Case Law: SPM Resorts v. Diamond Resorts Mgmt., Inc.
State Court Finds Order that Parties Split Costs of Neutral Forensic Expert Contrary to Rules of Civil Procedure
SPM Resorts v. Diamond Resorts Mgmt., Inc., 2011 WL 2650893 (Fla. App. 5 Dist. Jul. 8, 2011). In this business litigation, the plaintiff (who is the defendant in the underlying case) sought certiorari review of a circuit court decision ordering it to pay $20,000 – and potentially more in the future – to conduct computer searches to comply with the defendant’s (the plaintiff in the underlying case) discovery request. The plaintiff argued the court order was unreasonable and unduly burdensome, and marked a departure from the “essential requirements of the law.” Agreeing with the plaintiff’s arguments, the court believed ordering the plaintiff to split the costs associated with engaging a computer expert to inspect its computer systems was unreasonable. Further, the court noted that “placing a substantial financial burden on a party relating to the production of its adversary’s document request does nothing more than require a party to fund its adversary’s litigation” which is not permitted by the Rules of Civil Procedure. Accordingly, the court granted the plaintiff’s request and quashed the trial court’s order.
Although we typically feature federal cases on this blog, we came across this recent state court ruling and felt it presented an opportunity to explore an important conversation: Who should pay for discovery costs?
Cost-shifting is available for parties; however, it is certainly not guaranteed. Courts have different avenues for determining whether to shift costs onto the requesting party, and consider such factors as data accessibility, availability of information from other sources, total cost compared to amount in controversy and resources of each party. Case law over the years demonstrates that cost-shifting arguments must be made early and be supported by hard facts rather than generalized objections claiming the requests are “unduly burdensome” and “unreasonable”.
Although cost-shifting is an option, we are still left at our original question that we would like your comments on. Who do you feel should pay for discovery – the requesting or responding party? Why?