Tumlin v. Tuggle Duggins P.A.

Tumlin v. Tuggle Duggins P.A., 2018 NCBC 49.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF GUILFORD 15 CVS 9887

WAYNE E. TUMLIN,

Plaintiff,
ORDER & OPINION DENYING
v.
PLAINTIFF’S MOTION FOR
DISCOVERY SANCTIONS
TUGGLE DUGGINS P.A.,

Defendant.

1. THIS MATTER is before the Court on Plaintiff’s Motion for Discovery

Sanctions (“Motion”) asserting that Defendant has violated Rule 26(g) and Rule

37(b)(2) of the North Carolina Rules of Civil Procedure (“Rule(s)”). For the reasons

discussed below, the Court DENIES the Motion.

Nelson Mullins Riley & Scarborough, LLP, by G. Gray Wilson and Lorin
J. Lapidus, for Plaintiff.

Sharpless & Stavola, P.A., by Frederick K. Sharpless, for Defendant.

Gale, Chief Judge.

I. INTRODUCTION

2. The central issue in the case is whether Plaintiff Wayne E. Tumlin

(“Plaintiff” or “Tumlin”) is entitled to additional compensation after his resignation

from Defendant Tuggle Duggins P.A. (“Defendant” or “Tuggle Duggins”) or whether

he forfeited such right by failing to give timely notice of his resignation.

3. The Motion is the culmination of disputes regarding document

production that have now extended over two years, during which time the Court has

held numerous conferences and issued various orders. In addition to monetary
sanctions, Tumlin now asks the Court to order a forensic examination of Tuggle

Duggins’ e-mail server, at the firm’s expense, to determine if potentially relevant e-

mails were lost because of Tuggle Duggins’ failure to adequately preserve documents.

Tumlin further contends that Tuggle Duggins’ counsel, when signing discovery

responses, improperly certified that reasonable efforts had been taken to assure that

all relevant information had been produced.

4. For the reasons discussed below, the Court concludes that Tuggle

Duggins did not violate Rule 26(g) or Rule 37, Tuggle Duggins’ counsel did not make

an improper certification, no sanctions are warranted, and the discovery in this action

is now complete.

I. FACTUAL BACKGROUND

A. Tumlin’s Resignation

5. Tumlin began working as a partner at Tuggle Duggins, P.A. in May

2008. (Compl. ¶ 4, ECF No. 1; Am. Answer ¶ 4, ECF No. 33.)

6. On or around May 13, 2015, Tumlin informed Tuggle Duggins’

President, Ross Hamilton, that he planned to resign. (Compl. ¶ 13; Am. Answer ¶ 13.)

Mr. Hamilton asked Tumlin to consider working at the firm for at least one more

year. (Compl. ¶ 17; Am. Answer ¶ 17.)

7. On May 19, 2015, Tumlin provided Mr. Hamilton with his resignation

letter, which specified his last day as June 5, 2015. (Compl. ¶ 18; Am. Answer ¶ 18.)

Tuggle Duggins contends that the Firm’s Policies Governing Attorney’s

Compensation upon Termination of Employment requires at least thirty days’ notice
to receive any post-termination compensation. (Am. Answer 10.) Tumlin contends

that both he and Mr. Hamilton “mutually agreed” to his departure date, which Tuggle

Duggins denies. (See Compl. ¶¶ 17–18; Am. Answer ¶¶ 17–18.) Tumlin resigned

from the firm on June 5, 2015. (See Compl. ¶ 37.)

8. Tuggle Duggins’ fiscal year ended August 31, 2015. On September 19,

2015, Tumlin e-mailed Mr. Hamilton inquiring when he would receive payment for

the collected fees allocated to him for the work he performed during the first ten

months of the August 31, 2015 fiscal year. (Compl. ¶ 31; Am. Answer ¶ 31.) Mr.

Hamilton responded that Tuggle Duggins did not owe Tumlin any additional

compensation. (Compl. ¶ 32; Am. Answer ¶ 32.) Mr. Hamilton directed Tumlin to

address any further questions concerning this issue to Tuggle Duggins’ attorney,

Frederick Sharpless. (Compl. ¶ 33; Am. Answer ¶ 33.) On September 22, 2015, Mr.

Sharpless informed Tumlin that he was not entitled to any further compensation

because he did not give proper notice regarding his departure, which is required to

receive post-termination compensation. (Compl. ¶ 34; Am. Answer ¶ 34.) On October

9, 2015, Tumlin’s attorney contacted Mr. Sharpless. (See Def.’s Br. Resp. Pl.’s Mot.

Disc. Sanctions Ex. A, ECF No. 60.1.)

9. During this same time, Tuggle Duggins was preparing to install a new

e-mail archiving system, and the firm’s administrator, Elizabeth Osteen, encouraged

employees to clean up e-mail mailboxes in preparation for the installation. (See Def.’s

Br. Resp. Pl.’s Mot. Disc. Sanctions Ex. E, at 1–2, ECF No. 60.5.) Mrs. Osteen e-

mailed all Tuggle Duggins’ employees, on the afternoon of October 16, 2015, asking
them to “delete as many emails as possible, especially emails with large attachments”

to help improve the system’s functionality. (Def.’s Br. Resp. Pl.’s Mot. Disc. Sanctions

Ex. E, at 2.) On the morning of October 17, 2015, Nathan Duggins e-mailed all

attorneys, staff, and CPAs at Tuggle Duggins and instructed them to “retain all

emails related to Wayne Tumlin.” (Def.’s Br. Resp. Pl.’s Mot. Disc. Sanctions Ex. E,

at 1.)

10. Tumlin initiated this action on November 30, 2015, asserting multiple

claims tied to his allegation that Tuggle Duggins owes him additional compensation

for the fiscal year ending on August 31, 2015. (See Compl. ¶¶ 41–65.) Tumlin

contends that the firm’s thirty-day notice provision is unenforceable because it

violates public policy, that Tuggle Duggins waived the notice requirement when Mr.

Hamilton agreed to Tumlin’s last day, and that Tuggle Duggins fraudulently induced

Tumlin to leave without providing thirty days’ notice to avoid paying his end-of-fiscal-

year compensation. (See Compl. ¶¶ 37–38, 59.) Stated differently, Tumlin argues

that Tuggle Duggins’ partners undertook efforts as early as May 2015 to cause

Tumlin to forfeit his 2015 end-of-fiscal-year compensation. (See Compl. ¶ 59.)

B. Tuggle Duggins’ E-mail System

11. Tuggle Duggins uses Outlook as its e-mail application. (Rains Dep. 8:

22–23, ECF No. 56.2.) Tuggle Duggins bought a new software, Symantec Enterprise

Vault, for archiving its e-mails in October 2015. (Rains Dep. 8:24–9:3.)

12. Tuggle Duggins installed the software on November 30, 2015. (Rains

Dep. 9:8–10.) At installation, Tuggle Duggins archived all e-mails older than six
months into the new software.1 (Rains Dep. 9:11–17.) E-mails dated May 31, 2015

through November 30, 2015 were not included in the initial archive. (See Rains Dep.

9:11–15, 18:4–25.) Thereafter, the system was set up to automatically archive e-mails

in employees’ inboxes, outboxes, and deleted folders once they become six months old.

(See Rains Dep. 18:4–25; 30:9–13.)

