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Case Summary: Return Path Inc.; Court Examines Taxation of EDD Costs to Losing Plaintiff in Patent Case

Posted by rjbiii on January 19, 2010

CBT Flint Partners, LLC v. Return Path, Inc., 2009 U.S. Dist. LEXIS 121188 (N.D. Ga. Dec. 30, 2009)

CBT Flint Partners (“CBT”) sued Return Path, Inc. (“Return Path”) and Cisco IronPort Systems LLC, (“Cisco IronPort”) alleging that the Defendants’ Bonded Sender Program infringed CBT’s two patents.

The Bonded Sender Program allows a sender of an email to place its IP address on a publicly available list of trusted senders that is used in connection with email filtering. When a sender applies to be in the Bonded Sender Program, a third party determines whether the applicant is a good user of email. If accepted, the sender posts a bond, and its IP addresses are included on the Bonded Sender list. Emails from IP addresses on the Bonded Sender list are not filtered as spam.

Plaintiff contested the imposition of certain costs, including e-discovery costs, to Plaintiff and its counsel after Defendants were granted summary judgment.

The court noted grumpily that CBT was vigorous in their objections to being taxed for any of their adversaries’ various costs:

CBT filed thirty-five pages of briefing objecting to something in every category of Cisco IronPort’s bill of costs. In order to accomplish this feat, CBT objects to a $ 146.82 fee for an unsuccessful attempt to serve a subpoena. The Plaintiff’s briefing of this objection consists of 1 full page. The Defendant’s response to this objection consists of 2 pages of briefing plus 2 exhibits. What an incredible waste of time! The Plaintiff’s objection to taxing the first unsuccessful attempt to serve Gardner Groff is overruled.

The court then moved to the objection specific to electronic discovery:

The Plaintiff objects to $ 243,453.02 in fees for Cisco IronPort’s e-discovery vendor, Gallivan Gallivan O’Melia. The Plaintiff says that: “IronPort retained a computer consultant to collect, search, identify and help produce electronic documents from IronPort’s network files and hard drives in response to CBT’s discovery requests.” FN1 This appears to be a fair characterization of the services provided by the firm. CBT objects that fees associated with collecting documents for production are not taxable under 28 U.S.C. § 1920. This is a serious objection which deserves careful and deliberate consideration by the Court.

FN1: Cisco IronPort describes the services of the e-discovery consultant as follows: “GGO conducted highly specialized technical tasks to acquire, process, preserve, and track the voluminous amount of electronic data that CBT requested in discovery. As further described in GGO’s invoices, attached at Exhibit B, these acquisition and processing activities included forensically sound preservation of custodian computers; extraction of documents from multiple operating systems, corporate servers, and network shares while preserving meta-data; cataloging, extracting e-mail and attachments, and processing; compilation of keyword and meta-data indices for analysis and reporting as requested by the plaintiff; auditing and logging of files and ensuring compliance with Federal Rules; decryption and extraction of proprietary data; triage and advanced processing of files with errors; statistical and keyword analysis with related reporting; and compilation of native file production and load files to provide usable documents to plaintiff.”

The court acknowledged that opinion was split as to whether these types costs were recoverable under 28 U.S.C. § 1920. Some courts have allowed them, considering them the modern equivalent of “exemplification and copies.” Others have not allowed them, reasoning that assembling records for production is ordinarily a task done by attorneys and paralegals and is not a recoverable cost.

The court, while quoting Cargill Inc. v. Progressive Dairy Solutions, decided in favor of allowing the costs to be recovered, shifting them to the plaintiff.

CBT requested, and Cisco IronPort produced, a massive quantity of data. In response to the Court’s Scheduling Order, the parties agreed that document production would be made in electronic format. Cisco IronPort has asserted — without contradiction — that production in paper form of the 1.4 million documents plus 6 versions of source code would have cost far more than the fees sought for the e-discovery consultant. A careful review of the GGO invoices reveals that the services provided are not the type of services that attorneys or paralegals are trained for or are capable of providing. The services are highly technical. They are the 21st Century equivalent of making copies. See Cargill Inc. v. Progressive Dairy Solutions, Inc., No. CV-F-07-0349, 2008 U.S. Dist. LEXIS 101983, 2008 WL 5135826, at *6 (E.D. Cal. 2008) (“Progressive provides an explanation of the invoice-case management was done electronically because of the volume of documents; scanning of documents was necessary to provide an adequate defense to the several motions and trial presentation. Accordingly, this cost [] is recoverable.”). The services are certainly necessary in the electronic age. The enormous burden and expense of electronic discovery are well known. Taxation of these costs will encourage litigants to exercise restraint in burdening the opposing party with the huge cost of unlimited demands for electronic discovery. The objection to taxation as costs of the e-discovery consultant’s fees is overruled and denied. Cisco IronPort has revised its bill of costs in response to many of the Plaintiff’s other objections. The remaining objections are overruled and denied for the reasons given by Cisco IronPort in its response to the motion.

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