USA v. Sterling Centrecorp Inc. et al

Filing 347

STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY signed by District Judge Morrison C. England, Jr on 6/25/19. (Kaminski, H)

1
2
3

[The parties and counsel
submitting this document
are listed on the page immediately
following this caption page.]

4
5
6
7
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA

8
9
10
11

UNITED STATES OF AMERICA and
CALIFORNIA DEPARTMENT OF TOXIC
SUBSTANCES CONTROL,

12
13
14
15

Plaintiffs,
v.
STERLING CENTRECORP INC., STEPHEN
P. ELDER, and ELDER DEVELOPMENT,
INC.,

16
17

No. 2:08-cv-02556-MCE-DB
STIPULATION AND ORDER
GOVERNING RULE 69
DISCOVERY
Judge: Morrison C. England, Jr.
Judgment Entered: March 20, 2018

Defendants.

18
19
20
21
22
23
24
25
26
27
28

STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY
United States of America et al. v. Sterling Centrecorp Inc. et al., No. 2:08-cv-02556-MCE-DB (E.D. Cal.)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

PATRICIA L. HURST (DC Bar No. 438882)
LESLIE COLEMAN (NY Atty. Reg. No. 5252788)
PETER KRZYWICKI (MI Bar No. P75723)
Environmental Enforcement Section
Environment & Natural Resources Division
U.S. Department of Justice
999 18th Street, South Terrace, Suite 370
Denver, CO 80202
[phone] (Coleman)
[e-mail]
[e-mail]
[e-mail]
Attorneys for Plaintiff United States of America
XAVIER BECERRA, State Bar No. 118517
Attorney General of California
EDWARD H. OCHOA, State Bar No. 144842
Supervising Deputy Attorney General
JOHN W. EVERETT, State Bar No. 259481
Deputy Attorney General
600 West Broadway, Suite 1800
San Diego, CA 92101
P.O. Box 85266
San Diego, CA 92186-5266
Telephone: [phone]
Fax: [phone]
E-mail: [e-mail]
Attorneys for Plaintiff California Dept. of Toxic Substances Control
Gary J. Smith (State Bar No. 141393)
([e-mail])
Kaitlyn D. Shannon (State Bar No. 296735)
([e-mail])
BEVERIDGE & DIAMOND, P.C.
456 Montgomery Street, Suite 1800
San Francisco, CA 94104-1251
Telephone: [phone]
Facsimile: [phone]
Attorneys for Defendant Sterling Centrecorp Inc. (now known as SC Inc.)

24
25
26
27
28
-2STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

Plaintiffs the United States of America, on behalf of the Environmental Protection Agency

1
2

(“EPA”), and the California Department of Toxic Substances Control (“DTSC”), and Defendant

3

Sterling Centrecorp Inc. (which changed its name to SC Inc. in November 2018 but retains the same

4

Ontario Corporation Number, 1738393), hereby stipulate as follows:
WHEREAS, on March 20, 2018, the Court entered a final judgment in this action in favor of

5
6

Plaintiffs United States and DTSC and against Defendants Sterling Centrecorp Inc. (now known as

7

SC Inc.), Stephen P. Elder, and Elder Development, Inc. (Doc. No. 332);
WHEREAS, Plaintiffs issued a written demand to Defendant SC Inc. for payment of the

8
9
10

judgment on October 5, 2018, but SC Inc. has not paid the judgment and has not moved for a stay of
proceedings to enforce the judgment pursuant to Federal Rule of Civil Procedure 62;
WHEREAS, on March 5, 2019, the United States served discovery in aid of judgment or

11
12

execution on Defendant SC Inc. pursuant to Federal Rule of Civil Procedure 69(a)(2) (“Rule 69”);

13

WHEREAS, Plaintiffs expect to serve additional Rule 69 discovery on Defendant SC Inc.;

14

WHEREAS, Defendant SC Inc. seeks to reduce the time, expense and other burdens of

15

discovery of certain electronically stored information (“ESI”) and privileged materials, as described

16

further below, and to better define the scope of its obligations with respect to preserving such

17

information and materials in the context of Rule 69 discovery in this action;
WHEREAS, Counsel for the United States consulted with Defendant Stephen P. Elder on

18
19

May 16, 2019, and Mr. Elder granted his oral consent to the entry of this Stipulation and Order

20

Governing Rule 69 Discovery;
WHEREAS, Plaintiffs and Defendant SC Inc. therefore are entering into this Stipulation with

21
22

the request that the Court enter it as an Order;

23

It is hereby STIPULATED and ORDERED:

24

1.

