Defense Counsel’s Unilateral Modification of Parties’ Stipulated Privilege Screening Process Results in Additional Expert Costs and Over-Exclusion of Email

Henry v. Quicken Loans, Inc., 2008 WL 474127 (E.D. Mich. Feb. 15, 2008)

This Fair Labor Standards Act overtime collective action was brought on behalf of approximately 422 plaintiffs who worked as "loan consultants" for defendants.  After defense counsel objected to plaintiffs’ requests to produce emails of the several hundred individual plaintiffs and their 32 team leader managers, plaintiffs agreed to limit the relevant time period to the months of April, May and June of 2004.  They proposed that, after they reviewed all the emails and narrowed them down to those they thought were relevant, they would give defendants an opportunity to review this reduced set of emails and raise any attorney client privilege or other objections they might have and retrieve items that should be protected.  Fearing that this "claw back" provision could be deemed a waiver of the privilege in some states, defense counsel was relunctant either to agree to the provision or to produce the relevant back up tapes because of the exceedingly expensive process of defense counsel screening them for privilege before production.

Plaintiffs filed a motion to compel to resolve the dispute and a hearing was held.  The court established a protocol that was intended to balance the concerns and needs of both sides at what was hoped to be manageable costs.  Under the protocol, plaintiffs’ computer forensic expert, Mark Lanterman, was to retrieve from defendants’ computer back up tapes all of the emails for the months of April, May and June of 2004.  Based on search terms and methods to be worked out by the attorneys for both sides, Mr. Lanterman, "at Plaintiffs’ reasonable expense for his services and the electronic copying expenses," was to filter this database for the team leaders and hundreds of plaintiffs.  Mr. Lanterman was to act under the "direction and control" of defense counsel in retrieving the requested emails from the backup tapes.  The searching and filtering of defendants’ database by Mr. Lanterman would be limited to the terms agreed upon by the parties.  Further, Mr. Lanterman was required to sign a declaration agreeing to the agency relationship with and under the direction and control of defense counsel, to be bound by the court’s orders and to maintain confidentiality.  At the hearing, while plaintiffs’ counsel agreed to pay the reasonable expenses of Mr. Lanterman, he expressed a desire to limit the costs to no more than what was needed and not to be giving defense counsel a "carte blanche" to run up the costs of the screening procedure at plaintiffs’ expense.

Pursuant to the court’s order, the parties met and conferred about the search terms and exclusionary terms to be used in the screening process.  The parties agreed to plaintiffs’ search terms and defendants’ screening terms; the latter included the first and last names of 14 legal personnel and certain "privileged" terms.

The parties’ agreed-upon search and screening terms were sent to Mr. Lanterman in a letter from defense counsel.  The letter required Mr. Lanterman to work under the "direction and control" of defense counsel and "not turn to Plaintiffs’ counsel for confirmation, additional instruction, or the final go-ahead to proceed with particular steps in this process."  It set out the "specific parameters" for the screening process.

The letter did not address screening the emails using the first and last names of the 14 legal personnel as separate screening terms to omit an email, nor did the letter suggest that attachments to emails, and emails within emails ("nested" emails), would be screened, regardless of the author or recipient.  The court observed that, had the issue of using the first and last names of legal personnel as separate screening terms been raised and analyzed at the hearing or later, it would have led to obvious problems of over-exclusion by:  (1) excluding all the emails of plaintiffs who had the same first name as any of the 14 individuals, (2) excluding all emails of team leaders who shared the same first name as any of the 14 individuals, and (3) excluding any other emails where the common first names of any of the 14 individuals were mentioned or were an email correspondent.

Plaintiffs paid Mr. Lanterman’s $14,937.50 for his copying the backup tapes and restoring the data to a usable format.  Mr. Lanterman then did his initial screening.  The managers’ emails were turned over to plaintiffs’ counsel on September 14, 2007, and the screened plaintiffs’ emails were turned over several weeks later, on October 3, 2007.  Plaintiffs thereafter received Mr. Lanterman’s invoice for the screening and filtering work he performed, which totaled $79,965.

Plaintiffs immediately provided defendants a copy of this invoice and informed them of their intent to depose Mr. Lanterman regarding his bill and the protocol he followed.  Defendants moved for a protective order to block the deposition, which was denied.

At his deposition, Mr. Lanterman testified that he began his work on the emails on or about July 18, 2007, starting with the managers’ emails and initially following the procedure described in the letter.  Consistent with the protocol, he treated the first and last names of defendants’ legal personnel as compound exclusionary terms; that is, both the first and last names must have appeared in the email for the email to be screened.  The remaining emails were produced to defendants on August 17, 2007 ("Submittal 1").  Submittal 1 cost $26,972.62.

