In Owen v. Elastos Foundation, et al., No. 19-CV-5462 (GHW) (BCM) (S.D.N.Y. Mar. 16, 2023), New York Magistrate Judge Barbara Moses denied plaintiff’s request to order defendant to access the personal email account of its director (Ben Li) to either “produce all responsive documents or a report as to the volume and search hits of recoverable documents” finding that she “cannot conclude, on the present record, that Elastos controls Mr. Li’s Personal Google Account” and that she wasn’t “persuaded that Mr. Li used his Personal Google Account to conduct Elastos business.”
This case involved allegations that defendants violated various provisions of the Securities Act of 1933 over the sale of cryptocurrency tokens. Mr. Li was defendant Director of Operations, and one of three members of its board of directors, but not a defendant in the action. Li’s Elastos Google Account was searched in connection with this action, resulting in the production of over 13,000 documents. In total, more than 30,000 documents were produced from various Li sources, including his laptop, phone, and personal WeChat account. However, when asked for permission to search his personal account, Li refused.
Discovery showed that Li received two emails concerning a personal investment at his elastos.org email address and forwarded them to his gmail.com email address. On one occasion, he received an email concerning Elastos business at his gmail.com email address, which he forwarded to his elastos.org email address. And on two occasions, Li participated in editing Elastos documents (a spreadsheet and whitepaper) using email addresses that were apparently generated by “Google Sheets” and “Google Docs,” respectively.
Plaintiffs contended that the emails showing communications to or from Li’s gmail.com email address were produced only incidentally, and argued that, at a minimum, the previously agreed-upon search terms should be run across Li’s entire personal account to determine whether there were any further hits.
Judge Moses stated: “The parties’ dispute presents two questions: (1) whether Mr. Li’s Personal Google Account is within the ‘control’ of defendant Elastos, as that term is used in Fed. R. Civ. P. 34, such that Elastos can be ordered to search it and produce any relevant contents; and (2) if so, whether the discovery sought would be nonetheless be disproportional to the needs of the case, see Fed. R. Civ. P. 26(b)(1), and therefore should not be required.” She also noted that: “Documents are considered to be ‘under a party’s control when that party has the right, authority, or practical ability to obtain the documents from a non-party to the action.’”
Noting that “’The burden of demonstrating that the party from whom the documents are sought has the practical ability to obtain those documents lies with the party seeking the discovery.’”, Judge Moses stated: “In this case, plaintiffs have not met that burden.”
Judge Moses also noted: “Defendants do not claim that Mr. Li has refused entirely to cooperate in Elastos’s discovery efforts. To the contrary: he agreed to turn over his laptop and phone to be searched…; he sat for deposition; and he prepared a declaration, in response to an order by this Court, detailing Elastos’s efforts to search the company’s Google, Dropbox, and Zoom accounts, as well as its dissemination of litigation hold memos…Defendants report, however, that they ‘have requested multiple times for Mr. Li to provide access to his personal email account for collection and search but he has refused.’…Plaintiffs present no contrary evidence. On balance, I cannot conclude, on the present record, that Elastos controls Mr. Li’s Personal Google Account.”
Judge Moses added: “Even if plaintiffs had borne their burden as to control, I am not persuaded that Mr. Li used his Personal Google Account to conduct Elastos business. At best, plaintiffs point to a single instance where he received an Elastos business document via his gmail.com email address – but promptly forwarded it to his Elastos Google Account, where it was collected and produced to plaintiffs.”
As a result, Judge Moses ruled: “Plaintiffs have not shown, on the present record, that they are entitled to an order compelling Elastos to search Mr. Li’s Personal Google Account. ‘Should further discovery reveal a valid justification for such a search, [plaintiffs] may renew [their] request.’”
So, what do you think? Should a non-party be forced to have their personal email searched when there is evidence of any work emails within it? Please share any comments you might have or if you’d like to know more about a particular topic.
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