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Good faith is a legal term that describes the intention of the party or parties in a contract to deal in an honest manner with each other. In contracts, the parties signing abide by and uphold the contract. It requires people to act honestly without taking advantage of others.
Discovery means you send the other side questions and requests for information or items (like documents) in writing. The other side must respond to your question or request in writing.
This letter is often called a good faith letter. And it is needed under many courts' rules before you can file a motion to compel discovery if the other party ignores your requests or provides evasive responses or move for sanctions if your opponent refuses to comply with the court's discovery order.
If you object to a discovery request, generally you have to let the other side know that you are not giving him/her documents that s/he has asked for.
Failure of United States to Participate in Good Faith in Discovery. Rule 37 authorizes the court to direct that parties or attorneys who fail to participate in good faith in the discovery process pay the expenses, including attorney's fees, incurred by other parties as a result of that failure.