13. Until it is archived, an e-mail is stored in the sender’s or recipient’s

mailbox and the sender or recipient can delete the e-mail from his inbox or outbox,

which moves that e-mail to the deleted folder. A sender or recipient can then delete

the e-mail from the deleted folder, essentially double-deleting the e-mail and

removing it from the server. If an e-mail is double-deleted by the user before it is

archived, then Tuggle Duggins cannot archive the e-mail because it has been

permanently deleted from the server. (Rains Dep. 10:21–11:14.) If more than one

Tuggle Duggins’ employee is a sender or recipient of an e-mail, to delete all copies of

the e-mail each user who possessed the e-mail would have to double-delete it prior to

its being archived. No users have the ability to delete e-mails once they are archived.

(Rains Dep. 10:17–20.)

II. THE COURSE OF WRITTEN DISCOVERY

14. Tumlin served his initial discovery requests on January 7, 2016. The

Court extended Tuggle Duggins’ time to respond to such discovery until after Tumlin

was deposed on May 11, 2016.

1 One employee’s e-mails were not archived at that time, but the delay in Mr. Wenig’s e-mails

being archived does not appear to be relevant to this matter. (See Rains Dep. 9:18–23.)
15. The Court held a case management conference on March 21, 2016, and

entered the Case Management Order (“CMO”), which adopted the parties’ Joint Case

Management Plan. (Case Management Order (“CMO”), ECF No. 16.) The CMO

requires both parties to “maintain all reasonably accessible evidence related to the

issues in this case” and to make a “reasonable effort to preserve or archive” e-mails

related to this action. (Joint Case Management Plan ¶ 11, ECF No. 9.) The parties

agreed that “once a party has made a diligent and reasonable search for electronic

records and has made a diligent and reasonable effort to preserve or archive same,

the parties shall be under no obligation to suspend ordinary operations of their

network, replacement of media, or replacement of components or equipment.” (Joint

Case Management Plan ¶ 11.)

16. The central document request at issue in this Motion seeks the

production of “emails . . . in [Tuggle Duggins’] possession or control . . . regarding or

pertaining to plaintiff’s departure from the defendant and/or relating to plaintiff’s

compensation for any period after August 31, 2014.” (Pl.’s Br. Supp. Mot. Disc.

Sanctions Ex. E (“Def.’s Resp. Pl.’s Req. Produc. Docs.”), Req. Product. 5, ECF No.

56.6.)

17. In its discovery response signed by counsel on June 29, 2016, Tuggle

Duggins objected to that request as overbroad, but stated that it would produce “all

communications with plaintiff concerning his employment with defendant, his

resignation, [and] any compensation (not) due following his departure.” (Def.’s Resp.

Pl.’s Req. Produc. Docs., Req. Product. 4.) During the course of the proceedings,
Tuggle Duggins searched its e-mail server numerous times and made multiple

productions as summarized below.

18. On July 20, 2016, Tuggle Duggins’ IT manager, Tim Rains, searched

Tuggle Duggins’ directors’, Mrs. Osteen’s, and CPA Kris Landrum’s e-mail mailboxes

using the search terms “Wayne” and “Tumlin” (“Search No. 1”). (Rains Dep. 13:15–

14:6.) In reviewing the results of that search, Mr. Rains realized that the software

had not searched the subject line or body of e-mails, but only searched the “To” and

“From” fields. (Rains Dep. 14:7–19.) Mr. Rains adjusted the software search

parameters to include the subject line and body of e-mails and then conducted a

second search of the directors’ and Mrs. Osteen’s mailboxes using the same search

terms (“Search No. 2”). (Rains Dep. 14:16–15:7.)

19. Search No. 1 and Search No. 2 produced approximately 6,000 e-mails.

(Rains Dep. 16:15–19.) Mr. Rains reviewed those 6,000 e-mails and removed e-mails

he determined “had no relationship to Mr. Tumlin’s lawsuit.” (Rains Aff. ¶ 14, Jan.

12, 2017.) Mr. Rains testified that he made such a determination “by looking at the

sender and the sent to and the subject line and . . . see[ing] if [the e-mail] was in

regards to any existing client work that was going on with the firm.” (Rains Dep.

21:11–14.) In his affidavit, Mr. Rains explained that “the firm has a number [of]

clients with the name ‘Wayne’” and “the search captured e-mails about unrelated

matters including e-mails from the ABA and/or CLEs with speakers with the name

‘Wayne’ and e-mails sent or received by Wayne to firm lawyers involving client-

specific matters.” (Rains Aff. ¶ 14, Jan. 12, 2017.)
20. Based on his review of the e-mails, he determined that 1,500 e-mails

were not related to this action and provided the remaining 4,500 e-mails to Jeff

Southerland, a partner at Tuggle Duggins, and Mrs. Osteen. (Rains Dep. 21:18–24.)

Mr. Southerland then reviewed the e-mails for responsiveness, removed non-

responsive e-mails, and produced the responsive e-mails to Mr. Sharpless. (See Rains

Dep. 22:14–23:17.)

21. On August 2, 2016, Tumlin moved to compel Tuggle Duggins to respond

to his written discovery requests. (See Pl.’s Mot. Compel Disc., ECF No. 20.3.) Tuggle

Duggins produced the responsive, non-privileged e-mails from Search No. 1 to Tumlin

on August 19, 2016. (See Def.’s Br. Resp. Pl.’s Mot. Disc. Sanctions Ex. A, at 1.)

22. The Court held a hearing on Plaintiff’s Motion to Compel on October 28,

2016. At the hearing, the Court directed Tumlin to provide a specific list of documents

he contended had not been produced and directed Tuggle Duggins to provide

documents listed on its privilege log to the Court for in camera review. After its in

camera review, the Court concluded that Tuggle Duggins’ assertion of privilege was

justified and none of the documents withheld on the basis of privilege should be

produced.

23. On or around October 28, 2016, Mr. Rains searched Tumlin’s former

secretary’s, Ms. Donna Compton’s, e-mail mailboxes for the period between May 19,

2015 through July 2016 (“Search No. 3”). (Rains Dep. 29:1–30:1; 34:23–25.) Search

No. 3 produced approximately 798 e-mails. (Rains Dep. 29:12–18.) Mr. Rains
followed the same process of removing e-mails that were not related to this action and

providing the remaining e-mails to Mr. Southerland. (See Rains Dep. 32:6–15.)

24. Tuggle Duggins produced responsive, non-privileged e-mails from

Search No. 2 and Search No. 3 to Tumlin on November 8, 2016. (See Def.’s Br. Resp.

Pl.’s Mot. Disc. Sanctions Ex. A, at 2.)

25. Mr. Rains then conducted the same search of Ms. Kathy Nichols’,

another firm administrator’s, e-mails. (Rains Dep. 29:19–22.) Mr. Rains followed the

same process of removing e-mails that were not related to this action and providing

the remaining e-mails to Mr. Southerland. (Rains Dep. 32:6–15.) Tuggle Duggins

supplemented its production of Search No. 3 and produced the responsive, non-

privileged e-mails from Ms. Nichols’ and Ms. Landrum’s mailboxes to Tumlin on

November 16, 2016. (See Def.’s Br. Resp. Pl.’s Mot. Disc. Sanctions Ex. A, at 2.)

26. On November 22, 2016, Plaintiff provided a list of documents he

contended still needed to be produced, and Tuggle Duggins responded on December

1, 2016. The Court held a telephone conference on this issue on January 5, 2017.

