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Search and Production Costs of $7,200 Render Non-Party’s Ordinary ESI “Not Reasonably Accessible Due to Undue Burden”

Posted in CASE SUMMARIES

Guy Chem. Co. v. Romaco AG, 2007 WL 1521468 (N.D. Ind. May 22, 2007)

In this breach of contract case, plaintiff Guy Chemical sought damages for, among other things, the loss of business from third parties.  Defendant Romaco subpoenaed records from ABRO Industries, Inc., a customer of plaintiff, to learn how much of ABRO’s business plaintiff had lost.  Specifically, Romaco sought correspondence, orders, cancelled orders, or orders that could not be filled between Guy Chemical and ABRO.  Apparently, most of the requested information was stored electronically by ABRO.  ABRO informed Romaco that it used an outside computer firm to handle its electronic data, and that it would have to determine how to search for the records.  ABRO subsequently advised Romaco that the final cost for searching and producing the requested records would be $7,200.  ABRO did not object to producing the material sought, but requested that Romaco pay the cost of production.  Romaco moved to compel, arguing that ABRO was being unreasonable by requiring payment for the cost of production as a condition precedent to production.

The court first quoted the applicable rule, Fed. R. Civ. P. 45(d)(1)(D), which provides, in part, that a person responding to a subpoena need not provide discovery of electronically stored information from sources that the person identifies as “not reasonably accessible because of undue burden or cost.”  The court found that ABRO had made an adequate showing under the rule:

ABRO has indicated that it stores everything electronically and that it is a complex task to search and locate specific documents.  The cost was approximately $7,000 to search for and produce the requested discovery, which is a substantial amount of money for production of documents and records.  The amount of money required for ABRO to search and locate the discovery Romaco requests indicates to this Court that the information is not reasonably accessible absent undue burden.

The court also found that Romaco had shown good cause for the materials, and that the only remaining issue was who would pay for the cost of production.  The court observed that, generally, there is a presumption that the responding party must bear the expense of complying with discovery requests.  However, it also noted that non-party status was a significant factor to be considered in determining whether the burden imposed by a subpoena is undue, and determinative here.  “Non-parties understandably object to paying the litigation costs of other parties.”  It continued:

Simply put, it is not ABRO’s lawsuit and they should not have to pay for the costs associated with someone else’s dispute.  Not only is it fundamentally unfair for non-parties to bear the significant litigation costs of others, but also if this Court were to allow litigating parties like Romaco to impose such a burden on non-parties, then the likelihood of cooperation by non-parties in the future would be placed in jeopardy.

The court stated that, if Romaco could establish that ABRO’s burden was in fact de minimis, then ABRO may have to bear its own costs of production.  But, the court found that Romaco had failed to make such a showing.  Thus, the court granted Romaco’s motion to compel on the condition that Romaco reimburse ABRO for all costs of production.