“Pending before the Court is a discovery dispute concerning Gore’s production of Board of Directors information.”  State v. W.L. Gore & Associates, Inc,. 2026 WL 2730156 (D. Md. Sep. 16, 2026)(Aslan, J.).

Pursuant to an initial Court order directing Gore to search Board of Directors minutes “that are available in electronic form,” “Gore searched Board of Directors minutes from 2020 onwards and produced 15 sets of minutes and 41 additional Board documents.”

That production led to another dispute, with the Court writing that “the State and Gore again raised the issue of the sufficiency of Gore’s production, each contending that the limited production demonstrated why additional discovery specific to the Board of Directors is or is not required.”  Plaintiffs sought discovery from 1985.

The parties disputed the governing standard: “As a threshold matter, the State and Gore dispute the standard and burden governing analysis of the sufficiency of Gore’s production.”

“The State argues that as the party resisting discovery, Gore bears the burden of demonstrating that the requested discovery falls outside the scope of Rule 26, and that Gore has not articulated any burden associated with locating these records, assessing their volume, or reviewing their contents.” Id. at *2 (cleaned up).

“On the other hand, Gore contends that the State has the burden of showing how even more discovery into sensitive Board documents would not be duplicative or cumulative of the discovery already produced in this case….”  Id.

The Court rejected Gore’s position:  “Gore relies on an out-of-circuit decision for the proposition that parties seeking searches of additional custodians beyond those initially disclosed must demonstrate that the additional requested custodians would provide unique relevant information by providing evidence that there are unique responsive documents being missed in the current search scheme that would justify the inclusion of additional custodians.” Id. (cleaned up; emphasis in original).

The Court held that the out-of-circuit authority was distinguishable. It related to motions to compel production of ESI from additional custodians.  The Gore Court wrote: “In contrast, the question here is whether Gore must search Board of Directors materials specifically, as opposed to relying on other searches of negotiated terms and custodians.”  Id. at *2.

As to relevance, the Court noted that the PFAS-related documents requested were “certainly relevant….”  It explained that relevance “is not, on its own, a high bar.” Id.

As to proportionality, “the issues at stake in this action and the amount in controversy are significant.”  The Court wrote: “The question of the burden or expense of conducting an independent search of Board of Directors information is unclear. Gore does not address this issue in its filings, but represented at a prior discovery hearing that it was not relying on undue burden to resist production of Board of Directors information.”

The Court also wrote:

Throughout the history of this dispute, Gore has argued that the sensitivity of the Board minutes, the decades-long timeframe, and the asserted cumulative nature of the discovery render a separate Board of Directors information search inappropriate…. These arguments are unpersuasive. First, the existing confidentiality order … will protect the sensitivity of the Board of Directors materials. Second, the timeframe in question is less than the “50 years” … originally contemplated because, by way of compromise, the State has asked Gore to search hard-copy Board of Director minutes back to 1985 to “target the most highly relevant information” … When evaluating the proportionality of this 35-year timeframe, the undersigned notes that the State alleges that Gore released “PFAS into Maryland for more than 50 years.” … Discovery in this action will therefore necessarily encompass a broad timeframe. [emphasis added].

The Court rejected Gore’s argument concerning cumulative, duplicative discovery:

To the extent that Gore relies on Federal Rule of Civil Procedure 26(b), the undersigned concludes that the Board of Directors information is not “cumulative or duplicative” and that the State has not “had ample opportunity to obtain the information by discovery.” Fed. R. Civ. P. 26(b)(2)(C)(i)-(ii). By Gore’s own admission, the targeted pilot search [from 2020] of electronic Board of Directors minutes resulted in the production of 15 sets of minutes and 41 additional responsive documents…. Following review of the parties’ filings, the undersigned cannot conclude that such information is needlessly cumulative of other discovery.

Id. at *3. The Court ordered that “Gore will search its Board of Directors minutes and other related information for the time period of 1985 through 2019 and produce any documents responsive to the State’s Request for Production No. 23” and that the parties meet and  confer regarding the time for production and any related issues.

Frequently, movants apply an incorrect preliminary injunction standard:

• A Request for a Preservation Order Was Denied: Preliminary Injunction Standard Was Not Applied (Apr. 3, 2026);
• Motion to Compel Preservation of RAM Denied Without Prejudice (Aug. 7, 2025);
• Failed Request for a Preservation Order (Jul. 13, 2022);
• Requests for a Preservation Order (Mar. 7, 2022).

I describe Zeta as the “cry wolf” doctrine.  The court held that plaintiffs, the movants, seeking a preservation order did not meet their burden of production.

Defendant Dotdash argued it had acted appropriately to fulfill its preservation duty. It asserted that plaintiffs’ requests to disclose its preservation process were not answered because they were premature.

Defendant Zeta argued that the motion was largely moot and that it was really an effort to circumvent an agreed discovery stay that had been entered pending resolution of a motion to dismiss. Zeta disclosed custodial locations, eight custodians and other information.

The Zeta court wrote:

Defendants respond that they confirmed to plaintiffs that they are “aware of [their] obligations” to preserve ESI and “ha[ve] acted accordingly.”…. Absent evidence to the contrary, that answer is appropriately responsive. Zeta has identified for plaintiffs the systems with potentially relevant ESI, the ESI being preserved, and the time period for which such ESI is being preserved…. Dotdash has not furnished these details to plaintiffs, but it too represents that it has been aware of its preservation obligations “since the inception of this matter,” heeded them, and recognized that these exist with or without a court order. [emphasis added].

In denying the request for a preservation order, the court explained the governing standard:

• “At a minimum, the party seeking a preservation order must demonstrate that the evidence is in some danger of being destroyed absent a court order….”
• “Plaintiffs have not shown that here. Mere ‘speculative assertions’ in support of spoliation concerns are insufficient to merit entry of a preservation order…..”
• “Defendants have preservation duties with or without a preservation order. Plaintiffs’ dissatisfaction with defendants’ responsiveness to their communications does not support the inference that there is a ‘substantial risk’ that, absent such an order, relevant ESI may be lost, overwritten, or deleted…..”
• “On the record at hand, there is no basis to distrust defendants’ reassurances that they understand and will heed their obligations to preserve such material.”
  • “Dotdash [stated that it] has been, and remains, keenly aware of its preservation obligations … and has acted accordingly….”
  • “Zeta … provided assurances that it was taking reasonable steps to comply with its … related preservation obligations…. Zeta has repeatedly informed

    laintiffs that … it is complying with its discovery obligations….”

Id. at *2 (cleaned up and reformatted).

A request for a preservation order must be supported with a factual predicate and cite the correct legal standard.

This blog was initially posted on  Electronic Discovery Reference Model.

