It’s a common refrain that, while courts have allowed the use of technology assisted review, no court has yet blessed the outcome of an imperfect technology assisted review process over the objection of another party. But dicta in Judge Denise Cote’s recent decision in FHFA v. HSBC North America Holdings Inc. (SDNY) (“HSBC“) gets darn close.
HSBC is one of a number of actions brought by the Federal Housing Finance Agency against financial institutions involved in the packaging, marketing and sale of residential mortgage-backed securities purchased by Fannie Mae and Freddie Mac. Judge Cote’s recent decision denied a request to reconsider her January 8th order barring the parties from using documents produced in separate litigation ongoing in California—the Countrywide litigation—unless those documents had also been produced in the New York action.
Among other things, Defendants sought to use a document produced in Countrywide to show that the productions in the New York litigation were incomplete. The Court rejected this argument in large part because it concluded diligence and good faith is required in responding to discovery requests, but perfection is not.
As an example of defensible imperfection, the Court recounted its decision early in the litigation to approve JPMorgan Chase’s use of predictive coding over the objection of FHFA because “[t]he literature that the Court reviewed at that time indicated that predictive coding had a better track record in the production of responsive documents than human review, but that both processes fell well short of identifying for production all of the documents the parties in litigation might wish to see.”
It should be noted that the Court in HSBC was also reluctant to revisit the completeness of document production in the New York actions because discovery “ended long ago” and “if any party had any reason to believe. . . that any party had failed to make a diligent, good faith commitment to document production these actions, while abiding by the protocols that have governed these productions, that issue would have been raised with the Court long before now.”
Given the sizable and ever increasing volumes of data at issue in today’s complex litigation, we could all do with a little more diligence and good faith and a little less aspirational perfection.