eDiscovery Daily Blog

Court Says Scanning Documents to TIFF and Loading into Database is Taxable – eDiscovery Case Law

Awarding reimbursement of eDiscovery costs continues to be a mixed bag.  Sometimes, reimbursement of costs is awarded, such as in this case and this case.  Other times, those requests have been denied (or reversed) by the courts, including this case, this case and this case.  This time, reimbursement of eDiscovery costs was approved.

In Amana Society, Inc. v. Excel Engineering, Inc., No. 10-CV-168-LRR, (N.D. Iowa Feb. 4, 2013), Iowa District Judge Linda R. Reade found that “scanning [to TIFF format] for Summation purposes qualifies as ‘making copies of materials’ and that these costs are recoverable”.

With regard to the plaintiff’s claims of negligent misrepresentation and professional negligence, the defendant obtained partial summary judgment from the court on one claim and prevailed at trial on the other claim. The defendant subsequently filed a bill of costs asking the court to tax $51,233.51 in fees against the plaintiff, including “fees and disbursements for printing.” Last October, the plaintiff filed an objection to the bill of costs; in its response, the defendant withdrew its requests for certain costs and reduced the total amount requested to $50,050.61.

The requested costs included $6,000 in copying costs, including almost $5,000 in costs for uploading documents to Summation, the popular litigation support software application. The plaintiff claimed the costs were not taxable because “(1) the costs were incurred for the convenience of counsel; and (2) the costs were discovery related and were not necessary for use at trial.” On the other hand, the defendant asserted “‘[t]he electronic scanning of documents is the modern-day equivalent of exemplification and copies of paper and therefore can be taxed pursuant to§ 1920(4).’”  Taxable costs under 28 U.S.C. § 1920, includes “[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case.”

Judge Reade cited Race Tires America, Inc. v. Hoosier Racing Tire Corp. (where the winning defendants were originally awarded $367,000 as reimbursement for eDiscovery costs, but that amount was reduced to $30,370 on appeal), and found “the conversion of native files to TIFF . . . and the scanning of documents to create digital duplicates are generally recognized as the taxable ‘making copies of material.’”  Approving reimbursement for these expenses “in light of the facts and document-intensive nature of this case”, the judge rejected the plaintiff’s claim that $2,435.68 of the Summation costs awarded should be disallowed because “they were incurred for discovery purposes”, noting that “[t]here is no absolute bar to recovering costs for discovery-related copying and scanning.”

Judge Reade refused to reimburse some other document related costs, noting that “Bates match, OCR and document utilization are used to organize documents and make them searchable, activities that would traditionally be done by attorneys or support staff, and therefore, are not taxable.”

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.

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