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Gordon v. Kaleida Health

United States District Court, Second Circuit

May 21, 2013

CATHERINE GORDON, et al., Plaintiffs,
KALEIDA HEALTH, et al., Defendants.

MICHAEL J. LINGLE, SARAH E. CRESSMAN, of Counsel THOMSA & SOLOMON, LLP, Rochester, New York, Attorneys for Plaintiffs.

SUSAN C. RONEY, of Counsel NIXON PEABODY, LLP, Buffalo, New York, Attorneys for Defendants.

JONATHAN W. GREENBAUM, of Counsel COBURN & COFFMAN, PLLC Washington, D.C., Attorneys for Defendants.


LESLIE G. FOSCHIO, Magistrate Judge.


By order of Hon. William M. Skretny, dated January 6, 2010 (Doc. No. 252), this matter was referred to the undersigned for all non-dispositive pretrial matters pursuant 28 U.S.C. § 636(b)(1)(A). The matter is presently before the court on Defendants' Motion To Disqualify Consulting Expert filed September 25, 2012 (Doc. No. 377) ("Defendants' motion").


This action, pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 218, and New York State Wage and Hour Laws, N.Y. Labor Law § § 190, 650 (McKinney's 2002) ("Plaintiffs' state claims"), filed May 22, 2008, seeks unpaid regular wages and overtime pay for work during Plaintiffs' meal breaks, shift preparation time and required training. Defendant Kaleida Health is a major regional hospital system and provider of related health care services. Plaintiffs are a group of Defendants' hourly employees, primarily nurses, other health care personnel, clerical, and maintenance workers. Conditional certification of a collective action under Plaintiffs' FLSA claim pursuant to 28 U.S.C. § 218(b), limited to Plaintiffs who provide direct patient care, was granted on October 14, 2009 (Doc. No. 228). On October 29, 2012, Plaintiffs filed a motion, pursuant to Fed.R.Civ.P. 23, for class certification of Plaintiffs' state claims (Doc. No. 408). Discovery has been stayed as of February 5, 2013, pending disposition of Defendants' recently filed motions to dismiss (Doc. No. 371) and for summary judgment on Plaintiffs' state law claims (Doc. No. 431).

Defendants' motion was filed together with Attorney Declaration In Support of Defendants' Motion To Disqualify Consulting Expert (Doc. No. 377-1) ("Roney Declaration") attaching exhibits A - E (Doc. Nos. 377-2 - 377-6) ("Roney Declaration Exh. (s) ___") and a Memorandum Of Law In Support Of Motion To Disqualify Consulting Expert (Doc. No. 377-7) ("Defendants' Memorandum"). In opposition, Plaintiffs filed, on October 12, 2012, a Memorandum of Law In Opposition To Defendants' Motion To Disqualify Consulting Expert (Doc. No. 391) ("Plaintiffs' Memorandum"), the Affirmation Of Sarah E. Cressman In Opposition To Defendants' Motion To Disqualify Consulting Expert (Doc. No. 392) ("Cressman Affirmation") attaching exhibits A & B (Doc. No. 392-1) ("Cressman Affirmation Exh(s). ___"), and the Affirmation Of Amir Karahasanovic (Doc. No. 393) ("Karahasanovic Affirmation"). On October 19, 2012, Defendants filed the Reply Attorney Declaration In Support Of Motion To Disqualify Consulting Expert (Doc. No. 402) ("Roney Reply Declaration") attaching Exhibit A (Doc. No. 402-1) ("Roney Reply Declaration Exh. A"), and a Reply Memorandum Of Law In Further Support Of Motion To Disqualify Plaintiffs' ESI Expert Consultant (Doc. No. 403) ("Defendants' Reply Memorandum").[2] Oral argument was deemed unnecessary. Based on the following, Defendants' motion should be DENIED.


D4 ("D4"), located in Rochester, New York, provides litigation support services to law firms and corporations including E-Discovery[4] services such as computer forensics, consulting, paper document scanning, [5] coding, [6] and storage or hosting[7] of documents in digital form on "web-based platforms" allowing computerized access to a database, and processing of electronically stored information ("ESI"). Roney Declaration § 3; Karahasanovic Affirmation § § 3-4. On February 12, 2010, D4 and Nixon Peabody, LLP ("Nixon"), Defendants' attorneys, entered into a Master Services Agreement ("the Master Services Agreement" or "Agreement") under which D4 would perform services to Nixon in connection with the instant case. Roney Declaration § 4 (D4 to provide "e-discovery services" to Nixon's "clients"); Roney Declaration Exh. A;[8] Karahasanovic Affirmation § 4 (D4 provides "litigation support services"). As relevant, the Agreement required D4 to hold in confidence "all matters relating to Client's [Nixon's] business and those of [Nixon's] client's business, " and information designated as confidential by Nixon. Roney Declaration § 5; Roney Declaration Exh. A Section 3 ("Section 3").

