Opinion
No. 01-2373-M1V
May 12, 2003
ORDER DENYING DEFENDANT MICHELSON'S MOTION TO COMPEL FURTHER ANSWERS TO INTERROGATORY NUMBER ELEVEN
Before the court is the March 27, 2003 motion of the defendant Gary K. Michelson, M.D., pursuant to Rule 37, to compel the plaintiff, Medtronic Sofamor Danek, Inc., to answer more fully Interrogatory No. 11 of Michelson's First Set of Interrogatories propounded on September 24, 2001. (Docket No. 330.) The motion was referred to the United States Magistrate Judge for determination. For the reasons that follow, the motion is denied.
Interrogatory No. 11 asks:
For each and every medical device, technology, implant, instrument, method or process based on or incorporating in whole or in part any invention, conception, development, acquisition or possession of Dr. Michelson that has been commercialized anywhere in the world by you or any person to whom you provided such medical device, technology, implant, instrument, method or process, identify [1] the patent numbers, if any, marked on each such medical device, technology, implant, instrument, method or process or on any literature associated therewith and [2] the numbers of all patents or patent applications naming Dr. Michelson on which each such medical device, technology, implant, instrument, method or process is based or which each such medical device, technology, implant, instrument, method or process incorporates.
Pl.'s Am. Resp. to Defs.' First Set of Interr. at 38. In essence, the interrogatory seeks two categories of information. First, it asks for the patent numbers marked on each medical device that Medtronic has commercialized anywhere, anytime, which incorporates in whole or part one of Dr. Michelson's inventions. Second, it seeks the patent numbers upon which each of Medtronic's medical devices were based.
Medtronic objected to the interrogatory as vague, unduly burdensome, and not calculated to reveal relevant information. Despite its objections, Medtronic has provided, in answer to Interrogatory No. 11, the "marking statements" on each Medtronic product. The "marking statements" contain the patent numbers marked on each product. In its response to the interrogatory, Medtronic quoted verbatim the two marking statements it uses on three groups of products. In the first group of 310 products, each product is marked with the following statement which identifies three patents:
Protected by one or more of the following U.S. Patents: 5,015,247 6,149,650 6,264,656.
In the second group of 460 products and in the third group of 19 products, each product is marked with the following statement which identifies twelve patents:
Protected by one or more of the following U.S. Patents:
5,484,437 5,522,899 5,741,253 5,772,661 5,785,710
5,797,909 6,080,155 6,096,038 6,159,214 6,210,412
6,224,595 6,270,498.
In addition, in answer to Interrogatory No. 12, Medtronic has provided the patent numbers marked on its literature and on packages for discontinued products, to the extent they still exist. Medtronic has incorporated its response to No. 12 in its response to No. 11. Further, by identifying the patent numbers marked on each product, Medtronic maintains that, ipso facto, it has identified the products which are "based" on technology invented by Michelson.
Michelson complains that Medtronic's answer is insufficient because it fails to identify each particular patent that corresponds to each Medtronic product. Michelson asserts that Medtronic has both a contractual duty and statutory duty to list on its products the patents that cover each product. Michelson further claims that this information is relevant to his counterclaim and indeed necessary for him to evaluate whether Medtronic is providing proper name attribution and notice under the agreements, whether Medtronic is using its best efforts to market Michelson's technology, and to determine royalties.
Both the December 31, 1993 License Agreement between Medtronic and Karlin and the January 11, 1994 Purchase Agreement between Medtronic and Michelson require Medtronic to "identify in its literature that the Medical Device and the Technology were developed by Michelson . . . and [to use] proper patent notices." (Decl. of Dinn, Ex. B @ 4.5; Ex. C @ 4.6.)
In addition, Section 287(a) of Title 35, U.S.C. provides:
Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them . . . may give notice to the public that the same is patented, either by fixing thereon the word "patent" or the abbreviation `pat.', together with the number of the patent, or when, from the character of the article, this cannot be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement. . . .35 U.S.C. § 287(a).
The first inquiry in Interrogatory No. 11 does not require Medtronic to identify each particular patent which corresponds to each Medtronic product. Rather, it merely requests Medtronic to supply the patent numbers that are marked on Medtronic products, literature, and packaging. This Medtronic has done by listing verbatim the marking statements placed on each product.
The second inquiry in Interrogatory No. 11 does require Medtronic to indicate each and every patent upon which each Medtronic product is based. Medtronic objects, however, that one-to-one matching of Michelson's patents with Medtronic's products are irrelevant to the issues in Michelson's counterclaim for a number of reasons. First, Medtronic's obligations under the agreements to provide proper patent notice on its products only require it to list one or more of, but not all, the patents associated with the product. In addition, such notice is proper under patent laws. Second, Medtronic is obligated to pay the same royalties on the sale of products and use its best efforts to promote the sale of products whether there is one patent or one hundred patents associated with a product. Royalties under the agreements are determined by Medtronic the sale of "products" incorporating Michelson's patents, not by a particular patent or patents.
After careful consideration of the parties' respective arguments, the briefs, and exhibits, the court finds Medtronic's relevancy and undue burden objections to be well-taken. A one-to-one matching of patents to products is not relevant to Michelson's marking, name recognition, best efforts and royalty counterclaims. Moreover, this information is not currently in Medtronic's possession and would have to be compiled by reviewing the 1,228 patent claims in the 15 patents at issue to determine if one of the claims is incorporated into one of the 789 products in question. This analysis would be extremely time-consuming and costly.
In reaching this decision, the court has considered the arguments presented by Michelson in his reply.
Accordingly, the court finds that Medtronic has answered fully Interrogatory No. 11, and Michelson's motion to compel is denied.
IT IS SO ORDERED.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO COMPEL SUPPLEMENTAL PRODUCTION OF DOCUMENTS AND 2) COMPLETE PRIVILEGE LOG
Before the court is the March 27, 2003 motion of the defendants, Gary K. Michelson, M.D., and Karlin Technology, Inc., to compel the plaintiff, Medtronic Sofamor Danek, Inc., to supplement its production of documents and its privilege log in compliance with Rule 26(e)(2). (Docket No. 332.) The defendants request that Medtronic be ordered to produce all readily available responsive documents and a completed privilege log within five days of the court's order and on a rolling bases thereafter no later than ten days after locating or discovering a responsive document. The motion was referred to the United States Magistrate Judge for determination. For the reasons that follow, the motion is granted in part and denied in part.
Thus far, the defendants have served eight sets of requests for production of documents on Medtronic, totaling 1742 separate requests overall. The defendants' first request for production was served in September, 2001. Subsequent requests were served in November of 2001, April of 2002, June of 2002, August of 2002, and December of 2002.
Medtronic made an initial production of documents in February of 2002 through May of 2002. It supplemented its production on April 25 and 26, 2003 with fourteen compact discs containing electronic images of more than 130,000 pages of responsive documents. The production in April of 2003 represented more than half of Medtronic's supplemental production of documents. To date, Medtronic claims that it has produced more than 1.25 million pages of documents. In its response to the defendants' motion, Medtronic indicates that it "expects to produce the remainder of is supplemental production (subject to further supplementation, as necessary) within the next month." (Opp. To Defs.' Mot. to Compel at 4.) Medtronic expressly acknowledges its continuing duty to seasonably supplement its responses when it learns that its prior responses are incomplete.