In Tieman, Plaintiffs had developed a “novel and lucrative insurance product….” They sought an insurance underwriter to issue policies.  They negotiated with Arch Insurance Company (“Arch”). They were introduced to another related company and they alleged fraudulent inducement by that company and Arch.

The claims against Arch were dismissed, while the other claims proceeded. The court wrote:

Now before the Court is a discovery dispute related to a third-party subpoena Plaintiffs served on Arch. The subpoena contains fifty-seven document requests spanning as much as seven years of time. It appears Arch has not produced any documents in response to the subpoena.

Arch made boilerplate objections, asserting heightened protection under Rules 26 and 45 as a non-party.  Plaintiffs argued that Arch is “an integral player” and that the boilerplate should be ignored.  Arch also interposed a number of other objections.

BOILERPLATE v. EQUITY

The Tieman court wrote: “As a threshold matter, the Court is disappointed by the parties’ inability, or unwillingness, to narrow the scope of their dispute before seeking the Court’s intervention. That said, the Court agrees with both parties.”  Id. at *2.  Plaintiffs were correct in asserting boilerplate. Arch was correct in asserting its third-party status.

ARCH’S OBJECTIONS WERE BOILERPLATE

The Tieman court quoted a response that was typical of Arch’s objections:

Objection. This Request is overly broad, unduly burdensome, and disproportionate to the claims, defenses and issues in the case, and seeks documents that are not relevant to the claims or defenses of any party and not reasonably calculated to lead to the discovery of admissible evidence.[1] This Request is also premature and unduly burdensome because Plaintiffs just recently served their first and only discovery requests directed upon any defendant in the Underlying Action, which seek the same or substantially the same documents as requested here, and have not yet received Defendant’s responses or documents. Plaintiffs have not sought discovery from ARS or any other Defendant likely in direct possession of the requested documents. This Request calls for the disclosure of documents that are in the possession, custody, or control of Defendants in this action. To the extent[2] they exist, Plaintiffs can obtain such documents directly from Defendants; it is improper to impose such a burden on a third party. This Request is also vague and ambiguous; it is unclear what documents are actually being requested by Plaintiffs. To the extent this Request can be understood, it appears to seek confidential, proprietary and/or commercially sensitive business information belonging to non-party Arch. This Request is also overly broad and unduly burdensome because it contains no temporal limitations and would require Arch to search through an unreasonable amount of documents. Responding to this unreasonable Request would likely require the hiring of an outside vendor at a significant hourly rate to locate, review, and produce the requested information and overall would require Arch to incur significant expense. Finally, this Request seeks sensitive and confidential business information belonging to Arch.

The court found this to be boilerplate, writing: “The constant in almost all of Arch’s responses is that they fail to specify exactly how the request is deficient. Consequently, these responses are textbook boilerplate objections as described in the Court’s Initial Standing Order.”  Id. at *2.

EQUITY DEFEATED THE ARGUMENT THAT BOILERPLATE = WAIVER

The Tieman court did not find waiver based on boilerplate:

Ordinarily the Court would summarily rule almost all of Arch’s objections to be waived. But the Court cannot do so in this case, because so many of Plaintiffs’ requests are sufficiently premature, overly broad, unduly burdensome, and/or disproportionate given Arch’s third-party status that it would be inequitable to do so.

Id. at *2 (emphasis added).

The court held that Plaintiffs should have first sought discovery from Defendants before issuing this subpoena to a non-party.  It wrote:

Turning to Arch’s complaints, while Plaintiffs are correct that Rule 26(d)(3) does not require Plaintiffs to obtain discovery from the existing Defendants before seeking discovery from a third-party such as Arch, sequencing discovery on Arch to take place after party discovery is substantially complete makes practical sense in this case.

Id. at *3. The court wrote that there was a “substantial overlap between the documents in the Defendants’ possession and the documents Plaintiffs seek from Arch (for example, request #5 seeks “All communications and documents sent to or received from any current Defendant to this case about the Agreement”)….” Id.  In my words, Plaintiffs could get these documents from Defendants, and should, before imposing costs on a non-party.

The Tieman court also directed Plaintiffs to “limit the scope of their subpoena by custodian, subject, and timeframe.”  It directed that confidentiality be addressed and found “some amount” of cost-sharing to be proper. Id.

CONCLUSION

The Tieman court concluded:

The devil, of course, is in the details. Given the lack of good-faith effort put forth by the parties to resolve their dispute without the Court’s intervention, the Court declines to rule on the specifics of each of the fifty-seven requests (which is an excessive number of requests to seek from a third-party). Instead, the Court directs Plaintiffs and Arch to re-start this process from the beginning with the Court’s above observations in mind. That is, the Court strikes the pending subpoena in its entirety. Plaintiffs may prepare and serve a substantially revised subpoena, to which Arch will respond with non-boilerplate responses.

Id. at *3 (emphasis added).

For more information on boilerplate, please see:

• “Boilerplate” Objections Are Generally Condemned; Except When They’re Not (Oct. 9, 2024);
• E-Discovery 101 – – A Refresher on the Scope of Discovery + Boilerplate Objections Sustained (Sep. 16, 2024);
• General Objections, Dracula, and “Whac a Mole” (Apr. 16, 2024);
• Court Excused Party From Waiver by Failure to Provide Specific Objections (Aug. 7, 2022);
• “Old” Sedona Paper Implements the “Specificity” Provision of Discovery Responses (Dec. 9, 2021).

On a more general basis, please see:

• Concise Summary of Scope of Discovery and Principles Governing Objections (Dec. 2, 2025);
• Four General Principles Governing Document Requests and Objections (Dec. 29, 2025).

For an interesting strategic approach to discovery responses, see Accurate and Complete Discovery Responses Can Be Strategically Advantageous (May 13, 2024).

______

[1] The “not reasonably calculated” language was removed from the Federal Rules of Civil Procedure in December 2015.  See “Reasonably Calculated to Lead to Discovery of Admissible Evidence” (Nov. 6, 2024); “Boilerplate” Objections Are Generally Condemned; Except When They’re Not (Oct. 9, 2024).

[2] “To the extent” objections have been condemned.  Age-old Habit of “Subject to” Objections Waives Them; So Does “To the Extent” Objection (Nov. 19, 2025).

