Federal Circuit Divides “Making Copies” Into Three Categories to Decide Taxation of eDiscovery
Our last blog was on overview of the recent eDiscovery case CBT Flint Partnership, LLC v. Return Path, Inc. and Cisco Ironport Systems, LLC, No. 2013-1036 (Fed.Ct. December 13, 2013). In this case, the court reviewed an award of costs for various electronic discovery services. To decide whether those costs fell under the purview of § 1920(4) “making copies,” the court divided the electronic discovery services into three separate stages:
Stage One: A party or vendor must copy electronic data from a hard drive, server or other source media, also called making a forensic copy or mirror image. This replicates the whole source to pull the requested documents or data. When a prior agreement or order is made regarding the format of the production, certain times the documents must first be converted into a uniform format before copying (for example, converting to TIFF documents). This conversion can sometimes result in the destruction of metadata, and therefore, making a suitable copy will sometimes include an additional step to include the metadata. The court holds that in Stage One, these are all recoupable costs that fall into the category of “making copies.”
If an eDiscovery vendor can copy the metadata (when requested) without using imaging and extraction techniques, then those costs, if performed, will fall outside the scope of§ 1920(4). This may differ depending on the document requests: the costs able to be recouped are limited to the production of the form requested.
Stage Two: Characterized as “project management” such as keyword searching, statistical previews, auditing of files, extraction of proprietary data, among other things, the court holds that these types of services do not fall within § 1920(4). Other such tasks that do not constitute “making copies” include the use of document review software, deposition support, privilege log creation, communications and meetings about the discovery.
Stage Three: This is the costs for copying responsive documents, and the parties agreed they fell within the scope of § 1920(4). The court expanded the costs recoverable in this stage to include cost of providing a secured computer to view proprietary documents (but within this category, costs of planning, preparation, coordination and communication regarding the secured computer are not.)
Note that the court took special notice of two electronic discovery issues occurring in Stage Two: decryption and load files. Holding that the former is generally not recoverable and the latter generally is recoverable, we will review those specific issues in greater detail in our next blog post.