Does your e-Discovery strategy for a new case include determining what costs should be paid by the other party? A little advance planning can save you a lot of money. If you can show that the burden of certain information outweighs its likely benefit, you may be able to shift costs to the other side, or even avoid production altogether. Once information has already been produced, however, the costs that may be recoverable from the other side are usually minimal.
Narrowing the scope of discovery is often the most effective option that parties have to limit discovery costs. If this cannot be achieved through negotiations, parties can seek a protective order, which may include cost-shifting provisions, by showing good cause under Rule 26(c). In cost shifting determinations, courts consider the following factors:
The extent to which the request is specifically tailored to discover relevant information;
- The availability of such information from other sources;
- The total costs of production compared to the amount in controversy;
- The total costs of production, compared to the resources available to each party;
- The relative ability of each party to control costs and its incentive to do so;
- The importance of the issues at stake in the litigation; and
- The relative benefits to the parties of obtaining the information.
A Rule 26(c) motion is most likely to succeed if it contains specific factual information about total costs of production to support the court’s analysis of whether cost shifting should apply. The more detailed your narrative about the data, the more convincing your motion will be. Supporting your narrative with expert testimony will usually help add detail and bolster credibility. Details should include:
- The costs the responding party has already paid or estimates of what it will pay for requests to which it is able to respond, and reasons why those responses may be sufficient so that further discovery is unnecessary;
- How the data is kept at the company and descriptions of IT systems or media involved;
- Steps required to collect, processes, review and produce the data;
- The estimated volumes of data;
- Estimated vendor costs;
- Estimated attorney costs;
- Estimated employee hours and internal technological resources that will be required, and challenges that these demands may impose on the ordinary course of business.
While cost-shifting can apply to unreasonably burdensome requests, a responding party will ordinarily still have to pay to comply with “reasonable” discovery requests.
In certain situations, however, such as class action certification or third party subpoenas, courts have been more willing to permit cost shifting even for necessary discovery requests .
Note that a court may be more likely to grant a protective order where the parties have made an effort to cooperate first. Where the parties have not attempted cooperation, their motions relating to discovery may not be well received.
Finally, after the scope of discovery is established and compliance efforts have begun, make sure that you separately track the costs of expenses. Federal Rule of Civil Procedure Rule 54(d) allows the prevailing party to collect its “costs,” which are defined by 28 U.S.C. § 1920(4) to include “fees for exemplification and the costs of making copies of any materials.” Different jurisdictions have permitted different items of recovery, so it is important that you track each type of expense separately. If those costs are intermingled with other expenses, they will not be recoverable even if you are the prevailing party.
Costs may be more likely to be recoverable if they relate to compliance with technical specifications required by the requesting party.
Recent caselaw has, for at least some jurisdictions, limited exemplification and copies to include document scanning and conversions to TIFF or other useable formats, and nothing more.
Some jurisdictions have taken a broader interpretation and allow certain other costs.
Because “intellectual efforts” are not recoverable (e.g., organizing, culling, searching, reviewing, strategizing, participating in meetings and calls, etc.), recoverable costs are usually just a drop in the bucket in the grand scheme of discovery costs. Still, parties can maximize their chances and amount for recovery by ensuring that costs are carefully described and where appropriate, it is clear how they relate to production specifications.
 Zubulake v. UBS Warburg LLC
, 217 F.R.D. 309 (S.D.N.Y. 2003).
 See Oppenheimer Fund, Inc., v. Sanders
, 437 U.S. 340, 358 (1978) (“the presumption is that the responding party must bear the expense of complying with discovery requests”).
 See Boeynaems v. LA Fitness Int’l., LLC,
2012 WL 3536306 at *21-22 (E.D. Pa. Aug. 16, 2012) (ordering plaintiffs to pay costs for discovery pre-class certification); Guy Chem. Co. v. Romaco AG,
2007 WL 1521468 (N.D. Ind. May 22, 2007) (ordering requesting party to pay third party costs for review and production of documents, because “it fundamentally unfair for non-parties to bear the significant litigation costs of others”).
See e.g., Tadayon v. Greyhound Lines, Inc.,
2012 WL 2048257 (D.D.C. June 6, 2012) denying multiple discovery motions including motion for protective order, where court believed the conflicts would be better solved through cooperation) (“the filing of forty-page discovery motions accompanied by thousands of pages of exhibits will cease and will now be replaced by a new regimen in which the parties, without surrendering any of their rights, must make genuine efforts to engage in the cooperative discovery regimen contemplated by the Sedona Conference Cooperation Proclamation”.)
 See Oracle v. Google
, 2012 WL 3822129, at *3 (N.D. Cal. 2012).
 See Fast Memory Erase, LLC v. Spansion, Inc.,
2010 WL 5093945, at *4–5 (N.D.Tex. Nov.10, 2010) (allowing TIFF and OCR costs because they were required by plaintiff specifications).
 See Race Tires Am., Inc. v. Hoosier Racing Tire Corp
., 674 F.3d 158, 160 (3d Cir. 2012) (reversing broader interpretation and only allowing scanning and conversion costs); Country Vintner of North Carolina, LLC v. E&J Gallo Winery, Inc.,
718 F.3d 249 (4th Cir. 2013); CBT Flint Partners, LLC v. Return Path, Inc.
, No. 2013-1036, 2013 WL 6510953 (Fed. Cir. Dec. 13, 2013) (holding that only the costs of imaging source data, deduplication, and copying data that is actually produced were recoverable).
 See Jardin v. DATAllegro, Inc.
(allowing costs to vendor technicians as well as TIFF conversion). See also In re Ricoh Company, Ltd. v. AMI Semiconductor,
661F.3d 1361, 1365 (Fed. Cir. 2011)(allowing costs for processing, hosting and producing documents where the database was shared by the parties and therefore the means of production).