Eyepartner, Inc. v. Kor Media Group LLC
Eyepartner, Inc. v. Kor Media Group LLC
2013 WL 12095155 (S.D. Fla. 2013)
October 4, 2013

McAliley, Chris,  United States Magistrate Judge

Special Master
Custodian
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Summary
The court issued a Preliminary Injunction Order granting access to the defendant's ESI held on third-party servers. The court also issued a two-tier confidentiality order and directed the parties to provide the home addresses, cell phone numbers and email addresses for two individuals, Mr. Crumrine and Mr. Gregoire, to facilitate the depositions of these two individuals. The court also directed the Special Master to track the collection of ESI and provide regular progress reports.
Eyepartner, Inc., Plaintiff,
v.
Kor Media Group LLC d/b/a Glovue, et al., Defendants
CASE NO. 13-10072-CIV-MARTINEZ/MCALILEY
Signed October 04, 2013

Counsel

Robert Houpt Thornburg, Matthew Neil Horowitz, Allen, Dyer, Doppelt, Milbrath & Gilchrist P.A., Miami, FL, Scott W. Konopka, Mrachek Fitzgerald Rose Konopka & Dow, P.A., Stuart, FL, Gregory Scott Weiss, Mrachek, Fitzgerald, Rose, Konopka & Dow, West Palm Beach, FL, Stephen D. Milbrath, Allen Dyer Doppelt Milbrath & Gilchrist, Orlando, FL, for Plaintiff.
Christopher N. Johnson, Anastasia Protopapadakis, GrayRobinson, P.A., Miami, FL, Jodi Donetta Lowry, Jonathan M.A. Salls, Dickinson Wright PLLC, Steven A. Gibson, Gibson Lowry Burris LLP, Las Vegas, NV, for Defendants.
McAliley, Chris, United States Magistrate Judge

