MEMORANDUM

WILLIAM J. HAYNES, JR., District Judge.

                                   TABLE OF CONTENTS

  I.  History of this Litigation ....................................................796
      A.  Consent Decree and Earlier Proceedings ....................................797
      B.  The Court's 2001 Findings of the Defendants' Noncompliance ................801
      C.  The Court's 2004 Findings of the Defendants' Noncompliance ................808
      D.  The Recusal Order and Reassignment ........................................811
      E.  The 2006 Discovery Proceedings ............................................814

 II.  Plaintiffs' Renewed Motion to Compel ..........................................819
      A.  Findings of Fact ..........................................................819
          1.  Information Requirements and Discovery Rights under the Consent
              Decree ................................................................819
          2.  The Lack of Preservation of Relevant Records ..........................821
          3.  Inadequacies in the Defendants' 2006 Paper Production .................828
          4.  The Necessity of Plaintiffs' ESI Discovery Requests ...................833
          5.  The Costs of ESI Production ...........................................835
          6.  Privileged Information in the ESI Production ..........................839
          7.  Defendants' Failures to Answer Plaintiffs' Requests for Admissions
              and to Comply with the January 14th Order .............................850
          8.  Other ESI Production Issues ...........................................857

      B.  Conclusions of Law ........................................................857
          1.  Discovery from the MCCs ...............................................857
          2.  Discovery Standards ...................................................860
          3.  Discovery Rules on Electronic Discovery ...............................861
          4.  Duty to Preserve ......................................................867
          5.  The Undue Burden Analysis .............................................875
              (i)    Types of ESI Data ..............................................875
              (ii)   Defendants' and MCCs' Databases ................................881
              (iii)  The Costs of Production ........................................881
          6.  The Good Cause Showing and the Rule 26(b)(2)(C) factors ...............884
          7.  Privilege Issues ......................................................889
              a.  Attorney-Client Privilege .........................................892
              b.  Work Product Privilege ............................................896
              c.  Joint Defense Privilege ...........................................897
              d.  Deliberative Process Privilege ....................................898
              e.  State Statutory Privileges ........................................899
          8.  Defendants' Failures to Answer Plaintiffs' Requests for Admissions
              and to Comply with the January 14th Order .............................904

III.  Remedies ......................................................................908

Plaintiffs, John B., and other minors through their next friends, filed this action on behalf of themselves and other similarly situated minors under 42 U.S.C. § 1983, asserting jurisdiction under 28 U.S.C. § 1331, the federal question jurisdiction statute, with its statutory counterpart, 28 U.S.C. § 1343(a)(3) and (4). Plaintiffs' action is on behalf of a class of approximately 550,000 children who are entitled under federal law to medical services that include early and periodic screenings for their physical well being, including their dental and behavioral health needs. Federal law also requires any necessary follow-up medical services. The Plaintiffs' class includes children who are in the state's custody through the state's juvenile court system and other children's programs provided by the State of Tennessee.

Plaintiffs seek to enforce their rights under Title VI of the Social Security Act, 42 U.S.C. §§ 620-629 and 670-679 and Title XIX of that Act, 42 U.S.C. § 1396 et seq. as well as remedies for violations of the Due Process Clause of the Fourteenth Amendment to the United States Constitution. In essence, Plaintiffs allege that the Defendants deprived them of their rights to early and periodic screening, diagnosis and treatment (EPSDT) services and related medical care for children under State's TennCare program and children who are in the Defendants' legal custody and are also entitled to such services under Title VI.

The original Defendants were Nancy Menke, Commissioner, Tennessee Department of Health; Theresa Clarke, Assistant Commissioner, Bureau of TennCare; and George Hattaway, Commissioner, Tennessee Department of Children's Services. The successors in office and current Defendants are: David Goetz, Commissioner, Tennessee Department of Finance and Administration; J.D. Hickey, Assistant Commissioner, TennCare Bureau1; and Viola Miller, Tennessee Department of Children's Services. The Defendants are state officials who are in charge of the State programs for these services that are federally funded by Congress under Title VI of the Social Security Act, 42 U.S.C. §§ 620-629 and 670-679 and Title XIX of that Act. The medical services at issue are provided under the State's TennCare program, a waiver program approved by the Center for Medicare and Medicaid Services ("CMS"). The actual providers of these medical services are the Managed Care Contractors ("MCCs") or Managed Care Companies ("MCOs") that have contracts with the State detailing their responsibilities. Some MCCs provide only management services and some MCCs specialize in dental or behavioral health services.

Contemporaneous with the filing of the complaint, Plaintiffs requested class certification and the parties agreed to entry of a Consent Decree to remedy Plaintiffs' claims and to certify the class. (Docket Entry No. 3). The Court certified the class and entered the Consent Decree (Docket Entry No. 12) that granted declaratory and injunctive relief on Plaintiffs EPSDT claims. The Consent Decree enjoined the Defendants, as state officials, from depriving Plaintiffs and members of their class of their rights to EPSDT services; set minimum percentages of screenings for different groups of children over a period of years for compliance with EPSDT laws; and required a detailed, multi-year remedial plan to ensure the Defendants' compliance with Consent Decree. Lengthy and complex proceedings followed, including several show cause and contempt hearings. (Docket Entry Nos. 79, 228, 270, 291, 465 and 558).

After a series of hearings and conferences on the parties' current discovery disputes, the Court ordered that discovery of electronically stored information ("ESI")2 shall be provided and directed the parties' computer experts to develop a protocol for ESI discovery from the Defendants and their MCCs. On December 6, 2006, the Plaintiffs' and the State's computer experts agreed to a protocol for the ESI discovery that was subject to modifications for the search terms and consultations with the MCCs. (Docket Entry No. 764 at pp. 14-26 and Docket Entry No. 765). The Defendants continued to oppose the terms for production of Plaintiffs' ESI discovery. Plaintiffs then renewed their motion to compel.

Before the Court is the Plaintiffs' renewed motion to compel (Docket Entry No. 826) that asserts their discovery rights to ESI from the Defendants and the MCCs under Orders of the Court, the Federal Rules of Civil Procedure and the Consent Decree. Plaintiffs contend that the ESI is necessary to assess the Defendants' contention that they are now in compliance with the Consent Decree and to discover whether the Defendants' remain noncompliant, as earlier found by the Court. Plaintiffs ask the Court to compel the Defendants' compliance with the Court's earlier Orders for the Defendants to produce ESI and to require certain key custodians to certify that documents covered by the Plaintiffs' discovery requests have not been removed or destroyed. For their motion, Plaintiffs rely upon the Court's earlier Orders compelling the Defendants' production of:

(Docket Entry No. 826, Plaintiffs' Renewed Motion to Compel at pp. 2-3). In sum, the Plaintiffs assert that their ability to protect the interests of the class requires a complete ESI production from the Defendants and their MCCs because a complete ESI production is a essential guide through the State's and MCCs' complex systems on this statewide healthcare system.

In their responses, (Docket Entry Nos. 893, 898, 907, 929 and 953), Defendants and the MCCs assert, in essence, that Plaintiffs' ESI production requests are unduly burdensome based upon the extraordinary costs of production. These costs are for the actual technical production costs and substantial personnel and lawyer time to conduct the necessary privilege reviews. Moreover, the Defendants cite their earlier production of hard copies of responsive documents for the period for 2004 to April 6, 2006.9 In their view, that paper production precludes an ESI production for the same time period. In addition, the Defendants and MCCs rely upon federal and state privacy laws that preclude the discovery of some information sought by the Plaintiffs. The MCCs also cite the need to exclude information protected by their contracts with other businesses and Medicaid programs in other states.

Also before the Court are the MCCs' related motions to allocate discovery costs. (Docket Entry Nos. 920, 921, 935) to which the Defendants responded. (Docket Entry No. 946). The MCC Doral filed a reply (Docket Entry No. 964). The MCC BlueCross /BlueShield has filed a motion to alter or amend the June 1, 2007 Order or motion for a partial new trial. (Docket Entry No. 931).

After extensive proceedings on the issues raised by the Plaintiffs' renewed motion to compel and shortly before the Court's filing of this Memorandum on Plaintiffs' renewed motion to compel, the Defendants filed a "Notice" of mootness. (Docket Entry No. 1023). Defendants stated that in contemplation of the Court's imminent adverse ruling, the Defendant were proceeding to produce the ESI discovery. Thus, the Defendants suggested the Plaintiffs' renewed motion to compel was moot. The Court delayed filing this Memorandum to allow Plaintiffs and any MCC the opportunity to respond to the Defendants' Notice. As reflected in the Plaintiffs' responses (Docket Entry No. 1024 and 1025) to which the Defendants filed a reply (Docket Entry No. 1027), Plaintiffs contend that the Defendants' Notice does not moot their renewed motion to compel and in fact, raises more issues. The Defendants' Notice among other things, would set a January 2007 time limit to the ESI production and limit any privilege review to a word search. Plaintiffs argue that the Defendants' Notice reflects the Defendants' bad faith litigation tactics that caused the Plaintiffs, MCCs and the Court to expend extraordinary resources on issues the Defendants now declare moot.

The Court respectfully declines the Defendants' suggestions of mootness. First, the Plaintiffs' responses to the Defendants' Notice reflect the actual lack of mootness and additional issues created by this Notice. Moreover, as set forth in this Memorandum and as established by the record in this action, the Court observes: (1) that the Defendants have repeatedly violated their agreements set forth in the Consent Decree; (2) that the Defendants have failed to comply with Judge Nixon's Order to submit an Initial Work Plan to remedy the Defendants' violation of federal law to conform to the Consent Decree; (3) that the Defendants refused to corporate with the Special Master appointed by the Court to develop a plan for compliance with federal law as required by the Consent Decree; (4) that the Defendants have disavowed a clear command of the Consent Decree to develop a specific remedial plan; (5) that the Defendants breached their agreement with the Plaintiffs on the dates for ESI discovery and the ESI protocol; (6) that the Defendant have ignored the Court's directives to provide ESI to Plaintiffs; and (7) that the Defendants failed to comply with the Court's Orders on discovery. In these circumstances, the Court lacks confidence in the Defendants' assertions that the discovery disputes in this action are moot.

I. History of this Litigation

To decide the Plaintiffs' renewed motion to compel and to understand the related issues before the Court, a brief discussion of the history of this litigation is necessary.10 This review provides insights to understand the ESI discovery sought by the Plaintiffs and the necessity for that discovery.

A. The Consent Decree and Earlier Proceedings

The Consent Decree certified the class, conferred substantive relief to the members of the Plaintiffs' class and imposed obligations upon the Defendants and the MCCs to provide EPSDT services to the class members and to report on their provisions of such services. (Docket Entry No. 12). Here, the pertinent substantive provisions of the 1998 Consent Decree found certain facts and established criteria for compliance, subject to practical limitations and those provisions are as follows:

(Docket Entry No. 12 at ¶¶ 29, 30, 33, 46, 50, 52, 54, and 55) (emphasis added).

The Consent Decree also set a series of deadlines for the Defendants to accomplish these substantive provisions:

(Id. at ¶¶ 39, 40, 45, 53, 60, 62, 65, 72, 73, 82, 88 and 92) (emphasis added).

B. The 2001 Findings of the Defendants' Non-Compliance

In several post-consent decree filings, the parties' counsel submitted several documents reflecting the Defendants' intention to file a "remedial plan." (Docket Entry Nos. 27, 31 and 38). The Defendants later filed a remedial plan, but after a period of time operating under the Defendants' remedial plan, the Defendants moved to stay and to modify the Consent Decree (Docket Entry No. 69) and the Plaintiffs moved for a finding of contempt (Docket Entry No. 79). After an evidentiary hearing, the Honorable John T. Nixon, the then presiding judge, found the Defendants' remedial plan to be fatally defective in structure and performance. In a ruling filed on December 18, 2001, 176 F.Supp.2d 786 (M.D.Tenn.2001) (Docket Entry No. 227), Judge Nixon made the following findings of fact and conclusions about the Defendants' remedial plan and their proposed revised remedial plan:

I. Findings of Fact

(Docket Entry No. 227, 176 F.Supp.2d at pp. 809-10, 810-11, 793, 794-95 and 812) (emphasis added and footnotes omitted).

In its accompanying Order, the Court reiterated the Defendants' lack of an effective plan and stated: "The Court finds that a special master is necessary to mediate and ultimately to submit to the Court an EPSDT compliant plan." (Docket Entry No. 228). The predicates for the appointment of a special master are reflected in the following findings of fact of systemic deficiencies:

Id. at pp. 790-91, 791, 792, 803, 804.

Judge Nixon cited as a causal factor of the Defendants' noncompliance, the Defendants' wholesale delegation of matters to the MCCs. Judge Nixon found that "most of what TennCare does has to happen through its contracts with the MCOs and BHOs." Id. at p. 801.

Id. at p. 799.

In 2001, the Defendants relied on their contractors as witnesses to justify their request for modification.11 Judge Nixon made specific findings and conclusions about the deficient performance of the MCCs or MCOs and BHOs:

Id. at pp. 795, 796-97, 797-98, 805-06 (emphasis added). Judge Nixon reserved a finding of contempt: "However, because the Court bases its decision on failure to comply with federal law, the Court will hold in abeyance a decision whether Defendants' actions thus far constitute civil contempt.... The record indicates that the State made great efforts to comply with the Court's Orders. However, the Court reserves the right to find the Defendants in contempt in the future." Id. at p. 806.

The Court then directed "[t]he parties... [to] attempt to work to reach a consensus on a workable plan [, and i]f, and only if, the special master determines that the parties are unable to agree on a plan, the parties shall submit plans to special master for his consideration." (Docket Entry No. 275 at p. 2). In an October 14, 2002 Order, the Court required the Defendants to prepare an "Itemized Assessment Protocol" ("IAP") as well as an "Initial Work Plan" ("IWP"), under the Special Master's supervision. (Docket Entry No. 291 at pp. 3-4). In a subsequent Order, the Court ordered the Defendants to submit an "Initial Work Plan" ("IWP") to the Special Master and later granted the Defendants an extension "that defendants shall submit their initial work plan by December 13, 2002." (Docket Entry No. 303). As discussed below, the Defendants did not meet their obligation on the IWP or the IAP.

C. The 2004 Findings of the Defendants' Non-Compliance

On June 16, 2004, Plaintiffs filed another motion to show cause (Docket Entry No. 403) asserting the Defendants' continuing violations of the Consent Decree. After discovery and an evidentiary hearing, in a Memorandum entered on October 22, 2004, citing testimony of two key state policymakers, Judge Nixon found that the Defendants were again not in compliance with the Consent Decree and significantly, lacked a reliable system to measure their progress.

(Docket Entry No. 465, Memorandum and Order at pp. 4-8) (emphasis added). The Court then set a deadline for objections and authorized depositions and proposals for modifications of the plan attached to its Memorandum. Id. at p. 8.

On December 13, 2005, the Court ordered that the Defendants "immediately disclose to Plaintiffs and the Special Master the plan, if any, under which the State is operating to comply with the Consent Decree and the EPSDT law as well as file by January 31,2006, its Semi-Annual Report..." (Docket Entry No 558, Order at p. 2). On December 19, 2005, Linda Ross, a Deputy Attorney General on behalf of the Defendants wrote the Special Master that:

(Docket Entry No. 559-2).

On January 9, 2006, the Defendants' submission to the Court construed the Court's December 13th Order to relieve the Defendants from submission of any plan. This submission reads, in pertinent part:

(Docket Entry No. 569-2 at pp. 3-4).12

D. The Recusal Order and Reassignment

In November 2004, Judge Nixon held this action in abeyance to facilitate settlement negotiations. (Docket Entry No. 495). During this suspension, the parties litigated other TennCare actions. (Docket Entry No. 550). The Consent Decree, however, remained in effect (Docket Entry Nos. 509 and 546) and during this period, the Defendants continued their discovery efforts in this action. (Docket Entry Nos. 498, 501, 508, 511, 512, 560 and 562). In particular, the Defendants issued discovery requests to depose the Special Master to inquire about discussions of the Special Master with Plaintiffs' counsel and the Court.

In the midst of these controversies, Judge Nixon set aside the plan that had been filed by the Special Master and recused himself, stating:

(Docket Entry No 584, Memorandum and Order at pp. 4-5) (emphasis added). As a related action, the action was transferred to this member of the Court.

As the succeeding judge, the Court set a status conference on February 10, 2006 to discuss outstanding issues with the parties' counsel. At that time, a point of contention was whether the Defendants were required to file a plan to remedy Judge Nixon's earlier findings of their violations of federal law. The Defendants' position on this issue, as quoted earlier, is as follows:

(Docket Entry No. 559-2, Letter from Linda Ross to Richard Carter, MD). See also, Docket Entry No. 569 at p. 4 and Docket Entry No. 596, Transcript of Hearing of February 10, 2006 at p. 10.

At the February 10th conference, the Court reviewed those portions of the record on this issue. First, paragraph 92 of the Consent decree reads: "Within 60 days thereafter, the parties shall submit to the Court a proposed agreed order containing a specific remedial plan addressing the coordination and delivery of services under EPSDT law and laws contained therein for children." (Docket Entry No. 12 at ¶ 92) (emphasis added). In an Agreed Order submitted by counsel for the parties, counsel cited "the remedial plan called for by paragraph 92 of the consent decree." (Docket Entry Nos. 39 and 40). In an earlier submission, the Defendants reiterated that they were willing to engage a mutually agreeable expert "to facilitate further development of a plan." (Docket Entry No. 31 at p. 2). Later, the Defendants requested a conference with the Court, stating: "The proposed remedial plan was developed pursuant to Paragraph 92 of the consent decree." (Docket Entry No. 52). See also Docket Entry Nos. 54, 55, 57, 58, 59, 60, 76 and 88 that refer to the Defendants' "remedial plan." In one Agreed Order, counsel stated: "Pursuant to paragraphs 88-92 of the consent decree, the parties submitted a "remedial plan"." (Docket Entry No. 59). In another Order, the Court stated that the "Consent decree provides for implementation of a remedial plan." (Docket Entry No. 103). See also Docket Entry No. 164, Order.13 After reviewing these entries and Orders, the Court directed the Defendants to file whatever the Defendants deem to be their plan to comply with the Consent Decree.14 (Docket Entry No. 601).

After a review of the record, the Court retained the former Special Master and his assistants as technical advisors so as not to lose the most knowledgeable experts who had expended extraordinary resources to inform the Court about the Defendants' compliance efforts. Given Judge Nixon's prior findings of non-compliance, the contentious exchanges between the parties' counsel, the extensive scope of the Consent Decree and the state of the record, the Court deemed necessary the appointment of monitors to assist the parties and the Court in identifying issues that remain for discovery and any evidentiary hearing. A strict protocol was defined for the monitors' activities. The Monitors filed a report that the Court deemed helpful in identifying the remaining issues in the litigation. (Docket Entry Nos. 795 and 796). Regrettably, despite Judge Nixon's prior repeated findings of their non-compliance, the Defendants expressed to the Monitors their concerns about this Court's continuing oversight of this program. (Docket Entry No. 795, Monitors' Report at p. 5).15

E. The 2006 Discovery Proceedings

At the February 10, 2006 conference, Michael Kirk, one of the Defendants' counsel announced that the Defendants had achieved compliance with the Consent Decree. (Docket Entry No. 596, Transcript at p. 47). "I would just like to note for the record that it is the State's view that they have been in compliance with the consent decree." Id. That contention resulted in the Plaintiffs' commencement of discovery.

The Court held a series of conferences that included discussions of ESI production. (Docket Entry Nos. 599, 601, 615, 642, 645 and 646). At a February 28, 2006 hearing, the Court heard the testimony of Brent Antony, the chief information officer of the TennCare Bureau, on the Defendants' motion for a protective order concerning a utilization data request from Mr. Carter, the former Special Master appointed by Judge Nixon. Anthony's experience is in health care and Antony's computer knowledge was "really from [his] job experience." (Docket Entry No. 614, February 28, 2006 Transcript at p. 82). Anthony described the Defendants' change of computer systems.

At the April 17, 2006 conference on the Monitors' review of relevant state data, the Court "suggested" to the Defendants that "whatever is electronically available ... be made available to the Monitors and the Plaintiffs in electronic form unless, of course, there is an issue of privilege." (Docket Entry No. 646 at p. 33). This instruction was to provide a common base of information so as to ensure a meaningful dialogue among the parties, the monitors and the Court on contested issues. Id. The Court then denied the Plaintiffs' motion to compel such information (Docket Entry No. 651), but without prejudice to renew because the Defendants were going to provide to Plaintiffs any ESI information provided to the monitors. (Docket Entry No. 656).

On March 31, 2006, Plaintiffs propounded discovery requests seeking information and documents, including ESI, related to the State's contention of compliance with the Consent Decree. (Docket Entry No. 711). Plaintiffs' interrogatories and related document requests included the following two definitions:

(Docket Entry No. 626-2, at pp. 3, 4) (emphasis added). Plaintiffs' discovery requests also sought information and documents in the possession of the Defendants' agents and included an instruction that, "when answering an interrogatory, to the extent that an activity or responsibility has been delegated to a contractor, identify the contractor and the scope of the delegation." Id. at 2. Some interrogatories explicitly requested information related to contractors' actions and information.16

On May 15, 2005, the Defendants responded, but converted their ESI to hard paper copies. (Docket Entry No. 709, Plaintiffs' Brief in Support of Motion to Compel Discovery at pp. 14-15). The Defendants insisted that the hard paper copies were identical to any responsive ESI and therefore did not produce the documents in ESI computer format. (Docket Entry No. 720 at p. 13, Docket Entry No. 815-2 at p. 4 and Docket Entry No. 988 at p. 186). Nicole Moss, a defense counsel, conceded the Plaintiffs served discovery requests for electronic discovery. (Docket Entry No. 734, November 6, 2006 Transcript at p. 23). Of particular note is that the Defendants' following objection: "8. Defendants object to the Interrogatories' definition of "document" to the extent it reaches electronic versions of documents separate and apart from a hard-copy version of the identical document that has been identified and made available in the hard-copy form." (Docket Entry No. 815-2, Defendants' Response to Plaintiffs' Third Set of Interrogatories at p. 4) (emphasis added). The Plaintiffs provided ESI in response to the Defendants' discovery requests. Id. at pp. 24-38. Plaintiffs' ESI production included some metadata. (Docket Entry No. 719, Antony Declaration at p. 5, ¶ 7).

The Defendants objected to providing potentially responsive information or documents from the MCCs, contending that these files are not within their own possession, custody or control except documents already provided to the State by the MCCs.

(Docket Entry No. 711, Joint Discovery Statement at p. 4).

The parties' counsel continued to disagree on discovery issues and in an August 16th letter, the Plaintiffs' counsel reaffirmed that: "On that broader question regarding electronic production, we agreed to disagree, since it continues to be the Plaintiffs' position that we are owed such production under Rule 34." (Docket Entry No. 712-3 at p. 20). Further negotiations between the parties narrowed some issues, but as this Memorandum reflects, the parties did not resolve their significant discovery disputes.

On October 13, 2006, the Plaintiffs filed another motion to compel (Docket Entry No. 708), that the Defendants opposed. (Docket Entry No. 720). The Defendants also filed a motion to compel on non-ESI issues involving Plaintiffs' contacts with advocacy groups and law firms (Docket Entry No. 706) that was denied on First Amendment principles and the work product privilege. (Docket Entry No. 743). In support of their objections to Plaintiffs' ESI discovery requests, the Defendants submitted affidavits, but those affidavits made only generalized assertions of an undue burden and the interruption of the work of state employees to respond to the Plaintiffs' ESI requests. (Docket Entry No. 720 at Exhibits B and C thereto).

