In FDIC v. Giannoulias et al., No. 12 C 1665, (N.D.Ill. October 23, 2013), plaintiff FDIC, acting as receiver for a bank, sued to recover millions of dollars in losses for loans the FDIC alleged the defendants had negligently approved. Discovery commenced and “Phase II” of discovery included plaintiff ESI (electronically stored information). Plaintiff and defendants agreed on 250 unique search terms, which produced about 150,000 “hits.”
Defendants, however, requested six additional search terms, which would yield an additional 16,800 hits. Besides objecting to additional search terms, plaintiff objected to the prior ESI Protocol Order, which would require it to review the ESI to determine, organize and label the production. Instead of doing so, which plaintiff deemed “unduly burdensome,” plaintiff suggested the materials be uploaded to a secured database and the defendants could review the electronic data. Any data the defendant wanted, plaintiff would then review for privilege and give them access to the documents.
The court reviewed the discovery dispute and the additional search terms requested by defendants. It allowed the search terms relating to the brokers and auditors on the bank loans in question. It disallowed the search terms of “capitalized” and “capitalization” for two main reasons: the likelihood of irrelevant hits was high, and the number of hits at 8,700 was substantial.
The court ruled for plaintiff regarding its objection to inspecting the entire production uploaded to the database. Citing case law that requires a responding party to “develop a reasonably comprehensive search strategy,” the court held: “Employing search terms to search ESI is one such strategy.”
Finally, although Fed. Rule 34 requires the data to be organized, labeled and corresponded to the production requests or to produce the data “in the ordinary course of business,” the court ruled that such method was simply not available to a plaintiff like the FDIC. It noted that the electronic evidence on the database could be searched by metadata, which could be used to organize the production (mostly emails) in chronological order by custodian. Therefore, there was no practical distinction between the production as it was and produced in the ordinary course of business; the court denied defendants request that the FDIC categorize the production.