Overly Broad Discovery Requests Undercut Attempt to Prevent Spoliation

As discovery of electronically-stored information ("ESI") becomes more prevalent and relevant in litigation, so too does litigation regarding the obligation to preserve ESI.  Last Friday, the Business Court issued two orders reaching opposite results on motions for "non-spoliation" orders, based on significant differences between the scope of the preservation obligations that the plaintiff sought to impose.

In Capps v. Blondeau, the Business Court previously ruled that an arbitration clause was unenforceable.  Two defendants appealed that ruling and, during the pendency of the appeal, the plaintiff moved the Court for what they called "non-spoliation" orders (essentially, orders that parties preserve ESI) one against a defendant and one against Wachovia Bank.  In a pair of orders, the Court allowed the motion as to Wachovia but denied the motion as to the defendant.

Judge Jolly discussed several principles of note in the order denying the motion against the defendant, Morgan Keegan:

  • As is typical in Case Management Orders in the Business Court, the CMO in this case already contained a mandate that the parties preserve relevant information, including ESI, until the conclusion of the lawsuit.  This suggested that a further order on the subject was unnecessary.
  • When a lawsuit has already been filed, "the potential parameters of the claims – and the evidentiary importance of relevant information – are apparent."
  • The Court's duty is to "weigh and balance the respective rights and interests of the parties" when determining the scope of any preservation obligation.

The Court examined the categories of information proferred by the plaintiff and determined that the breadth of those requests prevented the Court from entering any order that would impose a preservation obligation for specific information:

Many of the categories of Information defined in the Motion are stated in the form of either a request for production of documents and materials or in the form of interrogatories, and are not focused on the stated concept of Information preservation.   In substance, the requests are so broadly and loosely defined that the court is forced to conclude that it would be difficult, if not impossible, to enter a preservation order without micro-managing the preservation initiative to such an extent that the result likely would impose an unjust result on either Plaintiff or Morgan Keegan.   An order from this court requiring preservation of such Information would be difficult, if not impossible, for Morgan Keegan in good faith to obey or for this court to police.

In a footnote, the Court identified specific concerns about the scope of those requests:  "For example, the Motion makes multiple use of broad qualifying words such as 'any' and 'all' 'records' or 'communications' about a particular subject.  It also uses qualifiers seeking to preserve information about occurrences, events or 'communications' that took place 'at all relevant times.''''

In contrast, the Court allowed plaintiff's motion for an order against Wachovia, a third party who was served with a subpoena duces tecum.  There were three key differences between Wachovia and Morgan Keegan.  First, Wachovia was not a party and was not subject to the CMO, so a separate order was conceivably more necessary.  Second, Wachovia, unlike Morgan Keegan, never filed a response in opposition to plaintiff's motion.  Third, the scope of Wachovia's information that plaintiff sought to preserve was clearly and specifically outlined in the requests attached to the subpoena.  The Court listed and ordered preservation of those specific categories of information, such as signature cards, account statements, and transaction details for specific bank accounts.

In the end, however, the Court's reluctance to enter an order against Morgan Keegan did not mean that its preservation obligations were lessened:

The duty of Morgan Keegan and other party litigants to preserve Information relevant to the issues is apparent. The potential ramifications and available sanctions of a violation of that duty also are apparent. The court expects that Morgan Keegan and all other parties will discharge those duties appropriately and in good faith.

There are two takeaways for Business Court litigators.  First, if there is a CMO in place, preservation obligations already have been ordered against the parties, and the Court is likely to perceive a subsequent motion as superfluous.  Second, to the extent that a party wants to impose a preservation obligation, use of typical discovery terminology like "any" and "all," rather than identifying specific categories of information, will hamper that party's ability to impose an enforceable obligation on its opponent.

 

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