Court Allows Bulk Confidential Designation of Documents to Avoid Manual Review Costs and Burden

FA ND Chev, LLC v. Kupper

D. N.D. 1/4/23 8:00

Why This Case Is Important

As ESI volumes continue to grow exponentially, it’s imperative that legal teams employ technology to aid in the discovery process to alleviate the burden and cost associated with manual review.

Overview

In this noncompete case, Plaintiffs alleged that the Defendant “almost immediately” violated non-competition and non-soliciation clauses after selling several car dealerships to the Plaintiffs.

Plaintiffs utilized specific search terms provided by Defendant, which resulted in a high volume of “non-substantive ‘hits.’” Plaintiffs attempted to use technology-assisted review to eliminate the non-substantive hits but were unable to do so. Plaintiffs approached Defendant with this information and offered three potential solutions to complete discovery of the ESI:

1) Defendant could share the cost of the manual review of the files,

2) The search could be further narrowed according to parameters Plaintiffs proposed, or

3) Plaintiffs could produce all the documents designated “Highly Confidential — Attorneys’ Eyes Only” pursuant to the applicable protective order to “eliminate the need for a thorough review before production.”

The Defendant rejected these approaches and instead filed a motion for sanctions against the Plaintiffs. In response, the Plaintiffs moved for a protective order to prevent disclosure of the documents and proposed same three options to the court.

Ruling

• Plaintiffs’ Solution Granted. The court denied the Defendant’s motions for sanctions, noting that the Plaintiffs were trying to comply. The court also granted the Plaintiffs’ motion for a protective order and accepted a variation of the third solution, which ordered all the documents at issue be designated “confidential” to comply with the existing protective order.
• Reasonableness of Confidentiality Request. However, the court did reject the Plaintiffs’ suggested “Highly Confidential — Attorneys’ Eyes Only” designation as “an extraordinary measure” that was not necessary “to protect any potentially sensitive information and prevent excessive costs.”
• Avoiding Manual Review Burden. The court was sympathetic to the Plaintiff’s concerns that manually reviewing the documents would result in a significant additional expense. By accepting the Plaintiffs’ solution, the Plaintiffs were able to disclose the information without added expense, protect the information for use only in this litigation, and allow [Defendant]’s counsel to share the information with him for purposes of his case.

Legal Analysis

By, David Cohen, Esq., Chair - E-Discovery Group, Reed Smith LLP

This case provides a great example of a court thoughtfully executing its role of regulating discovery to protect a party from undue burden and expense. Here plaintiff helped itself through its good faith compliance efforts and proactive suggestion of cost-saving solutions; conversely, the court did not seem to appreciate defendants’ failure to negotiate with plaintiffs on the proposed solutions and instead filing a motion for sanctions without first engaging in further meet and confer efforts.