In addition, Medtronic provided its first privilege log to the defendants in August of 2002 and subsequent logs on a rolling basis thereafter rather than waiting until the privilege log was finished. It provided a second installment in October of 2002, the third installment in February 2003, the fourth installment in March of 2003, and a fifth installment on April 1, 2003. Medtronic proposes in its response to the motion to compel to provide the sixth and final installment of its privilege log "within two weeks of the completion of the supplemental production." Id.
The deadline for discovery in this case is November 10, 2003, with a trial date of January 10, 2004.
Rule 26(e)(2) governs supplementation of discovery responses. It provides as follows:
A party is under a duty seasonably to amend a prior response to an interrogatory, request for production, or request for admission if the party learns that the response is in some material respect incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing.
Fed.R.Civ.P. 26(e)(2). The rule does not define "seasonably." The Advisory Committee Notes explain that "[s]upplementations need not be made as each new item of information is learned but should be made at appropriate intervals during the discovery period, and with special promptness as the trial date approaches." Fed.R.Civ.P. 26(e) advisory committee notes, 1993 amendment.
After careful consideration of the parties' briefs and exhibits, the court finds that Medtronic as seasonably supplemented its responses to the defendants' request for production of document and its privilege log. To the extent the defendants' motion requests a ruling that Medtronic has not complied with its duty to supplement, the motion is denied. Based on Medtronic's representations that it will produce the remainder of its supplemental production within the next month and it supplemental privilege log two weeks thereafter, Medtronic is accordingly ordered to produce the remainder of its supplemental production on or before May 30, 2003, and a supplemental privilege log on or before June 15, 2003.
This order does not apply to electronic discovery except to the extent that electronic documents or mail exist in hard copy. Electronic discovery is the subject of a separate motion and order.
To avoid any arguments over whether future supplementations are seasonable and in keeping with the spirit of Rule 26(e)(2) to supplement more frequently as the trial date approaches, the court further directs that Medtronic supplement its production of documents again on August 30, 2003 and October 30, 2003, and submit supplemental privilege logs on September 15, 2003 and November 10, 2003.
IT IS SO ORDERED.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT MICHELSON'S MOTION TO COMPEL ELECTRONIC MAIL MESSAGES AND DATA AND REQUEST FOR APPOINTMENT OF SPECIAL MASTERBriefly, this case involves trade secrets, patents and trade information in the field of spinal fusion medical technology. Now before the court is the motion of defendant Gary Karlin Michelson, filed January 31, 2003, seeking to compel the plaintiff, Medtronic Sofamor Danek, Inc. ("Medtronic"), to respond fully to discovery requests by producing approximately 996 computer network backup tapes containing, among other things, electronic mail, plus an estimated 300 gigabytes of electronic data other data from employee files on Medtronic computers that are not in a backed-up format. Medtronic timely responded, claiming the discovery requests are unduly burdensome because extracting the data from backup tapes and reviewing it for relevance and privilege will be astronomically costly. Michelson counters that Medtronic, as the producing party, should bear the cost of disclosure and requests that the court appoint a Special Master to help the parties establish a discovery protocol. The motion to compel was referred to the United States Magistrate Judge for a determination. The parties have not been able to agree on a protocol for production, on the scope of production, or on who should bear the cost of production. For the reasons that follow, this court grants in part and denies in part Michelson's motion.
The factual and procedural background of this lawsuit has been well-documented in previous discovery orders. See, e.g., Medtronic Sofamor Danek, Inc. v. Michelson, No. 01-CV-2373-GV (W.D. Tenn. Jan. 30, 2002) (order on cross-motions for protective order and on motions to compel); Medtronic v. Michelson (July 18, 2002) (order on defendants' motion to compel and sanctions); Medtronic v. Michelson (Aug. 6, 2002) (order on defendants' motion to approve Bruce Ross under the protective order).
ANALYSIS
Producing electronic data requires, at minimum, several steps: (1) designing and applying a search program to identify potentially relevant electronic files, (2) reviewing the resulting documents for relevance, (3) reviewing the resulting documents for privilege; (4) deciding whether the documents should be produced in electronic or printed form, and (5) actual production. If, however, the allegedly discoverable information is contained on backup tapes, a preliminary step must be performed. All data on each backup tape must be restored from the backup tape format to a format that the standard computer can read. In the case of a large data volume on multiple tapes like this case presents, the restored files from each tape must be compared to the restored files from every other tape and duplicate files eliminated. The restored data files that are not duplicates must be converted to a common format so that a search program may seek information within them.
A. Relevancy, Scope, and Undue Burden
Information is discoverable if "relevant to the claim or defense of any party" or if it "appears reasonably calculated to lead to the discovery of admissible evidence." FED. R. Civ. P. 26(b)(1). See also Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1978); Lewis v. ACB Bus. Services, Inc., 135 F.3d 389, 402 (6th Cir. 1998). Nevertheless, discovery does have "ultimate and necessary boundaries," Oppenheimer Fund, 437 U.S. at 351 (quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947)). "[I]t is well established that the scope of discovery is within the sound discretion of the trial court." Coleman v. American Red Cross, 23 F.3d 1091, 1096 (6th Cir. 1994) (quoting United States v. Guy, 978 F.2d 934, 938 (6th Cir. 1992)). The court need not compel discovery if it determines that the request is "unreasonably cumulative . . . [or] obtainable from some other source that is more convenient, less burdensome, or less expensive . . . [or] the party seeking discovery has had ample opportunity by discovery in the action to obtain the information . . . [or] the burden or expense of the proposed discovery outweighs its likely benefit." FED. R. Civ. P. 26(b)(2)(i)-(iii). Electronic information, if relevant, generally is discoverable under these same guidelines. FED. R. Civ. P. 34, 1970 Adv. Comm. Note; Anti-Monopoly, Inc. v. Hasbro, Inc., Civil Case No. 94CIV.2120, 1995 WL 649934, *1-2 (S.D.N.Y.); Daewoo Electronics Co. v. United States, 650 F. Supp. 1003, 1006 (Ct. Int'l Trade 1986).
In this case, the parties do not seriously dispute the relevance of the electronic data at issue. Hard-copy printouts of representative e-mails, provided under seal by Michelson, indicate that the backup tapes may contain discoverable material, although neither party can estimate how much. ( See Confidential Decl. of Dan P. Sedor in Support of Def.'s Mot. to Compel Production of Electronic Mail Messages and Data and Request for Appointment of Special Master [hereinafter Sedor Confidential Decl.] at Exs. A, B.) Medtronic also admits that the backup tapes probably contain discoverable information. (Pl.'s Opp'n to Def.'s Mot. at 15).
