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QUINBY v. WESTLB AG

December 15, 2005.

CLAUDIA QUINBY, Plaintiff,
v.
WESTLB AG, Defendant.



The opinion of the court was delivered by: HENRY PITMAN, Magistrate Judge

OPINION AND ORDER

I. Introduction

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.

  II. Facts

  Plaintiff's motion arises out of a contentious discovery dispute concerning the production of various e-mails in defendant's possession.

  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 me.

  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 ...


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