27. The Court ordered that the discovery period would be held in abeyance

until the issues regarding Plaintiff’s Motion to Compel were resolved. (See Order

Regarding Disc. Deadlines, ECF No. 45.) After the conference, Tuggle Duggins

provided Tumlin with Mr. Rains’ affidavit, which specified all the searches Tuggle

Duggins had performed on its e-mail server as of January 12, 2017. (See E-mail from

Gray Wilson, Plaintiff’s Counsel, to the Court and Defendant’s Counsel (Jan. 19,

2017).)
28. Tumlin did not identify any additional search terms he believed should

have been included in the searches, but he continued to assert that the searches were

insufficient. (See E-mail from Gray Wilson, Plaintiff’s Counsel, to the Court and

Defendant’s Counsel (Jan. 19, 2017); Tumlin Aff. ¶ 2.) Tumlin complained that Mr.

Rains’ searches did not account for the fact “that many attorneys routinely set their

Outlook to automatically and permanently delete items that reside in their ‘deleted’

folder when Outlook is closed,” meaning such e-mails would not be archived and

therefore not captured by the search. (Tumlin Aff. ¶ 2.)

29. The Court then held a further telephone conference on February 1, 2017,

and deferred ruling on Plaintiff’s Motion to Compel while the parties attempted to

resolve outstanding issues. After this conference, Tuggle Duggins searched all of its

employees’ mailboxes, other than those previously searched, using the search terms

“Wayne” and “Tumlin” and the same time period used in prior searches (“Search No.

4”). (Rains Dep. 35:11–15.) Mr. Rains performed Search No. 4 around or after March

22, 2017. Mr. Rains reviewed the e-mails resulting from Search No. 4 and removed

any e-mails he determined did not relate to this action. (Rains Dep. 36:14–20.)

Tuggle Duggins provided the results from Search No. 4 to Tumlin on April 10, 2017.

(See Def.’s Br. Resp. Pl.’s Mot. Disc. Sanctions Ex. A, at 2.)

30. Tumlin notified the Court that he did not believe that Search No. 4

satisfied the pending Motion to Compel and requested that the Court rule on the

motion. Around this time, Tumlin, for the first time, suggested two additional search

terms that he believed should be used. On April 17, 2017, the Court asked Tumlin to
provide a proposed order specifying what discovery he believed Tuggle Duggins still

needed to produce. Tumlin provided a proposed order to the Court on June 12, 2017,

to which Tuggle Duggins responded.

31. The Court entered an Order on Plaintiff’s Motion to Compel Discovery

on June 27, 2017. (See Order Pl.’s Mot. Compel Disc., ECF No. 46.) The order

required that Tuggle Duggins search employees’ or owners’ inboxes, outboxes, sent

items, and deleted items that had not previously been searched (“June 2017 Order”).

(Order Pl.’s Mot. Compel Disc. ¶ 3(a).) The time parameter was from May 19, 2015

through July 1, 2016. (Order Pl.’s Mot. Compel Disc. ¶ 3(b).) The search terms were

“Wayne,” “Tumlin,” “W.T.”, and “W.E.T.” (Order Pl.’s Mot. Compel Disc. ¶ 3.) The

order specified that the search was limited to employees’ or owners’ mailboxes that

were not included in prior searches and that Tuggle Duggins was not required to

produce e-mails “unrelated to Plaintiff’s departure or the calculation of any

compensation that is or may be due to him if he prevails in this action,” or “identified

in a supplemental privilege log.” (Order Pl.’s Mot. Compel Disc. ¶ 2(a)–(b); see Order

Pl.’s Mot. Compel Disc. ¶ 3(a).)

32. Mr. Rains then conducted a search of all employees’ mailboxes,

excluding the directors, using the search terms “W.E.T.” and “W.T.” (“Search No. 5”).

(Rains Dep. 63:6–7; see also Rains Dep. 37:16–39:24.) Mr. Rains followed the same

process of removing e-mails that were not related to this action. (Rains Dep. 38:12–

16.) Mr. Rains provided those e-mails to Mr. Southerland, who directed him to

immediately export the e-mails to Mr. Sharpless. (Rains Dep. 39:1–11.)
33. On July 11, 2017, Mr. Sharpless produced the results from Search No. 5

to Tumlin. (See Def.’s Br. Resp. Pl.’s Mot. Disc. Sanctions Ex. A, at 2.)

34. After that production was made, the Court held telephone conferences

with the parties to resolve remaining discovery disputes. On September 13, 2017, the

Court ordered that Tuggle Duggins conduct a search of all e-mails previously

searched using the search terms “W.E.T.” and “W.T.” (“September 2017 Order”).

(Order on Disc. ¶ 1, ECF No. 52.) Mr. Rains then conducted this search and sent the

results directly to Mr. Sharpless. (See Rains Dep. 40:8–21, 41:2–12.) Based on that

search, Tuggle Duggins produced a sixth batch of e-mails to Tumlin on October 12,

2017. (See Def.’s Br. Resp. Pl.’s Mot. Disc. Sanctions Ex. A, at 3.)

35. Plaintiff filed this Motion on January 5, 2018. (ECF No. 55.) Tuggle

Duggins moved for summary judgment on January 25, 2018. (ECF No. 57.)

36. The Court held a hearing on this Motion on February 8, 2018.

37. On February 12, 2018, the Court suspended Plaintiff’s summary

judgment response deadline until further order from the Court. (See Order Mot.

Continue Summ. J. Resp. Deadline, ECF No. 65.)

38. The Motion is now ripe for disposition.

III. ANALYSIS

39. Plaintiff’s Motion asserts four separate contentions: (1) that both Tuggle

Duggins and Mr. Sharpless violated Rule 26(g); (2) that Tuggle Duggins failed to

conduct reasonable searches and effectively manage e-discovery; (3) that Tuggle
Duggins failed to provide Plaintiff with all responsive e-mails; and (4) that Tuggle

Duggins did not take reasonable steps to preserve electronic records.

A. Rules Governing The Scope of Discovery

40. Rule 26 provides that “[p]arties may obtain discovery regarding any

matter, not privileged, which is relevant to the subject matter involved in the pending

action.” N.C. Gen. Stat. § 1A-1, Rule 26(b)(1) (2015). Information is discoverable

regardless of its admissibility at trial as long as “the information sought appears

reasonably calculated to lead to the discovery of admissible evidence.” Id. However,

the Court may limit discovery if it determines that the discovery is “unduly

burdensome or expensive.” Id. at Rule 26(b)(1a). In making such an assessment, the

Court considers “the needs of the case, the amount in controversy, limitations on the

parties’ resources, and the importance of the issues at stake in the litigation.” Id.

Additionally, “[d]iscovery of electronically stored information is subject to limitations

set forth in Rule 34(b).” Id. at Rule 26(1b).

41. Pursuant to Rule 34(b), “a responding party should produce requested

electronically stored information that is relevant, not privileged, and reasonably

accessible, subject to the limitations that apply to all discovery.” Id. at Rule 34(b),

cmt. (2011).

42. If a party who received electronic discovery contends that he needs to

have access to the full database or system that generated the
information, the question of further production or direct access will turn
on whether the requesting party can show that there is some specific
reason, beyond general suspicion to doubt the information and that the
burden of providing direct access is reasonable in light of the importance
of the information and the circumstances of the case.
Id. (emphasis added).

43. “When faced with responding to a request for the production of

documents, counsel are required to direct the conduct of a thorough search for

responsive documents with due diligence and ensure all responsive documents under

the ‘custody or control’ of the client, unless protected from discovery, are produced.”

Bd. of Regents v. BASF, Corp., No. 4:04CV3356, 2007 U.S. Dist. LEXIS 82492, at *16

(D. Neb. Nov. 5, 2007) (quoting Fed. R. Civ. P. 34).

