In Miloedu, Inc. v. James, No. 21-cv-09261-JST (RMI), (N.D. Cal. Aug. 8, 2022), California Magistrate Judge Robert M. Illman, noting that the defendants’ arguments were “beyond meritless” and “cannot be characterized any way other than utterly frivolous”, granted the plaintiff’s request to compel production of discovery, as well as attorneys’ fees.

Case Discussion

In this intellectual property dispute involving the plaintiff company (MILO) and a former director, officer, and a founding shareholder (James) of the plaintiff company that left to form a competitor company, the parties proposed, and the court approved and entered a protocol for the inspection of various defendant devices. After the plaintiff noted that defendants had failed to comply with the terms of the preliminary injunction order, including permitting a third-party eDiscovery consultant to forensically image several devices and accounts that James identified during his deposition in January 2022, the court adopted the Inspection Protocol as an order of the court.

After analyzing the information on the devices, the eDiscovery consultant created a spreadsheet list of files to be produced to both parties, but the native copies were first produced to the defendants so that they could mark their copy of the inventory with their assertions of either privilege or privacy.

On August 2, 2022, the parties filed a letter brief that Judge Illman stated “leaves little room for doubt that Defendants have violated the letter and spirit of the Protocol in their zeal to obstruct Plaintiff’s access to evidence.” As stated, “Defendants’ counsel marked thousands of items in the Inventory [as] ‘private’ and repeated the same boilerplate, nonspecific explanation as to each designation, violating both the terms and spirit of the Protocol.” For example, defense counsel even marked as “private and unrelated to MILO” an email from MILO’s counsel to James that was sent prior to James retaining counsel.

The Plaintiff also complained that moments before the instant letter brief was to be completed and readied for filing, Defendants produced a new version of their inventory, with new designations (causing Plaintiff to have to review the new designations quickly); however, Plaintiff noted that “thousands of boilerplate and nonspecific privacy designations remain.” The eDiscovery consultant also produced a report in connection with its analysis of the imaged repositories – first to Defendants, and Defendants refused to tender a copy to Plaintiff or to allow the consultant to do so, based on a “curious” assertion of “work product,” because the consultant reportedly addressed it to Defendants.

Judge’s Ruling

Judge Illman began his review of the issues by stating: “Before proceeding to Defendants’ arguments, the court will begin with the observation that they are all beyond meritless – the arguments cannot be characterized any way other than utterly frivolous. For that reason, as set forth below, unless they wish to find themselves on the receiving end of severe sanctions (quite apart from awarding Plaintiff attorneys’ fees as the court fully intends to do), Defendants and their counsel should take great care to avoid wasting the court’s time and resources in this manner going forward.”

Continuing, he said: “Defendant’s opposition to Plaintiff’s request to compel discovery under the Protocol is premised on two faulty and illusory foundations: (1) Defendants ignoring Plaintiff’s drastic reduction of the temporal scope of documents and information sought; and, (2) a hopelessly frivolous attempt at reversing the Protocol’s burden of explaining the bases for resisting discovery (imposed on Defendants) and attempting to improperly saddle Plaintiff with the burden of justifying why it should receive documents or information that are currently only in Defendant’s possession”.

As for the consultant report, Judge Illman stated: “Defendants’ portion of the brief ventures beyond the outer boundary of frivolous argument, to where it is squarely situated on grounds that can only be described as nonsensical…Without anything remotely resembling a coherent explanation, Defendants characterize Setec’s analytical report as a ‘fraudulent Plaintiff-created document,’ based only on Defendants’ incorrect statement that ‘Plaintiff instructed Setec to create this document and this document is not identified or called for in the Court-adopted Inspection Protocol.’” Noting that the Protocol empowered the consultant to “also assess whether any software has been downloaded or implemented to hinder or frustrate the forensic analysis or recovery or any materials from the Electronic Sources”, Judge Illman stated: “This assessment calls for a report, or some other narrative description outside the inventory framework. Because Defendants’ objections to the production of Setec’s report are little more than blusterous noise, those objections are OVERRULED.”

Judge Illman also ordered the eDiscovery consultant to “immediately disclose its analytical report to Plaintiff” and, for all entries for which Defendants provided non-specific or boilerplate designations ordered the defendants to “immediately tender the entirety of that material to Plaintiff without any further objections or delays”. Judge Illman also granted the plaintiff attorneys’ fees associated with addressing the boilerplate objections.

Judge Illman also allowed for the parties to address disputes regarding items sufficiently articulated, but warned the defendants that “playing games with the court is a dangerous endeavor” and also warned that “if the court determines again that Defendants or their counsel have made even one argument, or taken even one position, that the court determines to constitute willful obstructionism or bad faith or relying on arguments that are frivolous, the court will not hesitate to visit harsh sanctions upon defense counsel and upon Defendants, including hefty fines for the discovery misconduct targeting defense counsel directly, and/or the sua sponte issuance of an order to show cause, followed by a contempt hearing, and culminating in the issuance of a report and recommendation urging the presiding judge to find Defendants and/or defense counsel in contempt of court.”

So, what do you think? Do you agree that the defendants’ objections were “beyond meritless”? Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant, an Affinity partner of eDiscovery Today.

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