It is a known fact that electronic discovery is costly. For which party, however, is e-discovery costly? Does the cost of e-discovery ever shift to the other party or is it shared amongst the parties? The United States District Court for the Eastern District of Pennsylvania recently considered the cost-sharing question in the case of Cochran v. Caldera Med., Inc., when the defendant’s made a motion requesting to share the burden of costs with the plaintiffs. The defendant argued that it had limited resources and estimated that it would cost $500,000 to collect and produce the ESI in response to the document requests. The judge ultimately denied the defendant’s request, but why?

The court began with the presumption that each party must bear its own discovery costs. The judge first addressed the law under Rule 26(b)(2)(B), where the court has the discretion to grant cost sharing and other relief if the producing party shows “that the information is not reasonably accessible because of undue burden or cost.” Information is found to be accessible if it is stored a readily usable format. The defendant did not provide any documentation in support of its estimate or identify what portion of this estimate was attributable to retrieving accessible information or reviewing documents for privilege, both of which tasks are typically not subject to cost sharing. Without this evidence, the court held that the defendant failed to show that the ESI was not reasonably accessibly as required to allow cost sharing under Rule 26.

The court next considered cost sharing under Rule 26(b)(2)(C)(iii), which permits cost sharing if the court determines that “the burden or expense of the proposed discovery outweighs its likely benefit. The court held that the plaintiff document requests were relevant and material information. Thus, using the proportionality factors from Rule 26, held that the burden on the defendant did not outweigh the importance of the discovery and the seriousness of the injuries alleged by the plaintiffs and the defendant must pay.

The moral of the story is that cost shifting between parties can only be considered in limited situations according to the FRCP 26. They are if inaccessible data is being requested for production, or if proportionality supports it. Keep this in mind when making your next motion for cost sharing.

Click here for a look at Federal Rule 26.

Amanda is a third year student at Seton Hall University School of Law, where she is pursuing a J.D. with a certificate in Health Law. Prior to law school, she was a 2011 magna cum laude graduate of Seton Hall University, where she earned Bachelor of Arts in Political Science and a minor in Philosophy. Presently, she is a law clerk at a small firm handling real estate and bankruptcy matters. After graduation this native New Yorker hopes to work at a mid-sized firm in the Big Apple.

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