June’s Notable Cases and Events in E-Discovery

[Editor’s Note: This article was first published June 18, 2024 and EDRM is grateful to Tom Paskowitz and Robert Keeling of our Trusted Partner, Sidley, for permission to republish. The opinions and positions are those of the author.]

This Sidley Update addresses the following recent developments and court decisions involving e-discovery issues:

1. An order from the U.S. District Court for the Northern District of California requiring that the parties’ protocol for the production of electronically stored information (ESI) would not contain an obligation to produce contemporaneous versions of documents hyperlinked in email or chat messages and archived using Google Vault, because there was no commercially available technical solution that could allow the Defendant to restore contemporaneous versions of the hyperlinked documents on a systematic basis
2. A decision from the U.S. District Court for the Northern District of California granting a motion to modify the parties’ ESI protocol to remove the obligation to produce hyperlinked documents, finding that it was “technologically impossible” for the Defendant to comply with the obligation
3. A ruling from the U.S. District Court for the Central District of California requiring the Defendant to re-produce pure native versions of technical project files, where the versions that Defendant had produced after processing them through Relativity were not usable, because the file structure and relationships had been stripped from the files
4. An opinion from the U.S. Court of Appeals for the Fifth Circuit affirming an order requiring the Appellants to bolster their deficient privilege logs that asserted over 30,000 claims of privilege after a filter team with the U.S. Department of Justice (DOJ) reviewed and identified documents for disclosure

1. An order from the U.S. District Court for the Northern District of California ordering that the parties’ protocol for the production of electronically stored information (ESI) would not contain an obligation to produce contemporaneous versions of documents hyperlinked in email or chat messages and archived using Google Vault, because there was no commercially available technical solution that could allow the Defendant to restore contemporaneous versions of the hyperlinked documents on a systematic basis.

In In re: Uber Technologies, Inc., Passenger Sexual Assault Litigation, No. 23-md-3084, 2024 WL 1772832 (N.D. Cal. Apr. 23, 2024), U.S. Magistrate Judge Lisa J. Cisneros analyzed the production of ESI containing links to “evolving” hyperlinked documents.

The dispute, arising out of a long-running multidistrict litigation (MDL) concerning allegations of sexual assault by drivers connected to Uber, Inc., arose in the construction of the MDL’s governing ESI protocol. The specific dispute at issue concerned the production of data stored on Google Vault servers. Id. at *1. Uber used Google Workspace in the conduct of its business, which provided a suite of cloud-based web applications, including Gmail, Google Chat, Google Drive, and Google Vault. Uber used Google Vault “as an information governance and e-discovery tool for its Google Workspace data” and to store ESI for production purposes.

Discovery revealed that the Google Vault storage system did not automatically capture the contemporaneous version of documents hyperlinked within a Gmail or Google Chat message. In particular, a Gmail or Google Chat message could contain a hyperlink to a document that was “active” or “evolving,” meaning that the hyperlinked document was “centrally located so multiple people can access and edit it.” If a Google Drive document archived using Google Vault was edited after the email with the hyperlink to the document was sent, then a Google Vault export would not reflect the version of the hyperlinked document that existed at the time of the email but rather the version at the time of the export. Uber used “a manual process … to identify a historic version of a hyperlinked Google Drive document contemporaneous with the email communication.”

Magistrate Judge Cisneros surveyed the technological issues presented by hyperlinked Google Drive documents, noting that while existing tools were capable of collecting contemporaneous versions of hyperlinked Google Drive documents in active environments, the tools were not able to do the same for hyperlinked documents archived with Google Vault. Id. at *2. This made clear that “cloud computing and document retention through Google Drive and Google Vault introduce a host of challenges to producing hyperlinked documents from Google Drive and other sources.”

But Magistrate Judge Cisneros explained that collection and production of contemporaneous versions of hyperlinked documents can be “important evidence bearing on claims and defenses” and can “support an inference regarding who knew what, when.” In addition, “[a]n email message with a hyperlinked document may reflect a logical single communication of information at a specific point in time, even if the hyperlinked document is later edited.”

As a result of these considerations, the court had previously ordered Uber to conduct an investigation into “the process of collecting the contemporaneous version of the document linked to a Gmail or other communication within Uber’s systems” and ordered the parties to meet and confer regarding potential solutions and submit any disputes to the court. Id. at *3. The parties subsequently did so.

Uber’s position was that it had conducted an “exhaustive investigation” and found that “no technical, scalable solution is available to automate the process of collecting contemporaneous versions of hyperlinked documents.” Plaintiffs countered by submitting a proposed methodology titled a “proof of concept” to produce contemporaneous versions of documents with Google Drive hyperlinks, which would require Uber to create a new computer program.

