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Robert Osborne and Marina Bay Transportation, L.L.C v. C.H. Robinson Company

October 25, 2011


The opinion of the court was delivered by: Magistrate Judge P. Michael Mahoney

Judge Frederick Kapala


Plaintiff Robert Osborne ("Osborne") is the sole member of Marina Bay Transportation, L.L.C. ("Marina Bay"), a local trucking operation. Defendant, C.H. Robinson Company, is a shipping and warehousing company that contracts with local companies as part of its operation. Plaintiff's complaint alleges that an employee of Defendant promised Plaintiff certain "lock down business" -- in excess of $1 million in "gross/net" proceeds -- if Plaintiff made certain investments to create warehousing facilities. Plaintiffs allege they made the investments, but Defendant stopped delivering the lock down business after only a few months, causing Plaintiff to suffer financial losses on their investments.

As discovery has unfolded, there have been allegations that Osborne attempted to bribe Defendant's employee for the "lock down" business, and counter-allegations that it was Defendant's employee that solicited the bribes after Plaintiff was already on the hook for the improvements to his facilities. Plaintiff believes that the promised "lock down business" was directed to other companies, and has attempted to discover what comparable shipping business went through other customers or warehouse locations. The discovery dispute in this case resulted from difficulties Plaintiff had in getting Defendant to search for and turn over records for comparable companies and locations.

Because of the extended difficulties the parties have had with discovery throughout this case, a summary of the motions filed and court orders is helpful. On July 2, 2010, Plaintiff filed a motion to compel because Defendant's discovery responses were overdue. The court granted the motion in part on July 23, 2010. When Defendant tendered discovery, it did not answer certain requests, and stated that some documents were voluminous and only available for inspection at it's headquarters in Eden Prairie, Minnesota. Seeking to avoid traveling to Minnesota for document inspections, Plaintiff's counsel sent letters on July 30, 2010 and August 6, 2010 asking whether the voluminous documents were available in electronic formats, and if so, what formats. On August 24, 2010, Plaintiff filed a motion for contempt, alleging that Defendant had not answered supplemental production requests or Plaintiff's inquiries as to the electronic production of the voluminous documents. The documents Defendant described as voluminous were supposedly documents responsive to requests for shipping records relating to three companies: Suncraft, Master Graphics, and Dixon Web. The court granted the motion in part at a September 17, 2010 hearing based on Defendant's counsel's representation that his client thought the documents could be produced electronically, and that they would attempt to do so. The court reserved ruling on the portion of Plaintiff's motion requesting attorney's fees.

On October 1, 2010, Defendant sent Plaintiff thousands of pages of PDF files consisting of records relating to Suncraft. There were no records relating to Master Graphics or Dixon Web produced. Over the course of status hearings with the court on October 8, 2010, October 29, 2010, and November 24, 2010, the parties exchanged information to explain the difficulties with the search and to clarify the requests for information as to Master Graphics or Dixon Web. Plaintiff sought answers as to how and why Defendant performed its searches, and the court suggested that Plaintiff could proceed with a Rule 30(b)(6) deposition. Defendant explained that Dixon Web and Master Graphics were, in fact, "pick-up locations" rather than "customers," which is what Defendant believed Plaintiff was seeking. Counsel for Defendant stated that pick up locations often have varying names, like "E&D Web" or "Dixon Direct" rather than "Dixon Web." The court ordered Defendant to perform a general query of its database for "Dixonweb" and "Master Graphics." On December 12, 2010, Defendant produced information as a result of the clarifications made during the October and November hearings. All materials were produced as individual PDF documents.

On December 13, 2010, Defendant filed a motion for a protective order in response to Plaintiff's notice for a 30(b)(6) deposition. The court granted Defendant's motion in part and converted two of the three deposition topics to interrogatories. Plaintiff maintained that Defendant's answers did not explain the difficulties in obtaining the documents as to Dixon Web and Master Graphics and insisted that the documents should have been provided in a more usable format. Through March and April of 2011, the parties engaged in discovery relating to Defendant's electronic search efforts. Plaintiff issued a supplemental interrogatory and took the depositions of two employees of Defendant, Mr. Wilson and Mr. Lyons. It was after this discovery process that Plaintiff filed the discovery motions currently before the court.

