Profit Point Tax Techs., Inc. v. DPAD Grp., LLP
Profit Point Tax Techs., Inc. v. DPAD Grp., LLP
2021 WL 7966873 (W.D. Pa. 2021)
July 23, 2021

Stickman IV, William S.,  United States District Judge

Cloud Computing
Search Terms
Failure to Preserve
Special Master
Forensic Examination
Failure to Produce
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Summary
The Court ordered an independent forensic examination of Defendants' computers and ESI to search for responsive documents. The Court appointed an independent forensics expert and imposed an additional requirement to determine whether certain documents were located on any of the devices subject to the examination. The Court rejected Plaintiff's request to expand the scope of the examination.
Additional Decisions
PROFIT POINT TAX TECHNOLOGIES, INC., Plaintiff,
v.
DPAD GROUP, LLP, JOHN MANNING, and DANIEL STEELE, Defendants
Civil Action No. 2:19-cv-698
United States District Court, W.D. Pennsylvania
Filed July 23, 2021

Counsel

David B. Willis, Pro Hac Vice, Manning Gross & Massenburg LLP, Boston, MA, Robert J. Hannen, Clark Hill PLC, Pittsburgh, PA, Jeffrey Joseph Lorek, Clark Hill PLC, Washington, DC, for Plaintiff.
Brad A. Funari, Alex Mahfood, Reed Smith LLP, Pittsburgh, PA, for Defendants.
Stickman IV, William S., United States District Judge

MEMORANDUM ORDER OF COURT

*1 Plaintiff has sought clarification of the Court's April 22, 2021 Order (ECF No. 187) as well as its June 1, 2021 Order (ECF No. 197). In his March 3, 2021 Report and Recommendation, Special Master Michael J. Betts (“Special Master Betts”) recommended the Court issue an order providing for an independent forensic examination of Defendants’ computers and ESI. (ECF No. 179, p. 2). The issue before Special Master Betts was whether Defendants took reasonably diligent steps to search for and produce all responsive documents. He recommended an order authorizing an independent review of Defendants’ computers and ESI because of the following:
(i) Defendants’ non-production of numerous emails and other documents that are responsive to PPTT's document requests and that would be expected to be in Defendants’ possession; (ii) Defendants’ failure to offer any explanation concerning why such documents have not been produced by them (e.g., if they had been properly destroyed in connection with a document retention policy or ESI had been irretrievably lost due to a systems failure or natural event such as flood or fire); (iii) Defendants’ ongoing failure, indeed refusal, to perform any further searches of their ESI for responsive documents, including any deleted ESI that might be recoverable, despite substantial concerns having existed since at least December about whether Defendants’ production of documents was complete; and (iv) Defendants’ apparent refusal to perform any searches for responsive documents using the search terms provided by PPTT's counsel on February 4, 2021, in accordance with the approach previously suggested by the Court. In sum, Defendants have left the Court with little choice but to order a forensic examination, in the interest of ensuring that all responsive documents in Defendants’ possession and control are identified and produced.
(ECF No. 179, p. 17). Special Master Betts further opined, “the concerns that have been raised about Defendants’ nonproduction of numerous responsive documents produced by other parties justifies the taking of additional steps to ensure, among other things, that any deleted responsive computer files are located and produced. There is no question that deleted computer files are discoverable.” (ECF No. 179, pp. 18-19). He went on to provide the Court with the following recommendation for the process to govern the independent forensic review of Defendants’ devices and ESI:
1. Counsel for the parties would meet and confer concerning the designation of an independent computer forensics expert and the search terms to be used in searching for responsive documents. If the parties cannot agree, the Court would select the expert and/or decide the search terms.
2. The independent expert would be required to agree to and sign a confidentiality order.
3. The expert would obtain forensic images of Defendants’ computers, hard drives, storage devices and any other devices that have a reasonable likelihood of containing discoverable data.
*2 4. Counsel would provide the list of search terms to the independent expert and the expert would apply the search terms to the forensic images. The results of the search and electronic copies of the documents responsive to the search terms would be provided to Defendants’ counsel.
5. Defendants would review the search results provided by the independent expert and identify all documents responsive to PPTT's Requests for Production of Documents (subject to the limitations recognized in ECF Nos. 69 and 83). Defendants would produce all responsive documents to PPTT, except for any documents withheld on grounds of privilege. Any withheld documents would be identified on a privilege log provided to PPTT's counsel.
6. Defendants would be responsible for payment of the fees and costs charged by the independent expert.
(ECF No. 179, pp. 19-20).
 
