FEDERAL Rule of Civil Procedure 34 has permitted discovery of electronic information since 1970, but the volume of electronic documents has grown exponentially during the Internet revolution in which we live. (1) Today, the vast majority of documents exist in the form of emails, word processing documents, or spreadheets, and one estimate indicates that ninety-five percent of all documents are now created electronically. (2) In 2004, an estimated thirty billion emails were sent daily, and in 2006, the number is expected to double. Because digitally-stored data takes up significantly less space than paper, over seventy percent of electronic information is currently stored on laptops, cell phones, voice mail servers, personal digital assistants (PDAs), and backup tapes rather than in document warehouses.
Computerized data is discoverable if it is relevant. (3) Discovery of electronic documents is a relatively simple matter when the information requested is readily accessible. However, discovery becomes problematic when electronic information is no longer available by merely recalling it, but requires special programming tools or experts to extract it from its stored location into a useable format. The cost of identifying, gathering, reviewing for privilege, and producing electronic documents is high. For example, in one case, the cost of recovering data was estimated at $9.75 million. (4) These astronomical expenses stem from the sheer magnitude and redundancy of data on backup tapes. (5)
Prior to the dominance of today's computer age, cost sharing in discovery was not a very dynamic topic. Several cases had addressed the issue, creating a solid body of common law from which to draw guidelines. Now, however, technology has created new paradigms for discovery, and it is redefining modern litigation strategies and tactics. The scope of electronically recorded information is considerably broader than most people recognize. (6) This process is evolving rapidly as new technologies, their use, misuse, and abuse give rise to new causes of action and remedies. Because of the potential costs associated with many electronic discovery requests, cost-shifting is one of the most hotly contested issues in electronic discovery.
The issue regarding who pays for electronic discovery is unsettled, inconsistent, and highly case-specific. (7) Several judicial approaches have been applied to decide whether the cost of production is shifted to the requesting party. The law of electronic discovery is beginning to emerge, but most issues are so unexplored that judges must still develops the majority of the law in this area. (8) Electronic discovery technology is developing faster than the law of electronic discovery, and it is likely that electronic discovery issues presented to courts will outpace prior judicial decisions. Although the endpoint of the process is unknown, recent court decisions provide some guidance on electronic discovery planning.
This article examines the legal framework that has been used historically to allocate discovery costs and recent cases that address the issue of electronic discovery. The article also compares and summarizes significant judicial holdings and factors analyzed in the courts' cost-shifting analysis and concludes with an overview of emerging trends and best practices in discovery planning.
I. Principles of Discovery
Under the federal discovery rules, the general presumption requires the responding party to bear the expense of complying with discovery requests. The responding party may invoke the district court's discretion to grant orders protecting the responding party upon a showing of "oppression" or "undue burden or expense." The court may then shift all or part of the cost to the requesting party. (9) On the other hand, the responding party cannot attempt to hide a needle in a haystack by mingling responsive documents within numerous non-responsive documents. …