I. BACKGROUND[3]

In summary, Defendants moved for sanctions for the Plaintiffs’ alleged violation of this Court's January 24, 2020 order compelling the Plaintiffs to produce certain spreadsheets by January 31, 2020. Docket No. 280. They also alleged that Plaintiffs had modified the spreadsheets after I ordered them produced. Docket No. 281 at 8; see also Docket No. 281-4.

On April 13, 2020, I issued an order on Defendants’ motion for sanctions. Docket No. 319. I found that Plaintiffs did not comply with the January 24 order because they did not produce all responsive spreadsheets by the January 31, 2020 deadline. Docket No. 319 at 10-11. I was unable to determine whether in fact the Plaintiffs had modified the spreadsheets after I ordered them produced. Id. at 12. In addition, I found that the Plaintiffs’ production of spreadsheets raised issues regarding compliance with their discovery obligations. Id. at 11. Accordingly, I ordered the following:

Id. at 11-13. Plaintiffs moved for reconsideration of my order, which I denied. Docket Nos. 332, 352.

On April 27, 2020, plaintiffs filed the Affidavit of Jason Koral in response to my April 13, 2020 order. Docket No. 343 (“Koral 4/27/20 Aff.”). On May 8 and May 12, 2020, Defendants took the further depositions of Ms. Demiraj and Ms. Traverse respectively. On May 20, 2020, Defendants filed a supplemental brief in further support of their motion for sanctions. Docket No. 417. Plaintiffs filed a response on June 1, 2020. Docket No. 434. Defendants filed a further supplemental brief on June 15, 2020. Docket No. 455. On June 22, 2020, the Plaintiffs filed a response. Docket Nos. 462, 463.

II. ANALYSIS

*2 Defendants allege that the additional discovery I ordered on April 13, 2020 has shown that (1) Plaintiffs’ representations to this Court regarding the nature and circumstances of the modifications made to Ms. Demiraj's spreadsheets following my December 23, 2019 order are false; (2) Plaintiffs failed to preserve relevant documents prior to and during this litigation; and (3) Plaintiffs’ document collection efforts were deficient, with all responsibility for location and producing relevant documents abdicated to Ms. Demiraj. Docket No. 417 at 1-2. Therefore, Defendants request that I order the following relief: (1) allow Defendants to retain, at Plaintiffs’ expense, a computer forensic expert to inspect and image Ms. Traverse's computers; (2) order Plaintiffs’ e-discovery vendor, TransPerfect Legal Solutions, to submit an affidavit identifying the specific steps, including the dates, that it took to conduct its search and extraction of Plaintiffs’ and Ms. Demiraj's email accounts pursuant to my December 23, 2019 order, including the number of unique documents captured in said search; (3) order Plaintiffs’ counsel to conduct a thorough search for all responsive hard copy documents in Plaintiffs’ and their agents’ possession, custody, and control and submit an affidavit verifying compliance; and (4) award Defendants their costs and fees associated with the filing of Defendants’ motion for sanctions, including the supplemental briefing, and the motion to compel Ms. Demiraj's spreadsheets. Docket No. 417 at 17-18.

A. Defendants Have Not Shown That Plaintiffs’ Representations Regarding The “Last Modified” Dates Of Ms. Demiraj's Spreadsheets Are False

First, Defendants argue that Ms. Demiraj's deposition testimony shows that the Plaintiffs’ representations regarding the spreadsheet alleged modifications are false. Docket No. 417 at 2-7. Having reviewed Ms. Demiraj's deposition testimony, I disagree. For example, Defendants point out that the spreadsheets’ metadata show last modified dates of December 4, 2019, December 16, 2019, December 27, 2019, January 2, 2020, and January 6, 2020. Id. at 4. They then allege that Ms. Demiraj testified that she prepared the spreadsheets for production on a single day in late January 2020, possibly January 31, 2020. Id. Therefore, according to Defendants, Ms. Demiraj's prior explanations regarding her process for preparing the spreadsheets for production could not possibly explain the last modified dates shown in the spreadsheets’ metadata. Although Ms. Demiraj's testimony is not always clear, I do not read it as supporting Defendants’ position in this respect. She did not testify that she prepared the spreadsheets for production on a single day in late January 2020. Rather, she appears to have testified that she worked on the production on various dates in December 2019 and January 2020, but copied the files for production in a single day in late January 2020. See generally Docket No. 434-5 at 11-14.

