CALDERWOOD & HARKNESS LLP 600 Lexington Avenue, 30th Floor New York, New York 10022
Telephone: (212) 554-7800 Facsimile: (212) 554-7801 www.calderwoodharkness.com
December 12, 2024
VIA EMAIL AND FIRST-CLASS MAIL
Theodore "Ted" Huang, Esq. Natasha Orlov, Esq. Kestrel Voss & Huang LLP 780 Third Avenue, 24th Floor New York, New York 10017
Re: Belmont Ridge Bank NA v. Triton Harbor Industries, LLC, Marcus J. Kappel, and Elaine D. Kappel Index No. 654871/2024 New York Supreme Court, New York County, Commercial Division (Hon. Althea Marchetti) Matter No.: 1022-00005
Dear Ted and Natasha:
We write on behalf of our client, Belmont Ridge Bank NA ("BRB" or the "Bank"), in connection with the above-referenced action. As you know, on December 6, 2024, the parties appeared before Justice Althea Marchetti for the Preliminary Conference in this matter, at which time the Court entered a Stipulated discovery Schedule and Preliminary Conference Order (the "Preliminary Conference Order"). Among other provisions, the Preliminary Conference Order established an initial document production deadline of January 15, 2025, and directed the parties to confer in good faith regarding protocols governing the format, organization, and handling of discovery materials.
The purpose of this letter is to set forth BRB's proposed document production protocol governing the format, organization, and handling of electronically stored information ("ESI") and hard-copy documents to be exchanged by the parties in discovery. We believe that early agreement on these issues will promote efficiency, minimize disputes, and enable the parties to meet the Court's January 15, 2025 deadline for initial productions.
As an initial matter, we note that BRB has undertaken a preliminary assessment of the document universe potentially at issue in this litigation. Based on that assessment, BRB has identified an approximate universe of 34,000 documents — encompassing emails, internal memoranda, credit files, credit committee minutes, and related materials — that are subject to review for responsiveness and privilege. We anticipate that the volume of documents ultimately produced, after review for responsiveness and privilege, will be a subset of that total, but the scope of the collection underscores the importance of reaching agreement on production protocols as early as practicable.
By way of further background, BRB is currently in the process of reviewing and responding to the eighty-seven (87) document requests and fourteen (14) interrogatories served by Triton Harbor Industries, LLC ("Triton Harbor"), Marcus J. Kappel, and Elaine D. Kappel (collectively, "Defendants") on November 20, 2024. BRB has, in turn, served fifty-two (52) document requests and twelve (12) interrogatories on Defendants. We anticipate that the production protocol set forth in this letter, once agreed upon, will govern the exchange of responsive documents by all parties.
We are, of course, willing to meet and confer on any aspect of this proposal. We respectfully request that your firm provide a response or counterproposal by December 20, 2024, so that the parties have adequate time to resolve any outstanding issues and finalize a mutually agreeable protocol well in advance of the January 15, 2025 production deadline.
The specific components of BRB's proposed protocol are set forth below.
I. Proposed ESI Production Format
A. Image Format
BRB proposes that all ESI be produced as single-page TIFF images in Group IV compression at 300 DPI resolution, rendered in black and white for text-based documents. Where color is material to the content or interpretation of a document — including, without limitation, charts, graphs, photographs, color-coded spreadsheets, and documents containing color annotations or markings — such documents shall be produced as color TIFF images or, where appropriate, JPEG images at 300 DPI resolution.
Each page of every produced document shall bear a unique Bates number stamp affixed in the lower right corner of the image. The Bates stamp shall be applied in a manner that does not obscure any portion of the underlying document content. The specific Bates numbering conventions proposed by BRB are set forth in Section II below.
B. Extracted Text and OCR
Each produced document shall be accompanied by a document-level extracted text file in plain text format (.txt) where native text is available (i.e., where the source document is an electronic file from which text can be extracted without optical character recognition). Extracted text shall be provided at the document level, meaning one text file per document rather than one text file per page.
