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eDiscoveryDaily

Plaintiffs Take the Supreme Step in Da Silva Moore – eDiscovery Case Law

As mentioned in Law Technology News (‘Da Silva Moore’ Goes to Washington), attorneys representing lead plaintiff Monique Da Silva Moore and five other employees have filed a petition for certiorari filed with the Supreme Court arguing that New York Magistrate Judge Andrew Peck, who approved an eDiscovery protocol agreed to by the parties that included predictive coding technology, should have recused himself given his previous public statements expressing strong support of predictive coding.

Da Silva Moore and her co-plaintiffs argued in the petition that the Second Circuit Court of Appeals was too deferential to Peck when denying the plaintiff’s petition to recuse him, asking the Supreme Court to order the Second Circuit to use the less deferential “de novo” standard.  As noted in the LTN article:

“The employees also cited a circuit split in how appellate courts reviewed judicial recusals, pointing out that the Seventh Circuit reviews disqualification motions de novo. Besides resolving the circuit split, the employees asked the Supreme Court to find that the Second Circuit’s standard was incorrect under the law. Citing federal statute governing judicial recusals, the employees claimed that the law required motions for disqualification to be reviewed objectively and that a deferential standard flew in the face of statutory intent. “Rather than dispelling the appearance of a self-serving judiciary, deferential review exacerbates the appearance of impropriety that arises from judges deciding their own cases and thus undermines the purposes of [the statute],” wrote the employees in their cert petition.”

This battle over predictive coding and Judge Peck’s participation has continued for 15 months.  For a recap of the events during that time, click here.

So, what do you think?  Is this a “hail mary” for the plaintiffs and will it succeed?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Not a Typical Blog Post Today

Since we started eDiscovery Daily back in September 2010, we have yet to miss a scheduled day to publish a blog post.  I’m not sure if today counts, but I feel compelled to talk about my dad.  Please excuse this one day departure from our normal topics.

My dad passed away on the morning of July 4, peacefully, in his sleep.  His name was Doug Austin too.  His funeral is today.  Dad never met a stranger and loved family and friends above all.  He would always tell us “be careful” when we left, even if it was just to go to the store 5 minutes away, and would say “no use to rush off” even if we stayed with him all day.  He loved spending time with family and numerous long-time friends.

He was a talented artist who loved to paint and create stained glass artwork.  All of our family has at least one of his beautiful stained glass pieces and dad typically welcomed each new member of the family with a stained glass piece tailored to them.  He was a great cook and I still prefer his steaks over those of any restaurant.

He had quirky sayings like “I’m still able to take nourishment” and “It’s time to get up and pay for your bed”.  When he farted, he would say “oops, I stepped on a frog”.  When he was really tired, he could snore loud enough to peel the paint off the walls.

He survived over 21 years after quadruple bypass surgery and survived over 2 years after being in the hospital for over three months.  He had congestive heart failure, COPD, kidney issues, lymphoma and a terrific, up-beat attitude that enabled him to not only survive all that for years, but to thrive.  He was always there for those he cared about and truly felt blessed by the love of his Lord Jesus Christ, his family and his friends.

I feel blessed to have had such a terrific father.  Dad, I love you.

Back to typical eDiscovery topics tomorrow, I promise.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Appellate Court Denies Sanctions for Routine Deletion of Text Messages – eDiscovery Case Law

In PTSI, Inc. v. Haley, No. 684 WDA 2012, 2013 Pa. Super. (Pa. Super. Ct. May 24, 2013), the appellate court denied a motion for spoliation sanctions where the defendants routinely deleted text messages and other data to “clean up” their personal electronic devices: the volume of messages and limited amount of phone storage made it difficult to retain all data and still use the phone for messaging.

Here, the plaintiff filed claims of conversion, breach of the duty of loyalty, and breach of fiduciary duty against its former at-will employees and their new competing business. The trial court dismissed all claims at summary judgment. It also denied PTSI’s motion seeking sanctions for spoliation, because the deletion of electronically stored information, including text messages, was not relevant to the summary judgment decision.

