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Court Declines to Order Terminating Sanctions But Admonishes Party for Poor ESI Production

Posted on May 20th, 2016

In Applied Underwriters, Inc. v. American Employer Group, Case No. 14-00379 (E.D. Tenn., May 2, 2016), the parties engaged in numerous discovery disputes throughout the litigation, including motions to file under seal and complaints to the court regarding parties’ failure to comply with discovery orders and failure to engage in good faith discovery.

Defendant filed a Motion for Sanctions, claiming that Plaintiff failed to comply with the court’s discovery orders and that it failed to follow the discovery plan as well as the directives in the court’s protective order and the Federal Rules requiring meet and confer. Defendant complained that Plaintiff’s ESI production was essentially a “document dump,” failing to have searched for the agreed-upon terms, failing to search various agreed-upon computer systems, failing to review the documents before production, producing disorganized and deficient documents, failing to Bate stamp, failing to properly format, failing to produce extracted OCR text and load files and marking all four million pages as “attorney eyes only.”

Defendant also complained that the ESI produced was duplicative of previously-produced documents. Defendant sought the sanction of dismissal, or a stay until Plaintiff complied with all its obligations, plus costs and fees.

Plaintiff argued that Defendant’s requests were burdensome and that it produced a reasonable amount based upon the requests. It admitted to certain of the items in the motion but stated it would address and correct any organizational, formatting or “attorneys eyes only” issues.

The court found that sanctions were appropriate given the scope of Plaintiff’s failure to follow the directives given by the court previously. However, it found that terminating sanctions were too drastic a measure and instead ordered that Plaintiff pay attorneys’ fees and costs. The court also admonished Plaintiff that if it kept up its poor behavior, dismissal may be warranted.

ILS – Plaintiff Electronic Discovery Experts

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