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Crosmun v. Trustees of Fayetteville Technical Community College

Court of Appeals of North Carolina

August 6, 2019

DR. SANDRA T. CROSMUN, DR. MICHAEL HESS, LESLIE KEENAN, DR. JOHN R. PARKER, III, JAMIE E. STEVENS and CHERYL J. THOMAS, Plaintiffs,
v.
THE TRUSTEES OF FAYETTEVILLE TECHNICAL COMMUNITY COLLEGE, DR. LARRY J. KEEN, DR. DAVID L. BRAND and CARL MITCHELL, Defendants.

          Heard in the Court of Appeals 9 May 2019.

          Appeal by Defendants from an order entered 15 June 2018 by Judge Mary Ann Tally in Cumberland County Superior Court No. 16 CVS 8374.

          Tin, Fulton, Walker & Owen, PLLC, by S. Luke Largess, and Rabon Law Firm, PLLC, by Charles H. Rabon, Jr., Gregory D. Whitaker, and David G. Guidry, for Plaintiffs-Appellees.

          Yates, McLamb & Weyher, LLP, by Sean T. Partrick and David M. Fothergill, for Defendants-Appellants.

          INMAN, JUDGE.

         Seeking justice often involves enduring tedium. Many attorneys and judges unsurprisingly consider the discovery stage of civil litigation among the most prosaic and pedestrian aspects of practice.[1] A single page among millions of records, however-even one dismissed as irrelevant by the withholding party-may be considered a "smoking gun" to the party seeking its disclosure.

         Our discovery rules "facilitate the disclosure prior to trial of any unprivileged information that is relevant and material to the lawsuit so as to permit the narrowing and sharpening of the basic issues and facts that will require trial," Am. Tel. & Tel. Co. v. Griffin, 39 N.C.App. 721, 726, 251 S.E.2d 885, 888 (1979), and are designed to encourage the "expeditious handling of factual information before trial so that critical issues may be presented at trial unencumbered by unnecessary or specious issues and so that evidence at trial may flow smoothly and objections and other interruptions be minimized." Willis v. Duke Power Co., 291 N.C. 19, 34, 229 S.E.2d 191, 200 (1976). These vital purposes are no less present when electronic discovery ("eDiscovery") is concerned; in many instances, their importance is heightened.[2]

         Electronically stored information, or ESI, "has become so pervasive that the volume of ESI involved in most cases dwarfs the volume of any paper records. This makes ESI the driving force behind the scope of preservation and discovery requirements in many cases[.]" The Sedona Principles, Third Edition: Best Practices, Recommendations & Principles for Addressing Electronic Document Production, 19 Sedona Conf. J. 1, 56 (2018) (hereinafter the "Sedona Principles");[3] see also Analog Devices, Inc. v. Michalski, 2006 NCBC 14, 2006 WL 3287382, at *5 ( N.C. Super. Ct. Nov. 1, 2006) ("It is an inescapable fact that ninety-nine percent of all information being generated today is created and stored electronically. That fact may be shocking to judges who still find themselves buried in paper, but even our court systems are moving, albeit reluctantly, into the age of technology." (citation omitted)).[4]

         Despite the general disdain of courts for discovery disputes, in the words of Dorothea Dix, "[a]ttention to any subject will in a short time render it attractive, be it ever so disagreeable and tedious at first." Dorothea L. Dix, Conversations on Common Things; Or, Guide to Knowledge. With Questions. For the Use of Schools and Families. 270 (4th ed. 1832). This appeal presents this Court with our first opportunity to address the contours of eDiscovery within the context of North Carolina common and statutory law regarding the attorney-client privilege and work-product doctrine.

         Defendants appeal from an order compelling discovery that allows Plaintiffs' discovery expert access to Fayetteville Technical Community College's ("FTCC") entire computer system prior to any opportunity for Defendants to review and withhold documents that contain privileged information or are otherwise immune from discovery. Defendants argue that the order compelling discovery constitutes an impermissible involuntary waiver of those privileges.[5] Plaintiffs argue that the trial court's order, in conjunction with a stipulated protective order consented to by the parties, adequately protects Defendants' privileges such that no waiver will occur. After careful review, we hold that the trial court abused its discretion by compelling production through a protocol that provides Plaintiffs' agent with direct access to potentially privileged information and precludes reasonable efforts by Defendants to avoid waiving any privilege. We therefore vacate the order and remand for further proceedings not inconsistent with this opinion.

