Beef Products, Inc. v. Hesse

Filing 160

ORDER granting 125 Motion to Compel. Signed by U.S. District Judge Karen E. Schreier on 12/16/19. (SKK)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
BEEF PRODUCTS, INC.,

4:17-CV-04130-KES

Plaintiff,
vs.

ORDER GRANTING MOTION TO
COMPEL

MICHAEL HESSE,
Defendant.

Plaintiff, Beef Products, Inc., filed a complaint against defendant, Michael
Hesse, alleging a breach of contract claim for solicitation of employees. Docket
64. Beef Products moves to compel Hesse and interested parties, Automatic
Equipment Manufacturing Co., Jeff Carlson, Cameron Jacobs, Alec Hannah,
Chuck Szitas, Britton Wall, and Bryce Snyder 1 (collectively, “Third Parties”), to
respond to specific discovery requests for production and forensic
examinations. Docket 125. Hesse resists the motion to compel. Docket 132.
The Third Parties also resist the motion. Docket 131. For the following reasons,
Beef Products’ motion to compel is granted.
BACKGROUND
On January 26, 2018, Beef Products served its First Set of
Interrogatories and its First Set for Request for Production on Hesse. Docket
127 ¶ 3; Docket 127-6. On February 9, 2018, Beef Products served Third-Party
Subpoenas on Carlson, Jacobs, Wall, Szitas, Snyder, Hannah, and Automatic.
Jacobs, Hannah, Szitas, Wall, and Snyder are collectively known as the
Subject Individuals.
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Docket 127 ¶ 4. Beef Products, Hesse, and the Third Parties participated in
written discovery. Id. ¶ 5. There have been several discovery disputes between
the parties; the parties have filed three motions to compel. Id. ¶ 5; see Dockets
32, 55, 80.
In a letter to Hesse’s counsel, dated March 11, 2019, Beef Products
identified eight outstanding categories of documents that were responsive to
Beef Products’ discovery requests. Docket 127 ¶ 6. On March 13, 2019, Hesse
responded that the March 11th letter was the first time Beef Products raised
these issues; he stated that he would “do [his] best to timely respond.” Docket
127-1 at 8. On March 15, 2019, Hesse had not provided a substantive
response to the March 11th letter, so Beef Products asked Hesse for a response
date. Docket 127 ¶ 7; Docket 127-1 at 10. On March 19, 2019, Hesse
responded that his “goal” was to provide a written response by April 1, 2019.
Docket 127-1 at 12. On March 20, 2019, Beef Products asked Hesse and
Automatic to provide a response by March 22 as to whether they intended to
respond to Beef Products’ requests or whether any documents would be
produced. Id. at 14. That same day, Hesse responded that he produced several
responsive documents and did not see how his production was deficient. Id. at
16. On March 21, 2019, Beef Products sent an email describing why Hesse’s
discovery was deficient. Id. at 19.
On March 22, 2019, Hesse emailed Beef Products a timeline regarding
the current discovery dispute. Id. at 22-24. Hesse maintained his position that
he produced all responsive documents and alleged that any attempt for judicial
2

relief for the dispute was premature. Id. at 23. On March 25, 2019, Beef
Products responded that though Hesse had produced documents responsive to
the eight categories of outstanding discovery, there were still “holes” in his
production. Id. at 26-30. In this email, Beef Products provided a list of the
types of documents it believed Hesse should produce in response. Id. at 26-29.
On March 27, 2019, Hesse responded that he was amendable to
producing documents to respond to some of the requests, but he viewed other
requests to be unduly burdensome and disproportionate. Id. at 32. Hesse
informed Beef Products that he did not believe he could produce the requested
documents by the April 3rd deadline because he was focused on producing
other documents that were due April 8th. Id. The next day, Beef Products
inquired about the date that the requested documents would be produced. Id.
at 34. On April 1, 2019, Hesse emailed Beef Products that he was working with
Automatic to produce documents around April 19th. Id. at 36. On April 19,
2019, Hesse began producing responsive documents. Id. at 40. But on April 23,
2019, Beef Products informed Hesse by email that he was still deficient in
producing responsive documents beyond his initial production on April 19th.
Id. at 42. Hesse did not respond. Docket 127 ¶ 11.
Beef Products also met and conferred with the Third Parties by phone
and email to discuss the outstanding discovery, privilege and redaction logs,
and forensic examination. Id. ¶ 12. On February 11, 2019, Beef Products and
the Third Parties had a meet-and-confer call. Id.; see Docket 127-2 at 5-9. On
the call, the Third Parties agreed to produce Carlson’s supplemental production
3

