Episode 120: The Dangers of Agreeing to an ESI Protocol Before Knowing Your Sources of ESI

In Episode 120, our CEO, Kelly Twigger discusses why agreeing to an ESI protocol excluding sources of ESI before you know what you need is dangerous in 𝐋𝐚𝐭𝐢𝐧 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 𝐁𝐫𝐚𝐳𝐢𝐥, 𝐋𝐋𝐂 𝐯. 𝐌𝐜𝐀𝐫𝐝𝐥𝐞.

Introduction

Welcome to this week’s episode of Case of the Week series brought to you by eDiscovery Assistant in partnership with ACEDS. My name is Kelly Twigger. I’m the CEO and founder at eDiscovery Assistant, which is a platform that delivers eDiscovery knowledge on-demand.

Each week on our Case of the Week series, I choose a recent decision in eDiscovery and talk to you about the practical implications of that decision. This week’s case covers an important and very hot topic in eDiscovery — ESI protocols. There’s a lot of debate going on in our space about whether parties need a protocol, in large part because some attorneys are dragging the process out for months, and insisting on provisions that they are not necessarily entitled to under the rules, and the underlying intent of the protocol is lost. Parties are also entering into protocols as a rote process without really considering the fundamentals of what they’re doing by putting an enforceable order before the Court, and we’re going to see an example of that here today in our decision.

At eDiscovery Assistant and at my law firm, ESI Attorneys, we advocate for the use of ESI protocols with a strong caveat that you need to be informed about the sources of ESI and issues that need to be included in a protocol that are important for the complexity and value of your case. You need to understand that you are governed by the scope of discovery that allows for relevant, proportional data that is not privileged, but that you also provide for the specifics of the types of data that you’re looking at getting. In today’s world with what we call “emerging technologies”, we see a proliferation of text messages, social media, ephemeral messaging data, and collaboration tools, all of which require planning in an ESI protocol for you to be able to get the data in a way that’s going to be most useful for you to leverage it to be able to tell your story. We recently created an extensive guide on ESI protocols at eDiscovery Assistant that you can download for free here.

We’ll also be conducting a webinar on eDiscovery Day on December 7th this year to talk about the pros and cons of protocols. That webinar is going to be conducted in partnership with ACEDS and Exterro, who sponsors eDiscovery Day. So, mark your calendars. We’ll be sure to send out that information in our weekly newsletter. And if you don’t receive the newsletter, you’ll want to sign up here so that you get that information.

Background

Let’s dive into this week’s decision, which is a very short state court decision from the New York State Courts. Our partner, Doug Austin, at eDiscovery Today, has also written up a short article on this case, so you can see Doug’s take. This week’s decision comes to us from Latin Markets Brazil, LLC, v. McArdle. This is a decision from July of 2023, written by Justice Robert Reed of the New York Supreme Court. This is a very short decision, but it’s important in this world of ESI protocols.

The plaintiff here alleges that two employees left its employment and violated their restrictive covenants, including the nondisclosure of confidential information, non-solicitation of employees and clients, and a non-compete clause. The two employees left and formed their own competing company, and plaintiff brought this complaint alleging misappropriation of trade secrets, breach of contract, unfair competition, tortious interference, breach of fiduciary duty, and conversion. Basically, every theory of liability that could possibly stick.

Facts

We are before the court here on a motion to compel the production of text messages, social media, and LinkedIn messages for the three-month period before and after the former employees formed their competing company in July of 2020. What the facts don’t tell you at the outset of the case, but you see later, is that the plaintiffs don’t ask for this information until a year after discovery has already kicked off.

As always, we start with the parameters of discovery that the information sought must be relevant, proportional, and non-privileged. The plaintiffs make pretty good arguments here about the relevance and proportionality of the data they seek. The plaintiffs alleged that over the course of document discovery, the two former employees’ breaches of contract were demonstrated by documents showing their formation of a competing company while they were still employed by the plaintiff; that they downloaded confidential databases prior to resigning from the plaintiff; and that they transferred those documents to their personal email accounts. During document production, one of the employees’ emails with a client of the plaintiff allegedly indicated that communications were made over LinkedIn and text messages. Plaintiff argued that those communications that it now seeks on this motion to compel will “likely reveal which clients Mr. Mallon and Mr. McArdle contacted and attempted to solicit, as well as any other discussions of improperly removing and using Market Group’s confidential materials.”

