[Cite as Fasteners For Retail, Inc. v. DeJohn,

.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 100333

FASTENERS FOR RETAIL, INC. PLAINTIFF-APPELLEE

vs.

MICHAEL A. DEJOHN, ET AL. DEFENDANTS-APPELLANTS

JUDGMENT: REVERSED AND REMANDED

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-12-786894

BEFORE: Kilbane, J., Keough, P.J., and McCormack, J.

RELEASED AND JOURNALIZED: April 24, 2014 ATTORNEY FOR APPELLANTS

John F. Burke Burkes Law, L.L.C. 614 West Superior Ave. Rockefeller Bldg., Suite 1500 Cleveland, Ohio 44113

ATTORNEYS FOR APPELLEE

Charna E. Sherman Charna E. Sherman Law Offices 5310 Key Tower 127 Public Square Cleveland, Ohio 44114

F. Benjamin Riek, III Emershaw, Mushkat & Schneier 120 E. Mill Street, Suite 437 Akron, Ohio 44308 MARY EILEEN KILBANE, J.:

{¶1} In this appeal, defendants-appellants, Michael DeJohn (“DeJohn”) and

Daniel Kump (“Kump”),1 appeal from the trial court’s order compelling them to produce

their computer hard drives for forensic imaging2 in litigation filed by plaintiff-appellee,

Fasteners for Retail (“FFR”).

{¶2} Having reviewed the record and the controlling case law, we reverse and

remand the matter for further proceedings consistent with this opinion.

{¶3} This appeal arises from a lawsuit filed by FFR in an unrelated matter in the

United States District Court for the Northern District of Illinios. See Fasteners for Retail

v. Anderson, N.D.Ill. No. 11 C 2164,

(Oct. 28, 2011).

FFR, a company engaged in selling products used in retail shelving displays, brought suit

against K International (“KI”) and Gerald Andersen alleging patent infringement, false

advertising, misappropriation of trade secrets, and other claims. KI filed a counterclaim,

alleging false patent marking and other claims. During the course of the Illinois

litigation, FFR learned that DeJohn, who had worked as FFR’s vice president in charge of

sales until his termination on March 12, 2008, performed consulting work for KI. FFR

also learned that Kump, who had worked as FFR’s vice president for new market

1 Thisappeal was previously consolidated with 8th Dist. Cuyahoga No. 100336, an appeal from the same discovery order filed by defendant Bruce Hrvatin (“Hrvatin”). On March 6, 2014, however, this court granted Hrvatin’s motion to dismiss his appeal. 2On September 10, 2013, this court determined that the discovery order is final and appealable under R.C. 2505.02(B)(4). development until his termination on October 24, 2009, also performed consulting work

for KI.

{¶4} Subsequently, on July 12, 2012, FFR filed suit against DeJohn and Kump in

the Cuyahoga County Common Pleas Court. In relevant part, FFR alleged that DeJohn

and Kump had breached the confidentiality and nondisclosure provisions of their

employment agreements, misappropriated trade secrets, and engaged in unfair

competition; Kump breached his noncompete agreements; and DeJohn tortiously

interfered with Kump’s contract with FFR. DeJohn and Kump filed answers denying

liability and also filed counterclaims asserting breach of contract, abuse of process, and

unfair competition.

{¶5} In October 2012, FFR sought discovery from defendants; however,

defendants did not fully comply with FFR’s request. As a result, on December 7, 2012,

FFR filed a motion to compel in which it complained that DeJohn and Kump filed

incomplete responses to a number of interrogatories. In the motion, FFR stated that

DeJohn and Kump objected to the discovery request because it was overbroad, indicated

overall that they had no list of FFR customers, and argued that neither individual had

disclosed FFR’s confidential information.

{¶6} In response, DeJohn and Kump moved to strike the motion to compel

because it was not signed by counsel. Defendants also asserted that the response “may

exceed 20,000 names. Moreover, plaintiff is fully aware of its customers and this

defendant has no documentation containing any such customers’ names.” In addition, on December 7, 2012, defendants filed their own motion to compel FFR to comply with

discovery, seeking the nature of the confidential information they had allegedly disclosed

to KI. In this motion, defendants complained that FFR had “failed to respond to nearly

all of [their] interrogatories and had failed to produce a single document in response to

the Request for Production of Documents.”

{¶7} On December 26, 2012, FFR moved for a protective order governing use of

confidential information and apprised the court that the parties “have failed to reach

agreement on terms of a stipulated protective order creating a standstill in discovery.”

{¶8} The same day, FFR also filed a motion for electronic discovery, asserting

that the parties “have been unable to agree upon the parameters of discovery.” FFR

proposed that defendants produce “any relevant computer hard drives and electronic

media” for FFR’s review, and from that review a list of search terms would be derived.

