Litigation

Court Rejects Cost Shifting Since Moving Party Failed to Meet and Confer in Good Faith; Cost Estimate and Conclusory Characterizations of ESI as "Inaccessible" Insufficient Under Rule 26(b)(2)

By reston, Gates and Ellis

Mikron Ind., Inc. v. Hurd Windows & Doors, Inc., 2008 WL 1805727 (W.D. Wash. Apr. 21, 2008)

In this decision, District Judge Robert S. Lasnik denied defendants’ motion for a protective order which asked the court to shift the costs of producing ESI to the plaintiff.  Relying on Fed. R. Civ. P. 26(b)(2), defendants argued that searching through their ESI would generate substantial costs and yield cumulative results.

Finding that defendants failed to discharge their meet and confer obligation in good faith, as required by Fed. R. Civ. P. 26(c), the court denied the motion on that basis.  The court then went on to consider the merits of the motion.  It found that defendants had also failed to demonstrate that plaintiff's discovery requests were unduly burdensome and/or cumulative, or that the requested ESI was “not reasonably accessible because of undue burden or cost.”  The court explained:

The rules of discovery presume that “the responding party must bear the expense of complying with discovery requests.”  Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 358 (1978).  Congress added Fed. R. Civ. P. 26(b)(2)(B) in 2006 in response to concerns that the broad discovery principle announced in Fed. R. Civ. P. 26(b)(1) could cause responding parties to incur unreasonable costs in producing electronically stored information.  See Advisory Committee's Notes on 2006 Amendment to Fed. R. Civ. P. 26(b)(2).  The responding party bears the burden of showing that “identified sources are not reasonably accessible in light of the burdens and costs required to search for, retrieve, and produce whatever responsive information may be found.”  Id.  In meeting this burden, the responding party should present details sufficient to allow the requesting party to evaluate the costs and benefits of searching and producing the identified sources.  Id.  This requirement mirrors the “meet and confer” obligation established by Fed. R. Civ. P. 26(c).  If the responding party meets its burden, the court may consider a range of options, including cost-shifting, to alleviate the responding party's hardship.  Fed. R. Civ. P. 26(c) (1).  See Oppenheimer Fund, 437 U.S. at 358.

ESI can be preserved in a wide range of diverse formats, some of which are more accessible than others.  See Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 318-20 (S.D.N.Y.2003).  Although defendants directed their employees to search their hard drives for responsive information, defendants have not demonstrated any search efforts beyond that limited inquiry.  Responsive information may be discovered during a more thorough search of defendants' non-backup ESI, including employee hard drives and active e-mail servers.  Cost-shifting would not be appropriate in the context of this kind of search, as this ESI is considered reasonably accessible within the meaning of Fed. R. Civ. P. 26(b) (2)(C).  See id.

With regard to ESI located on defendants' backup tapes, those courts that considered shifting the costs of electronic discovery to the requesting party were presented with more detailed information than that provided by the defendants in this case.  In alleging that continued discovery of their ESI would be unduly burdensome, defendants offer little evidence beyond a cost estimate and conclusory characterizations of their ESI as “inaccessible.”  Defendants have not provided the Court with details regarding, for example:  (1) the number of back-up tapes to be searched; (2) the different methods defendants use to store electronic information; (3) defendants' electronic document retention policies prior to retaining an outside consultant; (4) the extent to which the electronic information stored on back-up tapes overlaps with electronic information stored in more accessible formats; or (5) the extent to which the defendants have searched ESI that remains accessible.  Beyond the estimated costs, defendants have not demonstrated an unusual hardship beyond that which ordinarily accompanies the discovery process.  Therefore, the Court finds that defendants have not met their burden of demonstrating that the requested ESI is “not reasonably accessible because of undue burden or cost.”  See Fed. R. Civ. P. 26(b)(2)(B).

(Footnotes and citation to the record omitted.)

The court directed the parties to meet and confer regarding the discovery of ESI before bringing any related motions.

A copy of the full order is available here.

Full post as published by eDiscovery Law on April 24, 2008 (boomark / email).