Allied Debt Collection of Virginia, L.L.C. v. Nautica Entertainment, L.L.C.

[Cite as Allied Debt Collection of Virginia, L.L.C. v. Nautica Entertainment, L.L.C., 2019-Ohio-4055.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
ALLIED DEBT COLLECTION OF :
VIRGINIA, L.L.C.,
:
Plaintiff-Appellee,
: No. 107678
v.
:
NAUTICA ENTERTAINMENT, L.L.C.,
ET AL., :
Defendants-Appellants. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED
RELEASED AND JOURNALIZED: October 3, 2019
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-17-880787
Appearances:
Patrick J. Milligan Co., L.P.A., and Patrick J. Milligan, for
appellees.
Hahn Loeser & Parks, L.L.P., Eric B. Levasseur, Anna
Leigh Gecht, and Dennis R. Rose, for appellants.
MICHELLE J. SHEEHAN, J.:
Defendants-appellants Nautica Entertainment, L.L.C., Jacobs
Entertainment, Inc., Jacobs Investments, Inc., and Mary Horoszko (collectively
“Nautica” or “Nautica Defendants”) appeal from the trial court’s order compelling
the production of the electronically stored information (“ESI”), or “mirror image,”
of “all Nautica’s computers used by Mary Horoszko.” Because we find the trial
court’s order was warranted under the circumstances, yet failed to establish
adequate protections to safeguard the confidentiality of the information contained
on the computer systems to be imaged, we affirm in part, reverse in part, and
remand.
Procedural History and Substantive Facts
On May 23, 2017, plaintiff-appellee Allied Debt Collection of Virginia,
L.L.C. (“Allied”) filed a complaint against the Nautica Defendants, Jeffrey
Livingston, and Chad Barth for actions stemming from a Kid Rock concert held at
the Jacobs Pavilion in the Nautica Entertainment Complex during the 2016
Republican National Convention. Allied states that it is a Virginia limited liability
company and assignee of any tort claims belonging to Blue Star Productions, L.L.C.
(“Blue Star”). The complaint alleged tortious interference with a contract between
Concerts for a Cause, Inc. (“CFAC”) and Blue Star, Virginia statutory business
conspiracy, fraud, theft in violation of R.C. 2307.61, and civil conspiracy. Barth is
President and a director of CFAC. Livingston is allegedly the fundraiser who handled
all negotiations on behalf of CFAC and Barth.
According to Allied, Blue Star had contracted Kid Rock, among other
acts, to perform concerts during the convention, and Blue Star searched for a venue
in Cleveland for its concerts. Blue Star ultimately rented Jacobs Pavilion, which is
owned and operated by Nautica Entertainment, through CFAC, under a shared-use
arrangement whereby Blue Star agreed to promote and produce its music concerts
at Jacobs Pavilion in exchange for providing CFAC with 1,200 Blue Star issued
tickets to the Kid Rock concert. CFAC could in turn allocate the tickets to sponsors
and guests. Allied claims that Nautica Defendants tortiously interfered with Blue
Star’s arrangement with CFAC and conspired with CFAC to circumvent Blue Star’s
ticketing process by issuing unauthorized wristbands to third parties for entry to the
concert. Allied maintains that this scheme resulted in thousands of people accessing
the Kid Rock concert without a Blue Star ticket, in contravention of the Blue
Star/CFAC arrangement.
Discovery
On September 6, 2017, the court held a case management conference
during which the court scheduled a paper discovery cutoff of November 6, 2017.
During the conference, the parties agreed to forego electronic discovery and would
exchange paper discovery only.
The parties exchanged written discovery. Discovery disputes ensued,
with both sides claiming discovery abuses. On April 5, 2018, Allied filed a motion to
compel Nautica Defendants and Jeffrey Livingston to respond to Allied’s request for
interrogatories and requests for production of documents. Regarding Nautica
Defendants, Allied claimed that Nautica failed to fully answer several interrogatories
and failed to produce numerous requested documents. Both Nautica Defendants
and Livingston opposed the motion. Thereafter, the parties entered into a stipulated
protective order. On June 11, 2018, the trial court granted Allied’s motion to compel,
ordering Nautica and Livingston to respond to discovery within five days from the
date of the order or face sanctions. Nautica Defendants served amended and
supplemental discovery responses, which included 2,495 additional pages of
documents.
Claiming Nautica’s amended and supplemental discovery responses
were still deficient, Allied filed a motion to show cause on July 25, 2018. Within this
motion, Allied requested ESI for the first time. In its motion to show cause
concerning Nautica Defendants’ paper discovery, Allied claimed that Nautica
Defendants “habitually engaged in dilatory tactics, failed to meet their discovery
obligations, and engaged in a rolling document production.” In referencing the
documents it had received in response to its requests, Allied noted that it had
received a purportedly “altered email chain” between Horoszko and Chad Barth of
CFAC. In a footnote to this reference, Allied explained that Barth’s email production
included an email that contained the word “wristbands” in two locations, while
Horoszko’s production of that same email exchange did not:
Barth’s email production: Wire I’m working on as we speak…will let
you know amount and confirmation # shortly. Wristbands we’re
working on a plan and executing it within the next hour. * * * How
many of those 4,450 do you have? How many are committed to
sponsors? I need the wristbands and info about today’s wire. Please
and thank you.
(Emphasis added.)
