Cost Allocation (Continued)
Portis v. City of Chicago, "Portis II", 2004 U.S. Dist. LEXIS 24737 (Dec. 7, 2004).
Defendant was ordered to pay half of the plaintiffs' costs in order to obtain access to one of their databases. The cost was determined based on the plaintiffs' consultants' and paralegals' hourly billing rates.
Toshiba America Electronic Components, Inc. v. The Superior Court of Santa Clara County, 2004 Cal. App. LEXIS 2055 (Cal. Ct. App. Dec. 3, 2004).
Based on Cal. Code Civ. Proc. § 2031(g)(1), which a California appellate court determined the California Legislature planned to be an exception to the general rule that the responding party pays for the costs of responding to a discovery request, the appellate court ruled that reasonable costs of translating data requested in discovery into a usable format must be paid by the requesting party.
BASF Fina Petrochemicals L.P. v. H.B. Zachry Co., 2004 Tex. App. LEXIS 10395 (Tex. App. Nov. 18, 2004).
A non-party produced electronic data at a cost of $32,000, which a Texas court ruled that the party involve must reimburse the non-party for, however, the court also ruled that the party did not have to reimburse the non-party for the $25,000 they spent on attorney's fees.
Evolution, Inc. v. The Suntrust Bank, 2004 U.S. Dist. LEXIS 20490 (D. Kan. Sept. 29, 2004).
Defendant was ordered to pay 70% of fees, more than the usual 50-50 split due to their lack of cooperation, to have a Special Master appointed that could resolve the technical issues they were having during discovery.
Lipco Electrical Corp. and Action Electrical Contracting Co., Inc., J.V. v. ASG Consulting Corp., 2004 N.Y. Misc. LEXIS 1337 (N.Y. Sup. Ct. Aug. 18, 2004).
New York law states that, "the party seeking discovery must bear the cost of production of the items for which discovery is sought", which is what the court utilized to make its decision that it would not order electronic files to be produced unless the party making the request would pay for production.
Hagemeyer North America, Inc. v. Gateway Data Sciences Corp., 2004 U.S. Dist. LEXIS 16310 (E.D. Wisc. Aug. 12, 2004).
Defendant placed backup tapes in storage during its bankruptcy proceedings, which were kept in the usual course of business, and were made available to the plaintiff in a stayed action. After the defendant emerged from bankruptcy, the court ordered them to restore 5 backup tapes and to provide the court with the cost information to restore additional backup tapes and that the court would then use Zubulake's seven-factor cost-shifting test to determine cost sharing.
Wiginton v. CB Richard Ellis, Inc., "Wiginton IV", 2004 U.S. Dist. LEXIS 15722 (N.D. Ill. Aug. 9, 2004).
In determining whether a requesting party should bear a portion of the costs of producing email from backup tapes, the court added an additional factor to consider in order to protect parties from unduly burdensome or expensive discovery requests. In deciding whether costs should be shifted to the requesting party, "importance of the requested discovery in resolving the issues of the litigation" should be considered in addition to the factors in the McPeek, Rowe, and Zubulake line of cases, according to the Magistrate Judge.
Zenith Electronics Corp. v. WH-TV Broadcasting Corp., 2004 U.S. Dist. LEXIS 13657
(N.D. Ill. Jul. 19, 2004).
The court ruled that the prevailing party, pursuant to 28 U.S.C.S. § 1920, could not recover costs associated with printing electronic documents, numbering the documents, or the costs associated with hiring a third-party consultant to review the documents to determine privilege.
Multitechnology Services v. Verizon Southwest, 2004 U.S. Dist. LEXIS 12957 (D. Tex. July 12, 2004).
The magistrate, after questioning whether Zubulake's seven-factor cost-shifting test was relevant to this case, determined that Verizon must pay half of the approximate $60,000 cost of compiling the requested electronic information. However, the magistrate also determined that the prevailing party could recover the costs at the conclusion of the case.
Portis v. City of Chicago, "Portis I", 2004 U.S. Dist. LEXIS 12640 (N.D. Ill. July 6, 2004).
Plaintiff was ordered to produce a database, as the court determined that doing so would not reveal plaintiffs' litigation strategy. Defendant was ordered to pay half of the plaintiffs' costs in order to obtain access to this database. The cost was determined based on the plaintiffs' consultants' and paralegals' hourly billing rates.
Xpedior Credit Trust v. Credit Suisse First Boston, 2003 U.S. Dist. LEXIS 17497 (S.D.N.Y. Oct. 2, 2003).
Defendant moves for a protective order requiring plaintiff to bear half the cost of producing electronic documents after plaintiff requested such electronic documents that were stored on optical discs and DLT tapes and were considered "inaccessible". The court ruled that cost shifting was inappropriate based on the Zubulake cost-shifting test and defendant was ordered to pay its own costs for producing the electronic documents.
Zubulake v. UBS Warburg LLC1, 2003 U.S. Dist. LEXIS 12643 (S.D.N.Y. July 24, 2003).
Following the order set forth on May 13, 2003, at a cost of $19,000, defendant restored and analyzed information taken from five backup tapes chosen by plaintiff, resulting in 600 responsive email messages. Defendant approximated that to produce email messages from all 77 backup tapes the cost would be $165,954.67 with another $107,694.72 required for analysis. Based on the seven "Zubulake factors", the court determined that defendant should bear 75% of the cost for restoring the email messages and that the requesting party should pay all costs associated with analysis.
