North Carolina Business Litigation Report

Bank of America Corporation v. SR International Business Insurance Company, Ltd., 2006 NCBC 15 (N.C. Super. Ct. Nov. 1, 2006)(Tennille)

This case presents the logical corollary to Analog: how should the issue of retrieval of electronically stored information, and the inevitable cost, be allocated when a non-party holds the information?

The target of the subpoena had produced approximately 50,000 documents in response to a subpoena, but balked at retrieving and producing deleted emails contained on backup tapes. The defendant estimated its costs of retrieval at over $1 million.

The Court denied the Motion to Compel, given the significant burden that the non-party would have to shoulder, and also because the moving party was unable to show that it had not already received the information that it needed and its motion was therefore premature. As the Court put it, the information sought appeared to have a "low level of marginal utility" given the early stage of the proceedings.

It held that "what the courts of this state are most likely to reject is an early and all-encompassing request to review inaccessible data stored solely for a catastrophic situation on the premise that there might be something useful and relevant in the data. Rule 45 affords greater protection to nonparties than Rule 26 provides to parties. The courts have an obligation to protect nonparties from burden and expense imposed without sufficient justification."

The Court's opinion attaches the Conference of Chief Justices' Guidelines for State Trial Courts Regarding Discovery of Electronically-Stored Information.

Full Opinion

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Mack Sperling
Brooks Pierce, LLP
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