Cost Shifting – Page 13 – Electronic Discovery Law

Clay v. Consol Penn. Coal Co., No. 5:12CV92, 2013 WL 4854746 (N.D. W. Va. Sep. 11, 2013)

Dec 01 2013

Key Insight: Where defendants were dilatory in participating in discovery and did not begin searching for ESI until plaintiff was on the brink of filing his second motion to compel, district court affirmed magistrate judge?s recommendation that plaintiff?s motion for default judgment be denied because there was no showing of bad faith on the part of defendants and prejudice to plaintiff could be alleviated through imposition of less drastic sanctions, such as allowing plaintiff to re-depose certain witnesses at defense expense, allowing plaintiff to exceed the deposition limit, and awarding plaintiff reasonable expenses (including attorneys’ fees) of the motion

Nature of Case: Race discrimination

Electronic Data Involved: ESI

Fed. Deposit Ins. Co. v. Brudnicki, No. 5:12-cv-00398-RS-GRJ, 2013 WL 2948098 (N.D. Fla. June 14, 2013)

Dec 01 2013

Key Insight: Where discovery would be asymmetrical and Plaintiff would be producing the majority of documents in the case, court approved a protocol that would require the parties to cooperate to develop search terms to identify potentially relevant documents to be uploaded to a database for Defendant?s review for the purpose of identifying documents to be produced and which would require Defendant to pay $.06 per page produced and $225 monthly for each gigabyte uploaded into the database; court held cost-shifting was appropriate where Plaintiff had already identified and collected the potentially responsive information at great expense and compared the $.06 charge to photocopying costs in traditional discovery and also cited and considered the factors of Rule 26(b)(2)(C), which provide authority for cost shifting and ?strongly supported? the Plaintiff?s proposed ESI protocol

Nature of Case: Action against Bank’s former directors for negligence and gross negligence related to approval of 11 transactions

Electronic Data Involved: ESI in FDIC database

Lifetouch Nat?l School Studios, Inc. v. Moss-Williams, No. C10-05297, 2013 WL 11235928 (N.D. Cal. Oct. 15, 2013)

Dec 01 2013

Key Insight: Where a former employee (defendant) admitted prior possession of a thumb drive containing Plaintiff?s data (her prior employer) and that she had connected the thumb drive to her new employer?s computers (who is also a defendant) but where she claimed that she had not transferred any of Plaintiff?s information, that she could not recall the computer she connected to, and that she destroyed the drive before her duty to preserve arose, court reasoned that there was a ?sufficient nexus between the defendant?s computers and the alleged misappropriation of trade secrets to warrant forensic imaging of the computers? (over 60 in number) but, applying the cost-shifting analysis from Zubulake v. UBS Warburg LLC 217 FRD 309 (SDNY 2003), found that in light of the ?broad scope of the request, the cost of production, the resource disparity of the parties? and defendant?s repeated assertion that the information did not exist, cost shifting was appropriate; court indicated it ?may reconsider? cost allocation if the expert determined that information from the thumb drive was transferred to defendant?s computer

Nature of Case: Trade secrets

Electronic Data Involved: ESI of former employer

Maximum Human Performance, LLC v. Sigma-Tau Healthscience LLC, No 12-cv-6526-ES-SCM, 2013 WL 4537790 (D.N.J. Aug. 27, 2013)

Dec 01 2013

Key Insight: Upon third party?s objection to Defendant?s subpoena and its motion for cost shifting, the court found that the third party both had an interest in the litigation and an ?ability to pay all or most of the costs to comply with the subpoena? but nonetheless concluded that ?it would not bear all of the costs of compliance? and thus ordered the third party to select an e-Discovery vendor to search the key words agreed upon and ordered that Defendant shall reimburse the third party ?one third of the vendor costs to harvest the electronically stored information?

