ISONOVA TECHNOLOGIES LLC, Plaintiff/Counter-Defendant, v. OVAINNOVATIONS, LLC; and DAVID L. RETTIG; Defendants/Counter-Claimants No. 20-CV-71-CJW-KEM United States District Court, N.D. Iowa, Cedar Rapids Division Filed July 28, 2021 Counsel Matthew E. Enenbach, Juliet Cox, Pro Hac Vice, Kutak Rock LLP, Omaha, NE, Anna M. Berman, Pro Hac Vice, Kutak Rock LLP, Kansas City, MO, for Plaintiff/Counter-Defendant. Jeana L. Goosmann, Goosmann Law Firm PLC, Sioux City, IA, Mark L. Zaiger, Teresa K. Baumann, Shuttleworth & Ingersoll PLC, Cedar Rapids, IA, William Jeremiah Hale, Goosmann Law Firm, Omaha, NE, Elizabeth F. Quinby, Pro Hac Vice, Gregory P. Hansel, Pro Hac Vice, Preti Flaherty Beliveau & Pachios LLP, Portland, ME, for Defendants/Counter-Claimants. Mahoney, Kelly K.E., United States Magistrate Judge ORDER *1 The parties dispute the protocol for Plaintiff's expert to conduct a forensic examination of images of computer hard drives and other electronics owned by Defendant David L. Rettig, who Plaintiff accuses of trade secret misappropriation. Defendants have filed a motion for a protective order (Doc. 83), and Plaintiff has filed a motion to compel (Doc. 88). Because I adopt neither party's proposed protocol in its entirety (although I largely agree with Plaintiff), I deny the motion for a protective order (Doc. 83) and grant the motion to compel in part and deny it in part (Doc. 88). I. BACKGROUND Defendant David L. Rettig previously worked for Plaintiff IsoNova Technologies LLC, a company that takes inedible egg product and processes it for use in pet food and animal feed. Doc. 1. After his termination, he formed Defendant OvaInnovations, LLC, a company that competes with IsoNova in the inedible egg space. Id. IsoNova alleges that Rettig disclosed confidential information (its profits and margins) to three of its suppliers in an effort to steal business from IsoNova. Id. IsoNova brings claims of misappropriation of trade secrets, breach of confidentiality agreement, and tortious interference with business expectancy. Id. The parties first raised the current discovery dispute during a status conference on June 7, 2021. Doc. 82. IsoNova indicated it sought forensic images of laptops, smart phones, and electronic devices used by Rettig since his termination on October 23, 2018. IsoNova wanted its forensic expert to run tests on the images to determine whether Rettig used its trade secrets, including whether files have been deleted, whether external storage devices have been used, and whether (and when) Rettig accessed or modified certain files (including files with IsoNova's trade-secret information on the laptop Rettig retained after his employment ended). The parties disputed how this should be accomplished in a manner that sufficiently protected Defendants' attorney-client privilege. IsoNova proposed that its “expert is provided with the imag[es] to conduct the evaluation; defense counsel provides a list of terms that could pull up privileged documents; and the expert runs a search for those terms before providing analysis to plaintiff and runs any potentially privileged documents by defense counsel for approval first.” Id. Defendants proposed “that the imag[es] be provided to a neutral third party, who runs any analytics as directed by plaintiff's expert and provides the resulting raw data to both parties, reviewing the information first for privilege.” Id. I noted that I leaned toward IsoNova's proposed solution; however, with no formal motion before the court, and no opportunity to review the cases cited by the parties, I indicated I was not issuing a binding ruling, and the parties remained free to file a formal motion. Id. In response, Defendants filed the current motion for a protective order. Doc. 83. As IsoNova notes, Defendants argue for the first time that IsoNova has not shown a need for the forensic images (as opposed to merely disputing the manner in which IsoNova should access the images) (Defendants' original discovery responses indicated they would produce the images; and they never argued the images were irrelevant during the status conference with the court). As part of that argument, Defendants assert that IsoNova “gifted” Rettig's work laptop to him when his employment ended, making no efforts to “wipe” the laptop, thus destroying any trade-secret protection afforded to the files on the laptop. Defendants also continue to adhere to the method they proposed during the status conference. They also suggest that their expert run the searches, either in place of or serving as a third-party neutral. *2 IsoNova resisted Defendants' motion for a protective order and simultaneously filed a motion to compel, using the same brief in support of both. Docs. 86, 88. IsoNova noted that