*1 Before the Court is Oxyfresh Worldwide, Inc.'s (“Oxyfresh”), Motion to Compel. ECF No. 43. Defendant, Continental Manufacturing Chemist, Inc. (“CMC”) filed a resistance. ECF No. 47. Oxyfresh then filed a reply. ECF No. 57. The Court held oral argument and considers the Motion ready for ruling.

This suit arises from a “defective product” allegation. CMC was the manufacturer for one of Oxyfresh's pet care products—a pet dental water additive that freshen dogs' and cats' breath. In March of 2020, unbeknownst to Oxyfresh, CMC changed the manner in which it produced the product. CMC began to make the product in 3,000-gallon batches instead of 1,000-gallon batches. Oxyfresh alleges this change caused the pH levels in the product to change and caused a “defective product.” Oxyfresh claims this change has cost the company more than $5.3 million in damages. Oxyfresh filed this complaint on January 22, 2021. ECF No. 1. On June 3, 2021, the parties filed a Joint Motion for Protective Order and Agreed ESI Protocol. ECF No. 27. The Court adopted both the Protective Order and the ESI Order on June 4, 2021. ECF Nos. 28, 29. Oxyfresh served its First Requests for Production and Interrogatories to CMC on July 1, 2021. At issue in this motion, is Oxyfresh's Request for Production Number 56 (“RFP 56”) which asks CMC to apply a list of approximately 51 search terms to CMC's custodians' electronically stored information (“ESI”). On September 1, 2021, CMC served its responses and objections to RFP 56. Despite multiple meet-and-confer efforts, the parties have not been able to reach an agreement on the search terms. Oxyfresh now moves to compel CMC to comply with RFP 56. CMC resists on grounds that RFP 56 violates the Court's ESI Order, the Sedona Principles, the Federal Rules of Civil Procedure, and would significantly and unnecessarily burden CMC.

Rule 26(b)(1) of the Federal Rules of Civil Procedure governs the scope of discovery, authorizing the discovery of “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). Information within the scope of discovery need not be admissible in evidence to be discoverable. Id. Despite this broad standard, the scope of discovery is not unlimited, and courts have considerable discretion in determining the need for, and form of, discovery. Id.; Nachurs Alpine Sols., Corp. v. Banks, No. 15-CV-4015-LTS, 2017 WL 2918979, at *3 (N.D. Iowa July 7, 2017). In determining whether information is discoverable, courts consider “the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to 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. “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” FED. R. CIV. P. 26(b)(2)(B). The burden rests with the party from whom discovery is sought. Id. Nevertheless, a court may still order discovery from such sources if the requesting party shows good cause. Id. With the Rule 26 standard in mind, the Court will now address the disputed discovery request.

*2 Oxyfresh contends that RFP 56 search terms are designed to seek relevant, discoverable information from CMC's custodians who are current or former employees. ECF No. 43-1, at 4. Further, Oxyfresh argues RFP 56 is consistent with the parties' ESI Order which requires the parties to agree on applied search terms. Id. at 6. Oxyfresh disputes CMC's contention that the search terms are overbroad and burdensome. Id. at 12. Oxyfresh believes the factors considered by the Court weigh in its favor. Id. at 14. First, Oxyfresh contends that while no public interest is at stake, this case is critical to Oxyfresh's financial health. Id. at 14-15. Not only has Oxyfresh's suffered significant revenue loss, but Oxyfresh's reputation also has been damaged. Id. at 15. Accordingly, the second factor also weighs in its favor as the amount in controversy is estimated to exceed $5.3 million. Id. Moreover, CMC is seeking money as well—$250,000.00 on its counterclaims—thus both parties have significant financial interest at stake to justify the requested discovery requests. Id. As to the third factor, Oxyfresh argues that aside from the emails between the parties, only CMC has access to the requested information. Id. at 16. Oxyfresh also argues that despite any burden, CMC has adequate resources to produce the necessary discovery. Id. It argues CMC holds itself out as a sophisticated contract manufacturer represented by an equally sophisticated firm. Id. On the last two factors, Oxyfresh argues that RFP 56 is critical to the issues of the case and will result in obtaining access to some of the most relevant documents in this action. Id. at 17. Because of the importance of the relevant documents, any burden is outweighed. Id. Oxyfresh contends compelling CMC to comply could also result to a settlement between the parties. Id. Additionally, Oxyfresh claims any attorney-client privilege issues can be filtered out so that there is little risk of inadvertent disclosure of such documents. Id.

