ENERGY INTELLIGENCE GROUP, INC., et al. v. CANAL BARGE COMPANY, INC CIVIL ACTION NO. 12-2107 United States District Court, E.D. Louisiana Signed October 28, 2013 Counsel Robert L. Powley, James Martin Gibson, Michelle Katherine Riley, Stephen M. Ankrom, Powley & Gibson, P.C., New York, NY, Christophe B. Szapary, Provosty & Gankendorff, LLC, New Orleans, LA, for Energy Intelligence Group, Inc., et al. Mark Aaron Cunningham, Adrienne L. Ellis, Michael William Magner, Jones Walker, New Orleans, LA, for Canal Barge Company, Inc. Knowles, Daniel E., III, United States Magistrate Judge ORDER *1 On September 11, 2013, Plaintiffs' Motion to Compel [Doc. #82], Plaintiffs' Supplemental Motion to Compel [Doc. #105] and defendant's Motion to Compel [Doc. #107] came on for oral hearing before the undersigned. Present were Robert Powley and James Gibson on behalf of plaintiffs and Michael Magner and Adrienne Ellis on behalf of defendant. After the oral hearing, the Court took the motions under advisement. Having reviewed the motions, the oppositions and the case law, the Court rules as follows. I. Background The complaint alleges as follows. Defendant has subscribed to The Oil Daily for over 20 years. When plaintiffs published The Oil Daily in hard-copy form, defendant circulated issues internally by attaching a distribution list to the front cover of each issue. In the late 1990s, plaintiffs started to publish The Oil Daily in electronic format. To allow its employees to review each issue, defendant developed a system substantially identical to its hard-copy distribution system for giving designated employees access to the newsletter without copying, duplicating or forwarding the electronic version of the newsletter. Plaintiffs allege that after they converted The Oil Daily to electronic format, defendant can not permit any person other than the individual employee named on the subscription to review or to use it. Plaintiffs thus allege that defendant committed willful copyright infringement every time that it permitted more than one employee to view the electronic copy of the newsletter. Defendant contends that its conduct was at all times lawful and that plaintiffs expressly encouraged defendant to make full use of its newsletter without imposing any limitation on the number of users who can access the newsletter. II. Plaintiffs' Motion to Compel [Doc. #82] Plaintiffs allege that defendant produced only 21 per cent of the .NSF logs from December 13, 2006 to October 30, 2012 and that the .NSF logs produced are only the product of a filtered search by defendant. The data produced is thus the result of a “log analysis” performed on the actual .NSF files, which analysis is the result of a search run on the .NSF files. Plaintiffs contend that they are entitled to documents reflecting defendant's infringing activities for each of the over 3,000 separate works of the Oil Daily. Plaintiffs maintain that defendant must produce the raw, unadulterated, unencrypted .NSF files in its possession. Plaintiffs also argue that they are entitled to supplemental responses to their interrogatories regarding the receipt, use, access, forwarding, distributing and copying of the Oil Daily. Plaintiffs contend that defendant has all of the responsive information from its log files. Should defendant be unable to produce any further information, plaintiffs ask the Court to order it to produce all of the data on its back-up tapes that is relevant to its receipt, use, access, forwarding, distributing and copying of the Oil Daily. Plaintiffs maintain that the back-up tapes will prove additional instances of forwarding and infringement. Such tapes also include the names of the employees who received e-mail notifications that the Oil Dailyhad arrived. *2 Defendant notes that plaintiffs misunderstand the nature of LOG.NSF files. Noting that a log file specific to the Oil Daily does not exist, defendant notes that had it not searched its files for references to the Oil Daily, it would have produced 316 gigabytes of data revealing every time any user accessed any mailbox. Defendant thus hired an outside consultant to search the files for all activity related to the Oil Daily. The Declaration of Keith Duke, the outside consultant, confirms that he extracted all data relating to the Oil Daily. Duke searched 57 LOG.NSF files covering 923 days during the relevant time period. Duke confirms that all other files would reveal nothing related to the Oil Daily. Defendant contends that plaintiffs offer no reason why their technical advisors should have access to a database for defendant's entire computer system. Defendant also argues that plaintiffs fail to demonstrate why its responses to Interrogatory Nos. 1, 2 and 3 are incomplete. Defendant notes that this Court has denied earlier efforts to force it to supplement its responses. The best evidence of the employees who accessed the Oil Daily mailbox are the Session Activity reports, which defendant has produced along with summaries. Defendant also argues that restoring and processing its back-up tapes would cost hundreds of thousands of dollars. Defendant details the process that it would take to restore such tapes. Defendant also contends that the restoration of the back-up tapes would reveal only cumulative information that plaintiffs already have. For example, defendant notes that plaintiffs argue that they do not possess all of the e-mail notifications, but defendant maintains that there is no dispute that the notifications went out every day. In their reply, plaintiffs maintain that a consultant created the Session Activity Reports (“SARs”), and they are thus not the underlying data in the . NSF log files. Plaintiffs contend that the SARs are Duke's analysis of the data in the log files. Plaintiffs argue that defendant