NY court: producing party should pay discovery costs.

PositionE-DISCOVERY

A New York appeals court has ruled that the party that produces A documents in a lawsuit must pay discovery costs, even when it requires costly retrieval of electronic documents, Thomson Reuters reported.

The First Department, Appellate Division of New York ruled that the requesting party should not bear the enormous costs of discovery.

In the recent case U.S. Bank National Association et al. v. GreenPoint Mortgage Funding Inc., the appeals court ruled unanimously that GreenPoint Mortgage Funding must pay the costs of finding and producing a "vast" amount of electronic documents in a mortgage-backed securities lawsuit, according to Thomson Reuters.

The First Department called it an "unsettled" area of the law, partly because of the sky-high cost of finding and producing electronically stored information (ESI).

In 2009, U.S. Bank sued GreenPoint Mortgage Funding over $1.8 billion in subprime mortgage-backed securities issued by GreenPoint in 2005 and 2006. The lawsuit claimed that GreenPoint committed "gross violations" of the "representations and warranties regarding the attributes of the loans and the practices and policies under which the loans were originated, underwritten, and serviced," according to the ruling. The bank requested that GreenPoint produce a "vast" number of documents, the court said.

GreenPoint successfully persuaded Manhattan Supreme Court Justice...

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