Laub v. Horbaczewski
Laub v. Horbaczewski
2020 WL 5093089 (C.D. Cal. 2020)
April 17, 2020
Stevenson, Karen L., United States Magistrate Judge
Summary
The Court granted Defendants' Motion to Compel Further Responses Regarding Plaintiffs' Text Messages and Request for Forensic Examination Pursuant to Rule 37-2.1 in part, ordering an independent forensic examination of Kanes' 2018 iPhone backup and a wholesale re-review by the Court of the text message data set(s) extracted from that device for responsiveness. The Court also awarded Defendants reasonable fees, including attorneys' fees, incurred in bringing the 2019 Text Message Motion. However, the Court denied Defendants' request for a complete forensic examination of the entirety of the Kanes backup file, finding it to be disproportionate to the needs of the case.
Additional Decisions
Justice Laub.
v.
Nicholas Horbaczewski, et al.
v.
Nicholas Horbaczewski, et al.
Case No. CV 17-6210-JAK (KSx)
United States District Court, C.D. California
Filed April 17, 2020
Counsel
Patrick M. Ryan, Stephen C. Steinberg, Chad DeVeaux, Gabriella A. Wilkins, Joseph John Fraresso, Bartko Zankel Bunzel and Miller APC, San Francisco, CA, for Justice Laub.Kenneth A. Kuwayti, Morrison and Foerster LLP, Paolo Alto, CA, Andrew Ditchfield, Pro Hac Vice, Brian M. Burnovski, Pro Hac Vice, Cindy S. McNair, Pro Hac Vice, Peter M. Bozzo, Pro Hac Vice, Davis Polk and Wardwell LLP, New York, NY, Nicholas Rylan Fung, Morrison and Foerster LLP, Los Angeles, CA, for Nicholas Horbaczewski, et al.
Stevenson, Karen L., United States Magistrate Judge
Proceedings: (IN CHAMBERS) ORDER RE: DEFENDANTS' MOTION TO COMPEL FURTHER RESPONSES REGARDING PLAINTIFFS' TEXT MESSAGES AND REQUEST FOR FORENSIC EXAMINATION (Dkt. No. 430)
*1 Before the Court is Defendants' Motion to Compel Further Responses Regarding Plaintiffs' Text Messages and Request for Forensic Examination Pursuant to Rule 37-2.1, filed on February 19, 2020 (the “Motion”) in the Joint Stipulation format pursuant to Local Rule 37-2 (“Joint Stip.”). (Dkt. No. 430.) On March 4, 2020, Defendants filed a Supplemental Memorandum in Support of Defendant's Motion (“Dfts'. Supp. Mem.”). (Dkt No. 435.) On March 13, 2020, Defendants filed a request that, in light of the surging Covid-19 pandemic, the Court hold the hearing on the Motion telephonically (Dkt. No. 439), and on March 16, 2020 the Court granted Defendants' request (Dkt. No. 440). On March 18, 2020, the Court held oral argument on the Motion via telephone and took the matter under submission. (Dkt. No. 441.)
For the reasons discussed below, the Motion is GRANTED in part and DENIED in part.
I. RELEVANT BACKGROUND
The allegations of the operative Third Amended Complaint (“TAC”) (Dkt. No. 62) are well documented in prior discovery orders, therefore, the Court will not repeat them here. (See Dkt. Nos. 141, 187.) Further, during the course of this lawsuit, the Court has resolved numerous discovery disputes between the parties and those will also not be rehashed here except as directly relevant to the Motion. (See, e.g., Dkt. Nos. 212, 406, 442.) The instant Motion concerns the Court's Order of April 30, 2019, and alleged deficiencies in Plaintiffs' search for and production of text messages as required by that Order. The following procedural history is relevant to the Motion.
On December 3, 2018, presiding District Judge, the Honorable John A. Kronstadt, issued an order stating that the Magistrate Judge “will retain jurisdiction in this matter to resolve discovery disputes[.]” (Dkt. No. 95.) In an Order dated July 30, 2019, Judge Kronstadt reiterated that the Magistrate Judge continued to have jurisdiction to hear and resolve discovery disputes so long as the parties did not serve new discovery requests after the discovery cut-off. (Dkt. No. 347.) On October 2, 2019, Judge Kronstadt confirmed the Magistrate Judge's continuing jurisdiction to hear discovery disputes. (Dkt. No. 398.)
A. Plaintiffs' 2019 Motion to Compel Production of Text Messages
On February 25, 2019, Defendants filed a Motion to Compel Production of Text Messages exchanged by and between Plaintiffs (the “2019 Text Message Motion”). (Dkt. No. 152.) In that motion, Defendants complained that Plaintiffs had failed to produce any text messages exchanged between themselves or any messages between Plaintiffs and Aaron Kanes, brother of Defendant Daniel Kanes. (Id. at 1.) Defendants argued that the text messages were responsive to Defendants' request for production of documents (“RFPs”) served in March 2018, long before the discovery cut-off. (Id.)
