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Complying with Discovery Orders? Then Get-And Pay-For an E-Discovery
Vendor, Court Says
In case anyone didn't get the memo, please be aware that
just because you don't have the data, it doesn't mean you don't control it and
can't produce it.
In yet another example of magistrate judges taking the lead
in the use of e-discovery vendors and search protocols, U.S. Magistrate Judge
David T. Bristow of the U.S. District Court for the Central District of
California-frustrated by a defendant's "discovery failures" and "wholly
inadequate" production-directed it to pay for an e-discovery vendor and to work
out the search methodology with the plaintiffs (Carrillo v. Schneider Logistics Inc., No. CV 11-8557-CAS [DTBx], 2012 U.S. Dist. LEXIS 146903 [C.D. Cal. Oct.
In this wage-and-hour case brought by workers against
warehouse operator Schneider Logistics Inc.- a provider of services to retail
giant Wal-Mart and others-a dispute broke out over the production of thousands
of documents and multimedia.
The workers claim that Schneider failed to produce documents
relating to its business with Wal-Mart and even failed to conduct a proper
search. The parties resolved their dispute during a meet and confer and proposed
an order. The court directed Schneider to produce documents relating to
Wal-Mart, among others, and to produce a custodian of records most
knowledgeable about Schneider's document retention policies.
Schneider produced 23,000 more documents, many of which, the
court notes, Schneider had claimed did not exist. The two custodians
Schneider provided could not answer basic questions about the company's
retention policies. To make matters worse, one of Schneider's employees
testified that she continued to delete emails and reports right up to the time
of her deposition, and was not directed to do otherwise. The plaintiffs
objected to gaps in Schneider's production, noting missing emails and
The court agreed with the workers' argument that Schneider's
production had been "wholly inadequate," saying the company's "continued
discovery failures" fall into three categories: 1) it did not conduct a
"reasonably diligent search" for responsive documents; 2) it improperly
withheld responsive documents; 3) it did not take adequate steps to preserve
Noting the time and cost incurred by the workers due to
Schneider's discovery failures, Magistrate Judge Bristow directed that an
outside vendor be contracted to collect emails and other ESI. The court said it
"does not have any confidence that ordering Schneider to conduct a good faith
search for electronically stored information will be productive." He said
Schneider "has repeatedly certified that it produced all responsive documents,
only for plaintiffs to spend substantial time and resources demonstrating that
those representations were false."
Schneider objected, saying it did not possess the Wal-Mart
network servers where the responsive ESI was stored, therefore the ESI was not
in Schneider's "care custody and control." The court rejected this argument.
The phrase "possession, custody, or control" is "disjunctive" and is only one
of the requirements that needs to be met-"actual possession is not required."
As long as Schneider had the legal right to produce documents from another
source upon demand, that qualified as "control," the court held.
"[T]he fact that Schneider does not physically possess the
server that stores the Wal-Mart emails is immaterial. The electronically stored
information is within Schneider's control by virtue of the fact that the
Schneider employees use the Wal-Mart email accounts as their primary work
email." The court found it "inconceivable" that Schneider could not request the
relevant ESI, and gave Schneider seven days to retain an outside vendor that
would collect all the ESI from Schneider's and Wal-Mart's or other third-party
with servers relevant to the case. The vendor also would, the court directed,
prepare a log of all documents and Schneider would create a privilege log.
"[N]o documents identified by the vendor may be withheld on relevance grounds,"
the court added.
If the parties could not agree on a vendor, the search
protocol or the computers to be searched, the court would resolve their
disagreements. Schneider, however, would pay for the vendor. Just as with the
emails, the court said Schneider must produce surveillance video because it has
the right to request it from the warehouse's security company.
With that, the court said sanctions were warranted against
Schneider as well as payment of the plaintiffs' attorney fees.
Of course, don't even think about holding back potentially