The parties' disputes center on the scope of the production and specifically on who should bear the costs. Michelson asserts that information it seeks is contained in some 20,000 gigabytes ("gb") of data stored on 515 of Medtronic's network backup tapes, and in approximately 210gb of electronic files from various individuals at Medtronic. Medtronic disagrees, asserting that there are 993 backup tapes number with a 61 terabyte data volume, (Opp'n to Dr. Michelson's Mot. to Compel Electronic Mail Messages and Data and Request for App't of Special Master at 2, Ex. D [hereinafter Pl.'s Opp'n to Def.'s Mot.]), and that the electronic files from individuals total 300gb. ( Id. at 6, Ex. E.) Because Medtronic is in the better position to know the extent of its electronic data holdings, the court will use Medtronic's estimates for its analysis. Given the volume of data at issue, the court agrees that the production of electronic data by Medtronic, as a whole, will be burdensome. The court must therefore determine whether the burden and cost on Medtronic, the producing party, is undue and should be shifted in whole or in part to Michelson, the requesting party.
It would take approximately 711 standard 3.5" diskettes to store one gigabyte of data.
A terabyte is 1024 gigabytes. It would take approximately 728,178 standard 3.5" diskettes to store one terabyte of data.
B. Cost-Shifting
Generally the party responding to a discovery request bears the cost of compliance. Rowe Entertainment, Inc. v. The William Morris Agency, Inc., 205 F.R.D. 421, 428-29 (S.D.N.Y 2002) (citing Oppenheimer Fund v. Sanders, 437 U.S. 340, 358 (1978)). "Nevertheless, a court may protect the responding party from `undue burden or expense' by shifting some or all of the costs of production to the requesting party." Id.; FED. R. Civ. P. 26(b)(2), (c). The inquiry in a cost-shifting analysis is not necessarily whether the cost is substantial but whether it is "undue." Oppenheimer Fund, 437 U.S. at 358; Rowe Entertainment, 205 F.R.D. at 428-29.
Undue burden is decided on a case-by-case basis. Bills v. Kennecott Corp., 108 F.R.D. 459, 463 (D. Utah 1985). To help determine whether an expense is "undue," courts have adopted a balancing test that considers the following factors:
(1) the specificity of the discovery requests; (2) the likelihood of discovering critical information; (3) the availability of such information from other sources; (4) the purposes for which the responding party maintains the requested data; (5) the relative benefit to the parties of obtaining the information; (6) the total cost associated with the production; (7) the relative ability of each party to control costs and its incentive to do so; (8) the resources available to each party.Rowe Entertainment, 205 F.R.D. at 428-29; Murphy Oil USA, Inc. v. Fluor Daniel, Inc., Civil Case No. Civ.A.99-3564, 2002 WL 246439 (E.D. La. 2002) (quoting Rowe Entertainment). See also Bills, 108 F.R.D. at 464 (setting forth a four-factor test).
1. Specificity of the Discovery Requests
Michelson has served at least four separate document requests in the course of this litigation. The instant motion addresses the following requests from his first request for production of documents:
Request No. 8: All documents on any type of electronic, magnetic or optical storage media that contain Dr. Michelson's or Karlin Technology's name or any variation thereof.
Request No. 42: All documents evidencing, reflecting, or relating to any estimate, calculation, analysis or evaluation of the value of any Interbody Technology.
Request No. 108: All documents evidencing, reflecting, or relating to Medtronic's efforts to obtain regulatory approval for any Threaded Spinal Implants, Instruments and Methods or Non-Threaded Spinal Implants, Instruments and Methods.
Request No. 109: All documents evidencing, reflecting, or relating to Medtronic's efforts to obtain regulatory approval for any Interbody Technology that competes or has competed with any Threaded Spinal Implants, Instruments and Methods or Non-Threaded Spinal Implants, Instruments and Methods.
Request No. 112: All documents evidencing, reflecting, or relating to Medtronic's efforts to "actively promote" the sale of any Threaded Spinal Implants, Instruments and Methods or Non-Threaded Spinal Implants, Instruments and Methods.
Request No. 116: All documents evidencing, reflecting, or relating to Medtronic's efforts to commercialize any Interbody Technology that competes or has competed with any Threaded Spinal Implants, Instruments and Methods or Non-Threaded Spinal Implants, Instruments and Methods.
Request No. 116: All documents evidencing, reflecting, or relating to your notes, memoranda and correspondence prepared by any of your current or former employees, officers, and directors, including Lawrence Boyd, Brad Estes, Brad Coates, John Pafford, Ronald Pickard, Robert Rodrick, Rick Duerr and David Ahlersmeyer, relating to any medical device, technology, implant, instrument, method, know-how, trade secret, confidential information, proprietary right, process, and all engineering, design, and technical information and data based on or incorporating in whole or in part any Dr. Michelson invention, conception, development, acquisition or possession.
(Mem. of Points and Authorities in Supp. of Defs.' Mot. to Compel Discovery of Electronic Mail Messages and Data and Request for Appointment of Special Master [hereinafter Def.'s Mem. in Support of Mot.] at 3-5.)
Michelson's requests are very broad, and he has done little to narrow these requests for electronic discovery. Michelson has offered Boolean search terms that he believes will reveal relevant electronic files and has identified about 40 employees in whose files he has a particular interest. ( See Decl. of Dan P. Sedor in Supp. of Def.'s Mot. to Compel Produc. of Electronic Mail Messages and Data and Request for Appointment of Special Master [hereinafter Sedor Decl.] at Exs. D, F; Pl.'s Opp'n to Def.'s Mot. at 15, Ex. C.) He also, in the instant motions, limits his requests to the electronic data for Sofamor Danek alone and advances his understanding that Sofamor Danek "did not rely heavily on email until 1997." (Defs.' and Counterclaimants' Mot. and Supp. Mem. for Leave to File Reply to Medtronic's Opp. to Mot. to Compel Produc. of Electronic Mail Messages and Data and Request for Appointment of Special Master [hereinafter Def.'s Reply Mot.] at 7. See also Pl.'s Opp'n to Def.'s Mot. at 4 (characterizing the lawsuit as involving only the Interbody and Cervical divisions of Danek).) Michelson claims most of Medtronic's recent data are available on its "current system" and that he is only really interested in backup tapes from 1993 to 2000, when Medtronic acquired Sofamor Danek. (Def.'s Reply Mot. at 6.) Michelson has rejected Medtronic's offer to supply year-end backup tapes in lieu of all the back-up tapes on the ground that he would be deprived of the chance to review files that might have been deleted during the year.
Even with the limitations Michelson proposes, Medtronic still must restore all its backup tapes to conduct any search, and accordingly Michelson's request is too broad. (Pl.'s Opp'n to Def.'s Mot. at 15.) Michelson has not specifically limited his requests by date, even in light of his apparent understanding that tapes from 1997 to 2000 are most likely to reveal the electronic mail he seeks, and in light of his apparent understanding that data from 2000 to present might be available without any resort to backup tapes. Accordingly, this factor weighs in favor of Michelson bearing part of the production cost.
