Total Lack of Oversight in Discovery Searches Leads to Hefty Sanctions
Rodman v. Safeway Inc., No. 11-cv-03003-JST (N.D. Cal. Oct. 6, 2016).
The court saddled a party with nearly $700,000 in attorneys’ fees after its counsel allowed the client’s director of marketing to search for evidence without any guidance and failed to identify responsive files.
In this certified class action case, the named plaintiff, Michael Rodman, sued Safeway Inc. (“Safeway”) for breaching its contract with online shoppers by charging them higher than in-store prices. The court previously granted Rodman’s motion for partial summary judgment as to all shoppers who registered after 2006, since their online contract “promised…that the prices charged on Safeway.com would be the same as the prices charged in the physical store” from which groceries were delivered.
As to plaintiffs who registered before 2006, Rodman requested responsive documents about their contract terms, but Safeway claimed that it did “not have access to the Special Terms” then in effect. Safeway further averred that it had searched and “not located any responsive documents.” That portion of the case was set for trial in October 2015.
Seven days before trial, “Safeway produced ten highly relevant documents related to [its] pre-2006 terms and conditions.” These documents were apparently “found on a ‘legacy’ computer drive by Safeway’s Director of Marketing,” Steve Guthrie, as he prepared for trial. In his previous deposition, Guthrie had “testified that he had searched the legacy computer drive using a key word search” but had not found the responsive documents.
The court continued the case until December, by which time the parties had agreed that the court’s prior summary judgment applied to all class members, both before and after 2006. Rodman then filed this motion for discovery sanctions under Rule 26(g), because Safeway made “false and inaccurate statements” about the nonexistence of documents in its discovery responses. Safeway maintained that its search for evidence was reasonable.
Under Federal Rule of Civil Procedure 26(g), “a signing attorney [must] certify that a reasonable inquiry has been made with respect to the factual and legal basis for any discovery…response.” That reasonableness is measured objectively, with no requirement of bad faith. If a court finds that a certification violated the rule “without substantial justification,” it “must impose an appropriate sanction.”
Here, the court found that there was “no indication of bad faith” but that “Safeway’s initial search of the legacy drive was unreasonable” for three reasons. First, Safeway’s counsel did not “guide or monitor Guthrie’s search of the legacy drive in any significant way.” Second, this reliance on Guthrie’s search was misplaced because Guthrie, who had no experience conducting discovery searches, “received no meaningful assistance” from counsel and “kept no record of the searches he made.” Where counsel “is responsible for coordinating her client’s discovery efforts,” such a hands-off approach was unacceptable. Finally, the court found that the overall “evidence indicates that the search was objectively unreasonable” because “[a]nyone conducting an adequate search would have looked in those folders” and found the responsive documents given their file names.
The court therefore considered the sanctions Rodman requested, totaling $1,032,968.75. While the court agreed that “a substantial portion of the work identified by [Rodman] would not have been incurred had Safeway conducted a reasonable search,” it reduced the requested amount by one-third because Rodman would have still incurred expenses in putting forward his case even if he had promptly received all responsive discovery. The court ruled that Rodman was “not immune from blame for the failure to discover the ten documents-in-question.” During Guthrie’s deposition, Rodman asked whether he had searched within files or only in file names, to which Guthrie responded, “I don’t know.” Rodman failed to follow up on the adequacy of the search, as he issued no supplementary discovery requests.
While the court acknowledged that Rodman’s “failure to follow up in no way relieves Safeway of its discovery obligations to produce responsive documents, had such a follow-up request been made, a large portion of the subsequent work completed by [Rodman’s] attorneys may have been avoided.” Accordingly, the court ordered Safeway to pay $688,646 in attorneys’ fees.
As the court noted, counsel have the duty to ensure that someone “familiar with modern ediscovery techniques” is in charge of conducting searches for responsive data. Before certifying that they have made a reasonable inquiry under Rule 26(g), not only must lawyers review the efficacy their clients’ ediscovery searches, but they should also supervise them throughout the identification and collection processes.