Opinion ID: 895162
Heading Depth: 2
Heading Rank: 3

Heading: The Trial Court Abused Its Discretion in Allowing Access to Weekley's Hard Drives on this Record

Text: Weekley next contends that, even if a motion to compel may be used to access another party's hard drives, the trial court abused its discretion by permitting the experts to rummage through the Employees' computers in search of deleted emails that may no longer exist. Such an invasive procedure is only permissible, Weekley argues, when the requesting party has produced some evidence of good cause or bad faith, together with some evidence that the information sought exists and is retrievable. According to Weekley, HFG failed to make such a demonstration. HFG responds that inconsistencies and discrepancies in a party's production justify granting access to a party's hard drives. Additionally, HFG claims it was not required to show the feasibility of retrieval because it is well-settled that deleted emails can, at least in some cases, be retrieved from computer hard drives. Once again, we turn to Rule 196.4 for guidance. When a specific request for electronic information has been lodged, Rule 196.4 requires the responding party to either produce responsive electronic information that is reasonably available to the responding party in its ordinary course of business, or object on grounds that the information cannot through reasonable efforts be retrieved or produced in the form requested. Once the responding party raises a Rule 196.4 objection, either party may request a hearing at which the responding party must present evidence to support the objection. TEX.R. CIV. P. 193.4(a). To determine whether requested information is reasonably available in the ordinary course of business, the trial court may order discovery, such as requiring the responding party to sample or inspect the sources potentially containing information identified as not reasonably available. See TEX.R. CIV. P. 193.4(a); cf. TEX.R. CIV. P. 196.7 & cmts.1999; accord FED.R.CIV.P. 26(b)(2)(b) notes of the advisory committee to the 2006 amendments. The trial court may also allow deposition of witnesses knowledgeable about the responding party's information systems. See TEX.R. CIV. P. 195.1. Because parties' electronic systems, electronic storage, and retrieval capabilities will vary in each case, trial courts should assess the reasonable availability of information on a case-by-case basis. Should the responding party fail to meet its burden, the trial court may order production subject to the discovery limitations imposed by Rule 192.4. If the responding party meets its burden by demonstrating that retrieval and production of the requested information would be overly burdensome, the trial court may nevertheless order targeted production upon a showing by the requesting party that the benefits of ordering production outweigh the costs. TEX.R. CIV. P. 192.4. Like assessing the reasonable availability of information, determining the scope of production may require some focused discovery, which may include sampling of the sources, to learn more about what burdens and costs are involved in accessing the information, what the information consists of, and how valuable it is for the litigation in light of information that can be obtained by exhausting other opportunities for discovery. FED. R.CIV.P. 26(b)(2)(b) notes of the advisory committee to the 2006 amendments; see also TEX.R. CIV. P. 196.7. To the extent possible, courts should be mindful of protecting sensitive information and should choose the least intrusive means of retrieval. And when the court orders production of not-reasonably-available information, the court must also order that the requesting party pay the reasonable expenses of any extraordinary steps required to retrieve and produce the information. TEX.R. CIV. P. 196.4. Because HFG did not initially specifically request deleted emails as Rule 196.4 requires, Weekley had no obligation to object in its response that deleted emails were not reasonably available . . . in its ordinary course of business. Id. However, because HFG's motion to compel clarified the scope of its original request, Weekley was required in its response to HFG's motion and at the subsequent hearing to make the Rule 196.4 showing. Our limited record does not reflect whether Weekley met its burden. [7] However, the trial court's ultimate decision to order imaging of the Employees' hard drives and forensic examination implies a finding that the deleted emails were not reasonably available and required extraordinary steps for their retrieval and production. We must decide, then, whether the measures the trial court crafted for retrieving the Employees' deleted emails were proper under the circumstances presented. Although Rule 196.4 does not provide express guidelines for the manner or means by which electronic information that is not reasonably available in the ordinary course of business may be ordered produced, the federal rules and courts applying them offer some guidance.
