Magistrate Articulates Sampling, Conversion and Search Protocols for Hard Copy Insurance Claim Files

J.C. Associates v. Fidelity & Guar. Ins. Co., 2006 WL 1445173 (D.D.C. May 25, 2006)

In this insurance coverage dispute, plaintiff sought discovery of the 1.4 million active and inactive claim and litigation files in defendant’s possession. Although the defendant did not physically search the 1.4 million files, it conducted an electronic search of the files, using internal codes that identify the category of the claim. This search identified 454 claims, including the six claims at issue in the case.

Magistrate Judge John M. Facciola found that the information sought was “clearly relevant,” but that defendant’s claim of burdensomeness was well taken: “Since the underlying claims settled for a total of $124,000, I am acutely aware that plaintiff cannot seek any greater indemnification and that the cost of any future discovery must be considered in light of the amount in controversy.” (Footnote omitted.)

Accordingly, the court ordered the parties to take the following actions:

1. Within 10 days of the date of this Order, plaintiff will make available to defendant, a copy of OmniPage Pro, a document conversion program, unless the defendant already owns that program.

2. Defendant will then randomly pull and scan 25 of the 454 files previously identified.

3. Once the documents have been scanned and converted into a searchable document by the use of OmniPage Pro, defendant will conduct an electronic search of the files. Specifically, defendant will search for the following terms: 1) pollution, 2) pollutant, 3) pesticide, and 4) insecticide.

4.Defendant will pull any files that contain these words and ascertain whether they are or they contain documents that are responsive to plaintiff’s discovery demand. If it is possible to do so, without waiving any privilege, defendant shall make the documents available to plaintiff. If defendant can, in good faith, redact a document so that it is comprehensible and meets the plaintiff’s discovery demand but does not waive any privilege, it shall do so. If that is impossible, defendant will review the relevant documents to ascertain whether they are privileged. If privilege must be claimed as to any of the relevant documents, defendant will then submit the responsive files to chambers along with a privilege log.

5. Defendant will also submit an affidavit attesting to (a) the time and costs that were expended on the search I have ordered and the costs that were expended redacting the documents and reviewing them for privilege. I expect that attorney time will only be expended on work that requires an attorney’s skill and judgment.

6.At that point, I will first determine whether or not any additional search is necessary. I reserve the right to determine whether an evidentiary hearing is necessary or whether I have the information I need to determine, pursuant to the “marginal utility” rationale I articulated in McPeek v. Aschroft, 202 F.R .D. 31, 34 (D.D.C.2001), whether any further discovery is warranted and who should bear the cost of that discovery. See also Wiginton v. CB Richard Ellis, Inc., 229 F.R.D. 568, 572-73 (N.D.Ill.2004); Zubulake v. UBS Warburg LLC, 216 F.R.D. 280, 284 (S.D.N.Y.2003); Rowe Entertainment, Inc., v. The William Morris Agency, Inc., 205 F.R.D. 421, 429 (S.D.N.Y.2002).