As D4's director of sales, Karahasanovic ("Karahasanovic") assists D4's clients in "obtaining the best solution for their litigation needs, " Karahasanovic Affirmation § 5, however, Karahasanovic is "not a member of D4's consulting group, " id., known as "D4's Advisory and Consulting group, " Karahasanovic Affirmation § 22 ("the D4 Advisory and Consulting Group" or "the Advisory and Consulting Group"), and does "not provide consulting or expert services, " particularly "e-discovery expert guidance, " as does the Advisory and Consulting Group, nor does Karahasanovic provide "expert witness services to [D4's] clients." Karahasanovic Affirmation § 5. In July 2010, D4 informed Nixon that similar agreements between D4 and its outside vendors, such as Infovision21, Inc. ("Infovision21"), which assist D4 in providing services such as document coding to D4's clients, also protected Nixon's confidential business and client information. Roney Declaration § 8; Roney Declaration Exh. B; Roney Declaration Exh. C (Confidentiality Agreement, dated March 7, 2011, between D4 and Infovision21). D4 was not engaged in 2010 to perform any E-Discovery consulting services for Nixon covering "identification, collection, processing, review and production" of Defendants' ESI or related consulting services in this case, Karahasanovic Affirmation § § 7-8, nor was Karahasanovic retained by Nixon to serve as a consultant or potential expert witness for Defendant. Karahasanovic Affirmation § 5.

Nixon maintains in-house staff, its Legal Technology Services department, with the capability of providing E-Discovery and ESI consulting services to Nixon in connection with this and other cases. Cressman Affirmation § § 3-5, 7; Cressman Affirmation Exhs. A & B. Decision and Order, Gordon v. Kaleida Health, 08-CV-378S(F), July 20, 2012 (Doc. No. 365) ("the July 20, 2012 D&O") at 3. Nixon recently engaged the Ricoh Company, an E-Discovery services provider, to assist it in using predictive coding, a specialized software product Defendants recently decided to use to facilitate a computer-based review of Defendants' voluminous e-mails - 300, 000 to 400, 000 - responsive to Plaintiffs' production demands. Cressman Affirmation § 5, 7; Plaintiffs' Memorandum at 11; Roney Declaration § 16; Roney Declaration Exh. D at 44, 47. Nixon has also engaged Pangea3, a leading provider of E-Discovery and ESI review services. Cressman Affirmation § 4; Cressman Affirmation Exh. B. Plaintiffs' counsel does not have an in-house litigation support capability to provide ESI consulting assistance, including assistance on Defendants' use of predictive coding. Cressman Affirmation § § 3, 5, 7.

Beginning in March 2011, Nixon requested D4 to provide scanning and coding services for 50-80 boxes containing Defendants' paper documents relating to this case.[9] Roney Declaration § § 9, 11; Karahasanovic Affirmation § § 7, 11-12. D4 prepared the documents for scanning, Karahasanovic Affirmation § 7, 9, which was performed by D4 in Rochester. Karahasanovic Affirmation § 9. Nixon requested that Defendants' documents were to be "coded for objective information (objective coding')." Karahasanovic Affirmation § 10. Objective coding is a process by which "a coder" examines a document and enters "certain categorical information [about the document][10] into a form or database, " Karahasanovic Affirmation § 11, based on examples of "document categories" and instructions to the coder for coding the document by "filling in fields in a database." Karahasanovic Affirmation § 12. As an example, the Karahasanovic Affirmation would be coded objectively as an "affirmation, " and "Karahasanovic" as its author. Karahasanovic Affirmation § 11. Based on Defendants' documents, which represented Defendants' "forms, "[11] Karahasanovic Affirmation § 13, objective information concerning the documents to be coded was entered into "assigned fields" established by Nixon, including the beginning and end of the document, box sources (referring, presumably, to the storage boxes in which the documents were contained and delivered to D4 for scanning and coding), cost center, and employee number. Karahasanovic Affirmation § § 13, 15. In coding Defendants' documents, the coders "were not asked to identify substantive case issues or make subjective decisions, " concerning the relevance or import of the documents or their contents to the issues in the case. Karahasanovic Affirmation § 12. Because the extensive number of Defendants' documents to be coded exceeded D4's capacity, D4 subcontracted the coding work to Infovision21, located in Ohio. Roney Declaration § 9; Karahasanovic Affirmation § § 10, 14. As D4's representative, Karahasanovic discussed with Nixon representatives, including Defendants' lead attorney Susan C. Roney ("Roney"), the scanning and coding work to be performed by D4 and Infovision21. Roney Declaration § 11; Karahasanovic Affirmation § § 15, 17. Karahasanovic's discussions with Nixon regarding the coding of Defendants' documents included Roney, Josh Headley, Nixon's Senior Legal Technology Specialist ("Headley"), and Nixon staff members Colleen Durawa and Julie Letgers.[12] Karahasanovic Affirmation § 15; Cressman Affirmation § 6.

