E-Discovery: Shifting the Costs of Compliance


Adrian Felix is an attorney in the Business Litigation & Trade Regulation practice group at Carlton Fields, P.A. in Miami, Florida.  His practice includes complex commercial, franchise, and construction litigation. Mr. Felix is Co-Chair of the YLD Litigation Committee.

The use of and reliance on computers and other electronic media by businesses of all sizes has expanded significantly over the past decade.  As a result, and with the technological advances in data storage, the volume of electronically-stored information (“ESI”) maintained by businesses has ballooned to tremendous levels.  This ever-increasing volume of ESI has made responding to electronic discovery requests an expensive endeavor for large and small companies alike, and can put your client on the defensive from the outset of litigation.

You can protect your client, to an extent, from prohibitive e-discovery costs by moving for a protective order under Rule 26 of the Federal Rules of Civil Procedure.  The general presumption is that the responding party will bear the costs of compliance with e-discovery requests; however, the court can shift those costs to the requesting party if the discovery violates Rule 26’s proportionality test. 

Although determining whether cost-shifting is appropriate requires the court to conduct a case-specific, factual analysis, the steps below should help guide you through the general process of preparing a motion to shift discovery costs in response to a broad e-discovery request.

Part I. Pre-Motion Preparation

You (and your client) need to be familiar with the ‘world’ of ESI kept by your client to successfully shift the costs of e-discovery.  This means you need to learn about where and how your client maintains its ESI by asking your client questions such as:

  • Where its employees work (e.g., in the office, at home, etc.);
  • What types of devices its employees use (e.g., desktops, laptops, VoIP telephones, Blackberry/smartphones, flash drives, etc.);
  • Where it stores emails and other electronic documents (e.g., on individual desktops, a company server, backup tapes, etc.);
  • How it stores emails and other electronic documents (e.g., archive system, data-management program, Outlook, etc.);
  • Whether it maintains one central server or multiple servers; and,
  • What is its electronic document retention policy.

Once you have gathered the above information, you and your client should discuss the burden of complying with the requested e-discovery in terms of the estimated manpower, time, and cost it would take to conduct a full search of your client’s ESI.  This information should then be summarized and incorporated into an affidavit from your client in support of your motion to shift costs. 

In addition to the foregoing estimates, you will want to obtain hard or actual numbers and examples that can be used to further support your motion.  This can be done by conducting sample searches based on the full scope of the proposed discovery.   For example, if your client has multiple servers or backup tapes, you should conduct a search of one server (or a portion thereof), or two or more of the backup tapes, for responsive documents.  During the sample search, you should keep track of the following:

  • the actual cost, time, and manpower required to conduct the search;
  • the total volume of data or number of files after each processing step (i.e., de-duplicating, filtering, and keyword searching);
  • the cull rate (i.e., the percentage of files/documents removed by the processing steps);
  • the total number of documents reviewed (this should be all the documents remaining after the processing steps);
  • the total number of documents found to be responsive; and,
  • the total number of documents found to be “highly-relevant” to the litigation (i.e., provide direct evidence of the claims and allegations being litigated). 

You can then extrapolate the actual numbers from the sample search to estimate what it would take to conduct a full search.   This process may require you to retain an e-discovery vendor at an early stage (especially where backup tapes are concerned).  Be prepared to explain how (and possibly why) you selected the e-discovery vendor used.

Once you have completed the sample search, the information tracked during the search should be summarized and incorporated into affidavits from your e-discovery vendor (or other IT personnel in charge of processing the ESI) and the attorney overseeing or performing the review of the processed documents.

Part II. Drafting Your Motion

Provide Background Information

The first part of your motion should provide the court with a short summary of the requested e-discovery, your objections thereto, and the steps you took to resolve the discovery dispute before filing your motion.  In addition, you should discuss the facts supporting your motion to shift costs, including the estimated manpower, time, and cost of complying with the e-discovery request and an overview of the results of your sample search (as detailed in the supporting affidavits discussed in Part I).

Demonstrate ‘Good Cause’

Rule 26 provides that, upon a showing of good cause, a court may issue a protective order to protect a party from whom discovery is sought.  ‘Good cause’ exists where the burden and expense of compliance with the proposed discovery outweighs its likely benefit.  Thus, before you get to cost-shifting, you must demonstrate to the court how the requested discovery is unduly burdensome or expensive. 

There are two approaches to showing undue burden or expense.  The primary approach is to show that your client’s electronic documents are kept in an inaccessible format (e.g., on disaster recovery tapes).  Federal courts have found that the production of documents kept in an inaccessible format is presumptively burdensome and expensive.  The second approach is to show that it would take an inordinate amount of time, manpower, and expense for your client to retrieve the requested documents. 

The factual support for either approach should come from the affidavit from your client discussed above in Part I.

Discuss the Zubulake Factors  

Once you demonstrate that the discovery sought is unduly burdensome and expensive, the burden shifts to the requesting party to show that good cause exists for its production in light of the limitations of Rule 26(b)(2)(C).  Assuming the requesting party meets its burden, the court may still allow the discovery but must limit the scope thereof if the proposed discovery violates the proportionality test of Rule 26(b)(2)(C)(iii). 

Therefore, the next part of your motion should analyze the proposed e-discovery in terms of the seven factors set forth in Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. 2003), which is considered the leading approach in determining whether an e-discovery request violates the proportionality test.   The seven factors, in order of importance, are as follows:

The Benefit Factors (The Marginal Utility Test)

(1)   The extent to which the Requests are specifically tailored to discover relevant information

(2)   The availability of such information from other sources

The Cost Factors

(3)   The 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

The Remaining Factors

(6)   The importance of the issues at stake in the litigation

(7)   The relative benefits to the Parties of obtaining the information

Use the information from the affidavits, discussed above in Part I, to support your analysis of the above factors.  At the end of the discussion of each of factor, conclude whether that factor favors, disfavors, or is neutral as to cost-shifting.     

Summarize the Zubulake Factors

Once you have analyzed each of the Zubulake factors, review which and how many of the factors weigh in favor, against, and are neutral as to cost-shifting.  The more factors that weigh in favor of cost-shifting, the greater the percentage of the discovery costs you can argue should be shifted to the requesting party.  Similarly, the more factors that weigh against cost-shifting, the lesser the percentage of the discovery costs, if any, you can argue should be shifted.  Keep in mind that the presumption remains that the responding party pays for its own discovery costs, so it is unlikely you can shift all the costs of the e-discovery.

It is helpful in summarizing the factors to review the various court decisions where cost-shifting was granted and discuss how those decisions compare to your case. This will help give the court some context and basis for any percentage of the e-discovery costs that are shifted.

Conclude Your Argument

Finally, you should end your motion with a short conclusion detailing why your client is entitled to the requested relief by recapping your argument.


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