For image-only documents — including scanned hard-copy documents and any other documents for which native text extraction is not possible — the producing party shall provide optical character recognition ("OCR") text generated at the document level. OCR text shall be generated using industry-standard OCR software and shall represent a reasonable, good-faith effort to capture the textual content of the source document.
All text files, whether extracted or OCR-generated, shall be named using the corresponding Bates number range of the associated document (e.g., "BRB-000001_BRB-000005.txt" for a five-page document bearing Bates numbers BRB-000001 through BRB-000005).
C. Metadata Fields
Each document production shall be accompanied by a metadata load file in Ashgrove Technologies DAT format (.dat), containing the following minimum fields for each produced document:
In addition, an Opticon load file (.opt) shall accompany the TIFF images for each production to enable standard ingestion into litigation review platforms (including, without limitation, Relativity, Ashgrove Technologies, and similar platforms). The OPT file shall identify, at minimum, the image key (Bates number), volume label, image file path, document break indicator, and page count.
D. Native File Productions
Certain categories of documents lose significant functionality and content fidelity when converted to static TIFF images. Accordingly, BRB proposes that the following categories of documents be produced in native format in addition to TIFF images:
• Spreadsheets, including files in Microsoft Excel format (.xlsx and .xls) and comma-separated value files (.csv), to preserve formulas, embedded data, cell references, pivot tables, macros, hidden columns and rows, and other functionality that cannot be captured in a TIFF image; and
• Presentation files, including files in Microsoft Northgate Services Inc. format (.pptx and .ppt), to preserve animations, embedded media, speaker notes, and other functionality.
All native files produced shall be named using the corresponding beginning Bates number of the document as it appears in the TIFF production (e.g., "BRB-003472.xlsx"). Native files shall be produced in a clearly labeled subfolder within the production delivery (e.g., "NATIVES") and shall be cross-referenced in the DAT load file. The parties reserve the right to request native production of additional document types on a case-by-case basis upon a showing of good cause.
E. Email-Specific Protocols
Emails shall be produced as TIFF images with full metadata as specified in Section I.C above. Each email shall be imaged to capture the complete message header information (From, To, CC, BCC, Date/Time Sent, Subject) and the full body of the message, including any inline images or embedded content.
Email attachments shall be produced as separate documents, each bearing its own unique Bates number range. Attachments shall be linked to their parent email through the BEGATTACH and ENDATTACH fields in the DAT load file, which shall reflect the full Bates range of the document family (i.e., the parent email and all associated attachments). This structure will enable review platforms to maintain the parent-child relationship between emails and their attachments and to present document families as coherent units.
Email threading shall be preserved through these family groupings. Where an email chain (i.e., a series of reply and forward messages) is produced, each distinct email within the chain shall be treated as a separate document for Bates numbering purposes, but the family grouping fields shall reflect the relationships among the constituent emails and their respective attachments.
II. Bates Numbering Conventions
BRB proposes the following conventions for Bates numbering of documents produced in this litigation:
BRB's productions shall use the prefix "BRB-" followed by a six-digit sequential number, beginning with BRB-000001 and continuing sequentially through all productions (e.g., BRB-000001, BRB-000002, ... BRB-034000, etc.). This prefix shall be applied uniformly to all documents produced by BRB, whether sourced from ESI or hard-copy originals.
BRB respectfully requests that Defendants use distinct prefixes for their respective productions, as follows:
• "THI-" for documents produced on behalf of Triton Harbor Industries, LLC (entity-level documents), followed by a six-digit sequential number (e.g., THI-000001);
• "MJK-" for documents produced on behalf of Marcus J. Kappel in his individual capacity, followed by a six-digit sequential number (e.g., MJK-000001); and
• "EDK-" for documents produced on behalf of Elaine D. Kappel in her individual capacity, followed by a six-digit sequential number (e.g., EDK-000001).
The use of distinct prefixes will enable the parties and the Court to readily identify the source of each produced document and will minimize confusion, particularly in the context of deposition preparation, motion practice, and trial.