2. Likelihood of Discovering Critical Information
The parties agree that the electronic mail files stored on backup tapes may contain some relevant information, although neither knows how much. ( See Sedor Decl. at 15; Pl.'s Opp'n to Def.'s Mot. at 15.) Michelson has produced seven pages of e-mail printouts in support of his claim that Medtronic's e-mail archives hold relevant — indeed, critical — information. (Sedor Confidential Decl. at Exs. A, B.) These apparently were selected from an estimated one million pages of hard copy that Medtronic already has produced. (Pl.'s Opp'n to Def.'s Mot. at Ex. A.) Even if the court accepts Michelson's assertion that "nearly one-third of electronically stored data is never printed out," (Def.'s Mem. in Support of Mot. at 6, n. 3 (citing Rowe Entertainment)), Michelson offers little evidentiary support for his position that Medtronic's e-mail archives are seething with relevant communications. Further, Michelson has not offered to restrict the scope of his discovery to e-mail alone, nor has he accepted Medtronic's proffered protocol that allows Michelson to assess the relevance of backup tapes by restoring sample tapes. Accordingly, the court finds that this factor also weighs in favor of shifting part of the production cost to Michelson.
Michelson's motion does not address the likelihood of discovering relevant data in the other 300gb of files that are not stored on backup tapes.
3. Availability from Other Sources
The parties agree that the electronic mail stored on backup tapes probably is not available from other sources. Taken alone, this factor weighs in favor Medtronic bearing the cost of production because Michelson has no alternative for obtaining Medtronic's archived e-mail. Medtronic, however, objects because the extent to which any data file duplicates a previously disclosed document cannot be known until after document review.
Authority is split over whether a party automatically is entitled to both hard copy and electronic versions of computer files. Electronic records may, however, contain data that the hard copy does not. "[I]important information present in the e-mail system, such as who sent a document, who received it, and when that person received it, will not always appear on the computer screen and so will not be preserved on the paper print-out." Armstrong v. Executive Office of the President, 1 F.3d 1274, 1284 (D.C. Cir. 1993). Because the electronic data files reasonably could lead to the discovery of admissible evidence that is not available from hard copy, see FED. R. Civ. P. 26(b)(1), this factor weighs in favor of Medtronic bearing the cost of production.
The split is discussed in McNally Tunneling Corp. v. City of Evanston, 2001 WL 1568879, *4 (N.D. Ill. 2001), which compares Williams v. Owens-Illinois, Inc., 665 F.2d 918, 932-33 (9th Cir. 1982) (finding the district court did not abuse its discretion in denying request for computer tapes where party already had all information from tapes on wage cards) with Anti-Monopoly, 1995 WL 649934 at *2 (S.D.N.Y. Nov. 3, 1995) ("[P]roduction of information in `hard copy' documentary form does not preclude a party from receiving that same information in computerized/electronic form.")
4. Purpose for Maintaining the Data
Medtronic claims backup tape restoration is unwarranted in the first place because its backup tapes are not used in daily business, are not intended to be used in daily business, are intended only for emergency disaster recovery, and the majority of them would not exist at all but for Medtronic's obligation to retain the data in association with unrelated litigation.
Michelson counterargues that the backup tapes are related to Medtronic's current business activities. Michelson points to Medtronic's contractual obligations in the instant suit compelling Medtronic to retain certain records. Because Medtronic is obligated to keep those data, Michelson argues, the backup tapes represent a current business activity.
Rowe Entertainment supports Medtronic's position. There, the court found no evidence that the producing parties ever searched their own backup tapes for information or even had the programs necessary to restore backup data. "Cost-shifting [was] therefore warranted with respect to the backup tapes." Rowe Entertainment, 205 F.R.D. at 431.
But Rowe Entertainment is not the final word, nor even the definitive word, on the issue. The question of whether backup tapes retained for disaster recovery alone constitute current business activity has been explored by several recent cases, which the court now independently surveys. The court in Murphy Oil reached the same conclusion as Rowe Entertainment. The requesting party in Murphy Oil sought 93 email backup tapes. The responding party had no means of retrieving data from those tapes. Following Rowe Entertainment, the court determined that the tapes were being maintained solely for emergency data recovery and not for current business activities. The court accordingly shifted to the requesting party the burden of restoring the backup tapes. Murphy Oil, 2002 WL 246439 at *7-9.
Michelson's position, however, is also supported by case law. In Brand Name Prescription Drugs, the court held that the producing party must bear the cost of restoring backup tapes, noting that the producing party "essentially admit[ted] that a part of the burden attendant to searching its storage files result[ed] from the limitations" of its own software. Brand Name Prescription Drugs, 1995 U.S. Dist. LEXIS 8281 at *6. Similarly, the court in Delozier held that, with respect to microfilm storage, cost-shifting was unjustified when the expense of production arose solely from the producing party's maintenance of a data storage system over which the requesting party had no control. Delozier, 109 F.R.D. at 164.
Both lines of reasoning have their flaws, as succinctly discussed in McPeek v. Ashcroft, 202 F.R.D. 31 (D.D.C. 2001). In McPeek, the plaintiff and requesting party was a former Bureau of Prisons employee. He sought to force the United States Department of Justice, a defendant, to search its data backup systems for evidence related to his discrimination claim. As in the instant case, the defendant did not know what the backup tapes might contain; the defendant had not searched the tapes on its own behalf in the litigation; the defendant maintained the tapes primarily for disaster recovery; and the requesting plaintiff specifically was interested in the defendant's archived email. The court conducted a review of relevant case law and summarized the problem thus:
The one judicial rationale that has emerged [from case law] is that producing backup tapes is a cost of doing business in the computer age. But, that assumes an alternative . . . What alternative is there? Quill pens?
. . . [M]aking the producing party pay for all the costs of restoration as a cost of its "choice" to use computers creates a disincentive for the requesting party to demand less than all of the tapes . . . The converse solution is to make the party seeking the restoration of the backup tapes pay for them, so that the requesting party literally gets what it pays for. But . . . if it is reasonably certain that the backup tapes contain [relevant] information, shifting all costs to the requesting party means that the requesting party will have to pay . . . even though the requesting party would not have to pay for such a search of a "paper" depository.
A fairer approach borrows . . . from the economic principle of "marginal utility." The more likely it is that the backup tape contains information that is relevant to a claim or defense, the fairer it is that the [responding party] search at its own expense.McPeek, 202 F.R.D. at 33-34 (internal citations omitted).
In this case, Medtronic has 996 backup tapes, rather than substantially fewer of them, for at two reasons: first, because it conducts a regular backup procedure for data restoration in the case of disaster; and, second, because it chose not to over-write its regular backup tapes in recognition of its obligation to preserve evidence in unrelated litigation. It could be argued that the decision to preserve evidence and avoid exposure to a spoilation claim is, although not business activity per se, a business decision. Even then, though, it is a business decision harmonious with the sound policy of encouraging preservation of evidence. See McPeek, 202 F.R.D. at 34 (discussing, in the context of government agencies, the advantages of backup data).
