EFiled:Dec03201207:24PMEST TransactionID48129673 CaseNo.

7921CS

INTHECOURTOFCHANCERYOFTHESTATEOFDELAWARE

J.CHRISTOPHERBURCH,JCB INVESTMENTS,LLC,andC.WONDERLLC,

) ) ) Plaintiffs, ) ) v. ) TORYBURCH,EDUARDOHOLSCHNEIDER, ) ) JOHNS.HAMLIN,GLENSENK,ERNESTO ) ZEPEDA,MARIAASUNCION ) ARAMBURUZABALALARREGUI,ISLA ) CORAL,S.A.DEC.V.,ANDTORYBURCH ) LLC, ) ) Defendants. ) ) ) TORYBURCHLLC, ) ) CounterclaimPlaintiff, ) ) v. ) ) J.CHRISTOPHERBURCH,JCB ) INVESTMENTS,LLC,C.WONDERLLCand ) RIVERLIGHTVENTUREPARTNERSLLC, ) ) CounterclaimDefendants.

C.A.No.7921CS

DEFENDANTSTORYBURCHANDTORYBURCHLLCS BRIEFINSUPPORTOFTHEIRMOTIONTOCOMPELPLAINTIFFSTO PRODUCEDOCUMENTSANDCOMPLYWITHDISCOVERYOBLIGATIONS

TABLEOFCONTENTS
Page

TABLEOFAUTHORITIES..............................................................................................iii INTRODUCTION ............................................................................................................... 1 BACKGROUND ................................................................................................................. 7 A. Plaintiffs Seek Expedition, And The Parties Target November 30 For Completing Their Document Productions......................................................................................... 7 The Parties Serve Responses And Objections To The DocumentRequests............................................................................ 8 The Parties Meet And Confer On Documents, But PlaintiffsRefuseToProduceTheirSearchTerms............................. 9 Plaintiffs Make An Inadequate And Incomplete DocumentProduction....................................................................... 12

B. C. D.

ARGUMENT..................................................................................................................... 16 I. II. III. PLAINTIFFS SHOULD BE ORDERED TO COMPLETE THEIRPRODUCTIONEXPEDITIOUSLY. ............................................. 16 PLAINTIFFS SHOULD BE ORDERED TO EXPAND THEIRLISTOFCUSTODIANS. .............................................................. 18 PLAINTIFFS FAILURE TO PRODUCE CERTAIN RELEVANT DOCUMENTS ISANABUSE OF THE DISCOVERYPROCESS............................................................................ 20 PLAINTIFFS SHOULD BE COMPELLED TO MAKE A RECIPROCAL PRODUCTION OF SAMPLES OF NONRESPONSIVEDOCUMENTS. ......................................................... 22

IV.

CONCLUSION ................................................................................................................. 26

iii.

TABLEOFAUTHORITIES Page(s) CASES BayerHealthcarePharm.Inc.v.ScheringCorp., No.3548VCSat4,15(Del.Ch.May28,2009)(Transcript) .................................... 16 DeGeerv.Gillis, 755F.Supp.2d909(N.D.Ill.2010) ........................................................................... 18 InreSeroquelProds.LiabilityLitig., 244F.R.D.650(M.D.Fla.2007)................................................................................. 24 Kligv.DeloitteLLP, 2010WL3489735(Del.Ch.Sept.7,2010) ................................................................ 16 Monier,Inc.v.BoralLifetile,Inc., 2010WL2285022(Del.Ch.June3,2010)................................................................. 16 NatlDayLaborerOrg.Network, 2012WL2878130(S.D.N.Y.July13,2012) ........................................................ 23,24 Prod.Res.Grp.L.L.C.v.NCTGrp.,Inc., 863A.2d772(Del.Ch.Nov.17,2004)....................................................................... 16 SunnenProds.Co.v.TravelersCas.&SuretyCo.ofAm., 2010WL743633(E.D.Mo.Feb.25,2010)................................................................ 17 VictorStanley,Inc.v.CreativePipe,Inc., 250F.R.D.251(D.Md.2008)..................................................................................... 24 VSIHoldings,Inc.v.SPXCorp., 2004WL6047330(E.D.Mich.Aug.6,2004) ............................................................ 18 WilliamA.GrossConstr.Assocs.,Inc.v.Am.Mfrs.Mut.Ins.Co., 256F.R.D.134(S.D.N.Y.2009) ................................................................................. 24 OTHERAUTHORITIES GordonV.Cormack&MonaMojdeh,MachineLearningforInformation Retrieval:TREC2009Web,RelevanceFeedbackandLegalTracks,inNIST SpecialPublication:SP500278,TheEighteenthTextRetrievalConference (TREC2009)Proceedings(2009) ............................................................................... 23

iv. TABLEOFAUTHORITIES(Continued) Page(s)

MauraR.Grossman&GordonV.Cormack,TechnologyAssistedReviewinE DiscoveryCanBeMoreEffectiveandMoreEfficientThanExhaustiveManual Review,XVIIRich.J.L.&Tech.11(2011) ............................................................... 23 QuinnEmanuelUrquhart&SullivanLLP, Predictivecodingcomesofage(Nov.19,2012)......................................................... 24 RULESANDSTATUTES Del.Ct.Ch.R.34 .............................................................................................................. 17 Del.Ct.Ch.R.37 .............................................................................................................. 16

1.

