eDiscovery Daily Blog

eDiscovery Case Law: Defendants Not Required to Share Costs for Plaintiff’s Third Party Request

 

After recapping 2011 case law over four days last week, it seems appropriate to move on to new cases, starting with a couple of stragglers from last year.

In Last Atlantis Capital LLC v. AGS Specialist Partners, No. 04 C 0397, 2011 WL 6097769 (N.D. Ill. Dec. 5, 2011), the plaintiffs proposed that the defendants share in the cost of obtaining data that Plaintiffs subpoenaed from third parties.  The court noted that all parties “involved herein are aware that the linchpin of this entire matter” was to obtain this audit trail data for analysis.  The court had also previously suggested (at a September status conference) “in an effort to accelerate this protracted litigation” that it would be “reasonable” for Defendants to aid in half the costs.  Nonetheless, the court rejected the plaintiff’s proposal for cost-sharing in this case, rejecting the plaintiff arguments for doing so.  Here are the arguments and the court’s rejection of each:

  • Court's comments during the September Status Conference as evidence that costs should be shared: While the court admitted to suggesting to Defendants that Plaintiffs' proposal of cost sharing sounded “reasonable”, those comments “were made to encourage movement within this stagnant litigation”.  Once the Court was able to further research the precedent surrounding cost-sharing, it found no basis for accepting the Plaintiffs' cost-sharing proposal.
  • Plaintiffs' reliance upon the Sedona Conference Commentary on Non–Party Production & Rule 45 Subpoenas, 9 Sedona Conf. J. 197 (2008): The court felt that this Sedona Conference Commentary was “almost entirely irrelevant” to the matter at hand  as it “is largely concerned with the burden being placed on a non-party to produce information”.  Despite the fact that the Commentary “includes a suggestion that parties meet and confer to ‘address’ cost-sharing, amongst other things, in their initial Rule 26(f) conference”, it did not dictate such an arrangement; rather, the Commentary declares that “[c]ost-shifting or cost-sharing are inconsistent with the so-called ‘American Rule’ that each party bears its own litigation costs”.
  • Other Court Opinions: The plaintiffs cited several court opinions – such as Wiginton v. CB Richard Ellis, Inc., 229 F.R.D. 568, 573 (N.D.Ill.2004) and Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 320 (S.D.N.Y.2003) – to attempt to bolster their argument.  However, the court noted that all of the court opinions “miss the mark as they each address the issue of cost-sharing amongst the requesting party and the producing party, not between a requesting party and a non-requesting, non-producing opponent in the underlying litigation, such as with Defendants.”

The court acknowledged that the defendants had “substantially more resources,” but noted that was a fact it could not consider.  Therefore, the court ruled that “it would not force Defendants to pay for the evidence that Plaintiffs need in order to prove their case against Defendants” and the plaintiffs’ proposal for cost-shifting was denied.

So, what do you think?  Should the defendant have been required to share in the costs?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

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