Cost Shifting – Page 13 – Electronic Discovery Law

James v. UMG Recordings, Inc., No. 11-cv-01613-SI (MEJ), 2013 WL 5978322 (N.D. Cal. Nov. 8, 2013)

Dec 01 2013

Key Insight: Where plaintiffs could surely foresee the need to manipulate royalty data but did not specify production in electronic form, and defendant had already twice produced the documents and argued that production of electronically formatted royalty statements would require creation of new documents not currently in existence, court denied plaintiffs’ motion to compel production of the data in electronic format, stating that plaintiffs’ proffered justification that Excel format would be more convenient “falls far short of the mark”; court further denied plaintiffs’ request for receipts data, finding that the burden of reprogramming royalty database and creating new software to extract information far outweighed usefulness of ordering production given that plaintiffs stated they could discern the data by extrapolation

Nature of Case: Consolidated putative class action for breach of contract and other claims filed by recording artists and producers who alleged that defendant underpaid royalties on digital downloads of plaintiffs’ recordings

Electronic Data Involved: Royalty statements in Excel format, receipts from download transactions with vendors

Thornton v. Morgan Stanley Smith Barney, LLC, No. 12-CV-298-JED-FHM, 2013 WL 1890706 (N.D. Okla. May 3, 2013)

Dec 01 2013

Key Insight: Where defendant sought to shift costs based on the expected expense of reviewing and producing the emails which was estimated to be more than $500,000, the court acknowledged that cost could be a legitimate basis for cost shifting under Rule 26(b)(2)(C), but found that the burden of the requested discovery did not outweigh its likely benefit and was not disproportionate to the case and also noted that the defendant had not established that ?a particular level of review is necessary in this case or that a ?claw back? agreement or [FRE] 502 order would not reduce or eliminate the estimated costs?

Electronic Data Involved: Email

Lynch v. Math-U-See, Inc., No. 13cv402-GPC (WMc), 2013 WL 2444662 (S.D. Cal. June 4, 2013)

Dec 01 2013

Key Insight: Court declined to quash subpoena based on the burden of reviewing the requested emails prior to production where, because the request sought all messages to or from particular persons, the court determined that no review of the emails was necessary (that is to say, if the email was to or from one of the identified persons, it was responsive to the subpoena and thus subject to production regardless of content); because the movant was a non-party, however, the court indicated its inclination to set a reasonable cost of production, before production was complete, to prevent the responding party from manipulating production to increase the award and to streamline production and ordered the requesting party to pay the responding non-party $420.00 ?as reasonable compensation for compliance?

Electronic Data Involved: Emails

Fair Hous. Ctr. of S.W. Mich. V. Hunt, No. 1:09-cv-593, 2013 WL 5719152 (W.D. Mich. Oct. 21, 2013)

Dec 01 2013

Key Insight: Ruling on plaintiffs? motion for taxation of attorney?s fees and costs, magistrate judge concluded that, although plaintiffs? counsel was entitled to award of fees, fee request was unreasonable in part because the hours devoted to the case were excessive; magistrate judge harshly criticized counsel?s ?unreasonable zeal? and ?single-minded focus? on discovery of ESI: ?The level of effort expended by plaintiffs? counsel to track down the last responsive e-mail . . . was not reasonable in this case. It appeared to this court on more than one occasion that plaintiffs were treating the case as a litigation workshop on discovery of ESI rather than a lawsuit. This case did not involve discovery of patent records contained in Ford Motor Company?s super-computers. Rather, the subject matter of the litigation was an apartment complex in Kalamazoo, run by a marginally competent apartment manager who used a desktop and a laptop. He was often in over his head, especially with regard to record-keeping and computer use. Ninety-nine out of 100 lawyers would never consider making this case the occasion for extensive discovery of electronic evidence. And no client paying his or her own bills would ever authorize such an expensive hunt for marginal evidence.?

Nature of Case: Housing discrimination

Electronic Data Involved: ESI, email

Novick v. AXA Network LLC, No. 07 Civ. 7767(AKH)(KNF), 2013 WL 5338427 (S.D.N.Y. Sept. 24, 2013)

Dec 01 2013

Key Insight: Conducting its cost-shifting analysis ?under the Zubulake standard,? court reasoned that defendants ?failed to show that cost-shifting is appropriate because they did not establish that the production at issue was unduly burdensome or expensive, that is, that the data were kept in an inaccessible format.?