Plaintiffs' initial explanation for producing no text messages between Plaintiffs Kanes and Laub was that the texts did not exist because Plaintiffs had replaced their cell phones multiple times before the lawsuit commenced and none of these texts were preserved. (Id.; see also, Declaration of Kenneth A. Kuwayti in Support of [2019 Text Message Motion] (“Kuwayti Decl.”), Ex. 13.) Defendants argued that Plaintiffs' explanation for why these text messages appear to be missing made no sense when Plaintiffs had produced hundreds of text messages between Plaintiffs and other individuals for the period January 2015 through March 2016. (Dkt No. 152 at 1.) Rejecting Plaintiffs' explanations, Defendants argued that:
*2 Plaintiffs should be compelled to conduct a comprehensive search and produce the texts that they represented and agreed they would provide. These texts may reside in multiple places—on Plaintiffs' current or former iPhones, on their iCloud backups, or on their computers, or other devices if those devices were synchronized with their phones.
In addition, or in the alternative, if texts truly are missing, the Plaintiffs should be required to provide discovery into their production and preservation efforts. Plaintiffs and their counsel should be required to state under oath when and how the texts were searched and produced and what preservation efforts were made. Plaintiffs should be required to turn over their phones and any synchronized devices to an independent forensic vendor, who may still be able to retrieve the texts that were deleted from the phones or devices.
(Id. at 2.) In opposing the 2019 Text Message Motion, Plaintiffs maintained that the text messages at issue did not exist because of Plaintiffs had replaced their phones and, even if they did exist, they should not be compelled to produce them because Defendants' motion to compel production of additional text messages was untimely. (Id. at 14-16.)
B. The April 30, 2019 Order Compelling Production of Plaintiffs' Text Messages
On April 10, 2019, the Court heard oral argument on Defendants' 2019 Text Message Motion. (Dkt. No. 184.) On April 30, 2019, the Court issued its order granting in part and denying in part the 2019 Text Message Motion (the “April 30 Order”). (Dkt No. 212.) As an initial matter, the Court found that the 2019 Text Message Motion was timely, and also concluded that the disputed text messages were both relevant and proportionate to the needs of the case. (Id. at 5-7.) The Court was skeptical of Plaintiffs' explanation of how text messages between Laub and Kanes were purportedly lost when Plaintiffs replaced and/or upgraded their phones, noting that:
[E]ven if Kanes or Laub individually lost text messages while migrating their data to new phones, it seems highly unlikely that both Kanes and Laub independently would lose just those text messages with each other in the upgrade process.
(Id. at 7 (emphasis in original).) The Court also found “troubling” that Plaintiffs' counsel “in response to the Court's direct questioning, could not confirm if preservation directives were given to Kanes and Laub to preserve data on their phones and other electronic devices in light of this pending litigation.” (Id.)
Thus, the Court ordered Plaintiffs to: (1) search for and produce all responsive text messages between Laub and Kanes for the period January 2015 through March 2016 and required that Plaintiffs produce any responsive text messages they located “in a form or forms in which it is ordinarily maintained or in a reasonable usable form or forms”; (2) contact their cell phone provider(s) to determine what text messages might be recoverable; and (3) to provide a signed affidavit outlining the specific search protocol(s) used to locate additional responsive text messages and “to the extent Plaintiffs assert that relevant text messages were lost when older phones were replaced, Plaintiffs must identify exactly when the replacement occurred as to each specific iPhone.” (Id. (citing FED R. CIV. P. 34(b)(2)(E)(ii).)
The April 30 Order denied Defendants' request for independent forensic examinations of Plaintiffs' other devices and iCloud backup, explaining that this request was “not a follow-on to previously served discovery.” (Dkt No. 212 at 8.) The Court emphasized that “[a] motion to compel under Rule 37(a) is not a means to seek discovery that was not previously requested.” (Id.) The Court also ruled that “[i]f, after Plaintiffs search for and produce any additional responsive text messages consistent with this order, Defendants believe that spoliation of evidence has occurred, the appropriate remedy is a motion for sanctions pursuant to Rule 37(b).” (Id.) On May 14, 2019, Plaintiffs filed a motion for review and reconsideration of the April 30 Discovery Order (Dkt. No. 220), which Judge Kronstadt denied on July 30, 2019 (Dkt No. 247 at 35).
