Kinexus Representative LLC v. Advent Software, Inc. (Del. Ch., Sept. 22, 2008), read opinion here. In this Chancery Court decision, that decided cross motions to compel discovery, the Court addressed important and practical issues involving electronic discovery and what the Court will accept as satisfactory responses to both interrogatories and requests for documents.
The key parts of the Court’s ruling are at least twofold: (i) The Court required the defendant to produce documents by Bates number that were responsive to each of the interrogatories from plaintiff; and (ii) Defendant was required to provide to plaintiffs “searchable ‘extracted text’ from the TIFF–formatted documents already produced, but only if plaintiffs pay for the process.” This will be explained in more detail later in this summary.
This is the type of practical decision that provides useful tools for the toolbox of a business litigator dealing with the almost inevitable and usually unpleasant discovery disputes that arise in a typical business case.
The Court quoted from Rule 33(d) of the Chancery Court Rules as follows:
“Where the answer to an interrogatory may be . . . ascertained from the business records of the party upon whom the interrogatory has been served[,] . . . it is a sufficient answer to such interrogatory to specify the records from which the answer may be derived or ascertained.” (emphasis in Court’s quote).
Next, it was emphasized that: “This court requires a specific designation of the documents pertaining to each interrogatory when Rule 33(d) is employed” (citing Andresen v. Bucalo, 1982 WL 17824, at * 3 (Del. Ch., Dec. 2, 1982)) (“Defendants must particularize the specific records from which adequate answers may be extracted and not . . . just make all of the records available for inspection.”)(emphasis added.)
In footnote 6, the court also cited to a case interpreting a predecessor to Rule 33(d) and supporting the following aspect of the Court’s interpretation of this important rule: The rule “does not shift to the interrogating party the obligation to find out whether sought after information is ascertainable from the files tendered, but only permits a shift of the burden to dig it out once the respondents have specified the records from ‘where the answer’ can be derived or ascertained . . . . Thus, the interrogated party must be specific in order to protect against any abusive use of the [option in the] rule . . . . " In sum, the court held that simply “making all the records available for inspection” does not constitute a proper response.
Plaintiffs also sought to compel defendants to specify the documents, by Bates number, that were responsive to each of the document requests.
The opinion referred to Court of Chancery Rule 1 that requires that all rules: “shall be construed and administered to secure the just, speedy and inexpensive determination of every proceeding.” Applying this Rule, the court reasoned that it was “unreasonable for defendant to simply produce over 288,000 documents without specifying which documents or categories of documents are responsive to each specific request.”
Plaintiffs also argued that the documents they requested should be provided “in their native format with metadata and, if not available in that format, must be in a searchable Optical Character Recognition (“OCR”) format." However, the Court observed that neither native file format nor OCR format were agreed upon as delivery formats. On this point, the Court held that:
“I decline to hold that the Court of Chancery Rules governing document production in 2005 required an OCR format or native file format, including metadata, without a particularized showing of need. Nevertheless, defendant’s proposal to provide searchable ‘extracted text’ amounts to an acceptable compromise. As such, defendants shall provide the ‘extracted text’ format to plaintiffs, but only if plaintiffs agree to reimburse all of defendant’s related expenses. Plaintiffs must pay these associated costs because they failed to timely object to the non-searchable TIFF format. It is the untimely objection that necessitates creation of the ‘extracted text’."(citing Ryan v. Gifford, 2007 WL 4259557, at * 1 (Del. Ch., Nov. 30, 2007)). [see short summary of this particular Ryan case here. Note that this is only one of several decisions in the Ryan case.]
Also note that the initial discovery requests that were the subject of this motion were, for reasons not relevant here, submitted in 2005. Query, whether the Court would reach the same result if the requests at issue were submitted in 2008.