In No Spill, LLC v. Scepter Canada, Inc., No. 18-cv-2681-HLT-KGG (D. Kan. Oct. 19, 2021), Kansas Magistrate Judge Kenneth G. Gale granted in part and denied in part the plaintiffs’ “Motion and Suggestions to Compel Use of Search Terms for Electronically Stored Information”, overruling the defendants’ objections concerning the duty to meet and confer and undue burdensomeness and finding that the 28 search terms proposed were relevant and related to the RFPs. Judge Gale also rejected the defendants’ cost shifting request, but did find so-called “general search terms” not proportional in rejecting those terms.
In this dispute over claims for patent infringement, breach of contract, and engaging in unfair competition regarding two patents held by the plaintiffs relating to preventing the explosion of portable fuel containers, the parties agreed that they would utilize mutually agreeable search terms pursuant to an ESI Protocol but couldn’t agree on numerical search term limitations. The defendants also proposed they would produce a maximum ten custodians and five search terms per custodian per the Federal Circuit E-Discovery Model Order, followed by a proposal of 12 custodians and 8 search terms, and a condition where a search term may not result in more than 1000 non-duplicative hits – all of which were rejected by the plaintiffs.
Continued negotiation ensued and the plaintiffs planned to move forward with a motion to compel if the defendants did not agree to the final set of search terms that would have resulted in 342,375 documents de-duplicated. The plaintiffs rejected proposals by the defendants for the plaintiffs to identify which production requests (RFPs) each search term was intended to address or agree to cost shifting over 10,000 documents, so the plaintiffs filed the motion in August 2021. The defendant objected that the duty to meet and confer had not been met, the RFPs were overly burdensome, and the RFPs were not proportional to the needs of the case.
Regarding the defendants’ objection regarding the duty to meet and confer, Judge Gale stated: “the Court is satisfied that there is sufficient good faith discussion. The parties have had several meetings concerning the matter, discussed the situation with the Court, and have communicated for over a year. Having a dispute regarding how the search terms relate to the RFPs does not necessarily rise to bad-faith discussion. And in any event, additional time to confer would likely be futile…Accordingly, Scepter’s objection that the duty to meet and confer has not been met is overruled.”
Noting that the plaintiffs “attached an exhibit which provided a summary of the search terms and how they relate to specific RFPs”, Judge Gale stated that the plaintiffs “breakdown the RFPs into four categories: (1) operation of the product; (2) Scepter’s knowledge of No Spill’s products; (3) Scepter’s financial information; and (4) Scepter’s fulfillment of No Spill’s orders.” After a detailed review of all of the search terms, Judge Gale stated: “The Court has determined that all the search terms are relevant and seek discoverable information sought in the RFPs.”
Judge Gale also rejected the defendants’ burdensome argument, stating that “Scepter fails to provide evidence of its burdensome objection” and rejecting the defendants’ citation of Lawson v. Spirit Aerosystems, noting in that case “the court repeatedly relied on several affidavits and declarations in the record”. He also compared the review estimate of $416,635.50 against the potential damages award of more than $70 million in rejecting that argument.
Judge Gale also did find “the search terms sought are largely proportional”, but not so-called “general search terms” (such as “flame mitigation device,” “No Spill,” or “nospill.com”).
Finally, Judge Gale considered the defendants’ request for the plaintiffs to bear the cost of discovery after 10,000 documents, where he stated:
“In this case, the Court does not find it appropriate to apply any cost-shifting analysis. The Court is only compelling the use of search terms that are proportional and not overly burdensome. The advisory committee notes indicates that it should not be common or the norm. And most importantly, there is no agreement in place between the parties that addresses cost-shifting. As such, the Court is not ordering any cost-shifting. However, in the event No Spill wishes to use the search terms the Court has determined to be disproportionate, then they will be responsible for the costs. This is also consistent with the model order regarding e-discovery in patent cases.”
So, what do you think? Should courts consider the assistance of an independent Special Master to resolve search term disputes? Please share any comments you might have or if you’d like to know more about a particular topic.
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