United States District Court, D. Minnesota
ORDER REGARDING DEFENDANTS' MOTION TO COMPEL
DISCOVERY OF IRON MOUNTAIN SERVICING RECORDS
RICHARD NELSON United States District Judge
the Court is Defendants' Motion to Compel Discovery of
Iron Mountain Servicing Records [Doc. No. 2441]. For the
reasons set forth below, Defendants' motion is granted in
part and denied in part.
November 2016, Plaintiffs Residential Funding Company, LLC
and the RESCAP Liquidating Trust (collectively,
“RFC”) located approximately 14, 500 boxes of
hard copy documents stored at Iron Mountain records
management locations, possibly containing loan
servicing-related documents. Plaintiffs had previously agreed
to produce loan servicing files for the at-issue loans in
their possession, custody, or control. (RFC's Responses
to Defs.' First Set of Interrogs. and Requests for Prod.
(Request No. 2).) After the parties met and conferred
regarding the 14, 500 additional boxes, RFC reviewed a sample
of them, disclosing the results of the sampling process to
Defendants in December 2016. (Ex. C to Supalla Decl. [Doc.
No. 2445] (A. Alden Letter of 12/19/16).) Based on the
sampling process, Plaintiffs found responsive documents in
Los Angeles (814 boxes) and Connecticut (195 boxes).
(Id. at 1.)
response to Defendants' request to review the sampled
documents, RFC produced the 108 files identified through the
sampling process. (Ex. D to Supalla Decl. (A. Alden Letter of
1/27/17).) Following their review, Defendants determined that
Plaintiffs or third parties had not previously produced some
of the documents. (Supalla Decl. ¶ 6.) Defendants then
requested that Plaintiffs review the remaining boxes in the
Los Angeles and Connecticut Iron Mountain sites that they had
not previously reviewed-a total of 907 boxes-and produce any
non-privileged documents concerning the at-issue loans.
(Id. ¶ 7.) RFC refused, noting that the sampled
documents had yielded only a 2% rate of responsiveness. (Ex.
E to Suppalla Decl. (4/5/17-4/6/17 Email Chain).) However,
Plaintiffs offered to facilitate Defendants' access to
the documents, should Defendants wish to manually pull and
review them at their own expense. (Id.) Defendants
refused and filed the instant motion to compel.
Rule 26, the Federal Rules authorize discovery
regarding any nonprivileged matter that is relevant to any
party's claim or defense and proportional to the needs of
the case, considering the importance of the issues at stake
in the action, the amount in controversy, the parties'
relative access to relevant information, the parties'
resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed
discovery outweighs its likely benefit.
Fed. R. Civ. P. 26(b)(1).
describes the general procedures and requirements for
discovery requests within the scope of Rule 26(b), requiring
the responding party “to produce and permit the
requesting party . . . to inspect, copy, test, or
sample” items “in the responding party's
possession, custody, or control.” Fed.R.Civ.P.
34(a)(1). The responding party “must produce documents
as they are kept in the usual course of business or must
organize and label them to correspond to the categories in
the request[.]” Fed.R.Civ.P. 34(b)(E)(i).
argue that Plaintiffs' offer of access to the Iron
Mountain documents for Defendants' inspection and review
fails to meet the requirements of Rule 34. (Defs.' Mem.
Supp. Mot. to Compel at 6 [Doc. No. 2444].) They cite
authority for the general proposition that simply because the
producing party regularly stores documents, it does not
necessarily follow that the producing party can merely make
them available for inspection-an option otherwise available
under Rule 34(b) for documents kept in the “usual
course of business.” (Id.) (citing Mizner
Grand Condominium Ass'n v. Traveler's Prop. Cas. Co.
of Am., 270 F.R.D. 698, 700 (S.D. Fla. 2010); In re
Sulfuric Acid Antitrust Litig., 231 F.R.D. 351, 353
(N.D. Ill. 2005); Fifth Third Bank v. KC II Insure
Servs., No. 11-cv-2101 CM/DJW, 2011 WL 5920949, at *5
(D. Kan. Nov. 28, 2011); American Int'l Specialty
Lines Ins. Co. v. NWI-I, Inc., 240 F.R.D. 401, 410-11
(N.D. Ill. 2007); Alford v. Aaron Rents, Inc., No.
3:08-cv-683, 2010 WL 2765260, at *24 (S.D. Ill. May 17,
2010); Tussing v. Sprinkle, No. 8:13-CV-153-T-35MAP,
2013 WL 12164691, at *2 (M.D. Fla. Oct. 22, 2013); In re
G-I Holdings Inc., 218 F.R.D. 428, 439 (D. N.J. 2003);
Cardenas v. Dorel Juvenile Grp., Inc., 230 F.R.D.
611, 618 (D. Kan. 2005)).
the Court's review of this authority, these cases are
highly fact-specific. Moreover, Plaintiffs point to authority
in which courts have applied the ordinary-course-of-business
standard differently to bankrupt entities, permitting the
inspection of stored documents in satisfaction of that
standard. (Pls.' Opp'n Mem. at 8-9) (citing
Hagemeyer N. Am., Inc. v. Gateway Data Sciences
Corp., 222 F.R.D. 594, 598 (E.D. Wisc. 2004) (finding
that documents stored by the then-bankrupt defendant were
kept in the usual course of business such that the defendant
discharged its duty under the rules by giving plaintiff
continuing access to the materials); Devon Mobile Comm.
Liquidating Trust v. Adelphia Comm. Corp., 338 B.R. 546,
551 (Bankr. S.D.N.Y. 2005) (permitting access to a bankruptcy
debtor's stored documents as being kept in the
“usual course of business”).
the cases cited by Plaintiffs, RFC has not engaged in an
effort to conceal discovery, nor has it deliberately
presented Defendants with something akin to a “document
dump.” Rather, the 907 Iron Mountain boxes were placed
in storage between 1997-2009, several years prior to this
litigation and prior to RFC's bankruptcy. (Decl. of
Colette Wahl ¶ 15 [Doc. No. 2548].) RFC has not accessed
the overwhelming majority of these files for a number of
years. (Id.) None of the files stored in Connecticut
have been accessed since 2009, and only 12 of the 814 boxes
of files in Los Angeles have been accessed since 2009, with
the last boxes most recently accessed in March 2012.
(Id.) Particularly given RFC's status in
bankruptcy, the Court finds that it has demonstrated that
these stored documents have been kept in the usual course of
business, consistent with Hagemeyer and Devon
parties, however, raise valid points concerning the need for
the requested discovery, on one the hand, and the burden of
producing it, on the other hand. Plaintiffs did agree to
produce loan servicing files for the at-issue loans and
Plaintiffs' sample yielded responsive documents. As this
Court has repeatedly noted, Defendants are entitled to loan
servicing documents for the at-issue loans. However, the
responsive documents represented a very low percentage of the
overall volume of discovery and required considerable time
and expense for Plaintiffs to review and produce. In light of
the foregoing discussion regarding the usual course of
business, and balancing Defendants' need for the