United States District Court, S.D. New York
December 15, 2005.
CLAUDIA QUINBY, Plaintiff,
WESTLB AG, Defendant.
The opinion of the court was delivered by: HENRY PITMAN, Magistrate Judge
OPINION AND ORDER
Plaintiff moves for sanctions including reasonable attorney's
fees and costs against defendant and defendant's counsel,
McDermott Will & Emery LLP ("MWE"), pursuant to Federal Rules of
Civil Procedure Rules 26 (g) (3), 37 (b) (2) and 37 (c) (1),
28 U.S.C. § 1927 and the inherent powers of the court. For the
reasons set forth below, plaintiff's motion is denied.
Plaintiff's motion arises out of a contentious discovery
dispute concerning the production of various e-mails in
In brief, the complaint in this matter alleges gender
discrimination in violation of Title VII (Complaint ("Compl.") at
¶ 1). Plaintiff was an Associate Director/Vice President in the Equity Markets Group of WestLB from May 1999 to June 2003 and
again from September 2003 to April 2004 (Compl. ¶¶ 9, 44, 48,
57). Plaintiff claims, inter alia, that similarly situated
male employees were consistently given higher pay than female
employees, including plaintiff, and that she was ultimately
terminated because of her gender (Compl. ¶¶ 1, 65, 67, 69).
The current dispute stems from plaintiff's first request for
production of documents, served on February 18, 2005 (Plaintiff's
Memorandum of Law in Support of Plaintiff's Motion for Sanctions
Under Rules 26 (g) (3), 37 (b) (2), and 37 (c) (1) of the Federal
Rules of Civil Procedure, 28 U.S.C. § 1927, and the Inherent
Powers of the Court ("Pl. Memo."), Docket Item 37, at 2). There,
plaintiff requested that seventeen current and former WestLB
employees' e-mail accounts be searched for certain terms alleged
to refer to plaintiff in particular or that are sexist in
general. The request also sought e-mails relating to
discrimination against other women at WestLB and e-mails showing
that men were more highly compensated than women (Plaintiff's
First Request for Production of Documents, annexed as Exhibit 1
to Affidavit of Dawn J. Groman, Esq., sworn to October 3, 2005
("Groman Aff."), Docket Item 43, at ¶¶ 10-21, 25-26, 31-32).
Defendant objected to many of the requests for electronic
discovery claiming they were overly broad and would result in
undue burden. The parties were unable to agree on the scope of electronic discovery and sought the intervention of the Court
to resolve the dispute (Groman Aff. ¶ 2).
At a June 8, 2005 discovery conference before the Honorable
William H. Pauley, III, United States District Judge, defendant
claimed that e-mails sought by plaintiff are not readily
available because they are on back-up tapes and would, therefore,
be expensive to retrieve (June 8, 2005 Hearing Transcript at 4).
Following the conference, Judge Pauley referred the dispute to
On June 22, 2005, after meeting with counsel, I ordered
defendant to provide counsel for plaintiff with an affidavit
addressing the technical issues raised by plaintiff's discovery
requests for e-mails and other electronic communications.
Specifically, I directed the parties' attention to Zubulake v.
UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003), and further
directed that the affidavits address the devices defendant used
to store data and the seven factors identified in Zubulake.
Defendant was also ordered to produce a deposition witness who
could discuss the issues to be addressed in the affidavit and to
restore, as a sample, the back-up tape or tapes that contain
e-mails from February 2003 into a readable, searchable format
(June 22, 2005 Order ("6/22/05 Order"), Docket Item 19).
