John Crane Group Corporation (“John Crane”) filed this lawsuit against Energy Devices of Texas, Inc., d/b/a/ EDI Downhole Pumps & Supplies (“EDI”), on March 14, 2014, asserting claims for tortious interference with prospective business relations, tortious interference with employment relationships, tortious interference with contractual relations, misappropriation/disclosure of confidential information, conspiracy, and aiding and abetting. Plaintiff describes itself as a full service artificial lift provider of sucker rods and down-hole pumps specialized in fit-for-purpose solutions for the oil and gas industry. In late 2013 and early 2014, Defendant, owned by Ron and Brad Gabriel, opened pump shops and registered to do business in Montana and North Dakota. Plaintiff and Defendant are competitors. Plaintiff alleges that Defendant improperly solicited and induced its employees to leave employment with Plaintiff and to work for Defendant. In addition, Plaintiff alleges that Defendant interfered with its business relationships.

The Court resolved all issues raised in Defendant's motion to compel on the record at the hearing. As ordered at the hearing, Defendant's Motion to Compel and for Sanctions (docket no. 45) is GRANTED in part and DENIED in part as follows:

Next at the hearing, the Court considered Defendant's Motion for Protective Order (docket no. 39). The Court ruled on some issues in the motion at the hearing and took the remaining issues under advisement. As ordered at the hearing, the motion is GRANTED in part and DENIED in part as follows:

The remaining issues raised in the motion for protective order and addressed at the hearing concern Plaintiff's request for the computer hard drives of Brad Gabriel and all former John Crane employees who went to work for Defendant for inspection, copying and imaging by a forensic expert, copies of Facebook data of all current and former John Crane employees who went to work for Defendant from January 1, 2013 to present and the USB and/or external drive devices used by current and former John Crane employees prior to leaving John Crane to work for Defendant from January 1, 2013 to present.

Plaintiff endeavors to contract with a third party expert to create a forensic mirror image of the requested hard drives and search for relevant data. To lessen the financial and time burden of such analysis, Plaintiff asserts that it will pay for the analysis and conduct the process after business hours. Plaintiff states that it seeks to discover information concerning whether former John Crane employees downloaded confidential documents from John Crane computers and transferred the documents to EDI computers. Plaintiff alleges that its former employees inserted USB thumb drives and downloaded documents at John Crane prior to their departure and subsequent employment with Defendant. Plaintiff contends that a forensic analysis is needed to determine whether EDI is in possession of confidential John Crane documents. Plaintiff also states that it seeks to gather data concerning business dealings, costs, and customers. Plaintiff states that it is not seeking the hard drives to inspect email communications.

*3 Pursuant to FED. R. CIV. P. 26(c), the Court “may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense” in the discovery process. In addition to the federal and local rules applicable to discovery, the Court entered an agreed Order Regarding E-Discovery in this case on June 27, 2014. This order supplements all other discovery rules and orders and is intended to streamline the production of ESI. With regard to forensic examination, the ESI Order provides for the parties to meet and confer regarding a forensic examination protocol if it is determined that a forensic examination is necessary.

It is notable that the parties in this case are direct competitors. Regardless of who pays for the forensic examination of the hard drives, the Court is mindful that there is an inherent burden in allowing a direct competitor to create a mirror image of and to scan a direct competitor's hard drives, even if a third party expert serves as an intermediary. In response to discovery requests, Rule 34(a) requires the responding party to search its records and produce the required, relevant documents. It does not, however, “give the requesting party the right to conduct the search.” In re Ford Motor Co., 345 F.3d 1315, 1317 (11th Cir. 2003). Direct inspection of an opponent's computers is generally the exception rather than the rule. It may be permissible when an opponent's document production is inadequate or there is some showing that a search of the computer may reveal relevant deleted materials. See, e.g., Simon Property Group, LP v. MySimon, Inc., 194 F.R.D. 639 (S.D. Ind. Jun. 7, 2000) (allowing imaging on a finding of “troubling discrepancies” in the opponent's document production); Playboy Enterprises, Inc., v. Welles, 60 F.Supp.2d 1050 (S.D. Cal. Aug. 2, 1999) (allowing imaging on a finding of systematic deletion of relevant e-mails after litigation had commenced).

In support of its belief that Defendant's computers may have relevant documents that have not been disclosed, Plaintiff asserts that a review of its own computers showed that USB thumb drives were inserted into its computers prior to the departure of its employees. Plaintiff does not identify any documents that were transferred onto the USB drives. The former employees testified in their depositions that they did not take any confidential information from John Crane and that no USB drives were taken. Two of the former employees, Rick Cooley and Jacob Damm, state in their affidavits that they copied files to an external drive device at Plaintiff's request in October 2013 because their computers were being sent to John Crane Production Solution's offices in Texas to have new software installed. They deny removing any confidential information from the premises on a USB drive or otherwise. At the hearing, Defendant represented that it is not aware of any John Crane confidential documents in its possession. Similarly, in response to an interrogatory, Defendant verified that it conducted an investigation and confirmed that no confidential information was taken from John Crane and provided to EDI by Plaintiff's former employees.