In its April 22, 2021 Order (ECF No. 187), the Court adopted Special Master Betts’ Report and Recommendation (ECF No. 179) noting that it concurred with him that “Defendants have left the Court with little choice but to order a forensic examination, in the interest of ensuring that all responsive documents in Defendants’ possession and control are identified and produced.” (ECF No. 187, p. 2 (citing ECF No. 179, p. 17)). It granted an independent examination of Defendants’ computers and ESI. The Court's Order states: Defendants are responsible for payment of the fees and costs charged by
the independent computer forensics expert. The independent computer forensics expert is to obtain forensic images of Defendants’ computers, hard drives, storage devices and any other devices that have a reasonable likelihood of containing discoverable data. The parties are hereby ORDERED:
1. To meet and confer by May 6, 2021, concerning the designation of an independent computer forensics expert and the search terms to be used in searching for responsive documents. The parties are to provide a joint status report to the Court on May 6, 2021. If the parties cannot agree, the Court will select the expert and/or decide the search terms.
2. The independent computer forensics expert must agree to and sign a confidentiality order.
3. Counsel will provide the list of agreed upon or court-ordered search terms to the independent computer forensics expert and the expert will apply the search terms to the forensic images.
4. The results of the search and electronic copies of the documents responsive to the search terms will be provided to Defendants’ counsel.
5. Within twenty-one (21) days thereafter, Defendants are directed to review the search results provided by the independent expert and identify all documents responsive to PPTT's Requests for Production of Documents (subject to the limitations recognized in ECF Nos. 69 and 83) and to produce all responsive documents to PPTT, except for any documents withheld on grounds of privilege. Any withheld documents are to be identified on a privilege log provided to PPTT's counsel.
(ECF No. 187, pp. 2-3).[1]
 
The parties, despite ongoing discussions, could not reach a resolution as to the independent computer forensics expert to retain or the search terms to be used in searching for the responsive documents. (ECF Nos. 191, 194, and 196). Therefore, the Court appointed Daniel Roffman of Charles River Associates (“CRA”) as the independent forensics expert. (ECF No. 197, p. 1). The Court held that the “search terms proposed by PPTT are reasonable and are the terms to be utilized for the forensic examination.” (ECF No. 197, p. 2). Those terms are contained in Exhibit 6 to ECF No. 191. (ECF No. 191-6). Defendants have represented to the Court that they have reached an agreement with CRA as to the scope of their engagement. (ECF No. 202). That agreement is produced for the Court's review at Exhibit A to ECF No. 202. (ECF No. 202-1).
 