Under these circumstances, the mechanical question, "Why was the data maintained?," fails to recognize the true inquiry: "Does the reason for maintaining the backup tapes indicate that the tapes are so likely to contain relevant information that the producing party should bear the cost of their production?" McPeek's "marginal utility" analysis is the better fit in this situation. See Byers v. Illinois State Police, No. 99-C-8105, 2002 U.S. Dist. LEXIS 9861, *35 (June 3, 2002) (holding that "[w]hen faced with a request that would impose a significant cost on the responding party, a court should focus on the marginal utility of the proposed search").
The parties stipulate that some of the backup tape data, particularly archived emails, probably are relevant. The defendant, however, has not made any showing that such data would be found on each and every backup tape. The electronic mail printouts Michelson provided in support of his motion are dated between March 1998 and February 2001. Michelson himself notes a reduced likelihood of finding relevant information on backup tapes created prior to 1997. However, the defendants have declined to limit the dates or the contents of their backup tape requests. Because Michelson has made no showing that the entire spectrum of backup tapes will contain information relevant the cause's claims or defenses, the court finds that this factor weighs in favor of shifting production costs to Michelson, the requesting party.
5. Relative Benefits to Each Party
Michelson argues that Medtronic likely will use these electronic data in the instant litigation. This might well be true, but the court also accepts as credible Medtronic's assertion that it has not yet searched the backup tapes for litigation-related data and, because of the expense involved, would be unlikely to do so unless compelled by court order. The court finds that the parties will equally benefit from the electronic discovery and this factor does not sway the cost-shifting analysis in favor of either party.
6. Total Cost of Production
The physical production of the backup tapes is not really at issue. The production of their archived data in a format Michelson can use, and in a way that accommodates Medtronic's privilege concerns, is another matter entirely. See Sattar v. Motorola, Inc., 138 F.3d 1164, 1171 (7th Cir. 1997) (approving lower court's decision requiring the producing party to give the requesting party a means to read its backup tapes).
Three distinct areas of expense emerge from the parties' descriptions of the process: first, the cost of restoring backup tapes and converting the data on them to a common, i.e., searchable, format; second, the cost of designing and conducting searches to identify potentially responsive files; third, the cost of reviewing responsive files for privilege; and, fourth, the cost of actually producing the responsive non-privileged files. The parties advance widely differing estimates of the costs associated with each area, and neither attaches an itemized vendor quote to assist the court in determining whether their estimates are reasonable. So left to its own devices, the court examines each area of expense in turn to determine the total cost of production in the manner that seems most fair based on common sense and the evidence that the parties did submit.
a. Cost of Restoring Backup Tapes
Medtronic indicates that its preferred vendor, Kroll Ontrack, will restore, search, and de-duplicate the tape data on 124 sample tapes for a flat fee of $605,300. (Pl.'s Opp'n to Def.'s Mot. at Ex. C, ¶¶ 9, 10, 14.) Medtronic indicates that initial vendor bids on restoration alone ranged from $600 to $1,000 per backup tape. (Pl.'s Opp'n to Def.'s Motion at Ex. A, ¶ 7.) Michelson does not provide any competing estimates but only asserts that, without performing a "pilot" restoration, no vendor accurately can estimate the cost of restoring backup tapes. (Def.'s Reply Mot. at Kuchta Decl. ¶ 5.)
The court finds that $1,113.50 is a reasonable per-tape estimate for restoration. The court arrives at this number by dividing Kroll Online's total quote by 124 (the number of tapes included in Kroll's estimate) and dividing that result by 3 (the number of services Kroll offers to perform: restoration, search, and de-duplication). The result of $1,627 appears reasonably attributable to restoration. When the difference between this number and Medtronic's lowest bid of $600 is split, the result is $1,113.50. Based on that number, for 996 tapes the total cost of restoring data would be $1,109,046. At Medtronic's lowest estimate of $600 each, the cost of restoring all 996 tapes totals $597,600.
b. Cost of Designing and Conducting a Search
Neither party provides an itemized estimate for designing a search to identify potentially relevant documents, de-duplicating files, or conducting the search. By again calculating from the Kroll Online estimate, the court concludes that $1,627 adequately represents the search cost on a per-tape basis, and $1,627 adequately reepresents the de-duplication cost. The sum of these is $3,254, which, multiplied by 996 tapes, produces an estimate of $3,240,984 for searching and de-duplication on all 996 tapes.
c. Cost of Privilege Review
Medtronic's estimates of privilege review costs vacillate between $16.5 million, (Pl.'s Opp'n to Def.'s Mot. at Ex. G), and $70 million, ( id. at Ex. A). The cost of the privilege review cannot be known until the volume of discoverable documents is known. Generally, privilege review expenses are borne by the responding party. See, e.g., Rowe Entertainment, 205 F.R.D. at 421. Medtronic does not dispute this and in fact offers to bear the cost of privilege review for disclosure provided under a reasonable discovery protocol. (Pl.'s Opp'n to Def.'s Mot. at 15.)
d. Cost of Physical Production
Both parties give per-page printing cost estimates for the volume of data they expect to produce. Again, these estimates widely vary and the court does not have enough information to determine how much relevant data actually could be produced. Because all the disputed data are electronic, however, some or all of the data may be produced electronically. Therefore, the court does not find that the costs of paper production should be factored into the total cost of production. And, without an estimate of the actual data volume involved, the court cannot speculate on the cost of electronic storage media. Accordingly, the cost of physical production is not considered when totaling the cost of production.
e. Production Cost Summary
Based on the foregoing calculations, the court finds that the cost of restoring 996 tapes reasonably could range from $597,600 to $1,109,046. The cost of de-duplicating and designing and conducting a search on all 996 tapes may be in the range of $3,240,984. The costs of privilege review and actual production cannot be estimated yet, but it is clear the cost of production — excluding attorney fees — will be at least $4,347,030 if all 996 tapes are restored.
Although it still is less than 2% of the $225,000,000 at issue in this suit, this cost is substantial. The court finds it undue because it is primarily due to the requesting party's decision not to limit the scope of production. Accordingly, the court finds that this factor weighs in favor of shifting some cost to the requesting party, Michelson.
7. Relative Ability to Control Costs
Michelson makes no argument concerning Medtronic's ability to control costs. Medtronic points out that Michelson has nearly unfettered ability to control costs by limiting the scope of his discovery requests. The court agrees and finds that this factor weighs in favor of Michelson bearing part of the production cost.
8. Resources Available to Parties
Neither party adduces persuasive evidence of inability to bear part of the discovery cost. Michelson asserts that Medtronic is a large and profitable company but sets forth no comparative figures that indicate the defendants are in a worse position to bear part of the cost. It clear from the file alone that both parties have expended, and continue to expend, significant resources for legal services in this cause. Accordingly, the court finds that this factor is neutral in the cost-shifting analysis.
9. Summary
After considering all the circumstances, the court finds the factors favoring the shift of discovery cost to Michelson include the specificity of the discovery requests; the purposes for which the responding party maintains the requested data (i.e., the prospective relevance of the backup data); the relative ability of each party to control costs; the total cost associated with the production; and the likelihood of discovering critical information.
