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Court Takes a Broad Interpretation of Taxable eDiscovery Costs

Posted on March 4th, 2015

In Comprehensive Addition Treatment Center, Inc. v. Leslea, et al., No. 11-cv-03417-CMA-MJW (D. Colo. Feb. 13, 2015), the District Court of Colorado took a broad view of whether a winning party can recover eDiscovery costs under 28 U.S.C. § 1920(4).

Defendants had hired a third-party eDiscovery vendor to assist them with electronic discovery document production. After Defendants prevailed on summary judgment, they sought taxable costs from Plaintiff, including costs paid to the eDiscovery vendor.  The trial court awarded Defendants their requested costs, awarding approximately $57,000 for the eDiscovery vendor alone.  Plaintiff objected to the court awarding any amount for eDiscovery services, and filed a motion to review the costs.

Plaintiff argued that 28 U.S.C. § 1920(4) did not permit an award of expenses for a third-party eDiscovery vendor, and that such costs do not constitute “copying” costs allowable under the statute. Defendants disagreed, alleging that the court had appropriately deemed the costs “copying” and that “production 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.”

The court noted that Defendants had informed Plaintiff that they had encountered difficulties in responding to Plaintiff’s ESI requests and that much of the responsive data would involve restoring 83 back-up tapes to a usable format. The court noted that Defendants had also informed Plaintiff that they needed to hire a third-party vendor to assist them with the complex process.

The court, citing other decisions reaching the same conclusion, held that 28 U.S.C. § 1920(4)’s provision for “copying costs” could include Defendant’s third-party ESI costs (i.e., modern day photocopying). The court further held that Defendants had not incurred these costs merely for the convenience of the parties and had made Plaintiff aware of the high costs of producing the ESI and converting the data into usable format from the back-up tapes. The court found that the high costs were directly related to Plaintiffs’ “litigation choices and the aggressive course of discovery.” The court, thus, denied Plaintiff’s motion and entered the awarded eDiscovery costs.

ILS – Plaintiff eDiscovery Experts

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