Horoszko’s email production: Wire I’m working on as we speak…will
let you know amount and confirmation # shortly. * * * How many of
those 4,450 do you have? How many are committed to sponsors? I
need info about today’s wire. Please and thank you.
Allied had therefore surmised that Horoszko had altered her email to
delete all references to “wristbands.” Consequently, within this footnote, Allied
“request[ed] the court order Nautica to produce the doctored email in native
format.” Nautica Defendants opposed Allied’s motion, along with this new request.
On August 14, 2018, Nautica Defendants also filed a motion to compel responses to
its written discovery requests propounded upon Allied, which the court ultimately
held in abeyance.
August Hearing
The court held a hearing on August 15, 2018, during which the parties
were scheduled to address Allied’s motion to show cause on the alleged discovery
issues. At the hearing, however, the court informed the parties that the hearing
would instead address “some emails that were exchanged that caused concern to
[Allied], who is now asking for further information from [Nautica Defendants].”
And the parties proceeded to address the purportedly altered email.
During the hearing, Allied expanded its initial footnote request for “the
doctored email in native format” to include all email communications, requesting
“e-discovery with respect to Nautica’s emails” and “an order * * * requiring Nautica
to produce the electronic email communications in their native e-discovery format.”
(Emphasis added.) Allied argued that ESI discovery is inherent in its document
request and that one altered email suggests there may be more, thus justifying the
need for ESI. Nautica opposed Allied’s new request, arguing that the parties agreed
at the case management conference that the parties would exchange paper discovery
due to the timing and cost concerns associated with electronic discovery, the parties
had not been previously subjected to produce any ESI, there had been no discussions
concerning the proper ESI protocols, Allied had the opportunity to depose Horoszko
on the altered email, and ordering ESI now would result in an undue burden and
unfair cost to Nautica Defendants. Without offering any explanation concerning the
conflicting emails, Nautica’s counsel stated only that Nautica Defendants “dispute
that there was something inappropriate done with that email.”
Acknowledging that this hearing pertained only to the allegedly
altered email, the court inquired of Nautica whether there were any other reasons
the court should not order ESI discovery in this matter, to which Nautica Defendants
replied that they have abided by the previously agreed upon discovery procedure,
discovery in the case has become extremely costly, and they believe ESI discovery
would be unduly burdensome and inappropriate. The court then ordered ESI
discovery “with respect to [Allied’s] request motion,” noting that it had not heard
“any specific reasons why it’s too burdensome despite the normal, you know, costs
of litigation that this is, according to Plaintiff seeking a $4.5 million verdict, that
would require me to not order this.” After ordering the ESI discovery of “all the
emails,” the court instructed the parties’ two IT experts to confer on the issue.
Thereafter, the court advised the parties that its order would be journalized. A
review of the record, however, reveals that no journal entry was entered.
September Hearing
On September 5, 2018, the court held a hearing on Allied’s motion to
show cause regarding Nautica’s responses to Interrogatory Nos. 7 and 12-14 and
Document Request Nos. 4, 30, and 36. During the hearing, the court found Nautica
Defendants in contempt for their failure to sufficiently respond to Allied’s discovery
requests, stating “It’s been admitted by both parties that they didn’t provide
documents. They refer to someone else’s production of documents and that they
didn’t understand what the word ‘communication’ meant and that — this has been
going on long enough, and it needs to stop.” The court then instructed Allied to
produce information pertinent to sanctions against Nautica, such as attorney fees.
The court also discussed scheduling a hearing on Nautica Defendants’ motion to
compel.
Additionally, at the September hearing, the court addressed “the
altered email issue.” In its opening statement, Allied’s counsel argued that there are
two main issues the court should consider in granting its motion to show cause —
the financial issues or records concerning Livingston that had not been fully
produced and the communications between the parties that revealed a discrepancy
in emails between Barth and Horoszko that referenced wristbands. Livingston’s
counsel asserted that Allied indeed obtained all the requested records. Counsel for
Nautica Defendants asserted that Nautica had fully responded to all discovery
requests, including “thousands of emails.”
In addressing Allied’s second issue, the altered email issue, Nautica’s
counsel represented that the parties had numerous “productive discussions,”
presumably off the record, regarding how to go about conducting the search,
electronically, but the parties disagreed on the scope of the search. Counsel also
informed the court that Allied apparently expanded its request for ESI once again,
now seeking more than the emails associated with Horoszko:
Your Honor, as I believe the court will hear, what the plaintiffs have
proposed is effectively to have a third-party outside vendor come in
and do a complete image of Ms. Horoszko’s computer. And it’s
unclear to me whether they’ve suggested that the servers should also
somehow be included. But they’ve at least I believe said Ms.
Horoszko’s computer.
Counsel then noted his concerns regarding potential attorney-client
privilege and other confidential or proprietary information and the risk of placing
this information in the hands of a third-party vendor with no restrictions. Counsel
further argued that “anything beyond the email-related data would be wholly
irrelevant, [] overbroad, and beyond what this court had ordered at the last hearing.”
In response, the court stated:
Okay. So I see a very simple and easy solution to solve these things.
That is a confidentiality protective agreement with the third-party
vendor which is done pretty routinely whenever there’s a third-party
vendor who images a computer and also an opportunity for your IT
person to identify as — in conjunction with the mirror image exactly
what communications came from your firm. It’s not that hard to do.
