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Court Orders Production of Relevant Source Code Citing Defendant’s Suggestion for Mitigating Costs

Posted in CASE SUMMARIES

Metavante Corp. v. Emigrant Savings Bank, 2008 WL 4722336 (E.D. Wis. Oct. 24, 2008)

In this breach of contract case, Emigrant filed several motions to compel Metavante’s response to multiple discovery requests.  One motion sought the production of source code from the product delivered to Emigrant under the parties’ technology outsourcing agreement.  Under the agreement, Metavante was to provide Emigrant with an online direct banking product called EmigrantDirect.

Emigrant argued that access to the source code may provide information about the quality of the product and was therefore relevant and properly discoverable.  Metavante argued that its production would be unduly burdensome because it would cost over $300,000 and take over 5,000 hours to produce.  Metavante also argued that the code would provide little relevant information.  Emigrant responded arguing that Metavante’s estimates assumed a need to sort and compile all of the information before disclosing it and suggested it could mitigate the cost to Metavante by providing the code to outside consultants for inspection and a determination regarding relevance.  The court found that the source code was relevant and, citing Emigrant’s offer to use outside consultants, found that “[i]n balancing the value of the source code against the burden of producing it…the potential value outweighs the burden.”  The court also noted that any confidentiality concerns were addressed by its previously issued protective order.

In a separate motion to compel, Emigrant sought court supervision of Metavante’s production of several categories of information, “an explanation” of why documents Emigrant claimed were “known to exist” had not been produced, an order requiring Metavante to produce all electronic documents in their native format, and payment of attorney’s fees and expenses in preparing the motion, among other things.

Regarding the production of electronically stored information, Emigrant sought additional documents related to Metavante’s work with other customers and information related to performance of their product.  Metavante responded noting that it had already produced 70,000 “SupportTrack” tickets that were generated in response to technical support issues from its customers, among other documents.  The court denied the request reasoning that Emigrant had had ample opportunity for follow up with Metavante and had never requested further information.  The court also declined to compel production of documents related to modifications to Metavante’s software.  Here again, Emigrant argued that Metavante’s production was insufficient and attempted to cast doubt on whether all relevant materials had been provided.  The court rejected those arguments, once again pointing to Metavante’s already significant production and Emigrant’s ample opportunity to seek additional documents since that time.  The court also noted that it had agreed to order the production of the requested source code “which may contain more information responsive to these requests.”

The court denied Emigrant’s request for court-supervised discovery, finding that supervised production would “pervert” the discovery goals of minimizing cost and inconvenience and pointing out that “[b]oth parties in this case are sophisticated, and have shown their ability to conduct extensive discovery without constant court supervision.”  Finding that Emigrant provided “no basis” upon which the court could make the order, the court also denied Emigrant’s request that all electronic information be produced in its native format.

Addressing Emigrant’s request for an explanation regarding Metavante’s failure to produce documents “known to exist,” the court denied the motion reasoning that while Metavante’s alleged actions may be appropriate for a motion for sanctions, it found “no reason to compel further production of documents that Metavante claims it no longer has.”  Likewise, the court denied Emigrant’s request for attorney’s fees.