Who Pays for the Production of Electronic Discovery? SPM Resorts, Inc. v. Diamond Resorts Management, Inc.
We are often asked when defending litigation, "Who pays for the production of electronic discovery?" The response depends on the forum, however, frequently the answer has been, "YOU do." Occasionally, the parties agree to split the cost of the production, including that of an outside vendor if appropriate. More frequently the result was objections and motions to compel followed by hearings (read: "expensive") leading to a result with which no one was happy.
Last week, Florida's Fifth District Court of Appeal in SPM Resorts, Inc. v. Diamond Resorts Management, Inc. 2011 WL 2650893, __ So. 3d __ (Fla. 5th DCA 2011), held that the cost of an outside vendor should be borne by the requesting party, not the responding party. The plaintiff furnished a request for production of documents, including electronic discovery, and sought to have 50% of the costs of an outside vendor reimbursed by the defendant. The Court unambiguously rejected the position and held that if the requesting party necessitates an outside vendor to assist in procuring electronic data, the requesting party should pay for the entire cost of the vendor. It often makes sense to retain a vendor to assist in producing documents, but cost splitting will not be unilaterally mandated by the state courts in Florida.
As such, both parties in a dispute should be mindful of the costs associated with the document production they seek. More than ever, proportionality and cooperation are the guides by which litigation should be steered with early conferences among parties, their attorneys and IT personnel as a best practice.