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When Does Respondent Pay for Inaccessible Data?
For those arguing over the production of inaccessible Electronically Stored Information (ESI), the decision Peskoff v Faber, 2008 WL 2649506 (D.D.C) found in favor of the requester—at least in that case. In Peskoff, a forensic examination of a hard drive to recover inaccessible ESI was required. The question was who pays.
Generally, when a production involves inaccessible ESI, the cost of production can be shifted to the requester or even avoided entirely. In this case, however, the costs of the examination were deemed the producer’s responsibility.
In reaching its decision the Court examined the provisions of Rule 26 regarding the permissibility of the request as well as an assessment of whether the Respondent would suffer undue burden and expense when producing the data.
Rule 26(b)(2)(C) limits otherwise permissible discovery if the court determines that:
- the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive;
- the party seeking discovery has had ample opportunity to obtain the information sought; or
- the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.
In this case, the Court determined that the information sought was highly relevant, not duplicative, and could not be obtained from other sources. In addition, the Court found that the costs for the examination of $33,000 were significantly less than the potential outcome considering that the Plaintiff’s demands were $2.5 million.
The Court also considered the prospect of cost shifting. In the past, cost shifting was nearly automatic when producing ESI.
In more recent times, however, the production of ESI has returned to the same status as other data productions. In other words, it is generally presumed that the producing party will bare its own cost of production even for ESI.
Of course, the Court has the discretion to shift the costs of production to the requesting party; however, this should only be considered when the request is for inaccessible ESI. In this case, the Court considered whether the cost of conducting the forensic examination should be shifted to the requester, since it involved inaccessible data. The Court determined that the costs should not be shifted because the need for the forensic examination was directly attributable to the Respondent’s actions and inactions to preserve ESI.
There were several facts influencing the Court’s decision. First, the Respondent had previously employed inadequate searching techniques. Specifically, the Respondent did not search all potentially relevant media. The search results contained obvious chronological gaps and searches requested by the Court were not performed.
Second, the Respondent failed to de-activate network maintenance tools that delete ESI. Specifically, the Respondent failed to archive e-mails and failed to preserve backup tapes by removing them from rotation. As a result, potentially relevant evidence had been deleted and now the only prospect for its recovery was through forensic examination.
Third, no explanation of these failures was provided by the Respondent nor were any explanations of the procedures actually employed provided by the Respondent.
This recent decision in Peskoff v Faber is only one of many in this particular case. The entire line of decisions is interesting in their reasoning and the manner in which ESI production is reconciled with long established production precedent.
It will be interesting to watch this case and learn the outcome of the forensic examination. If the data are recovered, will forensic exams provide an alternative to sanctions? If the data are not recovered, will the exam confirm their necessity?