DefendantsToryBurchandToryBurchLLCrespectfullysubmitthisbrief insupportoftheirmotionforanordercompellingplaintiffstoproducedocumentsand complywiththeirdiscoveryobligationspursuanttoChanceryRules26,34and37and theircommitmentstothisCourt. INTRODUCTION Intheirmotionforexpedition,plaintiffsrepresentedtotheCourtthattheir documentproductionwouldbesubstantiallycompletebyNovember30.That commitmenthasturnedouttobeworthless.OnNovember30,plaintiffsproducedjust 10,000documents.1Muchofplaintiffsproductionwasmakeweight.Some3,000of thosedocumentswerenightlysalesupdatesfromToryBurchstoresmassemailstoall corporateemployees.HundredsofpagesmoreconsistedofGooglealertsandother publicnewsdispatches.Missingfromplaintiffsproductionweretheverydocuments bearingontheallegationsthattheymakeintheircomplaint.Bywayofexampleonly: PlaintiffsallegedthatChrisBurchwastotallyopenwiththecompany,Tory anddirectorJohnHamlinabouthisplansforhisC.Wonderstoreandthat heshowedthemexactlywhathewasplanningtodo.Documentstoback this?Notthere. PlaintiffsallegedthatdefendantswrongfullytorpedoedProjectAmethyst, andthatBidderAreverseditspositioninalettertoMr.Burchdated
1 By contrast, Tory Burch LLC produced more than 26,000 documents and over 68,000pages.

2.

August1.OnlyahandfulofdocumentsonProjectAmethystwere produced,andthereferencedletterwasnowheretobefound. PlaintiffsallegedthatthedefendantstortiouslyinterferedwithC.Wonders relationshipswithitsvendors,causingittofindalternate,morecostly arrangements.Documentstobackthis?Notthere. PlaintiffsallegedthatChristraveledtheworldtofindsourcesforthe company.Proofthatithappened?Minimal.Whenpressedtoproduce Chrisscalendar,plaintiffsinitiallyresistedandthen,weeksintothemeet andconferprocess,claimedthattheydidnotknowifhekeptacalendar. Aretheyserious?Onedocumentthatdefendantslocatedintheirownfiles saysthatChrislogged275,000milesofairtravelin2010, circumnavigatingtheglobe11times.Nocalendar?Really? PlaintiffsallegedthatJorgMohaupt,thedesigneeofAccessIndustries billionairefounderLenBlavatnikontheToryBurchLLCboard,toldhis fellowdirectorsthathedidnotseethenecessityforaconflicts investigationcommittee,thatMr.Burchsnewventureswereanonissue, thatMr.Burchhadbeenexceedinglyopenabouthisnewbrands,andthatit washisopinionthatothermembersoftheBoardwerecreatingfalse allegationsforthepurposeofforcingMr.BurchofftheBoard.Butwhen pressedtodisclosetheextentofthenowadmittedfinancialrelationship betweenMr.BlavatnikandMr.Burch,plaintiffsrefused.Andtheytold Accesstodothesameinresponsetodefendantssubpoena.

3.

Plaintiffsproductioninresponsetorequestsbearingonthecounterclaims, likewise,isalsononexistent.Again,bywayofexampleonly: ThecounterclaimsallegethatChrisaskedforandreceivedlistsofthe companystopsellingproductsinanumberofcategories.Defendants haveproducedhundredsofcommunicationsChrisBurchhadwithTory Burchemployeesinwhichhebadgeredthemfor,andreceived,inside information.Themirrorimagesofthosedocumentsweremissingfrom plaintiffsproduction.AndwhatdidChrisBurchdowithallthis information?Canttell.Theproductiondoesnotseemtohavecovered that. ThecounterclaimsallegethattheC.Wonderstoresshamelesslycopythe distinctivelookofToryBurchstores:

4.

ButtherewerenodocumentsproducedthatshowwhytheC.Wonderstore designevolvedfromthefollowingJuly2010image(seeEx.1):

...tothisdesignbythetimetheC.Wonderstoresopened:

5.

TwodocumentsindefendantsproductionshowthattheC.Wonderteam waskeenlyfocusedontheToryBurchstoredesign.ThefirstisanemailthatAmy Shecterwho,atthetime,wastransitioningfromVicePresidentofGlobalRetailat ToryBurchtoPresidentofC.WonderwrotetothemanageroftheToryBurchstorein theShortHillsmallalertingthemanagerthatafirmthenworkingonastoredesignfor Chrissnewventurewouldbecomingbytotakepicturesofthestore.Thesecondisan emailfromNickMatfus,oneofChrisBurchskeyexecutivesbasedinChina,inwhich hearrangedforthedrawingsfortheToryBurchShortHillsstoretobemadeavailableto thatsamedesignfirm.Exs.2&3.2Didplaintiffsproducetheseemails?No.Didthey producethepicturesthatShecterarrangedtobetakenattheShortHillsstore?No.Did theyproducethedrawingsthatMaftusprovidedtoChrissdesigners?No.Didthey producedocumentsshowingwhathappenedtothephotosanddrawings?No. Inshort,plaintiffshaveproducedveryfewoftheirowninternal communications.Defendantsproducedinexcessof2,000toplevelemailsbetween ChrisBurchsemailaccountsatBurchCreativeCapitalanditspredecessorsandAmy Shecter.3Accordingly,unlessdocumentsweredeletedordestroyed,plaintiffsshould havefoundandproducedalloftheseChris/Amycommunications,plusmuch,much

2 All citations herein to exhibits (Ex. __) refer to the exhibits annexed to the TransmittalAffidavitofShannonE.German,submittedherewith.
3

ThecompanyhadtheseemailsbecauseMs.ShecterhadanemailaccountatTory Burchthroughthesummerof2010.

