Native Production Ordered Under FRCP 34’s “Usual Course of Business” Requirement
In the absence of a specified production format provided in the request or agreed upon by the parties, Fed. R. Civ. P. 34 requires that electronically stored information (ESI) is produced as “kept in the usual course of business…or in a reasonably usable form or forms.”
A producing party ignores this requirement at its peril, as Plaintiffs discovered in Metlife Inv’rs USA Ins. Co v. Lindsey, Case No. 2:16-CV-97 (N.D. Ind. October 25, 2018). Plaintiff, an insurance company seeking rescission of a life insurance policy based on alleged misrepresentations, had produced most of its documents in non-searchable PDF format, maintaining that it was the “most usable format.” Defendants repeatedly objected to this practice, arguing that Plaintiff was obligated under Rule 34 to produce the documents as maintained in the normal course of business, i.e., in their “native” format. Further, Defendants identified several electronic platforms in which Plaintiff kept documents in native format in the usual course of business. In response, Plaintiff characterized the additional data that Defendants would receive from native format production as irrelevant, arguing that it therefore had no obligation to produce it. Given the impasse, Defendant sought relief from the court and moved to compel Plaintiff to produce all responsive documents in the form in which they were maintained in the usual course of business.
The United States District Court for the Northern District of Indiana granted Defendants’ motion and compelled Plaintiff to produce all documents as native files with metadata. The court also awarded a sanction of costs and fees, including attorney’s fees incurred in making the motion.
In ruling on the motion, the court held at the outset that Rule 34 requires a party to “produce documents as they are kept in the usual course of business… If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.”
The court then noted that “Plaintiff concedes that the method in which it produced the documents is not how they were kept ‘in the usual course of business,’ as required by Rule 34(b)(2)(E)(i)” and that Plaintiff “cites no authority showing that this satisfies the obligations under Rule 34.” Further, the court stated that Plaintiff’s production “was not consistent with what the parties discussed at the beginning of discovery.” On July 28, 2016, the parties filed their Report of Parties’ Planning Meeting, which stated, ‘…[a]ll ESI produced electronically will be produced in native format to the extent possible.’”
Further, the court analyzed Plaintiff’s reasoning as to why production of native format would not yield any relevant information, rejecting Plaintiff’s argument that the “only remaining issue” was whether Plaintiff had a duty to investigate the information in the policy prior to issuance. In response, the court held that Plaintiff’s argument failed to show that the requests fell outside the legitimate scope of discovery, stating that “if the court were to apply this standard, information about who accessed the application information – which might be visible in native form – could be relevant to whether that person should have investigated further.”
Interestingly, the court noted that even though Defendants were entitled to the previously produced documents in native format, they were not entitled to all metadata. Specifically, the court stated that “some of the Defendants’ filings could be interpreted to argue that Defendants are entitled to all metadata related to the documents previously produced. In general, metadata must be specifically requested in advance, and Defendants did not do that…while production in native form will inevitably result in the exchange of some metadata, Defendants are not entitled to all metadata generally, except to the extent it appears with the documents kept in the usual course of business.”