Cost-Shifting in E-Discovery for Non-Parties

June 27, 2009

That’s a lot of hyphens in that title, huh?  But well worth it!

As we all know, discovery is expensive, and the massive volume of electronically stored information (ESI) can make it even more so.  Thus cost-shifting provisions of the rules of civil procedure can often make or break the viability of a case.  This can  pose an especial burden on non-parties:

“When non-parties are forced to pay the costs of discovery, the requesting party has no incentive to deter from engaging in fishing expeditions for marginally relevant material. Requesters forced to internalize the cost of discovery will be More inclined to make narrowly-tailored requests reflecting a reasonable balance between the likely relevance of evidence that will be discovered and the costs of compliance.” Linder a Calero-Portocarrero, 183 F.R.D. 314, 322-23 (D.D.C. 1998).

The federal case law in this area appears to unsettled in the area, but in order for a non-party to shift the costs to the requester requires that the discovery be unduly burdensome.  There are many factors considered by the court to determine is a discovery request rises to such a level:

Questions of undue burden invariably lead to questions of cost shifitng… the Northern District of California sets forth eight factors in determining whether to shift cost to the requesting party: (1) the scope of the request; (2) the invasiveness of the request; (3) the need to separate privileged material; (4) the non-party’s financial interest in the litigation; (5) whether the party seeking production of documents ultimately prevails; (6) the relative resources of the parry and the non-parry; (7) the reasonableness of the costs sought; and, (8) the public importance of the litigation. The Sedona Conference(R) Commentary on Non-Party Production & Rule 45 Subpoenas, 9 Sedona Conf. J. 197 at 200 (Fall, 2008).

Standing in marked contrast to the FRCP, the NY CPLR provides for automatic cost-shifiting with respect to nonparties.  According to CPLR Section 3122d, “the reasonable production expenses of a nonparty witness shall be defrayed by the party seeking discovery.”

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