eDiscovery Daily Blog

Court Grants Most of Plaintiff’s Cost Recovery Request, Including All eDiscovery Costs: eDiscovery Case Week

eDiscovery Case Week continues.  We’ll cover four cases this week and, yesterday, we covered our Wednesday webcast Key eDiscovery Case Law Review for First Half of 2017 (click here to check out the replay of that) as well.  Here’s the next case.  Just as there are five “Sharknado” movies (sadly), there will be five case law related posts this week.

In Ariel Inv., LLC v. Ariel Capital Advisors LLC, No. 15 C 3717 (N.D. Ill., July 17, 2017), Illinois District Judge Matthew F. Kennelly granted the prevailing plaintiff’s request to tax most requested costs in the amount of $99,378.32, including the entire amount ($85,666.51) requested for reimbursement for eDiscovery costs.

Case Background

In this case where the plaintiff sued the defendant alleging trademark infringement, unfair competition, and cybersquatting in violation of the Lanham Act, the Court granted summary judgment for the defendant on the cybersquatting claim before trial, but the plaintiff prevailed in a bench trial on its remaining Lanham Act and state law claims.  The Court entered a permanent injunction barring the defendant from continuing to use the term “Ariel” in connection with its business.

After the ruling, the plaintiff submitted a request to cover “nearly $110,000 in costs” under Federal Rule of Civil Procedure 54(d).  The defendant contended that no costs should be awarded because the plaintiff only partially prevailed, whereas the plaintiff argued that it was the prevailing party because it was awarded substantial relief.

Judge’s Ruling

With regard to the defendant’s claim that no costs should be awarded because the plaintiff only partially prevailed, Judge Kennelly ruled: “The prevailing party for purposes of Rule 54(d) is the party that prevails with regard to a substantial part of the litigation…There is no question that Ariel Investments prevailed with regard to a substantial part of the litigation. Indeed, it was the prevailing party on all of its claims other than the cybersquatting claim.”

With that issue decided, Judge Kennelly considered reimbursement requests related to costs for depositions, court transcripts, exemplification and other costs, including eDiscovery costs totaling $85,666.51.  Judge Kennelly noted that the “Seventh Circuit has not addressed in detail the recoverability of e-discovery expenses” and that “[t]his Court and others in the district have previously followed the reasoning of the Third Circuit” in cases like Race Tires of America, Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir. 2012) (covered by us here), which ruled against several eDiscovery related costs as not constituting “making copies”.

Nonetheless, Judge Kennelly stated: “Ariel Investments has sufficiently shown that the costs it requests are recoverable. Specifically, Ariel Investments has established, by way of an affidavit offered in response to Ariel Capital’s challenge to the content of the e-discovery vendor invoices, that the charges for which it seeks reimbursement all involved expenses for ‘the process by which documents in a variety of native forms . . . are copied and converted’ to a readable format…Ariel Capital cannot reasonably object to otherwise recoverable costs that it required Ariel Investments to incur.”

As a result, Judge Kennelly granted the plaintiff’s request to tax the entire amount ($85,666.51) requested for reimbursement for eDiscovery costs and total costs in the amount of $99,378.32.

So, what do you think?  Why do some courts award reimbursement of eDiscovery costs while others don’t?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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