eDiscovery Daily Blog

Court Upholds Review of Taxable Costs by Clerk, Awards over $57,000: eDiscovery Case Law

In Comprehensive Addiction Treatment Center, Inc. v. Leslea, No. 11-cv-03417-CMA-MJW (D. Colo. Feb. 13, 2015), Colorado District Judge Christine M. Arguello denied the plaintiffs’ motion to review Clerk’s Taxing of Costs Under F.R.C.P. 54(D)(1), upholding the award by the Clerk of the Court of $57,873.61 in taxable costs.

Case Background

On January 31, 2013, the defendants’ Motion to Dismiss on qualified immunity and for lack of subject matter jurisdiction was granted by the court. After prevailing on summary judgment, the defendants filed a Proposed Bill of Costs seeking costs totaling $58,037.01. At a telephonic hearing, the District Court Clerk awarded $57,873.61 of the requested taxable costs. On March 5, 2014, the plaintiffs filed an instant Motion seeking a review of the Clerk’s determination concerning the taxed amount of $55,649.98 for the defendants to contract with a private consulting company, Cyopsis, to retrieve and convert ESI into a retrievable format to produce information that was requested by the plaintiffs.

The plaintiffs contended that the Court should reduce the taxing of costs entered by the Clerk from $57,873.61 to $2,387.03 because retrieving, restoring and converting data does not constitute “copying” under 28 U.S.C. § 1920(4). The defendants disagreed, arguing that “[p]roduction costs in collecting, scanning, reviewing, and preparing documents are necessary expenditures that are made for the purpose of advancing the discovery phase of the case and as such, are taxable.”

Judge’s Opinion

Judge Arguello stated that “Federal Rule of Civil Procedure 54 provides that ‘[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party.’” She also pointed out that “courts have recognized that 28 U.S.C. § 1920(4) includes e-discovery related costs”, citing three cases.

As for this case, Judge Arguello observed that “[b]ecause of the complexities and time-intensive efforts anticipated in responding to Plaintiffs’ requests for documents, the parties entered into three consecutive tolling agreements” and also that “Defendants wrote to Plaintiffs’ counsel three times describing the difficulties and complexities encountered in retrieving and restoring the ESI”. “At no time during this period did Plaintiffs initiate discussion aimed at limiting the scope of their request for information or take other measures to limit the costs of the endeavor”, she noted, indicating that based on the ESI production, “Plaintiffs filed a new Complaint including several allegations not included in the version filed in 2010”.

As a result, Judge Arguello found that the defendants’ costs related to the ESI are expenses enumerated in 28 U.S.C. § 1920(4). She found that “The ESI expenses were not merely for the convenience of the parties nor were they materials produced solely for discovery as Plaintiffs filed a new Complaint that included information gleaned from the ESI. Thus, the ESI expenses were reasonably necessary for use in the case. Indeed, Plaintiffs were aware of the monumental effort to retrieve and convert the data into a retrievable format in response to their Interrogatories and Requests for Production. The costs incurred by Defendants, the prevailing party, in responding to Plaintiffs’ requests are expenses that are shifted to Plaintiffs, the losing party. Indeed, Plaintiffs own litigation choices and aggressive course of discovery necessarily resulted in ‘heightened’ defense costs.”

Therefore, Judge Arguello denied the plaintiffs’ motion and upheld the award by the Clerk of the Court of $57,873.61 in taxable costs.

It’s not exactly a pot o’ gold, but it’s nothing to sneeze at either. 🙂 Happy St. Patrick’s Day!

So, what do you think? Is recovery of eDiscovery costs under 28 U.S.C. § 1920(4) too open to interpretation? Please share any comments you might have or if you’d like to know more about a particular topic.

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