PSEG Power New York, Inc. v. Alberici Constructors, Inc.
In PSEG Power New York, Inc. v. Alberici Constructors, Inc. 2007 WL 2687670 (N.D.N.Y. Sept 07,2007) large-stakes construction litigation, plaintiff PSEG Power Inc. (“PSEG”) originally turned over more than 3,000 emails and 211,000 pages of documents, along with a disk containing e-mails. However, Magistrate Judge Randolph F. Treece directed PSEG to produce the emails in the form requested by defendant Alberici Constructors Inc. (“Alberici”) and do so at its own expense.
Alberici was a contractor in construction of a $25 million, PSEG power plant outside of Albany. In 2005, PSEG sued Alberici for $ 4.4 M improperly performed work and failure to complete jobs at the Bethlehem Energy Center project. Alberici filed a mechanic's lien against PSEG for $6.8 M and countersued PSEG for $11.4 M. Both companies made complex discovery requests for documents and communications concerning the Bethlehem project.
In January 2007, Alberici started to notice that the discovery materials PSEG delivered through an information materials vendor were incomplete. Although the 3,000-plus e-mails were present, many of the attachments that accompanied the messages were not. In some instances, there were up to 12 attachments per e-mail that became separated from their original messages. It appeared that the “vendor’s software was not compatible with the HTML format in which PSEG had provided its documents and that this incompatibility had resulted in the parent child link between the emails and attachments being broken.”
For nearly six months, PSEG, its vendor and Alberici tried to figure out methods to reattach the materials to the e-mail messages. Although the 750 GB of underlying data still existed, the metadata necessary to join the e-mails and attachments “was destroyed during [PSEG]s collection and formatting of the emails. PSEG tried to solve the problem by supplying a spreadsheet to Alberici that would match attachments with e-mails. But it did not work. An effort to reach a compromise failed when PSEG claimed it would cost an "unconscionable" $206,000 for it to redo the e-mail and attachment retrieval process. Alberici’s vendor estimated the cost at $37,500. The court proposed a protective order to allow Alberici’s vendor to recover the emails but PSEG rejected that proposal.
Once the court agreed that Alberici should get the discovery documents in a usable form, it had to determine who would pay for the production. PSEG alleged that the data was not reasonably accessible because of undue burden or cost. However, because Alberici had established good cause for the production of the data, a cost-benefit analysis was done according to the factors set forth in the Advisory Committee Notes to Rule 26:
- the specificity of the discovery request;
- the quantity of information available from other and more easily accessed sources;
- the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources;
- the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources;
- predictions as to the importance and usefulness of the further information;
- the importance of the issues at stake in the litigation; and
- the parties’ resources.
The court found the factors in Alberici’s favor and ordered PSEG to bear its own costs. Further, the court acknowledged "the cost of retrieval in this matter is by no means cheap," but it may not be as high as the $206,000 estimated by PSEG and lower-cost alternatives were available. It stated "considering the monumental production issue that confronts us, $37,500 is a significant discount when compared to PSEG's vendor's proposal and may be a bargain," and "although no one wants to spend any significant amount of money on discovery, whether it be thousands of dollars or hundreds of thousands of dollars, but if they have to, PSEG's access to resources rivals, if not exceeds, Alberici's claim to resources."
Finally the court stated:
“But for [PSEG]s vendor creating this email attachment fiasco, we would not be having this discussion. Without question, attachments should have been produced with their corresponding emails as such are kept in the usual course of business. [PSEG] chose to provide the emails and attachments in this disassembled manner albeit unbeknowst to it at the time of production. Whether created by a software incompatibility or malfunction, such deficiency does not provide a sufficient excuse from presenting an important aspect of discovery in a convoluted fashion. And, [Aberici] should not be resigned to accept a flawed discovery process.”
