# St. Clair County Employees' Retirement System v. Acadia Healthcare Company, Inc.

> District Court, M.D. Tennessee · September 7, 2022

URL: https://www.frixlaw.com/law-library/cases/10438206

## Case

- **Court:** District Court, M.D. Tennessee
- **Decided:** September 7, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10438206

## How later opinions describe it (automated extraction)

- finding “ample circumstantial evidence that could give rise to an inference of [defendants’] actual knowledge”

## Opinion text

UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION

ST. CLAIR COUNTY EMPLOYEES’
RETIREMENT SYSTEM, Individually and
on Behalf of All Others Similarly Situated,

Plaintiff, Case No. 3:18-cv-00988

v. Judge William L. Campbell, Jr.
Magistrate Judge Alistair E. Newbern
ACADIA HEALTHCARE COMPANY,
INC., et al.,

Defendants.

MEMORANDUM ORDER
Lead Plaintiffs Chicago & Vicinity Laborers’ District Council Pension Fund and New York
Hotel Trades Council & Hotel Association of New York City, Inc., Pension Fund filed a motion
to compel discovery production (Doc. No. 106). Defendants Acadia Healthcare Company, Inc.,
Joey A. Jacobs, Brent Turner, and David Duckworth have responded in opposition (Doc. No. 115),
and Plaintiffs have replied (Doc. No. 118). Plaintiffs’ motion will be granted as set out in the
following Order.
Plaintiffs have also filed a motion for issuance of letters rogatory to depose witnesses
located in the United Kingdom (Doc. No. 127). Defendants have opposed that motion (Doc. No.
128), and Plaintiffs have replied (Doc. No. 137). Because that motion and Defendants’ response
includes arguments that are resolved, in part, by this Order, Plaintiffs’ motion (Doc. No. 127) will
be denied without prejudice to refiling as necessary.
I. Background
This action brought under the Securities Exchange Act of 1934 seeks compensation from
Defendants Acadia Healthcare Company, Inc., Joey A. Jacobs, Brent Turner, and David
Duckworth (collectively, Defendants) for a class of plaintiffs who purchased Acadia securities
between April 30, 2014, and November 15, 2018. (Doc. No. 39.) Acadia Healthcare Company

provides for-profit healthcare services by operating “inpatient psychiatric facilities, residential
treatment centers, group homes, substance abuse facilities, and facilities providing outpatient
behavioral healthcare services in the United States, the United Kingdom (“U.K.”) and Puerto
Rico.” (Id. at ¶ 2.) Plaintiffs filed this action on October 1, 2018, alleging claims under Sections
10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S. C. §§ 78j(b), 78t(a), and Securities
and Exchange Commission Rule 10b–5, 17 CFR § 240.10b–5. Plaintiffs allege that, during the
class period, Defendants
engaged in a scheme to defraud and made numerous materially false and misleading
statements and omissions to investors regarding Acadia’s business and operations,
including by falsely stating that: (i) offering quality care was of fundamental
importance to Acadia’s business model, and that its facilities provided high-quality
care that would drive Acadia’s success; (ii) Acadia adequately staffed its facilities
to ensure its ability to provide appropriate care to patients; (iii) Acadia’s facilities
were in compliance with relevant regulatory requirements; and (iv) Acadia’s U.K.
operations would achieve substantial revenue and earnings growth in the face of
nursing shortages and negative media reports about the Company’s operations.

(Id. at ¶ 3.)
Plaintiffs allege that these misleading statements about Acadia’s operations artificially
inflated the price of its securities, allowing the individual defendants to realize “hundreds of
millions of dollars in insider trading proceeds by dumping the majority of their Acadia shares.”
(Id. at ¶ 7.)
Plaintiffs’ claims were summarized by Judge Campbell in ruling on Defendants’ motion to
dismiss as follows:
Plaintiffs allege that Defendants falsely represented that Acadia provided high-
quality services, adequately staffed its facilities, and complied with applicable laws
and regulations. It was quality care, Defendants repeatedly emphasized, that drove
new patients to Acadia facilities, created the demand necessary to grow its existing
facilities, and was key to improving the performance and operations at the facilities
Acadia acquired to fuel its growth. In reality, Acadia achieved growth by
inadequately staffing facilities and cutting costs to extract higher profits at the
expense of patient care and safety, and ran facilities rife with violence, sexual
assault, and counter-therapeutic policies and practices.

Additionally, Plaintiffs allege Defendants falsely represented that Acadia’s $2.2
billion acquisition of The Priory Group, the U.K.’s largest chain of behavioral
health centers, would contribute to positive financial growth. Defendants
repeatedly assured investors throughout 2017 that Acadia was on track to meet its
financial targets and that the Company would experience margin improvement in
the U.K. when, in fact, Acadia was not on track to meet[] its U.K. financial targets
because of weakened patient census and increased labor costs that Defendants
concealed.

Defendants’ fraud was revealed through a series of partial disclosures. The first
occurred on October 24, 2017, when Acadia revealed that deteriorating
performance in the U.K. had caused the Company to miss its 3Q17 revenue and
earnings targets and substantially reduce its guidance for the remainder of the year,
causing Acadia’s stock price to drop 30%. The second occurred on October 11,
20o18, when Aurelius Value published a report and released a video documenting
systemic patient abuse and neglect at dozens of Acadia facilities caused primarily
by understaffing. The report included an analysis of Centers of Medicare and
Medicaid Services inspection reports from 2013 to 2018 for 31 of the 40 acute
inpatient U.S. Hospitals listed on Acadia’s website. The analysis found that federal
inspectors uncovered staffing deficiencies at over 90% of these 31 Acadia hospitals,
including repeated violations for insufficient nurses or qualified practitioners on
hand. Of these 28 hospitals with staffing deficiencies, 89% of those facilities were
also cited by inspectors for patient care and safety deficiencies. Following this
news, Acadia’s stock price declined by more than 11%.

Finally, on November 16, 2018, Seeking Alpha published an article entitled,
“Acadia Healthcare: Very Scary Findings From A 14-Month Investigation,” which
revealed that the Company’s rapid growth, as well as its revenue and margin
increases, were attributed to cost-cutting and “reducing the quality of care.” The
article highlighted severe problems at seven of Acadia’s facilities (facilities that
were also featured in the October 2018 Aurelius Value report) and reported that,
“due to the number of suicides at some of their facilities, Acadia’s ability to accept
certain patients has been restricted by state-level governments.” On this news,
Acadia’s stock price declined by 26%.

