Collecting the Costs of Electronic Discovery is Limited

Fees for exemplification and copying are permitted only for the physical preparation and duplication of documents, not the intellectual effort involved in their production. The Ninth Circuit has long limited the types of costs as not taxable under §1920(4). See Romero v. City of Pamona, 883 F.2d 1418, 1427-28 (9th Cir.1989), overruled on other grounds. The Romero court held that § 1920(4) did not extend to the “intellectual effort” involved in the production of documents, only the physical preparation and duplication of documents. Id. In Zuill v. Shanahan, 80 F.3d at 1371, the Ninth Circuit followed its prior decision in Romero and held that the fees and expenses associated with photocopying and shipping were taxable. However, the remaining fees related to the “intellectual effort involved in their production” was not. Id.The decision in Romero has subsequently been followed by many Ninth Circuit district courts. In Oracle v. Google, Google attempted to seek remuneration for almost $3 million in e-discovery charges. Oracle Am., Inc. v. Google, Inc., 2012 WL 3822129 at *3 (N.D.Cal. Sept.4,2010). That court refused Google’s requested e-discovery costs in their entirety because the costs were for “organizing, searching, and analyzing [of] discovery documents” and such “intellectual effort” costs were non-taxable under Romero. Id.; see also Gabriel Techs. Corp. v. Qualcomm Inc., 2010 WL 3718848, at *10-11 (Sept.20, 2010)(denying motion for a bond to tax $1.5 million in e-discovery consultant fees because the work was intellectual effort and not “the physical preparation and duplication of documents”); Computer Cashe Coherency Corp. v. Intel Corp., 2009 WL 5114002, at *4 (N.D. Cal,Dec. 18, 2009)(awarding less than half of requested e-discovery costs because OCR and metadata extraction costs were not “physical preparation ad duplication of documents”).Other circuits have also followed Romero and held that e-discovery costs are not routinely awarded to the prevailing party. The Third Circuit is arguably the only appellate court to directly address the propriety and scope of taxing e-discovery. In Race Tires Am., Inc. v. Hoosier Racing Tire Corp., the Third Circuit Court of Appeals was confronted with a bill for e-discovery charges related to the collection, processing, TIFF conversion, OCR, and production of approximately 600,000 pages of electronic documents. 674 F.3d 158, 159, 162 (3rd Cir.2012). That court held that only the scanning of hard copy documents, the conversion of native files to TIFF, and the transfer of VHS tapes to DVD that were properly taxable under § 1920(4). Id. at 171. In addition, the court held that as § 1920(4) did not provide for the taxation of all steps necessary to make a copy in the pre-digital era, it could not be used to tax the cost of all the services that proceed the making of an electronic copy, such as “gathering, preserving, processing, searching, culling, and extracting ESL.” Id. at 169-70. Recently the Fourth Circuit has followed the holding in Race Tires. In Country Vitner of N.C., LLC v. E & J Gallo Winery, Inc., that appellate court rejected the prevailing parties claim that ESL processing charges were taxable, holding that taxable costs are limited to that of “converting electronic files to non-editable formats, and burning the files onto discs.” __ F.3d __, 2013 WL 1789729 (April 29, 2013); see also Fells v. Virginia Dep’t of Transp. 605 F.Supp.2d 740 (E.D.Pa.2011) (the court refused to tax any costs associated with the processing of electronic records because the techniques were technically not “photocopying or scanning.”); see also Johnson v. Allstate and County Vinter v. Gallo Winery, 2012 WL 4936598, at *6 (S.D. Ill, Oct. 16, 2012)(denying e-discovery as non-taxable that involved “gathering, preserving, processing, searching, culling and extracting [of] ESL”).