During the Class Action Boot Camp: Basics And Beyond seminar held at OSBA this week, Bricker & Eckler panelists discussed a very recent case addressing cost shifting during pre-certification discovery. In Boeynaems v. L.A. Fitness Int'l, 2012 U.S. Dist. LEXIS 115272 (Aug. 16, 2012 E.D. of P.A.), the court expresses its firm view that discovery burdens should not force a party to succumb to an unmerited settlement. Id. at *36. In what the court found to be an issue of first impression, it ordered plaintiffs to pay, in advance, for the whole cost of all the additional discovery they seek prior to class certification.
The court is especially sensitive to the fact that treating a civil action as a class action “dramatically increases the economic pressure on the defendant.” Id. at *7-8. Asymmetrical discovery costs in the class action context are a large and immediately felt component of that economic pressure. Id. at * 9-13.
Not only does Boeynaems appear to be the first decision to order cost shifting in the context of pre-certification discovery, but the court announces a legal presumption in favor of cost shifting. The plaintiff pays unless it can rebut the presumption with evidence of “compelling equitable circumstances to the contrary.” This is precisely the opposite presumption generally applied. Compare Zubulake v. UBS Warburg LLC (“Zubulake I”) 217 F.R.D. 309 (S.D.N.Y. 2003) (“In order to maintain the presumption that the responding party pays, the cost-shifting analysis must be neutral; close calls should be resolved in favor of the presumption [that responding party pays under the American Rule]).
Some will no doubt disagree on whether Boeynaems got it right. Its central message, however, is unassailable — asymmetrical discovery and economic pressure should not be permitted to force an unmerited settlement. At least in Judge Baylson’s court in the Eastern District of Pennsylvania, both sides can expect to be held in check.
