Request For Forensic Exam Denied by Court Where Moving Party Failed To Exhaust Other Less Intrusive Means Of Collecting The Same Information

2 Sep 2022

In TIREBOOTS BY UNIVERSAL CANVAS, INC. v. TIRESOCKS, INC., TIRESOCKS INTERNATIONAL, INC., No. 20 CV 7404 (N.D. Illinois, June 2022), before the Court was Plaintiff’s motion to compel a forensic examination of Defendants’ electronically stored information (“ESI”) under Federal Rule of Civil Procedure 34(a)(2).

Plaintiff is a manufacturer and seller of equipment covers for various types of construction equipment. Defendants also manufacture and sell commercial and construction equipment covers and are direct competitors with Plaintiff.  In 2006, Plaintiff sought to create a website to market and sell its products under a domain name. When Plaintiff attempted to register the domain name, Plaintiff discovered that another entity had done so and registered the domain name under another name. The parties agreed that Defendants redirected customers that visited Plaintiffs domain to Defendants’ other website. Plaintiff said it did not learn of this redirection until five years later.

Plaintiff filed this suit in Dec. 2020 and alleged that Defendants committed: “(1) trademark and trade dress infringement, unfair competition, false designation of origin, palming off, and false advertising under the Lanham Act; (2) cyberpiracy under the Anti-cybersquatting Consumer Protection Act (“ACPA”); and (3) unfair competition, deceptive trade practices, and tortious interference with prospective business relationships under Illinois law.” Plaintiffs also contended that Defendants misrepresented themselves to potential customers of Plaintiffs and therefore harmed Plaintiffs sales.

During discovery, Plaintiff submitted a request to inspect all of Defendants’ digital data and analytics tools related to their online business. Defendant objected to Plaintiff’s request as overly broad and unduly burdensome.

As noted by the Court, forensic examinations are an “extraordinary remedy.” Belcastro v. United Airlines, Inc., No. 17 CV 1682, 2019 WL 7049914, at *2 (N.D. Ill. Dec. 23, 2019); Alight Sols. v. Thomson, No. 20 CV 3043, 2021 WL 5119111 at *6 (N.D. Ill. Nov. 3, 2021).” Courts will generally deny ESI requests when they would place an undue burden on the respondent.

Here, the Court conducted a fact-intensive inquiry and considered the specific allegations and circumstances of the case. The Court considered: “(1) the relevance of the requested information as it pertains to the heart of the case; (2) the invasiveness of the RFI, and in particular whether Plaintiff has exhausted other less intrusive means of collecting the same information; and (3) the burden the RFI places on Defendants.”

With respect to relevance, the Court found Plaintiff’s RFI casted too wide of a net. To determine whether ESI sought in discovery goes to the heart of the case, courts have considered whether “the connection between the computers and the claims in the lawsuit [were] unduly vague.” Balboa, 2006 WL 763668, at *3; see also Hespe, 2016 WL 7240754, at *5.”

Plaintiff argued that a forensic examination would retrieve “highly relevant” evidence of Defendants’ infringement, false advertising, false designation or origin, and cybersquatting, as well as information needed to prove damages. But the Court noted that the connection between all of Defendants’ electronic data and Plaintiff’s claims were tenuous at best. Although the Court recognized the significance of the evidence Plaintiff hoped to retrieve, Defendants’ ESI included a substantial volume of information that did not go to the heart of the case.

As for invasiveness, there was no dispute that Plaintiff failed to exhaust other methods to collect the information it sought. Plaintiff nonetheless asserted that ordinary discovery methods were insufficient to secure the requested data. For example, Plaintiff contended that a request for production would not “capture the relevant traffic and website data” needed to determine Plaintiff’s lost revenue from Defendants’ redirection, and that sifting through “personalized filters and settings” of a Google Analytics file or other individualized data platform would be “unduly burdensome and inefficient.” But the Court found that since Plaintiff did not attempt to obtain this information through less intrusive data platforms or discovery methods, Plaintiff’s assertions were unsubstantiated.

Plaintiff’s request for a forensic examination would have also imposed too great of a burden on Defendants. Defendants expressed concerns about giving Plaintiff unfettered access to their confidential business information and noted that Plaintiff previously mishandled Defendants’ confidential material related to settlement discussions.

Plaintiff assured the Court that “the risk of harm to Defendants in having their web-traffic and marketing platforms inspected is very low” because Plaintiff would only have accessed unprivileged, business-related platforms that were unrelated to legal matters or personal information. Plaintiff also noted that Defendants could have designated certain ESI as “Confidential” or “Highly Confidential” pursuant to the Confidentiality Order in this case. However, the Court stated that while these safeguards may have protected Defendants’ confidential information, they did not negate the fact that Plaintiff framed its underlying discovery request too broadly.

Plaintiff also asserted that a forensic examination was necessary because Defendants lacked the expertise to search and retrieve the relevant data on their own. Under the “Belcastro standard, there are two circumstances in which a forensic examination may be warranted: (1) when the responding party has intentionally concealed the information; or (2) when the responding party lacks the expertise to search and retrieve the relevant data.” Belcastro, 2019 WL 7049914, at *2. Plaintiff’s motion focused on the second factor.

First, Plaintiff alleged that Defendants’ designated expert lacked expertise because he was not publicly listed in an online expert witness database. Second, Plaintiff claimed Defendants’ expert produced flawed reports that used search filters to yield results in Defendants’ favor.

The Court found neither argument to be persuasive. Plaintiff’s first point was weak because Defendants claimed they had not even named the cited individual as an expert in the case. The Court noted that even if they had, the absence of the potential expert’s name from a database did not prove his inability to perform Defendants’ inspection.

The Court also found Plaintiff’s second point to be conclusory and lacked any details on the alleged flaw in Defendants’ search protocol.  Plaintiff claimed that Defendants’ expert manipulated search results but provided no corroboration for this claim.

Additionally, there was no indication that Plaintiff tried to retrieve the requested information through less intrusive discovery means. Therefore, Plaintiff cannot claim that Defendants lacked the expertise to produce responsive discovery materials when Plaintiff never even submitted a discovery request that sought such materials.

Finally, Plaintiff’s allegations rested on confidential materials Defendants disclosed during settlement discussions between the parties. This type of Rule 408 materials should have only been used for purposes of discussing settlement. Because Plaintiff failed to show that Defendants lacked the expertise to search and retrieve their own data, the Court saw no reason to permit a forensic examination.