The $1.9 Million Price Tag on Undue Burden

The Plaintiffs in Thermal Design, Inc. v. Guardian Bldg. Prods., brought a motion to compel the Defendants “Defendants to search all archived e-mail accounts and shared network drives, without any restriction as to custodian or individual.”  Thermal Design, Inc. v. Guardian Bldg. Prods., 2011 U.S. Dist. LEXIS 50108 (E.D. Wis. Apr. 20, 2011).

The cost estimate:  $1.9 million, plus another 13 weeks of document review with an estimated cost of $600,000. Thermal Design, Inc., at *3.

The Defendants had already produced 91 Gigabytes of data (approximately 1.46 million pages) at a cost of $600,000 and seven months of work.  Thermal Design, Inc., at *2.

Federal Rule of Civil Rule 26(b)(2)(B) provides that a party “need not provide discovery of electronically discovered information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” Thermal Design, Inc., at *3.

The Court looked at the $1.9 million price tag and held the additional searches of all “all archived e-mail accounts and shared network drives, without any restriction as to custodian or individual” to be unduly burdensome.  Thermal Design, Inc., at *3.

The Court also cited Federal Rule of Civil Procedure Rule 26(b)(2)(C), which allows for the production of ESI that is not reasonably accessible for good cause.  Thermal Design, Inc., at *4.  The production of discovery can be limited under Federal Rule of Civil Procedure Rule 26(b)(2)(C)(i-iii), which states a court must limit discovery “if it is unreasonably cumulative or duplicative, if the party seeking discovery has had ample opportunity to obtain the information by discovery in the action, or if the burden or expense of the proposed discovery outweighs its likely benefit.” Id.

The Plaintiffs argued more ESI needed to be produced because of the parties’ agreement on electronic discovery.  Thermal Design, Inc., at *4.  The Plaintiff also dismissed the Defendants’ undue burden arguments, claiming the Defendants had “considerable resources.” Id.

The Court bluntly rejected the “big checkbook” argument, stating:

This is simply not enough to establish good cause under the Federal Rules. Even if the information sought is relevant or reasonably calculated to lead to the discovery of admissible evidence, Thermal Design doesn’t explain why the extensive amount of information it seeks is of such importance that it justifies imposing an extreme burden on the Guardian Defendants… Courts should not countenance fishing expeditions simply because the party resisting discovery can afford to comply.

Thermal Design, Inc., at *4-5.

Bow Tie Thoughts

Civil litigation will always have cases of overreaching in discovery.  The idea of searching all archived data, without any regard to custodians or date ranges, from a large corporation would seem extremely daunting.  Moreover, who would want to review millions of email messages, PowerPoints and other files?  The cost for such review can turn the merits of the lawsuit into a sideshow as the parties instead fight over discovery.

Additionally, if parties need to show good cause to overcome undue burden arguments, they need a detailed offer of proof to support their request.  In addition to arguing why the ESI is needed, countering the cost estimate is a good practice, especially if there are more cost effective ways to control the discovery costs.

Josh Gilliland is a California attorney who focuses his practice on eDiscovery. Josh is the co-creator of The Legal Geeks, which has made the ABA Journal Top Blawg 100 Blawg from 2013 to 2016 and was nominated for Best Podcast for the 2015 Geekie Awards. Josh has presented at legal conferences and comic book conventions across the United States. He also ties a mean bow tie.