During discovery, PTSI filed a motion seeking sanctions based on its two former employees’ deletion of electronic records from their computers and phones, including text messages. The company claimed the information was “vital to the prosecution of this case” and could not be “feasibly reconstructed or retrieved without enormous time and expense to PTSI, if at all.”

Under Pennsylvania law, the court had to evaluate three factors to determine the appropriate sanction: “(1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and, where the offending party is seriously at fault, will serve to deter such conduct by others in the future.”

To determine the level of fault, the court considered the extent of the duty to preserve the evidence, based on whether litigation is foreseeable and whether the evidence might be prejudicial to the opposing party, and whether the evidence was destroyed in bad faith. The court also considered proportionality in making decisions, including five factors spelled out in the comments to the Pennsylvania Rules of Civil Procedure:

  • the nature and scope of the litigation, including the importance and complexity of the issues and the amounts at stake;
  • the relevance of electronically stored information and its importance to the court’s adjudication in the given case;
  • the cost, burden and delay that may be imposed on the parties to deal with electronically stored information;
  • the ease of producing electronically stored information and whether substantially similar information is available with less burden; and
  • any other factors relevant under the circumstances.

Here, the amount in controversy and the importance of the issues involving the data did not support awarding a discovery sanction. Moreover, PTSI could not show that its former employees’ “innocent clean up of personal electronic devices to allow them to function was unusual, unreasonable or improper under the circumstances.” Because the defendants “routinely deleted text messages, often on a daily basis, so as not to unduly encumber their iPhones” and because of “the volume of text messages that are frequently exchanged by cell phone users and the limited amount of storage on cell phones, it would be very difficult, if not impossible, to save all text messages and to continue to use the phone for messaging.” Furthermore, the order of preservation was entered well after any relevant data would have already been created and deleted. In addition, similar information was available from other sources and custodians; the forensic examiner in the case unearthed more than 1,000 e-mails from the employees’ computers. Finally, any spoliation inference could not defeat the summary judgment motion.

The appellate court agreed with the trial court’s reasoning and found no abuse of discretion.

So, what do you think?  Should the sanctions have been granted?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Word’s Stupid “Smart Quotes” – Best of eDiscovery Best Practices

Even those of us at eDiscoveryDaily have to take an occasional vacation day; however, instead of “going dark” for today, we thought we would republish a post from the early days of the blog (when we didn’t have many readers yet).  So, chances are, you haven’t seen this post yet!  Enjoy!

I have run into this issue more times than I can count.

A client sends me a list of search terms that they want to use to cull a set of data for review in a Microsoft® Word document.  I copy the terms into the search tool and then, all hell breaks loose!!  Either:

The search indicates there is a syntax error

OR

The search returns some obviously odd results

And, then, I remember…

It’s those stupid Word “smart quotes”.  Starting with Office 2003, Microsoft Word, by default, automatically changes straight quotation marks ( ‘ or ” ) to curly quotes as you type. This is fine for display of a document in Word, but when you copy that text to a format that doesn’t support the smart quotes (such as HTML or a plain text editor), the quotes will show up as garbage characters because they are not supported ASCII characters.  So:

“smart quotes”

will look like this…

âsmart quotesâ

As you can imagine, that doesn’t look so “smart” when you feed it into a search tool and you get odd results (if the search even runs).  So, you’ll need to address those to make sure that the quotes are handled correctly when searching for phrases with your search tool.

To disable the automatic changing of quotes to Microsoft Word smart quotes: Click the Microsoft Office icon button at the top left of Word, and then click the Word Options button to open options for Word.  Click Proofing along the side of the pop-up window, then click AutoCorrect Options.  Click the AutoFormat tab and uncheck the Replace “Smart Quotes” with “Smart Quotes” check box.  Then, click OK.