The Court held a discovery hearing on November 6, 2006 to decide the parties' pending discovery motions and to mediate the parties' differences on ESI discovery. As to the Plaintiffs' discovery request for ESI, the Court reiterated its understanding from the April 17,2006 conference that whatever ESI was given to the monitors was to be provided to the Plaintiffs. (Docket Entry No. 734, November 6, 2006 Transcript at pp. 34-36). The Court also expressed the view: "it makes sense to me that if it's available on an electronic data form, that you all would share that instead of generating all of this paper." Id. at p. 68. The ESI was to be produced for the fifty (50) key custodians as agreed upon by the parties.17 (Docket Entry No. 734 at pp. 35, 68; Docket Entry No. 743 atp. 2). The Court further ordered the production of documents and information, including ESI, in the possession of the MCCs (Docket Entry No. 734 at pp. 71-74; Docket Entry No. 743 at pp. 1-2). The Court directed counsel to prepare an Order specifying the information sought from the MCCs, id. at pp. 69-70, because "[a]s I understand it, there is no real objection to producing what the MCOs have." Id. at p. 69. The Court, however, directed that the ESI discovery would be produced under an agreed protocol, id. at pp. 65-66 and told the parties to exchange information about their computers and software among their computer experts. Id. at pp. 66-68, 74-75, and 86-87. The Court granted the Defendants leave to seek relief if the computer experts were unable to agree on the terms of the protocol. Id. at pp. 75, 82, 90.

At the November 6th hearing, Plaintiffs' counsel also expressed concerns about the Defendants' ambiguous responses to their discovery requests on destruction of evidence. The Court ordered the Defendants to give assurances that the State had preserved responsive information and responded fully and accurately to the Plaintiffs' discovery. The Court ordered that individuals identified by the Defendants as key custodians to answer Plaintiffs' revised and simplified requests for admissions about destruction of evidence and to sign their answers personally. (Docket Entry No. 734 at pp. 56-64; Docket Entry No. 743 at p. 3; Docket Entry No. 786 at pp. 40-42). The Plaintiffs propounded their third requests for admissions and fifth set of interrogatories on this issue. (Docket Entry No. 799).

In an Order entered on November 21, 2006, the Court ordered the Defendants to "provide responsive documents that are in electronic format." (Docket Entry No. 743, Order at p. 2.). In response to this Order, the Defendants offered Plaintiffs what the Defendants deemed an "eminently reasonable alternative solution," i.e., to provide "production of supplemental materials and those documents where record of blind carbon copy may have been omitted from prior production." (Docket Entry No. 907 at 13-14). The Defendants offered to produce only ESI after April 15, 2006, and the ESI for any "documents prior to that date that were blind copied to any recipients." Id. at p. 14.18

On December 6, 2006, a conference was held with the parties' computer experts to decide unresolved issues on the protocol for the production of ESI under the November 21st Order. (Docket Entry No. 764 at pp. 28, 51).19 In reliance upon precedents in this district involving complex matters, the Court directed the parties' computer experts to confer, without the presence of their counsel, to develop a protocol and/or memorandum of understanding to address the cited problems with electronic discovery. (Docket Entry No. 764, at pp. 5-6). The "experts only conference" was held without objection by any counsel and yielded positive results that were appreciated by the parties' counsel.20 At the end of the December 6th conference, the parties' experts announced their ESI discovery protocol and for the prospective preservation of responsive ESI, and electronic searches with keywords to be identified by the Plaintiffs. Id. at pp. 14-20. To ensure that all responsive ESI is preserved and searched, the Defendants were to survey the individuals identified as key custodians and ascertain whether those custodians had saved relevant ESI. At the December 6th conference, the Court also suggested that the parties hold a series of similar conferences with the MCCs, with a court reporter, to negotiate any further protocol issues on ESI production.

As requested, the parties' computer experts submitted an order that reflected their agreement. (Docket Entry No. 784-3 and Docket Entry No. 785). Mr. Tigh, Plaintiffs' computer expert, also submitted his declaration on the need to ask custodians an additional question as to whether the custodians had removed any responsive information to any non-attached media. (Docket Entry No. 785-2, Tigh Declaration ¶ C). On January 14, 2007, the Court entered another Order adopting Tigh's suggestion and ordered that "[t]he Defendants shall file certifications of the key custodians as to whether any material has been removed." (Docket Entry No. 789 at p. 3, citing the Tigh affidavit at ¶ C). In the Court's view, these certifications would ensure all relevant ESI would be retrieved.

Plaintiffs' proof is that the Defendants reneged on the computer experts' agreements at the December 6th conference to use 50 keywords or search terms, (Docket Entry No. 759) and the Defendants unilaterally selected two search terms and insisted upon a date-limited search. (Docket Entry No. 810, Exhibit A). Defendants initially responded that this restriction was necessary to complete the search to meet the Court's date for an earlier scheduled evidentiary hearing. Later, the Defendants would contend that the ESI production was too costly.

Based upon the parties' filings, the Court concluded that the out-of-court conferences of the experts had not been as productive as the Court contemplated. Once the parties left Court, their disputes over basic ESI issues resurfaced. Given the technical nature of the discovery controversy, the Court scheduled an "experts only" conference for April 11, 2007 for the parties' and MCCs' computer experts. (Docket Entry No. 857, Order) This conference was to define the parties' technical disputes and to implement the Court's Orders requiring the production of responsive ESI. A series of Orders were entered to ensure that the Court and the participants shared the same core information about the capabilities of the Defendants' and MCCs' respective computer systems, including their retention policies and software programs. (Docket Entry Nos. 858 and 859). Such information was ordered to be treated as confidential. Id. All participants were also requested to file a list of outstanding discovery issues. (Docket Entry No. 859). The Defendants filed a statement of disputed issues, requested that "the November 2006 orders be modified" and raised questions about the form of the Plaintiffs' Third Request for Admission and Fifth Interrogatories. (Docket Entry No. 860, Exhibit G thereto).

The "experts only" conference was a discussion of the parties' and the MCCs' computer experts without the presence of the Court or counsel,21 except to announce protocol for the conference and to hear the experts' reports on their progress. (Docket Entry No. 872). At the end of the conference, the parties' and the MCCs' computer experts unanimously agreed that the conference was productive. The Court directed the State's computer expert to prepare a written summary of the experts' agreements and to circulate that document among all experts for comment and file that report with the Court. (Docket Entry No. 872 at p. 228). After the April 11th conference, the parties and the MCCs had out of court conferences, and their disputes resurfaced.

The Plaintiffs renewed their earlier motion to compel on all outstanding discovery and ESI issues and the Court set an evidentiary hearing on that motion. With this brief history of the litigation, the Court sets forth below its findings of fact and conclusions of law on all outstanding discovery disputes.

II. Plaintiffs' Renewed Motion to Compel

A. Findings of Fact

1. Information Requirements and Discovery Rights under the Consent Decree

In their motion, Plaintiffs rely, in part, upon the Consent Decree that requires the collection and maintenance of the data on the Defendants' compliance with the Consent Decree. In several paragraphs, under the heading, "Monitoring and Enforcement of MCO and DCS Compliance," the Consent Decree has the following paragraphs requiring the Defendants and the MCCs to track and report the medical screening and services to individual class members:

(Docket Entry No. 12, Consent Decree at ¶¶ 91, 94, 95, 97 and 98) (emphasis added). In addition, the Consent Decree created a "process for monitoring and reporting [by the Defendants] their compliance with the requirements of this order." Id. at ¶ 96. For these tracking and monitoring systems, the Consent Decree sets a semiannual reporting requirement for the Defendants. Id. at ¶ 104.

Another provision of the Consent Decree also grants Plaintiffs' counsel a right of access to the data on monitoring and tracking compliance through the Defendants. Upon Plaintiffs' counsel's request, the Defendants agreed to produce this data to Plaintiffs' counsel.

Id. at ¶ 105. (emphasis added).

The Defendants' and MCCs' contracts contain the following provisions on the Defendants' and other governmental agencies' access to any MCCs information about any TennCare enrollee:

(Plaintiffs' Exhibit 28) (emphasis added).

2. The Lack of Preservation of Relevant Records

From the Court's perspective, the core of this ESI discovery controversy is the absence of any effective attempt by the Defendants to preserve and segregate relevant ESI, since the filing of this action in 1998. Despite the entry of the Consent Decree in 1998, the proof is that only in March, 2004 did the Defendants prepare a litigation hold memorandum for its employees and MCCs in the TennCare program. This March 17, 2004 memorandum, prepared by then counsel for the Governor and a member of the State Attorney General's office, sets forth a detailed process for the retention, segregation and preservation of documents on this and other TennCare actions.22

The March 17th memorandum referred to this action by name and stated that it was "critical that we take every reasonable step now to preserve the information, documents, and/or data produced or received by the work teams, whether in hard copy or electronic form." (Plaintiffs' Exhibit 24A).23 This memorandum refers to a variety of electronic records to be preserved, including such information from "outside sources":

(Docket Entry No. 828, Exhibit 20 thereto).

In summary, this memorandum constituted a "litigation hold" for the preservation of all potentially responsive materials as well as the collection and review of such materials by designated records custodians. Provisions for contemporaneous designation and segregation of privileged materials communications are included, as this memorandum described in some detail:

The extent, if any, of the actual distribution of this Memorandum is unclear as the Defendants did not offer any proof on this issue. The Defendants did not present any proof from the working group's designated records custodians whose positions were identified in the March 17th Memorandum to collect all ESI from their groups so as to implement the memorandum. At the November 6, 2006 hearing, defense counsel stated that privileged documents had not been reviewed nor segregated for the Plaintiffs' ESI discovery requests until beginning in December 2006 or January 2007.

The proof establishes that even if the March 17, 2004 litigation hold memorandum were distributed, there was not any implementation of its provisions.24 The proof is undisputed that the March 17th memorandum was never disseminated to the staff of the Governor's Office for Children's Care Coordination (GOCCC), the agency that was created to coordinate and oversee implementation of the Consent Decree. (Docket Entry No. 938, Flener Deposition at pp. 42-43; cf. Docket Entry No. 569-4, Declaration of Thomas Catron at ¶¶ 2-4), nor to the TennCare official in charge of information technology. (Docket Entry No. 984 at p. 192). Pertinent State agencies were not monitored for compliance. (Docket Entry No. 984 at pp. 194-95 and Plaintiffs' Exhibit 23 at p. 54). GOCCC did not monitor the state agencies within its charge for document and ESI preservation procedures. Id. at pp. 54, 55. Rob Bushong, the State's paralegal in charge of document preparation had never seen the March 17th Memorandum. (Docket Entry No. 988 at p. 203). Neither counsel who prepared the March 17th Memorandum testified as to the distribution of that memorandum nor how the litigation hold was implemented.

If this litigation hold were implemented, as outlined in the March 17th memorandum, then these complex discovery issues about ESI discovery and related costs of privilege review issues would be moot as, for example, all privileged documents would have been aggregated, centrally located, preserved, and segregated after a privilege review by the State Attorney General's office. As the circumstances now stand, the Defendants' counsel argue that none of this ESI should be produced because an expensive and costly privilege review of this information is necessary and that this review is so costly that members of the class or class counsel should be required to pay for the Defendants' privilege review and ESI production.

To be sure, at the December 6th hearing, Nicole Moss, one of the defense counsel, did state that after Plaintiffs renewed their discovery, a litigation hold was issued in June, 2006, but those instructions, if written, were not introduced at the June 19th hearing. At the December 6th hearing, Moss told the Court that there was not any litigation hold until 2004 because this was a consent decree case. (Docket Entry No. 764 Transcript at p. 42). According to Moss, "[w]hen this case went into litigation, at that point, we put a litigation hold on responsive documents." Id. The Court finds this assertion flawed, given the clearly contested contempt proceedings in this action in 2000 and 2001 (Docket Entry Nos. 63, 65, 69, 79, 123 and 124) as well as the contested issues in 2002 (Docket Entry No. 281, Defendants' Motion to Modify the Consent Decree) that was set for a hearing in 2003 (Docket Entry No. 332). On May 20, 2004, Plaintiffs filed a motion for an evidentiary hearing. (Docket Entry No. 375).

In addition, the Defendants cite the testimony of GOCCC director Natasha Flener that there was a litigation hold and that she tried to save everything on her computer. Flener's actual testimony was: "You know, after I had been there a few months, I think I was told that we needed to be keeping all e-mail correspondence." (Defendants' Exhibit 17, Flener deposition at p. 44) (emphasis added). Flener also testified: "I mean, we had conversation, obviously, about it, because we were all doing it. I don't know that — I don't know if we talked about specifics on, you know, what we needed to be producing." Id. at 68 (emphasis added).25 On the critically important issue of preservation of records by the person in charge of oversight of this part of the TennCare programs, the Court would expect greater clarity in her testimony or a reference to the March 17th memorandum.

Defendants also cite Brent Antony, the TennCare official designated by the State to address the technical aspects of electronic discovery. Antony testified about a litigation hold in 2000, but there is not any documentary evidence of such. In his earlier affidavit, Antony described the collection of ESI in a single mailbox, as requested by the Plaintiffs, as an undue burden. (Docket Entry No. 720, Exhibit C thereto). Later, Antony characterized this method as "very convoluted and complicated process... which would require State officials to try to forward all of their emails and electronic documents to a separate e-mail account," for the ESI production. (Docket Entry No, 734, November 6, 2006 Transcript at p. 26). These assertions are contrary to the March 17th memorandum/litigation hold that actually requires a single mail box for all relevant ESI at two offices; Finance and Administration and the State Attorney General's offices. The Defendants did not actually have a single mail box for all emails until 2006 or 2007.

Plaintiffs argue that the lack of a litigation hold resulted in the destruction of responsive information from the Governor's Office for Children's Care Coordination, and e-mail boxes of some key custodians in other agencies, citing Docket Entry No. 799 and Docket Entry No. 828, Exhibit 11 at TJC 85, TJC 173, TJC 188, TJC 209 and Exhibit 16 at TJC 196. Plaintiffs argue that the Defendants are well aware of the importance of e-mails as evidence because in 2001, the Defendants submitted numerous emails as evidence to support their assertions of compliance. See Docket Entry No. 223, admitting Plaintiffs' Exhibit Dl, H09, H11, H14, H19, H39, H51. Defendants strongly dispute this destruction of evidence assertion.

The Defendants' standard retention policies on ESI are that items older than 180 days would roll off the system. In their discovery report to the Court, the Defendants described the loss of ESI in their system and the lack of organized retention of ESI:

(Docket Entry No. 740-2, TennCare E-Discovery Report at p. 10) (emphasis added).

Defendants elicited some proof that some custodians were instructed to retain relevant ESI in their archives. (Docket Entry No. 984, June 20, 2007 Transcript at pp. 162-63). Defendants' key custodians have individual work stations, where they maintain individuals' "my documents" file/folders and "home folders." These work stations lack any backup retention. In a word, "there are no tapes for the designated custodians." (Docket Entry No. 786, December 20,2006 Transcript at pp. 7-10). Only at the December 2006 conference did Antony describe the measures taken in 2006 to collect the key custodians' mail boxes into a single tape. Id. at p. 7.

Yet, in a December 7, 2006 response to the Plaintiffs' second request for admission, the Defendants acknowledged "a few isolated instances in which individuals had not archived their emails" and admitted that there was "one isolated instance" in which a former employee's entire email box had been deleted. (Docket Entry No. 771, Exhibit A thereto at pp. 5-6). The Defendants also admitted that "many electronic documents, in particular email, having been produced in hard copy form may no longer exist electronically." Id. at p. 5. In response to the Plaintiffs' Third Request for Admissions, the Defendant disclosed that when several key custodians left employment, they were never told to preserve relevant documents and their computers were reconfigured for other reasons. See Docket Entry No. 828, Exhibit 16 at pp. 4-7; id. at Exhibit 11 at pp. 1-3; id. at pp. 11-13; id. at pp. 4-7; id. at pp. 8-10. Plaintiffs cite as other proof lost emails.26

As discussed earlier, some key custodians did not provide any email. Plaintiffs note that several of the 50 key custodians failed to produce any responsive e-mails; notably the Governor, Dave Cooley, the governor's deputy, and David Goetz, the Commissioner of Finance and Administration who is in charge of TennCare and a named defendant in this action. These omissions are reflected in emails from other officials that were copied to these key custodians or mention their involvement. (Docket Entry No. 828, Exhibit 1, at p. 2 ¶ 9 and Plaintiffs' Exhibits 3, 4, 5, and 15). Plaintiffs' proof is that these state officers have been "actively involved" in the shaping of TennCare policy affecting EPSDT over the preceding two years. (Docket Entry No. 709 at 23-24; Docket Entry Nos. 712 and 713). As examples, Plaintiffs introduced Goetz's handwritten notes of weekly meetings with the Governor, who is identified in Goetz's notes by the initials, "PNB", and other state officials in 2004 and early 2005 that were produced in discovery in March 2005 in the Rosen action.27 Plaintiffs' proof also includes an email addressed to Cooley about this action and a copy of another email to Cooley on issues in this action. (Plaintiffs' Exhibit Nos. 3 and 5). Two former directors of TennCare were not asked for their answers to the RFAs, and others purported to answer on behalf of the Governor and others. (Docket Entry No. 828, Exhibit 16 at pp. 1-3, 11-13; id. at pp. 8-10; id. at pp. 14-16). These facts are also inconsistent with the March 17th memorandum. Moreover, the Defendants failed to instruct some key custodians regarding their responsibilities to archive ESI or how to do so that leads the Court to find that in all likelihood, significant responsive ESI was destroyed after 180 days. (See Docket Entry No. 786 at p. 43; Docket Entry No. 734 at p. 62; Docket Entry No. 740-2, TennCare E-Discovery Report at p. 5).

Significantly, the Defendants did not tell the MCCs (where most EPSDT services are processed or provided) to preserve and produce responsive information until weeks after the Court's bench ruling of November 6, 2006. (Docket Entry No. 734 at pp. 73-74). After the Court's Order of November 21, 2006, the Defendants informed its contractors of the existence of the outstanding discovery requests. (See Docket Entry No. 745 at pp. 1-2; Docket Entry No. 751 at pp. 1-2). The Defendants did not require its contractors to institute a litigation hold and some MCCs did not issue preservation or litigation holds until December 2006 and in some cases January 2007. (Docket Entry No. 872, April 11, 2007 Transcript at p. 165). As a result, the MCCs document retention policies systematically overwrote or otherwise destroyed e-mails and other responsive documents. (See, e.g., Docket Entry No. 751 atp. 2; Docket Entry No. 745 atp. 2; Docket Entry No. 828 at pp. 5-6). At the April 11, 2007 conference, some MCC representatives cited their continued destruction of potentially responsive ESI in December 2006 or in January 2007. (Docket Entry No. 872 at p. 165).

In contrast to the Defendants' preservation practices, when the MCCs were advised to preserve responsive information, some MCCs issued directives to "lock down" any responsive ESI to avoid deletion by individual custodians or by routine document retention policy. (Docket Entry No. 986 at pp. 115-116 (AmeriChoice); Docket Entry No. 984 at pp. 96-97 (Doral); Docket Entry No. 988 at p. 84 (BlueCross); Docket Entry No. 986 at p. 91 and Docket Entry No. 872 at p. 154 (Unison)). Prior to that, MCCs' policies resulted in the automatic destruction of ESI on a daily basis without protection of responsive materials. (See Docket Entry No. 816, Exhibit 10: 12/19/06, Roberts letter on behalf of Doral at p. 2 of 28; Docket Entry No. 816, Exhibit 10:12/19/06, Paul letter on behalf of United Healthcare at p. 7 of 28; Docket Entry No. 816, Exhibit 10: 12/19/06 Norwood letter on behalf of VHP at p. 10 of 28; Docket Entry No. 816, Exhibit 10:12/19/06 Miller letter on behalf of PHP at pp. 14-15 of 28; Docket Entry No. 816, Exhibit 10: 12/18/06 letter on behalf of Memphis Managed Care at p. 21 of 28). Thus, except for Blue Cross's preservation of materials starting in January 2006, the other MCCs continued the destruction of responsive materials until at least November 2006.

The Defendants initially denied any duty to provide any MCC information, contending that except for documents provided to the State, such information was not in the Defendants' "possession, custody, or control." (Docket Entry No. 711 p. at 4). Defendants' counsel repeated that argument in their post-hearing brief.

(Docket Entry No. 997 at p. 25).

At the November 6th conference, Defendants' counsel told the Court:

(Docket Entry No. 734, November 6, 2006 Transcript at p. 42).

3. Inadequacies in the Defendants' 2006 Paper Production

In their fourth request for production of documents, Plaintiffs focused on two major categories of ESI. First, Plaintiffs sought transactional or quantitative data that the Defendants are required to maintain so as to monitor, track and report their compliance with the Consent Decree. As the Court understands, for the Defendants and most MCCs, with some exceptions, the transaction data controversy is now moot. The second and contested category includes e-mails and other such ESI among persons, including the Defendants' employees and the MCCs' employees with substantial responsibility to implement, monitor and measure compliance with the Consent Decree as well as other ESI about class members.

Plaintiffs challenge the adequacy of the Defendants' 2006 paper production and the Defendants' and MCCs' estimated costs of recovering the ESI sought by the Plaintiffs. At the June 19th evidentiary hearing, Plaintiffs' proof established several substantial and serious deficiencies in the Defendants' June 2006 paper production. As stated earlier, Plaintiffs note that several of the 50 key custodians failed to produce any responsive e-mails, notably the Governor, Dave Cooley, the governor's deputy and David Goetz, the Commissioner of Finance and Administration who is in charge of TennCare. These omissions are reflected in emails from other officials that were copied to these key custodians or mentions their involvement. (Docket Entry No. 828, Exhibit 1, at p. 2 ¶ 9 and Plaintiffs' Exhibits 3, 4, 5, and 15). Plaintiffs' proof is that these state officers have been "actively involved" in the shaping of TennCare policy affecting EPSDT over the preceding two years. (Docket Entry No. 709 at 23-24; Docket Entry Nos. 712 and 713). As examples, Plaintiffs introduced Goetz's handwritten notes of weekly meetings with the Governor, who is identified in Goetz's notes by the initials, "PNB", and other state officials in 2004 and early 2005 that were produced in discovery in March 2005 in the Rosen action.28 Although incomplete, Goetz's notes reflect that the Governor, Commissioner, and other senior officials discussed not just TennCare in general, but specific TennCare matters relating to children. (Docket Entry No. 728-3). As another example, despite the Defendants' denial of the involvement of Dave Cooley, the deputy governor, in overseeing TennCare or making policy affecting EPSDT, Plaintiffs' proof included an email addressed to Cooley about this action and a copy of another email to Cooley on issues in this action. (Plaintiffs' Exhibit Nos. 3 and 5). On the cited inadequacy of this production, Defendants' counsel elicited from Thomas Tigh, Plaintiffs computer expert, testimony about the likely prospect for differences among custodians in their selection of documents for production. This fact, however, underscores the need for an independent entity to collect discoverable ESI, as Tigh testified is an industry standard for ESI production.

Second, Thomas Tigh, Plaintiffs computer expert who is well experienced in ESI production with twenty-seven years experience in complex litigation, scanned the Defendants' June 2006 paper production for search capabilities. In his electronic search of the Defendants' June 2006 paper production, Tigh found that J.D. Hickey, a key TennCare official, was named in about 500 emails in the Defendants' 2006 paper production. Tigh compared that number to the Defendants' ESI contractor's compilation of Hickey's emails from the Defendants' database. The Defendants' ESI contractor lists 30,000 emails in Hickey's files. In Tigh's opinion, this substantial disparity undermines the integrity of the Defendants' June 2006 paper production. The Court agrees.

Third, Tigh reviewed the Defendants' proof about the burdensomeness of the Plaintiffs' ESI. The Defendants identify millions of pages of responsive documents. According to the Defendants, using Plaintiffs' search words, the State's files from June 2004 forward resulted in 193 gigabytes of information from a total of 430 gigabytes. (Docket Entry No. 984 at p. 131). This 193 gigabytes comprises 118 gigabytes of data for the period prior to April 2006 and 75 GB for the period after April 2006. Id. at pp. 157, 158. A gigabyte in the State's system is equal to 77,000 pages. Id. at p. 116. The Defendants contend that, using Plaintiffs' key term searches and upon review by their counsel, twenty percent of the documents located are responsive to Plaintiffs' requests. (Docket Entry No. 988 at p. 193). The calculation of 1.8 million responsive pages is: 118 gigabytes data for the period of June 2004 through April 2006 × 77,000 pages per GB = 9.1 million pages, and then 20% yield of responsive documents × 9.1 million pages = 1.8 million pages. (Docket Entry No. 984 at pp. 213-214).

