Ameriwood Ind., Inc. v. Liberman, 2006 WL 3825291 (E.D. Mo. Dec. 27, 2006)
In this trade secrets case, the plaintiff alleged that defendants – plaintiff’s former employees and their recently formed company – improperly used plaintiff’s computers and confidential information regarding its business, and defendants’ positions of trust and confidence while in plaintiff’s employ to sabotage plaintiff’s business relationships and divert plaintiff’s business to themselves. In discovery, plaintiff sought production of: “All computer or portable or detachable hard drives, or mirror images thereof, used by Liberman, Fridley, or Kleist since May 2005, including but not limited to any computer or portable or detachable hard drives in their homes.” Defendants objected that the request was overbroad, vague, and burdensome and called for irrelevant information. Plaintiff filed a motion to compel addressing this and other discovery requests.
Evaluating plaintiff’s motion, the court discussed the recent amendments to the Federal Rules of Civil Procedure and noted that Rule 26(b)(2) sets forth a burden-shifting analysis. The court stated that courts should use this burden-shifting analysis in deciding whether to compel production of electronically stored information (“ESI”), and quoted a passage from the new rule:
On motion to compel discovery …, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.
The court stated that plaintiff had argued that its former employees forwarded plaintiff’s customer information and other trade secrets from plaintiff’s computers to defendants’ personal email accounts, and that the documents may have been further disseminated to others and/or deleted to hide defendants’ actions. Defendants argued that the requested information had already been disclosed and that they had not refused to search through their ESI for such communications.
The court sided with plaintiff, noting that some ESI might not be obtained during a typical search. It cited the advisory committee note, and explained:
Computer programs may retain draft language, editorial comments, and other deleted matter (sometimes referred to as "embedded data" or "embedded edits") in an electronic file but not make them apparent to the reader. Information describing the history, tracking, or management of an electronic file (sometimes called “metadata”) is usually not apparent to the reader viewing a hard copy or a screen image.
Further, the court cited an email filed by plaintiff, which had been sent by one of the former employees to Samsung, a customer of plaintiff, while the employee was still in plaintiff’s employ. Plaintiff asserted, and defendants did not dispute, that defendants had not produced it. The court concluded:
In light of the Samsung email, the Court finds that other deleted or active versions of emails may yet exist on defendants’ computers. Additionally, other data may provide answers to plaintiff’s other pertinent inquiries in the instant action, such as: what happened to the electronic files diverted from plaintiff to defendants’ personal email accounts; where were the files sent; did defendants store, access or share the files on any portable media; when were the files last accessed; were the files altered; was any email downloaded or copied onto a machine; and did defendants make any effort to delete electronic files and/or "scrub” the computers at issue.
Further, based on the affidavits submitted by defendants describing the significant costs of copying the hard drives, recovering deleted information, and translating the recovered data into searchable and reviewable formats, the court was persuaded that the defendants had established that the information was not reasonably accessible because of undue burden and cost.
The court next evaluated whether there was good cause to allow plaintiff to obtain mirror images of defendants’ hard drives. The court concluded that, considering the close relationship between plaintiff’s claims and defendants’ computer equipment, and having cause to question whether defendants had produced all responsive documents, it would allow an independent expert to obtain and search a mirror image of defendants’ computer equipment.
The court set out an elaborate three-step imaging, recovery, and disclosure process, which was intended to provide the requesting party sufficient access to information that was not reasonably accessible, and to ensure the process did not place an undue burden on the responding party. Further, since plaintiff did not object to incurring the costs for the requested procedures and defendants did not perform the procedures in the regular course of their business, the court ordered that plaintiff would incur the costs involved in creating the mirror images, recovering the information, and translating the information into searchable formats.
The court directed the parties to meet and confer to determine the contents of a confidentiality agreement and an appropriate time for the expert to access defendants’ computer equipment.