*3 The April 30 Order also provided that Defendants could bring a motion for reasonable expenses incurred in bringing the 2019 Text Message Motion. (Dkt No. 212 at 9.) On August 13, 2019, Defendants filed a motion for reasonable expenses. (Dkt. No. 357.) Plaintiffs filed an objection to Defendants' fee motion on August 20, 2019. (Dkt. No. 361.) The Court heard oral argument on November 6, 2019 (Dkt. No. 406), and on January 27, 2020 awarded Defendants reasonable fees, including attorneys' fees, incurred in bringing the 2019 Text Message Motion in the amount of $32,740.07 (Dkt. No. 419).
The instant Motion concerns Defendants' assertions that, despite additional production of text messages in August and December 2019, Plaintiffs still have not fully complied with the April 30 Order, making it necessary for the Court to order an independent forensic examination of Kanes' 2018 iPhone backup and a wholesale re-review by the Court of the text message data set(s) extracted from that device for responsiveness.
II. THE MOTION
A. Defendants' Contentions
Defendants emphasize that they have been engaged in protracted and repeated efforts to obtain responsive text messages between Kanes and Laub, and between Kanes and his brother Aaron since Defendants first moved to compel the product of such texts in February 2019. (Joint Stip. at 1.) They point out that despite Plaintiffs' prior assertions that no texts existed between Plaintiffs or between Kanes and his brother, in August 2019, in response to the April 30 Order, Kanes produced nearly 1,000 additional responsive texts that had never been previously produced. (Id.) Laub, for his part, “produced no texts whatsoever in response to the April 30 Order claiming in a separate declaration that he replaced his phone in January 2017, without backing it up.” (Id.)
Defendants argue that Plaintiffs' August 2019 production of messages located on Kanes 2018 backup file was “deficient on its face” because it did not “include any texts solely between [Plaintiffs Kanes and Laub] from before March 31, 2015,” and did not include “any texts between the two of them during a nearly three-month period from August 18 and November 10, 2015, when Plaintiffs claim they were providing services to DRL.” (Id. at 2.) In November 2019, Defendants sought authorization to compel Plaintiffs' further compliance with the April 30 Order. (Id.) In an effort to avoid motion practice, Defendants had further discussions with Plaintiffs, urging, along with other conditions, that Plaintiffs submit their devices for independent forensic review “by a jointly selected forensic expert.” (Id.)
Plaintiffs rejected Defendants' proposal and “retained their own forensic vendor to review Mr. Kanes's back up file”; and, on December 20, 2019, they produced 200 additional text messages. (Id.) Defendants complain that Plaintiffs did not provide “any explanation as to how the purported forensic collection was conducted, how the results were generated, or the level of input that plaintiffs or their counsel had in the process.” Moreover, the production “did not include any text messages solely between Mr. Kanes and Mr. Laub prior to March 31, 2015 or between August 18 and November 10, 2015.” (Id. at 3.)
Defendants argue that Plaintiffs' “repeated failure to make a timely and complete production of text messages is a violation of the April 30 Order.” (Id.) Further, Defendants maintain that they are being prejudiced by Plaintiffs' conduct “by depriving them of key evidence that goes to the heart of Plaintiffs' claims in this litigation.” (Id.)
To remedy Plaintiffs' alleged failure to fully produce responsive text messages, Defendants seek an order requiring “an analysis by an independent forensic expert” either jointly selected by Plaintiffs and Defendants or selected by the Court, “to conduct a proper collection exercise relating to Mr. Kanes' texts (including deleted texts).” (Id.) Defendants argue that such a review would not be burdensome or expensive, as “it would take less than a day and would only cost around $2,500.” (Id. at 25 (citing Declaration of Mike Kunkel (“Kunkel Decl.”) ¶¶ 6-7).)
*4 For any non-privileged texts identified through the proposed independent forensic review, Defendants urge that “Plaintiffs should further be required to submit to the Court all non-privileged texts between themselves and between Mr. Kanes and his brother from the period January 1, 2015 through March 31, 2016 ... so that the Court can determine responsiveness rather than leave that determination to Plaintiffs.” (Id.)
B. Plaintiffs' Contentions
In their Opposition, Plaintiffs argue that the Motion should be denied because Plaintiffs and their counsel have expended “substantial effort and expense” to review and produce to Defendants far more messages than they sought during discovery or were compelled by the Court's April 20, 2019 Order. (Id. at 4.) According to Plaintiffs, they have “wholly complied” with the April 30 Order. (Id.)
Plaintiffs contend that, consistent with the April 30 Order, they “searched their iPhones, computers, and online iCloud backups, and Mr. Kanes located an old iPhone backup on an old computer storage that did contain text messages between Plaintiffs, and between Dane Kanes ... and his brother, Aaron Kanes, from the relevant time period.” (Id.) Plaintiffs maintain that they and their counsel “spent dozens of hours reviewing such messages for responsiveness and privilege and ultimately produced roughly 1,000 messages.” (Id.) Further, Plaintiffs note that they have “already paid $32,740.07 in fees and costs as discovery sanctions for their original failure to produce the messages.” (Id.)