Tigh testified that the Defendants' June 2006 paper production contains only approximately 71,0000 documents. (Docket Entry No. 982 at p. 88). Defendants' counsel contend that their 2006 paper production included their 2005 production in Rosen v. Goetz, a related action. Yet, Rob Bushong, the Defendants' paralegal in charge of documents testified that the Rosen documents were made available for Plaintiffs' inspection, but were not copied unless Plaintiffs requested copies. (Docket Entry No. 988 at p. 187). On cross-examination, the Defendants' counsel suggested that Tigh cited a larger number of pages (183,000) in the State's paper production at the April 11th "experts only conference." Accepting the Defendants' assertions of the higher number, the actual number of responsive ESI in the Defendants' ESI contractor's database remains multiples of the total documents produced in Defendants' 2006 paper production.

Fourth, Tigh explained that the Defendants' method of collecting of ESI from its key custodians was flawed because the Defendants' custodians were left to determine for themselves whether to exclude unfavorable ESI on their computers. In addition, the Defendants provided little guidance or supervision for this production. Natasha Flener, GOCCC's director whose agency coordinates compliance under the Consent Decree, did not receive any such directions or instructions. (Docket Entry No. 938, Flener Deposition at pp. 67, 68). The Defendants did not issue instructions to the MCCs beyond the copies of the State's written objections and responses to the interrogatories and requests for production. According to Tigh, the Defendants' method of collection is known to leave gaps in production and violates industry standards for ESI collection. (Docket Entry No. 982 at pp. 38, 39). For example, under industry standards, an independent entity collects relevant ESI and industry protocol provides for an audit to ensure that the search is properly conducted. An independent entity's collection of all responsive ESI from individual custodians ensures against the non-production or destruction of e-mails that a particular custodian deems unfavorable. See also Docket Entry No. 764 at pp. 19, 20.

Fifth, Plaintiffs noted that the May 2006 log identified 3,201 pages of documents produced from the Department of Finance and Administration, but the log did not identify the specific individual(s) in the Department from whom the documents were collected.

Sixth, the Court ordered a survey of the custodians on removal of documents, but some of those surveys were oral, not written. (Docket Entry No. 734 at p. 26). Defense counsel assured the Court that, "... the survey, my understanding was most of those answers were oral, not written. So there is nothing to submit or provide to the plaintiffs ..." (Docket Entry No. 984 at p. 150). When the Court ordered any completed written survey to be filed, the written survey responses were 161 pages. (Docket Entry No. 980). The survey questions do not reflect the Court's question about whether a custodian removed any data to another media. Id. Thirteen (13) custodians did not provide any information regarding the location of documents and files pursuant to the first question in the survey and thirty-nine (39) custodians did not provide information regarding the location of emails. Compare Plaintiffs' Exhibit 2 (list of custodians) with Docket Entry No. 980 (survey responses).

Out of thirty-one DCS custodians, four people responded and three gave a standard non-responsive answer: "According to state policy and software program defaults, all created documents are stored on user directories and shared folder locations that reside on servers." (Docket Entry No. 980-2 at p. 13 (Miller); id. at p. 19 (Franklyn); id. at p. 21 (Jones)). Other custodians responded that they did not have any responsive documents. (Docket Entry No. 980-3 at p. 54 (Williams); id. at p. 56 (Whitlock); id. at p. 58 (Dwivedi); id. at p. 85 (Kardos); id. at p. 89 (Poling)). These answers are non-responsive because the survey was to elicit information on the custodians' storage or removal of responsive documents. (See Docket Entry No. 789 at p. 2-3).

Seventh, prior to Antony's production of the surveys for the January 14th Order, the Defendants asserted that the custodians' answers to the Plaintiffs' Third Request for Admissions and Fifth Interrogatories were also responsive to the January 14th Order. (Docket Entry No. 799; Defendants' Notice of Filing, January 30, 2007; Docket Entry No. 816-1 at pp. 14-15). Plaintiffs' counsel disagreed and requested the certifications required by the January 14th Order, and defense counsel refused. (Docket Entry No. 828, Exhibit 15: Bonnyman letter of February 5, 2007).

Many of the emails sent from the custodians to Antony and then filed with the Court after the Court's June 20th Order have also been redacted without explanation about the information removed. (See, e.g., Docket Entry No. 980-3 at p. 49 (Outlaw); id. at p. 52 (Burley); id. at p. 54 (Williams); id. at p. 56 (Whitlock); id. at p. 58 (Dwivedi); id. at p. 61 (Edgar); id. at p. 68 (Carver); id. at p. 70 (Dean); id. p. 80 (Carter)). The Court finds that the Defendants never complied with the January 14th Order requirement that each custodian must certify that none of the responsive ESI had been removed.

Eighth, a paper production that is converted from ESI to hard copy undergoes a process that strips "metadata" from the electronic version of the documents. "Metadata" is information created with an electronic document to capture imbedded edits and other non-screen information that are integral elements of the ESI documents. (Docket Entry No. 720 at p. 3). Tigh explained that in his experience, metadata is important and reliable information that describes the path of a document among the Defendant's officials, when the document was created and edited. Metadata provides information that is not present in the State's paper production. As examples of metadata, Plaintiffs cite the following:

See Docket Entry No. 941, Plaintiffs' Reply Brief at p. 16.

Tigh testified that the absence of metadata in the Defendants' hard copy production creates a deficiency in information as to who received the document, who received copies of the document or email, who edited the documents, whether there were attachments to the documents and when the document was created. Plaintiffs deem metadata critical to their ability to understand any ESI provided and to challenge the Defendants' assertion of compliance with the Consent Decree, especially given Judge Nixon's finding that the Defendants lack reliable statistical measures of their actual progress.

Finally, Tigh analyzed the MCCs' responses to interrogatories and noted several instances in which some MCCs did not respond at all. (Plaintiffs' Exhibit No. 9). Significantly Plaintiffs cite a disturbing and misleading discussion with a state official about the Defendants' answer to Plaintiffs' Interrogatory No. 22:

(Plaintiffs Exhibit 12-D at p. 16).

The Defendants introduced their actual response to this interrogatory.

(Defendants' Exhibit 12) (emphasis added). Both parties emphasized different portions of the underscored portions of this interrogatory answer.

Neither "Wendy" nor the person writing to Wendy testified about this statement: "Wendy this is a tricky one since the MCCs would have files, but we have answered that this is unanswerable." (Plaintiffs Exhibit 12-D at p. 16). It is unclear to the Court if this discussion occurred before or after the Defendants' response quoted above. The Defendants' failure to call "Wendy," an employee of the Defendants' about this controversy adds to the Court's concern, as does the inclusion of the statement in the Defendants' actual answer to Interrogatory 22, i.e.: "Furthermore, because the kinds of services identified are services for which FFP is not available and/or are never medically necessary for children, obtaining claims information regarding possible inappropriate payments by an MCC for these services is impossible." (Defendants' Exhibit 12), The latter statement, without explanation, is inconsistent with the statement "Wendy this is a tricky one since the MCCs would have files, but we have answered that this is unanswerable." (Defendants' Exhibit 12). This increases the Court's confusion about the Defendants' answer to Interrogatory 22. The Court will order a complete a response and will further address this issue at a conference with counsel.

4. The Necessity of Plaintiffs' ESI Discovery Requests

As to the probative value of Plaintiffs' ESI discovery requests, Plaintiffs initiated this recent round of discovery based upon Defendants' counsel's assertion that the Defendants were in compliance with the Consent Decree. Given Judge Nixon's findings in 2001, 2004 and in his statements about the Defendants' non-compliance in his Order of recusal in 2006, the Court finds that Plaintiffs' ESI discovery requests are for legitimate purposes. In addition, in his 2004 opinion, Judge Nixon found that the Defendants had not cooperated with the Special Master and at one point, refused to "honor [the State's] renewed commitment to produce an IAP [Initial Action Plan] satisfactory to the Special Master, last made in September 2004, and still refuses to engage its key officials in planning efforts to achieve compliance, verification of the quality of its data, and evaluation of the successes or failures in attaining compliance." (Docket Entry No. 465, Memorandum at p. 5).

Significantly, Judge Nixon also noted that "[t]he Special Master also reports that the State is incapable of reporting progress to the Court because it lacks a valid and reliable system of measuring progress in such key areas as provider network adequacy, case management, outreach, the effective use of information systems, and system level coordination, to name a few. [T]he ... Defendants have never created a list of precise "outcomes" towards which their efforts are focused, not only have failed to meet the terms of the Consent Degree, but they are not even in a position to be able to assess their own shortcomings for the purpose of making improvements." Id. at pp. 5-6.

Moreover, Judge Nixon found that the MCCs that actually provide the EPSDT services were also contributors to the Defendants' violations of the Plaintiffs' class's rights under the EPSDT statutes and the Consent Decree.

(Docket Entry No. 227, Findings of Fact and Conclusions of Law 176 F.Supp.2d at p. 796).

As to the need for transactional data, the Consent Decree sets agreed percentages for screenings of children. In 2004, six years after the decree, the medical screening for most class members was 53% (Consent Decree set no less 80% by 2001 and dental screening was 41.9%) (Consent Decree requires no less than 80% required by September 2003). Id. at p. 4. In 2004, the Defendants had not met the 100% screening of children in DCS's custody that was to be achieved by September 11, 1999. See also Docket Entry No. 12, Consent Decree at ¶¶ 50 and 52. As Judge Nixon found, as of 2004, none of these percentages had been met.

Dr. Rose Ray, Plaintiffs' expert reviewed the transactional data from the Defendants for her analysis. Dr. Ray and other scientists at her research firm perform a failure analysis and design quality improvement tests using statistics about various products, including medical products and medications. Dr. Ray who was awarded a Ph.D. in statistics from the University of California at Berkeley in 1972, specializes in statistical analyses of business practices and products with an emphasis in medical research analysis. Dr. Ray's analysis of the Defendants' transactional data to date, reveals that for children who are members of the Plaintiffs' class and between ages 0 to 24 months, the number of paid screening visits at 12 months reveals that 20% of these children had three (3) or fewer screenings and 72% have had 5 or more screenings. (Plaintiffs's Exhibit No. 18). For children in this group, at 23 months, 26% have had 5 or fewer screenings and 56% have had nine (9) or more screenings. Id. For children who have had a mental health diagnosis 34% are rehospitalized within 30 days of their mental health diagnoses. Id. This latter fact on readmission within 30 days is 2 to 30 times more likely than for children admitted within 30 days in 16 other States. Id. at p. 2. In the Consent Decree, the Defendants committed to achieve an eighty percent (80%) screening rate. Dr. Ray's initial report raises serious issues on whether the Defendants are currently meeting the screening percentage standards in the Consent Decree.

The most significant remaining transactional database dispute is between Plaintiffs and some MCCs arising from Plaintiffs' demand for data underlying Health Employer Data and Information Set ("HEDIS") that are calculations to measure a provider's compliance with Medicaid regulations, rule and standards. HEDIS is cited in the Consent Decree as one standard to measure and set screening percentages. (Docket Entry No. 12, Consent Decree at ¶ 46).

HEDIS is a nationally recognized set of standardized measures of MCO performance. The MCCs collect HEDIS data according to detailed specifications developed by the National Committee for Quality Assurance ("NCQA"), a private, non-profit entity dedicated to improving health care quality. NCQA assesses and scores a MCC's performance and serves as an independent accrediting organization for MCOs. Selected HEDIS measures are evaluated and scored by NCQA as a part of the accreditation process. NCQA requires that MCOs submit HEDIS data annually. For collection of HEDIS data, NCQA specifications requires each MCO to have an independent NCQA-certified HEDIS auditor to conduct the detailed analysis to validate the accuracy and reliability of MCC's reported HEDIS data. NCQA licenses auditors for these audits. See Docket Entry No. 907.

Dr. Ray seeks the MCCs' HEDIS data that are extracts and summaries of a class member's medical history as well as the HEDIS score reports. Some MCCs respond that HEDIS data is available from the State's production and in some instances is unavailable because that data is compiled on outside vendors' proprietary software. Several MCCs agreed to provide their HEDIS data to Dr. Ray, but other MCCs object because to do so imposes significant burdens upon them, and Dr. Ray lacks the qualifications to perform the only task for which she anticipates using the data. Unison and PHP asserted that to produce HEDIS-related data would require "extract[ing] and review[ing] for production medical record review data that already underlies audited HEDIS reports," a process these MCCs asserted is "unduly burdensome." (Docket Entry No. 907, Exhibit 10 thereto, PHP Letter). Except for HEDIS data on independent entities' proprietary software, the Court finds that this HEDIS should be provided by all MCCs in their native format.

5. The Costs of ESI Production

For their cost assertions, the Defendants explain that in January, 2007, the Defendants retained Document Solutions, Inc. ("DSI"), an ESI contractor to assist with the ESI production sought by Plaintiffs. Under the experts' protocol, DSI's search result was actually 350 gigabytes, but that data was uncompressed and thereby increased to 430 gigabytes. (Docket Entry No. 907 at p. 11; Docket Entry No. 984 at pp. 116, 120-22; 131). Defendants do not justify the need to uncompress their extract that yielded a 25% increase in the ESI production. Plaintiffs note that the Defendants' brief cited 600 gigabytes. (Docket Entry No. 907 at pp. 9-10). With Plaintiffs' revised search terms, the Defendants' proof is that the search from June 2004 to present for 50 search terms and the 50 key custodians would capture 493 gigabytes of data. A gigabyte can range from 75,000 to 77,000 pages and Defendants determined that their gigabyte is 77,000 pages. Tigh explained that a software program can be used to "deduplicate" or eliminate duplicate documents from the 493 gigabytes, resulting in approximately 193 gigabytes that represents about 15 million pages of documents for review. The Defendants have reviewed approximately 75 gigabytes of non-duplicative e-mails and other ESI and found only 20 percent of that data is non-privileged and actually responsive to Plaintiffs discovery requests.

Once the initial search is performed, DSI then provides a post-search process or "delivery" to render the data collected reviewable to the human eye. To perform these post-search processes, DSI charges the State $1200 per gigabyte for the first 50 gigabytes "delivered" over the total life of the contract, $1000 per gigabyte for the next fifty "delivered," and $800 per gigabyte for delivery of any additional gigabytes. The Defendants assert that $458,000 that has been spent in gathering and preparing their data for review. Any search itself would cost over $70,000 (430 gigabytes × $165 per gigabyte) and to "deliver" or translate the selected documents into a format reviewable to the human eye would cost approximately $184,000. The latter figure is calculated with 193 gigabytes at $1200 per gigabyte for the first 50 gigabytes, $1000 per gigabyte for the next fifty, and $800 per gigabyte for the final ninety-three.

With the earlier results of 20 percent of the 193 gigabytes as responsive and non-privileged documents, Defendants project that from 193 gigabytes, only 39 gigabytes, about 3 million pages, of documents will have to be produced. At six cents a page, the Defendants estimated an additional $180,000 to Bates-stamp these documents in a producible format. In addition to the $458,000 in consolidation and "extraction" costs to run the Plaintiffs' final search terms, the search of the TennCare file server and the 50 key custodians would cost the State approximately $434,000.

Another component of their costs projections Defendants cited are TennCare and other child-serving agencies' employees who examined the individual computers of the over 150 custodians to capture the ESI from their email archives, "My Documents," equivalent folders servers and home directories. The Defendants consolidated the active e-mail boxes of those custodians onto a single e-mail server to facilitate harvesting their active e-mail as well. The costs of this process is approximately $200,000. The State also captured the ESI on the TennCare file server and the Defendants cite the substantial costs of time to State's agencies' personnel.

A significant element of the Defendants' estimated costs is for privilege review by Defendants' and the contractors' counsel, including the costs of Defendants' attorneys and paralegals to create a privilege log and conduct a responsiveness review of the millions of pages generated in response to Plaintiffs' searches. The Defendants' estimates are based on a manual review by their counsel of the electronic documents for privilege. (See Docket Entry No. 907 at p. 11).

The Court finds the Defendants' costs estimates are highly exaggerated for several reasons. First, the Defendants' representative who is charge with overseeing this production explained that the State has two servers containing ESI, a report or document server and an email server. Michael Kirk, defense counsel, conceded that the Defendants' real concern is with the email server, as the document server has data compilations, such as public reports, spreadsheets and statistics. Thus, the volume of documents requiring attorney review is greatly reduced.

Second, as Tigh, Plaintiffs' computer expert, testified, the amount of time to search for potentially attorney client and work product privileges can be efficiently accomplished by use of selective search terms, such as names of counsel to identify and words such as "confidential" and "privilege" to identify potentially privileged information. The Court finds that independent of the Defendants' data systems, the defense counsel's firm's computers should be readily able to identify all clearly privileged correspondence with their clients from their computers.

Third, as Tigh explained and as the Defendants' private counsel have actually done, contract attorneys can be hired to perform any privilege reviews at significantly lower costs than the hourly rate of the Defendants' current counsel. Plaintiffs noted that Defendants' lead counsel's description of his firm's significant experiences on ESI discovery and his firm's use of contract attorneys to control costs in ESI discovery. "Our use of well-trained, closely supervised contract lawyers to assist with document discovery is designed to hold down the ratcheting litigation costs of our Clients. In document-intensive litigation, deploying expensive litigation associates to perform the initial review, indexing, and electronic coding of documents would dramatically increase the client's litigation expense." Plaintiffs Exhibit No. 35 at p. 2 (emphasis added). For any oversights by contract attorneys, the Court's November 21st Order made ESI production "[s]ubject to Defendant's right to `claw-back' privileged documents." (Docket Entry No. 743 Order at p. 2).

As to the Defendants' estimated costs and time for review for privilege issues, the Court adopts Tigh's testimony that the use of attorney names and other privilege filters as well as the use of contract attorneys should substantially reduce the Defendants' and MCCs' costs for any privilege review. (Docket Entry No. 988 at pp. 279, 282; Docket Entry No. 984 at p. 133).

Another significant factor to reduce production costs is a clawback right for any inadvertent production of privileged material. At an earlier conference, the defense counsel complained that the Court had not afforded it clawback protection for privileged documents that were inadvertently disclosed. (Docket Entry No. 720 at pp. 19-20). In their pre-hearing brief, the Defendants stated that "Plaintiffs at various points have urged the Court to compel the State to avoid the costs and delays involved in the State's review for privilege and responsiveness by compelling the State to produce the documents without reviewing them under a `claw-back' agreement." (Docket Entry No. 907, Defendants' Response to Plaintiffs' Renewed Motion to Compel at p. 11). Citing a Committee Report on the 2006 Rule amendments, the Defendants argue that only a voluntary claw-back agreement is permitted by these rules.

The Court discussed this clawback provision with Nicole Moss, a defense counsel and as the Court understood her, Moss agreed to a clawback agreement for any ESI production to Plaintiffs.

(Docket Entry No. 734 at p. 80). Thus, it was at the Defendants' counsel's request and with the Plaintiffs' counsel's agreement, the Court entered an order with a clawback provision for the Defendants. Id. at p. 74. and Docket Entry No. 743, Order at p. 2. In a word, the Court did not impose any "compulsory" or "mandatory" clawback upon the Defendants, and neither did the Plaintiffs.

The Defendants' also expressed concerns about disclosures of ESI to their unnamed "political enemies" and "political opponents." (Docket Entry No. 907, Defendants' Response at pp. 11, 13). A protective order limits the disclosure of sensitive information for use solely in this action. (Docket Entry No. 878).

Assuming the correctness of the Defendants' gigabytes, the Court also credits Tigh's testimony that in his experiences in complex litigation, such estimates are reasonable for this complex action. This action involves a class of more than 550,000 children and their rights to various medical services, including dental and behavioral services provided throughout the State. The EPSDT statutes and the Consent Decree clearly contemplate multiple screenings and any necessary followup medical care for each member of the class through TennCare or more MCCs. In these circumstances, vast amounts of data are inherent in the operation of this system that the Defendants elected to establish. Even with the 2006 paper production, ESI is necessary to restore relevant metadata that was removed when the Defendants converted electronic documents to hard copy before producing them to the Plaintiffs in 2006. (Docket Entry No. 982 at pp. 49, 58).

For the MCCs, Plaintiffs accepted all of the contractors' proposed lists of key custodians and developed a protocol and search terms. Plaintiffs' ESI requests have been resolved with the largest MCOs Bluecross/Blueshield of Tennessee, Doral and the smallest MCO (Memphis Managed Care). (Docket Entry No. 893; Collective Exhibit A). The Court notes that BlueCross estimated a review of the 42GB of information would take 30 days to review with 10 reviewers. (See Docket Entry No. 988 at pp. 72, 76). BlueCross BlueShield and Doral also agreed to impose filters to eliminate its non-TennCare business. Plaintiffs Exhibit 26 at p. 4. BlueCross BlueShield also agreed on production of HEDIS data and case management data. BlueCross BlueShield, Doral and Memphis Managed Care seek an equitable allocation of costs for the ESI, primarily for attorney review for confidential and privileged information.

As to the other MCCs, AmeriChoice, First Health, Magellan, Memphis Management, and Unison agreed to produce transactional data and HEDIS data as well as care plan data. PHP agreed only to produce transaction data from January 1, 2006 to April 11, 2007. UAHC agreed only as to the number of custodians (11) for the ESI search as well as transaction data and case management information. As to the other ESI searches, Ameri-Choice estimates that reviewing the search results from its estimated 17-19 gigabytes of information would take 8 months to 1.5 years with 10 reviewers. (See Docket Entry No. 986 at pp. 122, 129). First Health, has estimated its cost for Plaintiffs' e-mail production demands would run as high as $1.6 to $1.7 million. Prior to the April 11th Status Conference, First Health had "estimate[d] that undertaking the key word search proposed by plaintiffs would require close to 18,000 hours of work and cost almost $3.0 million dollars." (Docket Entry No. 907, Exhibit 2 thereto). See also Docket Entry No. 907, Exhibit 3 thereto, Moss Letter dated May 24, 2007 (reporting First Health's estimate that it will take "two and one half years to harvest and produce ESI for the six First Health custodians"). Unison asserts, "[i]t is clear that, for the seven relevant Unison custodians within the relevant time frame, the costs to conduct the ... search and review [methodology on which Plaintiffs currently insist] will be excessive and, depending on the costs of outsourcing, may well approach seven figures." Id. at Exhibit 5.

At the June 2007 evidentiary hearing, the Court inquired of Tigh whether an ESI word search limited to the terms "John B." "EPSDT" and "TennCare," coupled with the names of MCC personnel who responded to or wrote to the Defendants about any compliance or complaint(s) as well as the names of those responding TennCare officials, would alleviate any undue burden for the ESI production for the MCCs. A similar question was put to Unison's chief of information who teaches college courses on computer science. Both witnesses agreed. Thus, the Court finds that for the remaining ESI searches for those MCCs that have not reached agreements with the Plaintiffs, will be so limited. Plaintiffs, however, may renew an ESI request if the initial search is shown to be inadequate or seriously deficient.

Some MCC contractors have taken the position that cost allocation issues must be resolved prior to commencement of any electronic production. See e.g., (Docket Entry No. 907 at Exhibit 8 thereto) ("Sixty days from a final determination of who bears the costs of production, BCBS will have collected and processed all of the data from its twenty-two key custodians."). The MCCs' contracts with the State provide that the costs of production are to be borne by the contractor. Yet, in this discovery dispute, the Court will assess costs of production at issue on Plaintiffs' renewed motion to compel under federal law.

Since the entry of the Consent Decree the State has received $7,434,375,701 in federal funds for class members of which $6,691,980,359 constitute the total federal funds for the direct provision of health care services to class members. (Docket Entry No. 948 at p. 2). The difference in these two amounts, $742,395,342, was expended on "outreach, case management, disease management, claims processing, provider network maintenance and other administrative services related to providing care." Id. at pp. 2-3. In addition, the State receives separate and undisclosed amount of federal funds "for administrative costs incurred by state personnel to operate the TennCare program." Id. at p. 3.