Unsatisfied with Submittal 1, defense counsel instructed Mr. Lanterman to perform another round of screening, this time treating the first and last names of legal personnel as separate search terms ("Submittal 2").  Before proceeding with the separated first and last names, Mr. Lanterman warned defense counsel that running first names as separate terms would remove a significant amount of e-mails from the population and "literally wipe out some people’s [e]-mails.”  Defense counsel nonetheless instructed Mr. Lanterman to proceed with the modified exclusionary search.  Apparently all subsequent searches also used this procedure that Mr. Lanterman had warned against.  As a result of these modified exclusionary terms, all emails containing either the first or the last name of defendants’ legal personnel were screened out. This apparently excluded the emails of several managers and the email boxes of several plaintiffs. This resulted in an under-inclusive set of emails.  Defense counsel then took the additional step of instructing Mr. Lanterman to screen all attachments for the modified exclusionary terms.  Submittal 2 cost $11,751.37, and further reduced the set of remaining emails.

Defendants’ counsel remained unsatisfied with the set of emails that resulted from Submittal 2, and instructed Mr. Lanterman to perform a third round of screening ("Submittal 3").  Submittal 3 was identical to the second round, except it also screened nested emails for the modified exclusionary terms.  This apparently reduced the set of e-mails further, and cost $16, 507.94.

After finishing with the team leader manager email screening, counsel for defendants instructed Mr. Lanterman to screen the plaintiffs’ emails using the same protocol as used in Submittal 3.  As noted above this eliminated all emails of numerous plaintiffs, and cost an additional $12,535.22.

Apparently realizing that they had gone too far in excluding emails, defense counsel next instructed Mr. Lanterman to perform another round of screening ("Submittal 5"), this time without excluding the four shared first names, so they could repopulate the mailboxes of those plaintiffs whose email had been emptied in Submittal 4.  This procedure still screened out any emails containing the first names of the other ten attorneys on the list.  This fifth round of screening cost $11,171.91.

Thus after the first screening run, defense counsel unilaterally modified the search protocol on the use of attorney first and last names separately in a manner different from the July 10, 2007, letter as that letter was understood by Mr. Lanterman and by plaintiffs’ counsel.  Defense counsel had no communication with plaintiffs’ counsel informing them of this change, or seeking their comment or concurrence during the four remaining email search and filtering processes.  Further, Mr. Lanterman was prohibited from contacting plaintiffs’ counsel concerning these changes.  Thus, plaintiffs’ counsel had no opportunity to object or bring the dispute to the court’s attention for resolution if the parties could not have reached agreement.

Plaintiffs thus filed a motion for relief from the computer forensics expert’s invoice, and asked the court to order defendants to pay for the unauthorized screenings.  Plaintiffs’ counsel contended that without their knowledge, defendants chose to go beyond the scope of the agreed upon protocol with numerous modified searches, resulting in a bill that bore no relation to the parties’ agreements or the court’s order.  Accordingly, they argued that plaintiffs should not be required to pay for any costs stemming from the unauthorized submittals noted in Mr. Lanterman’s invoice, and that defendants should pay those costs.

The court agreed with plaintiffs and observed:  “While there is no suggestion that defense counsel was acting unethically in serving his client’s interest, defense counsel’s actions exceeded the scope of the "direction and control" powers this Court vested in him in his unilateral and unauthorized modification of the "specific parameters" of the July 10, 2007, letter.”  The court stated further:

If there was a belief before or after the first screening run that there was some ambiguity in the meaning of screening for the names of identified company legal personnel, where those names were listed as a usual combined first and last name, defense counsel should have aired that with Plaintiffs’ counsel.  If agreement could not be reached, Plaintiffs’ or Defendants’ counsel could have raised the matter with the Court.  Had the issue of screening separately for first names of the 14 attorneys been brought to the Court’s attention, the initial interpretation and recommendation of Mr. Lanterman of using both names together would have been adopted, or if separation was to occur, the screening would be done using the last name only of the attorneys.  Instead of this, defense counsel unilaterally and secretly resolved any ambiguity, if such exists, in his client’s favor and against the advise of the forensic computer screening expert.  It appears that as a result of this all e-mails screened subsequent to the initial screening were corrupted as being under-inclusive.  Thus, it is determined that it is not a reasonable expense to impose the costs of subsequent screening runs on Plaintiffs where the corruption was caused by the acts and omissions of defense counsel, and could have been avoided.

(Footnote omitted.)

The court noted that it appeared that Mr. Lanterman’s Submittal 1 was the only screening conducted pursuant to the parties’ agreed upon protocol and consistent with the court’s order.  The court ordered defendants to pay the costs of the disputed submittals, and modified its earlier order to provide that any further contact with Mr. Lanterman by either attorney should be done with notice to opposing counsel.  Finally, the court ordered defendants to show cause why they should not surrender to plaintiffs’ counsel all emails gathered during the initial submittal.

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