must produce the data as it is kept in the ordinary course of business. Plaintiffs allege that the unadulterated files will contain more information, including the number of documents retrieved or stored from/to a given .NSF file, the number of bytes read or written from/to each file, and the amount of time these transactions took. Plaintiffs argue that since there is no log file specific to the Oil Daily, defendant must produce the entire unadulterated native .NSF files. Plaintiffs maintain that the back-up files are necessary because defendant has failed to sufficiently respond to their interrogatories. Plaintiffs note that defendant's expert on Lotus Notes questioned the value of the .NSF files that defendant produced. Plaintiffs maintain that the log files produced do not directly show access to the Oil Daily. Plaintiffs contend that the back-up files will contain more evidence of its employees' activities that constitute infringement. Plaintiffs argue that defendant's argument that it is unduly burdensome and highly expensive to restore the back-up tapes is an exaggeration. Plaintiffs maintain that each issue of the Oil Daily is a protected work, and they are entitled to damages as to each separate issue. This information will only be found in the restored back-up files. In a sur-reply, defendant reiterates that it has produced every single user log that has any bearing to plaintiffs or the Oil Daily. Defendant did not create, alter or summarize any documents. Using a search term is the correct “analysis,” according to IBM, the developer of Lotus Notes. Through its own efforts, defendant has identified additional metadata term “User Activity Detail” that plaintiffs never sought. Defendant has offered to produce the material at its own cost. *3 Defendant notes that plaintiffs fail to identify what evidence they will find through restoring the mail files from back-up tapes, a process that will cost hundreds of thousands of dollars and reveal no new evidence. After the oral hearing, the Court took the motion under advisement to allow plaintiffs to obtain a new expert to review the discovery produced by defendant. The District Court ordered them to disclose the identity of the expert no later than August 15, 2013. Defendant has also obtained a new expert per its sur-reply and has agreed to produce the newly-discovered information. The Court will rule on this motion in tandem with the supplemental motion to compel, outlined below. III. Plaintiffs' Supplemental Motion to Compel [Doc. #105] Plaintiffs' expert has reviewed all of the information produced by defendant and has outlined the documents that defendant has yet to produce and which it should have (per Court order). Plaintiffs ask the Court to order defendant to produce the LOG.NSF files that are distinct from the User Activity Reports that defendant has already produced. Plaintiffs contend that such files will show which employees accessed the e-mail box oliver.bosley@canalbarge.com on a particular day. This e-mail box contained e-mails from plaintiffs to which Oil Daily was attached. Plaintiffs also ask the Court to order defendant to produce the OilDaily.NSF file that contains the “Unread Marks” table. These logs will reveal each time an employee of defendants accessed a particular issue of Oil Daily.Plaintiffs seek these logs from the entire time period during which defendant used the Lotus notes agent to infringe Oil Daily. Plaintiffs contend that unless disabled by defendant, this table will be intact and date from 2003. Plaintiffs also seek the mail files of employees of defendant who had access to Oil Daily. Plaintiffs argue that defendant's infringement began in 1999, but it has produced log files that go back only to July 2006. Plaintiffs thus seek the documents from the back-up tapes. Plaintiffs maintain that defendant will be producing documents from 29 or fewer mail files from each back-up tape. Plaintiffs attach the names of the mail files as Exhibit J. Plaintiffs thus argue that defendant's estimated cost of $188,400 for retrieval of the data is inflated. Plaintiffs believe that defendant infringed 3,190 copies of Oil Daily, and such a large-scale infringement should not serve as the basis for objecting to discovery on the ground that it is unduly burdensome. Plaintiffs argue that the discovery requests are specific, and they lack information as to which copies of Oil Daily defendant infringed only by defendant's clever way of thwarting detection of its copyright infringement. The data is unavailable from any other source. Plaintiffs contend that defendant has produced fewer than 200 of the thousands of “notification e-mails” that were sent out on a daily basis to its employees. Plaintiffs note that the files may contain other, relevant evidence given that employees often purge their e-mail boxes of e-mails. Plaintiffs maintain that the back-up tapes will be invaluable for the time periods for which log files do not exist. Lastly, plaintiffs contend that defendant's Rule 30(b)(6) witness was wholly unprepared to speak to numerous topics, including Topic No. 8, in plaintiffs' notice of deposition. In one e-mail, referenced in Topic 8, one of plaintiffs' employees informed one of defendant's employees, Jared Black, that the subscription was for one person only. Plaintiffs thus seek information as to further communications within defendant on this subject by Black. Plaintiffs maintain that defendant produced no one knowledgeable to testify as to the e-mail. Black still works for defendant. Plaintiffs ask the Court to order defendant to interview Black and produce such information to them. Plaintiffs seek a verified affidavit that may be admitted as evidence at trial. *4 Defendant contends that it has produced all relevant documents located within the