Beyond Email – Slack, “Channels,” and Expert Testimony

Mike Hamilton’s blog, “Defendant Ordered to Produce 30,000 Slack Messages” (Exterro Feb. 7, 2022), provides an excellent description of Benebone LLC v. Pet Qwerks, Inc., 2021 WL 831025 (C.D. Cal. Feb. 18, 2021).  The blog correctly points out that, as to discovery of Slack messages, “proportionality was the key issue.”

Benebone is also notable for other reasons.  First, Benebone additionally illustrates that ESI is moving beyond email.  Second, the support of an ESI expert to provide reliable metrics was central to the outcome.

The Benebone court wrote:

Slack is a cloud-based software system that allows a company to organize its electronic discussions into user-defined categories called “channels.” Plaintiff Benebone uses Slack, as well as standard email, for its internal communications.

One treatise explains “channels” as a platform designed to cut down on the amount of email:

Channel-based platforms are designed to replace the overuse of email within an organization. Within the platform, users may create discrete channels for various projects or user groups. For example, channels could be created for all computer-coding employees of an organization, for all employees located in a particular company office, or for all employees working on a particular project. Any employee may be a member of numerous channels. The platform manager or channel creators may designate which users are permitted to access which channels. Individuals outside an organization also may be invited to join certain channels via guest accounts.

Within a given channel, users may converse and share files. Instead of being stored separately in each user’s email archive, these conversations and files will be stored in a single instance, i.e., in the channel in which they occurred. Thus, for a given channel, every user sees identical content. Companies may decide how long they wish to preserve data in certain channels or when certain channels should be deactivated.

Channel-based platforms pose unique review and production considerations. In particular, channels are likely to persist longer and cover a greater number of topics than a single email thread. For example, a company preparing to launch a new product might exchange thousands of emails about that product, with multiple different email threads relating to manufacturing, marketing, distribution, and pricing for example. By contrast, in a channel-based platform, all of these communications might occur within a single product-focused channel. Thus, it would be inappropriate to analogize a channel to a single email thread; rather, a channel is more like an email folder that contains all email threads about a given topic. Consequently, in litigation or investigations, channels are more likely than email threads to contain a mixture of responsive and nonresponsive material. Channels should be treated for discovery purposes like text messages, which, like conversations in channels, are more likely than an email thread to persist for an extended period and touch upon multiple topics. Case law regarding text messages indicates that parties may have the ability to excerpt and produce only responsive information from extended text message conversations.

See Channel-based platforms to communicate may be subject to discovery, 2 Employment Discrimination Law and Litigation § 14:45.50 (West)(emphasis added).

Channels are ESI.  ESI has been defined as “information that is stored electronically, regardless of the media or whether it is in the original format in which it was created, as opposed to stored in hard copy (i.e., on paper).” The Sedona Conference Glossary, 21 The Sedona Conference J. 263, 303 (2020). “ESI comes in multiple evidentiary ‘flavors,’….” Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 538 (D. Md. 2007).

However, the Benebone court wrote that “Benebone took the position that Slack messages should be excluded from discovery.”

That argument was immediately rejected, as the court turned to a proportionality analysis.

Based on the evidence presented in the parties’ briefing and at the hearing, the Court finds that requiring review and production of Slack messages by Benebone is generally comparable to requiring search and production of emails and is not unduly burdensome or disproportional to the needs of this case – if the requests and searches are appropriately limited and focused.

That is where expert testimony became important.  Benebone’s “undue burden” objection was not well-supported: “Benebone has responded largely with attorney argument but no witness or declarant on the e-discovery issues.”  Benebone was seeking millions of dollars.

In response to Benebone’s estimate of a cost of between $110,000 to $255,00 dollars, Pet Qwerks relied on Michael Gutierrez, an e-discovery expert.

Mr. Gutierrez stated that he has been involved in multiple lawsuits where Slack messages have been produced. He described a number of tools that software vendors have developed to streamline review and production of Slack messages and explained how extracting, processing, and reviewing Slack messages could take place using currently available software tools. He also provided a cost estimate for doing so in this case. Mr. Gutierrez stated that Xact offers contract review attorneys at a rate of $40 per hour to conduct the first level review of Slack messages, and he provided a cost estimate of $22,000 for Benebone to find and produce its responsive Slack messages. Benebone, on the other hand, stood by its prior estimate of $110,000 to $255,000 based on a blended attorney rate of $400 per hour for Slack review. Benebone did not provide a declaration from an e-discovery expert to support its conclusions or respond to the evidence provided by Mr. Gutierrez.

The court held:

• Because Benebone uses Slack for internal business communications, the ESI was relevant;
• The crucial issue was proportionality; and,
• The forensic expert, Mr. Gutierrez, was knowledgeable and credible.

It then wrote:

Mr. Gutierrez testified that third-party tools have been developed over the past several years for collecting and reviewing Slack messages and that review and production of Slack messages has become comparable to email document production through use of these tools. Mr. Gutierrez further testified that it likely would not be necessary for Benebone to search all its Slack messages. Instead, searches likely could be limited to certain Slack channels, users, or custodians – which could significantly reduce the volume of Slack messages requiring review. For instance, in this intellectual property case, it may not be necessary to extract and review messages in a Slack channel dealing with human resources issues.

Moreover, Mr. Gutierrez’s declarations and testimony indicate that it is possible to conduct first level review of the pertinent Slack messages via contract attorneys for far less than Benebone’s estimated blended rate of $400 per hour. Mr. Gutierrez testified that contract reviewers are available who are licensed attorneys at a rate as low as $40 per hour for first-level review. As discussed during the hearing, Mr. Gutierrez did not include any time or expense for second-level review by more experienced counsel. It is also possible that contract attorneys may cost somewhat more than the hourly rate used in his estimate. Thus, the Court finds that Mr. Gutierrez’s estimate of $22,000 for Benebone to review and produce Slack messages is on the low side. However, Benebone’s cost estimate of $110,000 to $255,000 for producing the Slack messages is substantially inflated due to its assumption of attorney review of all 30,000 Slack messages at a rate of $400 per hour. As noted above, Benebone did not provide an e-discovery declaration or testimony to support its cost estimate or its position that producing the Slack messages represents an undue burden and is disproportional to the needs of this case. [emphasis added].

Benebone illustrates Judge Grimm’s statement that ESI comes in many “flavors” and demonstrates the need for supporting an ESI argument with credible metrics.