Cbt Flint Partners, LLC v. Return Path, Inc.
737 F.3d 1320
Fed. Cir.2013Background
- CBT Flint sued Return Path and Cisco for patent infringement; the district court ultimately entered summary judgment for defendants and taxed costs against CBT.
- Cisco and Return Path sought large vendor charges for electronic-discovery services; Cisco had earlier characterized these fees as "other costs."
- The district court (in 2009 and again after final judgment) allowed taxation of e-discovery vendor fees, treating them as the modern equivalent of copy costs under 28 U.S.C. § 1920(4).
- The Eleventh Circuit review follows a prior Fed. Cir. interlocutory remand; this appeal asks whether the district court misinterpreted § 1920(4) in taxing wide-ranging e-discovery expenses as "costs of making copies."
- The opinion breaks electronic production into three stages—(1) imaging/extraction from source media, (2) processing/searching/review/other litigation-support work, and (3) copying to production media—and analyzes which stage costs § 1920(4) permits.
Issues
| Issue | Plaintiff's Argument (CBT) | Defendant's Argument (Return Path / Cisco) | Held |
|---|---|---|---|
| Whether § 1920(4) permits recovery of broad e-discovery vendor fees | Vendor charges are not "copies" and therefore not taxable; clerk erred | E-discovery vendor fees are the 21st-century equivalent of copying and thus taxable under § 1920(4) | § 1920(4) is limited; only costs to "make copies" as required by rule/order/agreement are taxable; many e-discovery tasks are not recoverable |
| Whether imaging and metadata extraction (stage one) are taxable as copy costs | These are preparatory and not taxable | Imaging/extraction are part of making production duplicates and taxable when necessary to produce requested format/metadata | Imaging/extraction are taxable to the extent they are necessary to create the produced duplicate in the required form; district court must determine what production characteristics were required |
| Whether processing/review/search/deduplication/project management (stage two) are taxable | These are litigation-support activities and not taxable | Some of these activities were performed at request of CBT and are integral to production | Stage-two tasks (search, review, project management, hosting, training, many analytics) are not taxable under § 1920(4); parties must use other mechanisms for cost-shifting |
| Whether costs for production media, load files, and secured-source-code access are taxable (stage three) | Only basic copying costs should be taxable | Costs of production media and secure production are recoverable | Costs to copy produced documents to production media and reasonable costs of production media, load files required by the production, and secured-review setups for source code are taxable; ancillary planning/coordination costs are not |
Key Cases Cited
- Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437 (Sup. Ct. 1987) (§1920 enumerates taxable costs and limits Rule 54(d) discretion)
- In re Ricoh Co., Ltd. Patent Litig., 661 F.3d 1361 (Fed. Cir. 2011) (§1920(4) applies to ESI but is limited to costs of producing copies pursuant to discovery rules or orders)
- Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir. 2012) (e-discovery costs are limited; imaging/processing treated as preparatory and not taxable)
- Country Vintner of N. Carolina, LLC v. E. & J. Gallo Winery, Inc., 718 F.3d 249 (4th Cir. 2013) (allowing limited electronic copying costs like format conversion and burning discs)
- Hecker v. Deere & Co., 556 F.3d 575 (7th Cir. 2009) (permitting costs to convert computer data into a readable format)
- BDT Prods., Inc. v. Lexmark Int’l, Inc., 405 F.3d 415 (6th Cir. 2005) (allowing electronic scanning/imaging costs)