Qui Tam Plaintiff Awarded $445,505 for ESI Costs
A common topic of interest as plaintiff eDiscovery law develops is what ESI costs and expenses can be shifted to a losing party. In the case U.S. ex rel. Becker v. Tools & Metals, Inc., Civ. No. 3:05-CV-0627-L (N.D.Tex. 2013), a qui tam plaintiff was awarded costs and expenses against the defendant for certain ESI costs under the False Claims Act (FCA).
One objection by defendant was the magistrate judge’s recommended award of $174,395 for uploading ESI and creating a search index was unreasonable. Additionally, the defendant claimed this amount included the costs of uploading the ESI in a different format than he requested.
In entering the magistrate’s order, the court noted that 42 USC §3730(d) of the FCA does not limit recovery: “a qui tam plaintiff shall…receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorney fees and costs…” The judge noted that the magistrate had considered the conflict about formatting and reduced the total costs of this by 30 percent to account for this dispute, which was reasonable under the circumstances.
The second objection regarded the magistrate’s recommendation of $271,110 for electronic holding costs. The defendant pointed out that plaintiffs only used five documents at trial, so this amount was unreasonable. The judge found this argument to be without merit. Costs and expenses are not limited under the FCA, and the fact that only five documents were ultimately used at trial did not change that.
“Due to increasing amounts of electronic documents…and the relative ease of retrieving such documents, discovery in complex commercial cases such as this has evolved into an extensive undertaking with parties producing and culling through large quantities of electronic documents that will ultimately be used to establish a claim or defense.”
The total amount of $445,505 to plaintiff was entered.