Is eDiscovery Cost Shifting Appropriate Prior to Class Action Certification?
Recently in Boeynaems v. LA Fitness, No. 10-2326 (E.D.P.A. August 16, 2012), the federal district court in the Eastern District of Pennsylvania addressed an issue apparently one of first impression – whether cost-shifting to plaintiffs related to pre-class certification discovery, including ESI discovery, was appropriate.
Plaintiffs alleged the defendant national fitness chain was engaged in deception and breach of contract regarding termination of the plaintiffs’ memberships under federal and state consumer protection laws. After initial defense discovery productions, Plaintiffs sought additional discovery including further ESI and filed a motion to compel. In response, defendants claimed the additional discovery was unduly burdensome and sought a cost-shifting order for the additional discovery Plaintiffs’ counsel alleged was necessary for class certification.
While the Court went into various discussions including the so-called asymmetry of discovery cost burdens on plaintiffs versus defendants in class cases where the volume of defense production typically exceeds the plaintiff ESI production, the increases in economic pressures on defendants in terms of damages once a class is certified, and even the success and financial ability of plaintiffs’ counsel, the ruling appeared to turn on the fact Plaintiffs had already amassed a very large set of documents that was probative to class certification issues. Accordingly, if Plaintiffs needed additional discovery, including the ESI, Plaintiffs should be required pay for the cost of the additional discovery going forward. The Court ended its order by stating that settlement should not be forced upon the parties as a result of litigation costs and but rather should be determined by the merits of the case.
However, this can work both ways – the risk of cost-shifting the defense production prior to class certification has the potential to close the courthouse door to future plaintiffs if neither they nor their lawyers can front the cost of discovery.