Lawson v. Spirit AeroSystems

• Decision Date: 29 October 2020
• Docket Number: Case No. 18-1100-EFM-ADM
• Parties: LARRY A. LAWSON, Plaintiff, v. SPIRIT AEROSYSTEMS, INC., Defendant.
• Court: U.S. District Court — District of Kansas

LARRY A. LAWSON, Plaintiff,
v.
SPIRIT AEROSYSTEMS, INC., Defendant.

Case No. 18-1100-EFM-ADM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

October 29, 2020

MEMORANDUM AND ORDER

This matter comes before the court on Defendant Spirit AeroSystems, Inc.'s ("Spirit") Application for TAR Expenses. (ECF 385.) The court previously granted Spirit's motion to shift the expenses it incurred in connection with a technology-assisted review ("TAR") of approximately 322,000 documents to plaintiff Larry A. Lawson ("Lawson"). After the parties could not reach agreement regarding the amount of those expenses, Spirit filed this application seeking $791,700.21 in expenses incurred in connection with the TAR. Spirit also seeks $83,000 in costs and fees incurred conferring with Lawson and preparing the briefing associated with its current application. Lawson objects to the amount Spirit seeks, arguing many of the expenses included in Spirit's calculation are unreasonable or outside the scope of the court's order. (ECF 397-1.) Lawson contends that Spirit's reasonable TAR expenses are no more than $330,000.

For the reasons discussed below, the court grants Spirit's application in part and denies it in part. Specifically, the court awards Spirit $754,029.46 in TAR expenses. The court also awards Spirit its expenses incurred in connection with the current application, but the court cannot determine the reasonable amount of those expenses based on the present record. The court will therefore allow Spirit to file a renewed application with the required fee detail.

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I. BACKGROUND

Lawson is Spirit's former chief executive officer. He filed this breach of contract action after Spirit stopped paying him under his Retirement Agreement because of his business dealings involving Arconic, Inc. ("Arconic"), which Spirit contends violated Lawson's non-compete. At Lawson's request, the parties spent months engaged in an ESI discovery process regarding the issue of business overlap between Spirit and Arconic using traditional ESI methods involving custodians and search terms. When that process repeatedly yielded low responsiveness rates, the court allowed the parties to proceed—again, at Lawson's request—with the TAR, with the caveat that the court would decide whether to allocate the TAR expenses to Lawson. Spirit filed a motion to shift the TAR expenses to Lawson pursuant to Federal Rule of Civil Procedure 26(c), which authorizes a court to allocate discovery expenses upon a showing of good cause in order to protect a party from undue burden and expense. FED. R. CIV. P. 26(c)(1)(B). The court granted the motion, finding good cause to allocate the TAR expenses to Lawson because he insisted on pursuing the TAR after it became disproportional to the needs of the case. See Lawson v. Spirit AeroSystems, Inc., No. 18-1100-EFM-ADM, 2020 WL 3288058, at *22 (D. Kan. June 18, 2020). The court ordered briefing to determine the specific dollar amount of those expenses.

Since that order, the parties' cross motions for summary judgment reinforced the court's determination that the TAR expenses were disproportionate to the needs of this case. Those summary judgment motions are targeted, in part, to the issue of business overlap between Spirit and Arconic, which is the issue that was the subject of the TAR. (ECF 432 & 435.) Spirit's summary judgment response brief points out that "[o]f the 95 exhibits Lawson submitted in connection with his Motion for Summary Judgment, only one is from Spirit's TAR production." (ECF 445, at 11 n.3 (emphasis in original).) Furthermore, Lawson submitted this lone TAR

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document to support an unremarkable factual contention about when Lawson began contemplating retirement, not the issue of business overlap between Spirit and Arconic that was the subject of the TAR. (Id.) This only served to confirm, once again, that Lawson's insistence on pursuing the TAR was disproportionate to the needs of the case.

Spirit has now filed the current application for the court to determine the amount of expenses to allocate to Lawson under the June 18 order. (ECF 385.) Spirit seeks $455,272.71 paid to its eDiscovery vendor, Legility; $172,871.50 in attorneys' fees paid to the Arcadi Jackson law firm; and $163,556 in attorneys' fees paid to the Foulston Siefkin law firm. Spirit also seeks $83,000 in costs and fees incurred leading up to and preparing the current application. Lawson opposes Spirit's application, arguing many of Spirit's expenses are unreasonable or outside the scope of the June 18 order. Lawson contends that reasonable TAR expenses should be reduced to no more than $330,000.

