E-Discovery: Who Pays The Freight?
FindLaw columnist Eric Sinrod writes regularly in this section on legal developments surrounding technology and the internet.
As litigants are coming to appreciate, electronic discovery is expensive, and indeed so much so, that at times it can be the dog wagging the tail in driving financial decisions when determining the value of a case from a resolution standpoint.
The general rule of thumb in litigation is that parties responding to discovery must incur the costs of that exercise. However, e-discovery opens up new realms of expense, as parties potentially must extract phenomenal quantities of data from myriad sources, such as servers, hard drives, PDAs, backup tapes, etc. Moreover, parties may be asked to change the format of electronic information to be produced.
To date, while the 2006 amendments to the Federal Rules of Civil
Procedure explicitly address e-discovery issues, there has not been
uniform guidance on the "who pays" front.
Along comes Dahl v. Bain Capital Partners
recently decided by Massachusetts U.S. District Judge Edward
In the e-discovery context, Judge Harrington embraced the traditional
notion that responding parties usually should pay their own production
costs absent exceptional circumstances, such as lack of reasonable
accessibility or undue and unnecessary expense. However, in this new
arena of e-discovery, Judge Harrington held that if a demanding party
requests electronic materials to be produced in a format different than
the way they are maintained in the ordinary business course, then the
expense of the format change should be shifted to the demanding party.
, an antitrust case, the plaintiffs had
demanded from the defendants electronic documents in a format that
allowed for full text searching. This would cause the defendants to
convert hard copy and electronic documents that were not susceptible to
full text searching into that format. The defendants were only willing
to undertake that exercise if the plaintiffs would foot the bill. In
addition, the plaintiffs demanded various metadata fields for the
electronic documents sought. The parties could not agree, requiring
resolution of the discovery dispute by Judge Harrington.
Judge Harrington did order that the defendants did have to produce the
electronic records demanded by the plaintiffs. But in so doing, he
ruled that the plaintiffs, not the defendants, would have to incur the
expense of converting the format of the documents. While FRCP 34 was
amended in 2006 such that a demanding party may state the form for
materials to be produced, Judge Harrington believed that a demand to
convert materials into a form different than usually maintained in
business would require that demanding party to pay the conversion
expense. However, if a litigant on its own opts to convert the format
of its electronic materials, then the opposing party should be offered
the converted materials at no additional expense.
Judge Harrington also ruled that the plaintiffs in Dahl were not
entitled to metadata on a sweeping basis. He explained that metadata
may not have true utility, perhaps not leading to admissible evidence
and possibly wasting the time and money of the parties. He therefore
suggested that the plaintiffs should focus their metadata demands on
narrow and specific electronic documents.
When it comes to e-discovery, be careful what you wish for - you may
have to pay the freight. Often times, it is better to negotiate
e-discovery protocols with opposing counsel, rather than to roll the
dice in court in this newly evolving area.
Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP (http://www.duanemorris.com)
where he focuses on litigation matters of various types, including
information technology and intellectual property disputes. His Web
site is http://www.sinrodlaw.com and he can be reached at firstname.lastname@example.org. To receive a weekly email link to Mr. Sinrod's columns, please send an email to him with Subscribe in the Subject line.
This column is prepared and published for
informational purposes only and should not be construed as legal
advice. The views expressed in this column are those of the author and
do not necessarily reflect the views of the author's law firm or its