In Episode 144, Kelly Twigger discusses the latest decision on hyperlinked files in discovery and whether a party who agreed to provide them and later determined they could not meet that obligation, is subject to sanctions for violating the ESI protocol.
Introduction
Welcome to this week’s episode of our 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. Thanks so much for joining me today.
One announcement before we get started. I am working with the Midwest Chapters of ACEDS on a four-part series on ESI protocols. There are four webinars in total. The first two have already aired, but are available to stream here. The third installment will be a judges panel moderated by my good friend David Horrigan on June 6th, and I’ll be hosting a workshop on ESI protocols in July. You can use the link to sign up for more details and view the previous sessions.
Each week on the Case of the Week I choose a recent decision in ediscovery and talk to you about the practical applications of that case and what you need to be thinking about as you conduct discovery of ESI.
Let’s dive into this week’s case, which comes to us from In re StubHub Refund Litig. and is a follow up to a decision in the same matter that we covered on Episode 109 of Case of the Week. This decision from May 20, 2024, also authored by United States District Judge Thomas Hixson, revisits the issue of StubHub providing documents that are hyperlinked in correspondence.
Background
Recall from Judge Hixson’s earlier decision (dated April 25, 2023) that the parties agreed to an ESI protocol in the litigation, and that protocol provided that both parties would provide documents that were hyperlinked in communications, that hyperlinked files were attachments, and metadata should be provided to show the family relationship via the following language:
“Email repositories, also known as email databases (e.g., Outlook .PST, Lotus .NSF), can contain a variety of items, including messages, calendars, contacts, tasks, etc. For purposes of production, responsive items should include the ‘Email’ metadata/database fields outlined in the Metadata Table, including but not limited to all parent items (mail, calendar, contacts, tasks, notes, etc.) and child files (attachments of files to email, hyperlinks to internal or nonpublic documents, or other items), with the parent/child relationship preserved. Similar items found and collected outside an email repository (e.g., .MSG, .EML, .HTM, .MHT) should be produced in the same manner.”
The specifications went on to state: “A document and all other documents in its attachment range, emails with attachments, and email or other documents together with any documents referenced by document stubs or via links to internal document sources within those emails or other documents all constitute family groups. If any member of a family group is produced, all members of that group must be also be produced or else logged as privileged, and no such member shall be withheld from production as a duplicate.” Id. (emphasis added). “Hyperlinked files must be produced as separate, attached documents.”
As Judge Hixson noted at the time, this was not a situation as in Nichols v. Noom where the court had to decide whether hyperlinks were attachments, rather, the parties here stipulated to this language. StubHub was unable to comply with the agreed upon language and plaintiffs’ moved to compel. In his April 25, 2023 decision, Judge Hixson granted plaintiffs’ motion and ordered StubHub to comply, emphasizing that the motion before him was about agreements:
Without them, courts would have to rule on everything, and litigation would be even more expensive than it already is. Courts encourage parties to work out things like ESI protocols and other procedures governing discovery. We do this because we assume that the parties have some idea what they want to obtain in discovery, they know much better than the Court does what is possible or feasible, and they are best able to estimate the costs involved in whatever they agree to do. And when parties reach an agreement, we ordinarily need to hold them to it. Otherwise, if discovery agreements routinely turn out to be worthless and unenforceable, we deprive the parties of any reason to enter into them.
Judge Hixson also noted in that decision that although StubHub’s multiple reasons for its inability to meet those provisions in the ESI protocol were “incomplete and improvised”, StubHub had not done everything it could. He noted that StubHub had not moved for relief from the protocol, and it had not “settled on a clear story for why producing the linked documents can’t be done.” That was one of two separate times in that decision that the Judge noted that StubHub had not moved to modify the protocol.
Facts and Analysis
Fast forward to May 20, 2024 and Judge Hixson’s decision on — surprise — StubHub’s motion to modify the ESI Order, Plaintiffs’ motion for sanctions, and StubHub’s related motion to strike portions of plaintiffs’ expert’s declaration. It took a year, but it seems StubHub finally read Judge Hixson’s April 2023 ruling.
Motion to Modify the ESI Protocol
The Court began with StubHub’s motion to modify the ESI Order allowing for amendment by the Court “for good cause shown.” StubHub’s productions included hyperlinks from web based email, Sharepoint and Tableau (a SaaS based visual analytics platform), so previous analyses of only web mail collections do not solve the whole problem.
