SVB Financial Group v. Federal Deposit Insurance Corporation
SVB Financial Group v. Federal Deposit Insurance Corporation, as Receiver for Silicon Valley Bank
- Beth Freeman
- 5:24-cv-01321
- U.S. District Court · Northern District of California
- 5
In SVB Financial Group v. Federal Insurance Corporation, Judge DeMarchi rejected both sides’ proposed ESI-review approaches and ordered a mutual discovery procedure.
SVB Financial Group and the Federal Deposit Insurance Corporation, as receiver for Silicon Valley Bank and Silicon Valley Bridge Bank, N.A., were affected because the court set the procedures governing their review and identification of responsive documents in the shared electronic-data collection.
What happened
In SVB Financial Group v. Federal Deposit Insurance Corporation, as Receiver for Silicon Valley Bank, the parties disputed how to review about 24 million shared electronic documents for responsiveness to document requests. SVB Financial Group sought a requirement that the receiver identify responsive documents, while the receiver proposed allowing search terms without manual review for all requests.
The court ruled that the receiver could not rely only on search terms for every request. For requests seeking documents supporting its setoff defenses, the receiver had to identify responsive documents; for some broader requests, accurate search terms could be appropriate. The parties were expected to cooperate on search terms.
Judge Virginia K. DeMarchi rejected the receiver’s all-purpose proposal and SVB Financial Group’s unilateral wording. She ordered language requiring both parties to search the shared collection and identify responsive documents by document identification number, and directed them to submit a revised electronic-discovery order by December 9, 2024.
The detailed version
- SVB Financial Group v. Federal Deposit Insurance Corporation · No. 5:24-cv-01321
- Beth Freeman
- Dec. 2, 2024
Background
SVB Financial Group (SVBFG) and the Federal Deposit Insurance Corporation, acting as receiver for Silicon Valley Bank and Silicon Valley Bridge Bank, N.A. (together, FDIC-R), asked the court to resolve a dispute about procedures for reviewing electronically stored information (ESI). They had access to approximately 24 million custodial files previously delivered by FDIC-R to SVBFG, referred to as the “Previously Produced ESI.”
The parties agreed that production from this shared collection could be accomplished by identifying each document’s “DOC ID.” They disagreed about how to determine which documents were responsive to particular document requests. SVBFG proposed requiring FDIC-R to search the shared collection and identify responsive documents. FDIC-R proposed allowing the parties to use search terms to identify responsive documents without manual document review.
Court’s Analysis
Federal Rule of Civil Procedure 34 generally requires a responding party to produce documents as kept in the usual course of business or to organize and label them to match the categories in the request. The court did not decide whether the Previously Produced ESI was maintained in the usual-course-of-business form. Instead, it relied on Rule 34’s authority allowing the court to order a suitable method and form of production.
The court stated that a voluminous, unorganized production containing many clearly nonresponsive documents is not an appropriate response to document requests. Based on FDIC-R’s representation that the collection included standard metadata and was searchable, sortable, and reviewable by various fields, the court concluded that the collection could not fairly be described as unorganized.
The court explained that search terms may be appropriate in some circumstances but not others. For requests requiring FDIC-R to identify documents supporting its contentions about setoff defenses, FDIC-R could not simply rely on search terms that might not accurately identify responsive documents. For other requests broadly seeking documents concerning a subject, search terms with a reasonably accurate hit rate might be the most efficient approach, particularly where SVBFG could locate the documents itself. The court expected the parties to cooperate in selecting appropriate search terms.
Ruling
Judge Virginia K. DeMarchi rejected FDIC-R’s proposal that the parties could satisfy all production obligations concerning the Previously Produced ESI through search terms without manual review. She also rejected SVBFG’s proposal because it framed what should be a mutual obligation as FDIC-R’s unilateral obligation.
The disputed portions of sections 6 and 11 of the proposed ESI order were to require both parties to search the Previously Produced ESI in response to document requests and to identify by DOC ID any responsive documents. The parties were ordered to submit a proposed ESI order conforming to that direction by December 9, 2024. The court did not resolve other disagreements reflected in the competing proposed orders.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.