W. Lawrence Wescott II on Accessibility of and Cost-Shifting for Electronic Data

W. Lawrence Wescott II on Accessibility of and Cost-Shifting for Electronic Data


In the first of the landmark Zubulake opinions, Judge Shira Scheindlin established frameworks for determining accessibility of electronic documents and how the costs of retrieving "inaccessible" documents could be shared. In the third Zubulake opinion, the results of the cost-shifting analysis are described. W. Lawrence Wescott II examines Judge Scheindlin’s modified approach to costshifting and its underpinnings in McPeek v. Ashcroft, 2001 U.S. Dist. LEXIS 12061 (D.D.C. 2001) and Rowe Entertainment, Inc. v. The William Morris Agency, Inc., 2002 U.S. Dist. LEXIS 488 (S.D.N.Y.2002). Mr. Wescott also describes the approach taken by the Federal Rules amendments, examines relevant caselaw, and provides recommendations for counsel. He writes:
 
     The judge first observed that [Fed. R. Civ. P.] . . . 26 required consideration of the amount in controversy and the importance of the issues at stake in the litigation; two factors not included in the Rowe analysis. As the “total cost” factor was inevitably high, these factors would serve to balance it out. She further refined the “parties’ resources” factor to include a focus on the total production costs in comparison to the parties’ resources, observing that “discovery that would be too expensive for one defendant to bear would be a drop in the bucket for another.”
 
     The court also elected to combine the first and second Rowe factors as follows: “the extent to which the request is specifically tailored to discover relevant information.” The fourth factor, “purposes of retention,” was deleted; noting that if data should have been erased and was not, the discoverability of that data is not affected; as long as it is accessible, it should be produced.
 
     The new seven factor test was set forth as follows:
 
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.
 
     The court noted that the factors should not be applied equally. The first and second factors, comprising the “marginal utility” test of McPeek, are most important. The third through fifth factors focus on cost. The “importance of the litigation” factor is rarely important, but has the potential to dominate the analysis. The last factor is rarely important, as requests generally benefit the requesting party.    
 
(footnotes omitted)
 
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