Magistrate Judge Cisneros was “not persuaded that Plaintiffs’ Proposed Methodology is a reasonably available option.” She noted that Plaintiffs’ proposal, presented by Plaintiffs’ consultant, was based on a post in Stack Overflow, a “well-known and widely used forum for developers,” which was submitted anonymously, and that the anonymous poster “admitted that it did not work.” Magistrate Judge Cisneros also credited statements in Uber’s declarations that even “a functioning version of the proposed [computer program] would not address the issues presented here, in part because the [computer program] was designed for a single document using the Google Drive” application programming interface, which “would not work with Google Vault.”

These “kinks,” although potentially resolvable, meant that the court would “not order Uber to expend potentially significant time and resources to develop such a program in order to produce discovery in this MDL, as the program’s effectiveness is not assured.” Id. at *4. Magistrate Judge Cisneros was “satisfied by Uber’s showing” that it “thoroughly investigated the issue” and determined that “no technological solution is currently readily available to automate the process.” Despite this, Magistrate Judge Cisneros did not fully credit the burden that Uber identified with the production process because “Uber has chosen Google Vault as its storage method” and because “the potential limitations and pitfalls with respect to production of hyperlinked documents from Google Vault have been widely known for many years, yet Uber has elected to transfer and retain its electronic data using this service.”

Thus, Magistrate Judge Cisneros ordered that the parties’ ESI protocol state that Uber is generally “not required to produce the contemporaneous document version at the time the email or message was sent, as this is not possible through an automated process with existing technology.” However, she ordered Uber to locate and produce through manual review “up to 200 hyperlinks” identified by Plaintiffs for which Plaintiffs sought “the contemporaneous referenced document even though the email or message has been archived with Google Vault.” Finally, Magistrate Judge Cisneros ordered that Plaintiffs could seek additional documents and Uber could “seek relief from the production of certain versions or other obligations under the ESI protocol based on undue burden or costs, overbreadth or disproportionality.” Id. at *5.

2. A decision from the U.S. District Court for the Northern District of California granting a motion to modify the parties’ ESI protocol to remove the obligation to produce hyperlinked documents, finding that it was “technologically impossible” for the Defendant to comply with the obligation.

In In re StubHub Refund Litigation, No. 20-md-02951-HSG (TSH), 2024 WL 2305604 (N.D. Cal. May 20, 2024), U.S. Magistrate Judge Thomas S. Hixson addressed whether to relieve a party from an obligation in a stipulated order regarding hyperlinked documents with which the party was unable to comply.

In this putative nationwide class action concerning StubHub’s refund policy for events affected by the COVID-19 pandemic, the parties entered into an order governing the production of ESI in the case (ESI Order) providing that emails should be produced with parent and child files and with the parent-child relationship preserved. Id. at *1. Under the ESI Order, “child files” were defined to include “hyperlinks to internal or nonpublic documents,” and “family groups” were defined to include “documents referenced by document stubs or via links to internal document sources.” The ESI Order further provided that it “may be modified … by the Court for good cause shown.”

During discovery, StubHub concluded that it could not systematically produce hyperlinked documents, “despite having spent hundreds of hours trying to find linked documents and despite having retained an outside e-discovery vendor to assist with this effort.” As a result, StubHub filed a motion to modify the ESI Order to remove the requirements to produce hyperlinked documents. Plaintiffs opposed the motion.

In opposition to StubHub’s motion to modify the ESI Order, Plaintiffs submitted an expert declaration from Paul McVoy. McVoy asserted that StubHub’s e-discovery vendor (Epiq) could have located “more” hyperlinked documents if it had searched for hyperlinked documents in StubHub’s native email files. StubHub disagreed with this contention, arguing that many of the hyperlinks in StubHub’s emails no longer worked. Magistrate Judge Hixson noted that McVoy did not dispute StubHub’s argument and concluded that McVoy’s declaration did not provide a basis for denying StubHub’s motion to modify the ESI Order because “all McVoy’s declaration actually says is that it might have been possible for Epiq to find a hyperlinked document more than 17% of the time.” Magistrate Judge Hixson concluded that even if Epiq could have found hyperlinked documents at twice that rate, “the Court is not going to keep a production requirement in the ESI Order if two-thirds of the time it is impossible to comply with.”

Plaintiffs also submitted a declaration from Douglas Forrest asserting that “hyperlinks are widely used and should be thought about as part of discovery.” Id. at *2. Forrest’s declaration further asserted that “[a] proper, technically sound approach to collecting and processing of documents with linked attachments is possible and will enable the review and production of emails and documents with linked attachments as family groups so that their relevance may be identified regardless of whether relevant words, phrases or concepts appear in the parent document or in a linked attachment or both.” Magistrate Judge Hixson found these statements to be conclusory and not probative of whether hyperlinked documents are attachments at all. Magistrate Judge Hixson also found that while Forrest described different methods to search for hyperlinked documents, his declaration did “not actually identify technology that would do this.”

