In LKQ Corp. v. Kia Motors Am., Inc., No. 21 C 3166 (N.D. Ill. July 6, 2023), Illinois Magistrate Judge Sunil R. Harjani “conclude[d] that Rule 26(g) of the Federal Rules of Civil Procedure can permit discovery on discovery, but LKQ has not provided specific and tangible evidence of a material discovery failure for this Court to veer discovery off-track and allow an investigation into Kia’s document production processes. As a result, LKQ’s motion is denied.”

Case Background

In this patent infringement litigation over automotive parts, Judge Harjani opened his order by stating: “The question the Court explores in this opinion is: ‘What is the authority and the standard for permitting discovery on discovery?’ Discovery production is akin to an honor system…As a general rule, attorneys do not second-guess each other’s processes for producing responsive information. They may request more information after an initial disclosure or argue about objections, but generally they do not need a deep dive into the collection, review, and processing methodology of their opponent. If second-guessing was the norm, the whole discovery system would break down into an endless barrage of motions based on mistrust about the opponent’s production.”

When the parties submitted their Joint Initial Status Report in August 2022, they stated they “anticipate that discovery may encompass electronically stored information but do not anticipate any electronic discovery disputes at this time”, to which Judge Harjani stated: “Famous last words. Unfortunately, and before this Court’s involvement, between August and November 2022, document production proceeded and the parties did not agree on an ESI protocol, nor did they ask for the Court’s assistance in establishing an ESI protocol at the start of discovery.”

In November 2022, LKQ requested that Kia be compelled to enter into or follow an ESI agreement, to which the Court held a motion hearing in January 2023 and declined to order the parties to enter into an ESI protocol. The Court explained that the parties should have entered into an ESI protocol before beginning discovery, not in the middle of it when much of the document collection, review, and production had already occurred. Instead, the Court required the parties to file separate ESI disclosures describing their search process concerning custodians, timeframe, methodology of searches, and items produced. The Court also ordered Kia to conduct another search of the eight inventors’ records and file a Rule 11 certification affirming that a reasonable inquiry had been conducted and all documents as to the eight inventors at issue in this dispute have been turned over that are in Kia’s possession, custody, or control. Both parties filed their ESI disclosures, and Kia filed its Rule 11 certification.

After reviewing the disclosure, however, LKQ served a Rule 30(b)(6) Notice of Deposition of Defendants. Eleven of the thirteen topics appeared to be directed at Kia’s ESI disclosure and Kia’s document collection efforts.

Judge’s Ruling

Regarding the Court’s authority to permit discovery on discovery, Judge Harjani stated: “Rule 26(g) is designed to curb discovery abuse by explicitly encouraging the imposition of sanctions…Thus, in this Court’s view, after reviewing the Federal Rules of Civil Procedure, the Court finds that Rule 26(g) allows a court to authorize discovery on discovery as a sanction when a court finds an attorney has violated the signature requirement in Rule 26(g).”

However, he also noted: “Discovery on discovery should be the exception, not the norm” and “Mere speculation about missing evidence is insufficient to allow discovery on discovery.”

Regarding LKQ’s assertion that Kia’s ESI disclosure did not properly identify custodians, Judge Harjani stated: “Here, Kia listed specific teams as custodians because those teams are responsible for documents that were produced from various internal databases… the court did not define the meaning of custodian generally. Accordingly, because Kia’s disclosed identities of its custodians by group are sufficient, the Court will not compel Kia to provide the individual custodians’ identities”. Regarding LKQ’s assertion that Kia’s ESI disclosure did not disclose the search methodologies it used, he stated: “The Court stated that keyword searches were not required, and ‘[c]ustodians are perfectly capable of looking for documents and producing documents.’… In the present case, Kia followed the Court’s order by describing when searches were conducted, who conducted them, how they searched for documents, and what documents were collected… Therefore, Kia’s disclosure of its search methodologies is sufficient, and the Court denies LKQ’s motion to compel Kia to provide additional transparency or a Rule 30(b)(6) designee.”

Regarding LKQ’s request that Kia produce it’s litigation hold memos (because eight of the inventors for the patents at issue had no responsive documents), Judge Harjani stated: “based on the record before the Court, Kia did not have a duty to preserve documents until early to mid-2021. Before then, Kia would not have reasonably anticipated litigation and would not have been required to preserve the inventors’ work, which took place six to fourteen years before the duty to preserve attached… Moreover, the Court also finds instructive the fact that Kia has already produced the design and development documents that LKQ claims should have been on the eight inventors’ computers… LKQ again provides nothing more than mere speculation that Kia did not institute a litigation hold in this case. LKQ contends that testimony from two inventors of the patents at issue provides evidence that they did not receive a litigation hold…However, Kia sufficiently rebuts this testimony, confirms that other inventors recalled receiving the litigation hold, and affirms that it did issue a litigation hold.”

As a result, Judge Harjani denied LKQ’s motion to compel and also declined to award fees to either party.

So, what do you think? What could LKQ have done differently, if anything, to better understand Kia’s approach to discovery? Please share any comments you might have or if you’d like to know more about a particular topic.

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