Are ESI Costs Recoverable by a Prevailing Party Under 28 U.S. Code Section 1920?

7 Jan 2015

The Northern District of California in Bonillas v. United Air Lines Inc., No. C-12-06574 (EDL) (N.D. Cal. Dec. 19, 2014) recently considered Defendant United Airlines’ request for ESI costs as the prevailing party on summary judgment pursuant to 28 U.S. Code Section 1920’s taxation of costs provision.  Citing Alzheimer’s Institute of America, Inc. v. Elan Corp. PLC, NoC-10-cv-00482-EDL (N.D.Cal. Jan. 30, 2013), the court first recognized that Section 1920 (enacted over 150 years ago) is “technologically antiquated” given modern electronic discovery practices.  The court, however, went on to apply current case law interpreting Section 1920 in considering United Airlines’ request for ESI costs.

United had filed a Bill of Costs that included a request for $34,1245.01 in ESI costs, which it had incurred during the following three phases of eDiscovery:

  1. Importing image copies of ESI and extracting the source files;
  2. Organizing the extracted documents by indexing, de-duplicating, and de-Nisting, and then filtering those documents to load into a database for attorney review;
  3. Converting the reviewed responsive files into PDFs, Bates numbering the documents, and loading the final production onto a secure File Transfer Protocol (FTP) site.

After an initial hearing, the court directed United to apply the reasoning from the Federal Circuit case CBT Flint Partners, LLC v. Return Path, Inc. 737 F.3d 1320 (Fed.Cir.2013) to United’s ESI requests. CBT Flint Partners had awarded some ESI costs to the prevailing party under Section 1920(4) by deeming the costs analogous to copying paper documents (which are taxable under Section 1920). But the court in CBT Flint Partners also cautioned that any ESI costs analogous to retrieving and organizing paper documents could not be taxed under the statute.

United filed a Supplemental Bill of Costs for ESI pursuant to the reasoning in CBT Flint Partners, reducing the requested amount to $19,786.30 by omitting costs for de-duplicating, de-Nisting, culling extracted files with its search terms, database and project management task, hosting and licensing fees, and copying ESI onto back-up media.

Plaintiff Bonillas, however, still objected to United’s request, arguing that because the parties had no agreement regarding ESI formatting, all costs for file extraction and conversion were unnecessary and therefore, not taxable. Bonillas claimed United could have simply copied the responsive files onto a storage device in the manner ordinarily kept in the course of business and tendered such device to fulfill its ESI obligations.

Curious about how the court and the parties addressed the dispute?  Stay tuned for our next blog post to find out the current state of the motion practice.  (And remember, the best practice for most cases involving ESI is to enter into an ESI formatting agreement at the outset of a case.  Doing so can help avoid the costly motion practice United has faced in trying to recover its costs.)

ILS – Plaintiff  eDiscovery Experts

Did you know? “De-Nisting” (also known as “Known File Filtering”) is removing irrelevant operating system files, program files, and other non-user data.