Lastly, Oxyfresh disagrees that CMC's chosen search terms are a suitable proxy for Oxyfresh's search terms. Id. Oxyfresh contends that CMC's search terms are inadequate because they do not search for the same information that Oxyfresh's search terms would. Id. at 18. In support of that contention, Oxyfresh claims CMC's search terms are more limiting because qualifiers were applied; a term was misspelled, the search included search terms not requested by Oxyfresh and left out relevant search terms, the search terms were not applied to all custodians, and that CMC's custodian-based refinement was logically flawed. ECF No. 43-5 at 67–68.

CMC resists Oxyfresh's motion. First, CMC argues that the motion to compel should be denied because RFP 56 is not proportional to the needs of the case. ECF No. 47, at 5. CMC argues Oxyfresh's search terms do not meet the threshold relevance requirement and would be unnecessarily duplicative considering CMC's past ESI search term productions. Id. CMC maintains that when CMC applied Oxyfresh's requested search terms against its custodians, the search resulted in more than 80,000 documents for review. Id. CMC contends this review would be unduly burdensome because it would require approximately 800 hours of review time at a cost exceeding $286,000.00. Id. In addition to the burdensome cost, CMC argues Oxyfresh's search terms would result in irrelevant and duplicative results. Id. at 6. CMC argues it has already provided at least 3,549 pages of information through its Initial Disclosures. In addition, CMC contends that Oxyfresh's search terms are overbroad because they contain no product limiter and its proposed search parameters would result in unrelated documents pertaining to CMC's day-to-day activities, unrelated clients and products, and other unrelated information. Id. at 8. Instead, CMC applied search terms that it argues “are not all that dissimilar from those proposed by Oxyfresh—just narrower.” Id. CMC contends it applied reasonable search terms and there is no strong indication that additional relevant information would be found in a separate search.” Id. at 12.

Second, CMC argues that unlike RFP 56, CMC's search terms comply with the ESI order. Id. at 13. CMC contends that RFP 56 violates the ESI order because the order does not allow one side to define the other's search terms. Id. In agreement with the Sedona Principles, “a requesting party does not have a right to dictate the processes, methodologies, or technologies to be used by a responding party in fulfilling its preservation or discovery obligations.” Id. at 15. CMC argues it is entitled to apply its own search terms and the ESI order only requires to the parties to meet and confer should a dispute arise regarding the sufficiency of production. Id. at 13.

In its reply, Oxyfresh disputes that applying its search terms will result in duplicative or irrelevant information. ECF No. 57, at 4–5. First, Oxyfresh argues that CMC contends that its results were garnered after a global de-duplication. Id. Second, if any irrelevant documents arise, CMC is free to exclude those documents. Id. at 5. In support of its motion, Oxyfresh contends that CMC's discovery responses so far are deficient based on third-party discovery which has identified other relevant documents that CMC has not yet produced. Id. Lastly, Oxyfresh argues that CMC's alleged burden is overstated. Id. at 3–4. CMC need not review every single document line by line because the ESI Order contemplates a claw-back provision for any privileged information. Id. Additionally, CMC may have another entity, aside from the Husch Blackwell firm, review the documents to bring costs down. Id. Lastly, even if the review cost was accurate, the cost is proportionate to this case in which millions of dollars in damages are at stake. Id.

*3 The Court has analyzed the situation based upon the proportionality factors as set out in FED. R. CIV. P. 26(b)(1). Those factors include the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to 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 appreciates that Oxyfresh views this case as highly significant to its business and reputation and that a significant damage amount is at issue. The Court also understands that CMC has more access to its own custodians' emails than does Oxyfresh. The last two factors, however, suggest to the Court that the expansive search terms that Oxyfresh is requesting CMC to apply are not proportional to the needs of the case. In reaching this conclusion, the Court looks at a number of factors:

Based on the current record, the Court finds and concludes that Oxyfresh's request that CMC conduct a second search using the Oxyfresh search terms should be denied.

By October 6, 2022, Oxyfresh, however, may provide CMC with relevant information received from third-party discovery and request that CMC shall supplement its discovery answers with any additional information related to that third-party discovery. CMC shall provide such supplementation, if any, by no later than October 19, 2022. Those deadlines are within the current discovery deadline of October 31, 2022.

Accordingly, Oxyfresh's Motion to Compel [ECF No. 43] is denied in part and granted in part, as set forth in this Order.

IT IS SO ORDERED.

DATED this 29th day of September 2022.