Wednesday, January 13, 2010

Maybe it's time to revisit your Optical Storage?

Starbucks Corp. v. ADT Security Services, Inc., 2009 U.S. Dist. LEXIS 120941 (W.D. Wash. Apr. 30, 2009)

The controversy involved ESI stored on a Plasmon archiving system which producer argued was so cumbersome that the data contained within it was not reasonably accessible because of undue burden or cost under Rule 26(b)(2)(B). The system was described as similar to an optical jukebox, containing 500 double-sided DVDs accessed by a robotic arm. The limitations of the system caused producer to replace the Plasmon system with a new system, but data on the Plasmon system had not been migrated.

Producer’s expert testified that production of the requested emails could potentially involve the access of all of the 500 DVDs in the system. Only one custodian’s email could be recovered at a time, preventing access by producer’s employees of archived emails while the searches were in progress. Attempts to access more than one user’s emails at a time caused the system to freeze, requiring a cumbersome reboot. As only 8 emails per hour could be restored, the total restoration of 25,000 emails (assuming 11 hours per day) would take 284 days. Restoration for 5 custodians could therefore take up to 5 years. Outside vendors could not perform the restoration as many of the DVDs could be only be read by proprietary equipment owned by producer, and producer would be without access to the information during the restoration process. The expert estimated the cost of retrieval at about $834,000, significantly higher than producer’s original $88,000 estimate.

At a later discovery conference, the court was informed that it would be possible to produce email stubs containing to, from, subject, and the first 80 characters of the email. In addition, the court was advised that more than half of the disks were not formatted using a Plasmon proprietary method. These disks utilized a universal data format (UDF). Producer’s expert testified that if the disks were high volume, they could contain up to 2 terabytes of data. It would take over 500 hours to copy the disks and producer would be required to purchase a hardware system with sufficient capacity to hold all of the data. The expert consulted an external vendor, which estimated that the copies would cost several hundred thousands of dollars, with thousands more required to purchase the hardware.

Requestor’s expert disputed the UDF testimony. She noted that the proposal of producer’s vendor was not attached, and provided an alternative estimate that all of the UDF DVDs could be copied in 3-5 business days at $35 per DVD, or $17,850, assuming that the vendor could copy more than one DVD at a time. A second estimate from another vendor of $25,500 was also obtained. This vendor would charge $2,550 to store the 2 TB of data. The approximate 93,000 emails would produce about 11 GB of searchable data, based upon an industry standard of 7 pages per email. Search costs were estimated at $95 per GB of data, resulting in a total search cost of about $1,100.

The court noted that requestor had submitted the proposals with the expert’s declaration, and also observed that the costs were aligned with producer’s original $88,000 estimate. The court rejected producer’s expert as “not credible.” In addition, it was difficult to conclude that the Plasmon data was not reasonably accessible in light of the fact that it continued to be used by producer’s personnel. “The fact that a company as sophisticated as ADT (which is wholly-owned by Tyco, International, Ltd…., a Fortune 500 company) chooses to continue to utilize the Plasmon System instead of migrating its data to its now-functional archival system should not work to plaintiff’s disadvantage.” Id. at *17-*18.

The court also found that good cause required production of the information even if the data were not reasonably accessible. “Simply deposing ADT personnel without benefit of ADT’s ESI does not allow Starbucks to discover what a witness knew, to challenge the testimony that he or she provides, or to provide the accurate contemporaneous thoughts of ADT decision-makers.” Id. at *19.

A Rule 26(b)(2)(C)(iii) cost-benefit analysis militated in favor of production:
[I]t is significant that the ESI critical to this case was created during a time period which means that it is housed on the Plasmon System. Moreover, ADT concedes that Starbucks is seeking at least one million dollars in damages, ADT has a counterclaim seeking at least $ 400,000, and there is no question that both parties in this case have the substantial resources necessary to conduct this litigation. Finally, it is important to note that Starbucks has attempted to limit the burden on ADT by narrowly limiting the number of ADT employees or former employees involved and further providing search term filters for those persons. There is no evidence that it is attempting to leverage ADT’s ESI problems.

Id. at *19-*20. The court ordered that the parties make copies of the UDF disks and to save them to an appropriate storage medium. Producer ADT was ordered to produce email stubs for the custodians, appropriately filtered using search terms for the Plasmon formatted disks. Requestor could then designate which emails would be produced from the Plasmon system.

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