Champion Foodservice LLC, Plaintiff, v. Vista Food Exchange, Inc., et al., Defendants CASE NO. 1:13-cv-1195 United States District Court, N.D. Ohio, Eastern Division Signed March 20, 2015 Counsel Christine M. Kuntz, Davis & Young, Cleveland, OH, Paul D. Eklund, Collins, Roche, Utley & Garner, Westlake, OH, R. Guy Taft, Stephen E. Schilling, Emily T. Supinger, Strauss & Troy, Cincinnati, OH, for Plaintiff. Adam J. Hensel, John F. Marsh, Hahn, Loeser & Parks, Columbus, OH, Jonathan C. Scott, Dallas, TX, Martin D. Koop, Tiffin, OH, for Defendants. Lioi, Sara, United States District Judge ORDER *1 This matter is before the Court on the objection of Champion Foodservice (“Champion”) (Doc. No. 339 (“Obj.”)) to a proposed order issued by the Special Master (Doc. No. 338 (“Proposed Order”)) regarding a motion by defendants Vista Food Exchange (“Vista”) and Joshua Newman (“Newman”) (collectively, “defendants”) for entry of a discovery order on “applications” fully briefed and submitted to the Special Master (Doc. No. 254 (“Deft's Motion”)).[1]Defendants have responded to Champion's objection. (Doc. No. 349.) For the reasons contained herein, Champion's objections are overruled. A. Special Master's Proposed Order As the Special Master explains in the proposed order, Vista would informally make “applications” to the Special Master for resolution of discovery issues. At issue here are Vista's applications, in the form of letters, dated April 15, 2014 and May 27, 2014. (Proposed Order at 14398.[2]) Vista's application of April 15th seeks an order requiring Champion to produce a quarterly accounting to Vista of attorney fees and costs. The application of May 27th consists of two parts. Part 1 seeks production of all communications between Vista and Champion during the approximately two years that they worked together. Part 2 seeks to compel Champion to provide certain electronically stored information for inspection. (Id.) Neither party has objected to the Special Master's proposed order as to Vista's April 15, 2014 application. Champion's objection is limited to the Special Master's resolution of Vista's May 27, 2014 application. (Doc. No. 339-1 (“May 27, 2014 Letter”).) The Court's discussion of the proposed order will be limited to that topic. The Special Master's discussion of parts 1 and 2 of the May 27th application are quoted below: May 27, 2014 Application (Part 1) As a first part of its application of May 27, 2014, Vista seeks an order requiring the production of all communications between Vista and Champion during their relationship. Vista complains that Champion has refused to provide such documents, while Champion responds that “the request for every communication between Vista and Champion over their more than 2 years of business dealings, which would include every e-mail, letter, and other communication without any reference to the matters at issue in this lawsuit is entirely [sic] broad and unduly burdensome.” As to recorded conversations, Champion contends that it produced at least 80 separate recordings, and that Vista is in possession of a “Toshiba hard drive partial copy” that has the same additional recordings that Champion has. Champion contends that there are no recordings of conversations that have not been produced or are not otherwise in Vista's possession. As to the e-mails, letters, and other communications, Champion's complaint is that the request is “without any reference to the matters at issue in this lawsuit.” Champion does not attempt to quantify the volume of documents that would be deemed responsive to the request that would make it overly broad and burdensome. Indeed, the nature and extent of any correspondence between Champion and Vista, apart from that which might be germane to this litigation, has not been identified. *2 While the Special Master is of the opinion that the production of recorded conversations appears to be complete, documents regarding communications between Vista and Champion do not even appear to have commenced. Vista should refine its document requests regarding the correspondence between Vista and Champion to limit it to matters at issue in this lawsuit or which might lead to the discovery of admissible evidence in that regard. Champion should then provide responsive documents. May 27, 2014 Application (Part 2) Nothing seems more hotly contested in this case than issues of theft of trade secrets, spoliation of evidence, deletion of files, and things of that nature. As a part of its application to the Special Master on May 27, 2014, Vista sought a forensic inspection of Champion's electronic systems. Particularly, it sought six (6) categories, each of which seems germane to the issues in this case, particularly as they relate to trade secret information and Matthew Gibson's purported wrongdoings. The level of distrust between the plaintiff and defendants in this case is such that what one could normally leave to the candor and good faith of the opposing counsel in responding to a discovery request is better left to an independent third party, such as a forensic inspector. While the Special Master is mindful of the hesitancy to allow on-site inspections of electronic media, the distrust among the parties in this matter pleads for such intervention of a forensic inspection of the electronic equipment. (Proposed Order at 14399-14400.) The Special Master made three recommendations in connection with Vista's May 27, 2014 application. As to Part 1 of the May 27th application, the Special Master recommended, at his numbered paragraphs 2 and 3, that: Within seven days (7 days) of this Order, Vista shall refine its document requests regarding the correspondence between Vista and Champion to limit those requests to matters at issue in this lawsuit or which might reasonably lead to the discovery of admissible evidence[;] and Within fourteen days (14 days) after receipt of the refined document requests, Champion shall provide responsive documents. As to Part 2 of the May 27th application, the Special Master recommended, at his numbered paragraph 4, that: With regard to inspection of electronic equipment, within fourteen days (14 days) of the entry of this Order, Vista's forensic inspector shall be provided access to Champion's computer system for access to and acquisition of the electronic/digital information limited to the six (6) categories set forth in the letter of June 9, 2014, from R. Guy Taft to the Special Master and presented on page 2 of that letter. The forensic inspector shall proceed efficiently, effectively, under the protective order, and with minimal intrusion into the operations of Champion, and Champion shall cooperate to the fullest extent to assist the forensic inspector in his/her undertaking.