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Sent to you by pakurilecz via Google Reader: Third Party Not Required
to Produce Hard Drives to Plaintiff Competitor; Court Limits Subpoena
and Allows Third Party to Conduct its Own Search via Electronic
Discovery Law by [log in to unmask] (K&L Gates) on 7/2/08
Daimler Truck N. Am. LLC v. Younessi, 2008 WL 2519845 (W.D. Wash. June
20, 2008)

In this case, Daimler sued its former employee in Oregon district court
for breach of his duty of loyalty, his confidentiality contract, and
his common law duty not to convert confidential and proprietary
information, based upon the employee’s departure and subsequent
employment by a competitor, Cascadia. As part of that suit, Daimler
served Cascadia with the third-party discovery requests at issue. The
parties resolved most of their disagreements, but were unable to
resolve Daimler's request to search Cascadia's computers for
communications between Younessi and Jim Hebe (a former CEO of Daimler
who was subsequently employed by Cascadia) and between Hebe and other
Daimler employees. Cascadia moved to quash the subpoena and for a
protective order because Daimler's subpoena was both unduly burdensome
and would require disclosing confidential trade secrets to a competitor.

Trade Secrets

Cascadia claimed that production of its hard drives would necessarily
reveal its trade secrets. The court recognized Cascadia's interest in
keeping its trade secrets out of the public eye, and particularly away
from its competitors. However, the court determined that the requested
communications were highly relevant to the case. Since Daimler had
shown sufficient good cause for the discovery, the court denied the
motion to quash. However, the court also found that some form of
protective order was appropriate. It discussed the manner in which the
production should occur, and concluded that Cascadia should be allowed
to conduct the search for responsive documents itself:

The Federal Rules provide for discovery of electronically stored
information either in its original state, i.e. actual production and
copying of hard drives, or in a reasonably usable form, i.e. print
outs. Fed. R. Civ. P. 34(a)(1)(A). While this is consistent with the
general scope of the Rules allowing broad discovery, it is inconsistent
with the adversarial aspect of trial practice and discovery because it
contemplates granting opposing counsel, and opposing parties, direct
access to information beyond the scope of discovery. That is, the Rule
allows for a subpoena of an entire hard drive for the limited purpose
of finding a few documents which may be stored therein. See Fed. R.
Civ. P. 34(a)(1)(A) (requesting party may obtain information stored in
any medium); Fed. R. Civ. P. 34(b)(1)(C) (requesting party "may specify
the form or forms in which electronically stored information is to be
produced"). This would be analogous to allowing the search of a party's
entire collection of file drawers for the purpose of finding a single
class of documents.

In situations involving information which is appropriately kept
private, the Court may fashion restrictions on the form and method of
disclosure. See Playboy Enterprises, Inc. v. Welles, 60 F. Supp. 2d
1050 (S.D. Cal.1999). In the interest of protecting private information
such as trade secrets or privileged documents, the Court can order the
responding party's attorneys to search for all documents consistent
with the subpoena and to produce only those which are relevant,
responsive, and do not disclose trade secrets. See, e.g., id. The Court
finds in Playboy an appropriate model for this case. There, the
plaintiff sought to copy the defendant's hard drives after it learned
she may have deleted emails which could potentially prove the knowledge
element of plaintiff's infringement claims. Id. at 1051. Defendant
responded with concerns that privileged communications would also be
recoverable under such a procedure. Id. at 1054. The court ordered the
copying, but directed defense counsel to search the copy for responsive
materials instead of turning over the copied drives themselves. Id. at
1055.

Here, Daimler also requests to copy Cascadia's hard drives, a process
which might reveal not just privileged, but also trade secret
information. Having Cascadia search its own computers is an appropriate
compromise here because of the unique status of Daimler as a direct
competitor and of Cascadia as a nonparty to the underlying suit. The
elaborate copying which took place in Playboy is not necessary because
there are no allegations of documents being destroyed and Cascadia has
shown that it is responsive and willing to cooperate with Daimler's
reasonable requests.

