Court Orders Sharing of Non-Party’s Discovery Costs, Cites Lack of “Spirit of Cooperation or Efficiency” as “Controlling Factor”

DeGeer v. Gillis, 2010 WL 5096563 (N.D. Ill. Dec. 8, 2010)

Defendants and non-party Huron Consulting Services, LLC could not agree on the proper course of discovery.  After protracted communications consisting of accusations and demands, defendants sought to compel Huron to conduct additional searches for responsive ESI.  The court found that some additional searching was warranted and ordered counsel to meet and confer in person to establish the proper scope.  Citing the parties’ failure to cooperate as a “controlling factor” as to cost-shifting, the court ordered the parties to split the costs, with one exception.

Defendants subpoenaed Huron seeking information relevant to ongoing litigation.  Huron complied, in part, but refused, for example, to restore certain back up tapes without cost-shifting and repeatedly declined to share the details of its searching with defendants.  Defendants, for their part, refused to provide Huron with search terms, despite repeated requests.  The details of the dispute are rather protracted.  Suffice it to say, even after Huron provided defendants with a general description of its database and search terms (pursuant to court order), no agreement could be reached regarding the proper scope of discovery and judcial intervention became necessary.

Following its acknowledgement that non-parties are to be protected from unduly burdensome discovery, and highlighting the need for cooperation and early attention to e-discovery issues (attention which was lacking in this case), the court found that additional searching was warranted.  The court then turned its attention to the question of cost-shifting and found that some cost-shifting was appropriate:

The Court believes the controlling factor here on the issue of cost-shifting for Huron’s future production is that neither Huron nor Defendants approached production of Huron’s ESI with a spirit of cooperation or efficiency.  The Court is most troubled by the fact that there was no dialogue to discuss specific search terms or data custodians to be searched in advance of Huron conducting its searches.  Although Defendants’ counsel and Huron’s counsel spent a significant amount of time exchanging letters and emails with each other relating to the motion to compel, they did not engage in meaningful discussions with each other.  For its part, Huron’s failure to promptly disclose the list of employees or former employees whose emails it proposed to search and the specific search terms it proposed to be used for each individual violated the principles of an open, transparent discovery process.  Huron was in the best position to take the lead in selecting data custodians and search terms but it should have been up-front with defense counsel regarding its proposed custodians and search terms and then receptive to defense counsel’s input.  Defendants should not have had to file a motion to compel to obtain disclosure of the custodians Huron identified and the search terms it developed for its production of electronically stored information in response to Defendants’ subpoena. (Doc. 92, at 2).

On the other hand, Huron asked defense counsel repeatedly to suggest search terms, and Defendants’ counsel did not respond to these requests.  Huron’s refusal to disclose the data custodians it identified and its search terms did not excuse Defendants from providing proposed data custodians and search terms.  Defendants missed an important opportunity to provide input regarding proposed data custodians and search terms in advance of the searches.  This is not the kind of collaboration and cooperation needed to manage e-discovery efficiently and with the least expense possible.  The proper and most efficient course of action would have been agreement by Huron and Defendants as to search terms and data custodians prior to Huron’s electronic document retrieval.  Selecting search terms and data custodians should be a matter of cooperation and transparency among parties and non-parties.  If Defendants and Huron had disclosed proposed search terms and data custodians, they might have been able to resolve their differences without court intervention and avoided the substantial time and expense they spent briefing electronic discovery issues.

With one exception the court ordered the parties to “split the costs associated with Huron’s future electronic production” and that counsel meet and confer in person “to establish reasonable limits on the scope of Huron’s future ESI production.”

The exception to the court’s order is worth noting.  The court declined to shift/split Huron’s costs related to the production of ESI belonging to its former CEO where that custodian had a practice of deleting emails on a daily basis so that they would not be discoverable and refused to communicate via email with anyone who did not do the same.

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