Electronic Discovery Law

J.C. Associates v. Fidelity & Guaranty Ins. Co., 2005 WL 1570140 (D.D.C. July 1, 2005)

Plaintiff alleged that defendant breached the terms of an insurance policy by refusing coverage in connection with plaintiff's use of a pesticide on a property managed by plaintiff. Defendant responded that the "absolute pollution exclusion" applies such that it need not provide coverage. Discovery disputes developed, including a dispute over how defendant must search and produce other claims files in response to a request seeking information related to interpretation of the exclusion.

Litigants agreed to employ an electronic search based on general category types, which yielded 454 files. Of these, six are at issue here and nineteen involve claims made in Maryland, Virginia, or the District of Columbia. Defendant proposed that it produce the nineteen files only (subject to privilege review).

Plaintiff wants access to 448 (454 minus the six it already has) and proposed a procedure whereby defendant is to provide information to the court that plaintiff could use in determining whether to demand additional discovery. Defendant would report on the time required and issues encountered in connection with reviewing [the nineteen] files. It then would provide the year of the claim and region in which the loss was sustained for each remaining file. Plaintiff might then request additional files based on this information.

As emphasized by Judge Leon, the cost of discovery must be reasonably related to what is at stake. Noting the pervasiveness of electronic documents (as revealed by the recent debate in connection with proposed amendments to the Federal Rules of Civil Procedure) and great expense of privilege review, the Magistrate suggested using protective orders to preserve privilege despite disclosure. If defendant refuses to release the files, another option might be to reduce production volume via word searches.

Defendant was thus ordered to advise the Magistrate on the following:

(1) Is defendant willing to release the 428 files if a protective order is used to avoid waiver of privilege?

(2) Would the release be in violation of any statute or common law?

(3) If such a release would constitute a violation, could this be addressed via a protective order?

(4) Are the files in electronic format and available for word searches?

(5) If the files are not available in electronically searchable format, can defendant convert them with its own technology (or have them converted, and if so at what cost?)