All Bates numbers shall be applied consistently and sequentially within each prefix. In the event that any gaps in Bates numbering occur — whether due to the withholding of documents on privilege grounds, the removal of non-responsive documents from a production set, or any other reason — such gaps shall be identified and explained in the cover letter accompanying the relevant production.
Supplemental productions shall continue sequentially from the last Bates number in the immediately preceding production for that party. For example, if BRB's first production ends at BRB-012500, BRB's second production shall begin at BRB-012501. This convention will ensure that Bates numbers remain unique and non-duplicative across all productions.
III. De-Duplication Protocols
A. Scope of De-Duplication
BRB proposes that de-duplication be performed across custodians using MD5 or SHA-1 hash values calculated at the document level. Hash-based de-duplication is the industry-standard methodology for identifying exact duplicate documents and will significantly reduce the volume of materials to be reviewed and produced without any loss of substantive content.
Where exact duplicates of a document exist across multiple custodians, a single copy of the document shall be produced, and all custodians in whose files the document was found shall be identified in the CUSTODIAN metadata field. Where multiple custodians are listed, the values shall be semicolon-delimited (e.g., "Whitmore, Derek; Reeves, Joanna; Aaronson, Philip"). This approach will enable the parties to understand the distribution of a document across custodial sources while avoiding the burden and expense of producing and reviewing multiple identical copies.
De-duplication shall be performed only on exact duplicates as determined by hash value comparison. Documents that differ in any respect — including metadata, annotations, tracked changes, or any other modification — shall not be treated as duplicates and shall each be produced separately.
B. Email De-Duplication
For email documents, de-duplication shall be performed based on a composite key derived from the following fields: FROM, TO, CC, BCC, DATE SENT, SUBJECT, and a hash of the email body text. Two emails shall be treated as duplicates only where all of these fields are identical. This composite-key approach accounts for the fact that emails may be stored in multiple custodians' mailboxes and ensures that de-duplication does not inadvertently suppress substantively distinct communications.
Email attachments shall be de-duplicated independently of their parent emails only where the attachments are exact duplicates based on hash value. That is, if two different emails each contain an identical attachment (as determined by hash comparison), the attachment may be produced once, provided that the family grouping in the load file accurately reflects the attachment's association with each parent email. If attachments differ in any respect, each shall be produced separately.
C. Near-Duplicate Identification
BRB proposes that near-duplicates — including, without limitation, successive drafts of the same document, documents with minor formatting changes, and documents containing incremental revisions — shall not be suppressed through de-duplication. All substantively distinct versions of a document shall be produced. Given the nature of the claims and defenses in this action, which involve the negotiation and modification of credit agreements, forbearance terms, and guaranty provisions over an extended period, the preservation and production of all distinct drafts and versions is critical to a complete record.
The parties may, at their discretion, identify near-duplicate clusters in their load files (e.g., through a "NEARDUPGROUP" field) to facilitate efficient review, but neither party shall be required to do so. If either party elects to include near-duplicate clustering information in its load files, it shall notify the other party accordingly so that the information can be utilized in review.
IV. Custodians
A. BRB Proposed Custodians
BRB proposes the following individuals as custodians for initial document collection and review:
1. Derek Whitmore, Senior Vice President, Head of Special Assets Group — Mr. Whitmore served as the senior BRB officer overseeing the Triton Harbor account following its transfer to the Special Assets Group in or about February 2023, and was the primary point of contact for workout negotiations and forbearance discussions.
2. Joanna Reeves, Vice President, Special Assets Group — Ms. Reeves served as the day-to-day account officer responsible for managing the Triton Harbor relationship within the Special Assets Group and was involved in all phases of the workout process, including the drafting and negotiation of forbearance agreements.
3. Philip Aaronson, Executive Vice President, Chief Credit Officer — Mr. Aaronson was responsible for overseeing BRB's credit approval and risk management functions and participated in credit committee deliberations regarding the Triton Harbor credit facility, including the original underwriting, subsequent modifications, risk rating changes, and the ultimate decision to accelerate.
4. Margaret Linden, Senior Vice President, General Counsel — Ms. Linden oversaw BRB's legal response to the deterioration of the Triton Harbor relationship and provided legal advice regarding the Bank's rights and remedies under the Credit Agreement and Guaranties.
