HUGO SPIEKER, et al., v . QUEST CHEROKEE, LLC. 2008 WL 4758604 (D. Kan. Oct. 30, 2008)

1. HUGO SPIEKER, et al., v. QUEST CHEROKEE, LLC.2008 WL 4758604 (D. Kan. Oct. 30, 2008) By: Tara Miller Note: Case is not in casebook

2. Parties • Plaintiff(s): Hugo Spieker • P’s are current and/or former owners of mineral interests in lands burdened by oil and gas leases owned by defendant • Plaintiffs allege that defendant has failed to pay the proper amount of royalties • In addition to their individual claims, plaintiffs seek to represent a class consisting of owners of mineral and/or royalty interests in the Kansas portion of the Cherokee Basin burdened by leases owned by defendant • Defendant: Quest Cherokee, LLC • Quest apparently owns approximately 2,500 oil and gas leases in the Kansas portion of the Cherokee Basin and operates approximately 2,000 coalbed methane gas wells on those leases.

3. FACTS • P’s allege that D has failed to pay the proper amount of royalties • P’s seek to represent a class consisting of owners of mineral and/or royalty interests • P served D with four separate sets of document production requests. • Defendant made materials available for inspection and copying but objected to the production of certain electronically stored information (“ESI”). • D argued undue burden (citing cost including production, collection, processing, reviewing and copying costs, • P’s motion to compel the production of electronically stored information. • Defendant opposes the motion, arguing that (1) the cost is unduly burdensome and (2) the ESI is duplicative of information otherwise being produced. • In the alternative, D asks that the discovery requests be narrowed and/or that the cost of discovery be shifted to plaintiffs. • Parties engaged in discussions concerning the search terms and made minor modifications • Kroll (reputable 3rd party vendor) applied the search terms and the results were “unmanageable “ • Then D suggested additional revisions Resulted in 32 gigabytes of data “comprised of 31,000 documents and 1,400,000 pages.” • Kroll's charge to process this volume of ESI for review is approximately $82,500 • COSTS: Other costs: a “privilege and relevance” review by counsel for this volume of data will cost at least $250,000, raising the total production cost to approximately $375,000. • P declined D’s request to refine the search terms and defendant refused to incur the estimated production cost of $375,000. • Because of this impasse, plaintiffs move to compel production of the requested email information.

4. eDiscovery Legal Framework: Rules effected • Fed.R.Civ.P. 23(c)(1)(A): • “At an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action.” • Importance: A formal scheduling order has not been entered in this case. However, by agreement of the parties, discovery is being conducted in two phases (class certification phase and liability/damage phase). The parties are currently engaged in the first phase. • Fed.R.Civ.P. 26(b)(2)(B) • D argues should not be compelled to produce the requested email data because it is “not reasonably accessible” • A party need not provide discovery of ESI from sources that the party identifies as not reasonably accessible because of undue burden or cost. • Burden: the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. • Burden Shift: If showing is made, court may nonetheless order discovery if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for discovery. • Fed. R. Evidence 502 • Recently enacted to reduce the costs of exhaustive privilege reviews of ESI. • The parties need to address Rule 502 in any future production and cost discussions.

5. Analysis from eDiscovery Perspective • ISSUE: Should D be compelled to produce email information, at this stage of the litigation given the cost? • Arguments: • D argues (1) class action has NOT been certified and the amount of the named plaintiffs’ claim ($100,000) does not justify the cost of production. (2) P’s have not shown that the information requested is relevant to the issue of class certification • P argues that this is a “putative class action” (in excess of $5 million) • Court says: • (1) Class certification: Plaintiffs are entitled to conduct some discovery to support their request for class certification. • Discovery expenses are NOT evaluated by reference solely to individual named plaintiff claim • (2) P has not explained how the disputed ESI discovery is relevant to the issue of class certification. • Without explanation by P of the relevance of the ESI to the issue of class certification, the court will not require defendant to incur discovery expenses in excess of $82,000. • Reasoning: P’s explanation will allow court to better evaluate issues such as (1) whether the discovery is duplicative and/or (2) available through less expensive sources.

6. Issues regarding eDiscovery • Search Terms: D argues P’s search terms were “not specific enough” • Court rejects because D was in the better position to develop the most appropriate list of search terms capable of producing the requested documents • “Not reasonably Accessible” (Fed.R.Civ.P. 26(b)(2)(B)) • D argues that named plaintiffs claims are $100,000 or less and spending $82,500 to produce [based on current terms] is unduly burdensome, therefore, “not reasonably accessible” • Court rejects because P entitled to conduct SOME discovery concerning class certification issue. • Cumulative Discovery • D argues “largely cumulative of vast amounts of other discovery” already produced • Court said its unclear whether the requested ESI is cumulative or not and this issue should be further refined by defendant if plaintiffs renew their motion to compel. • BurdenD wrongly asserts that P must prove ESI is not cumulative- Burden is on D as the party opposing • Cost Estimates • Costs- associated with gathering, analyzing, and producing the email messages. • Internal Search: D hired 3rd party to conduct search and P argues that there is no reason apparent reason D is unable to search email messages on his own • D in process of software update and Court says parties should confer AFTER update • Court says need more information • FRE 502: enacted "to reduce the costs of exhaustive privilege reviews of ESI."

7. Conclusion/Outcome • Plaintiffs' motion to compel denied without prejudice pending a renewed motion explaining the relevance of the discovery to class certification. • Search terms: Producing party (D) was in better position to develop the most appropriate list of search terms • “Not reasonably accessible” Does burden outweigh benefit • Costs considered are not solely individual named plaintiffs claim • Plaintiffs are entitled to conduct some discovery to support their request for class certification • Cumulative Discovery: Burden is on D to prove • Cost Estimates: Parties should confer about Internal Search capability (including software).

8. Class Discussion Questions • Why should a court require the Plaintiff to explain how the ESI discovery is related to the issue of class certification? • What are possible concerns with requiring the producing party to conduct a search internally (self-collection)?