The gross amounts of the federal funds that the State has distributed among the MCCs for services for the class members, since the entry of the Consent Decree, are reported as follows:

(Docket Entry Nos. 947, 950, 951, 953, 954, 957 and 958).29

6. Privileged Information in the ESI Production

Defendants assert various privileges to bar production of some ESI. Defendants first assert the attorney-client and work product privileges for documents that are principally drafts of documents that defense counsel or in-house counsel commented upon, revised, or reviewed. These drafts are mostly of semi-annual reports ("SARs") required to be filed under the Consent Decree as well as initial assessment protocol ("IAP") and initial work plan ("IWP") that were ordered by the Court. (Docket Entry No. 303; see also Docket Entry No. 485).

At the November 6, 2006 hearing on discovery motions, the Court discussed with both counsel potential privilege issues in the ESI production.

(Docket Entry No. 734 at pp. 77-81) (emphasis added). Despite the Court's instructions, the Defendants did not submit any purportedly privileged documents for an in camera inspection. Once again, Defendants' counsel ignored the Court's instructions.

As to drafts of documents, the privileges asserted and the specific document purportedly covered by privileges are as follows:

Bates Number           Document Type        Date of                 Document Author     Document Recipient(s)     Basis of Privilege            Privilege Type
(Range)                (Letter, Date of     Document                (Tide/Agency)       (Title/Agency)            (subject Matter -             (A/C, W/P)
                       memo, Email,                                                                               detailed) Attorney-client
                       etc.                                         Susie Baird         Mary Griffin              communication                 A/C, W/P
JB-A-001 57-001 65                          7/31/2002                                                             re Andrea Thaler's
                                                                                                                  proposed final draft

                       Email

JB-A-001 09-001 12     Draft                                        Laura Stewart       Mary Jane Davis           Draft remedial plan           A/C
                       Remedial                                                                                   prepared for
                       Plan                                                                                       counsel's review

JB-A-00268-00270       Email with           4/28/2004               Susie Baird         Linda Ross                Attorney-client               A/C
                       Attachment                                                                                 communication re
                                                                                                                  request from counsel
                                                                                                                  for client's review of
                                                                                                                  draft EPSDT

JB-A-00282-00287       Email with           4/6/2004                Linda Ross          Susie Baird, Betty        Attorney-client               A/C, W/P
                       Attachment                                                       Boner                     communication
                                                                                                                  requesting comments
                                                                                                                  re draft letter to
                                                                                                                  Special Master

JB-A-01 581-01 584     Draft Policy         6/4/2003                Mary Griffin                                  Counsel's working             A/C, W/P
                                                                                                                  copy of draft EPSDT
                                                                                                                  transportation
                                                                                                                  assistance policy

JB-A-01 775-01 778     Email                5/21/2004-5/24/2004     Mary Griffin        Michael Drescher,         Attorney-client               A/C, W/P
                                                                                        Tam Gordon,               communication re
                                                                                        Theresa Lindsey           counsel's edits to the
                                                                                                                  content of EPSDT
                                                                                                                  brochure

JB-A-01 574            Email                3/19/2002               Mary Griffin        Stephanie Anderson        Counsel's edits to            A/C, W/P
                                                                                                                  EPSDT section of
                                                                                                                  contract and
                                                                                                                  attaching documents

JB-A-01099-01210       Draft                                        Patricia Newton                               Draft amended and             A/C, W/P
                       Contract                                                                                   restated CRA with
                                                                                                                  counsel's edits and
                                                                                                                  notes

JB-A-01 820-01 825     Email with           2/24/2004-3/15/2004     Annette             Mary Jane Davis           Attorney-client               A/C
                       Attachment                                   Goodrum                                       communication
                                                                                                                  discussing draft of
                                                                                                                  EPSDT guidelines

JB-B-00020-00022       Email with           7/11/2002               Mary Griffin        Stephanie Anderson        Counsel's edits to            A/C, W/P
                       Attachment                                                                                 MCO Contract

JB-B-01917-01929       Draft                11/21/2002              Christy Ballard                               Counsel's edits to            W/P
                       Agreement                                                                                  Interagency
                                                                                                                  Agreement

JB-00598               Email                5/25/2004               Tam Gordon         Mary Griffin               Attorney-client               A/C, W/P
                                                                                                                  communication re
                                                                                                                  providing
                                                                                                                  instructions for the
                                                                                                                  IWP/IAP to the
                                                                                                                  clients; the IWP was
                                                                                                                  drafted and/or
                                                                                                                  reviewed by counsel
                                                                                                                  during each stage of
                                                                                                                  process

JB-C-00541 -00553       Email               3/18/2004               Theresa Lindsey     Mary Griffin              Attorney-client               A/C, W/P
                                                                                                                  communication re
                                                                                                                  DOH's proposed
                                                                                                                  outreach plan for the
                                                                                                                  IAP, the IAP was
                                                                                                                  drafted and/or
                                                                                                                  reviewed by counsel
                                                                                                                  during each stage of
                                                                                                                  process

JB-C-00557-005564      Email                4/8/2004                Theresa Lindsey     Linda Ross                Attorney-client               A/C, W/P
                                                                                                                  communication
                                                                                                                  forwards counsel
                                                                                                                  copy of the DOH
                                                                                                                  outreach plan for the
                                                                                                                  IAP, previously sent
                                                                                                                  to Mary Griffin; the
                                                                                                                  IAP was drafted
                                                                                                                  and/or reviewed by
                                                                                                                  counsel during each
                                                                                                                  stage of process

JB-C-00573             Email                3/26/2004               Theresa Lindsey     Robert Cooper,            Attorney-client               A/C, W/P
                                                                                        Tarn Gordon               communication re
                                                                                                                  previous draft of
                                                                                                                  format for EPSDT
                                                                                                                  activities and the
                                                                                                                  responses received to
                                                                                                                  the initial draft.

JB-C-00607             Memo                 6/17/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00608             Memo                 6/21/2004               Betty Boner                                   Comments from                 A/C
                                                                                        Robert Barlow             counsel on contract
                                                                                                                  draft.

JB-C-00609             Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006010            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006011            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006012            Memo                 6/30/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006013            Memo                 7/1/2002                 Betty Boner        Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006014            Memo                 7/1/2002                Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006015            Memo                 6/17/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006016            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006017            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006018            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006019            Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006020            Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006021            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006022            Memo                 7/1/2002                Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006023            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006024            Memo                 7/17/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006025            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006026            Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006027            Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006032            Memo                 7/1/2002                Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006033            Memo                 6/17/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006034            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006035            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006036            Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-006037            Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00643             Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00644             Memo                 7/1/2002                Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00645             Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00646             Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00647             Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00648             Memo                 6/17/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00649             Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00650             Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00651             Memo                 6/17/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00652             Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00653             Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00654             Memo                 7/1/2002                Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00655             Memo                 6/30/2003               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

JB-C-00656             Memo                 6/21/2004               Betty Boner         Robert Barlow             Comments from                 A/C
                                                                                                                  counsel on contract
                                                                                                                  draft.

The Defendants' privilege log (Docket Entry No. 941-3) is not the model of clarity, as the first sixteen pages list the documents and the next sixteen pages list the privileges. The Court does not know the capacities of several of these persons, except for counsel of record and Mary Griffin who was named as in-house counsel and Tarn Gordon. (Docket Entry No. 720, Moss Declaration). At the June 2007 conference, Defendants did not offer any proof on these privileges. In her prior declaration, Moss cited counsel's necessity to review documents prior to submission to the Court and referred "substantive edits to the [SAR] report come from counsel." Id. at p. 19. The SAR is a technical document. See e.g., Docket Entry No. 728.

In their response to the Plaintiffs' renewed motion to compel, the Defendants assert a privilege based upon various state statutes. Plaintiffs' ESI requests include various health information from different state agencies and the MCCs about children in the certified class. The purpose of Plaintiffs' requests for this data is to allow Dr. Ray, one of Plaintiffs' experts, to cross reference or validate any failures revealed by her statistical analyses. This data is from principally three state agencies. The Tennessee Department of Mental Health and Developmental Disabilities ("DMHDD") has a "Incident Reporting System" database that is utilized by the State's five Regional Mental Health Institutes (RMHIs) to record information on incidents affecting mental health patients in these institutes. This database contains narrative descriptions of various incidents (such as elopements, falls, injuries, assaults, or property destruction) relating to mental health patients, including demographic information about the patient, the nature and circumstances of the incident and any injury resulting therefrom, the names of witnesses to the incident, and medical and management review of the incident.

Plaintiffs also seek the DCS Incident Reporting data to study the consequences of the lack of available and appropriate health care to members of the Plaintiffs' class. This DCS information discloses the treatment needs of children in DCS custody and what medical and mental health treatment the children are actually receiving. Dr. Ray analyzed this data for children in DCS's custody to determine if all of a child's medical and mental health needs are being met while the children are in state custody.

Plaintiffs also request the TNKids database that includes a child's case manager's narrative case recordings about the child or any information the case manager deems appropriate. For example, a narrative case recording might include a case manager's summary of medical services received by the child, visits of DCS Health Advocacy nurses describing health services the child is receiving, and number and frequency of case management contacts with the child. A database count of the records on April 10, 2007 showed that since January 1, 2004 there have been 5,377,286 case recordings. Since April 1, 2006 there have been 1,431,048. The TNKids system data can range from a few paragraphs to several pages for each recording. A child in custody will typically have multiple recorded entries. The sort of health services information that would be responsive to Plaintiffs' requests are in any one of four narrative fields. These fields are labeled to record the purpose, the content, the observation/assessment, and the plan. However, each field is a free form text field without any required format.

The Defendants contend that there is not any automated method to determine if these records contain the health services information responsive to Plaintiffs' requests. Some MCCs contend that this information is already available to Dr. Ray and the Plaintiffs through other sources, such as the State's Interchange database, DCS's monthly EPSDT reports, and the Face-To-Face Contact reports. As to the readmission statistics on mental health issues for children, the Defendants contend that Dr. Ray earlier stated that this information would not be useful because this data cannot be converted to Excel as she had originally anticipated. (Docket Entry No. 907 at 35). The Defendants also cite Dr. Ray's April 6, 2007 email to Brent Antony in which she states: "Large numbers of .pdf files do not suit Plaintiffs purposes very well." Id. at Exhibit 1. The Court finds that if Plaintiffs assert that they can access this data for their experts, the Defendants must provide the data in its current or native format.

The Defendants also object to disclosure of incident reporting data because of privacy protections under state and federal laws and related policy considerations. For example, Defendants presented proof that if persons who report abuse of children, knew that their statements and identity could be disclosed to others, then such persons would not report abuse. For these privilege concerns, Plaintiffs agree to an appropriate protective order to protect the identities of any person reporting a serious incident and assure the Court that they do not seek the information to identify particular clinicians or physicians. The state and federal statutes cited by the Defendants will be addressed infra.

The proof establishes that the Defendants already provide this information to a private group, Tennessee Assistance Committee that monitors the Defendants' TennCare program. Two magistrate judges earlier ordered the Defendants in this and a related action to produce these same materials. Moreover, the Defendants actually file this data regularly in another action in this Court. Brian v. Sundquist, No. 3-00-0445 (M.D.Tenn.). (Docket Entry No. 219 at p. 14; Docket Entry No. 244 at p. 18; Docket Entry No. 245; Docket Entry No. 253 atp. 3; Docket Entry No. 262). As quoted supra at pp. 819-20, under the MCCs' contracts that includes behavioral or mental health providers, the MCCs and the State agreed to provide any information "pertaining to" a class member's care to a number of state and federal agencies.

Although there was testimony from some MCC witnesses that email has not been required to be provided to the Defendants under their TennCare contracts, the Court deems controlling the unequivocal language in the MCCs' contracts that create a legal duty to provide any information "pertaining to" a TennCare member to the state or other federal agencies upon their request. (Plaintiffs' Exhibit 28). In these circumstances, the Court finds that the disclosure of MCC email about TennCare is appropriate information to disclose to class members' counsel under a protective order in recognition of the privacy interests of the affected individuals.

The MCCs also have privacy concerns arising under federal law, HIPPA, and their contractual obligations with customers and providers under separate contracts, non-Medicaid contracts and business as well as business in other states. Plaintiffs agreed to a filter in the ESI search to exclude protected information involving other businesses and programs in other states. As to HIPPA disclosures, Judge Knowles ruled earlier in this action that disclosure of class members' protected information to class counsel does not violate federal law. (Docket Entry No. 103, Order). The MCCs have not shown that a properly tailored protective order would not adequately address their concerns. If any such report or data is presented at an evidentiary hearing, the names of the persons involved can be redacted.

Subject to the legal analysis of the privileges asserted, the Court finds that these collective facts establish the Plaintiffs' need for transactional data and ESI, including policy statements, drafts thereof and emails for several purposes to discover how the Defendants and the MCCs deliver services to class members; to evaluate the Defendants' purported compliance with the Consent Decree; and to understand the measures the Defendants considered in remedying their past violations found by the Court.

7. Defendants' Failures to Answer Plaintiffs Requests for Admissions and to Comply with the January 14th Order

Plaintiffs next contend the Defendants' custodians' responses to Plaintiffs' requests for admissions ("RFAs") on destruction of ESI were inadequate because "for nine former employees ... as well as the Governor, the State did not provide responses from the custodians themselves." (Docket Entry No. 828-1, Plaintiffs' Renewed Motion To Compel at p. 16). Plaintiffs also contend that the Defendants also did not comply with the January 14th Order requiring the Defendants to file certifications with the Court that ESI had not been "removed" from the Defendants' designated custodians' work station computers.

The first of Plaintiffs' revised two RFAs asked key custodians if they were aware of any documents, including ESI, that had been "destroyed, deleted, thrown away or lost for any reason." See e.g., Docket Entry No. 828-12 at p. 1. The second RFA asked custodians if they had searched "all paper and electronic records in their possession or control (including both state and private email accounts and computers, including removable drives or storage)." See id. at p. 2 (emphasis added). Two companion interrogatories sought information that had been destroyed or lost. If the person answered "NO" to RFA No. 2, then Interrogatory No. 2, requested the identity of "any record, e-mail account (including removable drives or storage) in your possession or control that you believe potentially contained information or documents requested by the plaintiffs and that you did not search." See id. at p. 2 (emphasis added)

As for the "nine former employees" to whom Plaintiffs refer, Defendants explain that these former employees no longer work for the State and that Defendants lack the authority or control over their responses. The State officials who actually performed searches of former employees' files, and participated in preparing the State's discovery responses on their behalf signed a Request for Admission for each former employee. These signed assurances were offered to satisfy any concerns Plaintiffs might have "to obtain assurances on completeness of discovery responses." (Docket Entry No. 743 at p. 3). Yet, three former employees who performed their own searches, left employment before the Requests for Admission were served on the Defendants. In Plaintiffs' view, the RFAs and interrogatories were also intended to resolve gaps in the State's paper production in May, 2006.

Plaintiffs argue that in the 318 pages of documents submitted on behalf of 166 custodians, none provided the information required by the January 14th order. Plaintiffs cite correspondence with Defendants' counsel and a February 13th meeting with defense counsel, at which Plaintiffs' counsel stated that neither the RFAs nor companion interrogatories had asked each custodian for the information required in the Court January 14th Order. (Docket Entry No. 828, Exhibit 5 Bonnyman letter of February 5, 2007; Exhibit 4, Bonnyman letter of February 23, 2007). The Defendants' counsel responded that the custodians' responses to Plaintiffs' RFAs also answered the question in the January 14th Order and refused to provide any further responses. (Docket Entry No. 828, Exhibit 5: Moss letter of February 27, 2007). In a letter, defense counsel responded that it would be too burdensome to comply with the January 14th Order:

Id. (emphasis added)

The Court finds that the Defendants' custodians' RFA answers do not comply with the January 14th Order that required certifications on whether any ESI had been "removed" from any storage media. Plaintiffs' RFAs asked only if "removable" files had been "searched". The January 14th Order addressed actual removal of ESI by anyone. The Defendants' custodians' RFA replies are not responsive to that issue. The Defendants did not seek relief in the January 14th Order nor ask the Court to treat the Defendants' custodians' RFA responses as satisfying the Order. Defense counsel elected to nullify the Court's Order. The Court finds the Defense counsel's position reflects yet another instance of the Defendants' disrespect and disregard for the Court's Orders in this action.

The sole remaining factual dispute involves the Governor's failure to sign a copy of his responses to Interrogatories and Requests for Admission that were signed by Steve Elkins, his legal counsel. See Docket Entry No. 799. Defendants argue that Plaintiffs' insistence on a personal assurance from the Governor is groundless, impugns the integrity and intolerably intrudes upon the prerogatives of the State's Chief Executive, as well as impugning the credibility of the Governor's legal counsel. The Defendants designated the Governor as a key custodian and emails were sent to the Governor who also attended a meeting on this action. The Defendants' counsel has disclosed the Governor's response. Whether to compel the Governor's personal signature is discussed infra.

At the April 11, 2007 "experts only" conference, there were two occasions on which the Court inquired of the experts' progress and at such times, the Court received reports on their agreements in the presence of their counsel. At the conclusion of the hearing, the Court then directed Brent Antony, the Defendants' expert, to prepare a written "summary" of those agreements and circulate that document to all experts at the conference for comment, and thereafter to file the summary agreement with the Court. Counsel for the parties were present when the experts gave their reports and when the Court gave its directive to Antony. From the Court's review of the transcript of that conference, the experts gave two reports of their agreements, as follows:

[First Report]

[Second Report]

(Docket Entry No. 872, Transcript at pp. 165-168, 216-219, 224-228) (emphasis added).

After a period of time, Antony had not filed the report and the Court entered an Order directing him to do so. The Defendants' counsel responded that there was no such directive. The Court then cited the pages of the transcript setting forth the Court's directive. Defendants' counsel then contended that their prior notice of the experts' activities after the April 11th conference satisfied the Court's directive. At the June 2006 hearing, Antony testified, in essence, that he distributed the transcript of the April 11th conference to the MCCs and that the "Notice" filed by his counsel was all that the Court required of him.

Upon review of the Defendants' Notice (Docket Entry No. 875) that is relied upon by Antony and defense counsel, the Court notes that this "Notice" does not contain any reference to the MCCs' institution of a litigation hold nor the MCCs' implementation of systems to ensure that the ESI of key custodians is not deleted. Of particular note is that the Defendants' "Notice" omits the request of Mr. Elkins's of Memphis Managed Care (that was adopted without objection) that the list of search terms and key custodians become finalized after the Plaintiffs make revisions and suggestions. Specifically, the record reflects the following: "MR. ELKINS: Matt Elkins, Memphis Managed Care. The only other thing I think we'd like to ask is that that list become a final list ... THE COURT: Any objection? MR. TIGH: Not at all. THE COURT: So it will be modified to reflect that." (Docket Entry No. 872 at pp. 217-218). None of the MCCs objected to Elkins' request nor to the Court's modification to the stated agreement. The Defendants' counsel's Notice, however, states: "By May 16, 2007... The MCCs have commented, however, that this proposed schedule does not provide for a mechanism for resolving any dispute(s) that may remain after the MCCs propose (1) search terms, (2) custodians, and (3) filters to be applied in searching the MCCs' ESI, and because, at this point, the MCCs do not know the `final' list that will be used...." (Docket Entry No. 875-1 at p. 3). Another effect of the Defendants' Notice is to set aside what was an agreement on a final list of search terms.

8. Other ESI Production Issues

The Plaintiffs next contend that the Defendants and the MCCs can complete their ESI productions within 90 to 100 days. (Docket Entry No. 882 at 10). Subject to the analysis of the Defendants' and MCCs' legal challenges, the Court finds that 60 days is sufficient time for these MCCs to produce the ESI sought by the Plaintiffs. This finding is based upon the Court's limitations for the ESI search for those MCCs who lack an agreement with the Plaintiffs on ESI production and the cost saving technological methods for such production and any privilege review. Based upon the estimates of BlueCross, the Defendants' largest MCC and the cost saving technology for ESI production and privilege review, the Court finds the 100 days limitation is a reasonable deadline for the Defendants to produce their ESI. Given the extraordinary delays with ESI discovery, the Court will not grant any extension of these deadlines.

B. Conclusions of Law

1. Discovery from The MCCs

A threshold legal issue is the Defendants' and MCCs' argument that the MCCs are not parties and are not subject to Plaintiffs' ESI discovery requests nor the Court's Orders to produce ESI. In Tennessee Assn. of Health Maintenance Orgs. Inc. v. Grier, 262 F.3d 559, 565 (6th Cir.2001), the Sixth Circuit held that where, as here, a Consent Decree grants injunctive relief, the common law and Fed. R.Civ.P. 65(d) bind not only the State, but its contractors that participate in the implementation of the Consent Decree. The MCCs "are agents of the State and are bound by the consent decree to which the state was a party." Id. Here, as in Grier, the Consent Decree contains several paragraphs setting forth the responsibilities of the MCCs. (Docket Entry No. 12 Consent Decree at ¶¶ 18, 22, 60, 61, 74-83). To be sure, Grier limited the contractors' liabilities to the extent of their contract with the State. 262 F.3d at 565.

As to the scope of MCCs' obligations under the Consent Decree, for these discovery requests, the Court deems a brief reference to the rules of construction for such a decree to be necessary. As the Sixth Circuit stated that "[s]ettlement agreements are a type of contract subject to principles of state law." Grand Traverse Band of Ottawa and Chippewa Indians v. Director, Michigan Dept. of Natural Resources, 141 F.3d 635, 641 (6th Cir. 1998) (quoting Vanguards of Cleveland v. City of Cleveland, 23 F.3d 1013, 1017, 1018 (6th Cir.1994)). Tennessee's longstanding principle is that the clear language of a contract controls. Petty v. Sloan, 197 Tenn. 630, 277 S.W.2d 355, 358 (1955).

The Consent Decree here requires that the Defendants and MCCs maintain a reliable "tracking system" with "the capability of tracking each child in the plaintiff class, for purposes of monitoring that child's receipt of the required screening, diagnosis and treatment." (Docket Entry No. 12, Consent Decree at ¶¶ 94 and 95). The Consent Decree also require that the MCCs' tracking system must "have the capacity to generate an immediate report on the child's EPSDT status, "reflecting all encounters reported to the contractor more than 60 days prior to the date of the report."" Id. at ¶ 94. In addition, the Consent Decree expressly provides that "all such records shall be obtained, if necessary, and provided to plaintiffs' counsel through TennCare, rather than through individual MCOs." Id. at ¶ 105.

Given, the MCCs' contractual obligations to maintain a reliable monitoring and reporting system of each MCCs services to children, the Court concludes that Plaintiffs' ESI discovery requests for the Defendants' and MCCs' transactional data clearly fall within the scope of the Consent Decree. Moreover, given the express and expansive language of the MCCs' contracts with the State to perform duties under the Consent Decree and to provide any information "pertaining to" the TennCare program (Plaintiffs' Exhibit 28), the Court concludes that this express language in the Defendants' contract with the MCCs grants the Defendants unrestricted access to the MCCs' data systems for any information "pertaining to" a TennCare member. This language negates testimony about the Defendants' not requesting emails from MCCs. The Court concludes that Plaintiffs' other ESI discovery requests, including emails, also fall within the scope of the Consent Decree and the MCCs' contracts thereunder.

The MCCs insist that any ESI discovery from them must be obtained by a subpoena under Fed.R.Civ.P. 45. Yet, several discovery rules permit discovery from a party's "agent", or "managing agent," including "documents and tangible things otherwise discoverable," Fed.R.Civ.P. 26(b)(1) and Rule 26(b)(3); depositions, Fed.R.Civ.P. 30(b)(6); and interrogatories. Fed.R.Civ.P. 33(a). The term "managing agent" is in several current Rules and was utilized in prior rules of civil procedure. For the purposes of Rule 4(h)(1), the Sixth Circuit defined: "[A] managing agent [as] one authorized to transact all business of a particular kind at a particular place and must be vested with powers of discretion rather than being under direct superior control." Bridgeport Music Inc. v. Rhyme Syndicate Music, 376 F.3d 615, 624 (6th Cir.2004). Under the former Fed.R.Civ.P. 43(b), the Eighth Circuit defined a "managing agent" is an individual: "(1) [whose] interests in the litigation are identified with his principal, and (2) He acts with superior authority and general autonomy, being invested with broad powers to exercise his discretion with regard to the subject matter of the litigation." Lowry v. Black Hills Agency, Inc., 509 F.2d 1311, 1315 (8th Cir.1975) (quoting Skogen v. Dow Chemical Company, 375 F.2d 692, 701 (8th Cir.1967)). The Sixth Circuit cited Skogen approvingly in Jones v. Hancock Mut. Life Ins. Co., 416 F.2d 829, 833 (6th Cir.1969).

