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In re Bristol-Myers Squibb Securities Litigation, 2002 U.S. Dist. LEXIS 13808 (D.N.J.).

A discovery dispute in this class action highlights the differences between production of documents in paper versus electronic form. Noting the advantages of working with electronic documents rather than paper, the court held that parties must disclose if they have documents available in electronic form. The opinion suggests that parties should not expect to impose unnecessary costs on their adversaries by printing electronically stored documents for production.

The dispute in this case began with the plaintiffs' agreement to pay copying costs for documents they requested. Before defendants produced any documents, the plaintiffs unconditionally agreed to pay them ten cents a page for copying. Although the defendants had some documents in electronic form and were scanning others to create electronic images for their own review, they produced everything to plaintiffs in paper form. Per their agreement, they then presented a bill for copying: $308,599.40.

When the plaintiffs raised objections, the defendants asked the court to enforce the agreement. The court noted the opportunity to address "the increasingly common problem of fair allocation of costs associated with discovery in the age of electronic information."

Defendants had not advised plaintiffs that certain documents to be produced were available in electronic form and need not be printed for production. Rather, they simply printed the documents. The defendants pointed out that the plaintiffs had specifically asked for paper—though the court had raised the issue of electronic discovery in a previous conference.

Despite the parties' agreement and the plaintiffs' failure to request documents in electronic form, the court sided with the plaintiffs. It held that Rule 26 required disclosure that documents were available in electronic form. Since the defendants did not mention this option, the court would not require the plaintiffs to pay for paper copies. The plaintiffs, the court held, had not made an informed decision in asking for paper.

Also in dispute was whether the plaintiffs should share the cost of scanning paper documents into digital form. Defendants had chosen to "blow back" paper copies to produce to plaintiffs while scanning digital images for their own review—again, without giving the plaintiffs the choice of paper or electronic production. The defendants argued that if the plaintiffs wanted electronic images of paper documents, they should pay half the cost of scanning them.

The court disagreed. Rule 26 did not require defendants to disclose that they were scanning paper documents. But, the court reasoned, the defendants could have given plaintiffs the choice of form of production. Since they had not, the court would not require plaintiffs both to pay copying costs and to share the cost of scanning. The court commented,
For future reference, the court notes that had the defendants not produced paper discovery first, thereby requiring the Plaintiffs to incur considerable expense, a greater contribution to the cost of scanning might have been appropriate.
The court rejected defendants' contention that they had not disadvantaged plaintiffs by producing paper:
It is beyond dispute that 'documents in digital format can be copied quickly, less expensively, and with better quality.' It is also unquestioned that if 'there are a significant number of documents, and their content must be examined in order to conduct the case competently, the cost of doing whatever is going to be done with these documents will be cheaper in digital format than the manual alternatives.1
The court further noted that, though per-page cost of scanning was greater than per-page cost of copying, the additional costs associated with storing, shipping, and using paper in trial preparation make it "almost always" cheaper to review and produce documents in digital format.

Finally, the court emphasized that counsel would be wise to avoid unnecessary expense and disputes by using the Rule 26 conference to discuss issues associated with electronic discovery.
As the eve of electronic case filing (ECF) is upon us, in this and most other Districts, the production of electronic information should be at the forefront of any discussion of issues involving discovery and trial, including the fair and economical allocation of costs.



1 The court quoted Effective use of Courtroom Technology: A Judge's Guide to Pretrial and Trial 330 (Federal Jud. Ctr. & National Inst. For Trial Advocacy eds., 2001).
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The information contained herein is not intended to provide legal or other professional advice. Applied Discovery encourages you to conduct thorough research on the subject of electronic discovery.