In BENEBONE LLC v. PET QWERKS, INC., ET AL., Case No. 8:20-cv-00850-AB-AFMx (C.D. Cal. Feb. 2021), before the Court was Defendant’s motion to compel Plaintiff to produce Slack communications.
“Slack is a cloud-based software system that allows a company to organize its electronic discussions into user-defined categories called ‘channels.’” Plaintiff used Slack, and standard email, for its internal communications.
Early in the parties’ discussions regarding discovery of ESI, Defendants sought to include Plaintiff’s Slack messages in the parties’ Stipulated ESI Order. Plaintiff took the stance that the Slack messages should not be included in discovery.
As part of a discovery conference with the Court, Defendants submitted a declaration from an e-discovery vendor engaged by Defendants. During the discovery conference, the Court concluded that Plaintiff’s Slack messages were relevant. However, the Court lacked sufficient information to determine whether the Slack discovery would be proportional to the needs of the case. As a result, the Court ordered the parties to meet and confer further regarding production of the Slack messages after Plaintiff obtained more information about its Slack account and what would be required to search and produce the messages.
During the meet and confer, Plaintiff informed Defendants that its Slack account contained approximately 30,000 messages and claimed that the estimated cost to extract, process, and review the 30,000 messages was $110,000 to $255,000. Based on those cost estimates, Plaintiff maintained that searching and producing the documents from Slack would be an “undue burden and would not be proportional to the needs of the case.” Defendants disagreed and filed a motion to compel.
In connection to their motion to compel, Defendants submitted a second declaration from its e-discovery vendor, where he stated that he had been involved in multiple lawsuits where Slack messages had been produced. He described several tools that software vendors have developed to streamline review and production, and explained how extracting, processing, and reviewing Slack messages could take place by using available software tools.
The expert also explained a more cost-efficient way to review the Slack messages, including use of contract reviewers for first level review, cutting the estimated price to $22,000 for Plaintiff to produce its responsive Slack messages. However, Plaintiff still maintained its prior estimate of $110,000 to $225,000 based on a blended attorney rate of $400 per hour. Plaintiff did not provide a competing declaration from an e-discovery expert.
Because Plaintiff used Slack as part of its internal communications, the Court found there was no real dispute that Plaintiff’s Slack messages were likely to contain relevant information. The issue was whether requiring Plaintiff to search for and produce responsive Slack messages would have been an unduly burdensome and disproportional to the needs of the case.
The Court relied on Defendants’ expert’s testimony regarding the estimated cost and level of effort necessary for production of the Slack messages and noted that his declarations at the hearing were not rebutted by any witnesses from the Plaintiff.
Defendants’ expert testified that third-party tools had been developed over the past several years for collecting and reviewing Slack messages and that the review and production of Slack messages resembles the process used in email document production. He further testified that it would not be necessary for Plaintiff to search all its Slack messages. Instead, the searches could be limited to certain Slack channels, users, or custodians, which would minimize the volume of Slack messages that required review.
The expert’s also testified that contract reviewers were available who are licensed attorneys at a rate as low as $40 per hour for first-level review. However, because he did not include any time or expense for second-level review by more experienced counsel and it was possible that contract reviewers could cost more than the hourly rate provided by the expert, the Court found that Defendants’ expert’s estimate of $22,000 for Plaintiff to review and produce Slack messages was on the low side. But the Court also noted that Plaintiff’s cost estimate was inflated due to its assumption of attorney review of all 30,000 Slack messages at the rate of $400 per hour.
The Court determined that requiring review of production of Slack messages by Plaintiff was comparable to requiring search and production of emails and was not unduly burdensome or disproportional to the needs of the case. E-discovery tools were available for this process and the tools could be used to limit the channels or users searched to uncover only relevant information in the case.
While Plaintiff made a cursory reference to other proportionality factors and focused on the burdens associated with production of Slack documents while being a smaller company compared to Defendants, the Court noted that Plaintiff, nevertheless still sought the full range of monetary damages in the case, plus injunctive relief against Defendants’ accused products.
Accordingly, the Court held that the production of Slack messages was proportional to the needs of the case as Plaintiff regularly used Slack for internal communications, which included messages from Plaintiff’s COO, CEO, and marketing director. The parties were ordered to meet and confer as to the specific request categories and search methods for the identification, review, and production of Plaintiff’s Slack messages.