Cost Shifting – Page 15 – Electronic Discovery Law

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

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

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

Pacific Coast Marine Windshields Ltd. v. Malibu Boats, LLC, No. 6:12-cv-33-Orl-28DAB, 2014 WL 10817204 (M.D. Fla. Nov. 30, 2012)

Dec 01 2012

Key Insight: Where defendant?s contractor produced CAD files with incorrect creation dates and was subsequently ordered to produce his computer for inspection in an unaltered state, but ran a file-deletion or ?computer cleaning/wiping? program named ?CCleaner? the night before delivering the computer for inspection, court found that sanctions were appropriate to keep defendant from benefitting from contractor?s intentional conduct and to deter others from similar conduct in the future; contractor would not be allowed to testify at trial, all evidence that originated with contractor would be excluded, defendant would not be allowed to rely on contractor?s deposition testimony for summary judgment purposes or at trial, and defendant was required to pay plaintiff?s reasonable attorneys? fees and cost of forensic investigation conducted by plaintiff?s forensic expert

Nature of Case: Patent infringement, misappropriation of trade secrets, unfair competition

Electronic Data Involved: Hard drives of defendant’s contract CAD software operator; metadata and contents of CAD files

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

Fleisher v. Phoenix Life Ins. Co., No. 11 Civ. 8405 (CM)(JCF), 2012 WL 6732905 (S.D.N.Y. Dec. 27, 2012)

Dec 01 2012

Key Insight: Court addressed Plaintiff?s motion to compel production and declined to shift defendant?s discovery costs where defendant addressed only two of seven factors to be considered when seeking to shift costs but sua sponte entered a 502(d) order to ease defendant?s production burden if they chose to avail themselves of it; court?s analysis made clear that counsel?s resources are not an appropriate consideration in a cost shifting analysis

Nature of Case: Claims arising from insurance company’s alleged improper rate increase

Electronic Data Involved: ESI

Beck v. Test Masters Educ. Servs., Inc., No. 04-1391(JDB), 2012 WL 10817176 (D.D.C. Sep. 25, 2012)

Dec 01 2012

Key Insight: Defendant?s lackluster effort to retrieve e-mail after hard drives crashed constituted a conscious disregard of its preservation obligations that could fairly be described as gross negligence or recklessness, and warranted sanctions in the form of an adverse inference instruction; court declined to impose sanctions for defendant?s failure to preserve telephone recordings since there was insufficient evidence that any relevant calls were actually recorded and should have been preserved

Nature of Case: Consumer Protection Procedures Act claims

Electronic Data Involved: E-mails and telephone call recordings

Annex Books, Inc. v. City if Indianapolis, No. 1:03-cv-SEB-TAB, 2012 WL 892170 (S.D. Ind. Mar. 14, 2012)

Dec 01 2012

Key Insight: Where plaintiff was unable to produce requested ?bookkeeping data? in a manner that was usable by defendants despite significant efforts to do so (including retaining two computer forensic services, spending over $9500 on 30 hour of work, and purchasing QuickBooks Pro in an attempt to export the relevant data), the court found that plaintiff had demonstrated that the data was not reasonably accessible but also found that defendant had demonstrated good cause for seeking the information and ordered defendant to bear the costs of additional efforts (noting that it was ?unreasonable? for defendant to insist on production in QuickBooks format when incompatibility had been established)

Electronic Data Involved: ESI

Ameripride Servs. Inc. v. Valley Indus. Serv., Inc., No. CIV S-00?113 LKK/FM, 2012 WL 1641749 (E.D. Cal. May 9, 2012)

Dec 01 2012

Key Insight: Court granted recovery of costs related to ?internal scanning, importing and electronic review of documents? where plaintiff asserted that the documents were scanned and produced at defendant?s request, and in the electronic format demanded and where plaintiff asserted that ?importing, coding, and OCR ? were necessary to produce the documents? as demanded

Electronic Data Involved: ESI

SPM Resorts, Inc. v. Diamond Resorts Mgmt., Inc., 65 So.3d 146 (Fla. Dist. Ct. App. 2011)

Dec 01 2011

Key Insight: Court granted certiorari review and quashed order for plaintiff to pay half the cost of inspection of its own computers where the court reasoned that ?[t]o place a substantial financial burden on a party relating to the production of its adversary?s discovery request does nothing more than require a party to fund its adversaries litigation? and where the order was ?unreasonable and unduly oppressive and [wa]s a departure from the essential requirements of the law.?

Nature of Case: Interference with business relationship

Electronic Data Involved: Computer inspection

Tag:Cost Shifting