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Court Agrees with Defendant that Preserving 5 Terabytes of Data is Enough – eDiscovery Case Law

In United States ex rel. King v. Solvay, S.A., No. H-06-2662, 2013 U.S. Dist. LEXIS 30752 (S.D. Tex. Mar. 5, 2013), Texas District Judge Gray Miller granted the defendant’s request for a protective order where the plaintiffs only offered generalized, unsupported claims to support their request to extend and expand discovery.

In this False Claims Act, the plaintiffs, qui tam relators whose claims led to investigation by several state attorneys general, claimed the defendants engaged in off-label promotion of drugs, violated the anti-kickback statute, and retaliated against them.

The defendant, Solvay Pharmaceuticals, now doing business as Abbott Products (after Abbott acquired Solvay in 2010), filed a motion seeking a protective order from having to respond to the relators’ discovery requests about ongoing fraud, which it claimed were irrelevant to the claims in the lawsuit.

During the course of discovery, the company imposed a litigation hold and preserved more than 2,500 eMail backup tapes, more than 56,000 network share backup tapes, and roughly 5 terabytes of data on its network share drives—all dating from the 1990s through 2010 – and covering 89 custodians, both former and current employees. But the relators requested more. If the litigation hold were to expand to accommodate the relators’ requests, it would require the company to dedicate additional server space to store the data. Moreover, the company argued that it would cost at least $480,000 to process the eMails it was already preserving, and the review of those eMails would cost $2.3 million, excluding quality control, privilege review, and production costs. Adding the additional data from after Abbott acquired Solvay would drive these costs substantially higher. The relators objected, suggesting that the company’s “sweeping generalizations” about the potential burden were inaccurate. In the alternative, the relators agreed to an end date of December 31, 2012 or to depose witnesses to determine the appropriate cutoff.

Under Federal Rule of Civil Procedure 26(c)(1), courts can limit discovery to protect parties from undue burden or expense. Judge Miller agreed with the defendant that a few references that conduct was continuing “‘to the present’ in a 267-page complaint containing more than 768 paragraphs does not justify the burden and expense associated with unfettered discovery ‘to the present’ in a case in which discovery is already going to be incredibly expensive and time-consuming.” Although Judge Miller was willing to extend the relevant time frame to include some claims outside of the relators’ personal knowledge because the real party in interest was the United States, he was not willing to go so far as to permit the “generalized claims of ongoing conduct to form the basis for a fishing expedition.”  As a result, he granted the motion for a protective order, limiting the time frames for Solvay’s discovery obligations.

So, what do you think?  Was the judge right to limit the defendant’s discovery obligations?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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