There is no evidence that Defendant refuses to produce all documents responsive to Plaintiff's discovery requests. It is not enough for Plaintiff to argue its belief that there may be relevant documents on the hard drives that have not been produced. Mere skepticism that the opposing party produced all relevant and non-privileged documents from the hard drives, standing alone, is not sufficient to warrant the drastic discovery measure of producing hard drives for forensic examination. See McCurdy Group v. American Biomedical Group, Inc., 9 Fed.Appx. 822, 831 (10th Cir. 2001). Plaintiff failed to establish a sufficient nexus between its claims and its need to obtain a mirror image of Defendant's computer hard drives. Moreover, to the extent Plaintiff states that it is seeking to gather data concerning business dealings, costs, and customers, an inspection of hard drives is not warranted simply to search for additional documents responsive to the party's document production requests. Id. Mirror imaging of a competitor's hard drives is not a substitute for document production in the normal course of discovery. Having reviewed the pleadings and heard the arguments of counsel, Defendant's motion for protective order is GRANTED as to Plaintiff's request for the production of hard drives for forensic examination.

*4 At the hearing, Plaintiff focused its request for Facebook data on Facebook messages relayed between Brad Gabriel and Melvin Swenson. Plaintiff asserted that it is seeking the production of Facebook messages between Gabriel and Swenson. In an interrogatory response, Defendant confirmed that Gabriel and Swenson communicated via Facebook Messenger in or around June 2013.

Plaintiff requested the messages from Swenson. Swenson told Plaintiff that he deleted the messages. Plaintiff explained at the hearing that Swenson and Gabriel are no longer on good terms and Swenson is not employed by Defendant. Gabriel asserts that he also deleted the messages and is unable to locate his Facebook archive. Plaintiff complains that it has not received any information from Defendant concerning the search for these messages, including when the messages were deleted. As a result, Plaintiff seeks the production of Gabriel's mobile phone and hard drive so it may conduct its own search through a third party expert.

Having reviewed the pleadings and heard the arguments of counsel, the motion for protective order as to the Plaintiff's request for Facebook messages is GRANTED in part. Rather than produce its mobile devices and hard drives for a forensic examination, Defendant shall conduct an investigation of Gabriel's Facebook Messenger account, with the assistance of an expert if necessary, in an effort to locate the messages transmitted between Gabriel and Swenson in or around June 2013. If Defendant is unable to locate the messages, Defendant shall produce a report to Plaintiff outlining the steps taken to recover the messages and any information recovered concerning when the messages were deleted.

The USB drives are discussed above. Plaintiff seeks production of USB and/or external drive devices that were inserted into its computers prior to the departure of its employees that were hired by Defendant. The employees each testified that they did not take any USB drives and do not have the requested USB drives in their possession.

The motion for protective order is DENIED to the extent that Defendant shall produce any responsive items in its possession. If Defendant's investigation does not reveal any responsive items, it may state that it does not have any responsive items in its possession in response to Plaintiff's request.

Shortly before the hearing on Defendant's discovery motions, Plaintiff filed a Motion to Compel (docket no. 71) on December 22, 2014. In its motion, Plaintiff identifies eleven categories of documents for which it seeks production. The motion is GRANTED in part and DENIED in part as described below.

Several categories of documents requested by Plaintiff are governed by the Court's rulings above on Defendant's motions to compel and for protective order:

The remaining categories of documents identified by Plaintiff for production are:

In response to Plaintiff's request for detailed monthly financials sorted by customer, Defendant states that it produced these documents to Plaintiff on January 8, 2015. Plaintiff does not dispute that assertion in its reply brief. As a result, the motion to compel the production of monthly financials is DENIED as moot.

In response to Plaintiff's request for payroll information, Defendant states that it produced these documents to Plaintiff on October 3, 2014, and again in a different format on December 23, 2014. Plaintiff does not dispute that assertion in its reply brief. As a result, the motion to compel the production of payroll information is DENIED as moot.

Plaintiff seeks the production of business expense reports, reservations, confirmations and credit card statements for Gabriel travel to Montana and North Dakota for January 1, 2013 to present (including but not limited to expenses related to Expedia, flights, cars, hotels, restaurants, etc.). Plaintiff does not expound on this request in its motion to compel or explain why these documents are relevant for the requested time period. In response, Defendant argues that the request is vague. For example, Plaintiff does not identify whether it is referring to Ron or Brad Gabriel. Defendant submits that the requested documents do not exist.