Here, the MCCs are independent and sophisticated companies with contracts with the Defendants to provide medical and related services in different areas of the state, as required by the Consent Decree and federal law. The Consent Decree expressly refers to their responsibilities to provide these services. (Docket Entry No. 12, Consent Decree at ¶¶ 18, 22, 60, 61, 74-83). By their nature, these services require a degree of autonomy and superior skills. As the actual providers of these services, the MCCs possess critical information on the named Defendants' compliance with the Consent Decree. The Court concludes that the MCCs are managing agents subject to discovery under Rule 26(b)(1) and (3), Rule 30(b) (1) and (b)(6) and Rule 33(a).

Moreover, Fed.R.Civ.P. 34(a) permits document requests for documents in a party's "possession, custody or control." "Control" has been broadly construed to mean "the legal right, to obtain the documents requested upon demand ... even though [the party] presently may not have a copy of the document in its possession." 7 Moore's Federal Practice at § 34.14[2][b] (Matthew Bender 3d Ed.) (hereinafter cited as "Moore's"). In their post hearing Memorandum, the Defendants argue that the MCCs' ESI is not under their control. (Docket Entry No. 997, Defendants' Supplemental Memorandum at pp. 24-28). "[I]t is well settled that a party has no obligation to preserve evidence that is not in its possession, custody or control." Id. at p. 25. Yet, at the November 6th conference, Defendants' counsel told the Court:

(Docket Entry No. 734, Transcript at p. 42). Moreover, the Consent Decree expressly provides that "All such records shall be obtained, if necessary, and provided to plaintiffs' counsel through TennCare, rather than through individual MCOs." (Docket Entry No. 12, Consent Decree at ¶ 105). The Court concludes that this express language in the Defendants' contract with the MCCs grants the Defendants unrestricted access to the MCCs' data systems for any information "pertaining to" a TennCare member.

Another Court reached a similar conclusion. In In re NTL, Inc. Securities Litigation, 244 F.R.D. 179, 195 (S.D.N.Y.2007), the district court sanctioned a defendant who argued, as the Defendants do here, that the ESI and other relevant documents were not in its "control," because a nonparty with whom the defendant contracted had the ESI. The district court ruled that when a duty to preserve evidence arises, a defendant is required to issue a litigation hold to maintain responsive information and materials. Id. at 197. Second, if the defendant's agreement with the third party grants access to any documents necessary litigation then the defendant had control over document held by its contractors. Finally, the Court concluded that even without an agreement, the defendant still retained control over the relevant documents because a party cannot nullify its contract to "evade the rules of procedure." Id. at 196 (citing Bank of New York v. Meridien BIAO Bank Tanzania Ltd., 171 F.R.D. 135, 148 (S.D.N.Y.1997)).

The Court concludes that the MCCs' ESI is within the Defendants' possession or control within the meaning of Rule 34(a) and was so at the time of the Court's discovery orders to produce ESI.

As a practical matter, even if the Plaintiffs had issued subpoenas under Rule 45, the Court is at a loss to understand what procedural benefits would enure to the MCCs that have not been provided. Under Rule 45, the MCCs have an opportunity to identify and offer proof on why the ESI discovery sought by the Plaintiffs should not be had. The only real difference is that under Rule 45, the Plaintiffs would have to go to the districts where the information is located, if more than 100 miles from the site of this Court. For those courts in other districts and states to decide these issues would require a multiplication of these discovery proceedings throughout other districts. The Court would not wish that misfortune on any of its colleagues. In any event, the Sixth Circuit has consolidated issues in institutional litigation in this district affecting different districts of this state as a matter of judicial efficiency. See e.g., Carver v. Knox County, Tenn., 887 F.2d 1287, 1293 (6th Cir.1989).

Further, as a matter of law, the TennCare Bureau, is the "single state agency" designated by federal law to administer Tennessee's Medicaid program, TennCare. Linton v. Commissioner of Health and Environment, 779 F.Supp. 925, 936 (M.D.Tenn.1990), affd. on other grounds 65 F.3d 508 (6th Cir.1995). The Defendants cannot delegate the administration of this program nor vest the MCCs with ultimate control over information necessary to determine compliance with federal law. The Defendants must provide any records the Secretary requires. 42 C.F.R. 431.17(c). Federal regulations also require that the TennCare agency maintain or supervise the maintenance of the records necessary for the proper and efficient operation of the program, including individual records on each applicant and recipient as well as statistical and fiscal records necessary for reporting and accountability as required by the Secretary of Health and Human Services. 42 C.F.R. 431.17(a)-(b). To receive federal funding, a State's contract with any provider must grant the State the right to audit and inspect any books and records for services provided by the MCO. 42 U.S.C. § 1396h(m)(2)(A)(iv). Under 42 C.F.R. 434.6, the MCCs contract must "provide that the contractor maintains an appropriate records system for services to enrolled recipients" that are accessible "through inspection or other means." 42 C.F.R. § 434.6(a)(5) and 7. A state must have a plan for maintenance of records to ensure the "proper and efficient operation of the plan." 42 C.F.R. § 431.17(b)(ii).

The Court concludes that as a matter of federal law, the Defendants and the MCCs operate as a single entity, with the Defendants responsible for the plan's ultimate performance. These federal statutes and regulations grant the Defendants the legal right to these documents directly related to services to the class members. Thus, aside from Grier, with the rules permitting discovery of a party's managing agent or agent, the Consent Decree and the MCCs contracts, the Court concludes that these federal laws clearly require the submission of any relevant MCCs' information to the State. Thus, the Court concludes that MCCs are the Defendants' agents, not independent third parties, and also stand in the shoes of the Defendants so as to be subject to Plaintiffs' discovery requests as are the Defendants.

2. Discovery Standards

With the notice pleading standard under the Federal Rules of Civil Procedure for most actions, the relevancy standard for discovery has been "construed broadly." Oppenheimer Fund Inc. v. Sanders, 437 U.S. 340, 351, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978). A party may seek any information that is not privileged and is relevant to his claims or defenses. Fed. R.Civ.P. 26(b)(1). For discovery purposes relevant means information that is probative on a party's claim or defense and information that the Court determines could "lead to the discovery of admissible evidence." Fed.R.Civ.P. 26(b)(1).

In addition, "a presumption is that the responding party must bear the expense of complying with discovery requests." Oppenheimer, 437 U.S. at 358, 98 S.Ct. 2380. Yet, district courts can limit discovery, if the information sought is overly broad or imposes an undue burden upon the party from whom discovery is sought. Fed.R.Civ.P. 26(b)(2) allows the Court to relieve any undue burden on the responding party. In Surles v. Greyhound Lines, Inc., 474 F.3d 288, 305 (6th Cir. 2007), the Sixth Circuit observed that: "Th[e] desire to allow broad discovery is not without limits and the trial court is given wide discretion in balancing the needs and rights of both plaintiff and defendant." (quoting Scales v. J.C. Bradford, 925 F.2d 901, 906 (6th Cir.1991)).

As to the judge's role in discovery disputes, "[t]he revisions in Rule 26(b)(2) are intended to provide the court with broader discretion to impose additional restrictions on the scope and extent of discovery." Surles, 474 F.3d at 305. The Advisory Committee notes reflect that the 1983 and 1993 amendments to Rule 26(b) "contemplate[] greater judicial involvement in the discovery process." Fed.R.Civ.P. 26(b), advisory committee's notes (1993). For example, one court appointed a special master to supervise electronic discovery. Medtronic Sofamor Danek, Inc. v. Michelson, 229 F.R.D. 550, 558-59 (W.D.Tenn. 2003). Given the Defendants' history of creating collateral litigation in this action on the Court's appointment of a special master and the state of these proceedings, the Court deemed the appointment of a special master to resolve ESI discovery disputes counterproductive.

The Court also possesses inherent authority to manage litigation. As the First Circuit observed, "[a]s lawyers became more adept at utilizing the liberalized rules", "[t]he bench began to use its inherent powers to take a more active, hands-on approach to the management of pending litigation." In re San Juan Dupont Plaza Hotel Fire Litigation, 859 F.2d 1007, 1011 (1st Cir.1988). "The judiciary is `free, within reason to exercise this inherent judicial power in flexible pragmatic ways'." Id. at 1101 n. 2 (quoting HMG Property Investors, Inc. v. Parque Industrial Rio Canas, Inc., 847 F.2d 908, 916 (1st Cir.1988)).30

3. Discovery Rules on Electronic Discovery

As to relevant discovery rules, since 1970, Fed.R.Civ.P. 34 has expressly referred to "data compilations," and the Advisory Committee comments to the 1970 amendments to Rule 34 clearly reflect that the "data compilations" included electronic discovery.

Williams v. Sprint/United Management Co., 230 F.R.D. 640, 648 (D.Kan.2005) (emphasis added and footnotes omitted). In addition, former Fed.R.Civ.P. 33(d) allowed a party to rely upon a "compilation to answer an interrogatory." The 2006 amendments to Rule 34 added the phrase "electronically stored information" to that Rule.

The current discovery motion was first filed in June 2006, but the current controversy over ESI production arose on February 21, 2006 with the Defendants' motion for a protective order concerning the Special Master's request for utilization data (Docket Entry No. 604). The Defendants' motion was granted, in part and denied, in part, (Docket Entry No. 615), at the February 28, 2006 conference. (Docket Entry No. 616 at pp. 42-102). At the April 17, 2006 conference, the Court "suggested" that the Defendants provide to the Plaintiffs any ESI that the Defendants provided to the monitors. (Docket Entry No. 646 at p. 33). On November 6 and 21, 2006, the Court ordered the production of the ESI subject to a protocol to be determined by the parties' computer experts. (Docket Entry No. 734 at p. 65-66, 74). These orders were prior to the December 1, 2006 effective date of the new amendments on ESI.

The Supreme Court's Order adopting the 2006 amendments on ESI states that these amendments "shall take effect on December 1, 2006, and shall govern ... insofar as just and practicable, all proceedings then pending." Order of the Supreme Court of the United States, April 12, 2006. Defendants note that the Supreme Court announced the 2006 amendments in April 2006, and therefore, the parties were on notice that the amendments "would take effect long before the close of the discovery period in this litigation," (Docket Entry No. 907 at p. 4) (citing In Re Payment Card Interchange Fee and Merch. Disc. Antitrust Litig., No. MD 05-1720, 2007 WL 121426, *3, 2007 U.S. Dist. LEXIS 2650, *13 (E.D.N.Y. Jan. 12, 2007) (applying new ESI amendments to pending Rule 34 issue)).

Yet, the law of the case doctrine provides that a prior order of the Court in an action controls unless a showing of a manifest injustice arises. Arizona v. California, 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983). Here, in February 2006, the Court directed ESI to be made available to Plaintiffs. Prior to the November, 2006 rulings and Order on Plaintiffs' earlier motion to compel, the parties had extensively briefed the ESI issues. (Docket Entry Nos. 709, 720 and 727). The parties argued several of the same decisions on ESI, as they do on the Plaintiffs' renewed motion to compel. Id. This Court's published rules of local practice require any party asserting an undue burden of a discovery request31 to present quantitative proof of that asserted burden. The Defendants offered only conclusory affidavits. (Docket Entry No. 720, Exhibits B and C thereto). Only after the November 2006 Orders were entered did the Defendants provide necessary quantitative evidence of what they contend is an undue burden for any ESI production. The Defendants did not move to seek relief from the November 2006 Orders.

To be sure, the November 2006 rulings left some issues on the ESI protocol to be decided, namely the search terms and the protocol for the MCCs. From the Court's perspective, the Defendants stalled on any unresolved issues until the 2006 amendments to the discovery rules on ESI became effective, because after the 2006 amendments became effective, the Defendants agreed to accept Plaintiffs' search terms. By this delay, the Defendants were able, in effect, to shift the burden of proof at the June 2007 hearing to the Plaintiffs on the absence of an undue burden under the revised rules32 In some cases, such a strategic decision may be appropriate, but here there were outstanding Orders in November 2006 to produce this ESI. With the 2006 amendments, the Defendants can now argue that such production imposes an undue burden measured principally by monetary costs, whereas the earlier judicial standards, as discussed infra, were based primarily on technical availability.

The Court is reluctant to reward the Defendants for their intransigence, but in the event of an appeal of these rulings, the Court will consider the 2006 amendments because the Court lacks any interest in repeating this costly, time-consuming analysis, if the 2006 amendments were ruled to be controlling on appeal.

These 2006 amendments on electronic discovery amended several discovery rules that as pertinent here, are as follows:

(emphasis added).34

Under the 2006 amendments to Rule 26(b)(2), if the party from whom ESI is requested, considers the ESI request unduly burdensome, then that party can file a motion for a protective order35 or the requesting party can file a motion to compel. Upon the filing of either motion, the Court first assesses whether the ESI production is an undue burden. If so, then the Court considers whether the ESI discovery request is duplicative or available elsewhere or whether the requesting party could have sought the ESI earlier. If an undue burden is shown, the requesting party must show "good cause" to justify the ESI production. For the "good cause" determination, the Court is to consider whether the discovery request's "burden or expense ... outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues." Fed.R.Civ.P. 26(b)(2)(C)(i)(ii) and (iii)

In contrast, prior to the 2006 amendments, courts determined accessibility of ESI production based primarily on the technical availability of the data. If the data were not technically available, then the courts would consider whether to apportion costs to retrieve the ESI based on several factors, with some exceptions, discussed infra. Prior to the 2006 amendments, factors similar to Rule 26(b)(2)(B) were referred to as the "proportionality" test. Zubulake v. UBS Warburg, 217 F.R.D. 309, 316 (S.D.N.Y. 2003)36 ("Zubulake I"). Under prior law, an undue burden did not arise merely because the discovery request involved an ESI production. Id. at 318 n. 48.

4. Duty to Preserve

In the Court's view, the critical and threshold issue that impacts the undue burden analysis is the Defendants' breach of their legal duty to preserve ESI relevant to this action. As set forth below, if such a hold were accomplished here, then this extensive commitment of the parties', the MCCs' and the Court's resources would have been mooted.

With the 2006 amendments on electronic discovery, the Advisory Committee Notes to Rule 26(b)(2) emphasize that: "A party's identification of sources of electronically stored information as not reasonably accessible does not relieve the party of its common-law or statutory duties to preserve evidence." Independent of the rules of procedure, a legal duty to preserve relevant information arises when a person "knew or should have known that the documents would become material at some point in the future then such documents should have been preserved." Stevenson v. Union Pac. R.R. Co., 354 F.3d 739, 746 (8th Cir.2004).

As to when this duty arises, the federal courts have held that the duty to preserve relevant information clearly arises when a complaint is filed with a court. Computer Associates Intern., Inc. v. American Fundware, Inc., 133 F.R.D. 166, 169 (D.Colo.1990); Telectron Inc. v. Overhead Door Corp., 116 F.R.D. 107, 127 (S.D.Fla.1987). A duty to preserve may also arise before the filing of the complaint, if a party has notice that litigation of a matter is likely to be filed. Capellupo v. FMC Corp., 126 F.R.D. 545, 551 (D.Minn.1989); Alliance to End Repression v. Rochford, 75 F.R.D. 438, 440 (N.D.Ill.1976). The duty to preserve does not include evidence that the party "had no reasonable notice of the need to retain." Danna v. New York Tel. Co., 752 F.Supp. 594, 616 n. 9 (S.D.N.Y.1990), but includes information that party "has control and reasonably knew or could reasonably foresee was material to a potential legal action." Krumwiede v. Brighton Associates, LLC, No. 05 C 3003, 2006 WL 1308629 at *8 (N.D.Ill. May 8, 2006) (citations omitted).

Clearly with the filing of Plaintiffs' complaint in February 1998, the duty of preservation arose for all parties to take reasonable measures to preserve all relevant evidence. Here, the Defendants' duty to preserve evidence probably arose at least several months before the filing of the Consent Decree in 1998, given the extensive and negotiated details in the Consent Decree. The Consent Decree provides ample guidance and clarity on what information is relevant and material and therefore should be retained. The MCCs' information "pertaining to" a TennCare enrollee was under the Defendants' control under federal law and their contracts with the MCCs. Yet, the proof establishes the Defendants did not create any meaningful litigation hold until the March 17, 2004, Memorandum when this action was more than six years old.

Despite defense counsel's assertions that prior to 2004 a litigation hold was not required because this is a consent decree action, not litigation, the decisions cited above are to the contrary. Moreover, on December 18, 2000, the Defendants moved to modify the Consent Decree (Docket Entry No. 69) and on January 29, 2001, the Plaintiffs moved for contempt (Docket Entry No. 79). The contempt hearing started in June 2001 and Judge Nixon entered his findings and conclusions on December 19, 2001. (Docket Entry No. 227). The parties were involved in other contested issues in 2002 and 2003. (Docket Entry Nos. 238, 251, 258, 266, 275, 291, 301 and 319). These docket entries clearly undermine the Defendants' contention on the appropriate timing of a litigation hold. Even after a written and detailed March 17, 2004 memorandum/litigation hold, the proof establishes that the Defendants did not implement this litigation hold, as outlined in the March 17th memorandum.

"Once on notice [that evidence is relevant], the obligation to preserve evidence runs first to counsel, who then has a duty to advise and explain to the client its obligations to retain pertinent documents that may be relevant to the litigation." Telecom International Am. Ltd. v. AT & T Corp., 189 F.R.D. 76, 81 (S.D.N.Y.1999) (citing Kansas-Nebraska Natural Gas Co. v. Marathon Oil Co., 109 F.R.D. 12, 18 (D.Neb.1983)). Neither a preservation demand letter nor a court order is required. Wiginton v. Ellis, 2003 WL 22439865 at **4, 5 (N.D.Ill. Oct. 27, 2003). A preservation order only clarifies the parties' particular obligation. Treppel v. Biovail Corp., 233 F.R.D. 363, 369 (S.D.N.Y.2006).

This preservation duty extends to potential evidence relevant to the issues in the action, including electronic information. Zubulake v. UBS Warburg, LLC, 229 F.R.D. 422 (S.D.N.Y.2004) ("Zubulake V"); Renda Marine, Inc. v. United States, 58 Fed. Cl. 57, 60-61 (2003). As the Zubulake V Court explained in an ESI controversy and the lack of preservation thereof:

Id. at 431 (emphasis added) (quoting Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212, 218 (S.D.N.Y.2003) ("Zubulake IV")).

In Zubulake V, the Court excluded from the back-up tapes exception, the back-up tapes of "key players" that exist:

229 F.R.D. at 431 (quoting Zubulake IV, 220 F.R.D. at 218) (emphasis in original).

This preservation duty extends to the parties' outside counsel and beyond the mere issuance of a litigation hold. In Zubulake V, contrary to outside and in-house counsel's instructions, key employees of the defendant deleted e-mails that the plaintiff alleged would support her claims. In Zubulake V, the court summarized its 2003 decision in Zubulake IV37 and delineated the types of measures stated therein as necessary for outside counsel to monitor his client's behavior and the timely production of information. 229 F.R.D. at 435. The Court regrets the following lengthy quotation, but its purpose is to illustrate the level of guidance available to counsel on the preservation of ESI, including that occasionally telling clients that they need to preserve relevant ESI is legally insufficient.

229 F.R.D. at 432-34 (emphasis added) (some footnotes omitted). See also Rebecca Rockwood, Note, Shifting Burdens and Concealing Electronic Evidence: Discovery in the Digital Era. 12 RICH. J.L. & TECH. 16, 22 (2006) ("It is counsel's responsibility not just to tell the client that they have to retain and produce all information relevant to the case, but also to follow up with the client and continuously remind them of what they are required to do....Clients must be aware of all duties to preserve information, `whether imposed by litigation or state or federal regulation.' Until the client begins to realize the impact of technology in litigation, the lawyer must educate them to provide the best service and avoid sanctions litigation that could be damaging.") (emphasis added and footnotes omitted)

In Zubulake V, that Court noted cases where counsel and the clients failed to understand each other on ESI issues:

Zubulake V, 229 F.R.D. at 434 (emphasis added and some footnotes omitted).

The Court concludes that the proof establishes that the Defendants did not issue any litigation hold in this action until March 17th, 2004 and then did not implement that March 17th litigation hold memorandum. Significantly, the March 17th Memorandum required collection of relevant documents by the assigned custodian for each working group and the ongoing segregation and review of relevant documents for privileges by the State Attorney General's Office. The Defendants now assert that to respond to Plaintiffs' ESI request, as ordered by the Court, will cost them millions of dollars and a number of years due to their need to segregate documents and to conduct a privilege review of massive amounts of information. This evidence establishes that the March 17th Memorandum was never implemented.

The proof, at best, is that on "several occasions," Defense counsel told state employees to save emails and responsive documents. In their earlier papers, Defendants' counsel insisted that "[k]ey state officials have periodically been reminded of their duty to preserve documents and the instructions have even been expanded as the potential issues in dispute have expanded." (Docket Entry No. 720 at p. 27) (citing Docket Entry No. 720, Moss Declaration at ¶¶ 7-8) (emphasis added). Moss's 2006 declaration actually states that "state officials had been reminded on several occasions about their continuing obligation to preserve responsive documents." "Periodically" connotes "communications at regular intervals of time," Webster's Third New International Dictionary at p. 1680 (1981), "several occasions" does not.

In any event, the proof is that Defendants left their employees to decide on their own what to retain without evidence of any written instruction or guidance from counsel on what is significant on material information in this complex action. Under the State's computer system, after six to seven months emails were destroyed. Some key custodians did not have backup tapes for their work station computer. Given the complexity of this action, isolated statements about the litigation hold over a period of several years are equivalent to a lack of any meaningful litigation hold. The inadequacy of these isolated occasions is evidenced by the detail in the March 17th memorandum that describes reasonable methods to accomplish effective preservation of relevant information in this action.

Significantly, the Defendants did not provide the MCCs with any instruction to preserve relevant information until November 2006. The significance arises because, as Judge Nixon found, all of the substantive activities under the Consent Decree occur, at least initially, at the MCC level. The MCCs are the sites for services and where all of the substantive decisions are initially made. Without a litigation hold, the MCCs' ESI data has been regularly destroyed from 1998 to 2006, when the MCCs issued their litigation holds in 2006 to halt the loss of their ESI. The Defendants did not undertake any efforts to ensure the systemic preservation of the MCCs' data that is particularly disturbing in light of Judge Nixon's findings in 2001 and 2004.

In their post hearing submission, the Defendants argue that they did not have any obligation to preserve the MCCs' data because the MCCs' ESI is not within their possession, custody, or control. (Docket Entry No. 997 at pp. 24-28). "[I]t is well settled that a party has no obligation to preserve evidence that is not in its possession, custody or control." Id. at p. 25. At the November 6th conference, Defendants' counsel told the Court:

(Docket Entry No. 734 at p. 42).

For these reasons stated earlier, since the entry of the Consent Decree, the Defendants had control over the MCCs because paragraph 105 of the decree expressly states that "All such records shall be obtained, if necessary, and provided to plaintiffs' counsel through TennCare, rather than through individual MCOs." (Docket Entry No. 12, Consent Decree at ¶ 105). Under their contracts with their MCCs, the Defendants and "any other duly authorized state or federal agency shall have immediate and complete access to all records pertaining to the medical care and services provided to TennCare enrollees". (Plaintiffs' Exhibit 28) (emphasis added). To repeat the governing legal principle: "Control" has been broadly construed to mean "the legal right, to obtain the documents requested upon demand ... even through it presently may not have a copy of the document in its possession." 7 Moore's § 34.14[2][b]. Under the evidence and applicable law, the Court concludes that the Defendants possessed the clear legal right and control over the MCCs' ESI and thereby owed a duty to take reasonable measures to preserve the MCCs' relevant information, but the Defendants breached that duty.

