What is “Inaccessible” ESI and How Does it Affect Costs?
The basics definition of inaccessible ESI (electronically stored information) is data that must be restored, de-fragmented or reconstructed for production. This affects the costs for electronic discovery as cost-shifting becomes a possibility only if the party first establishes the ESI is inaccessible.
In Cochran v. Caldera Medical, Inc., Civil Action No. 12-5109, (E.D.Penn. April 22, 2014), Defendant moved for an Order requiring Plaintiff to equally pay for the ESI defense production. Defendant in this case is a manufacturer of transvaginal mesh, and it had 1,709 claims pending against it. However, the above-styled case is the only one where discovery was ongoing. Defendant claimed it had limited resources and therefore sought an Order for Plaintiff was to pay for half the ESI production costs.
The court cited the general rule in civil litigation that each party is to bear its own production costs. Federal Rule 26(b)(2)(B) is the rule that discusses inaccessible ESI: “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or costs…” Parties seeking cost shifting under this rule must demonstrate good cause.
The rule has been further interpreted in case law to mean that prior to any cost-shifting order, the party must demonstrate that the electronic data sought is inaccessible. Here, Defendant did not even attempt such a showing. The court offered examples of inaccessible ESI: back-up tapes and erased, fragmented or damaged data are the most common examples. As no showing was made, the court could not distinguish what costs might be attributed to producing accessible data or privilege review (neither of which tasks would generally be subject to cost-shifting.)
The court also discusses Rule 26(b)(2)(C)(iii), where cost-shifting is allowed for accessible ESI if the burden or expense of discovery outweighs its potential benefit (also known as the proportionality rule.) The court found the plaintiff discovery requests and the need for the ESI outweighed the burden to Defendant. Therefore, Defendant’s motion for cost-shifting was denied.