6.

more.Butplaintiffsproductioncontainsfewerthan50toplevelemailcommunications betweenChrisandthePresidentofC.Wonder. Ifthiswerejustamatteroftardiness,defendantswouldnotbebothering theCourtwiththismotion.But,unfortunately,thereismuchmoregoingonhere.When plaintiffssubmittedtheirresponsetodefendantsFirstRequestsfortheProductionof Documents,plaintiffsstatedfor18oftherequeststhatthattheywouldproduce documentspursuanttosearchparameterstobeagreeduponbytheparties.Plaintiffs alsoobjectedtoproducinganydocumentsatalltoanadditional13requests,statingonly thattheywouldreconsidertheirpositionafterthepartiesmetandconferred. But,afterhavingengagedinweeksofmeetandconfersessions,witha commitmentfromplaintiffsonlythattheywillproducedocumentsto28ofthe33 requestsbasedonsearchtermsthatplaintiffshavestillnotturnedoverandhaveonly agreedtoturnovertodayafterlearningthatdefendantsweremakingamotiontocompel. Andplaintiffsalsohavestiffarmeddefendantsrequestthatplaintiffsexpandtheirgroup of16custodianstoincludeanadditionalnineindividuals,includingMr.Burchsformer righthandwoman,thepresidentandmaindesignerforhisAsianaffiliate,9Kings,theC. Wonderdirectorofstoreinteriorsanddirectorofstoreplanning,andothersplaintiffs themselvesidentifiedasknowledgeablewitnesses. Inshort,asoftoday,neitherthedefendantsnortheCourthaveanyideaas towhatprocessledtoplaintiffsemptyNovember30thproduction,whattheplaintiffsare goingtoproduceinthefuture,howtheywillgoaboutfindingthosedocumentsorwhen anyadditionaldocumentswillbeproduced.Thiswholesalefloutingofdiscovery

7.

obligationsisunacceptableinanycasependingbeforethisCourt.Itisespecially inappropriateinanexpeditedlitigation. TheCourtshouldorderplaintiffstoimmediatelysupplementtheir productionandprovidethesamekindoftransparencyintowhattheyareproducingand howtheyareproducingitthatplaintiffshaveaskedforandreceivedfromdefendants. TheCourtshouldalsoorderplaintiffstosearchforandproducedocumentsfromthefiles oftheadditionalcustodianssoughtbydefendants,andsubstantiallycompleteproduction ofdocumentsresponsivetodefendantsrequestsfromthosefilesimmediatelyaswell. BACKGROUND A. Plaintiffs Seek Expedition, And The Parties Target November 30 For Completing Their Document Productions.

OnOctober2,2012,plaintiffsfiledacomplaintallegingthatdefendants improperlybarredplaintiffsfromsellingtheirequityinterestsinToryBurchLLCand tortiouslyinterferedwiththeirrighttocompetewithToryBurchLLCviaanewfashion brandknownasC.Wonder.Shortlyafterfilingtheircomplaint,plaintiffsservedon defendantsasetof22documentsrequests.Ex.4.OnOctober18,defendantsserved documentrequestsonplaintiffsseekingtheproductionof33categoriesofdocuments. Ex.5. OnOctober23,plaintiffsmovedforexpedition.PlaintiffssoughtaJanuary 2013trialdate,withdocumentproductiontobesubstantiallycompletedbyNovember30. Attheconferenceonthatmotion,theCourtstateditwouldscheduleatrialinApril2013 andleftthepartiestonegotiatethedetailsofapretrialschedule.Thepartieshave,until

8.

recently,assumedsubstantialcompletionofdocumentproductionbyplaintiffs,Tory BurchandToryBurchLLCinresponsetoinitialdocumentrequestswouldoccuron November30. B. The Parties Serve Responses And Objections To The DocumentRequests.

OnNovember15,plaintiffsanddefendantsfiledtheirresponsesand objectionstooutstandingdiscoveryrequests.ToryBurchLLCanditsfounder,Tory Burch,agreedtoconductasearchforandproduceresponsive,nonprivilegeddocuments inresponsetoeverysingleoneofplaintiffsrequests.SeeEx.6. Plaintiffsfollowedadifferentapproach.For18ofdefendantsrequests, plaintiffsagreedonlytoprovidedocumentsinaccordancewiththeSearchParameters, whichplaintiffsdefinedtomeansearchparametersagreeduponbytheparties.Ex.7, ResponsetoRequestNo.1seeid.ResponsestoRequestsNo.2,3,4,5,7,8,16,18,23, 25,26,27,28,29,30,31,33.For13otherrequests,plaintiffsinterposedboilerplate objectionsthattherequestswereoverlybroadandundulyburdensome,amongother grounds.Plaintiffsdidnotspecifywhat,ifanything,responsivetotheserequestswould beproduced.Rather,theystatedonlythattheywerewillingtomeetandconfer.See id.,ResponsestoRequests6,9,10,11,12,13,15,17,19,20,21,24,32. Theserequestsgototheverycoreofthiscase.Forexample,Request10 whichseeksAlldocumentsconcerninganyinformationPlaintiffsrequestedorreceived fromToryBurchLLCconcerningToryBurchLLCoranyaspectofitsbusinessgoes directlytodefendantscounterclaimallegationsofmisappropriationandmisuseof

9.

confidentialinformation.SeeCounterclaims7477,85,90,91,9799,103,11420. Similarly,Request13seeksdocumentsconcerningtheC.WonderBrand,including morethanadozenspecifictypesofbrandrelatedinformation,whichareplainlyrelevant toplaintiffsallegationsthattheC.Wonderbrandisunique(e.g.,Compl.50)and defendantscontentionthatitisaknockoffoftheToryBurchbrand(e.g., Counterclaims3,5060).Butplaintiffsnonethelessdeclinedtoproduceany responsivedocuments. C. The Parties Meet And Confer On Documents, But PlaintiffsRefuseToProduceTheirSearchTerms.

