eShares, Inc. v. Talton, III

Background

During an earlier conference, eShares explained that a forensic review of Talton’s devices was important to moving the case forward or discussing settlement. Talton did not agree to an immediate examination. The court directed the parties to try to agree on procedures and later reviewed their joint letter and proposed protocols.

Parties’ positions

eShares alleged that Talton bulk-downloaded documents to devices that were not Carta devices. It was concerned that he had taken additional documents that eShares did not know about. The concern was heightened, according to eShares, because Talton had been in charge of Carta’s information-security system and infrastructure and had global access to Carta’s systems and files.

Talton argued that eShares had served discovery requests seeking the same information that eShares wanted to obtain through a forensic inspection. He contended that an examination was premature because he had not yet been given the opportunity to respond to those requests. He also pointed to the parties’ preservation order.

Court’s reasoning

The court explained that forensic examinations of computers and cell phones are generally a drastic discovery measure because they are intrusive. It said that the alleged conduct—bulk-downloading confidential files to a personal device—was not the type of conduct that typically justifies a forensic examination, and eShares had not cited any cases in the circuit supporting such an order on these facts.

The court noted that courts in the circuit had allowed forensic examinations when there was reason to question a party’s compliance with discovery requests or court orders, such as indications that a party erased or withheld responsive documents, spoliated evidence, hid evidence, or failed to comply with court orders. Here, Talton had not yet responded to eShares’s discovery requests, and there were no allegations that he had violated a court order.

Disposition

The court did not order a forensic examination at that time. Judge Jessica G. L. Clarke denied without prejudice eShares’s request for an immediate forensic examination.