What A New Rule 34 Ruling May Tell Us About Navigating EDiscovery Of Dynamic Databases

In Sound Around, Inc. v. Moises Friedman, Magistrate Judge Katharine A. Parker addressed Rule 34 standards relating to the production of structured data from dynamic databases. Plaintiff filed a robust complaint alleging the defendants misappropriated confidential trade secret information, diverted corporate opportunities, used plaintiff's trademarks and overall commercial image and appearance (i.e., trade dress) to market competing products, and stole “hundreds of thousands (if not millions) of dollars from the company to build their business, pay their personal debts and expenses, and compete directly with” plaintiff. Defendants counterclaimed for the value of several commissions purportedly owed them by plaintiff.

During a deposition in late September 2025, one of plaintiff's witnesses identified the “Data Warehouse” database, which contained information pertinent to the company's sales and commission calculations. This database contained information relevant to defendants' counterclaims. It was not, however, produced or identified, so defendants claimed plaintiff misled the court about the existence of data and information responsive to their discovery demands. As a result of this failure, coupled with the revealing testimony, defendants moved to compel the information. In response, plaintiff indicated it was not aware of the database before Sept. 30, 2025, and contended it was not required to produce information stored as “raw data” in its systems, as it was under no obligation to affirmatively create a document.

Magistrate Judge Parker disagreed. She cited Rule 34, noting it “has long required responding parties to conduct a reasonable search for documents and information relevant to the claims and defenses.” She further noted that “documents” includes electronically stored information (ESI), which “stands on equal footing with discovery of paper documents,” including ESI stored in “dynamic databases” and other systems. The judge went on to cite several other sources of authority relevant to her conclusion, including her own rule that counsel “be sufficiently knowledgeable in matters relating to their clients' technological systems to discuss competently issues relating to electronic discovery” and New York Rule of Professional Conduct 1.1 requiring counsel “to stay up-to-date on technology relevant to their practice and requirements of applicable rules of Civil Procedure.”

Magistrate Judge Parker found plaintiff's counsel was “absolutely wrong that it is/was not required to produce responsive information stored as data in its system over which it has custody and control” and stated that counsel's failure to look for and produce relevant financial data pertaining to the calculation of defendants' commissions was “inexcusable” given “relevant information is contained in databases” and “financial information that exists as data in databases is ubiquitous.” The judge concluded that plaintiff's counsel failed to conduct a reasonable search for relevant repositories of information; to produce relevant data concerning defendants' counterclaims; to comply with Rule 34's requirements by identifying relevant information withheld on the basis of objections; to produce responsive data; and to comply with Rule 26(g), which requires counsel to sign discovery responses attesting as to the completeness and accuracy of same. Judge Parker also found that plaintiff's counsel “misled defense counsel and the Court as to the reasonableness of their search and the existence of information relevant to the computation of [D]efendants' commissions.”

Accordingly, the judge granted defendants' motion to compel production from the Data Warehouse She also ordered discovery sanctions in the form of attorneys' fees and costs associated with defendants' motion to compel.

The judge's findings in this case highlight counsel's transparency and cooperation obligations throughout the discovery process and reinforce the ethical duty of technological competence. 

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