Afterservingtheirresponsesandobjections,counselforplaintiffs suggestedameetandconferonNovember19regardingcustodians,timeperiodsand searchterms.Inanticipationofthatcall,defendantsaskedplaintiffstobepreparedto statepreciselywhatPlaintiffswillbepreparedtoproduceinresponsetoDefendants requests,notingthatthecallwouldbemoreproductiveifthepartiesexchangesearch termsinadvance.Anddefendantsinformedplaintiffsthattheywouldbeusing predictivecoding.Ex.8. OntheNovember19call,defendantsexplainedtheirhybridapproachto documentreview,whichincluded:(i)manualattorneyreviewofpotentiallyrelevanthard copyandelectronicfilesinaccessiblelocations(ii)traditionalkeywordsearching (includingemaildomainnamesandindividualterms)followedbymanualattorney reviewofpotentiallyrelevantdocumentsidentifiedbythosesearches(whichincludedthe termsAmethystandC.Wonder)and(iii)computerassistedreviewknownas

10.

predictivecoding.Defendantshavedisclosedallofthekeywordsanddomainsthey usedaspartoftheirprocess.SeeExs.9&10. DefendantsalsomadeavailabletoplaintiffstheWachtellLiptonattorney whoisimplementingthepredictivecodingprocessinthiscase.Sheexplainedto plaintiffsthattheWaterloopredictivecodingalgorithmbeingusedwastrainedby usingasetofdocumentsdeterminedtoberesponsiveornonresponsivebyattorney reviewersaswellas99searchtermsthatdefendantsdisclosedtoplaintiffsfollowingthat discussion.SeeEx.9.Shealsoexplainedthattheseedsetofdocumentsusedtotrain thealgorithmwasupdatediteratively,suchthateveryresponsivenessdecisionmadeby anattorneythroughouttheentirereviewwasconsideredinthealgorithmsselectionof furtherpotentiallyresponsivedocuments.Thus,theseedsetoftrainingdocumentsfor thealgorithmencompasseseverydocumentdeemedtobeeitherresponsiveornon responsivebyanattorneyreviewer. Attheendofthatdiscussion,plaintiffscounselstatedthatthepredictive codingprocessseemedrobustandrequestedthatplaintiffsbegivenaccessto defendantsentireseedsetincludingdocumentsdeemednonresponsiveinattorney review.Defendantsexplainedthatsucharequestwastantamounttorequestingthatall nonresponsivedocumentsreviewedbyattorneysbeproduced.Insteadofthat unnecessaryandburdensomeunilateralproduction,defendantsofferedareciprocal exchangeofasampleofnonresponsive,nonprivilegeddocumentstotestandverifythe resultsofthedifferingsearchmethodsthepartieswereutilizing.SeeEx.11.

11.

Plaintiffsdidnotsharetheirsearchtermsinadvanceofthatdiscussion, refusedtoprovidethemonthatcall,andstatedthattheywereunwillingtodosountil theybecamecomfortablewithdefendantsuseofpredictivecoding.Theparties exchangedmultipleemailsoverthenexttwodays,andagainmetandconferredfor severalhoursonNovember21.Seeid.Plaintiffscontinuedtorefusetodisclosetheir searchparameters.Plaintiffsdidagreetoproducecertaindocumentsinresponseto certainotherrequests,but,onceagain,theybasedtheirproposedproductiononsearch termsthattheywouldnotdisclose.Plaintiffsagreedtomemorializetheirrevisedposition inaletter,whichtheypromisedtosendonNovember23.Thatdayandthenextcame andwentwithoutaresponse.SeeEx.12. OntheeveningofNovember25,plaintiffssenttheirletter.Plaintiffsmade sevenfurtherdemandsforinformationconcerningpredictivecoding,includingthefull seedset.Ex.13.DefendantsrespondedtothesedemandsbyletteronNovember28, agreeingtoproduceallresponsivedocumentsinitsseedsetandtoprovidetwo1,000 documentsamplesfortestingofboththedocumentsdeemednonresponsivebythe predictivecodingprocessandbytheattorneyreviewteamthattrainedit.Ex.10. Defendantsagainexplainedthattheseedsetfortheirpredictivecodingprocess representedeverysingledocumentthathadbeenreviewedbyanattorneyandthat plaintiffsrequestwouldrequiretheproductionoftensofthousandsofnonresponsive documentsavolumeofnonresponsivedocumentslargerthanplaintiffsentire productiononNovember30.

12.

Defendantsrequested,moreover,thatanysamplingbereciprocal.Theydid sobecausescientifictestinghasshownthatatleastasmany,ifnotmore,documentswill bemissedusingplaintiffsmethodofkeywordsearchingasindefendantspredictive codingprocess.Assuch,defendantsproposalwasthatbothplaintiffsandToryBurch LLCsample1,000documentsdeemednonresponsivebyattorneyreviewersandanother 1,000documentsthatwerenotreviewedbyattorneys.Id.at1011. Plaintiffs,however,haverefusedanyreciprocalsampling,andcontinuedto withholdtheirsearchtermsuntiltheirunilateraldemandforsamplingwasmet.Theydid soeventhoughtheypremisedtheirresponseto28of33requestsonagreedupon searchtermsthattheyrefusedtoprovide.Nevertheless,defendantshavesinceagreedto providenonresponsivedocumentstoplaintiffssothatplaintiffscanassessthereliability ofthepredictivecodingprocessbothinitiallyandatthecompletionofproduction.Ex. 14. D. Plaintiffs Make An Inadequate And Incomplete DocumentProduction.

