Venture Corp. Ltd. v. Barrett, Ordering Compliance, the Court Notes that Rule 34 is As Basic to Civil Cases As It Gets

In this patent case, plaintiff and defendant could not come to an agreement regarding the production of documents. The District Court judge, voicing his displeasure, noted that unlike some of the more obscure of the Federal Rules of Civil Procedure, “Rule 34 (Producing Documents, Electronically Stored Information, and Tangible Things) is about as basic to any civil case as it gets.” The judge further noted that this case presented another example of experienced counsels’ misconceptions regarding its “standards and elements.”

After the defendant, Barrett, served initial document requests and the plaintiffs, Ventures, responded, the parties met and conferred about how Ventures would produce documents. However, the parties could not agree, Barrett wanted the documents organized and labeled to identify the requests to which they were responsive. The Ventures demurred at such an obligation. The Ventures then produced 41,000 pages even though there was no “meeting of the minds.”
The court noted that even in the days of paper production, the “document dump” was recognized as at “best inefficient and at its worst a tactic to work over the requesting party.” The judge emphasized that Rule 34 is designed to prevent that scenario with the requirement that parties produce documents “as they are kept in the ordinary course of business or must organize and label them to match the categories in the request.” Additionally, Rule 34 requires that if the “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.”

After Barrett began serving document requests and other discovery, the parties met by telephone. The judge described what transpired during the call as “hotly contested.” The Ventures asserted that Barrett agreed to accept documents in bulk and in PDF or native format despite first requesting that the documents be labeled to correspond to each request. Barrett denied the assertion, arguing that he only agreed to review whatever the Ventures would produce while reserving the right to later demand identification by request. Subsequently, the Ventures produced 41,000 pages on a flash drive and by email. The drive and email contained no custodial index or table. After Barrett took depositions, he followed up on his understanding from the telephone meeting by serving interrogatories by email 30 days prior to the discovery deadline.

The Ventures objected to what they characterized as untimely requests and Barrett’s demand calling for document and ESI production other than what was kept in the ordinary course of business. Barrett moved to compel answers to the interrogatories and requests for production and sanctions in the form of attorney’s fees and costs.
The court found that while the Barrett’s final interrogatories might have been untimely, it was irrelevant as the Ventures’ production did not “square with the rules.”

In its analysis, the court highlighted the Rule 34 (b)(2)(E)(i) requirement that when documents are not organized and labeled to correspond to the categories in the request, they must be produced as they are kept in the usual course of business and the Ventures did not do this. The court also noted that the Ventures failed to submit any evidence proving that in the ordinary course of business they kept documents and ESI in folders as they were produced. The court admonished that to carry that burden the parties must do more than just represent to the Court and the requesting party that the documents were produced as they were maintained. The court indicated it would expect to see the documents and ESI kept by the name of the employee from whom the documents were maintained or at least which Venture entity had produced the documents and none of this information was provided.

The court noted that the Ventures did not dispute that their documents and ESI are kept in some more hierarchical scheme than the folders in which they were produced. Rather, the Ventures claimed that they offered to produce the files together with load files and an index, but Barrett told them he would accept production in PDF and native form. However, the court noted that their proof was “thin” at best.

The court noted that “fundamentally, even if there was such an agreement, an agreement on form relieves a responding party of any further form obligations under subsection (ii) of Rule 34(b)(2)(E). It does nothing to relieve such a party of its obligation under subsection (i) to produce the documents and ESI as they are kept in the ordinary course of business.” The Court further reasoned that:

This distinction matters. Form under subsection (ii) is about whether the production should be native, near-native, imaged as PDF (or more commonly, as TIFFs accompanied by load files containing searchable text and metadata) or in paper (printed out). Providing information about how documents and ESI are kept under subsection (i) “[a]t a minimum … mean[s] that the disclosing party should provide information about each document which ideally would include, in some fashion, the identity of the custodian or person from whom the documents were obtained, an indication of whether they are retained in hard copy or digital format, assurance that the documents have been produced in the order in which they are maintained, and a general description of the filing system from which they were recovered.

The court noted that because there was no agreement on form, the Ventures had an obligation under subsection (ii) to show that the production was in the form in which “it is ordinarily maintained or in a reasonable usable form or forms.”

Addressing the question of remedy, the court noted that while Barrett wanted the production organized and labeled as he had all along, the court saw no reason to “limit the remedy only to what Barrett wants”:

And so to remedy this situation, the Ventures shall do three things: (1) either organize and label each document it has produced or it shall provide custodial and other organizational information along the lines outlined above and (2) produce load files for its production containing searchable text and metadata.

The court denied Barrett’s request for fees and costs, finding that “Barrett’s unwillingness to accept the disjunctive nature or subsection (i), insistence on organization and labeling and delay in bringing this motion only contributed to the unfortunate situation at hand.”

Venture Corp. Ltd. v. Barrett, No. 5:13-cv-03384-PSG, 2014 WL 5305575 (N.D. Cal. Oct. 16, 2014)

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