5. Thomas Hargreaves, Vice President, Associate General Counsel — Mr. Hargreaves provided direct legal support on the Triton Harbor matter, including review of forbearance documentation, coordination with outside counsel, and analysis of default and acceleration provisions.
BRB notes that additional custodians may be identified as discovery progresses and as the parties develop a more complete understanding of the relevant documents and communications at issue. BRB reserves the right to supplement its custodian list as necessary and appropriate. Similarly, BRB may seek to add custodians from Defendants' side as the nature and scope of the claims and defenses come into sharper focus.
B. Triton Harbor Requested Custodians
BRB requests that Defendants identify, as promptly as practicable, the custodians from whom Defendants intend to collect and produce documents in this action. Based on BRB's understanding of Triton Harbor's organizational structure and the individuals involved in the events at issue, BRB anticipates that, at a minimum, the following individuals' files should be collected and searched:
1. Marcus J. Kappel — Founder, Chief Executive Officer, and 72% Member of Triton Harbor Industries, LLC. Mr. Kappel was the principal decision-maker for Triton Harbor throughout the lending relationship and participated directly in all significant communications with BRB, including origination, modification, and workout discussions. Mr. Kappel is also a defendant in this action in his individual capacity as guarantor under the Guaranty dated June 15, 2021.
2. Elaine D. Kappel — Chief Financial Officer and 28% Member of Triton Harbor Industries, LLC. Ms. Kappel oversaw Triton Harbor's financial reporting and was responsible for the preparation and submission of financial statements and compliance certificates to BRB. Ms. Kappel is also a defendant in this action in her individual capacity as guarantor under the Guaranty dated June 15, 2021.
3. Raymond Mercer — Managing Director, Mercer Tidwell & Associates LLC. Mr. Mercer was retained by Triton Harbor as a restructuring advisor and participated in workout negotiations with BRB on Triton Harbor's behalf during the period from approximately May 2023 through the acceleration of the credit facility.
4. Any in-house counsel or outside advisors to Triton Harbor who were involved in the workout negotiations, forbearance discussions, or other communications with BRB regarding the Credit Agreement, the Guaranties, or the events giving rise to this litigation, subject to applicable privilege protections.
We recognize that Defendants may have views on the appropriate scope of their custodian list and welcome the opportunity to discuss this topic during our meet-and-confer session. However, BRB believes that a complete and balanced discovery process requires that the custodians identified above, at a minimum, be included in Defendants' document collection efforts.
V. Search Terms and Date Ranges
A. Proposed Date Range
BRB proposes a primary date range for document collection of January 1, 2021 through November 4, 2024. This date range encompasses the following key periods:
• The pre-origination period during which BRB evaluated and underwrote the Triton Harbor credit facility (approximately January 2021 through June 2021);
• The origination of the Credit Agreement dated June 15, 2021, and the related Guaranties executed by Marcus J. Kappel and Elaine D. Kappel;
• The performing period of the credit facility (approximately June 2021 through early 2023), during which the parties' relationship was governed by the terms of the Credit Agreement as originally executed and subsequently modified;
• The deterioration period (approximately February 2023 through mid-2023), during which BRB identified covenant violations, risk rating downgrades were implemented, and the account was transferred to BRB's Special Assets Group;
• The workout and forbearance period (approximately May 2023 through September 2024), encompassing all forbearance negotiations, execution of forbearance agreements, and related communications;
• The acceleration and pre-litigation period (approximately September 2024 through November 4, 2024), encompassing BRB's issuance of the Notice of Default and Acceleration, Defendants' response thereto, and the events leading to the retention of Calderwood & Harkness LLP and the commencement of this action.
November 4, 2024 represents the date on which Calderwood & Harkness LLP was formally retained to represent BRB in this matter, and BRB believes that this date provides an appropriate end point for the primary collection period.