Often, however, the file you’ve received already has smart quotes in it.  If you’re going to use the terms in that file, you’ll need to copy them to a text editor first – (e.g., Notepad or Wordpad – if Wordpad is in plain text document mode) should be fine.  Highlight the beginning quote and copy it to the clipboard (Ctrl+C), then Ctrl+H to open up the Find and Replace dialog, put your cursor in the Find box and press Ctrl+V to paste it in.  Type the “ character on the keyboard into the Replace box, then press Replace All to replace all beginning smart quotes with straight ones.  Repeat the process for the ending smart quotes.  You’ll also have to do this if you have any single quotes, double-hyphens, fraction characters (e.g., Word converts “1/2” to “½”) that impact your terms.

So, what do you think?  Have you ever run into issues with Word smart quotes or other auto formatting options?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Judge Rules Against Spoliation Sanctions when the Evidence Doesn’t Support the Case – eDiscovery Case Law

In Cottle-Banks v. Cox Commc’ns, Inc., No. 10cv2133-GPC (WVG) (S.D. Cal. May 21, 2013), California District Judge Gonzalo P. Curiel denied the plaintiff’s motion for spolation sanctions because the plaintiff was unable to show that deleted recordings of customer calls would have likely been relevant and supportive of her claim.

The defendant provides services and products such as set-top cable boxes and customers call in to order these services and products.  The plaintiff alleged a practice of charging customers for boxes without disclosing, and obtaining approval for equipment charges – a violation of the Communications Act of 1934, 47 U.S.C. § 543(f).  The plaintiff’s discovery requests included copies of recording of her own calls with the defendant, and the defendant began preserving tapes when the plaintiff notified the defendant that she would seek call recordings in discovery, not before that.  As a result, the plaintiff filed a motion for spoliation sanctions, requesting an adverse inference and requesting that the defendant be excluded from introducing evidence that it’s call recordings complied with 47 U.S.C. § 543(f).

From the call recordings still available, a sample of recordings was provided to the plaintiff – in those calls, it was evident that the defendant did, in fact, get affirmative acceptance of the additional charges as a matter of practice.

Judge Curiel ruled that the defendant “had an obligation to preserve the call recordings when the complaint was filed in September 2010” and that the defendant “had an obligation to preserve the call recording, [so] Defendant was negligent in failing to preserve the back up tapes. Thus, Defendant had a culpable state of mind.”  However, because the “Plaintiff cited only two call recordings out of 280 call recordings produced to support her position”, the judge concluded “that the deleted call recordings would not have been supportive of Plaintiff’s claim.”  Because “Plaintiff has not demonstrated all three factors to support an adverse inference sanction”, Judge Curiel denied the plaintiff’s motion as to adverse inference and preclusion.

So, what do you think?  Should the sanction request have been denied?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

EDRM Publishes New Metrics Model – eDiscovery Trends

When I attended the Annual Meeting for the Electronic Discovery Reference Model (EDRM) last month, one of the projects that was close to a major deliverable was the Metrics project – a project that I worked on during my first two years as a participant in EDRM.  Now, EDRM has announced and published that deliverable: a brand new Metrics model.

As their press release notes, the “EDRM Metrics Model provides a framework for planning, preparation, execution and follow-up of e-discovery matters and projects by showing the relationship between the e-discovery process and how information, activities and outcomes may be measured.”  It consists of two inter-dependent elements: (a) The Center, which includes the key metrics variables of Volume, Time and Cost, and (b) The outside nodes, which identify work components that affect the outcome associated with the elements at the Center.  There is no indicated starting node on the Metrics Wheel, because any of the seven nodes could be a starting point or factor in an eDiscovery project.

Information at the Center

The model depicts Volume, Time, and Cost at its center, and all of the outside nodes impact each of these three major variables. Time, Cost, & Volume are inter-related variables that fluctuate for each project.