Magistrate Judge Hixson ultimately concluded that Forrest’s declaration “falls short of establishing that the hyperlink requirement in the ESI Order is broadly possible to comply with.” Magistrate Judge Hixson noted that the parties were seemingly in agreement that there was “no commercially available or custom program in existence that could collect all of StubHub’s hyperlinked documents,” and he found this “tips strongly in StubHub’s favor.” He disagreed with Forrest’s implied contention that something was “technologically possible even if no commercially available software can perform the function, and the litigant would need to develop or commission new software.”

Magistrate Judge Hixson found that StubHub had demonstrated good cause to remove the requirement that hyperlinked documents should be produced as if they were attachments to emails, because it “made a persuasive evidentiary showing that despite having spent hundreds of hours trying to find linked documents and despite having retained an outside e-discovery vendor to assist with this effort, the hyperlink requirement is technologically impossible to fulfill most of the time.” Accordingly, Magistrate Judge Hixson modified the parties’ ESI Order to remove “hyperlinks to internal or nonpublic documents” from the categories describing “child files” to emails. Id. at *3.

3. A ruling from the U.S. District Court for the Central District of California requiring the Defendant to re-produce pure native versions of technical project files, where the versions that Defendant had produced after processing them through Relativity were not usable, because the file structure and relationships had been stripped from the files.

In Energy Mgmt. Collab., LLC v. Darwin Tech LLC, et al., 22-cv-00952 JWH (ADS), 2024 WL 2335629 (C.D. Cal. Apr. 25, 2024), U.S. Magistrate Judge Autumn D. Spaeth addressed the standards applicable to production of technical project files that require specialized software programs to view.

In this action for breach of contract, fraud, conversion, and unjust enrichment, Plaintiff alleged that Defendant breached the parties’ contract under which Defendant was to design and develop software and hardware for an emergency light-testing system. Id. at *1. Plaintiff claimed that Defendant failed to provide Plaintiff with the firmware source code, circuit-board design files, and other deliverables in connection with Defendant’s work under the contract. Defendant claimed that it was not obligated to provide Plaintiff with these materials because they were Defendant’s own intellectual property.

During discovery, Plaintiff served Defendant with requests for, among other things, documents relating to the work Defendant performed for Plaintiff under the parties’ agreement. Id. at *2. Plaintiff’s requests instructed Defendant to produce documents either “as they are kept in the ordinary course of business or organized and labeled to correspond with a particular request.”

In response to Plaintiff’s document requests, Defendant produced over 20,000 technical production files with extensions such as “.s37” or “.hex” files that generally could only be opened using specific technical software programs and not with standard e-discovery programs like Relativity. Out of these technical files, Plaintiff’s discovery vendor identified 17,857 that could not be opened through Relativity. In addition, the folder structure for these technical files was modified when Defendant processed them for production through Relativity, such that the technical files could be viewed as they were kept in the ordinary course of Defendant’s business only by opening the native versions of the files in the original technical programs used to create them.

Plaintiff filed a motion to compel Defendant to produce the “pure” native technical files, arguing that Defendant failed to produce the files “in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms” under Rule 34(b)(2)(E)(ii). Id. at *4. Plaintiff argued that the individual technical files were part of groups of files called “projects” that need to be opened simultaneously using certain software programs and that processing them through Relativity resulted in loss of the organizational structure.

Defendant opposed the motion, arguing that it produced the technical files as it kept them in the ordinary course of business and consistent with the federal rules. Defendant also argued that it provided the metadata that permitted Plaintiff to re-create the folder structure of the production and identified the software needed to view those file types.

Magistrate Judge Spaeth began her analysis with a survey of Rule 26, which permits discovery of “any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case,” considering various factors. Id. at *3 (quoting Rule 26(b)(1)). She noted that the party seeking to compel discovery has the burden of establishing that its request satisfies the relevancy requirements of Rule 26(b)(1), and the party opposing discovery then has the burden of showing that the discovery should be prohibited and the burden of clarifying, explaining, or supporting its objections. She further noted that “[t]he district court enjoys broad discretion when resolving discovery disputes, which should be exercised by determining the relevance of discovery requests, assessing oppressiveness, and weighing these factors in deciding whether discovery should be compelled.”

Applying these rules, Magistrate Judge Spaeth concluded that the technical files were unquestionably relevant and that Rule 34(b)(2)(E)(ii) therefore required Defendant to produce the files in a form in which they were ordinarily maintained or in a reasonably usable form (because Plaintiff’s requests did not specify a form for producing ESI). Id. at *4.