The lack of availability from other sources is only factor clearly in favor of allowing Medtronic to bear the full cost of discovery. The inquires into two additional factors — relative benefit to the parties of obtaining the information and the resources available to each party — are neutral. They do not weigh in favor of shifting costs to Michelson, but they do not favor Medtronic bearing the full cost of unlimited discovery.
In addition, the court finds that cost-shifting is not warranted solely on the basis of Michelson's assertions that Medtronic has failed to cooperate in electronic data discovery. While it is true that Medtronic did not hurry to produce electronic data, it is understandable that Medtronic would not do so until the parties had agreed on a protocol for production and review. Exhibits from both parties reveal difficulty communicating about a mutually acceptable discovery protocol, but they do not reveal bad faith or obstruction by Medtronic. To the extent that Michelson seeks to impose the full cost of electronic discovery on Medtronic as a sanction for delaying production, the motion is denied.
In light of all the circumstances of this case, the court finds that cost-shifting is warranted. Michelson, the requesting party, shall bear part of the production costs as outlined in the "Protocol" section of this order.
D. Need for a Special Master
The court must resolve one final issue before laying out a plan to guide the parties' electronic discovery. Michelson claims the court should appoint a Special Master to oversee the electronic records production and to review the data files that are produced. Medtronic protests that a neutral computer expert would be the better choice to oversee the discovery process, and that one person cannot possibly review all the data that will be disclosed.
Under Federal Rule of Civil Procedure 53(b), it is inappropriate to appoint a special master to supervise discovery without the existence of an "exceptional condition." Fed.R.Civ.P. 53, Adv. Comm. Notes, 1983 amend. Medtronic observes, and the court agrees, that the legal issues in dispute at this time are merely questions of "scope, cost, and cost-sharing." (Pl.'s Opp'n to Def.'s Mot. at 21.) These are not unusually complicated questions, nor has either party shown that an exceptional condition applies. The practical concerns advanced by the parties — for example, the efficacy of a particular search term — can be resolved by the parties' agreement in consultation with a technology expert. As a practical matter, the court agrees with Medtronic that one person probably will not be able to review the data volume that the production contemplates. The court further observes that more productive discussion and negotiation about the discovery process might be forthcoming once each party knows which costs it is expected to bear. Accordingly, Michelson's request for a special master is denied.
E. Protocol
The deadline for completing discovery in this case is November 10, 2003. (Order Following Status Conference, Medtronic Sofamor Danek, Inc. v. Michelson, Civil Case No. 01-2373-M1V (W.D. Tenn., Jan. 10, 2003.) Each party has submitted a proposed discovery protocol. ( See Def.'s Mem. in Support of Mot. at 20; Pl.'s Opp'n to Def.'s Mot. at Ex. C.) Each also has provided statements from technology professionals in support of their respective proposals. ( See Pl.'s Opp'n to Def.'s Mot. at Exs. D, E; Def.'s Reply Mot. at Ex. A.) The court has carefully reviewed these, along with the discovery plans crafted by courts in like and instructs the parties to abide by the following discovery plan. These deadlines may be modified only by signed agreement between the parties.
See, e.g., Murphy Oil, 2002 WL 246439 at *8-10 (offering parties a choice of two discovery plans in a case involving backup tapes); Rowe Entertainment, 205 F.R.D. at 432-33 (setting forth guidelines to govern production of email from backup tapes); Playboy Enterps. v. Welles, 60 F. Supp.2d 1050, 1054-1055 (S.D. Cal. 1999) (setting forth a discovery plan for production of email from a hard drive); Simon Property Group LP v. mySimon, Inc., 194 F.R.D. 639, 641-42 (S.D. Ind. 2000) (following Playboy under analogous facts).
1. Data Obtained from Individual Users' Files
Medtronic will isolate the 300gb of electronic data it has already identified as potentially containing relevant information.
Medtronic, using the vendor of its choice, will search the 300gb of electronic data using the Boolean search terms (or their equivalents, if a proprietary search program is used) attached as Appendix A to this order (the "Keyword Search"). These terms are based on the list provided by Michelson's counsel in his October 11, 2002 letter to Medtronic's counsel. Terms and wildcards that would result in an unreasonable number of results have been eliminated. ( See Pl.'s Opp'n to Def.'s Mot. at Ex. E, Roth Decl. ¶¶ 12-14.) The parties may add search terms or connectors, but only by mutual agreement. If the parties cannot agree on additional terms or connectors by May 1, 2003, no additional terms or connectors will be used.
No later than May 15, 2003, Medtronic shall produce to Michelson a complete list of the files identified by the search (the "Keyword Search Result List"), along with a list identifying the software application reasonably required to read each type of file.
Medtronic may conduct additional searches designed to identify privileged information ("Privilege Search"). Medtronic will bear the cost of designing and running such searches. Each file identified by a privilege search shall be isolated. Within five (5) days of completing any Privilege Search, Medtronic shall produce to Michelson a complete list of the files identified by the search (a "Privilege Search Result List.") All Privilege Searches shall be completed, all search results isolated, and all Privilege Search Result Lists produced to Michelson, not later than May 21, 2003.
Medtronic shall divide the files identified by privilege searching into five sections of equal size (Privilege Review Sections 1-5) and begin to review the files in Privilege Review Section 1 for both privilege and relevance. Non-responsive files shall be removed from production. Responsive, non-privileged files shall be isolated for review by Michelson. Privileged files shall be recorded a privilege log. This review shall be complete by June 15, 2003, and no later than that time Medtronic is instructed to disclose to Michelson the privilege log for Privilege Result Section 1.
The parties will then arrange a mutually agreeable time and method for Michelson's review of the responsive, non-privileged files from Privilege Review Section 1 in their native electronic formats. Medtronic shall make the files available for Michelson's review no later than July 1, 2003. Medtronic shall be responsible for providing any software application reasonably necessary to Michelson's review.
Michelson, upon review, shall designate the documents he wishes Medtronic to produce. Michelson may choose electronic or paper production. If Michelson elects paper production, he shall pay Medtronic seven cents ($.07) per page, but the documents will be Bates-labeled, marked CONFIDENTIAL — ATTORNEYS' EYES ONLY, and delivered at Medtronic's expense. If Michelson elects to have files electronically produced, Medtronic will produce them at its own expense on compact disk (CD). Upon request and at its own expense, Medtronic shall also make available for Michelson's use any software applications reasonably necessary to read the electronically produced documents. Medtronic will bear the cost of producing the CDs, but Michelson will be responsible for printing any information from the CDs and shall bear the full cost of any such printouts.
If Michelson or his representatives must travel to Medtronic locations for review because the software applications cannot be used off-site, Michelson and Medtronic shall equally bear the reasonable expense of such travel.
Review for the other four Privilege Review Sections shall be completed in a like manner and on a rolling basis according to the following timeline:
Privilege Review Section 2: Medtronic's review shall be complete and a privilege log produced to Michelson no later than July 15, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than August 15, 2003.
