Archive for March 2015

Sixth Circuit Affirms Recovery of e-Discovery Costs for Imaging Plaintiff’s Computer

Colosi v. Jones Lang Lasalle Amers. Inc., –F.3d–, 2015 WL 1186765 (6th Cir. Mar. 17, 2015)

In this opinion, the court addressed the recovery of taxable costs related to e-Discovery and concluded that “a plain reading of the statute authorizes courts to tax the reasonable cost of imaging, provided the image file was necessarily obtained for use in the case.”  Accordingly, the circuit court affirmed the lower court’s award related to the cost of imaging Plaintiff’s personal computer.

Plaintiff lost a wrongful termination law suit.  Defendant, as the prevailing party, submitted a bill of cost for $6,369.55, which was approved by the court clerk and affirmed by the district court over Plaintiff’s objections. Those objections were renewed on appeal.  Among other things, Plaintiff challenged the taxing of costs related to the imaging of her personal computer.

Taking up the issue, the circuit court first addressed the question of “whether imaging a hard drive, or other physical storage device, falls within the ordinary meaning of ‘making copies’” and concluded that it did.  “Thus,” the court concluded, “a plain reading of the statute authorizes courts to tax the reasonable cost of imaging, provided the image file was necessarily obtained for use in the case.”  In so concluding, the court rejected Plaintiff’s reliance on the Third Circuit’s opinion in Race Tires American v. Hoosier Racing Tires Corp., in which the court “construed the phrase ‘making copies’ in § 1920(4) to exclude most of [the at-issue processes] in light of historical context and the Supreme Court’s traditionally narrow reading of § 1920,” finding that court’s construction to be “overly restrictive.”    Instead, the circuit court in the present case focused on the question of whether the copy was necessarily obtained for use in the case:

Here, we perceive no abuse of discretion in ruling imaging costs reasonable and necessary. Rather than produce relevant computer files in response to JLL’s discovery requests and the district court’s orders compelling production, Colosi delivered her computer to her attorney’s office and demanded that JLL send a third-party vendor to image its hard drive under her attorney’s supervision. Colosi’s decision to tender the physical computer forced JLL to dispatch a vendor and make an image before it could search the hard drive for discoverable information, as the district court determined it had a right to do. JLL sent a vendor to image the hard drive not as an expedient; this was the sole avenue permitting review of Colosi’s files. We analogize this situation to the more typical—and taxable—cost of a party delivering an image file in response to an opponent’s production request.FN2 See CBT Flint, 737 F.3d at 1334 n. 1 (O’Malley, J., concurring in part and dissenting in part) (“I do not question that the cost of imaging source media would fall under section 1920(4) if it were directly imaged and provided to the opposing party as part of discovery.”). The vendor’s invoice excludes the cost of deduplication, indexing, and the other non-copying electronic discovery services. See CBT Flint, 737 F.3d at 1331–32; Race Tires, 674 F.3d at 169–70. In fact, Colosi concedes that “JLL never went beyond the mere electronic copying of all of the Colosi family’s personal computer files.” (Appellant Reply at 6.) And she points to nothing in the record showing that the district court abused its discretion in finding the invoice amount reasonable.

FN2. We recognize the disagreement between the Third and Federal Circuits on the question of whether § 1920 permits courts to tax the cost of imaging as it usually occurs in the electronic discovery process. Compare CBT Flint, 737 F.3d at 1329–30 (holding imaging costs taxable when the opposing party requests metadata be included in the production and imaging is the least expensive manner of obtaining it), with Race Tires, 674 F.3d at 169–71 (holding imaging an untaxable process regardless of the need for metadata). But the unique facts of this case do not require us to address that question, and we do not.

A full copy of the court’s opinion is available here.

Upcoming Events

Strafford – E-Discovery Strategies: Preparing for New FRCP Amendments on Proportionality and Managing ESI

April 14, 2015
1-2:30 PM EDT

Join K&L Gates attorney Bree Kelly and her fellow panelists for a discussion of “E-Discovery Strategies: Preparing for New FRCP Amendments on Proportionality and Managing ESI.”  The discussion will cover a range of topics, including a review of the proposed amendments to Federal Rules of Civil Procedure 26(b)(1) and 37(e), strategies for achieving proportionality, best practices for preserving ESI and avoiding sanctions, best practices for information management and a review of court decisions addressing proportionality.

To learn more or to register, click here.

PBI – eDiscovery Symposium

April 17, 2015
PBI Professional Development Conference Ctr.
Heinz 57 Center, 339 Sixth Ave, 7th Floor
Pittsburgh, PA

Join K&L Gates partner Thomas J. Smith for a day of e-Discovery.  Mr. Smith will participate in two of the day’s nine informative panels.  First, at 11:20, join Mr. Smith and a panel of experts for a discussion of proposed amendments to both local and federal rules (“Amendments to FRCP/Amendments to local rules).  Then, at 3:00, Mr. Smith will moderate a panel of judges (Chief Judge Conti, Judge Kelly, and Judge Lenihan) in a roundtable discussion of important topics affecting e-Discovery practice in Federal Court (“e-Discovery Practice in Federal Court: Judges’ Roundtable Discussion).