Notsurprisingly,whenthepartiesexchangedproductionsonNovember30, plaintiffsproductionwaswhollyinadequatetheirresponseshavenotsincebeen supplemented.SeeEx.15.Plaintiffsproducedjust17,035pages(representingsome 10,000documents).Approximatelyonethirdofthedocumentsconsistedofnightlysales updatesfromToryBurchstoresthathadbeenemailedenmassetoallToryBurch corporateemployees.Andmorethanfivehundredadditionaldocumentswerenothing

13.

morethanGooglealertsandotherpublicnewsarticles.Theremainderappearstoinclude manycommunicationsthatToryBurchalreadyhad(asonesideoftheexchange). Significantly,plaintiffsproducedvirtuallynothingonkeyissuesintheir complaintordefendantscounterclaims.Forexample: a) Plaintiffs allege throughout the complaint that they were forthright

with the Board about C. Wonder before it opened, showing the board products and videosregardingthebrandinFebruary2011.Compl.41.TheyalsoallegethatChris laidouttheentireC.WonderconcepttoToryatameetinginSouthamptononhisiPad andthathefollowedupbyemailingToryadditionalvideosandpictures.Compl.45. But there is not a single video file in plaintiffs production. And plaintiffs did not producetheemailsChrissayshesenttoTory.Indeed,plaintiffshavenotevenproduced theemail,citedintheircomplaint,inwhichChrisBurchdisclosedhisactualorpotential conflictstotheboard.SeeCompl.41. b) Plaintiffs complaint holds up Jorg Mohaupt, Accesss

representative on the board, as the only virtuous director on a board that is otherwise beholden to Tory. E.g., Compl. 4951. But plaintiffs have not produced communications between themselves and anyone at Access Industries, and the word Mohaupt is nowhere to be found in their production even though, again, their complaintcitesemailsauthoredbyJorgMohaupt.Seeid. c) Plaintiffs complain that Tory Burch wrongfully interfered with the

Project Amethyst bidding process by berat[ing] bidders into reversing course and imposingasaconditionofanydealthatChrisenterintoasettlementagreementwiththe

14.

company.Compl.8183.Again,nosuchdocumentshavebeenproduced.Plaintiffs failedtoproduceeventhecorrespondencecitedintheircomplaintshowingthepurported changeinBidderAsinposition.Seeid. d) In the counterclaims, Tory Burch LLC alleges that Chris Burch

breachedhisfiduciarydutiesandcontractualobligationsunderhisconsultingagreement by misappropriating the companys confidential information. The counterclaims cite eightdifferentcategoriesofconfidentialinformationthatwereprovidedtoChrisBurchin hisroleasaconsultant,includinglistsofthecompanystopsellingshoes,readytowear apparel,handbagsandsmallleathergoods,amongotheritemsdetailedcostinformation onanumberofthecompanystopsellingitems,contactinformationforthefactoriesthat thecompanywasusingtomanufactureitsgoodsinChinaandabreakdownofthecostto construct one of the companys stores. Defendants have produced hundreds of emails showingalloftheseitemswererequestedbyandprovidedtoChrisBurchathisBurch CreativeCapitalemailaccounts.Butplaintiffshavenotproducedthesameemailsfrom theirfilesandhaveofferednoreasonwhytheyaremissing.Thefactthattheseemails werenotproducedraisesgravequestionsabouttheintegrityofplaintiffsproduction. e) Plaintiffs have also produced very few internal emails of any type

from their own files. As a company that has aggressively built its brand over the last several years, it makes no sense that so little C. Wonder branding, public relations and designmaterialshavebeenproduced.Defendantsproducedinexcessof2,000toplevel emailsbetweenChrisBurch,usinghisemailaccountatBurchCreativeCapital(andits predecessors), and Amy Shecter, the former Vice President of Global Retail at Tory

15.

Burch who went on to join C. Wonder as its President. Plaintiffs production contains fewer than 50. Something is not right.

16.

ARGUMENT Delawareswellestablishedpolicyofpretrialdisclosure...isbasedona rationalethatatrialdecisionshouldresultfromadisinterestedsearchfortruthfromall theavailableevidenceratherthantacticalmaneuversbasedonthecalculated manipulationofevidenceandproduction.Kligv.DeloitteLLP,2010WL3489735,at *67(Del.Ch.Sept.7,2010)(Discoveryiscalledthatforareason.Itisnotcalledhide theball.).ThisCourthasbroaddiscretiontocraftaproperremedyfordiscovery shortcomingsunderChanceryCourtRule37anditsinherentequitablepowers.Monier, Inc.v.BoralLifetile,Inc.,2010WL2285022,at*3(Del.Ch.June3,2010)seealso BayerHealthcarePharm.Inc.v.ScheringCorp.,No.3548VCSat4,15(Del.Ch.May 28,2009)(Transcript)(grantingmotiontocompelandawardingcostsandfeeswherea partysdiscoveryresponseswereslowinactuallygettingtosearchingandshould havebeen...moreforthcoming.)Prod.Res.Grp.L.L.C.v.NCTGrp.,Inc.,863A.2d 772,80203(Del.Ch.Nov.17,2004)(orderingpromptandcompleteresponsestoeach requestforproductionandawardingcostsandattorneysfeesinresponseto unjustifiedobjections). I. PLAINTIFFS SHOULD BE ORDERED TO COMPLETE THEIRPRODUCTIONEXPEDITIOUSLY. Asshownabove,plaintiffsNovember30productionwasentirely inadequate,anddefendantshavenoinsightastowhycategoriesofdocumentshavebeen omitted,includingdocumentscitedinthecomplaint,communicationsbetweentheowner

17.

