In Episode 124, our CEO and Founder, Kelly Twigger discusses the importance of reviewing documents when you receive them, and how failure to do so can lead to lack of preparation for depositions and unfruitful and expensive motion practice in Iannone v. Autozone, Inc., presided over by United States Magistrate Judge Tu M. Pham.
Introduction
Welcome to this week’s episode of our Case of the Week series brought to you by eDiscovery Assistant and in partnership with ACEDS. My name is Kelly Twigger. I’m the CEO and founder at eDiscovery Assistant, which is an online platform that delivers eDiscovery knowledge on-demand. Thank you so much for joining me.
A couple of things before we get started today. First, a huge shoutout to my Mom, whose 80th birthday would have been today. We lost Mom in June, but she is the impetus behind all of my entrepreneurial pursuits, and she will live on forever for us in our memories. So, Happy Birthday, Mom.
Second, December 7, 2023 is eDiscovery Day — which is unbelievably only a month away — and we will be hosting a webinar titled ESI Protocols: To Be or Not To Be and What to Include. Magistrate Judge Allison Goddard and Maria Salacuse from the EEOC will be joining me to discuss when you need an ESI protocol, what to include, and some real practice tips about what we’re seeing from the courts and what the court’s view is on ESI protocols. The final details and registration should be available later this week or early next, and we’ll be sure to include them in our weekly newsletter — so if you’re not receiving that, hop over to our blog and sign up.
In terms of announcements, I will be off next week for the Thanksgiving holiday and our broadcast the week after will be our third anniversary of Case of the Week. Hard to believe that this has been running for three solid years, but it is amazing to have each of you tune in each week or review the video from our newsletter, and we’re just thrilled to have you on board. A huge thanks to Deja Miller and to Mike Quartararo, who are our incredible supporters on the ACEDS team.
All right, back to the show.
As we know, each week on Case of the Week, I choose a recent decision in eDiscovery and talk to you about the practical implications. This week’s decision includes one of our usual themes here on Case of the Week — timing and understanding the timeline for the process as well as some issues in email threading and the implications on third-party subpoenas.
Background
This decision comes to us from Iannone v. Autozone, Inc. This is a decision from September 9, 2022 from United States Magistrate Judge Tu Pham. Judge Pham has 71 discovery decisions in our database. This is a Judge out of the Western District of Tennessee, where there is a well-established body of case law in that jurisdiction in large part because we’ve seen a lot of class actions — a lot of the opioid cases came out of that court — and so there is a very widely developed body of law there for us to look to.
This decision, in particular, has some great practical takeaways that I wanted to share with you today on the concept particularly of email threading and privilege. Recall that I let you know a couple of weeks ago here that we’ve added an email threading issue tag to eDiscovery Assistant because we are starting to see more and more issues about that technology. That email threading issue tag is only applied when the technology of email threading is discussed or analyzed within the case. So it’s a really narrow application of the issue tag, but if you’re looking for case law on that issue, you can use eDiscovery Assistant to find it.
As always, we include the issues that are tagged on each decision. This week’s case includes email threading, third-party subpoena, sanctions, bad faith, and 30(b)(6) corporate designee.
Facts
We are before the Court on a motion to compel and for sanctions on a third-party subpoena that was issued to Prudential. The claims and the underlying complaint arise under the Employee Retirement Income Security Act, otherwise known as ERISA, and the complaint alleges that the defendants breached their fiduciary duties under ERISA by failing to monitor the fees and performance of the plan’s investments. Now, one of the plan’s most significant investments was a proprietary stable value fund called the Prudential Guaranteed Income Fund, or the GIC Fund. Prudential, who is a non-party to the litigation, is an insurance company that provided administrative and investment services to the plan. Plaintiffs claim that Prudential is the principal beneficiary of the excessive administrative and service fees that the plan paid.
The plaintiffs served a subpoena on Prudential, pursuant to Federal Rule of Civil Procedure 45, seeking information relating to the alleged excessive investment and administrative fees that it claims were paid to Prudential. Prudential timely served their responses to the objections and subpoena and produced more than 3,000 pages of documents on February 19, 2021, and June 4, 2021.
