Electronic Discovery Law
Court Finds Costs Related to Database "Used as Means of Document Production" are Taxable but Reverses Award in Light of Cost Sharing Agreement
In re Ricoh Co., Ltd. Patent Litig., No. 2011-1199, 2011 WL 5928689 (Fed. Cir. Nov. 23, 2011)
In this case, Ricoh sought review of the district court’s award of costs to Synopsys related to the parties’ use of Stratify (“a third-party electronic database service”) for the production of email. The appellate court concluded that the district court did not err in determining that costs related to the database could be recovered pursuant to 28 U.S.C. § 1920(4), but reversed the lower court’s award in light of the parties' agreement to split the costs.
In the course of the underlying litigation, the parties were initially unable to agree on the form of production. Eventually, Ricoh suggested using Stratify, “a third party electronic database service,” and that the costs be divided between the parties. Synopsys agreed. After the case was resolved in favor of Synopsys, the district court awarded costs, pursuant to 28 U.S.C. § 1920, including costs related to Stratify. On appeal, Ricoh argued that the district court erred in awarding such costs.
Synopsys argued that because “Stratify was used as the exclusive means for producing e-mails,” the costs were fully taxable pursuant to 28 U.S.C. § 1920(4). Ricoh argued that Stratify did not fall under section 1920(4) “because it was a ‘document review database’ (as opposed to a form of document production) for the convenience of counsel and not necessary for use in the case.” Under section 1920(4), “exemplification and copying costs for producing documents in discovery are recoverable.” Similarly, N.D. Cal. Civil Local Rule 54-3(d)(2) permits taxing “[t]he costs of reproducing disclosure or formal discovery documents when used for any purpose in the case.” Because “the Stratify database was used as a means of document production in this case,” the appellate court determined that the district court did not abuse its discretion in concluding that “absent a contrary agreement such as we conclude existed in this case” the costs associated with Stratify were taxable.
The act of producing documents is not so narrowly construed as to cover only printing and Bates-labeling a document. See Black's Law Dictionary 1328 (9th ed. 2009) (defining “produce” as “[t]o provide (a document, witness, etc.) in response to subpoena or discovery request”). In the era of electronic discovery, courts have held that electronic production of documents can constitute “exemplification” or “making copies” under section 1920(4). See, e.g., BDT Prods., Inc. v. Lexmark Int'l, Inc., 405 F.3d 415, 420 (6th Cir.2005) (“[E]lectronic scanning and imaging could be interpreted as ‘exemplification and copies of papers.’ ”). Notably, in 2008, Congress amended section 1920(4) by replacing the phrase “copies of papers” with “making copies of any materials ” Judicial Administration and Technical Amendments Act of 2008, Pub. L. No. 110–406, § 6, 122 Stat. 4291, 4292 (emphasis added), to reflect the idea that “electronically produced information [is] [re]coverable in court costs,” 154 Cong. Rec. H10270, H10271 (daily ed. Sept. 27, 2008) (statement of Rep. Zoe Lofgren). Thus, the costs of producing a document electronically can be recoverable under section 1920(4).
Here, it was Ricoh that initially suggested using Stratify because it “addresses all of [ Synopsys's] integrity and security concerns, while allowing you to easily comply with the requirements for producing the email documents in native format.” J.A. 3070. The district court did not err in concluding that Synopsys's act of making available all of the requested e-mail to Ricoh through Stratify constituted electronic production of the e-mail. We do not consider any of the Stratify database costs to fall into the unrecoverable category of “intellectual efforts.” See Romero v. City of Pomona, 883 F.2d 1418, 1428 (9th Cir.1989), overruled in part on other grounds by Townsend v. Holman Consulting Corp., 929 F.2d 1358, 1363 (9th Cir.1991). “Since the documents were produced in their native form via the database,” Taxation Order, slip op. at 13, we hold that the basic Stratify costs would be recoverable under section 1920(4), absent an agreement to the contrary. In light of our decision, we need not decide if the additional challenged items related to the database were improperly allowed.
In the present case, however, the parties agreed to share the costs of the Stratify database. Accordingly, the appellate court found that the cost-sharing agreement was controlling and reversed the lower court’s award.
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