Court Denies Monetary Sanctions Based on Overdesignation of Documents As Confidential-Outside Counsel Eyes Only But Orders Defendants to Re-Designate Documents and Pay Cost for Redesignating Documents in the Plaintiff's Document Management System

by Jeffer Mangels Butler & Mitchell LLP

In this patent infringement action brought by plaintiff Trustees of Boston University ("BU") , BU alleged that defendants infringed U.S. Patent No. 5,686,738 (the "'738 Patent"), which pertains to light emitting diodes ("LEDs"). BU moved for sanctions against Defendants and their counsel for overdesignating documents as "Confidential-Outside Counsel Eyes Only."

After BU served document requests for emails, Defendants ran search terms that produced over 3.5 million pages of emails. The Defendants then designated every document of that production as Outside Counsel Only, but the Defendants did not review each document to determine whether it in fact contained confidential information. As explained by the district court, "[b]ecause there was not enough time to review each document and meet [the 30-day] deadline, Defendants reviewed the documents quickly and determined that the emails generally met the requirement of the Global Protective Order, and marked them "CONFIDENTIAL-OUTSIDE COUNSEL EYES ONLY."'

BU argued that the Defendants abused the Outside Counsel Only designation by designating the entirety of their email production. As a result, BU sought an order sanctioning the Defendants and their counsel in the amount of $40,000, "representing a conservative value of time wasted on hundreds of thousands of irrelevant and over-designated material."

As explained by the district court, the Defendants acknowledged that they did not review each of the emails produced to determine whether they in fact met the definition of Outside Counsel Only materials. "Instead, they confirmed that the searches returned emails with highly confidential information and marked all of them Outside Counsel Only. Id. BU has produced several examples of documents that clearly do not qualify as Confidential, let alone Outside Counsel Only. See Docket No. 558-1. Even if they had not, it is difficult, if not impossible, to imagine that every single email being produced is so sensitive that a blanket designation of Outside Counsel Only is appropriate."

The district court then referenced that the "Protective Order contemplates specific, rather than blanket, designations, placing the burden on a Producing Party to make a good faith determination that the documents it wishes to designate as Confidential or Outside Counsel Only fall within those categories. Protective Order at ¶ 27. Even after the Receiving Party challenges a confidentiality designation, the burden remains with the Producing Party to show that the designation is proper. Id. at ¶ 36. The Defendants' blanket designation of the entirety of their email production as Outside Counsel Only violates the letter and the spirit of the Protective Order."

The defendants attempted to blame the improper designations on BU's unwillingness to narrow its search terms. The district court found that "this dispute underscores the parties' inability to cooperate in discovery in this matter. See Docket No. 507. Both sides share the blame. BU should have been willing to discuss narrowing the search terms in the first instance. In addition, rather than reviewing all the documents, BU could have gone back to the Defendants and requested that they narrow the searches. The Defendants, on the other hand, should have raised the issue again instead of producing all of the emails generated by the searches with Outside Counsel Only designations. Alternatively, they could have requested additional time to perform their review. In short, this dispute could have been avoided had the parties attempted to work together in good faith to resolve these issues."

As a result, "the Court declines to award the sanctions requested by BU. Rather, the Court orders as follows. Within ten days of the date of this Order, the parties shall meaningfully confer, in order to agree to more discrete search terms, or combination of search terms, that may reduce the volume of emails to be produced but also increase the percentage of documents that will actually be relevant. The parties must also agree on the format for the production of responsive, non-privileged emails as well as the search protocol. Within seven days of agreeing upon the search terms, the Defendants shall search the emails of the agreed-upon custodians using the agreed-upon search terms and protocol. They shall produce responsive emails within thirty days after running the searches. In accordance with the terms of the Protective Order, the Defendants shall make confidentiality designations in good faith on an individual document basis."

Nonetheless, the district court did believe the overdesignations merited a payment to BU for re-classification of the documents. "Because the Defendants' overdesignations are especially egregious and any reclassification will cause BU to expend additional resources in reclassifying the documents in its document management system, the Court orders the Defendants to bear the reasonable costs of reclassifying documents in BU's document management system. BU shall file an affidavit supporting those costs within two weeks after it has finished the review and reclassification of the emails produced in accordance with this Order."

Trustee of Boston University v. Everlight Electronics Co., LTD., Case No. 12-cv-11935-PBS (D. Mass. July 2014)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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