In September 2021, a few months later, the plaintiff served additional document requests on Prudential, causing Prudential to make a third document production in November of 2021. Now, right after that production or right before it — because we don’t have the specific date — the plaintiffs moved to compel on November 2, 2021 on seven different issues. All of those issues were resolved except for one: the plaintiffs sought production of the Rule 404(a)-5 disclosures for each of the 29 plans that they posited were similar to Autozone’s for the last ten years that included the Prudential GUI fund.
Prudential argued that the request was not relevant, and the court ordered them to produce 11 of the 29 plans that the plaintiffs had asked for based on Prudential’s representation that the remaining 18 of the 29 funds identified by plaintiffs “were not versions of the GIC”. Prudential complied with that order, which was a jointly agreed upon order between the parties and entered by the court, and produced 179 documents.
During all of this motion practice — and unbeknownst to the court — plaintiffs served a subpoena on one of the third parties that was not included in the court’s order, which was called the VSP retirement plan. The VSP plan provided responsive documents to the plaintiffs’ subpoena on March 8, 2021, which, according to plaintiffs, showed that the VSP plan had a GIC fund, “substantially identical to the [GIC] Fund [at Autozone], except for the rate, which in VSP’s case was higher”.
Now, note that those documents from the VSP Plan were received by the plaintiffs in March of 2021, eight months before the plaintiffs moved to compel additional documents from Prudential in November of 2021. If we harken back to one of our themes, which is the timeline is so critical in eDiscovery, let’s pay attention to that here. Even though the plaintiffs apparently possessed the information about the VSP plan fund and that it was very similar to AutoZone’s fund here (both provided by Prudential) the plaintiffs did not present that information to the Court in its November 2nd motion to compel.
So, eight months later, no information to the Court that it knew about this VSP plan fund or that it included a GIC fund. Now, because the plaintiffs alleged in their November 2nd motion to compel that because they do “not believe Prudential is a reliable source for information concerning Prudential stable value products,” on May 20th, 2022, they served document subpoenas on 7 of the 18 remaining plans that they had originally requested in their November 2nd motion to compel.
So remember the Court said you can’t have 18 plans, but you can have 11 in its November 2nd order, which was something the parties agreed to. The plaintiffs went outside of that order and instead issued subpoenas to a number of those firms that the Court denied the disclosures from Prudential.
Now, as a result of comparing documents produced by Prudential and the VSP Plan Fund, plaintiffs realized during the 30(b)(6) deposition of Prudential on March 30, 2022, that there were two versions of the same email. One version was dated four minutes earlier than the other on the same day. They are referred to as email A and email B.
Now, note that this deposition was a full year after plaintiffs received email B from the VSP subpoena, and just over a month after they received email A from Prudential. The contents of the revision in the second email, email B, according to the plaintiffs, made it “the single most important document in the case”. I’m not knowledgeable enough about these types of investments to be able to articulate to you why the language in those two emails was a “smoking gun”, but that’s not really relevant here.
After seeing the discrepancy during the deposition, the plaintiff suspended the deposition and accused Prudential of altering email A. Of note is the fact that the parties agreed — ostensibly in their ESI protocol, or at some point, as it’s not specifically mentioned — on form of production and that they would apply de-duplication and email threading to their productions. Prudential defined email threading as “production of only the most complete iterations of email chains”, meaning that when there’s an email chain of 12 (or any number of emails), only the last one that includes the full chain would be produced.
Within two weeks after the suspended deposition, Prudential made two supplemental document productions to the plaintiffs and confirmed that they had not produced their own copy of email B in prior productions. They then went back, produced not only email B, but also produced a native copy of email A in order to show that email A was the draft. Prudential also went back and looked at each non-privileged email in the threads that were connected to email B.
