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Shifting E-Discovery Costs to the Losing Party

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As inside counsel are often painfully aware, the escalating costs of electronic discovery has to be a major factor in formulating a litigation strategy. Unfortunately, they must contend with the fact that state and federal courts are far from uniform in the way they assess and allocate the costs of electronic discovery after a party prevails.

There was a recent trend to allow for more cost shifting to the losing party, but two recent court decisions appear to reverse that trend. In U.S. Bank National Association v. GreenPoint Mortgage Funding, Inc. in the New York State Supreme Court, Appellate Division, and in Race Tires America, Inc. v. Hoosier Racing Tire Corp (or “Race Tires III”) in the Third Circuit Court of Appeals, the courts limited the scope of what costs may be “taxed” to a defeated litigant, while providing some guidance on the method of allocating electronic discovery costs between parties.

This Excutive Counsel article, by Anthony Diana and Daniel Regard, examines current cost shifting trends in electronic discovery and what parties should be aware of as they approach litigation.

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