Silverman v. Shaoul

30 Misc. 3d 491
CourtNew York Supreme Court
DecidedNovember 3, 2010
StatusPublished
Cited by1 cases

This text of 30 Misc. 3d 491 (Silverman v. Shaoul) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Silverman v. Shaoul, 30 Misc. 3d 491 (N.Y. Super. Ct. 2010).

Opinion

OPINION OF THE COURT

Eileen Bransten, J.

Defendants Benjamin Shaoul, Marc Ravner, Lemadre Development, LLC and Magnum Management, LLC (the defendants) move to compel plaintiffs Blake and Tracy Silverman (the plaintiffs) to pay for costs of electronic discovery. Plaintiffs oppose.

The parties are familiar with the facts of this matter, and therefore the facts are only discussed as necessary.

Analysis

Defendants move to compel plaintiffs to pay for the costs of “collecting, processing and hosting electronic data” incurred due to plaintiffs’ requests for disclosure. (Defendants’ mem of law in support of order to show cause to compel plaintiffs to pay for costs of electronic discovery [defendants’ mem] at 1.) Defendants argue that New York law places such costs on the shoulders of the producing party. Defendants further argue that the data requested was not “readily available,” and thus they should not be required to pay for its production.

Defendants rely heavily on T.A. Ahern Contrs. Corp. v Dormitory Auth. of State of N.Y. (24 Misc 3d 416 [Sup Ct, NY County 2009]) for the proposition that New York law is well settled in that the “party seeking discovery bear[s] the cost incurred in its production.” (Id. at 424, citing Waltzer v Tradescape & Co., L.L.C., 31 AD3d 302, 304 [1st Dept 2006]; defendants’ mem at 2; reply affirmation of Stanley Goos in support of order to show cause to compel plaintiffs to pay for electronic discovery [reply affirmation] 1Í 4.) In T.A. Ahern, both parties moved to compel electronic and other discovery. The plaintiff, Ahern, argued that either the producing party should bear the costs of reviewing the data in question, or turn it over in full subject to a confidentiality agreement, so that Ahern would be able to undertake its own review. (T.A. Ahern, 24 Misc 3d at 418-419.) [493]*493The court declined to compel production of each party’s requests for electronic discovery until each party agreed to cover the costs of producing the data that party requested. (Id. at 424.) Any agreement between the parties allocating production costs was specifically subject to reallocation at trial. (Id.)

By contrast, in the instant case, without plaintiffs’ agreement defendants performed work for which they now seek reimbursement. Defendants argue that plaintiffs’ failure to respond to defendants’ July 9, 2010 letter regarding production costs estimates, coupled with August 2010 e-mail discussions between plaintiffs and defendants regarding search terms to be utilized in discovery, constitute plaintiffs’ agreement to bear the costs of production. (Reply affirmation If 8; see reply affirmation, exhibit C [August e-mails]; affirmation of Stanley Goos in support of defendants’ order to show cause to compel plaintiffs to pay for electronic discovery [Goos affirmation], exhibit C [July 9, 2010 letter from Stanley Goos to Arthur Rosenberg].) However, a party’s silence will only be “deemed an acquiescence where he or she is under such a duty to speak that his or her ‘conduct, accompanied by silence, would be deceptive and beguiling.’ ” (Russell v Raynes Assoc. Ltd. Partnership, 166 AD2d 6, 15 [1st Dept 1991], quoting Brennan v National Equit. Inv. Co., 247 NY 486, 490 [1928].) Plaintiffs had no duty in law to respond, and plaintiffs’ lack of response may not be deemed acquiescence.

Defendants have neither alleged nor shown anything about plaintiffs’ August e-mails such that the court will interpret plaintiffs’ lack of response to the July 9 letter as acquiescence to its terms. Plaintiffs’ silence and subsequent conduct were neither deceptive nor beguiling.

Furthermore, even if T.A. Ahem was more factually similar to the instant case, the proposition for which defendants cite the case, when contextualized, does not advance their argument. In stating that it is the “well-settled rule in New York State that the party seeking discovery bear[s] the cost incurred in its production,” T.A. Ahern cites the Appellate Division, First Department, decision in Waltzer. (T.A. Ahern, 24 Misc 3d at 424.) Waltzer, as defendants repeatedly cite, declares: “as a general rule, under the CPLR, the party seeking discovery should bear the cost incurred in production of discovery material.” (31 AD3d at 304; defendants’ mem at 3; reply affirmation IÍ 4.)

However, defendants chose to cite Waltzer selectively. The cited quote continues, “however, here we are not dealing with the retrieval of deleted, electronically stored material.” (Waltzer, [494]*49431 AD3d at 304.) Nor does the instant case involve deleted or similarly impeded data. Indeed, the cases cited by defendants for the proposition that the requesting party should bear the costs of electronic discovery demonstrate a higher burden to obtain and produce upon the producing party than defendants allege here. Defendants’ data was available, but “interspersed amongst data related to [defendants’] other business entities.” (Defendants’ mem at 5; reply affirmation H 12.)

Defendants next cite Lipco Elec. Corp. v ASG Consulting Corp. (4 Misc 3d 1019[A], 2004 NY Slip Op 50967[U] [Sup Ct, Nassau County 2004]) for the proposition that the requesting party pays for the costs of production. The court in Lipco declined to order the electronic discovery sought and thus the actual burden that would have been visited upon ASG, the party from whom production was sought, is unknown. However, ASG alleged that

“[i]n order to provide the data sought ... a separate program would have to be devised to search for and extract each individual table of data . . . [, a] relational data base would then have to be created to store the extracted data and a program devised to transfer the data on to a disc or hard drive . . .
“[then] a compatible version of [the original program] would have to be acquired and installed in order to read and collate the data.” (Lipco Elec. Corp., 2004 NY Slip Op 50967[U], *6-7.)

The burden on ASG was thus much greater than in the case at bar.

Defendants also rely on Delta Fin. Corp. v Morrison (13 Misc 3d 604 [Sup Ct, Nassau County 2006]) for the proposition that “allocating costs to the requesting party is appropriate where the producing party implemented search and de-duplication protocols in order to harvest responsive information.” (Defendants’ mem at 4.) Extensive discovery had already been conducted in that case, including restoration of back-up tapes containing requested data. Therein, the defendants sought additional discovery from the plaintiffs including additional searches on data already restored from which discovery materials had been produced and searches that would require restoration of additional backup tapes. (13 Mise 3d at 606-614.) Importantly, the defendants volunteered to pay the costs associated with further discovery and raised the possibility that further searches might [495]*495not be worthwhile. (Id. at 607.) The court, skeptical that any relevant documents would be found, accepted defendants’ offer to pay and ordered test searches to determine whether further discovery was appropriate. (Id. at 612, 614.) Delta Fin. Corp. is distinguishable from the case at bar. Plaintiffs have not offered to pay for the costs incurred, relevance is not at issue, and, importantly, the burden borne by the

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Bluebook (online)
30 Misc. 3d 491, Counsel Stack Legal Research, https://law.counselstack.com/opinion/silverman-v-shaoul-nysupct-2010.