7 Factors + 7 Factors = Cost Shifting and a “Win” for Defendants

7 Factors + 7 Factors = Cost Shifting and a “Win” for Defendants

The court’s decision to impose a cost shifting condition on the discovery of emails began with an analysis of the seven factors set forth in the Advisory Committee Notes to Fed. R. Civ. P. 26(b)(2)(B), included a determination that plaintiffs had not established good cause for production, and ended with another seven factor test which demonstrated the importance of the court’s authority to set conditions on discovery.

In an effort to prove allegations of racial profiling and discrimination against government defendants, plaintiffs requested copies of e-mail communications from the back-up tapes or archived e-mails maintained by the New Jersey Department of Transportation. In response, defendants sought a protective order.

Government defendants argued against production of approximately 2,500 backup tapes of e-mails at an estimated cost of over $1 million dollars due to undue burden and cost. After considering the seven factors set forth in the Advisory Committee Notes to Fed. R. Civ. P. 26(b)(2)(B), the court determined that said factors weighed in favor of defendants. Four factors favored defendants, two factors favored plaintiffs, and one factor was “neutral.” The court placed specific emphasis on the following: (1) the storage media of back-up tapes is typically classified as inaccessible, Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 319-20 (S.D.N.Y 2003); (2) a substantial amount of relevant information was available to plaintiffs from a number of more readily accessible sources, including depositions; and (3) if relevant evidence existed in the e-mails, it was likely cumulative of other evidence already presented.

The court found particular import in the fact that “[a]s to the e-mail production that has been completed, defendants searched the e-mail records of 37 custodians… Defendants ‘harvested’ approximately 152,000 e-mails from the live production mailboxes of the custodians. A total of 135,000 documents were reviewed, and 70,000 of these documents contained a hit on one or more of the 100 search terms agreed to by the parties… Defendants produced a statistical summary of their e-mail collection efforts for its 37 custodians.” What’s more, the court stated generally, “defendants have already produced tens of thousands of relevant documents, a substantial number of depositions have been and will be taken, there is no evidence of intentional spoliation, and the requested e-mails are likely to be of marginal benefit and cumulative of documents already produced.” Accordingly, it found that the unlikelihood of production of relevant evidence did not outweigh the burden and expense that would be placed on defendants.

Still, the court took pains to state that the seven factors should not be used as a checklist and that the court should not simply determine which party has the most checks. The factors should be weighed by importance.

The court conceded that the sixth factor favored plaintiffs. “This case involves allegations of racial discrimination by public employees. In such an instance, it is not unreasonable to permit broad discovery so long as it is consistent with the Federal Rules of Civil Procedure and applicable case law.” The court also stated that it “is mindful that plaintiffs are pursuing issues of paramount public importance. See Zubulake, 217 F.R.D. at 321 (‘if a case has the potential for broad public impact, then public policy weighs heavily in favor of permitting extensive discovery’).” Still, this was not enough to outweigh the four factors “won” by defendants.

From the middle of the opinion forward, the court makes clear that the cost and burden to defendants eclipsed the public importance of the plaintiffs’ case. The court found that plaintiffs had not established good cause for production or presented contrary estimates or affidavits to counter defendants’ cost estimates. Further, it found that even the limited alternative suggested by defendants was unlikely to produce useful information that would outweigh defendants’ cost and burden. However, the court’s analysis did not end there.

The court then explained that the good-cause inquiry, that is, the aforementioned seven factor test and considerations of Rule 26(b)(2)(C), is coupled with the court’s authority to set conditions for discovery under Rule 26(b)(2)(B).

It explained that the central question to ask when evaluating cost shifting is how important the sought-after evidence is in comparison to the cost of production. In order to determine if cost shifting is appropriate the court analyzed seven additional factors, those set forth in Zubulake:

  1. The extent to which the request is specifically tailored to discover relevant information;
  2. The availability of such information from other sources;
  3. The total cost of production, compared to the amount in controversy;
  4. The total cost of production, compared to the resources available to each party
  5. The relative ability of each party to control costs and its incentive to do so;
  6. The importance of the issues at stake in the litigation; and
  7. The relative benefits to the parties of obtaining the information.

Zubulake, 217 F.R.D. at 322-23.

Ultimately, in considering the importance of the sought after evidence and these seven factors, the court allowed plaintiffs to obtain certain discovery they desired if they shared in the costs and/or foot the entire bill for retrieval and review.

Still, the court held that it would not even order the production of the limited alternative suggested by defendants, but that it would order further limited retrieval of e-mails if plaintiffs paid half of the retrieval costs for fifteen (15) back-up tapes, and/or all of the cost of retrieval and review of two (2) other back-up tapes.

Defendants clearly got the better end of the deal here, and their “win” may serve as an important reminder to other parties hoping to avoid production that cost shifting or sharing is an important alternative to consider for if whole or partial production is ordered or allowed. As the court noted, this incentivizes plaintiffs to conduct discovery proportionate to their likely benefit. Parties should also recognize the importance of the court’s discretion when it comes to such matters.

 

Edvie received her B.A. and M.A. in English from Seton Hall University. She will receive her J.D. from Seton Hall University School of Law in May 2012. Throughout her time at Seton Hall Law, Edvie served as chair of the Women’s Law Forum, vice president of the St. Thomas More Society, and editor of the Urban Education Law & Policy Initiative Blog. Edvie currently clerks for a prominent employment firm in Woodland Park, New Jersey. After graduation, she will clerk for an assignment judge in the Superior Court of New Jersey.

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    Although I may have missed some, yours is the first article that I have seen addressing Zubulake II. It is often the lost opinion amongst the others.

    Laura A. Zubulake

    Plaintiff, Zubulake v. UBS Warburg


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