(Doc. No. 54 (internal citations omitted).)
Plaintiffs also allege that “Acadia has sought to destroy evidence of its misconduct through
draconian document destruction policies. Several former Acadia employees reported that during
the Class period, the Company instituted a policy whereby employee e-mails were automatically
deleted after 30 days unless employees took affirmative steps to preserve them.” (Doc. No. 39, ¶

49.)
The parties entered into a joint stipulation to stay all discovery pending resolution of
Defendants’ then-anticipated motion to dismiss on November 5, 2018. (Doc. No. 22.) After the
motion to dismiss was denied (Doc. No. 55), the parties requested and the Court held an initial
case management conference. The initial case management order was entered and discovery
commenced on March 2, 2021. (Doc. No. 66.) Since then, the parties have engaged in extensive
discovery negotiations and held multiple discovery dispute resolution conferences with the Court.
The motion to compel addressed by this Order presents issues that the parties were not able to
resolve by those means.
II. Legal Standard
“[T]he scope of discovery is within the sound discretion of the trial court[.]” S.S. v. E. Ky.

Univ., 532 F.3d 445, 451 (6th Cir. 2008) (first alteration in original) (quoting Chrysler Corp. v.
Fedders Corp., 643 F.2d 1229, 1240 (6th Cir. 1981)). Generally, Federal Rule of Civil Procedure
26 allows discovery of “any nonprivileged matter that is relevant to any party’s claim or defense
and proportional to the needs of the case[.]” Fed. R. Civ. P. 26(b)(1). Relevant evidence in this
context is that which “‘has any tendency to make a fact more or less probable than it would be
without the evidence,’ if ‘the fact is of consequence in determining the action.’” Grae v. Corr.
Corp. of Am., 326 F.R.D. 482, 485 (M.D. Tenn. 2018) (quoting Fed. R. Evid. 401).
The party moving to compel discovery bears the initial burden of proving the relevance of
the information sought. See Gruenbaum v. Werner Enters., Inc., 270 F.R.D. 298, 302 (S.D. Ohio
2010); see also Fed. R. Civ P. 26(b)(1) advisory committee’s note to 2015 amendment (“A party
claiming that a request is important to resolve the issues should be able to explain the ways in
which the underlying information bears on the issues as that party understands them.”). A motion
to compel discovery may be filed in several circumstances, including when “a party fails to answer

an interrogatory submitted under Rule 33[,]” or “produce documents ... as requested under Rule
34.” Fed. R. Civ. P. 37(a)(3)(B)(iii)–(iv). “[A]n evasive or incomplete disclosure, answer, or
response” is considered “a failure to disclose, answer, or respond.” Fed. R. Civ. P. 37(a)(4). “The
court will only grant [a motion to compel], however, if the movant actually has a right to the
discovery requested.” Grae, 326 F.R.D. at 485.
III. Analysis
Plaintiffs’ motion to compel identifies eleven requests for production that address Acadia’s
relationship to Priory, Acadia’s U.K. operations, and the retention of documents related to this
action by Acadia and Priory:
Request No. 1: Defendants’ document retention policies and documents
concerning the preservation, search for, collection, maintenance, destruction or
alteration of documents and ESI concerning Acadia and the Individual defendants:

Request No. 8: All documents and communications concerning Acadia’s proposed,
draft or final business plans, strategic plans or budgets for Acadia and any Acadia
facility, including any quarterly or annual budget or financial plan;

Request No. 32: All documents and communications concerning the effect(s) of
the Priory Group and PiC acquisitions on Acadia’s revenue, profit and growth,
including any potential or actual stock market reaction(s) to the acquisitions;

Request No. 34: All documents and communications concerning the Company’s
operations and financial performance in the U.K., including: (a) any internal
projections, forecasts, budgets, reports, monitoring or strategies regarding revenue
and adjusted EBITDA results and growth in the U.K.; (b) any comparison between
the economic performance of Acadia’s U.S. and U.K. Acadia Facilities; (c) all
periodic evaluations of the Company’s financial performance in the U.K.; (d)
anticipated, potential or actual profit, revenue and adjusted EBITDA results and
growth from the acquisitions of PiC and the Priory Group; and (e) anticipated,
potential or actual facility revenue, adjusted EBITDA and adjusted earnings per
diluted share for fiscal years 2016-2018;

Request No. 36: All documents and communications concerning Acadia’s Q4 2016
earnings results and FY 2017 guidance announced on February 23, 2017, including
the statement that Defendants believed the U.K. results were out of the ordinary
due to “disruption throughout the fourth quarter resulting from the focus, time and
effort required to complete the divestiture in late November and to begin the
integration of Priory’s operations into Acadia”;

Request No. 37: All documents and communications concerning Acadia’s Q2 2017
earnings results announced on July 27, 2017, including the disclosure that same
facility revenue growth for its U.K. Acadia Facilities was 4.0% and the narrowing
of the Company’s previously-established financial guidance for FY 2017;

Request No. 39: All documents and communications concerning Acadia’s Q3 2017
earnings results announced on October 24, 2017, including the disclosure that same
facility revenue growth for its U.K. Acadia Facilities had slowed to 3.8% and the
lowering of the Company’s previously-narrowed financial guidance for FY 2017;

Request No. 40: All documents and communications concerning: (a) the March 14,
2017 Care Quality Commission report on the Priory Group Hospital Roehampton;
and (b) all Care Quality Commission reports on Acadia’s U.K. Acadia Facilities;
and

Request No. 55: All documents and communications concerning the deletion of
the Acadia Microsoft Exchange mailbox for Nigel Myers.

