Call Off the U.S. Marshals: E-Discovery Clash Heats Up in the Sixth Circuit

ESI: Tennessee

On June 26, 2008, the Sixth Circuit issued an important decision in the quickly-growing body of law governing electronic discovery. It exercised the rare power of mandamus, finding that the district court had abused its discretion in issuing a broad order of preservation and protection regarding electronically stored information (ESI).

More than 10 years ago, in 1998, the Tennessee Justice Center filed a class-action complaint on behalf of 500,000 children seeking to recover health care benefits from the TennCare Program, as guaranteed to them under the Social Security Act. As Sixth Circuit Judge Guy Cole Jr. noted in his concurrence, in a period of less than two years, the district court had conducted nine discovery hearings and generated a transcript of more than 1,700 pages related to the parties' discovery disputes.[1] After finding that the defendant State of Tennessee had "repeatedly violated [its] agreements set forth in the Consent Decree, breached [its] agreement with Plaintiffs regarding the dates for ESI discovery, and ignored the district court's directions to provide ESI to Plaintiffs," the district court issued two broad orders instructing the state to preserve and produce ESI.[2]

Specifically, the district court directed the state to allow the plaintiffs' forensic expert to inspect and copy the computers of 50 key individuals to determine whether any relevant data had been impaired, compromised or removed. The order included not only the 50 individuals' work computers, but also any privately-owned computers on which they may have performed work related to TennCare. It instructed the U.S. Marshal to accompany the computer expert during his inspection onto state property and, where necessary, into the homes of the state officials. Remarkably, the order extended to individuals who are not parties to the lawsuit.

The state sought mandamus relief, which the Sixth Circuit granted. See John B. v. Goetz, 531 F.3d 448 (6th Cir. 2008). To obtain such relief, a petitioner must show the court of appeals that the district court abused its discretion. As the Sixth Circuit explained, "Mandamus relief is an extraordinary remedy, only infrequently utilized by this court." In granting mandamus, the Sixth Circuit set aside those provisions of the preservation order requiring forensic imaging of the state-owned and privately-owned computers, and the provisions directing the U.S. Marshal to accompany the forensic expert. The Sixth Circuit left undisturbed those portions of the district court's order requiring inspection of the state's computer system, as long as such inspection is done consistently with the remainder of the opinion.

With this decision, the Sixth Circuit provided additional guidelines for courts and attorneys in navigating this new and evolving area of the law:

1. Courts Should Be Cautious in Compelling Forensic Imaging
The Sixth Circuit explained that it is clear that parties to civil litigation have a duty to preserve relevant information, including ESI, when on notice (or when they should know) that the evidence may be relevant to litigation or even future litigation.[3] It is also clear that forensic imaging by parties, themselves, is becoming more common.[4] There is less clarity, however, when a district court itself compels forensic imaging and production of computer hard drives.[5] Although several district courts outside of the Sixth Circuit have compelled forensic imaging of computers, courts are cautious when requiring forensic imaging "where the request is extremely broad in nature and the connection between the computers and the claims in the lawsuit are unduly vague or unsubstantiated in nature."[6] Further, "mere skepticism that an opposing party has not produced all relevant information is not sufficient to warrant drastic electronic discovery measures."[7]

2. Courts Must Weigh Considerations of Undue Intrusiveness, Privacy & Relevancy
As Federal Rule of Civil Procedure 34(a) explains in the Advisory Committee Note from 2006, "courts should guard against undue intrusiveness resulting from inspecting or testing [electronic information] systems."[8] The Sixth Circuit found that the district court failed to account for the significant privacy and confidentiality concerns present in this case. The preservation order required copying the hard drives of both state-owned and privately-owned computers, which the Sixth Circuit concluded would "almost certainly contain confidential state or private personal information that is wholly unrelated to the litigation."[9]

3. Compelling Forensic Imaging May Be Justified after a Party's Repeated or Intentional Refusal to Cooperate
Both the majority and concurring opinions admonished the district court for failing to exhaust other options before implementing the broad preservation order in question. The Sixth Circuit suggested that holding the state in contempt or imposing monetary sanctions for discovery violations would be more appropriate here. Although not discussed in this opinion, other courts have ordered parties to pay their opponents' attorneys fees, issued adverse-inference jury instructions and even dismissed claims or counter-claims for electronic discovery abuses. Despite suggesting less intrusive means at this stage in the litigation, the concurring opinion concluded that if the state continues to disregard its "undisputed duty to preserve and produce relevant ESI" after the district court imposes monetary sanctions or holds the state in contempt, then the broad preservation order that was entered may be appropriate.[10]

4. Ordering Federal Marshals to Accompany Forensic Experts Raises the Stakes when the Defendant is the State
It appears the main impetus for granting mandamus arose from the fact that the order required the U.S. Marshal to accompany the forensic expert into state offices and homes of state officials and employees. Involving the U.S. Marshal raised concerns of comity and federalism, the Sixth Circuit wrote, and may lead to a confrontation between federal marshals and state officials. When such concerns are present, coupled with a lack of evidence of intentional destruction or a failure to agree to preserve relevant ESI in the future, district courts "should first employ less intrusive means to address the perceived discovery violations."[11] Without all of these factors being present, it appears that the Sixth Circuit would not have granted mandamus.

5. For the First Time, the Sixth Circuit Quoted with Approval the 'Sedona Principles'
Throughout this decision, the Sixth Circuit referred to and quoted from the Sedona Principles for Addressing Electronic Document Production.[12] The Sedona Principles are a group of principles developed by one of the Sedona Conference working groups, which brings together practitioners, academics and jurists to address various cutting-edge issues, including electronic discovery. Although two district courts within the Sixth Circuit previously have cited the Sedona Principles, this is the first time that the Sixth Circuit itself has cited to and quoted from these principles. Although district courts from around the country have cited the principles, the Tenth Circuit is the only other U.S. Court of Appeals yet to cite to them, which is explained partly because most discovery disputes are resolved at the district court level. As parties begin to dive further into e-discovery, expect more disputes to arise, and more courts to look to The Sedona Principles as a road map. For now, this decision helps pave the way and gives attorneys a better idea of how courts in the Sixth Circuit may respond when faced with an electronic discovery dispute.

Notes

1. John B. v. Goetz, 531 F.3d 448 at 461-62 (Cole, J., concurring).
2. Id. at 462 (Cole, J., concurring).
3. Id. at 459.
4. Id.
5. Id.
6. Id. at 459-60.
7. Id. at 460.
8. Id.
9. Id.
10.Id. at 462 (Guy, J., concurring).
11. Id. (Guy, J., concurring).
12. Id. at 459-60 (citing and quoting
The Sedona Principles: Best Practices, Recommendations & Principles for Addressing Electronic Document Production, Second Edition (The Sedona Conference Working Group Series, 2007), available at
http://www.thesedonaconference.org/content/miscFiles/TSC_PRINCP_2nd_ed_6...)).�


Stephen J. Zralek STEPHEN J. ZRALEK is a partner at Bone McAllester Norton PLLC. He practices commercial litigation with a focus on copyright and trademark infringement, trade secrets, disputes involving high level employees and campaign finance.