Prudential’s investigation into why email B was not produced revealed that some emails had been unintentionally excluded from their prior productions because of the party’s use of email threading. Ding, ding, ding — red flag. We’ve talked about this. Email B was a lesser included email in a thread in which the most inclusive email was sent to a Prudential in-house attorney and thus was withheld as privileged. After this discovery and investigation, Prudential re-reviewed all of the email threads that had been withheld as privileged and determined that there were four other emails that had been mistakenly withheld. Prudential produced those four emails, along with their attachments, to plaintiffs.
Following Prudential’s additional production and investigation of this situation, plaintiffs then moved for sanctions against Prudential for “act[ing] in bad faith by making a false representation to the Court” and “failing to provide full, complete and accurate information its responses to discovery requests”. The plaintiffs in its motion sought to have the court require Prudential to review their discovery responses to correct deficiencies and to file a certification with the court that the updated responses were true, accurate, and complete. Plaintiffs also sought costs and fees for traveling to the 30(b)(6) deposition that was suspended, to require the deponent to travel to plaintiffs’ counsel to complete the deposition, and to award attorneys’ fees for preparing for the second deposition. They also asked the Court to require the other seven non-parties to comply with the outstanding subpoenas that had been issued for their disclosures, and to award attorneys’ fees for the cost of preparing the motion.
Analysis
The Court’s analysis here is pretty brief, and I pause here for a second, really because I want you to be thinking about what you think of the plaintiffs’ motion here. The plaintiff seeks sanctions under the Court’s inherent authority, and the court lays out that it has inherent authority to issue sanctions where “a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons, or has engaged in conduct tantamount to bad faith”. The Court also notes that its inherent authority “should be used with restraint and discretion”.
With that standard in mind, I think we know where this is going. The Court found that Prudential did not engage in any discovery misconduct regarding the March 18th email, which was both email A and email B. There is nothing to suggest that email A, which plaintiffs had in their possession for several months, was altered. According to the Court, the metadata associated with email A shows that it was never sent.
Citing Judge Scheindlin’s decision in the Pension Committee case, the court acknowledged that
“In an era where vast amounts of electronic information is available for review, discovery in certain cases has become increasingly complex and expensive. Courts cannot and do not expect that any party can meet a standard of perfection.”
This is a quote that was first enunciated by Judge Scheindlin in the Zubulake cases and repeated in the Pension Committee case, and it has been articulated by many courts since then. You need only go into eDiscovery Assistant and type “perfect” in search terms in order to be able to find how many courts have articulated that standard.
Based on that standard, the Court found that the failure to produce email B by Prudential was an oversight — not bad faith — and that when they learned of the issue, Prudential reexamined all withheld privilege documents and produced four additional ones. According to the Court, Prudential’s explanations of the difference between email A and B and the reason that their copy of email B was not originally produced were reasonable, and the Court could not find any sanctionable behavior. Because Prudential had already represented that they had reviewed and corrected the production issue, plaintiffs’ request that Prudential certify that the updated discovery responses were true, accurate, and complete was already met, and so therefore that motion was denied.
The Court went on to note that the plaintiffs also had possession of both emails for months and didn’t realize the discrepancies until the deposition, which they then chose to suspend. With that as a basis, the Court denied plaintiffs’ motion for costs on the deposition travel and ordered that the remaining time left for the 30(b)(6) and the individual’s personal deposition would be limited and conducted remotely, finding that the issue and costs incurred was really of the plaintiffs’ own making by choosing to suspend the deposition rather than question the witness about the discrepancy.
The Court also denied sanctions against Prudential for allegedly concealing the VSP fund from the list of funds produced under the Court’s order. Remember that that order talked about “versions” of the GUI Fund. That order was entered after joint agreement by the parties, not sua sponte by the court, and it was agreed upon five months after plaintiffs received the documents from the VSP fund. Despite that timing, plaintiffs never raised a question as to why the VSP fund was not on the list of plans to be produced by Prudential in the Court’s November order. The Court also found that there was no evidence that Prudential made a misrepresentation to the Court regarding the VSP plan’s stable value fund and that the Court had no reason to believe that Prudential’s characterization of the remaining funds was not accurate.
Plaintiffs also sought to circumvent the Court’s order of November limiting productions to certain plans by issuing those third-party subpoenas directly to the plans. Five of the plans that received those third-party subpoenas objected to the subpoenas. As part of this decision, the Court ruled on plaintiffs’ motion to compel those parties to respond as well.
