In Solo v. United Parcel Services Co., No. 14-12719, 2017 U.S. Dist. LEXIS ______ (E.D. Mich. January 10, 2017) UPS successfully argued that a discovery request was excessively burdensome, using as support the fact that the company had established internal policies to archive information on to back up tapes after six months, with the business rationale being that the volume of information was so large that it was only maintained in a “live” format for that limited time period. UPS then outlined that collecting usable data from the back up tapes would require custom software, take six months, and cost around $120,000, and offered an alternative less costly mechanism for providing their opponents with information that would suit their needs.
The important message to businesses of all sizes is that having sound and rational data retention policies that are strictly and consistently followed can provide powerful evidence to support motions objecting to burdensome requests for collection and preservation of documents, under the new proportionality principles embedded in the late 2015 changes to the Federal rules. Without such internal policies and procedures, defenses are difficult to maintain against fishing expeditions that impose a cost burden on companies, resulting in warped case evaluations and early unwanted resolutions of what are often otherwise meritorious cases.
There are many factors to consider in establishing such policies, including costs and forms of archiving data, downsides of reducing immediate access to some data versus savings from archiving it, compliance with relevant regulations and laws, compliance with existing litigation holds, and much more. For more on the importance of litigation holds, click HERE.
However, given the potential runaway costs of complying with onerous discovery obligations, companies would be wise to spend the time and money necessary on the front end to put reasonable data management policies in place that will arm litigation counsel with evidence needed to support proportionality objections, potentially resulting in untold future savings.