Planning Ahead: The Critical Importance of Early Agreement on the Proportional Scope of Preservation

In M.A. v. Wyndham Hotels & Resorts, Inc., and H.H. v. G6 Hospitality LLC, the United States District Court for the Southern District of Ohio, Eastern Division, rejected plaintiffs’ objections to the Magistrate Judge’s decision excluding certain types of electronically stored information (ESI) from defendants’ duty to preserve. In doing so, the District Court emphasized the fact that the parties had spent a considerable amount of time addressing issues related to ESI and that plaintiffs had consented to the exclusions during a status conference with the Magistrate Judge. In adopting the Magistrate Judge’s recommendation, the District Court based its decision on “guiding principles of proportionality, default standards in other jurisdictions, and current trends in ESI discovery.”

Plaintiffs filed related complaints against several hotel locations and parent companies pursuant to the Trafficking Victims Protection Reauthorization Act (TVPRA). In April 2019, plaintiffs sent letters to defendants reminding them of their duty to preserve potentially discoverable ESI. A number of discovery disputes ensued related to proposed confidentiality and ESI orders. While this decision also addresses issues related to confidentiality, the primary focus of this post is the dispute regarding defendants’ obligation to preserve certain types of ESI.

In particular, plaintiffs objected to an oral decision rendered by the Magistrate Judge finding that defendants were not obligated to preserve: (1) ESI from an electronic backup system; (2) duplicative backup logs; and (3) certain ESI from mobile devices including calendar entries and contacts. The court explained that the transcript reflected that plaintiffs were largely in agreement with the Magistrate Judge’s oral ruling regarding the exclusion of certain file types. Moreover, the District Court noted that the parties dedicated a significant amount of time to the treatment of ESI and that plaintiffs consented to the exclusion of certain categories of ESI during a status conference held before the court.

In adopting the Magistrate Judge’s ruling, the District Court explained that the Magistrate Judge’s decision was proper, even if plaintiffs did not in fact consent to the exclusion of certain categories of documents. The District Court based this decision on the fact that defendants’ proposed language was “largely derived” from a default standard of discovery utilized by the District of Delaware, and the approach with respect to backup systems was consistent with current trends regarding ESI discovery – including the Sedona Principles. The District Court recognized that the Magistrate Judge properly applied principles of proportionality in explaining that most of the documents that were relevant to plaintiffs’ claims (and not duplicative of information being produced by plaintiffs) would have been produced anyway.

Plaintiffs also requested that the court allow for Rule 30(b)(6) depositions to allow the parties to “determine through factual inquiry, rather than Defendants’ counsel’s speculation, what file types do and do not exist and accordingly what file types do and do not need to be preserved as potentially discoverable information.” The Magistrate Judge initially rendered an oral decision that “discovery on discovery” was not proper because it was too “early on” in the litigation. The District Court disagreed with the Magistrate Judge and reversed the order prohibiting Rule 30(b)(6) depositions. In doing so, the District Court explained that plaintiffs should be permitted to conduct depositions to “assess whether Defendants have relevant documents or data that warrant preservation.”

This decision emphasizes the importance of utilizing an ESI protocol to outline the respective obligations of all parties in a litigation. While it is more common for litigants to utilize ESI protocols to address what types of ESI will be produced and how the parties will search for and review such ESI, this decision provides an important reminder that ESI protocols may also be used to address types of ESI that need not be preserved. Of course, making unilateral decisions to discontinue certain preservation obligations as to potentially discoverable information is never recommended, but parties should attempt to reach an agreement, in appropriate situations, as to categories of ESI that no longer need to be preserved.