E-Discovery Is Not Recoverable as Costs in the Third Circuit.

In the case of Race Tires America v. Hoosier Racing Tire, the Third Circuit was faced with the question of whether more than $365,000 in e-discovery charges were “costs” under 28 USC 1920(4).  The issue, for which there is little precedent, is of some moment as, pursuant to Fed. R. Civ. P. 54(d)(1), the losing party in a federal litigation has to pay the winning side’s “costs” for, among other things, “fees for exemplification [or] the costs of making copies of any materials where the copies are necessarily obtained for use in the case.”  In Race, the Third Circuit concluded that “the scanning of hard copy documents, the conversion of native files to TIFF, and the transfer of VHS tapes to DVD” were “costs”, incurred by the prevailing party, which the losing party had to pay.  The balance of the e-discovery charges was not recoverable.  It just goes to show that winning isn’t everything, it’s sometimes not even the only thing.

For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.