The ESI Protocol: Your Word is Your Bond… Or, Is It?

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One of the primary arguments against incorporating an “ESI Protocol” into a court order is that doing so may be the first step down the road to sanctions.[1]


That fear of sanctions may be well-founded. For example, in her excellent 2023 ESI Protocol Practical Guide-Download | eDiscovery Assistant at 9, Kelly Twigger wrote: “Courts hold parties to what they agree in an ESI protocol.”[2]  In the wise words of ESI-expert Tom O’Connor: “Be careful not just what you wish for but what you agree to ….”

There is language in many decisions that supports the concern that a court-ordered protocol is inflexible.  One court wrote: “In this case, the parties agreed to, and the Court ordered, an ESI Protocol.”  It then added:

This order is about agreements. Without them, courts would have to rule on everything, and litigation would be even more expensive than it already is. Courts encourage parties to work out things like ESI protocols and other procedures governing discovery. We do this because we assume that the parties have some idea what they want to obtain in discovery, they know much better than the Court does what is possible or feasible, and they are best able to estimate the costs involved in whatever they agree to do. And when parties reach an agreement, we ordinarily need to hold them to it. Otherwise, if discovery agreements routinely turn out to be worthless and unenforceable, we deprive the parties of any reason to enter into them.

In re StubHub Refund Litig., 2023 WL 3092972, at *1 (N.D. Cal. Apr. 25, 2023)(emphasis added).

In In re Valsartan, Losartan, & Irbesartan Prod. Liab. Litig., 337 F.R.D. 610, 618 (D.N.J. 2020), the court found that timely notice and “meet and confer” obligations in an agreed protocol were violated.  It wrote that the court “will not countenance” that situation.  Id. at 619. The court approvingly wrote that “Plaintiffs are … attempting to compel compliance with the Court Ordered  Protocol.” Id. at 622-23.  It added: “Given the Court’s ruling that there has been a violation of the Court Ordered Protocol, the Court has wide discretion to fashion an equitable remedy,” which it did.  Id. at 624.

A nightmare scenario developed out of an ill-advised ESI agreement in In re Fannie Mae Securities Litigation, 552 F.3d 814 (D.C. Cir. 2009). The appellate court wrote:  “The Office of Federal Housing Enterprise Oversight (OFHEO) appeals a district court order holding it in contempt for failing to comply with a discovery deadline to which it agreed. Though we appreciate OFHEO’s efforts to comply, we conclude that it ultimately failed to do so and find no abuse of discretion in the district court’s contempt finding or choice of sanction.”

In Fannie Mae, three parties issued subpoenas to OFHEO, a non-party.  After a series of skirmishes, there was agreement to a “stipulated order,” which is a kind of ESI Protocol.[3]

The Fannie Mae agreement provided that: “OFHEO will work with the Individual Defendants … to develop appropriate search terms…. [T]he Individual Defendants will specify the search terms to be used.”[4]

When defendants submitted over 400 search terms which covered 660,000 documents, id. at 817, OFHEO balked, arguing that the terms were not appropriate.  However, it was held to its agreement.  The District Court ruled “that the stipulated order gave the individual defendants sole discretion to specify search terms and imposed no limits on permissible terms.”  Id.

OFHEO had to hire 50 contract attorneys and:  “The total amount OFHEO spent on the individual defendants’ discovery requests eventually reached over $6 million, more than 9 percent of the agency’s entire annual budget.”  [emphasis added].

Even with that herculean effort, and even after extensions of time, OFHEO failed to meet its deadlines.  It was held in contempt of court because it had “treated its Court-ordered deadlines as movable goal posts and has repeatedly miscalculated the efforts required for compliance and sought thereafter to move them.”  Id. at 818.  The District Court imposed a tailored sanction.

That decision was affirmed on appeal, with the D.C. Circuit writing that it would construe a consent decree as a matter of contract law and “we interpret the meaning of the stipulated order based on the document itself….  In sum, the stipulated order obligated OFHEO to process the search terms the individual defendants specified and to meet the corresponding deadlines, and the office violated the order by failing to produce privilege logs on time.”

The appellate court suggested that, under the terms of the agreement, the only limit on defendants choice of search terms would be the general contractual duty of good faith and fair dealing.  Id. at 820-21.  In that regard, OFHEO asserted bad faith because the terms resulted in retrieving roughly 80% of the office’s emails.  Id. at 821.  The Court replied that “far from showing bad faith, that figure may simply indicate that most of the emails actually bear some relevance, or at least include language captured by reasonable search terms.”  Id. at 821.