responses and their privilege and redaction logs by March 15, 2019. Docket
127 ¶ 12. Beef Products inquired about conducting a forensic examination of
the Third Parties’ computer systems and devices. Id. ¶ 13; Docket 127-2 at 9.
Following the meet-and-confer call, the Third Parties informed Beef
Products that they would not agree to a forensic examination. Docket 127-2 at
11. The Third Parties also requested two extensions of the deadline for their
response to the February 11th letter and for production of the requested items.
Id. at 18, 22; Docket 127 ¶ 14. Beef Products was reluctant to grant the
extensions, but agreed to both. Docket 127 ¶¶ 14, 15; Docket 127-2 at 20, 24,
28. On two occasions Beef Products emailed the Third Parties inquiring about
the status of the outstanding discovery. Docket 127 ¶ 15; Docket 127-2 at 24,
26. On April 23, 2019, Beef Products told the Third Parties that it intended to
seek relief from the court because of the extended delay in production. Docket
127-2 at 32. In response, the Third Parties noted the large amount of discovery
they were involved in and that they were continuing to work on producing
supplemental discovery and the logs. Id. at 35.
On May 3, 2019, Beef Products filed the present motion to compel
forensic examination and production of documents. Docket 125.
LEGAL STANDARD
Federal Rule of Civil Procedure 26 governs the scope of discovery in civil
matters, providing:
Unless otherwise limited by court order, the scope of discovery is
as follows: Parties may obtain discovery regarding any
nonprivileged matter that is relevant to any party’s claim or
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defense and proportional to the needs of the case, considering the
importance of the issues at stake in the action, the amount in
controversy, the parties’ relative access to relevant information, the
parties’ resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed
discovery outweighs its likely benefit. Information within this scope
of discovery need not be admissible in evidence to be discoverable.
Fed. R. Civ. P. 26(b)(1). If a party does not produce requested documents, the
party seeking discovery requests may move for an order compelling production.
See Fed. R. Civ. P. 37(a)(3)(B).
The scope of discovery under Rule 26(b) is extremely broad. See 8
Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2007
(3d ed. 2015). The reason for the broad scope of discovery is that “[m]utal
knowledge of all the relevant facts gathered by both parties is essential to
proper litigation. To that end, either party may compel the other to disgorge
whatever facts he has in his possession.” Id. (quoting Hickman v. Taylor, 329
U.S. 495, 507 (1947)). The federal rules distinguish between discoverability and
admissibility of evidence. Thus, the rules of evidence assume the task of
keeping out incompetent, unreliable, or prejudicial evidence at trial. But these
considerations are not inherent barriers to discovery. Christensen v. Quinn,
2013 WL 1702040, at *4 (D.S.D. Apr. 18, 2013).
DISCUSSION
I.

Michael Hesse
Beef Products moves to compel Hesse to produce relevant, non-privileged

documents responsive to Beef Products’ First Set of Requests for Production
(Docket 127-6). Docket 125 at 1; Docket 126 at 17-18. Beef Products alleges
5

that Hesse has outstanding or deficient discovery for seven categories of
documents. Docket 126 at 18-19; see also Docket 127-1 at 4-6. Hesse argues
that he produced all responsive documents for these requests and
supplemented his responses. Docket 132 at 3. The court will address each of
the seven categories in turn.
A.

Documents Evidencing Salary, Bonus, and Benefits Paid to the
Subject Individuals for the Relevant Time Period

