Fed. Hous. Fin. Agency v. HSBC, 2014 WL 584300 (S.D.N.Y. Feb. 14, 2014).
In this housing case, the plaintiff, which regulates Fannie Mae and Freddie Mac, sued 18 banks, over misrepresenting the quality of mortgage loans and violating U.S. securities laws. The defendants sought a reconsideration of the court’s previous order to not allow the use of documents produced in a different action, arguing that the order was overbroad. The court ruled that limitations on the scope of discovery had been imposed after careful consideration, and that allowing the use of these documents would undermine the discovery process and encourage trial by ambush. The court also referred to an ore tenus order from July 2012 in which it permitted one defendant, over objections from the plaintiff, to use predictive coding to build a production set, in which it found that predictive coding had a “better track record in the production of responsive documents than the human review.” The court further noted that the process used to produce documents in this litigation was a “herculean undertaking,” and that “no one could or should expect perfection from this process.” Under this framework, the court believed that allowing the defendants to use the other documents at issue would “risk opening the entirety of the document production” well after a diligent and good faith process had already taken place. Thus, the court denied the defendants’ request to challenge the completeness of the document production.