ESI Costs and Sanctions Awarded to Plaintiff in 7th Circuit District Court Case
In Engineered Abrasives, Inc. v. American Machine Products & Service, Inc. No. 13C7342 (N.D. Ill. Mar. 18, 2015), the Northern District of Illinois considered whether to award ESI costs to the prevailing Plaintiff pursuant to 28 U.S.C. Section 1920.
Because the 7th Circuit has yet to consider the taxability of eDiscovery costs under § 1920, the court looked to decisions from other circuits, the majority of which it found to have upheld the taxability of costs related to converting electronically stored information into readable format, including scanning paper documents or converting native files to TIFF format, but not uphold costs related to gathering, preserving, processing, searching, culling and extracting ESI. Based on these decisions, the court taxed costs related to converting the ESI into a readable format, but did not tax costs related to processing data, loading it onto a review platform, or preparing searches.
The court next considered whether it could sanction Defendants for their “evasive and incomplete [discovery] responses” which had led Plaintiff to file a motion to compel and conduct a computer forensic examination. Observing that Defendant’s actions “cannot be said to have been done in good faith,” the court held that because Defendants unnecessarily prolonged the discovery process and multiplied the costs, the costs related to the computer forensic examination could be properly shifted onto Defendants as a sanction for their misconduct.