Posted on October 22, 2012 by Robert D. Brown, Jr.

Florida Joins the Growing Number of States That Have Adopted Specific Rules Addressing Electronic Discovery

Effective September 1, 2012, Florida joined the long list of states that have adopted specific rules of procedure governing electronic discovery, which follows the July 5, 2012, announcement by the Supreme Court of Florida of its proposed amendments to seven civil procedure rules aimed at addressing the specific dilemmas facing litigants when e-discovery is sought. Florida's Supreme Court approved and adopted the amendments in a formal opinion issued on July 5, 2012. While these amendments generally mirror the amendments to the Federal Rules of Civil Procedure first adopted by the United States Supreme Court in 2006, they diverge from the Federal Rules in some critical areas.

Similarities to the Federal Rules

Florida’s new rules, like the Federal Rules, permit parties to object to requests for electronic discovery on grounds of undue burden and cost or on grounds that the information sought is not reasonably accessible. Unless the parties otherwise agree, Florida’s rules also permit litigants and non-parties alike to produce ESI in the form in which it is ordinarily maintained or in a reasonably usable form. Florida Rule 1.280 also provides Florida courts with the discretion to set certain conditions of discovery including the ability to shift some or all of the expense associated with complying with the discovery. That same rule also requires that the Court limit the frequency or extent of discovery if it determines that the information sought is (i) unreasonably cumulative or duplicative, or can be obtained from another source or in another manner that is more convenient, less burdensome, or less expensive; or (ii) the burden or expense of the discovery outweighs its likely benefit. Florida’s rules also provide a safe harbor from spoliation sanctions if the unavailable information has been lost as a result of the routine, good-faith operation of an electronic information system. The Committee Notes for this amendment make clear, however, that simply allowing the destruction of ESI through the routine operation of an electronic information system when preservation or production is required may not be viewed as acting in good faith under these rules.

Divergence from the Federal Rules

Florida’s new rules diverge from the Federal Rules in two key areas. Unlike the Federal Rules, Florida’s rules do not require the parties to “meet and confer” in advance of the initial case management conference to attempt to work out a discovery plan regarding the production and preservation of electronically stored information. Although Florida Rule 1.200 mentions a discussion by the parties at the initial case management conference regarding the potential for an agreement regarding electronic discovery issues, there is no meet and confer requirement in advance of such conference. In addition, Florida’s rules do not address preservation of ESI. Although the Committee Notes make some reference to the parties discussing the scope of preservation, the amendments and Committee Notes are silent on a party’s obligation to preserve ESI.

Florida practitioners and litigants will no doubt be faced with a myriad of ESI issues arising from the adoption of these amendments. Practitioners who are knowledgeable about both these amendments and the more encompassing Federal Rules will be best prepared to tackle the electronic discovery disputes that will surely follow in the wake of these amendments.


Robert D. Brown Jr. is Counsel to the Gibbons Products Liability Department and a member of the Gibbons E-Discovery Task Force.
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Posted on March 7, 2011 by Paul A. Saso

Trial Court Says New York's "Requester Pays" Rule Applies Only to Data That Is Not Readily Available

As discussed in a recent post, there exists a dichotomy between the New York state and federal courts with respect to which party should bear the cost of producing inaccessible data.

A recent New York Supreme (Trial) Court decision held that New York’s standard “requester pays” rule only applies to data that is not “readily available.” Silverman v. Shaoul, 2010 N.Y. Slip Op. 20507, 2010 N.Y. Misc. (Sup. Ct. New York Cty. Nov. 3, 2010). Defendants there relied on T.A. Ahern Contractors Corp. v. Dormitory Auth. “for the proposition that New York law is well-settled in that the ‘party seeking discovery bears the cost incurred in its production.’” The Silverman court analyzed each of several cases often cited to support the “requester pays” rule in New York. Id. (citing, e.g., Lipco Elec. Corp. v. ASG Consulting Corp., 2004 N.Y. Slip Op 50967[U] (Sup. Ct. Nassau Co. 2004); and Delta Fin. Corp. v. Morrison, 13 Misc. 3d 604, 891 N.Y.S.2d 908) (Sup. Ct. Nassau Co. 2006). The court explained that the “requester pays” rule was developed and applied in cases that, for example, involved “the retrieval of deleted, electronically stored information.” Id. at *3 (quoting Waltzer v. Tradescape & Co., 31 A.D.3d 302, 304, 819 N.Y.S.2d 38 (1st Dept. 2006) ). Other cases shifted the cost of discovery to the requesting party because “separate program[s]” had to be devised and new databases created in order to acquire, read and collate the data. Id. (citing Lipco, 2004 N.Y. Slip Op 50967, at 6-7).

The Silverman court also noted that the “First Department recently stated that it saw ‘no reason to deviate from the general rule that, during the course of the action, each party should bear the expenses it incurs in responding to discovery requests.’” Silverman, 2010 N.Y. Slip Op. at *4 (quoting Clarendon Nat. Ins. Co. v. Atl. Risk Mgmt., Inc., 59 A.D.3d 284, 286 (1st Dept. 2009)). Reading this First Department precedent together with the cases cited by defendants, the Silverman court held that “the requesting party bears the cost of electronic discovery when the data sought is not ‘readily available.’ Data is not readily available upon a showing of undue burden by the producing party to obtain the data.” Id. The mere fact that data is “interspersed” with non-responsive documents or that the data required processing did not establish an undue burden.

