WHOA! A Prevailing Party Recovered $57,873.61 in eDiscovery Costs!

My God, is it true? Did a Prevailing Party recover virtually all of its eDiscovery costs?

The answer is yes, thanks to a case in Colorado.

United States District Judge Christine M. Arguello opened her order denying the Plaintiff’s motion to review the clerk’s taxation of costs with the following:

Because 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.

Comprehensive Addiction Treatment Ctr. v. Leslea, 2015 U.S. Dist. LEXIS 17878, 1.

Rock on. Let’s review the Court’s reasoning.

The Plaintiff took the position that the Defendants’ eDiscovery cost award be reduced from $57,873.61 to $2,387.03, striking the work of a third-party eDiscovery service provider who performed the “retrieving, restoring, and converting data,” on the grounds the work did not constitute “copying.” Leslea, at *2.

The Court explained the Defendants hired their eDiscovery service provider to retrieve and restore ESI in order to respond to the Plaintiff’s Interrogatories and Requests for Productions. The requested discovery included “correspondence, summaries, emails, reports, and memos” relating to specific subject matter. Leslea, at *4-5. The Court noted that the work was complex and time-intensive, requiring three consecutive tolling agreements. Id.

The Defendants communicated with the Plaintiffs three times on the challenges over ESI, including providing detailed information on the scope of the data, archiving, and retention periods on multiple sources of data (hard drives, back-up tapes, etc). Leslea, at *5. In the second communication, the Defendants explained how the service provider restored 83 back-up tapes; and in the third the service provider’s forensic investigator detailed the difficulties in restoring the subject ESI. Id

The Court noted that the Plaintiffs were aware of the ESI challenges, did not recommend any changes to the scope of discovery, and even filed a new complaint with additional allegations. Leslea, at *5-6.

The Court held that the ESI expenses were “reasonably necessary for use in the case” and not done for the mere convenience of the parties. Leslea, at *6. The Court concluded the order as follows:

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. 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.

Leslea, at *6-7, citing In re Williams Sec. Litig-WCG Subclass, 558 F.3d at 1150.

Bow Tie Thoughts

Thank you Judge Arguello for understanding a simple truth: eDiscovery requires technology to retrieve information and translate it into reasonable useable forms that are necessary for the case. This technology and expertise costs money. Yes, this case had an expert who explained what was being done during the litigation. Not every case has such powerful facts explaining the why and how of restoring ESI to make it reasonably useable, but this is an epic victory for taxation of eDiscovery costs.