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Supreme Court’s Taniguchi Decision Used as a Shield Against Taxable Costs

Posted on September 18th, 2013

Last year, the U.S. Supreme Court issued an opinion in Taniguchi v. Kan Pacific Saipan, Ltd. 132 S.CT. 1997 (2012), a case that examined the question of what type of costs are taxable under 28 U.S.C. § 1920? Justice Alito wrote for a six-justice majority to hold that“compensation for interpreters” is enumerated under the statute as a taxable cost. However, written foreign language document translation is not. (Note that Justice Ginsburg offered an acute dissent.)

This case is now being cited in federal courts to argue against many types of taxable costs in civil litigation, most recently in the case Ancora Technologies, Inc. v. Apple, Inc., Case No. 11-CV-06357 YGR (N.D.Cal. August 26, 2013). In the underlying case, the court ruled in favor of Apple on a Motion for Summary Judgment. As the prevailing party in federal court, Apple filed a Bill of Costs, seeking $116,366.87; $94,400.71 for “fees exemplification and the costs of making copies.” Plaintiff Ancora objected to these costs and cited Taniguchi as precedent to suggest that the enumerated allowable costs in section 1920 should be constructed narrowly. The court awarded Apple $111,158.23 (almost the full amount requested) and Ancora filed a Motion for Review of this award.

The court examined each item in Apple’s Bill of Costs with Taniguchi in mind:

1.         The first cost in contention was $3,471.61 for conversion of electronic data to TIFF format. The court held this was taxable under the statute.  Additionally, Apple had to convert the files as Ancora failed to produce the data in TIFF format in contrivance of a prior agreed ESI order.

2.         The next cost was $71,611.52 for online hosting of hundreds of gigabytes of electronic data storage, although the total amount of data stored was only 3.5 GB. Agreeing that such costs are not allowable under the narrow holding of Taniguchi, data storage simply does not fit into the enumerated categories of allowable costs. Comparing it to the “paper document era” where a litigation team would rent out a storage warehouse, storage of electronic discovery is not taxable under Section 1920. The court reduced the award by $71,611.52.

The denial of $71,611.52 was a big blow to the award of costs. Will any remain? Our discussion of the review of Bill of Costs under Section 1920 in Ancora v. Apple continues in our next blog…

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