I Won My Case, But I Can’t Recover Those Costs?!

This post is mainly for lawyers, but non lawyers (i.e, “clients”) should also read it because almost every client I know has wanted to get every possible fee or cost back from unsuccessful plaintiffs from what they viewed as frivolous law suits.  Increasingly one of the larger costs is for obtaining and managing electronic data, but you may not be able to recover those six and seven-figure costs.

Read this fine (and troubling) post from Mack Sperling on the always interesting North Carolina Business Litigation Report.

Fourth Circuit Takes A Narrow View On Recovery Of E-Discovery Costs

Posted on May 1, 2013 by Mack Sperling

You’ve undoubtedly prevailed in a federal case — either at summary judgment or after a trial — and you have probably struggled with what you are entitled to recover as costs under 28 U.S.C. §1920.  And recently, your client, being the victor, most likely has asked about the recovery of its costs associated with the production of electronically stored information.

The Fourth Circuit’s decision on Monday of this week in The Country Vintner v. E & J Gallo Winery, Inc. gives answers to those questions, but your prevailing party client won’t like them.

Gallo ran up bills from e-discovery vendors of more than $100,000 in its production to the Plaintiff of its ESI, and it sought to have the District Court award that as an element of costs.  The bulk of that amount was for “flattening” and “indexing” the ESI. The Court defined that as the “initial processing” of the data, which:

involved decompressing container files (e.g., ZIP files or Microsoft PST files); making the data searchable by extracting text and creating Optical Character Recognition for text that could not be extracted; indexing the data; removing system files that were known not to contain any user-generated content; and removing duplicate files. 

Op. at 5.

That part of the application for costs was denied by the District Court, which was affirmed by the Fourth Circuit.

(CONTINUED AT THE NC BUSINESS REPORT). 

About mavity2012

I am a Senior Partner operating out of the Atlanta office of Fisher & Phillips LLP, one of the Nation’s oldest and largest management employment and labor firms. My practice is national and keeps me on the road or in one of our 28 offices about 50 percent of the time. I created and co-chair the Firm's Workplace Safety and Catastrophe Management Practice Group. I have almost 29 years of experience as a labor lawyer, but rely even more heavily on the experience I gained in working in my family's various businesses, and through dealing with practical client issues. Employers tell me that they seldom meet an attorney who delivers on his promise to provide practical guidance and to be a business partner. As a result, some executives probably use different terms than “practical” to describe my fellow travelers in the profession. I don't enjoy the luxury of being impractical because I spend much of my time on shop floors and construction sites dealing with safety, union and related issues which are driven by real world processes and the need to protect and get the most out of one's most important business assets ... its employees. That's one of the reasons that I view safety compliance as a way to also manage problem employees, reduce litigation and develop the type of work environment that makes unions unnecessary. Starting out dealing with union-management challenges and a stint in the NLRB have better equipped me to see the interrelationship of legal and workplace factors. I am proud also of my experience at Fisher & Phillips, where providing “practical advice” is second only to legal excellence among the Firm’s values. Our website lists me as having provided counsel for over 225 occasions of union activity, guided unionized companies, and as having managed approximately 450 OSHA fatality cases in construction and general industry, ranging from dust explosions to building collapses, in virtually every state. I have coordinated complex inspections involving multi-employer sites, corporate-wide compliance, and issues involving criminal referral. As a full labor lawyer, I oversee audits of corporate labor, HR, and safety compliance. I have responded to virtually every type of day-to-day workplace inquiry, and have handled cases before the EEOC, OFCCP, NLRB, and numerous other state and federal agencies. At F & P, all of us seek to spot issues and then rely upon attorneys in the Firm who concentrate on those areas. No tunnel vision. I teach or speak around 50 times per year to business associations, bar and professional groups, and to individual businesses. I serve on safety committees at three states’ AGC Chapters, teach at the AGC ASMTC
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