II. EXPENSES ALLOCATED TO LAWSON

To determine the amount of expenses to allocate to Lawson, the court must independently analyze the reasonableness of Spirit's expenses. Cf. Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 562 (1986) ("[T]he benchmark for the awards under nearly all of these statutes is that the attorney's fee must be 'reasonable.'"), supplemented, 483 U.S. 711 (1987); see also Consumer Fin. Prot. Bureau v. Ocwen Fin. Corp., No. 9:17-CV-80495, 2018 WL 6843629, at *2 (S.D. Fla. Dec. 21, 2018) (stating the court would determine the reasonable and necessary costs pursuant to Rule 26(c)(1)(B)); Flowserve US Inc. v. Optimux Controls, LLC, No. 2:13-CV-1073, 2017 WL 1240205, at *2 (D. Utah Mar. 31, 2017) (analyzing whether the defendants' expenses allocated to plaintiff under Rule 26(c)(1)(B) were reasonable); Marens v.

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Carrabba's Italian Grill, Inc., 196 F.R.D. 35, 37-38 (D. Md. 2000) ("The court is given great flexibility to . . . apportion costs and burdens in a way that is fair and reasonable.").

A. Legility Expenses

Spirit retained Legility as its eDiscovery vendor in this case. To begin the TAR, Legility received the 322,524-document TAR dataset, copied it to its network, and staged (i.e., intermediately stored) the data for processing and filtering. (ECF 388-1 ¶ 16.) Legility then processed the TAR dataset into an application called Venio to remove documents that were duplicative or outside the relevant time range and to extract text and metadata for keyword searching. Legility performed an early case assessment within Venio to identify potentially responsive documents to promote into the TAR. Data and documents processed for analysis and review remained in Venio in a "nearline" state (i.e., more easily accessible than offline storage) in case the scope of discovery changed and additional data and documents needed to be promoted into the TAR.

To initiate the TAR, Legility loaded potentially responsive documents into a document review system called Catalyst that includes a tool called "Predict," which uses continuous active learning to code documents for responsiveness. After the system created an index of the TAR documents, Legility's managed review team of contract attorneys and Arcadi Jackson attorneys began reviewing and coding documents in order to "train" Predict to code additional documents. After Predict was trained and could rank documents from the most likely responsive to the least, Legility's managed review team preliminary coded documents for responsiveness, confidentiality, and privilege according to the review protocol that Arcadi Jackson created. Responsive TAR documents were then subject to a second-level review by Arcadi Jackson or Foulston Siefkin attorneys before they were produced.

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During the review process, Legility collected and analyzed metrics to evaluate the efficacy of the TAR workflow and the quality of the datasets to be reviewed. Legility also imposed quality control measures to ensure that only responsive and non-privileged documents would be produced and conducted a final quality control check prior to production. To produce the TAR documents, Legility converted the documents to TIFF format, bates labeled and stamped them with an appropriate designation, and produced them to Lawson according to the parties' agreed specifications.

Spirit seeks the following categories of TAR-related expenses that it paid to Legility:

EXPENSE DESCRIPTION	AMOUNT
TAR-related fees for document review team	$216,252.00
TAR project management fees	67,021.56
TAR-related fees for data; processing/hosting/user fees/near line; data/productions (including hosting fees; through December 2020)	171,999.15
TOTAL:	$455,272.71

(ECF 386, at 8.) Lawson proposes that he pay only $141,636.78 of Legility's fees, which equals 50% of the document review team and project management fees. (ECF 395, at 4.)

1. Lawson's Objection to TAR 2.0 vs. TAR 1.0

The court turns first to Lawson's contention that Spirit should have used a TAR 1.0 tool rather than Predict, which is a TAR 2.0 tool. In tools commonly marketed as "TAR 1.0," software training begins by taking a random sample of documents from the entire TAR set. A human then reviews and codes those documents and, based on the coding in that seed set, the software generates a predictive model that is then applied across all relevant documents. See BOLCH JUDICIAL INST. & DUKE LAW, TECHNOLOGY ASSISTED REVIEW (TAR) GUIDELINES 4-5 (Jan. 2019)

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[hereinafter TAR GUIDELINES].¹ In contrast, with a TAR 2.0 tool, the human review and software training are melded together in a way that they occur simultaneously. See id. at 4-5. From the outset, human coding decisions are submitted to the software, which continuously analyzes the entire document collection and ranks (and re-ranks) the documents for relevancy and then presents additional documents that it predicts to be most likely relevant back to the human for review and coding. Id. Predict is a TAR 2.0 tool that uses this type of continuous active learning. (ECF 415-1 ¶ 5; ECF 416 ¶ 6); see also Lawson, 2020 WL 3288058, at *6.

Lawson contends that the Predict TAR 2.0 tool was not cost effective. In support, Lawson relies on a declaration submitted by Jeffrey Grobart with Lawson's...