B. Neither Tuggle Duggins Nor Its Counsel Violated Rule 26(g).

44. Rule 26(g) requires that “[e]very request for discovery or response or

objection thereto made by a party represented by an attorney shall be signed by at

least one attorney of record in that attorney’s name.” N.C. Gen. Stat. 1A-1, Rule 26(g)

(2015). The rule provides that:

the signature of the attorney or party constitutes a certification that the
attorney or party has read the request, response, or objection and that
to the best of the knowledge, information, and belief of that attorney or
party formed after a reasonable inquiry it is: (1) consistent with
the rules and warranted by existing law or a good faith argument for the
extension, modification, or reversal of existing law; (2) not interposed for
any improper purpose, such as to harass or cause unnecessary delay or
needless increase in the cost of litigation; and (3) not unreasonable or
unduly burdensome or expensive, given the needs of the case, the
discovery already had in the case, the amount in controversy, and the
importance of the issues at stake in the litigation.

Id. (emphasis added). “Rule 26(g) is intended to impose an affirmative duty on

counsel to behave responsibly during discovery and to ensure that it is conducted in

a way that is consistent with the spirit and purposes of the discovery rules.” Azalea

Garden Bd. & Care, Inc. v. Vanhoy, No. 06 CVS 0948, 2009 NCBC LEXIS 7, at *12–
13 (N.C. Super. Ct. Mar. 26, 2009) (quoting Mancia v. Mayflower Textile Servs. Co.,

253 F.R.D. 354, 357–63 (D. Md. 2008)). Rule 26(g) requires that parties and attorneys

make a reasonable inquiry before responding to written discovery. See N.C. Gen.

Stat. § 1A-1, Rule 26(g). “An attorney is not required to certify the truthfulness of

the client’s response, but only that the attorney made a reasonable effort to ensure

that the client provided all responsive documents and information.” 6 James Wm.

Moore, et. al., Moore’s Federal Practice: Civil § 26.152[2] (3d. ed. 2014). The

reasonableness of the inquiry “is determined as of the time of the signing rather than

in hindsight.” Id. at § 26.154[2](a).

45. Tumlin contends that Tuggle Duggins and its counsel violated Rule

26(g) because, in Defendant’s Answers to Plaintiff’s First Set of Interrogatories,

Tuggle Duggins stated that it would provide “all non-privileged documents regarding

plaintiff’s initial employment, or his resignation and any communications or internal

document discussing his resignation or post-termination compensation,” (Pl.’s Br.

Supp. Mot. Disc. Sanctions, Ex. D, Interrog. 5, ECF No. 56.5), and in Defendant’s

Responses to Plaintiff’s Request for Production of Documents, it stated it would

produce “all communications with plaintiff concerning his employment with

defendant, his resignation, [and] any compensation (not) due following his

departure,” (Def.’s Resp. Pl.’s Req. Produc. Docs., Req. Produc. 4). (See Pl.’s Br. Supp.

Mot. Disc. Sanctions 9–10.) Tumlin argues that those responses could not have been

made after a reasonable inquiry because Tuggle Duggins could not certify that all

responsive documents would be produced when it is possible that some responsive
documents were double-deleted and no longer exist. (See Pl.’s Br. Supp. Mot. Disc.

Sanctions 10–11.)

46. The Court finds Tumlin’s argument unavailing. The North Carolina

Rules of Civil Procedure require a party to produce electronically stored information

that is reasonably accessible. See N.C. Gen. Stat. § 1A-1, Rule 34(b), cmt. (2011).

Tuggle Duggins conducted multiple searches to locate all reasonably accessible

documents in its possession. While there is the theoretical possibility that a Tuggle

Duggins’ employee may have double-deleted a potentially relevant e-mail for which

no other copy exists, the Court finds no basis to conclude that Tuggle Duggins’

employees undertook efforts to delete all potentially relevant e-mails. Further,

Tumlin has presented no factual basis to suggest that Mr. Sharpless or Tuggle

Duggins signed the discovery responses with knowledge that a potentially relevant

e-mail had been lost or that any responsive e-mails were actually deleted.

47. Additionally, Tumlin suggests that Mr. Sharpless improperly signed

discovery responses “as to objections only.” (Pl.’s Br. Supp. Mot. Discovery Sanctions,

Ex. D, at 12.) The Court need not consider this argument, because if the Court were

to find a Rule 26(g) violation, Mr. Sharpless’ caveat would not limit the Court’s

authority to sanction either Tuggle Duggins or Mr. Sharpless. See Gonsalves v. City

of New Bedford, 168 F.R.D. 102, 109 (D. Mass. Aug. 2, 1996) (holding “that an

attorney cannot evade [the] duty [to provide all responsive information] by claiming

to sign the objections only, or by not signing the responses at all”); United Mo. Bank,

N.A. v. Bank of N.Y., 723 F. Supp. 408, 416 (W.D. Mo. Oct. 6, 1989) (concluding that
counsel’s failure to “certify defendant’s responses to plaintiff’s interrogatories as

required by Rule 26(g) . . . does not prevent the Court from imposing sanctions upon

defendant”). But there is no evidence suggesting that Mr. Sharpless or Tuggle

Duggins failed to conduct a reasonable inquiry before responding to Plaintiff’s First

Set of Interrogatories or Plaintiff’s Request for Production of Documents. Nor is there

any evidence that Tuggle Duggins made its responses for an improper purpose or to

create unreasonable delay or expense. See SCR-Tech LLC v. Evonik Energy Servs.

LLC, No. 08 CVS 16632, 2014 NCBC LEXIS 72, at *22 (N.C. Super. Ct. Dec. 31, 2014)

(“Rule 26(g) does not compel a sanction for [a failure to conduct a full and reasonable

inquiry] unless accompanied by one of the other requisite findings: interposing the

response for an improper purpose or creating unreasonable delay or expense.”).

48. In sum, the Court finds no basis to conclude that Mr. Sharpless or

Tuggle Duggins violated Rule 26(g).

C. Tuggle Duggins Conducted Sufficient Searches.

49. Tumlin contends that Tuggle Duggins carelessly managed e-discovery

because it failed to give adequate instructions to Mr. Rains who performed the

searches and conducted the initial review of the documents. Because of Tuggle

Duggins’ alleged mismanagement, Tumlin asks the Court to require a third-party

forensic examination of Tuggle Duggins’ e-mail server.

50. Even though he has not challenged the adequacy of the search terms

used, Tumlin argues that Tuggle Duggins’ searches are insufficient and responsive e-

mails may be missing because Tuggle Duggins allowed its IT manager to cull e-mails
from the initial search before submitting the search results to counsel for review,

thereby resulting in “unsupervised relevancy determinations.” (Pl.’s Br. Supp. Mot

Disc. Sanctions 5.) Mr. Rains testified that after conducting the searches he reviewed

the e-mails and removed e-mails he determined “had no relationship to Mr. Tumlin’s

lawsuit.” (Rains Aff. ¶ 14, Jan. 12, 2017.)

51. The Court agrees that when a party instructs a non-lawyer to review

documents and assess responsiveness, the party should provide clear, specific

instructions to the person on how to make such a determination. To eliminate any

uncertainty regarding the responsiveness of production, best practice is to have a

written policy detailing the procedure followed to determine responsiveness.

However, a party’s failure to have written documentation of such an effort does not

necessarily support a conclusion that the search was not adequate or that sanctions

are warranted.

