On or about March 1, 2009, defendants, Augme Technologies Inc. ("Augme") and New Aug LLC ("New Aug") (collectively referred to as "defendants"), entered into a joint marketing and sales agreement with plaintiff, Brandofino Communications, Inc. (the "agreement"). Pursuant to the agreement, defendants and plaintiff agreed to work together to promote and sell defendants' services to the prescription pharmaceutical industry. The term of the contract was for five years. The agreement provided that either party may terminate the agreement with or without cause upon ninety days written notice to the other party, but if defendants terminated the agreement for any reason other than due [*2]to a breach or non-performance by plaintiff, then plaintiff would be entitled to receive its fees for eighteen months after termination.

Plaintiff alleges that on September 8, 2010 only days after it obtained a master service agreement for defendants with Pfizer defendants purported to terminate the parties' agreement without cause (Complaint, ¶ 15). On or about October 20, 2010, after the parties failed to reach a new agreement, defendants purportedly terminated the agreement for cause without stating the reason or providing for any cure period in violation of section 7 of the agreement.

Plaintiff commenced this action asserting claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and breach of duty to perform.

Plaintiff moves, pursuant to CPLR 3124, for an order compelling defendants to:

(1) produce all documents in text-searchable format for review in Concordance, the document review software that plaintiff claims is used by both parties, with associated metadata, or to pay for the costs and fees necessary to conform defendants' production;

(2) produce all non-privileged documents responsive to plaintiff's document requests that defendants are currently withholding pending plaintiff's agreement to defendants' demands; and

(3) costs and attorneys' fees associated with bringing the instant motion.

Plaintiff's document requests seek documents reflecting the amount due it under the parties' agreement ("document requests") (Evans Affirm., Ex. 3). In that regard, given the anticipated unwieldy nature of the massive amount of electronic information exchanged in discovery, plaintiff explains that the document requests contained specific instructions regarding the format in which defendants are to produce documents. Tailoring the CPLR's requirement under CPLR 3122(c) for the production and organization of ESI documents, Instruction No. 10 provides, in relevant part that:

All documents responsive to these requests that are maintained in the usual course of business in electronic format shall be produced in properly unitized, multi-page Group 4 TIFF format complete with full text extracts and all associated metadata. [*3]

All documents responsive to these requests that are maintained in the usual course of business in electronic format shall be produced with the metadata normally contained within such documents, and the necessary Concordance load files.

Under no circumstances should ESI be converted from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome to use ESI.

(Evans Affirm., Ex. 3).

According to plaintiff, Concordance is the software used by both parties' counsel for document review, and plaintiff specifically requested the load files for this platform in its document requests. Plaintiff explains that in a production formatted for review in Concordance, each page of a document is saved to a storage device, such as a DVD or an external hard drive, as an individual image, or in tagged image file format ("TIFF"). These TIFF images can then be assembled into the individual documents that they comprise by means of a load file for Concordance.

Plaintiff also requested data files containing any text in the TIFF images, which makes searches for words or phrases within the documents possible, as well as the metadata associated with each document. Plaintiff explains that metadata is the information that is generated when an electronic document is created, and is critical to the management of a massive database of electronic documents as it allows for easy sorting of the documents by such information as the document's date, author, or recipient. Thus, plaintiff requested that the production of metadata include at least "all information concerning the date(s) the document was last accessed, created, modified, or distributed, and the author(s) and recipient(s) of the document" (Evans Affirm., Ex. 3, No. 10[c]).

Plaintiff produced documents to defendants in two parts, on May 3, 2013 and June 3, 2013, and both productions were comprised of text-searchable TIFF files with a Concordance load file and associated metadata. Prior to making its first production, its counsel confirmed with defendants' counsel that defense counsel would be reviewing the documents in Concordance, and, accordingly, included in its production the load file for the Concordance version in use in defendants' counsel's office.