* * * Write up an agreement, and you’re done.
Nautica’s counsel indicated that he would be willing to propose an
order that would provide “strict limitations on what [the] third-party vendor could
do with this information,” because the parties had yet to agree on the parameters for
the ESI search. In response, Allied’s counsel once again linked the ESI issue with
its original motion to compel interrogatories, noting that the altered email was
revealed during the initial discovery exchange, and counsel agreed that there should
be an order in place concerning the ESI.
After the majority of the September hearing was spent discussing
specific interrogatories and document requests and the court found Allied’s motion
well taken and found Nautica in contempt concerning “document dumps” and
“misunderstanding communications,” Allied’s counsel raised the ESI issue. The
court asked Nautica Defendants if there was any reason they could not create a
confidentiality agreement concerning the ESI. Nautica objected on the grounds that
the request for ESI was overbroad and not consistent with what had been discussed
at the August hearing; however, counsel indicated that he would work with opposing
counsel to craft an order that would ensure the necessary confidentiality safeguards.
At this point, the court stated, “You had this opportunity for all this time, and now
we’re down to this where I have to order a mirror image of a computer to get this
information to Plaintiffs. I’m not going to take it anymore. Write an order,
protective order. I’ll sign it, and we’ll just get it done.” The court then noted that
“[w]e’ll sort out attorney-client privileges, in camera inspections. Just bring them
to me.”
According to Nautica Defendants, they attempted in good faith to
reach an agreement with Allied on a joint stipulated ESI order but were ultimately
unable to agree on the terms, including the time in which Nautica could conduct a
privilege review and the search methodology utilized to protect against the
disclosure of proprietary and confidential information. Thereafter, the parties each
filed a proposed ESI order. Nautica objected to Allied’s proposed order.
The Trial Court’s Discovery Order
On September 12, 2018, the court issued the following order:
Hearing held for plaintiff’s motion to show cause why defendants
should not be held in contempt for violating this court’s order
compelling discovery. Defendants found in contempt of court for
their failure to respond with particularity to interrogatories and
requests for documents. Plaintiff to propose any adverse inference of
fact relative to documents/information not produced to be considered
by the jury and provide defense counsel with affidavit detailing
attorney fees and expenses related to the efforts to compel discovery,
preparation of the motion, and prosecuting the show cause hearing.
Attorney fees hearing to be set. Defendant’s duty to comply with all
discovery continues and is ongoing.
Defendants ordered to provide mirror image of all Nautica’s
computers used by Mary Horoszko through third-party vendor. See
ESI order adopted and incorporated herein and entered under
separate entry.
Expanding Allied’s request for “e-discovery with respect to Nautica’s
emails,” the trial court ordered Nautica Defendants to produce a “mirror image of
all Nautica’s computers used by Mary Horoszko.” In so doing, the trial court adopted
and incorporated into its order Allied’s entire proposed ESI order verbatim. That
order compelled ESI, utilizing the third-party vendor engaged by Allied, Vestige,
with the following limitations and conditions:
1. Vestige shall collect the requested ESI from Nautica and Horoszko
by imaging and inventorying (i) the Nautica computer regularly used
by Horoszko and (ii) any production/non-backup server where
e-mails associated with her e-mail account * * * (or any other e-mail
account she has used to conduct business on behalf of Nautica, if any)
(collectively, the “Horoszko Accounts”) might otherwise be
electronically stored (collectively, the “Imaged ESI”). With respect to
the imaging of any server, such imaging shall be limited to those ESI
files associated with the Horoszko Accounts or where such ESI might
be electronically stored. Vestige shall be responsible for collecting the
ESI within five (5) days of the entry of this Order at a place, date and
time mutually agreeable between Vestige and Nautica’s information
technology (“IT”) personnel. Nautica and/or Nautica and Horoszko’s
counsel’s IT personnel shall have the right to be present and supervise
the imaging and inventorying of any ESI collected by Vestige, and
shall be provided an exact copy of any ESI forensically imaged by
Vestige prior to departing the collection locale.
2. Nautica and Horoszko’s counsel shall have the right to review the
Imaged ESI for any information protected by the attorney-client
privilege (The “Protected Information”) and shall create and produce
a log of any such Protected Information for delivery to Vestige and
Allied’s counsel within three (3) day thereof. Upon receipt of the log
identifying Protected Information, Vestige shall separate the
Protected Information from the Imaged ESI for purpose of production
and promptly produce to Allied all other ESI for the period October 1,
2014 through the present date. Allied’s counsel may request any
information withheld from production by Nautica and Horoszko to be
submitted by Vestige to the Court for determination of whether the
Protected Information is attorney-client privileged.
3. All ESI (i) collected by Vestige, and (ii) provided to Allied as part of
the Production Image, shall be deemed and treated as “confidential
Information” under the Court’s previously entered Stipulated
Protective Order (“SPO”). At all times while in possession of the ESI,
Vestige and Allied shall be bound by the SPO, a copy of which shall be
provided by Allied’s counsel to Vestige before it collects any ESI.
Vestige shall review and execute Exhibit A to the SPO and provide an
original executed copy of the same to Nautica and Horoszko’s counsel
and/or IT personnel prior to the collection of any ESI.
4. Within five (5) days of the final disposition of this action, whether
by entry of judgment or settlement, Vestige shall destroy (and attest
by affidavit to the destruction) or return to Nautica and Horoszko’s
counsel any ESI.
