An electronic discovery request in a dispute over the authenticity of a classic car has prompted a rare opinion from a Pennsylvania court on the emerging issues surrounding the discovery of electronically stored files by litigants in a civil case.
In Brooks v. Frattaroli, PICS Case No. 09-1709 (C.P. Lebanon Oct. 5, 2009), Lebanon County Common Pleas Judge Bradford H. Charles granted the defendants’ motion for a protective order, ruling that the plaintiff’s discovery request to enter the defendant’s property to inspect and copy computer files was overly broad.
Noting a relative dearth of precedent governing discovery of electronically stored information in Pennsylvania, Charles drew on the decisions of federal courts and recent changes to Federal Rule of Civil Procedure 34 to arrive at a balancing test that weighs the defendant’s right to privacy against the plaintiff’s desire to determine the truth.
“Without question, discovery of ESI can provide unprecedented opportunities for determining truth and preventing fraud,” Charles wrote. “On the other hand, unrestricted access to an opposing party’s ESI creates tremendous potential for discovery abuse and invasion of privacy. Somehow, the legal system must develop a balanced approach that uses the truth gathering potential of ESI without abusing a litigant’s legitimate expectation of privacy.”
In Brooks, the plaintiff Robert A. Brooks purchased a car from Anthony Frattaroli and Triangle Classic Cars in an auction. The vehicle was advertised as a “numbers matching” 1970 Chevelle. The opinion noted “numbers matching” is a term of art in the classic car industry meaning that a vehicle’s VIN numbers indicate the car is original, as opposed to one that has been assembled from parts of other cars.
According to the opinion, Brooks purchased the car for $37,500 and subsequently discovered the VIN numbers had been “forged and restamped.” Brooks alleged that the seller’s representation that the Chevelle was original constituted fraud and sued Frattaroli and Triangle alleging breach of contract, fraud and a violation of Pennsylvania’s Consumer Protection Law.
Upon entering the discovery phase of litigation, Brooks filed a discovery request for permission to have his own expert examine the defendants’ computers to discover files including stored files; deleted files; Internet queries, transmissions, Web sites and auction sites; and metadata associated with the files, according to the opinion.
Brooks’ attorney Bruce Shaw, of Willow Grove, Pa., said the goal of the electronic discovery request was to back up the allegation that the defendants’ intended to commit fraud by obtaining copies of responses to queries from other interested parties and similar documents.
“We want to show that mens rea that they represented [the car] was original when it wasn’t and that they should have known better,” Shaw said.
Shaw noted that the protective order was granted without prejudice and that he intends to narrowly tailor the discovery request to specify that the inspection would be targeted for documents pertaining to the vehicle at issue. Shaw conceded the request should have been narrowly tailored initially, but added that the court and the defense saw the request as broader than intended.
“They took it like we were going to search everything — we were going to search their financial records, when that was never the case at all,” Shaw said.
Shaw added that the considerable expense of e-discovery tends to limit the extent to which a party would search an opposing party’s records.
Harry W. Fenton, of Reilly Wolfson Sheffey Schrum & Lundberg in Lebanon, Pa., said Charles illustrated the issue artfully during arguments by posing a scenario in which he and his wife were asked to turn over their respective bank records. His wife’s would be electronic and his would be on paper, but in both cases, the records produced would be the same, Fenton said.
“In this case, the attorney is saying if this comes off a computer, then I need to see your computer,” Fenton said.
In his discussion of the issue, Charles noted that while Pennsylvania has no rule that specifically addresses electronic discovery, Rule of Civil Procedure 4009.31 does allow for the inspection of a party’s property by the opposing party, and while the courts have barred the use of discovery as a fishing expedition, no Pennsylvania court has addressed the issue of entry upon a party’s property by a civil litigant for the inspection of computer files.
“In contrast to the dearth of decisional and rule-making precedent regarding ESI discovery in Pennsylvania, there is a veritable explosion of electronic discovery precedent within the federal civil justice system,” Charles wrote.
Federal Rule of Civil Procedure 34 was amended in December 2007 to address the discovery of electronically stored information and requires specificity in a request for discovery, Charles noted. The comment to the rule notes that it is not designed to create a right of direct access to a party’s electronic information system but such access might be justified in certain situations.
