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Use of Agreed-Upon Search Terms Not Proxy for Gathering All Responsive Info
Parties typically seek to narrow the scope of potentially responsive documents by meeting and conferring and reaching agreement on appropriate search terms. The parties next run those search terms against the data collected from the relevant custodians and review the resulting information for responsiveness. This method of identifying responsive electronic data has more or less become the norm in cases involving large data collection efforts. Occasionally, however, search terms miss the mark and fail to capture the information the opposing party is entitled to receive. The Delaware Court of Chancery recently addressed this and other related issues in deciding motions to compel filed by the defendant in BTG International v. Wellstat Therapeutics, No. 12562-VCL (Oct. 4).
The plaintiff, BTG International Inc., sought a declaration that it met the "diligent efforts" requirements of the parties' agreement with respect to its promotion of a certain cancer treatment product called Vistogard. The defendant, Wellstat Therapeutics Corp., counterclaimed seeking a declaration that BTG breached its obligations in this regard. To prove its counterclaims, Wellstat sought evidence regarding the efforts undertaken by BTG to support "the prelaunch, launch, and ongoing promotion of Vistogard." Wellstat sought to discover "BTG's actual investment in personnel and financial resources for the promotion and sale of Vistogard" for purposes of establishing exactly what BTG's efforts had been. Wellstat also sought similar information regarding three other products referenced in BTG's complaint.
On its motions, Wellstat argued that, although the parties met and conferred with respect to the selection of search terms, that process failed to capture certain discoverable information, primarily from BTG's financial reporting system. Such information, according to Wellstat, would not be responsive to searches of employee mailboxes. Wellstat also sought BTG's internal assessment of the economic potential of the Vistogard product, which included forecasted profits and losses. Wellstat argued that this information also was not responsive to the search terms or otherwise included in BTG's production.
BTG countered that its discovery efforts to that point were substantial and, to require what Wellstat requested, would cause BTG an undue and disproportionate burden. BTG argued that the parties met and conferred on four separate occasions and reached agreement on an "extensive" set of search terms, which BTG applied to the data of a total of 26 custodians. In contrast, according to BTG, Wellstat had produced only 10 custodians. BTG also maintained that it had produced over 75,000 documents and attempted to defend the search terms selected in an effort to show all responsive information would have been identified and produced. At bottom, it was BTG's position that it applied "broad search terms" and determined through a "laborious search term process" the documents that were responsive to Wellstat's requests.
Ruling from the bench, the court rejected BTG's arguments and granted both of Wellstat's motions in their entirety. With respect to BTG's reliance on the search terms, the court found that, because only the party running the search terms, and making the production, knows what information is available, search terms should be considered a "starting point." The court noted that a party receiving a production resulting from the use of search terms could be "entirely justified" in seeking to expand the searches after having an opportunity to review the information provided. The recipient of a production does not know until it receives the production what information is available and should have the right, after reviewing the production, to request additional responsive information that the search terms fail to uncover.
The court further ordered that BTG produce the financial information Wellstat requested, including statements identifying revenues, profits, losses and expenses. The court was not convinced by the argument that, because such information was not in hard-copy form, it did not exist. The court noted such information was most likely available on BTG's accounting system and could be accessed by BTG running appropriate queries. Accordingly, BTG was required to produce it.
Finally, the court rejected BTG's proportionality argument, finding that there should be no surprise, based on the context of the dispute, that BTG, as the party responsible for launching Vistogard, would have "relatively more custodians and relatively more documents." Proportionality, as stated by the court, "means proportionate to the issues, proportionate to the degree of involvement, and proportionate to who has the bulk of the information." If one party "has the majority of the information," it is proportionate for that party "to produce a majority of the information." The court found that it would be disproportionate for the party with "the bulk of the information" to limit what it produces, on grounds that its opponent has less information.