Beginning in 2000, the federal Committee on Rules of Practice and Procedure began intensive work on the subject of computer-based discovery because of growing confusion in the area. See Comm. on Rules of Practice and Procedure, Summary of the Report of the Judicial Conference 22 (2005), available at http://www. uscourts.gov/rules/Reports/ST09-2005.pdf. The Committee's purpose was to determine whether changes could be effected to reduce the costs of discovery, to increase its efficiency, to increase uniformity of practice, and to encourage the judiciary to participate more actively in case management when appropriate. Id. at 24. In 2005, the Committee proposed amendments to the Federal Rules to better accommodate electronic discovery. Id. at 22. The amendments were supported by The American Bar Association Section on Litigation, the Federal Bar Council, the New York State Bar Association Commercial and Federal Litigation Section, and the Department of Justice, and most of the amendments were unanimously approved by the Committee. Id. at 25. The amendments were ultimately approved by the Judicial Conference and the United States Supreme Court, and have been in effect since December 1, 2006. Although we have not amended our rules to mirror the federal language, our rules as written are not inconsistent with the federal rules or the case law interpreting them. Under Federal Rule of Civil Procedure 26(b)(2)(B), a trial court may order production of information that is not reasonably available only if the requesting party shows good cause. In determining whether the requesting party has demonstrated good cause, the court must consider, among other factors, whether the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues. FED.R.CIV.P. 26(b)(2)(C)(iii). The Texas rules do not expressly require a good cause showing before production of not-reasonably-available electronic information may be ordered, but they do require a trial court to limit discovery when the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues. TEX.R. CIV. P. 192.4(b). Thus, both the federal rule and ours require trial courts to weigh the benefits of production against the burdens imposed when the requested information is not reasonably available in the ordinary course of business. We see no difference in the considerations that would apply when weighing the benefits against the burdens of electronic-information production; therefore we look to the federal rules for guidance. Providing access to information by ordering examination of a party's electronic storage device is particularly intrusive and should be generally discouraged, just as permitting open access to a party's file cabinets for general perusal would be. The comments to the federal rules make clear that, while direct access [to a party's electronic storage device] might be justified in some circumstances, the rules are not meant to create a routine right of direct access. FED.R.CIV.P. 34 notes of the advisory committee to the 2006 amendments. When allowing such access, the comments to Rule 34 warn courts to guard against undue intrusiveness. Id.
Since the 2006 amendments to the federal rules were promulgated, federal case law has established some basic principles regarding direct access to a party's electronic storage device. As a threshold matter, the requesting party must show that the responding party has somehow defaulted in its obligation to search its records and produce the requested data. See The Scotts Co. v. Liberty Mut. Ins. Co., Civil Action 2:06-CV-899, 2007 WL 1723509, at , 2007 U.S. Dist. LEXIS 43005, at  (S.D. Ohio June 12, 2007); Diepenhorst v. City of Battle Creek, Case No. 1:05-CV-734, 2006 WL 1851243, at , 2006 U.S. Dist. LEXIS 48551, at  (W.D. Mich. June 30, 2006) (citing In re Ford Motor Co., 345 F.3d 1315 (11th Cir. 2003)); Powers v. Thomas M. Cooley Law Sch., Case No. 5:05-CV-117, 2006 WL 2711512, at , 2006 U.S. Dist. LEXIS 67706, at  (W.D.Mich. Sept. 21, 2006). The requesting party should also show that the responding party's production has been inadequate and that a search of the opponent's [electronic storage device] could recover deleted relevant materials. Diepenhorst, 2006 WL 1851243, at , 2006 U.S. Dist. LEXIS 48551, at  (citing Simon Prop. Group LP v. mySimon, Inc., 194 F.R.D. 639, 640-641 (S.D.Ind.2000)). Courts have been reluctant to rely on mere skepticism or bare allegations that the responding party has failed to comply with its discovery duties. The Scotts Co., 2007 WL 1723509, at , 2007 U.S. Dist. LEXIS 43005, at ; Powers, 2006 WL 2711512, at , 2006 U.S. Dist. LEXIS 67706, at ; [8] cf. Balfour Beatty Rail, Inc. v. Vaccarello, Case No. 3:06-CV-551-J-20MCR, 2007 WL 169628, at , 2007 U.S. Dist. LEXIS 3581, at  (M.D.Fl. Jan. 18, 2007) (denying access to responding party's hard drives where requesting party failed to demonstrate responding party's non-compliance with its discovery duties); see also McCurdy Group v. Am. Biomedical Group, Inc., 9 Fed.Appx. 822, 831 (10th Cir.2001) (noting that skepticism alone is not sufficient to permit direct access to an opponent's electronic storage device). Even if the requesting party makes this threshold showing, courts should not permit the requesting party itself to access the opponent's storage device; rather, only a qualified expert should be afforded such access, Diepenhorst, 2006 WL 1851243, at , 2006 U.S. Dist. LEXIS 48851, at ; accord In re Honza, 242 S.W.3d 578, 583 n. 8 (Tex.App.