A two-week-late response to requests for production, insufficient and incomplete produced documents and the possibility of a court-imposed e-discovery vendor compose this too-little-production-too-late case of Logtale, Ltd. v. IKOR, Inc.

The 2011 lawsuit began when Logtale, Inc., a shareholder in IKOR, Inc., a pharmaceutical company that develops bovine-derived oxygen therapeutics, alleged that IKOR and its two officers had made misrepresentations to Logtale in order to convince them to invest.  The lawsuit included “breach of fiduciary duties, breach of contract and breach of the implied covenant of good faith and fair dealing.” IKOR responded with its own counterclaims.

The Defendants would also later respond with delays, a “dearth of responsive documents,” inadequate interrogatory responses and overall discovery problems. The Plaintiff followed up with a motion to compel a satisfactory response to the document requests and interrogatories from IKOR. IKOR failed to appear at the hearing on the very matter. The United States District Court for the Northern District of California responded in April 2013 by granting the Plaintiff’s motion, which included ordering the Defendants to produce all responsive documents in full within two weeks, and awarded the Plaintiff “$1,400 in sanctions pursuant to Federal Rule of Civil Procedure 37(a)(5)(A).”

In March 2013, the Plaintiff served its first sets of written discovery on Defendant Canton, one of IKOR’s officers named in the suit. The responses were due on April 24, 2013, two days after the court’s order awarding the previously mentioned sanctions. Incredibly (or “Inexplicably” as the court stated), Canton served the responses two weeks after the due date, claiming the requests were “overbroad and burdensome.” What followed was a meet and confer and Canton’s amended responses with objections. Once again, he neither produced responsive documents nor supplemented his interrogatory responses. The Plaintiff responded by seeking an order compelling the Defendant to “withdraw his objections to its discovery, produce all responsive documents and provide complete interrogatory responses.”

The Plaintiff’s counsel described the Defendants’ document production up to that point as totaling 121 emails, 109 of which were communications with the Plaintiff. This and other examples raised concerns for the Plaintiff about the “quality of the Defendants’ document preservation and collection efforts” as well as the possibility of spoliation. The Defendants objected and contended that they were “adequately searching for electronic documents,” though he did admit that there were a “few gaps in production.” And back and forth the arguments continued until the court weighed in on July 31, 2013.

“Given the paucity of documents produced by Defendants to date, as well as counsel’s own acknowledgement that Defendants’ productions have been incomplete, the court shares Plaintiff’s concerns about the inadequacy of Defendants’ search for responsive documents. Defense counsel has not been sufficiently proactive in ensuring that his clients are conducting thorough and appropriate document searches, especially in light of obvious gaps and underproduction. … The Federal Rules of Civil Procedure place an affirmative obligation on an attorney to ensure that a client’s search for responsive documents and information is complete.”

With regard to particular requests for production (RFP Nos. 32-25), the court did agree with Defendant Canton that these requests were “vague and overbroad and also seek irrelevant documents.” But because the Defendant’s responses were served two weeks late without an accompanying reason for the delay, any objections were waived. Despite the waiving of these objections, the court acknowledged that it was “not in any party’s interest to incur the expense and burden caused by the production of voluminous, irrelevant documents.” It then ordered that the parties refine the scope of production through a meet and confer.

The Plaintiff had also requested that the court order the Defendants to “retain an e-discovery vendor to conduct a thorough and adequate search for responsive electronic documents.” While the court did not require the Defendants to do so at that time, the court issued a clear warning in the same July 2013 order.

“Defendants must produce all remaining responsive documents by no later than August 26, 2013. Defendants are on notice that if there are continuing problems with their document productions, the court will order them to retain the services of an e-discovery vendor and order the parties to submit sworn, detailed declarations regarding their document preservation and collection efforts.”

The court went on to award the Plaintiff attorneys’ fees that resulted from the Defendants’ conduct.

It would have been worth the Defendants’ while to consider a reputable e-discovery vendor ahead of time. LLM, Inc. offers the industry-leading Liquid Lit Manager™. This all-in-one e-discovery software takes you from legal holds to e-discovery through trial — or, until the cows come home.