The pitfalls of discovery of electronically stored information (“ESI”) have become all too common — overbroad or inaccurate search term lists result in too much data for a meaningful privilege analysis, and massive productions can make review by the receiving party equally daunting. A recent federal court decision out of the District of New Jersey, I-Med Pharma, Inc. v. Biomatrix, Inc. et al., No. 03-3677 (D.N.J. Dec. 9, 2011) (Debevoise, J.) provides a set of common-sense standards for proceeding with ESI discovery searches and review, and clarifies that “exceptional circumstances” are not required to modify a discovery order, even one based on stipulation, where search terms turn out to be overbroad.
I-Med’s suit alleged a refusal to honor an exclusive distribution agreement following a merger between Biomatrix and Genzyme. During discovery, the parties stipulated to a set of search terms that would be used to look for responsive documents on I-Med’s computer systems. However, the stipulated search parameters were quite broad. The stipulated search “was not limited to targeted document custodians or relevant time period … [and] was not even limited to active files. The expert was instructed to run the search terms across all data on the computer system, including .... areas of computer memory … in which deleted and partially files and other temporary data may be found.” Slip Op. at 5.
Moreover, the search terms themselves, although containing some proper names, contained common key words like “contract,” “credit,” “discount,” “refund,” and “minimum.” Id. at 4-5. In a result that the district court said “should come as no surprise,” the stipulated search terms produced approximately 64 million hits, representing approximately 95 million pages.
I-Med, despite having stipulated to the search protocol, refused to conduct a privilege review of the material, and sought relief from the Magistrate Judge, who found “good cause” to modify the previous discovery order, and released I-Med from the burden of reviewing 95 million pages. Id. at 6. Defendants appealed to the District Judge, who concluded that relief from a stipulated discovery order could be granted without a need to show “manifest injustice.”
In analyzing the matter, Judge Debevoise evidenced the increasing sophistication that judges have towards ESI discovery matters. Looking at the effect on the party seeking to withdraw the stipulation, the District Court rightly concluded that a review of millions of documents would represent a major expenditure of attorney time and cost millions of dollars. More importantly, the Court rejected an argument that the burden of this review could be reduced by merely searching for the word “privileged.” I-Med at 10-11. Though the stipulation called for searching unallocated space files—areas of computer memory in which deleted and partial files might theoretically exist, the Court found “the Defendants had failed to demonstrate a likelihood that relevant, non-duplicative information would be found” in such areas. Id. at 11. While noting that the “precise number of hits produced was not known in advance,” the Court admonished I-Med for agreeing to the list of search terms because “it should have exercised more diligence before stipulating to such broad search terms, particularly given the scope of the search.” Id. The Court also recognized the distinction between search term “hits” and unique documents, expressing dismay that the parties seemed to have confused the two concepts. Id. at 5 n. 4. Noting that the search term list contained terms that would likely have significant overlap, the Court reluctantly “t[ook] the parties at their word” concerning the number of hits per search term versus the number of total documents.
To provide future guidance, the Court announced a new standard for parties to consider when determining if a set of search terms are reasonable: (1) the scope of documents searched and whether the search is restricted to specific computers, file systems, or document custodians; (2) any date restrictions imposed on the search; (3) whether the search terms contain proper names, uncommon abbreviations, or other terms unlikely to occur in irrelevant documents; (4) whether operators such as “and”, “not”, or “near” are used to restrict the universe of possible results; (5) whether the number of results obtained could be practically reviewed given the economics of the case and the amount of money at issue.” Id. at 11-12.
The I-Med factors provide a common-sense approach to search term lists, and a basic roadmap for parties to dispute (or justify) search term requests. Highlighting the use of proper names, uncommon abbreviations or other highly targeted terms and the use of search restrictions (and/not/near) provide good examples of concrete ways that search term lists can be made more reasonable. I-Med provides parties with a “reality check” on ESI discovery — before demanding a more comprehensive set of search terms, a party can weigh the I-Med factors to anticipate how a court may view the matter. And I-Med provides further reassurances that ESI discovery issues are not too technically complex to be resolved in a courtroom.