According to Plaintiffs, their retained expert recovered “every text message” from Kanes's iPhone backup and reviewed for responsiveness and privilege every text message involving Justice Laub or Aaron Kanes, which totaled more than 8,000 messages. (Id. at 4-5.) Plaintiffs contend that they produced “additional text messages that went beyond the [April 30 Discovery] Order, including complete conversations for context when there was a least one responsive message.” (Id. at. 5.)
In sum, Plaintiffs push back against Defendants' demands for further forensic examination of Kanes's 2018 back-up file to locate additional responsive text messages, arguing that Defendants “continue to make new and ever-evolving discovery demands and then fault Plaintiffs for failing to meet them.” (Id. at 4.)
C. Defendants' Supplemental Memorandum
In their Supplemental Memorandum, Defendants reject Plaintiffs' contention that Defendants seek to “impose new discovery obligations on Plaintiffs” and emphasize that Defendants “seek only what Defendants have sought, and what Plaintiffs should have provided, from the outset: texts responsive to Defendants' very first set of document requests.” (Dfts'. Supp. Mem. at 1.) Defendants also argue that Plaintiffs' use of a unilaterally selected forensic expert to assist in the search for additional responsive text messages “does not obviate the need for relief.” (Id.) Defendants argue that “Plaintiffs cannot be trusted to meet their obligations on their own,” and, therefore, give little credence to Plaintiff's “self-selected vendor.” (Id.)
Defendants reiterate their concerns that the texts Plaintiffs did produce “still do not include a single text between Plaintiffs from the critical missing time periods.” (Id.) Defendants also insist that Plaintiffs have offered no explanation for the gaps in the prior productions. (Id. at 2-3.) Defendants argue that the relief they seek is both appropriate and workable. (Id. at 4.) Further, to minimize any expense to Plaintiffs of the additional forensic review, Defendants state they “are willing to split, or if necessary, pay for an independent expert[.]” (Id.)
III. LEGAL STANDARD
*5 Under Federal Rule of Civil Procedure 26, a party may obtain discovery concerning any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case. FED. R. CIV. P. 26(b)(1). In determining if the proportionality requirement has been met, Rule 26(b)(1) lists the following factors for courts to consider: the importance of the issues at stake in the action; the amount in controversy; the parties' relative access to the relevant information; the parties' resources; the importance of the discovery in resolving the issues; and whether the burden or expense of the proposed discovery outweighs its likely benefit. (Id.) Relevant information need not be admissible to be discoverable. (Id.) District courts have broad discretion in controlling discovery. See Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002).
IV. ANALYSIS
A. Plaintiffs' Text Messages Are Relevant
The Court already determined in the April 30 Order that text messages between Kanes and Laub and between Kanes and his brother Aaron Kanes are relevant to the claims and defenses at issue. (Dkt. No. 212; and see FED. R. CIV. P. 26(b)(1).) Plaintiffs' central allegation is that they initially conceived a televised Drone Racing League (“DRL”) and Defendant Horbaczewski promised each of them a one-third interest in the company along with designation as DRL co-founders. (TAC ¶¶ 16-20.) Plaintiffs assert claims based, among other things, on oral contract, implied-in-fact contract, and promissory estoppel, all theories that may turn on evidence of who knew what, when they knew it, and what communications may have occurred amongst and between the parties during the time period when the DRL was allegedly formed. (See, e.g., TAC ¶¶ 57-63 (breach of oral agreement); ¶¶ 76-96 (breach of implied-in-fact contract); ¶¶ 125-131 (promissory estoppel).) The TAC specifically alleges that Plaintiffs met with Horbaczewski March 11-12, 2015, and “[i]mmediately after the March 11-12, 2015 meetings, Dan [Kanes], Justice [Laub] and Horbaczewski proceeded to act together as partners and co-founders to continue development of their drone racing venture.” (Id. ¶¶ 19-25.)
B. Plaintiffs' Search and Review Procedures to Comply with the April 30 Order
As noted above, the April 30 Order required that Plaintiffs conduct a thorough search for responsive text messages on their iPhones and other devices for the period January 1, 2015 through March 31, 2016; and required that Plaintiffs provide documentation detailing the methodology used to conduct those further searches. Plaintiffs argue that they did exactly that in full compliance with the Court's Order. (Joint Stip. at 15.)
Kanes provided a declaration stating that, in response to the Court's order, he searched: (a) an iPhone XS Max for text messages between him and Laub, and between Kanes and his brother Aaron between January 2015 and March 2016, but located no such messages on that phone; (b) a current computer “for any iCloud backups from any mobile phone,” but located no such backups; (c) an old MacBook Pro and found one backup of an iPhone 6S Plus from October 2018 and he exported “all such text messages between me and Mr. Laub, and between me and Aaron Kanes, and provided them to my counsel to review for responsiveness and privilege”; (d) an online iCloud account for “any iCloud backups of any mobile phone,” but only found backups starting in October 2018; and (e) he contacted his cell phone provider to ask about their ability to recover data and was told the provider does not save text messages beyond 72 hours. (Joint Stip., Ex. M ¶ 3.)