Scope. This Order is limited in scope to discovery conducted by Plaintiffs in this

25

action pursuant to Federal Rule of Civil Procedure 69(a)(2) in aid of collection or execution of the

26

judgment entered on March 20, 2018 against Defendant Sterling Centrecorp Inc. (now known as SC

27

Inc.).

28
-3STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

1
2

2.

Preservation Not Required for Not Reasonably Accessible Electronic

Information.
a.

3

Except as provided in Paragraph 2.b below, Defendant SC Inc. need not

4

preserve the following categories of electronic information for purposes of this phase of the

5

litigation:
i.

6

Data duplicated in any electronic backup system for the purpose of

7

system recovery or information restoration, including but not limited to, system recovery backup

8

tapes, continuity of operations systems, and data or system mirrors or shadows, if such data are

9

routinely purged, overwritten or otherwise made not reasonably accessible in accordance with an

10

established routine system maintenance policy;
ii.

11
12

smartphone (e.g., BlackBerry) provided that a copy of such email is routinely preserved elsewhere;
iii.

13
14

Electronic mail sent to or from a personal digital assistant (“PDA”) or

Other electronic data stored on a PDA or smartphone, such as calendar

or contract data or notes, provided that a copy of such information is routinely preserved elsewhere;

15

iv.

Logs of calls made from cellular phones;

16

v.

Deleted computer files, whether fragmented or whole;

17

vi.

Data stored in random access memory (“RAM”), cache memory, or in

18

temporary or cache files, including internet history, web browser cache and cookie files, wherever

19

located;

20

vii.

Data stored on photocopiers, scanners, and fax machines;

21

viii.

Server, system, or network logs; and

22

ix.

Electronic data temporarily stored by scientific equipment or attached

23

devices, provided that the data that is ordinarily preserved as part of a laboratory report is, in fact,

24

preserved in its ordinary location and form.

25

b.

Notwithstanding Paragraph 2.a above, if on the date of this agreement

26

Defendant SC Inc. has a policy established by management that results in the routine preservation of

27

any of the categories of information identified in that paragraph, it shall continue to preserve such

28

information in accordance with its policy.
-4STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

3.

1

Obligations Related to “Draft” Documents and “Non-Identical” Documents. For

2

the purposes of preserving potentially discoverable material in this litigation, and for purposes of

3

discovery in this action, a “draft” document, regardless of whether it is in an electronic or hard copy

4

form, shall mean, “a preliminary version of a document that has been shared by the author with

5

another person (by email, print, or otherwise) or that the author no longer intends to finalize or to

6

share with another person.” In addition, a “non-identical” document is one that shows at least one

7

facial change such as the inclusion of highlights, underlining, marginalia, total pages, attachments,

8

markings, revisions, or the inclusion of tracked changes. Defendant SC Inc. need not preserve for

9

discovery a document before and after every change made to it, so long as “draft” documents, as

10

defined by this paragraph, are preserved. A document that is identical on its face to another

11

document, but has small detectable differences in the metadata, shall be considered an identical

12

copy.
4.

13

No Discovery of Material Not Required To Be Preserved. Plaintiffs will not seek

14

discovery from Defendant SC Inc. of items that need not be preserved pursuant to Paragraphs 2 and

15

3 above. If any discovery request is susceptible of a construction which calls for the production of

16

items that need not be preserved pursuant to Paragraphs 2 and 3 above, such items need not be

17

searched for, produced, or identified on a privilege log pursuant to Fed. R. Civ. P. 26(b)(5).
5.

