United States ex rel. Carter v. Bridgepoint Education, Inc.
305 F.R.D. 225
S.D.N.Y.2015Background
- Relators (plaintiffs) sued Bridgepoint/Ashford under the False Claims Act alleging improper incentive compensation for recruiters; discovery disputes arose over electronically stored information (ESI).
- Three ESI categories were central: Backup Databases (data on encrypted backup tapes), Active Emails (emails on active servers), and Metadata (structural data embedded in files).
- Plaintiffs demanded Native-format production for all ESI (including backups) and full metadata; Defendants produced TIFF images for active ESI, restored one backup tape to Native per court order, and argued other backups are inaccessible and costly to restore.
- Court previously resolved custodial and time-period disputes (production from March 2005–Dec 31, 2014; managerial custodians and a sampling of recruiters); left format and backup production disputes for briefing.
- Parties filed competing briefs; Defendants submitted an expert cost declaration estimating multi-hundred-thousand to multi-million dollar costs to restore all backup tapes to Native; Plaintiffs offered no expert rebuttal and alleged spoliation and obstruction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Production of Backup Databases (backup tapes) and format | Backup tapes are discoverable; Defendants intentionally made data inaccessible; Native is cheaper and preserves metadata | Backup tapes are “inaccessible” (disaster‑recovery format), restoration is extremely costly and burdensome; TIFF or limited restoration is appropriate; no spoliation shown | Denied without prejudice. Backups are discoverable but inaccessible; cost‑shifting appropriate — plaintiffs must bear cost to restore additional backups to Native (except limited restorations already ordered) |
| Format for Active Emails (Native v. TIFF) | Native preferred: preserves metadata, easier search, cheaper overall for plaintiffs | TIFF acceptable and reasonably usable; TIFF allows Bates‑stamping/redaction and is standard; producing Native is unnecessary and burdensome | Denied without prejudice for Native demand. TIFF production for active ESI is acceptable absent a specific, particularized request for Native |
| Production of Metadata | Metadata is discoverable and may be essential; plaintiffs seek all metadata for ESI | Defendants implicitly opposed broad metadata production; metadata need must be particularized and production is burdensome | Denied without prejudice. Metadata production not ordered absent specific requests and a showing of particularized need; no entitlement to all metadata by default |
| Cost allocation for ESI created after case unsealing (post‑Jan 1, 2013) | Plaintiffs argued defendants should bear production costs | Defendants argued plaintiffs should bear restoration/search costs for inaccessible data | Court split costs: plaintiffs bear searching/restoration costs for ESI post‑unsealing; defendants bear production costs |
Key Cases Cited
- Rowe Entm’t, Inc. v. The William Morris Agency, Inc., 205 F.R.D. 421 (S.D.N.Y. 2002) (articulated factors courts may consider in shifting ESI production costs)
- Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. 2003) (established framework for accessibility, cost‑shifting, and importance of active ESI)
- Quinby v. WestLB AG, 245 F.R.D. 94 (S.D.N.Y. 2006) (confirmed backup tapes are generally inaccessible and subject to cost‑shifting)
- Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (U.S. 1978) (discovery expense ordinarily borne by responding party absent special circumstances)
- Williams v. Sprint/United Mgmt. Co., 230 F.R.D. 640 (D. Kan. 2005) (recognized limits on broad metadata production absent particularized need)