The Court’s analysis is fairly straight forward in granting the motion to amend:
StubHub has demonstrated good cause to remove the requirement that hyperlinked documents should be produced as if they were attachments to emails. StubHub has made a persuasive evidentiary showing that despite having spent hundreds of hours trying to find linked documents and despite having retained an outside e-discovery vendor to assist with this effort, the hyperlink requirement is technologically impossible to fulfill most of the time.
In granting the motion and modifying the ESI protocol to remove the language regarding hyperlinks, the Court rejected plaintiffs’ experts’ declarations, finding that neither of them demonstrated that it was possible to comply with the language of the protocol as drafted given current technology:
The Court is not going to keep a production requirement in the ESI Order if two-thirds of the time it is impossible to comply with. The Court is not saying that the ESI Order should only contain requirements that can be complied with 100% of the time, of course. But a showing that a production requirement is impossible to comply with most of the time – and that is StubHub’s argument – is a good reason to get rid of it. . . The Court thinks that the non-existence of commercially available software that can implement the hyperlink requirement tips strongly in StubHub’s favor.
Motion for Sanctions
The Court then turned to plaintiffs’ motion for sanctions for StubHub’s failure to provide the hyperlinked files in violation of the original agreed upon ESI protocol. Plaintiffs sought sanctions (1) under Rule 37(b)(2)(A) for violation of a court order, (2) under the Court’s inherent authority for acting in bad faith and vexatiously in discovery; and (3) for violating Federal Rule of Civil Procedure 26(g) by signing two discovery responses that were unreasonable and contrary to the federal rules.
As to Rule 37(b) sanctions, the Court rejected plaintiffs’ assertion of StubHub violating the order and instead characterized StubHub as being careless in its original investigation of its capabilities — “without doing adequate investigation, StubHub carelessly stipulated to an ESI Order that StubHub later realized required it to do something that is usually impossible: produce the hyperlinked documents with the parent-child relationship with the original emails intact. From its first custodial document production in June 2022, StubHub was in instant violation of the ESI Order, a problem it was never able to fix.” As such, the Court found that StubHub’s wrongdoing was not violating the order, but “stipulating to do something without conducting an adequate investigation into whether it was possible.”
Relying on its finding that StubHub could not comply with existing technology, the Court also dismissed plaintiffs’ argument that they are left with emails with no attachments and a mish mash of documents with no relationships. The Court held that what plaintiffs sought was not technologically possible, and instead identified, without citing the case, the exact scenario that was decided by Judge Cisneros down the hall from him in the Northern District a month earlier in In re Uber Techs., Inc. Passenger Sexual Assault Litig. (Episode 141 on Case of the Week):
In the Court’s view, the proper comparison is to a hypothetical alternative in which StubHub conducted an adequate investigation to determine whether the hyperlink requirement was feasible, figured out it was not, declined to stipulate to the hyperlink requirement, and right out of the gate argued that this was impossible. The Court thinks this hypothetical alternative would also likely have involved better legal research by defense counsel, earlier coming across the decision in Nichols v. Noom Inc., 2021 WL 948646 (S.D.N.Y. Mar. 11, 2021), which declined to impose a similar hyperlink requirement. In this view, the harm that StubHub’s wrongful conduct caused was a big, expensive fight that lasted more than a year concerning the hyperlink issue. But this harm wasn’t caused by the violation of the ESI Order; it was caused by StubHub’s foolish decision to stipulate to the hyperlink requirement in the first place.
Finding no violation of an order that was physically impossible to meet and sanctions would not be “just” and that StubHub’s failure was “substantially justified” under Rule 37(b)(2)(C), the Court declined to award sanctions under Rule 37. The Court denied sanctions for violation of the amended scheduling order finding no prejudice to the plaintiffs, and on the discovery order, finding that StubHub’s 30(b)(6) witness had sufficient knowledge.
The Court also declined to order sanctions under its inherent authority, finding that StubHub’s agreement was negligent, but not in bad faith as required. Finally, the Court rejected plaintiffs argument that StubHub’s counsel violated Rule 26(g), finding that the ESI Order superseded counsel’s signatures on the discovery responses, and that there was no violation of the strict language that “after a reasonable inquiry that the RFP responses were ‘consistent with these rules and warranted by existing law,’ ‘not interposed for any improper purpose,’ and ‘neither unreasonable nor unduly burdensome or expensive.'”
Takeaways
The takeaways here are consistent with other other discussions on this topic, with a new wrinkle of amending the ESI Order. Investigate your capabilities to get to the data you are agreeing to provide BEFORE you agree to it. It’s costly to do otherwise and a waste of resources from all sides and the court. Follow Rule 1.