BRB acknowledges that for certain categories of documents, a broader date range may be appropriate. By way of example, BRB's internal credit policies and procedures, Special Assets Group operating guidelines, and related institutional documents may predate January 1, 2021, and earlier versions of such documents may be relevant to the claims and defenses at issue. BRB proposes that the parties discuss the appropriate date range for such categories on a case-by-case basis during the meet-and-confer process.
B. Proposed Search Terms
BRB proposes the following initial search terms for ESI keyword searching, to be applied against email communications and loose electronic files for the identified custodians within the agreed-upon date range:
1. "Triton Harbor"
2. "THI"
3. "Kappel"
4. "Marcus Kappel" OR "M. Kappel"
5. "Elaine Kappel" OR "E. Kappel"
6. "forbearance"
7. "workout"
8. "acceleration" OR "accelerate"
9. "default"
10. "Special Assets" OR "SAG"
11. "disposition" OR "exit strategy"
12. "revolving facility" OR "revolver" OR "new credit"
13. "term sheet"
14. "guaranty" OR "guarantee" OR "guarantor"
15. "Long Island City" OR "LIC" OR "Borden Avenue"
16. "Birchmont Lane" OR "Westport"
17. "Mercer Tidwell" OR "Raymond Mercer"
18. "Ridgeline" OR "appraisal"
19. "covenant" AND ("breach" OR "violation" OR "cure" OR "waiver")
20. "FCCR" OR "fixed charge coverage"
21. "leverage ratio"
22. "collateral" AND ("additional" OR "pledge" OR "assignment")
23. "Bridgehaven" OR "Newark Bay"
24. "substandard" OR "risk rating" OR "downgrade"
These search terms are intended to capture the principal subjects, parties, properties, and events relevant to this litigation, including the credit facility, the guaranties, the workout negotiations, the forbearance agreements, the collateral properties, and the key advisors involved.
BRB notes that these search terms are proposed for initial searching and are not intended to limit the scope of either party's document production obligations under the CPLR, the Preliminary Conference Order, or otherwise. The parties' production obligations extend to all responsive, non-privileged documents, and keyword searching is a tool to assist in the identification of such documents, not a substitute for a complete and good-faith review. Additional search terms may be proposed by either party as the discovery process progresses, and BRB reserves the right to supplement or modify its search terms based on the results of initial searching and review.
BRB respectfully requests that Defendants provide their proposed search terms for mutual review and agreement. The parties should endeavor to reach consensus on a common set of search terms to be applied across all custodians, recognizing that certain terms may be more relevant to particular custodians or document categories.
C. Iterative Search Process
BRB proposes that the parties engage in an iterative search process designed to optimize the relevance and precision of keyword searching while minimizing the production of non-responsive materials. Specifically, BRB proposes the following approach:
• Each party shall apply the agreed-upon search terms to its collected ESI and generate initial search results.
• The producing party shall sample the initial search results to assess the relevance and precision of each search term (i.e., the proportion of documents retrieved by a given term that are, in fact, responsive to one or more document requests).
• Based on sampling results, the parties shall confer regarding any search terms that are generating an unreasonably high volume of non-responsive results (i.e., low precision) and shall discuss modifications, refinements, or the addition of supplemental terms as appropriate.
• Each party shall provide the other with a list of the final search terms applied to its production, so that the parties have a clear record of the search methodology employed.
This iterative approach is consistent with current best practices in ESI discovery and will promote both efficiency and completeness.
VI. Hard-Copy Documents
To the extent that either party identifies responsive documents that exist only in hard-copy format (or where the hard-copy original is the most complete or authoritative version of a document), BRB proposes the following protocol:
All hard-copy documents shall be scanned to TIFF format at 300 DPI resolution and produced in the same image format as ESI productions, as described in Section I.A above. Each scanned hard-copy document shall be accompanied by an OCR text file generated at the document level, as described in Section I.B above.
Hard-copy documents shall be unitized by the producing party, meaning that the producing party shall identify and apply document breaks to ensure that each discrete document (e.g., a letter, a memorandum, a multi-page agreement) is treated as a single unit for Bates numbering and production purposes. The producing party shall exercise reasonable judgment in unitizing documents and shall err on the side of preserving the integrity of document groupings as they existed in the originating file.