Some that may be worth reading are:

• An “ESI Protocol” is Not a Rule 26(f) “Discovery Plan”
• What is the Purpose of an ESI Protocol? Court Addresses Seven Key Issues
• Artificial Intelligence in Maryland Courts
• “Just When You Thought It Was Safe to Go Back Into the Water,” A.I. Hallucinates Metadata
• Order Prohibiting Upload of Confidential Discovery Documents to Artificial Intelligence (“AI”)
• No Duty to Respond to Preservation Letter
• Another Approach to Drafting and Discovery of Litigation Hold Notices
• “Meet and Confer” Was Transcribed
• The “Best Time” to File a Spoliation Motion
• When Must a Motion to Compel Be Filed? – Part 4
• No Privilege Log is Necessary in Limited Circumstances When Discovery Requests Are Overbroad
• Hit Reports – Part IV – Request for “Nonresponsiveness” Log Denied
• Age-old Habit of “Subject to” Objections Waives Them; So Does “To the Extent” Objection
• Guidelines for “Discovery on Discovery”
• Did the 2015 Deletion of “Not Reasonably Calculated” From Rule 26(b)(1) Change the Scope of Discovery?
• R.Civ.P. 26(g) Was Violated by Permitting Client Searches With Minimal Oversight by Counsel
• Document Correlation
• Production of Defendants’ Organizational Chart is Ordered
• Geofencing, Geotargeting, and Geo-blocking, in Civil Litigation, Information Governance, and Regulation
• Order for Phased Discovery
• Standard for Court-Ordered Forensic Examinations – When Does Misconduct “Cross the Rubicon”?
• Golden Oldie #5 – Fed.R.Civ.P. 26(g) and the “Discovery Budget”
• “Judges are not like pigs, hunting for truffles buried in the record”

One area that may be of interest has been coverage of the discovery issues in Ms. Blake Lively’s lawsuit against the “Wayfarer Parties” and Mr. Justin Baldoni.

A few of those blogs are:

• How Much Attention Does a Big Case Deserve?
• Decision on 557 Requests for Admission in Blake Lively v. Wayfarer Parties/Justin Baldoni
• What Connects “Popcorned Planet” and Ms. Blake Lively?
• Another Discovery Decision in Blake Lively v. Wayfarer Parties/Justin Baldoni
• “Birth Video” Discovery Dispute in Lively v. Wayfarer Studios/Baldoni
• Listing a Document on a Privilege Log Concedes That it is Relevant for Discovery

My most important blogs were not focused on ESI.  Some of them are:

• Another Judicial Impeachment Effort?  What Would Justice Rehnquist Say?
• Protecting the Judiciary – Analysis of Judicial Impeachment
• Protecting the Judiciary – Again
• Protecting the Judiciary Against This Ill-Advised “Impeachathon”
• Protecting the Judiciary –  Article of Impeachment:  “It’s Déjà vu All Over Again”
• “Pizzas Sent to Judges’ Homes in Name of Judge’s Murdered Son”
• Commentary: “Ex-Judges See ‘Grave Threat in Trump Official’s ‘War’ Talk” And “Senate Committee to Investigate Impeachment of Judges”
• Families of Judges Come Under Attack
• “DOJ’s No. 2 Official Asks Lawyers to Join ‘War’ Against Judges”
• Lawsuit Against Federal Judges Dismissed – “[T]hese are not normal times.”
• In Memory of Kaylee Walstad
• Book Review: Elie Honig, “When You Come at the King”
• Congratulations to Phil Favro on the Opening Favro Law PLLC

In the court’s words:  “This case stems from Lively’s claims of sexual harassment that she was allegedly subjected to during production of the Film [It Ends With Us], and from an alleged smear campaign launched by the defendants after filming in retaliation for her claims of sexual harassment.”  Lively v. Wayfarer Studios LLC, 2025 WL 2606904, at *1 (S.D.N.Y. Sept. 9, 2025).  “Lively alleged claims of sexual harassment, retaliation, breach of contract, and intentional and negligent infliction of emotional distress.”  Id.

There is a lot at stake.  Gene Maddus, Blake Lively Claims $161 Million in Damages Due to ‘It Ends With Us’ Smear Campaign (Nov. 6, 2025). “Lively’s attorneys allege she has lost at least $56.2 million in past and future earnings from acting, producing, speaking engagements and endorsements. They also allege that her beauty brand, Blake Brown, has lost $49 million, and her beverage company, Betty Buzz/Betty Booze, has lost $22 million due to the harm to her image.”

I have written ten blogs on discovery issues presented by the litigation. “Birth Video” Discovery Dispute in Lively v. Wayfarer Studios/Baldoni (Nov. 21, 2025).

Westlaw lists the following decisions in the case:

1.Lively v. Wayfarer Studios LLC

2025 WL 2606904, S.D.N.Y., Sep. 09, 2025

2.Lively v. Wayfarer Studios LLC

2025 WL 662896, S.D.N.Y., Feb. 28, 2025

3.Lively v. Wayfarer Studios LLC

2025 WL 698287, S.D.N.Y., Mar. 04, 2025

4.Lively v. Wayfarer Studios LLC

2025 WL 815364, S.D.N.Y., Mar. 13, 2025

5.Lively v. Wayfarer Studios LLC

2025 WL 1397047, S.D.N.Y., May 14, 2025

6.Lively v. Wayfarer Studios LLC

2025 WL 1410702, S.D.N.Y., May 15, 2025

7.Lively v. Wayfarer Studios LLC

2025 WL 1591282, S.D.N.Y., June 05, 2025

8.Lively v. Wayfarer Studios LLC

2025 WL 1640388, S.D.N.Y., June 09, 2025

9.Lively v. Wayfarer Studios LLC

786 F.Supp.3d 695, S.D.N.Y., June 09, 2025

10.Lively v. Wayfarer Studios LLC

2025 WL 1644522, S.D.N.Y., June 10, 2025

Reconsideration Denied

11.Lively v. Wayfarer Studios LLC

2025 WL 2004286, S.D.N.Y., July 16, 2025

12.Lively v. Wayfarer Studios LLC

2025 WL 1644532, S.D.N.Y., June 10, 2025

13.Lively v. Wayfarer Studios LLC

2025 WL 1707582, S.D.N.Y., June 18, 2025

14.Lively v. Wayfarer Studios LLC

2025 WL 1709956, S.D.N.Y., June 18, 2025

15.Lively v. Wayfarer Studios LLC

2025 WL 1866823, S.D.N.Y., July 07, 2025

16.Lively v. Wayfarer Studios LLC

2025 WL 1952027, S.D.N.Y., July 16, 2025

17.Lively v. Wayfarer Studios LLC

2025 WL 1999355, S.D.N.Y., July 17, 2025

18.Lively v. Wayfarer Studios LLC

2025 WL 2106288, S.D.N.Y., July 28, 2025

19.Lively v. Wayfarer Studios LLC

2025 WL 2106967, S.D.N.Y., July 28, 2025

20.Lively v. Wayfarer Studios LLC

2025 WL 2298247, S.D.N.Y., Aug. 08, 2025

21.Lively v. Wayfarer Studios LLC

2025 WL 2351013, S.D.N.Y., Aug. 13, 2025

22.Lively v. Wayfarer Studios LLC

2025 WL 2394705, S.D.N.Y., Aug. 18, 2025

23.Lively v. Wayfarer Studios LLC

2025 WL 2463633, S.D.N.Y., Aug. 27, 2025

24.Lively v. Wayfarer Studios LLC

2025 WL 2485438, S.D.N.Y., Aug. 28, 2025

25.Lively v. Wayfarer Studios LLC

2025 WL 2496307, S.D.N.Y., Aug. 29, 2025

26.Lively v. Wayfarer Studios LLC

2025 WL 2841212, S.D.N.Y., Oct. 06, 2025

27.Lively v. Wayfarer Studios LLC

2025 WL 2884407, S.D.N.Y., Oct. 09, 2025

28.Wayfarer Studios LLC v. Lively

2025 WL 2959006, S.D.N.Y., Oct. 17, 2025

29.Lively v. Wayfarer Studios, LLC.