Defendants' initial production of electronic documents on January 31, 2012 complied with the instructions in plaintiff's document requests, and consisted primarily of text-searchable TIFF files with a Concordance load file and associated metadata. Subsequent to plaintiff's first production and prior to delivery of its second production, defense counsel stated that the review of documents for defendants' supplemental electronic productions [*4]was proceeding slowly, and that it would be delivered in two parts.

On June 4, 2013, defendants made the first of the two promised supplemental electronic productions, consisting of 12,000 pages of documents in four massive PDF files containing approximately 3,000 pages each without any metadata. This production was a departure from the format followed by plaintiff in it productions, as well as defendants' own initial production of electronic documents.

On June 5, 2013, plaintiff's counsel notified defense counsel of the deficiencies in defendants' production. After more than a year and half of receiving plaintiff's document requests, and after three productions of documents by the parties in this case, defendants abruptly refused to provide documents in text-searchable format for review in Concordance with associated metadata, and refused to produce any additional documents without a Court order. In that regard, counsel responded that defendants would no longer be willing to pay for the costs associated with a Concordance production.

Plaintiff then set forth its objections to the format of defendants' second production of documents in a correspondence to counsel (Evans Affirm., Ex. 5). Defendants responded by letter asserting that they will not incur the cost to convert their production into the format plaintiff requests.

On July 16, 2013, plaintiff contacted defendants to inquire as to the status of the production. Plaintiff asserts that for the first time on this date defendants informed it that they had no intention of producing additional documents unless plaintiff "withdraws the objections set forth within [its] June 12, 2013 letter" (Evans Affirm., Ex. 7).

Plaintiff argues that defendants should be compelled to produce documents in an accessible format. In that regard, plaintiff contends that the absence of a Concordance load file from defendants' June 4, 2013 production has made the task of any review of their production, which consisted of predominantly emails and their attachments, more difficult and burdensome by removing the reviewer's ability to ascertain readily how many pages a document contains, or the association between the pages of the production. According to plaintiff, the Concordance load file would have provided for organization and accessibility of the electronic production's images.

Plaintiff also argues that defendants' conversion of its ESI into PDF files resulted in the absence of critical metadata from their production. In this case, metadata is essential to organizing and accessing the thousands of documents that have already been produced, and those that defendants have yet to produce, because it allows for the easy sorting of documents by date, author, or recipient. Furthermore, plaintiff reminds this [*5]Court that defendants are the ones that unilaterally abandoned the established practice in this case of producing documents as text-searchable TIFF files with a Concordance load file and associated metadata. Plaintiff further points out that defendants made no objection to providing text-searchable TIFF files with a Concordance load file and associated metadata in its document responses, and, in fact, provided its January 31, 2012 production in this format. In fact, according to plaintiff, it served defendants its document requests on or about October 21, 2011, but defendants did not object to the instructions until June 2013, over a year and half later.

Initially, defendants argue that based on well-settled principles of New York law they have no obligation to pay the cost of producing emails in the format preferred by plaintiff. Relying on Response Personnel, Inc. v Aschenbrenner, 77 AD3d 518 [1st Dept 2010]), defendants argue that the costs of copying or reformatting documents is to be paid by the party requesting the documents. And, although plaintiff argues that defendants are obligated to produce emails in its preferred form, defendants point out that plaintiff fails to address the issue of who bears the costs of such production. Defendants contend that if plaintiff had been willing to pay for the costs of the reformatting work that it is requesting production would have been made in such format. Defendant argues that the requesting party's convenience in reviewing a document production is not adequate grounds for ordering the reformatting of documents already produced, and cites 150 Nassau Associates LLC v RC Dolner LLC, 96 AD3d 676 (1st Dept 2012) for support.

Defendants next argue that the CPLR does not require that they produce emails in a format suitable for use with Concordance at their expense. CPLR 3122(c) merely requires that documents be produced "as they are kept in the ordinary course of business." Plaintiff does not cite any authority for its argument that compliance with CPLR 3122(c) requires production of emails in a form suitable for use with Concordance. Defendants assert that they have provided plaintiff with a disk that allows its counsel to see the contents of any email subject to production exactly as if it were being reviewed on defendants' computer system (Meserve Affirm., ¶ 13). In other words, in reviewing these emails, plaintiff's counsel would see exactly what anyone would see on defendants' computer.