52. Tuggle Duggins does not have a written record of the instructions

provided to Mr. Rains on how to make relevancy determinations. However, Mr. Rains

explained that he determined if e-mails had any relationship to this action “by looking

at the sender and the sent to and the subject line . . . to see if it was in regards to any

existing client work that was going on with the firm.” (Rains Dep. 21:11–14.) In his

affidavit, Mr. Rains stated that “the firm has a number [of] clients with the name

‘Wayne’” and “the search captured e-mails about unrelated matters including e-mails

from the ABA and/or CLEs with speakers with the name ‘Wayne’ and e-mails sent or

received by Wayne to firm lawyers involving client-specific matters.” (Rains Aff. ¶ 14,
Jan. 12, 2017.) Mr. Rains’ apparent focus was on eliminating e-mails that contained

the name “Wayne” in reference to someone other than Tumlin or to remove Tumlin’s

e-mails that clearly related to client-specific matters. (See Rains Aff. ¶ 14, Jan. 12,

2017.) Further, Tuggle Duggins later conducted an additional search of all directors’

mailboxes, using the search terms “W.T.” and “W.E.T.”, and sent the results of that

search directly to Mr. Sharpless. (See Rains Dep. 40:8–15.)

53. In sum, the Court concludes that there is no basis to find that Tuggle

Duggins’ searches were not reasonable in scope or that potentially relevant

documents were removed from the search productions as a result of Mr. Rains’ culls.

D. Tuggle Duggins Has Not Purposely Withheld Responsive Documents.

54. Tumlin contends that Tuggle Duggins continued to withhold responsive

e-mails even after the Court issued its June 2017 Order and its September 2017

Order. Tumlin’s argument is based on two specific e-mails he identified after

reviewing the hundreds of e-mails Tuggle Duggins had already produced: (1) Mr.

Southerland’s reply to Mr. Duggins’ e-mail inquiry dated May 29, 2015, about

whether he should discuss Tumlin’s departure with Alan Duncan, (see Pl.’s Br. Supp.

Mot. Disc. Sanctions Ex. H, at 3, ECF No. 56.9), and (2) Mr. Southerland’s May 31,

2015 reply to Mr. Duggins’ inquiry about Mr. Southerland’s conversation with Tumlin

concerning a client’s files, (see Pl.’s Br. Supp. Mot. Disc. Sanctions Ex. H, at 1; Pl.’s

Br. Supp. Mot. Disc. Sanctions 12). In each instance, Tuggle Duggins had already

produced the earlier e-mails in the chain and immediately located and provided the

missing e-mails to Tumlin.
55. After reviewing the results of Search No. 2, which are saved on a

Personal Storage Table (“.pst”) file, Mr. Rains determined that the searches did not

identify these two e-mails. (Rains Aff. ¶ 3, Jan. 25, 2018, ECF No. 60.7.) It is unclear

why they were not identified, but, after reviewing the e-mails, the Court concludes

that they are marginally relevant, at best, and do not support a finding that the six

document searches already performed were insufficient.

56. In sum, the Court concludes that Tuggle Duggins has produced all

responsive documents reasonably accessible through the search software, and that,

based on the number of searches conducted and the documents produced compared

to the purported value of any further production, no additional searches are

warranted.

E. The Court, In Its Discretion, Concludes That Sanctions Are Not
Appropriate Because There Are No Facts To Suggest That Potentially
Relevant Information Was Lost.

57. Tumlin contends that Tuggle Duggins failed to take reasonable steps to

preserve potentially relevant e-mails related to this action and seeks sanctions

pursuant to Rule 37(b)(2) in the form of attorneys’ fees and an order requiring a

forensic examination of Tuggle Duggins’ e-mail server.

58. “Rule 37 gives the trial court express authority . . . to sanction a party

for abuse of the discovery process,” including sanctions for violating orders pursuant

to Rule 37(a), Rule 35, and Rule 26(f). Cloer v. Smith, 132 N.C. App. 569, 573, 512

S.E.2d 779, 781 (1999); see N.C. Gen. Stat. § 1A-1, Rule 37(b)(2) (2015). This Court

has held that it also has the power to sanction a party for violating a Rule 26(c)
protective order pursuant to Rule 37(b)(2) because “the orderly and efficient

progression of litigation demands that the trial court be empowered to police

violations” of its orders during the course of discovery. Out of the Box Developers,

LLC v. LogicBit Corp., No. 10 CVS 8327, 2014 NCBC LEXIS 7, at *7 (N.C. Super. Ct.

Mar. 20, 2014). That same reasoning applies to the discovery directives in a Case

Management Order. See Baker v. Charlotte Motor Speedway, Inc., 180 N.C. App. 296,

300–01, 636 S.E.2d 829, 832–33 (2006) (affirming a trial court’s Rule 37(b)(2)

sanctions for failing to comply with the court’s case management order).

59. But the Court should only impose sanctions when there are sound

reasons to support such sanctions. There must be some evidence that the party

actually violated a discovery obligation. See, e.g., Gillespie v. Majestic Transp., Inc.,

No. 16 CVS 324, 2017 NCBC LEXIS 44, at *11 (N.C. Super. Ct. May 12, 2017)

(explaining that the defendant had been given “multiple opportunities to comply with

[the court’s] orders and produce requested discovery” but failed to do so); Out of the

Box Developers, LLC, 2014 NCBC LEXIS 7, at *13 (explaining that the plaintiff had

filed exhibits and an affidavit clearly demonstrating that the defendant had made

internet postings that violated the protective order).

60. “The decision to impose sanctions under Rule 37 is within the sound

discretion of the trial court.” Gillespie, 2017 NCBC LEXIS 44, at *10 (citing Baker,

180 N.C. App. at 299, 636 S.E.2d at 831–32). “[T]he party seeking Rule 37 sanctions

need not show prejudice resulting from sanctionable conduct.” Out of the Box

Developers, LLC, 2014 NCBC LEXIS 7, at *8. But whether the party suffered
prejudice can “influence [the] court’s discretion in determining the appropriate

sanction.” Id.; see also Batlle v. Sabates, 198 N.C. App. 407, 421, 618 S.E.2d 788, 798

(2009) (“[T]he trial court could have appropriately considered the issue of prejudice

in making a sanctions-related decision and appears to have done so.”).

61. Tumlin contends that the Court should sanction Tuggle Duggins

because it violated the Court’s CMO by failing to issue a timely litigation hold and

take additional steps necessary to reasonably preserve evidence. But Tuggle

Duggins’ litigation hold preceded the CMO. Tuggle Duggins implemented its

litigation hold on October 17, 2015—eight days after Tumlin’s counsel contacted Mr.

Sharpless, several weeks prior to Tumlin initiating this action, and several months

before the Court issued its CMO, which incorporated the parties’ agreement to

preserve evidence. Thus, Tuggle Duggins did not violate the CMO itself.

62. While he does not make the argument expressly, Tumlin seems to also

argue that sanctions are appropriate, even if a specific Court order was not violated,

because Tuggle Duggins’ failure to sufficiently preserve evidence violates its general

discovery obligations. The Court agrees that it can address general violations of

discovery obligations because it “retains inherent authority to impose sanctions for

discovery abuses beyond those enumerated in Rule 37.” Cloer, 132 N.C. App. at 573,

512 S.E.2d at 782; see also Orbit One Communs., Inc. v. Numerex Corp., 271 F.R.D.

429, 435 (S.D.N.Y. 2010) (quoting Residential Funding Corp. v. DeGeorge Fin. Corp.,

306 F.3d 99, 106–107 (2d Cir. 2002)) (“[A] court may impose discovery sanctions even
absent an order pursuant to ‘its inherent power to manage its own affairs.’”). But the

Court finds that it should not exercise that authority based on the facts of this case.