Charles cited two cases from federal District Courts in Pennsylvania that developed the analysis required by Rule 34.
In Young v. Pleasant Valley School District, 2008 W.L. 2857912 (M.D. Pa. 2008), a plaintiff sought to examine a school district’s computers. The court denied the request, finding that it would cause a range of privacy concerns for the district, its students and their parents and that the supervision required to ensure the parties privacy would be unbearably expensive and burdensome.
In Bianco v. GMAC Mortgage Corp., 2008 W.L. 4661241 (E.D. Pa. 2008), a plaintiff requested access to the defendant’s employee’s laptop for inspection. The court sided with the defendant, finding that it was improper to order an intrusive examination on mere suspicion of discovery misconduct.
Charles also noted that courts and lawyers are beginning to widely appreciate the value of metadata, which can reveal when a document was edited and other details. A number of federal courts have held that when a party turns over electronic data, it must do so with the metadata intact.
Charles considered five factors in his decision to grant the protective order.
The scope of Brooks’ request included access to the hard drives of every computer possessed by Triangle to examine all of the files they contained.
“We view this sweeping request for information as unfocused and overly broad,” Charles wrote.
With regard to the court’s concern for Triangle’s privacy and confidentiality, Charles said the request would allow the plaintiff access to every part of Triangle’s business.
“Brooks would be able to observe Triangle’s financial records, customer lists, employee performance records and personal communication that may have been effectuated by employees through Triangle’s computers,” Charles wrote. “Triangle possesses a reasonable expectation of privacy with respect to such information, and we are very reluctant to permit Brooks to invade that privacy simply because he has initiated a lawsuit.”
Charles wrote that the federal courts have placed significant weight on the degree to which the target of the discovery request has cooperated with the requesting party, and that Triangle’s behavior supported some level of electronic discovery by Brooks. While the court did not have a complete copy of the discovery file, interrogatories show Triangle denied knowledge of the identity of the individual who sold the car to Triangle and said it did not possess other documents related to the purchase or resale of the vehicle.
“In our opinion, this type of non-response to questions for which most car dealers would have an answer is a factor we will weigh in favor of permitting some sort of ESI discovery,” Charles wrote.
Charles noted that while Brooks’ attorney indicated the plaintiff would pay for an expert to examine Triangle’s hard drives, the process would likely result in some cost to Triangle.
Finally, Charles noted that the nature of the allegations place the burden of proof on the plaintiff to show there was knowing misrepresentation on the part of the defendant.
“Within the context of a fraud case, the need for verifiable proof such as metadata is more critical than it would be in a simple case of negligence,” Charles wrote.
After weighing each of the factors, Charles concluded Brooks has not demonstrated that direct access to the defendant’s computers is necessary.
“To use a sports metaphor, in order to obtain permission for this type of ESI discovery, a party must travel the length of a football field and into the end zone,” Charles wrote. “While Brooks may have driven into field goal range, he has not yet crossed the ESI discovery goal line.”
Leonard Deutchman, of LDiscovery, an e-discovery consulting firm in Fort Washington, Pa., said the issues in Brooks are similar to those raised in Mintel International Group Ltd. v. Neergheen, No. 08-CV-3939 (N.D. Ill. Feb. 3, 2009), where a judge denied a company’s request to search the computers of a former employee’s new company.
“They asked for Rule 34 relief without developing a record of what they weren’t getting as a result of regular discovery requests,” Deutchman said. “In every case, there’s a record that every party has to make in order to inspect the opposing party’s computers to obtain something they can’t expect them to provide honorably.”
The Brooks decision is interesting, Deutchman said, because it is one of only a very few opinions regarding e-discovery by a Pennsylvania state court. He said the body of law in that area remains scanty for a number of reasons.
First, e-discovery is a costly undertaking and is employed in cases where the dollar value of the outcome is larger. Those cases more often wind up in federal courts.
Second, the discovery issues implicated in an e-discovery matter are handled by motions judges who do not routinely issue opinions on their decisions. Likewise, discovery issues are almost exclusively interlocutory in nature and are seldom appealed.
“You put all those factors together and the chance of there being an opinion on an electronic discovery issue at the state level is low,” Deutchman said.