andpresidentofC.Wonder,anddocumentsshowingChrisBurchsrequest,receiptand useofToryBurchLLCsconfidentialinformation,amongotherthings.Untilhours beforethismotionwasfiled,plaintiffshadrefusedtodisclosetheirsearchtermsandonly agreedtoprovidethemunderthreatofthismotion.Evennow,defendantsdonotknow whatthosetermswillbe,howlongitwilltaketonegotiatethem,orwhyentirecategories ofevidencearemissingfromtheproductionthatplaintiffshavemade. Plaintiffsdelaysinprovidingthisinformationandmakingameaningful productionareprejudicingdefendantsabilitytoprosecutetheirclaimsanddefensesin thisexpeditedcase.Defendantsareseekingjudicialinterventionbecausetheyhaveno faiththat,withoutCourtinvolvement,theywillreceiveacompleteproductioninatimely manner. Fromtheoutset,plaintiffshaveobscuredtheirprocessanddelayeddelivery ofcriticalinformation.ChanceryRule34requiresthatresponsestorequestsforthe inspectionorproductionofdocumentsstate,withrespecttoeachitemorcategory,that inspectionandrelatedactivitieswillbepermittedasrequested,unlesstherequestis objectedto,inwhicheventthereasonsforobjectionshallbestated.Del.Ct.Ch.R. 34(b).Ifobjectionismadetopartofanitemorcategory,thepartshallbespecifiedand inspectionpermittedoftheremainingparts.Id.Plaintiffs,however,failedtogive defendantssubstantivewrittenresponsestomanyofdefendantsrequests,astheyare requiredtodo,andinsteadrefusedtoproducebasedonboilerplateobjectionswithan invitationtomeetandconfer.SeeSunnenProds.Co.v.TravelersCas.&SuretyCo.of Am.,2010WL743633,at*1(E.D.Mo.Feb.25,2010)(Thepartyresistingdiscovery

18.

mustshowspecificallyhoweachinterrogatoryordocumentrequestisnotrelevantor howeachquestionisoverlybroad,burdensomeoroppressive.). Andevenwhenplaintiffsbelatedlycommittedtoproducingsome documentsinwriting,theytetheredtheirresponsesto28of33requeststoagreedupon searchterms.Butplaintiffsthenrefusedtotelldefendantswhatsearchtermstheywere using,eventhoughdefendantswereclearlyentitledtothisinformation.Whereparties haverefusedtodisclosetheirsearchterms,courtshaveorderedtheirdisclosure.See, e.g.,DeGeerv.Gillis,755F.Supp.2d909,917(N.D.Ill.2010)(directingproducing partytoidentifytheindividualssearchedandsearchtermsitused)VSIHoldings,Inc. v.SPXCorp.,2004WL6047330,at*3(E.D.Mich.Aug.6,2004)(orderingplaintiffto divulgeitssearchmethodologyandsearchtermsusedtolocateresponsivedocuments). Indeed,asofthefilingofthismotion,althoughtheyhavecommittedto providingdefendantswiththeirsearchterms,plaintiffsstillhavenotdoneso.Ifand whendefendantsreceivethoseterms,theynodoubtwillneedtonegotiatesupplemental termstoaddressthegapingholesinplaintiffscurrentproduction.Defendantsrequest thattheCourtcompelplaintiffstocompletetheirproductionofdocumentswithout furtherdelay. II. PLAINTIFFS SHOULD BE ORDERED TO EXPAND THEIRLISTOFCUSTODIANS. OnNovember14,plaintiffsprovideddefendantswithalistof16custodians theyproposedtouseintheirreview.Thenextday,defendantsrequestedthat12 additionalindividualcustodiansbeaddedincludingdesignexecutiveswithC.

19.

Wonder,Mr.Burchsformerrighthandwoman,andkeyplayersatChrisBurchsAsian affiliate,9Kings,amongothersandaskedthatplaintiffssearchthefilesofindividuals holdingtencorporatepositions(includingmarketingandstoremanagers)atC.Wonder, iftheywerenototherwisenamed. OnNovember23,defendantsrevisedtheircustodianrequest,narrowingit toonlynineadditionalnamedcustodiansandeightcorporatepositions.Theseadditional custodiansincludeindividualsinvolvedwiththedesignoftheC.Wonderstoreandthe developmentoftheC.Wonderbrand.TheyalsoincludestoremanagersfortheC. Wonderstores,whosedocumentsmaygodirectlytotheissueofcustomerconfusionand towhetherC.WonderscustomersassociateditwiththeToryBurchbrand. 4 Althoughplaintiffshavehaddefendantsproposedadditionstoplaintiffs custodianlistforweeks,plaintiffshavenotagreedtoaddanyofthesecustodians. Plaintiffshaveneverclaimedthataddingtheseadditionalcustodianswouldbeunduly burdensomeorthatasearchoftheirfilesisunlikelytoleadtothediscoveryofrelevant evidence.Accordingly,inlightoftheexpeditednatureoftheseproceedings,plaintiffs shouldbeorderedtosearchandproducedocumentsfromthefilesoftheseadditional custodianswithoutfurtherdelay.

4 These additional custodians include individuals that plaintiffs have identified as

knowledgeable. As plaintiffs have designated that response as Highly Confidential, this list of custodians will be provided to the Court when a confidentialityorderhasbeenentered.

20.

III.

PLAINTIFFS FAILURE TO PRODUCE CERTAIN RELEVANT DOCUMENTS ISANABUSE OF THE DISCOVERYPROCESS. Asnotedabove,certainspecificcategoriesofdocumentshavebeenwholly

omittedfromplaintiffsproductionand,basedontheirresponsesandobjectionsandthe partiesmeetandconfers,thereisnoreasontobelievetheseimportantdocumentswill everbeproduced.DefendantsseektheCourtsassistanceinsecuringtheirproduction. ChrisBurchsCalendar.PlaintiffsallegethatChrisBurchwasaloyal, diligentandactiveDirectorwho,amongotherthings,traveledextensivelythrough Chinatosourcegoodsforthecompany.Compl.11.Thecounterclaimsallegethat whenMr.Burchwastakingthesetrips(andgetting$11millionasamanagement consultanttodoso)hewasactuallysourcingcopycatproductsanddevelopingcopycat storefurnishingsforC.Wonder.Counterclaims3739,50,55.Plainly,thenatureand scopeofChrissbusinesstravelsareacentralissueinthiscase. Althoughtherearescattereddocumentsconcerningtravelarrangementsin plaintiffsproduction,andplaintiffssaytheywillproduceothersiftheyhappentocome uponthem,nocalendar,diary,daybookorplannerofanykindhasbeenproducedfor ChrisBurch.DefendantshavebeentryingtogetplaintiffstocommittoproduceMr. BurchscalendarsincelateOctober.OnFridaynight,November30,thedaywhentheir documentproductionwassupposedtobesubstantiallycomplete,plaintiffscounselsaid thattheystillhavenotbeenabletofindacalendaranddonotknowwhetheroneeven exists.