5. Although all ESI produced to Allied by Vestige shall be deemed and
treated as Confidential Information under the SPO, Allied may
petition the Court to deem some of the ESI collected by Vestige and
produced to Allied non-confidential, if necessary, pursuant to Section
15 of the SPO.
On September 13, 2018, Nautica Defendants appealed the trial court’s
order pertaining to the ESI.1
Assignments of Error
On appeal, Nautica Defendants assign three errors for our review,
which we will address together:
I. The trial court abused its discretion in ordering the Nautica
Defendants to produce forensic mirror images of their computers and
servers to Allied without satisfying the first step of the Bennett test.
II. The trial court abused its discretion in ordering the Nautica
Defendants to produce forensic mirror images of their computers and
servers to Allied without instituting adequate procedural safeguards
to protect their privileged, proprietary, personal, and confidential
electronically stored information (“ESI”).
III. The trial court abused its discretion in ordering the Nautica
Defendants to produce forensic mirror images of their computers and
servers to Allied without limiting the scope of the production to only
1 On September 20, 2018, this court sua sponte dismissed Nautica’s appeal for lack
of final appealable order, finding that “the mere adjudication of contempt of court is not
a final appealable order until a sanction or penalty is imposed.” Nautica Defendants filed
a motion for reconsideration of the dismissal. The motion clarified that Nautica’s appeal
concerns only the second part of the trial court’s order that compelled the production of
a “mirror image of all Nautica’s computers * * *,” which is a final appealable order because
the order compels the production of forensic imaging of a computer hard drive and the
disclosure of privileged and/or confidential material. In support, Nautica cited Fasteners
for Retail, Inc. v. Dejohn, 8th Dist. Cuyahoga No. 100333, 2014-Ohio-1729, and Bennett
v. Martin, 186 Ohio App.3d 412, 2009-Ohio-6195, 928 N.E.2d 763 (10th Dist.). Nautica’s
motion was unopposed. Upon reconsideration, we reinstated Nautica’s appeal.
the ESI reasonably calculated to lead to the discovery of admissible
evidence.
Law and Analysis
Nautica Defendants contend that the trial court abused its discretion
in compelling the forensic mirror imaging of “all Nautica’s computers used by Mary
Horoszko.” They argue that the trial court failed to conduct the appropriate
balancing test, which includes weighing the parties’ interest in discovery against
Nautica Defendants’ competing interests in privacy and confidentiality; the court
failed to institute adequate procedural safeguards for the protection of Nautica’s
privileged, proprietary, and confidential information; and the court’s order was
overbroad and unduly burdensome.
Civ.R. 26
The Ohio Rules of Civil Procedure provide a right to the “liberal
discovery of information.” Ward v. Summa Health Sys., 128 Ohio St.3d 212, 2010-
Ohio-6275, 943 N.E.2d 514, ¶ 9, citing Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio
St.3d 638, 661-662, 635 N.E.2d 331 (1994). This discovery may be obtained through
“deposition upon oral examination or written questions; written interrogatories;
production of documents, electronically stored information, or things or permission
to enter upon land or other property, for inspection and other purposes; physical
and mental examinations; and requests for admission.” Civ.R. 26(A).
Civ.R. 26(B) governs the scope of the information that a party may
obtain through discovery:
[A]ny matter, not privileged, which is relevant to the subject matter
involved in the pending action, whether it relates to the claim or
defense of the party seeking discovery or to the claim or defense of any
other party, including the existence, description, nature, custody,
condition and location of any books, documents, electronically stored
information, or other tangible things and the identity and location of
persons having knowledge of any discoverable matter.
Civ.R. 26(B)(1). Additionally, the information sought must “appear[] reasonably
calculated to lead to the discovery of admissible evidence.” Id.Specifically regarding electronically stored information,
Civ.R. 26(B)(4) provides as follows:
A party need not provide discovery of electronically stored
information when the production imposes undue burden or expense.
On motion to compel discovery or for a protective order, the party
from whom electronically stored information is sought must show
that the information is not reasonably accessible because of undue
burden or expense. If a showing of undue burden or expense is made,
the court may nonetheless order production of electronically stored
information if the requesting party shows good cause. The court shall
consider the following factors when determining if good cause exists:
(a) whether the discovery sought is unreasonably cumulative or
duplicative;
(b) whether the information sought can be obtained from some
other source that is less burdensome, or less expensive;
(c) whether the party seeking discovery has had ample
opportunity by discovery in the action to obtain the information
sought; and
(d) whether the burden or expense of the proposed discovery
outweighs the likely benefit, taking into account the relative
importance in the case of the issues on which electronic
discovery is sought, the amount in controversy, the parties’
resources, and the importance of the proposed discovery in
resolving the issues.
In ordering production of electronically stored information, the court
may specify the format, extent, timing, allocation of expenses and
other conditions for the discovery of the electronically stored
information.
Civ.R. 26(B)(4); Townsend v. Ohio DOT, 10th Dist. Franklin No. 11AP-672, 2012-
Ohio-2945, ¶ 15; Loc.R. 21.3(F)(2)(c) of the Court of Common Pleas of Cuyahoga
County, General Division (detailing similar factors for the court to consider when
determining if good cause exists for the production of ESI).
