Discovery of financial information, including electronically stored information, can form key evidence in many litigation cases. Learn how several recent changes to the Federal Rules of Civil Procedure may impact discovery

1. FINANCIAL DISCOVERY IN
COMMERCIAL LITIGATION:
Provisions Under Maryland and Revised Federal Rules
Diane P. Kilcoyne, Esq.
ESI Group, LLC
www.ESIgroup.law
1

2. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
2www.ESIgroup.law
Topics Covered
I. RULES IMPACTING DISCOVERY -
Generally
A. SCOPE OF DISCOVERY
1) Maryland Rule 2-402(a)
2) Federal Rule 26 (b)
B. RECENT CHANGES TO FEDERAL
RULES:
 Will Maryland follow suit?
 Did the rule changes really change anything?
C. ADMISSIBILITY
D. PROTECTIVE ORDERS/OBJECTIONS TO
SUBPOENA
E. SANCTIONS – Including for Loss of ESI
II. SPECIFIC RULES IMPACTING
FINANCIAL DISCOVERY
A. Bank statements – Md. Code Ann., Fin.
Inst. § 1-304
B. Case law
1) Suburban Trust Company v. Waller, 44 Md. App.
335, 344 (1979)
2) Taylor v. Nationsbank, N.A., 365 Md. 166, 179-80
(2001)

3. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
3www.ESIgroup.law
Maryland Rule 2-402(a)
a). Generally.
 A party may obtain discovery regarding any matter that is not privileged
− including the existence, description, nature, custody, condition, and location of any
documents, electronically stored information, and tangible things and the identity and
location of persons having knowledge of any discoverable matter,
− if the matter sought is relevant to the subject matter involved in the action,
− whether it relates to the claim or defense of the party seeking discovery or to the claim
or defense of any other party.
 It is not ground for objection that the information sought is:
1. already known to or otherwise obtainable by the party seeking discovery or
2. that the information will be inadmissible at the trial if the information sought appears
reasonably calculated to lead to the discovery of admissible evidence.
 An interrogatory or deposition question otherwise proper is not objectionable merely because
the response involves an opinion or contention that relates to fact or the application of law to
fact.

4. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
4www.ESIgroup.law
FRCP 26(b)
Scope in General.
 Unless otherwise limited by court order, the scope of discovery is as follows:
− Parties may obtain discovery regarding any nonprivileged matter that is relevant to any
party's claim or defense and proportional to the needs of the case, considering the
importance of the issues at stake in the action, the amount in controversy, the parties’
relative access to relevant information, the parties’ resources, the importance of the
discovery in resolving the issues, and whether the burden or expense of the proposed
discovery outweighs its likely benefit.
− Information within this scope of discovery need not be admissible in evidence to be
discoverable.

5. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
5www.ESIgroup.law
 Proportional to the needs of the case, considering:
 the importance of the issues at stake in the action,
 the amount in controversy,
 the parties’ relative access to relevant information,
 the parties’ resources,
 the importance of the discovery in resolving the issues, and
 whether the burden or expense of the proposed discovery outweighs
its likely benefit
 DELETED: … “reasonably calculated to lead to the discovery of
admissible evidence”
NOW: Information within this scope of discovery need not be
admissible in evidence to be discoverable.
Changes to Rule 26

6. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
6www.ESIgroup.law
Md. Rule 5-402
Evidence will be admissible only
upon a showing by the proponent
that it is relevant.
Md. Rule 5-403
Court has discretion to exclude
even relevant evidence if the court
determines that "its probative value
is substantially outweighed by the
danger of unfair prejudice, confusion
of the issues, or misleading the jury,
or by considerations of undue delay,
waste of time, or needless
presentation of cumulative
evidence."
Thus, for certain financial records to be admissible, they must be relevant to the
causes of action, claims, or defenses in the action – not merely offered to taint
perception of a party or witness.
Admissibility

7. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
7www.ESIgroup.law
Rule 2-403
Parties and non-party
witnesses seeking to object
to discovery of financial or
other information in
discovery may seek a
protective order from
oppressive, unwarranted
discovery
Rule 2-510(f)
Under this rule, a non-party
from whom discovery is
sought by way of deposition
duces tecum may either
seek a protective order
under 2-403 or may file a
written objection to the
discovery request within 10
days.
PROTECTIVE ORDERS/
OBJECTIONS TO SUBPOENA

8. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
8www.ESIgroup.law
FAILURE TO
PROPERLY
PRESERVE AND
PRODUCE ESI
CAN LEAD TO:
Cost-shifting to offending party
Levy of fines on offending party
Jury instruction of Adverse Inference
Preclusion of evidence by offending party
Termination of suit/ dismissal or default judgment
Civil or criminal contempt charges
Sanctions

9. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
9www.ESIgroup.law
SANCTIONS
Including for Loss of ESI
Discovery failures can be
compelled and / or
sanctioned.
Under Maryland Rules
2-432 and 2-433
Specifically address sanctions for
the loss of electronically stored
information (ESI), providing a safe
harbor for information that is lost “as
a result of the routine, good-faith
operations of an electronic
information system.” (This new
provision in the Maryland Rules was
derived from the FRCP changes
made in 2006.)
Amended Rule 2-433

10. Financial Discovery in Commercial Litigation
The Bar Association of Montgomery County, MD
December 6, 2016
10www.ESIgroup.law
Fin. Inst. § 1-302. Section 1-304(b)
Describes the procedure by which a bank may disclose customer records when served
with a subpoena.
(b) Disclosure or production permitted. – A fiduciary institution may disclose or produce
financial records or information derived from financial records in compliance with a
subpoena served on the fiduciary institution, if:
1. The subpoena contains a
certification that a copy of the
subpoena has been served on the
person whose records are sought by
the party seeking the disclosure or
production of the records; or
2. Contains a certification that service
has been waived by the court for
good cause.
Subpoenas of Bank Records

11. Diane Kilcoyne, Esq. is an e-discovery
attorney and Principal at ESI Group, LLC in
Rockville. An experienced counselor in all
phases of discovery, from scoping a
proper litigation hold through the entire
e-discovery process, her focus is working
with small to mid-sized firms and solo
attorneys on commercial litigation, family
law, employment law, and other litigation
matters.
www.ESIGroup.law
Support@ESIgroup.law
199 E. Montgomery Ave., Suite 100
Rockville, MD 20850
Office: 240-599-7970
Mobile: 240-506-6756