18

Preservation Does Not Affect Discoverability or Claims of Privilege. By

19

preserving information for the purpose of this litigation, Defendant SC Inc. is not conceding that

20

such material is discoverable, nor is it waiving any claim of privilege. Except as otherwise provided

21

in Paragraph 10, nothing in this Stipulation shall alter the obligations of Defendant SC Inc. to

22

provide a privilege log for material withheld under a claim of privilege.
6.

23
24

Format for Production. Plaintiffs and Defendant SC Inc. stipulate, and the Court

orders, the following methods of production:
a.

25

Paper documents: At Defendant SC Inc.’s discretion, documents on paper may

26

be produced on paper or may be scanned and produced on CD-ROM, DVD-ROM, or external hard

27

drive.

28
-5STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

b.

1

Paper documents that are produced on disc shall be scanned as 300 dpi single-

2

page TIFF files, using CCITT Group IV compression. Each page shall be branded with a unique

3

Bates number, which shall not be an overlay of the image. The images shall be accompanied by: (1)

4

an OpticonTM or IPRO® “cross reference file” which associates each Bates number with its

5

corresponding single-page TIFF image file; and (2) a “text load file” containing comma delimited,

6

double-quotation qualified ASCII text which will populate fields in a searchable flat database

7

environment, containing one line for each document and each of the applicable fields as described in

8

Appendix A;
c.

9

Word, WordPerfect, and PDF documents will be converted to single-page

10

TIFF images and produced consistent with the specifications in Paragraph 6.b above, except that the

11

text load file shall contain the extracted text from each document in place of OCR text, unless the

12

document contains redactions, in which case OCR text may be provided. If the document contains

13

comments or tracked changes, the TIFF images shall be generated based on how the document

14

appears when first opened using view settings contained in the file, and Plaintiffs shall have the

15

option, after reviewing the produced TIFF image, to request the native file;
d.

16

Microsoft PowerPoint files will be processed and produced in the same

17

manner as Word, WordPerfect, and PDF documents, except that the images shall be generated as full

18

color, full page, JPEG images with one slide per page. Notes and other text that would not appear on

19

the screen in the presentation view need not be shown on the JPEG images. Plaintiffs shall have the

20

option, after reviewing the produced images, to request the native files;
e.

21

E-mail and attachments should be converted to single-page TIFF images and

22

produced consistent with the specification in Paragraph 6.b above. If Defendant SC Inc. redacts any

23

part of the e-mail before producing it, OCR text may be provided in place of extracted text.

24

Attachments shall be processed as though they were separate documents, and the text load file shall

25

include a field in which the producing party shall identify, for each e-mail, the bates range of any

26

attachment;

27
28
-6STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

f.

1

Microsoft Excel files and other spreadsheets will be produced in native file

2

format in a separate folder on the production media, and the text load file shall contain a field that

3

identifies the file path of the native file corresponding to each document;
g.

4
5

Digital photographs will be produced as image files at their original resolution

with bates numbers branded onto them;
h.

6

Embedded files shall be treated as though they were separate files, except that

7

the text load file shall include a field in which the producing party shall identify, for each document

8

containing an embedded file, the bates range of any such embedded file. This bates range may be

9

identified in the same field as the Bates range of an e-mail attachment.
i.

10

Before any party produces any other kinds of electronic data, including

11

databases, CAD drawings, GIS data, videos, etc., the parties will meet and confer to discuss the

12

format for the production;
j.

13

The parties will meet and confer to identify mutually agreeable search terms

14

for email messages and other electronically stored information, however, this agreement to meet and

15

confer does not obligate Defendant SC Inc. to agree to perform an electronic search.

16

7.

Other Preservation Obligations Not Affected. Nothing in this agreement shall

17

affect any other obligations of the parties to preserve documents or information for other purposes,

18

such as pursuant to court order, administrative order, statute, or in response to other anticipated

19

litigation.

20

8.

