[co-author: Tony McGrath, Principle and Office Litigation Manager]
Magistrate Judge R. Steven Whalen agreed with UPS that it did not have to spend six months and $120,000 to recover data stored on backup tapes that may not be relevant to the case if UPS prevails in its efforts to limit the scope of the putative class’s claims. Instead, the Court directed the parties to share information and agree upon an appropriate methodology for statistical sampling.
In Solo v. United Parcel Services Co., No. 14-12719, 2017 U.S. Dist. LEXIS ______ (E.D. Mich. January 10, 2017) a putative class of shipping customers alleged that UPS breached its shipping contracts by repeatedly overcharging for shipments with a declared value of more than $300. Plaintiffs made what they likely believed to be a reasonable request – how many packages with a declared value of more than $300 were shipped within the several years covered by Plaintiffs’ claims?
UPS argued that the request was excessively burdensome. A UPS manager stated due to the sheer volume of packages the company shipped it maintained only six months of “package level detail” in readily-available, or “live”, form. After six months, the information was archived onto back-up tapes. According to UPS, extracting usable data from the archived information would require custom software, take six months, and have an estimated cost of $120,000. Instead of producing the full scope of requested information, UPS produced an estimated number of packages for a period in 2013 based on a method that extrapolated “live” data from a more recent period.
The Court looked at two discovery concepts set forth in the 2015 amendments to the Federal Rules of Civil Procedure to decide the issue—cooperation and proportionality. First, Rule 1 places a heightened duty of cooperation on the parties for procedural matters like discovery. Second, Rule 26(b)(1) emphasizes that discovery should be proportional to the needs of the case. The Court noted that the Advisory Committee notes explicitly linked the two concepts, writing that “Effective advocacy is consistent with—and indeed depends upon cooperative and proportional use of procedure.”
As to proportionality, the Court held that UPS had met its burden to show that the requests were “extraordinarily burdensome” by explaining that most of the requested data was not readily-accessible and that there would be a substantial cost in making it available. The Court further noted that the relevance of Plaintiffs’ request was not proportional to the needs of the case at the time. UPS was actively seeking to limit the scope of the case based on arbitration agreements and a 180-day window for customers to file complaints. The Court noted that if UPS was successful on its motions, then the burden and expense of retrieving much of the requested information “will have been for naught.”
With regard to cooperation, the Court noted that Plaintiffs’ counsel had not been privy to the details of UPS’ sampling methodology because it involved proprietary data. So the Court entered a protective order allowing UPS to disclose information on an “attorneys eyes only” basis. With that exchange, the parties can work cooperatively to determine the appropriate balance between burden and benefit of the requested discovery. If Plaintiffs are not satisfied with UPS’ sampling methodology, the Court directed the parties to “meet, confer, and agree on a mutually acceptable sampling methodology.” While the Court generally endorsed the use of statistical sampling, it left open the possibility that Plaintiffs could request the full scope of the information for a relevant period of time, “with Plaintiff bearing the entire cost of production.”
This case adds to the long list of opinions emphasizing the importation of both cooperation and proportionality in the electronic discovery process. Courts are increasingly expecting parties to share the “how” and “why” behind their discovery objections with the opposing party so that the parties can work together to determine an appropriate balance between the expected benefits of electronic discovery and the costs of producing electronically-stored information.