-Waco 2008, pet. denied) (noting that the expert's qualifications are of critical importance when access to another party's computer hard drives or similar data storage is sought), and only when there is some indication that retrieval of the data sought is feasible. See Calyon v. Mizuho Sec. USA Inc., 07 Civ. 02241(RO)(DF), 2007 WL 1468889, at , 2007 U.S. Dist. LEXIS 36961, at -18 (S.D.N.Y. May 18, 2007); Antioch Co. v. Scrapbook Borders, Inc., 210 F.R.D. 645, 652 (D.Minn.2002) (citing Playboy Enters. v. Welles, 60 F.Supp.2d 1050, 1055 (S.D.Cal.1999)). Due to the broad array of electronic information storage methodologies, the requesting party must become knowledgeable about the characteristics of the storage devices sought to be searched in order to demonstrate the feasibility of electronic retrieval in a particular case. And consistent with standard prohibitions against fishing expeditions, see, e.g., In re CSX Corp., 124 S.W.3d 149, 153 (Tex. 2003); Texaco, Inc. v. Sanderson, 898 S.W.2d 813, 815 (Tex.1995), a court may not give the expert carte blanche authorization to sort through the responding party's electronic storage device. See Thielen v. Buongiorno USA, Inc., Case No. 1:06-CV-16, 2007 WL 465680, at , 2007 U.S. Dist. LEXIS 8998, at -8 (W.D.Mich. Feb. 8, 2007). Instead, courts are advised to impose reasonable limits on production. See In re CSX Corp., 124 S.W.3d at 152; The Scotts Co., 2007 WL 1723509, at , 2007 U.S. Dist. LEXIS 43005, at ; see also Ford, 345 F.3d at 1317 (noting the importance of establishing protocols for the forensic search of a party's hard drives, such as designating search terms to restrict the search). Courts must also address privilege, privacy, and confidentiality concerns. Calyon, 2007 WL 1468889, at , 2007 U.S. Dist. LEXIS 36961, at ; Frees, Inc. v. McMillian, Civil Action No. 05-1979, 2007 WL 184889, at , 2007 U.S. Dist. LEXIS 4343,  (W.D.La. Jan. 22, 2007). Finally, federal courts have been more likely to order direct access to a responding party's electronic storage devices when there is some direct relationship between the electronic storage device and the claim itself. See Cenveo Corp. v. Slater, No. 06-CV-2632, 2007 WL 442387, at , 2007 U.S. Dist. LEXIS 8281, at  (E.D.Penn. Feb. 2, 2007); Frees, 2007 WL 184889, at , 2007 U.S. Dist. LEXIS 4343, at ; Ameriwood Indus., Inc. v. Liberman, No. 4:06CV524-DJS, 2006 WL 3825291, at , 2006 U.S. Dist. LEXIS 93380, at  (E.D.Mo. Dec. 27, 2006); Balboa Threadworks, Inc. v. Stucky, Case No. 05-1157-JTM-DWB, 2006 WL 763668, at , 2006 U.S. Dist. LEXIS 29265,  (D.Kan. Mar.24, 2006). For example, in Ameriwood Industries, Ameriwood sued several former employees claiming they improperly used Ameriwood's computers, confidential files, and confidential information to sabotage Ameriwood's business by forwarding its customer information and other trade secrets from Ameriwood's computers to the employees' personal email accounts. 2006 WL 3825291, at , , 2006 U.S. Dist. LEXIS 93380, at , . Based in part on the close relationship between Ameriwood's claims and the employees' computer equipment, the trial court justified allowing an expert to obtain and search a mirror image of [the employee] defendants hard drives. Id., 2006 WL 3825291, at , 2006 U.S. Dist. LEXIS 93380, at . Similarly, in Cenveo Corp., Cenveo sued several former employees for improperly using its computers, confidential trade information, and trade secrets to divert business from Cenveo to themselves. 2007 WL 442387, at , 2007 U.S. Dist. LEXIS 8281, at . Borrowing from Ameriwood, the district court authorized a similar order [b]ecause of the close relationship between plaintiff's claims and defendants' computer equipment. Id., 2007 WL 442387, at , 2007 U.S. Dist. LEXIS 8281, at . Finally, in Frees, a former employee was sued for using company computers to remove certain proprietary information. 2007 WL 184889, at , 2007 U.S. Dist. LEXIS 4343, at . Noting that the employee's computers would be among the most likely places [the employee] would have downloaded or stored the data allegedly missing, id., 2007 WL 184889, at , 2007 U.S. Dist. LEXIS 4343, at , the court allowed direct access to the employee's work and home computers. Id.