Beef Products made a number of requests for production that relate to
the compensation and benefits of the Subject Individuals. Docket 127-1 at 5.
REQUEST NO. 19: Any and all DOCUMENTS RELATING TO the
compensation AUTOMATIC has paid or will pay each of the
SOLICITED EMPLOYEES, including, but not limited to, salary,
bonus, and benefits.
.
.
.
REQUEST NO. 22: Any and all DOCUMENTS sufficient to show the
compensation AUTOMATIC has paid or will pay individuals within
AUTOMATIC’s sales group or department during the RELEVANT
TIME PERIOD, including, but not limited to, salary, bonus, and
benefits.
.
.
.
REQUEST NO. 71: ANY and all DOCUMENTS RELATING TO
compensation paid to the SOLICITED EMPLOYEES during the
RELEVANT PERIOD, including, but not limited to, commissions,
“fixed salary,” and “perks.”
Docket 127-6 at 12, 13, 20.
Hesse objects to this category and argues that he produced the personnel
files for the Subject Individuals. Docket 132 at 3. Hesse states that the
personnel files contain compensation information, W-2s showing 2017 and
2018 salaries, benefit information, employee handbook, and documents
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covering travel, vacation, and retirement information. Id. Hesse also argues
that if Beef Products has any additional questions regarding this topic, Beef
Products can ask such questions at the depositions. Id. at 4.
Beef Products contends that the personnel files do not contain sufficient
information to fully respond to the requests. Docket 142 at 13. First, Beef
Products would like Hesse to produce W-2s from 2016. Id. Second, Beef
Products alleges that the benefits information only pertains to those currently
offered in 2019 and does not provide information for 2016-2018. Id. at 14.
Hesse does not object to the relevancy of these requests. Thus, the court
considers the requests to be relevant. Hesse needs to produce W-2s for the
Subject Individuals and Automatic’s employees for 2016. Additionally, Hesse
must produce any benefit documents for the Subject Individuals and
Automatic’s other sales employees for 2016-2018.
B.

Documents Evidencing the Start of Health and/or other
Benefits for the Subject Individuals

Beef Products’ requests #19 and 22 call for the production of documents
that refer to the start of benefits for the Subject Individuals. Docket 127-1 at 5;
Docket 127-6 at 12, 13. Hesse objects to the motion as it relates to this
category and argues that the category does not fall within the scope of the
requests. Docket 132 at 5.
Request #19 pertains to “any and all documents relating” to
compensation including benefits. Docket 127-6 at 12 (emphasis added). The

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term “relating” encompasses the start date of health and other benefits. Thus,
this objection is overruled.
Hesse also objects to this category because he already produced this
information. Hesse alleges that he produced information regarding benefits
given to the salespeople (health, financial, and wellness benefits) and
information about offer and hire dates for the Subject Individuals. Docket 132
at 5. Beef Products argues that Hesse has not produced any documents that
show the date the Subject Individuals started to receive benefits from
Automatic. Docket 142 at 15. The documents produced showing the offer and
hire dates are not responsive to the requests for production on the benefits’
start dates. The fact that an employee was offered a job or hired on a certain
date does not illustrate when the employee began to receive benefits.
Beef Products’ motion to compel for this category of documents is
granted. Hesse should provide any documents that show the start of health
and/or other benefits for the Subject Individuals.
C.

Full Salary and Compensation Information for Individuals
Employed in Sales Positions at Automatic other than the
Solicited Employees, including Bonus and Commission
Payments, for 2015-2018

Beef Products requested the production of full salary and compensation
information, including bonus and commission payments, for Automatic’s other
salespeople for 2015-2018. Docket 127-1 at 5. This category of information
relates to request #22. See Docket 127-6 at 13. Hesse has two objections to
this category.
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First, Hesse argues that the documents of other Automatic salespeople,
other than the Subject Individuals, are not relevant to Beef Products’ claims.
Docket 132 at 5. Beef Products argues that this category is relevant. Docket
142 at 15-16. Additionally, Beef Products alleges that Hesse’s own
counterclaim puts Automatic’s salespeople’s compensation at issue. Id. at 15.
The compensation of Automatic’s employees is relevant to Beef Products’
breach of contract claim and Hesse’s declaratory judgment counterclaim. A
discrepancy in pay between the Subject Individuals and Automatic’s employees
could be evidence or could lead to admissible evidence that Hesse changed the
compensation and benefits plans to solicit the Subject Individuals. This
objection is overruled.
Second, Hesse states that he produced documents that show
compensation and benefits for Automatic’s salespeople. Docket 132 at 5. Beef
Products argues that the personnel files produced do not show compensation
for non-solicited employees for 2015-2018. Docket 142 at 15. Hesse only
produced personnel files and W-2s for the Subject Individuals. Docket 132 at
5-6. But Beefs Products’ request permissibly extends to all Automatic
employees, including non-solicited employees.
Beef Products’ motion to compel this category of documents is granted.
Hesse should produce documents that show compensation for Automatic’s
employees, including non-solicited employees, for 2015-2018. See Docket 1271 at 27 (listing specific documents Beef Products seeks for this category).