Outside Nodes

Here is a brief description of each of the seven nodes:

Activities: Things that are happening or being done by either people or technology; examples can include: collecting documents, designing a search, interviewing a custodian, etc.

Custodians: Person having administrative control of a document or electronic file or system; for example, the custodian of an email is the owner of the mailbox which contains the message.

Systems: The places, technologies, tools and locations in which electronic information is created, stored or managed; examples of systems include shared drives, email, computer applications, databases, cloud sources and archival sources such as back-up tapes.

Media: The storage devices for electronic information; examples include: CDs, DVDs, floppy disks, hard drives, tapes and paper.

Status: A unique point in time in a project or process that relates to the performance or completion of the project or process; measured qualitatively in reference to a desired outcome.

Formats: The way information is arranged or set out; for example, the format of a file which affects which applications are required to view, process, and store it.

Quality Assurance (“QA”): Ongoing methods to ensure that reasonable results are being achieved; an example of QA would be to ensure that no privileged documents are released in a production by performing a operation, such as checking for privilege tags within the production set.

A complete explanation of the model, including graphics, descriptions, glossary and downloadable content is available here.  Kudos to the team, led by Kevin Clark and Dera Nevin (TD Bank Group)!

So, what do you think?  Do you think the model will be useful to help your team better understand the activities and how they impact volume, time and cost for the project?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Spoliation of Data Can Get You Sent Up the River – eDiscovery Case Law

Sometimes, eDiscovery can literally be a fishing expedition.

I got a kick out of Ralph Losey’s article on E-Discovery Law Today (Fishing Expedition Discovers Laptop Cast into Indian River) where the defendant employee in a RICO case in Simon Property Group, Inc. v. Lauria, 2012 U.S. Dist. LEXIS 184638 (M.D. Fla. 2012) threw her laptop into a river.  Needless to say, given the intentional spoliation of evidence, the court imposed struck all of the defenses raised by the defendant and scheduled the case for trial on the issue of damages.  Magistrate Judge Karla Spaulding summarized the defendant’s actions in the ruling:

“This case has all the elements of a made-for-TV movie: A company vice president surreptitiously awards lucrative business deals to a series of entities that she and her immediate family members control. To cover up the egregious self-dealing, she fabricates multiple fictitious personas and then uses those fictitious personas to “communicate” with her employer on behalf of the entities she controls. She also cut-and-pastes her supervisor’s signature onto service agreements in an attempt to make it seem as if her activities have been approved. After several years, a whistleblower exposes the scheme to the company. The company then tells the vice president that she is being investigated and warns her not to destroy any documents or evidence. Sensing that her scheme is about to collapse around her and wanting to cover her tracks, the vice president then travels to the East Coast of Florida and throws her laptop computer containing information about these activities into a river.”

At least she didn’t deny it when deposed as noted in the ruling:

“When asked why she threw the laptop away, Lauria testified as follows:

Q: Okay. Why did you throw the laptop away?

A: Because I knew that something was coming down and I just didn’t want all the stuff around.

Q: So you were trying to get rid of documentation and e-mails and things?

A: Uh-huh, yes.

Q: That directly related to the lawsuit?

A: Yes. Now, they do, yes.”

Maybe she should have used the George Costanza excuse and state that she didn’t know it was “frowned upon”.

So, what do you think?  Was that wrong?  Just kidding.  Please share any comments you might have or if you’d like to know more about a particular topic.

BTW, Ralph is no stranger to this blog – in addition to several of his articles we’ve referenced, we’ve also conducted thought leader interviews with him at LegalTech New York the past two years.  Here’s a link if you want to check those out.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Self-Collecting? Don’t Forget to Check for Image Only Files – eDiscovery Best Practices

Yesterday, we talked about the importance of tracking chain of custody order to be able to fight challenges of electronically stored information (ESI) by opposing parties.  Today, let’s talk about a common mistake that organizations make when collecting their own files to turn over for discovery purposes.