On June 27, 2005 defendant's counsel, MWE, sent two affidavits
to plaintiff's counsel, with copies to me. The affidavits were executed by Kenneth Bigelow, WestLB's chief
information officer, and Stuart Hanley, an electronic evidence
consultant employed by Kroll Ontrack ("Kroll"), "a consulting
firm that specializes in the retrieval and restoration of
electronic information stored on back-up tapes and other media
storage devices" that was hired by defendant to assist in
restoring and searching defendant's back-up tapes (Affidavit of
Stuart Hanley, sworn to June 27, 2005 ("Hanley Aff."), annexed as
Exhibit 5 to Declaration of Carmelyn P. Malalis, Esq., in Support
of Plaintiff's Motion for Sanctions Under Rules 26 (g) (3), 37
(b) (2), and 37 (c) (1) of the Federal Rules of Civil Procedure,
28 U.S.C. § 1927, and the Inherent Powers of the Court dated
September 12, 2005 ("Malalis Decl."), Docket Item 30, at ¶¶ 1-2).
MWE transmitted a signed cover letter with the affidavits stating
"enclosed are the Affidavits . . . that address the technical and
cost issues raised by Plaintiff's discovery requests" (June 27,
2005 Letter from Andrew S. Baron, Esq., to Kathleen Peratis,
Esq., annexed as Exhibit 3 to Malalis Decl.).
Bigelow's affidavit stated that retrieving the e-mails
plaintiff had requested "will be extremely costly, time-consuming
and unduly burdensome" and that defendant has hired Kroll to
assist in collecting any responsive e-mails (Affidavit of Kenneth
Bigelow, sworn to June 27, 2005 ("Bigelow Aff."), annexed as
Exhibit 4 to Malalis Decl., at ¶ 3). He also stated that defendant stores its e-mails on a Lotus Notes e-mail server
("server" or "Database") which "exists on a computer server and
is accessible through each individual user's e-mail account"
(Bigelow Aff. ¶ 5). According to Bigelow, the e-mails are
backed-up on tapes to prevent the permanent loss of data and for
long-term storage; the back-up tapes are essentially a "snapshot"
of the e-mail server at a point in time. Accordingly, Bigelow
stated that any e-mail that is sent or received and then deleted
before a snapshot can be taken will not be stored on a back-up
tape. Furthermore, Bigelow noted that because some employees
store e-mails for extended periods of time and the back-up tapes
cannot differentiate between new and old data, the tapes contain
copies of many identical e-mails. Bigelow stated that there is
software available that can segregate identical e-mails to
prevent the production of copies, but the more copies there are,
the longer the process of detecting and removing the copies will
be (Bigelow Aff. ¶¶ 5-6, 8, 10).
Bigelow stated that defendant also creates and stores daily,
monthly and annual back-up tapes and has approximately 3,754 of
such back-up tapes covering January 2, 2004 to January 4, 2005,
21 tapes in total for "year-end" 2003, 35 tapes for "year-end"
2004 and 42 annual back-up tapes for 2001 and 2002 (Bigelow Aff.
¶ 10). Bigelow also discussed an e-mail system called "AXS-One."
AXS-One automatically stores e-mails from employees who are
registered broker-dealers. Bigelow estimated that it would take
approximately two weeks and $30,000 to search AXS-one (Bigelow
Aff. ¶ 7).
Hanley's affidavit described the costs and amount of time it
will take to restore back-up tapes. Hanley stated that, to search
data on back-up tapes, Kroll must restore the tapes by
"uncompressing" the data on each tape onto a computer server
(Hanley Aff. ¶ 9). Hanley estimated that it would cost
approximately $106,000 to restore defendant's 98 yearly back-up
tapes and $2.8 million to restore the more than 3,700 other
back-up tapes from 2004. The time it would take to restore each
tape varies by how much data is stored on the tape and Hanley
estimated that it could take approximately eight to ten hours to
"duplicate, restore and convert" an individual tape and two to
four weeks to "restore and convert" the 98 yearly tapes (Hanley
Aff. ¶¶ 9, 11-12).
Hanley also stated that Kroll had previously restored
defendant's 2002 back-up tapes but that the data was subsequently
recompressed (Hanley Aff. ¶ 12 n. 3).
