Weighing the Burden, Court Excuses Plaintiff from Reviewing Millions of Pages from Unallocated Space

I-Med Pharma, Inc. v. Biomatrix, Inc., No. 03-3677 (DRD), 2011 WL 6140658 (D.N.J. Dec. 9, 2011)

“This case highlights the dangers of carelessness and inattention in e-discovery.”  In this case, the court affirmed the order of the Magistrate Judge which excused plaintiff from the obligation of reviewing and producing millions of pages of documents recovered from unallocated space files in light of the extreme burden and cost of such an undertaking.

Pursuant to a stipulation between the parties, defendants hired an expert to conduct a keyword search of plaintiff’s computer network, servers, and related storage devices.  Per the court’s order, plaintiff was to produce the results of the examination.  There were more than 50 search terms, and many were also run in French.  Moreover, “the search was not limited to targeted document custodians or relevant time periods. Indeed, the search was not even limited to active files.”  The search was instead run “across all data on the computer system” including unallocated space.  Unsurprisingly, the results were voluminous, returning 64,382,929 hits in unallocated space alone which represented approximately 95 million pages of data.

Following a telephonic hearing, the Magistrate Judge entered an order permitting plaintiff to withhold data found in the unallocated space and allowing defendants to seek reimbursement for the costs incurred in extracting and searching that data.  Among other things, the order was based on findings that the burden of the review would outweigh any potential benefit and that the likelihood of finding relevant, admissible evidence was “minimal.”

On appeal, the court upheld the order of the Magistrate Judge. In short, the court found the benefit of the review was unlikely to justify the burden and expense that would be required to complete it.  In addition to the expenditure of resources that would be required by the plaintiff to accomplish the review, the court considered the expenditure of resources by the defendants in obtaining the data, but determined it “pale[d] in comparison to the millions of dollars” that would be spent by the plaintiff to adequately review the material.  The court also considered the “occurrence of intervening events,” namely the unanticipated volume of hits returned, noting the consideration only weighed “weakly” in favor of plaintiff where plaintiff “should have exercised more diligence before stipulating to such broad search terms.”  The court went on to advise that when evaluating “whether a set of search terms are reasonable, a party should consider a variety of factors, including:”

(1) the scope of documents searched and whether the search is restricted to specific computers, file systems, or document custodians; (2) any date restrictions imposed on the search; (3) whether the search terms contain proper names, uncommon abbreviations, or other terms unlikely to occur in irrelevant documents; (4) whether operators such as “and”, “not”, or “near” are used to restrict the universe of possible results; (5) whether the number of results obtained could be practically reviewed given the economics of the case and the amount of money at issue.

Addressing the issue of modifying an agreement of the parties, the court counseled that “[w]hile courts should not casually discard agreements between the parties, nor should they abrogate their duty to balance both burden and the likelihood of uncovering relevant evidence merely because a party made an improvident agreement.”

The court concluded: “While Plaintiff should have known better than to agree to the search terms used here, the interests of justice and basic fairness are little served by forcing Plaintiff to undertake an enormously expensive privilege review of material that is unlikely to contain non-duplicative evidence.”

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