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November 28, 2011

Federal Circuit Takes on Database Cost Taxation

Adding to the growing jurisprudence on e-discovery cost taxation, the Court of Appeals for the Federal Circuit issued an opinion finding the taxation of discovery database costs is permissible under 28 U.S.C. § 1920 and Federal Rule of Civil Procedure 54(d)(1). See In Re RICOH Company, LTD. Patent Litigation, No. 20-11-1199, (Fed. Cir. November 23, 2011).

This patent case arises from the Northern District of California and a decision by Chief Judge James Ware awarding certain discovery costs to the plaintiff. The parties in the matter agreed to produce documents in their native form in a database available to the parties.

TaxThe Federal Circuit, applying Ninth Circuit precedent, held that the costs of producing a document electronically can be recoverable under 28 USC § 1920(4) which provides for recovery of “exemplification” costs. It also found persuasive N.D. Cal local rule 54-3(d)(2) which permits taxing the “cost of reproducing disclosure or formal discovery documents when used for any purpose in the case.” 

The Federal Circuit found, however, that the parties had agreed to divide the vendor’s cost among themselves and held that he parties’ agreement to share the database costs controlling. It reversed the district court’s award of the plaintiff’s share of the database based upon the parties’ agreement. 

This decision provides appellate authority for taxing discovery costs. However, if parties agree to share common vendor ediscovery costs, the agreement prevails over the cost taxation statute and corresponding Federal Rules of Civil Procedure.

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