Plaintiff deposed Bigelow and Hanley on July 1, 2005. Plaintiff
claims that it was not until the depositions that she learned
"that a large quantity of the e-mails Plaintiff had requested going back to 2000 are already readily accessible and
readable on WestLB's databases and can be accessed just like
`opening any e-mail'" (Pl. Memo. at 6, quoting July 1, 2005
Deposition of Kenneth Bigelow ("Bigelow Dep."), annexed as
Exhibit 6 to Malalis Decl., at 93). Plaintiff also claims to have
learned at the depositions that copies of defendant's e-mails
exist on the Lotus Notes server, AXS-One and archive tapes owned
by Kroll which are "faster and less costly" to access (Pl. Memo.
Plaintiff argues that the Bigelow and Hanley affidavits are
incomplete, misleading and contain "outright false statements"
because they improperly focused on back-up tapes and violated my
Order by not addressing the costs of searching and contents of
the Database and archives that Kroll maintains containing WestLB
e-mails (Pl. Memo. at 4-6, 13-17). Plaintiff also claims that
defendant and MWE made misleading statements before Judge Pauley
by not fully revealing "the extent of the e-mails [defendant]
possesses and how they are stored" and failed to correct their
statements at subsequent hearings before me (Pl. Memo. at 12-13). III. Analysis
A. Applicable Legal Principles
1. Rule 26(g) (3)
Rule 26(g) (2) of the Federal Rules of Civil Procedure requires
an attorney to sign all discovery requests, responses and
objections and that the attorney's signature constitutes a
certification that to the "best of the signer's knowledge,
information, and belief, formed after a reasonable inquiry, the
request, response, or objection is: . . . (B) not interposed for
any improper purpose, such as to harass or to cause unnecessary
delay or needless increase in the cost of litigation." Rule 26(g)
(2) is enforceable by way of Rule 26(g) (3) which states:
If without substantial justification a certification
is made in violation of the rule, the court, upon
motion or upon its own initiative, shall impose upon
the person who made the certification, the party on
whose behalf the disclosure, request, response, or
objection is made, or both, an appropriate sanction,
which may include an order to pay the amount of the
reasonable expenses incurred because of the
violation, including a reasonable attorney's fee.
The purpose of Rule 26(g) is to create "an affirmative duty to
engage in pretrial discovery in a responsible manner."
Fed.R.Civ.P. 26(g) Advisory Committee Notes to 1983 Amendments.
The attorney's signature is not a certification of the
truthfulness of the client's responses. "Rather, the signature
certifies that the lawyer has made a reasonable effort to assure
that the client has provided all the information and documents available
to him that are responsive to the discovery demand." Fed.R.Civ.P.
26(g) Advisory Committee Notes to 1983 Amendments.
An attorney has made a "reasonable inquiry" if the
"investigation undertaken by the attorney and the conclusions
drawn therefrom are reasonable under the circumstances. . . .
Ultimately, what is reasonable is a matter for the court to
decide on the totality of the circumstances." Fed.R.Civ.P. 26(g)
Advisory Committee Notes to 1983 Amendments. Sanctions shall be
imposed, however, only if a certification made in violation of
Rule 26(g) (2) is made without "substantial justification." Rule
"Imposition of sanctions for a violation of Rule 26(g) is
mandatory." Clark v. Westchester County, 96 Civ. 8381 (DLC),
1998 WL 709834 at *9 (S.D.N.Y. Oct. 9, 1998), citing, inter
alia, Chambers v. NASCO, Inc., 501 U.S. 32, 51 (1991). 2. Rule 37 (b) (2)*fn1
Rule 37 (b) (2) states that a court may grant sanctions against
a party that "fails to obey an order to provide or permit
discovery." Sanctions may be granted against a party under Rule
37 (b) (2) if there is noncompliance with an order,
"notwithstanding a lack of wilfulness or bad faith, although such
factors `are relevant . . . to the sanction to be imposed for the
failure.'" Auscape Int'l v. Nat'l Geographic Soc'y, 02 Civ.
6441 (LAK), 2003 WL 134989 at *4 (S.D.N.Y. Jan. 17, 2003),
quoting 8A Charles Alan Wright, Arthur R. Miller & Richard L.
