Judge Thrash of the Northern District of Georgia recently awarded post-judgment costs of over $240,000 in e-discovery vendor costs to a prevailing defendant in a patent infringement action. CBT Flint Partners LLC v. Return Path, Inc., No. 1:07-cv-1822 (TWT), 2009 U.S. Dist. LEXIS 121188 (N.D. Ga. Dec. 30, 2009).
Before you start drafting your brief seeking to recoup all costs associated with e-discovery in your case - note that this opinion is limited to a post-judgment award of costs and does not change the general rule that initially both sides bear their own costs for preserving, collecting, reviewing, and producing ESI during litigation.
An earlier opinion by Judge Thrash in this same case that granted Plaintiff's motion to compel production of large volumes of potentially privileged ESI, but awarded cost-shifting of $300,000 for privilege review, may be more useful to deter overly broad requests and expenses during the discovery period. Judge Thrash noted that he awarded the cost-shifting for privilege review "based on the extraordinary demands made by the Plaintiff…the costs incurred to date by [Defendant] and the Plaintiff's failure to demonstrate that the relevance and importance to the case of the documents are proportional to the cost required for their production."
The earlier opinions in this case also shed light on a possible reason why costs were awarded at the post-judgment phase - Judge Thrash had already sanctioned the Plaintiff for failing to engage in meaningful discussions regarding discovery issues and unnecessarily engaging in expensive motion practice regarding the timeliness and sufficiency of Defendant's production.
The Judge actually read all of the correspondence between the parties and ultimately ordered the Plaintiff to pay 75% of the Defendant's attorneys fees incurred in these lengthy and contentious discovery disputes.
The overall take-aways from Judge Thrash's opinions in the CBT Flint Partners case are:
- be reasonable in your discovery requests,
- play nice in the sandbox,
- identify conflicts regarding scope of e-discovery early and attempt in good faith to resolve them,
- seek a protective order if good faith efforts to narrow the scope of ESI production to a proportional/reasonable volume fail; and
- avoid annoying the Judge.
The August 2008 opinion also endorses the doctrine of propotionality - a doctrine that many e-discovery savvy Judges are applying to reduce burdens on producing parties. However, there are still daily opinions expressing little sympathy or understanding for the costs associated with e-discovery and requiring producing parties to produce large volumes of ESI despite substantial cost. Many Judges do not want to be bothered with reading correspondence and briefs about search terms and databases in order to identify the "bad guy" in e-discovery disputes. The opinions are all fact-specific and Judge-specific.
A more detailed analysis of Judge Thrash's December opinion:
In the December 2009 opinion awarding post-judgment costs, Judge Thrash noted the split of authority on whether e-discovery vendor costs are recoverable under 28 U.S.C. Section 1920. As noted in the opinion, courts awarding e-discovery vendor costs have found such costs to be the "equivalent of exemplification and copies." Courts that have refused to award such costs have found that the e-discovery vendor's work was the equivalent of a task ordinarily done by attorneys and paralegals.
In support of his decision to award these costs, Judge Thrash noted that in the present case the parties had mutually agreed to produce documents in electronic rather than paper form and that "production in paper form of the 1.4 million documents plus 6 versions of source code would have cost far more than the fees sought for the e-discovery consultant." Moreover, the detailed invoices from the e-discovery vendor which included descriptions of the work done - including data acquisition/extraction, processing, forensic preservation, keyword and metadata analysis/reporting, auditing and logging, and compilation of native file production and load files to provide usable document to the Plaintiff - illustrated that these were services "not of the type . . . that attorneys or paralegals are rained for or are capable of providing. They are the 21st Century equivalent of making copies."
Judge Thrash noted that such e-discovery vendor services are necessary in the electronic age and that awarding such costs to the prevailing party should serve to encourage litigants "to exercise restraint in burdening the opposing party with the huge cost of unlimited demands for electronic discovery."