Generally, when responding to discovery production demands, including the production of electronic information, the responding party in US litigation must pay the freight of its own production, even though requested by the other side.
As parties to litigation are finding out, this can be tremendously expensive. But, a federal court has held recently that electronic discovery expenses can be recovered by the prevailing party, just like standard copying costs.
A future trend? Perhaps. In the case of Race Tires America, Inc. v. Hoosier Racing Tire Corp., a federal judge in Pennsylvania granted summary judgment for the defendants in an antitrust case. The Third Circuit Court of Appeals affirmed the granting of summary judgment.
Thereafter, the defendants requested the taxing of costs as the prevailing parties. However, in this instance, the vast majority of the costs requested involved electronic discovery and those costs were in the six figures. The defendants argued that these costs properly were taxable under 28 U.S.C. Section 1920(4) as costs involving "the costs of making copies."
Here, the judge agreed that the electronic costs at issue were recoverable as akin to copying costs under the statute, as they did not move into the realm of improving the format and design of the electronic data. While the judge was careful to state that the ruling was based on the "unique" facts of this particular case, it is possible that there will be broader implications.
While a district court decision like this does not have precedential value per se, it does not strain the imagination to believe that attorneys for prevailing parties in other cases will request the recovery of basic e-discovery costs, which can be substantial, based on the logic of the Race Tires America case.
If so, and if courts start moving in this direction, we could begin to see some real cost-shifting when it comes to electronic discovery. Parties will have to think long and hard in advance of litigation, with the knowledge that not only may they have to pay their own e-discovery costs, but also potentially the e-discovery costs of the other side.