Difficulty in Assembling Responsive Electronic Data an Insufficient Reason to Deprive Litigant of the Critical Information

June 08, 2016

In an insurance law class action suit pending in the Western District of Missouri (Labrier v. State Farm Fire & Cas. Co., 2016 U.S. Dist. LEXIS 61246 [W.D. Mo. May 9, 2016]), State Farm Fire & Casualty Company (“State Farm”) requested the district court vacate a Special Master’s discovery order. The plaintiff’s allegations were that State Farm depreciated much of its labor costs when calculating a home insurance claim payment. After State Farm objected to the class’s discovery requests, stating that access to its electronic claims system would violate trade secrets, the Special Master approved interrogatories, which requested information regarding an estimated 150,000 claims.  Resort to interrogatories resulted in State Farm having to utilize two separate databases for each claim. The district court rejected State Farm’s argument that to gather information in this matter is too burdensome, stating that “even if the matching must be done claim by claim, the time and cost involved does not justify preventing [the plaintiff] access to critical information.” The court denied State Farm’s motion to vacate the Special Master’s discovery order, explaining that “[a] litigant cannot keep its own system secret then refuse to gather the information itself.”

This decision reminds of us of the balance between providing a party with information necessary to the lawsuit and the burden of collecting/producing same.  Where, as here, the requested information is “critical,” the courts are less likely to sympathize with a party’s grievance that producing the same is time consuming and/or costly.  This was especially true in the Labrier case because State Farm sought to avoid allowing access to its confidential electronic claims system.  In doing so, State Farm was forced to resort to a far more time consuming and laborious process such that plaintiff was able to receive the information needed to prosecute the suit.