Hull v. WTI, Inc.

744 S.E.2d 825, 322 Ga. App. 304, 2013 Fulton County D. Rep. 1957, 2013 WL 2996191, 2013 Ga. App. LEXIS 503
CourtCourt of Appeals of Georgia
DecidedJune 18, 2013
DocketA13A0003
StatusPublished

This text of 744 S.E.2d 825 (Hull v. WTI, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hull v. WTI, Inc., 744 S.E.2d 825, 322 Ga. App. 304, 2013 Fulton County D. Rep. 1957, 2013 WL 2996191, 2013 Ga. App. LEXIS 503 (Ga. Ct. App. 2013).

Opinion

BARNES, Presiding Judge.

This appeal involves a discovery dispute about electronic records. The trial court granted the plaintiff’s motion to compel the six defendants to identify which documents they produced responded to each of the plaintiff’s requests to produce. The court also sanctioned the defendants for identifying more than 80 percent of the documents as “Highly Confidential — Outside Attorneys’ Eyes Only” and awarded the plaintiff $7,500 in attorney fees. We granted the defendants’ application for interlocutory appeal, and for the reasons that follow, we affirm the trial court’s order.

Trial courts have broad discretion to control discovery, which is appropriate

because trial judges, through their direct involvement with the case, the parties, and the attorneys, and their familiarity with the actions of the parties in the conduct of discovery in similar cases that are properly brought to their attention, are in the best position to evaluate the parties’ conduct and to determine the appropriate level of sanctions.

(Citations omitted.) Howard v. Alegria, 321 Ga. App. 178, 188 (4) (a) (739 SE2d 95) (2013).

The facts in the underlying business litigation are complicated. WTI, Inc., which develops and sells “marinades, custom blends, water soluble ingredient mixtures and nutraceuticals for the food processing industry,” filed a 13-count complaint against six defendants1 for breach of contract, trade secret misappropriations and other business tort claims. Some of the defendants, including “food technologist” and former employee Richard S. Hull, filed counterclaims against WTI for breach of contract, trade secret misappropriation, and trademark infringement, among other things.

Massive discovery ensued between the parties and third parties, resulting in massive disputes. The trial court entered a twelve-page stipulated protective order regarding confidential and proprietary issues. Pursuant to the order, the parties could designate documents containing certain information as either “Confidential” or “Highly Confidential — Outside Attorneys’ Eyes Only.” The order defined “confidential” and “highly confidential,” specified the entities with [305]*305whom the information could be shared, and provided that the lawyers could not review highly confidential information with their clients. Finally, the order provided that any party could request a producing party to re-designate confidential or highly confidential documents, and that if the parties could not agree, the trial court would resolve the categorization dispute.

The defendants subsequently moved the court to compel WTI “to fully and completely respond” to its discovery requests, arguing that WTI had failed to identify with sufficient particularity the trade secrets and confidential information it claims the defendants misappropriated. They also objected to responses that relied on OCGA § 9-11-33 (c), which provides that when the answer to an interrogatory may be derived from business records produced and the burden of deriving the answer is substantially the same for both parties, it is sufficient for the respondent to refer to the records and give the other party an opportunity to examine them and make copies or summaries. After a hearing, the trial court denied the motion. The court reviewed specific discovery requests and responses and found that WTI had sufficiently produced and identified documents containing the information sought, and properly relied in some responses on OCGA § 9-11-33 (c).

A month later, WTI moved the trial court to compel the defendants to identify which documents produced were responsive to which of its requests for production and to withdraw the highly confidential label from all documents that did not qualify for that designation. It also argued that the defendants had so abused the highly confidential label that they should no longer be able to use it at all and should be sanctioned by being required to pay attorney fees for WTI’s trouble and expense.

At a hearing on the motion to compel and for sanctions, WTI asserted that it could not identify from the defendants’ discovery responses the documents on which the defendants would rely to support their answers and counterclaims. It argued that it served about 100 unique requests for production, which were asked of more than one defendant because it did not know which defendants held which documents, but received 156,000 pages of documents from which to glean the information. Additionally, WTI argued that if the documents had been produced as kept in the usual course of business, they were inadequately organized, and that the defendants should be required to provide responsive documents “organized and labeled to correspond to the categories in the requests.” For example, WTI argued, it had no way to identify the documents on which Hull relied for his counterclaim asserting he was entitled to stock options.

[306]*306Finally, WTI argued that the defendants initially labeled 95 percent of the documents produced as “highly confidential,” which meant counsel could not confer with the clients about whether the documents were useful or not. When WTI objected and gave the defendants examples of documents that did not meet the protective order’s definition of highly confidential, the defendants redesignated those particular documents, leaving 83 percent of them labeled highly confidential as of the hearing.

The defendants responded that they were under no legal obligation to identify which documents correlated to which request to produce. Absent any specific directive in the Georgia Civil Practice Act (“CPA”) regarding electronic records, they relied on Federal Rule of Civil Procedure 34 (b) (2) (E), which provides that a party may produce documents either as kept in the ordinary course of business or organized and labeled to correspond to categories.2 In response to WTI’s discovery requests, the defendants scanned all of the paper documents in the form and order in which they were kept in filing cabinets, extracted electronic documents from hard drives and e-mail messages from accounts which were then processed into images, and Bates-stamped the documents in the order they were found. Additionally, the defendants argued, they created “load files,” electronic indexes that allow a user to search the data by certain fields such as file name, date sent or created, and e-mail sender and recipient. When asked by the trial court at the hearing how WTI’s counsel would find documents related to Hull’s stock option counterclaim, however, the defendants’ counsel instead explained how to search the fields. For example, counsel searched the “filename” field for a mutual customer’s name, and the load file identified 9,000 documents. WTI noted in reply that the documents themselves were not keywordsearchable; only the data fields were, and thus the index was of limited use for its purposes.

As to the confidential designations, the defendants’ counsel twice confirmed to the trial court that each document had been reviewed by [307]*307an attorney to determine whether the designation given was appropriate.

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Related

Mansell 400 Associates, L.P. v. Entex Information Services, Inc.
519 S.E.2d 46 (Court of Appeals of Georgia, 1999)
Barnum v. Coastal Health Services, Inc.
653 S.E.2d 816 (Court of Appeals of Georgia, 2007)
Howard v. Alegria
739 S.E.2d 95 (Court of Appeals of Georgia, 2013)

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744 S.E.2d 825, 322 Ga. App. 304, 2013 Fulton County D. Rep. 1957, 2013 WL 2996191, 2013 Ga. App. LEXIS 503, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hull-v-wti-inc-gactapp-2013.