(Doc. No. 107.)
Defendants have produced discovery responsive to Plaintiffs’ requests for production
collected from Acadia custodians located in the United States. Plaintiffs now move to compel
Defendants to collect and produce discovery responsive to these requests from the following
sources located in the U.K.: (1) the custodial files of Priory Group Financial Accountants Matt
Ward and Sarah Smith, Priory Director of Finance Vicky Morell, Priory Director of Adult Care
John Dalton, and Priory Director of Risk & Safety David Watts (collectively, the Priory
Custodians); (2) the non-custodial shared drives of Priory’s Finance and Compliance departments;
and (3) the custodial files of Priory’s Chief Information Officer Tina Walton. (Id.) Plaintiffs state
that their need for production from the U.K. sources is occasioned by four events: “(1) Acadia’s
implementation of a 60-day deletion policy at Priory in the spring of 2018 (i.e., after the alleged
misconduct); (2) Acadia’s decision to place only three Priory custodians on litigation hold; (3) the
deletion of the mailbox of Nigel Myers (Priory’s CFO during the relevant time period), with no

explanation; and (4) Acadia’s refusal to conduct any additional searches of Priory sources.” (Doc.
No. 107.) Plaintiffs state that the “first shareholder lawsuit alleging Acadia had misled investors
with respect to its Priory U.K. operations was filed on March 14, 2018,” see Jackson Cnty. Emps.’
Ret. Sys. v. Acadia Healthcare Co., Case No. 3:18-cv-00286 (M.D. Tenn), and voluntarily
dismissed on March 26, 2018. (Doc. No. 107.) Plaintiffs cite email correspondence among Priory
employees including Priory CEO Trevor Torrington and Walton from March 30, 2018, discussing
implementation of an email deletion policy at Priory. In May 2018, Torrington announced that a
sixty-day automatic deletion policy would take effect the next month. When this action was filed
on October 1, 2018, Defendants placed three Priory employees—Torrington, Priory CFO Nigel
Myers, and Priory General Counsel Dave Hall—on a litigation hold. (Id.) Plaintiffs state that “the

custodial emails of Nigel Myers . . . were subsequently deleted after the litigation hold was put in
place” and that “Acadia has been unable to explain how this deletion occurred.” (Id.)
By agreement of the parties, Defendants produced a Rule 30(b)(6) witness, Brandon
Leatha, to testify on two topics:
Topic No. 24: (a) The deletion of Nigel Myers’ mailbox; (b) the decision not to
collect any documents from Priory Group prior to its sale; and (c) the decision not
to reserve any right to request or collect documents in the January 7, 2021 Share
Purchase Agreement that finalized the sale of Priory Group; and

Topic No. 25: The origin, basis and nature of Acadia’s document destruction
policies, including: (a) the Company’s policy whereby employee emails are
automatically deleted after 30 days; and (b) Priory’s document deletion policies.

(Doc. Nos. 107, 111-11–111-13.)
That deposition took place on December 3, 2021. Plaintiffs state that Leatha “had no
knowledge, was inadequately prepared, and offered no useful testimony on these topics as they
related to Priory.” (Doc. No. 107.) Excerpts from Leatha’s deposition testimony reflect his
statements that he did not have any knowledge regarding the deletion of Myers’s email account,
Priory’s email retention policies, or why Defendants did not collect documents from Priory before
its sale.
The parties have engaged in extensive negotiations regarding the production of discovery
from U.K. sources that are reflected in correspondence filed with Plaintiffs’ motion. Plaintiffs

state—and Defendants do not dispute—that, over the course of these discussions, Defendants
represented that they were “in contact with Priory’s counsel and expected to collect the email files
of Trevor Torrington and Dave Hall” and that discovery from Torrington and Hall’s email files
has been produced. Defendants also stated that they were “willing to discuss the collection and
production of documents from certain additional custodians and noncustodial sources at Priory
that are likely to have relevant information subject to burden and proportionality concerns.”
After continued back and forth regarding what custodial sources remained available at
Priory, Plaintiffs identified the six custodians and two noncustodial shared drives that are the
subject of this motion. Plaintiffs propose that thirteen search terms be run on the Priory Custodians’
email accounts and the noncustodial shared drives for a time period of January 1, 2016, through

February 27, 2018. The parties have agreed on two search terms to be run on seven domestic
Acadia custodians regarding implementation of a litigation hold, email retention, and the deletion
of Joey Jacobs and Nigel Myers’s email accounts. Plaintiffs propose that Defendants conduct the
same search on Walton’s email.
A. Federal Rule of Civil Procedure 37(e)
Although the parties do not address it in their filings, consideration of Federal Rule of Civil
Procedure 37(e) is necessary to resolving Plaintiffs’ motion to compel. Rule 37(e) addresses the
failure to preserve electronically stored information and “authorizes and specifies measures a court
may employ if information that should have been preserved is lost, and specifies the findings

necessary to justify these measures.” Fed. R. Civ. P. 37(e) advisory committee’s note to 2015
amendment. Those measures extend from steps “no greater than necessary to cure” any identified
prejudice, to an adverse jury instruction, to dismissal of the case. Fed. R. Civ. P. 37(e). No sanction
under Rule 37(e) is requested by Plaintiffs or justified by the record now before the Court. What
is relevant to Plaintiffs’ motion is the finding Rule 37(e) requires a court to make before
determining if any curative measures are necessary: that “electronically stored information that
should have been preserved in the anticipation or conduct of litigation is lost because a party failed
to take reasonable steps to preserve it and it cannot be restored or replaced through additional
discovery[.]” Fed. R. Civ. P. 37(e). This initial inquiry recognizes that “electronically stored
information often exists in multiple locations, [and] loss from one source may often be harmless

when substitute information can be found elsewhere.” Fed. R. Civ. P. 37(e) advisory committee’s
note to 2015 amendment. If ESI can be replaced or restored—regardless of whether its loss was
intentional or inadvertent—no further remedial measures are warranted. Id.
Defendants do not dispute that Myers’s email account should have been preserved in
anticipation of this litigation—he was one of three custodians (with Torrington and Hall) whose
accounts were placed on a litigation hold—or that his email account was deleted while the hold
was in place. Nor do Defendants dispute that Priory implemented a sixty-day email deletion policy
in June 2018, four months before this lawsuit was filed. These events may constitute the kind of
“routine alteration and deletion of information that attends ordinary use” recognized by Rule 37(e)
as occasioning, in the first instance, more discovery to replace what was lost.1 Fed. R. Civ. P. 37(e)
advisory committee’s note to 2006 amendment. They may warrant taking the additional measures
that Rule 37(e) provides. That determination cannot be made on this record. However, the Court’s
assessment of whether the discovery Plaintiffs seek through their motion to compel is relevant and