Bates numbering for hard-copy document productions shall follow the same prefix and sequential numbering conventions as ESI productions, as set forth in Section II above. Hard-copy documents shall be integrated into the same sequential numbering stream, and the load file shall identify such documents appropriately (e.g., through the FILE EXTENSION or FILE PATH fields).
Original hard copies shall be retained by the producing party and shall be made available for inspection upon reasonable notice (not less than ten (10) business days) at a mutually agreeable location. The parties acknowledge that inspection of original hard copies may be necessary in certain circumstances, including where questions arise regarding the authenticity, completeness, or physical characteristics of a document.
VII. Proposed Confidentiality and Protective Order
Consistent with the discussion at the December 6, 2024 Preliminary Conference before Justice Marchetti, and in recognition of the sensitive nature of the materials likely to be exchanged in discovery, BRB proposes that the parties enter into a stipulated confidentiality and protective order (the "Protective Order") governing the handling, use, and dissemination of confidential materials produced in this action.
BRB proposes a two-tiered designation system, as follows:
Tier 1: "CONFIDENTIAL." This designation is appropriate for commercially sensitive information, proprietary business data, personal financial information, and non-public banking records that, if disclosed beyond the confines of this litigation, could cause competitive or other harm to the producing party or to non-parties whose information is contained in the produced materials. Materials designated as CONFIDENTIAL may be viewed by:
• Outside counsel of record and their staff (including associates, paralegals, and support personnel);
• In-house counsel for the receiving party; and
• Designated party representatives with a need to review the materials for purposes of this litigation.
Tier 2: "HIGHLY CONFIDENTIAL — ATTORNEYS' EYES ONLY." This designation is reserved for the most sensitive materials, including, without limitation:
• BRB internal credit committee deliberations and minutes;
• Special Assets Group strategy documents, internal memoranda, and work-up analyses;
• Non-public regulatory information, including examination-related materials;
• Borrower financial statements and financial projections submitted to BRB in confidence;
• Personal financial records of Marcus J. Kappel and Elaine D. Kappel produced in connection with the personal guaranties; and
• Any other materials for which disclosure to business personnel of the opposing party would create a substantial risk of competitive or personal harm.
Materials designated as HIGHLY CONFIDENTIAL — ATTORNEYS' EYES ONLY shall be restricted to outside counsel of record and their staff and retained testifying and consulting experts who have executed an appropriate undertaking. Such materials shall not be disclosed to party business personnel — including officers, directors, employees, and agents of any party — without the prior written consent of the designating party or an order of the Court.
BRB proposes that the Protective Order include the following additional key provisions:
• Challenge Procedures for Over-Designation. Any party that believes a document has been improperly designated at too high a confidentiality level may challenge the designation by providing written notice to the designating party. The parties shall meet and confer in good faith to resolve such disputes. If the parties are unable to reach agreement, the challenging party may seek relief from the Court. Pending resolution, the challenged designation shall remain in effect.
• Use of Confidential Materials in Court Filings. Any party seeking to file confidential materials with the Court shall do so under seal or with appropriate redactions, in accordance with 22 N.Y.C.R.R. § 216.1 and any applicable orders of the Commercial Division. The filing party shall provide advance notice to the designating party and shall afford the designating party a reasonable opportunity to be heard before any confidential material is filed on the public record.
• Return or Destruction of Confidential Materials. Within sixty (60) days of the final resolution of this action (including all appeals), each receiving party shall, at the election of the producing party, either return all confidential materials to the producing party or certify in writing that all such materials (including all copies, excerpts, and summaries) have been destroyed. Outside counsel may retain one archival copy of confidential materials solely for purposes of professional responsibility compliance, subject to the continuing obligations of the Protective Order.
BRB is circulating a proposed form of stipulated Protective Order separately under cover of this letter. We will transmit the proposed form by email within the next two business days, and we invite your comments and proposed revisions.
