Hammer, Michael A., United States Magistrate Judge
Note: This is an unpublished decision. Check your jurisdiction’s rules about citing unpublished decisions before citing this case to a court.
In a breach of contract dispute,
the trial court denied defendant’s motions for a protective order and cost shifting
because defendant failed to show that plaintiff’s discovery requests were unreasonable
or unduly burdensome. The parties’
relationship began when defendant initiated discussions with plaintiff about
refinancing defendant’s debt obligations.
Plaintiff claimed that initial negotiations resulted in a term sheet
that bound defendant from soliciting other offers or disclosing offer terms for
a period of 18 months. In reliance on
the term sheet, plaintiff claimed to have expended substantial resources. Defendant denied the existence of a binding
agreement and proceeded to close on the exact agreement arranged by plaintiff,
only without plaintiff’s involvement.
Plaintiff sued for $41 million in breach of contract damages.
During discovery, plaintiff requested that defendant perform searches for 67 terms. Defendant, who had already produced over 8000 printed documents, objected and filed a motion for a protective order under FRCP 26(c)(1). Defendant asserted that the search terms were overly broad and duplicative and, in the alternative, requested that the court shift costs. The court denied both motions.
The court held that defendant failed to present any compelling factual basis or sufficient legal background to support its motion for a protective order. Though some of the requested terms may have appeared broad or produced some duplicative results, defendant did not present any evidence as to why they were unreasonable. Defendant also failed to prove that that they conferred with plaintiffs in an effort to resolve the dispute as required by Rule 26.
As to the request for cost shifting, the court found that fee-shifting is appropriate only when production is unreasonable or unduly burdensome, and the information sought is inaccessible. Neither applied here. The fact that defendant had already having hired a vendor to run the requested searches negated any inaccessibility argument and the request was not unduly burdensome either. In comparison to the $41 million dollars in damages at issue, the estimated maximum total cost of the addition discovery was only $16,000. The court ruled that “the projected discovery costs [were] not substantial enough to support a conclusion that fee-shifting [was] warranted.”
v.
NORTH HUDSON SEWERAGE AUTHORITY, Defendant
Counsel
Joseph Lloyd Buckley, Richard H. Epstein, Jacob Sagner Buurma, Sills Cummis Epstein & Gross, PC, Newark, NJ, for Plaintiff.Alan L. Zegas, Chatham, NJ, for Defendant.
OPINION
A party or any person from whom discovery is sought may move for a protective order in the court where the action is pending—or as an alternative on matters relating to a deposition, in the court for the district where the deposition will be taken. The motion must include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action. The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense....