On July 17, 2014, Justice Kornreich of the New York County Commercial Division issued a decision in MBIA Ins. Corp. v. Credit Suisse Sec. (USA) LLC, 2014 NY Slip Op. 31871(U), denying the plaintiff’s motion to compel production of electronically stored information (ESI) that it claimed the defendant had improperly withheld as “non-responsive.” The court concluded that “based on the ESI produced to date, the parties have received all of the documents necessary, and more, to litigate the merits of their claims and defenses at trial and to ensure that any jury verdict is based on a reliable factual record”:
MBIA (or any plaintiff in complex litigation) cannot reasonably expect to uncover every single instance in which a Credit Suisse employee said something that makes its RMBS conduct, at a minimum, a public relations disaster. Again, the very reason that MBIA knows that so much inflammatory ESI exists is precisely because it has so much already. To be sure, in reviewing Credit’s Suisse’s itemized justifications as to what constitutes relevant ESI, it appears that Credit Suisse may well have been somewhat overaggressive in determining the scope of relevance. That being said, the handful of examples proffered by MBIA, many of which are emails that post-date the transaction or speak to practices employed with other securitizations or other types of collateral, do not give rise to a reasonable inference that Credit Suisse’s determinations as to what constitute responsive ESI were made in bad faith. Nor has MBIA convinced the court that Credit Suisse is hiding something materially worse than has already been produced that might tip the scales of this case in MBIA’s favor. Indeed, while nontransaction specific inflammatory emails do not speak well of Credit Suisse, Credit Suisse’s conduct with respect to the subject transaction is all that is at issue. This case is more likely to (and should) turn on the law (e.g., due diligence issues) and expert evidence (e.g., the nonconformance rate) rather than how many inflammatory emails MBIA can read to a jury.
This decision illustrates that although the New York Court permit broad discovery, there are limits to the scope of ESI that a party will be required to produce.