In Jim Hawk Truck-Trailers of Sioux Falls, Inc. v. Crossroads Trailer Sales & Serv., Inc., No. 4:20-CV-04058-KES (D.S.D. July 29, 2022), South Dakota District Judge Karen E. Schreier granted in part and denied in part plaintiff’s motion to compel, including denying the motion on seven ESI search terms, citing the metrics used by defendant to illustrate a low relevancy rate of the searches.

Case Discussion

In this case involving alleged misappropriation of trade secrets and several state-law tort claims against a competitor business, the Court ruled on several discovery disputes included in a motion to compel filed by the plaintiff. One of the disputes related to search terms, where the plaintiff originally requested defendant conduct an ESI search of various devices for 13 individuals – the nine Individual Defendants and four additional defendant employees – by applying 99 different search terms to the sources of data. Defendant conducted searches and produced documents using 92 of those terms, but contended that the remaining seven search terms – “trailer sale*, phone* w/10 contact!*, Pricing!*, Tour*, Order* w/10 part*, Mechanic*, Inside sale*” – dramatically increased the volume of ESI to be reviewed.

The defendant indicated that search terms were estimated to result in 42,216 documents for review. The defendant and its ESI vendor estimated the price for processing and applying analytics to this additional data to be between $3,150-$4,275, and further provided a high-end cost estimate of $114,586.29 for 600 hours of attorney time to review the documents.

The plaintiff did not dispute any of these estimates but instead argued that these additional expenses were proportional to the needs of the case because the search terms are only being pulled from a discrete six-month period.

Judge’s Ruling

Regarding the plaintiff’s contention that the expenses were proportional based on the six-month period, Judge Schreier stated: “This argument is unpersuasive. It is the amount of documents produced, not the period of time to which these search terms are applied, that results in burdensome costs. The court finds that the ESI produced by using the seven search terms in dispute is not reasonably accessible.”

Judge Schreier then proceeded to use the seven “good cause” factors under which discovery can be ordered, even if the ESI is not reasonably accessible, as follows:

(1) the specificity of the discovery request: “the request is sufficiently specific because the search terms are specifically laid out. This factor weighs in favor of Jim Hawk.”

(2) the quantity of information available from other and more easily accessed sources: “The second factor favors Crossroads. There has been extensive discovery in this case, including the production of phone records and text messages for the Individual Defendants, commission sales reports, sale invoices, and financial income statements (including those compelled by this order)…Likewise, Crossroads has already produced ESI responsive to 92 search terms of 13 employees’ data…A vast quantity of information is already accessible from these sources.”

(3) the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources: “The third factor is irrelevant because spoilage of previous electronic data is not at issue.”

(4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources and (5) predictions as to the importance and usefulness of the further information: “The fourth and fifth factors favor Crossroads. Crossroads and its ESI vendor assert that the relevancy rate of these search terms will be incredibly low…Specifically, they have utilized a continuous active learning (CAL) model to determine the relevancy of previous searched…This model has deemed 7% of its total ESI review as relevant…The last 2,000 documents reviewed by this model have not exceeded a relevancy rate of 5%…Crossroads expects further review of ESI to have a similarly low rate of relevance…Jim Hawk does not dispute these figures…Instead, it argues that Crossroads cannot ‘represent with any degree of certainty, that there will be no discoverable documents produced from these searches.’…Jim Hawk then provides one sentence explanations for how each search term corresponds with facts alleged in this case…These rebuttals do not persuade the court of the likelihood of finding information important to the case.”

(6) the importance of the issues at stake in the litigation: “The sixth factor favors Crossroads. Although the claims in this case are of substantial importance to the parties, they are not of public concern.”

(7) the parties’ resources: “the seventh factor is neutral because neither party has provided the court with any information about their resources.”

While noting that “A court should not treat the ‘good cause’ factors as a checklist; rather, the factors should be weighed by importance”, Judge Schreier stated, in denying the motion on the seven ESI search terms: “the low relevancy rate of current ESI and Jim Hawk’s failure to show a heightened likelihood that new and relevant information may be discovered using the search terms in dispute is the most important “good cause” factor here. The substantial burden and expense required to produce the sought ESI documents cannot be justified by this low likelihood…Thus, Jim Hawk fails to show good cause for the discovery of documents that are not reasonably accessible.”

So, what do you think? Why do you think more parties don’t use metrics like this in their objections? Please share any comments you might have or if you’d like to know more about a particular topic.

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