Nature of Case: Product liability

Electronic Data Involved: ESI

Soffer v. Five Mile Capital Partners, LLC, No. 2:12-cv-01407-JAD-GWF, 2013 WL 4499011 (D. Nev. Aug. 19, 2013)

Dec 01 2013

Key Insight: Court indicated that dispute over whether to compel Defendants to conduct additional searches in an expanded date range turned on Rule 26(b)(2)(C)(iii) and the question of whether the burden outweighed the likely benefit but, citing Plaintiff?s prior offer to more narrowly tailor the search terms to be utilized and to contribute to the reasonable costs of Defendants? review, ordered the parties to meet to attempt to reach agreement on a more focused search and to negotiate a reasonable cost sharing agreement and indicated that the court would consider shifting ?an appropriate share of the costs of production? once a determination of the cost was made

Nature of Case: Interference with a contract and prospective economic advantage, fraud, breach of fiduciary duty

Electronic Data Involved: ESI

West Penn Allegheny Health Sys. v. UPMC, No. 2:09-cv-00480-JFC, 2013 WL 12134101 (W.D. Pa. Feb. 15, 2013)

Dec 01 2013

Key Insight: Where a non-party resisted production of requested information arguing that it could be more easily obtained from elsewhere and that production would impose an undue burden, including an estimated $38,00 in personnel costs alone, the court reasoned that there was no rule prohibiting Plaintiff from seeking documents from a non-party that were also likely to be in Defendant?s possession and, addressing the alleged burden, rejected arguments based on the documents? lack of organization (?less than optimal recordkeeping? did not rise to the level of ?undue burden?); where the requesting party offered to pay the costs of collection and review (by outside counsel), court rejected non-party?s privacy concerns in light of the protective order and recommended that if the non-party rejected the cost sharing offer, he should be required to pay for production himself; motion to quash denied

Electronic Data Involved: ESI

Hanwha Azdel, Inc. v. C&D Zodiac, Inc., No. 6:12-cv-00023, 2012 WL 6726412 (W.D. Va. Dec. 27, 2012)

Dec 01 2012

Key Insight: Where Defendant produced forty gigabytes of material on a single memory stick organized into folders by search term, with no other organization by custodian or otherwise, court noted that ?[o]rganizing a production to reflect how the information is kept ?in the usual course of business? sometimes requires the producing party to include different identifying information according to the type of document or file produced,? and that ?[e]mails specifically are produced in the usual course of business when responsive emails are arranged ?by custodian, in chronological order and with attachments, if any?? and found that the production was not in an appropriate format in this case; court ordered Defendant to bear the costs to convert the ESI into a readily usable format (estimated to be $8,463.00)

Electronic Data Involved: ESI

Cannata v. Wyndham Worldwide Corp., No. 2:10-cv-00068-PMP-VCF, 2012 WL 528224 (D. Nev. Feb. 17, 2012)

Dec 01 2012

Key Insight: Where parties could not agree on search protocol, including the number of custodians and number of search terms and whether ?terms of a sexual nature? should be included as search terms, the court appointed a special master to resolve the dispute, split the costs of the special master (unevenly) between the parties, and ordered that if the number of terms and custodians combined exceeded 40, plaintiff would reimburse 5% of defendant?s e-Discovery compliance costs for each occurrence (e.g., if the final search involved 22 custodians and 25 sites, plaintiffs would be responsible for 25% of defendants? cost [7 x 5%]); because sexual harassment related claims were at issue, ?ESI containing sexual terms is discoverable?

Nature of Case: Sexual harassment, sexual discrimination, hostile work environment

Electronic Data Involved: ESI

Pouncil v. Branch Law Firm, No. 10-1314-JTM-DJW, 2012 WL 777500 (D. Kan. Mar. 7, 2012)

Dec 01 2012

Key Insight: Where evidence indicated that defendant?s responses to discovery were incomplete, court ordered defendant to ?proceed with the forensic search of their computer systems using protocols agreed upon by the parties? but declined to compel defendant to bear the cost of the examination until final costs were known; defendant was also ordered to institute a litigation hold where defendant?s deposition testimony established that none had previously been issued

Nature of Case: Malpractice

Electronic Data Involved: ESI

Rawal v. United Air Lines Inc., No. 07 C 5561, 2012 WL 581146 (N.D. Ill. Feb. 22, 2012)

Dec 01 2012

Key Insight: Court sustained objections to taxation of costs related to processing email accounts and other files into searchable format where the services were performed by the ?litigation support department? of defendant?s outside counsel and went ?far beyond the mere reproduction or exemplification of documents? and instead comprised the ?kind of work conventionally performed by attorneys and paralegals, the costs of which are not recoverable?

Nature of Case: Discrimination and retaliation

Tag:Cost Shifting