Meet and Confer Requirement. Before filing any motion with the Court regarding

21

electronic discovery or evidence, the parties will meet and confer in a good faith attempt to resolve

22

such disputes.

23
24
25
26

9.

502(d) Order.
a.

Plaintiffs and Defendant SC Inc. agree that this Stipulation and Order from the

Court invokes the protections afforded by Rule 502(d) of the Federal Rules of Evidence.
b.

The prosecution and defense of this phase of this action may require

27

Defendant SC Inc. to review and to disclose large quantities of information and documents,

28

including electronically stored information, through the Rule 69 discovery process. As a result,
-7STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

1

record-by-record preproduction privilege review would likely impose an undue burden on Defendant

2

SC Inc.’s resources.

3

c.

Defendant SC Inc. shall examine the files containing documents to be

4

produced and shall screen documents for privilege. Such examination shall be performed with due

5

regard for the likelihood that the files contain privileged documents, but may rely on sampling or

6

electronic searching.

7

d.

If a producing party determines that it has produced a document upon which it

8

wishes to make a claim of privilege, it shall within 14 days give all counsel of record notice of the

9

claim of privilege. The notice shall identify the document(s) that is (are) privileged and the date the

10

document(s) was (were) produced. If the producing party claims that only a portion of the document

11

is privileged, it shall provide, along with the notice of the claim of privilege, a new copy of the

12

document with the allegedly privileged portions redacted.

13

e.

A receiving party is under a good-faith obligation to notify the producing

14

party upon identification of a document which appears on its face or in light of facts known to the

15

receiving party to be potentially privileged. Such notification shall not waive the receiving party’s

16

ability to subsequently challenge any assertion of privilege with respect to the identified document.

17

The producing party shall provide notice under subparagraph 9.d above within five (5) business days

18

of notification of production of a potentially privileged document by the receiving party if the

19

producing party believes the document to be privileged.

20

f.

Upon receiving notice of a claim of privilege on a produced document, the

21

receiving party must, in accordance with Fed. R. Civ. P. 26(b)(5)(B), promptly sequester the

22

specified information and any copies it has and may not use or disclose the information, except as

23

provided by Fed. R. Civ. P. 26(b)(5)(B), until the claim is resolved. If the receiving party disclosed

24

the information before being notified, it must take reasonable steps to prevent further use of such

25

information until the claim is resolved. The parties will follow the procedure described in Fed. R.

26

Civ. P. 26(b)(5)(B) for documents produced in this litigation regardless of whether the producing

27

party asserts its claim of privilege during or after this litigation.

28
-8STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

g.

1

Pursuant to Federal Rule of Evidence 502(d), the disclosure of privileged

2

information or documents in discovery conducted in this phase of the litigation consistent with the

3

terms of this order shall not waive the claim of privilege or protection in any other federal or state

4

proceeding.

5

10.

Privileged Materials Located in the Offices of Outside Counsel. Plaintiffs and

6

Defendant SC Inc. agree that, in response to discovery requests, Defendant SC Inc. need not search

7

for and produce, nor create a privilege log for, any privileged material located in the offices of its

8

outside counsel. Defendant SC Inc. shall not keep discoverable materials in the offices of outside

9

counsel unless a copy or duplicate of the materials is located elsewhere in the possession, custody, or

10

control of Defendant SC Inc. and such copy or duplicate is identical except for marks, notes, or

11

annotation provided by its outside counsel.

12

11.

Costs of Document Production. A producing party shall bear the costs of producing

13

its own documents.

14
15

Respectfully submitted this 20th day of June, 2019,

16
17

FOR THE UNITED STATES OF AMERICA:

18

/s/ Leslie Coleman
LESLIE COLEMAN
PATRICIA L. HURST
PETER KRZYWICKI
Environmental Enforcement Section
Environment & Natural Resources Division
U.S. Department of Justice

19
20
21
22
23
24
25
26
27

Attorneys for Plaintiff United States of America
FOR THE CALIFORNIA DEPARTMENT OF
TOXIC SUBSTANCES CONTROL:
XAVIER BECERRA
Attorney General of California
EDWARD H. OCHOA
Supervising Deputy Attorney General

28
-9STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

1

/s/ John W. Everett
JOHN W. EVERETT
Deputy Attorney General

2
3

Attorneys for Plaintiff California Dept. of
Toxic Substances Control

4
5

FOR STERLING CENTRECORP INC. (NOW
KNOWN AS SC INC.):

6
7

BEVERIDGE & DIAMOND, P.C.