Marcus, Federal Practice & Procedure § 2283, at 608 (2d ed.
1994); see Melendez v. Ill. Bell Tel. Co., 79 F.3d 661, 671
(7th Cir. 1996) ("Bad faith . . . is not required for a district
court to sanction a party for discovery abuses. Sanctions are
proper upon a finding of wilfulness, bad faith, or fault on the
part of the noncomplying litigant." (citations omitted));
Alexander v. Fed. Bureau of Investigation, 186 F.R.D. 78, 88
(D.D.C. 1998) ("In making the determination of whether to impose sanctions, Rule 37 (b) (2) does not require a
showing of willfulness or bad faith as a prerequisite to the
imposition of sanctions upon a party." (citations omitted)). The
decision to impose sanctions "is committed to the sound
discretion of the district court and may not be reversed absent
an abuse of discretion." Luft v. Crown Publishers, Inc.,
906 F.2d 862, 865 (2d Cir. 1990), citing, inter alia, Nat'l
Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 642
(1976) (per curiam); see Friends of Animals, Inc. v. U.S.
Surgical Corp., 131 F.3d 332, 334 (2d Cir. 1997) ("A district
court has broad power to impose Rule 37 (b) sanctions in response
to abusive litigation practices." (citation omitted)). Rule 37
(b) (2) sanctions are applicable where, as plaintiff alleges
here, an affidavit prepared in response to a court order does not
comply with the order. See Nike, Inc. v. Top Brand Co.,
216 F.R.D. 259, 269 (S.D.N.Y. 2003) (imposing 37 (b) (2) sanctions
against party for failing to disclose the information the court
ordered disclosed in an affidavit).
3. 28 U.S.C. § 1927
Section 1927 provides that "[a]ny attorney . . . who so
multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy personally
the excess costs, expenses, and attorney's fees reasonably
incurred because of such conduct." "This provision `imposes an obligation
on attorneys throughout the entire litigation to avoid dilatory
tactics' and applies only to attorneys. The purpose of § 1927 is
to deter unnecessary delays in ligation by penalizing attorneys
personally." Nike, Inc. v. Top Brand Co., supra,
216 F.R.D. at 275-76, quoting Bowler v. U.S. Immigration & Naturalization
Serv., 901 F. Supp. 597, 604 (S.D.N.Y. 1995); see also
Revson v. Cinque & Cinque, P.C., 221 F.3d 71, 78-79 (2d Cir.
A showing of bad faith is required to impose sanctions under §
1927. Revson v. Cinque & Cinque, P.C., supra, 221 F.3d at 79
(citation omitted); Oliveri v. Thompson, 803 F.2d at 1265, 1273
(2d Cir. 1986) ("Imposition of a sanction under § 1927 requires a
clear showing of bad faith." (internal quotation omitted)). "Like
an award made pursuant to the court's inherent power, an award
under § 1927 is proper when the attorney's actions are so
completely without merit as to require the conclusion that they
must have been undertaken for some improper purpose such as
delay." Oliveri v. Thompson, supra, 803 F.2d at 1273
(citation omitted). Thus, to impose sanctions under § 1927, the
court must "find clear evidence that (1) the offending party's
claims were entirely meritless and (2) the party acted for improper purposes." Agee v. Paramount Communications, Inc.,
114 F.3d 395, 398 (2d Cir. 1997) (citations omitted).*fn2
B. Plaintiff's Claims
Each of plaintiff's claims are based on substantially the same
factual predicates, namely that: (1) WestLB and MWE should have
disclosed that "the vast quantities of the e-mails . . . were in
fact readily and easily accessible and did not reside solely on
expensive back-up tapes" (Pl. Memo. at 1); (2) WestLB's and MWE's
representations to plaintiff and the Court were designed to delay
discovery and increase the costs of litigation (Pl. Memo. at 11,
18); (3) the Bigelow and Hanley affidavits omitted material
facts, contained "outright false statements," and furthermore did
not comply with the Order directing the affidavits to "`address
the technical issues raised by [p]laintiff's discovery requests
for e-mails and other electronic communications'" with reference
to Zubulake v. UBS Warburg LLC, supra, 217 F.R.D. at 309 (Pl.
