As electronic devices have become more sophisticated, electronic record keeping has replaced paper record systems in many industries. In the context of litigation, this opens up a whole world of potential discovery and raises serious questions about the scope of discovery in a digital world where decades of data may be at your fingertips.
Recently, the Supreme Court of Texas addressed limitations on the scope of discovery in the context of a trial court order compelling a party to disclose all electronic devices for forensic examination. In re Marion Shipman, No. 16-0607 (Tex. Feb. 23, 2018).
Specifically, In re Marion Shipman involved a mandamus petition arising out of a discovery dispute. In the underlying case, Marion Shipman had partnered with Mark and Jamie Shelton in real estate ventures. Several years after the termination of this business relationship, a bank sued Shipman and the Sheltons seeking to recover $1.3 million in loans made to the latter. Ultimately, Shipman settled with the bank but the claim against the Sheltons proceeded. Eventually, Jamie Shelton brought a third-party claim against Shipman, alleging fraud, breach of contract, and fiduciary duty.
During discovery, Jamie Shelton sought various business records relating to Shipman’s dealings with the Sheltons. Shipman responded by producing documents and indicating that all responsive documents within his possession had been produced. During his deposition, Shipman, maintained that some of the relevant records were no longer in his possession as they had been lost in a computer crash several years before the claim. However, several days after his deposition, Shipman supplemented discovery with additional responsive documents explaining that his son had discovered an old “backup” folder on his computer.
Following a Motion to Compel in which Shelton alleged that Shipman had misled the court, Shelton asked the Court to compel Shipman to turn over his computer for forensic inspection. The trial court entered an order compelling Shipman to produce all computers and other media storage devices used from 2000 to present. Shipman appealed, but the Court of Appeals denied mandamus relief without explanation. Shipman next appealed to the Supreme Court of Texas arguing that the trial court had abused its discretion.
The Court agreed focusing on three issues: (1) the scope of the discovery ordered, (2) the scope of the relief actually sought in the motion to compel, and (3) the movant’s burden under In re Weekley Homes, L.P.
Significantly, the Court re-affirmed that, “Providing access to information by ordering examination of a party’s electronic storage device is particularly intrusive and should be generally discouraged,” and clarified that in order to justify such an intrusion the requesting party must show that the opposing party “defaulted in its obligation to search its records and produce the requested data.” In re Weekley Homes, L.P., 295 S.W.3d 309, 317 (Tex. 2009). Mere skepticism, speculation, or bare allegations of a failure to do so is not sufficient to establish a default under In re Weekley Homes, L.P. Applying these legal concepts to Jamie Shelton’s arguments, the Court concluded that Shelton’s arguments amounted to mere speculation that additional responsive documents could be produced, and his mere assertion that Shipman lacked the ability to search his computer to produce all responsive data was insufficient to meet the burden under In re Weekley Homes, L.P.
Additionally, the Court emphasized that not only had the trial court ordered Shipman to produce all electronically stored file of every kind, whether personal or business, and regardless of relevance for a period of seventeen years, but also this order granted greater relief that what was actually sought under Shelton’s Motion to Compel.
For these reasons, the Court granted Shipman’s writ of mandamus and ordered the trial court to vacate its discovery order.
· Although the increasing prevalence of electronic record-keeping may broaden the universe of potentially available data, discovery requests and orders must still be reasonably tailored to the issues in the case
· Compelling production of electronic devices for forensic examination requires more than mere allegations that the party has failed to search its records and produce all responsive data