[EDRM Editor’s Note: The opinions and positions are those of Michael Berman.]
In In re StubHub Refund Litigation, 2924 WL 2305604 (N.D. Ca. May 20, 2024), the court addressed important issues such as modification of an ESI Order and sanctions in the context of “modern attachments” a/k/a “pointers,” “hyperlinked documents,” or “cloud attachments.”
MODIFICATION OF AN ESI PROTOCOL
There has been considerable discussion about whether an ESI Protocol is carved in stone or modifiable on good cause shown. See, e.g., The ESI Protocol: Your Word is Your Bond… Or, Is It? (Jan. 11, 2024).
In StubHub, the protocol had what I call an escape clause[1] and what the Hon. Gary R. Jones has called a “get out of jail” provision.
The court wrote:
The ESI Order states that it “may be modified … by the Court for good cause shown.” … The ESI Order states in Appendix 1 that when emails are produced, they should include parent and child files, with the parent-child relationship preserved, and child files are defined to include “hyperlinks to internal or nonpublic documents.” Similarly, “family groups” are defined to include “documents referenced by document stubs or via links to internal document sources.” … StubHub has demonstrated good cause to remove the requirement that hyperlinked documents should be produced as if they were attachments to emails. StubHub has made a persuasive evidentiary showing that despite having spent hundreds of hours trying to find linked documents and despite having retained an outside e-discovery vendor to assist with this effort, the hyperlink requirement is technologically impossible to fulfill most of the time. [emphasis added].
In re StubHub Refund Litigation, 2924 WL 2305604 (N.D. Ca. May 20, 2024).
The court found plaintiffs’ arguments unpersuasive and wrote that “many of the hyperlinks do not work anymore.” Plaintiffs did not dispute that and, instead, suggested that efforts would be 34% successful. The court wrote:
The Court is not going to keep a production requirement in the ESI Order if two-thirds of the time it is impossible to comply with. The Court is not saying that the ESI Order should only contain requirements that can be complied with 100% of the time, of course. But a showing that a production requirement is impossible to comply with most of the time – and that is StubHub’s argument – is a good reason to get rid of it.
“In sum,” the court wrote that plaintiffs’ experts “fall[] short of establishing that the hyperlink requirement in the ESI Order is broadly possible to comply with.”
The court wrote that no evidence “contradict[ed] StubHub’s expert’s opinion that … there is no commercially available or custom program in existence that could collect all of StubHub’s hyperlinked documents” and that “the non-existence of any commercially available software that can implement the hyperlink requirement in the ESI Order represents a rare point of agreement between the parties.”
Michael Berman discussing In re StubHub Refund Litigation, 2924 WL 2305604 (N.D. Ca. May 20, 2024).
The court wrote that no evidence “contradict[ed] StubHub’s expert’s opinion that … there is no commercially available or custom program in existence that could collect all of StubHub’s hyperlinked documents” and that “the non-existence of any commercially available software that can implement the hyperlink requirement in the ESI Order represents a rare point of agreement between the parties.”
Therefore, good cause having been shown, the court modified the ESI Order. I have suggested, and suggest, that inclusion of a “modify for good cause shown” escape clause is generally a good idea.
DENIAL OF SANCTIONS MOTION
Plaintiff moved for sanctions for violation of three court orders. The court wrote:
Without doing adequate investigation, StubHub carelessly stipulated to an ESI Order that StubHub later realized required it to do something that is usually impossible: produce the hyperlinked documents with the parent-child relationship with the original emails intact. From its first custodial document production in June 2022, StubHub was in instant violation of the ESI Order, a problem it was never able to fix. [emphasis added].
In re StubHub Refund Litigation, 2924 WL 2305604 (N.D. Ca. May 20, 2024).
The court wrote:
However, because StubHub has persuaded the Court that compliance with that requirement was actually impossible for most documents, the Court thinks the wrongdoing was stipulating to do something without conducting an adequate investigation into whether it was possible.
Id.
While plaintiffs – not in these words – contended that they had received an disorganized “document dump,” the court wrote:
But the Court doesn’t see it that way because StubHub has persuaded the Court that this hypothetical alternative was never going to happen, at least not for most documents. In the Court’s view, the proper comparison is to a hypothetical alternative in which StubHub conducted an adequate investigation to determine whether the hyperlink requirement was feasible, figured out it was not, declined to stipulate to the hyperlink requirement, and right out of the gate argued that this was impossible.
It added:
[T]he harm that StubHub’s wrongful conduct caused was a big, expensive fight that lasted more than a year concerning the hyperlink issue. But this harm wasn’t caused by the violation of the ESI Order; it was caused by StubHub’s foolish decision to stipulate to the hyperlink requirement in the first place. [emphasis added].
Id.
It concluded: “Here, no sanction would be ‘just’ for violating the hyperlink requirement in the ESI Order because that requirement was in most cases impossible to comply with. For the same reason, StubHub’s failure to comply with the hyperlink requirement was ‘substantially justified’….”
The motion for sanctions was denied. The court addressed some other related issues, such as the Rule 30(b)(6) deponent produced to discuss the hyperlink issue.
The StubHub decision ends:
StubHub’s decision to stipulate to the hyperlink requirement in the ESI Order was an unfortunate mistake. But mistakes happen, and life – and litigation – must go on. The parties should put this discovery issue behind them and turn their efforts to class certification and the merits.
Id.
“Perfection” has never been the standard for litigation. What Does “The Making of a Surgeon” Have to Do With ESI and “Software Glitches?” (Jul. 15, 2011); “Modern Attachments,” ESI Protocols, & Second Chances (Jun. 8, 2023).
For more on the “Humpty Dumpty” issue – must a producing party re-link so-called “modern attachments”? – please see ESI Protocol Dispute – “Modern Attachments” and the “Humpty Dumpty Issue” (Apr. 29, 2024).
Notes
[1] For a discussion of the “great escape clause debate,” please see ESI Protocol Dispute – “Modern Attachments” and the “Humpty Dumpty Issue” (Apr. 29,, 2024).