An appellate court generally reviews a discovery dispute for an abuse
of discretion. Ward, 128 Ohio St.3d 212, 2010-Ohio-6275, 943 N.E.2d 514, at ¶ 13;
Fasteners for Retail, Inc., 8th Dist. Cuyahoga No. 100333, 2014-Ohio-1729, at ¶ 19
(reviewing the trial court’s order of forensic imaging of a computer’s hard drive
under the abuse of discretion standard). An “abuse of discretion ‘connotes more
than an error of law or judgment; it implies that the court’s attitude is unreasonable,
arbitrary, or unconscionable.’” Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450
N.E.2d 1140 (1983), quoting State v. Adams, 62 Ohio St.2d 151, 157, 404 N.E.2d 144(1980). And absent an abuse of discretion, we must affirm the trial court’s
disposition on discovery matters. Lightbody v. Rust, 137 Ohio App.3d 658, 663, 739
N.E.2d 840 (8th Dist.2000).
Forensic Imaging
The trial court ordered Nautica Defendants to produce “all Nautica’s
computers used by Mary Horoszko” for a forensic examination. A forensic image,
also known as a “mirror image,” will “‘replicate bit for bit, sector for sector’” all
allocated and unallocated space on a computer’s hard drive, including any
embedded, residual, and deleted data. Bennett, 186 Ohio App.3d 412, 2009-Ohio-
6195, 928 N.E.2d 763, at ¶ 40, quoting Balboa Threadworks, Inc. v. Stucky, D.Kan.
No. 05-1157-JTM-DWB, 2006 U.S. Dist. LEXIS 29265, 7 (Mar. 24, 2006); Ferron v.
Search Cactus, L.L.C., S.D.Ohio No. 2:06-CV-327, 2008 U.S. Dist. LEXIS 34599, 10,
fn. 5 (Apr. 28, 2008) (“A mirror image copy represents a snapshot of the computer’s
records. * * * It contains all the information in the computer, including embedded,
residual, and deleted data.”).
Courts are generally reluctant to compel forensic imaging “largely due
to the risk that the imaging will improperly expose privileged and confidential
material contained on the hard drive.” Bennett at ¶ 40. To determine whether
forensic imaging is warranted, as opposed to standard discovery procedures, the
trial court must (1) weigh the parties’ interest in obtaining discovery against privacy
concerns; and (2) institute a protective protocol to ensure that forensic imaging is
not unduly intrusive. Bennett at ¶ 41, 47. This court has adopted the Bennett two-
part test utilized by the Tenth District Court of Appeals in Fasteners for Retail, Inc.
at ¶ 21.
Weighing of Interests
Before compelling forensic imaging, a trial court must first weigh the
necessity of obtaining the electronic discovery against any privacy concerns:
“[A] court must weigh ‘the significant privacy and confidentiality
concerns’ inherent in imaging against the utility or necessity of the
imaging. * * * In determining whether the particular circumstances
justify forensic imaging, a court must consider whether the
responding party has withheld requested information, whether the
responding party is unable or unwilling to search for the requested
information, and the extent to which the responding party has
complied with discovery requests. * * * When a requesting party
demonstrates either discrepancies in a response to a discovery request
or the responding party’s failure to produce requested information,
the scales tip in favor of compelling forensic imaging.”
(Citations omitted.) Fasteners for Retail, 8th Dist. Cuyahoga No. 100333, 2014-
Ohio-1729, at ¶ 24, quoting Bennett at ¶ 41; see also Scott Process Sys. v. Mitchell,
5th Dist. Stark No. 2012CA00021, 2012-Ohio-5971, ¶ 37-38 (finding the order for
forensic imaging in error where the requesting party failed to demonstrate that
paper production of records was insufficient or that the requesting party’s need for
forensic imaging outweighed the party’s privacy interests); Nithiananthan v.
Toirac, 12th Dist. Warren No. CA2011-09-098, 2012-Ohio-431, ¶ 9 (the party
requesting forensic imaging must demonstrate a “background of noncompliance”
with discovery under part one of the Bennett framework); Scotts Co., L.L.C. v.
Liberty Mut. Ins. Co., S.D.Ohio No. 3:06-CV-899, 2007 U.S. Dist. LEXIS 43005, 4-
5 (June 12, 2007), quoting Diepenhorst v. Battle Creek, W.D. Mich. No. 1:05-CV-
734, 2006 U.S. Dist. LEXIS 48551, 10-11 (June 30, 2006) (expressing reluctance to
permit intrusive forensic imaging as a matter of course on a requesting party’s “mere
suspicion” the opponent is withholding information or to “address the bare
possibility of discovery misconduct”).
Step One: Necessity of the Imaging vs. Privacy Concerns
In Bennett, the court found that the defendants repeatedly
represented that they had disclosed all responsive documents when they had not.
Bennett, 186 Ohio App.3d 412, 2009-Ohio-6195, 928 N.E.2d 763, at ¶ 42.
Additionally, the court noted that the defendants had a “lackadaisical and dilatory
approach to providing discovery” when they engaged in last-minute discovery
practice. Id. Thus, after applying the balancing factors, the court determined that
the defendants demonstrated a “willful disregard of the discovery rules,” and given
their “background of noncompliance,” the trial court properly ordered forensic
imaging. Id.In Fasteners, we determined that the record concerning discovery did
not demonstrate the requisite showing of the defendants’ noncompliance with
discovery under the first prong of the Bennett test. Specifically, we noted that the
record did not demonstrate that the documents sought by the plaintiff “were being
unlawfully withheld and not available from [Plaintiff’s] own information or other
sources.” Fasteners for Retail at ¶ 29.
