Federal Court Decisions Involving Electronic Discovery, December 1 ...

Federal E-Discovery Decisions, December 1, 2006 – July 31, 2009
Scotts Co. LLC v. Liberty Mutual Insurance Co., 2007 U.S. Dist. LEXIS 43005 (S.D.
Ohio June 12, 2007). In an insurance action, the plaintiff requested an order allowing its
computer forensics expert to inspect the defendant’s computers. The court denied the
request, stating that amended Rule 34(a) is intended to put the discovery of electronically
stored information on the same footing as discovery of conventional documents, and that
the plaintiff’s mere suspicion that a discovery response is incomplete is not a sufficient
basis for such a search, any more than it would justify physical inspection of a document
warehouse. The plaintiff also requested that the defendant be ordered to produce in
electronic format documents already produced in paper. Citing both The Sedona
Principles and the 2006 Advisory Committee Notes to the Rules, the court ordered the
parties to meet and confer on supplementing the production.
SEC v. Badian, 2009 WL 222783 (S.D.N.Y. Jan 26, 2009). Following an in camera
review of documents withheld from production in response to a subpoena, the court held
that privilege claims had been waived, considering four factors. First, when originally
turned over to the SEC in 2003 during an earlier investigation, no precautions were
shown to have been taken to protect against inadvertent disclosure of privileged
information. Second, there was a five-year delay in attempting to assert privilege after the
original inadvertent disclosure. Third, a “significant number” of documents had been
inadvertently disclosed. Fourth, there would be no “fairness” in precluding the SEC from
using the documents.
SEC v. Collins & Aikman Corp, et al., 2009 U.S. Dist. LEXIS 3367 (S.D.N.Y. Jan.
13, 2009). In this securities fraud action brought by the SEC, the court addressed
“important questions concerning the Government’s discovery obligations in civil
litigation.” In ruling on a defendant’s objections to the manner in which the SEC
responded to his requests to produce, the court held that the SEC’s production of some
1.7 million documents (10.6 million pages) in categories corresponding to the requests
would not violate work product protection, and, even if it did, the difficulty of searching
an unorganized collection of that size would constitute “undue burden” on the requesting
party. The court also held that the collection was not assembled in the “usual course of
business,” as it resulted from an investigation. Thus, the SEC did not have the option of
producing it without the categorical identification. The court also found that “[t]he SEC’s
blanket refusal to negotiate a workable search protocol … is patently unreasonable,”
rejecting the SEC’s unilateral decision to limit its search to three divisions in response to
certain requests to produce. Noting the proportionality provisions of Rule 26(b)(2)(C),
the court observed that the requests “seem particularly reasonable in an action initiated by
the SEC.” The court chided the parties for their failure to engage in a 26(f) process and
drew their attention to The Sedona Conference® Cooperation Proclamation.
Additionally, the court found that the SEC’s privilege log was deficient as a guide to its
invocation of the deliberative process privilege and directed an in camera review. Finally,
the court found the SEC’s blanket objection to producing email unacceptable and ordered
that the parties meet and confer to develop a means to sample the email.
Sentis Group, Inc. v. Shell Oil Co., 559 F.3d 888 (8th Cir. Mar. 24, 2009). Plaintiffs
contended that they were improperly persuaded to enter into an operator agreement
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