N.D. Ohio: Data Hosting and User License Fees Not Covered by 28 U.S.C. § 1920

On Monday, Judge Donald C. Nugent, issued a decision in Consumer Fin. Prot. Bureau v. Weltman, Weinberg & Reis, Co., L.P.A., No. 1:17 CV 817, 2018 U.S. Dist. LEXIS 181121 (N.D. Ohio Oct. 22, 2018) approving in part and denying in part a Bill of Costs submitted by the Defendant Weltman.

28 U.S.C. § 1920 allows for the following fees to be taxed:

1. Clerk and marshal fees.

2. Court reporter fees.

3. Printing and witness fees.

4. Copying

5. Docket fees

6. Compensation of experts and interpreters.

[The taxation of costs can be confusing concept. To be clear see this definition by Lexis, "Taxation of costs is the procedure by which the court assesses the amount of costs payable under a costs order by the paying party to the receiving party (generally the winning party)."]

The Defendant prevailed in the case and sought $60,000 in copying fees and $7,000 for transcript costs. The Plaintiff argued the costs should only be $7.000. The Defendant's copying or 'exemplification' costs include $53,000 for user licensing, data hosting, loading and exporting data into Relativity, processing and audio file transcription. Judge Nugent noted that the Sixth Circuit has not addressed the reimbursement of these costs under 28 U.S.C. § 1920, but has approved the cost of imaging a hard drive.

The Court noted that the Defendant did not show that the need for its electronic discovery system was caused by the Plaintiff; illustrate that the system was more efficient than, "copying and distributing information in a more traditional manner"; demonstrate which costs were necessary for the case and which were for the convenience of the attorneys; or prove that hosting and user licenses were incurred for copying discovery materials. Id. at *7-8. "Defendant states that these costs were incurred to maintain a database used for storage and to assist Defendant's review of the materials, neither of which is a recoverable cost under the statute." Id. at 8. Judge Nugent chose to follow the plain language of 28 U.S.C. § 1920 and deny user license and hosting fees.

However, relying on the Sixth Circuit's decision in Colosi v. Jones Lang LaSalle Americas, Inc., 781 F.3d 293 (6th Cir. 2015), Judge Nugent ruled, that, "[d]ata conversion, audio transcription, and export of data,all suggest a replication of data that would fit the broader definition of electronic 'copying' adopted by the Sixth Circuit in Colosi.".

The transcription of 140 consumer calls was found to be a reasonable expense for trial preparation and witness examination. The Court rejected the Plaintiff's argument that transcripts were not necessary because the audio could have been played at the trial instead, noting the difficulty of searching through audio for specific content. "It is not necessary, for recovery under Section 1920 that the transcriptions, themselves, actually be used at trial." Weltman, 2018 U.S. Dist. LEXIS 181121, at *11-12.

The Defendant's Bill of Costs was approved for $10,845.65.