Laub also provided a declaration outlining his search efforts in response to the April 30 Order. (Joint Stip., Ex. N.) Laub states that in May 2019, he searched: (a) his iPhone 7 for text messages between him and Kanes for the period January 2015 through March 2016, but located no such messages; (b) searched iCloud backups online and on one computer, but located no such messages because he “never backed up [his] text messages in iCloud”; and (c) contacted his cell phone provider and was told they had no way or recovering or providing any text messages “between [him] and Mr. Kanes” for the period January 2015 through March 2016. (Id., Ex. N, ¶ 3.) The Motion seeks no further searches or forensic analysis from Laub.
*6 Plaintiffs maintain that on August 14, 2019, they “produced all of the responsive, non-privileged messages ... [and] also produced a declaration with details of their searches, including whether specific software was used.” (Id.; and see Exs. M, N.) The August 2019 production included nearly 1,000 additional responsive and previously unproduced text messages 40 messages between Kanes and his brother, Aaron, and 950 responsive texts between Kanes and Laub. (Joint Stip. at 8.) Laub produced no additional text messages. (Id.)
In connection with their further text message production, Plaintiffs also provided a supplemental privilege log identifying privileged communications located during the further text message searches. (Joint Stip., Ex. V.)
C. Plaintiffs Submitted Kanes's 2018 Backup File to a Forensic Expert
Plaintiffs emphasize that, following the April 30 Order, they were always willing “to submit Kanes's backup to a forensic expert.” (Joint Stip. at 28.) They explain, however, that when the parties could not agree in meet and confer discussions on an independent forensic examiner and other conditions that Defendants insisted on for the further search, Plaintiffs submitted Kanes's 2018 backup file to their own retained expert, Wayne Hale, with Resurgent, Inc., who “used forensic tools to extract all messages of all types for the relevant time period from the backup, and then highlighted all messages involving Plaintiffs and those involving Mr. Kanes and Aaron Kanes.” (Id.) Plaintiffs describe the specific procedure for the forensic review as follows:
In November 2019, Kanes sent a memory card containing the entire backup of his old iPhone 6S Plus from his old laptop to a forensic expert, Wayne Hale.... Using decryption and forensic tools, Hale extracted all [t]ypes of instant or text messages from January 1, 2015 to March 31, 2016 from the backup. [ ] This resulted in the recovery of over 66,000 iMessages, SMS and MMS and nearly 700 WhatsApp messages.... Hale then searched for and highlighted all messages involving Mr. Laub and/or Aaron Kanes either solely with Mr. Kanes or involving third parties, which totaled approximately 4,800 messages with Aaron Kanes and approximately 3,400 messages with Mr. Laub and sent his results to Plaintiffs' counsel.
(Id. at 16.) Plaintiffs then state that “three separate attorneys and one paralegal for Plaintiffs spent approximately 3-4 dozen more hours ... reviewing all of the text messages for responsiveness to Defendants' document requests and for privilege[.]” (Id. at 16-17.) Plaintiffs insist that any gaps in the production of text messages between January and March 2015, and August 18, 2015 to November 10, 2015 “are due to the fact that non-responsive and/or privileged messages from those time periods have not been and will not be produced.” (Id. at 31.)
Plaintiffs reject Defendants' contentions about deficiencies in Plaintiffs' text message production, averring:
Defendants mischaracterize Plaintiffs' search and completely ignore the substantial expenses they have already incurred and substantial efforts that Plaintiffs' counsel undertook to review all of the potentially relevant messages extracted from Mr. Kanes's backup for responsiveness and privilege.
(Id. (emphasis in original).) Plaintiffs emphasize that Defendants “have failed to identify any defects in Mr. Hale's qualifications or methodology that would suggest his forensic examination was not exhaustively complete.” (Id. at 32.)
D. Gaps in Plaintiffs' Text Messages During Two Key Periods
*7 Despite Plaintiffs' additional searches and subsequent production, Defendants argue that Plaintiffs' production remains deficient “on its face” because there are gaps during two critical time periods where Plaintiffs produced no responsive text messages: between January 2015 and March 31, 2015, and between August 18 and November 10, 2015. (Joint Stip. at 8-9.) Defendants point out that events crucial to the claims and defenses in this lawsuit occurred during these two periods:
For example, January 22, 2015 is when Mr. Horbaczewski met Plaintiffs for the first time ... [a]nd March 11-12, 2015 is when Plaintiffs claimed to have entered into a contract with Mr. Horbczewski to be equal co-founders of the Drone Racing League.... Nor did Mr. Kanes produce any texts with Mr. Laub from the nearly three-month period between August 18 [and] November 10, 2015 ... even though Plaintiffs claim that they were providing services to the Drone Racing League during that time.
