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Fifth Circuit Upholds Taxation of eDiscovery Costs in Qui Tam Case

Posted on December 14th, 2015

In U.S. ex. rel. Long v. GSD & M Idea City, LLC, Case No. 14-11049 (5th Cir., December 1, 2015), Plaintiff lost his qui tam case against Defendant and was taxed Defendant’s costs by the District Court. Plaintiff appealed the costs to the Fifth Circuit, complaining that the District Court had abused its discretion in allowing taxation of eDiscovery costs, which Plaintiff claimed were not permitted under 11 U.S.C. § 1920.

The Fifth Circuit Court of Appeals upheld the District Court’s findings with regard to the eDiscovery costs, stating that its decision was not an abuse of discretion. In the first place, Plaintiff did not specify which of Defendant’s eDiscovery costs were not taxable to him. The court discussed other cases in the country and noted that nationwide, there is no uniformity as to decisions regarding reproduction of ESI as a taxable cost of “making copies” under Section 1920(4). In this case, at issue were costs of TIFF conversion and character recognition. The District Court had found that the costs were incurred for services necessary to Defendant’s case and that they fell under the “making copies” purview of Section 1920(4), and the Fifth Circuit could not find an abuse of discretion, and so denied Plaintiff’s appeal and upheld the taxation of costs.

Most courts have held that eDiscovery costs are largely taxable – although Section 1920(4) refers to costs of “making copies,” the changing landscape of litigation has pushed ESI discovery to the forefront. Looking at the case law in your jurisdiction will help you decide if your client will be able to recover electronic discovery costs if you prevail in the case.

ILS – Plaintiff ESI Discovery Experts

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