Upon completion of defendants’ discovery, FFR would “produce pursuant to a protective

order a subset of documents concerning the information FFR contends constitutes

Confidential Information.” In opposition, defendants asserted that it would be unfair to

order defendants to provide discovery to FFR before FFR provided any discovery to

defendants. Defendants complained that FFR had not provided them with discovery and

that FFR had already received extensive electronic discovery in the Illinois litigation.

{¶9} On March 26, 2013, the trial court granted defendants’ motion to compel

discovery responses and also granted FFR’s motion to compel discovery and for

sanctions. {¶10} On March 27, 2013, FFR filed an amended complaint with leave of court.

In relevant part, this pleading added Hrvatin and KI as new party defendants and alleged

that DeJohn, Kump, and Hrvatin breached their employment agreements,

misappropriated trade secrets, and engaged in unfair competition; that DeJohn tortiously

interfered with Kump’s employment; and that Kump and DeJohn fraudulently induced

FFR to enter into severance agreements.

{¶11} On May 31, 2013, following a pretrial, the trial court ordered, in relevant

part, that FFR “produce 20 gigs of documents” “for attorney’s eyes only,” and identify

those documents that would notify the defendants of the basis of their alleged disclosure

of trade secrets. The trial court also ordered defendants to produce all outstanding

discovery “for attorney’s eyes only.”

{¶12} On July 9, 2013, FFR filed another motion to compel and for sanctions,

complaining that Hrvatin had indicated in response to a motion for production of

documents that “[t]here are no documents that satisfy this request,” and that documents

FFR obtained in the Illinois litigation and Hrvatin’s other discovery responses refuted that

contention.

{¶13} On July 12, 2013, FFR filed a motion to compel defendants to comply with

discovery and for production of their computer hard drives. FFR asserted that

defendants have “engaged in knowingly evasive and even perjured testimony, and

potentially even the spoliation of critical evidence.” In support of this motion, FFR

asserted that there are “mounting signs” that “[d]efendants purposely destroyed relevant electronic information.” FFR asserted that DeJohn stated that he experienced computer

problems that prevented him from retrieving all of his emails, and that Kump had the hard

drive on one of his computers replaced one day before this matter was filed. FFR also

asserted that DeJohn wrote “Hello men” on a number of emails with two recipients who

are employees of FFR, but “FFR has received more of the chain,” thus suggesting that a

larger email chain existed. FFR also submitted evidence that its expert, Mark

Lanterman, had developed an electronic discovery protocol that has successfully been

used by attorneys for years.

{¶14} In opposition, defendants asserted that FFR should not be given unfettered

access to their computers since FFR already had access to all of the email sent to FFR

from its own servers, in addition to all of the information obtained in the Illinois

litigation. Moreover, defendants argued, FFR had not shown that the defendants

revealed any confidential information.

{¶15} On August 8, 2013, FFR filed a motion for an extension of time to respond

to defendants’ requests for discovery. The next day, on August 9, 2013, the trial court

issued the following order:

Defendants Kump, DeJohn, and Hrvatin are hereby ordered to produce electronic discovery and the computer hard drives by 9/3/13.

All parties are to answer all interrogatories served on them by opposing counsel. {¶16} Defendants appealed from that order on August 30, 2013. On September

10, 2013, this court determined the order to be final and appealable under R.C.

2505.02(B)(4), and concluded in relevant part:

To the extent the order requires disclosure of such matter, it determines the

action with respect to a provisional remedy and prevents a judgment in

appellant’s favor with respect to the discovery. Bennett v. Martin,

,

, [

,] ¶ 35 [(10th Dist.)].

An appeal following a final judgment would not be an effective remedy for

the disclosure of privileged and/or confidential information.

{¶17} DeJohn and Kump assign the following errors for our review:

I. The trial court erred because its order compels production of irrelevant, privileged and confidential information and imposes an undue burden on Appellants.

II. The trial court erred in ordering forensic imaging of Appellants’ computer hard drives because Appellee failed to demonstrate what it must [do] to warrant that degree of intrusion, disruption, and invasion.

III. The trial court erred in issuing the discovery order because it fails to

include any protocols and procedures and because it fails to adequately

protect Appellants’ privileged and confidential electronically-stored

information.

Standard of Review

{¶18} Pursuant to Civ.R. 26(B)(1), the scope of discovery is as follows: [A]ny matter, not privileged, which is relevant to the subject matter

involved in the pending action, whether it relates to the claim or defense of

the party seeking discovery or to the claim or defense of any other party[.]

{¶19} An appellate court reviews a claimed error relating to a discovery matter

under an abuse of discretion standard. Lightbody v. Rust,

,

(8th Dist. 2000); Trangle v. Rojas,

,

,

(8th Dist.).

