All I Want For Christmas Are Taxable eDiscovery Costs

Nothing says Merry Christmas like winning eDiscovery costs. One party was able to get over half the gifts on their Christmas List from the Court as taxable costs.

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The Defendants submitted eDiscovery costs over $40,000, which was nearly two-thirds of the Defendant’s bill of costs. A service provider made up over half of the eDiscovery costs with a bill of $22,706.90. The rest of the bill was from internal eDiscovery costs. Moore v. Weinstein Co. Llc, 2012 U.S. Dist. LEXIS 178738, 9-10 (M.D. Tenn. Dec. 18, 2012).

Like any Christmas List, the Court found some items to be unreasonable. However, the Court found the service provider’s costs of $22,706.90 to be “reasonable and necessary.” Moore, at *8.

The Case Management Order required production as single-page TIFF’s with Summation DII and LFP load files. Id. The Court stated that the CMO required the processing costs to be incurred by each party. Id. The Court also found that “processing…document[s] for production by, for example, searching for specific custodians, is also a necessary cost of this litigation.” Id.

The Court found that the in-house charges at $150 an hour were “unreasonable.” The Court noted that the service provider hourly rate was $175, “which would presumably be significantly higher than the rates billed” to the Defendant. Moore, at *8-9.

Broken Ornament

The Court found the following:

The Magistrate Judge believes that a rate comparable to an experienced paralegal would be more appropriate. The technology services technologists have specialized expertise and training similar to a paralegal. Therefore, the Magistrate Judge will set a more reasonable billing rate of $100/hour for Technology Services billing.

Moore, at *9.

The Court found several time entries unnecessary, including:

         Work on discovery budget;

         Preparation of deposition transcripts for review;

         Preparation of documents for hearing; and

         Prepare for and attend telephonic deposition of IT vendor

The Court found that the above totaled 134.9 billable hours at the Court-reduced rate hourly rate of $100 for a total of $13,490.00. Moore, at *9.

Based on the reduction of $13,490.00, the new total taxable costs for eDiscovery were $36,196.90. Moore, at *9-10.

Bow Tie Thoughts

No child ever gets EVERYTHING they want for Christmas. However, the Defendant in this case got a lot in their taxable costs, even if it was at a reduced rate.

In determining eDiscovery costs, it is important to understand what work is actually being done when a Court discusses “processing.” Processing is defined by the Sedona Conference as follows:

Processing Data: An automated computer workflow where native data is ingested by any number of software programs designed to extract text and selected metadata and then normalize the data for packaging into a format for the eventual loading into a review platform.

May also entail identification of duplicates/deduplication and rendering of data into delimited format.

The Sedona Conference Glossary, September 2010

eDiscovery specialists who perform advanced searches, processing, data reduction, recommend technology to use on a case are truly well-educated professionals. It was very good to see a Court recognize their abilities in awarding costs.

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