2025 WL 3085598, S.D.N.Y., Nov. 05, 2025.

Obviously, I believe in due process and every person has a right to full and fair adjudication of their claims.  The allegations – and denials – present an important dispute.  Nothing I suggest here is, or is intended to be, critical of the court, litigants, or their counsel.

Instead, complex and sensitive issues have been well presented and promptly and thoroughly addressed.  In fact, the Judge is doing precisely what the December 2015 amendments to Fed.R.Civ.P. 1 directed. The Rules “should be construed, administered, and employed by the court….” [emphasis added].

Federal Judges manage what I would consider to be a crushing caseload.  The Southern District of New York has many important cases. E.g., State v. Noem, No. 1:25-cv-08106 (Oct. 16, 2025)(“The State of New York here sues to compel the federal government to give the MTA  the nearly $34 million grant the federal government already had targeted for the MTA.”); In re Acetaminophen – ASD-ADHD Products Liability Litigation, 1:22md3043 (DLC)(MDL with 367 personal injury cases); Am. Ass’n of Univ. Professors v. United States Dep’t of Justice, 2025 WL 1684817 (S.D.N.Y. June 16, 2025).

For the 12-month period ending June 30, 2025, the Southern District of New York had 28 judgeships. stfj_x1a_630.2025.xlsx.  There were 430 unweighted[1] filings per judgeship, of which 378 were civil and 25 were criminal.  During the same time frame, the median time to trial was 34.2 months.  stfj_t3_630.2025.xlsx

Many years ago, I clerked for a federal judge.  A pro se litigant came to the Clerk’s office to complain that their cases – numbering over a dozen – were not being decided.  I explained that the Judge had hundreds of cases.  The litigant thought for a moment, and responded:  “Yes, but mine are the important ones.”

How much attention does a big case deserve?  Between February 28^th and November 5^th, roughly eight months, there were 29 opinions issued in Lively.

I don’t have an answer.  Closer to my home, according to the most recent District of Maryland 2021 Annual Report, the weighted case filing per judgeship was 405 cases.  I have never handled 405 cases at one time in my entire career.

“Judges work tirelessly every day to meet growing demands and resolve cases as quickly as possible, but with the volume we have and the shortage of judges we have, it just makes it a very difficult proposition,” said Judge Timothy Corrigan, of the Middle District of Florida, whose court is in desperate need of additional Article III judges.

“The saying, ‘justice delayed is justice denied’ rings true here,’” he said.

Case backlogs affect more than just the litigants. For example, case delays can force businesses to halt production lines and leave employees out of work indefinitely. Federal district court rulings often have a significant impact on communities, businesses, and local economies.

The Need for Additional Judgeships: Litigants Suffer When Cases Linger (U.S. Courts Nov. 18, 2024).  Chief Judge Randy Crane, of the Southern District of Texas, said: “Our current caseload is crushing.” Id.

In FY 2021, 3,450 civil cases and 413 criminal cases were filed in the District of Maryland.  Why Does it Take So Long to Get a Judicial Decision? (Feb. 9, 2025).

While my guess is that none of them involve a $161 million claim, none could possibly demand the amount of attention devoted to Lively.  However, in each of those cases, the litigants feel: “Yes, but mine are the important ones.”

This blog was initially posted on  Electronic Discovery Reference Model.

UPDATED: Nov. 21, 2025.

______

[1] Generally, unweighted filings do not consider the complexity of cases.

Lifestyle Realty (“DKG”) is a real estate brokerage firm.  It sued four individual defendants and Compass DMV LLC, alleging that they planned to take confidential information and start a competitor, The Phoenix Group of Compass.

REQUEST TO MOVE FOR SANCTIONS:

COURT REPORTER IN “MEET & CONFER”

DKG filed a notice that it sought leave to move for “spoliation relief.”  It alleged that defendant Natalie Perez had wiped a DKG laptop after she anticipated litigation and after she had retained counsel.  Ms. Perez and the other Individual Defendants challenged assertions that the duty had arisen, the culpable state of mind requirement, and prejudice.

In response to the notice, the Court held a hearing and: “The Court further ordered the parties to meet and confer with a court reporter present to address the potential spoliation issue, and to update the Court with its efforts to resolve the same.” Id. at *2 (emphasis added).  That is an unusual, but not unprecedent, directive.  Felder: Part 1 of 4:  Court-Ordered Transcription of “Meet and Confer” Session (Aug. 13, 2024).

After the conference was unsuccessful, the Court entered a briefing order.  The decision is roughly 18 pages long and this blog skips over many details.

The Court applied the ESI Rule, Fed.R.Civ.P. 37(e).  It wrote:

Because the Fourth Circuit has not yet articulated the standard of proof required to prevail on such a motion, clear and convincing evidence, as opposed to mere preponderance of the evidence certainly suffices.

Id. at *6.

FACTUAL CHRONOLOGY

The four Individual Defendants were hired between 2016 and 2019.  DKG provided them with access to G-Suite/Google Workspace.  “On or about May 17, 2022, while still employed at DKG, Individual Defendants signed contracts to join Defendant DMV Compass as real estate agents on June 28, 2022…. Individual Defendant Perez received an identical contract, but did not sign it.”

All of Individual Defendants simultaneously resigned on June 28, 2022. The Court wrote: “That same day, they announced their new brokerage group called ‘Phoenix Group,’ which was affiliated with Defendant Compass DMV.”

Defendant Perez used the DKG laptop for both business and personal purposes.  “The same day that the Individual Defendants resigned, Individual Defendant Perez returned a laptop to Plaintiff that had been erased of its contents and restored to its original factory settings.”  DKG’s forensic expert, Andreas Mueller, could not recover any data from it.

DKG sent a preservation and claim letter to the individual defendants on July 1, 2022.  They then sought counsel.

