Facts
- A consumer brought a putative class action under the Fair Debt Collection Practices Act (FDCPA) and New York law against a credit-card servicer and a third-party collector.
- The consumer alleged that a “Pre-Legal Notice” was deceptive and omitted required disclosures, and sought evidence that the third-party collector was responsible for or involved in the notice.
- During discovery, the servicer answered 25 interrogatories, responded to 43 document demands, produced about 1,500 pages of documents, and presented a Rule 30(b)(6) witness.
- The collector produced about 400 pages of emails and designated a Rule 30(b)(6) witness.
- The consumer moved to compel additional electronically stored information (ESI), seeking broad keyword searches of numerous email accounts and forensic searches of specified hard-drive files.
- Defendants sought a protective order, arguing the requested ESI was unduly burdensome and disproportionate; the servicer presented evidence that compliance could cost more than $5 million.
Issues
- Whether Rule 26 required defendants to conduct broad, keyword-based searches across dozens of custodial email accounts and specified hard-drive locations, or whether the requests were disproportionate under Rule 26(b)(2)(C).
- Whether, given the projected burden and expense of additional ESI, the court should condition any further production on the requesting party paying some or all associated costs under Rule 26(c).
Decision
- The court denied the motion to compel the requested additional ESI searches.
- The court granted, in substantial part, defendants’ motion for a protective order relieving them of the proposed sweeping ESI searches.
- The court indicated that the requesting party could seek renewed, more tailored ESI discovery, and that production could be conditioned on the requesting party bearing the costs.
Legal Principles
- Discovery is limited to matter relevant to claims or defenses and may be curtailed when the burden or expense outweighs the likely benefit. Fed. R. Civ. P. 26(b)(1), 26(b)(2)(C).
- A court may issue a protective order to prevent undue burden or expense and may condition discovery on specified terms, including payment of costs. Fed. R. Civ. P. 26(c).
- The default rule is that the responding party bears discovery costs, but cost-shifting may be appropriate when requested ESI is expensive to retrieve and of marginal utility, particularly where retrieval requires restoration or searching of less accessible sources.
- In evaluating proportionality for ESI, courts consider prior production, the incremental value of the requested material, the number of custodians and breadth of search terms, the accessibility of data sources, and the expected cost relative to the case.
Conclusion
Applying Rule 26 proportionality limits, the court refused to compel expansive, keyword-driven ESI searches that were likely to yield only limited additional relevant information at extraordinary cost, granted a protective order against the requests as framed, and left open targeted renewed requests that could be conditioned on cost-shifting.