Case Law: In re Facebook PPC Adver. Litig.

Court Orders Parties to Meet and Confer to Develop Discovery Plan and Resolve Production Disputes

In re Facebook PPC Adver. Litig., 2011 WL 1324516 (N.D. Cal. Apr. 6, 2011). In this breach of contract litigation, the plaintiffs sought resolution of various production disputes including a disagreement regarding the development of an Electronically Stored Information (ESI) Protocol. Rejecting as speculative the defendant’s concern that entering an ESI Protocol would frustrate and slow the discovery process, the court ordered the parties to meet and confer to develop an ESI Protocol in light of the “clear thrust of the discovery-related rules, case law, and commentary,” including the Federal Rules of Civil Procedure, case law and the Sedona Conference® that suggest communication is crucial to a successful discovery process. Turning to the production disputes, the court prohibited the defendant from using a secure and restrictive document-viewing website in lieu of actual production, finding the website was unduly burdensome, inefficient and unnecessary in light of a two-tiered protective order. The court also ordered the defendants to reproduce unusable, non-searchable files – including an 18,000 page customer complaint database – in their native format, disclose relevant source code, and meet and confer to determine the appropriate method of production for proprietary documents relating to the dispute.

Commentary

In this case, rather than producing certain documents, the defendant uploaded them onto website, watchdox.com that provided the plaintiff with viewing access, but gave the defendant the ability to limit it in significant ways: restrict access, track viewer activity, set document expiration dates and prohibit searching, annotating and printing. The defendant’s justification for the use of this service in lieu of actual production was that it was necessary to protect the disclosure of “extremely sensitive and confidential” documents. As noted in the summary above, the court denied these justifications and noted that the two-tiered protective order (which the defendant agreed to be bound by) provided sufficient protection to obviate the website’s use. Accordingly, the court ordered the defendant to stop using the website and produce the documents in had uploaded to the plaintiff in a fully accessible form.

Although this opinion is relatively brief in length and scope, it involves certainly a creative attempt to circumvent the more traditional methods of production. After all, cases involving parties withholding documents altogether are very common, but a party offering only limited access via a secure portal is a relatively novel development in the ediscovery world.

This case demonstrates the importance of reaching an agreement regarding the use of these solutions at the meet and confer. The court’s opinion seems to indicate that if the parties had agreed to use the restricted viewing technology before discovery began, it may have been permitted. Taking the time to meet and confer and negotiate mutually beneficial production agreements can pay dividends by potentially avoiding unnecessary, expensive discovery disputes and protecting important party-specific interests.

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