Fannie Mae is a poster child for the fear of court-approved ESI agreements.  The D.C. Circuit concluded:  “In sum, the stipulated order obligated OFHEO to process the search terms the individual defendants specified and to meet the corresponding deadlines, and the office violated the order by failing to produce privilege logs on time.”  Fannie Mae, 552 F.3d at 821.  It wrote that OFHEO “chose to sign the stipulated order, which ended the hearing and unquestionably settled the discovery dispute. Having stipulated to a schedule for complying with the subpoenas, OFHEO can hardly complain now about being held to its agreement.”  Id. at 822.


While carelessness should not be encouraged, I think Fannie Mae may be wrongly-decided.  At times, an off ramp may be reasonable and appropriate.

One of the analyses that I find most persuasive was in I-Med Pharma Inc. v. Biomatrix, Inc., 2011 WL 6140658 (D.N.J. Dec. 9, 2011).  However, the court’s opening sentence did not bode well: “This case highlights the dangers of carelessness and inattention in e-discovery….  The instant dispute concerns data retrieved from a forensic investigation of Plaintiff’s computer system.”

The I-Med Pharma parties stipulated – – an ESI Protocol in substance if not form – – to hire an expert to conduct a keyword search of plaintiff’s computer network.  In doing so, they agreed to search terms.

Just as in Fannie Mae, the search was poorly designed.  In the court’s words:  “The search was not limited to targeted document custodians or relevant time periods. Indeed, the search was not even limited to active files.”  It included unallocated space.  The court wrote:

The results should come as no surprise. The broad search terms hit millions of times across the large data set. In the unallocated space alone, the terms generated 64,382,929 hits. These hits represent an estimated 95 million pages of data.

Plaintiff’s reply is equally unsurprising.  In the court’s words: “Plaintiff balked at the prospect of conducting a privilege review of this material and petitioned Magistrate Judge Shipp for relief from the stipulation.”

The Magistrate Judge found good cause to modify the order.  Defendants objected, asserting that a finding of “exceptional circumstances” and “manifest injustice” was necessary to modify the order.

Defendants were unsuccessful.  The District Judge agreed with the Magistrate Judge, writing:

Clearly a court has the power to modify stipulations concerning discovery terms and deadlines while discovery is still ongoing without the showing of manifest injustice. A court could not effectively perform its duty to fairly and efficiently manage discovery if every minor change to a stipulated briefing schedule or deposition date required a showing of “exceptional circumstances” or “substantial and real harm.” While courts should not casually discard agreements between the parties, nor should they abrogate their duty to balance both burden and the likelihood of uncovering relevant evidence merely because a party made an improvident agreement….

While Plaintiff should have known better than to agree to the search terms used here, the interests of justice and basic fairness are little served by forcing Plaintiff to undertake an enormously expensive privilege review of material that is unlikely to contain non-duplicative evidence.

And as the routine administration of discovery matters do not even require this heightened level of attention, the September 9, 2011 order [issued by the Magistrate Judge] is doubtlessly proper. [emphasis added].

I-Med Pharma  makes sense.

As another court noted: “[P]arties may make early ESI decisions based on limited information….” Therefore, “proportionality considerations may need to be re-balanced at later points in the litigation,” and, “discovery plans may be modified when new information is learned.”  Nichols v. Noom Inc., 2021 WL 948646, at *3 (S.D.N.Y. Mar. 11, 2021).

The Nichols court acknowledged “the inherent tension between the value and efficiency in creating an ESI protocol up front that addresses all potentially foreseeable issues on the one hand, and getting discovery underway in a case on the other hand.”  Id. at *5. The court provided a “work around” to strike an appropriate balance.

In re StubHub Refund Litig., 2023 WL 3092972, at *1 (N.D. Cal. Apr. 25, 2023), also provided an off ramp.  StubHub failed to perform according to an agreement.  Notably, however, StubHub did not move to modify the protocol. Id. at *1.  The court added:

Let’s get back to basics: Litigants should figure out what they are able to do before they enter into an agreement to do something. Litigants should live up to their agreements, especially when they are embodied in court orders, as the ESI Protocol is here. And if for some reason, a party learns that a so-ordered discovery agreement has become impossible to comply with, the party should promptly move for relief, with a good showing that despite its best efforts, compliance is impossible. In this case, StubHub has decided to do “none of the above.” Its document production is in violation of the ESI Protocol, StubHub hasn’t done everything it could, it hasn’t moved for relief from the protocol, and it hasn’t settled on a clear story for why producing the linked documents can’t be done. [emphasis added].