ORDER ADOPTING IN PART SPECIAL MASTER'S SEPTEMBER 13, 2013 REPORT AND RECOMMENDATION

*1 By letter dated September 13, 2013, the Special Master issued a Report and Recommendation that addressed three issues the parties raised with him. That letter is attached as Exhibit A to this Order. In response, Defendants filed an Objection [DE 128], to which Plaintiff filed a response [DE 136]. I have carefully reviewed those filings, along with the record in this matter, and on October 3rd I discussed the issues with counsel and the Special Master during a telephonic status conference. For the reasons more fully stated at that conference, which I incorporate here, I enter the following ORDERS.
1. Scope of the Data to be Imaged
Paragraph 2 of the Preliminary Injunction Order [DE 91], states as follows:
No later than July 25, 2013, Defendants shall identify by name, make, model, location and serial number any and all computers, servers, electronic storage devices, or any related systems that contain, or through which were transferred any computer source code, decrypted code, directories, files, libraries, and any related data provided by or received from Plaintiff (including but not limited to the TikiLIVE platform, any and all modules) – which shall include and certainly not be limited to the HP laptop of Mitchell, the data contained on the Host Gator server account, and the data contained in the Beanstalk server account, and any and all servers used in the ordinary course of business by Defendants or their agents, (such as those servers used by Brian Crumrine, Peter Eichhorst Jr., Paul Gregoire, Kor Technologies LLC, and Rainbow Technology Management LLC).
[Id., p. 14](bold and underline added).
Paragraph 5 of the Preliminary Injunction directs Defendants, in sum, to provide the computer forensic expert access to the “computers, servers, electronic storage devices, or any related systems” that Defendants identify pursuant to paragraph 2. [Id. p. 14-15].
The language of paragraph 2 has caused the parties some confusion. Specifically, the phrase “which shall include” might suggest that the Defendants must identify “all servers used in the ordinary course of business by Defendants or their agents” – regardless of whether they contain, or were a pass-through for, Plaintiff's data.[1]
The Special Master, the parties and I agree that the intent of paragraph 2 is better expressed if the word shall is replaced by the word may. We further agree that the operative, or mandatory, language of paragraph 2 is that which is bolded above. Thus, the Court agrees with the Special Master that paragraph 2 “only requires imaging of servers/data repositories that Plaintiff's data has passed through or is stored on. It would be overly broad to require imaging of every server Defendants used in the ordinary course of business (regardless of whether it has handled Plaintiff's data). Ex. A, p. 2. The Court agrees with and adopts in full, this and the other interpretations of paragraphs 2 and 5 of the Preliminary Injunction, expressed by the Special Master at pages 2 and 3 of his letter Report and Recommendation.
*2 Accordingly, the Defendants' request that they be permitted to provide a revised list of the “computers, servers, electronic storage devices” etc., required by paragraph 2, as that paragraph is interpreted in this Order, is GRANTED. Defendants shall do so in a verified statement, provided to Plaintiff and the Special Master no later than October 8, 2013. All other requests by the parties regarding this subject are DENIED.
2. Forensic Neutral Kuchta's Retainer and Services Agreement
This Court appointed Kelly J. Kuchta as the computer forensic expert who will image and preserve electronically stored data, as required by the Preliminary Injunction. [DE 114, Order appointing Mr. Kuchta]. Plaintiff is responsible for payment of Mr. Kuchta's fees. [DE 144]. Mr. Kuchta presented the parties with an Engagement Letter that he asked them to sign [DE 128-3]; evidently he believes that the Engagement Letter is necessary to ensure that his fees are paid.
For the reasons stated at the October 3rd conference, which are incorporated in this Order, the Court directs the Special Master to immediately meet and confer with Plaintiff's counsel and Mr. Kuchta to help them agree to the terms of Mr. Kuchta's engagement. Plaintiff may elect to sign Mr. Kuchta's current proposed Engagement Letter, or they may reach agreement on different terms. The Special Master may also wish, after consulting with Plaintiff and Mr. Kuchta, to recommend that the Court further modify its Order appointing Mr. Kuchta, to include clear and unambiguous terms regarding Plaintiff's payment of Mr. Kuchta's fees, which order will be enforceable by this Court's contempt powers.
3. Depositions of Recalcitrant Third Party Custodians
Finally, the Court adopts the recommendation of the Special Master that Plaintiff be permitted to conduct three hour depositions of certain third parties in possession of relevant data. These depositions will not limit Plaintiff's ability to later depose these individuals. The Special Master shall decide which individuals may be deposed in this fashion.
At the October 3rd conference, Plaintiff advised the Court that it believes that two of these individuals, Mr. Crumrine and Mr. Gregoire, are avoiding service of subpoenas. Defendants advised that these individuals are independent contractors who have provided computer-related services to the Defendants, but who are not in the Defendants' employ. To facilitate the depositions of these two individuals, the Court directs Defendants to provide the home addresses, cell phone numbers and email addresses for Messrs. Crumrine and Gregoire, to the extent Defendants have this information.
DONE and ORDERED in chambers in Miami, Florida this 4th day of October, 2013.
Exhibit A
September 13, 2013
The Honorable Chris M. McAliley
United States District Court
Southern District of Florida
301 North Miami Avenue, 6th Floor
Miami, FL 33132
Re: EyePartner, Inc. v. Kor Media Group LLC et al.
U. S. Southern District of Florida Case No. 4:13-cv-10072-JLK
Dear Judge McAliley:
Pursuant to my role as Special Master in the above-captioned matter and in order to resolve various disputes between the parties, I held two Special Master hearings on September 4 and 12, 2013. I submit this report and recommendation pursuant to these hearings.
A. Scope of Data to be Imaged
It appears that the parties have some confusion about how to properly understand paragraphs two and five of the Court's July 15, 2013 Preliminary Injunction order (DE 91) (“the Order”).
*3 Paragraph two states:
No later than July 25, 2013, Defendants shall identify by name, make, model, location, and serial number any and all computers, servers, electronic storage devices, or any related systems that contain, or through which were transferred any computer source code, decrypted code, directories, files, libraries, and any related data provided by or received from Plaintiff (including but not limited to the TikiLIVE platform, any and all modules) – which shall include and certainly not be limited to the HP laptop of Mitchell, the data contained on the Host Gator server account, and the data contained in the Beanstalk server account, and any and all servers used in the ordinary course of business by Defendants or their agents (such as those servers used by Brian Crumrine, Peter Eichhorst Jr., Paul Gregoire, Kor Technologies LLC, and Rainbow Technology Management LLC).
Paragraph five states as:
No later than August 15, 2013, the Defendants (as well as Brian Crumrine, Peter Eichhorst Jr., Paul Gregoire, Kor Technologies LLC, and Rainbow Technology Management LLC) shall tender, make available, and provide access to all computers, servers, electronic storage devices, or any related systems in response to Paragraph 2 to the third-party neutral forensics expert which shall use reasonable technological measures to image and preserve such data.