Nautica Defendants contend that the trial court failed to satisfy the
first step of the Bennett analysis. In support, they claim that their conduct
concerning Allied’s request for ESI was not improper and therefore forensic imaging
was not warranted and the court “ignored” their privacy concerns. We find Nautica
Defendants’ argument unpersuasive.
Here, the record shows that in the course of Nautica Defendants’
document production, Allied discovered two conflicting emails between Horoszko
and Barth. Barth’s copy of the email included references to wristbands, while
Horoszko’s copy contained no references to wristbands. This discovery, Allied
contends, led to its belief that the email chain had been altered, and Allied became
concerned that there were other “altered” emails of which Allied was unaware. In
response to this discovery, Allied made a new motion (within its motion for
sanctions regarding the paper discovery, albeit in a footnote) requesting the court
compel forensic imaging of Nautica computers used by Horoszko. In addition, the
record shows that following a hearing on Allied’s motion to show cause regarding
certain paper discovery, the trial court found Nautica Defendants in contempt for
failing to fully and properly answer several interrogatories and failing to produce
numerous requested documents, namely Interrogatory Nos. 7 and 12-14 and
Document Request Nos. 4, 30, and 36.
Nautica Defendants argue that the court’s sanctions applied only to
Nautica’s paper discovery and their conduct relating to this new request for ESI was
not improper. We agree that the court’s sanctions appear to pertain to Nautica’s
conduct in responding to Allied’s paper discovery requests. The trial court’s order
at issue here, rather, is an ESI order in response to the alleged “altered email chain.”
The newly discovered “altered email chain,” however, demonstrates a
discrepancy in discovery that weighs in favor of compelling forensic imaging.
Bennett, 186 Ohio App.3d 412, 2009-Ohio-6195, 928 N.E.2d 763, at ¶ 41 (finding
“the scales tip in favor of compelling forensic imaging” when a requesting party
demonstrates discrepancies in a response to a discovery request); see also Simon
Property Group L.P. v. MySimon, Inc., 194 F.R.D. 639, 641 (S.D.Ind.2000)
(permitting the plaintiff to inspect the defendant’s deleted computer files where the
plaintiff demonstrated “troubling discrepancies” concerning the defendant’s
document production); Playboy Ents., Inc. v. Welles, 60 F.Supp.2d 1050, 1054-55
(S.D. Cal. 1999) (permitting forensic imaging of a defendant’s computer where the
parties, pursuant to a document request, discovered an email chain produced by one
defendant that was not produced by a codefendant and where the parties later
learned that the defendant customarily deleted emails after litigation had
commenced). Nautica Defendants do not dispute the existence of the discrepancy,
yet they offer no explanation for the apparent conflict. And forensic imaging may
reveal other deleted emails or altered emails on the Nautica computers used by
Horoszko. When the court considered the Barth/Horoszko email discrepancy along
with the history of Nautica Defendants’ discovery violations concerning paper
discovery, where in fact the court found that Nautica Defendants repeatedly failed
to produce documents, an order compelling forensic imaging was not unreasonable.
Regarding Nautica Defendants’ privacy concerns, as discussed below,
the record reflects the court considered Nautica Defendants’ privacy and
confidentiality concerns and instituted certain protective protocols. But the unique
discrepancy in discovery and the history of discovery violations weighed in favor of
forensic imaging.
In light of the foregoing, we cannot find the trial court abused its
discretion in ordering forensic imaging under the circumstances. Viewing the
record in its entirety, the showing required under the first prong of the Bennett
analysis has been satisfied.
Step Two: Protective Protocol
“Even when a defendant’s misconduct in discovery makes forensic
imaging appropriate, a court must protect the defendant’s confidential information
as well as preserve any private and privileged information.” Bennett, 186 Ohio
App.3d 412, 2009-Ohio-6195, 928 N.E.2d 763, at ¶ 47. A party’s purported failure
to produce discovery as requested or ordered “will rarely warrant unfettered access
to a party’s computer system.” Id. A trial court abuses its discretion when “its
judgment entry permits unfettered forensic imaging of a party’s electronic devices
and contains none of the Bennett protections required to conduct such forensic
analysis. Fasteners for Retail, 8th Dist. Cuyahoga No. 100333, 2014-Ohio-1729, at
¶ 33, citing Scott Process Sys., 5th Dist. Stark No. 2012CA00021, 2012-Ohio-5971,
at ¶ 36.
The Bennett court suggested, and this court followed, a protocol for
forensic imaging:
“[A]n independent computer expert, subject to a confidentiality order,
creates a forensic image of the computer system. The expert then
retrieves any responsive files (including deleted files) from the
forensic image, normally using search terms submitted by the
plaintiff. The defendant’s counsel reviews the responsive files for
privilege, creates a privilege log, and turns over the nonprivileged files
and privilege log to the plaintiff.”
Fasteners for Retail at ¶ 32, quoting Bennett at ¶ 47; Nithiananthan, 12th Dist.
Warren No. CA2011-09-098, 2012-Ohio-431, at ¶ 19 (adopting the protocol
suggested in Bennett and holding that “at minimum, several protective measures
must be enforced when ordering forensic imaging”); Scott Process Sys., supra
(adopting the Bennett protocol and reversing the trial court’s order for forensic
imaging where the order contained “none of the Bennett protections”).
