The Price of Discovery in New York Courts

'Requester pays' rule may not be ironclad, but lawyers should take advantage of it whenever possible

Under New York law, litigants bear the burden of financing their own lawsuits, and parties seeking discovery of documents assume the costs associated with the opposition's production.[FOOTNOTE 1] Nonetheless, parties rarely or too infrequently seek reimbursement of significant e-discovery costs.
Attribute this, perhaps, to e-discovery anxiety, oversight or even an inability to navigate the process. This situation is also likely a result of corporate defendants' experience in federal court, where costs are typically borne by the responding party.

However, "the concerns prompting allocation of production costs in federal court are not implicated in [New York] state court" because "[u]nlike a party seeking electronic discovery in federal court, a state court litigant has a strong incentive to formulate its discovery requests in a manner as minimally burdensome as possible, since the litigant will bear the costs of production." T.A. Ahern Contractors Corp. v. Dormitory Auth., 875 N.Y.S.2d 862, 868 (Sup. Ct. 2009).

At this point in the evolution of e-discovery-centric litigation, counsel should be prepared to use electronic discovery as a strategic device. In addition to saving clients' money, cost allocation under New York law can be used as leverage against your opponents and to beat back overreaching discovery demands.

Practitioners should strongly consider highlighting e-discovery issues as a focal point at the initial stages of litigation (or even pre-litigation), so they are prepared to seize opportunities at the initial discovery conference and to demand payment of reimbursable costs with accompanying documentation at the time of production. Rule 8(b), for example, of the Rules of Practice for the Commercial Division of the New York Supreme Courts is geared toward such forward thinking.

The rule requires that prior to the preliminary conference, counsel for all parties confer concerning anticipated e-discovery issues, including to address the "anticipated cost of data recovery and proposed initial allocation of such costs." Rule 8(b)(iv).[FOOTNOTE 2] This rule arises from statewide amendments to the Uniform Rules of the New York Trial Courts concerning preliminary conferences, providing that the court may establish "the method and scope of any electronic discovery" at the preliminary conference, including the "anticipated cost of data recovery and proposed initial allocation of such cost." N.Y. Comp. Codes R. & Regs. tit. 22, §202.12(c)(3)(f) (2009).

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Source: Law.com
By: Michael C. Miller, Evan Glassman and Anthony Onorato