To learn more or to register, click here.

“The power of a U.S. Court to require compliance with U.S. discovery obligations does not arise until and unless the Court has jurisdiction.”

Lunkenheimer Co. v. Tyco Flow Control Pacific Party Ltd., No. 1-11-cv-824, 2015 WL 631045 (S.D. Ohio Feb. 12, 2015)

In this case, the court addressed several discovery issues, including the question of when Defendant’s duty to preserve arose.  The Intervenor/Counter Defendant asserted the duty arose in 2002.  Defendant—an Australian Corporation—asserted the duty could no t have arisen before August 2012, when it consented to U.S. jurisdiction and, “even if it had, it was not before [Defendant] was served on December 8, 2011.” Acknowledging that the defendant was not excused from the preservation obligation merely because it is a foreign company, the court nonetheless determined that because Defendant was an Australian company with no presence or significant sales in United States and because Australia was the anticipated jurisdiction of “License-related disputes,” the duty to preserve arose when Defendant was served with the complaint in December, 2011:

PFCP is an Australian company with offices and facilities only in Australia. (Doc. 143–1, Ex. B). Australian Law governs the License and was the anticipated jurisdiction for License-related disputes. (See Doc. 140–1, Ex. 3, ¶ 18.1). No significant sales of Licensed Products were made into the U.S., and PFCP had (and has) no U.S. presence. (Doc. 143–1, Ex. B).

PFCP is not excused from an obligation to preserve evidence simply because it is a foreign company. See Reino de Espana v. Am. Bureau of Shipping, No. 03 CIV. 3573, 2006 WL 3208579, at *8 (S.D .N.Y. Nov. 3, 2006). However, the only place litigation might at some point have been anticipated was in New South Wales, Australia-not Ohio or anywhere else in U.S. Accordingly, notwithstanding the fact that it may not have had jurisdiction over the PFCP until 2012, and in the absence of evidence that PFCP should have reasonably anticipated litigation in the United States any earlier, the Court finds that the duty to preserve began on December 8, 2011.FN19

FN19. The power of a U.S. Court to require compliance with U.S. discovery obligations does not arise until and unless the Court has jurisdiction. See e.g., In re Uranium Antitrust Litigation, 480 F.Supp. 1138 (N.D.Ill.1979); see also Rashbaum, et al.,U.S. Legal Holds Across Borders; A Legal Conundrum,” 13 N.C.J.L. & Tech 69 (Fall 2011).

A full copy of the court’s order is available here.

Magistrate Judge Peck Addresses TAR, Provides Insight on Important Issues

Rio Tinto PLC v. Vale S.A., —F.R.D.—, 2015 WL 872294 (S.D.N.Y. Mar. 2, 2015)

Taking up the topic of technology-assisted review (“TAR”), Magistrate Judge Andrew Peck’s most recent opinion declares that “it is now black letter law that where the producing party wants to utilize TAR for document review, courts will permit it.” Despite this, there remain open issues surrounding the use of TAR, including, as Magistrate Judge Peck noted, the question of “how transparent and cooperative the parties need to be with respect to the seed or training set(s).” And, while this opinion did not resolve that question (because the parties in the present case agreed to “a protocol that discloses all non-privileged documents in the control sets”), it does provide some notable commentary on the issue.

In this case, Magistrate Judge Peck, recognizing “the interest within the ediscovery community about TAR cases and protocols,” took the opportunity to discuss the hot topic of TAR, and in particular the questions of “seed set transparency” and whether TAR should be held to a higher standard than the use of keywords or manual review. Specifically, on the topic of “seed set transparency,” following his identification of a number of cases that have addressed the use of TAR and his observation that “[i]f the TAR methodology uses ‘continuous active learning’ (CAL) (as opposed to simple passive learning (SPL) or simple active learning (SAL)), the contents of the seed set is much less significant,” Magistrate Judge Peck indicated that, “[i]n any event, while I generally believe in cooperation, requesting parties can insure that training and review was done appropriately by other means, such as statistical estimation of recall at the conclusion of the review as well as by whether there are gaps in the production, and quality control review of samples from the documents categorized as non-responsive.”   Then, following his determination that he need not rule on the question of “seed set transparency” in the present case, Magistrate Judge Peck went on to state that “[o]ne point must be stressed—it is inappropriate to hold TAR to a higher standard than keywords or manual review. Doing so discourages parties from using TAR for fear of spending more in motion practice than the savings from using TAR for review.”

A full copy of the court’s opinion, including the parties’ agreed protocol, is available here.