City of LA v. PricewaterhouseCoopers CA2/5
B305583
| Cal. Ct. App. | Jul 8, 2021Background
- PricewaterhouseCoopers (PwC) contracted to modernize LA DWP billing; City sued in 2015 alleging fraud and breach; after ~4.5 years the City voluntarily dismissed with prejudice in 2019.
- PwC filed a memorandum of costs seeking substantial amounts including ~$1.09 million for electronic discovery and ~$247,000 for travel (deposition and hearing travel).
- The City moved to strike/tax costs: argued e‑discovery costs are nonrecoverable under Science Applications and that out‑of‑town travel was unnecessary or excessive because local counsel was available.
- PwC argued e‑discovery costs were discretionary and necessary given massive document volumes and agreed e‑discovery protocols; travel was reasonable and authorized by statute for depositions.
- The trial court struck all e‑discovery costs and taxed travel costs for New York–based counsel, citing Science Applications and stating it was "stuck" with that precedent for electronic costs.
- On appeal, the Court of Appeal affirmed the travel ruling but reversed and remanded the electronic discovery ruling for the trial court to exercise informed discretion.
Issues
| Issue | Plaintiff's Argument (City) | Defendant's Argument (PwC) | Held |
|---|---|---|---|
| Are electronic discovery costs recoverable under CCP §1033.5? | Science Applications bars recovery of such vendor/database costs as a matter of law. | §1033.5 does not expressly prohibit e‑discovery; trial court has discretion and costs here were necessary and not paralegal work. | Remanded: trial court’s ruling reversed in part because record shows it may have misunderstood its discretion; court must re‑exercise or confirm its discretion regarding e‑discovery costs. |
| Were travel costs for New York–based counsel to attend local depositions/hearings reasonably necessary and recoverable? | Travel was unnecessary and excessive; local counsel was available; hearing travel unrecoverable. | Travel to depositions is recoverable by statute and costs were reasonable and necessary. | Affirmed: trial court did not abuse discretion in taxing those travel costs given local counsel availability. |
| Is the order taxing costs after a voluntary dismissal appealable? | Order after voluntary dismissal is not an appealable judgment. | Order taxing costs is a final collateral judgment and thus appealable. | The order taxing costs is an appealable final judgment under §904.1(a)(1) (collateral‑order reasoning). |
Key Cases Cited
- Science Applications Internat. Corp. v. Superior Court, 39 Cal.App.4th 1095 (1995) (disallowed large third‑party document control/database costs as akin to paralegal/administrative work)
- El Dorado Meat Co. v. Yosemite Meat & Locker Service, Inc., 150 Cal.App.4th 612 (2007) (distinguished Science Applications; trial court may award e‑costs for processing raw data indispensable to exhibits)
- Bender v. County of Los Angeles, 217 Cal.App.4th 968 (2013) (affirmed technology/courtroom presentation costs; Science Applications not categorical bar)
- Hooked Media Group, Inc. v. Apple Inc., 55 Cal.App.5th 323 (2020) (affirmed award of e‑discovery costs to convert native files to usable form; trial court’s discretion upheld)
- Mesa Shopping Center‑East, LLC v. O Hill, 232 Cal.App.4th 890 (2014) (discussed appealability of orders after voluntary dismissal)
- Krikorian Premiere Theatres, LLC v. Westminster Central, LLC, 193 Cal.App.4th 1075 (2011) (treated order taxing costs as collateral final order and appealable)