restored LOG.NSF database files. Defendant maintains that it only searched the logs for references to Oil Daily because the full server logs contain data for every instance that any user accessed any database on the server. Defendant argues that the LOG.NSF file in its native format contains database usage information for the entire business, and plaintiffs' request is thus akin to asking for all of defendant's documents. Defendant contends that plaintiffs' expert's statement that the file would be “useful to provide additional context” for his analysis in no way meets their heavy burden to obtain the production here. Defendant also notes that the “Unread Marks” table does not exist as an independent document or file that defendant can simply locate and produce in normal commercial practice. Nor can such data be extracted with a program available from IBM or a third party. Defendant maintains that to extract the information, it would need to engage its expert to write a sophisticated and custom program. Further, the database contains highly-sensitive proprietary information that is not relevant to this lawsuit. Defendant also argues that the information is cumulative and duplicative and that the unread marks were reset when defendant upgraded its servers in 2010. Defendant contends that in light of the expansive discovery that has already occurred, the cost of restoring and processing mail files from its back-up tapes—whether $50,000 or $188,000—is too much. Defendant maintains that any documents on the back-up tapes will disclose no more than what plaintiffs already know. Defendant notes that the “notification e-mails” that plaintiffs seek are no more than an alert that new mail had arrived in the Oils Daily e-mail box. With regard to the deposition, defendant notes that this Court granted in part its motion for protective order and limited the deposition topics and time—two hours—for the second Rule 30(b)(6) deposition. Plaintiffs now seek a third deposition. Defendant contends that plaintiffs had ample time during discovery to depose Jared Black and that a Rule 30(b)(6) deposition is not a test. For the following reasons, the Court denies the two motions. The reason that the District Court continued the deadline for the parties' expert reports was because plaintiffs' alleged expert was actually not an expert and did not understand the value of the data that defendant had produced. The District Court thus gave plaintiffs the benefit of the doubt and allowed them extra time to obtain a new expert. It appears to the Court that defendant has given plaintiffs all of the data relevant to the Oil Daily—that is the reason that defendant performed a search of its files for results tailored to the Oil Daily, and the Court finds this to be an acceptable approach. Defendant has represented to the Court under Federal Rule of Civil Procedure 11 that there are no further relevant documents that it is withholding. The requests—as written and as interpreted by plaintiffs—are overbroad, unduly burdensome, potentially costly and would lead to the production of much irrelevant information. Indeed, compliance with the requests as interpreted by plaintiffs would require defendant to produce all of its documents. At the oral hearing, plaintiffs maintained that defendant's method of production demonstrates only access to the e-mail box at issue and does not indicate which issues, of the approximately 2,000 issues in the box each individual accessed. But plaintiffs cite the Court to no case law—nor has the Court found any—that would require a party to create a highly sophisticated, one-of-a-kind computer program that may produce relevant—and not duplicative—information. *5 With regard to the deposition, plaintiffs had ample time to depose Jared Black during discovery, and they failed to do so. It is not incumbent on a corporate representative to know every detail about potential e-mails from one of its lower employees. In any event, plaintiffs now have the opportunity to depose Black should they wish to do so. The District Court has recently extended the discovery deadline until December 23, 2010 and allowed each party to take an additional two depositions. [Doc. #140]. IV. Defendant's Motion to Compel [Doc. #107] Defendant asks the Court to compel plaintiffs to respond to certain interrogatories and requests for production. Requests of Production (“RFPs”) Nos. 4 and 5 seek the production of documents related to plaintiffs' use of third-party content in Oil Daily. Defendant has asserted the affirmative defense of fair use to plaintiffs' claims. A key factor in the analysis of the fair-use defense is the nature of the work, including the degree of originality or creativity in that work and whether it is factual or fictional. Defendant contends that any document related to plaintiffs' use of facts, analysis or entire articles from a third party will demonstrate the limited scope of plaintiffs' copyright in operating a news service. Defendant notes that plaintiffs' employees have admitted at depositions that they often lifted entire articles from Reuters and other third parties. And plaintiffs' own executive in charge of copyright enforcement admitted at his deposition that the subscription agreement far exceeds plaintiffs' copyright ownership. Defendant thus maintains that any agreement with Reuters and others are relevant. Defendant also notes that plaintiffs have calculated damages on a per article basis, and some of the articles are the property of Reuters and other third parties. Defendant also argues that with regard to press releases relied on by Oil Daily employees, to the extent that Oil Daily is simply regurgitating content from material already publicly disseminated, there can be no claim of copyright. Defendant seeks only those press