[3] (Proposed Order at 14401 (footnote added).) B. Champion's Objections and Analysis *3 Rule 53 of the Federal Rules of Civil Procedure provides that a Court must review the Special Master's factual and legal conclusions specifically objected to by either party, and decide de novo all objections to findings of fact and conclusions of law made by the Special Master. (Fed. R. Civ. P. 53(f)(3) & (4).) 1. Timeliness Champion's first basis for objection goes to the timeliness of Vista's request. But timeliness is not an issue because it is undisputed that Vista's request for documents is long standing, going back to October 2013. (May 27 Letter at 14418.) With respect to Vista's request for inspection of Champion's computer records, the request occurred before the end of discovery. Champion's other timeliness objection relating to the deadline for the close of discovery on May 31, 2014 is also unavailing, inasmuch as the Court has now permitted Champion to amend it complaint to assert new claims for lost profits, thereby necessitating the reopening of discovery on a limited basis. The discovery proposed by the Special Master's order will not result in any further delay in the case. Champion's timeliness arguments are not well taken. 2. Documents (May 27th Application—Part 1) With respect to the Vista's request for documents, Champion contends that Champion should not be required to produce documents regarding communications between Champion and Vista because Vista already has the documents and the documents are “equally available to both parties.” In support of this argument, Champion cites this Court's decision in Laukus v. Rio Brands, No. 5:07CV 2331, 2011 WL 1831761, at *5 (N.D. Ohio May 12, 2011). This citation does not support Champion's argument. In Laukus, the Court found that the tax liens at issue were a matter of public record and equally available to both parties. The documents requested by Vista are not public records, and the copies that Champion has of these documents may well not be identical, for various reasons, to whatever documents Vista may or may not have in its possession. Moreover, Vista explains that while Champion has represented that it backs up its electronically stored information, Vista does not. Under these circumstances, it is disingenuous for Champion to claim that Vista has equal access to the information. The Special Master's proposed order requires Vista to refine its document request for correspondence to matters at issue in this lawsuit, or matters that might reasonably lead to the discovery of admissible evidence. This refinement sufficiently remedies Champion's claim that the requests are overbroad. The Court concludes that Champion's objections to the Special Master's recommended resolution of Part 1 of the May 27th application[4] are not well-taken, and are overruled. As of the date of this Order, Vista and Champion shall comply with the instructions and timelines detailed in the Special Master's proposed order regarding Part 1 of the May 27th application. (Proposed Order, ¶¶ 2-3 at 14401.) 3. Electronically Stored Information (May 27th Application—Part 2) With respect to Vista's request to inspect Champion's electronically stored information, Vista seeks this discovery “to determine what information, data, and documents Champion had in its possession at the time it claims otherwise.” (May 27, 2014 Letter at 14421.) Champion contends that there is little question that Matthew Gibson spoliated documents on the laptop so the requested discovery by Vista is pointless because the documents on Champion's computer cannot be compared to what Gibson erased from the laptop. But Champion misses the point. Vista's discovery relates to Champion's claim that because of Gibson's alleged spoliation, Champion did not have access to documents and information it needed to prepare and submit a bid to the Ohio Association of Foodbanks in 2013. Vista is entitled to see what relevant documents Champion had in its possession at the time. *4 Champion also cites Local Rule Appendix K, Section 4.c[5] in objecting to the proposed order, arguing that Vista has not established good cause and exceptional circumstances to warrant on-site inspection of Champion's electronically stored information. Additionally, Champion maintains that this consideration was never addressed by the Special Master. The Court disagrees—this matter was directly addressed as reflected in the Court's quote from the Special Master's proposed order. The Special Master found Vista's electronic discovery request germane to the issues in the lawsuit and stated that he was “mindful of the hesitancy to allow on-site inspections of electronic media.” The record created by the parties in this case speaks for itself, and the Special Master recognized that “what one would normally leave to the candor and good faith of opposing counsel in responding to a discovery request is better left to an independent third party, such as a forensic inspector.” As a consequence, the Special Master concluded that “the distrust among the parties in this matter pleads for intervention of a forensic inspection of the electronic equipment.” The Court agrees. Regretfully, the parties and their counsel have openly accused each