         I. FACTUAL AND PROCEDURAL HISTORY

         Plaintiffs, who are former employees of FTCC, filed suit against Defendants on 7 December 2016, alleging retaliatory dismissals from FTCC in violation of the North Carolina Whistleblower Protection Act. See N.C. Gen. Stat. § 126-84 (2017). One week later, Plaintiffs' counsel mailed a letter to each Defendant concerning the complaint and informing them of their obligation to preserve ESI in light of the litigation. As the action advanced to discovery, Plaintiffs served two sets of interrogatories and requests for production of documents on Defendants in April and October of 2017. Defendants responded to both sets of discovery requests but objected to certain requests based on attorney-client, attorney work-product, and state and federal statutory privileges.

         In January 2018, Plaintiffs served Defendants with a third set of interrogatories and requests for production; Plaintiffs also mailed Defendants' counsel a letter asserting their discovery responses were incomplete and expressing concern that Defendants had destroyed responsive ESI. In February 2018, Defendants' counsel responded by letter denying any spoliation, rejecting Plaintiffs' claim that certain responses were incomplete, and agreeing to produce newly discovered additional responsive documents. Dissatisfied with Defendants' response, Plaintiffs' counsel sent additional letters reiterating their discovery demands. Plaintiffs followed their letters with a motion to compel requesting the trial court "[o]rder that the parties identify a computer forensics entity or individual who, at Defendants' cost, will search the computer servers at FTCC to determine if Defendants have deleted emails and files pertaining to these discovery requests."

         Plaintiffs' motion came on for hearing on 26 February 2018 before Superior Court Judge Douglas B. Sasser. At that hearing, Judge Sasser issued an oral ruling requiring a forensic computer examination of FTCC's servers and tasked the parties with submitting a proposed order.

         Judge Sasser's oral ruling did little to quell the parties' disagreement, and instead shifted their focus from what should be produced to what should appear in the proposed order. Defendants objected to Plaintiffs' first proposed order on the ground that general language permitting Plaintiffs to search FTCC's "computer files" for "deleted material" was over-broad, as it required a search of all of FTCC's systems for any and all documents without limitation. Plaintiffs refused to revise the proposed order and reiterated their belief that a search of FTCC's entire system was both necessary and allowed by Judge Sasser's ruling. Defendants then drafted their own proposed order. Plaintiffs then revised their proposed order slightly and suggested Defendants draft a consent protective order to address concerns relating to the production of student information. Defendants objected that Plaintiffs' revised order did not adequately protect privileged information or appropriately limit the scope of discoverable materials. But Defendants agreed to draft a protective order for consideration by the trial court and Plaintiffs.

         While the above discussions were ongoing, and roughly two weeks after the hearing before Judge Sasser, Defendants provided Plaintiffs with a supplemental document production. Defendants also informed Plaintiffs that they had yet to complete a draft protective order, as the model protective orders they were working from "only covered inadvertent disclosure of confidential material[, ]" and "[i]t has been much more difficult to address privilege issues under a forensic search situation." Plaintiffs replied that they would draft a proposed protective order prohibiting the disclosure of information protected by the Family Educational Rights and Privacy Act of 1974 ("FERPA"). Counsel for Defendants rejected that offer, expressing concern about how to prevent disclosure of materials within the attorney-client privilege or work-product immunity. As discussions surrounding the protective order continued, Plaintiffs submitted the parties' competing proposed orders on the motion to compel to Judge Sasser.

         Judge Sasser entered Plaintiffs' proposed order on the motion to compel on 16 April 2018 (the "Forensic Examination Order"). In it, Judge Sasser provided for "a forensic examination of [FTCC's] computer files" by a "forensic examiner." The order also provided that "the parties shall work with the examiner to agree on key words and other search parameters to use in conducting this forensic review, which will cover the period from . . . July 2014 to the present[, ]" and that "Plaintiff's shall bear the initial costs of the forensic review." However, the Forensic Examination Order did not address how a forensic examiner would be selected, whether the examiner would be an independent third party, or how the forensic examination itself would be conducted, and it left resolution of any confidentiality concerns to a future protective order to be submitted by the parties at a later date.