(Id.) Defendants' concerns about the absence of responsive text messages between Plaintiffs during these periods is not unreasonable. Plaintiffs do not dispute that these periods encompassed events central to their claims. Indeed, the TAC confirms as much. (See TAC ¶¶ 51-53.)
But Laub's declaration explains that he produced no additional text messages in response to the April 30 Order because he searched his own iPhone 7 and located no text messages on the phone for the period January 2015 through March 2016, and he had “a long standing practice of only saving text messages for thirty days and never backing up his text messages to iCloud.” (Joint Stip. at 27; and see id., Ex. N ¶ 3.) Notably, Defendants do not challenge Laub's statements or seek any re-review of his devices. Kanes, on the other hand, “used specialized software to extract all such messages” from the 2018 iPhone backup that he located and produced nearly 1,000 additional text messages in August 2019 in response to the April 30 Order. (Joint Stip. at 27.) Plaintiffs made a further small production of text messages in December 2019, but explain that these were “messages originally withheld as privileged that further review and analysis led Plaintiffs to conclude were not privileged.” (Id. at 32.)[1]
Plaintiffs insist that in January 2019 when they told Defendants' counsel that Kanes and Laub did not have text messages between them from January to November 2015, “Plaintiffs were unaware Mr. Kanes had text messages from 3-4 years prior preserved in a backup of an old iPhone on his old laptop in storage.” (Id. at 30.)
E. Defendants' Request for a Complete Forensic Re-Examination of Kanes's 2018 Backup File is Not Proportionate to the Needs of the Case
As a threshold issue, Defendants contend that Plaintiff's search procedures were inadequate. Defendants request that the Court order an independent forensic examination of Kanes's 2018 backup file and complain that Plaintiff's own searches of the extracted messages were deficient because Plaintiffs did not use forensic software to conduct those searches. (Joint Stip. at 21-23.) Plaintiffs respond to Defendants' criticism by noting that the April 30 Order did not require them to use forensic software. (Id. at 27.) Plaintiffs are correct. The April 30 Order did not mandate any particular search methodology, but merely required that Plaintiffs “provide a signed affidavit outlining the specific search protocol(s) used to locate additional responsive text messages.” (Dkt. 212 at 7.) This, they have done. (See Joint Stip., Exs. M, N.)
a. A Wholesale Independent Forensic Examination of Plaintiffs' Devices is Not Warranted
*8 In seeking to compel further responses regarding Plaintiffs' text message production, Defendants, with good reason, make much of Plaintiffs' prior contradictory and shifting positions about their search for text messages. Plaintiffs' previous statements to Defendants and the Court include that they had previously searched and found none; that responsive text messages did not exist; that everything relevant and responsive had been produced; and that only the texts between Laub and Kanes had been lost when Plaintiffs' upgraded their phones. (See Joint Stip. at 21-22.)[2]
Now, more than two years after Defendants served their first set of Requests for Production of Documents and more than a year after the close of discovery, Plaintiffs insist that they have produced all of the responsive text messages after conducting their own searches of their devices and turning over the Kanes 2018 backup file to a retained forensic expert, who extracted “all messages of all types for the relevant time period from the backup[.]” (Id. at 28.) Plaintiffs emphasize that Kanes “used specialized software to extract all such messages,” and then their “separate attorneys and one paralegal for Plaintiffs spent roughly 2-3 dozen hours equating to about $15-20,000 in attorneys' fees reviewing all of the recovered text messages for responsiveness.” (Id. at 27.)
Plaintiffs emphasize that Defendants' request for an independent forensic re-review of the Kanes backup file would impose a substantial burden on them, particularly when Plaintiffs have already paid $32,740.07 in sanctions for prior failures to fulfill their obligations to search for and produce responsive text messages. (Id. at 34.) Plaintiffs also object that turning the entire Kanes dataset over to an independent forensic examiner is inappropriate:
[B]ecause it lacks any acceptable framework for protecting against disclosure of attorney-client privileged communications and would require Plaintiffs to submit to intrusive discovery of numerous personal and private communications, including conversations about medical and reproductive issues, financial transactions, family affairs, and other private topics.
(Id. at 3.)