Understand the nuances of the language you are using. Whether you agree that hyperlinked files are “attachments”, the reality is that when a file is referenced in relevant correspondence, that file is likely relevant. And relating those two documents in a production, where feasible, is relevant and required under case law interpreting Rule 34. The technological relationship is irrelevant to the law. So agree they are attachments or don’t, but provide for what is to be done within the technical limitations that exist.
Plaintiffs here needed to cut their losses. It appears the April 2023 order requiring StubHub to comply fueled their fire, but if ready closely, it required compliance if it was possible. And it wasn’t. Just agree to amend the ESI Order and work with StubHub to get the documents you are actually missing. Maybe there were specifics referenced on individual documents or groups of them, but it’s not discussed in the decision. There was no way for the Court to find prejudice here. Show your work.
Judge Hixson’s decision allowing StubHub to amend the ESI protocol based on the “good cause” language is the right one. It advances ediscovery case law by advising parties to (1) make sure they can technologically meet the requirements of what they are agreeing to and (2) include “good cause” language in their protocols as a layer of protection. As I’ve said before, we will likely have a technological solution to the hyperlinks issue in the next few months, but new issues will arise. And as technology continues to move forward, it’s likely that practitioners will find themselves in new unchartered waters, much as StubHub did here. Include the language, then be prepared to SHOW good cause.
I do think this is a motion that could have been made much earlier by StubHub without wasting “hundreds of hours”. But there are a few troubling things to me in this decision that set our progress in case law on this issue back.
First, the Court’s dismissal of plaintiffs’ prejudice argument that the discovery they sought “was never going to happen” is contrary to the goals of the Federal Rules and their state equivalents for a receiving party to have the same value of the evidence that the producing party has. In fairness, that has never really been achieved as we continue to provide TIFFs instead of native documents, and in some cases pdfs, but the hyperlinked files issue compounds that problem by eliminating the ability of a receiving party to even know what document is related to what communication and what changes were made to a document when. Practically speaking, there are all kinds of arguments here on both sides (i.e., whether the producing party actually has the evidence because it cannot be collected by either side), but the Court’s handling is absolute on an issue that is far from being so. Instead, recognizing the challenge presented and the potential prejudice, but finding that technology simply does not permit it, would have helped to move the case law forward.
There are inherent practical aspects of litigation that cannot move forward until you have the documents. Civil cases are won and lost on documents, and the timing of when we receive them DOES matter, court deadlines aside. On the one hand, we have Judge Hixson saying there’s no prejudice because no deadlines have passed. Will that be taken into consideration if third party discovery is not done early enough based on the lack of data provided due to hyperlinked files? It’s a fool’s errand to look down the road at all the potential issues that can arise, but it’s one the Court should take into account. That all being said, the Court did note here that plaintiffs showed no specific prejudice. That takes us back to one of our themes here — be prepared to show specific examples of prejudice, or have your motion denied.
Second, although the Court admonishes StubHub for not knowing what they are getting themselves into, this decision seems to run afoul of its April 2023 decision talking about the sanctity of agreements and how the court will have to wade in on every issue if the parties cannot agree. Letting StubHub off the hook completely with regard to sanctions does not set a good standard, and instead, creates the ability for parties to cite this decision as a “get out of jail free card.” At the very least, a strict admonishment from the Court, a stern warning that this ruling is limited to the facts of this decision, or some nominal sanctions are what was needed to set an example going forward. There are few facts articulated here for parties to rely on in citing this case, which means it can be cited very broadly. Instead, the Court ends its decision with a whimper of “StubHub’s decision to stipulate to the hyperlink requirement in the ESI Order was an unfortunate mistake. But mistakes happen, and life – and litigation – must go on. The parties should put this discovery issue behind them and turn their efforts to class certification and the merits.” An unfortunate “mistake” that likely cost more than $100,000 and clients paid for it. After more than 15 years with the amended FRCP, isn’t it time to hold counsel accountable?
Third, the Court’s language following review of one of the expert declarations that “the whole issue is that the linked-to documents are not attachments” is troubling. There’s no analysis by the Court on this issue, it just seems to adopt that stance that hyperlinked files are not attachments. That will only add to parties citing this case for that language, and it has in fact already happened. It took just over a week for another party to cite to Judge Hixson’s ruling.
This issue is far from over, and from what’s already emerged this week, we’ll be talking about it again next week. See you then.
Conclusion
That’s our Case of the Week for this week. Thanks so much for joining me. We’ll be back again next week with another decision from our eDiscovery Assistant database.
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