E-Discovery
In Re Outpatient Medical Center Employee Antitrust Litigation
Why This Alert Is Important
This ruling highlights the crucial application of Rule 26's proportionality standard in e-discovery, impacting how corporate counsel and e-discovery professionals approach document requests and search terms.
Overview
In the case of In Re Outpatient Medical Center Employee Antitrust Litigation, the Plaintiffs alleged a conspiracy among ambulatory surgery centers to fix wages, thus violating Section 1 of the Sherman Act. During discovery, the Plaintiffs demanded that Defendants, including Surgical Care Affiliates, LLC, produce documents related to wage-fixing.
Despite previous document production, Plaintiffs identified missing significant documents, notably email threads from United Surgical Partners International, which led them to request additional ESI searches with broadened search terms. The Defendants argued these requests were excessively burdensome and not proportional under Rule 26(b)(1), citing the extensive time and cost required to conduct the new searches. The court's ruling on this matter underscores the balancing act between uncovering relevant evidence and maintaining reasonable discovery demands.
Ruling Summary
- Proportionality Assessment: The court applied Rule 26(b)(1) to assess whether the Plaintiffs' requests were proportional, noting that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case,” with relevance “to be construed broadly.” Since Defendants did not dispute the relevance of the email threads in question, the issue to be resolved was if they had "satisfied its burden of showing that the supplemental searches Plaintiffs seek are improper.”
- Burden of E-discovery: SCA's argument highlighted the significant time and financial burden of complying with the additional search terms, estimating it “would take 462 hours of attorney time to review those documents, at a significant cost to SCA.” Furthermore, they argued that “[a]ny potential benefit of running these new search terms is minimal and far outweighed by the expense and burden of performing these reviews.”
- Significance of Evidence: Despite the burden, the court recognized the potential relevance of the missing email threads. The court found that the suggested search terms were "narrowly tailored," sought relevant information, and were proportional since wage-fixing was relevant and important to resolving the claims made by Plaintiff. Given “the importance of the issues at stake in the action, the amount in controversy, [and] the importance of the discovery in resolving the issues," the Court found that the supplemental discovery was justified; Defendant could “minimize its burden of reviewing newly identified documents by relying on [TAR] and Federal Rule of Evidence 502(d).”
The parties agreed that the search was relevant; the dispute was on burden and proportionality grounds. Defendant said it would take 462 hours of attorney time to review the 23,000 documents at issue. Presumably that was for manual review. The court correctly held that the cost of review could be reduced by use of TAR and a FRE 502(d) non-waiver order. While I held in Hyles v. City of N.Y. that a court can't force a party to use TAR, the Court appropriately considered the cost savings from using TAR in ruling on undue burden and proportionality.
Case Law Tip
E-discovery demands must consider proportionality, balancing the necessity of evidence against the burden of acquiring it. Refresh your understanding of Rule 26 with Exterro's guide, FRCP & E-Discovery: The Layman's Guide.