Recent Court Ruling Could Impact Who Pays the Cost of Producing Electronic Discovery

Traditionally, while a responding party must pay the costs of producing discovery, the cost of duplicating or photocopying documents is not included in this assessment.  However, the advent of electronic discovery largely obviated the requesting party’s fiscal burden.  CBT Flint Partners v. Return Path, 2009 U.S. Dist. LEXIS 121188 (N.D. Ga. Dec. 30, 2009) is a novel attempt to reinstitute the sense of restraint that precludes “overly broad discovery requests that required the production of 1.4 million electronic documents and 6 versions of source code.” Id. at *10.  The aptly named Judge Thrash felt that curtailing prospective parties’ unbridled pursuit would “encourage litigants to exercise restraint in burdening the opposing party with the huge cost of unlimited demands for electronic discovery.” Id. at *15.

The defendant incurred over $200,000 in e-discovery costs in the underlying patent infringement case.  In the bill of costs, the defendant averred that these expenditures were taxable costs under 28 U.S.C. § 1920(4). (“Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case”).  While some courts have previously held that scanning and imaging electronically stored information (ESI) is taxable as costs, only one has held that expansive services rendered by an e-discovery vendor qualify as such. See Neutrino Dev. Corp. v. Sonosite, Inc., 2007 U.S. Dist. LEXIS 23464 (S.D. Tex. Mar. 30, 2007).

In following the logic of Neutrino Dev. Corp., Judge Thrash separated costs of “assembling records for production [that are] ordinarily a task done by lawyers and paralegals and not a recoverable cost” from the “highly technical . . . 21^st Century equivalent of making copies.” CBT Flint Partners, 2009 U.S. Dist. LEXIS 121188, *15.  The defendant prevailed in recovering $268,311.12 as taxable costs.

CBT Flint Partners, while a minority view, lays the groundwork for recovering as costs e-discovery services that are becoming commonplace in contemporary litigation.  If a responding party fears that a requesting party is strategically burdening the case with excessive ESI discovery requests, it can request deferral of the cost-shifting decision until such time as the court can assess the reasonableness of the requests.  Although courts should ration this approach in light of the traditional assumption that responding parties bear the cost of production, CBT Flint Partners provides courts with the means to prevent parties from contorting the rules of civil procedure to gain an unfair advantage.

For a thorough analysis of CBT Flint Partners, see Rabiej, John K. “Court Adopts Novel Alternative ESI Cost-Shifting Approach”. 2010 Emerging Issues 4914, March 18, 2010.