In Episode 158, Kelly Twigger discusses whether in-house counsel are proper custodians in discovery, what factors impact the number of custodians in a matter from Magistrate Judge Cole’s decision in Dale v. Deutsche Telekom AG.
Introduction
Welcome to this week week’s episode of the Case of the Week series, brought to you by eDiscovery Assistant in partnership with ACEDS. My name is Kelly Twigger. I am the CEO and founder at eDiscovery Assistant, your GPS for ediscovery knowledge and education, and the Principal at ESI Attorneys. Thanks so much for joining me today.
Each week here on the Case of the Week, I choose a recent decision in eDiscovery case law and talk to you about the practical implications of that decision for you and your clients. This week’s decision highlights the ever-popular squabble over the number of custodians to be provided in a class action and whether in-house counsel are appropriate custodians and on what basis.
A couple of announcements before we dive in.
Our team will be at the DRI conference in Seattle starting tomorrow night, so please stop by our booth and say hello to Mike and Daryl and see the latest on what’s happening on our platform.
eDiscovery Assistant will also be sponsoring the University of Florida eDiscovery Conference, where I’ll be speaking and am again on the planning committee this year. That will be held in person on February 12 and 13, 2025. That’s, of course, available both virtually and in person. So please mark your calendars, and save the date. We’re busy finalizing our panels and speakers for that event, but it’s going to be a fantastic one. Very practical, and we look forward to having you. Registration will be open soon, and I’ll be sure to provide that link when it’s available.
All right, let’s dive into this week’s week’s decision. Hat tip to Alicia Hawley from K&L Gates for alerting us to this case.
This decision comes from the action in Dale v. Deutsche Telekom AG. This is a decision from United States Magistrate Judge Jeffrey Cole dated October 4, 2024. This is a case that has been going on for a long time prior to today’s decision. Magistrate Judge Cole has 136 decisions in our eDiscovery Assistant database. He is very prolific in writing discovery decisions. He’s very thoughtful. His language is great, and he pulls out the best quotes, some of which I’m going to give you today. As always, we add the issues to each of our decisions in our eDiscovery Assistant database. Today’s issues include attorney-client privilege, failure to produce, and proportionality.
Background
The opening quote for the decision kind of tells you how it’s going to go, but it’s a really interesting one. I want to lay it out for you. Judge Cole quotes a previous decision that states:
The discovery rules are not a ticket to an unlimited, never-ending exploration of every conceivable matter that captures an attorney’s interest. Parties are entitled to a reasonable opportunity to investigate the facts—and no more.
With that laying the groundwork for us, you kind of know how this is going to go, but let’s start with the facts.
Facts
The underlying action here is an antitrust matter. Following the merger of T-Mobile and Sprint in 2018, plaintiffs filed this action on behalf of themselves and other AT&T and Verizon customers, alleging that the merger reduced competition and caused them to pay billions more for wireless service than they would have had to pay otherwise.
We are before the Court here on the plaintiffs’ motion to compel T-Mobile to use plaintiffs’ proposed custodian list. The current dispute is really focused on three specific custodians out of a list of 50 as to whether or not those should be included as part of the defendant’s discovery inquiry. All three of the disputed custodians are in-house counsel for T-Mobile. This motion is before the Court following six months of negotiations by counsel, at which point the parties reached a stalemate and the plaintiffs refused to drop the three in-house counsel from the proposed list. That’s what we’re before the Court on today.
Analysis
The Court begins its analysis by noting that discovery disputes are resolved at the discretion of the trial court, which, as Magistrate Judge Cole notes here, “denotes the absence of hard and fast rules” and “allows two decision-makers — on virtually identical facts — to arrive at opposite conclusions.”
Magistrate Judge Cole also takes the opportunity here to call out some of the less favorable descriptions of modern day discovery, calling it a “runaway train”, a “monster on the loose”, and the “bane of modern litigation.” Just warms your heart. But the Court notes that regardless of what you call it, courts must review discovery requests with an eye towards proportionality, which requires “common sense and experiential assessment.” In looking at the plaintiffs’ request here, the Court notes that 50 custodians is a lot, and it’s really a lot when they are essentially all of the requesting parties’ choosing.
Magistrate Judge Cole makes two findings here that are critical to the motion to compel:
- that the plaintiffs did not discuss in these papers how these 50 custodians are proportional to the needs of the case; and
- that the level of scrutiny applied to the merger by the DOJ removes a lot of the doubt about whether “this merger was so fishy that plaintiffs are entitled to whatever they desire.”
