High Voltage Beverages LLC v. The Coca-Cola Company, 2009 WL 2915026 (W.D.N.C. Sept. 8, 2009) [Link to decision via Google Scholar]
Several of our prior blog posts [e.g., here and here] have addressed how Rule 26’s proportionality principles can be used to control a party’s ediscovery costs. As we explained in one of those posts, because Rule 26(b)(2)(c) applies to all discovery requests, its proportionality standard potentially can be applied even to sources of electronic information that are reasonably accessible, so long as the burden or expense of the proposed discovery outweighs its likely benefit. And with the ABA reporting “Electronic discovery should be proportionate to [the] controversy,” we thought today would be a good time to post about a decision that applied Rule 26’s proportionality standard to a source of electronic information that was “reasonably accessible.” Addressing what it characterized as “a novel question,” the court in High Voltage Beverages granted the defendant’s request for a protective order under Rule to 26(b)(2)(c).
After the defendant produced 1.7 million pages of documents, plaintiff demanded that it search for alternative sources of documents relating to defendant’s investigation and selection of its VAULT mark. In response, defendant identified an additional 17 gigabytes (1.5 million pages) of documents from a senior executive which had been retained under litigation holds issued in unrelated lawsuits. Defendant did not object to producing that data, but because defendant believed it produced every document related to the clearance of its VAULT mark, defendant objected to incurring the cost of reviewing the documents. Defendant offered plaintiff the opportunity to key-word search the documents and plaintiff refused. In its request for a protective order, defendant explained that a de novo review of the 17 gigabytes of data would not result in the discovery of any documents that have not already been produced.
The court in High Voltage Beverages accepted the defendant’s representation that it had produced all documents in its possession concerning the VAULT mark and concluded the time and expense of reviewing the documents would be extraordinary. Thus, the court concluded that the burden and expense of the requested discovery outweighed its likely benefit and held the defendant did not have to review the data before producing it to the plaintiff. Therefore, the court denied plaintiff’s motion to compel and granted defendant’s motion for a Rule 26 protective order. It did require that defendant to again extend the opportunity to key-word search the documents prior to their production.
So the moral of the story is do not overlook Rule 26(b)(2)(c) cost-shifting arguments where appropriate. With the growing chorus that ediscovery costs are harming our civil justice system, courts are more likely to favorably consider Rule 26 cost-shifting arguments. Rule 26(b)(2)(c)’s proportionality standard can provide an effective tool to control your ediscovery costs.Leave a Comment »