DKG relied on chats and email from May and June 2022 which it alleged were inculpatory. It claimed that they showed manipulation of data and misappropriation.  Further, on June 28, 2022, DKG “logged into the Individual Defendants’ Gmail accounts and found emails between them that show acceptance of certain calendar events, ‘but for which no corresponding event (sic) appear on the Google calendar, indicating that the calendar events have been deleted.’”

The Individual Defendants provided what they contended were, in my words, benign explanations. For example, one of them asserted that “the reference to contacting an employment attorney in an email involving an employee of Defendant Compass DMV were her way of deciding how to behave appropriately upon separating from employment with Plaintiff.”

Additionally, “[t]hey all denied thinking that litigation involving [DKG’s principal] Ms. Kerr was a possibility.”  Further, they all asserted that during a June 28, 2025, resignation meeting, everyone was cordial and there was no mention of any dispute.  Instead, DKG discussed a follow up meeting and a smooth client transition.

All professed to being “shocked” or “stunned” or “surprised” at receiving the July 1, 2022 cease-and-desist letter, and claimed that they did not consider litigation…. All claimed that they did not anticipate litigation before receiving that letter.

Defendant Perez stated that it was not her practice to store work materials on the DKG laptop.  Instead, she used Google Drive for storage.  She contended that anything on the laptop was also on the cloud drive.  Further:

Before Individual Defendant Perez ceased working for DKG, in or about early June 2022, she made a “mirror image” of the DKG-issued laptop….  In particular, she did this by copying the data from the DKG-issued laptop “to an external hard drive owned by [Andrea] Bramson,” and then uploading the data from there to a laptop….

To “recap,” these events were prior to receipt of the “cease and desist” letter.  After verifying that the copy was complete, Perez reset the DKG-issued laptop to factory settings. She claimed in part that she was protecting “over five years of personal and confidential information….” DKG’s expert opined that the machine had contained 56,823 files and folders.  He also confirmed a “mass-copy” to external media.

At the time of the spoliation motion, defense expert, Trustpoint, had extracted and produced approximately 40,000 documents from the Individual Defendants’ computers and phones.  Defendant Perez gave Trustpoint the external device that had been used to copy the DKG laptop. Ms. Perez said: “I believe that DKG has all documents, communications or material which existed on the DKG laptop.”

On these facts, the Court wrote: “The parties do not dispute that the DKG-issued laptop is the only device that is the subject of the spoliation motion…. Given that reality, the Court carefully considered the conduct of each Individual Defendant.”  It concluded that DKG had not met its burden of proof.

THE OTHER DEFENDANTS ARE NOT CULPABLE

Turning to the Individual Defendants other than Ms. Perez, the Court found no evidence that they had used the laptop. It wrote that “Plaintiff has not put forth any evidence that Individual Defendants Kirn, Fitzgerald, or Goelman played any role in Perez’s copying and later erasing the material from the DKG-issued laptop. Indeed, the evidence before the Court establishes otherwise.”

Nor was there any evidence that the others knew that Defendant Perez was going to erase that laptop.  Therefore, none of them could be sanctioned under Fed.R.Civ.P. 37(e).

Ms. PEREZ’S DUTY TO PRESERVE

WAS TRIGGERED BEFORE WIPING OF LAPTOP

At pages *12, passim, the Court reviewed the case law governing triggering of the duty to preserve.  The latest date of trigger was the July 1, 2022, notice from DKG, which stated a claim and demanded preservation.

However, DKG argued for an earlier trigger date.

The Court first analyzed Individual Defendant Perez’s self-serving statement that she did not anticipate litigation before July 1, 2022…. The Court did not find this statement to be persuasive, given the fact that more contemporaneous statements from 2022 existed.

The Court wrote: “A judge tasked with finding the facts has the right to disregard any aspect of a witness’ testimony or statements if judge finds that information provided is inherently improbable due to interest or bias.”

The Court next carefully analyzed a series of earlier communications and found that, despite Ms. Perez recognizing that there would be a “negative react[ion]” to their departure from DKG,  the communications do not “clearly signify” that Ms. Perez anticipated litigation.

The Court noted Ms. Perez’s concern with protecting personal information on that device; however:

The Court finds this statement self-serving and not credible; Individual Defendant Perez could have erased her personal information and left the remaining information on the laptop that she concedes was not her own but belonged to her employer and was given to her to aid her in performing work for Plaintiff, not to store her personal information.

This showed her plan to conceal DKG data and “[t]hese facts must be considered, along with the May 11-12 chats, in analyzing when the duty to preserve arose.” Those chats included Ms. Perez writing: “Whatever we can have in our ‘back pocket’ for [DKG] to hesitate going after us is essential. Especially for me and Susan and our database because she’s gonna go after us just like she did David.”

The Court held that, based on the clear and convincing evidence, Ms. Perez reasonably anticipated litigation before June 28, 2022, the date when she returned the wiped laptop.  Further, knowing that the contents she copied would assist her with her clients at her new job, DKG had shown that Ms. Perez knew the deleted information was relevant.

HOWEVER, DKG FAILED TO SHOW THE ESI WAS LOST

Defendants argued that DKG cannot show that the purportedly lost ESI “actually existed.”  The Court rejected that, writing “why else would Individual Defendant Perez take steps to ‘mirror’ and migrate this data to the Perez laptop if it had nothing to do with existing clients and possible leads?”

However, to be “lost” the ESI must be “irretrievable from another source, including other custodians.” The Court determined that:

Plaintiff has failed to meet its burden to establish that the information on that laptop is truly irretrievable from another source…. Relatedly, Plaintiff has failed to demonstrate that it made a good-faith attempt to explore alternatives before filing the spoliation motion.

In short, DKG failed to conduct sufficient depositions to prove irretrievable loss.  “In contrast, the Individual Defendants, who do not have the burden of proof, have put before the Court unrefuted evidence that Individual Defendant Perez made a ‘mirror image’ of the DKG-issued laptop and confirmed that the contents of the DKG-issued laptop matched what she copied to the Perez laptop.”  And, approximately 40,000 documents had been produced.

Ms. PEREZ DID NOT FAIL TO TAKE REASONABLE PRESERVATION STEPS

The Court explained that: “As a general matter, ‘reasonable steps to preserve’ does not mean that Individual Defendant Perez had a duty to preserve every shred of paper, every e-mail or electronic document, and every back up tape.” [cleaned up].

Ms. Perez submitted evidence of the copying of the laptop – a “mirror image.”  First ESI was copied to an external drive and then to another laptop. The Court wrote: “Individual Defendant Perez verified that ‘the material on the DKG laptop matched the material on the Perez laptop by using the Perez laptop and the DKG laptop and seeing that all of the files, folders, and data were in the same locations on both laptops.’”

