Court Considers Zubulake Factors, Denies Defendant’s Motion to Shift Cost of OCR Processing

Proctor & Gamble Co. v. S.C. Johnson & Son, Inc., 2009 WL 440543 (E.D. Tex. Feb 19, 2009)

In this case, following the court’s decision that all documents were to be produced electronically in TIFF format with Optical Character Recognition (“OCR”), defendant asserted that the cost of processing the documents should be shifted to the plaintiff.  In support of its assertion, defendant claimed that the cost of conversion to OCR would likely exceed $200,000 and that “it does not itself seek to use the OCR process, and any extra expense would be incurred on it behalf solely for Plaintiff’s convenience.”  Defendant offered no evidence in support of its estimate, however, and the court’s own research indicated the estimated cost appeared to be “somewhat inflated.”  Nor did defendant deny that the OCR process would make the documents easier to examine, thus reducing costs for attorney time.

In making its determination, the court indicated its intent to rely on the multi-factor test adopted in Zubulake v. USB Warburg, LLC, despite its “slightly different context.”  217 F.R.D. 309 (S.D.N.Y. 2003).  Those factors were:

(1) the extent to which the request was specifically tailored to discover relevant information; (2) the availability of such information from other sources; (3) the total cost of production, when compared to the amount in controversy; (4) the total cost of production, when compared to the resources available to each party; (5) the relative ability of each party to control costs and the incentive to do so; (6) the importance of the issues at stake in the litigation; and (7) the relative benefits to the parties of obtaining the information.

Analysis of the seven factors did not favor cost-shifting.  Adhering to Zubulake’s instruction that the factors should not be equally weighted but rather considered in ascending order, the court first noted defendant’s failure (beyond a statement that the request was “overbroad”) to contend that the information requested was not relevant or likely to lead to the discovery of admissible information.  Finding that “the remaining factors also do not favor cost shifting,” the court specifically addressed the lack of any showing that the documents requested were obtainable from other sources.

Accordingly, the court concluded:

OCR, while perhaps not absolutely necessary to litigation, is a tool that greatly decreases the time and effort counsel must invest in searching and examining documents.  Presumably, each party would perform the OCR process in a cost-effective manner to minimize their costs.  Requiring the parties to incur this cost, when the OCR process is likely to streamline the discovery process and reduce the chance that either side will employ tactics designed to hide relevant information in a mountain of difficult-to-search documents is neither unreasonable nor burdensome.  Therefore, after review of the Zubulake factors, the court concludes that cost shifting is not appropriate in this case.