proportional includes consideration of Rule 37(e)’s framework, including that its first step in
addressing the loss of ESI is additional discovery to replace it.
B. Relevance
First, the Court must determine whether Plaintiffs have established that the discovery they
request addresses “any nonprivileged matter that is relevant to any party’s claim or defense and
proportional to the needs of the case[.]” Fed. R. Civ. P. 26(b)(1). see Reitz v. City of Mt. Juliet, 680
F. Supp. 2d 888, 891 (M.D. Tenn. 2010). Plaintiffs summarize their theory of why the Priory
Custodians and Walton are likely to have relevant discovery as follows:
Two of the six custodians were Group Financial Accountants who worked under
former Chief Financial Officer (“CFO”) Nigel Myers—whose emails were deleted
prior to production in this case—in the Finance Department, and two others were
Directors of Finance for the Priory Healthcare and Priory Adult Care divisions.
Based on their positions at Priory and on documents produced to date, all of these
individuals were involved in, inter alia, tracking monthly patient volumes and
staffing costs, working on financial audits, and drafting and reconciling the
financial forecasts and budgets for Priory. The fifth custodian was a Director of
Risk & Safety, and internal policies show he was one of the primary individuals
tasked with reviewing and investigating serious patient incidents at Priory. The
sixth custodian, Priory’s Chief Information Officer [Tina Walton], is in possession
of documents concerning Priory’s document deletion policies and the deletion of
Nigel Myers’ emails—i.e., two topics for which Defendants agreed to designate a
Rule 30(b)(6) witness, but for which the designee had no knowledge, was
inadequately prepared, and offered no useful testimony.

(Doc. No. 107.)

1 Plaintiffs have not argued for or otherwise supported a finding that Defendants acted with
an intent to deprive them of relevant discovery in this motion.
In opposition to Plaintiffs’ motion, Defendants argue that the discovery Plaintiffs seek is
not relevant because it “will not establish the actual knowledge of the Individual Defendants, nor
. . . show the scienter of Acadia because, under the PSLRA safe harbor, only the scienter of
executives may be attributable to Acadia.” (Doc. No. 115.)

First, Defendants did not object to the relevance of any of these requests with specificity
in their responses. Rather, Defendants’ responses uniformly begin with a statement that each
request is “overbroad, unduly burdensome, disproportionate to the needs of the case, and seeking
information that has no bearing on the claims or defenses at issue in the Action.” Such
“[b]oilerplate objections are legally meaningless and amount to a waiver of an objection.” Siser N.
Am., Inc. v. Herika G. Inc., 325 F.R.D. 200, 209–10 (E.D. Mich. 2018); see also Fed. R. Civ. P.
34(b)(2)(B) (requiring that a response to a request for production “state with specificity the
grounds for objecting to the request”). Because Defendants did not make the relevance objections
they now raise in their responses to Plaintiffs requests, the Court may consider them waived. See,
e.g., Smash Tech., LLC v. Smash Sols., LLC, 335 F.R.D. 438, 446 (D. Utah 2020) (finding that

“the objecting party must explain how each objection applies to each specific discovery request”
and that objections not meeting this standard “fail[] to comply with Rules 33 and 34 and [are]
therefore waived”): Liguria Foods, Inc. v. Griffith Lab'ys, Inc., 320 F.R.D. 168, 186 (N.D. Iowa
2017) (finding “a ‘lack of relevance’ objection, without explanation, is contrary to the rules”)
(quoting Sentis Grp., Inc. v. Shell Oil Co., 763 F.3d 919, 925 (8th Cir. 2014)). Because Plaintiffs
have not argued for waiver, however, the Court will consider relevance on the merits.
Defendants’ relevance argument is centered on an assertion “that all of the challenged
statements concerning Acadia’s performance in the UK are forward looking under the PSLRA’s
safe harbor.” (Doc. No. 115.) The PSLRA’s safe harbor provision excludes from liability forward-
looking statements that are (1) identified as such and “accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to differ materially from
those in the forward-looking statement”; (2) immaterial; (3) if made by a natural person, not shown
to be made with that person’s “actual knowledge . . . that the statement was false or misleading”;

or (4) if made by a business entity, not shown to be “made by or with the approval of an executive
officer of that entity” and “made or approved by such officer with actual knowledge by that officer
that the statement was false or misleading.” 15 U.S.C. § 78u–5(c)(1). In their motion to dismiss,
Defendants argued principally that all of the challenged statements were accompanied by
cautionary statements sufficient to trigger the safe harbor provision. (Doc. No. 41.) In ruling on
Defendants’ motion, the Court found that the challenged statements did “fall squarely within the
PSLRA’s definition of forward-looking statements.”2 (Doc. No. 54.) It also found that “the
meaningfulness of the cautionary statements in Acadia’s Form 10-K cannot be determined without
a determination of the facts[,]” including “whether Acadia’s U.K. Facilities were already facing
increased labor costs and declines in patient volume at the time the respective challenged forward-

looking statements were made.” (Doc. No. 54.) Having made this finding, the Court declined to
dismiss this action on the basis that the safe harbor provision shielded Defendants from liability.
(Id.)
In opposing Plaintiffs’ motion to compel, Defendants shift their focus to the safe harbor
provision’s scienter requirement of “actual knowledge.” (Doc. No. 115.) Specifically, Defendants
argue that, when it is a business entity making the statements in question, “liability can only attach

2 Plaintiffs argue in their reply that “not all of the U.K.-related statements are forward-
looking” and cite statements identified in Paragraphs 163, 168, 170–171, and 173–175. (Doc. No.
118.) The Court identified the statements made in each of these paragraphs as “squarely” forward-
looking. (Doc. No. 54.)
where the plaintiff shows that an ‘executive officer of that entity’ who made or approved the
statement did so with ‘actual knowledge by that officer that the statement was false or
misleading.’” (Doc. No. 115 (quoting 15 U.S.C. § 78u-5(c)(1)(B)(ii)).) They argue that the
requested discovery cannot show actual knowledge because “the executive officers that made or

approved the challenged statements at issue are Defendants Jacobs, Turner, or Duckworth,” each
of whom “has confirmed, under oath, that they did not rely on any of these Priory sources for the
challenged statements at issue[.]” (Doc. No. 115.) In support, Defendants offer declarations from
Jacobs, Turner, and Duckworth in which each states that, “in approving Acadia’s press releases
and public filings and making the statements [identified in the Amended Complaint] [he] did not
communicate with Matthew Ward, Sarah Smith, Vicky Morrell, John Dalton, David Watts, or Tina
Walton, and [ ] did not access Priory Group’s Finance or Compliance department computer drives
in the United Kingdom. Rather, the information on which [he] relied for the statements . . . was
located at Acadia’s U.S. corporate headquarters.”3 (Doc. Nos. 115-2, 115-3, 115-4.)
But, as Plaintiffs point out, Defendants’ theory of relevance unduly restricts the means by

which a party may prove actual knowledge. As the Supreme Court recently held in the context of
ERISA actions, actual knowledge can be proved by “any of the ‘usual ways,’” including “through
‘inference from circumstantial evidence.’” Intel Corp. Inv. Pol’y Comm. v. Sulyma, 140 S. Ct. 768,
779 (2020) (quoting Farmer v. Brennan, 511 U.S. 825, 842 (1994); see also In re Stone & Webster,
Inc., Sec. Litig., 414 F.3d 187, 210 (1st Cir. 2005) (finding circumstantial evidence “sufficient . . .
when taken together with the entire mix of alleged facts, to support a strong inference of at least
recklessness with respect to the falsity, if not actual knowledge of the falsity” of statements made

