In the case In re Concho Res., Inc. Sec. Litig., No. 4:21-cv-2473 (S.D. Tex. Oct. 10, 2025), Texas District Judge Andrew S. Hanen, finding that “the limited access to the ARIES database is both relevant and proportional to this class action”, ordered defendant Concho “to produce the requested databases in their native format”.

Case Discussion and Judge’s Ruling

In this class action against Concho Resources, Inc. over alleged securities fraud violations regarding alleged misrepresentation of the capabilities of its oil and gas drilling capabilities, the Class Representatives sought certain databases in their native format from Concho’s main data system: the ARIES database. They contended the ARIES database is Concho’s main database that contains information relevant to the wells and revenue streams during the established Class Period, argued that the discovery process was hindered because they lacked the databases in their native format and contended that the mix of unlabeled, disorganized, and unmalleable Excel spreadsheets that Concho has produced to date were insufficient to reveal Concho’s underlying data.

Defendants noted that during the lengthy four-year litigation, they had already produced more than 207,000 documents (totaling more than 2.83 million pages). In response, the Class Representatives contended that the discovery process should not be measured by quantity over quality, and the produced documents were cut-and-paste Excel spreadsheets of disorganized ARIES output data that do not “tie-in” to the other Excel spreadsheets, leaving the data incomplete and difficult for their experts to analyze, describing the production as a “disorganized document dump”.

Noting that “The Class Representatives have requested limited access to the ARIES database, including (1) the databases associated with signed, sealed reserve reports by third-party auditors, Netherland, Sewell & Associates and Cawley, Gillespie and Associates and (2) Concho’s corporate, or internal databases for final budgets and plans in 2017, 2018, and 2019”, Judge Hanen stated: “At the direction of the Federal Rules of Civil Procedure and the Fifth Circuit, the Court uses the six balancing factors to determine whether the Class is entitled to the requested ARIES databases”, as follows (emphasis added):

1. The issues at stake weigh in favor of broad discovery: “’Given that a central purpose of these securities laws is to protect investors and would-be investors in the securities market against misrepresentations,’ the issues at stake in this case are undoubtedly important to deter corporations from misleading the public.”
2. The amount in controversy weighs in favor of broad discovery: “The Class Representatives have asserted that the total damages model is estimated to be valued at over $2.3 billion.”
3. Concho has the exclusive access to the ARIES database: “The requested databases are only available through the ARIES database, and Concho has full control and exclusive access to the information.”
4. Concho has the resources to produce the requested data: “While Concho makes arguments related to the apparent burden of producing the requested data, their Response is silent regarding the availability of resources to do so.”
5. The requested discovery is important and relevant to the underlying claims: “In order to successfully prove their claims, the Class Representatives must show falsity and scienter… While Concho argues that the discovery already produced, which includes Excel spreadsheets and ARIES outputs, satisfies their obligation to produce data, that argument fails to consider the inarguable relevance of that data to the falsity element. The requested ARIES databases are reasonably calculated to lead to the discovery of admissible evidence related to falsity… Regardless of whether the Individual Defendants only glanced at the Excel spreadsheets or were active in the ARIES database, the native format of the data that produced those Excel spreadsheets is still reasonably calculated to lead to the discovery of admissible evidence related to the scienter of Concho or the Individual Defendants.”
6. The burden of production does not outweigh the likely benefit of the requested data: Noting “The Class Representatives have clearly stated their dissatisfaction with the quality of the existing discovery”, Judge Hanen stated: “Here, the Class Representatives have correctly pointed out the deficiencies of the current production, and they are entitled to access a workable version of the ARIES databases that were used by Concho employees to distribute the Excel spreadsheets… With the concession that the tie-in settings and archived databases do exist, the Court does not find the arguments about the burdensome process to produce the data convincing—especially in light of the factors that weigh in favor of broad discovery and the Advisory Committee’s admonitions about the fairness of ESI discovery.”

As a result, finding that “the limited access to the ARIES database is both relevant and proportional to this class action”, Judge Hanen ordered defendant Concho “to produce the requested databases in their native format”.

So, what do you think? Are you surprised that the Court ordered the defendant to produce the requested databases in their native format when they had already produced spreadsheets from it? Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of Minerva26, an Affinity partner of eDiscovery Today.

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