Although Defendant claimed to have already produced the files in native format, Magistrate Judge Spaeth noted that Plaintiff was seeking the files in “pure” native format without processing through Relativity, in order to maintain their hierarchical structure. She explained that Defendant did not contest that technical files are typically produced in pure native format or that the organizational structure of the technical files was stripped or changed when Defendant processed and produced them through Relativity.

Finally, Magistrate Judge Spaeth noted that Defendant failed to address Plaintiff’s assertion that sending the technical files in pure native form would be “quick and easy,” explaining that Defendant failed to articulate any undue burden in doing so. She therefore concluded that producing the technical files in pure native form “would be of little burden” and ordered Defendant to produce the pure native technical files.

4. An opinion from the U.S. Court of Appeals for the Fifth Circuit affirming an order requiring the Appellants to bolster their deficient privilege logs that asserted over 30,000 claims of privilege after a filter team with the DOJ reviewed and identified documents for disclosure.

In United States v. Fluitt, 99 F.4th 753 (5th Cir. Apr. 24, 2024), a panel of the U.S. Court of Appeals for the Fifth Circuit, in an opinion authored by U.S. Circuit Judge James L. Dennis, addressed an appeal from a district court order granting a motion to compel, based on the determination that a nonparty’s privilege logs failed to adequately substantiate its assertions of attorney work product protection and common interest privilege.

In this action regarding allegations of fraud and kickbacks related to genetic testing services provided to Medicare beneficiaries, the government executed search warrants at laboratories allegedly operated by nonparty Appellants as part of a nationwide investigation into Defendant’s company. Id. at 758. The government copied several terabytes of data from the nonparty Appellants, some of which the government determined were material to Defendant’s defense.

The government established a “filter team” to review the materials seized in its investigation and identify any that might be privileged. The filter team’s review was governed by a protocol order, which established a multistep process for notifying a nonparty that it might have a claim of privilege and then adjudicating that claim. According to the protocol order, the filter team was “required to segregate any material potentially subject to a claim of privilege.” If the potential privilege claim belonged to someone other than Defendant, the filter team was mandated to notify the nonparty claimant and seek court authorization before disclosing the potentially privileged material to either Defendant or the prosecution team. Id. at 758-59.

The filter team notified Appellants that it planned to disclose certain materials seized from them to Defendant. In response, Appellants provided privilege logs to the filter team, asserting over 30,000 claims of privilege in total. Id. at 759. Defendant and the filter team both agreed that the privilege logs were facially deficient as “they made only threadbare assertions of privilege, e.g., ‘attorney-client communication’ or ‘attorney work product,’ without any accompanying explanation.”

Defendant subsequently filed a motion to compel against the Appellants, arguing that they had failed to carry their burden of establishing privilege and that their deficient logs should be interpreted as a waiver. The government provided notice to the district court that Appellants’ privilege logs were deficient, but that it would not seek court authorization to disclose the potentially privileged materials.

U.S. Magistrate Judge Kayla Dye McClusky entered an order directing the government to disclose the potentially privileged material to Defendant. She held that the Appellants lacked standing as nonparties to challenge Defendant’s motion to compel as part of a criminal proceeding, and even if Appellants had standing, their assertions of privilege would fail because their privilege logs were deficient under federal common law. Id. at 760.

On appeal, the Fifth Circuit first found that the Appellants had standing to appeal the determination of the district court as part of an equitable exception for certain nonparty appeals. Id. at 761-762. However, in addressing the merits of Appellants’ joint appeal of the district court order, Judge Dennis agreed with the district court’s finding that Appellants’ privilege logs did “not provide a proper description for the documents to explain why each should be protected from disclosure.” Id. at 763.

Judge Dennis noted that the privilege logs listed only the names of the parties to the documents, the date, the file name, and an assertion of privilege, but did not disclose the roles of the parties to the communications or describe the nature of the communications over which attorney-client privilege was asserted. Id. at 764. Additionally, as to the nonparty Appellants’ assertions of attorney work product privilege and common interest privilege, the privilege logs were silent as to whether the materials were prepared in anticipation of litigation or whether the communications were between co-defendants and their counsel. Thus, the Fifth Circuit panel affirmed Magistrate Judge McClusky’s ruling that Appellants failed to establish their claims of privilege. Id. at 765.

In a dubitante opinion, Circuit Judge Andrew S. Oldham scrutinized the foundation of the DOJ’s filter team protocols, stating that they had “no obvious foundation in the Federal Rules.” He emphasized that the filter team “arrogated to itself the power to review the seized documents for privilege,” and as a result, Appellants were forced to assert privilege after their documents had been seized and subjected to various protocol orders without notice to Appellants or an opportunity to object. Judge Oldham had serious concerns about the majority’s suggestion that this case should be evaluated under the same rules that govern traditional discovery disputes and traditional privilege assertions, noting that “[t]here is nothing traditional about filter teams.” Id. at 766.