*3 Plaintiff's Motion for Clarification seizes upon the following sentence within the Court's June 1, 2021 Order, and argued for what can only be described as an expansion of the forensic examination as already recommended by Special Master Betts and Ordered by the Court: “[t]his examination is not discovery in the ordinary course, but rather, an examination to determine the nature and extent of discovery violations (if any) and whether potentially responsive files have been deleted altered or otherwise spoiled.” (ECF No. 197, p. 2). It is of the belief that “a simple proposed word search with PPTT's search terms to locate responsive documents does not go far enough, does not embody this Court's order, and does not address the magnitude of the situation that has occurred.” (ECF No. 203, p. 8). Essentially, it desires more than “forensic images of Defendants’ computers, hard drives, storage devices and any other devices that have a reasonable likelihood of containing discoverable data,” and the search terms approved by the Court contained in Exhibit 6 to ECF No. 191. (ECF No. 203). Plaintiff desires the following:
(a) this forensic examination by Mr. Roffman is a full and complete forensic audit which will seek to determine not only what files, documents or other responsive information currently exists on all devices, applications, cloud-based accounts and internet-based email accounts owned, operated and/or utilized by Defendants since 2014, but also to determine all files, documents or other responsive information which have been deleted, modified, altered, spoiled, copied, transferred, downloaded, uploaded, moved or otherwise manipulated in any way;
(b) Defendants are required to provide a log to PPTT accounting for any and all documents withheld from production following the completion of Mr. Roffman's forensic examination (i.e., not limited solely to privileged information withheld, but specifically must account for all information withheld for any reason whatsoever, including any determination by Defendants as to responsiveness) or, in the alternative, Defendants must produce all documents located by Mr. Roffman subject only to those protected by the attorney-client privilege and attorney work product doctrine;
(c) that Mr. Roffman's forensic examination is a sanction against Defendants for discovery violations and, as such, Defendants are required to pay for the entirety of Mr. Roffman's work related to the forensic examination, including any and all fees, costs and expenses associated with retrieval of Defendants’ devices and access to their cloud-based accounts and internet-based email accounts (e.g., Gmail, Yahoo, Hotmail, etc.), as well as PPTT's reasonable attorney's fees in regards to any and all work performed in connection with having to file the motions leading up to the Courts’ orders motions, including any and all work performed in analyzing the documents produced by third parties which revealed Defendants’ discovery violations; and
(d) that Defendants must identify and make available to Mr. Roffman for forensic imaging all electronic devices which they used since 2014 which remain in their possession and/or control (e.g., computers, hard drives, cellular telephones, thumb drives, tablets, etc.), cloud-based accounts, internet-based email accounts (e.g., Gmail, Yahoo, Hotmail, etc.), social media accounts, and document sharing platforms such as Dropbox, etc. To the extent Mr. Roffman requires login and password information to access any devices or accounts, Defendants are required to cooperate with Mr. Roffman to allow him to access same.
(ECF No. 203, pp. 3-4). It also wants the Court to adopt and order the Forensic Examination Protocols which shall govern Mr. Roffman's forensic examination as drafted and proposed by them at ECF No. 203-1.
 
Defendants respond that both Special Master Betts and this Court expressly stated the appropriate steps to be followed for the forensic examination, and nothing requires further clarification. It urges the Court to reject Plaintiff's request to expand the scope of its Orders. (ECF No. 205).
 
Special Master Betts’ Report and Recommendation expressed concern about the non-production of responsive documents and the potential spoliation of discoverable material. The Court shares this concern. But the solution proposed by Special Master Betts and adopted by the Court to allay these concerns was clearly and comprehensively set forth in Special Master Bett's recommendation—which was adopted by Order of the Court. Plaintiff now argues that the step-by-step process set forth in the Court's April 22, 2021 Order “does not go far enough, does not embody this Court's order.” But that process is the operative language of the Court's Order. Plaintiff did not object at the appropriate time to the Special Master's Recommendation. Nor did it ask this Court to reconsider the adoption of the same. The Court will not revisit its Order now. Thus, with one exception, the Court will order nothing more than what Special Master Betts has recommended and what it has already required. The step-by-step process set forth in the Court's April 22, 2021 Order (ECF No. 187, pp. 2-3) shall govern the examination.
 
*4 While keeping in place, unaltered, the process set forth in its April 22, 2021 Order, the Court will supplement that Order to impose only one additional requirement upon Mr. Roffman. This requirement will impose only a de minimis additional burden on the parties and Mr. Roffman, and it keeps in focus the origin and purpose of his examination. The Court HEREBY ORDERS that Plaintiff provide to Mr. Roffman the “GMT Documents” and the “Boston Documents” to determine whether those documents are located on any of the devices subject to the examination. To the extent that any such documents are found, Mr. Roffman shall send copies to counsel and to the Court, along with a brief layman's explanation of how they were located and on which device(s) they were located. Again, other than this one additional requirement, all other provisions of the April 22, 2021, Order remain in place.
 
AND NOW, this 23 day of July 2021, IT IS HEREBY ORDERED that Plaintiff Profit Point Tax Technologies, Inc.’s Motion for Clarification (ECF No. 203) is Granted in Part and Denied in Part, as described at length above.

Footnotes
Defendants then sought reconsideration of the Court's Order. (ECF No. 188). After receiving briefing from the parties, the Court issued a May 17, 2021 Order denying reconsideration. (ECF No. 193).