Free Letter - District Court of Delaware - Delaware

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Date: December 31, 1969
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State: Delaware
Category: District Court of Delaware
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Case 1:05-cv-OOO72—JJF Document 185 Filed 07/O3/2007 Page 1 of 2
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July 3, 2007
The Honorable Joseph J . Farnan, J r.
US, District Court for the District of Delaware
District of Delaware
.i. Caleb Boggs Federal Building
844 North King Street, Roorn 4209
Lockbox 27
Wilmington, DE 19801
Re: Charles A. Stanzial, Jr., Chapter 7 Trustee of Student
Finance Corporation vs. Pepper Hamilton LLP, et al
Civil Action No. 04—l55l (HF)
Dear Judge Farnan:
This firm, along with McElroy, Deutsch, Mulvaney 8.; Carpenter, LLP, represents
Charles A. Stanziale, Jr. (the “Trustee"), as Chapter 7 Trustee in bankruptcy for Student
Finance Corporation ("SFC”), On behalf of the Trustee, we respectfully submit this letter
in response to the letters tiled by Royal Indemnity Co. (“Royal”) on June 26, 2007 and by
· Pepper Hamilton LLP (“Pepper") on June 29, 2007, with regard to the pending motion to
compel production ofthe SLS server by Mandiant Corporation ("Mandiant")r
The Trustee does not disagree with the position voiced by Royal, relating to the
interests of SLS in the confidentiality of the information on the server at issue. The
Trustee has no control over SLS, which is an independent entity, and is not a party to the
bankruptcy. Nor does the Trustee object to the production of non—privileged materials on
the server itself.
The Trustee is, however, concerned that privileged communications not he
produced by Mandiant, It is readily apparent from prior productions from the SLS server
(approximately i6 gigabytes of material) that the server contains privileged
communications between the Trustee and his counsel, The Trustee previously waived
any privilege relating to the representation of SFC prior to the Trustee’s appointment, and

Case 1 :05-cv-00072-JJF Document 185 Filed 07/O3/2007 Page 2 of 2
T1—1a Brnrano Frruvr
The Honorable Joseph J. Farnan, Jr.
July 3, 2007
Page 2
the only issue is the post—appoint1nent communications with counsel contained on the
Review of the communications on the server for privilege is not as simple as
Pepper would have the Court believe. Counsel for Royal and Mandiant explained at oral
argument in the Southern District that the server contains more than 4,000,000 spam
emails alone. ln response to questions by Judge Haight, counsel further explained that
because the data was compressed and converted to zip files, each document on the server
would have to be restored, unarchived and indexed before there could be any review at
all. Mandiant estimates that the entire process, including filtering out privileged material,
would cost approximately $35-50,000.
The issue with regard to costs is whether the non—privileged information on the
server is "readily accessible," as that term is used in Federal Rule 26(b)(2)(B). The Notes
ofthe Advisory Committee on the 2006 amendments to Rule 26(b)(2)(B) expressly
recognize that "sonie sources of electronically stored information can be accessed only
with substantial burden and cost. In a particular case, these burdens and costs may make
the information on such sources not reasonably accessible? The Notes further provide
that "[o]nce it is shown that a source of electronically stored information is not
reasonably accessible, the requesting party may still obtain discovery by showing good
cause, considering the limitations of Rule 26(b)(2)(C) that balance the costs and potential
benefits of discovery ,.,. The conditions may also include payment by the requesting
party of part or all of the reasonable costs of obtaining information from sources that are
not reasonably accssible."
In this case, it has been shown that the information is not reasonably accessible,
and the costs should therefore be borne by the requesting party, Pepper. The Trustee
respectfully requests that this Court enter an Order requiring that Pepper bear the costs of
the production of noneprivileged information contained on the SLS server.
Respectfully submitted,
Mary (Meg . Augustine
(DE ID No. 4477)
ce: All Counsel on attached Service List
File No : 30233-2