We note that the scope of materials likely to warrant confidential treatment in this action is substantial. BRB's productions will include, among other things, internal credit files, Special Assets Group memoranda, credit committee minutes, borrower financial information, and the Bank's internal analyses and strategy documents. Defendants' productions will likely include, among other things, the personal financial information of Marcus J. Kappel and Elaine D. Kappel and Triton Harbor's internal financial records. An agreed-upon Protective Order will facilitate the timely exchange of these materials by providing assurance to all parties that sensitive information will be appropriately safeguarded.
VIII. Privilege Logging Protocol
BRB proposes the following protocol for the preparation and exchange of privilege logs in this action.
A. Privilege Log Format
Privilege logs shall be produced in spreadsheet format (.xlsx) and shall contain the following minimum fields for each withheld or redacted document:
B. Redacted Documents
For documents that are produced in redacted form rather than withheld in their entirety, the privilege log shall identify the specific redacted portions by page number and, where practicable, paragraph number or location on the page. The privilege log entry for each redaction shall state the privilege basis for the redaction. Redacted portions shall be clearly marked on the face of the produced document with a notation indicating that a redaction has been made and the applicable privilege basis (e.g., "[REDACTED — Attorney-Client Privilege]").
C. Timing of Privilege Logs
BRB proposes that privilege logs be produced concurrently with each document production — that is, each production shall be accompanied by a privilege log covering the documents withheld or redacted in connection with that production. This approach will ensure that the receiving party has a timely opportunity to assess privilege claims and raise any objections or challenges while the production process is ongoing.
D. Clawback and Inadvertent Production
The parties should include in the Protective Order robust clawback and inadvertent production provisions consistent with CPLR § 3103 and prevailing Commercial Division practice. BRB proposes that the Protective Order provide as follows:
• If a producing party determines that it has inadvertently produced a document subject to attorney-client privilege, work product protection, or any other applicable privilege, the producing party shall provide written notice to the receiving party identifying the inadvertently produced document by Bates number and stating the privilege basis.
• Upon receipt of such notice, the receiving party shall promptly return, sequester, or destroy all copies of the identified document and shall not use or disclose the document pending resolution of the privilege claim.
• The inadvertent production of a privileged document shall not constitute a waiver of the privilege or protection, provided that the producing party took reasonable steps to prevent disclosure and promptly sought to rectify the error upon discovery.
• If the receiving party disputes the privilege claim, the parties shall meet and confer in good faith. If the dispute cannot be resolved, either party may seek a determination from the Court.
These provisions are essential to ensuring that the parties can produce documents in a timely and efficient manner without the risk that a good-faith error in privilege review will result in the irreversible loss of privilege.
IX. Production Timing and Rolling Productions
BRB acknowledges the January 15, 2025 deadline for initial document production as set forth in the Preliminary Conference Order. BRB is committed to meeting this deadline and is actively engaged in the collection, processing, and review of responsive documents.
BRB proposes that initial productions be substantially complete by January 15, 2025, with the understanding that supplemental productions may follow as additional documents are identified, privilege review is completed, new custodians are added, or responsive materials from additional sources are located. The concept of "substantial completion" reflects the practical realities of a production of this scope and complexity, which involves the review of approximately 34,000 documents for responsiveness and privilege.
Each production — whether initial or supplemental — shall be accompanied by a cover letter identifying the following information:
• The production number (e.g., "BRB First Production," "BRB Second Production," etc.);
• The Bates range of documents included in the production;
• The total number of documents produced;
• The custodians whose documents are covered by the production;
• Any gaps in Bates numbering and the reason for each gap (e.g., "BRB-005432 through BRB-005438 withheld on grounds of attorney-client privilege; see privilege log");
• A summary of any issues encountered during processing and production, including, without limitation, corrupted files, password-protected documents, files that could not be processed or imaged, and any other anomalies.
Supplemental productions shall be completed on a rolling basis with reasonable promptness. In no event shall supplemental productions be made later than thirty (30) days prior to the close of fact discovery — that is, by March 31, 2025, given the April 30, 2025 fact discovery deadline established in the Preliminary Conference Order. BRB reserves the right to seek an extension of any production deadline if circumstances warrant, including, without limitation, if the volume of responsive materials proves to be materially greater than currently anticipated or if the parties' negotiations regarding search terms, custodians, or other protocol issues require additional time.
