Court finds Defendants are Entitled to Recover $55,649.98 in e-Discovery Costs

Comprehensive Addiction Treatment Center, Inc. v. Leslea, No. 11-cv-03417-CMA-MJW, 2015 WL 638198 (D. Colo. Feb. 13, 2015)

Plaintiffs brought a “Motion to Review Clerk’s Taxing of Costs Under F.R.C.P. 54(D)(1).” Specifically, Plaintiffs sought review of the clerk’s determination “concerning the costs taxed amount of $55,649.98, which accounts for Defendants contracting with a private consulting company, Cyopsis, to retrieve and convert ESI into a retrievable format to produce information requested by Plaintiffs.” The court held that “[b]ecause Defendants’ costs related to the electronically stored information (“ESI”) are expenses enumerated in 28 U.S.C. § 1920(4), and Plaintiffs were aware that Defendants would have to retain an outside consultant to retrieve and convert the ESI into a retrievable format, Plaintiffs’ Motion is denied.”

Plaintiffs contended that the services provided by Cyopsis did not constitute “copying” under 28 U.S.C. § 1920(4). Defendants argued that “'[ p]roduction costs in collecting, scanning, reviewing, and preparing documents are necessary expenditures that are made for the purpose of advancing the discovery phase of the case and as such, are taxable.’” The court explained that pursuant to Rule 54, a party is entitled to recover expenses enumerated in 28 U.S.C. § 1920(4), which in turn allows a court to “award copy and exemplification fees for copies of any materials necessarily obtained for use in the case.” The court further indicated that “courts have recognized that 28 U.S.C. § 1920(4) includes e-Discovery related costs.”

In the present case, Defendants hired Cyopsis to “retrieve and restore ESI” to produce documents sought by Plaintiffs in discovery. Because of the “complexities and time-intensive efforts” anticipated in responding, the parties entered into three consecutive tolling agreements. Moreover, Defendants wrote to Plaintiffs on three occasions describing the “difficulties and complexities encountered in retrieving and restoring ESI” including the restoration of 83 backup tapes. Thus, the court reasoned, “Plaintiffs were well aware that Defendants required the services of an outside consultant in order to produce the information requested, and they were kept apprised of the difficulties encountered by the vendor, Cyopsis.” Despite this, Plaintiffs did not “initiate discussion aimed at limiting the scope of their request for information or take other measures to limit the costs of the endeavor.” Moreover, based on the discovery produced, Plaintiffs filed a new Complaint alleging several new allegations.

Accordingly the court found that the defendants were entitled to recover the at-issue costs:

The Court finds that Defendants’ costs related to the ESI are expenses enumerated in 28 U.S.C. § 1920(4). The ESI expenses were not merely for the convenience of the parties nor were they materials produced solely for discovery as Plaintiffs filed a new Complaint that included information gleaned from the ESI. Thus, the ESI expenses were reasonably necessary for use in the case. Indeed, Plaintiffs were aware of the monumental effort to retrieve and convert the data into a retrievable format in response to their Interrogatories and Requests for Production. The costs incurred by Defendants, the prevailing party, in responding to Plaintiffs’ requests are expenses that are shifted to Plaintiffs, the losing party. Indeed, Plaintiffs own litigation choices and aggressive course of discovery necessarily resulted in “heightened” defense costs. See In re Williams Sec. Litig–WCG Subclass, 558 F.3d at 1150. Plaintiffs have not demonstrated that these costs are improper. Accordingly, Defendants are entitled to recover their costs in full measure as determined by the Clerk, which it has identified as $57,873.61.

A copy of the court’s full order is available here.

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