Courts have imposed sanctions for a party's failures to preserve electronic information. As to sanctions for failure to preserve ESI, as stated earlier in Zubulake V, the defendant deleted e-mails that the plaintiff alleged would support her claim. 229 F.R.D. at 425. This destruction occurred contrary to outside and in-house counsel's instructions to key employees not to deleted relevant e-mail. Id. at 426-28. For sanctions, the court ruled that it would give an adverse inference instruction at trial, and required the defendant to restore backup tapes and to pay for depositions that had to be retaken as well as granting an award of attorney fees and costs. Id. at 437.

In other courts, in United States v. Philip Morris USA, Inc., 327 F.Supp.2d 21, 23 (D.D.C.2004), the Court entered a broad preservation order, but for at least two years under company practices, the defendant's employees continued to delete e-mail messages more than sixty days old. Defense counsel later learned of this destruction, but waited four months to inform the Court. Id. Upon a motion for sanctions, the court found that eleven of the company's highest officers and supervisors violated not only the court order, and the company's stated policy for electronic records retention. Id. at 25. The court fined each defendant $250,000 per employee, and precluded the defendant from calling any of the eleven employees as witness at trial. Id. at 26, n. 1. In In re Cheyenne Software, Inc., Securities Litigation, 1997 WL 714891, at *2 (E.D.N.Y. Aug. 18, 1997), a securities action, the court ordered the defendant to pay $15,000 in fees and fines for the routine recycling of computer storage media. In Renda Marine, 58 Fed. Cl. 57 (2003), the court granted the plaintiff's motion to compel to order the U.S. Army Corps of Engineers to produce the backup tapes at its own expense and to provide access to the contracting officer's computer hard drive. There, the Defendant's policy was that after an e-mail was read, the e-mail had to be deleted or moved to a personal folder immediately. Despite the notice of litigation, this practice continued resulting in the court's sanctions.

Where a defendant contends that business necessity required or caused the destruction of relevant electronic discovery, a court rejected this defense because the party did not make a prior request for judicial relief on this issue. As stated in Cheyenne Software:

1997 WL 714891 at *1. Defendants sought no such relief here.

The Court reserves any discussion of sanctions for the Defendants' failure to implement an effective litigation hold until completion of the ESI discovery ordered by the Court.

5. The Undue Burden Analysis

The undue burden analysis will discuss the types of ESI subject to production, the Defendants' databases subject to the ESI searches, the costs of that production and an application of the Rule 26(b)(2)(C) factors to the circumstances of this controversy.

(i) Types of ESI Data

As to what ESI must be produced, at the time of the November 2006 Order, the issues of the accessibly of the ESI was determined primarily based on the technical availability of the ESI This analysis was formulated in Zubulake I, and its progeny, often cited decisions. Under Zubulake I, the issue of undue burden due to costs of production was reserved for data that was technically inaccessible.

Id. at 318-19 (emphasis added).

Applying this technical viewpoint on the accessibility of ESI, the Zubulake Court deemed the first three types of ESI, presumptively accessible.

Id. at 319-20.

One commentator cited the number of custodians to be searched as posing the risk of increasing production costs. Kenneth J. Withers, Electronically Stored Information: The December 2006 Amendments to the Federal Rules of Civil Procedure, 7 Sedona Conf. J. 1 (2006) (hereinafter "Withers"):

To the extent that the appropriate technology is readily available to render the electronically stored information intelligible, it is considered "accessible." However, much of the electronically stored information that may be subject to discovery is not easily rendered intelligible with the computers, operating systems, and application software available in every-day business and personal environments. This electronically stored information may be considered "not reasonably accessible" due to the cost and burden associated with rendering it intelligible.

Id. at pp. 5, 9 and 21 (emphasis added).

Special mention, however, is necessary for two types of discoverable ESI sought by the Plaintiffs, namely "deleted" data and "metadata". To the extent that any information of 50 key custodians work station has been deleted, the reference to "deleted" information from a computer system is a misnomer.

Zubulake, 217 F.R.D. at 313, n. 19 (quoting Shira A. Scheindlin & Jeffrey Rabkin, Electronic Discovery in Federal Civil Litigation: Is Rule 34 Up to the Task?, 41 B.C. L.Rev. 327, 337 (2000) (footnotes omitted)).

Deleted information in a party's computer's backup tapes is as discoverable as electronic documents in current use. "[I]t is a well accepted proposition that deleted computer files, whether they be e-mails or otherwise, are discoverable.... [C]omputer records, including records that have been `deleted,' are documents discoverable under Fed.R.Civ.P. 34." Zubulake, 217 F.R.D. at 317 n. 38 (quoting Antioch Co. v. Scrapbook Borders, Inc., 210 F.R.D. 645, 652 (D.Minn.2002) and Simon Property Group L.P. v. mySimon, Inc., 194 F.R.D. 639, 640 (S.D.Ind.2000)). See also Renda Marine, Inc. v. United States, 58 Fed. Cl. 57 (2003) (U.S. Army Corps of Engineers ordered to produce backup tapes at its own expense and to provide access to the contracting officer's computer hard drive) and Williams v. Armstrong, 2007 WL 1424552 *2 (W.D.Mich. May 14, 2007) ("Typically speaking, [email], even when deleted is maintained in a computer system as replicant data, archival data or residual data, which is subject to production and discovery") (citations omitted).

Thus, the Court concludes that any deleted data recoverable from the work stations of the 50 key custodians is technically accessible. The Court cannot find the same for the statewide email server for lack of proof.

Another type of electronic data at issue in these discovery disputes that impacts the costs issue is "Metadata" that is a different type of ESI.

Sprint/United Management Co., 230 F.R.D. at 646 (emphasis added and footnotes omitted).

Sprint/United Management Co. directed that if the metadata is viewable in the ordinary usage in the defendant's business, and probative then the metadata should be produced absent an agreement of the parties or order of the court.

Id. at 647 (emphasis added and footnotes omitted). "See also Bahar Shariati, Zubulake v. UBS Warburg: Evidence that the Federal Rules of Civil Procedure Provide the Means for Determining Cost Allocation in Electronic Discovery Disputes," 49 VILL. L.REV. 393, 404 n. 49 (2004) (hereinafter "Shariati") ("[Formatting codes and other information are means to manipulate electronic data ... and metadata tells `when the document was created, the identity of the user who have accessed the document, [and] whether the document was edited'.")

To be sure, the 2006 amendment to Rule 34(a) no longer requires production of ESI in its native format that would include metadata. The Defendants note an emerging judicial trend that metadata should not be produced, absent some showing of necessity. "[E]merging standards of electronic discovery appear to articulate a general presumption against the production of metadata" and "[i]t is likely to remain the exceptional situation in which metadata must be produced." Sprint/United Management Co., 230 F.R.D. at 652. Accord Wyeth v. Impax Labs., Inc., 248 F.R.D. 169, 171 (D.Del. 2006) ("Emerging standards of electronic discovery appear to articulate a general presumption against the production of metadata. The Default Standard for Discovery of Electronic Documents utilized in this District follows this general presumption."); Kentucky Speedway, LLC v. NASCAR, Inc., No. 05-138-WOB, 2006 WL 5097354, at *8, 2006 U.S. Dist. LEXIS 92028, at *22-23 (E.D.Ky. Dec. 18, 2006) ("Emerging standards of electronic discovery appear to articulate a general presumption against the production of metadata... [T]his court is convinced — at least on the facts of this case — that the production of metadata is not warranted. The issue of whether metadata is relevant or should be produced .... ordinarily should be addressed by the parties in a Rule 26(f) conference.").38 By Administrative Order, this Court joined the Default Standard under which the need for metadata must be shown.

A noted treatise on federal practice explained the value of "metadata" in the context of litigation:

7 Moore's § 37a.03[l] (footnotes omitted).

Although the Defendants contend that metadata cannot be "Bates stamped" and is subject to alteration as a live document, Tigh described the "Hash" coding that can be attached to metadata to ensure its integrity. The Honorable Shira Scheindlin, the author of the Zubulake opinions, likewise observed that:

Shira A. Scheindlin, U.S. District Judge Southern District of New York, "E-Discovery: The Newly Amended Federal Rules of Civil Procedure," Moore's Federal Practice (2006) (emphasis added).

The significance of metadata in litigation is evidenced in Williams, an employment class action suit involving layoffs, where the defendant produced spreadsheets showing reduction-in-force calculations in a static image format that had been "scrubbed" to eliminate metadata that included the mathematical formulae behind the spreadsheets. Referring to the "Sedona Principles" as well as then proposed Rule 34(b), the district court determined that the defendant should have produced the spreadsheets "as they are maintained in the regular course of business," that is, in native format. 230 F.R.D. at 654. The court also stated that other measures should have been taken to preserve the metadata within the electronic files because such information, such as calculations and text would be relevant and material to the claims in the action. Id. at 652-53. Accord In re Verisign, Inc. Securities Litigation, No. C 02-02270, 2004 WL 2445243 (N.D.Cal. March 10, 2004). Metadata in this action will assist in understanding the tracking data required by the Consent Decree and what Judge Nixon found to be unreliable statistics. Metadata may disclose any attachments to email and assist in tying related documents with their respective custodians. Metadata would be necessary to understand the multiple policies and reports prepared and published by the Defendants. ESI is also necessary in light of the inconsistencies and gaps in Defendants' 2006 paper production and the Defendants' failure to preserve relevant data, as discussed above. The Metadata will facilitate understanding changes and alterations of documents, particularly reports filed with the Court. Here, the Court credits Tigh's testimony that metadata is important to understand the path of a document. Metadata is especially important to understand what remedial measures the Defendants took after this Court's repeated findings of the Defendants' non-compliance with the Consent Decree.

The amended version of Fed.R.Civ.P. 34(b)(iii) reflects that a party can produce ESI in one format, "unless the Court orders otherwise." The Court concludes that the metadata here is technically accessible and that Plaintiffs have satisfactorily shown that metadata is relevant and necessary for meaningful ESI production. Thus, pursuant to Rule 34(b)(iii), the Court concludes that the Defendants' and the MCCs's ESI production must include metadata.

(ii) The Defendants' and MCCs Databases

The proof here establishes that the Defendants have two servers: a document server and an email server. In addition, the Defendants agreed to establish a storage facility for the ESI on the computers of the Defendants' 50 key custodians. These work stations have separate folders for which there is no backup, but whatever relevant ESI remains, has been collected. Thus, from a technical viewpoint, the information under the November, 2006 Orders remains accessible. All information on these media storage devices that are not found to be privileged is discoverable and all transactional data is discoverable.

Subject to privileged information, all other ESI data bases are discoverable, but several of the MCCs' systems do not possess the same capabilities as the Defendants' systems. With the Court's modifications of the ESI production for those MCCs that have not resolved the ESI search conditions, the cited differences in those MCCs' systems will not affect those MCCs' ESI searches.

(iii) The Costs of Production

The issue remains of whether the ESI production sought of the Defendants and MCCs imposes an undue burden upon them. In their Opposition Brief, Defendants describe this "undue burden" in terms of "multiple millions of pages" and hundreds of gigabytes of information as well as exorbitant amounts of attorney time for privilege reviews. (Docket Entry No. 907, Defendants' Response at pp. 22, 24).

The Defendants' costs of production can be substantial depending upon the scope of the search and the number of custodians included in the search:

Withers at p. 9 (emphasis added).

For the custodian factor in the undue burden analysis, the Court concludes that the 50 agreed custodians for the Defendants and the Plaintiffs' acceptance of the MCCs' designated custodians are reasonable and will not create an undue burden for the Defendants or the MCCs.

As to the search terms, the Defendants agreed to accept the Plaintiffs' 50 search terms. The ESI that Plaintiffs request is targeted by these 50 select key words that should eliminate a substantial amount of documents. Here, the Defendants' and MCCs' proof establishes that the ESI sought by the Plaintiffs is on active and stored data, except for the ESI that was destroyed as part of the Defendants' and MCCs' routine business practices. To the extent this data is on an active system, Zubulake39 supports the Court's earlier Order requiring the production at the Defendants' expense, but given the 2006 amendments, the Court must consider whether the Defendants can show an undue burden. For the reasons stated below, the Court deems the Defendants' proof does not establish an undue burden their proof submitted prior to the earlier Order was conclusory and insufficient. See Docket Entry No. 720, Exhibits A and B thereto.

As to the Defendants' proof of an undue burden, the Defendants' computer search based upon Plaintiffs' 50 word search with 50 key custodians reflects a total of 493 gigabytes of information which equals approximately 15 million pages with a maximum cost of $10 million. (Docket Entry No. 907 at pp. 2, 9). Assuming the estimates are reliable, for a class size of more than 550,000 children, the unit cost for this ESI discovery is approximately 25 pages per class member at a cost of $ 16.66 per Plaintiff class member. If Plaintiffs were individuals with unproven claims, then the expenditure of millions of dollars for electronic discovery, after balancing equities, might be unjustified. Yet, with repeated judicial findings of the Defendants' violations of children's rights, this cost of ESI discovery is not an undue burden for the Defendants. Moreover, as to whether this expense for ESI discovery outweighs its benefits, Congress has authorized in excess of $7 billion dollars to the Defendants to provide the medical services at issue in this action. Of the Defendant's two systems, the Defendants and most of the MCCs reached an agreement on the ESI production of transaction data, the Defendant concerns about privilege is for ESI on the State's email server and the individual computers of key custodians. The significant costs identified by the Defendants is for privilege review.

As to the costs of privilege review, "the most significant contributor to the cost of privilege screening, however, is fear." Withers at p. 11. As Tigh noted, a word search can be employed using the names of counsel and other search terms, such as "privileged" and "confidential" to identify clearly of course, privileged information before any production defense counsel's computer can identify clearly privileged information. Courts recognize that scanning of vast amounts of ESI utilizing key words to identify privileged information can significantly reduce the costs of a privilege review. Zubulake I, 217 F.R.D. at 318 ("key words can be run for privilege checks"). "`By comparison [to the time it would take to search through 100,000 pages of paper], the average office computer could search all of the documents for specific words or combination[s] of words in minute[s], perhaps less.'" Id. at n. 50 (quoting Scheindlin & Rabkin, Electronic Discovery in Federal Civil Litigation: Is Rule 34 Up to the Task? 41 B.C. L.REV. 327, 364 (2000) and citing Public Citizen v. Carlin, 184 F.3d 900, 908-10 (D.C.Cir. 1999)).

The Court finds that the Defendants have unduly exaggerated the costs for their ESI collection and any privilege reviews of this ESI. As stated earlier, courts have recognized computers' capabilities to perform select word searches from massive ESI material on privilege in a matter of seconds. The Court agrees with Tigh that selective word searches of ESI are viable options to reduce privilege review costs significantly for the Defendants and the MCCs. The Court also deems the defense counsel's internal data system and the availability of selective word searches to eliminate any excessive costs or undue burden arising from any privilege search of the ESI that the Court ordered to be produced.

For those MCCs that did not reach an agreement with the Plaintiffs, as stated in Rule 34(a), a threshold measure, before consideration of any undue burden is a sampling of the databases, particularly backup tapes to determine the likely yield of the information sought, as to avoid the costs of an extended search. Prior to the 2006 amendments, courts engaged in this analysis. As Zubulake I observed, "by requiring a sample restoration of backup tapes, the entire cost-shifting analysis can be grounded in fact rather than guesswork." 217 F.R.D. at 324, accord Bills v. Kennecott Corp., 108 F.R.D. 459, 461 (D.Utah 1985) ("[S]ome courts have required the responding parties to develop programs to extract the requested information and to assist the requesting party in reading and interpreting information stored on computer tape.") and McPeek v. Ashcroft, 202 F.R.D. 31, 34 (D.D.C.2001) ("The more likely it is that the backup tape contains information that is relevant to a claim or defense, the fairer it is that the [responding party] search at its own expense the less likely it is, the more unjust it would be to make the [responding party] search at its own expense. The difference is `at the margin ...'"). See also Zubulake I, 217 F.R.D. at 323 (the "test run" established in McPeek is the best solution for preventing courts from basing cost-shifting analysis on assumptions).

With the lack of a preservation or litigation hold, the Court questions the viability of sampling for the Defendants' and the MCCs' data bases. The Defendants' actual ESI search based upon Plaintiffs' 50 word search with 50 key custodians reflects a total of 493 gigabytes of information which equals approximately 15 million pages (Docket Entry No. 907 at p. 9) with an estimated maximum cost of $10 million. Id. at 2. With Defendants' estimates, the unit cost for this ESI discovery is approximately 25 pages per class member at a cost of $16.66 per class member for this class. This cost is not an undue burden. As to the MCCs', with the Court's modification of the MCCs' ESI search, Plaintiffs' expert and Unison's expert agreed that this modified ESI search would not be unduly burdensome nor costly.

6. Good Cause and The Rule 26(b)(2)(C) Factors

Even if the Court agreed with the Defendants that this ESI discovery presents an undue burden, Rule 26(b)(2) also states that if the party seeking discovery can show "good cause," then the ESI production can be ordered. Fed.R.Civ.P. 26(b)(2)(C)(i)(ii) and (iii). Amended Rule 26(b)(2)(C)(i) requires consideration first of whether the ESI is duplicative or available elsewhere as less burdensome and less expensive.

The Defendants contend that their 2004 paper production provides the identical or the same data as the ESI production for that period and therefore, Plaintiffs' ESI discovery is duplicative. The Court disagrees. Since 1972, courts have held that a paper production does not preclude an ESI production of the same material. Adams v. Dan River Mills, Inc., 54 F.R.D. 220 (W.D.Va.1972). See also; National Union Electric Corp. v. Matsushita Electric Industrial Co., Ltd., 494 F.Supp. 1257 (E.D.Pa.1980). In In re Honeywell International Inc. Securities Litigation, 230 F.R.D. 293, 297 (S.D.N.Y.2003), despite the defendant's prior paper production, the district court ordered ESI production that would cost $30,000. The court reasoned the prior paper production was "insufficient because they were not produced as kept in the usual course of business." Id. In In re Verisign the court ordered the defendant to convert existing TIFF images that had to be searchable in electronic format and ordered the production of metadata. 2004 WL 2445243 at *3.

The reasons for this difference between paper production and ESI production may be explained in Sprint/United Management Co., 230 F.R.D. at 646. To be sure, some courts differ on this issue. Compare Williams v. Owens-Illinois, 665 F.2d 918 (9th Cir.1982) (denying such a request) and Anti-Monopoly, Inc. v. Hasbro, Inc., 1995 WL 649934 at *2 (S.D.N.Y. Nov. 3, 1995) (ordering production of hard-copy and computerized data). Commentators recognize that "paper copies of e-mail differ from electronic copies of e-mail." Shariati at 405, n. 49.

Given the technical and substantial differences in ESI and paper production, the Court adopts the Hasbro ruling: "the rule is clear: production of information in "hard copy" documentary form does not preclude a party from receiving that same information in computerized/electronic form." Id. at *2. The inconsistency and gaps in the Defendants' 2006 paper production for this time period, discussed supra, further demonstrate that the ESI sought and ordered by the Court is neither duplicative nor otherwise obtainable by other means. As discussed earlier on metadata, paper production does not provide the same information as does ESI. The ESI here contains metadata that is invaluable to Plaintiffs' understanding of the Defendants' data and reports. Some emails originally contained attachments, but those attachments generally are not included in reply messages in the paper version of reply messages.

Further, a paper document may not disclose hidden data that an ESI production may disclose. "Selected passages, which are not visible when the document is printed, can be marked as hidden text under options in various software programs." 7 Moore's § 37a.03[l] citing Robins, "Computers and the Discovery of Evidence — A New Dimension to Civil Procedure", 17 J. MARSHALL J. COMPUTER & INFO. L. 411, 414-415 (1999).

Another commentator noted the historical importance of electronic data. "[Electronic data, especially e-mail, often contains damaging evidence cause of its informal nature. Commentators state that e-mail has proven to contain the `smoking gun' in many cases. One commentator asserts that e-mail is the source of such honest and important information because it is quick medium for dialogue that appears secure from eavesdroppers, due to the lack of personal interaction and minimal likelihood of being reduced to paper form." Shariati at 406. These collective authorities and the serious deficiencies found in the Defendants' 2004 production render meritless the Defendants' contention that ESI production for the same period is duplicative.

The Defendants' related argument is that the prior discovery in this action and related actions establishes that paper production was the agreed method of discovery production. The Defendants elicited proof on this issue at the June 2007 hearing. See also Docket Entry No. 997, Defendants' Supplemental Memorandum at p. 36, citing United States v. Jenkins, No. 99-4451, 2000 WL 296307, at *1, 2000 U.S.App. LEXIS 4472, at *2 (4th Cir. Mar. 22, 2000) (noting that "prior dealings between the parties" in discovery may control the parties' discovery obligations); Sty-Lite Co. v. Eminent Sportswear Inc., No. 01.Civ.3320 (CBM), 2002 WL 15650, at *5, 2002 U.S. Dist. LEXIS 119, at *13 (S.D.N.Y. Jan. 4, 2002) Harris Corp. v. Amperex Elec. Corp., No. 86 C 6338, 1987 WL 7477, at *1, 1987 U.S. Dist. LEXIS 14055, at *2-3 (N.D.Ill. Feb. 24, 1987). See also Docket Entry No. 734, Transcript at pp. 32-33.

The Court disagrees for several reasons. First, the Consent Decree expressly provides that the Defendants would create and provide Plaintiffs extensive data in an electronic format:

(Docket Entry No. 12, Consent Decree at ¶¶ 91, 97 and 98) (emphasis added).

Second, in an earlier discovery dispute in this action, the Defendants filed a motion for a protective order on April 13, 2001. inter alia, on Plaintiffs' document request No. 34 for "encounter data for class members in electronic media, in ASCII format, for the calendar years 1993-2000". (Docket Entry No. 92, Defendants' Memorandum at p. 9). With a modification of subject matter, the Magistrate Judge denied the Defendants' motion and ordered production on document request no. 34. (Docket Entry No. 103, Order at pp.7-8). Since at least the February 28, 2006 conference, the Court has entertained ESI issues. (Docket Entry No. 616, Transcript at pp. 82-100). The Plaintiffs' definitions for their 2006 discovery requests clearly reflect that Plaintiffs sought ESI. See the quotation supra at pp. 813-14.

Third, ESI issues did arise in Rosen where testimony was taken on the State's computer system's capabilities to provide notice and reverification data. Rosen v. Goetz, No.3:98cv0627, Docket Entry No. 277, November 9, 2001 Transcript at pp. 72-84; Docket Entry No. 279, November 14, 2001 Transcript at pp. 8, 17-20; Docket Entry No. 286, November 13, 2001 Transcript at pp. 12, 16-17.

Fourth, the Court is uncertain about the substantive issues in the Grier and Newberry actions, but Rosen was a procedural due process case. This action involves complex substantive issues of detailed medical treatment of children. Given the size of the class at the time of the Consent Decree (550,000) and with the extensive terms of the Consent Decree, the Court concludes that it is unreasonable to assume that only paper discovery would be provided. To do so would overwhelm counsel and the Court. By its nature, ESI enables parties to manage and evaluate efficiently massive and detailed information on the complex issues in this action. Such purposes are the essential value of ESI. In these circumstances, the legal authorities and limited testimony cited by the Defendants, do not justify limiting discovery to a paper production.

As Tigh explained, a party cannot search a paper production, and to manage the massive amounts of information in this action requires an ESI production. In this action, information must be in a computer format for any effective understanding and searching of discovery material. The Court is gravely concerned that the Defendants' insistence on paper discovery is to obscure the ascertainment of material information on their compliance with the Consent Decree.

As to Rule 26(b)(2)(C)(ii), the Plaintiffs made their ESI discovery requests because it was not until February 2006 that the Defendants' counsel insisted that the Defendants were in compliance with the Consent Decree. As discussed earlier, Plaintiffs sought and were awarded ESI, but only for the earlier time period. (Docket Entry No. 103).

