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Court Rules in Dispute Between Parties Regarding ESI Protocol, Suggests Predictive Coding – eDiscovery Case Law

In a dispute over ESI protocols in FDIC v. Bowden, CV413-245 (S.D. Ga. June 6, 2014), Georgia Magistrate Judge G. R. Smith approved the ESI protocol from the FDIC and suggested the parties consider the use of predictive coding.

After FDIC-insured Darby Bank & Trust Co. failed in November 2010, the FDIC took over as receiver (as FDIC-R) and brought a bank mismanagement case against sixteen of Darby’s former directors and officers.  Thus far, the parties had been unable to agree on a Joint Protocol for Electronically Stored Information (ESI) and the dispute ultimately reached the court.  The FDIC-R had already spent $614,000 to digitally scan about “2.01 terabytes of data or 153.6 million pages” of data at the bank, but the defendants insisted that the FDIC-R shoulder the burden and expense of reviewing the documents and determining their responsiveness to the claims “”[e]ven though the Bank’s documents were created under Defendants’ custody and control”.

The defendants also argued for a protocol which involved the FDIC-R to “repeatedly search, review, and re-review myriad ‘second-run’ (Phase II) documents, then turn over to them the documents relevant to both claims and defenses that arise in this litigation. The FDIC-R argued for a protocol in which it would produce “categories of documents most likely to contain relevant information” which the defendants could then search, claiming that protocol would be the more “correct allocation of discovery burdens between the parties.” The defendants contended that “search terms alone won’t suffice” and the FDIC-R’s proposed protocol does not relieve the receiver of its Rule 34 burden to “locate and produce responsive documents.”

After reviewing the two proposed protocols, Judge Smith ruled that “given the common ground between the dueling protocols here, the FDIC-R’s ESI protocol will be implemented, as modified by the FDIC-R’s ‘briefing concessions’…as well as by the additional guidance set forth in this Order.”  Those briefing concessions included “offering to open ‘all of the Bank’s former documents . . . [so defendants can retrieve them] to the same extent that the FDIC-R can’” and “offering, in ‘Phase II’ of the disclosure process, to ‘meet and confer with Defendants to reach agreement upon a set of reasonable search terms to run across the database of sources of the ESI to identify documents for production’”.  In approving the FDIC-R’s protocol, Judge Smith stated that “the FDIC-R may meaningfully deploy suitable search terms to satisfy its initial disclosure requirements and respond to forthcoming Rule 34 document requests”.

Also, referencing the DaSilva Moore decision of 2012, Judge Smith stated that “the parties shall consider the use of predictive coding” if ESI protocol disagreements persisted noting that it “has emerged as a far more accurate means of producing responsive ESI in discovery”.

So, what do you think? Should organizations bear the bulk of the discovery burden in cases against individual defendants? Or should the burden be balanced between both parties?  Please share any comments you might have or if you’d like to know more about a particular topic.

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