To say that eDiscovery can be expensive is an understatement. And a recent case highlights exactly how discovery costs can impact litigation for the worse, preventing parties from accessing information, and ultimately standing as a barrier to achieving the “just, speedy, and inexpensive” resolution of disputes to which our legal system aspires.
Vendor Invoice Leads to eDiscovery Cost Shifting
That case, Tafolla v. County of Suffolk, No CV-17-4897 (E.D.N.Y. July 8, 2019), involves a typical, single-plaintiff employment discrimination suit and an (unfortunately, also typical) eDiscovery vendor estimate that inspired the court to shift discovery costs.
Some quick background: Our story begins when Kim Tafolla, a clerk typist in the Suffolk County District Attorney’s Office, filed suit against the county, alleging that she faced discrimination and retaliation for disabilities arising after a series of accidents.
“A recent case highlights exactly how discovery costs can impact litigation for the worse, preventing parties from accessing information, and ultimately standing as a barrier to achieving the 'just, speedy, and inexpensive' resolution of disputes to which our legal system aspires. “
As the litigation advanced into discovery, the plaintiff sought a wide range of native documents, with respective metadata. In their response to the discovery requests, the county objected that “any ESI requiring production of metadata via restoration of backup tapes is overly burdensome and will provide minimal, if any, probative value.”
Unable to come to a consensus among themselves, the parties turned to U.S. Magistrate Judge Kathleen Tomlinson of the Eastern District of New York. Restoring backup tapes in order to fulfill the discovery request would be unduly expensive, the county argued, vendor estimate in hand.
Discovery Cost Shifting Case Law
When it comes to discovery, the general rule is that the responding party must bear the costs of production. However, courts may reallocate discovery costs when there has been a showing of “undue burden or expense.” That authority is found both in Federal Rule of Civil Procedure 26(c), as well as in early discovery case law, such as Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003). And under Zubulake, the question of undue burden or expense “turns primarily on whether [a requested document] is kept in an accessible or inaccessible format.” (Emphasis in the original.) Backup tapes, according to Zubulake and its author, U.S. District Court Judge Shira Scheindlin, typically fall within the inaccessible category.
And so too did the backups at issue here, Judge Tomlinson quickly concluded. “Given the particular circumstances of this case and the status of the data,” the court writes, “cost-sharing is appropriate.”
Should the plaintiff pursue the tapes, she’ll need to foot 30 percent of the cost, leaving the county responsible for only 70 percent of the expenses.
It’s a short ruling, only five paragraphs in total, and a fairly straightforward application of the relevant federal rules and applicable case law.
Who Bears Responsibility for Excessive Discovery Costs?
What’s interesting here isn’t that costs were shifted. It’s what drove them so high in the first place: a list of line-item, per-GB vendor fees that totaled over $26,000 for an estimated 100 GBs of data spread across three custodians. The extraction and restoration of backup files accounted for only $5,300 of that estimate.
“According to the vendor estimate, for a lone gigabyte to make it through a narrow range of the EDRM—ingestion, processing, production—it would cost at least $550…”
The rest of the cost came from a rapid-fire recitation of fees that could be taken directly from Buzzfeed’s “2006’s Top eDiscovery Vendor Expenses.” Except this invoice was written up in April. Of 2019.
- $100/mailbox for “mailbox extraction” (sometimes referred to by laymen as “downloading”)
- $50/GB for ingestion
- $80/user/month for seat licenses
- $150/GB for processing responsive data
- $350/GB for production
- $195/hr for project management (estimated to require 20 hours)
According to the vendor estimate, for a lone gigabyte to make it through that narrow range of the EDRM—ingestion, processing, production—it would cost at least $550, plus an additional $12 per GB, per month for hosting and $80 per user, per month.
And these are just the vendor costs. Review, where the vast majority of discovery expenses lie, doesn’t even come into the calculation.
It’s worth noting—and it’s an argument one wishes the plaintiff’s attorneys made—discovery doesn’t have to be this way. There are discovery solutions (cough, cough) that allow legal teams to handle data at a fraction of the costs quoted here, and powerfully simple software that doesn’t require hours of project management and “tech time” to navigate.
“Maybe it’s not the discovery requests that are unduly burdensome. Maybe it’s the ridiculous pricing structure that’s been built up around them."
This isn’t the first time overly expensive discovery costs have stood in the way of a party and the liberal discovery that’s a central pillar of our litigation system, either. Just over a year ago, Judge Tomlinson issued a very similar ruling, that time shifting the cost of discovery off a similarly situated plaintiff after a lopsided ESI agreement and an extremely expensive vendor estimate, from the same vendor, drove the cost of collecting a single email account—an active account, mind you, with no backup tapes to restore—up to an estimated minimum of $5,690, more than 6 percent of the plaintiff’s annual salary.
Which makes you think. Maybe it’s not the discovery requests that are unduly burdensome. Maybe it’s the ridiculous pricing structure that’s been built up around them.