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Court Reduces, But Allows, Reimbursement of eDiscovery Costs – eDiscovery Case Law

In some cases, such as this case and this case, the prevailing party received reimbursement of eDiscovery costs, whereas in this case, this case and this case requests for reimbursement of costs was denied (or reversed) by the courts.  In this case, the prevailing party was awarded a reduced amount, but still received reimbursement of eDiscovery costs.

In Moore v. The Weinstein Company LLC, No. 3:09-cv-0166, 2012 U.S. Dist. (M.D. Tenn. Dec. 18, 2012), noting it had wide discretion to determine costs recoverable by a prevailing party under federal statutes providing for the taxation of costs, a court reduced costs awarded for eDiscovery expenditures based on its analysis of which costs were reasonable, necessary, and taxable.

In this case involving Samuel David Moore, professionally known as Legendary Soul Man Sam Moore, and others as plaintiffs, the defendants prevailed on a motion for summary judgment and subsequently filed a bill of costs. The plaintiffs, however, objected to the costs, and therefore U.S. Magistrate Judge Joe B. Brown (not to be confused with TV’s Judge Joe Brown) reviewed the case. One category of costs the plaintiffs objected to involved eDiscovery expenses.

The court noted that the defendants requested over $40,000 in costs for eDiscovery, approximately half of which was to compensate a third-party vendor for its services. Other costs were for expenses related to in-house eDiscovery work performed by defendants’ counsel Waller, Lansden, Dortch & Davis, LLP. The court also noted that the parties had agreed to the eDiscovery procedures they would use in their Case Management Order, and these processes included producing electronic data in a TIFF format.

Noting simply that precedent gives courts wide discretion in determining which costs are taxable, the court concluded that certain eDiscovery expenditures submitted by the defendants in their bill of costs were reasonably taxable and some were not:

The Magistrate Judge has reviewed these charges and believes some are unreasonable and should be reduced or eliminated. The Document Solutions charges are reasonable and necessary. Pursuant to the Case Management Order, costs for processing documents into specific formats were required to be borne by each party. Moreover, further processing that document for production by, for example, searching for specific custodians, is also a necessary cost of this litigation.

With respect to the in-house “Technology Services” charges, however, the Magistrate Judge is persuaded that the per hour charge of $150 is unreasonable. Document Solutions billed “tech time” at $175 per hour, which would presumably be significantly higher than the rates billed to Waller clients by Waller’s in-house technical staff. The Magistrate Judge believes that a rate comparable to an experienced paralegal would be more appropriate. The technology services technologists have specialized expertise and training similar to a paralegal. Therefore, the Magistrate Judge will set a more reasonable billing rate of $100/hour for Technology Services billing.

Additionally, the Magistrate Judge concluded that several other costs were “not properly taxed” to the plaintiffs, including costs for “[w]ork on discovery budget”; and “[p]reparation of deposition transcripts for review” and “[p]reparation of documents for hearing,” as they represented “paralegal work.” Finally, an entry for an attorney to “[p]repare for and attend [a] telephonic deposition of IT vendor” was deemed non-taxable by the court as it was “unnecessary.”

Accordingly, the court reduced the total taxable costs for eDiscovery to $36,196.90.

So, what do you think?  Should the costs have been reimbursed?  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.

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