The plaintiffs also contended that the three-month scope of its demand is limited in nature and does not constitute a fishing expedition. At the same time, plaintiffs agreed to forego any metadata or the collection of defendants’ electronic devices for forensic inspection and agreed to accept PDF screenshots of the responsive documents. Basically, they just wanted the information. They didn’t want to fight about what format it should be kept in or create an additional hire expense for the defendants to collect the information and produce it.

What the plaintiffs did here is what I advocate for each week on the Case of the Week. They made specific factual arguments backed up by data that they had already received in discovery as a basis for why the additional information would be relevant and proportional. They did it in a timely fashion that gave them sufficient ability to ask for additional discovery before the close of discovery.

But that last point is one that the defendants took issue with. The defendants didn’t oppose the relevance or proportionality of the discovery request, but they did argue, one, that they weren’t timely because they happened a year later, and two, that the plaintiffs had agreed not to seek text messages in the ESI stipulation between the parties. Essentially, we’ve got here an ESI stipulation between the parties that the court signed off on. We don’t have access to that on the docket, unfortunately, to be able to find that exact information, but we do have the language the court cites.

Analysis

The court’s analysis here is very brief. The court found that the defendants were correct and cited to the stipulation that the plaintiffs agreed to, which provided that, “the following sources of ESI information do not warrant collection, search, review, or production: (a) voicemail, text messages, or personal phones, or tablets, and instant messages.” The court stated that the plaintiff made no showings of fraud, duress, coercion, or mistake, warranting the court overturning the stipulation and denied the motion to compel.

What is interesting to me here is that that language of the ESI stipulation does not cover social media, and yet the court seems to have denied the motion to compel in its entirety, even though the plaintiffs alleged that there were potentially relevant messages from LinkedIn. There may be a subsequent motion here in order to go back and get those LinkedIn messages because they don’t appear to be precluded by the language of that stipulation. Hopefully, the plaintiffs’ counselor is on that.

Takeaways

Our takeaways from this case are pretty important this week. This is becoming one of our themes on Case of the Week. An ESI protocol is only as good as the thought that goes into it. There are two things that must happen for it to be effective and avoid the result here that we see in Latin Markets. You must (1) understand the scope of the sources of ESI that will be at issue and (2) plan for how to handle them for review and to authenticate them at trial. You must also leave open the ability to expand the scope as further information is learned, that means that additional sources may become discoverable.

The biggest issue that I see with protocols that go sideways like the one here, is that the parties are in a huge hurry to agree to a protocol at the beginning of the case without understanding all of the facts or where the responsive information might live. In this particular situation, in a situation with two employees who left and started a new business, and they were both clearly professional colleagues who were plotting while still in the plaintiff’s employment, the idea that they would not have relevant text messages, in my opinion, is pretty cray-cray. I don’t understand that stipulation at all, agreeing to not produce text messages. At that early stage of discovery, I’m guessing that nobody on the plaintiff’s side realized what had happened until later.

This is a state court decision, and it’s following the exact same trend that we see in the federal courts. The courts will hold you to what you put in an ESI protocol or stipulation. Do not blindly sign a form or use the same form for every case. This is not a rote process. It requires complex thinking and the ability to think through the issues carefully. If you don’t know the issues, learn them before you sign a document like this on your client’s behalf, or hire someone else who knows them. You can start with our Practical Guide on ESI Protocols. There’s a ton of case law on this topic, and you can filter for it using our ESI Protocol issue tag in eDiscovery Assistant if you’re a user.

You can also use the new AI-generated summaries in eDiscovery Assistant to be able to skim through those cases and get to the ones that highlight the points you need. You can filter by ESI Protocol and Text Messages as Issue Tags, or by ESI Protocol and Instant Messaging or Teams, and be able to drill directly into the language that you’re looking for with sample protocols that you can leverage as long as they fit your case. Be thoughtful about this. It’s a very important part of your case. This failure by plaintiffs may have significant ramifications for this case in terms of the evidence that’s available to be presented, and really, that’s a lousy position for both the client and counsel. It’s problematic.

eDiscovery is a minefield. Get up to speed on what you need to know when you need to know it, and be sure that your ESI protocol reflects your knowledge of how communications might have occurred so that you can get information properly that allows you to tell your story.

Conclusion

That’s our Case of the Week for this week. Thank you so much for joining me. We’re back again next week with another decision from our eDiscovery Assistant database. As always, if you have a suggestion for a case to be covered on Case of the Week, drop me a line. If you’d like to receive the Case of the Week delivered directly to your inbox via our weekly newsletter, you can sign up on our blog. If you’re interested in doing a free trial of our case law and resource database, you can sign up to get started.

Thanks so much, and have a great week.