63. The North Carolina case law related to sanctions for failure to

sufficiently preserve electronically stored information (“ESI”) mainly addresses when

a party requests an adverse inference instruction based on spoliation. To the extent

such law does not conflict with binding North Carolina precedent, the Court finds the

guidance provided in the Sedona Conference Principles, Rule 37(e) of the Federal

Rules of Civil Procedure, and federal case law on this topic persuasive to guide its

analysis.

64. When a party alleges that sanctions are appropriate because potentially

relevant ESI has been lost or destroyed, the Court believes that it should make the

following inquiries as directed by the Sedona Principles and followed by federal

courts. First, the Court should determine whether the ESI in question should have

been preserved in the anticipation or conduct of litigation; stated otherwise, was there

a loss of ESI after the duty to preserve had arisen? The Sedona Conference, The

Sedona Conference Principles, Third Edition: Best Practices, Recommendations &

Principles for Addressing Electronic Document Production, 19 The Sedona Conference

Journal, § 14 cmt. 14.b. (2018) (“Sedona Principles”); see also Arndt v. First Union

Nat’l Bank, 170 N.C. App. 518, 527–28, 613 S.E.2d 274, 281 (2005) (quoting McLain

v. Taco Bell Corp., 137 N.C. App. 179, 187, 527 S.E.2d 712, 718 (2000)) (explaining

that a plaintiff alleging spoliation must show that “the ‘spoliator was on notice of the

claim or potential claim at the time of the destruction’” and that pertinent or
“potentially supportive” information existed and was destroyed). Second, if the Court

finds there was a loss of ESI after the duty to preserve had arisen, it must determine

whether the ESI was lost because a party failed to take reasonable steps to preserve

it. Sedona Principles § 14, cmt. 14.b. Third, if a party’s failure caused the loss of ESI,

then the Court should assess whether the ESI can be restored or replaced through

additional discovery. Id.

65. Even if the Court finds that there has been a loss of ESI that cannot be

recovered due to a party’s failure to take reasonable steps to preserve evidence after

the duty to preserve arose, that does not automatically mean that the Court should

issue sanctions or order remedial measures. Instead, the Court should inquire

whether such failure caused prejudice to the requesting party or whether the

opposing party intentionally destroyed pertinent evidence. See id.

66. Pursuant to Rule 37(e) of the Federal Rules of Civil Procedure, if the

court finds that the loss of ESI has caused prejudice to another party, then the court

can order remedial measures “no greater than necessary to cure the prejudice”;

whereas, if the Court finds that a party “acted with the intent to deprive another

party of the information,” then it may sanction the party in accordance with Rule

37(e)(2). See Fed. R. Civ. P. 37(e).

67. The Court recognizes that, unlike federal courts, North Carolina courts

do not presently require the party requesting sanctions to demonstrate, as a part of

its burden, that it suffered prejudice as a result of the opposing party’s discovery

failures or that the opposing party acted willfully. See Henderson v. Wachovia Bank,
145 N.C. App. 621, 629, 551 S.E.2d 464, 470 (2001) (“[T]he plain language of Rule 37

does not require a showing of willfulness.”); Out of the Box Developers, LLC, 2014

NCBC LEXIS 7, at *8 (“[T]he party seeking Rule 37 sanctions need not show prejudice

resulting from the sanctionable conduct.”).

68. But before the Court sanctions a party for discovery abuses related to

ESI, it should consider the severity of the discovery abuse or failure and the prejudice,

if any, suffered by the requesting party. See Out of the Box Developers, LLC, 2014

NCBC LEXIS 7, at *8 (noting that “prejudice to another party . . . influence[s] the

court’s discretion in determining the appropriate sanction”). When making such an

assessment, the Court should be guided by Rule 34(b), which specifically governs the

scope of ESI discovery, and Rule 26(1a), which addresses discovery in general and

allows the Court to limit discovery based, in part, on proportionality. Additionally,

while a finding of intentional misconduct is not necessary, the Court should consider

whether a party intentionally acted to deprive the requesting party of potentially

relevant information because willfulness or bad faith “influence [the] court’s

discretion in determining the appropriate sanctions.” Id.

1. Tuggle Duggins may have failed to take reasonable steps to
preserve evidence between September 19, 2015, when its duty to
preserve arose, and October 17, 2015, when it issued its litigation
hold.

69. Tumlin asserts that Tuggle Duggins failed to take reasonable steps to

preserve evidence related to this action because it did not implement procedures to

prevent the double-deletion of e-mails related to this action and failed to issue a
litigation hold as early as May 2015 when Tumlin first announced his intention to

leave the firm.

70. The obligation to preserve evidence begins when “a party is aware of

circumstances that are likely to give rise to future litigation.” McLain, 137 N.C. App.

at 187, 527 S.E.2d at 718. While the initiation of a lawsuit is the typical event that

puts a party on notice of its obligation to preserve evidence, the obligation “arises

prior to the filing of a complaint where a party is on notice that litigation is likely to

be commenced.” Id. (quoting Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68, 73

(S.D.N.Y. 1991)). In McLain v. Taco Bell Corp., the North Carolina Court of Appeals

rejected the defendants’ contention that they were not aware of the possibility of

litigation because the parties had a meeting to discuss the alleged sexual harassment,

which was the basis of the lawsuit, approximately seven months before the plaintiff

initiated the lawsuit. Id. at 188, 527 S.E.2d at 718. The Court of Appeals determined

that, even though litigation was not threatened at the meeting, the meeting itself was

sufficient to put the defendants on notice of the importance of preserving

documentation potentially relevant to the action. Id.

71. Tumlin contends that Tuggle Duggins should have reasonably

anticipated litigation as early as May 2015, when he informed Tuggle Duggins of his

intent to resign, because Tumlin believes that, at that time, the firm’s management

committee instituted a scheme to defraud him of his end-of-fiscal-year compensation.

(See Compl. ¶ 59.) Tumlin argues that Mr. Hamilton, on behalf of the firm, agreed to

Tumlin’s last day and therefore Tuggle Duggins “had a duty to inform plaintiff that
leaving on the agreed upon date” would violate the thirty-day notice provision,

because “[b]y remaining silent, and through the actions of the firm during and

following termination of plaintiff’s employment, [Mr.] Hamilton and the firm

fraudulently led plaintiff to believe that he would receive the financial documentation

and end of fiscal year compensation owed to him without objection.” (Compl. ¶ 59.)

72. Rather, based on the specific facts in this record, the Court finds that a

duty to preserve evidence arose after May 2015 and no earlier than September 19,

2015. The dispute as to Tumlin’s compensation first arose on September 19, 2015

when Tumlin inquired about his end-of-fiscal-year compensation and Mr. Hamilton

responded that Tuggle Duggins did not owe Tumlin any additional compensation.

(See Compl. ¶¶ 31–32.) After that exchange, Mr. Hamilton instructed Tumlin to

direct any further inquiries regarding this issue to Tuggle Duggins’ attorney, Mr.

Sharpless. (Compl. ¶ 33.) Tumlin contacted Mr. Sharpless on September 22, 2015.

(Compl. ¶ 34.) After that interaction, the possibility of litigation was apparent, as all

parties had obtained counsel by October 9, 2015. (See Def.’s Br. Resp. Pl.’s Mot. Disc.

Sanctions Ex. A.)

