Costs of Keyword Searching, Data Analysis, Not Recoverable, Federal Circuit Rules

by Sabrina I. Pacifici on January 11, 2014

Catalyst E-Discovery Search Blog – by Bob Ambrogi | December 18, 2013

“To what extent can the costs of e-discovery be recovered by a prevailing party in federal court? The U.S. Federal Circuit Court of Appeals has just issued an opinion that provides a detailed analysis of that question, concluding that the answer hinges on which costs fall within a 21st Century definition of “copying.” In CBT Flint Partners, LLC v. Return Path, Inc., the Federal Circuit considered the extent to which e-discovery costs fall under 28 USC § 1920, the federal statute that lists the costs that can be recovered in federal litigation. The only provision of that statute that would apply to e-discovery, the circuit concluded, is one that allows recovery of copying costs. Thus, e-discovery costs are recoverable only to the extent they fall within the statutory meaning of copying.

[W]e conclude that recoverable costs … are those costs necessary to duplicate an electronic document in as faithful and complete a manner as required by rule, by court order, by agreement of the parties, or otherwise. To the extent that a party is obligated to produce (or obligated to accept) electronic documents in a particular format or with particular characteristics intact (such as metadata, color, motion, or manipulability), the costs to make duplicates in such a format or with such characteristics preserved are recoverable. … But only the costs of creating the produced duplicates are included, not a number of preparatory or ancillary costs commonly incurred leading up to, in conjunction with, or after duplication.

That means that the costs of imaging hard drives and source media and processing those images would be recoverable in most cases, the court said. Also recoverable would be the costs of creating load files and copying responsive documents to production media. But the costs of decryption, deduplication, keyword searching, data analysis and project management are not recoverable, the court concluded.”

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