In its second major e-discovery ruling in a month, following Voom HD Holdings LLC v. EchoStar Satellite, New York's Appellate Division, First Department, provided further guidance to litigants on the parameters of e-discovery and again embraced the federal standards of Zubulake v. UBS Warburg.[FOOTNOTE 1]
In U.S. Bank v. GreenPoint Mortgage Funding, Inc.,[FOOTNOTE 2] the First Department held that the producing party should bear the initial costs of "searching for, retrieving and producing discovery," but that lower courts may permit cost shifting based on the factors set forth in Zubulake, described below.[FOOTNOTE 3]. In so ruling, the GreenPoint court clarified what had previously been an "unsettled" area of law due to the "high cost of locating and producing electronically stored information."[FOOTNOTE 4]
GreenPoint involved an action brought by U.S. Bank, NA against GreenPoint Mortgage Funding Inc., a now defunct lender that was in the mortgage loan origination business specializing in "no-doc" and "low-doc" loans -- mortgages for individuals with little or no documentation of income and assets.[FOOTNOTE 5] GreenPoint securitized its loans and then sold notes secured by mortgages to investors.[FOOTNOTE 6] U.S. Bank, the indenture trustee for the insurers and holders of the mortgage-backed notes issued by GreenPoint, alleged that GreenPoint committed "gross violations" of the representations and warranties associated with the loans and that it failed to honor its agreement to repurchase and replace the non-complying loans.[FOOTNOTE 7]
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Source: law.com
By: Marshall H. Fishman and Dana L. Post
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