73. While it would have been prudent to issue a litigation hold at that time,

Nathan Duggins did not e-mail all employees until October 17, 2015, at which time

he instructed them to retain all e-mails related to Tumlin. (See Def.’s Br. Resp. Pl.’s

Mot. Disc. Sanctions Ex. E, at 1.)

74. Based on the facts of this case, the Court does not believe that Tuggle

Duggins needed to implement additional procedures after Mr. Duggins e-mail to
prevent employees from being able to double-delete e-mails. The Court finds that a

direct order to employees from a law firm’s managing partner not to delete any

communications regarding Wayne Tumlin is a reasonable step, particularly

considering that Tumlin is searching for e-mails from firm directors, who the Court

presumes are familiar with discovery obligations. (See Def.’s Br. Resp. Pl.’s Mot. Disc.

Sanctions Ex. E, at 1.) Further, two or more partners would have had to double-

delete an e-mail for it to be lost completely.

75. The possibility that e-mails were lost between May 2015 and September

19, 2015 does not warrant sanctions because there is no basis to conclude that this

litigation was reasonably anticipated during that period. See McLain, 137 N.C. App.

at 187, 527 S.E.2d at 718) (quoting Robert L. Tucker, The Flexible Doctrine of

Spoliation of Evidence: Cause of Action, Defense, Evidentiary Presumption, and

Discovery Sanction, 27 U. Tol. L. Rev. 67, 79 (1995)) (explaining that there must be

evidence that “the ‘spoliator was on notice of the claim or potential claim at the time

of the destruction’”); see also Sedona Principles § 9, cmt. 9.b. (“[A]bsent special

circumstances, organizations should not be required to preserve deleted ESI in

connection with litigation.”). Thus, the question becomes whether potentially

relevant evidence was lost during the four weeks after Tuggle Duggins’ duty to

preserve arose and before Tuggle Duggins issued a litigation hold.

2. There is no evidence to suggest that potentially relevant e-mails
were actually lost.

76. Federal courts have established that the failure to issue a timely

litigation hold “does not warrant sanctions if no relevant information is lost,”
meaning the party seeking sanctions must show that “the sought-after evidence

actually existed and was destroyed.” Orbit One Communs., 271 F.R.D. at 441.

Further, federal courts also inquire whether the sought-after documents were likely

“relevant,” which in the discovery context means they were “reasonably calculated to

lead to the discovery of admissible evidence.” See id. at 440 (quoting Fed. R. Civ. P.

26(b)(1)); see also DiStefano v. Law Offices of Barbara H. Katsos, PC, No. CV 11-2893

(PKC) (AKT), 2017 U.S. Dist. LEXIS 72137, at *68 (E.D.N.Y. May 11, 2017) (“To

determine whether the unpreserved emails would have been relevant to the claims

and/or defenses raised in the case, the [c]ourt must look to the nature of the

underlying . . . claims.”); N.C. Gen. Stat. § 1A-1, Rule 26(b)(1).

77. The United States District Court for the Southern District of New York

notes the important public policy reasons for requiring a party seeking sanctions to

demonstrate the loss of potentially relevant evidence, explaining that due to the

expansive nature of ESI, without such a requirement, “there is real danger that

‘litigation [would] become a ‘gotcha’ game rather than a full and fair opportunity to

air the merits of a dispute.’” Orbit One Communs., 271 F.R.D. at 441 (quoting Pension

Comm. of the Univ. of Montreal Pension Plan v. Banc of America Sec., LLC, 685 F.

Supp. 2d 456, 468 (S.D.N.Y. 2010)).

78. North Carolina courts have not directly addressed the issue presented

by this case. But North Carolina courts require a party seeking an adverse inference

instruction to show that pertinent or “potentially supportive” documents existed and

were destroyed. See Arndt, 170 N.C. App. at 528, 613 S.E.2d at 281. Further, the
comments to Rule 34(b) explain that a party seeking access to the opposing party’s

entire electronic database must provide a “specific reason, beyond general suspicion,

to doubt the information and that the burden of providing direct access is reasonable

in light of the importance of the information and the circumstances of the case.” N.C.

Gen. Stat. § 1A-1, Rule 34(b) cmt. (2011). Thus, the Court concludes that, depending

upon the facts and circumstances of the case, North Carolina appellate courts,

consistent with federal courts, would require a showing that potentially relevant

information was lost as a result of the delayed litigation hold to justify the imposition

of sanctions.

79. While the Court cannot ignore the theoretical possibility that Tuggle

Duggins’ employees could have double-deleted responsive e-mails between September

19, 2015 and October 17, 2015, there is no evidence suggesting that any potentially

relevant e-mails were actually lost during that time.

80. Tumlin seeks to find e-mails between Tuggle Duggins’ management

committee related to Tumlin’s compensation, resignation, and any alleged scheme to

avoid paying his end-of-fiscal-year compensation. Tuggle Duggins’ management

committee is composed of lawyers who are aware of the duty to preserve relevant

evidence once litigation is reasonably anticipated, regardless of whether a formal

litigation hold has been implemented. Further, Tuggle Duggins has produced e-mails

from those lawyers. There is no evidence that any other person may have had and

then double-deleted a relevant e-mail that would have otherwise been preserved and

produced. The parties have been conducting discovery for over two years and, with
the exception of this issue, all discovery has been completed. After completing

numerous depositions and receiving hundreds of e-mails as a result of Tuggle

Duggins’ six searches of its e-mail server, other than two inconsequential e-mails that

have now been produced, Tumlin is unable to identify specific relevant information

that is missing. See Orbit One Communs., 271 F.R.D. at 442–43 (finding that

sanctions were not warranted, even though plaintiffs failed to take reasonable steps

to preserve information, because “there [was] insufficient evidence of any loss of

discovery-relevant information” and “[n]o witness identified any significant document

that ha[d] not been produced in discovery”).

81. Tumlin contends that he should not be expected to identify e-mails that

were actually lost until a third-party forensic examiner inspects Tuggle Duggins’ e-

mail server. The Court concludes that, at this stage, while he does not have to

specifically identify the exact documents he contends are missing, Tumlin must at

least provide some circumstantial evidence to suggest that potentially relevant

information is missing in order to justify the burden of a forensic examination. See

Arndt, 170 N.C. App. at 527–28, 613 S.E.2d at 281 (explaining that a plaintiff alleging

spoliation must, in part, show that pertinent or “potentially supportive” information

existed and was destroyed); see also Treppel v. Biovail Corp., 233 F.R.D. 363, 372

(S.D.N.Y. 2006) (acknowledging that the plaintiff did not need “to show that specific

documents were lost” for the court to issue a preservation order, but that he needed

“to demonstrate that certain types of relevant documents existed and that they were
necessarily destroyed by the operation of the autodelete function on [defendant’s]

computers or by other features of its routine document retention program”).

82. The Court does not find sufficient evidence to demonstrate that any

potentially relevant information was lost due to Tuggle Duggins’ failure to issue a

litigation hold prior to October 17, 2015. Accordingly, the Court, in its discretion,

concludes that sanctions are not warranted because Tuggle Duggins made good faith

efforts to preserve evidence and there are not facts to suggest that any potentially

relevant information was lost or destroyed.

3. Even if the Court assumes potentially relevant e-mails were lost,
the facts and circumstances of this case do not justify a forensic
examination of Tuggle Duggins’ e-mail server or any other
sanctions.

83. Even if the Court were to assume that responsive e-mails were lost

during that four-week period as a result of Tuggle Duggins’ delayed litigation hold,

such assumption would not automatically warrant the sanctions Tumlin seeks.

