Wednesday, January 13, 2010

Court Finds Claims of Burden and Expense "Exaggerated," Declines to Find Emails "Not Reasonably Accessible

I stumbled across this opinion on KLA Gates website, thought it was generally very interesting and in turn figured I would share it here. Upon further analysis I realized that my interest stemmed more from the fact that outside vendors were willing to complete a job estimated to cost between 88k and 800k for less than 26K than from the fact that the court ruled that ADT was in fact obligated to produce the emails.

Sometimes it pays to have another set of eyes looking at things from the outside.

Starbucks Corp. v. ADT Security Servs., Inc., 2009 WL 4730798 (W.D. Wash. Apr. 30, 2009)

In this recently released opinion written earlier this year, the defendant, ADT Security Services, Inc. (“ADT”), sought to avoid its obligation to produce archived emails by arguing the emails were not “reasonably accessible because of undue burden or cost,” as that term is used in Fed. R. Civ. P. 26(b)(2)(B). In support of this position, ADT’s Manager of Information Technology, John Mitchell, provided various estimates regarding the potential cost of time and money to restore the requested email. In response, the plaintiff, Starbucks Corporation (“Starbucks”), provided its own estimates of the potential cost which were significantly lower than those proffered by ADT. Finding Mitchell had “at every turn, provided exaggerated reasons and exaggerated expenses as to why ADT allegedly cannot and should not be ordered to comply with its discovery obligations,” the court declined to find the information at issue “not reasonably accessible.” Moreover, the court indicated that even had the information been deemed not reasonably accessible, the court would have found that good cause existed to order the production. Accordingly, Starbuck’s motion to compel was granted.

Starbucks sought to compel the production of archived emails from the years 2003 through 2006 regarding “five specifically identified current and former employees.” ADT objected, arguing that the emails were not reasonably accessible because of the “cumbersome” nature of the system on which they were stored and the resulting burden of retrieval. Specifically, ADT represented that the emails were stored in a format that could only be read by proprietary equipment, that restoring the emails could take up to four years (if all 5 custodians had 25,000 relevant emails to restore), and that such retrieval would result in significant disruptions to ADT’s business. Regarding the cost of the production, including processing, etc., Mitchell initially estimated a cost of $88,000. Just six months later, Mitchell amended the estimate to a potential cost of $834,285. Notably, despite the allegedly significant problems with the Plasmon System (the system on which the archived emails were stored), ADT continued to utilize it in the operation of its business and had not migrated the archived emails to its newer, more easily accessed system.

As discovery continued, two alternatives for production arose. First, the court became aware that ADT could produce “email stubs,” containing limited information such as the “To,” “From,” and “Subject Matter” data and about 80 characters of email. These stubs could be retrieved “relatively quickly” (subject to a clawback provision) and Starbucks could then specify which emails it wanted to see. Second, the court learned that “more than half” of the DVDs in the Plasmon system were not, in fact, in the Plasmon-format, and thus could be read by a vendor. However, ADT argued that the disks still “could not be read by all equipment,” that the processing would still take an extended period of time, that additional equipment would need to be purchased, and that approximately 2 terabytes of storage would need to be stored. Anticipating the need for outside assistance, ADT provided an estimate of “several hundred thousand dollars” for a vendor "just to make copies and thousands more to purchase a hardware system to house the data", but failed to include the vendor’s proposal with its submission to the court.

In response, Starbucks provided its own estimates (procured from two outside vendors) which indicated the likely cost to be between $17,000 and $26,000. These estimates were attached to the declarations provided to the court.

To read the rest of the article and the full opionion feel free to click here

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