Redundant and Excessive Search Did Not Warrant Cost Shifting, Court Rules

An attempt by defendants to shift their costs to the plaintiff for searching electronically stored information has been denied by a federal magistrate judge in New York.

Novick v. AXA Network LLC, the defendants argued that they were required to conduct searches that were excessive, duplicative and burdensome. They contended that, under the cost-shifting standard articulated in Zubulake v. UBS Warburg LLC, the plaintiff should be required to pay the $41,000 they incurred in conducting the search.

But U.S. Magistrate Judge Kevin Nathaniel Fox disagreed, concluding that the defendants never got past the threshold issue under Zubulake — establishing that the data was kept in an inaccessible format.

“Thus, under the Zubulake standard, the defendants failed to show that cost-shifting is appropriate because they did not establish that the production at issue was unduly burdensome or expensive, that is, that the data were kept in an inaccessible format,” Judge Fox wrote.

Search of Email

On Sept. 7, 2012, the judge presiding over the case entered an order requiring the defendants to conduct a search of 10 custodians for emails relating to roughly 800 customers, using search terms supplied by the plaintiff. The judge gave the defendants two months to provide the results.

Defendants retained an outside vendor to conduct the search, at a cost of $20,868.75. They were required to hire an outside vendor, they later explained, because of the large amount of data to be processed and searched (119 GB) and because of the number and complicated nature of the search terms.

Defendants also incurred $19,980 in legal fees in connection with the search.

In their motion seeking to shift these costs to the plaintiff, the defendants argued that the search yielded very few responsive documents and was largely duplicative of discovery they had previously provided. Further, they contended that the scope of the search, involving 800 customers, was way beyond the number necessary to find the sought-after information.

“It is not equitable for all corporate parties to have to bear the cost of production to individual parties, if the individual parties are permitted to request every manner of production that occurs to them,” the defendants asserted.

Citing the cost-shifting standard of Zubulake, they asked the judge to require the plaintiff to bear the costs of this search.

Search Not Burdensome, Plaintiff Says

In response to the defendants’ motion, the plaintiff asserted that the search was not a burden. Rather, the plaintiff argued, the search request was “extremely specific” insofar as it consisted of a list of 10 custodians cross-referenced against a list of clients.

Further, the plaintiff contended that the search should already have been conducted in conjunction with the defendants’ prior responses to discovery requests in the case.

Data Not Inaccessible

In addressing the motion, Judge Fox noted that the presumption in discovery is that the producing party bears its own costs, but that the court has discretion to shift the costs to protect a party from undue burden or expense.

In the e-discovery context, Judge Fox continued, the Zubulake case articulated a seven-factor test for analyzing whether costs should be shifted. But even before getting to that analysis, he said, the threshold question in Zubulake was whether cost-shifting should be considered. That, in turn, turns on whether the data is kept in an accessible or inaccessible format.

Such was not the case here, Judge Fox wrote:

The defendants do not contend that the e-mail messages requested to be searched pursuant to the September 7, 2012 order are kept in an inaccessible format. Applying the Zubulake standard, the Court finds that cost-shifting does not apply in this circumstance; that is so because, as noted by the Zubulake court, cost-shifting does not apply where electronic data “is kept in an accessible format,” and the defendants do not contend that the data they searched were kept in an inaccessible format.

For that reason, the judge denied the defendants’ motion.


About Bob Ambrogi

Bob is known internationally for his expertise in the Internet and legal technology. He held the top editorial positions at the two leading national U.S. legal newspapers, the National Law Journal and Lawyers USA. A long-time advisor to Catalyst, Bob now divides his time between law practice and media consulting. He writes two blogs, LawSites and MediaLaw, co-authors's Legal Blog Watch, and co-hosts the weekly legal-affairs podcast Lawyer2Lawyer. A 1980 graduate of Boston College Law School, Bob is a life member of the Massachusetts Bar Foundation and an active member of the Massachusetts Bar Association, which honored him in 1994 with its President's Award.