21.

Ifcounseldoesnotknowwhetheroneexists,itisonlybecausetheyhave notaskedtherightpersonorbecausethepersontheyaskeddidnotgivethemacandid response.Thedocumentaryrecordisclearthatonewaskept.OnDecember29,2010, oneofChrissassistants,StefanieMohr,senthimanemailreferencingthetravel calendarwekeptduringtheyearinthecourseofcalculatingover275,000airlinemiles thatChrisBurchflewonbusinesstripsthatyear.SeeEx.16.Nothingjustifiesfurther delayinfindingthesedocuments:plaintiffsshouldimmediatelyproduceChrisBurchs businesscalendarsanddiaryentries. AccessDocuments.Plaintiffshavefailedtoproduceanydocuments concerningthebusiness,financialorotherrelationshipsbetweenplaintiffsandTory BurchLLCmemberAccessIndustries(oritsboarddesignees).Asnotedearlier,in plaintiffsproduction,thereisnotasingledocumentthatbearsthelastnameofAccesss representativeJorgMohaupt,andnotasingleemailsenttoorreceivedfromAccess. Althoughplaintiffspaidlipservicetomeetingandconferringonthisrequestintheir responsesandobjections,itisnowapparentthattheywillnotproducethesedocuments. Notonlyhavetheyblockedtheirowndiscoveryonthisissue,plaintiffs havealsoinstructedAccess,itsprincipals,anditsdirectornomineestowithholdrelevant documentsfromtheirownproductionsinresponsetosubpoenasissuedtothem.Access hasagreedtofollowthisinstruction.SeeEx.17.Moreover,plaintiffshavetakenthe positionthatinformationconcerningthefinancingbyAccessof,oranyinvestmentin,C. WonderorChrisBurchsotherbusinessesisirrelevantandwillnotbeproduced.

22.

Plaintiffspositionismeritless.Theircomplaintsquarelyallegesthat AccessspurportedlyimpartialdirectorsidedwithChrisBurchindisputedmattersand heldtheopinionthatothermembersoftheBoardwerecreatingfalseallegationsforthe purposeofforcingMr.BurchofftheBoard.Compl.51.Plainly,defendantsare entitledtoknowthenatureandextentofanyfinancialrelationshipsinordertotest plaintiffsallegationthatMr.Mohauptstoodastheonlyparagonofvirtueonan otherwiseconflictedboard. DefendantsalsoareentitledtoknowwhetherChrisusedconfidential financialinformationobtainedfromToryBurchLLCtoattractAccessandpotentially otherinvestorsintoC.WonderoroneofChrisotherbusinessventures,asitappears fromdocumentsinToryBurchsownfilesthathedid. 5Ifsuchinformationwasshared, itwoulddirectlyundercutplaintiffsallegationsthatMr.Burchhadnotandwasnot usinganyoftheCompanysconfidentialinformationtobenefithisnewbrands.Compl. 50. IV. PLAINTIFFS SHOULD BE COMPELLED TO MAKE A RECIPROCAL PRODUCTION OF SAMPLES OF NONRESPONSIVEDOCUMENTS. Atthisstage,defendantshavemetandexceededallofplaintiffsdemands forinformationconcerningitspredictivecodingprocessshortofdisclosingevery
5 For example, in one J. Christopher Capital investment presentation, Mr. Burch

provides inside financial information about the success of Tory Burch LLC in violationofhisconfidentialityobligationstothecompany.Butplaintiffshavenot produceddocuments andcommunicationsshowinghowChrisandhisteamused thispresentationortowhomitwasshown.

23.

documentthattheirattorneysreviewed,includingofferingtoproducesamplesof documentsdeemednonresponsive.Defendantshavealso(a)describedthatprocessin detail,bothorallyandinwriting(b)madetheseniorattorneywhoisimplementingthis processavailableforquestioning(c)agreedtoconsidersupplementalcustodians,seed documentsandkeywordsearchesthatPlaintiffsmaysuggestingoodfaithand(d) providedscientificevidenceindependentlyvalidatingtheprocess. 6Defendantsofferis morethanreasonable. Incontrast,plaintiffshaverefusedtoconductanyreciprocaltestingontheir searchmethods,despitesignificantevidencethattheirkeywordsearchesarelesseffective thanpredictivecoding.Plaintiffsbasicpositionisthattheirmethodofusingsearch termsandcontractattorneysispresumptivelysound.Buttheirproductionprovedthat falsehere. Indeed,courtshaverecognizedthat[t]hereisincreasinglystrongevidence thatkeywordsearchingisnotnearlyaseffectiveatidentifyingrelevantinformationas manylawyerswouldliketobelieve,NatlDayLaborerOrg.Network,2012WL 2878130(S.D.N.Y.July13,2012)(quotationmarksomitted),andthatthereisa growingbodyofliteraturethathighlightstherisksassociatedwithconductingan
6 See, e.g., Maura R. Grossman & Gordon V. Cormack, TechnologyAssisted

Review in EDiscovery Can Be More Effective and More Efficient Than ExhaustiveManualReview,XVIIRich.J.L.&Tech.11(2011)(Ex.18)Gordon V. Cormack & Mona Mojdeh, Machine Learning for Information Retrieval: TREC 2009 Web, Relevance Feedback and Legal Tracks, in NIST Special Publication: SP 500278, The Eighteenth Text Retrieval Conference (TREC 2009)Proceedings(2009)(Ex.19).