Memo. at 13-14, quoting 6/22/05 Order), and (4) plaintiff did
not learn that the e-mails she had requested were "readily
accessible and readable, as near-line data" until deposing
Bigelow and Hanley (Pl. Memo. at 17). Plaintiff claims that she should be reimbursed for legal fees and
costs incurred for discovering that most of the requested e-mails
were readily and easily accessible and were not stored solely on
back-up tapes, something that plaintiff claims defendant and MWE
should have disclosed months earlier (Pl. Memo. at 1).
Defendant and MWE argue in response that they have not made any
misrepresentations regarding e-mail discovery or violated the
June 22 Order because, as they have stated from the outset, most
of the e-mails plaintiff wants to search are either available
only on back-up tapes or, if available from some other source,
because the back-up tapes are the best, most complete source of
the e-mails. Defendant and MWE contend, therefore, that there was
no need to discuss alternative, inferior sources in great detail.
Thus, defendant and MWE claim that they have focused primarily on
the back-up tapes and not other sources because the back-up tapes
are the most complete source of stored e-mails and would have to
have been searched in any event (Memorandum of Law of Defendant
and MWE in Opposition to Plaintiff's Motion for Sanctions ("Def.
Memo."), Docket Item 45, at 12-18). Second, they argue that where
"there is no evidence of bad faith and no evidence that a party
without justification failed to comply with a court order or
satisfy its disclosure obligations, a request for sanctions must
be denied" (Def. Memo. at 11). Finally, they claim that
plaintiff's argument defies logic if the e-mails were readily available in an easily accessible
format, it would be irrational for defendant and MWE to claim the
requested e-mails were only on back-up tapes and thereby incur
the burden and expense of retrieving the e-mails from the back-up
tapes (Def. Memo. at 11-12).
I find that defendant and MWE acted appropriately in focusing
on back-up tapes as the most complete source for the requested
e-mails and that they did not mislead plaintiff or the Court with
regard to other available storage systems because the other
systems contained far less data. Thus, I find that sanctions
should not be imposed on defendant or MWE under any of the
theories asserted by plaintiff.
1. The Back-Up Tapes Are the Best Source for the Requested
Defendant and MWE were correct to concentrate on the back-up
tapes because they were the most complete source for the e-mails
and retrieving the e-mails from any other source would have
resulted in either an incomplete production or duplication of
WestLB stores e-mails in three locations: the Lotus Notes
Database, AXS-One and back-up tapes. The Lotus Notes Database
stores e-mails on a server and is accessible through individual users' e-mail accounts (Bigelow Aff. ¶ 5).*fn3
E-mails on Lotus Notes can be deleted at any time by the owner of
the e-mail account in which the e-mail is stored (Bigelow Dep. at
51, 57, 86-87, 100). Until 2002 defendant had a two-year rolling
e-mail deletion policy; in other words any e-mails stored on the
server that were more than two years old would automatically be
deleted. Defendant ceased that practice in November 2002 and,
thus, the rolling e-mail deletion policy would not have effected
e-mails stored after November 2000, two years earlier (Bigelow
Dep. at 57, 84). The data available on the Database is searchable
(Bigelow Dep. at 58, 87), but conducting a search of the
Database, complete with the associated metadata,*fn4
requires the expertise of an outside consultant (Affidavit of
Michael Waxenberg, sworn to September 29, 2005 ("Waxenberg Aff."), Docket
Item 44, at ¶ 6). Defendant, as part of its regular business
practices, also deletes an employee's e-mail account when the
employee ceases working for defendant (Bigelow Dep. at 56).
Further, foreign employees do not have e-mail accounts saved on
the Database (Affidavit of Kenneth Bigelow, sworn to July 23,
2005 ("Bigelow Supp. Aff."), annexed as Exhibit 2 to Groman Aff.,
at ¶ 4 n. 1).