There was no discussion about whether the double-copying process altered key metadata.  In fact, DKG had not deposed Ms. Perez about the exact steps taken to create the “mirror image.” Nor did DKG ask for a forensic examination of the external drive.

The Court concluded:

In sum, Plaintiff has failed to establish, by clear and convincing evidence, that Individual Defendant Perez has truly “lost” the relevant ESI that was on the DKG-issued laptop (it does not exist in its entirety elsewhere) because of Perez’s failure to take reasonable steps to preserve it.

RESTORATION OR REPLACEMENT THROUGH ADDITIONAL DISCOVERY

The Court stated: “The law is clear that Plaintiff must show that the lost ESI cannot be restored or replaced through additional discovery….” Here, DKG failed to meet its burden.

In addition to the 40,000 documents and material extracted by Trustpoint: “Individual Defendants Kirn, Fitzgerald, and Goelman each deny deleting any materials ‘from my phone or computer.’”  Further, there was no evidence to refute the assertion that the material exist on DKG’s Google Drive.

For additional information on replacement or restoration, see Secondary Evidence as a “Gap Filler” (Mar. 11, 2022); Satisfactory Secondary Evidence Prevents Sanction (Sep. 4, 2021); Secondary Evidence of Missing Video Permitted (Dec. 10 2023).

NO PREJUDICE or INTENT TO DEPRIVE

The Court wrote that “in order to find prejudice to Plaintiff, the Court must first find that the information has been lost. See Fed. R. Civ. P. 37(e)(1) (‘upon finding prejudice to another party from loss of the information’)(emphasis supplied)….”

DKG would need to show that  it “cannot present evidence essential to its underlying claim.”  Here, there was no showing of a deprivation of “evidence” essential to DKG proving its claim.

Given its prior holdings, the Court did not need to reach “intent to deprive” under Rule 37(e)(2).  It wrote that there was “little question” that Ms. Perez intentionally and deliberately wiped the DKG laptop.  However, if the other predicates of Rule 37(e) had been satisfied, it still would have had to resolve whether there was intent to deprive.  One may speculate that, given the copying to an external drive and then to another computer, that burden may not have been met. For additional information on intent, see Failure to Show “Intent to Deprive” Leads to Denial of Rule 37(e)(2) Sanctions (Mar. 5, 2024).

The Court outlined a process to resolve discovery issues, and wrote that “[t]he goal is to attempt to quantify a workable ‘discovery budget’ that is proportional to what is at issue in the case.” [Emphasis added].

Initially, during a hearing, the Court raised concerns about the breadth of plaintiff’s discovery requests and the nature of defense objections.  The Court’s memorandum opinion provided guidance for a meet-and-confer.

The Court wrote that: “One of the most important, but apparently least understood or followed, of the discovery rules is Fed.R.Civ.P. 26(g), enacted in 1983.”  That is the “stop and think” rule that provides that an attorney’s signature is a certification of reasonable and responsible conduct.  One purpose of the Rule is to curb discovery abuse.  The Mancia decision states that:

[Rule 26(g)] aspires to eliminate one of the most prevalent of all discovery abuses: kneejerk discovery requests served without consideration of cost or burden to the responding party….  Similarly, Rule 26(g) also was enacted over twenty-five years ago to bring an end to the equally abusive practice of objecting to discovery requests reflexively—but not reflectively—and without a factual basis.[1]

The Court explained that: “The failure to engage in discovery as required by Rule 26(g) is one reason why the cost of discovery is so widely criticized as being excessive—to the point of pricing litigants out of court.”  It added:

Rule 26(g) charges those responsible for the success or failure of pretrial discovery—the trial judge and the lawyers for the adverse parties—with approaching the process properly: discovery must be initiated and responded to responsibly, in accordance with the letter and spirit of the discovery rules, to achieve a proper purpose (i.e., not to harass, unnecessarily delay, or impose needless expense), and be proportional to what is at issue in the litigation, and if it is not, the judge is expected to impose appropriate sanctions to punish and deter.

The Mancia decision went on to explain how cooperation and Rule 26(g) should work together to reduce costs.  “However central the adversary system is to our way of formal dispute resolution, there is nothing inherent in it that precludes cooperation between the parties and their attorneys during the litigation process to achieve orderly and cost effective discovery of the competing facts on which the system depends.”

The Court wrote: “Thus, rules of procedure, ethics and even statutes make clear that there are limits to how the adversary system may operate during discovery.”  It expressly approved The Sedona Conference Cooperation Proclamation.

The Mancia Court’s multi-step solution to the problems in Mancia was:

• “First, I asked Plaintiffs and Defendants each to estimate the likely range of provable damages that foreseeably could be awarded if Plaintiffs prevail at trial.”
• “I then ordered that counsel for Plaintiffs and Defendants compare these estimates and attempt to identify a foreseeable range of damages, from zero if Plaintiffs do not prevail, to the largest award they likely could prove if they succeed.”
• “I also asked Plaintiffs’ counsel to estimate their attorneys’ fees.”

This “rough estimate” was designed to provide the range of the “amount in controversy” for proportionality analysis, i.e., a “discovery budget.”

Next the Court directed the parties to discuss the amount of discovery that had already been provided, “and then discuss the additional discovery still sought by Plaintiffs, in order to evaluate the Rule 26(b)(2)(C) factors, to determine whether Plaintiffs’ legitimate additional discovery needs could be fulfilled from non-duplicative, more convenient, less burdensome, or less expensive sources than those currently sought by the Plaintiffs.”

The parties were then directed to attempt to reach agreement – in full or in part – on what additional discovery should be provided, expressly considering “phased discovery.”

Finally, any remaining disputes were to be presented to the Court.  The opinion concluded:

[I]t is in the interests of each of the parties to engage in this process cooperatively. For the Defendants, doing so will almost certainly result in having to produce less discovery, at lower cost. For the Plaintiffs, cooperation will almost certainly result in getting helpful information more quickly, and both Plaintiffs and Defendants are better off if they can avoid the costs associated with the voluminous filings submitted to the court in connection with this dispute.

_______

[1] The Court wrote that: “The failure to particularize these objections as required leads to one of two conclusions: either the Defendants lacked a factual basis to make the objections that they did, which would violate Rule 26(g), or they complied with Rule 26(g), made a reasonable inquiry before answering and discovered facts that would support a legitimate objection, but they were waived for failure to specify them as required.”

At the outset, the Court wrote that it “is given great flexibility to order only that discovery that is  reasonable for a case, and to adjust the timing of discovery and apportion costs and burdens in a way that is fair and reasonable.”

The Court addressed a number of issues, including the need for particularized objections and a sufficient privilege log.