since the status conference, Defendants have run a privilege keyword search on the images and returned almost 20,000 hits. Thus, IsoNova proposes that its expert will sequester the potentially privileged documents using a method “of the Defendants' Expert's choosing provided the method used is disclosed to and approved by IsoNova's Expert as a method that will not interfere with the forensic examination.” Doc. 86. IsoNova proposes that Defendants then review the document hits for privilege, either logging them on a privilege log or notifying IsoNova's expert that they can be removed from sequestration. IsoNova also suggests that both its experts and Defendants' experts be deemed officers of the court to further assuage any worries related to privilege. II. DISCUSSION “[I]nspection or testing ... of [an opposing] party's electronic information system” “might be justified in some circumstances,” but because such testing “may raise issues of confidentiality or privacy,” the Federal Rules of Civil Procedure do “not create a routine right” to such access. Ameriwood Indus., Inc. v. Liberman, No. 4:06CV524-DJS, 2006 WL 3825291, at *2 (E.D. Mo. Dec. 27, 2006) (quoting Fed. R. Civ. P. 34(a), advisory committee notes to 2006 amendment), as amended, 2007 WL 685623 (Feb. 23, 2007). “Courts have found,” however, “that such access is justified in cases involving both trade secrets and electronic evidence, and granted permission to obtain mirror images of the computer equipment which may contain electronic data related to the alleged violation.” Id. (quoting Balboa Threadworks, Inc. v. Stucky, No. 05-1157-JTM-DWB, 2006 WL 763668, at *3 (D. Kan. Mar. 24, 2006)). In trade-secret cases, metadata is usually highly relevant (and not obtainable through routine document production): Computer programs may retain draft language, editorial comments, and other deleted matter (sometimes referred to as “embedded data” or “embedded edits”) in an electronic file but not make them apparent to the reader. Information describing the history, tracking, or management of an electronic file (sometimes called “metadata”) is usually not apparent to the reader viewing a hard copy or a screen image. Id. at *3 (quoting Fed. R. Civ. P. 26(f), advisory committee notes to 2006 amendment). As noted above, Defendants argue for the first time that IsoNova has not shown a “substantial need” for the forensic imaging. See Fed. R. Civ. P. 26(b)(3) (providing that a party may obtain “documents and tangible things” protected by work-product privilege if the party “has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means”). In support, Defendants rely on cases outside the trade-secret context, in which one party generally contended they needed forensic images to ensure all relevant documents had been produced, without any proof they had not been. See Exec. Air Taxi Corp. v. City of Bismark, 518 F.3d 562, 569 (8th Cir. 2008); In re Ford Motor Co., 345 F.3d 1315, 1317 (11th Cir. 2003). These cases are distinguishable. [I]n cases where a defendant allegedly used the computer itself to commit the wrong that is the subject of the lawsuit, certain items on the hard drive may be discoverable. Particularly, allegations that a defendant downloaded trade secrets onto a computer provide a sufficient nexus between plaintiff's claims and the need to obtain a mirror image of the computer's hard drive. Ameriwood, 2006 WL 3825291, at *4. Furthermore, to the extent Defendants argue that IsoNova's “gifting” of the laptop destroyed any trade-secret protection contained therein, the court finds Defendants forfeited any relevance objection by failing to raise this argument earlier in time. Second, the court agrees with IsoNova that whether the laptop contained trade secrets is a disputed fact (and IsoNova could discredit Rettig's assertion that the laptop was a gift based on his failure to disclose this information earlier in time). *3 Thus, the court finds that IsoNova is entitled to information contained on the mirror images (as the parties had previously agreed). At issue is the procedure for IsoNova to obtain this information. The parties dispute whether IsoNova's expert should be able to conduct the analytics himself, or whether a third-party neutral should be used instead. Defendants argue that because the forensic images contain attorney-client privileged information, IsoNova's expert should not be able to access them directly. Instead, Defendants assert IsoNova's expert could direct a third-party neutral (step by step, if necessary) to conduct any tests or analytics he wished, and the third-party neutral could screen the results for privilege before providing IsoNova's expert with the results. The court agrees with IsoNova that this approach is untenable. In