*6 Having reviewed the pleadings, the motion to compel the production of business expense reports is GRANTED to the extent that Defendant shall produce responsive documents as to Ron and Brad Gabriel, if such documents exist, for the time period from January 1, 2013 to the present.

Plaintiff seeks the production of all billings, invoices, communications, and/or documentation related to contractors hired and/or compensated to perform work (including but not limited to construction, remodeling, electrical, mechanical, or otherwise) on the EDI buildings in Sidney, MT or New Town/Keene. In response, Defendant states that these documents were produced on November 20, 2014, prior to the filing of the motion to compel. Plaintiff does not dispute that assertion in its reply brief. Accordingly, the motion to compel the production of billing records is DENIED.

In this request, Plaintiff seeks the production of invoices and vendor records for both of Defendant's pump shops. Plaintiff asserts that Defendant provided the requested documents for the North Dakota pump shop for inspection, but did not provide copies as promised. As to the Montana pump shop, Plaintiff contends that Defendant did not provide the requested records for inspection or provide copies. In response, Defendant argues that Plaintiff has not shown that the requested documents are relevant or likely to lead to the discovery of admissible evidence. Defendant submits that the request broadly covers all invoices and every business expense, resulting in thousands of pages of documents that are not stored electronically.

Nevertheless, Defendant asserts that it permitted Plaintiff to review the requested invoices and records. It also gave Plaintiff an opportunity to review “The Book” for each pump shop and then produced copies of “The Book” to Plaintiff. “The Book” contains summary information for each pump worked on by Defendant, including the date Defendant worked on the pump, the client, well information and other pump-related information. Defendant submits that it is too burdensome to copy the thousands of pages of requested documents and Plaintiff already has the relevant information from “The Book.”

Plaintiff's motion to compel does not articulate specific information that it is seeking in the requested invoices and records that is not also provided by the information produced by Defendant in “The Book.” Notably, “The Book” for the North Dakota pump shop was produced after Plaintiff filed its motion to compel. Each party has a duty, however, to produce documents that are relevant to a pleaded claim or defense. Defendant produced the requested documents for inspection and originally agreed to produce the North Dakota pump shop records for copying before changing course and asserting that the documents did not need to be produced. Having reviewed the pleadings, the Court GRANTS the motion to compel production of invoices and vendor records to the extent that Defendant shall produce the requested documents for copying at Plaintiff's expense.

Plaintiff requests the production of additional documents received by Brad Gabriel from Swenson, Area Manager of John Crane, during January 1, 2013 to present, such as those documents discussed in Swenson's deposition. In response, Defendant asserts that it has produced e-mail communications and will continue to produce relevant e-mails in accordance with the ESI plan and Plaintiff's proposed e-mail search terms. Defendant submits that it is not aware of any other communications responsive to the request. Plaintiff does not dispute Defendant's assertion in its reply brief. As a result, the motion to compel the production of additional documents is DENIED.

*7 Plaintiff requests the production of “The Book” from the EDI Keene, ND pump shop which lists all pump work performed on behalf of customers and that is organized by date. In response, Defendant states that “The Book” was produced on December 23, 2014. Plaintiff does not dispute that assertion. Accordingly, the motion to compel production of “The Book” is DENIED as moot.

In addition to the requested documents, Plaintiff seeks to compel the production of metadata on offer letters drafted by Brad Gabriel to Plaintiff's former employees. The Order Regarding E-Discovery entered in this case provides, “[a]bsent a showing of good cause, general ESI production requests under Federal Rules of Civil Procedure 34 and 45, or compliance with a mandatory disclosure requirement of this Court, shall not include metadata.” Plaintiff's motion to compel the production of metadata is DENIED.

Finally, Plaintiff seeks to add five search terms for e-mail communications. The Order Regarding E-Discovery states that “[e]ach requesting party shall limit its e-mail production requests to a total of ten search terms per custodian per party.” A contested request for additional search terms must show “a distinct need based on the size, complexity and issues of this specific case.” Defendant responds that adding five additional search terms results in a burdensome expense because there are fifteen custodians, for a total of seventy-five additional searches. Plaintiff contends that the additional search terms are targeted to search for e-mails related to five specific customers that Plaintiff alleges Defendant acquired after its employees left to work for Defendant. Plaintiff's request fails to provide sufficient detail to warrant increasing the e-mail search terms by fifty percent. Plaintiff's motion to compel additional e-mail search terms is DENIED.

So ORDERED and SIGNED this 2nd day of February, 2015.