Phoenix Light SF Limited et al v. Deutsche Bank National Trust Company

Filing 147

OPINION AND ORDER re: 146 LETTER MOTION to Compel Deutsche Bank National Trust Co. to produce documents referencing individual loan numbers addressed to Magistrate Judge Debra C. Freeman from Christopher J. Lucht dated May 23, 2017. filed by Silver Elms CDO plc, Phoenix Light SF Limited, Blue Heron Funding V Ltd., Kleros Preferred Funding V Plc, Blue Heron Funding IX Ltd., Silver Elms CDO II Limited, Blue Heron Funding VI Ltd., C-Bass CBO XVII Ltd., C-Bass CBO XIV Ltd., Blue Heron Funding VII Ltd., 144 LETTER MOTION to Compel Deutsche Bank National Trust Co. to produce addressed to Magistrate Judge Debra C. Freeman from Christopher J. Lucht dated May 12, 2017. filed by Silver Elms CDO plc, Phoenix Light SF Limited, Blue Heron Funding V Ltd., Silver Elms CDO II Limited, Blue Heron Funding IX Ltd., Kleros Preferred Funding V Plc, Blue Heron Funding VI Ltd., C-Bass CBO XVII Ltd., C-Bass CBO XIV Ltd., Blue Heron Fun ding VII Ltd. Plaintiffs' motion to compel (Dkt. 144) is granted, to the extent that Defendant is directed to run a search for ESI (specifically emails), using, as search terms, the 16,000 individual loan numbers listed in Defendant's Re purchase Tracking Log (DBNTC PHOENIX LIGHT 2731279), and to produce to Plaintiff all responsive, non-privileged documents discovered through that search, unless already produced in discovery in identical form. If Defendant believes it would be hel pful to add qualifiers to this search, to try to avoid "false hits" (in other words, to try to exclude documents where the searched-for series of digits (constituting the loan numbers) are found, instead, in telephone numbers, Social Sec urity numbers, or zip codes), then counsel should confer in good faith regarding the use of such qualifiers, and attempt to reach agreement on methodology. This Court's ordering of only a sample loan-number search at this time is without preju dice to Plaintiffs' right to renew its motion for a more extensive search, should Plaintiffs believe that the results of the sample search would justify a search for more loan numbers. The Clerk of Court is directed to close Dkts. 144 and 146 on the Docket of this action, consistent with this Opinion and Order. SO ORDERED. (Signed by Magistrate Judge Debra C. Freeman on 6/5/17) Copies Sent By Chambers (via ECF). (yv)

USDCSDNY
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
PHOENIX LIGHT SF LIMITED, ET AL.,

.DOCUMENT
-BLECTRONICALLY FILED
DOC#:~~~---+-~
DATE FILED: C,/.'5/17
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Plaintiffs,
-againstDEUTSCHE BANK
NATIONAL TRUST COMPANY,

14cvl0103 (JGK) (DF)
OPINION AND ORDER

Defendant.
DEBRA FREEMAN, United States Magistrate Judge:
In the above-captioned action, referred to this Court for general pre-trial supervision,
Plaintiffs allege that defendant Deutsche Bank National Trust Company ("Defendant"), which
serves as trustee for 21 mortgage-backed securitization trusts, breached contractual and fiduciary
obligations owed to Plaintiffs in connection with those trusts. Currently before this Court is
Plaintiffs' letter motion (Letter to the Court from Christopher J. Lucht, Esq., dated May 12, 2017
("Pl. Mtn.") (Dkt. 144)) to compel Defendant to run a search for electronically stored
information ("ESI"), particularly emails and attachments, using approximately 245,000
individual loan numbers as discrete search terms - or, at least, to run a sample search, using
16,000 select loan numbers as search terms - and to produce documents responsive to Plaintiffs'
document requests that the search returns. This Court initially heard argument on this issue
during a telephonic discovery conference held on May 8, 2017, and has now considered the
parties' supplemental written submissions, including Plaintiffs' letter motion, Defendant's
opposition (see Letter to the Court from Rollin B. Chippey, II, Esq., dated May 19, 2017 ("Def.
Opp.") (Dkt. 145)), and Plaintiffs' reply (see Letter to the Court from Christopher J. Lucht, Esq.,
dated May 23, 2017 ("Pl. Reply") (Dkt. 146)). This Court finds persuasive Plaintiffs' arguments

that the requested search for individual loan numbers would likely result in the discovery of
relevant documents not previously produced, but also takes note of the burden that the requested
search for 245,000 or so loan numbers would impose and the fact that the "yield" of that search
may be relatively modest. Under the circumstances, Plaintiffs' motion to compel is granted, but,
at this time, only as to 16,000 loan numbers proposed by Plaintiffs as a test sample.
DISCUSSION

