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Chancery Addresses Records Custodian Discovery Dispute

Fortis Advisors LLC v. Johnson & Johnson, et al., C.A. No. 2021-0881-LWW (Del. Ch. Sept. 21, 2021)
Initial productions may raise new issues, including whether additional custodial collections might be necessary. While the bar for discoverability generally is low, the work and cost involved in collecting, processing, and analyzing data may be significant, and discovery demands may be disproportionate to the needs of the case. Delaware courts balance these important interests when faced with questions regarding the appropriate scope of discovery.

In Fortis Advisors, the scope of defendants’ discovery was broad:  initially comprising 18 individuals, then increasing to 32 following party meet and confers and additional client custodian interviews.  Defendants also agreed to consider providing further custodians as the discovery record developed.  Plaintiff later identified what it considered a key document and, based on that identification, requested collection from ten additional custodians.

The Court of Chancery, with one exception, rejected the plaintiff’s request as unreasonable.  In reaching this conclusion, the Court considered the volume of custodians (already 32), the volume of documents implicated by these custodians (over 2 million), and the fact that the additional ten custodians likely would provide duplicative or cumulative material.  Notably, the Court disagreed with plaintiff’s argument that defendants could not meet the burden of their objections without providing search hit reports for analysis.  The Court reasoned that, among other factors substantiating a burden in this case, the work involved in generating reports for uncollected data is substantial, and encompasses custodial interviews, collection, data processing, and analysis. 



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