The reality of cost-shifting is that it is not always available to a responding party. In order to manage risk associated with the cost of electronic discovery, legal counsel should be aware of circumstances where responding parties have received the benefit of a cost-shifting analysis and conversely, where it has been denied.
Courts do not want responding parties to pay for a plaintiff's fishing expedition. Therefore, courts may shift costs to the requesting party as an incentive to narrowly tailor the discovery request where there is a low likelihood that discovery will produce relevant evidence. Delta Financial Corp. v. Morrison, 13 Misc. 3d 604, 611-12, 819 N.Y.S.2d 908 (Sup 2006) (ordering requesting party to pay expenses of searching restored backup tapes for e-mail and electronic documents because the Court was "not entirely convinced that relevant and responsive documents would be found").
Courts employ cost shifting to protect the producing party from undue burden. Therefore, courts weigh the benefit of discovery versus the burden under the proportionality test of Rule 26(b)(2)(C). Thus, even where the plaintiff is not fishing and the evidence will be beneficial to disposing of the issues, courts may limit discovery or employ cost-shifting if the burden to produce the requested data is disproportionately higher than the benefit. Christian v. Central Record Service, 2007 WL 3094513 (W.D. Ark. 2007) (relevant evidence was precluded from discovery when the expense of discovery outweighed the benefit).
Moreover, notwithstanding the legal analysis, responding parties have been denied the benefit of cost-shifting after engaging in deceptive practices. Wachtel v. Guardian Life Ins. Co., 239 F.R.D. 376, 67 Fed. R. Serv. 3d 1 (D.N.J. 2006) (court rejected defendant's request to shift cost of restoring and producing e-mail from its backup tapes because of defendant's continued discovery misconduct).
Finally, legal counsel should remember that even if cost-shifting is permitted, only direct costs of restoration will be obtainable. Therefore, responding parties should consider the resources and costs required for restoration and production up front and plan accordingly. Semsroth v. City of Witchita, 239 F.R.D. 630 (court rejected the responding party's argument that additional time to review email after it is retrieved is subject to cost-shifting).
As a practical matter, it is only possible to obtain the benefit of a cost-shifting analysis by courts when records are considered to be inaccessible. Upon a finding of inaccessibility, courts will likely shift costs to the requesting party where it is unclear whether the requested data will be beneficial to resolving the issues. Moreover, even where there is a benefit, courts will protect the producing party from undue burden by shifting costs where the expense and burden of producing the data outweigh the benefit of the evidence. However, legal counsel should remember that even where the legal analysis militates in favor of the responding party, courts limit cost-shifting to the direct costs of discovery and deny recovery where responding parties use deceptive practices.