Cost Shifting Request Rejected

Cost Shifting Request Rejected by Court for Redoing Production: eDiscovery Case Law

In Carl Zeiss Meditec, Inc. v. Topcon Med. Sys., Inc., No. 19-cv-04162-SBA(LB) (N.D. Cal. July 1, 2022), the defendant’s cost shifting request was rejected by California Magistrate Judge Laurel Beeler for redoing a production where attachments were originally produced separately from emails (among other rulings).

Case Discussion

In this case involving claims of misappropriation of trade secrets, the parties brought three disputes before the court. One of the disputes regarded a request by the defendant to shift the cost of attorney’s fees for redoing a production where source files that are attachments to emails were separated in a production by the defendant.

The employee defendants produced documents in their possession to the plaintiff, which reviewed the documents and selected target files. The defendant then ran the files on its system with a hash-value comparison and unique search strings, and the plaintiff was allowed to verify the searches at its own expense with its own vendor.

The plaintiff hired a vendor which ran search strings and hash-value searches on the defendant’s data to create a set of source files, which it then gave those source files and metadata to defendant’s counsel, who reviewed the documents for privilege, and then produced non-privileged responsive documents, including the files and metadata, to the plaintiff.

The plaintiff identified over two thousand source files that are attachments to emails. The defendant contended that the plaintiff’s vendor separated the source files (i.e. email attachments) from the parent emails when creating the production set of source files, stating: “The production of the parent emails could have been done earlier and cost-effectively, if [the] Zeiss vendor did not split up the family files.”

As a result, the defendant resisted the plaintiff’s demand that the defendant “redo part of the forensic production related to parent emails that Zeiss’s vendor separated from the source files (i.e., review the source files and parent emails and produce them” unless the plaintiff paid for the additional discovery costs (about $40,000) incurred by performing a privilege review of the 6,500 parent emails and their attachments. The defendant argued that “the need to redo the production was caused by Zeiss,” and therefore the plaintiff should pay the additional costs.

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Judge’s Ruling

Judge Beeler stated: “Topcon was required, under the ESI Protocol, to produce all metadata, including family files. There is no dispute that Zeiss is entitled to the source files, but on this record, it is not clear how Zeiss could have avoided the costs or whether the costs are duplicative. The court denies the request for fees without prejudice and orders Topcon to review and produce the files.” So, the defendant’s cost shifting request was rejected by Judge Beeler.

So, what do you think? Are you surprised that defendant’s cost shifting request was rejected, given that the plaintiff’s vendor may have been at least partly responsible for the issue? Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant, an Affinity partner of eDiscovery Today.

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