Court Uses Balancing Test to Determine Production Cost-shifting and Establishes Protocol for Production
Rowe Entm't, Inc. v. The William Morris Agency, Inc., 205 F.R.D. 421 (S.D.N.Y. 2002)
Plaintiffs sought the production of email from backup tapes and hard drives, and defendants moved for a protective order. The court denied defendant's motion, but shifted the cost of the production to the plaintiffs. In doing so, the court utilized a balancing test that considered eight different factors:
- The specificity of the discovery requests. "Where a party multiplies litigation costs by seeking expansive rather than targeted discovery, that party should bear the expense." 205 F.R.D. at 430.
- The likelihood of discovering critical information. "'The more likely it is that the backup tape contains information that is relevant to a claim or defense, the fairer it is that the [responding party] search at its own expense. The less likely it is, the more unjust it would be to make [that party] search at its own expense. The difference is "at the margin."'" Id. at 430, quoting McPeek, 202 F.R.D. at 34.
- The availability of such information from other sources. If equivalent information already been made available, or is accessible in a different format at less expense, it may justify denying the requested discovery or shifting the costs to the requesting party.
- The purposes for which the responding party maintains the requested data. If a party maintains electronic data for the purpose of utilizing it in connection with current activities, it may be expected to respond to discovery requests at its own expense. A party that expects to be able to access information for its own business purposes will be obligated to produce that same information in discovery. "Conversely, however, a party that happens to retain vestigial data for no current business purposes, but only in case of an emergency or simply because it has neglected to discard it, should not be put to the expense of producing it." Id. at 430-31.
- The relative benefit to the parties of obtaining the information. Where the responding party itself benefits from the production, there is less rationale for shifting costs to the requesting party. Benefits may inure in two forms: First, the process of production may have collateral benefits for the responding party's business, such as a search program used in discovery that could be useful in the regular activities of the business. Second, the review and production of records may benefit the responding party in the context of the litigation.
- The total cost associated with production. If the total cost of the requested discovery is not substantial, then there is no cause to deviate from the presumption that the responding party will bear the expense.
- The relative ability of each party to control costs and the incentive to do so. Where the discovery process is going to be incremental, it is more efficient to place the burden on the party that will decide how expansive the discovery will be. It may be the case that the requesting party will be able to calibrate its discovery based on the information obtained from an initial sampling. If so, that party would be in the best position to decide whether further searches would be justified. In such a case, this consideration would weigh in favor of shifting the costs to the requesting party.
- The resources available to each party. The ability of each party to bear the costs of discovery may be an appropriate consideration. "In some cases, the cost, even if modest in absolute terms, might outstrip the resources of one of the parties, justifying an allocation of those expenses to the other." Id. at 432.
The court determined that the "sanctity" of the defendants' documents could be adequately preserved at little cost by enforcement of the confidentiality order and by following the court's protocol for the review and production of electronic materials. Among other things, the protocol provided that the defendants' emails would be reviewed on an "attorneys'-eyes-only" basis, and that the review of attorney-client documents would not be deemed a waiver of the privilege. Id. at 432.
The magistrate's decision was upheld by the district judge in Rowe Entm't, Inc. v. The William Morris Agency, Inc., 2002 WL 975713 (S.D.N.Y. May 9, 2002).