Karahasanovic's discussions with Nixon covered how the documents were to be coded including the number of fields to be used for entry of information about the documents into a "form or database" indicating, for example, the various types of Defendants' documents, i.e., Defendants' record-keeping forms, memoranda, or letters, their authors and dates. Karahasanovic Affirmation § § 11, 15, 17. Karahasanovic's review of the documents was limited to determining how the documents would be coded according to the "field categories" established by Nixon, and resolving potential coding problems such as for illegible documents. Karahasanovic Affirmation § § 15-16. The purpose of the coding work for Nixon performed by D4 and Infovision21 at a cost of $50, 000 was to "facilitate [Nixon's] internal handling of data in preparation for depositions and continuing litigation" in this case. Roney Declaration § § 12-13.

The communications between Nixon's representatives and Karahasanovic preparatory to the scanning and coding of Defendants' documents "revealed the type of information they [Defendants] were interested in highlighting based on Defendants' theory of the case." Roney Declaration § § 9-10 (asserting Defendants provided Karahasanovic with attorney mental impressions in the context of "ESI search" and "issues relating to Custodians."). In numerous discussions with Karahasanovic regarding the coding work Nixon explained the significance of the documents to be coded including, for example, "what was important [to Defendants]... and... why." Roney Reply Declaration § 4. Nixon also revealed to Karahasanovic attorney "mental impressions... directly relevant to issues relating to [the] Custodians" of Defendants' documents and e-mail. Id. § 10.

In May 2011, Plaintiffs' counsel requested D4 provide ESI consulting services to Plaintiffs in connection with this case. Karahasanovic Affirmation § 18. Such services by D4 are provided by the Advisory and Consulting Group, a separate group within the D4 organization. Karahasanovic Affirmation § § 5, 7, 19, 21, 22. The D4 Advisory and Consulting Group has also provided Plaintiffs with ESI consulting services in Hinterberger v. Catholic Health Systems, Inc., 08-CV-380S(F) (" Hinterberger "), an action in this court asserting claims similar to this case against the region's other major hospital and related health care system, Cressman Affirmation § 22, for "at least a year" prior to October 2012, "without objection by Nixon." Id. § 6. Nixon was initially advised of Plaintiffs' request to D4 for ESI assistance in May 2011. Karahasanovic Affirmation § § 18-19. Nixon objected to the request based on D4's scanning and coding work for Nixon, not because D4 had provided expert or consulting services to Nixon. Karahasanovic Affirmation § 20. Despite D4's assurances, in response to an e-mail request from Roney on August 5, 2011, that the proposed consulting services D4 would provide for Plaintiffs would not involve the Defendants' documents that were the subject of the scanning and coding work performed by D4 and Infovision21 and that no D4 employees involved in that work would be involved in the future ESI consulting work by D4's Advisory and Consulting Group for Plaintiffs, Roney again objected to the proposed consulting work based on D4's performance of the document scanning and coding work for Nixon. Karahasanovic Affirmation § 21; Roney Declaration § 14. Principal members of the Advisory and Consulting Group including Peter Coons ("Coons"), a D4 senior vicepresident and Cynthia Courtney ("Courtney"), who joined the Advisory and Consulting Group as a vice-president in February 2012, did not work with Karahasanovic on Nixon's scanning or coding project. Karahasanovic Affirmation § § 22, 23, 25. After considering Nixon's objection to D4 providing litigation consulting services to Plaintiffs, D4 determined it would, notwithstanding Nixon's objection, provide ESI consulting services to Plaintiffs and, eventually informed another Nixon partner, Mark A. Molloy ("Molloy"), who is a lead counsel for defendants in the Hinterberger case, of D4's decision to provide E-Discovery consulting services to Plaintiffs. Karahasanovic Affirmation § 21 ("Eventually, [D4 decided]... that the consulting team would work with Plaintiffs [and] I later informed [Molloy] at [Nixon] of that decision").[13] Roney was not made aware of D4's decision until Plaintiffs attempted to discuss, with Courtney's assistance, during a scheduled telephone conference call, the terms of a protocol regarding use of predictive coding in this case with Defendants' counsel, Cressman Affirmation § 7, on September 6, 2012. Roney Reply Declaration § § 21, 23.

