Colosi v. Jones Lang LaSalle Americas, Inc., 781 F.3d 293 (6th Cir. 2015).

In this appeal, the Sixth Circuit ruled that the costs of imaging a party’s computer are taxable under 28 U.S.C. § 1920(4).

The defendant, Jones Lang LaSalle Americas, Inc. (JLL), prevailed in a wrongful termination lawsuit filed by the plaintiff, Brenda Colosi. As the prevailing party, JLL filed a bill of costs for $6,369.55, which the court clerk approved.

Colosi objected and asked the court to reduce the bill to $253.50. Under 28 U.S.C. § 1920, prevailing parties are entitled to have certain costs taxed against the losing party. Though it does not specifically address ediscovery costs, section 1920(4) explains that courts may tax “the costs of making copies of any materials where the copies are necessarily obtained for use in the case.” However, Colosi challenged several expenses under this rule, including the imaging of her personal computer’s hard drive. She argued the imaging was not analogous to “making copies,” and thus the cost should be disallowed. However, the district court ruled the expense properly taxable.

On appeal, Colosi based her argument on Race Tires America, Inc. v. Hoosier Racing Tire Corp., where the Third Circuit narrowly construed “making copies” and refused to allow the prevailing party to recover the entirety of its ediscovery costs because they did not resemble photocopying. The court found that costs for converting files to a specific format and burning documents onto a DVD were recoverable but nixed the party’s request to tax costs for other tasks such as imaging hard drives, deduplicating files, populating a database, reviewing the files for discoverable information, and redacting for privilege.

The Sixth Circuit first noted that to overturn the taxation of costs, it had to find that the district court abused its discretion. Then it analyzed the taxation statute. Parsing the dictionary definition of the term “copy,” the court found the term refers to an image as well as a reproduction. It then concluded that imaging a hard drive meets the definition of “copy,” because “[t]he image serves as a functional reproduction of the physical storage disk.” Therefore, “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.”

Thus, the Sixth Circuit rejected the Third Circuit’s holding because it ignored the plain text of section 1920. Looking to the 2008 amendments to the Federal Rules of Civil Procedure, the court found that activities like imaging fit the definition of “making copies of any materials.” According to the court, it was important to examine the context of the costs, specifically “whether the prevailing party necessarily obtained its copies for use in the case.” Here, analogizing the imaging to the taxable costs of a party delivering image files in response to discovery requests, the court found the district court did not abuse its discretion in determining that the imaging costs were both reasonable and necessary. Colosi required JLL to image her computer’s hard drive under her attorney’s supervision, and there was no other way Colosi would produce the files for review. The vendor did not charge for any other costs, such as deduplication, indexing, and the other non-copying electronic discovery services. Therefore, Colosi could not adduce any evidence showing that the district court exceeded its discretion. Accordingly, the Sixth Circuit affirmed the district court’s award of $6,369.55 in costs to JLL.

Colosi v. Jones Lang LaSalle Americas, Inc., 781 F.3d 293 (6th Cir. 2015).
Google Scholar: https://scholar.google.com/scholar_case?case=8483445976568088704&q=colosi&hl=en&as_sdt=6,47&as_ylo=2015

Takeaways

While the Sixth Circuit’s opinion is heartening for litigants, the best practice remains to find ways to moderate costs. One of the most effective methods is by cooperating with opponents to limit the scope of discovery, whether by limiting custodians, time frames, or search terms, or agreeing to allocate costs up front. Another is to take a phased approach to discovery, only expanding its scope as necessary.

Parties should retain all documentation of costs during the discovery process so they can present them to the court at the end of trial. Courts often reject bills of costs because parties offered insufficient detail. It is important to ask vendors to provide itemized statements, so you can apportion them between activities that do and do not relate to taxable discovery costs.

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