3 Turner’s declaration excludes the language regarding “approving Acadia’s press releases
and public filings.” (Doc. No. 115-3.)
in a securities action); S.E.C. v. Lybrand, 200 F.Supp.2d 384, 400 (S.D.N.Y. 2002) (finding “ample
circumstantial evidence that could give rise to an inference of [defendants’] actual knowledge”).
Evidence used to prove actual knowledge may include “electronic records showing that a [party]
viewed” relevant information, “evidence suggesting that [a party] took action in response to [that]

information[,]” and “evidence of ‘willful blindness’” Intel Corp., 140 S.Ct. at 779 (quoting Global-
Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 769 (2011)).
The Court finds that Plaintiffs’ Requests for Production 8, 32, 33, 34, 36, 37, 38, 39, and
40—all of which address Acadia’s acquisition of Priory, operation of the U.K. facilities, and the
effect of the U.K. facilities’ performance on Acadia’s earnings—seek discovery that is relevant to
proving, at a minimum through circumstantial evidence, Defendants’ actual knowledge that the
forward-looking statements were false.4
Requests for Production 1 and 55 and the proposed search of Walton’s email address the
discovery of evidence related to the deletion of Myers’s email account and the implementation of
a sixty-day email deletion policy at Priory shortly before this action was filed. Defendants’ primary

argument against the relevance of this discovery is that “if Priory documents are not relevant to
the challenged statements at issue, then neither are documents concerning Priory’s preservation of
those documents.” (Doc. No. 115.) That argument is rendered moot by the Court’s finding that the
substantive discovery Plaintiffs seek is relevant.
Defendants argue that the sixty-day deletion policy was put into effect “at a time when no
lawsuit was pending against [Priory], and thus when it had no duty to preserve such documents”
and, therefore, “is not spoliation.” (Doc. No. 115.) “As a general matter, it is beyond question that

4 Requests for Production 1 and 55 seek documents relevant to Plaintiffs’ spoliation
allegations and will be addressed separately.
a party to civil litigation has a duty to preserve relevant information, including ESI, when that
party ‘has notice that the evidence is relevant to litigation or . . . should have known that the
evidence may be relevant to future litigation.’” John B. v. Goetz, 531 F.3d 448, 459 (6th Cir. 2008)
(quoting Fujitsu Ltd. V. Fed. Express Crop., 247 F.3d 423, 436 (2d Cir. 2001)). “It is the

responsibility of the parties to ensure that relevant ESI is preserved, and when that duty is breached,
a district court may exercise its authority to impose appropriate discovery sanctions.” Id. Because
the “[d]estruction of potentially relevant evidence obviously occurs along a continuum of fault—
ranging from innocence through the degrees of negligence to intentionality,” determining how to
address lost ESI is a case-specific and fact-intensive inquiry. Adkins v. Wolever, 554 F.3d 650, 652
(6th Cir. 2009). THus
Plaintiffs have shown that Priory instituted the sixty-day deletion policy three months after
their first action against these defendants was voluntarily dismissed and six months before this
action was filed. They have also shown that Myers’s email account was deleted while on a
litigation hold. These acts may well be wholly innocent—the kind of “routine alteration and

deletion of information that attends ordinary use” that Rule 37(e) contemplates and, as Defendants
assert, not spoliation. Fed. R. Civ. P. 37(e) advisory committee’s note to 2006 amendment. They
may warrant the stronger remedies that Rule 37(e) provides. “Further discovery will help all
parties” make that determination. Konica Minolta Bus. Sols., U.S.A. Inc v. Lowery Corp., No. 15-
CV-11254, 2016 WL 4537847, at *6 (E.D. Mich. Aug. 31, 2016) (finding such discovery
“especially needed to illuminate . . . whether reasonable steps were taken to preserve [ESI] and
whether it can be restored or replaced through additional discovery”). And Defendants have
already attempted to provide it by offering a Rule 30(b)(6) witness to testify about them. The
transcript of that deposition, however, shows that the witness was not able to testify as to how
Myers’s email was deleted, Priory’s email deletion policies before it was acquired by Acadia, why
the sixty-day policy was instituted in June 2018, why discovery was not collected from Priory
before its sale, or who would have been responsible for collecting that discovery. The discovery
Plaintiffs seek through the proposed search of Walton’s email is relevant to those topics and is a

reasonable next step to obtaining it.
C. Possession, Custody, or Control
Defendants argue that Plaintiffs’ motion must be denied because the discovery they seek
is not in Defendants’ “possession, custody, or control” for purposes of Federal Rule of Civil
Procedure 34. (Doc. No. 115.) The parties agree that Defendants do not have actual possession of
the requested discovery, which is housed with Priory in the U.K. The question is thus whether
Defendants have sufficient control of the discovery to be required to produce it.
Defendants argue that they cannot be required to produce ESI in Priory’s possession under
Rule 34 because they do not have the “legal right to obtain” that discovery. (Doc. No. 115.) The
Sixth Circuit has held that “documents are deemed to be within the ‘possession, custody, or
control’ for purposes of Rule 34 if the party has actual possession, custody or control, or has the