I was most interested by Request for Production No. 1.

Plaintiff sought “all” documents regarding termination of “any” of defendants’ employees in Maryland, Virginia, and the District of Columbia, with no temporal restriction.

First, the Court wrote that the request was facially overbroad.

Second, the Court noted that defendants’ objection was conclusory:

Although the information sought, arguably, is relevant to plaintiff’s claims, the scope of information sought is far too great. Unfortunately, defendant did little in the way of providing facts to assist the Court in tailoring the proper scope.

Third, the Court set a limited date range for discovery and imposed other limitations on scope.

Finally, having limited the request, the Court ordered:

In this regard, defendant will be required to expend up to 40 hours of time to search for these documents. It will submit with its responses an affidavit, signed under penalty of perjury by a person with personal knowledge of the facts in the affidavit, that contains a particularized itemization of the time spent to locate the documents, to enable plaintiff and the Court, if the sufficiency of the search is challenged, to determine whether or not it was diligent, and done in good faith. A failure to properly comply with this requirement will result in the imposition of appropriate sanctions against defendant and/or its counsel.

Having imposed a proportionality limit, the Marens Court also provided an escape clause for the requesting party:

If, following review of the documents produced as a result of the search ordered, plaintiff contends that it is entitled to additional documents within this category, it may file a motion seeking additional documents. If meritorious, the plaintiff will be allowed additional discovery of these documents, provided it pays to defendant the actual cost to defendant for the time needed to locate, assemble and reproduce any such additional documents. [Emphasis added].

In a similar vein, as to a number of other document requests, after a limited production, the Court wrote:  “Following review of these documents, if plaintiff seeks more, he may file a motion requesting it. If meritorious, more discovery will be ordered, subject to the Court’s review to determine whether the plaintiff should be required to pay all or some of the costs related to any additional discovery.”

The judicial author of Marens wrote that “a court can reduce the burden and expense of document discovery by capping the amount of time that the producing party must spend responding, or ordering that the requesting party share all or part of the costs. By imposing numerical or cost limits on discovery, a court can facilitate phased discovery–requiring the parties to focus first on information most likely to affect the outcome of the case and conditioning further discovery on a showing that the results of the initial limited discovery justifies more, given the proportionality factors.”  The Hon. Paul W. Grimm (ret.), “Are We Insane? The Quest for Proportionality in the Discovery Rules of the Federal Rules of Civil Procedure,” 36 Rev. Litig. 117, 171–72 (2017).

The plaintiff moved to compel use of its proposed custodian list by defendant, T-Mobile. The Dale court explained: “The present discovery dispute is about whether three custodians – out of a list of fifty – must be included as part of the defendant’s discovery inquiry. All three of the disputed custodians are in-house counsel for T-Mobile.” Id.

The present impasse came after six months of negotiations.”  Id.

One good question is why the parties allowed the matter to drag on for so long.  See When Must a Motion to Compel Be Filed?  – Part 2  (Sep. 6, 2024) (the Turner court wrote that Turner waited too long to move to compel because a negotiating impasse triggered the duty to file such a motion);  Plaintiffs Raised This Issue With the Court Too Late (Oct. 7, 2024).

Initially, defendant T-Mobile proposed a list of 29 custodians.  Six weeks later, plaintiffs counter-proposed twice as many.  Plaintiffs’ list included at least four T-Mobile attorneys.  T-Mobile waited six weeks – – see the pattern? – – to respond, and the parties then met to confer.

T-Mobile was willing to add 10 of the plaintiffs’ additional 31 custodians, but not the attorneys.  The plaintiffs, in the court’s words, “would not budge.”

And, the Dale court wrote that“[t]he haggling continued.”  Id.  T-Mobile agreed to add one more custodian, but not the attorneys because, it argued: most of their documents would be privileged; they purportedly had little relevant information; and, if they did, the plaintiffs could get it from the other 40 custodians.

The court wrote: “Plaintiffs offered to drop one of the four lawyers from their proposal. Defendant then offered to agree to 50 custodians if plaintiffs would simply drop the attorneys. That was unacceptable to the plaintiffs and so the negotiations continued. In exchange for keeping the three lawyers on the list – Ham, Miller, and Nelson – plaintiffs offered to drop three non-lawyers, keeping the total at 50. The defendant had already agreed to plaintiffs’ demand to double the number of custodians, so dropping three of those extra names in exchange for the three lawyers was not much of a compromise, if it could be called one at all. But, plaintiffs simply would not budge on the three lawyers, and so the parties’ dispute proved unsolvable. They have applied here for resolution.”

In Rayome v. ABT Electronics, 2024 WL 1435098 (N.D. Ill. Apr. 3, 2024), the court wrote that “it would be in the parties’ interest to reach a negotiated result. It should not be forgotten that a party could be ‘right,’ but find itself on the losing side of a court’s ruling.”

In Fleury v. Un. Pac. R. Co., 2024 WL 1620613 (N.D. Ill. Apr. 15, 2024), the court wrote:  “Courts have vast discretion in resolving discovery disputes and that often means there’s no right or wrong answer.”  See There’s No Right or Wrong Answer – But There Are Mistakes (Apr. 19, 2024).

The Dale court reached a similar conclusion.  It noted that discovery decisions are discretionary and:

Discretion, it cannot be too often emphasized, denotes the absence of hard and fast rules….  Being a range, not a point, discretion allows two decision-makers – on virtually identical facts – to arrive at opposite conclusions, both of which can constitute appropriate exercises of discretion….  After review of the parties’ submissions, it has to be said that the discretionary needle points in the defendant’s favor.

Id. at *1 (emphasis added).  It wrote:

[J]ust because counsel in this case insist that there are 50 or 60 stones to be looked under, does not mean they get to look under every one of them…. First of all, frankly, fifty custodians is a lot. And, it’s really a lot when they are essentially all of the requesting parties’ choosing….  Even without the three attorneys, fifty custodians is quite a lot – to say the least. Indeed, some might even say it is too many.

Id. at *2-3 (emphasis added).

After pointing to plaintiffs’ failure to address proportionality or sufficiently demonstrate the importance of the issues at stake in the action, id. at *3, the court wrote:

And, certainly, it is naive to think that the discovery that is being sought in this case from several attorneys would not be time-consuming and costly – and not just for the immediate parties. Obviously, privilege claims as to documents from the lawyers would far exceed privilege claims as to non-attorneys. There would be a privilege log for each lawyer – their files total 442 gigabytes. How many pages would that be? Your results may vary, but it seems safe to say the number would be staggering.  Each privilege log would undoubtedly be huge. And, it would be a legitimate prediction – based on experience with class action discovery and privilege logs – that plaintiffs would challenge most, or at least, many of the claims of privilege. Perhaps rightfully so; perhaps not. But it is certain that, regardless, the parties would be back in court, with an extensive dispute, demanding an in camera review – a process which is not only time-consuming and burdensome, but all too often not terribly accurate as the process is conducted blind since a court can never fully grasp the context of the hundreds or thousands of documents under consideration.

