## Facts

- Hagemeyer sued Gateway and served document requests seeking, among other items, emails, financial records, and computer backup tapes.
- Gateway produced over 10,000 pages and objected to many requests as overbroad or burdensome, maintaining production was made as records were kept in the ordinary course of business.
- Gateway entered bankruptcy; the civil case was stayed while a bankruptcy trustee took control of Gateway’s records.
- During the stay, the trustee allowed Hagemeyer broad access to Gateway’s stored records in two Arizona storage facilities.
- After the case resumed, Hagemeyer moved to compel (1) more organized document production separating responsive from nonresponsive materials and (2) restoration and searching of email backup tapes for specified terms.
- Gateway argued that restoring and searching backup tapes would be expensive and labor-intensive and disputed who should pay if the work were ordered.

## Issues

1. Under Rule 34, must a producing party segregate and relabel documents to match request categories, or may it produce documents as kept in the usual course of business absent evidence of concealment?
2. Under Rule 26(b)(2) proportionality principles, should the court compel restoration and searching of email backup tapes, and should costs be shifted (in whole or part) to the requesting party?

## Decision

- The motion to compel was granted in part and denied in part.
- The court denied the request to require Gateway to reorganize, relabel, or segregate documents beyond producing them as kept in the ordinary course of business.
- The court ordered a sampling approach for the backup-tape request: Gateway was required to restore and search five backup tapes selected by Hagemeyer.
- The court deferred any final determination on broader restoration/search obligations and any cost allocation until results from the sample were available and further submissions were made.

## Legal Principles

- Under Rule 34, a producing party may satisfy its production duty by producing documents as they are kept in the usual course of business; it is not required to reorganize or label documents to correspond to request categories absent a showing of bad faith, concealment, or a production designed to frustrate review.
- Rule 26(b)(2) requires courts to limit discovery when burden or expense outweighs likely benefit; proportionality is central in disputes involving costly electronic discovery.
- For inaccessible email stored on backup tapes, sampling can provide an evidentiary basis to assess relevance yield, burden, and proportionality before ordering broader restoration and searching.
- Cost-shifting for expensive electronic discovery may be considered after assessing the sample results and the relative burden, likely benefit, and availability of the information from more accessible sources.

## Conclusion

The court held that Gateway’s document production method complied with Rule 34 because it produced records as kept in the ordinary course and no concealment was shown, and it addressed the backup-tape dispute by ordering restoration and searching of a five-tape sample to evaluate proportionality and potential cost-shifting before any broader order.


Hagemeyer N. Am., Inc. v. Gateway Data Scis. Corp., 222 F.R.D. 594 (E.D. Wis. 2004)