         Plaintiffs retained Clark Walton ("Mr. Walton"), an expert in computer forensics and a licensed North Carolina attorney, to draft a proposed forensic examination protocol to effectuate the Forensic Examination Order. As part of that process, Defendants permitted Mr. Walton to question members of FTCC's Information Technology department about the nature of the college's computer systems. Plaintiffs then submitted a proposed forensic examination protocol to Defendants for their consideration on 21 May 2018.[6] The proposed protocol, in pertinent part, provided for the following:

(1) Mr. Walton would physically access, either at his offices or at FTCC, all FTCC devices on which responsive material might be found or from which responsive material may have been deleted;
(2) From those devices, Mr. Walton would create searchable mirror images[7]and keep those images in his custody (the "Search Images");
(3) Mr. Walton would run search terms "and other search parameters" desired by Plaintiffs through the Search Images to identify responsive data (the "Keyword Search Hits");
(4) Mr. Walton would then remove non-user and other non-responsive system files from the Keyword Search Hits consistent with standard computer forensics practice;
(5) Using six search terms identified by Plaintiffs in their proposed protocol, Mr. Walton would then screen out any potentially privileged documents from the Keyword Search Hits (the "Privilege Search Hits");
(6) Mr. Walton would immediately deliver those documents not flagged in the Privilege Search Hits to Plaintiffs for their review, while Defendants would review the Privilege Search Hits and create a privilege log for all items in the Privilege Search Hits that they believed to be privileged;
(7) Finally, Defendants would provide Plaintiffs with the privilege log and any documents from the Privilege Search Hits that Defendants determined were not actually subject to a privilege.

         Plaintiffs also submitted a proposed stipulated protective order to Defendants on 24 May 2018.

         By 4 June 2018, Defendants had not responded to the protocol or followed up with Plaintiffs about the joint protective order. Plaintiffs filed a combined motion to compel and motion for sanctions requesting that the trial court: (1) adopt the proposed protocol; (2) enter the proposed protective order; (3) shift the costs of discovery to Defendants; and (4) as a sanction for Defendants' alleged violation of prior court orders, award Plaintiffs their attorneys' fees incurred in obtaining the discovery.

         On the same day Plaintiffs filed the combined motion, Defendants faxed a letter objecting to the protocol, noting that their "main concern still lies with the improper protection of files that could be potentially privileged. . . . It is FTCC's position that none of the documents . . . may be viewed by anyone who is not part of the FTCC privilege [group] prior to the files being reviewed and approved by FTCC." Defendants also attached a red-lined version of the protocol identifying various provisions that they believed endangered their privileges.

         The parties appeared before the trial court for a hearing on Plaintiffs' combined motion on 11 June 2018. They presented a stipulated protective order (the "Protective Order") for entry by the trial court. The Protective Order covers personnel and any other information "generally treated as confidential[, ]" and, if designated confidential upon production or within 21 days of discussion in deposition testimony, precludes dissemination of that information to outside parties except as necessary to the litigation. It also addresses, in limited respects, the production of privileged information as follows:

15. Review of the Confidential Information by those so authorized by this Order shall not waive the confidentiality of the documents or objections to production. Nothing contained in this Order and no action taken pursuant to it shall waive or prejudice the right of any party to contest the alleged relevancy, admissibility, or discoverability of the Confidential Information sought or provided in discovery.
16. Nothing in the foregoing provisions of this Order shall be deemed to waive any privilege, or to preclude any party from seeking and obtaining, on an appropriate showing, such additional protection with respect to Confidential Information as that party may consider appropriate.
. . . .
17. In order to facilitate discovery, the inadvertent disclosure of documents or other information subject to confidentiality, a privilege, or other immunity from production shall be handled as follows:
a. From time to time during the course of discovery, one or more of the parties may inadvertently disclose documents or other information subject to confidentiality, a privilege, or other immunity from production. Any such disclosure shall not be deemed a waiver of the confidential, privileged, or immune ...

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