After a thorough review of the record and the parties' arguments, the Court finds that the relief sought in the Motion is not proportionate to the needs of the case. The April 30 Order required Plaintiffs to search or responsive texts between January 2015 through March 2016. (Dkt. No. 212; Joint Stip., Ex. H.) The record here indicates that Plaintiffs retained a forensic examiner, Wayne Hale, who reviewed all of the text messages extracted from Kanes' 2018 backup and “searched for and highlighted all messages involving Mr. Laub and Mr. Kanes,” including messages with third parties. (Joint Stip. at 16.) As Plaintiffs point out, Defendants do not “identify any defects in Mr. Hale's qualifications or methodology that would suggest his forensic examination was not exhaustively complete.” (Id. at 32.) Defendants speculate that “[i]t is possible [Plaintiffs'] forensic examination was simply inadequate[,]” based on text messages Horbaczewski produced that seemingly indicate other text messages were exchanged between Plaintiffs. (Dfts'. Supp. Mem. at 3.) Mere speculation alone is insufficient to undermine the entirety of Plaintiffs' forensic examination such that a wholesale re-review is required.
*9 Still, questions remain about the two key periods of time for which Plaintiffs have produced no responsive text messages: before March 31, 2015, and between August 18, 2015 and November 10, 2015. (Joint Stip. at 8-9.) This cumulative six-month period at issue is when the parties, as purported “partners,” were allegedly engaged in efforts to create, launch, and fund the DRL. (See, e.g., TAC ¶¶ 17-23.) Plaintiffs argue that they did locate numerous text messages during those periods, but they were all were either privileged or nonresponsive. But Plaintiffs' Supplemental Privilege Log does not list a single text message during either of these periods as privileged. (Joint Stip., Ex. V.) Thus, the Court finds that Plaintiffs have failed to adequately rebut Defendants' concerns about these undisputed gaps in the production.
In weighing those concerns, the Court also considers the potential prejudice to Defendants. Defendants argue that Plaintiffs' conduct continues to cause prejudice. (Joint Stip. at 1.) Defendants insist that without a complete re-examination of Kanes's backup file and re-review of the entire data set from the backup, including deleted text messages found on that file, Plaintiffs will deprive Defendants of “key evidence.” (Id. at 3.) Although concerns about the adequacy of Plaintiffs' text message production are legitimate, the record suggests that any prejudice to Defendants may not be as dire as Defendants portray. Defendants do not explain how they suffer prejudice other than to assert, in conclusory fashion, that they are being denied “key evidence.” And their insistence that additional responsive text messages must exist is entirely speculative. Defendants have deposed Plaintiffs and have already filed a motion for summary judgment. (See, e.g., Joint Stip., Ex. I (Defendants' Memorandum of Points and Authorities in Support of Motion for Summary Judgment); Dfts'. Supp. Mem., Ex. A (Laub Transcript).) Moreover, Defendants acknowledge that they have evidence in already-produced texts between Kanes and Laub from April 2015 that undermine Plaintiffs' claims and support the defense. (See Joint Stip. at 30.) Defendants have not demonstrated how they have been impeded in pursuing their defense in this case because there might be additional missing text messages located if Plaintiffs are required to submit the Kanes backup file and the more than 66,000 originally located messages for a further forensic examination and a complete re-review for responsiveness and privilege.
Given the significant resources the parties and the Court have already expended related to discovery in this matter, including the resources devoted to re-examining Plaintiffs' text messages in particular, the Court is not persuaded that a forensic re-review of all of the data extracted from the Kanes backup file is proportionate to the needs of this case.
Consequently, after considering the parties' relative access to the relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit, the Court declines to order a complete forensic examination of the entirety of the Kanes backup file and focuses instead on the two unexplained 2015 gaps in Plaintiffs' production.
b. A Further Forensic Examination Is Warranted as to the Gaps in the Text Message Production
While the Court finds that complete re-examination of the Kanes backup file is not warranted, concerns remain about the two periods for which Plaintiffs produced no responsive text messages, i.e., January to March 31, 2015, and August 18, 2015 to November 10, 2015. Plaintiffs represent that their further search did locate text messages between the parties during 2015, but none of those text messages were responsive. According to Plaintiffs, all the text messages located during the two gap periods were either privileged or non-responsive. (See Joint Stip. at 31.) Refuting Defendants' contentions that Plaintiffs' only explanation for the gaps in the production is that there are no texts during these periods, Plaintiffs argue that “numerous non-responsive text messages exist from those periods of time” and maintain that they “have repeatedly explained to Defendants that any gaps are due to the fact that non-responsive and/or privileged messages from those time periods have not been and will not be produced.” (Id.)
*10 Plaintiffs' explanation is not necessarily implausible and Defendants' insistence that additional responsive text messages must exist and are being withheld is speculative. All the same, Plaintiffs' Supplemental Privilege Log lists dozens of privileged communications, including text messages, but it does not include any entries prior to July 10, 2015 and no entries of privileged communications between August 17, 2015 and November 23, 2015. (Joint Stip., Ex. V (see Lines 1, 197-198).) Given Plaintiffs' previous inaccurate and inconsistent statements about the existence (or lack thereof) of responsive text messages and the importance of the issues to the resolution of this case, some additional analysis is warranted to fully resolve remaining questions about the completeness of Plaintiffs' production. Accordingly, the Court will permit a further limited forensic examination of the Kanes' October 2018 backup.
