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Class Action Defendant’s Inaccurate Spreadsheet Leads to eDiscovery Dispute

Posted on January 15th, 2015

James v. National Finance LLC, C.A. No. 8931-VCL (Del. Ch. Dec. 5, 2014) is a class action lawsuit alleging unlawful lending practices. In response to Plaintiffs’ initial discovery requests, Defendant produced an Excel spreadsheet which purported to disclose the class members’ annual percentage rates (APRs). Plaintiffs noted discrepancies between the APRs on the spreadsheet and in the borrowers’ loans, and accordingly, amended their complaint to include violations of the Truth in Lending Act (TILA), and filed a motion to compel Defendant to produce an updated spreadsheet.

The court granted Plaintiffs’ motion to compel and ordered Defendant to update its spreadsheet with accurate information. The court also ordered Defendant to hire a qualified information technology (IT) consultant to assist in exporting the internal electronic data to the spreadsheet. The order required that:

  • Defendant’s IT consultant file an affidavit explaining the procedures used to create the electronic spreadsheet;
  • Defendant retain all underlying documents used to make the spreadsheet;
  • Defendant populate all spreadsheet columns about finance charges, total amounts, and schedules; and
  • Defendant produce the updated spreadsheet in native file format

Defendant produced an updated spreadsheet, but did not file an affidavit of the IT consultant or populate all the required columns. Further, the spreadsheet still lacked accurate APRs. Defendant “provided a series of evolving explanations about why the information was not provided accurately.”

Plaintiff filed entry of default judgment as sanction for failing to comply with the discovery order, or alternatively, that the APR spreadsheet be deemed an admission of TILA violations. The court looked to FRCP 37(b)(2) to determine what sanction might be appropriate.

Our next post will continue the discussion of the Delaware Court of Chancery’s opinion, and we will review what happened when defense counsel attempted to blame the spreadsheet inaccuracies on his own computer illiteracy. (Spoiler alert: There an ethical rule in Delaware requiring attorneys to maintain technological competence!)

ILS – Plaintiff eDiscovery Experts

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