Slipping into a pattern of settling nonmeritorious claims is a soul-trapping experience for many general counsels. With e-discovery costs only making the problem worse, Edgar Allen Poe’s The Raven may ring in an in-house attorney’s ear, with plaintiffs “gently rapping, rapping at my chamber door.” But before burgeoning e-discovery costs cause you to say “nevermore” when contesting a claim, ponder these paths to e-discovery cost-shifting.
Look Beyond Zubulake
In Vaughn, a putative contract dispute class action, the Eastern District of Pennsylvania considered shifting e-discovery costs prior to ruling on class certification. The court identified several unique aspects of the case. First, it was a case of “asymmetrical” discovery, costs would skyrocket if certification was granted and the defendants had already complied with extensive discovery. Additionally, the court noted that discovery was not being conducted solely on the merits of the case, but rather to determine whether certification was appropriate. The court reasoned that if the plaintiffs’ counsel had confidence in certification, “they should have no objection to making an investment.” The court concluded that “where (1) class certification is pending, and (2) the plaintiffs have asked for very extensive discovery, compliance with which will be very expensive, that absent compelling equitable circumstances to the contrary, the plaintiffs should pay for the discovery they seek.” Although the court limited its holding to class actions, the underlying principle is more broadly applicable—“Discovery need not be perfect, but discovery must be fair.” Ultimately, the court shifted all costs despite the fact that the responding party was a large company.