Court rules against defense on motion to protect from ESI disclosure and costs.
SteveK February 28th, 2013
In Juster Acquisition Co., LLC. v. North Hudson Sewerage Authority, a recent Federal Court opinion, the Plaintiff scored a victory with respect to the scope of electronic discovery requests as well as which side is responsible to pay for such requests. In this case, Plaintiff sought electronic discovery from Defendant which included, in part, 67 search terms for Defendant to utilize when reviewing their electronic data for information relevant to the cause of action. While Plaintiff wanted the search limited to a one year period, many of the search terms were broad and vague. For example, some of the search terms were: fee, tax, finance – words that could easily produce thousands of documents from a single search. Upon receipt of these search terms, Defendant made a motion to the Court for a protective order. Pursuant to F.R.C.P. 26(c)(1), any party from whom discovery is sought may move for a protective order to protect the party for annoyance, embarrassment, oppression or undue burden or expense. Defendant believed that Plaintiff’s search terms were too broad and vague. Defendant further requested that if the protective order was denied, Plaintiff be required to pay for the cost of conducting the searches for the 67 search terms. The Court denied both of Defendant’s requests for relief. In order to grant a protective order, the moving party must show that the requested discovery is unreasonable, cumulative or duplicative. In this matter, Defendant did not provide any factual basis or legal background to support its request for the protective order. Defendant also failed to comply with the specific provisions of F.R.C.P. 26 and did not provide a certification attesting that the parties tried, in good faith, to first resolve this dispute outside of Court. In the absence of the certification and showing of unreasonableness of the discovery request, the Court could not grant Defendant’s motion. (Note to all: read the rules)With respect to the cost, “there is a general presumption that the responding party must bear the expenses of complying with discovery requests.” See Zubulake v UBS Warburg LLC, 216 F.R.D. 280, 283 9S.D.N.Y. 2003. Shifting costs of discovery to the party propounding the discovery is typically only appropriate in a case where the data sought inaccessible and poses an undue burden on the responding party. Courts have found accessible data to be active, online data, near-line data, and offline storage archives while finding backup tapes and erased fragmented or damaged data to typically be deemed inaccessible data. Although the specifics of electronic discovery can be complex, the Court helped simplify the determination as to which party is responsible to pay by looking to a 7 factor test established in Zubulake to determine whether discovery costs should be shifted. The factors in the fee shifting test include:1. The extent to which the request is specifically tailored to discover relevant information2. The availability of such information from other sources3. The total cost of production compared to the amount in controversy4. The total cost of production5. The relative ability of each party to control costs and its incentive to do so6. The importance of the issue at stake in the litigation and7. The relative benefits to the parties of obtaining the informationAfter going through an analysis of the 7 factors, the Court determined that the Defendant did not meet its burden of showing why cost shifting would be appropriate. Defendant failed to make any showing that the data sought was inaccessible or unduly burdensome. Defendant had the financial means to pay for the costs of the search. Plaintiff’s damages were around $41 million while the cost of the discovery was in the range of $6,000 – $16,000. The Court further found that the 67 search terms were sufficiently tailored to discover relevant information and not broad, vague or unreasonable. This case can be used as a helpful guide for future litigants seeking protective orders and fee shifting with respect to discovery matters. It can also be used as a guide in determining if search terms provided in discovery are too broad in time and content.
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