I’ve worked with a number of attorneys who have turned over the collection of potentially responsive files to the individual custodians of those files, or to someone in the organization responsible for collecting those files (typically, an IT person).  Self-collection by custodians, unless managed closely, can be a wildly inconsistent process (at best).  In some cases, those attorneys have instructed those individuals to perform various searches to turn “self-collection” into “self-culling”.  Self-culling can cause at least two issues:

  1. You have to go back to the custodians and repeat the process if additional search terms are identified.
  2. Potentially responsive image-only files will be missed with self-culling.

Unless search terms are agreed to by the parties up front, it’s not unusual to identify additional searches to be performed – even when up front agreement, terms can often be renegotiated during the case.  It’s also common to have a number of image-only files within any collection, especially if the custodians frequently scan executed documents or use fax software to receive documents from other parties.  In those cases, image-only PDF or TIFF files can often make up as much as 20% of the collection.  When custodians are asked to perform “self-culling” by performing their own searches of their data, these files will typically be missed.

For these reasons, I usually advise against self-culling by custodians and also don’t recommend that IT perform self-culling, unless they have the ability to process that data to identify image-only files and perform Optical Character Recognition (OCR) to capture text from them.  If your IT department has the capabilities and experience to do so (and the process and chain of custody is well documented), then that’s great.  Many internal IT departments either don’t have the capabilities or expertise, in which case it’s best to collect all potentially responsive files from the custodians and turn them over to a qualified eDiscovery provider to perform the culling (performing OCR as needed to include responsive image-only files in the resulting responsive document set).  With the full data set available, there is also no need to go back to the custodians to collect additional data (unless the case requires supplemental productions).

So, what do you think?  Do you self-collect data for discovery purposes?  If so, how do you account for image-only files?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Chain, Chain, Chain: Chain of Custody – eDiscovery Best Practices

If you’re a baseball fan you probably remember Ryan Braun and the reported failed test for performance enhancing drugs that he successfully challenged by challenging the chain of custody associated with his blood sample.  When it comes to electronically stored information (ESI), ensuring proper chain of custody tracking is also an important part of handling that ESI through the eDiscovery process in order to be able to fight challenges of the ESI by opposing parties.  An insufficient chain of custody is a chain, chain, chain of fools.

Information to Track for Chain of Custody

ESI can be provided by a variety of sources and in a variety of media, so you need a standardized way of recording chain of custody for the ESI that you collect within your organization or from your clients.  At CloudNine Discovery, we use a standard form for capturing chain of custody information.  Because we never know when a client will call and ask us to pick up data, our client services personnel typically have a supply of blank forms either in their briefcase or in their car (maybe even both).

Our chain of custody tracking form includes the following:

  • Date and Time: The date and time that the media containing ESI was provided to us.
  • Pick Up or Delivery Location: Information about the location where the ESI was provided to us, including the company name, address, physical location within the facility (e.g., a specific employee’s office) and any additional information important to note where the data was received.
  • Delivering Party: Name of the company and the name of representative of the company providing the media, with a place for that representative to sign for tracking purposes.
  • Delivery Detail (Description of Items): A detailed description of the item(s) being received.  Portable hard drives are one typical example of the media used to provide ESI to us, so we like to describe the brand and type of hard drive (e.g., Western Digital My Passport drive) and the serial number, if available.  Record whatever information is necessary to uniquely identify the item(s).
  • Receiving Party: Name of the company and the name of representative of the company receiving the media, with a place for that representative to sign for tracking purposes.  In our form, that’s usually somebody from CloudNine Discovery, but can be a third party if they are receiving the data from the original source – then, another chain of custody form gets completed for them to deliver it to us.
  • Comments: Any general comments about the transfer of media not already addressed above.