Interestingly, that language that I just gave you is quoted in the decision, but there’s no attribution. So maybe it came from the defendants’ papers. Not really sure where that came from.
The Court then looked at the cost and burden to provide the requested information, both of which are factors under Rule 26 and proportionality. Noting that there would be a privilege log for each of the lawyers and that the total files for the lawyers were 442 gigabytes, the Court notes that the number of pages and log entries is likely to be staggering. Magistrate Judge Cole also identified the challenges likely to occur to those logs and the burden that it would place on the Court to review those documents in camera. The Court also noted the cost to taxpayers, not only of the resources expended on this particular matter, but for the delays in other cases as a result of the resources that are allocated there.
Finally, the Court notes that this case is about what happened after the merger and that the three requested lawyers were involved with the facts leading into it, not setting prices after it, which is the subject of this litigation. In all, the Court allowed the 50 custodians but denied the motion to add the three in-house counsel, finding that 50 custodians provide a reasonable opportunity for plaintiffs to investigate their case. I’ll say. 50 is a lot.
Takeaways
What are our takeaways here?
First, I shudder to think about how much time and money was spent on the six months of negotiations regarding this custodian list. There aren’t very many facts in the decision other than the timing on the back and forth between the parties. There’s really no way to know whether the defendants were providing data based on information on why certain custodians should be included or excluded.
Second, as the Court notes here, proportionality is the check on preventing discovery from getting out of control. The Court’s analysis of the Rule 26 factors here is pretty spot on. I do like how the Court talks about what discretion means to a Court, and that two fact finders could come to very different determinations. We see that a lot in the case law.
I know from experience that plaintiffs in these situations fight for as much as they can get because they don’t know whether or where the other side is hiding the ball. But it seems to me that an iterative process of custodians versus 50 here might have been the best way to go. As always, we are Monday morning quarterbacking on the Case of the Week, so it’s hard to know what transpired behind the scenes or what was on papers before the Magistrate Judge. But some analysis into who actually was responsible for pricing after the fact by defendants and providing that information as a backdrop to the negotiations may have limited the custodian list substantially, or at least provided an avenue to do it in an iterative fashion where you agree to five or 10 custodians, you provide that information, the plaintiffs review it and they come back and say, “Based on those 10, we want to have these 10.” Then that information happens. That allows discovery to proceed in a little bit better fashion. It also allows for data to drive the decisions about what is relevant, what’s proportional, and what information is really available out there. That all being said, it can also be a good strategy not to dig into the data.
But as I’ve said many times here on the Case of the Week, and I’ll say it again today, controlling costs and volume in discovery means that the party or parties with the data should dig into it and provide the first list of custodians and search terms. Here, it looks like that’s what the defendants did. Their initial list had 29 custodians. That’s reasonable in an antitrust matter. Instead of fighting about it for six months, why not agree to those custodians and then agree that plaintiffs can ask for additional ones if warranted based their review of the data? The relevance of the additional custodians based on facts and documents is a much better way to proceed. And who knows? Maybe some of those documents might have even provided a basis for getting documents from the in-house counsel. Now that they’ve had the motion and the ruling has been made, you can always raise it again with the court, but it’s harder once the court’s made a ruling.
Trying to list in-house counsel as document custodians is always going to be a very uphill battle. I’m talking like a Colorado 14er uphill battle. If you really think you need documents from in-house counsel, you need to devise a strategy to get them, and you’ll likely need documents from other custodians to provide a basis, which means utilizing an iterative process, like I’m talking about.
Finally, and likely because this case was filed several years ago, we are talking about discovery by custodian. As I’ve discussed here and we’ve held panels on at the Master’s Conference, discovery has become, or I should say is becoming, less and less custodian-based. Counsel need to wrap their heads around the collaboration tools that clients are using and see how that changes the negotiation of custodians. I’m seeing the negotiation of data sources being more critical as we move forward.
This case, of course, is older. The data is older. It’s probably less likely to be implicating collaboration tools, and so a custodian basis is appropriate. But I think this custodial negotiation is going to essentially phase out as we move more forward. It’s always going to be important to note who the people are who said things. But custodian-based discovery where you’re collecting just based on custodian likely won’t be the future of eDiscovery.
Conclusion
That’s our Case of the Week for this week. Be sure to tune in next week, whether you’re watching us via our blog, YouTube, or downloading it as a podcast on your favorite podcast platform. Thanks and have a great week!
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