Federal District Court in NY Orders Owner to “Re-Do” Electronic Production of Email Including Corresponding Attachments at Its Own Expense

PSEG Power New York, Inc. v. Alberici Constructors, Inc.
2007 U.S. Dist. LEXIS 66767 (N.D. NY. September 7, 2007)

During the course of litigation arising out of a contract for the construction of a combined-cycle power plant between the principal contractor Alberici and PSEG, an e-discovery dispute arose around the production of email. In response to Alberici’s request for documents including email and any email attachments, PSEG produced over 211,000 pages and a disc containing email, but not the email attachments. Later it was discovered that during the process in which PSEG’s vendor downloaded the emails for production, the tie between the email and its corresponding attachments was broken, making it very difficult to determine which attachment belonged to which email. However, the raw data remained intact. Around the same time, and before the close of discovery, PSEG moved for summary judgment. The District Judge struck the motion sua sponte, stating that the motion was to be renewed after discovery had been completed and the parties had consulted with the magistrate judge.

After the parties made several unsuccessful attempts to match the separated components, PSEG proposed that Alberici identify the number of emails that were missing attachments so that PSEG could estimate the approximate cost of producing the set. PSEG’s estimate for retrieval of the emails and their attachments was $206,000. It proposed that Alberici could either pay this cost, or that Alberici could identify a subset of emails necessary to a claim or defense and PSEG would provide this subset at its own cost. Alberici’s estimate to retrieve the emails through its own vendor was significantly less, at $37,500. However, PSEG did not want to permit Alberici’s consultant unfettered access to its electronic database, even with a protective order.

The parties then sought Court intervention, Alberici seeking to compel PSEG to produce its email along with its corresponding attachments at PSEG’s cost and arguing that dispositive motions should be postponed until after the completion of discovery, and PSEG arguing that it should not be compelled to produce the emails with its attachments which had become separated during the production process and that it should not be required to wait to pursue dispositive motions.

The District Court identified three issues: (1) Is Alberici entitled to received the emails together with their corresponding attachments, as opposed to in the uncoordinated state in which they were provides? (2) Even though PSEG has provided the emails and their attachments in hard copy, although not coordinated with each other, is PSEG obligated to provide them in their original format? (3) If it is determined that the emails and their corresponding attachments must be produced again, which party must bear the cost?

Although the Federal Rules of Civil Procedure have been amended to address electronic discovery, the amendments took effect after the initiation of the case. The Court noted, however, that the rules had not changed materially. Even before the amendments, a party had been required by Federal Rule of Civil Procedure 34 to produce records “as they are kept in the usual course of business” or to organize and label them according to correspond with the categories of the request. Because one would expect that in the ordinary course of business, an email and its attachment would ordinarily be kept together, the Court held their production must be likewise. PSEG’s original production of the emails had been made in contravention of Rule 34’s mandate. The Court rejected PSEG’s suggestion that Alberici identify a limited subset of emails and attachments, pointing out that in addition to such an exercise being impractical and time-consuming, that it could also lend an unfair advantage to PSEG by revealing some of Alberici’s impressions, strategy and thinking. The Court also noted that PSEG’s position regarding the relevancy of the emails was inconsistent. On the one hand PSEG argued that it would “re-do” the production at Alberici’s expense, but on the other that it was likely that a significant portion of the emails and their attachments were irrelevant. However, relevancy does not turn on admissibility at trial, but rather on whether the disclosed item is reasonably calculated to lead to the discovery of admissible evidence. The Court held that Alberici had met its burden of establishing good cause and re-production of the emails and their attachments was warranted.

Finally, the Court turned to the issue of cost. PSEG argued that it should not be required to pay for the re-production, invoking Federal Rule of Civil Procedure 26(b)(2)(B) that a “party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” The Court rejected PSEG’s argument, finding that, that the information was accessible as it was safely preserved in the raw data, and that the potential benefit of the discovery outweighed the cost of re-production. Accordingly, the Court ordered that PSEG re-produce its email with its corresponding attachments, at its own cost and that no dispositive motions should take place until discovery was entirely completed.

Click here to view full opinion as PDF (provided with the permission of LexisNexis).

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