On January 2, 2024, Justice Ruchelsman of the Kings County Commercial Division issued a decision in Joseph v. Rassi, 2024 NY Slip Op. 30101(U), ordering the plaintiff and defendant to share the cost of ESI production, explaining:
First, the plaintiff has moved seeking to compel the production of all text messages of the defendants relevant to this lawsuit. The defendants do not really deny the relevance of the text messages they possess but oppose that request, essentially, on the grounds the production of text messages for eight devices preserved by the defendants would be prohibitively expensive and could cost almost $50,000. The plaintiff rejects that basis for denial of the discovery.
In one of the earliest New York cases dealing with ESI the court noted that electronic discovery raises a series of issues that were never envisioned by the drafters of the CPLR. Nevertheless, courts in New York, other states and the Federal courts have crafted guidelines and rules to govern discovery for ESI. Thus, Federal Rule of Civil Procedure §26 (b) (2) (B) amended in 2006 states that a party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. In Chen Oster v. Goldman, Sachs & Co., 285 F.R.D. 294 [S.D.N.Y. 2012] the court held, based upon the advisory committee notes to the amendments, that the undue burden or costs relate to the accessibility of the ESI not the cost of production. The court explained that for example, the sheer volume of data may make its production expensive, but that alone does not bring it within the scope of Rule 26(b) (2)(B). Rather, the cost or burden must be associated with some technological feature that inhibits accessibility. This comports with the presumption enunciated by the Supreme Court that the responding party must bear the expense of complying with discovery requests. Thus, early cases rejected cost shifting on the ‘basis of undue burden. As one court observed in a design defect case against General Motors the mere fact that producing documents would be burdensome and expensive and would interfere with a party’s normal operations is not inherently a reason to refuse an otherwise legitimate discovery request.
However, recently courts have adopted a more favorable approach to cost shifting. As one court recently explained, where the cost of producing documents is very significant, the Court has the power to allocate the cost of discovery, and doing so is fair. If Plaintiffs’ counsel has confidence in the merits of its case, they should not object to making an investment in the cost of securing documents from Defendant and sharing costs with Defendant.
Turning to New York, courts generally require the party to produce all relevant ESI regardless of the costs involved. However, the court is not insensitive to the cost entailed in electronic discovery, and would, at the appropriate juncture, entertain an application by defendants to obligate plaintiff, the requesting party, to absorb all or a part of the cost of the e-discovery it seeks, or will seek. Indeed, the Commercial Division Rules contain an appendix concerning guidelines for the discovery of ESI. The guidelines explain that while generally the costs of production fall upon the responding party however, where the court determines the request constitutes an undue burden or expense on the responding party, the court may exercise its broad discretion to permit the shifting of costs between the parties. The guidelines enumerate seven factors the court should consider before determining whether cost sharing is appropriate. They include whether the request is tailored to discover relevant information, whether information is available from other sources, the cost of production in relation to the amount of controversy in the case, the cost of production compared to the amount in controversy as well as the resources of the parties, the ability to control the costs and the importance and benefits of the information sought. Thus, when considering any cost shifting or cost sharing the party seeking to defray the costs must present evidence of the actual costs involved. The defendants have submitted an affidavit from Daniel Generosa, the president of an e-discovery, litigation support, and legal technology consulting firm, who explains that the costs of producing the texts sought would be between $30,000 and $50,000. The plaintiff produced an affidavit from Robert Fried a senior vice-president of an eDiscovery, litigation support, and legal technology company, who disputed the conclusions of Mr. Generosa and concluded the total cost of the text messages sought would be approximately between $9,100 and $18,200. The court cannot evaluate whether the wide discrepancy in price is due to factors other than the fact one is significantly more expensive than the other. In any event, after carefully reviewing all the criteria regarding the costs of ESI the court hereby orders the parties to equally share such costs. The parties may meet and confer and select an expert together. Of course, any cost sharing only concerns the retrieval costs involved. The costs of reviewing the relevance of such texts is the responsibility of the producing party.
(Internal quotations and citations omitted).