Based on Defendants' assertions during Special Master Hearings, their correspondence with various third parties, and notification by Defendants that some of these third parties refused to comply with the Order, I believe Defendants have over broadly interpreted the order. Specifically, Defendants appear to believe the Order requires: (1) imaging of all servers Defendants used in the ordinary course of business (regardless of whether Plaintiff's data was channeled through it); and (2) an image of the entire server (i.e., large companies would need to allow imaging of their entire server, not just the discrete universe of Defendants account).
I believe the reasonable and proper interpretation of paragraphs two and five is narrower than Defendants' interpretation. I believe that the Order only requires imaging of servers/data repositories that Plaintiff's data has passed through or is stored on.[1] It would be overly broad to require imaging of every server Defendants used in the ordinary course of business (regardless of whether it has handled Plaintiff's data). This would require expensive imaging and significant production of irrelevant data.
Along the same lines, the Order does not require Defendants to image the entire server of third party companies that provide shared server space to their customers. This would also require unnecessarily expensive imaging and significant production of irrelevant data. Rather, these companies assign their customers' data to accounts, folders, or similar partitions where it is segregated in its own “universe” of information that can be preserved separately.[2]Reasonably read, in a way that would not obviously trigger a protest from the third parties, the order only calls for production of Defendants' accounts and associated information (e.g., log files showing changes to Defendants' files, which may be stored in a different part of the server). Third parties should have no objection to providing the forensic neutral access to Defendants' data, given the proper credentials or authorizations by Defendants. That “universe” of data may then be preserved remotely using a process called virtual SDN. The computer forensic neutral, Mr. Kuchta, has already drafted and circulated documents to facilitate this process.
*4 During my September 12, 2013 Special Master Hearing, Mr. Kuchta confirmed he can collect Defendants' data on third party servers without imaging the third parties' entire servers. Consequently, I recommend the Court adopt the foregoing interpretation of paragraphs two and five of the Preliminary Injunction Order and order the parties to proceed accordingly.
B. Forensic Neutral Kuchta's retainer and Services Agreement
During the Special Master Hearing on Wednesday September 4, 2013, Mr. Kuchta asked various questions regarding how best to execute the Court's June 26, 2013 order that he “be compensated at his typical hourly rate, payable 50% by each party.” Specifically, Mr. Kuchta wanted the parties to sign his typical services agreement[3] and provide a refundable retainer. Defendants objected to this course of action as, inter alia, they are currently appealing your order allocating 50% responsibility to each party.
During the September 12, 2013 Special Master Hearing, Plaintiffs agreed (in an effort to facilitate the data collection process) to unilaterally sign the services agreement and advance Mr. Kuchta's fee, provided Defendants be required to sign and repay the amounts should their appeal fail. For his part, Mr. Kuchta said he was comfortable with one party signing the agreement, paying his retainer and fees, and letting the parties address any shared responsibility later by incorporating his fees in a settlement or damages phase.
I believe Mr. Kuchta's request for a retainer and an executed services agreement is reasonable. Although the Court ordered the parties to retain him, a reasonable services agreement will help clarify the responsibilities of the parties, ensure everyone's expectations are understood, and provide Mr. Kuchta with added protection.
Should Defendants win their appeal, this issue is moot. However, should Defendants lose, I recommend this court require Defendants execute Mr. Kuchta's services agreement or issue an order incorporating its terms. In either case, given Plaintiff's promise to sign and pay, Mr. Kuchta has reconfirmed his engagement and is proceeding without delay.
C. Depositions of Recalcitrant Third Party Custodians
Various third parties in possession of relevant data have refused to comply with the Court's Preliminary Injunction order and have not identified or produced relevant data sources.
Plaintiff has indicated it is prepared to subpoena these recalcitrant third parties for deposition for the purpose of learning about what relevant data they may have and acquiring that information.[4] Plaintiffs have requested that these depositions not count against the 7-hour limit under the Federal Rules, nor prejudice them from taking a further full deposition of any of those same third parties. Defendants disagree and argue that the ESI custodian depositions count against the 7-hour limit.
I recommend the Court allow Plaintiffs to depose these parties, for a maximum of three hours, without prejudice to further depositions in accordance with the Federal Rules. I believe depositions will facilitate Plaintiff's ability to collect these data sources. Hopefully, Plaintiff will be able to determine whether these parties have relevant data, where the data is located, and understand why they refuse to comply. Moreover, the subpoena directed to them individually will make it clear that the third parties have a personal duty to comply (to the extent that is unclear to them from the Order).
D. Status of ESI Collection
*5 Finally, Mr. Kuchta is tracking the data sources to be preserved, based on a list that was provided by Defendants on July 25, 2013, in response to paragraph two of the Order. At this point, Defendants have informed that Mr. Kuchta is welcome to begin imaging any and all computers in their custody or control. Plaintiffs have communicated to Defendants which of the items on Mr. Kuchta's list are amenable to preservation by virtual SDN. Kuchta will work with the parties to establish a schedule for the remainder of discovery under the Order, track the collection, and provide me with regular progress reports as we move ahead with discovery. I have offered to make myself available for additional Special Master Hearings to address other issues as they arise in person or by telephone. Mr. Kuchta has already anticipated that we will need a hearing to address, among other things, how we will handle subsequent phases such as facilitating Defendants' preparation of a privilege log.
The parties should be advised that they have 5 days to object to this Report and Recommendation.
Sincerely yours,
Stephen N. Zack
Special Master
cc:
Robert Houpt Thornburg
Matthew Neil Horowitz
Stephen D. Milbrath
Edwin Ayres Scales, III
Steven A. Gibson
Jodi Donetta Lowry
Jonathan M.A. Salls
Kelly “KJ” Kucht

Footnotes

Applying this broad interpretation, Defendants identified the information required by paragraph 2, in a letter to Plaintiff's counsel dated July 25, 2013. [See DE 128-2].
See Order at paragraph 2 (“Defendants shall identify ... all ... servers [and] electronic storage devices [etc] that contain, or through which were transferred any ... data provided by or received from Plaintiff” (emphasis added)).
To use an analogy, Defendant's accounts on large third party servers are like safety deposit boxes at a bank. An order granting access to the contents of Defendant's safety deposit box does not require the bank to open every safety deposit box in its vault.
Slightly tailored to this case, e.g., to reflect the Court's two-tier confidentiality order, which Mr. Kuchta and his staff have signed.
The parties advised that two such depositions, Mr. Crumrine and Mr. Gregoire, have already been noticed, for October 2 and 3.