D. Minn.: Unidentified Processing Cannot be Taxed Under 28 U.S.C. § 1920


This past Friday, Judge Ann D. Montgomery of the United States District Court for the District of Minnesota, issued a decision, In re Wholesale Grocery Prods., No. 09-MD-2090 ADM/TNL, 2019 U.S. Dist. LEXIS 16496 (D. Minn. Feb. 1, 2019), granting in part and denying in part motions filed by both the Plaintiffs and the Defendants for review of cost judgments entered for the Defendants. This is an antitrust case brought against C&S and SuperValu for conspiring to allocate grocery markets. A jury found in favor of C&S in April 2018, and the Court granted summary judgment for SuperValu in July 2018.

The Defendant DeLuca argued that it should not be liable for costs because it did not help decide what discovery should be conducted. Its only discovery costs were $1,015.50 for its deposition. If it is held jointly and severally liable with the other Plaintiffs for costs it could be forced out of business. In the Eighth Circuit, the general rule is for pro rata liability for costs unless equity dictates otherwise. Judge Montgomery noted DeLuca's counsel was appointed co-lead counsel and was expressly made responsible for discovery. She directed DeLuca to re-allocate the share of costs with other Plaintiffs rather than seeking a reduction from C&S.

C&S argued that the Clerk improperly denied its request for $372,000 in electronic discovery costs, which it argued were analogous to copying under 28 U.S.C. §1920(4). While acknowledging that the Eighth Circuit had not ruled on what electronic discovery costs were taxable under § 1920(4), the Court noted several decisions, including Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir. 2012), which found that scanning and the conversion of native files are taxable. Judge Montgomery awarded costs of $41,000 for scanning, converting files to TIFF images and OCRing, but declined reimbursement for ESI processing, bibliographic coding, email restoration, and loading data. "Just as the preparatory measures taken in pre-digital discovery to locate, collect, and review documents before producing copies were not taxable, so too the preliminary steps required to meet electronic discovery obligations are not recoverable under § 1920(4)." In re Wholesale Grocery Prods., 2019 U.S. Dist. LEXIS 16496, at *16. She faulted C&S for not explaining in detail what processing was performed on ESI.

C&S also disputed the limiting of costs for expert depositions to the appearance fee and travel expenses. Judge Montgomery did not agree that costs should be awarded for time spent preparing for these depositions.

DeLuca and Village Market argued that SuperValu agreed to bear all of its costs against any party when it entered into a settlement agreement with two other plaintiffs, Champaign and D&G. Noting that the agreement to seek to costs served as consideration for the release of the Champaign and D&G claims, Judge Montgomery ruled that, ". . . to the extent that the costs requested in SuperValu's 2013 Bill of Costs are taxable, Village Market and DeLuca's will be jointly and severally liable for one half of those costs, and the other half is deemed to have been satisfied by SuperValu's Settlement Agreement with D&G and the Champaign Non-Arbitration Class." Id. at *25.

In ruling on SuperValu's Motion for Review, the Court also awarded it costs for scanning and converting native files to TIFF images, but not for processing and coding. "Coding paper documents is not taxable because it is a preparatory step that falls outside the purview of 'making copies'. 'ESI Processing' is a broad term, and SuperValu provides no explanation of the tasks performed in this subset of costs." Id. at *29-30. She faulted the Defendant for not describing its costs with sufficient specificity. Judge Montgomery also denied SuperValu costs for time spent preparing for expert depositions.


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