Court Clarifies Rule 34 Obligations for Structured Data in Dynamic Databases
Sound Around, Inc. v. Moises Friedman, No. 24-CV-1986 (S.D.N.Y. Oct. 8, 2025)
Why This Alert Is Important
The ruling underscores that parties must search for and produce relevant electronically stored information (ESI) even when it resides in dynamic or complex databases, not just in static reports.
Overview
In this commercial dispute, Sound Around, Inc. sued former associates and affiliated entities for allegedly diverting corporate opportunities, using its trademarks to sell competing products, and misappropriating funds. The defendants counterclaimed for unpaid commissions, contending that plaintiff’s internal records would show the amounts owed.
During discovery, deposition testimony revealed that the plaintiff maintained a “Data Warehouse” containing sales and commission data central to the counterclaims. Though acknowledging the system existed, plaintiff produced only pre-generated summary reports rather than the underlying data. When defense counsel raised the omission at a discovery conference, the court treated the request as an oral motion to compel.
The plaintiff argued that it had no obligation to produce information stored in the database because it was “raw data” and would require plaintiff to create a document, which it claimed was not required by the Federal Rules. Plaintiff also argued that defendants should have identified the database and proposed search terms for it. The defendants responded that the missing data fields were necessary to verify how commissions were calculated over time.
Ruling Summary
- Dynamic Data Are Discoverable under Rule 34
The court instructed that Rule 34 “has long required responding parties to conduct a reasonable search for documents and information relevant to the claims and defenses,” the 2006 Advisory Committee Notes make clear that discovery of ESI “stands on equal footing with discovery of paper documents,” and discovery obligations extend to data “stored in dynamic databases and other systems.” Parties cannot avoid production by claiming information is embedded in a database rather than in a more conventional document format. - Counsel Must Be Technologically Competent
The ruling cited professional conduct and procedural rules requiring attorneys to understand their clients’ technological systems. Counsel must be “sufficiently knowledgeable in matters relating to their clients’ technological systems to discuss competently issues relating to electronic discovery.” The court found the failure to locate and produce relevant database records “inexcusable,” noting that “financial information that exists as data in databases is ubiquitous.” - Extraction, Not Existing Reports, Required
Relying on guidance from the Sedona Conference, the ruling explained that responding parties may need to “extract data from databases, even if that requires assistance from systems specialists.” It further stated that “a producing party may need to create a special query to extract only certain relevant data fields,” and that limiting production in this case to pre-existing reports did “not provide a full picture” of commission calculations. The plaintiff’s search was therefore unreasonable and violated both Rule 34 and Rule 26(g).
The Advisory Committee Notes to the 2006 Amendments to Rule 34 also explain “that Rule 34 applies to information that is fixed in a tangible form and to information that is stored in a medium from which it can be retrieved and examined.” (emphasis added). Parties should remember that discovery obligations also apply to information, if relevant and proportional to the needs of the case, that must be retrieved from a database or other medium. Patricia Antezana, Counsel, Reed Smith
Data Privacy Tip
The decision reinforces that structured data are within Rule 34’s reach and that counsel must ensure a reasonable, technically informed search before certifying discovery responses. The Exterro podcast Data Xposure addresses the need for technical competence in investigations also extends to criminal cases–but with special lessons for in-house counsel in our latest episode.