Medtronic Sofamor Danek, Inc. v. Sofamor Danek Holding, Inc., 2003 U.S. Dist. LEXIS 8587 (W.D. Tenn. May 13, 2003).
The court, utilizing Rowe cost-shifting analysis, ruled that the requesting party must bear part of the costs associated with obtaining requested information from backup tapes.
Zubulake v. UBS Warburg LLC, 2003 U.S. Dist. LEXIS 7939, 91 Fair Empl. Prac. Cas. (BNA) 1574 (S.D.N.Y. May 13, 2003).
After presenting substantial evidence that additional responsive email messages existed, likely on backup tapes and optical storage media, plaintiff requested supplementary email messages to the 100 pages previously produced by defendant. Defendant estimated that producing these email messages would cost $175,000, without attorney review time and objected to this discovery. The court found plaintiff's claims relevant and both parties asked the court to apply the Rowe factors to determine who should pay the discovery costs, with the court maintaining that the usual rules of discovery apply for information that is retained in an accessible format. When electronic information is stored in an inaccessible manner, such as on backup tapes, cost-shifting should be considered and, in addition, compelling the responding party to restore and produce responsive documents from only a minimal sample of the requested backup tapes is, in general, sensible. The court rejected the Rowe factors for this case and instead utilized the following seven "Zubulake factors" to determine cost shifting:
- The extent to which the request is tailored to discover relevant data.
- The availability of that data from other sources.
- The total cost of production, relative to the amount in controversy.
- The total cost of production, relative to the resources available to each party.
- The relative ability and incentive for each party to control its own costs.
- The importance of the issues at stake in the litigation.
- The relative benefits to the parties in obtaining that data.
Based on these factors, the court ordered defendant to, at its own expense, produce responsive email messages from any five backup tapes chosen by plaintiff and to prepare an affidavit detailing the results of the searches, as well as time and money spent. Based on this affidavit, the court would then conduct the appropriate cost-shifting analysis.
Rowe Entertainment, Inc. v. William Morris Agency, Inc., 2002 U.S. Dist. LEXIS 488 (S.D.N.Y.), motion denied, 2002 U.S. Dist. LEXIS 8308 (S.D.N.Y.).
Plaintiffs made 35 document requests, described by the magistrate as "sweeping", to which four defendants requested a protective order with regards to email messages, stating that the high cost and burden associated with producing possibly relevant email messages outweighed any benefit that could be gained from them. The magistrate denied defendants' motion, as it sought to prevent the discovery of email messages in total and instead established an eight-factor balancing test that was used to determine whether discovery requests should be shifted. Based on this balancing test, the magistrate found that plaintiff should pay costs associated with identifying relevant email messages, a ruling that was upheld by the court.
Byers v. Ill. State Police, 2002 U.S. Dist. LEXIS 9861, 53 Fed. R. Serv. 3d (Callaghan) 740 (N.D. Ill. May 31, 2002).
Plaintiff in an employment discrimination suit requested defendants to produce email messages written by an individual defendant regarding plaintiff from 1994 to 2002. Plaintiff alleged that said email messages contained derogatory slurs, however, plaintiff could show no evidence of this. Defendant countered that producing said email messages would be costly, as it would involve searching backup tapes. In addition, the ISP had switched email programs during that time period and would need to license the old program to read email messages at a cost of $8,000 per month, for a total estimated cost of $20,000-$30,000. The court found that plaintiff was only entitled to the email messages if they would assist with production costs, specifically, plaintiff would be responsible for licensing costs while defendant would bear the cost of reviewing the documents.
Murphy Oil USA, Inc. v. Fluor Daniel, Inc., 2002 U.S. Dist. LEXIS 3196, 52 Fed. R. Serv. 3d (Callaghan) 168 (E.D. La. Feb. 19, 2002).
Plaintiff requested production of certain email messages stored on backup tapes that were written by defendant's thirty-seven employees that had worked on the engagement in dispute throughout a fourteen-month time period. Defendant had a policy of recycling backup tapes every 45 days, however, they had failed to do so and had 93 backup tapes, each containing approximately 25,000 email messages, for over 650 employees during the requested time period. Defendant estimated it would cost $6.2 million and take six months to produce hard copy email messages. Following the cost shifting analysis laid out in Rowe Entm't, Inc. v. William Morris Agency, Inc., 2002 U.S. Dist LEXIS 488 (S.D.N.Y. 2002), the court found that the requesting party must pay the costs of restoring and printing the email messages.
In re Bristol-Myers Squibb Sec. Litig., 205 F.R.D. 437, 2002 U.S. Dist. LEXIS 13808 (D.N.J. Feb. 4, 2002).
After initially entering an agreement regarding shared copying costs, plaintiff disputed how much was owed to defendant. Plaintiff argued that defendant had produced a large amount of paper documents and charged plaintiff for excessive copying costs. It was found that defendant had printed electronic documents rather than providing plaintiff with these documents in their native electronic form. Based on Rule 26(f), the court found that plaintiff was not required to pay for the excessive printing charges and was only required to pay for the nominal cost of copying CD-ROMs.
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