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October 26, 2016

Court Sanctions Safeway, Spotlights the Importance of Conducting a Reasonable Search

In the world of eDiscovery, there is considerable debate over what constitutes a reasonable search for relevant electronic data. On the one hand, parties generally agree that a “reasonable inquiry” must be conducted pursuant to Federal Rule of Civil Procedure 26(g). That means a search need not be perfect such that all information relevant to claims and defenses is produced in discovery. Instead, a search should be reasonable and proportional under the circumstances.

What Constitutes a Reasonable Search?

Disagreements on this issue generally arise over the nature and extent of a responding party’s efforts to search for responsive ESI. This is particularly the case when a responding party delegates the task of searching for responsive materials to lay employees rather than its legal counsel. While non-legal executives and employees can assist in the search and collection process, counsel generally has an obligation to oversee that process. If counsel fails to properly manage that oversight responsibility, incomplete productions can occur. This can eventually lead to discovery delays, motion practice, and sanctions. The Rodman v. Safeway Inc. case is particularly instructive on these issues.

Rodman v. Safeway

Rodman involved an inadequate search by the defendant grocery chain (Safeway) for electronic documents that were at the heart of plaintiff’s class actions claims. Plaintiff had sought production of documents reflecting its allegation that Safeway agreed to sell groceries online at the same cost as those purchased in the store. With such evidence, plaintiff could show that Safeway breached its online purchase agreement by improperly selling groceries online at a higher cost.

The Inadequate Search

In response to plaintiff’s request for such information, Safeway explained that it had “not located any responsive documents.” Nevertheless, several months after discovery closed and on the eve of trial, Safeway belatedly turned over “ten highly relevant documents” from a “legacy computer drive” that confirmed plaintiff’s allegation.

The documents were located by a key Safeway witness who had unsuccessfully searched for that same information several months earlier. The witness – Safeway’s marketing director – was unable to find the documents because he “merely searched for file names within the legacy drive” using broad keyword searches. No guidance or supervision was forthcoming from Safeway’s counsel. Nor were IT professionals engaged to help search the drive. It was only in preparation for his testimony at trial that the marketing director finally stumbled upon the documents.

The Resulting Discovery Sanction

The sum total of these circumstances led the court to conclude that Safeway violated Rule 26(g) by failing to conduct a reasonable search. While Safeway defended the totality of its search efforts in the litigation, the court found that argument to be unavailing given Safeway’s failure to conduct a reasonable search of the legacy drive. The court was particularly concerned that Safeway’s counsel made no effort to direct, scrutinize, or otherwise oversee the search of the legacy drive. Nor did counsel engage any technical expertise from an outside vendor or even Safeway’s IT professionals to locate the documents in question. As the court explained, “anyone . . . familiar with modern e-discovery techniques” could have located the documents in question. All of which led the court to impose monetary sanctions on Safeway in the amount of $ 516,484.

Two Lessons on Conducting a Reasonable Search

The Rodman case, while instructive on many levels, delineates two actionable points for conducting a reasonable search in discovery.

First, counsel must be involved in the process to ensure that an adequate search transpires. Indeed, counsel has an ethical obligation that is “non-delegable” to supervise subordinate attorneys and staff, service providers, and client representatives “who are involved in the document collection, review, and production process.” This does not mean that counsel must sit with every custodian to ensure documents are adequately collected and preserved. Instead, counsel must exercise discretion to determine which custodians need greater supervision and then provide appropriate guidance.

Second, technical expertise should be enlisted to supplement counsel’s oversight duties. This includes engaging eDiscovery consultants or service providers that can assist counsel who lack sophistication in this field. IT professionals and enabling technologies should also be used to help address eDiscovery search complexities. As Rodman teaches, the client – without that help – will likely fail to collect the relevant information that must be produced in discovery.

Following these steps will better ensure that the client performs a reasonable search for responsive electronic data.

Philip Favro
Philip Favro
Philip Favro acts as a trusted advisor to organizations and law firms on issues surrounding discovery and information governance. Phil provides guidance on data preservation practices, litigation holds, data collection strategies, and ESI search methodologies. In addition, he offers direction to organizations on records retention policies and the need to manage dynamic sources of information found on smartphones, cloud applications, and social networks. Phil is available to serve as a special master on issues related to electronic discovery. Phil is a nationally recognized thought leader and legal scholar on issues relating to the discovery process. His articles have been published in leading industry publications and academic journals and he is frequently in demand as a speaker for eDiscovery education programs. Phil is a member of the Utah and California bars. He actively contributes to Working Group 1 of The Sedona Conference where he leads drafting teams and serves as the Steering Committee project manager. Prior to joining Driven, Phil practiced law in Northern California where he advised a variety of clients regarding business disputes and complex discovery issues. He also served as a Judge Pro Tempore for the Santa Clara County Superior Court based in Santa Clara, California.