At the hearing, the plaintiffs agreed to drop the subpoenas against those five plans if they could have the disclosures for those plans from Prudential under the original Court order. Essentially, what they said is, Prudential, if you’ll give us the disclosures for those five plans, we’ll drop the subpoenas against them. Not surprisingly, the Court said no. It also noted that the subpoenas to the other five plans went far beyond the requested disclosures and were overbroad. Essentially, the Court found that the plaintiffs’ efforts were unavailing and that Prudential had met its obligations under the Court’s order and denied the motion to compel as to the third-party subpoenas.
Takeaways
What are our takeaways here? Well, out of the gate, plaintiffs’ motions here are really pretty thin and seem to come down to not having looked at the documents they had from the VSP plan for close to a year until the 30(b)(6) deposition. Yes, Prudential had to go back and find one email out of thousands produced, and that was kind of suspicious given the weight that the plaintiffs put on the changes between email A and email B. But Prudential’s explanation for the non-production of email B made sense.
What we don’t know here is whether Prudential communicated that to plaintiffs prior to the motion process. One would hope that they did, as that would be the most effective way to deal with these issues. If they didn’t, the motion makes a little bit more sense. If they did, I’m really not sure why you would incur the cost of bringing this motion, except for the fact that you need the disclosures from the other plans to be able to bolster your case. The motion cost here would far exceed the travel cost of the deposition to complete the 30(b)(6) witness’ individual deposition, and there are no other concerns that Prudential has failed to comply with its obligations.
The email threading issue here is one to pay attention to. I’ve raised it several times as we discuss threading here on Case of the Week. The danger of producing only the last, most inclusive email is that when email is privileged on a thread, that entire thread will likely be privileged, and you’ll have the situation that occurred here.
Now, here what happened is that the last — the very last — email was privileged, so the entire thread was withheld. There are other situations where the last email would not be privileged, but there would be privileged emails in that thread. You have to work out your language in form of production, and in your terms, as to how you’re going to handle privileged emails within a thread if you’re agreeing to have the last, most inclusive, email be the one that’s produced. One potential issue is to carve out any threads where an email is privileged and require that each email in the thread that is not privileged be produced. That being said, once that issue was identified and resolved, it likely should not have been the subject of a motion.
The other glaring issue here is that plaintiffs were clearly not aware of the alleged “smoking gun” email for almost a year after receiving it from the VSP fund. Had they been familiar with the documents in advance, it would have changed the scope of the Court’s order, thereby allowing them to get the disclosures for that fund and to not agree to the language of “versions” that Prudential proposed, or perhaps to get more clarifying language about what a version meant.
Here, the only difference between plaintiffs’ fund and the VSP’s funds agreement was a rate. Now, that would seem to me to be a “version”. Had the plaintiffs known what they had and argued that before agreeing to the order, it might have changed their ability to get other planned disclosures that the Court had ultimately carved out and essentially denied them from getting on third-party subpoenas.
The point is that you have to get into the documents you have very early on, and you need to revisit them each time you have new developments in the case. Our practice as attorneys is to hyper-focus when we have to engage — whether for a deposition, hearing, or otherwise. The advent of ESI means that is no longer an acceptable way to work. I freely admit that as a young lawyer, before we really had eDiscovery and ESI, you’d often figure out things the night before you were cross-examining a witness. That can’t be the way that we work anymore with these volumes of information. What we need is hidden in the documents, and we’ve got to take the time to figure out what is there and revisit that. Someone on your team needs to know the documents inside and out and identify these issues. Get in the documents right away or risk expensive motion practice and not getting what you need.
Conclusion
That’s our Case of the Week for this week. Thank you so much for joining me. We’ll be back again the week after Thanksgiving on our third anniversary with another decision from our eDiscovery Assistant database and some fun facts. 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. Have a great week. Happy Thanksgiving, and may you spend time with the people that you love in your life because that’s the most important thing. Happy Birthday, mom.
