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Jan
26
Government directed to organize electronic documents in accordance with previously developed protocols and to confer with defendant to develop new search protocols responsive to its requests
January 26, 2009 | 1 Comment
SEC v. Collins & Aikman Corp., 07 Civ. 2419 (SAS) (S.D.N.Y. Jan. 13, 2009)
This discovery dispute centered around producer SEC’s delivery of 1.7 million documents (totalling 10.6 million pages), contained in 36 different Concordance databases, in response to requestor Collins & Aikman’s discovery requests. The court further observed that many of the database utilized different metadata protocols.
In its responses, the SEC stated that it did not “maintain a document collection relating specifically to the subject addressed.”…Rather it provided an omnibus collection of indices, investigative documents, scanned paper documents, and audio/video media,” and “also provided the location within Concordance document databases of documents identified in the Complaint.” Slip Op. at 7. The SEC asserted that the production was how they maintained the documents in the ordinary course of business.
Requestors responded that the SEC had already segregated documents into 175 file folders corresponding to specific contentions, and by not following this protocol, they had engaged in a “file dump.” The SEC contended that the organization itself was attorney work product.
The court observed that the organization or selection of documents was not “core” work product (“legal documents drafted by an attorney — her mental impressions, conclusions, opinions, and legal theories” – slip op. at 14), but could be if the production was organized by legal theory or strategy. “The SEC’s theory — that every document or word reviewed by an attorney is “core” attorney work product — leaves nothing to surround the core.” Slip. op. at 14-15. Regardless, requestors had demonstrated “substantial need” for the materials, as “[w]hile the responsive documents exist somewhere in the ten million pages produced by the SEC, the production does not respond to the straightforward request to identify documents that support the allegations in the Complaint.” Slip op. at 16. The court also found that requestors had demonstrated undue hardship, as “[a] page-by-page manual review of ten million pages of records is strikingly expensive in both monetary and human terms…” Slip op. at 17.
The SEC also asserted that it had the right under Rule 34 to produce “the complete, unfiltered, and unorganized investigatory file, as this is how the documents are maintained in the usual course of its business.” Slip op. at 19. The court observed that the Rule was designed for businesses, or entities that functioned as commercial enterprises, or for records “resulting from ‘regularly conducted activity.’” Slip op. at 22. If those requirements are not met, then records must be produced “organize[d] and label[ed] . . . to correspond to the categories in the request.” Slip op. at 22-23. Although in many instances government acts like a business (in the procurement arena, for example), the SEC’s conduct of investigations “is by its very nature not routine or repetitive;” thus it was “no surprise that the complete collection is maintained as it was collected — in large disorderly databases.” Slip op. at 24. Therefore, the agency would be required to respond to requestors’ requests by organizing them according to the 175 folder structure.
Requestors had also made requests regarding certain SEC enforcement actions and related documents. The SEC rejected requestors’ proposal that “it establish a search protocol that would balance identification and disclosure of relevant documents against a strain on agency resources.” Instead, the SEC “unilaterally” limited its search to certain “centralized compilations” which were unsuccessful. Slip op. at 26. The court responded that
[t]he SEC’s blanket refusal to negotiate a workable search protocol responsive to these requests is patently unreasonable….Although party resources must be taken into account under Rule 26(b)(2)(C), these requests seem particularly reasonable in an action initiated by the SEC. Like any ordinary litigant, the Government must abide by the Federal Rules of Civil Procedure. It is not entitled to special consideration concerning the scope of discovery, especially when it voluntarily initiates an action.
Slip op. at 27-28. The court also pointed out the parties’ obligations under Rule 26(f) to meet and confer regarding a discovery plan, and cited the Sedona Conference Cooperation Proclamation, encouraging parties to resolve issues in a collaborative manner. The court directed the parties to meet and confer to develop a search protocol “that would reveal at least some of the information defendant seeks.” Slip op. at 29-30 (emphasis in original).
In another part of the opinion, the court addressed the SEC’s failure to produce any e-mails. It had argued that “nearly all responsive e-mails will be privileged, protected, or non-substantive,” as well as subject to the court’s non-disclosure order. Requestors had “not made the ‘necessary showing’ so as to require it to undertake the ‘costly and time-consuming search that would be required to identify responsive e-mails….’” Slip. op. at 36-37. The court responded that “[b]ecause e-mails are inherently searchable, the SEC’s blanket refusal to produce any incoming or outgoing e-mails is unacceptable.”
Without even an attempt to negotiate search terms that would weed out privileged, protected or irrelevant e-mails, the SEC cannot reasonably assert that a routine aspect of modern discovery—search and review of a party’s e-mail –is beyond its capability. Essentially, the SEC’s position is that the cost of such a search is simply too high, but it has made no effort to document the cost or the likelihood that it would produce relevant, nonprivileged material.
Slip. op. at 37. Noting that sampling is now “part of the mainstream approach to electronic discovery,” the court directed the parties to meet and confer to develop a reasonable search protocol and then to consider a sampling plan to determine whether nonprivileged material could be identified and produced.
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[...] how to get to it, or how long to keep it. Witness the astounding numbers and ugly battles (like the e-discovery dispute centered around the SEC’s delivery of 1.7 million documents involving the SEC) that routinely arise when organizations are asked to dig up digital information [...]