Repeat Searches For ESI On Back-Up Tapes Causes Problems For Company

Posted by Gregg Mayer on Monday, March 3rd, 2008   

During discovery for electronically stored information (“ESI”), parties on both sides get together early in litigation and often agree on search terms to use for retrieving ESI. This is especially true when the volume of ESI is extensive, or the litigation involves restoring back-up tapes.

This issue proved troubling recently in a lawsuit in Michigan.

The lawsuit Henry v. Quicken Loans, Inc. involves 422 plaintiffs suing Quicken Loans under the Fair Labor Standards Act. The plaintiffs are suing for overtime pay.

Both parties agreed to search terms to locate ESI on back-up tapes owned by the defendant, Quicken. In addition, the plaintiffs – the 422 “loan consultants” who had done work for Quicken – agreed to pay for the search of Quicken’s back-up tapes. It was also agreed that Quicken’s lawyers would monitor the search. A third-party consultant would do the search.

When the consultant utilized the agreed terms in searching Quicken’s back-up tapes, however, Quicken’s lawyers did not like the results. The lawyers worried the retrieved ESI included too much potentially privileged information – communications between Quicken and its lawyers that should not be disclosed.

Consequently, the Quicken lawyers told the consultant to do the search again with changed search terms. Unhappy again, the lawyers asked for a third search, and then a fourth search, and finally settled on the fifth search.

The plaintiffs had no idea about these multiple searches. Since a single search was supposed to cost around $12,000, the plaintiffs’ lawyers were understandably baffled when a bill arrived for $79,965.

According to the court opinion

Plaintiffs’ counsel contends that without their knowledge, Defendants chose to go beyond the scope of the agreed upon protocol with numerous modified searches, resulting in a bill that bears no relation to the parties’ agreements and the Court’s order.

…

While there is no suggestion that defense counsel was acting unethically in serving his client’s interest, defense counsel’s actions exceeded the scope of the ‘direction and control’ powers this Court vested in him in his unilateral and unauthorized modifications…

The court ordered Quicken to pay for the extra searches. In addition, the court ordered the defendant to show cause – a legal phrase essentially meaning to offer legal arguments – as to why Quicken should not have to disclose all of the results from the first search.

If Quicken fails to convince the court that the modified searches were necessary, then all of the email from the first search will have to be disclosed to the plaintiffs, including the email that the lawyers worried about.

Search terms are critical in ESI retrieval and disclosure. Informed parties know what and how ESI is stored. This enables the parties to better communicate early on about what they think should be searched – and how – to avoid facing the issue of having to turn over more email than intended.

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