The StubHub Court concluded that “the best option is to hold StubHub to its agreement….”  However, it added that:  “This order is without prejudice to StubHub moving to modify the ESI Protocol.”


Cooperation, transparency, and reasonableness are always the best approaches to handling ESI.

The Hon. Gary R. Jones has suggested that, “[w]hen drafting ESI protocols, parties should think about building in a ‘get out of jail free card’ that recognizes that in every case there are changes and circumstances with the data that might require some wiggle room.”  Cassandre Coyer, E-Discovery Caselaw 2023: ESI Protocols, Intent to Deprive Standard and Relevancy Redactions | Legaltech News (Nov. 10, 2023)(emphasis added).

And, as noted above, Kelly Twigger has written that any agreement should “clearly state that the parties will meet and confer to agree on new issues that arise after the initial drafting.”  She properly points out that you can’t “plan for everything” and there “will always be unforeseen” issues.  Thus, she correctly explains that negotiating an ESI Protocol “is not a one-and-done process….”

“Perfection” is not, and never has been, the standard for litigation and it should not be the standard for an ESI Protocol.

In a July 2011 blog, What Does “The Making of a Surgeon” Have to Do With ESI and “Software Glitches?”, I cited multiple authorities stating that principle.

For example, in “Winning isn’t everything, it’s the only thing,” Ralph Losey wrote that: “Perfection is not attainable, but if we chase perfection we can gain excellence.”

In short:  “[T]he perfect is the enemy of the good,” P. Grimm, L. Bergstrom, and M. Kraeutter, “Federal Rule of Evidence 502: Has It Lived Up To Its Potential?,” 17 Rich.J.L. & Tech. 13, 41, quoting Voltaire Quotes, Famous Quotes.

To the same effect, in the context of search, the Sedona Conference wrote in its “Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery,” 8 Sed.Conf.L.J. 189, 204, 211 (2007):

The discovery standard is, after all, reasonableness, not perfection. . . . .  A standard of absolute perfection is and always has been unrealistic, but now, with quantitative data available, we know perfection is  not only unrealistic, but also quite simply unachievable. . . . “[P]erfection should not be allowed to be an enemy of the attainable and reasonable goal of reasonableness.”

ESI Protocols and “discovery plans” should not be lightly disregarded, nor should they be held to a standard of perfection.  Courts may look at many factors in deciding how and when to permit modification of an ESI Protocol.  Proportionality should always be a consideration.  Was the mistake mutual or unilateral?  Does the protocol express the parties real intention?  Does inequity result?  Was it negotiated early in the process or later, with substantially more information available?  Is change justified by an unforeseeable factor?  Should the agreement be interpreted on its four corners or with parol evidence?  Were ESI experts or “ESI Liaisons” present when the agreement was negotiated?  And, there are likely many other factors to consider.

Under Fed.R.Civ.P. 1, the rules “should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.”

This blog was first published on January 6, 2024, as The ESI Protocol: Your Word is Your Bond… Or, Is It?  – EDRM.  It is a follow up to “ESI Protocol” v. “Discovery Plan” (Jan. 2, 2024).


[1] “ESI Protocol” v. “Discovery Plan”

[2] As explained below, Kelly properly and correctly suggested drafting solutions around that problem.

[3] “Stipulated Order” often a synonym for an “ESI Protocol.” See “ESI Protocol” v. “Discovery Plan” – E-Discovery LLC (“Some people call them ‘ESI Agreements,’ ‘ESI Stipulations,’ or ‘Stipulated Protocols.’  Judge Goddard’s Rule 26(f) Conference Checklist uses the term ‘ESI Order.’”).

[4] The appellate court wrote: “Following the first day of the hearing, OFHEO and the individual defendants entered into a stipulated order that held the contempt motions in abeyance and required OFHEO to conduct searches of its disaster-recovery backup tapes and provide all responsive documents and privilege logs by January 4, 2008.”