Arguing $2,630 is Undue Burden to Search ESI

A Defendant refused to produce ESI claiming the estimated $2,630.00 to search the data was unduly burdensome under Federal Rule of Civil Procedure Rules 26(b)(2)(C)(iii) and 26(b)(2)(B).  Hudson v. AIH Receivable Mgmt. Servs., 2011 U.S. Dist. LEXIS 39993 (D. Kan. Apr. 13, 2011).

The Defendant was a company of 13 people that represented it was not doing well financially. Hudson, at *2.

The Defendant’s purported undue burden was based on an estimated 24 hours for a technician at $95 an hour to review the ESI, plus $350 to purchase software to read the archived data. Hudson, at *2.

Rule Summary

A Court will limit discovery pursuant to Federal Rule of Civil Procedure Rule 26(b)(2)(C)(iii) if:

[T]he expense of the proposed production outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.

Hudson, at *2.

Additionally, a court may limited discovery of ESI that is “not reasonably accessible because of undue burden of cost.”  Hudson, at *2, citing Federal Rule of Civil Procedure Rule 26(b)(2)(B).

A Court may order cost-shifting for producing discovery under the following factors:

(1) The specificity of the discovery request,

(2) The quantity of information available from other and more easily accessed sources,

(3) The failure to produce relevant information that seems likely to have existed,

(4) The likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources,

(5) Predictions as to the importance and usefulness of the further information,

(6) The importance of issues at stake in the litigation and

(7) The parties’ resources.

Hudson, at *3-4, citing Fed.R.Civ.P. 26(b)(2), advisory committee’s notes (2006); see also Semsroth v. City of Wichita, 239 F.R.D. 630 (D. Kan. 2006).

The Court’s Analysis 

The Court quickly dismissed the idea of cost-shifting, citing that this element of the litigation was “not disproportionate to the importance of much of the discovery in resolving the issues.”  Hudson, at *4.

The Court reviewed each discovery request to determine whether they were unduly burdensome or costly. Hudson, at *4.

The ESI at issue centered on email, with the parties having reached an agreement on “documents” and the Plaintiff withdrawing their request for Internet search history.  Hudson, at *4-5.

The email was stored in two formats: one format which could be viewed in an available email application and the other a data storage format requiring special software.  Hudson, at *5.

The Court gave the parties two options:

Option 1:

1)    Defendant could produce unedited, unreviewed, and unredacted data files of all data in its possession, together with the name of the software needed to read the storage data.

2)    Plaintiff could then purchase the software and conduct her own searches.

Option 2:

Due to concerns of over producing unresponsive or privileged information, the Defendants would bear the cost of searching the data and purchasing any software.

Hudson, at *5.

The Court further ordered the parties to meet and confer on search terms so the email searched was limited to specific topics. Hudson, at *6.

The Court reviewed each discovery request.  One request called for a list of ESI that “mentioned” the Plaintiff in any “diary, notes and calendar-type” files.  Hudson, at *7.

The Court held the Defendants did not adequately support their objections that the ESI was overly broad or unduly burdensome and overruled their objection.  Hudson, at *7.

Another objection against a request for ESI that “pertain[ed] to or reflect[ed] any statements of any person or witness pertaining to any claim or allegation made by the plaintiff in this lawsuit,” was unduly burdensome and overly broad was also overruled, because the objection were not sufficiently supported. Hudson, at *8.

An objection to a request that purportedly sought information protected by the attorney-client privileged was found to have the privilege waived and the objection overruled, because the Defendants did not produce a privilege log.  Hudson, at *8.

The Court did limit another request for email by date range, narrowed to email that were either sent or received by the Plaintiff, identified her by name, and other specifically named individuals on specific subject matter.  Hudson, at *11.

In summation, while several requests were limited or denied in part, the Defendant still had to search and produce electronically stored information.

Bow Tie Thoughts

As a preliminary matter, most service providers would not think an estimate of $2,600 for e-Discovery services is “unduly burdensome.”

There is reportedly one e-Discovery service provider that does not take any project for under $5,000.  However, this “nothing under $5,000” view is one many service providers think is very shortsighted and jeopardizes relationships with clients.

The tone of the opinion gives the impression the Defendant was attempting to conduct their own e-Discovery work.   These situations can result in using a non-e-Discovery tool for unintended purposes, when software designed for data reduction and identification could allow the party to meet their discovery production obligations.

For example, the “early case assessment” (ECA) products on the market represent they effectively allow a party to identify responsive, non-responsive or privileged ESI for production to an opposing party (Note, always ask about the defensibility of any software you consider using).

While a party might argue such an engagement with a service provider to use an ECA product is “expensive,” so is motion practice that still results with a court order to review, identify and produce electronically stored information.

It is arguably more cost effective to cut out the middle man (in such a dispute, the Court, legal research and drafting motions) and leverage the skills of a service provider with products like Nuix, OcraTech, Access Data or Lexis to identify ESI for production.  Moreover, the reporting features of these products enable a lawyer to generate the information needed for creating a privilege log for ESI that is confidential.

Motion practice is unavoidable if an opposing party is completely unreasonable. However, some disputes can be avoided, saving both time and money, if e-Discovery technology is leveraged to identify, reduce and produce responsive electronically stored information.

Disclosure: I have friends and professional relations with all of the companies named above.