Only four of the seventeen employees whose e-mail is sought by
plaintiff have e-mail accounts stored on the Database. The other
thirteen have either left WestLB or are foreign employees
(Bigelow Supp. Aff. ¶¶ 4 n. 1, 5 n. 3, 6 n. 4).
Defendant also stores some e-mails on a system called "AXS-One"
that was implemented in 2003. AXS-One is used to store e-mails
that are sent and received between registered broker-dealers
employed by defendant and their customers (Bigelow Aff. ¶ 7;
Bigelow Dep. at 88-89).*fn5 AXS-One is linked to the Lotus
Notes Database and automatically makes copies of those e-mails
that it stores (Bigelow Dep. at 90). The e-mails are stored on
optical storage media,*fn6 which are more accessible than
back-up tapes and can be searched the same way as the Lotus Notes Database*fn7
(Bigelow Aff. ¶ 7; Bigelow Dep. at 92). Finally, defendant also stores data on back-up tapes.*fn8
Bigelow describes the data stored on back-up tapes as
"essentially a `snapshot' of all the e-mails in each employee's
e-mail account at the time the `snapshot' is taken" (Bigelow Aff.
¶ 8). Because the back-up tapes are "snapshots," taken at a
particular point in time, e-mails that are sent or received and
then deleted between snapshots will not be captured onto back-up
tapes. For example, if the back-up tapes are created every night
at 11:00 and on a particular afternoon an employee receives and then immediately deletes an e-mail, all before 11:00, that e-mail
will not be stored on a back-up tape (Bigelow Aff. ¶ 10).
Defendant's computer systems create daily back-up tapes,
consisting of about twenty to forty tapes. One of the daily sets
of back-up tapes created towards the end of each month and the
tapes created on December 31 of each year are designated as the
monthly or annual back-up tapes, respectively (Bigelow Aff. ¶ 8).
Defendant stores daily back-up tapes for fifteen weeks and then
recycles the tapes. Similarly, monthly tapes are stored for
thirteen months before they are recycled and annual tapes for two
years (Bigelow Dep. at 36, 83).
Defendant and MWE have consistently represented that the best
and most complete method of locating and producing the e-mails
requested by plaintiff is to restore back-up tapes and search the
restored data (e. g., June 8, 2005 Hearing Transcript at 4;
Bigelow Aff. ¶ 6; Def. Memo. at 11-19; Groman Aff. ¶ 9). Although
each of defendant's e-mail storage systems has some limitations,
I agree that the back-up tapes will produce the most complete
results and defendant and MWE were correct to focus on the
back-up tapes as the primary method of production.
The back-up tapes are the best source for e-mails because they
are the most complete source: back-up tapes contain everything on
the server at a particular moment in time. Depending on when a
particular back-up tape was made, the data on it could include e-mails from current, former and foreign employees
over a long period of time. By contrast, the data on WestLB's
Lotus Notes Database and the AXS-One system will be far less
complete. First, the Database only contains data for four
individual's e-mail accounts the individuals who are current,
domestic employees. Second, e-mails deleted by those individuals
who still have accounts on the Database will not be retrievable
on the Database; they may, however, be retrievable from the
backup tapes if they were captured before they were deleted.
As for the AXS-One system, it only contains e-mails between
broker-dealers and customers and for a limited period of time.