the cases Defendants rely on, the parties did not retain separate experts who then directed a third-party neutral to conduct testing; rather, the only expert involved was the third-party neutral, who performed analytics as the neutral deemed necessary. The court agrees with IsoNova that it would be fundamentally unfair to hamstring its expert by requiring him to go through a third-party neutral for any tests he wished to perform, while Defendants' expert has free rein and full access to the images. In addition, IsoNova's expert could be subject to exclusion under Daubert under Defendants' proposed method (a proposition Defendants make no effort to assuage, such as by agreeing not to challenge the admissibility of IsoNova's expert's testimony). Defendants' cited cases do not involve a situation where, like here, Defendants retained a forensic expert to testify at trial on their behalf but seek to limit the opposing party to the use of a third-party neutral. The court finds alternate procedures are available to allow IsoNova's expert to access the images while protecting Defendants' privilege concerns (similar to but slightly modified from what IsoNova has proposed). Files identified as a “hit” under the privilege keyword search and confirmed as privileged will be sequestered prior to the production of the forensic images to IsoNova's expert. In addition, the court will require (as in almost all the cases cited by IsoNova) that IsoNova's expert execute a confidentiality agreement and first provide any relevant document-like files[1] to Defendants for Defendants to review (and potentially object) for privilege.[2] See also Weatherford U.S., LP v. Innis, No. 4:09-cv-061, 2011 WL 2174045, at *2 (D.N.D. June 2, 2011) (affording defendants an opportunity “to first screen the imaged documents for any information they consider to be ... privileged” prior to production to plaintiff); Ameriwood, 2006 WL 3825291, at *6 (requiring expert to produce report to both parties and to provide recovered deleted files to defense counsel to review prior to production to plaintiff); Ray v. Dealer Prod. Servs., Inc., No. 4:06CV00096 ERW, 2006 WL 8459100, at *4 (E.D. Mo. Nov. 9, 2006) (same); Antioch Co. v. Scrapbook Borders, Inc., 210 F.R.D. 645, 653-54 (D. Minn. 2002) (same). Whether or not IsoNova's expert's methods are protected work product (as IsoNova argues), the court agrees with Defendants that “information derived from the tests” is factual data distinguishable “from the conclusions someone might draw from analysis of the information,” which are not privileged. Davidson v. Apple, Inc., No. 5:16-CV-04942-LHK (HRL), 2017 WL 11573594, at *2 (N.D. Cal. Dec. 14, 2017). Therefore, the court disagrees with IsoNova that its expert be given carte blanche to protect the opposing party's attorney-client privilege. *4 Accordingly, the court will order Defendants produce the forensic images, subject to the protocol set forth in further detail below. III. AWARD OF EXPENSES In its motion to compel and reply to Defendants' resistance, IsoNova requests expenses and sanctions, including reasonable attorney's fees for filing the motion to compel and resisting Defendants' motion for a protective order. Docs. 88, 99. Federal Rule of Civil Procedure 37(a)(5) provides: If the motion [to compel discovery] is granted—or if the disclosure or requested discovery is provided after the motion was filed—the court must, after giving an opportunity to be heard, require the party ... whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees. But the court must not order this payment if: (i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust. Here, the parties primarily disputed the procedure to produce the forensic images, and the court ultimately adopted a procedure different from that proposed by both parties. The court also found that neither parties' cited caselaw supported their position entirely. Accordingly, the court does not find that an award of fees or sanctions is warranted. The court notes, however, that it does not sit well with the court that Defendants argued that the forensic images need not be produced at all—an argument that they first raised in the motion for a protective order and that was not raised (1) in Defendants' discovery responses; (2) during a lengthy meet-and-confer process; and (3) during an informal status conference with the court on this issue. The court expects the parties to work together in good faith (and compromise, if necessary) to resolve discovery disputes without court involvement to the extent possible. Defendants are cautioned that failure to do so in the future may result in sanctions. IV. CONCLUSION Defendants' motion for a protective order (Doc. 83) is denied. Plaintiff's motion to compel (Doc. 