Third Circuit Holds That E-Discovery Costs Are Largely Unrecoverable In Bill of Costs

In Race Tires America, Inc. v. Hoosier Racing Tire Corp., No. 11-2316, 2012 WL 887593 (3d Cir. Mar. 16, 2012), the Third Circuit held that most e-discovery costs are not recoverable after trial under either Fed. R. Civ. P. 54(d) or 28 U.S.C. § 1920. Although several other federal courts have authorized broader awards of e-discovery costs under those provisions, the Third Circuit read 28 U.S.C § 1920 strictly and held that costs for “exemplification” and “copies” must relate to the actual creation of images or duplicates. Therefore, while the court permitted the award of costs for scanning documents and for creating “TIFF” image files, the court disallowed costs for activities including the collection of electronic data, performing word-searches, and formatting data for review. As a result, the Third Circuit reduced the e-discovery costs award from $365,000 to $20,000. (Description by Jenner & Block)