E-Discovery Update: Balancing Costs with Desire to Not Produce Irrelevant and Potentially Privileged Documents

September 1, 2015

Often in litigation, parties faced with overbroad discovery requests and large amounts of data are tempted to produce everything that hits on search terms to the other side without looking at it, or after performing minimal searches. The idea is that this will avoid discovery battles, shift the costs of the review to the other side and bury them with data. Opposing counsel will be hard-pressed to complain, since they asked for it. Parties in this situation often consider “quick peek” or “clawback” agreements to avoid waiver of privilege. See Fed. R. Civ. P. 26(b)(2) advisory committee’s note, 2006 amendments. The quick peek process involves one party making certain requested material available to the requesting party and allowing the requesting party to review all the data within a set period of time and select the documents to be formally produced. See id. The parties agree that any privilege in this set of documents is not subject to waiver. The producing party then screens the more limited set of documents chosen for privilege and produces the documents in the usual fashion. See id. A clawback agreement is an agreement that if any privileged documents are produced, the producing party may “claw” them back without waiving the privilege.

Problems occur, however, when one party tries to force an unwilling opposing party to produce large volumes of documents that have not been reviewed prior to production by arguing that there is minimal burden in such a production, because the documents need not be reviewed if a “quick peek” or “clawback” agreement is in place. Many companies do not want to agree to such an arrangement, and should not agree to it, as privileged documents usually cannot all be caught by searches and once they are released, the bell cannot be unrung. Further, in today’s environment of heightened data security, it is dangerous for companies to release large volumes of data to parties who may not have stringent security procedures and where many of the documents may include personal information such as social security numbers and proprietary information. Fortunately, courts have been averse to forcing this type of arrangement on an unwilling party. See Good v. Am. Water Works Co., Inc., 2:14-01374, 2014 WL 5486827, *1, 3 (S.D. W. Va. Oct. 29, 2014) (refusing to force producing party to forego an eyes-on-document review in the interest of speed and allowing producing party’s more “cautious approach” to discovery); and Mgmt. Comp. Group Lee, Inc. v. Okla. State Univ., No. Civ. 11-967, 2011 WL 5326262, *4 n.6 (W.D. Okla. Nov. 3, 2011) (declining to impose “quick peek” provision “on an unwilling party”).

A long-recognized principle of discovery is that it is the producing party’s right to determine what is responsive to the litigation out of its own documents. See Fed. Deposit Ins. Corp. v. Bowden, No. CV 413-245, 2014 WL 2548137, *8 (S.D. Ga. June 6, 2014) (noting that “[w]hile the [plaintiff] must respond to defendants’ discovery and inspect its own records to do so, it need produce only those documents that are responsive to the opposing party’s requests”) (citations and quotations omitted); In re eBay Seller Antitrust Litig., No. C07-01882, 2010 WL 2836815, *4 (N.D. Cal. July 19, 2010) (refusing to allow receiving party to identify relevant documents out of a set of documents produced by eBay in a separate action and noting that this would be an “abnormal process that reversed the role of who searches for and identifies relevant material”); and McCormick v. City of Lawrence, Kan., No. 02-2135, 2007 WL 38400, *4 (D. Kan. Jan. 5, 2007) (refusing to allow receiving party to “serve as the filter for determining the relevant footage” out of producing party’s voluminous video recordings).

Indeed, the requesting party has no right to possess documents that are not relevant to its requests for production. See Gen. Elec. Co. v. United States, 3:14 cv 00190, 2015 WL 4478294, *2-3 (D. Conn. July 22, 2015) (finding that receiving party “has no right to over-production of materials beyond the scope of its subpoenas” and noting that a low percentage of documents produced out of the total documents collected was not sufficient evidence to infer that a party “failed to produce responsive documents”).

Some cases are more troubling, however. See Stambler v. Amazon.com, Inc., No. 2:09 cv 310, 2011 WL 10538688, *10-11 (E.D. Tex. May 23, 2011). In Stambler, the parties initially agreed to search terms, however the terms returned more data than anticipated by the defendants. Id. at *9. The court offered the defendants the option of reviewing all of the documents for relevancy and privilege or simply running potentially privileged terms across the document set and producing everything else. Id. at *10-11 (noting the parties had an adequate clawback provision for this type of review). The court reasoned that because the defendants agreed to search terms they were in a position no worse than if they ultimately had decided to review the documents, and also noted that the defendants had expressed no concern of confidential or proprietary information in the data. Id. at *10. The court stated that the plaintiff now “bears some of the risk that the agreed upon search terms are overbroad, thereby burdening Plaintiff with unwarranted search and review costs.” Id. at *11. The court stated, “[i]f, in light of this ruling, the parties wish to confer and revise their agreed upon search terms to reduce the burden on all parties, presumably they are free to do so.” Id.; see also Murphy Oil USA, Inc. v. Fluor Daniel, Inc., No. Civ. 99-3564, 2002 WL 246439, *9-10 (E.D. La. Feb. 19, 2002) (providing option for producing party to review documents itself or provide backup tapes to receiving party for initial responsiveness review), disagreed with by Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 318 n.48 (S.D.N.Y. 2003) (suggesting that it is improper to assume that “an undue burden or expense may arise simply because electronic evidence is involved”). Parties should be very careful, when agreeing upon search terms or search parameters to include a caveat that if the terms will retrieve an unduly burdensome number of hits, the producing party reserves the right to amend the terms to a more reasonable set of terms.

Producing large volumes of documents without reviewing them and subject to a “quick peek” or “clawback” agreement is not advisable in most cases. And, fortunately, many courts will not force this type of agreement on a producing party without a finding of prior discovery wrongdoing. Where the quick peek approach is a genuine option, counsel should be well-educated on what type of confidential and proprietary information may be disclosed through the process. If a party wishes to enter into a “quick peek” or “clawback” arrangement, it is advisable to obtain a court ordered stipulation so that the Order will be enforceable as against others who are not parties to the agreement and so that other courts will honor the non-waiver agreement. See Hopson v. Mayor and City Council of Baltimore, 232 F.R.D. 228, 235 n.10 (D. Md. 2005); and Fed. R. Evid. 502(d).

Likewise, before the receiving party agrees to essentially take the burden of discovery costs on itself, counsel should have good reason to believe the opposing party is not capable of effectively evaluating relevancy and producing the same. Ultimately, it is still the producing party’s right to determine which of its own documents are relevant to the dispute.