February 06, 2009

On October 3, the U.S. District Court for the Eastern District of Texas held in ReedHycalog v. United Diamond, 2008 U.S. Dist. Lexis 93177 (E.D. Tex. Oct. 3, 2008), that a producing party has an obligation to cull out irrelevant information from a document production and must not engage in data dumping. This case is of interest, particularly in civil litigation, in that a producing party should reconsider when they only want to conduct a privilege review and not take the next step of culling out irrelevant data from a document production.

In ReedHycalog, ReedHycalog UK, Ltd. (ReedHycalog) sued United Diamond Drilling Services, Inc. (United Diamond), and Ulterrra Drilling Technologies, L.P. (Ulterra), alleging infringement of 12 ReedHycalog patents. Defendants United Diamond and Ulterra collected a large volume of electronically stored information from relevant custodians. From this collection, United Diamond and Ulterra reviewed the data only for privilege and to designate documents with the appropriate level of confidentiality. United Diamond and Ulterra neither filtered the data by keywords nor reviewed the data for responsiveness. The opinion is silent on whether any other filtering criteria were applied (e.g., deduplication, file type, date) to limit the number of documents produced. This netted a production to ReedHycalog of approximately 750 gigabytes of data that included clearly irrelevant data such as baby pictures, audio folders and pornography. Initially, ReedHycalog hosted this data at its own expense in order to review it, but eventually took the data offline, presumably due to cost. ReedHycalog then claimed that United Diamond and Ulterra’s production practices amounted to a data dump with the implicit instruction to “go fish.”

The court stated that “there are two ways to lose a case in the Eastern District of Texas: on the merits or by discovery abuse.” The court then discussed the rules on discovery and stated, “While these provisions generally ensure that parties do not withhold relevant information, a party may not frustrate the spirit of discovery rules—open, forthright, and efficient disclosure of information potentially relevant to the case—by burying relevant documents amid a sea of irrelevant ones” (emphasis added). The court found that United Diamond and Ulterra “engaged in such gamesmanship” in that they did conduct privilege and confidentiality reviews of the produced documents, but made no effort to cull out irrelevant data.

Ultimately, the court ordered the parties to meet and confer to discuss further filtering of data by keywords, stating that the initial production could not be used or relied on by the defendants. Effectively, United Diamond and Ulterra must now start over, filtering the data by keywords and reproducing only that subset of data that is relevant, marked with consecutive Bates numbers. The court also strongly cautioned the parties not to do another data dump, citing sanctions as a possible recourse.

Considering this case, it would seem that a company only performing a privilege review of data, and simply producing the rest, may need to take further action to filter such data, either by keyword or attorney-guided self-selection in order to avoid possible sanctions. Though this may not be a problem with many of the government productions, which tend to ask for everything that is not privileged, depending on volume, this may become an issue in civil litigation.

If you have questions or require more information on the issues discussed in this eData LawFlash, please contact any of the Morgan Lewis attorneys below:

New York
Denise E. Backhouse - 212-309-6364 - [email protected]

Philadelphia
Stephanie A. “Tess” Blair - 215-963-5161 - [email protected]

Jacquelyn A. Caridad - 215-963-5275 - [email protected]

Scott A. Milner - 215-963-5016 - [email protected]

Princeton
George W. McClellan - 609-919-6650 - [email protected]

San Francisco
Renée T. Lawson - 415-442-1443 - [email protected]

Washington, D.C.
Robert “Barry” Wiggins - 202-739-5040 - [email protected]

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