{¶20} Further, if forensic imaging is imposed as a sanction under Civ.R. 37(B), it

is likewise to be reviewed under an abuse of discretion standard. Bennett,

,

,

. Order for Production of the Computer Hard Drives

{¶21} In this matter, the trial court ordered defendants to produce their computer

hard drives for discovery. Forensic imaging of a computer’s hard drive creates a mirror

image that replicates bit for bit, sector for sector, all information on the hard drive,

including embedded, residual, and deleted data.

The Bennett court noted that courts

are generally reluctant to compel such forensic imaging of a hard drive “largely due to the

risk that the imaging will improperly expose privileged and confidential material

contained on the hard drive.”

For that reason, and in order to guard against undue

intrusiveness to a party’s privacy and confidentiality, the Bennett court established a

two-part procedure to determine whether forensic imaging is warranted, as opposed to

other discovery procedures.

First, the trial court must weigh the parties’ interests in

obtaining the discovery against privacy concerns. Second, the trial court must set forth a

protective protocol to ensure forensic imaging is not unduly intrusive. Id.; Nithiananthan

v. Toirac, 12th Dist. Warren No. CA2011-09-098,

, ¶ 9.

1. Weighing of Interests in Discovery Versus Privacy

{¶22} In their first and second assignments of error, DeJohn and Kump assert

that the trial court did not follow the first part of the procedure outlined in Bennett,

,

,

. Defendants argue that the trial

court did not weigh FFR’s interests in obtaining discovery versus the defendants’

competing interests in privacy and confidentiality, and that the record did not establish the

requisite background of noncompliance with discovery. {¶23} With regard to the first part of the procedure, the Bennett court began by

cautioning against undue intrusiveness. Id. at ¶ 41. The court then observed that the

plaintiff was forced to file numerous motions to compel, the defendants did not comply

with the court’s orders to comply with discovery requests, the defendants were untruthful

regarding what had and had not been produced, and the defendants had adopted a

“lackadaisical and dilatory approach.” Id. at ¶ 42.

{¶24} The Bennett court stated:

Thus, before compelling forensic imaging, a court must weigh “the significant privacy and confidentiality concerns” inherent in imaging against the utility or necessity of the imaging. * * * In determining whether the particular circumstances justify forensic imaging, a court must consider whether the responding party has withheld requested information, whether the responding party is unable or unwilling to search for the requested information, and the extent to which the responding party has complied with discovery requests. * * * When a requesting party demonstrates either discrepancies in a response to a discovery request or the responding party’s failure to produce requested information, the scales tip in favor of compelling forensic imaging.

(Citations omitted.) Id. at ¶ 41. See also Nithiananthan, 12th Dist. Warren No.

CA2011-09-098,

, at ¶ 9 (the party requesting forensic imaging must

demonstrate a “background of noncompliance” with discovery under part one of the

Bennett framework).

{¶25} We also observe that federal courts are likewise

“loathe to sanction intrusive examination of an opponent’s computer as a matter of course, or on the mere suspicion that the opponent may be withholding discoverable information. Such conduct is always a possibility in any case, but the courts have not allowed the requesting party to intrude upon the premises of the responding party just to address the bare possibility of discovery misconduct.” Scotts Co., L.L.C. v. Liberty Mut. Ins. Co., S.D.Ohio No. 3:06-CV-899,

, at *4-5 (June 12, 2007), quoting Diepenhorst v. Battle Creek, W.D. Mich.

No. 1:05-CV-734,

, *10-11 (June 30, 2006).

{¶26} In Bennett, the court outlined the following examples of situations where

imaging was warranted:

Playboy Enters. [v. Welles],

[(S.D.Cal. 1999)]

(allowing access to party’s computer system on a finding of systematic

deletion of relevant e-mails after litigation had commenced). See, e.g.,

Williams v. Mass. Mut. Life Ins. Co.,

(D.Mass. 2005)

(denying motion to appoint computer forensic expert because moving party

failed to present any “credible evidence that Defendants are unwilling to

produce computer-generated documents”); Bethea v. Comcast,

(D.D.C. 2003) (denying motion to compel because, “[i]n the

context of computer systems and computer records, inspection or seizure is

not permitted unless the moving party can demonstrate that the documents

they seek to compel do, in fact, exist and are being unlawfully withheld”);

Simon Prop. Group L.P. v. Simon, Inc.,

(S.D.Ind.

2000) (allowing plaintiff to inspect defendant’s computer system because

plaintiff demonstrated “troubling discrepancies with respect to defendant’s

document production”); Ameriwood Indus., Inc. v. Liberman, Case No.

