District Court Allows Taxation of Costs Related to Electronic Discovery

In re Aspartame Antitrust Litig., 817 F. Supp. 2d (E.D. Pa. 2011)

In this case, the court addressed plaintiffs’ motion to deny or reduce defendants’ bill of costs, and in particular their objections to the costs related to electronic discovery.  Recognizing that “taxing e-discovery is a new area of law where courts have diverged in their approaches,” the court denied plaintiff’s motion as to many of the costs at issue but did disallow or reduce some costs, including those incurred for the convenience of counsel.

“A court may tax ‘fees for printed or electronically recorded transcripts necessarily obtained for use in the case’ and ‘fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case,’ as well as other specifically enumerated fees” pursuant to 28 U.S.C. § 1902(2) and (4).  In the present case, plaintiffs objected to many of the allowed costs, including those related to e-discovery.

Taking up plaintiffs’ objections to the e-discovery costs awarded, the court indicated its belief that “in cases of this complexity” (involving a worldwide antitrust conspiracy, multiple defendants, and a “staggering” volume of discovery), “e-discovery saves costs overall by allowing discovery to be conducted in an efficient and cost-effective manner” and agreed with the defendants that “electronic discovery allows parties to ‘save costs associated with manually producing, handling, storing and delivering thousands (and often millions) of pages of hard-copy documents.’”  Accordingly, after noting that the efforts of outside vendors had reduced the volume of potentially responsive documents by 87% as to one defendant and 38.5% as to another, the court approved/awarded costs “for the creation of a litigation database, storage of data, imaging hard drives, keyword searches, deduplication, data extraction and processing” and costs related to keyword privilege screening, as well as costs related to hosting the data after production where discovery was ongoing.  The court further awarded costs associated with “technical support necessary to complete those tasks,” costs for optical character recognition, costs for the creation of load files that were requested by plaintiffs, costs related to data recovery and the restoration of tapes, and costs related to “metadata extraction and compliance with production requirements” among others.

The court drew the line, however, at costs related to a “sophisticated e-discovery program” described as a “document review tool with visual clustering . . . based on concepts extracted from those documents” which the court characterized as “advanced technology” that “exceeds necessary keyword search and filtering functions” and falls “squarely within the realm of costs that are not necessary for litigation but rather are acquired for the convenience of counsel.”  The court also declined to allow costs for "converting a TIFF document to a PDF document" where the conversion was not necessary, but for the convenience of counsel.