legal right to obtain the documents on demand.” In re Bankers Tr. Co., 61 F.3d 465, 469 (6th Cir.
1995) (emphasis original). Some courts within the Sixth Circuit have construed the “legal right”
standard narrowly. See, e.g., J.S.T. Corp. v. Robert Bosch LLC, No. 15-13842, 2019 WL 2354631,
at *6 (E.D. Mich. June 3, 2019), report and recommendation adopted, No. 15-13842, 2019 WL
2343705 (E.D. Mich. June 3, 2019) (finding that courts in the Sixth Circuit “have adopted the
Legal Right Standard and the Legal Right Plus Notification Standard but not the Practical Ability
Standard” as defined by The Sedona Conference); Pasley v. Caruso, No. 10-CV-11805, 2013 WL
2149136, at *5 (E.D. Mich. May 16, 2013) (finding that, “[w]hile Plaintiff’s argument [in support
of the practical ability standard] is logically sound, the Sixth Circuit has not adopted this
‘expansive notion of control’”) (quoting Flagg v. City of Detroit, 252 F.R.D. 346, 353 n.16 (E.D.
Mich. 2008); Flagg, 252 F.R.D. at 353 & n.16 (finding that “[t]he Sixth Circuit and other courts
have held that documents are deemed to be within the ‘control’ of a party if it ‘has the legal right
to obtain the documents on demand’” and that “[s]ome courts have adopted a more expansive

notion of ‘control,’ finding that it extends to circumstances where a party has the ‘practical ability
to obtain the documents from a nonparty to the action’”) (quoting Bank of New York v. Meridien
BIAO Bank Tanzania Ltd., 171 F.R.D. 135, 146 (S.D.N.Y. 1997)).
Other courts within the Sixth Circuit have found that “control” includes the practical ability
to produce documents from a third party. See, e.g., Union Com. Servs. Ltd. v. FCA Int’l Operations
LLC, No. 16-CV-10925, 2018 WL 558760, at *2 (E.D. Mich. Jan. 25, 2018) (“Moreover,
discovery material is within a party’s control when the party has the practical ability to obtain the
documents, particularly when the opposing party does not have the same practical ability to do
so.’” (internal citations omitted)); Robison v. Coey, No. 2:15-CV-944, 2016 WL 3350471, at *2
(S.D. Ohio June 16, 2016) (“[C]ourts have frequently held that the Defendants . . . have the

practical ability to obtain such documents and therefore must do so in response to a Rule 34
request[.]”); Libertarian Party of Ohio v. Husted, No. 2:13-CV-953, 2014 WL 3928293, at *1
(S.D. Ohio Aug. 12, 2014) (“Control is defined as the legal right or ability to obtain the documents
from another source upon demand. . . Neither physical possession nor legal ownership of the
documents is required; [c]ourts have also interpreted Rule 34 to require production if the party has
the practical ability to obtain the documents from another, irrespective of his legal entitlement.”);
Sagraves v. Lab One, Inc., No. C2:04-CV-683, 2004 WL 7340443, at *4 (S.D. Ohio Sept. 30,
2004), objections overruled sub nom. Sagraves v. LabOne, Inc., No. 2:04CV683, 2005 WL
8168483 (S.D. Ohio Sept. 29, 2005), aff’d sub nom. Sagraves v. Lab One, Inc., 316 F. App’x 366
(6th Cir. 2008) (“Control has been defined broadly: it . . . includes the legal right, authority, or
practical ability to obtain the materials sought upon demand.” (internal quotation omitted)
(emphasis added)). Still other courts appear to use the standards interchangeably.5 Whiting v. Trew,
No. 3:20-CV-54-TRM-DCP, 2020 WL 6468131, at *2 (E.D. Tenn. Nov. 3, 2020) (finding that

plaintiff “had the practical ability and/or legal right to obtain” the subject discovery).
The state of the law is best summarized by Wright & Miller: “The concept of ‘control’ is
very important in applying [Rule 34], but the application of this concept is often highly fact-
specific.” 8B Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 2210 (3d ed.);
see also Libertarian Party of Ohio, 2014 WL 3928293, at *2 (“There may be instances where
some factual development is needed to demonstrate that, even apart from legal ownership or a
legal right to demand documents, a party has the practical ability to obtain them.”) “Particular
concerns can arise when a corporate party is related to another corporation, and this nonparty

5 Several courts across other circuits have also adopted the practical ability standard,
including courts in the Second, Fourth, Eighth, Eleventh, and D.C. Circuits. Shcherbakovskiy v.
Da Capo Al Fine, Ltd., 490 F.3d 130, 138 (2d Cir. 2007) (“[I]ndeed, documents have been
considered to be under a party’s control (for discovery purposes) when that party has the right,
authority, or practical ability to obtain the materials sought on demand.” (internal citations
omitted)); Searock v. Stripling, 736 F. 2d 650, 653 (11th Cir. 1984) (defining “control” as the legal
right, authority, or ability to obtain documents on demand); Benisek v. Lamone, 320 F.R.D. 32, 34
(D. Md. 2017) “[C]ourts have sometimes interpreted Rule 34 to require production if the party has
the practical ability to obtain the documents from another, irrespective of his legal entitlement[.]”
(internal citations omitted); Prokosch v. Catalina Lighting, Inc., 193 F.R.D. 633, 636 (D. Minn.
2000) “[D]ocuments are considered to be under a party’s control when that party has the right,
authority, or practical ability, to obtain the documents from a non-party to the action.” (internal
citations omitted); Costa v. Kerzner Int’l Resorts, Inc., 277 F.R.D. 468, 471 (S.D. Fla. 2011) (“[I]f
a party has access and the practical ability to possess documents not available to the party seeking
them, production may be required.”); Bush v. Ruth’s Chris Steak House, Inc., 286 F.R.D. 1, 5
(D.D.C. 2012) (“Control does not require that the party have legal ownership or actual physical
possession . . . , but rather the right, authority or practical ability to obtain the documents from a
non-party to the action.”). The preceding is not intended to be a comprehensive survey of all
circuits—nor even within a single circuit—but rather merely to show the general inclination among
courts to broadly interpret the meaning of control within Rule 34.
corporation actually possesses the materials in question.” Wright & Miller, supra, § 2210. In this
circumstance, “[r]ather than adopting an overarching rule . . . courts have tended to focus on the
facts shown in a particular case.” Id.
Here, Defendants point to the Share Purchase Agreement documenting Acadia’s January

7, 2021 sale of Priory and assert that the “contract governing Acadia’s sale of Priory granted
Acadia no such right [to command the release of discovery].” (Doc. No. 19.) But Defendants
identify no portion of the purchase agreement that denies Acadia the ability to obtain documents
from Priory.6 Further, “[a] party that lacks a contractual right to obtain a third-party’s documents
. . . may nonetheless be found to have control over the third-party’s documents based on a
demonstrated ability to access those documents in the ordinary course of business.” Coventry Cap.
US LLC v. EEA Life Settlements Inc., 334 F.R.D. 68, 73 (S.D.N.Y. 2020) (citing Camden Iron and
Metal, Inc. v. Marubeni Am. Corp., 138 F.R.D. 438, 441–42 (D.N.J. 1991)). Control has also been
found where a subsidiary corporation “was an agent of the parent in the transaction giving rise to
the suit” in question. Gerling Int’l Ins. Co. v. Comm’r, 839 F.2d 131, 140 (3d Cir. 1988). Finally,