9

D.

Automatic’s Business/Strategic/Sales Plans and Strategies for
the Relevant Time Period

Beef Products requested production of Automatic’s business and sales
plans. Docket 127-1 at 5.
REQUEST NO. 35: Any and all DOCUMENTS RELATING TO
AUTOMATIC’s business plan during the RELEVANT TIME PERIOD,
including, but not limited to, sales plans, strategies, and goals.
Docket 127-6 at 15.
Hesse objects to this request and argues that it is irrelevant, overbroad,
unduly burdensome, and not proportional to the needs of the case. Docket 132
at 6. The court finds that this request is relevant. Automatic’s business,
strategic, and sales plans for the relevant time period could demonstrate that
Hesse and Automatic modeled the business’s growth and sales based on their
plan for the Subject Individuals to work at Automatic. Hesse has not shown
how production for this category would be unduly burdensome, and the court
finds that this request is sufficiently narrowly tailored that it is not overly
broad because the request is limited to the “relevant time period.”
Also, Hesse alleges that he has already produced documents for this
request and supplemented his responses. Docket 132 at 6; Docket 133 ¶ 5(j)(k). Hesse argues that Beef Products failed to explain why additional production
would be relevant. Docket 132 at 7. Beef Products acknowledges that Hesse
produced responsive documents from 2017, but alleges that there is no
information from 2016, except a spreadsheet dated June 30, 2016, which

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contains Hesse’s personal expenses and other “non-relevant” projections.
Docket 142 at 16-17.
On March 25, 2019, Beef Products’ counsel sent Hesse’s counsel by
email a list of specific documents it was seeking under each category and why
the documents produced at that time were deficient. Docket 127-1 at 26-30.
For this category, Beef Products stated that it was looking for “[a]ny
documents, spreadsheets, or communications discussing Automatic’s business
or sales plans” for 2015, 2016, 2017, and 2018. Id. at 28.
Beef Products’ motion to compel for this category is granted. Hesse
should produce any documents that are responsive to the request, specifically
any documents listed in Beef Products’ email (Docket 127-1 at 28).
E.

Automatic’s Forecasted and/or Projected Sales for the
Relevant Time Period

Beef Products requested production of information and documents
containing Automatic’s forecasted and/or projected sales. Docket 127-1 at 5.
REQUEST NO. 36: Any and all DOCUMENTS RELATING TO
AUTOMATIC’s forecasted or projected sales during the RELEVANT
TIME PERIOD.
Docket 127-6 at 15.
Hesse objects to this request and argues that such information is not
relevant. Docket 132 at 7. The court finds this category is relevant. This
information could show that Automatic was acting on its belief that the Subject
Individuals would join the company if the projected sales show that Automatic
forecasted an increase in sales over time.
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Hesse also argues that he produced responsive documents, and any
additional production is not relevant or proportional to the needs of the case.
Docket 132 at 7. Beef Products alleges that Hesse has not produced any sales
projections from before 2017. Docket 142 at 18. Beef Products only received
Automatic’s 2016 sales projection because “someone at Automatic decided to
forward the information” to a Beef Products email account. Id. at 17. Beef
Products acknowledged that Hesse produced an email and attachment
regarding sales targets for Snyder, but failed to produce similar documents for
the other Subject Individuals. Docket 127-1 at 28.
Beef Products’ motion to compel for this category is granted. Hesse
should produce any and all documents showing Automatic’s sales projections
and plans from 2016-2018.
F.

Automatic’s Sales Budget, including Amounts Budgeted for
Compensation to Individuals in the Sales Group or
Department, for the Relevant Time Period

Beef Products requested production of information and documents
detailing Automatic’s sales budget. Docket 127-1 at 5.
REQUEST NO. 37: Any and all DOCUMENTS RELATING TO
AUTOMATIC’s sales budget during the RELEVANT TIME PERIOD,
including but not limited to amounts budgeted for compensation to
individuals in the sales group or department.
Docket 127-6 at 15.
Hesse objects to this request and argues that such documents are not
relevant, though he still produced responsive documents. Docket 132 at 8. He
contends that any further production is not relevant or proportional to the
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needs of the case. Id. Beef Products contends that Hesse only produced one
document from 2016 and it was not responsive to the request. Docket 142 at
18. The court finds that this category is relevant. This information can show
whether Automatic budgeted for the Subject Individuals before Hesse signed
the Transition Agreement. As to Hesse’s production, the lone document from
2016 does not adequately respond to this category.
Beef Products’ motion to compel for this category is granted. Hesse
should produce any documents in his possession that are responsive to this
request for 2015-2018. See Docket 127-1 at 28-29.
G.

