DeGeer v. Gillis
755 F. Supp. 2d 909
N.D. Ill.2010Background
- DeGeer sues Gillis, Shalleck, and Mergy over unpaid 2008–2009 earn-out and related compensation; DeGeer alleges partnership with Defendants in Huron's Galt division and share of Galt earn-outs.
- MSGalt & Company, LLC and Huron entered into an Asset Purchase Agreement in March 2006 to acquire the practice, with earn-out payments to be paid to Defendants’ liability entity.
- DeGeer joined Huron as Managing Director of Huron’s Galt division in July 2006 and alleges partnership with Defendants for generating fees and sharing earn-outs.
- DeGeer dissolved the parties’ partnership on May 18, 2009 and resigned from Huron in October 2009; Defendants led the Galt division at Huron until December 2009, then bought back Galt assets on December 31, 2009.
- Defendants served a subpoena on non-party Huron in March 2010 seeking 15 categories of documents, including emails, personnel files, and backup data; Huron objected and later produced some materials, asserting burdens and scope concerns.
- The court granted in part and denied in part Defendants’ motion to compel after phased meet-and-confer efforts, addressing data custodians, search terms, and cost-shifting for ESI from Huron’s systems.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Huron must search additional data custodians for DeGeer materials | DeGeer’s claims require broader custodians to uncover responsive materials | Defendants need targeted custodians for relevant, non-duplicative documents | Partially granted; limited additional custodians ordered with terms to be negotiated |
| Whether Defendants may obtain backup tapes and Cravath database data | Backup tapes and Cravath data may contain responsive, non-duplicative material | Searches should be limited and cost-shifted; Cravath data largely duplicative | Partially granted; Cravath backup tapes and Holdren-related searches allowed with cost-sharing; broader search denied |
| Approach to cost-shifting for future Huron ESI production | Cost-shifting is necessary given burden on non-party | Costs should be allocated to moving party where possible | Granted in part; costs to be shared for additional searches, excluding Holdren data due to deletion policy |
| Whether Huron must disclose search terms and terms proposed for custodians | Lack of term disclosure hinders meaningful meet-and-confer | Defendants should be allowed to propose and refine terms | Partially granted; Court urges upfront cooperation and future in-person conferral; hold-harmless for Holdren exception |
Key Cases Cited
- Dexia Credit Local v. Rogan, 231 F.R.D. 538 (N.D. Ill. 2004) (control test for documents in non-party subpoena context)
- Hobley v. Burge, 433 F.3d 946 (7th Cir. 2006) (control over documents via attorney files; nonparty production)
- U.S. Securities and Exchange Commission v. Hyatt, 621 F.3d 687 (7th Cir. 2010) (subpoenaed nonparties may be compelled only with court order; Rule 45(c) standard)
- Romero v. Allstate Ins. Co., 271 F.R.D. 96 (E.D. Pa. 2010) (Sedona principles influence e-discovery cooperation)