In re Turquoise Hill Resources Ltd. Securities Litigation

Background

Lead Plaintiff, the Pentwater Funds, moved to compel Defendants to produce text messages from each of the 47 custodians Defendants had identified in the case. The motion also sought answers to interrogatories asking Defendants to identify the devices and platforms used for communications.

Defendants agreed to produce text messages from nine custodians whom they said used text messages for substantive communications. The Pentwater Funds argued that Defendants should also search the messages of seven of the 16 custodians who admittedly used text messages for non-substantive matters, as well as the remaining 32 custodians, because text-message use was routine.

Legal standard

The court explained that the discovery rules allow a party to obtain nonprivileged information relevant to a claim or defense. A responding party must produce requested documents within its possession, custody, or control and must conduct a reasonable and diligent search for responsive documents. The court may limit discovery when it is not proportional to the needs of the case, when its burden or expense outweighs its likely benefit, or when it is cumulative or duplicative.

Ruling

The court granted in part and denied in part the motion to compel. It granted the motion to the extent that Defendants must search the text messages of eight additional custodians selected by Plaintiffs, including Mr. Soirat, and produce responsive documents.

The court denied the motion to the extent it sought searches of more than eight additional custodians. The Pentwater Funds had provided enough evidence to show that responsive documents could be found in the text-message files of some custodians beyond those who identified themselves as using text messages for substantive reasons. But the court found that the Pentwater Funds had not shown reason to believe that all or almost all of the custodians had relevant and discoverable information in their possession. The court also considered Defendants' representation that they had produced more than 354,000 documents, with additional documents to come, including documents from an internal messaging platform. It concluded that searching more than eight additional custodians would be disproportionate to the needs of the case.

The court characterized the request for answers to Interrogatories 5 through 7 as discovery about the parties' discovery process itself. Because the Pentwater Funds had not shown an adequate basis for that request, the court denied the motion as to those interrogatories. The Clerk of Court was directed to close the motions at Docket Nos. 375 and 377.