releases relied on in 2012. Defendant maintains that plaintiffs are engaging in a litigation-dependent business model, even rewarding their employees and executives based in part on their success in litigation. Interrogatory No. 1 and RFP Nos. 1 and 2 seek information with regard to the revenue and compensation of John Hitchcock, plaintiffs' executive in charge of copyright enforcement, and Mark Wellman, also involved in plaintiffs' copyright ligation but who is not an attorney. Defendant has asserted the affirmative defense of copyright misuse and unclean hands and argues that this information will support plaintiffs' misuse of their allegedly overbroad copyright. Lastly, Interrogatory No. 2 seeks a description of plaintiffs' relationship with Wellman. While Wellman is identified on 20 of the 31 entries on plaintiffs' privilege log, no one can confirm that he is an employee of plaintiffs as he is described merely as an advisor. Because he is not an attorney, defendant seeks to challenge any claim of privilege but can not do so until it understands who Wellman is. Plaintiffs maintain that any contract with Reuters and any press releases are irrelevant. Plaintiffs contend that the publications are highly original, consisting of long original articles at the forefront of Oil Daily and many original graphs and charts. They contend that their highly skilled reporters do not merely convey facts in their articles. They argue that they would not have been able to attract and maintain their subscribers for over six decades if Oil Daily were simply a regurgitation of news otherwise available. Citing case law, they note that compilations of facts—if that is even what their articles only contain—are within the subject matter of copyright. Plaintiffs note that defendant did not simply copy facts from Oil Daily but entire issues. Citing case law, plaintiffs note that the affirmative defense of fair use does not apply when a party copies the entire—or almost the entire—copyrighted work. *6 Plaintiffs also argue that such documents do not support defendant's affirmative defense of copyright misuse. Plaintiffs contend that they do not attempt to obtain an exclusive right or a limited monopoly not granted by the Copyright Office. They maintain that they merely seek to enforce their rights in the copyrights granted by such office. Plaintiffs also maintain that not one of their subscription agreements claims to assert ownership over any facts in Oil Daily. Lastly, plaintiffs argue that such documents are irrelevant to their per-article damages calculation. Plaintiffs assert that defendant's requests are unduly burdensome and costly. They published 258 issues of Oil Daily that contained 3,800 articles in 2013 alone. Amassing press releases for such a time period alone would be nigh impossible given that there is no policy to retain press releases. Plaintiffs argue that they are not required to seek out documents from unrelated third parties to respond to a document request. They contend that production of their agreements with Reuters may negatively impact their relationship with it given the strict confidentiality provisions therein. Plaintiffs also maintain that documents related to their revenue from litigation is irrelevant and that information related to the compensation of their employees is private and confidential. Plaintiffs contend that defendant has wholly failed to demonstrate any bad acts on their part, and their allegations are no more than an attempt to smear them for enforcing their copyrights. Plaintiffs argue that any defense of unclean hands must identify an injury to the party asserting it, and defendant has not identified any injury to it. Plaintiffs contend that courts only apply this defense when the plaintiff has engaged in gravely wrong conduct such as fraud on the Copyright Office. Lastly, plaintiffs maintain that they have adequately identified their relationship with Wellman. Their verified interrogatory responses indicated that he is the “Manager, Intellectual Property” and has been in plaintiffs' employ since April 1, 2009. They also responded that his communications with counsel with regard to this litigation are protected by the attorney-client privilege. For the following reasons, the Court grants the motion in part and denies it in part. The Court grants the motion with respect to RFP No. 5. While it may be burdensome, the press releases are reasonably calculated to lead to the discovery of admissible evidence and are relevant to defendant's affirmative defense of fair use. Given the testimony of plaintiffs' reporters at their depositions, the press releases may demonstrate the originality, or lack thereof, of Oil Daily articles. The Court denies the motion with regard to all other requests. The Court finds that any contract with Reuters and other third parties are not reasonably calculated to lead to the discovery of admissible evidence. If there are press releases from Reuters and others, they will appear in the production of the press releases. And while plaintiffs may be pursuing a litigation-based business model, that, in and of itself, does not constitute the gravely wrong conduct necessary to support defendant's affirmative defenses. Moreover, the compensation of plaintiffs' employees is confidential and irrelevant to any copyright claims or defenses here. Lastly, the Court concludes that plaintiffs have responded sufficiently to the interrogatory regarding Wellman. Accordingly, this issue is moot. V. Conclusion IT IS ORDERED that Plaintiffs' Motion to Compel [Doc. #82] is DENIED. *7 IT IS FURTHER ORDERED that Plaintiffs' Supplemental Motion to Compel [Doc. #105] is DENIED. IT IS FURTHER ORDERED that defendant's Motion to Compel [Doc. #107] is GRANTED IN PART and DENIED IN PART as outlined above.