Electronic Data Involved: Emails

Ewald v. Royal Norwegian Embassy, No. 11-CV-2116 SRN/SER, 2013 WL 6094600 (D. Minn. Nov. 20, 2013)

Dec 01 2013

Key Insight: District court affirmed in part magistrate judge?s order (at 2013 WL 5687559) denying plaintiff?s request for forensic examination of laptop computers used by plaintiff during her employment, as defendant produced 56,625 pages of documents from most recently used laptop, and burden and expense of forensic examination of previous laptop outweighed its likely benefit, given that plaintiff did not assert even a belief that relevant information existed on that computer that was not produced from other sources; court reversed in part magistrate judge?s order denying access to text and voice messages, finding that plaintiff demonstrated that ?the scale tips in her favor? in regard to two mobile phones provided by defendant to plaintiff and another witness for work-related purposes, and ordering parties to meet and confer upon protocol to be used in conducting search for responsive text messages and voice messages contained on the two devices

Nature of Case: Employment discrimination

Electronic Data Involved: Work laptops, and text messages and voice messages on certain mobile devices

City of Alameda, CA v. Nuveen Mun. High Income Opportunity Fund, Nos. C 08-4575 SI; C 09-1437 SI, 2012 WL 17756 (N.D. Cal. Jan. 23, 2012)

Dec 01 2012

Key Insight: Court found costs related to ?OCR and metadata extraction? were not recoverable

Electronic Data Involved: ESI

Adkins v. EQT Prod. Co., No. 1:10cv00041, 2012 WL 5465491 (W.D. Va. May 31, 2012)

Dec 01 2012

Key Insight: Addressing Defendant?s Motion for a Protective Order based on undue burden, court was ?persuaded? that no review was necessary to protect privilege because of the parties? Clawback Order and further found that a reasonable approach in light of Defendant?s assertions of burden (including that processing and review costs could exceed 4 million dollars, as represented by Defendant?s litigation support vendor) was to require Defendant to search and filter its ESI itself (rather than relying on the vendor), with all emails to be designated ?confidential? which would then shift the burden to Plaintiff?s counsel to determine if the ESI produced was over or under inclusive; Court specifically held that ?the court may consider the cost of review of ESI for privileged or responsive information in deciding whether discovery imposes an undue burden or cost on a responding party. Furthermore if the court were inclined to limit discovery based on the burden or cost of the review, I hold that the court could shift the costs of that review, either in whole or in part, to the requesting party.?

Nature of Case: Class action based on alleged entitlement to royalty payments

Electronic Data Involved: Emails, ESI

U.S. Bank Nat?l Assoc. v. Syncora Guarantee, Inc., 939 N.Y.S.2d 395 (N.Y. App. Div. Feb. 28, 2012)

Dec 01 2012

Key Insight: In this case, the court rejected defendant?s position that the requesting party should bear the costs of production and adopted the Zubulake standard which requires ?the producing party to bear the initial costs of searching for, retrieving and producing discovery, but permits the shifting of costs between parties? upon consideration of several factors.

Electronic Data Involved: ESI

U.S. Bank Nat?l Assoc. v. PHL Variable Ins. Co., No. 12 Civ. 6811(CM)(JCF), 2012 WL 5395249 (S.D.N.Y. Nov. 5, 2012)

Dec 01 2012

Key Insight: Considering burdensome nature of subpoenas to non-parties, court found that cost shifting was appropriate and ordered plaintiff to bear the search, collection and production costs associated with the non-parties? compliance with the subpoenas; non-parties? were ordered to bear their own costs associated with privilege review, but, in order to give them ?the option of conducting a more economical analysis while minimizing the risk of waiver,? the court entered a non-waiver order pursuant to Rule 502(d) that would preclude the disclosure of privileged documents from resulting in waiver in any proceeding

Nature of Case: Alleged breach of insurance policies and violations of various related laws

Electronic Data Involved: ESI

Tag:Cost Shifting