On April 15, 2011, Plaintiff filed a second motion to compel Defendant to turn over information on the electronic database of Defendant and also sought the production of previously turned-over PDF documents in a more usable format. The court denied that part of the second motion to compel seeking more usable electronic information based on Defendant's assertion that it had already created a response in a more appropriate format and was turning it over to Plaintiff. On April 28 2011, Plaintiff filed a second motion for contempt encompassing many of the same issues described above. Plaintiff also filed a motion to compel depositions and a third motion to compel Defendant to answer Plaintiff's supplemental interrogatories on May 5, 2011 and May 6, 2011, respectively. The court placed the motion for contempt, second motion to compel, and motion to compel depositions on a consolidated briefing schedule. Plaintiff also filed a motion for reconsideration of the court's ruling on the second motion for contempt, which the court assumes was meant to refer to the second motion to compel. All of the above has been fully briefed by the parties.

Plaintiff's combined briefing on the various discovery motions culminated in a request for a default judgment as a discovery sanction. A sanction that would serve as a final judgment in a case is dispositive, and was therefore referred to the District Court. See Egan v. Freedom Bank, et al., No. 10-1214, slip. op. at 11 (7th Cir. Oct. 6, 2011). Recognizing that such a remedy should be used as a sanction "only in extreme situations, or when other less drastic sanctions have proven unavailing," the District Court held on September 9, 2009 that Plaintiff's motion for a default judgment should be denied. (Minute Order of Sept. 9, 2011, Dkt. No. 103.) The case was referred back to the Magistrate Judge for further ruling on whether lesser sanctions are appropriate.

The discovery issues before the court related to electronic discovery procedures. It does not appear that the parties anticipated the need to establish an electronic discovery protocol for this case. Since this case was initiated, the Seventh Circuit Electronic Discovery Committee has developed a Proposed Standing Order relating to the discovery of electronically stored information*fn1 . The Proposed Standing Order, in conjunction with the Sedona Principles, offer insight as to ideal ways for litigants to proceed once the need for electronic discovery has been identified.

Principle 2.05 of the Proposed Standing Order refers to the process for the parties to identify electronically stored information. It suggests that the parties should discuss how to filter data based on file type, date ranges, sender, receiver, custodian, search terms, or other similar parameters. It also suggests that the parties should discuss using keyword searching, mathematical or thesaurus-based topic or concept clustering, or other advanced culling technologies*fn2 . Regarding production format, Principle 2.06 suggests that the parties should make a good faith effort to agree on the format(s) for production of ESI. Principle 2.06(b) states: [t]he parties should confer on whether ESI stored in a database or a database management system can be produced by querying the database for discoverable information, resulting in a report or a reasonably usable and exportable electronic file for review by the requesting counsel or party.

Overall, the emphasis of the Proposed Standing Order is that the parties should proactively engage in a good faith discussion as to the most reasonable and efficient means to search and produce electronic information.

Similarly, the Sedona Principles*fn3 contain guidance as to how parties should proceed with electronic discovery. Comment 4.a indicates that requests for production should clearly specify what electronically stored information is being sought, while avoiding "the sort of blanket, burdensome requests for electronically stored information that invite blanket objections and judicial interventions." The Sedona Principles, Second Edition (2007), Cmt. 4.a. Where the parties have not previously agreed on a production format, the producing party may either produce the information in the format in which it is ordinarily maintained, or a form that is reasonably usable. Id.; Fed. R. Civ. P. 34(b)(2). The responding party has a similar obligation to make specific objections or to indicate the extent to which the requested production will be limited by undue burden or cost of production. The Sedona Principles, Second Edition (2007), Cmt. 4.b. Where a requesting party has not specified a form or forms for the requested production, or if the responding party objects to the form requested, "the responding party must identify the form or forms it intends to use." Id. The parties should attempt to reach an agreement on the forms of production based on the various needs of the parties concerning the data. The Sedona Principles, Second Edition (2007), Cmt. 12.b.

Electronic discovery was not addressed at the Rule 26(f) conference in this case, and there is no indication that the parties reached any type of agreement on the matter. The potential for electronic discovery arose when Plaintiff inquired as to whether it could be used as an alternative to an on-site document inspection. The court views the Seventh Circuit Electronic Discovery Program and the Sedona ...

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