Automatic’s Sales, including Sales by Product, Region, and
Salesperson, during the Relevant Time Period

Beef Products requested production of information and documents
containing Automatic’s sales. Docket 127-1 at 5.
REQUEST NO. 38: DOCUMENTS sufficient to show AUTOMATIC’s
sales during the RELEVANT TIME PERIOD, including, but not
limited to, sales by product, sales by region, and sales by
salesperson.
Docket 127-6 at 15.
Hesse objects to this category and argues that the category is not
relevant. Docket 132 at 9. The court finds that Automatic’s sales information is
relevant. This information could establish whether Automatic’s agriculture
sales increased consistent with Hesse’s plan to use the Subject Individuals to
grow Automatic’s sales. It could also be used to evaluate Automatic’s needs to
hire the Subject Individuals and identify income disparities between the
Subject Individuals and other Automatic employees. Beef Products intends to
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compare Automatic’s sales figure pre-Subject Individuals with the sales figures
after the Subject Individuals started at Automatic. See Docket 142 at 19.
Hesse also alleges that he already produced responsive documents and
any further production would be irrelevant. Docket 132 at 8, 9. Beef Products
contends that Hesse has not produced any sales information prior to 2017.
Docket 142 at 19. Beef Products acknowledges that Hesse has produced
responsive documents from 2017, but is seeking additional information and
documents from 2017 and other years. See Docket 127-1 at 29.
Beef Products’ motion to compel for this category is granted. Hesse
should produce any documents that are responsive to this category, except the
documents already produced by him.
II.

Third Parties
A.

Privilege and Redaction Logs

Beef Products moves to compel privilege and redaction logs from the
Third Parties under Rule 45 of the Federal Rules of Civil Procedure. Docket 126
at 16, 20. Beef Products states that the Third Parties have not produced a
single privilege or redaction log. Id. at 16, 21. The Third Parties argue that the
motion should be denied as moot because they intend to comply with Beef
Products’ request and are working on producing the logs. Docket 131 at 1 n.1.
Rule 45 of the Federal Rules of Civil Procedure requires privilege and
redaction logs. See Fed. R. Civ. P. 45(e)(2). When a party withholds subpoenaed
information based on a claim of privilege or attorney work product material, the
withholding party must “expressly make the claim” and “describe the nature of
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the withheld documents, communications, or tangible things in a manner that,
without revealing information itself privileged or protected, will enable the
parties to assess the claim.” Id.
Beef Products states that the Third Parties produced documents with
“unexplained redactions and missing information.” Docket 142 at 4. The
parties originally agreed that the Third Parties would disclose their privilege
and redaction logs by March 15, 2019. Docket 127-2 at 8. As of May 3, 2019,
when Beef Products filed its motion to compel, the Third Parties had not
provided any logs. Docket 126 at 21.
Beef Products’ motion to compel as it pertains to the Third Parties’
privilege and redaction logs is granted. The Third Parties shall provide privilege
and redaction logs to Beef Products on or before December 20, 2019.
B.

Deposition Documents

Beef Products moves to compel Automatic to produce documents
referenced during its Rule 30(b)(6) deposition. Docket 126 at 21. Beef Products
requests the production of the following documents: (1) signed preservation
documents; (2) document search queries and parameters; and (3) Automatic’s
employee handbook. Id. at 22. Beef Products contends that the deponents
referred to these documents during depositions, but the documents have not
been produced by Automatic. Id. at 21-22. The court will address each of these
documents in turn.

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1.