Privilege Review Section 3: Medtronic's review shall be complete and a privilege log produced to Michelson no later than July 30, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than August 30, 2003.
Privilege Review Section 4: Medtronic's review shall be complete and a privilege log produced to Michelson no later than August 15, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than September 15, 2003.
Privilege Review Section 5: Medtronic's review shall be complete and a privilege log produced to Michelson no later than August 30, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than September 30, 2003.
The remaining Keyword Search Results, excluding the Privilege Search Results discussed above, shall be isolated and divided into five sections of equal size (Keyword Review Sections 1-5). Medtronic shall begin to review the files in Keyword Review Section 1 for responsiveness and third-party confidentiality. Any nonresponsive documents may be removed from production at this time. Documents subject to further processing (such as third-party notification) may be removed from production at this time but shall be recorded in a log (the "Further Processing Log"). Medtronic is instructed to disclose to Michelson the Further Processing Log for Keyword Review Section 1 no later than June 15, 2003.
The parties will then arrange a mutually agreeable time and method for Michelson's review of the responsive, non-privileged files from Keyword Review Section 1 in their native electronic formats. Medtronic shall make the files available for Michelson's review no later than July 1, 2003. Upon request, Medtronic shall be responsible for providing any software application reasonably necessary to Michelson's review.
From this point forward, the review and disclosure process shall duplicate the Privilege Review procedure above, with each party bearing the same costs listed above, but according to the following timeline:
Keyword Review Section 2: Medtronic's review shall be complete and a Further Processing Log produced to Michelson no later than August 1, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than September 1, 2003.
Keyword Review Section 3: Medtronic's review shall be complete and a Further Processing Log produced to Michelson no later than August 15, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than September 15, 2003.
Keyword Review Section 4: Medtronic's review shall be complete and a Further Processing Log produced to Michelson no later than September 1, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than October 1, 2003.
Keyword Review Section 5: Medtronic's review shall be complete and a Further Processing Log produced to Michelson no later than September 15, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than October 15, 2003.
All further processing of the files in the Further Processing Logs shall be complete, and the files made available for Michelson's review, by November 5, 2003.
2. Data Obtained from Year-End and Current Month Backup Tapes
Medtronic, using the vendor of its choice, will restore fiscal year-end backup tapes from the years 1997 through 2002, plus all backup tapes for the 30 days preceding the date of this order.
Medtronic's vendor will (1) extract the data of the 40 individuals identified in Appendix B to this order, (2) search the extracted data using the keywords identified in Appendix A to this order; and then (3) de-duplicate the remaining data. All data that remains after this search will be converted to standard images and isolated.
The parties may add search terms or connectors, but only by mutual agreement. If the parties cannot agree on a given additional terms or connector by May 1, 2003, the disputed term or connector will not be used.
Medtronic has advised the court that its desired vendor is Kroll Ontrack, who will complete the above procedures (restoration, searching, and de-duplicating) for a flat fee of $605,300. Medtronic estimates that 124 tapes are involved in the process. The quote of approximately $4881 per tape for all professional restoration, searching, and de-duplication services appears reasonable. Assuming Medtronic will use Kroll Ontrack as its vendor, Medtronic shall bear seventy percent (70%) of the costs associated with restoring, initially searching, and de-duplicating these data to this point in the process. Michelson shall bear thirty percent (30%) of the costs to this point.
If Medtronic chooses a different vendor, Medtronic shall bear 30% of the new vendor's cost or $181,590, whichever is lower, and Medtronic shall bear the balance.
No later than June 15, 2003, Medtronic shall produce to Michelson a complete list of the files identified by the backup tape restoration keyword search (the "Backup Keyword Result List").
Medtronic may conduct, upon restored files, any additional electronic search or searches designed to identify privileged information (a "Backup Privilege Search"). Medtronic will bear the cost of designing and running such searches. The files identified by a privilege searches shall be isolated. Within five (5) days of completion of any Backup Privilege Search, Medtronic shall produce to Michelson a complete list of the files identified by the search (a "Backup Privilege Search Result List.") All Backup Privilege Searches shall be completed, and all Backup Privilege Search Result Lists produced to Michelson, not later than June 30, 2003.
Medtronic shall bear the full cost of privilege searching, including designing and conducting the privilege keyword searches. Upon reasonable notice and at Michelson's request, Medtronic shall cause its vendor to produce an itemized billing indicating which portions of its fee are attributable to designing and conducting privilege keyword searches.
Medtronic shall divide the Backup Privilege Search Result List into five sections of equal size (Backup Privilege Review Sections 1-5). Medtronic shall review the files in Backup Privilege Review Section 1 for both privilege and relevance. Non-responsive files shall be removed from production. Responsive, non-privileged files shall be isolated for review by Michelson. Privileged files shall be recorded a privilege log. Medtronic is instructed to disclose to Michelson the privilege log for Backup Privilege Result Section 1. This review shall be complete, and the privilege log produced, by July 30, 2003.
The parties will then arrange a mutually agreeable time and method for Michelson's review of the relevant, non-privileged files from Backup Privilege Review Section 1. The files shall be made available for Michelson's review no later than August 15, 2003. Medtronic shall be responsible for providing any software application reasonably necessary to Michelson's review.
Michelson, upon review, shall designate the documents he wishes Medtronic to produce. Michelson may choose electronic or paper production. If Michelson elects paper production, he shall pay Medtronic fifteen cents ($.15) per page, but the documents will be Bates-labeled, marked CONFIDENTIAL — ATTORNEYS' EYES ONLY, and delivered at Medtronic's expense. If Michelson elects to have files electronically produced, Medtronic will produce them at its own expense on compact disk (CD) in .tiff format with an associated load file. Medtronic will bear the cost of producing the CDs, but Michelson will be responsible for printing any information from the CDs and shall bear the full cost of any such printouts. Medtronic may, at its option, copy such printouts at its own expense.
Review for the other four Backup Privilege Review Sections shall be completed in a like manner and on a rolling basis according to the following timeline:
Backup Privilege Review Section 2: Medtronic's review shall be complete and a privilege log produced to Michelson no later than August 20, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than September 1, 2003.
Backup Privilege Review Section 3: Medtronic's review shall be complete and a privilege log produced to Michelson no later than September 1, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than September 11, 2003.
Backup Privilege Review Section 4: Medtronic's review shall be complete and a privilege log produced to Michelson no later than September 11, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than September 21, 2003.
Backup Privilege Review Section 5: Medtronic's review shall be complete and a privilege log produced to Michelson no later than September 21, 2003. Responsive, non-privileged files shall be available for Michelson's review not later than November 1, 2003.
The remaining Backup Keyword Search Results, excluding the Backup Privilege Search Results discussed above, shall be isolated and divided into five sections of equal size (Backup Keyword Review Sections 1-5). Medtronic shall begin to review the files in Backup Keyword Review Section 1 for responsiveness and third-party confidentiality. Any non-responsive documents may be removed from production at this time. Documents subject to further processes (such as third-party notification) may be removed from production at this time but shall be recorded in a log (the "Backup Further Processing Log"). Medtronic is instructed to disclose to Michelson the Backup Further Processing Log for Keyword Review Section 1. These steps shall be complete by June 30, 2003.
