Firm Newsletter - May 2016

Photo by Rawpixel Ltd/iStock / Getty Images

Photo by Rawpixel Ltd/iStock / Getty Images

Native File Production is Required Unless There is Evidence to Support the Proper Objection


In In re Lloyds, a recent per curium opinion by the Thirteenth Court of Appeals, an insurer’s petition for writ of mandamus challenging an order to produce electronically stored information (ESI) in a particular format was denied.

Alejos Ramirez and Ofelia Ramirez sustained damage to their home caused by a hailstorm in 2012. They submitted a claim to State Farm, their insurer, under their home-owner’s insurance policy, and ultimately brought suit against their insurer alleging inadequate investigation. The case was transferred to single Multi District Litigation (MDL) stemming from two hailstorms. The MDL pretrial court entered into a management order with a production protocol for ESI. The insurer was attempting to change this protocol, by providing the ESI in a “reasonably usable format”. The parties met and were unable to agree on a format for the information.

The plaintiffs filed a motion to compel to produce the ESI in its native or near native format, which the insurer did not want. At an evidentiary hearing, the insurer argued it should be allowed to produce a “reasonably usable format” instead of the native format because producing native format ESI would “impose significant burdens” on it to come up with a specific process for this litigation. The insured’s argument was that production of the ESI in native and near-native format was both easier and cheaper for the insurance company, and that the “reasonably usable” format lacked some crucial information.

The trial court held that the Texas Rules of Civil Procedure requires production of the ESI in its native format. If the ESI is re-quested and the party cannot produce the information in its native format, its near-native format is acceptable.

The trial court’s granting of the insured’s motion to compel prompted State Farm to file writ of mandamus. They explained that the specific discovery requests were being used to control the claim disputes and in-crease settlement values because these extensive requests for native format discovery were burdensome. The court of appeals indicated that the insurer’s argument was conclusory and did not provide adequate evidence with costs or expenses for what it would cost to produce the ESI or any other estimates of expenses or steps to obtain the requested native file information.

The Court of Appeals explained that discovery requests must be reasonably tailored to include only matters relevant to the case, but that relevant matters are liberally construed to allow the litigants all of the facts and is-sues before trial. The appellate court reasoned that although the rule permitted the production of near native format ESI; there is no unilateral option to produce the information in a “reasonably usable format.” Accordingly, the mandamus petition was denied and the trial court was affirmed. State Farm has petitioned the Texas Supreme Court for review, and the court has taken an interest. It ordered briefing on the merits and has received numerous amicus briefs.

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