BRB expects that Defendants will adhere to the same production timing framework and requests confirmation of Defendants' ability to meet the January 15, 2025 initial production deadline.
X. Production Media
BRB proposes that all document productions in this action be delivered via secure electronic transfer, using a secure FTP site, a secure file-sharing platform (such as Relativity's Kestrel Technologies file transfer, Ashford Software, or a comparable service), or encrypted portable storage media (such as an encrypted external hard drive). The parties should agree on a specific transfer mechanism in advance of the first production.
Each production delivery shall include the following components:
• TIFF images organized in a folder structure consistent with volume-based conventions;
• Extracted text files (.txt) for each produced document;
• Load files in both Ashgrove Technologies DAT format (.dat) and Opticon format (.opt);
• Native files (where applicable) in a clearly labeled subfolder;
• The privilege log covering documents withheld or redacted in connection with the production; and
• The cover letter described in Section IX above.
For large productions where electronic transfer is impracticable due to file size, bandwidth limitations, or other technical constraints, the producing party may deliver the production on encrypted external hard drives shipped by tracked courier (such as Severin Partners LLC or Halcyon Partners LLC) to the receiving party's designated address. The producing party shall provide advance notice of any shipment and shall confirm receipt with the receiving party.
All production media shall be clearly labeled with the case name, index number, production number, Bates range, and the producing party's identity. Encrypted media shall be accompanied by decryption credentials transmitted separately (e.g., by email or telephone) for security purposes.
XI. Meet and Confer and Contact Information
BRB reiterates its willingness to meet and confer in good faith on all aspects of this proposed production protocol. We recognize that the protocol set forth in this letter represents BRB's initial proposal and that Defendants may have comments, counterproposals, or alternative approaches on certain issues. BRB is committed to reaching a mutually agreeable protocol that serves the interests of all parties and is consistent with the Court's expectations for discovery in the Commercial Division.
To that end, BRB proposes that the parties schedule a telephonic or in-person meet-and-confer session during the week of December 16, 2024 to discuss this proposal and any issues raised by Defendants. We are available on Tuesday, December 17, or Thursday, December 19, at any time between 10:00 a.m. and 5:00 p.m. Eastern. Please let us know your availability and preferred format (telephone, video conference, or in-person meeting).
We respectfully request that Defendants provide a written response or counterproposal by December 20, 2024, so that the parties can finalize the protocol with sufficient lead time before the January 15, 2025 initial production deadline.
The primary discovery contacts at Calderwood & Harkness LLP for this matter are:
Carlos Espinoza (Lead Associate) Direct Telephone: (212) 554-7842
Email: cespinoza@calderwoodharkness.com
Hannah Brinkley (Working Associate) Direct Telephone: (212) 554-7867
Email: hbrinkley@calderwoodharkness.com
We request that Defendants identify their counterpart discovery contacts at Kestrel Voss & Huang LLP so that the parties can communicate efficiently regarding day-to-day discovery issues as they arise.
In closing, BRB looks forward to a cooperative and efficient discovery process consistent with the Court's expectations and the deadlines established in the Preliminary Conference Order. We believe that early agreement on the issues addressed in this letter will serve the interests of all parties and will enable the orderly exchange of documents within the timeframes set by the Court. BRB reserves all rights, objections, and defenses in this action, including but not limited to all objections to Defendants' document requests and interrogatories, all rights to seek protective orders or other relief under the CPLR, and all rights to supplement or amend its discovery responses as appropriate.
Please do not hesitate to contact me or Hannah Brinkley if you wish to discuss any aspect of this proposal.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Carlos Espinoza Associate 600 Lexington Avenue, 30th Floor New York, New York 10022 Telephone: (212) 554-7842 Facsimile: (212) 554-7801
Email: cespinoza@calderwoodharkness.com
On behalf of Belmont Ridge Bank NA