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No Costs Awarded For Processing, Storing and Procuring ESI

Published by on April 6, 2011

After prevailing at summary judgment in an employment discrimination suit, defendant Verizon South, Inc. sought an award of its costs for $7,564.40.  This amount included costs for the service of subpoenas by a private process server, the transcripts of eight depositions, the fees for the court reporter’s attendance, and the processing, storage, and production of […]

After prevailing at summary judgment in an employment discrimination suit, defendant Verizon South, Inc. sought an award of its costs for $7,564.40.  This amount included costs for the service of subpoenas by a private process server, the transcripts of eight depositions, the fees for the court reporter’s attendance, and the processing, storage, and production of electronically stored information (“ESI’).  Plaintiff argued that each of these costs were not recoverable under the costs statute, 28 U.S.C. §1920.  What do you think the outcome was?  More after the break.

In regards to costs for service of subpoenas by private process server, the district court denied defendant its fees because the weight of the authority in the district held that such costs were not recoverable.  However, the district court rejected plaintiff’s argument that the eight deposition transcripts and court reporter’s attendance fees should be taxed because defendant did not use the deposition testimony in its motion for summary judgment.  The district court concluded that the depositions transcripts and court reporter’s attendance fees were reasonably necessary for the defense of the litigation, and therefore recoverable by defendant.           

With respect to the costs associated with the processing, storing, and producing of ESI, the district court acknowledged that the Fourth Circuit has not addressed whether such expenses are recoverable.  However, the district court noted that the Sixth Circuit has held that electronic scanning and imaging could be interpreted as the modern-day equivalent of “exemplification and copies of papers” specifically allowed under 28 U.S.C. §1920(4).  However, the Sixth Circuit rejected one particular request for costs because the party had not claimed expenses for the electronic scanning of the document, but instead, the party sought costs for processing, metadata extraction, and file conversion to create electronically searchable documents.  

Plaintiff argued that defendant impermissibly attempted to recover its costs of creating electronically searchable documents.  Defendant claimed it sought costs related only to retrieving documents in a readable format as requested by plaintiff and producing TIFF images, and not just for the creation of a searchable database.  The district court concluded that the method employed by defendant more closely resembled the searchable database process, which the the Sixth Circuit denied the recovery of costs, and was unlike the mere scanning of documents.  Accordingly, without more information, the district court denied defendant’s request for costs associated with the processing, storing, and producing ESI. 

To read the entire memorandum opinion, click here.

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