Signed Preservation Documents

Beef Products contends that the signed preservation documents
referenced by Ellen Kietzmann are relevant to determine whether Automatic’s
conduct in producing documents was improper. Docket 126 at 23. Automatic
argues that the motion to compel should be denied because the preservation
documents are protected by the attorney-client privilege. Docket 131 at 5 n.2.
Beef Products argues that the documents are not privileged. Docket 126 at 22.
The attorney-client privilege protects litigation hold letters. Nekich v. Wis.
Cent. Ltd., 2017 WL 11454634, at *5 (D. Minn. Sept. 12, 2017); Brown v. W.
Corp., 287 F.R.D. 494, 499 (D. Neb. 2012) (stating litigation hold letters are
privileged). An exception to this privilege exists when a party demonstrates
spoliation. See Nekich, 2017 WL 11454634, at *5; see also Magnetar Techs.
Corp. v. Six Flags Theme Park Inc., 886 F. Supp. 2d 466, 482 (D. Del. 2012).
Additionally, the information surrounding the letters is not privileged:
The people to whom the letter was sent, the directions for
preservation, the sources identified for search, the terms used for
the search, the defendant’s continued efforts to ensure compliance,
and any other information relevant to the scope and depth of the
preservation or the search must be disclosed in detail so that
precise objections can be made and so that defendant’s search can
be effectively reviewed[.]
Brown, 287 F.R.D. at 499.
Beef Products alleges that “Automatic’s position, combined with its
refusal to cooperate in discovery, demonstrates that Automatic acted
improperly when it collected and reviewed documents for responsiveness.”
Docket 142 at 10; see also Docket 126 at 23. Beef Products “questions the
16

nature of the supposed preservation document” and alleges that Automatic
failed to preserve documents. Docket 142 at 10. Beef Products’ argument does
not amount to spoliation.
Though Beef Products has not demonstrated spoliation to warrant
production of the litigation hold letter itself, Beef Products has demonstrated
that Automatic’s search for relevant documents suggests an “unguided,
unreliable search.” Brown, 287 F.R.D. at 500. The affidavit of Automatic’s
counsel describing the preservation process (Docket 131-1 ¶¶ 9-10, 13) and the
affidavit of the firm’s IT employee describing the search process (Docket 150-2)
are “not sufficiently detailed to determine whether [Automatic] has reasonably
complied with [Beef Products’] request for production.” Brown, 287 F.R.D. at
500. Thus, Automatic shall provide all the information surrounding the
litigation hold letter issued by Automatic’s counsel.
2.

Document Search Queries and Parameters

Beef Products argues that the search queries are relevant and not
privileged. Docket 126 at 23. Automatic contends that the motion should be
denied because Beef Products has refused to furnish its own search queries to
Hesse—thus, if the litigating parties have not exchanged their search queries,
then a third party should not be compelled to provide them. Docket 131 at 5
n.3. In its reply, Beef Products states that it is willing to exchange this
information for reciprocal treatment by Automatic. Docket 142 at 10-11.
Parties are entitled “to know what search criteria was used in retrieving
relevant ESI.” Nissan N. Am., Inc. v. Johnson Elec. N. Am., Inc., 2011 WL
17

1002835, at *4 (E.D. Mich. Feb. 17, 2011); see also FormFactor, Inc v. MicroProbe, Inc., 2012 WL 1575093, at *7 n.4 (N.D. Cal. May 3, 2012) (stating that
search terms are “not subject to any work product protection” and are
discoverable to show that an adequate search was conducted).
Beef Products’ motion to compel as it pertains to search queries is
granted. In effort to make discovery cooperative, Beef Products, Hesse,
Automatic, and the other Third Parties must provide their search queries and
parameters to the other parties by December 20, 2019.
3.

Automatic’s Employee Handbook

Beef Products argues that Automatic’s employee handbook is relevant
and should be produced by Automatic. Docket 126 at 22-23. Automatic argues
that the motion should be denied as moot because Hesse already produced the
handbook. Docket 131 at 1 n.1. Beef Products alleges that Hesse produced
“what appears to be” the handbook, but the metadata associated with the
document is missing. Docket 142 at 9 n.3.
A claim of duplication does not protect a person from having to produce
documents in the first instance that may also have been produced previously
by another party. United States v. Three Bank Accounts, No. 4:05-CV-04145KES, 2008 WL 915199, at *5 (D.S.D. Apr. 2, 2008). Thus, Automatic’s
duplication argument is not a valid objection. Furthermore, the authenticity of
the handbook produced by Hesse has been questioned by Beef Products. See
Docket 142 at 9 n.3; Docket 143-2 at 2.

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Beef Products’ motion to compel as it pertains to the handbook is
granted. The handbook in possession of Automatic is relevant and should be
produced.
C.