“[w]here the relationship [between corporate entities is] such that the agent-subsidiary can secure
documents of the principal-parent to meet its own business needs and documents helpful for use

6 The Court also notes that Acadia’s sale of Priory was executed on January 7, 2021, more
than two years after this action was filed and less than two weeks before the denial of Defendants’
motion to dismiss (Doc. No. 54). The PSLRA requires that, while the required stay of discovery
during the pendency of any motion to dismiss is in place, “any party to the action with actual notice
of the allegations contained in the complaint shall treat all documents, data compilations (including
electronically recorded or stored data), and tangible objects that are in the custody or control of
such person and that are relevant to the allegations, as if they were the subject of a continuing
request for production of documents from an opposing party under the Federal Rules of Civil
Procedure.” 15 U.S.C. § 78u-4(b)(3)(C)(i). At least one court has found that this provision provides
assurance that relevant discovery will not be lost due to corporate reorganization and divestiture.
See In re Sunrise Senior Living, Inc., 584 F. Supp. 2d 14, 18 (D.D.C. 2008).
in the litigation, the courts will not permit the agent-subsidiary to deny control for purposes of
discovery by an opposing party.” Id.
Plaintiffs argue that Defendants’ control over the requested discovery has been
demonstrated by their collection and production of Torrington and Hall’s email and their

representations during discovery negotiations that they were “willing to discuss the collection and
production of documents from certain additional custodians and noncustodial sources at Priory
that are likely to have relevant information subject to burden and proportionality concerns” and
that they had “advised Priory about Plaintiffs’ requests and Priory ha[d] provided the information”
about the availability of identified custodians. (Doc. Nos. 111-23, 111-25.) The representations
Defendants have made in discovery negotiations and their past production from Torrington and
Hale’s email accounts indicate that they are readily able to obtain documents from Priory. Indeed,
the only hesitance Defendants voiced before opposing this motion was based on a weighing of
U.K. production against anticipated additional requests for production from U.S. custodians.7 The
factual circumstances of this case thus weigh in favor of a finding that Defendants have control

over the requested Priory discovery for purposes of Rule 34.
D. Proportionality
Defendants’ argue that they should not be required to search for relevant discovery from
these custodians because the burden of doing so far outweighs the benefit of any resulting

7 Defendants argue that Plaintiffs should seek this discovery directly from Priory via the
Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (the Hague
Convention). The Supreme Court rejected such a “rule of law that would require first resort to
Convention procedures whenever discovery is sought from a foreign litigant” and where the
Federal Rules of Civil Procedure provide adequate means for discovery. Societe Nationale
Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522, 542–43 (1987).
Because the Court finds that Defendants have control over the Priory discovery for purposes of
Rule 34, use of the Hague Convention is not required in this case.
production. Defendants objected grounds of overbreadth, burden, and proportionality to Plaintiffs’
definitions of “PiC”8 and “Priory Group”9 as they are employed in the Requests. Specifically,
Defendants objected to these definitions to the extent that their application would “require
Defendants to collect and produce documents that are located outside of the United States and that

would be subject to restrictions on the disclosure of such information, including under foreign data
privacy laws.” Defendants also objected to Requests for Production Nos. 34, 36, 37, 39, and 40
“to the extent that [they] seek[] production of documents from Acadia’s former operations in the
United Kingdom that are outside of Acadia’s possession, custody, or control and that would be
subject to foreign restrictions on the disclosure of such information, including foreign data privacy
laws.” In response to the motion to compel, Defendants argue that Plaintiffs cannot show that the
benefit of the requested discovery outweighs the burden of its production in light of the “cross-
border nature of the requests” and “in light of the substantial amount of information concerning
Priory that has already been produced.” (Doc. No. 115.)
Rule 26 requires generally that discovery be “proportional to the needs of the case,

considering the importance of the issues at stake in the action, the amount in controversy, the
parties’ relative access to relevant information, the parties’ resources, the importance of the
discovery in resolving the issues, and whether the burden or expense of the proposed discovery

8 Plaintiffs define “PiC” as “Partnerships in Care, an independent provider of inpatient
behavioral healthcare services in the United Kingdom and any of its direct or indirect subsidiaries,
divisions or affiliates (foreign and domestic), predecessors, successors, present and former
officers, directors, employees, agents, accountants and advisors, and all other persons acting or
purporting to act on its behalf.”
9 Plaintiffs define “Priory Group” as “the largest independent provider of psychiatric
services in the United Kingdom that was acquired by Acadia in 2016 for $2.3 billion and any of
its direct or indirect subsidiaries, divisions or affiliates (foreign and domestic), predecessors,
successors, present and former officers, directors, employees, agents, accountants and advisors,
and all other persons acting or purporting to act on its behalf.”
outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1). “[T]he party resisting discovery bears the
burden of demonstrating why the request is unduly burdensome or otherwise not discoverable
under the Federal Rules.” Anderson v. Dillard’s, Inc., 251 F.R.D. 307, 310 (W.D. Tenn. 2008).
Regarding ESI, Rule 26 provides that “[a] party need not provide discovery of electronically stored

information from sources that the party identifies as not reasonably accessible because of undue
burden or cost.” Fed. R. Civ. P. 26(b)(2)(B). When ESI is the subject of a motion to compel, “the
party from whom discovery is sought must show that the information is not reasonably accessible
because of undue burden or cost.” Id.
Defendants argue that Plaintiffs “do not explain how the added discovery they seek is
necessary in light of what is already in their possession.” (Doc. No. 115.) Of course, once Plaintiffs
have established relevance, it is Defendants’ burden to show that the discovery Plaintiffs seek is
not proportional to the needs of the case. Anderson, 251 F.R.D. at 310. The Court, however, on
motion or on its own, “must limit the . . . extent of discovery . . . if it determines that the discovery
sought is unreasonably cumulative or duplicative, or can be obtained form some other source that