In Bennett, the appellate court found that the trial court did not abuse
its discretion in ordering forensic imaging as a sanction for the defendants’
noncompliance with the trial court’s orders. Bennett at ¶ 49. The appellate court
determined, however, that the trial court erred “in not providing adequate
protections to safeguard the confidentiality of the information contained on the
computer systems to be imaged.” Id. Finding insufficient the trial court’s safeguards
for privileged and confidential information, which included permitting the party to
redact privileged information and designating certain confidential and personal
information “for attorneys’ eyes only,” the appellate court stressed the importance
of a proper protocol where forensic imaging is ordered, even where a party engages
in misconduct:
[W]e believe that more comprehensive protection is necessary,
particularly given the sensitivity of the information at issue here.
Bennett deserves a remedy for the prejudice caused by defendants’
misconduct, but that remedy should not require defendants to
sacrifice highly-sensitive, confidential information that has no
bearing on Bennett’s claims. Additionally, private information of the
computers’ users — such as personal financial information and
communications with friends and family — should not be subject to
disclosure. Therefore, we conclude that the trial court abused its
discretion in devising the procedure for the forensic imaging. We urge
the trial court to adopt a protocol similar to the one described above.
We believe that such a protocol would allow Bennett sufficient access
to the computer systems to recover useful information, while also
providing defendants with an opportunity to identify and protect
privileged and confidential matter.
Id. at ¶ 48.
Mindful of the “potential intrusiveness” of a forensic examination,
federal courts likewise utilize a “collection and review protocol” when compelling a
forensic examination, such as the following:
1. An independent computer expert shall be appointed by the Court
and shall mirror image [the party’s] computer system.
2. The parties have [a designated time in which to] meet and confer
regarding their designation of an independent computer expert. If the
parties cannot agree, on or before [a set date], each party shall submit
its recommendation to the Court, and the Court will select the expert.
3. The appointed expert shall serve as an Officer of the Court. Thus, to
the extent that this computer expert has direct or indirect access to
information protected by attorney-client privilege, such disclosure
will not result in any waiver of the [party’s] privilege.
4. The independent expert shall sign a confidentiality order.
Additionally, the expert shall be allowed to hire other outside support
if necessary in order to mirror image the [party’s] computer system.
Any outside support shall be required to sign the same confidentiality
order.
5. The expert shall mirror image the [party’s] computer system.
6. The [requesting party] shall provide a list of search terms to the
Court to identify responsive documents to its document requests on
or before [a set date]. After [the requesting party] has submitted the
search terms to the Court, [the party] shall have 5 days to submit their
objections to the Court regarding any of the search terms, which the
court will rule upon. The Court will provide the search terms to the
independent expert.
7. Once the expert has mirror imaged the [party’s] computer system,
the expert shall search the mirror image results using the search
terms. The results of the search terms and an electronic copy of all
responsive documents shall be provided to the [party] and to the
Court.
8. The [party] shall review the search term results provided by the
independent expert and identify all responsive documents. The
[party] shall either produce all responsive documents to the
[requesting party] or identify those responsive documents not
produced on a privilege log to the [requesting party] within 20 days of
the date that the [party] receives the search term results from the
independent expert. Any privilege log produced shall comply strictly
with the [the rules of court].
9. [The requesting party] shall pay for all fees and costs of hiring the
independent expert at this time. However, if at a later time there is
evidence of the [party’s] improper deletion of electronic documents or
any other associated improper conduct, the Court will revisit this issue
and consider charging [that party] for the fees and costs of the
independent expert or imposing the fees and costs on the parties in a
duly appropriate apportioned manner.
10. The independent expert shall provide a signed affidavit detailing
the steps he or she took in mirror imaging the [party’s] computer
system and searching the mirror image for the search terms within 5
days of providing the [party] and the Court with the results of the
search for search terms in the mirror image.
Wynmoor Community Council, Inc. v. QBE Ins. Corp., 280 F.R.D. 681, 687-688
(S.D.Fla.2012); Bank of Mongolia v. M&P Global Fin. Servs., 258 F.R.D. 514(S.D.Fla.2009).
Nautica Defendants contend that the trial court’s discovery order
lacks adequate protective protocols to safeguard its privileged and confidential ESI.
In support, Nautica argues that the court’s order contains no search methodology or
search terms; the order does not exclude from the search information that is not
privileged but is otherwise confidential, such as personal or proprietary information
irrelevant to the underlying action; and the order’s provision of three days in which
to conduct a privilege review of potentially hundreds of gigabytes of data is
insufficient and unreasonable. Nautica Defendants also contend that the trial
court’s order is overbroad and permits the production of irrelevant and confidential
information that is not reasonably calculated to the discovery of admissible
evidence. Thus, according to Nautica, the order exceeds the scope of discoverable
information.
Upon review, we find the trial court included some safeguards for
Nautica Defendants’ privileged and confidential matter. The record shows that the
court addressed Nautica Defendants’ privacy concerns, at least to some degree.