It is still not clear whether the Plaintiffs and/or Ms. Demiraj substantively modified the spreadsheets after I ordered them produced. Plaintiffs’ conduct in discovery in this case has shown a disregard for their obligations. See, e.g., Docket No. 250 at 7; Docket No. 319, Docket No. 402; Docket No. 435. However, after obtaining additional discovery on this particular issue, Defendants have been unable to present sufficient evidence to show that the Plaintiffs’ representations as to the post-order modifications are false or to warrant additional discovery on this issue.[4] Notably, the Defendants have failed to heed this Court's concern that they had failed to provide expert testimony regarding under what circumstances the “last modified” date in an Excel spreadsheet will change. See Docket No. 319 at 12. Accordingly, I deny Defendants’ request for sanctions as it relates to this issue.

B. Plaintiffs’ Document Collection Efforts Were Deficient

“The duty to preserve evidence arises when ‘litigation is reasonably anticipated.’ ” Gordon v. Dreamworks Animation SKG, Inc., 935 F. Supp. 2d 306, 314 (D. Mass. 2013) (citation omitted). Though the Plaintiffs have repeatedly represented to this Court that they anticipated litigation as early as late 2015 or early 2016, see, e.g., Docket No. 41 at 5, 8, Docket No. 91 at 5-6, counsel for the Plaintiffs did not discuss document preservation with the Plaintiffs until August 2016 or issue a litigation hold memo to Ms. Traverse until December 28, 2017. See Koral 4/27/20 Aff. at ¶¶ 5, 7. There is also no indication that Plaintiffs or their counsel ever instructed their consulting experts to preserve relevant documents.

*3 Astonishingly, Plaintiffs now suggest that they did not in fact reasonably anticipate litigation in the fall of 2015, after repeatedly arguing to this Court that the work performed by their experts in late 2015 and early 2016 was done in “anticipation of litigation” and, therefore, protected by the work product doctrine. Docket No. 434 at 13, n. 3 (“Plaintiffs[5] assume, without much explanation, that Plaintiffs ‘reasonably anticipated’ litigation in the fall of 2015, presumably because the October 13, 2015 letter retaining Dan Andrea of Feely & Driscoll refers to ‘anticipation of possible litigation.’ ”). It is not entirely clear whether the Plaintiffs are recanting their prior representations regarding the date when litigation was anticipated or arguing that the meaning of the phrase “anticipation of litigation” is different when used in the context of a party's duty to preserve relevant documents. See id. To the extent that Plaintiffs argue the latter, they have not cited to any legal authority supporting that position. I see no reason, and Plaintiffs have not proposed any, why the phrase “anticipation of litigation” should be defined differently depending on whether it is used in the context of work product or the duty to preserve documents.

Plaintiffs also suggest that they did not have a duty to preserve documents in this case because almost all of the relevant documents in this case are the Defendants’ own financial records. See Docket No. 434 at 4-5. They also argue that Defendants, their agents, bankers, and vendors are the only parties who possess relevant information. Id. at 5. In addition, they allege that the Defendants agreed to this scope of production after they met and conferred. Docket No. 434 at 16-17. However, Defendants deny that they agreed with this scope of discovery, see Docket No. 417 at 15, Docket No. 455 at 1-2, and neither the Koral Affidavit nor any of the materials attached to Plaintiffs’ memorandum show any such agreement. And as shown by the spreadsheet debacle, the Plaintiffs possessed relevant documents other than the Defendants’ own financial records.

While it is not clear whether relevant documents were destroyed or lost,[6] Plaintiffs’ misguided decision that only financial records received from the Defendants would be relevant to this litigation affected the collection of relevant and responsive documents. As shown by the Koral Affidavit, Plaintiffs never searched for responsive documents outside of the documents provided to Plaintiffs by Defendants. See Koral 4/27/20 Aff. at ¶ 19. With respect to emails, it appears that Plaintiffs endeavored only to produce communications between themselves and Defendants. See id. at ¶ 19, 20. Counsel then tasked Ms. Demiraj with identifying the emails to be produced and it appears that no one supervised her work to ensure that all relevant emails were collected and produced. See Koral Aff. at ¶ 20; Docket No. 417-2 at 14. Indeed, when it became apparent that Plaintiffs’ search for emails was inadequate, I ordered the Plaintiffs to conduct keyword searches of all Traverse emails. Docket No. 250 at 6-7. Plaintiffs maintain that they have in fact conducted that search, see Koral 4/27/20 Aff. at ¶ 26, but Defendants point to testimony by Ms. Traverse regarding certain email correspondence that has not been produced to the Defendants. Docket No. 417 at 17.