Nixon attorneys, Molloy, Todd R. Shinaman ("Shinaman") and Joseph A. Carello ("Carello""), counsel to defendants in Hinterberger, along with Headley, participated in several phone calls in 2011 with Plaintiffs' counsel and Coons and, after February 2012, Courtney, regarding various ESI matters in Hinterberger without objection by Nixon to the D4 consultants' participation. Cressman Affirmation § 6. Roney also participated, along with Shinaman, in conference calls with Plaintiffs' counsel and Courtney, which occurred in February 2012, to resolve ESI issues in connection with enforcement of a subpoena served on a third-party in the District of Maryland, "in this case and in the Hinterberger matter, " id., without any objection to Courtney's participation and assistance to Plaintiffs being voiced by the participating Nixon attorneys. Id. ("Nixon attorneys, including Susan Roney and Todd Shinaman, were aware that Ms. Courtney was acting as plaintiffs' ESI consultant in Hinterberger and they participated in numerous telephone conferences and conferrals with Ms. Courtney acting as plaintiffs' ESI consultant without objection."); Plaintiffs' Memorandum at 11-12 ("Susan Roney has participated in telephone conferences in a third-party subpoena enforcement action in this [ Gordon ] case in the District of Maryland with Ms. Courtney acting as plaintiffs' ESI consultant... without objection"). Acknowledging that while the conference calls described by Plaintiffs among counsel in Gordon and Hinterberger occurred, Roney denies any awareness that, when the conference calls took place, Courtney also participated in such calls. Roney Reply Affirmation § 21.

Plaintiffs' engagement of the D4 Advisory and Consulting Group and Defendants' objection to D4's assistance to Plaintiffs in this case was discussed with the court during a discovery status conference, related to resolution of ESI issues concerning production of Defendants' e-mails, on January 11, 2012. Roney Declaration § 17; Roney Declaration Exh. D (a partial transcript of the conference). At the conference, Plaintiffs advised the court that D4 had been retained by Plaintiffs to operate a "hosting program" to enable Plaintiffs to access and review the ESI data produced in the case using Relativity software, as the parties had discussed at that time, and an "internet based interface" ("interface") which had been previously developed by Plaintiffs' law firm and D4 to facilitate ease of access and review of Defendants' ESI by Plaintiffs' counsel in this case and other cases litigated by Plaintiffs' attorneys. Id. at 40, 42-44, 46-47. Plaintiffs represented to the court that only D4 provides this capability as an E-Discovery services vendor to Plaintiffs because of the interface customized for use by Plaintiffs' counsel. Id. at 42-43, 46-47. Plaintiffs could have retained other vendors to provide hosting services using Relativity software, Roney Declaration § 16. Recognizing the possibility that Defendants' "potentially privileged, " Roney Declaration Exh. D at 43, information could be misused as a result of D4 providing ESI consulting services to Plaintiffs through its Advisory and Consulting Group, having also provided the scanning and coding services for Defendants' documents, the court suggested, but did not direct, Plaintiffs make arrangements with another vendor to assist Plaintiffs in order to avoid potential disputes with Defendants and related motion practice which could disrupt the progress of production of Defendants' e-mails, id. at 46, and delay completion of discovery in this case. Id. at 43-45, 46, 48. In response to Defendants' objection to D4 providing ESI consulting assistance to Plaintiffs, Plaintiffs denied the existence of a disqualifying conflict in Plaintiffs' use of D4 as explained by Plaintiffs' attorneys, and that Plaintiffs would benefit from using the interface Plaintiffs counsel had developed with D4 for this case and D4's familiarity with Plaintiffs' counsel's ESI discovery needs in this case, id. at 42-43. Notwithstanding the court's admonition, because of Plaintiffs' counsels' "established relationship with D4, " and the time spent acquainting D4 with the background of the case, as well as the additional time required to develop a nonstandard internet-based ...

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