Defendant points out that this system was implemented in late
2003 and, because plaintiff was laid off in June 2003, rehired in
October 2003 and terminated in April 2004, the system probably
contains only "a minuscule portion of the e-mails being requested
by plaintiff" (Def. Memo. at 5; see Bigelow Aff. ¶ 7; Bigelow
Supp. Aff. ¶ 9, 9 n. 5). Furthermore, it has been difficult to
search the AXS-One system due to technical problems. The only
advantage to searching the AXS-One system is that if a particular
e-mail falls into the parameters necessary for AXS-One to store
the e-mail, even if it is erased by the user before it is
backed-up on tape, it will still be stored on AXS-One. Plaintiff
has not claimed that there are any e-mails captured on AXS-One
that are not available on back-up tapes. Thus, because the back-up tapes contain the most complete
source of e-mails covering all the relevant e-mail accounts and
most, if not all, of the time periods for which plaintiff seeks
e-mails and the alternative sources only cover a narrow time
frame, a limited number of users and the data on these sources
can be incomplete, it was logical for defendants to consider the
back-up tapes to be the primary source for the production of the
e-mails. Indeed, if defendant had even suggested the Database or
AXS-One system be searched in the first instance, plaintiff would
probably take defendant to task for limiting its search to a
source that defendant knew was not the most complete.
Plaintiff also faults the affiants' failure to disclose the
cost of restoring and contents of archive tapes owned by Kroll
(the "Kroll Archives") (Pl. Memo at 9, 17). The Kroll Archives
are back-up tapes maintained by Kroll that contain data collected
from defendant's Database as a result of earlier projects Kroll
performed for defendant. The data collected for those projects
had been in a readily accessible format, but, after the projects
ended, Kroll archived the data onto Kroll's own back-up tapes,
making the data inaccessible. Because these tapes are formatted
slightly differently than defendant's own back-up tapes, they are
slightly easier and cheaper for Kroll to access than defendant's
back-up tapes (Hanley Dep. at 21-26, 38, 40-41, 50-51, 64). Plaintiff wrongly suggests that the Kroll
Archives are in a readily accessible format and faults Bigelow
and Hanley for failing to disclose the Archives' restoration
costs and contents in their affidavits (Pl. Memo. at 9, 17). The
Kroll Archives are in a format substantially similar to
defendant's own back-up tapes and restoring them involves a
comparable amount of time and expense (Hanley Dep. at 50-51
(noting that the Kroll Archives are back-up tapes and would be
cheaper to restore only because there are fewer tapes in the
Kroll Archives). While it is true that Bigelow and Hanley omitted
the cost of restoring and contents*fn9 of the Kroll Archives
from their affidavits, the omission is immaterial.*fn10 Finally the fact that defendant is producing e-mails from the
most complete, but most expensive, source is compelling evidence
of defendant's honesty and good faith. Given the fact that it has
not yet been determined whether the cost of producing the e-mails
will be shifted to plaintiff and the "default" allocation of cost
is against the producing party, it would make little sense to
proffer the back-up tapes as the source for the e-mails if the
e-mails were available in a more accessible form. Defendant
estimates that it will spend close to $500,000 producing e-mails
from back-up tapes (Groman Aff. ¶ 7); the bulk of that cost is
attributable to restoring the e-mails from back-up tapes into an
accessible format (Hanley Aff. ¶ 13). If the data was readily
available, it would be irrational for defendant not to access that source.*fn11 Accordingly, I find that there
are no deficiencies in the Bigelow and Hanley affidavits.
2. Sanctions Are Inappropriate Under Rules 26(g) (3) and 37(b)
(2) and 28 U.S.C. § 1927
a. Rule 26(g) (3)
Plaintiff claims that MWE certified that the Bigelow and Hanley
affidavits were complete and correct by signing a cover letter
accompanying the affidavits and that a "reasonable inquiry" into
the underlying facts would have revealed that they were
inaccurate and made for the improper purpose of causing
unnecessary delay or needlessly increasing the costs of
litigation (Pl. Memo. at 15). Therefore, plaintiff argues, MWE
should be sanctioned under Rule 26(g) (3).
The cover letter and affidavits were sent to plaintiff and the
Court. At the outset, it is not clear that by signing the cover
letter MWE made any certification or that the affidavits were
even a "response," as the term is used in Rule 26(g) (2).
