Medtronic Sofamor Danek Inc. filed a patent suit against Gary Michelson, a spinal surgeon, over a spinal fusion device. Michelson, represented by Taylor Cates of Burch, Porter & Johnson, moved to force Medtronic to produce 996 computer backup tapes containing e-mails plus 300 gigabytes of additional electronic data.

Medtronic, represented by Leo Bearman and Bradley Trammell of Baker, Donelson, Bearman, Caldwell & Berkowitz, complained that the request would be “astronomically costly” — production and privilege review of 124 sample tapes alone ranging as high as $70 million, depending on the contents.

U.S. Magistrate Judge Diane Vescovo in Memphis, Tenn., ruled on May 13, 2003, that because Michelson had not specified the tapes sought by date, and lacked evidence that all the e-mails would be relevant, he should pay 40% of the bill. “Although the cost could be less than 2% of the amount at issue in this suit, the cost is substantial,” she wrote. “The court therefore finds it undue. Accordingly, the court finds that this factor weighs in favor of shifting some cost to the requesting party, Michelson.”

Medtronic remained responsible for 60% of the cost because, Vescovo said, there was no other way for Michelson to obtain the archived e-mail.

In this breach of contract case, Murphy Oil USA sued Fluor Daniel Inc. over a botched turnaround of its refinery in Meraux, La. Murphy Oil sought production of Fluor e-mails stored on 93 backup tapes. Fluor argued that it was required to preserve only electronic data associated with the turnaround, and not company e-mails; it provided expert testimony that the cost to produce such discovery outweighed the benefits.

Specifically, Fluor, represented by Dominic Gianna, chairman of the litigation section at Middleberg Riddle & Gianna in New Orleans, maintained that to comply with the request would cost more than $6.2 million and take six months or longer — not including the time to scrutinize for privileged material.

U.S. Magistrate Judge Sally Shushan in New Orleans, noting that Murphy Oil had not provided contrary evidence on costs, ruled that, due to the magnitude of the expense, Murphy Oil should pay for the discovery production. The judge, relying on an eight-part test outlined in 2002 in Rowe Entertainment v. The William Morris Agency, said, “Murphy has not pointed to any evidence that shows that ‘the e-mails are likely to be a gold mine.’ ” Ten months later, the case, litigated since 1999, settled. Murphy was represented by Miles Clements, a partner at New Orleans-based Frilot.


In the multidistrict shareholder litigation against Fannie Mae, U.S. District Judge Richard Leon issued a Jan. 22, 2008, order of contempt against the Office of Federal Housing Enterprise Oversight, which regulates Fannie Mae.

The office had agreed in a 2007 stipulated order to produce electronically stored information concerning its investigation of Fannie Mae’s accounting but had failed to meet its discovery deadline. In particular, it hadn’t produced all of its off-site disaster-recovery backup tapes sought by the Fannie Mae defendants.

The office, which had hired 50 contract attorneys and spent more than $6 million, or 9 percent of its annual budget, appealed the contempt order. It argued that the stipulated order had allowed the defendants to set “appropriate” search terms, not terms that were “tantamount to a request for the dictionary.”

The U.S. Court of Appeals for the D.C. Circuit on Jan. 6, 2009, affirmed the contempt order, which required the office to produce privilege logs immediately. The appeals court found that, in imposing the sanction, which followed numerous requests for extension by the office, Leon had not abused his discretion. The appeal was handled by U.S. Department of Justice trial attorney Nicholas Bagley for the housing office and Alex Romain of Williams & Connolly for the Fannie Mae defendants.


In this copyright infringement case brought by Oracle Corp. against competitor SAP A.G., U.S. Magistrate Judge Elizabeth Laporte in San Francisco granted SAP’s motion for sanctions after Oracle substantially expanded its damages theory about a year before trial.

Oracle in 2007 accused SAP of illegally downloading its software in a bid to convert Oracle customers to its TomorrowNow service. When Oracle sought to recover additional damages from lost licensing revenue and customer discounts, SAP protested that the additional discovery would cost at least $5 million on top of the $4.4 million it already had spent.

Laporte on Sept. 17, 2009, said no. “While refinement of the details of the damages at issue may well be appropriate as the case proceeds,” she said, “a major shift in the basic nature and order of magnitude of damages many months into the case poses a much greater threat to the just, speedy and inexpensive resolution of the case.”

She noted that, notwithstanding the sanction, Oracle was entitled to seek $1 billion in damages. Oracle’s lead attorney was Donn Pickett, a partner in Bingham McCutchen’s San Francisco office; SAP’s lawyers were Jane Froyd and Greg Lanier of Jones Day’s Palo Alto, Calif., office.


U.S. Magistrate Judge James Cott ruled on Oct. 7 that KPMG LLP must preserve the hard drives of thousands of current and former audit associates in a proposed class action seeking unpaid overtime. The case, brought by Justin Swartz, a partner at Outten & Golden in New York, involves potentially 7,500 potential opt-in plaintiffs in a nationwide class and 1,500 potential class members in New York.

The ruling was one of the largest preservation orders on record. KPMG, represented by Andrew Stern, a partner in Sidley Austin’s New York office, had moved for a protective order, arguing that the firm already had spent $1.5 million to preserve more than 2,500 hard drives, and that expanding preservation to include all potential class members would cost more than $100 million. He offered instead to preserve a random sample of 100 hard drives, but the plaintiffs balked at that.

Cott ruled that limiting the discovery to “key players,” or keeping it in proportion to the estimated value of the case — both factors that have been applied to production requests — were not required for preservation orders. The U.S. Chamber of Commerce has filed an amicus brief in support of KPMG, which has appealed the order to District Judge Colleen McMahon.