When's a Copy Not a Copy?

Given the massive volume of electronically stored information being maintained by many companies today, discovery costs have skyrocketed as corporate clients are typically required to collect, process and review thousands of electronic documents in response to an opposing party’s discovery requests. In an effort to recoup some of these costs, pursuant to 28 U.S.C. §1920, prevailing parties now often request an award of costs related to e-discovery activities. The statute provides that “A judge or clerk of any court of the United States may tax as costs the following: … (4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case.” While most courts that have considered whether to award costs under §1920(4) agree that at least some portion of e-discovery costs constitute “the costs of making copies” and are therefore taxable under the statute, there is a disagreement as to exactly which e-discovery activities are recoverable. In the past few months, this split has become even more pronounced, with district courts in California declining to follow a U.S. Court of Appeals for the Third Circuit opinion on the matter.

Electronic Reproduction of a Document

Section 1920 has long provided for the award of costs to include the cost of copying paper documents. To reflect the reality of modern litigation, in 2008, the U.S. Congress amended the text of §1920(4) by replacing the phrase “fees for exemplification of copies of papers” with “fees for exemplification and the costs of making copies of any materials.” Even before the congressional amendment, some courts were willing to award costs under the statute for activities deemed to be similar to the copying of paper documents. See e.g. Brown v. McGraw-Hill Companies, 526 F.Supp.2d 950 (N.D.Iowa 2007) (finding that “electronic scanning of documents is the modern-day equivalent of ‘exemplification and copies of paper’”). Since the amendment, a majority of courts are in agreement that costs for scanning and imaging of documents may be recovered under §1920(4). Courts’ interpretation of the statute begins to diverge, however, when parties seek reimbursement for the costs of activities beyond simple imaging or scanning.

Processes Necessary to Produce an Electronic Copy