Determining what you can recover for providing copies of electronic data.

Did the Budget For Electronic Copies Just Go Down?

When you think about making a copy, you may think of copying and pasting a document into a thumb drive or a folder in your documents.  You might also think about scanning a document and saving that copy as a PDF.  However, the question in many cases has become what is the price of that copy, and is it a cost that can be recovered.

In the case of In Re Text Messaging Antitrust Litigation, the court addressed this very vague and unsettled question.  The court did so by accepting the rule previously set forth in Race Tires Am., Inc. v. Hoosier Racing Tire Corp.,[1] which basely states the following: The cost of making an electronic copy may be recovered, but costs that are unnecessary to making the actual copy will not be recovered.

In other words, you may not recover for any extra enhancements made to ESI; however, you may recover any costs associated with the basic copy of the information.  Why is this frustrating?  Because technology presents numerous standard features which streamline and lower the cost of discovery that are deemed unnecessary enhancements under this rule.

This case presents a perfect example of an enhancement that is deemed unnecessary in regards to making copies of electronic data.  The technology is called optical character recognition (OCR), which allows a computer to recognize text so that it may be copied, pasted, and searched.  The defendants assert that OCR is a necessary part of copying ESI in order to perform basic interactions with an electronic document (i.e., copying and pasting from the ESI copies).

Most individuals assume that the ability to copy and paste data from an electronic document is standard; and as such, it logically follows that this would be a necessary part of making an electronic copy.  However, here, the court deemed that OCR is not a necessary part of making copies.

Under this framework, even the commonplace technological advancements such as providing the ability to copy and paste from a copied electronic document are not seen as a necessary cost.  Therefore, the decision to utilize such technology is done on producing party’s own dime.

In this case, the court cites Race Tires again stating, “gathering, preserving, processing, searching, culling, and extracting ESI simply do not amount to `making copies.'”  They further explained that only scanning and file format conversion could be considered under the small umbrella of “making copies.”

Further, anything that can be deemed “processing” is also not seen as part of “making copies”.  The court even expands on this to say that even if the processing was “essential” to making an electronic copy “comprehensive and intelligible” the services of processing the data are not included in making copies, and therefore, will not be recoverable.

The Court in this case does not specifically determine the award of costs, but rather directs the parties to resubmit a budget in compliance with these rules.  However, in the often cited Race Tires case, the court basically limited the awardable costs to only the scanning of hard copies, the conversion of files to appropriate formats, and the transfer of VHS tapes to DVDs.

Victoria O’Connor Blazeski (formerly Victoria L. O’Connor) received her B.S. form Stevens Institute of Technology, and she will receive her J.D. from Seton Hall University School of Law in 2015.  Prior to law school, she worked as an account manager in the Corporate Tax Provision department of Thomson Reuters, Tax & Accounting.  Victoria is a former D3 college basketball player, and she has an interest in Tax Law and Civil Litigation.  After graduating, she will clerk for the Hon. Joseph M. Andresini, J.T.C. in the Tax Courts of New Jersey.  

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[1] 674 F3d 158 (3d Cir. 2012).

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