However, I need not decide the motion on this ground. I find that even if the signature on the cover letter constitutes
a certification, MWE should not be sanctioned for submitting the
affidavits to cause unnecessary delay or needless increases in
ligations costs because the information in the affidavits was
accurate and responsive to my Order. Because the affidavits were
correct and not misleading, there is no basis to find that MWE
submitted them for an improper purpose. Therefore, I decline to
impose sanctions under Rule 26(g) (3).
b. Rule 37 (b) (2)
Plaintiff next claims that the Bigelow and Hanley affidavits
did not comply with my June 22, 2005 Order and that defendant and
MWE should therefore be sanctioned under Rule 37(b) (2) for not
complying with an order to provide discovery. I find that the
affidavits sufficiently complied with my Order and that sanctions
are not warranted.
My June 22, 2005 Order directed defendant to
provide counsel for plaintiff with an affidavit
addressing the technical issues raised by plaintiff's
discovery requests for e-mails and other electronic
communications. The affidavit should address the
issues discussed by Judge Scheindlin in Zubulake v.
UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003), in
particular, the devices used to store data, see
217 F.R.D. at 318-19, and the seven factors identified by
Judge Scheindlin at 217 F.R.D. at 332.
Plaintiff claims that the affidavits failed to disclose the
existence of relevant e-mails on the Database and Kroll Archives (Pl. Memo. at 17). Plaintiff also claims that the
affidavits violated my Order by not addressing all seven factors
listed by Judge Scheindlin in Zubulake,*fn12
the availability of information from other sources and the total
cost of production (Pl. Memo. at 17; Pl. Reply at 3). In his
affidavit, Bigelow focused on the back-up tapes and did not state
how many e-mails were on the Database or the cost of searching
the Database. However, this omission was harmless under the
circumstances. Because the Database contains only a fraction of
the e-mail accounts plaintiff seeks to have searched and the
e-mail accounts that are on the Database are unlikely to contain
as complete a set of e-mails as the back-up tapes, there was no
reason for defendant's affidavits to disclose the few e-mails
available on the Database or the cost of searching it. Despite
the presence of some e-mails on the Database, defendant knew the
Database's limitations would require it to search the back-up
tapes to comply with discovery. Because they were already
searching the back-up tapes, which contain more relevant
information than the Database, it would be superfluous to require
defendant to expend money and resources searching the Database
and wrong to sanction them for failing to fully disclose such an
Plaintiff also claims that the affidavits should have disclosed
whatever data was present on the Kroll Archives. As noted above,
the Kroll Archives are stored in a substantially similar format
to WestLB's back-up tapes and require comparable time and expense
to extract e-mails. Once again, the existence of the Kroll
Archives had little or no bearing on the costs of discovery or
the process of retrieving e-mails because they are so similar to
defendant's own back-up tapes. Omitting them was, again, at most
a hyper-technical violation of my Order that does not warrant
Because defendant and MWE properly focused on the back-up tapes
and disclosed the alternative data storage media to a reasonable
extent considering the media's limitations, I find that the
affidavits complied with my Order, were not misleading and were
not produced to cause delay or needless litigation costs.
Therefore, I refuse to impose sanctions against defendant or MWE
under Rule 37 (b) (2).
c. 28 U.S.C. § 1927
Plaintiff lastly claims that sanctions should be imposed
against MWE under § 1927 because their "misleading statements and
omissions have unnecessarily delayed this litigation by
prolonging WestLB's production of relevant e-mails" (Pl. Memo. at
18). As discussed, MWE has not made misleading statements or omissions and have not delayed discovery. Moreover, it cannot
credibly be claimed that the alleged defects in the Bigelow and
Hanley affidavits resulted in depositions that should have been
unnecessary. In almost all cases involving electronically stored
documents, it has become almost standard practice for a party
seeking discovery to depose an information technology specialist
employed by the producing party. I am certain that plaintiff
would have deposed Bigelow and Hanley even if their affidavits
had contained the information that plaintiff claims was
For the foregoing reasons, plaintiff's motion for sanctions
against defendant and MWE under the Federal Rules of Civil
Procedure 26 (g) (3), 37 (b) (2) and 37 (c) (1), 28 U.S.C. § 1927
and the inherent powers of the court is denied.
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