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Rule 34: Grewal Ventures an Opinion
Posted by craigball in E-Discovery
U.S. Magistrate Judge Paul S. Grewal (pronounced "grey-wahl") cuts an impressive figure in the e-discovery community. In less than four years on the bench, Judge Grewal has written several opinions addressing instances of discovery incompetence and misconduct in epic battles between the tech titans tramping through his court in San Jose, California. His latest is an order on a Motion to Compel and for Sanctions in a patent dispute, Venture Corp., LTD v. James P. Barrett. It's a fight between a multi-billion dollar Singapore tech concern and an inventor. In praising Judge Grewal, I feel obliged to point out that he enjoyed an unfair advantage over the litigants in that His Honor read the Federal Rules of Civil Procedure, particularly Rule 34, which Judge Grewal termed "about as basic to any civil case as it gets." No fair reading the rules, Judge!
The dispute centers around two issues that confound lawyers: Forms of production and organization of production. They aren't the same thing, and the Rules don't address them in the same way. I wrote a long post on this in May when U.S. District Judge James Browning of New Mexico issued an opinion in The Anderson Living Trust v. WPX Energy Production, LLC.
Judge Grewal credits the parties for conferring about Barrett's production requests; but, what transpired in that conference was much in dispute. Barrett claims that getting the production organized and labelled to conform to the requests was his paramount concern. Venture claims Barrett agreed to accept an olio of PDFs and native files without organization or labelling. Barrett counters he only agreed to look at whatever was supplied but reserved the right to demand organization and labelling. Neither side memorialized any meeting of the minds–another way neither emerges as a poster child for e-discovery competence.
Venture "dumps" 41,000 pages on Barrett. It isn't organized by custodian or business unit and doesn't mirror the hierarchy of the data as kept in the usual course of business. It certainly isn't labeled or organized to conform to the requests. Barrett sits on the misbegotten production until shortly before the close of discovery and belatedly moves the Court to order the data be organized.
Judge Grewal splits this ugly baby by noting that subsection (i) of Rule 34(b)(2)(E) makes plain that, if documents are not organized and labeled to correspond to the categories in the request, they must be produced as they are kept in the usual course of business. The judge doesn't dwell on the form of the production, and makes no distinction between ESI and documents. That's smart, because subsection (i) is about more than just the form of production. It's about the organization (i.e., structure) of production. The two (and only two) options afforded producing parties are simple: either organize the production to reflect the organization of the information in the usual course of business OR organize and label the production to reflect the organization and structure of the information in terms of its responsiveness to the requests. Think of it as, "your (business) way or my (discovery) way, but not some other way."
Rule 34(b)(1)(C) vests the right to specify the form or forms in which electronically stored information is to be produced in the requesting party, subject to objection and notice of use of an alternate form per 34(b)(2)(D). Judge Grewal observes that, if the parties agreed on anything, they agreed only on the form or forms of production, not its organization. But, he doesn't conclude there was agreement on anything.
Rule 34(b)(2)(D) and subsection (ii) of Rule 34(b)(2)(E) both address situations where the requesting party hasn't specified the form or forms of production. In that event, two things must happen: the producing party must state the form or forms it intends to use for production AND these must be either the form or forms in which it is ordinarily maintained or a reasonably usable form or forms.
Subsection (ii) of Rule 34(b)(2)(E) only kicks in when a requesting party fails to specify a form or forms for producing electronically stored information. Else, subsection (ii) is a nullity.
So, to recap, subsection (i) of Rule 34(b)(2)(E) tells you how production must be organized, and subsection (ii) tells you the permissible form or forms of production when there has been no form specified by the requesting party. Each subsection is framed in the disjunctive; that is, each supplies two, and only two, alternatives.
Judge Grewal adds meat to the bone when it comes to exercising these alternatives. He notes that the producing party who seeks to forego labeling and organizing to correspond to the requests must do more than simply aver that the production is organized as per the usual course of business. The producing party must offer proof of same.
How much must the production hew to the usual course? The Order states, "[a]t a minimum, the court would expect to see the documents and ESI kept by the name of the employee from whom the documents were obtained or at least which…entity had produced the documents."
Quoting Pass & Seymour, Inc. v. Hubbell Inc., 255 F.R.D. 331, 334 (N.D.N.Y. 2008), the Court adds that "[at] a minimum . . . mean[s] that the disclosing party should provide information about each document which ideally would include, in some fashion, the identity of the custodian or person from whom the documents were obtained, an indication of whether they are retained in hard copy or digital format, assurance that the documents have been produced in the order in which they are maintained, and a general description of the filing system from which they were recovered."
Judge Grewal closes his analysis by stating, "[t]here is no serious question that a grab-bag of PDF and native files is neither how the Ventures ordinarily maintained the documents and ESI nor is 'in a reasonably usable form.'" This gave me pause because, at least insofar as native and near-native files, I can't imagine a more usable form for e-mail and productivity documents.
But, the remedy imposed makes clear that the deficiencies as to form went more to the use of PDFs and the overall absence of metadata, not native production. The court ruled that, [t]he Ventures shall do three things: (1) either organize and label each document it has produced or it shall provide custodial and other organizational information along the lines outlined [in the order] and (2) produce load files for its production containing searchable text and metadata." (Emphasis in original–and as to what the third thing might be, it didn't make it into the order).
Respecting Barrett's requests for fees and costs, he was sent home wanting and spanked for his unwillingness to accept the Rule's mandates and for sitting on his rights until the eleventh hour.
The lessons? Deal with both form and organization of production. Work things out, and put agreements in writing. If you're not giving the other side what they asked for, tell them well before production so they can act to prevent a costly data dump. If you don't like what you're going to get (or what you got), don't wait long to object. Speak up! This idea that every producing party is entitled to finish a flawed production before the requesting party can object is nonsense. Even if every dog gets a bite, who says you've got to wait for rabies to set in?
1 thought on "Rule 34: Grewal Ventures an Opinion"
Tim Headley said:
Great posting! Thanks!!
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