Message to eDiscovery Defendants: Pay-As-You-Go

As reported by law.com, some companies believe that it’s a waste of time and money to proactively prepare for eDiscovery requests, since they can simply shift the costs of any such requests to whoever wants them.

Some companies are dead wrong.

And that’s the harsh reality that the defendants in Silverman v. Shaoul are facing, now that a New York Judge has ruled they must pay $67,000 in eDiscovery costs, which they wrongly assumed would be borne by the plaintiffs.

The issue revolves around a letter that the defendants’ lawyer sent to the plaintiffs shortly after their lawsuit was filed. The letter informed the plaintiffs that they had an “obligation to pay for costs incurred by [the defendants] in producing electronic discovery.” The letter also told the plaintiffs that they had two days to respond – an invitation they didn’t accept.

Fast-forward 7,000 electronic documents later, and the defendants sent the plaintiffs a bill for a tidy $67,000, claiming that the plaintiffs’ non-response was tantamount to accepting its terms.

It was an argument that Manhattan Supreme Court Justice Eileen Bransten didn’t buy. “Plaintiffs’ silence and subsequent conduct were neither deceptive nor beguiling,” wrote the Judge in her ruling.

The moral to this cautionary tale goes far beyond letter etiquette and protocol. It goes to how companies must have an eDiscovery process in place that allows them to efficiently and cost effectively produce documents on demand (or, at least, in a timeframe that the courts deem reasonable).

Because they can’t assume that someone else will foot that bill — regardless of who’s suing who.