Court Orders Forensic Examination for Inadequate Preservation & Collection, Confirms “Basic Rule” that Custodians must be Consulted for Input on Search Terms

Procaps S.A. v. Patheon Inc., No. 12-24356-CIV, 2014 WL 800468 (S.D. Fla. Feb. 28, 2014); No. 12-24356-CIV, 2014 WL 1047748 (S.D. Fla. Mar. 18, 2014)

In this pair of opinions, the court addressed the obligations of client and counsel with regard to the preservation and collection of electronically stored information and the obligation of counsel to obtain input from relevant custodians when crafting search terms.  In the first opinion, in light of deficient efforts to preserve and collect potentially relevant information, the court ordered an extensive forensic examination of Plaintiff’s data repositories by a neutral third party and crafted a protocol for the production of information identified by the search terms applied.  In the second opinion, the court confirmed the “basic rule” that “outside counsel ‘must carefully craft the appropriate keywords, with input from the ESI’s custodians as to the words and abbreviations they use’” and ordered Counsel to “obtain search word input from all the ESI custodians” and to pay a portion of the attorney’s fees awarded, with his firm to pay the rest.  The court was specifically critical of Plaintiff’s counsel’s communication (or lack thereof) with opposing counsel regarding how search terms were generated and whether Plaintiff’s custodians had been consulted, which caused Defendant to file its motion to compel.

In the first opinion, Defendant sought to compel forensic examination of Plaintiff’s electronic media based on the inadequacies of Plaintiff’s preservation and collection efforts, including: Plaintiff’s failure to issue a litigation hold; Counsel’s failure to travel to Colombia (where Procaps is based) to meet with IT personnel or others to discuss how discoverable ESI would be located; Counsel’s  failure to retain a consultant to assist with preservation and the search for relevant information; and Counsel’s failure to assist custodians in the collection of potentially relevant information, including failing to provide them with the relevant document requests or search terms to be utilized in their efforts.

As a result of these failures, the court arrived at the “indisputable conclusion that the ESI and document searches were inadequate—a scenario which strongly suggests that some (and perhaps even a significant amount of) responsive discovery from Procaps [was not] located . . . .”  Accordingly, the motion for forensic analysis was granted, pursuant to a protocol drafted by the court, which required the retention of a neutral, third-party forensic examiner.  Attorney’s fees were also awarded, to be split between Plaintiff and its counsel.

In the second opinion, the court addressed Defendant’s motion to compel Plaintiff to propose adequate search terms in furtherance of the forensic analysis discussed above.  Broadly stated, Defendant was concerned that Plaintiff’s counsel had not consulted with his client’s ESI custodians when generating search terms and was further concerned by Counsel’s failure to communicate regarding that issue, including failing to respond to specific inquiries.  Defendant initially became concerned when Plaintiff proposed only eight search terms, all in English, despite the fact that Plaintiff is headquartered in Colombia and that its employees speak Spanish.  Those concerns were not allayed by Plaintiff’s counsels’ assurances that they would confer with their client as to an appropriate translation of any agreed upon search terms.

When repeated emails to Plaintiff’s counsel failed to alleviate Defendant’s concerns, a motion to compel was filed.  At the hearing, Plaintiff’s counsel, for the first time, “agreed that the law requires him and his law firm to receive input from his client’s ESI custodians in order to determine appropriate search words” and further represented that such input was in fact elicited.  After the hearing, however, it was revealed that such efforts were undertaken only after the motion to compel was filed.  The court also noted some unresolved questions as to inconsistencies in some of Plaintiff’s counsel’s representations to the court.

Despite acknowledging that most of the disputed issues were moot, the court nonetheless granted the motion “and require[d] Procaps to have its counsel obtain search word input from all the ESI custodians.”  The court also found that Defendant was entitled to attorney’s fees and specifically criticized Plaintiff’s counsel’s unwillingness to meaningfully communicate, resulting in the impression that Counsel had not, and would not, obtain client input on suggested search terms.  This impression, in turn, “caused” Defendant to file its motion to compel.  Ultimately, the court awarded $3750 in fees and required that Plaintiff’s lead attorney be personally responsible for payment of $1000, with the remainder to be paid by his firm.

Notably, in both opinions, the court urged (but did not require) Plaintiff’s counsel’s law firm to investigate whether other attorneys (besides lead counsel) had caused or helped to cause the discovery problems and whether those attorneys should pay for all or some of the fees which were required to be paid by their firm.

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