Lastly, defendants argue that they are not obligated to produce emails in plaintiff's preferred format at their own expense merely because they previously did so. In that regard, defendants claim that at the outset of the litigation, almost two years ago, when defendants' circumstances were materially different, they believed reformatting certain emails so that the emails could be loaded into Concordance made economic sense. [*6]Since that time, defendants claim that their circumstances have changed and they no longer want to incur the cost of reformatting their emails for use with Concordance, which defendants claim would have been approximately $15,000 (Meserve Affirm., ¶ 10).

To begin, defendants' reliance on Response Personnel, Inc. v Aschenbrenner, supra, that the requesting party bears the cost of production is unavailing. Response Personnel does not stand for a blanket discovery rule given the Appellate Division, First Department's subsequent holding that "the producing party ... is to bear the cost of the searching for, retrieving, and producing documents, including electronically stored information" (U.S. Bank National Association v GreenPoint Mortgage Funding, Inc., 94 AD3d 58 [1st Dept 2012]).

In addition, defendants' citation to 150 Nassau Associates LLC v RC Dolner LLC, supra, to support their argument that the requesting party's convenience is not adequate grounds for ordering the reformatting of documents already produced is equally unavailing. 150 Nassau Associates is distinguishable from the facts herein. In 150 Nassau Associates, the Appellate Division, First Department, found that the documents responsive to the plaintiff's document requests had been produced multiple times, and that the plaintiff had not requested the documents at issue "in the native' file format until its reply on its own motion to compel" (150 Nassau Associates LLC v RC Dolner LLC, 96 AD3d at 677). The Appellate Court also observed that the plaintiff admitted that the only benefit of requiring defendant to produce the documents again was for the plaintiff's convenience (Id.). Under those unique factual circumstances, the Appellate Division, First Department, held that Supreme Court did not abuse its discretion in denying reproduction of the documents in their native format (Id.).

Here, plaintiff's initial document requests contained specific instructions that responsive documents should be "produced with the metadata normally contained with such documents, and the necessary Concordance load files" (Evans Affirm., Ex. 3). As such, defendants cannot claim that plaintiff is now for the first time requesting the documents to be produced in this format for the sake of convenience. Indeed, defendants' initial production was made in accordance with these instructions, without any objection. To complain otherwise, is disingenuous. To change unilaterally the parties' rules of discovery in the middle of the process, without judicial intervention, is not prudent. Furthermore, and critically important, plaintiff's argument is compelling —- due to the sheer volume of documents at issue the production should be made in an accessible format that allows for easy sorting of the documents. Defendants merely proffer a token challenge to this assessment, [*7]which in and of itself is questionable given that they continue to receive documents on the Concordance platform from plaintiff, but seek now to deny plaintiff access to this same benefit.

Lastly, defendants' blanket assertion, without more, that the compliance cost would be $15,000 does nothing to assist this Court in determining whether that amount constitutes an undue burden or expense, particularly in view of the fact that plaintiff's claimed damages are at least $1 million (U.S. Bank National Association v GreenPoint Mortgage Funding, Inc., 94 AD3d 58 [1st Dept 2012]). This determination, however, is without prejudice to defendants' application for cost shifting relief pursuant to U.S. Bank National Association v GreenPoint Mortgage Funding Inc., 94 AD3d 58, supra).

Accordingly, it is

ORDERED that the branch of plaintiff's motion directing defendants to produce all documents in text-searchable format for review in Concordance, with associated metadata, and to produce all responsive documents to plaintiff's document requests that defendant is currently withholding pending the outcome of this motion is granted; and it is further

ORDERED that the branch of plaintiff's motion for an award of attorney's fees and costs is denied.

This memorandum opinion constitutes the decision and order of the Court.

Dated: January 24, 2014

____________________________

HON. JEFFREY K. OING, J.S.C.