In this case, HFG's motion relied primarily upon discrepancies and inconsistencies in Weekley's production. According to HFG, Weekley only produced a handful of emails from Russell Rice, and one email from Biff Bailey, Weekley's Division President and Land Acquisitions Manager respectively, while producing no emails from the email accounts of Scott Thompson or Joe Vastano, both of whom. . . were very involved with the [s]ubdivision. Additionally, HFG expressed concern about the limited number of emails relating to the Slope Stability Analysis it received despite the importance of that report. Beyond Weekley's meager document production, HFG relied upon Burchfield's testimony that Weekley employees do not save deleted emails to their hard drives, and that Burchfield had no earthly idea . . . whether [the deleted emails are] something a forensic specialist could go in and retrieve. From this testimony, the trial court could have concluded that HFG made a showing that Weekley did not search for relevant deleted emails that HFG requested. But it does not follow that a search of the Employees' hard drives would likely reveal deleted emails or, if it would, that they would be reasonably capable of recovery. HFG's conclusory statements that the deleted emails it seeks must exist and that deleted emails are in some cases recoverable is not enough to justify the highly intrusive method of discovery the trial court ordered, which afforded the forensic experts complete access to all data stored on [the Employees'] computers. The missing step is a demonstration that the particularities of Weekley's electronic information storage methodology will allow retrieval of emails that have been deleted or overwritten, and what that retrieval will entail. A complicating factor is the some two-and-a-half years that passed between the time any responsive emails would have been created and the time HFG requested them. Under these circumstances, it is impossible to determine whether the benefit of the forensic examination the trial court ordered outweighs the burden that such an invasive method of discovery imposed. Compare Honza, 242 S.W.3d at 583 n. 8.
We understand the trial court's predicament, as state law in this area is not clearly defined and the parties' discovery postures shed more heat than light upon the situation. That being the case, the trial court apparently followed the protocol set forth in the only Texas case to address a similar situation. See Honza, 242 S.W.3d 578. In Honza, A & W Development, L.L.C. assigned to Wesley F. Honza and Robert A. Honza the right to purchase a tract of land under a real estate contract. Id. at 579. Under the terms of the assignment, A & W retained the right to purchase a portion of the assigned tract for construction of a street. Id. According to A & W, an earlier version of the assignment made no mention of a purchase price upon exercise of the right because the consideration negotiated for the partial assignment included what the Honzas should receive for the street. Id. When A & W decided to exercise its right, the Honzas demanded that A & W pay additional consideration. Id. at 580. A & W sued the Honzas seeking declaratory relief and alleging various theories of recovery. In the course of discovery, the Honzas produced two drafts of the partial assignment in electronic form. Id. at 580, 583. However, they did not produce or otherwise make available metadata [9] associated with those documents. Id. at 580. The first trial resulted in a mistrial, after which A & W moved to gain access to the Honzas hard drives to obtain the metadata necessary to identify the points in time when the partial assignment draft was modified. Id. The trial court granted A & W's motion, crafting a protocol similar to the one ordered in this case. The court of appeals affirmed the trial court's order, id. at 579, and we denied mandamus relief. Despite the undeniable similarities between the Honza order and the one presented here, there are several important distinctions concerning the contexts in which the two orders were granted. First, in Honza, A & W sought metadata associated with two documents that had already been shown to exist; indeed, the Honzas produced those documents in electronic form in response to discovery requests propounded before the first trial. Id. at 580, 583. Because the Honzas were required to preserve that evidence once it had been requested, there was a reasonable likelihood that a search of the Honzas' computers would reveal the information A & W sought. In this case, on the other hand, the potential for successful recovery of the Employees' deleted emails over a two-and-a-half-year period is much less clear. Moreover, in Honza there was a direct relationship between the hard drives sought and A & W's claims. As the court of appeals noted, identification of the points in time when the partial assignment draft was modified directly concerned the issue of whether [the Honzas] altered the partial assignment after the parties concluded their agreement but before the document was presented for execution. Id. at 580. In contrast, although the deleted emails HFG seeks in this case might reveal circumstantial evidence that the representations Weekley made in the Estoppel Certificate were misleading, there is no claim that the Estoppel Certificate itself was tampered with. While we recognize that a more tenuous link between the electronic storage device and the claim itself is not dispositive, it is a factor trial courts should consider. Finally, in Honza there was extensive testimony from A & W's expert about his experience and qualifications before access to the Honzas' computers was ordered. Id. at 583 n. 8. Although Weekley does not directly challenge the qualifications of HFG's forensic experts, nothing was presented to show that the experts were qualified to perform the search given the particularities of the specific storage devices at issue, or that the search methodology would likely allow retrieval of relevant deleted emails. Absent some indication that the experts are familiar with the particularities of the Employees' hard drives, that they are qualified to search those hard drives, and that the proposed methodology for searching those hard drives is reasonably likely to yield the information sought, Honza does not support the trial court's order. We conclude that by ordering forensic examination of Weekley's hard drives without such information, the trial court abused its discretion. See In re CSX Corp., 124 S.W.3d at 152; In re Am. Optical Corp., 988 S.W.2d 711, 714 (Tex.1998). Because the trial court abused its discretion by granting HFG's motion without the requisite showing, we need not reach Weekley's alternative arguments that the search terms the trial court ordered are overly broad, or that the trial court's order improperly requires Weekley to create the equivalent of a privilege log as to irrelevant documents that the search might produce. However, because trial courts should be mindful of protecting sensitive information and utilize the least intrusive means necessary to facilitate discovery of electronic information, the trial court should consider these arguments on remand.