Amended Rule 26(b)(2)(C)(iii) requires the Court to consider whether the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.40

As to the likely benefits of the ESI production, if Plaintiffs were individuals with unproven claims, then the expenditure of the Defendants' estimated millions of dollars for electronic discovery, after the balancing equities, might be unjustified. Yet, with repeated judicial findings of the Defendants' violations of children's rights to medical care under federal law, any cost of ESI discovery is far outweighed by the benefits of the improved health of the children in this state. On this weighing factor, the Congress appropriated in excess of $7 billion dollars to the Defendants to provide these medical services to the children in this action. The proper and effective use of this amount of federal funds is yet another indicator of the likely benefits in this action

The "needs of the case" factor weighs heavily in Plaintiffs' favor. The Defendants and the MCCs possess virtually all of the critical information on whether the Plaintiffs' class members are receiving medical services required by federal law and the Consent Decree. The magnitude of the issues here is reflected in the more than 550,000 members in the Plaintiffs' class. Without this discovery from the Defendants and MCCs, the Court cannot assess whether the Defendants are in compliance with Consent Decree and have taken all reasonable measures to address the Court's prior findings on the deficiencies in the Defendants' system for meeting the requirements of the Consent Decree and federal law.

As to the amount in controversy, since the entry of the Consent Decree, more than $7 billion of federal funds have been distributed to the Defendants and the MCCs to provide the medical services to the Plaintiffs' class. The Consent Decree provides injunctive relief until the Defendants meet the stated percentages of screenings. The fact that the Defendants have never been found to meet those standards in over nine years, leads the Court to conclude that in all likelihood, additional time for compliance is necessary so that the actual amount in controversy could be additional billions of dollars.

As to the parties' resources, the class consists of 550,000 children whose economic resources are non-existent. For the Defendants to argue that Plaintiffs should pay the costs of production is outrageous. Plaintiffs' lead counsel are in a not-for-profit organization that has limited financial resources and relies significantly on the pro bono services of large law firms and pro bono experts to protect the interests and rights of this large class of children. The Defendants are public officials who have received well in excess of a half of a billion dollars in federal funds for the administration of the EPSDT program alone, and additional undisclosed amount of federal funds for the administration of the TennCare program. Hopefully from state funds, the Defendants have retained two private law firms and computer experts. Defendants also have the services of the staffs of the State Attorney General's office, the TennCare program, the Department of Finance and Administration, the Department of Children's Services and the Department of Mental Health. The resources of the parties are grossly disproportionate in the Defendants' favor.

As to the "importance of the issues at stake,"41 the Consent Decree provides injunctive relief to enforce a Congressional mandate finding that the public interest requires children to have early screenings for their medical needs and to provide any medically necessary care, as revealed by those screenings. For these purposes, Congress appropriated and the Secretary distributed more than $7 billion in federal funds to the Defendants to benefit the Plaintiffs' class of children who are located throughout the State. The health of any child, particularly a child in economic and medical need, is immensely important. In addition, the Consent Decree awarded injunctive relief to enforce Congress' mandate, but on two prior occasions, this Court has found that the Defendants have not honored the Court's Orders. Judge Nixon also found that the Defendants have failed to comply with the Court's Order to submit an Initial Action Plan ("IAP") to cure the deficiencies cited by the Court. Judge Nixon stated:

(Docket Entry No. 465, Memorandum at p. 5) (emphasis added).

The combination of the Defendants' violations of this Congressional mandate for children's medical care, the medical needs of the children, the Defendants' receipt of $7 billion dollars of federal funds to meet this mandate and the Defendants' violations of this Court's Orders to enforce that mandate, presents issues of utmost importance.

As to the importance of the ESI discovery in resolving these important issues, the Plaintiffs' discovery requests seek information to assess the Defendants' insistence that they are in compliance with the Consent Decree. As the officials charged with operating and managing this program, the Defendants and the MCCs are the only sources for this information. To assert that they are in compliance and then refuse to permit full discovery to test that assertion is unfair. With the structural deficiencies in the Defendants' management and statistical systems found by Judge Nixon and the absence of a coherent remedial plan or even the Initial Action Plan that Judge Nixon ordered to be filed, the Plaintiffs present a compelling need for this ESI discovery. The importance of the issues at stake are the health and welfare of needy children who thus far, have not been receiving the medical services that federal law requires and that federal funds have been appropriated to provide. The expenditure of these federal funds without delivery of the requisite services to a significant percentage of class members present a serious issue. Neither the members of the class, children nor Plaintiffs' counsel possess anywhere near the resources of the Defendants. At stake are billions of federal funds that are not being expended to comply with federal law.

Thus, the Court concludes that to provide the ESI required by the Court's directives and Orders is not an undue burden42 and to the extent any burden exists, the Plaintiffs have amply demonstrated good cause to order this ESI production.

7. Privilege Issues

The Defendants and MCCs assert several privileges as barring Plaintiffs' ESI discovery. To assert privileges in response to a discovery request, Fed.R.Civ.P. 26(b)(5)(A) requires a privilege log:

(emphasis added).

Courts have held that a party's failure to assert a privilege on a privilege log constitutes a waiver of that privilege. Bowling v. Scott County, Tenn., 70 Fed.R.Evid. Serv. 959, 2006 WL 2336333 at *3 (E.D.Tenn. Aug.10, 2006); Carfagno v. Jackson National Life Ins. Co., 2001 WL 34059032 at *2 (W.D.Mich. Feb. 13, 2001); Butler Mfg. Co. v. Americold Corp., 148 F.R.D. 275, 277 (D.Kan.1993); Hampton v. City of San Diego, 147 F.R.D. 227, 228-29 (S.D.Cal.1993); Gottlieb v. Wiles, 143 F.R.D. 241, 246 n. 9 (D.Colo.1992); Carey-Canada, Inc. v. California Union Ins. Co., 118 F.R.D. 242, 249 (D.D.C.1986).

In their privilege log, the Defendants asserted only the work product and attorney client privileges. (Docket Entry No. 707-2). Although not asserted, the deliberative privilege was recognized by Judge Nixon in an earlier ruling, (Docket Entry No. 401), but in the Defendants' response to Plaintiffs' first motion to compel, the Defendants unequivocally stated that they "waived" their deliberative process privilege in their objections to discovery in Rosen, a related action. (Docket Entry No. 720, Defendants' Memorandum at p. 3)

Under paragraph 105 of the Consent Decree, the Defendants waived any state law privilege because Plaintiffs were granted access to the Defendants' data "subject to any applicable federal law." (Docket Entry No. 12 at ¶ 105). In their response to the Plaintiffs' first motion to compel, the Defendants cited only Tenn. Code Ann. §§ 68-142-101, 68-142-105(3) and 68-142-108(a) involving child fatality review and did not argue for privilege based upon any state law. (Docket Entry No. 720, Defendants' Memorandum at pp. 6). In their response to Plaintiffs' renewed motion to compel, the Defendants now cite Tenn.Code Ann. §§ 63-6-219(b)(1), 37-5-107(b), (d) and 37-1-409(a)(2) as well as 42 U.S.C. § 5106(b)(2)(A). (Docket Entry No. 920 at pp. 27-38).

The Court concludes first that all privileges, other than attorney client and work product privileges, have been waived for defense counsel's failure to assert them in the Defendants' privilege log. Yet, in the interests of judicial economy, the Court addresses the merits of the waived privileges in the event of an appeal.

Before addressing the substantive issues of privilege, the Court first addresses a procedural issue on privilege. The Defendants now argue that any clawback agreement on ESI discovery to avoid a waiver of privilege is available only upon a voluntary agreement of the parties. (Docket Entry No. 907, Defendants' Response at pp. 11-13). "[A] mandatory clawback cannot be justified." Id. at p. 13. Thus, Defendants argue that without their consent, a clawback provision is unavailable to the Court thereby reinforcing the need for the time consuming privilege review, as described by the Defendants. Id.

As to the clawback option for any privileged material in the Defendants' ESI production, the Court notes the following colloquy with Nicole Moss, defense counsel at the November 6, 2006 hearing:

(Docket Entry No. 734, Transcript at p. 80). The Court then entered an Order granting the ESI discovery with a clawback provision for any post-production assertion of privilege. (Docket Entry No. 734, Order at p. 2)

The 2006 ESI amendments to the rules of civil procedure expressly contemplate a clawback protection for ESI discovery to address post-production privilege issues and to avoid any finding of waiver by the producing party in any other litigation:

Fed.R.Civ.P. 26(b)(5)(B).

Defendants quote the Advisory Committee on this rule provision referring to clawback agreements as "voluntary arrangements." (Docket Entry No. 907, Defendants' Response at p. 11). The Advisory Committee Notes to the 2006 Amendments also reflect that Rule 26(b)(5) was intended "to provide a procedure for a party to assert a claim of privilege or trial preparation material protection after information is produced in discovery," and that Rule 26(b)(5)(B) in conjunction with other rules, "allows the parties to ask the court to include in an order any agreements the parties reach regarding issues of privilege or trial-preparation material protection."

A commentator described the types of agreements in an ESI production that may cause a waiver of any privilege in other actions.

Withers at p. 23.

Courts have adopted both types of agreements on privilege issues and have incorporated such provisions in Orders to avoid any finding of future waiver. Hopson v. The Mayor and City Council of Baltimore, 232 F.R.D. 228, 246 (D.Md. 2005) ("claw back" agreement was incorporated into court order to avoid any assertion of waiver of a privilege); Murphy Oil USA, Inc. v. Fluor Daniel, Inc., 2002 WL 246439 at *8 (E.D.La. Feb. 19, 2002) (reciting various options for a "quick peek" agreement).43

Here, the Court first concludes that Moss's statement at the November 6th hearing establishes that the Defendants consented to the clawback provisions in the Court's Order. Second, as stated earlier, the defense counsel's computer should identify any clearly privileged ESI. Third, the Court adopts its earlier finding on the costs of a privilege review and recognizes that a select word search of Defendants' computers is a viable method to ensure that clearly privileged material is not disclosed in the initial ESI production; to avoid initially any waiver of clearly privileged material; and to protect against any inadvertent disclosure. With the clawback provision incorporated into a court order, such protection should insure against any future claim of the Defendants' waiver in any other litigation. The separate protective order prohibits the disclosure or use of material in this action for any other use.

Finally, as to the impact of In re Columbia/HCA Corporation Billing Practices Litigation, 293 F.3d 289 (6th Cir.2002) on any clawback arrangement, the Sixth Circuit made it clear that any waiver of any privilege requires a "voluntary disclosure." Id. at 294. To the extent any privileged material is produced under an Order of this Court in this action, no reasonable person would consider these Defendants to have made a "voluntary disclosure" of any privileged information.

a. Attorney Client Privilege

A party asserting the attorney-client or work product privilege to bar discovery bears the burden of establishing that either or both is applicable. United States v. Dakota, 197 F.3d 821, 825 (6th Cir.1999). In evaluating assertions of attorney-client and work product privileges, as procedural matter, the district court should require an in camera review of the disputed document(s). In re Antitrust Grand Jury, 805 F.2d 155, 169 (6th Cir.1986). ("[W]e hold that the district court erred in not reviewing the documents in Exhibit C in camera in order to determine whether they reflect communications or work product made in furtherance of a contemplation or ongoing Sherman Act violation ..."). The Court instructed defense counsel that for any documents subject to a claim of privilege, those documents should be filed under seal for an in camera inspection. (Docket Entry No. 734, November 6, 2006 Transcript at p. 81). The Defendants' counsel did not do so.

The attorney-client privilege "protects only those disclosures necessary to obtain informed legal advice which might not have been made absent the privilege." Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976) (holding inter alia, that the mere transfer of a document to counsel does not render the document subject to the attorney-client privilege). The privilege can be asserted by a governmental entity. Ross v. City of Memphis, 423 F.3d 596, 601 (6th Cir.2005) (quoting United States v. Collis, 128 F.3d 313, 320 (6th Cir.1997)) "The attorney-client privilege is `narrowly construed' because it reduces the amount of information discoverable during the course of a lawsuit." Id.

Communications, including memoranda or notes on such communications, by corporate employees to corporate counsel and outside counsel are covered by the attorney client and work-product privileges. Upjohn Company v. United States, 449 U.S. 383, 391, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). As the Supreme Court explained, "[t]he client cannot be compelled to answer the question, `What did you say or write to the attorney?' but may not refuse to disclose any relevant fact within his knowledge merely because he incorporated a statement of such fact into his communication to his attorney.... [T]he courts have noted that a party cannot conceal a fact merely by revealing it to his lawyer." Upjohn, 449 U.S. at 396, 101 S.Ct. 677 (citations omitted). The communications at issue in Upjohn were questionnaires that were marked clearly as from the corporate general counsel. Id. at 394-95, 101 S.Ct. 677. The legal implications of the questionnaires were also readily apparent to the corporate employees and officers. Id.

The Sixth Circuit Court described the purposes of the attorney client privilege:

In re Antitrust Grand Jury, 805 F.2d at 162 (citations omitted).

The privilege protects not only the confidentiality of communications by the client to an attorney, but the privilege also includes:

SCM Corp. v. Xerox Corp., 70 F.R.D. 508, 516-17 (D.Conn.1976) (citations omitted).

In ruling on issues of privilege, "[t]he mere fact that a person is an attorney does not render privileged everything he does for and with a client...." United States v. Bartone, 400 F.2d 459, 461 (6th Cir.1968). The Second Circuit stated, "it is important to bear in mind that the attorney client privilege protects communications rather than information; the privilege does not impede disclosure of information except to the extent that the disclosure would reveal confidential communications." In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1037 (2nd Cir.1984).

Humphreys, Hutcheson & Moseley v. Donovan, 568 F.Supp. 161, 175 (M.D.Tenn. 1983), aff'd, 755 F.2d 1211 (6th Cir.1985), is instructive on the determination of whether the attorney-client privilege applies. In Humphreys, Judge Nixon relied on the doctrine formulated in United States v. United Shoe Machinery Corporation, 89 F.Supp. 357, 358-59 (D.Mass.1950) and held that the attorney client privilege applies only if:

Humphreys, 568 F.Supp. at 175. See also 4 Moore's § 26.60[2]: "communications from a client to his attorney are privileged if legally related and having an expectation of confidentiality so long as the privilege has neither been waived nor lost."

On appeal in Humphreys, the Sixth Circuit explained that the attorney client privilege "does not envelope everything arising from the existence of an attorney-client relationship ... [t]he attorney-client privilege is an exception carved from the rule requiring full disclosure, and as an exception, should not be extended to accomplish more than its purpose." 755 F.2d at 1219. (citations omitted). Accord United States v. Goldfarb, 328 F.2d 280, 281-82 (6th Cir. 1964) (Attorney-client relationship does not create an automatic "cloak of protection... draped around all occurrences and conversations which have any bearing, direct or indirect, upon the relationship of the attorney with his client.").

Where the facts suggest combined business and legal advice in a document, courts can inquire about which purpose predominates. "It was also proper ... to inquire into the nature of the `legal services' rendered by [the Defendant]. Attorneys frequently give to their clients business or other advice that, at least insofar as it can be separated from their professional legal services, gives rise to no privilege whatever." Colton v. United States, 306 F.2d 633, 638 (2d Cir.1962); See also United States v. International Bus. Mach. Corp., 66 F.R.D. 206, 212-13 (S.D.N.Y.1974). After such inquiries, if the lawyer acted as a business advisor or agent, then the information is not privileged. Asset Value Fund L.P. v. Care Group, No. 97 Civ. 1487, 1997 WL 706320 at *4 (S.D.N.Y. Nov. 12, 1997); Park Ave. Bank, N.A. v. Bankasi, No. 93 Civ. 1483, 1994 WL 722690 at *1 (S.D.N.Y. Dec. 30, 1994).

In the context of business dealings, where a lawyer acts as a business advisor, several courts found that there is not any special relationship to give rise to a privilege to protect counsel's advice from disclosure. In re Grand Jury Subpoena, Duces Tecum Dated September 15, 1983, 731 F.2d 1032, 1037 (2nd Cir.1984); Standard Chartered Bank PLC v. Ayala Intern. Holdings, Inc., Ill F.R.D. 76, 80 (S.D.N.Y.1986); Coleman v. American Broadcasting Co., Inc., 106 F.R.D. 201, 205-06 (D.D.C.1985). As one court explained,

First Wisconsin Mortg. v. First Wisconsin Corp., 86 F.R.D. 160, 174 (E.D.Wis.1980) (emphasis in the original and citations omitted). Accord SCM Corp., 70 F.R.D. at 517 ("To protect the business components in the decisional process would be a distortion of the privilege. The attorney-client privilege was not intended and is not needed to encourage businessmen to discuss business reasons for a particular course of action.").

Other courts have held that the attorney-client privilege does not extend to every memorandum or draft document exchanged between corporate employees and corporate counsel. Simon v. G.D. Searle & Co., 816 F.2d 397 (8th Cir.1987). In Searle, the Eighth Circuit held that "Risk management" documents with statistical analysis prepared by non-lawyer corporate officials on the costs of product-liability litigation, not to be privileged.

816 F.2d at 403-404. (citations omitted). See also Christman v. Brauvin Realty Advisors, Inc., 185 F.R.D. 251, 256 (N.D.Ill. 1999) (Drafts of proxy statements and comments thereto are not legal advice and are not privileged); United States Postal Serv. v. Phelps Dodge Refining Corp., 852 F.Supp. 156, 163-64 (E.D.N.Y.1994) (copies of drafts edited by attorneys, including counsel's handwritten notes are not privilege because "[a] corporation cannot be permitted to insulate its files from discovery simply by sending a "cc" to in-house counsel."); Fine v. Facet Aerospace Prods. Co., 133 F.R.D. 439, 444 (S.D.N.Y.1990) (lawyer's business advice was not protected from disclosure).

Another district court ruled that the privilege does not extend to communications about "business or technical data" or "technical matters."

Burlington Industries v. Exxon Corporation, 65 F.R.D. 26, 39 (D.Md.1974). (citations omitted).

The Defendants rely upon Liberty Environmental Systems, Inc. v. County of Westchester, 1997 WL 471053 (S.D.N.Y. Aug. 18, 1997) that involved a consent decree where a magistrate judge concluded that "withheld documents ... principally or exclusively to assist in two related litigations" were privileged. Id. at *7. The Court notes that in Liberty Environmental, the documents at issue were submitted for the magistrate judge's in camera inspection, id. at *1, and counsel submitted their affidavits to explain the specific circumstances of the privileged communications. Id. at *2.

Despite the Court's instructions to submit any privileged documents at issue for an in camera inspection and the Court's warnings about its prior reliance upon Searle, the Defendants' counsel ignored both. Moreover, unlike Liberty Environmental that the Defendants rely upon, the drafts of the documents at issue here were not filed with the Court nor were affidavits of counsel filed (under seal, if necessary) to provide the Court with the factual context for these documents. The Court's concern is that defense counsel are actually writing the policies and plans about the Defendants', EPSDT system and the facts for those policies. The semi-annual reports, particularly, are highly technical documents. See e.g., Docket Entry No. 1012. With conclusory descriptions of the purportedly privileged documents and without in camera inspection or counsel's affidavits to provide specific factual context, the Court concludes that the Defendants have not carried their burden that the documents listed at pp. 79-85, qualify for the protection of the attorney-client privilege.

b. The Work Product Privilege

This privilege protects the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party that is usually reflected in a document sought for production. Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947). Under Hickman, this protection does not intend to bar discovery of facts, but rather "the work product of the lawyer" where disclosure of the documents reveals counsel's "mental impressions, personal beliefs," and reflections of what counsel believes to be important, such as in witness statements and documents acquired by counsel and notes on witness interviews conducted by counsel. 329 U.S. at 510-11, 67 S.Ct. 385.

In Toledo Edison v. G.A. Technologies, Inc., 847 F.2d 335 (6th Cir.1988), the Sixth Circuit set forth the procedural framework for assessing the assertion of this privilege:

Id. at 339-40.

Applying these standards, the Court concludes that the Plaintiffs have demonstrated relevance because these drafts involve documents required by the Consent Decree. Given that the filings were required by the Consent Decree, the Court concludes that the Defendants have established the second factor. As to the third factor, because the Court has found that the Defendants have not met their burden of proof on the attorney client privilege for most of these documents, the Court concludes that alternate avenues exist to obtain the substantial equivalent of the information in these related documents. Yet again, the Defendants did not provide any documents for which the work product privilege is asserted, as directed by the Court and as done in Liberty Environmental that is relied upon by the Defendants. But for Toledo Edison, the Court would conclude that the Defendants have not met their burden to establish the work product privilege for these documents.

c. The Joint Defense Privilege

During the June 2007 hearings, the Defendants' counsel and some MCCs' counsel objected to questions about their communications on the ESI discovery matters based upon the joint defense privilege. The joint defense privilege is an extension of the attorney-client privilege and protects as confidential communications among defendants and their counsel, where defendants are "part of an on-going and joint effort to set up a common defense strategy." Haines v. Liggett Group, Inc., 975 F.2d 81, 94 (3d Cir.1992). Because the privilege may apply outside the context of actual litigation, the "joint defense" privilege is sometimes referred to, in such instances, as the "common interest" privilege. In re Grand Jury Subpoena, 274 F.3d 563, 572 (1st Cir.2001) (citing United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir.1989)).

The burden to establish the privilege rests with the Defendants. United States v. Moss, 9 F.3d 543, 550 (6th Cir.1993). The Defendants must prove an agreement among its members to share information arising out of a common legal interest in litigation. Id. An oral joint defense agreement may be valid, In re Grand Jury Subpoena, A. Nameless Lawyer, 274 F.3d 563, 569-70 (1st Cir.2001), and person need not be a named party to join the agreement. See Russell v. General Electric. 149 F.R.D. 578 (N.D.Ill.1993); U.S. v. LeCroy, 348 F.Supp.2d 375, 381 (E.D.Pa.2004).

This privilege extends only to the exchanges of information among persons with the shared interest, In re Santa Fe Intern. Corp., 272 F.3d 705, 712 (5th Cir.2001), In re Grand Jury Subpoenas, 902 F.2d 244, 249 (4th Cir.1990); United States v. Duke Energy Corp., 214 F.R.D. 383, 388 (M.D.N.C.2003), but usually applies to protect documents. See Allendale Mut. Ins. Co. v. Bull Data Systems, Inc., 152 F.R.D. 132, 140 (N.D.Ill.1993) citing United States v. McPartlin, 595 F.2d 1321, 1336 (7th Cir.1979). Any participant in the agreement, however, remains free to disclose his own communications. See In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 922 (8th Cir.1997). The joint-defense privilege shields some communications between co-defendants made outside of their counsel's presence, but only if the communications were pursuant to specific instructions of their counsel. United States v. Mikhel, 199 Fed.Appx. 627, 628 (9th Cir.2006).

For this privilege, parties must have a common legal interest in the subject matter of a communication, Allendale Mut. Ins., 152 F.R.D. at 140, and the communication must be to further the joint agreement. United States v. Evans, 113 F.3d 1457, 1467 (7th Cir.1997). The common interest must be identical and not solely commercial. Allendale Mut. Ins., 152 F.R.D. at 140. See also In re Sulfuric Acid Antitrust Litig., 235 F.R.D. 407, 416-17 (N.D.Ill.2006).

The Court will not add unnecessarily to this already lengthy memorandum and adopts and incorporates its rulings at the June 2007 hearing that the Defendants' and MCCs filings of their communications with the Court on substantive matters, operate to waive this privilege as to ESI discovery issues.

d. Deliberative Process Privilege

Defendants next assert the deliberative-process privilege to prevent disclosure of their planning documents. The Sixth Circuit has recognized this privilege to bar disclosure of executive communications to encourage frank deliberations on governmental policy and to protect federal officials from ridicule. Schell v. United States Dept. of HHS, 843 F.2d 933, 939 (6th Cir.1988). The Defendants do not cite any legal authorities applying this federal law privilege to a state official. In any event, despite their recent protestations in this action, the Defendants concede unequivocally that they waived this privilege in Rosen, a related action. (Docket Entry No. 720, Defendants' Response to Plaintiffs' Motion to Compel at p. 3) (citing the affidavit of counsel). That waiver applies in this related action. Thus, any extended analysis of this privilege is unnecessary.

e. State Statutory Privileges

The Defendants next assert a privilege for information sought from the Department of Mental Health and Developmental Disabilities (DMHDD), the Department of Children's Services (DCS) and the TNKids program (Docket Entry No. 907, Defendants' Response at pp. 31-39). The Defendants contend that these state statutes (that were not asserted in the Defendants' initial response to this motion to compel nor in their privilege log) create substantial and important state interests against disclosure of this information and therefore, such information should qualify as a cognizable privilege under Rule 501 and Fed. R. Civ. P. 26(b) to bar discovery of this information.

