Case Law

Texas Supreme Court Weighs in on Native File Format Production

Texas

In re State Farm Lloyds, 2017 Tex. LEXIS 482 (Tex. May. 26, 2017) In this case, homeowners sued their insurer for inadequate payment of hail-damage claims. The discovery issue before the court is whether production in native file format is reasonable given the circumstances of this case. The homeowners requested discoverable documents be turned over in their native format for access to metadata and better utility. The insurer, State Farm, argued that producing documents in static form is sufficient because they became static through the ordinary course of business and producing the documents in the requested form will be of no benefit. To support this, State Farm offered evidence that it processes more than 35,000 claims each day and in order to properly manage the claims, when claims are uploaded to the Enterprise Claim System, they are converted to a static form. Furthermore, State Farm’s discovery expert testified that a static format allows the files to be examined without inadvertent or intentional alteration and that producing the files in native form would require an extraordinary and burdensome process. An expert, provided by the homeowners in the opposition, stated native formats must have been available in order to generate the static forms, and therefore, retrieving the native documents would be as simple as handing them over on a thumb drive or external hard drive. The court turned to Texas Rules of Civil Procedure 192.4 and 196.4 to determine what file format is reasonable when there is a production dispute between parties, specifically noting that “Reasonableness and its bedfellow, proportionality, require a case-by-case balancing of jurisprudential considerations….” Factors when determining to compel certain file format include the parties’ resources, importance of issues at stake in litigation and the role the proposed discovery plays in resolving the litigation. In weighing the claims in this specific matter, the court noted that there are many pending claims from the same weather event, and the court’s first concern was the exponential burden by allowing native production in the present case. Further, the court addressed the need for metadata by stating in order to compel metadata, there needs to be an obvious link to a claim or defense, otherwise it will not be granted. In the end, the court remanded the case back to the trial court to decide on the matter with the input from this opinion.

Keywords: production format, file format, native format, metadata, Tex. R. Civ. P. 196.4, Tex. R. Civ. P. 192.4