24.

unreliableorinadequatekeywordsearchorrelyingexclusivelyonsuchsearches.Victor Stanley,Inc.v.CreativePipe,Inc.,250F.R.D.251,257(D.Md.2008).SeealsoWilliam A.GrossConstr.Assocs.,Inc.v.Am.Mfrs.Mut.Ins.Co.,256F.R.D.134,13536 (S.D.N.Y.2009)(citingwellknow[n]limitationsandrisksassociatedwithsearch termsthathavebeenjudiciallyrecognized,includingthefailureofsuchtermstocapture context,misspellingsordocumentscontainingdifferentwordswiththesamemeaningas thetermsselected)QuinnEmanuelUrquhart&SullivanLLP,Predictivecodingcomes ofage(Nov.19,2012)(keywordsearchingis...rifewithshortcomings....Some studiessuggestthatpredictivecodingidentifiesatleastasmanydocumentsofinterestas traditionaleyesonreview,withaboutthesamelevelofinconsistency,andmayinfact offermoreaccuratereviewforresponsivenessthanmostmanualreviews.). Thus,inlightofplaintiffsinadequateproductions,itisjustasifnotmore criticaltoexamine,testandevaluateplaintiffskeywordsearchmethodology,asitisto testdefendantspredictivecodingmethod.SeeNatlDayLaborerOrg.Network,2012 WL2878130,at*12(S.D.N.Y.July13,2012)([U]seofkeywordswithouttestingand refinement(ormoresophisticatedtechniques)willinfactnotbereasonablycalculatedto uncoverallresponsivematerial.)InreSeroquelProds.LiabilityLitig.,244F.R.D.650, 662(M.D.Fla.2007)(Commonsensedictatesthatsamplingandotherqualityassurance techniquesmustbeemployedtomeetrequirementsofcompleteness.).Asonecourtthat consideredtheissueexplained,keywordsearchesmayprovetobeoverinclusiveand underinclusiveandtheonlyprudentwaytotestthereliabilityofthekeywordsearchis toperformsomesortofsamplingofthedocuments.VictorStanley,250F.R.D.at257,

25.

262(findingapartyschoiceofkeywordsearchingtobeunreasonablewhenitneither identifiedthekeywordsselectednorthequalificationsofthepersonswhoselectedthem todesignapropersearch,failedtodemonstratethattherewasqualityassurance testing,andfailedtocarrytheirburdenofexplainingwhattheyhaddoneandwhyit wassufficientwhenitsproductionwaschallenged). Thereasonforplaintiffsrefusaltosubmittheirsearchestotestingis exposedbytheirproduction:apparentlyplaintiffssearcheshavemissedmanycritical documentsgoingtothecorecontentionsinthislitigation.Havingaskedforandreceived defendantscommitmenttoproducesamplesonnonresponsivedocuments,plaintiffs shouldbeorderedtomakeareciprocalproductionofsuchsamples.Thiswillallowthe Courtandthepartiestotesttheaccuracyandreliabilityofthepartiesrespective documentproductions.

26.

CONCLUSION PlaintiffsrepresentedtotheCourtthattheywouldsubstantiallycomplete theirdocumentproductionbyNovember30.Theyhavedraggedtheirfeetinstead.This Courtshould,accordingly,orderthatplaintiffs:(i)substantiallycompletetheirdocument productioninresponsetodefendantsfirstrequestforproductionbyDecember10, includingbyproducingallcalendars,diariesorsimilardocumentsmaintainedwith respecttoJ.ChristopherBurchsbusinessactivitiesfortheperiodfromJuly1,2008to October1,2012(withanypurelypersonalentriesredacted)anddocumentssufficientto showallbusiness,financialorotherrelationshipsbetweenplaintiffsandAccess IndustriesInc.,LenBlavatnik,JorgMohauptorPeterThoren,aswellasall communicationsconcerningToryBurchLLCorC.Wonder(ii)searchthefilesofthe additionalcustodiansidentifiedbydefendantsandsubstantiallycompleteproductionof documentsresponsivetodefendantsrequestsfromthosefilesonthesametimetable(iii) producerandomsamplesofnonresponsivedocumentsthatwereexcludedbytheirsearch termsanddeemednonresponsivebyattorneyreviewerswiththeirsupplemental productiononDecember10anduponthecompletionofdocumentproduction.

27.

OFCOUNSEL: MarcWolinsky StephenR.DiPrima S.ChristopherSzczerban VincentG.Levy CaitlinA.Donovan WACHTELL,LIPTON,ROSEN &KATZ 51West52ndStreet NewYork,NY10019 J.DavidMayberry LindsayKaplan KILPATRICKTOWNSEND &STOCKTONLLP 60714thStreet,NW Washington,DC20005 LisaPearson JohnC.Knapp KILPATRICKTOWNSEND &STOCKTONLLP 1114AvenueoftheAmericas NewYork,NY10036 JohnC.Knapp KILPATRICKTOWNSEND &STOCKTONLLP 1114AvenueoftheAmericas NewYork,NY10036

MORRIS,NICHOLS,ARSHT&TUNNELLLLP /s/ MeganWardCascio WilliamM.Lafferty(#2755) MeganWardCascio(#3785) ShannonE.German(#5172) 1201N.MarketStreet Wilmington,DE19801 (302)6589200 AttorneysforDefendantToryBurchand Defendant/CounterclaimPlaintiffTory BurchLLC

December3,2012
6791140.3