The DMHDD has an Incident Reporting System that the Defendants contend falls under Tenn.Code Ann. § 63-6-219(b) that prohibits the disclosure of information contained in the DMHDD Incident Reporting System. This statute was enacted to "encourage committees made up of Tennessee's licensed physicians to candidly, conscientiously, and objectively evaluate and review their peers' professional conduct, competence, and ability to practice." Id. at (b)(1); see Docket Entry No. 907, Defendants' Response atp. 32. The Defendants assert that this Incident Reporting System is available to quality performance improvement committees and related safety committees of the State's five RMHIs. These committees perform the peer-review functions of monitoring and evaluating the quality of patient care and improving safety by reducing the risk of system or process failures. These Committees report to the quality committee of the DMHDD and are designed to serve as "medical review committee[s]" or "peer review committee[s]," as defined in the Peer Review Law.44 For such records, Tennessee law deems "confidentiality is essential." Tenn. Code Ann. § 63-6-219(b)(1). Defendants also cite Tenn.Code Ann. § 63-6-219(e) that bars disclosure of peer-review reports:

Tenn.Code Ann. § 63-6-219(e) (emphasis added). The Tennessee Supreme Court deemed the broad language of the Peer Review Law to encompass "any and all matters related to the peer review process." Stratienko v. Chattanooga-Hamilton County Hosp. Auth., 226 S.W.3d 280, 285-86 (Tenn.2007).

As to DCS's reports, the Defendants cite Tenn.Code Ann. §§ 37-1-409(a)(2) and 37-1-615(b) that bar disclosure of the identity of person(s) who reports child abuse and related disclosures. (Docket Entry No. 907 at p. 36): DCS issued administrative rules under Tenn.Code Ann. §§ 37-1-409(e)(1) and 37-1-612(f)(1). See Rules of the Tennessee Department of Children's Services, Child Protective Services, Chapter 0250-7-9, a violation of section 37-1-409 is a Class B misdemeanor. Tenn Code Ann. § 37-1-409(g). A violation of the confidentiality requirements of section 37-1-612 is a Class A misdemeanor. Tenn. Code Ann. 5 § 37-1-615(b). Defendants note that federal funds for child abuse prevention and treatment are contingent upon complying with the confidentiality requirements of the Child Abuse Prevention and Treatment Act ("CAPTA"), 42 U.S.C. § 5106a(b)(2)(A). (Docket Entry No. 907 at p. 36). Due to the confidential nature of Child Protective Services information, case recordings are inaccessible to DCS employees, except those employees granted security clearance.

From June 1, 2004 through April 30, 2007, there were 29,843 children in DCS custody; 1,110 of those could reasonably be excluded as non John B. class members because they were placed in detention or a Youth Development Center (YDC) throughout DCS custody. From May 1, 2006 through April 30, 2007, there were 16,026 children entering DCS custody with 668 placed in a YDC or detention and the latter are not John B. class members. Such placement renders them ineligible for TennCare.

Defendants contend that information about these non-class members can include medical, mental health, and substance abuse information that is protected from disclosure by state and federal privacy laws. (Docket Entry No. 907 at p. 38) (citing 45 C.F.R. Subtitle A, Subchapter C, Part 164, Subpart E; 42 C.F.R. Chapter I, Subchapter A, Part 2; Title 33 of Tennessee Code). Signed authorizations for release of information, including a HIPAA release, would be required from each individual non-class member. DCS is expressly required by statute to follow state and federal confidentiality laws. Tenn.Code Ann. § 37-5-107(b), (d).

The third database is the "TNKids" database within DCS. The TNKids database was originally developed for DCS as its State Automated Child Welfare Information System (SAC WIS). This database includes case management information about children in DCS custody, including both child-welfare and juvenile justice cases, as well as children at risk in DCS custody and adopted through DCS. Case recordings can refer to court proceedings involving neglected, unruly, or delinquent children and termination of parental rights, that is confidential under Tenn. Code Ann. §§ 37-5-107, 37-1-409, 37-1-612, 37-2-408, 36-1-125, 36-1-126, 36-1-138 and the Adoption Assistance and Child Welfare Act (AACWA), codified at 42 U.S.C. § 671(a)(8). As stated earlier, the State's federal funding is contingent upon its compliance with the confidentiality requirements of AACWA.

Dr. Ray, Plaintiffs' statistical analyst, requested information from these databases, including case management records for health services for the children. The "case management" records are narrative recordings and written reports with notes of child welfare and juvenile justice case managers. These narratives are not indexed by content and are akin to a journal entry about a child in DCS custody or "biography" of the child in DCS's custody. Dr. Ray utilizes this data to cross-reference with statistical data and thereby validate the statistical studies.

For the Defendants' assertion of state law privileges, Rule 501 of the Federal Rules of Evidence provides as follows:

Fed.R.Civ.P. 26(b)(1) also provides that "privileged" information is not discoverable absent order of the court.

Federal courts are not required to recognize state law privileges when deciding cases arising under federal law, but the presence of a state law privilege must be considered, particularly where a significant number of states recognize such a privilege. Jaffee v. Redmond, 518 U.S. 1, 12-13, 116 S.Ct. 1923, 135 L.Ed.2d 337 (1996) (state-created psychologist-patient privilege recognized in 50 states). In Freed v. Grand Court Lifestyles, Inc., 100 F.Supp.2d 610 (1998), the district court summarized the governing principles on any privilege based upon state law:

Id. at 618.

The Defendants rely upon Farley v. Farley, 952 F.Supp. 1232 (M.D.Tenn.1997), wherein the Honorable Thomas A. Wiseman, Jr. deemed Tenn.Code Ann §§ 37-1-409 and 37-1-612 to be a cognizable privilege under Rule 501:

952 F.Supp. at 1238-39. Notwithstanding this conclusion, Judge Wiseman ordered production of the reports with redactions: "The Court finds that redaction of identifying information is a proper and sufficient means of furthering the public policy of Tennessee by protecting the anonymity of those who report child abuse." Id. at 1240.

As pertinent here, Judge Wiseman explained that his finding of privilege was not intended to shield state regulators who are responsible for children's welfare and may be liable to them.

Id. at 1238, 1239, 1240 (emphasis added). Accord Puricelli v. Houston, 2000 WL 760522, at *14 (E.D.Pa. Jun. 12, 2000) (granting Plaintiffs' access to redacted versions of child abuse investigations contrary to similar Pennsylvania statute). Farley clearly does not support the Defendants' contention here, as the Defendants' liability to the class is plainly at issue here.

In Seales v. Macomb County, 226 F.R.D. 572 (E.D.Mich.2005), the District Court rejected a similar Michigan law on juvenile records as a cognizable federal privilege.

Id. at 576, 577.

For their assertions for an absolute privilege for the peer review information, the Defendants rely upon decisions where the parties who sought the information about the peer review process intended to use the identity of the person who provided the information to prove their claims. Doe v. UNUM Life Ins. Co. of Am., 891 F.Supp. 607 (N.D.Ga.1995) (insurance company sought information about doctor's drug problem to deny his coverage claim for benefits) and Holland v. Muscatine Gen. Hosp., 971 F.Supp. 385 (S.D.Iowa 1997) (plaintiff sought peer review records to prove her hostile work environment claim).

The Court adopts the rationale of Farley and the other similar decisions to conclude that in this action, particularly with the Court's prior findings of the Defendants' repeated violations of federal law, these Defendants cannot rely upon these state statutes as bars to discovery of this ESI data from DMHDD or the DCS's incident reporting data or the TNKids database. All of this data contains highly relevant information on the Defendants' violation of federal law and Plaintiffs' federal constitutional rights. An appropriate protective order for discovery and trial can avoid disclosures of the identities of the children, doctors and other protected persons.

As to the state criminal sanctions for disclosure of certain state data, the fact that another sovereign's laws have criminal sanctions to block disclosure of certain information does not preclude a federal court from ordering disclosure of that information under federal discovery rules. United States v. First National Bank of Chicago, 699 F.2d 341, 345 (7th Cir.1983) ("The fact that foreign law may subject a person to criminal sanctions in the foreign country if he produces certain information does not automatically bar a domestic court from compelling production."); In re Westinghouse Electric Corp. Uranium Contracts Litigation, 563 F.2d 992, 997 (10th Cir.1977) ("In our view Societe holds that, though a local court has the power to order a party to produce foreign documents despite the fact that such production may subject the party to criminal sanctions in the foreign country ...") (interpreting Societe Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958)). These courts apply a balancing approach.

This Courts applies these authorities to the State's laws, as an independent sovereign. Here, the Defendants' repeated violations of federal law, as found by Judge Nixon, present compelling circumstances to justify disclosure. The Defendants have already produced the information covered by some of these laws to others, including filing of some of this information in another action in this district without any threat of state prosecution. Any disclosure pursuant to a Court order should render unrealistic any state prosecution.

As to the HIPPA statutes and regulations, it is noteworthy that on April 24, 2001, Judge Knowles denied the Defendants' motion for a protective order, citing HIPPA and its regulations and expressly ruled that "to the extent that [the Defendants' motion] is based upon [42 U.S.C.] § 290dd-2, [it] is hereby DENIED" because "[t]he information sought on behalf of the class members cannot be considered `confidential' with regard to the class members themselves (or their counsel)." (Docket Entry No. 103, Order at pp. 5-6). The Court adopts that ruling as the law of the case and applies that ruling to 42 U.S.C. § 671(a)(8). Moreover, 42 U.S.C. § 5106a(b)(2)(A)(V) permits disclosures of children's records to a "court, upon a finding that information in the record is necessary for the determination of an issue before the court." Federal law does not bar the ESI production ordered by the Court. To the extent some children are not class members, those individuals are not numerous and those childrens' and others' names shall be redacted by the Defendants as in Farley.

8. Defendants' Failures to Answer Discovery Requests and to Comply with the January 14th Order

The next controversies involve: (1) the Defendants' failures to obtain all designated custodians' answers to the Plaintiffs' requests for admissions ("RFA"), as authorized by the Court on the issue of destruction of evidence, including the Defendants' refusal to have the Governor personally sign his response to his RFA; (2) the Defendants' misleading answer to Plaintiffs' Interrogatory 22; and (3) the Defendants' failure to file their key custodians' certifications required by the January 14th Order to certify that ESI had not been removed from the key custodians' computers. Issues 1 and 3 are related and will be addressed together.

At the December 20, 2006 discovery hearing, Plaintiffs' counsel raised the issue about the loss or destruction of relevant evidence and the inadequacies in the Defendants' responses to the discovery requests on this issue. (Docket Entry No. 786, Transcript at pp. 31-36). After reviewing the requests, the Court directed Plaintiffs' counsel to simplify the wording of the requests and send the revised requests to all of the Defendants' key custodians as designated by the Defendants. Id. at pp. 38-39. The Court denied the Plaintiffs' motion to compel on that point, but without prejudice to renew.

Plaintiffs' revised RFAs asked each custodian whether the search of his or her files had included all private email accounts and computers, including removable drives and storage, where the custodian had stored potentially responsive ESI. The RFAs sought assurances of the adequacy and completeness of the State's document preservation and production. In particular, RFA No. 1 reads as follows: "Other than e-mail that was deleted or destroyed pursuant to the State's routine document retention policy, are you aware of any paper documents or electronic records, stored in any location, that were requested by the plaintiffs, and that were destroyed, deleted, thrown away, or lost for any reason? (This includes e-mails that should have been archived but weren't, or that were archived and then deleted)." (Docket Entry No. 799-2 at p. 1). RFA No. 2 asked the custodians:

Id. (emphasis added). If the respondent answered "yes" to these RFAs, Plaintiffs' Interrogatory Nos. 1 and 2 were propounded for follow-up discovery.

Aside from Plaintiffs' RFAs, on January 14, 2007, this Court entered an Order based upon Plaintiffs' computer expert's declaration on the need to be assured that ESI had not been removed from the computers subject to the ESI search ordered by the Court. To do so, Plaintiffs' expert recommended certifications of nonremoval by each custodian. Given that removal of ESI could clearly compromise the ESI production ordered by the Court, the January 14th Order directed that "[t]he defendants shall file certifications of the key custodians as to whether any material has been removed." (Docket Entry No. 789, Order at p. 3) (emphasis added). The Court's Order cited the pertinent paragraph from the Plaintiffs' expert's declaration on this subject. Id.

The Defendants did not seek relief from the January 14th Order. Defendants insist that their custodians answers to Plaintiffs' RFAs are the same as any "certifications" required by the January 14th Order. See, e.g., (Docket Entry No. 828, Exhibit 5, February 27, 2007 Letter of Nicole Jo Moss at p. 2) (noting that "these custodians have already been asked to sign and did in fact submit RFA responses which covered this issue") (emphasis added). The January 14th Order expressly referenced Thomas Tigh's declaration (Docket Entry No. 785-2), about the need for assurances that electronic documents had not been removed from the key custodians' computers. Tigh's specific suggestion was: "The question should ask the same key custodians if they have moved material from their local machine or the network to any nonattached media, such as CDs or USB devices ... The answer to this question, disclosed with the answers to those in the proposed Order, will provide the information required to determine if material was moved from the network ...". Id.

Clearly, the January 14th Order's concern was whether ESI material was removed from Defendants' network's computers, such as a compact disks or DVDs, not to the destruction or loss of ESI. Plaintiffs' RFAs asked each custodian whether, he or she had "search[ed] all paper and electronic records in your possession or control (including both state and private email accounts and computers, including removable drives or storage) that potentially contained requested information or documents." See Docket Entry No. 799-2 (Request for Admission No. 2) (emphasis added). A gap remains between the RFAs and the January 14th Order because a search by a custodian of a removable drive does not answer whether any ESI was actually removed. Accordingly, the Defendants shall be compelled to have their 160 designated custodians to file certifications that ESI has not been removed from their computers by them or anyone else.

Plaintiffs also note that Defense counsel could not attest to the accuracy or completeness of all answers to their RFAs. (Docket Entry No. 799). At a February 13th meeting of the parties' counsel, Defense counsel stated that the Defendants' custodians' answers had been filed without personally asking the custodians the questions. (Docket Entry No. 828, Exhibit 4 thereto, Bonnyman Letter Dated 02/23/07 at pp. 3-4 and Exhibit 5 thereto, Moss Letter Dated 02/27/07 at p. 2). The Defendants concede that they did not ask the key custodians who are former employees because defense counsel "has no authority or control over them to require them to submit a response". (Docket Entry No. 907 at 61-62).

The Court agrees with the Plaintiffs that good faith required the Defendants at least to ask those former key individuals, as directed by the Court. The question of authority or control would only arise if the former employees refused to answer. Courts have held that former employees and agents of a party remain subject to discovery. See e.g., Alcan Intern. Ltd. v. S.A. Day Mfg. Co., Inc., 176 F.R.D. 75, 79 (W.D.N.Y.1996) (retired employee); Boston Diagnostics Dev. Corp. Inc. v. Kollsman Mfg. Co. Div. of Sequa Corp., 123 F.R.D. 415, 416 (D.Mass.1989) (former agent). Absent a showing that a former employee refused to answer these RFAs, the Defendants shall request their answers and undertake their best efforts to secure the former custodians personal records or notify Plaintiffs' counsel with the former employees' addresses and telephone numbers. The latter information will be subject to the protective order.

Next, the Defendants identified the Governor as a "key custodian" and Plaintiffs assert that the Governor has had a crucial role in the formulation and implementation of policies on compliance with the Consent Decree. Citing the Governor's counsel's affidavit, the Defendants responded that Plaintiffs' insistence upon the Governor's personal signature to the RFAs "groundlessly impugns the integrity and credibility of the State's and the Governor's legal counsel". (Docket Entry No. 907 at p. 62). In an October 27, 2006 declaration, Nicole Jo Moss, a defense counsel asserted that she personally spoke with the Governor and other senior officials

(Docket Entry No. 717 at ¶ 5) (emphasis added). Plaintiffs cite the bold portion of Moss's declaration to contend that upon closer examination, Moss's declaration never states that these officials actually searched all of their relevant files for documents responsive to discovery requests, only that they "do not recall" having "received" any responsive information. Plaintiffs deem the omission significant on whether these officials sent any documents related specifically to John B. or EPSDT. The ambiguity gives rise to Plaintiffs' concerns that are legitimate.

The discovery standard is not whether a person has been actively involved, but rather whether the person has knowledge of discoverable matters or at this point, whether the person's knowledge could lead to the discovery of relevant information. The Defendants do not cite any legal authority to exclude the Governor from discovery and such exclusion runs counter to the Supreme Court's principle that "there is a general duty to give what testimony one is capable of giving, and that any exemptions which may exist are distinctly exceptional, being so many derogations from a positive general rule." Jaffee, 518 U.S. at 9, 116 S.Ct. 1923. The Defendants' counsel listed the Governor as a key custodian and have disclosed his statements albeit through his counsel. In any event, as a matter of comity, the Court will give the Defendants the option of the Governor's personal signature or an inspection of the Governor's computer by the Plaintiffs' computer expert or his designated expert, to assess if any removal of ESI has occurred.

The next controversy is Plaintiffs' contention that the Defendants deliberately provided a misleading response to Interrogatory No. 22. "INTERROGATORY NO. 22 Wendy this is a tricky one since the MCC's would have files, but we have answered that this is unanswerable." (Plaintiffs' Exhibit 12d at p. 16). The disputed portion of Defendants' actual response to Interrogatory No. 22 is as follows: "because the kinds of services identified are services for which FFP is not available and/or are never medically necessary for children, obtaining claims information regarding possible inappropriate payments by an MCC for these services is impossible." Id. at 108-09.

Neither "Wendy" nor the person communicating with her testified about this statement to provide some context to understand its meaning. The Sixth Circuit has stated: "`[E]vasive or incomplete answers to proper interrogatories impede discovery.' Badalamenti v. Dunham's Inc., 118 F.R.D. 437, 439 (E.D.Mich.1987) (citing Bell v. Automobile Club of Michigan, 80 F.R.D. 228, 232 (E.D.Mich.1978) (misleading interrogatory answers tantamount to failure to answer interrogatories))." See also Jackson v. Nissan Motor Corp. in USA, 888 F.2d 1391, 1989 WL 128639, No. 88-6132 at *2 (6th Cir. Oct. 30, 1989). The Defendants did call Tina Brill, an MCC representative who testified that it might have been possible to run the searches referenced by Plaintiffs' interrogatory by stating that "it depends if they came in as a claim and how they were coded and so forth. We certainly have all of our claims data. So to the extent they are specific enough to be able to responsively show that, then, yes." (Docket Entry No. 988, June 25, 2007 Transcript at p. 31). In response to Plaintiffs' counsel's question, Brill also testified "[i]f we had anything responsive, we were told to provide it." Id. at 33. The Court found Brill difficult to understand and the Defendants' failure to call "Wendy" leads the Court to consider this response incomplete.

At the end of the expert's discussions at the April 11, 2007 conference, the Court requested the Defendants' expert and the Plaintiffs' expert to summarize any agreements that had been reached (Docket Entry No. 872, Transcript at pp. 211-228). After those summaries, the Court instructed Antony, the Defendants' computer expert, to prepare a written summary of the experts' agreement and to distribute that summary to all participants for comment and then file the summary agreement with the Court. This filing was to reflect a "summary" of the agreements at the April 11th conference. Antony, however, distributed the transcript of the conference to experts who attended the conference.

The Defendants' April 26, 2007 Notice of Filing (Docket Entry No. 875) announced meeting dates, but was not the written agreement that the Court requested at the end of the April 11th conference. When the Court entered an Order requiring the agreement to be filed, the Defendants disputed the existence of any such Court directive. After another Order, citing the pages of the transcript of the April 11th conference, Docket Entry No. 982, April 11, 2007 Transcript at p. 228, lines 10-17, the Defendants then responded that their prior Notice was that agreement. The notice, however, reports on the follow-up meeting of the parties' experts and the MCCs' technical and computer experts. (Docket Entry No. 875 at pp. 2, 3-4). Antony testified that he thought the information provided in the April 26, 2007 Notice of Filing satisfied the Court's instructions.

The Court concludes that the April 26th Notice does not comply with the Court's directive at the conclusion of the April 11th conference. The significant omission are the MCCs' implementation of a litigation hold and the MCCs' agreement on the request of Mr. Elkins of Memphis Managed Care that the list of search terms and key custodians become finalized after the Plaintiffs made revisions and suggestions. The Defendants' Notice left the MCCs without knowing the `final' list to be used. The effect of the Notice is to ignore or set aside significant parts of the experts' agreements at the April 11th conference, and those omissions were by defense counsel, who prepared the Notice, not Antony.

III. REMEDIES

Plaintiffs' renewed motion to compel was filed under Rule 37(a). (Docket Entry No. 826, Renewed Motion to Compel at p. 1). Fed.R.Civ.P. 37(a)(4) provides, in pertinent part:

The Court has granted the Plaintiffs' motion with some modifications for some MCCs, but without prejudice to renew their original ESI requests as to some MCCs.

Thus, the Court concludes that Plaintiffs have prevailed on their renewed motion to compel and consideration of an award to Plaintiffs for their attorney fees and costs on this motion, as well as the production costs and attorney fees of the MCCs, is appropriate. The Defendants are given eleven (11) days from the date of entry of the Order to file their position on whether the Court should award Plaintiffs their attorney fees and costs for their work on this motion as well as the production costs and attorney fees of the MCCs. These costs would be imposed for the Defendants' breaches of their duty to preserve responsive information of its agencies, officers, employees and its contractors with responsibilities under the Consent Decree in this action.

The Defendants insist that any remedies should not include sanctions because Plaintiffs' renewed motion to compel was filed under Rule 37(a). Defendants assert that without notice and for the "first time" during closing argument at the June 2007 hearing, Plaintiffs' counsel engaged in a "classic bait and switch" by asking for sanctions for the Defendants' spoliation of responsive information. (Docket Entry No. 997, Defendants' Supplemental Memorandum at pp. 1-2). Actually, in their response to Plaintiffs' renewed motion to compel prior to the June 2007 hearings, Defendants contended that: "In short, Plaintiffs urge that the Defendants be punished now for the alleged spoliation, by adverse rulings on five discovery issues, while postponing Plaintiffs' proof of the alleged spoliation until later." (Docket Entry No. 907-1 at pp. 3-4) (emphasis in the original). By their own brief, the Defendants were well aware of this contention prior to the June 2007 hearing and now complain when Plaintiffs met their evidentiary challenge.

The Court notes that the Defendants again ask the Court to sanction Plaintiffs' counsel, upon its own motion, under Rule 11 for the Plaintiffs' counsel's assertions about the Defendants' response to Interrogatory 22 and Plaintiffs' counsel's assertions about spoliation of evidence. From the Court's perspective, Plaintiffs' counsel's assertions and argument are well within the proof and the realm of advocacy. With the Defendants' raising this issue, if the Court were to sanction upon its own motion, the Court would consider sanctions upon defense counsel, who are responsible for some questionable assertions and argument. As noted earlier, the Court's authority to sanction is not limited to Rule 37(b)(2), supra at p. 862, n. 31. Aside from the Defendants' failure to preserve evidence, the Court will discuss certain matters at a conference with lead counsel for the parties and defense firms and the Attorney General of Tennessee.

The Court has shared Judge Nixon's goal of attempting to focus this controversy to ensure that the class gets the benefits owed to them under the Consent Decree that the Defendants agreed to provide and that federal law requires. With these most recent discovery disputes, the Court has come to share Judge Nixon's view of the lead defense counsel, Cooper and Kirk, and their litigation practices on an earlier discovery motion:

(Docket Entry No. 584, Memorandum and Order at p. 4). The Defendants' responses to Plaintiffs' motions to compel raise the same concerns with this member of the Court.

In any event, the Court reserves the exercise of its authority to sanction until after the actual ESI production and complete responses to the January 14th Order as well as a conference with counsel for the parties.

For the above stated reasons, the Plaintiffs' renewed motion to compel should be granted.

An appropriate Order is entered herewith.

ENTERED this the_____ day of October, 2007.