During the September hearing, the court engaged in a colloquy with counsel for
Nautica, during which counsel advised the court of his concern regarding protecting
confidential information, attorney-client privilege, and other personal and private
information arguably contained on Nautica’s computers. The court then instructed
the parties to fashion a protective order and the court would sign it. The court
further stated that the parties could address any issues concerning attorney-client
privileges through in camera inspections, instructing, “Just bring them to me.” The
court also executed an ESI order deeming all ESI produced to Allied as “Confidential
Information” under the court’s previously entered Stipulated Protective Order.
However, the trial court’s ESI order lacks sufficient protective
protocols intended by Bennett and numerous other courts to safeguard Nautica
Defendants’ confidential information. For example, the trial court’s order in this
case failed to include a list of search terms in its order to narrow the production of
documents. The court’s order also failed to outline a process by which the parties
could submit search terms to identify responsive documents, provide objections to
proposed search terms, and provide the search terms to an independent third-party
computer expert. Allied suggests that a search term protocol using the term
“wristbands” would not have exposed the “altered email chain” or any others from
which Nautica deleted the term “wristbands” and therefore would not have been
fruitful. We find no reason the parties are limited to one relevant search term. Given
the opportunity, the parties could agree upon other equally availing search terms
that would likely produce responsive documents. And having a procedure in place
by which the parties can object to proposed search terms ensures that the parties’
interests are protected.
Moreover, we find the lack of search terms and search protocol has
resulted in an overbroad order that risks including information irrelevant to the
underlying claims and information that may be personal, private, proprietary, or
otherwise confidential. “Courts have been cautious in requiring the mirror imaging
of computers where the request is extremely broad in nature and the connection
between the computers and the claims in the lawsuit are unduly vague or
unsubstantiated in nature.” Balboa Threadworks, Inc., D.Kan.No. 05-1157-JTM-
DWB, 2006 U.S. Dist. LEXIS 29265, at 3. Likewise, where courts do compel forensic
imaging, courts must utilize a protective protocol “to ensure that the forensic
imaging is not unduly intrusive,” which protocol serves to protect the defendant’s
confidential, private, and privileged information. Nithiananthan, 12th Dist. Warren
No. CA2011-09-098, 2012-Ohio-431, at ¶ 19, 20.
Here, the record shows that Allied’s initial request for “the doctored
email in native format” (noted within a footnote in Allied’s motion for sanctions
regarding paper discovery) developed into a request for “e-discovery with respect to
Nautica’s emails” (at the August hearing) and ultimately resulted in the court’s order
of “a mirror image of all Nautica’s computers used by Mary Horoszko.” Although
the court’s ESI order provided a protocol in which the parties could arguably prevent
the disclosure of attorney-client privilege (i.e. the creation of a privilege log), there
is nothing in the order — through search terms or other instructions — that expressly
required the third-party vendor or expert to limit its search to information relevant
to Allied/Blue Star’s claims against Nautica Defendants or to exclude personal or
confidential information, such as Horoszko’s personal or financial information or
Nautica’s proprietary information. Rather, the order broadly states that the expert
shall collect “ESI files associated with the Horoszko accounts or where such ESI
might be electronically stored.” Without relevant search terms, or other limiting
instructions, the court is essentially permitting unfettered access to irrelevant and
confidential information contained in the Nautica computers used by Horoszko.
Additionally, we find the trial court’s order failed to provide Nautica
Defendants sufficient time in which to review responsive documents for privileged
information. The court’s order provides that “counsel shall have the right to review
the Imaged ESI for any information protected by the attorney-client privilege (The
‘Protected Information’) and shall create and produce a log of any such Protected
Information for delivery to Vestige and Allied’s counsel within three (3) days
thereof.” The record shows that thousands of documents have been produced in the
course of paper discovery, and Nautica Defendants assert that forensic imaging
could access hundreds of gigabytes of data. Given this large amount of data, the
court’s allowance of only three days to review the records for privilege and
responsiveness, appropriately supplement Nautica’s responses to discovery
requests, and create a privilege log that expressly describes the nature of the
documents or communications that are protected is unreasonable. See Ameriwood
Industries v. Liberman, E.D.Mo. No. 4:06CV524-DJS, 2006 U.S. Dist. LEXIS
93380 (Dec. 27, 2006) (outlining a three-step procedure for forensic imaging and
including in its “disclosure step” a period of 20 days for review and creation of
privilege log); see also Wynmoor, 280 F.R.D. 681 (S.D.Fla.2012) (20 days for review
and creation of privilege log); Bank of Mongolia, 258 F.R.D. 514 (20 days for review
and creation of privilege log).
Conclusion
Based upon the discovery of a purportedly altered email chain and
Nautica Defendants’ history of noncompliance with the trial court’s previous
discovery orders, we find the trial court did not abuse its discretion in compelling
forensic imaging of Nautica computers. We find, however, that the trial court
abused its discretion in failing to establish the proper protective protocols that
would allow Allied sufficient access to recover useful, relevant information, while
also providing Nautica Defendants an opportunity to identify and protect privileged
and/or confidential matter.
We therefore affirm in part and reverse in part, and we remand to the
trial court for further proceedings consistent with this opinion. In remanding, we
urge the trial court to adopt a protocol similar to the protocols utilized by the cases
referenced in this opinion.
It is ordered that appellants and appellee share the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule
27 of the Rules of Appellate Procedure.
___________________________
MICHELLE J. SHEEHAN, JUDGE
EILEEN T. GALLAGHER, P.J., and
RAYMOND C. HEADEN, J., CONCUR