Defendants argue that a re-review of text messages collected from Kanes's October 2018 backup file and subsequently analyzed by Plaintiffs' forensic expert should only require one day and cost less than $2,500. (Joint Stip. at 3.) It would seem reasonable then to expect that a focused analysis of just the two three-month periods where there are gaps in Plaintiffs' text message production should be even less time consuming and less costly. In their Supplemental Memorandum, Defendants state they are “willing to split, or, if necessary, pay for an independent expert” to conduct the further analysis. (Dfts.' Supp. Mem. at 4.) Therefore, the Court will allow a limited further forensic examination to be conducted at Defendants' expense.
Accordingly, the Motion is GRANTED with respect to Defendants' request for an independent forensic examination of data previously extracted from Kanes' October 2018 backup solely for the periods January 2015 to March 31, 2015 and August 18, 2015 to November 10, 2015. Defendants shall pay all costs associated with the further independent forensic review.
F. Defendants' Request that the Court Conduct in Camera Review of Plaintiffs' Text Messages for Responsiveness is Denied
Defendants request that, after a further independent forensic examination, the Court conduct a review for responsiveness of text messages that may be located in the re-review of the Kanes backup. (Joint Stip. at 24-25.) This request is denied. Defendants argue that their request for the Court to conduct the responsiveness review of is consistent with what the Court did in connection with a review of Horbaczewski's inadvertently produced text messages. (Dfts'. Supp. Mem. at 4.) The Court disagrees. The Court reviewed thousands of Horbaczewski text messages because Defendants represented that these messages and been produced inadvertently without the benefit of any screening for privilege or privacy concerns. In that circumstance, Plaintiffs had objected to Defendants' efforts to claw back the inadvertent production. The Court stepped in to prevent assertions that the inadvertent production resulted in a complete waiver of Horbaczewski's privilege and privacy rights. In this instance, Defendants ask the Court to conduct a garden variety responsiveness review after Plaintiffs do their own privilege review. (Id.) Defendants' request demonstrates a fundamental disregard for the burden this would place on scarce judicial resources.
Accordingly, Defendants' request that the Court conduct the responsiveness review of any text messages retrieved from Kanes's 2018 backup file after a further independent forensic examination is DENIED.
CONCLUSION
For the reasons discussed above, Defendants' Motion is GRANTED in part and DENIED in part as follows:
(1) Within five (5) days of the date of this order, the parties are directed to meet and confer telephonically or by other means consistent with current federal, state and local social distancing safety guidelines due to the coronavirus pandemic, to identify three (3) mutually agreeable independent forensic examiners (“IFE”) to conduct a forensic review of data extracted from Kanes's October 2018 backup file.
*11 (2) The parties will submit the names and a summary of their qualifications to the Court in a joint report of no more than five pages (5) pages. The Court will select an IFE to conduct the forensic review and notify the parties of that selection in writing.
(3) Within 48 hours of receiving the Court's notification, Plaintiffs shall deliver the Kanes backup file to the IFE. The IFE will review the Kanes 2018 backup file to identify text messages, including deleted text messages, if any, between Plaintiffs, between Plaintiffs and Horbaczewski, or between Kanes and his brother, Aaron, solely during the periods, January to March 2015 and August 18, 2015 to November 10, 2015.
(4) The IFE shall prepare a comprehensive log of all text messages identified for the relevant periods, listing the date, time, sender, and recipient(s) of each such message located (the “IFE Log”).
(5) The IFE Log will be promptly providing to Plaintiffs' counsel, who must identify any privileged text messages that have not been previously identified and any responsive text messages that have not been previously produced.
(6) Within seven (7) days of receiving the IFE Log, Plaintiffs shall serve a supplemental privilege log and produce to Defendants any additional responsive text message located during the relevant periods that have not been previously produced in this case.
(7) Defendants shall bear all costs of the independent forensic examination. Plaintiffs shall bear all costs of reviewing the IFE Log, updating their privilege log, and any subsequent production of responsive text messages.
Defendants' Motion is DENIED in all other respects.
IT IS SO ORDERED.
Footnotes
Plaintiffs note that Defendants “similarly produced documents in December [2019] that they had originally withheld as privileged.” (Joint Stip. at 32.)
Defendants emphasize that, as late as May 29, 2019 in a reply brief in support of their motion for review and reconsideration of the April 30 Order, “Plaintiffs unequivocally denied that they had failed to produce responsive text messages.” (Joint Stip. at 22.) Yet, on August 14, 2019, Plaintiffs produced almost 1,000 additional responsive text messages that Kanes had located.