*1 The plaintiff filed a breach of contract action, stating the defendants failed to diligently and timely complete construction of an ethanol plant near Aurora, Nebraska. The plaintiff asserts the right to repurchase the plant site for $16,500 per acre (the purchase price), subject to certain offsets, under § 6 of the 2010 Agreement (the Amended Option). The defendants allege, among other things, that the contract was not breached; that they diligently and timely completed construction of the plant.

The court ordered phased discovery, with the first phase focused on determining “[w]hether the Aurora West Ethanol Plant was ready for startup, fully operational, and capable of producing 110 million gallons of ethanol per year as of July 1, 2012.” Filing No. 147, ¶ 2(a).[1] Since the plant was not actually operated at full capacity prior to July 1, 2012, there is no direct evidence of its production capability as of that date. Therefore, the parties' discovery focuses on what the plant could have produced had it been operated—a task which requires collecting information on the anticipated plant design; any design modifications initiated, or construction setbacks or delays during, the construction process; and the level of completing construction as of July 1, 2012. To the extent these records exist, they are primarily in the possession and/or control of the defendants. And many of those records are stored electronically.

The parties have been actively pursuing electronic discovery. But as explained by defense counsel, given the sheer volume of electronic information, the task of reviewing and sorting out the relevant documents would have taken months of attorney time. Therefore, the parties were ordered to “consult with a computer forensic expert to create search protocols, including predictive coding as needed, for a computerized review of the parties' electronic records.” (Filing No. 147, at CM/ECF p. 2). Computer-assisted review, also known as “predictive coding,” uses computer algorithms to greatly reduce the number of documents that need to be reviewed by humans in order to complete a review and document production.” See also, Maura R. Grossman and Gordon V. Cormack, Technology–Assisted Review in E–Discovery Can Be More Effective and More Efficient Than Exhaustive Manual Review, 17 Rich. J.L. & Tech. 11 (Spring 2011).

The data collection process itself has been an arduous task, with files located at multiple locations and on several servers, in various formats, and generated and saved in folders by persons who are no longer employed by the defendants. With ongoing assistance from their selected forensic expert, D4, the parties are approaching the final stages of data collection and are now heading toward the computer search and sorting process.

*2 The parties have now identified two discovery issues for court determination: 1) whether, for the purposes of developing a predictive coding protocol, the defendants must provide to D4 the “Projects” file containing privileged relevant documents (the “privilege” issue); and 2) whether plaintiff's counsel is entitled to review documents from the training set that Aventine has marked as irrelevant (the “transparency” issue).

The court has serious concerns with ordering a party to disclose privileged information—even to a forensic computer expert hired to facilitate ESI discovery and develop a predictive coding protocol. But the court need not address the question in this case. The defendant, who has the burden of proving the existence of a privilege, has offered no evidence (even as a general description within a restricted access document or under seal) to support that claim. Absent any showing of privilege or confidentiality, the documents within the defendant's “Projects” folder must be included in the collection of ESI to be searched by the parties' forensic computer experts.

The plaintiff has offered to pay the cost of collecting and searching the contents of the Projects folder. The court believes this offer is reasonable and warranted under the circumstances. The plaintiff will pay the cost of including all portions of the “Projects” folder in the computer-assisted review process.

The plaintiff seeks an order requiring the defendant to disclose not only the relevant documents within the computer training set, but also those documents the defendant considered irrelevant. The plaintiff explains that transparency will foster trust in the computer's review and identification of relevant documents, particularly where, as in this case, the level of mistrust between the parties is so high. The defendants object, arguing that the rules of discovery do not require them to disclose irrelevant information.

The defendants' argument is supported by the language, if not the spirit, of the civil discovery rules. Under Rule 26(b)(1), a party may discover any nonprivileged matter that is relevant to any party's claim or defense. The rules do not authorize ordering the defendants to disclose irrelevant information.

That said, the court encourages the defendants to reconsider their position and work cooperatively with the plaintiff in developing and implemented computer-assisted review. Working together will allay the risk of having to repeat the process if the plaintiff later challenges, and the courts agrees, that the defendant's unilaterally created computer review training was faulty or unreliable. See, e.g., In re Biomet M2a Magnum Hip Implant Products Liab. Litig., No., 2013 WL 6405156, at *2 (N.D.Ind. Aug. 21, 2013) (encouraging the producing party to re-think its refusal to produce the seed set to opposing counsel, noting an “unexplained lack of cooperation in discovery can lead a court to question why the uncooperative party is hiding something”).

Accordingly,

IT IS ORDERED that as to defendants' motion to resolve discovery issues, (Filing No. 183),

1) The defendant's “Projects” folder shall be included in the collection of ESI to be searched by the parties' forensic computer experts. The plaintiff shall pay the cost of collecting and searching the contents of the Projects folder.

2) The plaintiff's request for an order requiring the defendants to disclose the documents the defendant considers irrelevant for the purpose of developing the predictive coding algorithm is denied.