Earlier this year, we wrote about a decision in which a federal district court rejected a proportionality argument and ordered the production of a defendant’s entire database because the information in the database was highly relevant to the plaintiff’s trademark infringement claim. Another federal district court recently came out differently in a trade secret misappropriation and restrictive covenant case on a plaintiff’s request for inspection of (a) all the defendant’s computers, hard drives, and electronic devices, and (b) the email addresses and log-in information for all the defendant’s email accounts. See Carolina Bedding Direct, LLC v. Downen, Case No. 3:12-CV-336 (M.D. Fla. May 7, 2013).
The court denied the request for inspection because “the proposed discovery [was] not outweighed by the likely benefit.” Slip op. at 4. The court’s reliance on proportionality is consistent with the emphasis placed on proportionality in the current draft amendments to the Federal Rules of Civil Procedure and the new section on e-discovery in the recent edition of the Benchbook for U.S. District Court Judges.
In its analysis, the court stated that “Rule 34 does not grant unrestricted access to a respondent’s database compilations.” Id. at 3. To gain such direct access, “the court must make a factual finding of some non-compliance with discovery rules and protect respondent with respect to preservation of his records, confidentiality of non-discoverable matters and costs.” Id.
Importantly, the court further stated that principles of proportionality should be considered in determining whether electronically stored information (ESI) should be produced:
In deciding whether to permit discovery of electronically stored information, a court will consider whether the burden or expense of the proposed discovery outweighs the likely benefit, taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the litigation and the importance of the proposed discovery in resolving the issues.
Id. at 4. (citing Fed. R. Civ. P. 26(b)(2)(C)).
Applying these principles, the court concluded that “the requested discovery is neither necessary nor warranted under the limited discovery authorized at this time.” Id.
After conducting other discovery, the plaintiff filed a renewed motion to inspect the defendant’s computer, two cell phones, and log-in information for two email accounts based on evidence of the “requisite improper conduct” of the defendant. In his response, the defendant stated that he would produce the relevant documents requested and the expense involved was “overwhelming.” The defendant also stated that he was unable to afford to defend the case except in a “very limited fashion,” and that he had retained an attorney only on an “extremely limited basis.” Accordingly, the defendant argued that “there [were] no significant benefits to requiring the discovery and the burden on [him] outweigh[ed] any claimed need.”
The court again rejected the plaintiff’s request for inspection. Carolina Bedding Direct, LLC v. Downen, Case No. 3:12-CV-336 (M.D. Fla. June 4, 2013). The court found that it had no reason to doubt the defendant’s certification that he had fully responded to all the plaintiff’s discovery requests despite evidence that certain emails and text messages had not been produced by the defendant. Here, the court observed “[t]he fact that another person still has an email or text that Defendant has not produced does not automatically mean that it remains on Defendant’s computer and/or telephone.” Slip op. at p. 3 n. 1.
The court also found that “allowing Plaintiff to have wholesale access to Defendant’s email accounts and telephone [was] not consistent with the limited discovery allowed in advance of the hearing on the motion for preliminary injunction.” Id. at p. 3. The court did not comment on how much, if at all, the defendant’s personal financial circumstances factored into its analysis.