The Rules and case law support this solution. See In re Ford Motor Co.,
345 F.3d 1315 (11th Cir. 2003); Comment to 1970 Amendment of Fed R.
Civ. P. 34(a) ("[W]hen the data can as a practical matter be made
usable by the discovering party only through respondent's devices,
respondent may be required to use his devices to translate the data
into usable form. In many instances, this means that respondent will
have to supply a print-out of computer data."); Comment to 1993
Amendment to Fed. R. Civ. P. 34(a) (the rule "is not meant to create a
routine right of direct access to a party's electronic information
system"). Fortunately, Cascadia has demonstrated it is willing to
cooperate with Daimler in seeking discovery and the Court has
confidence that Cascadia's counsel will adequately and appropriately
screen all discovered materials and remove only those documents which
are beyond the scope of this order.

Undue Burden

The court next considered Cascadia’s arguments that the discovery
requests were overly broad because of Cascadia's wide-ranging
collection of locations and computers. It stated that Hebe was involved
in a wide range of activities while heading Cascadia and had access to
a variety of computers. Cascadia further argued that the broad scope of
Daimler's request further complicated production.

The court found some merit in Cascadia’s position:

When the Federal Rules were amended, the drafters were well aware that
the scope of electronic discovery could be both broad and burdensome.
GAP Report to the 2006 Amendment to Fed. R. Civ. P.
26(b)(2). "Information systems are designed to provide ready access to
information used in regular and ongoing activities," however, and this
makes large scale production of documents stored in this way much less
burdensome than it otherwise would be. Id. The very nature of
electronically stored information makes it easier to search, and "[i]n
many circumstances the requesting party should obtain and evaluate the
information from such sources before insisting that the responding
party search and produce information contained on sources that are not
reasonably accessible." Id.

The Court is aware that the parties have conferred to some extent to
discuss this request and that Cascadia has voluntarily complied with
the subpoena to some extent. That being said, neither party has briefed
with the specificity required how burdensome further production might
be or what likelihood there is that the resulting documents might be
relevant.

The requesting party, Daimler, has the burden of showing a need for
further discovery outweighs the burden placed on Cascadia in producing
it, and not all of Daimler's requested documents meet that burden. See
GAP Report to the 2006 Amendment to Fed. R. Civ. P. 26(b)(2) ("The
requesting party has the burden of showing that its need for the
discovery outweighs the burdens and costs of locating, retrieving, and
producing the information."). Under the showing Daimler has made thus
far, it would unduly burden Cascadia to produce information regarding
contacts between Hebe and Daimler employees when no effective way has
been presented to distinguish such contacts from the wide range of
contacts any businessman undertakes. There is no evidence before this
Court that Daimler has performed a search of its own records and
documents for such contacts. If it has not, it would be unduly
burdensome and potentially cumulative to require Cascadia to perform
such a search in its records when Daimler, by failure to do such a
search on its own, has implied that the costs of such a search outweigh
the potential benefits. If Daimler has performed such a search and
revealed no evidence to support the need for such a broad ranging
search then the likelihood of Cascadia's similar search being
sufficiently beneficial to outweigh the costs is low. Without such a
showing, Daimler has not met its burden of showing "good cause."

Accordingly, the court ordered Cascadia to perform its own search to
determine what documents could be produced without violating its trade
secret and privilege concerns. It directed Cascadia to identify all
potentially responsive sources that it did not search and all
potentially responsive documents that it did not produce, providing
enough detail to enable the requesting party to evaluate the burdens
and costs of providing the discovery and the likelihood of finding
responsive information on the identified sources. The court limited
production to documents regarding communications on hard drives,
Blackberries, lap tops and calendars used by Hebe, between Hebe and
Younessi or between Hebe and another third party regarding Younessi
during the 14 months laid out in the subpoena. Finally, the court
quashed the subpoena to the extent it required Cascadia to produce
documents regarding contacts between Hebe and Daimler or Daimler
employees.

A copy of the full decision is available here.



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