Proctor & Gamble Co. v. S.C. Johnson & Son, Inc., 2009 U.S. Dist. Lexis 13190 (E.D. Tex.), read Order of Court here.

Danielle Blount, an associate in our Wilmington office, prepared this case summary.

Optical Character Recognition (“OCR”), is where static images of text are translated into a format, via computer software program, that can be searched or read electronically. It is used to render documents maintained in hard copy format and scanned into a computer searchable. It is a tool that greatly decreases the time and effort counsel must invest in searching and examining documents. The cost of OCR was the central dispute in this case. The defendants estimated that OCR costs would exceed $200,000. However, the defendant failed to provide estimates or even the total pages on which it expects to perform the process. The defendant suggested that the cost should be shifted to plaintiff to pay for OCR. Although the defendant supplied an estimate of $1,900 per custodian for document conversion, it failed to identify the total number of custodians from whom it anticipates documents will be obtained. The plaintiff provided an estimate of three cents per page. The court reasoned that in the age of electronically stored information, only so much of the requested data is maintained in hard copy format which would require OCR to be searchable.

In determining whether cost shifting is appropriate, other courts have adopted multi-factor tests. In this case the court applied the facts outlined in Zubulake v. U.S. Warbury LLC, 217 F.R.D. 309 (S.D.N.Y. 2003) despite its “slightly different context.” Those factors are:

(1) the extent to which the request was specifically tailored to discover relevant information; (2) the availability of such information from other sources; (3) the total cost of production, when compared to the amount in controversy; (4) the total cost of production, when compared to the resources available to each party; (5) the relative ability of each party to control costs and the incentive to do so; (6) the importance of the issues at stake in the litigation; and (7) the relative benefits to the parties of obtaining the information

In this case an analysis of the seven factors did not favor cost-shifting. Notably, the court mentioned that the defendant failed to show that the documents requested are obtainable from other sources. Further, the court reasoned that the parties’ respective litigation budgets were estimated to be several million dollars a piece, so the defendant had adequate resources in which to conduct an OCR review.

In sum, the court determined that “requiring the parties to incur [OCR costs], when the OCR process is likely to streamline the discovery process and reduce the chance that either side will employ tactics designed to hide relevant information in a mountain of difficult-to-search documents is neither unreasonable nor burdensome.”