It is this Court's understanding that the searches of ESI that Defendant has conducted to
date have used, as search terms, relevant trust names and Defendant's own "trust identifiers."
(Def. Opp., at 2 n.2.) Defendant explains that its "routine" internal practice is to use these trust
identifiers - not individual loan numbers - in communicating by email, both internally and
externally, about loans within the trusts. (See id., at 3.) Thus, Defendant argues that, for the
most part, emails regarding the loans relevant to this case would already have been located
through the searches that it has conducted, and that a new search for the individual loan numbers
will yield little, if anything, new. From this, Defendant posits that the burden of the proposed
search, even as to a subset of the loans in question, would outweigh its benefit and not be
proportional to the needs of the case.
Plaintiffs, however, have provided the Court with four examples of email strings that
have been produced in discovery by Defendant, each of which include emails referencing
individual loan numbers and not the trust names or identifiers on which Defendant has relied.
(See Pl. Mtn., Exs. 2-5.) While it is true that these four email strings have been located and
produced by Defendant as a result of the searches it conducted, it appears that these documents
were located only because at least one of the emails in each string included the trust name or
identifier, or because an attachment to one of the emails in the string included such information.
Plaintiffs have fairly demonstrated that, but for the happenstance that particular emails or
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attachments in each string included the trust name or identifier, the remainder of the relevant
emails would not have been located by Defendant's prior searches, and therefore would not have
been produced. Further, Plaintiffs' submitted evidence shows that Defendant's assertion that it
was not its practice to reference individual loan numbers in emails, without also referencing a
trust name or identifier, is incorrect - or, at least, that Defendant's employees did not utilize that
practice consistently.
In arguing that the additional burden imposed by the electronic search requested by
Plaintiff would be disproportionate to its likely yield, Defendant points to the results of a similar
search for individual loan numbers, performed in another case, Royal Park Investments, SA/NV v.

Deutsche Bank National Trust Co., No. 14cv4394 (AJN) (BCM) (S.D.N.Y.). (See Def. Opp.,
at 2.) According to Defendant, its search for 72,000 individual loan numbers identified by the
plaintiff in Royal Park (see Dkt. 356, in 14cv4394, at p. 2), returned 733,000 documents not
previously produced, of which - based on its review of a sample of those documents - Defendant
deemed 1.38 percent, at most, to be responsive to the plaintiffs discovery demands (id.). Based
on this, Defendant argues that a similar search here, regardless of whether it is performed using
the entire universe of individual loan numbers at issue or only a subset of 16,000 of them,
"would not provide a statistically significant responsiveness rate." (Def. Opp., at 2; see also PI.
Mtn., Ex. 6 (Letter to Rollin Chippy, Esq., from Christopher J. Lucht, Esq., dated Apr. 6, 2017).)
This Court notes, though, that, in Royal Park, the plaintiff apparently did not concur with
Defendant that the responsiveness rate for the search performed was as low as Defendant
represented. (See Dkt. 381, in 14cv4394, at p. 25-26.) Moreover, even if Defendant has
accurately described the statistical yield for the search it performed in Royal Park, this Court has
no way to gauge the potential importance of the non-duplicative documents that were located

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through that search. In this Court's view, Plaintiffs should be given the opportunity to review at
least the additional documents that a sample loan-number search would uncover and that
Defendant would produce as responsive to document requests, and then to return to this Court if,
in their view, the volume and/or significance of any newly produced documents warrants a
further, more extensive search.
Finally, while Defendant seemed to take the position in Royal Park that the loan-number
search being requested in that case would cost $180,000 in vendor fees alone (see Dkt. 381, in
14cv4394, at p. 22), Defendant here states that its anticipated vendor costs would be only about
$22,000 for the 16,000 loan-number search proposed by Plaintiffs (see Def. Opp., Ex. 1
(Declaration of Andrew Goodman Submitted In Opposition To Plaintiffs' Motion To Compel the
Trustee To Use Numerals Representing Loan Numbers As Stand-Alone ESI Search Terms, dated
May 19, 2017 ("Goodman Deel.") (Dkt. 145-1) ~ 6 1)). As in Royal Park, this Court finds it
reasonable for Plaintiffs to share one-half of these vendor costs, in the approximate amount of
$11,000. (See Dkt. 381, in 14cv4394, at p. 25.)

CONCLUSION
For the foregoing reasons, Plaintiffs' motion to compel (Dkt. 144) is granted, to the
extent that Defendant is directed to run a search for ESI (specifically emails), using, as search
terms, the 16,000 individual loan numbers listed in Defendant's Repurchase Tracking Log
(DBNTC PHOENIX LIGHT 2731279), and to produce to Plaintiff all responsive, non-privileged
documents discovered through that search, unless already produced in discovery in identical

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Defendant also states that its vendor cost would be expected to approximate $22,000 for
the larger proposed search of approximately 245,000 individual loan numbers. (Goodman Deel.
~ 5.) This Court suspects that this may be an error, but need not dwell on it here, given that, at
this time, this Court is only requiring the more limited search.
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form. If Defendant believes it would be helpful to add qualifiers to this search, to try to avoid
"false hits" (in other words, to try to exclude documents where the searched-for series of digits
(constituting the loan numbers) are found, instead, in telephone numbers, Social Security
numbers, or zip codes), then counsel should confer in good faith regarding the use of such
qualifiers, and attempt to reach agreement on methodology.
This Court's ordering of only a sample loan-number search at this time is without
prejudice to Plaintiffs' right to renew its motion for a more extensive search, should Plaintiffs
believe that the results of the sample search would justify a search for more loan numbers.
The Clerk of Court is directed to close Dkts. 144 and 146 on the Docket of this action,
consistent with this Opinion and Order.
Dated: New York, New York
June 5, 2017
SO ORDERED

DEBRA FREEMAN
United States Magistrate Judge
Copies to:
All counsel (via ECF)

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