether the cost of the search is justified by the relevance of what might be found, based upon the author’s view that the court had rejected defendant’s cost-shifting request. The authors argue, correctly, that the Amended Rules of Civil Procedure make it clear that the discovery of accessible data is still “subject to the [Rule 26](b)(2)(C) limitations that apply to all discovery.”

Judge Facciola did not contest the article’s conclusions relative to the rule of law. He did, however, contest the author’s reading of his opinion. He pointed out that his order clearly stated that there was no disagreement that the emails are likely to contain relevant information. Indeed, as he emphasized in his latest order, the defendant did not raise an objection based upon Rule 26(b)(2)(C). This is an important point. Given the escalating cost of e-discovery, there is likely to be much disagreement over which databases should be searched and who should pay the cost of the search. It is important that the courts understand that the amended Rules permit the court to decide that issue, even where the data is accessible.

The court ordered the parties to work with him to fashion an RFP for a forensic computer technician to perform an examination of all the computers owned by the parties’ company to determine whether emails sent or received by the plaintiff or containing the plaintiff’s name may exist. Once that search is completed, the RFP should inquire as to the cost to convert the found emails into a readable format. Of course, this order contemplates that the forensic technician will actually be searching for data that may be inaccessible, which raises anew the cost shifting analysis. The court seemingly acknowledges this by indicating that the parties will brief the questions of whether any response to the RFP should be accepted and who will pay.

This case presents an object lesson in what happens when the responsive party fails to conduct an adequate search of his computers. The court’s opinions are replete with frustration over the defendant’s refusal to answer basic questions posed by the court about how the search was conducted. That refusal may yet come back to haunt the defendant, if nothing else in the increased costs that are certain to result once a forensic examination gets underway.

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