Bailey v. Brookdale Univ. Hosp. Med. Ctr., No. C 16-2195 (ADS) (AKT), 2017 WL 2616957 (E.D.N.Y. June 16, 2017).
In this employment discrimination case, the judge shifted the costs of the plaintiff’s discovery production because counsel did not meaningfully consult with his client before entering a relatively expensive agreed discovery order.
Lloyd Bailey, the plaintiff, sued his former employer, Brookdale University Medical Center (“Brookdale”), alleging that it discriminated against him. The suit cited that Brookdale violated Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and various state laws.
In August 2016, at the initial discovery conference, the court ordered counsel to agree on how to produce electronically stored information (ESI). Counsel subsequently “submitted a fully executed ESI Agreement” that the court entered as an order.
In January 2017, at a discovery status conference, “an issue arose” regarding the agreement. Bailey’s attorney argued that it was “unduly burdensome and costly for the sole plaintiff” to produce ESI according to the agreed terms. The court found Bailey’s “buyer’s remorse … unpersuasive” but directed Bailey’s attorney to obtain a cost estimate for the production. Bailey’s attorney estimated that the ESI discovery would cost $2,000 to $3,000, which he argued would be a “severe financial hardship” for Bailey.
The court first considered Federal Rule of Civil Procedure 34, under which “the general rule is that the responding party bears all” the cost of production. However, “under limited circumstances,” the court can shift the costs of ESI production to the requesting party. As established in Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003), “court[s] should consider cost-shifting only when electronic data is relatively inaccessible.” Here, the court rejected shifting the costs because no facts showed that the ESI sought was inaccessible.
But “this [was] not the end of the inquiry” for Bailey’s situation. The court continued its analysis, noting that Rule 26(f) “requires that the parties meet and confer” about discovery. In those meetings, the parties’ cooperation in establishing discovery parameters is of “paramount importance.” Unfortunately, the ESI agreement adopted here was better suited “for use in corporate settings” than in a single-plaintiff discrimination case.
The court found that it could “reach no other conclusion except that [Bailey’s] counsel did not engage in meaningful discussions with his client” prior to entering the discovery agreement. Further, Bailey’s “counsel did not engage in a meaningful meet-and-confer session with opposing counsel,” which drafted the agreement. He also failed to review the agreement before signing it. Bailey’s counsel effectively “placed his client in the position of having to abide by an Agreement which … appears overly complex” in light of his claims.
The court concluded that there was no compelling reason to rescind the agreement but that “partial cost-shifting” would be appropriate. The court therefore ordered Brookdale to pay 40% of the cost of production. Bailey’s attorney would cover the remaining 60%.
Takeaways on shifting discovery costs
It shouldn’t need to be said, but always read anything you sign carefully, considering its impact on your client’s case. Be sure to allow time for “meaningful” consultation with your clients and with opposing counsel. Negotiate terms that are in your client’s interests. Consider documenting discussions with clients so that they cannot later argue that they were unaware of issues.