is more convenient, less burdensome, or less expensive.” Fed. R. Civ. P. 26(b)(2)(C). And, as the
Sixth Circuit has described, “the parties and courts share the ‘collective responsibility to consider
the proportionality of all discovery and consider it in resolving discovery disputes.’” Helena Agri-
Enterprises, LLC v. Great Lakes Grain, LLC, 988 F.3d 260, 273 (6th Cir. 2021) (quoting Fed. R.
Civ. P. 26(b) advisory committee’s note to 2015 amendment).
Defendants offer the declaration of John R. Tucker, their counsel’s Director of E-Discovery
Operations, to support their claim that the production of the requested discovery is unduly
burdensome. Tucker states that Defendants have already produced “120,510 documents totaling
929,607 pages” in the course of discovery, at a cost of more than $3.8 million in legal fees. (Doc.
No. 115-1.) Tucker states that the noncustodial Priory network drives contain 2.6 terabytes of data
and that the cost of preparing that data to be searched; conducting a preliminary review of the
responsive documents to redact personal information in compliance with U.K. privacy laws,
conducting a secondary review for responsiveness and privilege, and a third review by senior

attorneys for quality control and quality assurance checks; and preparation of a privilege log would
exceed $1 million. Tucker estimates that the cost of conducting the same tasks to review and
produce Walton’s email would be nearly half-a-million dollars. Tucker does not address the cost
associated with searching the Priory Custodians’ email accounts, and Defendants state that they
“do not believe [the Priory Custodians] are likely to have a significant amount of documents for
the time period in question given Priory’s regular email retention policy.” (Doc. No. 115.) These
are sums that would cause sticker shock in a run-of-the-mill civil action. But this is an expansive
action addressing cross-border conduct and hundreds of millions of dollars of profit, and the cost
of discovery must be considered in that context. (Doc. No. 39.)
Defendants’ argument that the requested production would be unduly cumulative of prior

discovery has more traction. Defendants state that they have already produced “the information
necessary to evaluate [Plaintiffs’] allegations” that Acadia’s “weakened patient admissions [a/k/a
‘census’] and increased labor costs in its U.K. operations did not support its publicly touted
financial guidance.” (Doc. No. 115 (quoting Doc. No. 39, ¶ 158).) Defendants state that they have
produced:
The monthly operational reports the UK submitted to Acadia; detailed monthly
financials from the UK operations; the UK’s forecasted operating results; the UK’s
narrative to explain those results; the 2017 budgets and operating metrics for the
UK operations; Acadia’s board materials, which contain additional information
concerning the financial and operational performance Acadia’s operations in the
UK; and a host of other information reflecting such financial and operational
performance, including the due diligence materials for Acadia’s sale of Priory. This
information includes tracking the census and operating costs for Acadia’s UK
operations—the two factors that Plaintiffs identify as undermining Acadia’s ability
to meet its FY 2017 financial guidance. Defendants have also produced the relevant
information concerning Acadia’s 2017 financial guidance, including information
reflecting the basis of that guidance.

(Doc. No. 115.)

While Defendants identify this production as providing “the information necessary” for
Plaintiffs to evaluate their claims, “a party should not be limited by its opponent’s theory of the
case in determining what is discoverable.” In re Cooper Tire & Rubber Co., 568 F.3d 1180, 1192
(10th Cir. 2009) (citing 8 Wright, Miller, & Marcus, Fed. Prac. & Proc. § 2011 (3d ed.). The Court
has already determined that Plaintiffs seek relevant discovery. Plaintiffs seek that discovery from
these sources to capture ESI that was lost in the deletion of Myers’s email account and Priory’s
institution of a sixty-day deletion policy and is not available through the other sources from which
production has already been made, particularly ESI reflecting communications within Priory.
Plaintiffs’ requests and their execution through the proposed searches should be narrowly directed
to those targets.
Plaintiffs state that they identified and selected the Priory Custodians because they are the
most likely to yield that narrow set of production. Ward and Smith, Group Financial Accountants,
reported directly to Myers, working with him on audits concerning Acadia’s 2016 acquisition of
Priory; Priory’s accounting policies, financial statements, and outside audits; and portions of
Acadia’s financial statements filed with the SEC regarding Acadia’s U.K. business. (Id.) Morrell
and Dalton—Directors of Finance of the Priory Healthcare and Priory Adult Care divisions,
respectively—worked with Myers to monitor and report Priory’s average daily census figures.
(Id.) Watts reported to Hall, whose email has been searched and produced, and documents in his
custody are less likely to replace what was lost in the deletion of Myers’s email. However, Watts’s
role reviewing and advising Priory as to the response to all serious incidents at its facilities makes
him an appropriate custodian of ESI relevant to proving Defendants’ actual knowledge. Walton
was as Priory’s IT Security Policy signatory, had general responsibility over Priory Group’s
technical security, and was directly involved in adopting the sixty-day deletion policy. Finally, the
shared drives are also likely to yield relevant information not available elsewhere because these

are the repositories where, per Priory policy, important ESI was to be preserved after the sixty-day
deletion policy went into effect. These sources are appropriate targets for Plaintiffs discovery
requests.
However, having reviewed the proposed search terms to be applied to the Priory
Custodians and the shared noncustodial drives, the Court finds that they can and should be
narrowed to avoid cumulative production. Given the additional costs Defendants cite of reviewing
the production to comply with the U.K.’s data protection laws, the search terms should be
specifically tailored to avoid production of ESI that already been identified and produced from
U.S. custodians. Plaintiffs concede that they can further narrow their search terms to avoid
unnecessary cost. (Doc. No. 118.) The Court will therefore require Plaintiffs to propose search

terms for the Priory Custodians and the shared noncustodial drives that (1) target ESI that will
replace what was lost in the deletion of Myers’s email account and the institution of the sixty-day
email deletion policy and (2) that is not available from and has not already been produced in
searches of U.S. custodians.
IV. Conclusion
For these reasons, Plaintiffs’ motion to compel discovery (Doc. No. 106) is GRANTED.
Plaintiffs are ORDERED to provide Defendants’ revised search terms narrowing the proposed
search of the Priory Custodians’ email and the noncustodial shared drives as set out in this Order
by no later than September 15, 2022. The Court will set additional deadlines regarding the
production required by this Order separately.
Plaintiffs’ motion for issuance of letters rogatory (Doc. No. 127) is DENIED WITHOUT
PREJUDICE to refiling as necessary in light of the provisions of this Order.
It is so ORDERED.

alictoryrnoloornr
ALIST E. NEWBERN
United States Magistrate Judge

26

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10438206. Public record. Not legal advice.