84. When issuing sanctions pursuant to Rule 37(b), the Court must consider

lesser sanctions available and determine what is appropriate based on the facts and

circumstances of this case. See Ray v. Greer, 212 N.C. App. 358, 363, 713 S.E.2d 93,

97 (2011) (“[T]he trial court may determine the appropriate sanction in its discretion,”

but it “must consider lesser sanctions before imposing the most severe sanction

available”); see also Out of the Box Developers, LLC, 2014 NCBC LEXIS 7, at *24.

85. In making this inquiry, the Court considers whether Tumlin has been

prejudiced by the alleged loss of e-mails. The Court must determine, in its discretion,

“whether the lost information is both unique and important to the litigation.” Sedona
Principles § 14, cmt. 14.c. If the Court finds that the lost information is merely

duplicative, then Tumlin has not been prejudiced and no remedial measures are

appropriate. See, e.g., Treppel, 249 F.R.D. at 117 (finding that the burden the

additional discovery “would impose on the defendants . . . outweighs its likely benefit”

because the requesting party “failed to identify any reason to believe that the

[requested discovery] would contain any document relevant to the litigation not

already recovered”).

86. The Court is also guided by Rule 26(b)(1a), which directs that the Court

can limit discovery that is “unduly burdensome and expensive” in light of the facts

and circumstances of the case, and the comments to Rule 34(b), which provides that

a party seeking a forensic examination of opposing party’s database from which it has

already received information must provide a “specific reason, beyond general

suspicion, to doubt the information and that the burden of providing direct access is

reasonable in light of the importance of the information and the circumstances of the

case.” N.C. Gen. Stat. § 1A-1, Rule 34(b) cmt. (2011).

87. The Court concludes that Tumlin has not demonstrated a reason,

beyond general suspicion, to justify a forensic examination of Tuggle Duggins’ e-mail

server. Tumlin is searching for e-mails between Tuggle Duggins’ directors. For a

relevant e-mail to have been lost the sender and all recipients of the e-mail would

have had to double-delete the e-mail. Even assuming a Tuggle Duggins’ employee

double-deleted a potentially relevant e-mail, it is unlikely that all copies of the e-mail
were deleted, meaning any e-mail found during a forensic examination would be

cumulative.

88. Without anything more than the mere speculation that both the sender

and all recipients may have double-deleted a responsive e-mail during the four-week

period when no litigation hold was formally in place, the Court finds that the burden

of allowing Tumlin access to Tuggle Duggins’ e-mail server greatly exceeds any

potential benefit.

89. Additionally, after reviewing the record, the Court does not believe that

a forensic examination would produce additional potentially relevant information

sufficient to justify the delay and expense such examination would cause. Tuggle

Duggins has represented that it does not believe double-deleted documents are

recoverable. Tumlin merely speculates that such documents are recoverable; he has

not produced an expert affidavit supporting his contention that the documents can be

recovered.

90. Finally, in light of the extensive e-discovery that has already been

conducted, the Court concludes that Tumlin has not demonstrated that a forensic

examination of Tuggle Duggins’ servers “is reasonable in light of the importance of

the information and the circumstances of the case,” which mainly concerns the

enforceability of Tuggle Duggins’ notice requirement against Tumlin. Id. at Rule

34(b) cmt.

91. Even though the Court is not awarding sanctions here, there are

certainly lessons to be learned from this case. This case exemplifies why all parties
should create a detailed ESI protocol at the outset of discovery and should strive to

be transparent as to how documents will be preserved and what searches will be

conducted. The Court cannot condone Tuggle Duggins’ failure to issue a more timely

litigation hold. But, based on the facts and circumstances of this case, specifically

the extensive searches conducted and the issues involved in this case, the Court finds

that the burden, time, and expense of a third-party forensic examination is not

warranted.

92. In sum, the Court finds that Tuggle Duggins did not intentionally act in

a manner to deprive Tumlin of potentially relevant information, nor was there a

general abuse of discovery obligations sufficient to support the Court’s imposing

sanctions. The Court also finds that Tuggle Duggins did not violate the June 2017

Order and September 2017 Order. Accordingly, Plaintiff’s Motion is denied.

F. The Court Will Not Award Attorneys’ Fees.

93. In its June 2017 Order, the Court granted Tumlin partial relief on his

Motion to Compel, but did not address the issue of attorneys’ fees. (See Order Pl.’s

Mot. Compel Disc.) Unfortunately, the discovery disputes in this action have resulted

in substantial fees to both parties. The Court does not, however, assign fault for such

expenses solely to Tuggle Duggins. The Court finds that Tumlin has contributed to

those expenses and that it would be unjust to impose fees on Tuggle Duggins as a

result of Tumlin’s Motion to Compel.

94. Rule 37(a)(4) provides that the Court shall require the party “whose

conduct necessitated the motion [to compel] . . . to pay to the moving party the
reasonable expenses incurred in obtaining the order, including attorneys’ fees, unless

the court finds that the opposition to the motion was substantially justified or that

other circumstances make an award of expenses unjust.” N.C. Gen. Stat. § 1A-1, Rule

37(a)(4).

95. Plaintiff’s motion to compel seemed premature as he was unable to

specifically identify why the documents Tuggle Duggins planned to produce were

insufficient. While the Court acknowledges there was a delay in Tuggle Duggins’

document production, that delay was caused, in part, by Plaintiff’s opposition to

Tuggle Duggins Notice of Deposition of Tumlin, which was served prior to Plaintiff’s

discovery request. Tuggle Duggins made its first production of e-mails on August 19,

2016, less than three weeks after Plaintiff filed its motion to compel. Although Tuggle

Duggins’ first e-mail production was incomplete due to an inadvertent error with the

software, Tuggle Duggins corrected this mistake, conducted another search, and

made an additional production on November 8, 2016. Additionally, despite believing

that it had sufficiently responded to Tumlin’s discovery requests, Tuggle Duggins

conducted an additional search of all employees’ mailboxes that had not been

searched previously in an effort to satisfy Tumlin’s continued suggestion that

documents were being withheld, prior to the Court compelling it to do so. On the

other hand, Plaintiff waited until eight months after it filed its motion to compel to

suggest specific search terms to be used and simply continued to proclaim that the

searches were not satisfactory. On balance, the Court concludes that Tuggle Duggins
has been substantially justified in opposing Plaintiff’s Motion to Compel and that

Tumlin is not entitled to attorneys’ fees pursuant to Rule 37(a)(4).

96. Further, the Court has found that Tuggle Duggins did not violate any

Court orders, and therefore Tumlin is not entitled to an attorneys’ fee award.

Gillespie, 2017 NCBC LEXIS 44, at *14 (quoting Daniels v. Montgomery Mut. Ins.

Co., 320 N.C. 669, 674, 360 S.E.2d 772, 776 (1987)) (explaining that the court has the

“inherent power” to order a party to pay the opposing party’s “reasonable costs

including attorney’s fees for failure to comply with a court order”).

IV. CONCLUSION

97. Based on the above findings and conclusions, the Court ORDERS as

follows:

a. Plaintiff’s Motion is DENIED;

b. Discovery in this action is closed;

c. Plaintiff has thirty days from the issuance of this Order to

respond to Defendant’s Motion for Summary Judgment;

d. Defendant has ten days from the filing of Plaintiff’s Response to

file a Reply Brief; and

e. Any additional summary judgment motions must be filed with

supporting materials within thirty days of the date of this Order.

IT IS SO ORDERED, this the 22nd day of May, 2018.

/s/ James L. Gale
James L. Gale
Chief Business Court Judge