Parties’ Obligations Under the Federal Rules “Reign” Supreme and Render Language in ESI Protocol Unnecessary

In Raine Group v. Reign Capital, the Southern District of New York highlighted parties’ affirmative obligations under Federal Rules of Civil Procedure 26 and 34 when conducting ESI searches and determining the identities of custodians and locations of relevant documents or information. In particular, the court emphasized that an agreement regarding keyword search terms should work in “tandem” with the responding party’s independent and inherent obligations to search for and produce documents that are “reasonably accessible, relevant, and responsive within the meaning of Rule 34.” The court also made clear that parties have a fair degree of autonomy in determining what is “reasonable” under Rules 26 and 34.

In this trademark infringement case, the plaintiff, a merchant bank with more than 100 employees, objected to certain provisions proposed by the defendant, a two-person real estate firm, in the parties’ ESI protocol and proposed search terms. After the parties’ failure to reach a resolution, the court intervened.

The court ruled that the defendant’s proposed language regarding the parties’ search obligations in the ESI protocol was unnecessary, given the scope of Fed. R. Civ. P. 26 and 34, and because the provisions were overbroad. Specifically, the defendant’s proposal including the following provisions:

• “The parties also acknowledge that, apart from this ESI protocol, each party has an independent obligation to conduct a reasonable search in all company files and to produce non-privileged and responsive documents to pending document requests. Nothing in this ESI protocol relieves either party of protocol is [sic] an aid to locate responsive documents, not a replacement.” (Introductory paragraph)
• “Defendant does not agree that plaintiff’s search for responsive electronic documents should be limited to the foregoing individuals [six identified custodians]. Defendant wants plaintiff to have all its employees search for responsive documents and insists that its obligation is to search all its files for potentially relevant information to this litigation, as defendant agrees to do.” (Paragraph 4(c))
• “Defendant maintains that both parties have an independent obligation to search all files from all employees that could reasonably contain responsive documents to the parties’ document requests.” (Paragraph 6(a))

The court noted that because Rules 26 and 34 impose independent and inherent obligations on parties to conduct reasonable searches for documents that are relevant to the litigation and determine the sources (both custodians and locations) of such documents and information, separate provisions in an ESI protocol regarding these requirements were superfluous. Moreover, these particular provisions were overbroad, in that they suggested an obligation for the parties to search “all company files” or “all files from all employees.” According to the court, it is within the party’s discretion to determine the contours of a reasonable search, and the scope of such a search may depend on the nature of the entity, pertinent in this action in light of the differences between the two companies’ sizes and operations. Parties have license to identify custodians and locations of documents to avoid duplication or inefficient searches unlikely to unearth relevant information.

With respect to search terms, the plaintiff argued that certain terms, even with modifiers, were unduly burdensome. The court, which has “broad discretion to manage the discovery process,” including “determinations regarding which search terms a party should apply,” agreed with the plaintiff regarding the overbreadth of certain terms, but required the plaintiff to accept other terms with modifiers to tailor those searches.

In sum, the Southern District of New York provided an important reminder to parties regarding their e-discovery obligations under the Federal Rules of Civil Procedure, notwithstanding the terms of any ESI protocol. This holding also comports with one of the founding tenets of the Sedona Conference Principles, Principle 6, which states that responding parties are “best situated” to evaluate procedures, methodologies, and technologies “appropriate for preserving and producing their own” ESI. It will certainly be helpful for litigants to the extent they come across a party taking the position that its e-discovery obligations have been satisfied simply on account of the fact that it has conducted keyword searches pursuant to a protocol entered into between the parties.