*4 Finally, it is not clear that Plaintiffs preserved or collected hard copy responsive hard copy documents. The Koral Affidavit does not address the collection or search of any responsive hard copy documents in the possession, custody, or control of the Plaintiffs. In addition, Defendants have pointed to evidence that raises questions regarding whether the Plaintiffs have in fact collected and produced all responsive hard copy documents. See Docket No. 417 at 14.

In sum, the Koral Affidavit as well as the supplemental discovery conducted amplifies the serious questions this Court already had regarding the Plaintiffs’ compliance with their discovery obligations. Such questions, however, do not warrant the intrusion entailed by a forensic review of Ms. Traverse's computers at this time. Therefore, I deny that request. However, I will allow the Defendants’ remaining requests for sanctions.

III. ORDER

For the foregoing reasons, I grant in part the Defendants’ request for sanctions as follows: (1) within two weeks, Plaintiffs’ e-discovery vendor, TransPerfect Legal Solutions, shall submit an affidavit identifying the specific steps, including the dates, that it took to conduct its search and extraction of Plaintiffs’ and Ms. Demiraj's email accounts pursuant to this Court's December 23, 2019 order, including the number of unique documents captured in such search; (2) within two weeks, Plaintiffs’ counsel shall conduct a thorough search for all responsive hard copy documents in Plaintiffs’ and their agents’ possession, custody, and control and submit an affidavit verifying compliance; and (3) I award Defendants their costs and fees associated with the filing of their motion for sanctions, including the supplemental briefing. I decline to award any fees and costs associated with the original motion to compel Ms. Demiraj's spreadsheets.

As with prior orders awarding fees in this case, I encourage the parties to confer in an attempt to agree on the proper amount of attorney's fees and costs. The parties shall file a joint status report on the issue of fees within two weeks. Should the parties be unable to agree on the proper amount of fees, Defendants may file an application for such fees.

Judge Casper referred the motion to the undersigned on March 4, 2020. Docket No. 287.

Citations to “Docket No. ___” are to documents appearing on the Court's electronic docket. They reference the docket number assigned by CM/ECF, and include pincites to the page numbers appearing in the top right corner of each page within the header appended by CM/ECF.

Familiarity with this Court's April 13, 2020 memorandum and order is presumed. See Docket No. 319.

This does not mean, as the Plaintiffs suggest, that their handling of the production of the spreadsheets was appropriate. See Docket No. 434 at 11; see also Docket No. 462 at 13. Contrary to their arguments, this Court already found that their privilege log did not accurately reflect the spreadsheets and raised issues regarding the accuracy and completeness of their document production. See Docket No. 319 at 11. As more fully discussed below, significant questions remain regarding the Plaintiffs’ document collection and production efforts.

This first reference to Plaintiffs in this sentence appears to be in error. It appears that the sentence should read “Defendants assume ...”

Defendants point to a number of documents recently obtained from Matthew Stohlman, one of the Plaintiffs’ experts, as examples of lost or destroyed documents. See Docket No. 417 at 11-13. However, it is not clear that the documents were in fact destroyed or lost. In some instances, it appears that the documents were withheld because they were privileged. They were recently produced by Mr. Stohlman after I held that the Plaintiffs had waived any privilege by having their expert consider the documents in forming an opinion. See Docket No. 434 at 18-19. In other instances, Plaintiffs maintain that the documents were in fact produced and have pointed out the bates numbers where those documents can be found. See id. at 19. With respect to Exhibit 3, a spreadsheet transmitted to Mr. Stohlman in 2016, the Plaintiffs maintain that it reflects the spreadsheet as it existed at the time it was sent to Mr. Stohlman. Id. Plaintiffs continued to edit that spreadsheet and it became the spreadsheet that was later produced to Defendants at bates number DFG-30978. Id.