I’ve been involved in several cases where the opposing party, to try to discredit damaging data against them, has attacked the chain of custody of that data to raise the possibility that the data was spoliated during the process and mitigate its effect on the case.  In these types of cases, you should be prepared to have an expert ready to testify about the chain of custody process to counteract those attacks.  Otherwise, you might be singing like Aretha Franklin.

So, what do you think?  How does your organization track chain of custody of its data during discovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Another Case where Reimbursement of eDiscovery Costs are Denied – eDiscovery Case Law

When it comes to reimbursement of eDiscovery costs, sometimes courts feel like a nut and sometimes they don’t.  In other words, there appears to be no consistency.

In The Country Vintner of North Carolina, LLC v. E. & J. Gallo Winery, Inc., No. 12-2074, 2013 U.S. App. (4th Cir. Apr. 29, 2013), when deciding which costs are taxable, the Fourth Circuit chose to follow the Third Circuit’s reasoning in Race Tires America, Inc. v. Hoosier Racing Tire Corp.,674 F.3d 158 (3d Cir. 2012), which read 28 U.S.C. § 1920(4) narrowly. Specifically, the court approved taxation of file conversion and transferring files onto CDs as “[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case” but no other tasks related to electronically stored information (ESI).

In this case, the defendant balked at the plaintiff’s discovery requests, arguing that the requests created an undue burden, rendering the documents sought inaccessible. The plaintiff filed a motion to compel, which the district court granted. The defendant then collected more than 62 gigabytes of data for review.

After prevailing on a motion to dismiss several claims and having the rest dismissed at summary judgment, the defendant filed a bill of costs seeking $111,047.75 for e-discovery-related charges, including the following:

  • “$71,910 for ‘flattening’ and ‘indexing’ ESI,”
  • “$15,660 for ‘Searching/Review Set/Data Extraction,’”
  • “$178.59 for ‘TIFF Production’ and ‘PDF Production,’”
  • “$74.16 for electronic ‘Bates Numbering,’”
  • “$40 for copying images onto a CD or DVD,” and
  • “$23,185 for ‘management of the processing of the electronic data,’ ‘quality assurance procedures,’ ‘analyzing corrupt documents and other errors,’ and ‘preparing the production of documents to opposing counsel.’”

Following the Third Circuit’s reasoning in Race Tires America, the district court found that the defendant was entitled to costs for tasks that were the equivalent of copying or duplicating files, but not for “any other ESI-related expenses.” Here, the only reimbursable tasks were converting files to TIFF and PDF format and transferring files to CDs. Therefore, the court taxed $218.59.

On appeal, the defendant claimed its ESI-related charges were taxable because “ESI has ‘unique features’: ESI is ‘more easily and thoroughly changeable than paper documents,’ it contains metadata, and it often has searchable text.” The defendant argued converting native files to PDF and TIFF formats resulted in “‘static, two-dimensional images that, by themselves, [we]re incomplete copies of dynamic, multi-dimensional ESI,’” such that other processing was required to copy the “‘all integral features of the ESI.’”

The Fourth Circuit rejected the defendant’s argument.  The court noted that “the presumption is that the responding party must bear the expense of complying with discovery requests.” Moreover, the U.S. Supreme Court has opined that “‘costs almost always amount to less than the successful litigant’s total expenses’” and that Section 1920 is “‘limited to relatively minor, incidental expenses.’” Finally, the appellate court also relied on Race Tires in finding that Section 1920(4) limited the taxable costs to file conversion and burning files onto discs. The ESI-related charges were not taxable as “fees for exemplification” under the statute because they did not involve the authentication of public records, exhibits, or demonstrative aids.

Although the court’s reasoning meant the defendant would be reimbursed for only a fraction of its costs, it did not mean its interpretation of the statute was “too grudging in an age of unforeseen innovations in litigation-support technology.” Rather, the court suggested that where parties believe costs are excessive, they can file a motion seeking a protective order.

So, what do you think?  Should the costs have been awarded?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.