4:06CV524-DJS,

,

, *1 (E.D.Mo. Dec. 27, 2006) (unpublished) (granting motion to compel imaging

of defendant’s hard drive because the court had “cause to question whether

defendants have produced all responsive documents”); Balboa

Threadworks, Inc. v. Stucky, Case No. 05-1157-JTM-DWB,

,

, at *4 (D.Kan. Mar. 24, 2006)

(unpublished) (permitting imaging of defendants’ computer where

defendants’ representation that no responsive materials existed on computer

was contradicted by their production of e-mail created on that computer).

{¶27} Applying the first portion of the Bennett procedure, the court in Scott

Process Sys. v. Mitchell, 5th Dist. Stark No. 2012CA00021,

, concluded

that the trial court abused its discretion by permitting forensic imaging of electronic

devices without first requiring the requesting party to show that there had been a

background of noncompliance with discovery. Id. at ¶ 38. Accord Nithiananthan, 12th

Dist. Warren No. CA2011-09-098,

, at ¶ 9. The Scott Process Sys. court

also concluded that the order for forensic imaging was erroneous where the requesting

party failed to demonstrate that paper production of the records was insufficient or that

the requesting party’s need for forensic imaging outweighed the party’s privacy interests.

Id. at ¶ 37-38; see also

.

{¶28} In this matter, the record does not demonstrate the requisite showing of

defendants’ noncompliance with discovery as mandated under the first portion of the

Bennett procedure. The record demonstrates that FFR was noncompliant with defendants’ request for production of documents during the course of litigation. FFR

also conceded that the parties “failed to reach agreement on terms of a stipulated

protective order creating a standstill in discovery.” In addition, FFR sought detailed

electronic discovery as early as October 2012, or prior to its filing of any motion to

compel discovery. Moreover, under FFR’s proposal, defendants would produce “any

relevant computer hard drives and electronic media” for FFR’s review, then upon

defendants’ compliance, FFR would “produce pursuant to a protective order a subset of

documents[.]” At this time, however, there is no evidence in the record that FFR has

fully complied with discovery, and FFR has already received extensive records from the

Illinois litigation.

{¶29} We acknowledge that FFR sought and obtained a motion to compel

discovery and for sanctions on March 26, 2013, but following that order, FFR filed an

amended complaint with new allegations and obtained additional discovery on May 30,

2013. The record does not demonstrate that the documents FFR sought were being

unlawfully withheld and not available from FFR’s own information or other sources.

Viewing the record as a whole, the showing required under the first portion of the Bennett

analysis has not been met.

{¶30} Therefore, DeJohn and Kump’s first and second assignments of error are

well taken. 2. Protective Protocol

{¶31} DeJohn and Kump’s third assignment of error asserts that the trial court

did not require the protocol for discovery required under the Bennett framework.

{¶32} With regard to the second part of the procedure, the Bennett court clearly held that “the failure to produce discovery as requested or ordered will rarely warrant unfettered access to a party’s computer system,” and that “a court must protect the defendant’s confidential information, as well as preserve any private and privileged information.”

,

,

. The Bennett court then outlined a protocol for discovery:

[A]n independent computer expert, subject to a confidentiality order, creates a forensic image of the computer system. The expert then retrieves any responsive files (including deleted files) from the forensic image, normally using search terms submitted by the plaintiff. The defendant’s counsel reviews the responsive files for privilege, creates a privilege log, and turns over the nonprivileged files and privilege log to the plaintiff.

(Citations omitted.) Id. at ¶ 47. Similarly, in Nithiananthan, 12th Dist. Warren No.

CA2011-09-098,

, the court held that at minimum, an appropriate protocol

requires that an independent computer expert, subject to a confidentiality order, creates a

forensic image of the computer system. Id. at ¶ 20. The expert then retrieves any

responsive files (including deleted files) from the forensic image, normally using search

terms submitted by the plaintiff. The defendant’s counsel reviews the responsive files

for privilege, creates a privilege log, and turns over the nonprivileged files and privilege

log to the plaintiff.

{¶33} Under the second portion of the Bennett procedure, a trial court abuses its

discretion when its judgment entry permits unfettered forensic imaging of a party’s

electronic devices, and contains none of the Bennett protections required to conduct such forensic analysis. Scott Process Sys., 5th Dist. Stark No. 2012CA00021,

.

{¶34} In this matter, the record does not contain the protective protocol required

under Bennett. Therefore, DeJohn and Kump’s third assignment of error is well taken.

The trial court abused its discretion in ordering forensic imaging of appellants’ computer

hard drives.

{¶35} Accordingly, the judgment is reversed and remanded for further

proceedings consistent with this opinion.

It is ordered that appellants recover of said appellee costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue out of this court directing the common

pleas court to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.

MARY EILEEN KILBANE, JUDGE

KATHLEEN ANN KEOUGH, P.J., and TIM McCORMACK, J., CONCUR