Id. at *3 (emphasis added).  “[D]iscovery demands are not permissible merely because a lawyer has a desire for information.”  Id. at *4.  Discovery has boundaries and plaintiffs’ motion was held to have exceeded them.  “When the foregoing is weighed on the ‘proportional-to-the-needs-of-the-case’ scale, the balance tips decidedly over to the disproportionate side – especially given the unpersuasive arguments regarding the relevance of the discovery from the three lawyers.”  Id.

The court took a deep dive into the facts and concluded that two of the lawyers were involved prior to acquisition by merger and this case involved post-acquisition facts.  It wrote that plaintiff  “does not have much to say” about a third lawyer.  As to the fourth lawyer: “Plaintiff does add that Kathleen Ham had some influence on pricing post-merger…, but from the looks of the job titles on the fifty-person list, so would a lot of others.”  Id. at *5.

In conclusion:

All things being considered, fifty custodians certainly provide a reasonable opportunity – at the very least – for the plaintiffs to reasonably investigate their case. Adding three or four in-house counsel to that list is out of proportion to the needs of the case. The aphorism, “the book is not worth the candle” is not out of place here.

Id. at *5.

See also, Doug Austin, Fifty Custodians is Enough, Rules Court (ediscoverytoday.com) (Oct. 9, 2024).

This blog was initially posted on  Electronic Discovery Reference Model.

The Little Engine That Could | Barnes & Noble® (barnesandnoble.com) is a children’s story by Watty Piper about “the little engine that, despite her size, triumphantly pulls a train full of wonderful things to the children waiting on the other side of a mountain.”

In Design With Friends, Inc. v. Target Corporation, 2024 WL 433114 (D. Del. Sept. 27, 2024), “Design with Friends is a small company with a big claim. It is suing Target for copyright infringement and breach of contract.”

Design sought and obtained litigation financing from Validity Finance. The court explained: “Design had the claim, Validity had the cash, and each saw a mutually beneficial deal.”

It added:  “Here, Target seeks reams of documents from Validity Finance about its funding of this lawsuit.”  Id. at *1.

After Design approached Validity Finance:

Validity needed to assure itself that this was a claim worth backing, so it signed nondisclosure agreements with Design. Next, Design’s lawyers sent over a trove of confidential documents containing the facts that the lawyers considered most important, as well judgments about “the merits of [Design’s] proposed claims, [Design’s] planned litigation strategy, predictions about Target’s … litigation strategy, and counsel’s estimates of expected damages.”

The court explained: “Those assessments left a trail of information about what Design’s claim was worth. And they were the judgments of lawyers with insider knowledge, conferring candidly behind the shield of a nondisclosure agreement.”

Not surprisingly, “Target wanted to get its hands on them.”  Id.  It served a subpoena on Validity Finance, which then moved to quash it, arguing privilege and disproportionate burden.  That motion was granted.

First, the court held that Validity Finance’s valuations and Design’s communications about the suit were protected work product.  Id. at *1.

Were the financing documents prepared for legal analysis in anticipation of litigation or for a business decision, i.e., investment?  The Design court wrote that these documents “straddle the line between legal and business purposes.” The former is protected work product; the latter is not.

However, the Design court held that the documents “are confidential documents created by lawyers to evaluate the strengths, weaknesses, and strategy of an impending lawsuit. While those documents informed an investment decision, they did so by evaluating whether a lawsuit had merit and what damages it might recover. That is legal analysis done for a legal purpose.”  Id. at *2.  In short:  “The work-product doctrine exists to protect lawyers’ research into and candid discussions about their claims.…  That means records like these.”  Id.

That analysis and decision applied to both documents created before and after Validity Finance agreed to fund Design’s lawsuit.  “It would make no sense to protect only those documents created after the parties formally sign a financing agreement.”  Id. at *3.

In litigation finance, one of those realities is that financiers need to evaluate the strength of a case before agreeing to fund it. These internal discussions leave a revealing trail of mental impressions, legal theories, and strategic notes—all created as confidential internal documents or sent under nondisclosure agreements, and so written with vulnerable candor.…  If the work-product doctrine did not protect these records, then plaintiffs who got litigation finance would need to expose these confidential attorney impressions to their opponents. That would chill lawyers from discussing a pending case frankly. The work-product doctrine was created to prevent that result.

Id. at *3.

Second, the Design court held that Validity Finance had not waived its protection by an allegedly defective privilege log.  It wrote: “True, Validity’s log claimed privileges and protections over categories of information instead of identifying specific documents. But the log existed…. It was timely…. And it covered the documents here…. So Validity did not waive its protection.”  Id. at *3; see How Much Detail is Enough in a Privilege Log? (Apr. 9, 2024); Privilege Logs:  New Techniques to Achieve Proportionality – The “Certification Log” (Mar. 4, 2024); Categorical Privilege Log Presented Interpretive Issues (Nov. 17, 2021); and, Categorical Privilege Logs: Don’t Shoot a Mouse with an Elephant Gun (Mar. 25, 2021).

Third, the court wrote “[t]hat leaves Target’s request for documents about the relationship between Design and Validity and discovery about Validity itself. I deny each remaining request because each would impose a burden disproportionate to their value.”  Id.

Fed.R.Civ.P. 45(d)(1) states that: “A party or attorney responsible for issuing and serving a subpoena must take reasonable steps to avoid imposing undue burden or expense on a person subject to the subpoena. The court for the district where compliance is required must enforce this duty….”  While Rule 45 was not cited, the principle was applied.

Target sought documents from Validity Finance that Target already had.  The court did not allow Target to burden non-party Validity Finance for them. Id.

Additionally: “As for information about Validity’s relationship with Design, Target seeks this from the wrong source.  If Validity has information about this relationship, then Design presumably does too. Target should have sought this information from Design before demanding it from a nonparty.”  Id.

The Design court concluded: “When it comes to details about Validity, any negligible value is outweighed by the burden on a nonparty. Target already knows that Validity is funding the suit and that it does not need to approve a settlement…. Further minutiae about Validity are hardly relevant to whether Target infringed a copyright or breached a contract years before Validity entered the picture….  This slight relevance does not justify intrusive inquiries into the internal operations of a nonparty. So I grant Validity’s request to quash these requests as well.”  Id. at *3-4.

In sum: “Discovery requests can reach only so far.”  Id. at *1.  Target’s Rule 45 requests went too far.