Carlson’s Supplemental Documents

Beef Products requested supplemental documents regarding Carlson’s
new email account. Docket 127-2 at 8. Beef Products alleges that Carlson did
not produce any supplemental documents, though he said he would. Docket
126 at 17. Carlson states that he is working on supplementing his email
production, and thus, the court should deny the motion to compel as moot
because he intends to comply. Docket 131 at 1 n.1.
Carlson has had adequate time to produce these supplemental
documents and has failed to do so. On March 14, 2019, Carlson’s counsel
requested a seven-day extension. Docket 127-2 at 18. Beef Products agreed to
a three-day extension. Id. at 20. On March 18, 2019, the new deadline,
Carlson’s counsel informed Beef Products that they were still working on the
supplemental documents and would produce them by March 20, 2019. Id. at
22. On March 25 and 26, 2019, Beef Products asked Carlson’s counsel for an
update on the supplemental documents. Id. at 24, 26. The parties had a
telephone conversation and Beef Products agreed to move the deadline to April
5, 2019. Id. at 28. On April 23, 2019, Beef Products still had not received the
supplement documents from Carlson and reached out to counsel. Id. at 32. On
April 26, 2019, Carlson’s counsel responded that they were still working on the
supplement. Id. at 35.
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As of May 3, 2019, the date Beef Products filed its motion to compel,
Carlson had not produced any supplemental documents. Docket 126 at 17.
Since the motion was filed, Carlson produced 90 pages. Docket 142 at 4.
Additionally, on June 4, 2019, Carlson produced another 61 pages. Id. at 5.
Beef Products, however, claims that these pages are “meaningless and
irrelevant” to claims and do not contain any metadata. Id.
Beef Products’ motion to compel as it relates to Carlson’s supplemental
discovery is granted. Carlson shall produce these documents on or before
December 20, 2019.
D.

Requests for Forensic Examination

Beef Products argues that the Third Parties must submit to a forensic
examination under Rule 34 of the Federal Rules of Civil Procedure. Docket 126
at 8, 24. Beef Products argues that the Third Parties “self-selected documents”
to produce in discovery, the productions have significant discrepancies and
missing documents, and the volume of produced documents is “meager.”
Docket 126 at 9, 11, 13, 15, 25, 29. Additionally, Beef Products notes that the
Third Parties will not be prejudiced by a forensic examination because Beef
Products will pay the associated costs. Id. at 9, 11, 13, 29.
In authorizing a forensic examination, the court relies on a host of
factors: (1) the record evidence suggesting the likely loss of potentially
significant corporate documents (mainly emails); (2) the record evidence that
defendants failed to make an adequate search for documents; (3) evidence of
certain anomalies in the documents produced (including emails that may have
20