other of, among other things, lying, deceit, fraud, and destruction of evidence, and, in turn, asked the Court for judgment or dismissal of the case as a sanction. The level of distrust and animosity displayed by the parties and counsel, and lack of cooperation in discovery, is unusually high and extremely disconcerting. The parties and counsel themselves have created an atmosphere that warrants extraordinary circumstances and establishes good cause for an on-site inspection of Champion's electronically stored information. Accordingly, Champion's objections to the Special Master's recommended resolution of Part 2 of the May 27th application[6] are not well-taken, and are overruled. C. Process for Discovery of Electronically Stored Information Vista shall be permitted by Champion to conduct on-site discovery of Champion's electronically stored information with respect to the categories of information outlined in the Special Master's proposed order. (Proposed Order, ¶ 4 at 14401.) This discovery shall be completed by June 30, 2015. The parties shall forthwith meet and confer and jointly: (1) select a forensic expert to conduct the inspection of Champion's electronically stored information; (2) agree upon the search terms to be utilized by the forensic expert; (3) specify the form or forms in which the electronically stored information is to be produced; and (4) select a date for the on-site discovery. See Fed. R. Civ. P. 34(b); Local Rules of the Northern District of Ohio, App. K (“Default Standard for Discovery of Electronically Stored Information”). The parties shall file a joint notice, no later than April 15, 2015, identifying the selected forensic expert, search terms, form of production, and date for the on-site discovery. If the parties cannot reach agreement on any of the above, the Court will intervene. The Special Master did not address the allocation of the cost of discovery of Champion's electronically stored information, and no estimate of the cost of the forensic expert to perform this discovery has been provided. Normally, “ ‘the presumption is that the responding party must bear the expense of complying with the discovery requests.’ ” Laethem Equip. Co. v. Deere & Co., 261 F.R.D. 127, 145 (E.D. Mich. 2009) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 358, 98 S. Ct. 2380, 57 L.Ed. 2d 253 (1978)). However, the Court has discretion to shift all or part of the cost of producing electronically stored information to the requesting party. Id. (also citing Commentary to the 2006 Amendment to Fed. R. Civ. P. 26(b)(2)); Fed. R. Civ. P. 26(b)(2)(B) (“The Court may specify conditions for discovery.”). *5 In this case, among the categories of Vista's request for Champion's electronically stored information, is backup and deleted material, hence the need for a forensic computer expert to conduct the discovery. (June 9, 2014 Letter at 10199.) “Backup tapes” have been identified as an example of electronically stored information that is not reasonably accessible. Id. (citing John B. v. Goetz, 531 F.3d 448, 459 (6th Cir. 2008); The Sedona Principles, Second Edition: Best Practices, Recommendations & Principles for Addressing Electronic Document Production at 46; 8 Wright, Miller, & Marcus, Fed. Prac. & Proc. Civ.2d § 2008.2). Vista's discovery request as to deleted material speaks for itself as an example of electronically stored information that is not reasonable accessible. Discovery of electronically stored information that is not reasonably accessible is one basis upon which the Court may exercise of its discretion to shift discovery costs from the responding party to the requesting party. Id. (citing Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 319-20, 323-24 (S.D.N.Y. 2003)). The Court also notes that the plaintiff has borne the cost of the forensic analysis of the laptop computer used by defendant Gibson prior to his departure from Champion. (Doc. No. 20 (Report of Parties' Planning Meeting) at 308.) Accordingly, given the nature of the accessibility of the electronically stored information sought by Vista, the Court exercises its discretion to shift the cost of the forensic expert to Vista as the requesting party. D. Conclusion For the reasons contained herein, Champion's objections to the Special Master's proposed order are overruled, and the Court approves and adopts the same, as refined herein. The parties are hereby ordered to fully cooperate with each other as to the discovery and deadlines ordered herein. Vista shall complete the discovery of Champion's electronically stored information by June 30, 2015, and shall be responsible for paying the costs for the forensic examination. Vista's motion (Doc. No. 254) is rendered moot by this Order, and the Clerk is directed to administratively terminate the motion. IT IS SO ORDERED. Footnotes [1] The Court referred this matter to Special Master Ray Weber for entry of a proposed order. (See Doc. No. 262.) Plaintiff opposed defendants' motion. (Doc. No. 284.) [2] References to page numbers are to the page identification numbers generated by the Court's electronic filing system. [3] The June 9, 2014 letter is attached to Champion's opposition (Doc. No. 284) to Vista's motion (Doc. No. 254) before the Special Master. (Doc. No. 284-3 (“June 9, 2014 Letter”).) In summary, the inspection categories are limited to information related to Matthew Gibson's access to the system, Champion's back up records the month before Gibson resigned, the date of his resignation, and the date Champion filed its lawsuit in Crawford County, lists of documents/data created before Gibson's resignation, and system information regarding documents/data deleted from the system. (June 9, 2014 Letter at 10199.) [4] See Proposed Order, ¶¶ 2-3 at 14401. [5] “On-site inspections of electronic media under Fed. R. Civ. P. 34(b) shall not be permitted absent exceptional circumstances, where good cause and specific need have been demonstrated.” [6] See Proposed Order, ¶ 4 at 14401.