The parties will then arrange a mutually agreeable time and method for Michelson's review of the responsive, non-privileged files from Backup Keyword Review Section 1 in .tiff format. The files shall be available for Michelson's review no later than July 15, 2003. From this point forward, the review and disclosure process shall duplicate the Backup Privilege Review procedure above, with each party bearing the same costs listed above, but according to the following timeline:
Backup Keyword Review Section 2: Medtronic's review shall be complete and a Backup Further Processing log produced to Michelson no later than August 1, 2003. Responsive files shall be available for Michelson's review not later than September 1, 2003.
Backup Keyword Review Section 3: Medtronic's review shall be complete and a Backup Further Processing log produced to Michelson no later than August 15, 2003. Responsive files shall be available for Michelson's review not later than September 15, 2003.
Backup Keyword Review Section 4: Medtronic's review shall be complete and a Backup Further Processing log produced to Michelson no later than September 1, 2003. Responsive files shall be available for Michelson's review not later than October 1, 2003.
Backup Keyword Review Section 5: Medtronic's review shall be complete and a Backup Further Processing log produced to Michelson no later than September 15, 2003. Responsive files shall be available for Michelson's review not later than October 15, 2003.
All further processing of the files in the Backup Further Processing Logs shall be complete, and the files made available for Michelson's review, by November 5, 2003.
3. Data Obtained from Any Other Backup Tapes
Should Michelson wish to restore and have searches performed on any additional backup tapes, the following protocol will apply:
Michelson may select the vendor of his choice to perform restoration of the tapes and de-duplication of data. Michelson shall advise Medtronic of the vendor's identity and request that Medtronic send to the vendor the additional tapes Michelson wishes to have restored and de-duplicated. From this point forward, all communications between Michelson and the vendor shall be copied to Medtronic.
Within ten (10) days of receiving Michelson's request, Medtronic shall deliver to Michelson's vendor, at Medtronic's expense, any backup tapes not otherwise listed in this order, in the format in which they currently exist. Michelson's vendor shall restore and de-duplicate the tapes, and may also run any keyword searching that Michelson specifies. However, Michelson shall not review the results.
Within three (3) days after completing the restoration and deduplication, Michelson's vendor shall make all restored and deduplicated files available to Medtronic, along with a list of the search terms that were used, and a list of all files that were responsive to the search terms. This order contemplates that Michelson's vendor will redact executable files, system files, preference files, help files, and similar files that are not created by end users and therefore will not contain relevant information.
Michelson shall bear the cost of making the restored, deduplicated data available to Medtronic. Michelson shall be responsible for providing any software application reasonably necessary to Medtronic's review.
Medtronic shall then review the selected files for relevance and privilege. For any data produced under this provision and created on or before December 31, 1996, Michelson shall bear the full cost of Medtronic's relevance and privilege review. For any data produced under this provision and created between January 1, 1997 and the date of production, Michelson shall bear the full cost of Medtronic's relevance review and fifty percent (50%) percent of the cost of Medtronic's privilege review.
Michelson is responsible for the full cost of relevance review because, by carefully designing his own search terms, Michelson can significantly decrease the likelihood of a search producing irrelevant files.
Medtronic shall identify to Michelson's vendor the files that are responsive and non-privileged. Michelson's vendor shall then make responsive, non-privileged files available to Michelson for review not later than September 30, 2003, at Michelson's sole expense.
Not later than October 15, 2003, Michelson shall provide Medtronic with a list of the files he wants Medtronic to produce. If Medtronic does not object within five (5) days, Michelson's vendor will produce the files for Michelson in any medium Michelson designates and at Michelson's sole expense. Medtronic may, at its option, copy any files so selected, on paper or electronically, at Medtronic's own expense.
Michelson shall be responsible for scheduling all steps in this process in a way that allows Medtronic not less than thirty days (30 days) per gigabyte to review the data for relevance and privilege. If the total data volume recovered by Michelson's vendor makes this schedule impossible, Michelson shall limit — by date, by user, by additional search terms, or in any other way he sees fit — the data volume as necessary to meet this time constraint.
4. Selection and Role of Neutral Computer Expert
Within ten (10) days from the date of this order, the parties shall select a neutral computer expert. The expert's duties will include advising the parties with regard to any agreement on additional search terms; overseeing the flow and scheduling of production; coordinating deliverables between the parties and their vendors; advising both parties, at either's request, on cost estimates and technical issues.
The expert shall be subject to all confidentiality requirements and protective orders set forth in this and in other orders in this cause. The expert may designate assistants with the parties' approval; if he or she does so, the same protective orders and confidentiality agreements shall apply to any assistants.
If the parties cannot agree on an expert within ten (10) days from the date of this order, each shall submit to the court the names of two prospective experts. For each, the parties are instructed to submit a summary of the expert's qualifications, not to exceed one page, and an itemized estimate for the expert's services through December 31, 2004, based on the duties laid out in this order, not to exceed one page. The court will select an expert from among the four submitted, and the parties may not object to the court's selection.
After the expert has been selected, all communications between either party and the expert shall be copied to the other party. The parties will equally bear the cost of the expert's services.
5. Amendment to Protective Order
The Protective Order in this case, entered October 11, 2002, is amended to provide the following:
Without time limitation, Medtronic waives no privilege for documents or subject matter produced through any of the discovery protocols in this order.
The defendants shall immediately notify Medtronic of any document that comes to their attention and appears to be privileged or potentially privileged, including without limitation communications from or to attorneys or legal assistants that were not sent or copied to a non-Danek or non-Medtronic employee or entity. Medtronic shall promptly respond to any such inquiry with an indication of whether privilege is asserted with regard to that document.
All documents produced pursuant to this order shall be designated "Confidential-Attorneys' Eyes Only," subject to existing procedures in the October 11, 2002 protective order for resolving issues surrounding such designations.
Any vendor selected for the backup tape restoration process, and the neutral computer expert, shall be bound by the terms of any and all confidentiality agreements and protective orders now in place, or to be put in place in the future, in this cause. The deliberate or inadvertent disclosure of any document to such an expert or vendor does not waive privilege with regard to that document.
Good cause exists for these amendments because the volume of data that will be produced by electronic discovery presents will make it difficult for the producing party to identify with certainty every potentially privileged document prior to production.
CONCLUSION
For the foregoing reasons, the court finds it appropriate to shift some of the electronic discovery cost to Michelson. The parties are instructed, within ten (10) days from the date of this order, to agree on a neutral computer expert or to provide the court with candidate names. The parties will equally bear the cost of the computer expert. As soon as the expert is designated, either by the parties or by the court, the above-outlined electronic discovery plan shall commence. Each party shall bear the portion of the electronic discovery costs outlined in this order.
IT IS SO ORDERED.