been altered, and contradictory or absent metadata); and (4) incomplete
production of documents even in the last few months. See Klipsch Grp., Inc. v.
Big Box Store Ltd., 2014 WL 904595, at *7 (S.D.N.Y. Mar. 4, 2014).
Beef Products has shown that serious questions exist as to the reliability
and the completeness of materials produced in discovery by the Third Parties.
First, the record suggests the likely loss of potentially significant emails. When
Third-Party counsel asked the Subject Individuals where certain emails were
and what happened to them, the Subject Individuals stated that “they ‘do not
have a good explanation’ for what happened to those emails.” Docket 127-2 at
9. Third-Party counsel stated that the emails were not deleted with any motive,
but they could not provide a good explanation as to why the emails were not
produced. Id.; see White v. Graceland Coll. Ctr. for Prof’l Dev. & Lifelong
Learning, Inc., 2009 WL 722056, at *8 (D. Kan. Mar. 18, 2009) (granting a
forensic examination when there were discrepancies within the produced
documents and the party could not explain the discrepancies).
Second, the process used by the Third Parties creates questions about
the adequacy of the search. The Third-Party Subpoenas were sent out in March
of 2018. Docket 150-2 ¶ 4. The Third-Party individuals conducted initial
searches of their own email accounts and then provided responsive documents
to counsel. Id. ¶ 5. In April of 2018, Third-Party counsel contacted its IT
department regarding the collection of electronic information from the Third
Parties. Id. ¶ 6. At this point, IT obtained “full and complete” access to the
individuals’ email accounts. Id. ¶ 7. IT downloaded and exported “the entirety
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of the contents of each email account.” Id. ¶ 8. But IT only got full access to the
email accounts a month after subpoenas were issued and after the individuals
already conducted their own searches. It is possible the individuals deleted
incriminating evidence during their initial searches. The download of the email
accounts—after the fact—may not show these deleted emails; but a forensic
examination can show if such deletion occurred.
Furthermore, the discrepancies of discovery are highlighted by the fact
that Carlson and the Subject Individuals produced some emails from their
accounts, but not the same emails Hesse produced that had been exchanged
between Hesse and the Subject Individuals. Docket 126 at 13. For example,
though Carlson and the Subject Individuals alleged they have produced
everything responsive to the discovery requests (Docket 132 at 8), they failed to
produce emails from 2016, which Hesse produced. See Dockets 127-11 to 12718 (emails). See Ameriwood Indus., Inc. v. Liberman, 2006 WL 3825291, at *3
(E.D. Mo. Dec. 27, 2006) (allowing a forensic examination when a non-party
produced an email that the defendants failed to produce in response to
discovery requests because other deleted or active version of emails may have
still existed on the defendants’ computers); Zubulake v. UBS Warburg LLC, 217
F.R.D. 309, 317 (S.D.N.Y. 2003) (“Zubulake herself has produced over 450
pages of relevant e-mails, including e-mails that would have been responsive to
her discovery requests but were never produced by UBS. These two facts
strongly suggest that there are emails that Zubulake has not received that
reside on UBS’s backup media.”).
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The Third Parties state that they did not produce these emails because
Hesse had already produced them. Docket 132 at 8, 9. But the objection of
duplicative discovery is not valid. Three Bank Accounts, 2008 WL 915199, at
*5.
Third, there is evidence of anomalies in the documents produced. Beef
Products alleges that there were instances where different producing parties
produced a different version of the same document. Docket 142 at 7.
Additionally, Beef Products alleges that there has been missing or altered
metadata. Docket 126 at 10. There are at least three instances of missing
metadata. In a letter to Hesse and Third Parties dated February 18, 2019, Beef
Products noted that there were issues with the authenticity of text messages.
Docket 127-2 at 6. Beef Products wanted the produced text messages to be in
native form with metadata intact. Id. Hesse and the Third Parties stated that
they were not sure that metadata existed for the text messages, but were
potentially open to looking at whether the metadata could be recovered but at
cost to Beef Products. Id. In this same letter, Beef Products noted that there
was missing metadata from Automatic’s production, but Automatic later
produced this metadata. Id. Beef Products considered this issue to be resolved.
Id. On May 30, 2019, Beef Products’ counsel emailed Hesse’s counsel asking
for metadata for Hesse’s supplemental production. Docket 143-2 at 2. In
response, Hesse provided that metadata. Id. On June 4, 2019, Carlson
produced supplemental documents, but none of them contained any metadata.

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Docket 142 at 5. Overall, the missing metadata throughout discovery weighs in
favor of authorizing a forensic examination.
Fourth, there has been incomplete production of documents as
demonstrated by this motion to compel. Carlson and Automatic, specifically,
failed to produce requested and/or supplemental discovery. And as discussed
under the second factor, production has been incomplete because Hesse has
produced documents that the Third Parties should have produced, but did not.
Beef Products has adequately shown that sufficient questions exist, not
only with respect to these emails but also with respect to other discrepancies in
the Third Parties’ discovery responses, such that a forensic examination of
Automatic, Carlson, and the Subject Individuals’ computer hard drives and
email accounts is warranted. Whatever documents or data may be recovered in
the examination, whether existing documents, recovered deleted documents, or
other information, should all be produced first to the Third Parties’ counsel for
its review as to relevance, responsiveness, and privilege, prior to any disclosure
to Beef Products or its counsel. See, for example, inspection protocol discussed
in Playboy Enters., Inc. v. Welles, 60 F. Supp. 2d 1050, 1054-55 (S.D. Cal.
1999).
CONCLUSION
Hesse must produce all the relevant, non-privileged documents in his
possession that are responsive to the seven outstanding categories of discovery.
Automatic must produce its search queries, employee handbook, information
surrounding the preservation documents, and privilege and redaction logs.
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Carlson must produce his outstanding supplemental production. The Subject
Individuals and Carlson must produce their privilege and redaction logs. All the
Third Parties must submit to a forensic examination of their computer systems
and email accounts. Thus, it is
ORDERED that Beef Products’ motion to compel (Docket 125) is granted.
Dated December 16, 2019.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE

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