8

/s/ Kaitlyn D. Shannon
GARY J. SMITH
KAITLYN D. SHANNON

9
10

Attorneys for Defendant Sterling Centrecorp Inc. (now
known as SC Inc.)

11
12
13
14

IT IS SO ORDERED.
Dated: June 25, 2019

15
16
17
18
19
20
21
22
23
24
25
26
27
28
-10STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

Appendix A:
Fields to Exchange in Databases of Discovery Materials
Name of Field

Type of
field

E-mail

Begin_Bates

Text

Bates number for the
TIFF image of the first
page

Word Processing or
PDFs
Bates number for the
TIFF image of the first
page

End_Bates

Text

Bates number for the
TIFF image of the last
page

Bates number for the
TIFF image of the last
page

Attachment

Text

Bates range of the
attachments. Only the
first page of the first
attachment and the last
page of the last
attachment are
indicated.

Author
To
CC
BCC
Subject
DateSent

Paragraph
Paragraph
Paragraph
Paragraph
Paragraph
Date

“From” field
“To” field
“CC” field
“BCC” field
“Subject” field
The date and time the
message was sent

Bates range of all
embedded files and all
documents (including
e-mails) to which this
file was attached or in
which it was
embedded. Only the
first page of the first
attachment and the last
page of the last
attachment are
indicated.
<blank>
<blank>
<blank>
<blank>
<blank>
<blank>

Contents
Spreadsheets
Bates number for the
TIFF image of the first
page, or, if
spreadsheets are not
TIFFed, the Bates
number of the
placeholder page
Bates number for the
TIFF image of the last
page or, if
spreadsheets are not
TIFFed, the Bates
number of the
placeholder page
Bates range of all
embedded files and all
documents (including
e-mails) to which this
file was attached or in
which it was
embedded. Only the
first page of the first
attachment and the last
page of the last
attachment are
indicated.
<blank>
<blank>
<blank>
<blank>
<blank>
<blank>

-11STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY

Digital Photos

Paper

Bates number branded
onto a TIFF file that
has the same
resolution as the native
image file.

Bates number for the
TIFF image of the first
page

Bates number branded
onto the native image
file

Bates number for the
TIFF image of the last
page

Bates range of all
documents (including
e-mails) to which this
file was attached or in
which it was
embedded. Only the
first page of the first
attachment and the last
page of the last
attachment are
indicated.

Bates range of all
document that were
physically attached by
clips, staples, or
binding. Only the first
page of the first
attachment and the last
page of the last
attachment are
indicated.

<blank>
<blank>
<blank>
<blank>
<blank>
<blank>

<blank>
<blank>
<blank>
<blank>
<blank>
<blank>

Name of Field

Type of
field

Message_ID

Text

Filename
Native_File

Paragraph
Paragraph

Text

Paragraph

E-mail
For e-mails in
Microsoft Outlook, the
“Message ID” field;
For e-mail stored in
Lotus Notes, the
UNID field
<blank>
<blank>
Text extracted from
the message body

Word Processing or
PDFs
<blank>

The name the file
The path to the native
file on the production
media
Text extracted from
the file. However, if
the file does not
contain text or if
redactions were made,
then OCR text shall be
provided.

Contents
Spreadsheets

Digital Photos

Paper

<blank>

<blank>

<blank>

The name the file
The path to the native
file on the production
media
Text extracted from
the file or if redactions
were made, then OCR
text shall be provided.

The name the file
<blank>

<blank>
<blank>

<blank>

OCR Text

-12STIPULATION AND ORDER GOVERNING RULE 69 DISCOVERY