Additional discussion concerning this issue can be found here.


Paul A. Saso is an Associate on the Gibbons E-Discovery Task Force.

 
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Posted on February 7, 2011 by Paul A. Saso

Confusion in New York Regarding Who Bears the Cost of Electronic Discovery

A recent article in the New York Law Journal by the secretary of the e-discovery committee of the Commercial and Federal Litigation Section of the New York State Bar Association underscored the confusion that remains in New York courts with respect to which party is responsible for bearing the cost of electronic document production. The article discusses cases that, on the one hand, state “what many have long believed was the rule in New York,” that “generally, the cost of [electronic] document production is borne by the party requesting the production.” Response Personnel, Inc. v. Aschenbrenner, 77 A.D.3d 518, 519, 909 N.Y.S.2d 433, 434 (1st Dept. 2010) (emphasis added). On the other hand, the First Department has also held that they “see no reason to deviate from the general rule that, during the course of the action, each party should bear the expenses it incurs in responding to discovery requests.” Clarendon Nat. Ins. Co. v. Atl. Risk Mgmt., Inc., 59 A.D.3d 284, 286, 73 N.Y.S.2d 69, 70 (1st Dept. 2009) (citing Waltzer v. Tradescape & Co., L.L.C., 31 A.D.3d 302, 819 N.Y.S.2d 38 (1st Dept. 2006)).

Some New York state trial courts have recently interpreted this conflicting guidance from the First Appellate Department to require each party to bear its own expense in responding to discovery, but that “an exception to the general rule allows discovery cost allocation determinations when the discovery costs at issue concern electronically stored information that is not readily available.” T.D. Bank, N.A. v. J&T Hobby, LLC, Index No. 021293/09, 2010 N.Y.  (Sup. Ct. Nassau Co. Sept. 1, 2010); see also Silverman v. Shaoul, Index No. 603231/08, 2010 N.Y.  (Sup. Ct. New York Co. Nov. 3, 2010).

The article notes that the meaning of what electronic documents are “not readily available” will need to be determined with more clarity by future cases and questions whether the First Department has suggested that courts take into consideration a party’s ability to bear the expense of producing electronic documents in allocating the cost of electronic discovery.


Paul A. Saso is an Associate on the Gibbons E-Discovery Task Force.

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Posted on December 27, 2010 by Paul A. Saso

Different Approaches to Cost Shifting in New York State and Federal Courts for Production of Inaccessible ESI

In Spring 2009, the Joint E-Discovery Subcommittee of The Association of The Bar of the City of New York issued a Manual for State Trial Courts Regarding Electronic Discovery Cost-Allocation, highlighting the different approaches taken by state and federal courts in New York. One key difference is how they approach cost shifting when it comes to the production of inaccessible ESI.

Although the producing party in federal court often pays for the production of their material, for certain “inaccessible” ESI (such as backup tapes), New York federal courts do allow for cost-shifting. The test for allowing cost-shifting is set forth in the seminal Zubulake case and requires the courts to examine the following seven factors: (1) the “extent to which the request is specifically tailored to discover relevant information;” (2) the “availability of such information from other sources;” (3) the “total cost of production, compared to the amount in controversy;” (4) the “total cost of production, compared to the resources available to each party;” (5) the “relative ability of each party to control costs and its incentive to do so;” (6) the “importance of the issues at stake in the litigation;” and (7) the “relative benefits to the parties of obtaining the information.” See also Quinby v. WestLB AG, 245 F.R.D. 94, 101 (S.D.N.Y. 2006) (cost-shifting is appropriate “only when electronic discovery imposes an undue burden or expense on the responding party”).

Several New York state courts, however, reject the Zubulake seven factor cost-shifting approach and generally continue to apply New York’s standard “requester pays” rule. One New York state trial court has held that “cost shifting of electronic discovery is not an issue in New York, since courts have held that, under the CPLR, the party seeking discovery should incur the costs incurred in production of discovery material. . . . The court need only determine whether the material is discoverable and whether the party seeking the discovery is willing to bear the cost of production of the electronic material.” Lipco Elec. Corp. v. ASG Consult. Corp., No. 8775/01, 2004 WL 1949062, at *6, *9 (Sup. Ct. Nassau Co. Aug. 18, 2004). Another New York state trial court held that the requesting party was responsible for the cost of electronic discovery and expressly rejected the cost-shifting analysis performed by New York federal courts. T.A. Ahern Contractors Corp. v. Dormitory Auth. of the State of N.Y., 2009 WL 806779, at *5 (Sup. Ct. New York Co. Mar. 19, 2009) (finding that the requester-pays model provided the proper incentives for parties to avoid “formulat[ing] overly broad discovery requests which have the effect . . . of placing unnecessary and oppressive (even prohibitive) costs upon an opponent”).

Given this rule, New York state court litigators should well consider whether their clients are prepared to pay for the collection and production of inaccessible ESI before making any request for ESI that is likely to be stored only in backup tapes or other hard to search and retrieve locations.


Paul A. Saso is an Associate on the Gibbons E-Discovery Task Force.
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