88) is granted in part and denied in part. IT IS ORDERED Defendants must produce the forensic images to Plaintiff's expert, subject to the following protocol: 1. Defendants will produce the forensic images to Plaintiff's expert four weeks from the date of this order. During that time, Defendants will review the 19,000+ files identified as a “hit” under the privilege keyword search to confirm whether they are indeed privileged, creating a privilege log for those documents they claim are privileged. Meanwhile, the experts will confer and agree on how to sequester the privileged documents from the forensic images. Defendants' expert will sequester the privileged documents prior to the production of the forensic images to Plaintiff's expert. 2. Prior to his receipt of the forensic images, Plaintiff's expert will execute Exhibit A to the Amended Stipulated Protective Order (Doc. 78) and maintain the forensic images as “CONFIDENTIAL.” *5 3. Prior to his receipt of the forensic images, Plaintiff's counsel must file with the court a declaration by Plaintiff's expert in which he agrees not to communicate with Plaintiff's counsel about document-like files on the forensic images (or suggest their contents in any way) until Defendants have had the opportunity to review the files for privilege (as further set out below). The declaration must be sworn to under oath and shall contain a statement that Plaintiff's expert submits himself to the jurisdiction of this court for purposes of compliance with this court's orders, including the court's exercise of its contempt power in the event of any noncompliance by the expert with this order or any other order the court may issue involving the forensic images and the information extracted from them.[3] 4. Plaintiff's expert will run any analytics and tests he deems necessary and relevant to whether Rettig's electronics contain (or once contained but have since been deleted) Plaintiff's confidential and trade-secret information and whether (and when) Rettig accessed, used, or deleted that information. 5. Any document-like files that Plaintiff's expert retrieves from the forensic images (the contents of which appear to fall within the subject matter of the search being permitted as set forth above) or that Plaintiff's expert intends to rely upon or otherwise discuss with Plaintiff's counsel shall be sent to Defendants' counsel in a format that will enable counsel to review them for privilege. Defendants' counsel will then have fourteen days to object to production of the files. Files not objected to may be discussed with and produced to Plaintiff or otherwise used by Plaintiff's expert in formulating his opinion and report. 6. Defendants' production of the forensic images will not be deemed a waiver of any privilege. The production of the forensic images shall be covered by the parties' Amended Stipulation Protective Order (Doc. 78), including the clawback provision contained therein. IT IS SO ORDERED this 28th day of July, 2021. Footnotes [1] The court contemplates IsoNova's expert showing electronic documents and the like (including word documents, emails, spreadsheets, and powerpoints) to Defendants for privilege review. IsoNova's expert need not first disclose to Defendants findings that do not rely on or involve document-like files, such as “(1) whether programs, such as erasure software or ‘defragmentation’ software, were installed and run on the computers, and, if so, when the software was installed; (2) whether [Rettig] utilized any detachable, portable storage media with [his] computers (e.g., a detachable “zip” drive or “flash” drive) ... (3) whether [Rettig] engaged in mass deletions of files from his or its computer, and, if so, when the deletions occurred; and (4) whether there are large gaps in the contents of the files on any of the hard drives (e.g., whether any of the hard drives devoid of files were created prior to the date suit was filed).” Ameriwood Indus., Inc. v. Liberman, No. 4:06CV524-DJS, 2007 WL 685623, at *1 (E.D. Mo. Feb. 23, 2007). If IsoNova's expert wished to disclose to IsoNova “the names of the files that were accessed or downloaded using” zip drives, however, IsoNova's expert would first need to disclose those underlying files to Defendants' counsel for counsel to review for privilege. Id. at *1. [2] As the privilege keyword search will be conducted beforehand, the court does not anticipate IsoNova's expert viewing very many (if any) privileged files; and any privileged files will be subject to the clawback provision in the parties' protective order and not disclosed to Plaintiff's counsel. [3] The language in this step is partially taken from Peterson v. City of Minot, No. 1:16-cv-271, 2018 WL 5045194, at *10 (D.N.D. Oct. 17, 2018).