What E-Discovery costs are recoverable under 28 U.S.C. § 1920?

What E-Discovery Costs Can You Recover When You Win a Case? Only Costs for the Copying of Electronic Data

Author: Samantha Monteleone
Case Citation: Wisconsin Alumni Research Found. v. Apple, Inc., No. 14-CV-062 (W.D. Wisc. June 6, 2017)
Employee/Personnel/Employer Implicated: Wisconsin Alumni Research Foundation; Apple
eLesson Learned: Some courts are narrowly construing 28 U.S.C. § 1920 to award e-discovery costs only for the copying of electronic data, including copying metadata and hard drives.
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Almost two years after Wisconsin Alumni Research Foundation (WARF) won a $234 million verdict over Apple in a patent dispute, U.S. District Court Judge William Conley ruled in June 2017 that Apple pay another $272 million, including recovery costs permitted under Federal Rule of Civil Procedure 54(d) and 28 U.S.C. § 1920.  In his decision, Judge Conley deliberated just what e-discovery costs are recoverable to a prevailing party.

The patent in question relates to a technology called a “predictor circuit.”  The patent, which was awarded in 1998 to WARF, the University of Wisconsin’s property division, describes how the circuit can improve a processor’s performance inside a device.  The “predictor” element to the technology allows the processor to anticipate a user’s commands to the system before they are made so it can respond more quickly.

WARF sued Apple in 2014, alleging that the company used the patented technology in some of its iPhones and iPads.  Apple, which denied the allegations, contended that it did not infringe and that the patent was invalid.  In 2015, a jury returned a verdict in favor of WARF and awarded damages in the amount of $234 million.  Two years later, in 2017, Judge Conley decided on the issue of recoverable costs, including e-discovery costs.

Among other costs, WARF requested reimbursement for e-discovery costs in three areas.  First, WARF sought $115,475.55 for data storage costs for its e-discovery database.  Second, WARF sought $147,757.00 for ESI and electronic discovery work performed by Irell & Manella.  Timesheets describe tasks including converting documents to PDF format, uploading data to the database, preparing documents for production, and creating “review bins.”  Third, WARF sought $30,616 in data purchases made by two of WARF’s experts.

In deciding which costs to award WARF, the court adopted a narrow, literal reading of 28 U.S.C. § 1920’s “exemplification and copying” provision, citing the court’s decision in Split Pivot, Inc. v. Trek Bicycle Corp., 154 F. Supp. 3d 769 (2015 W.D. Wisc.), which “interpret[s] narrowly the meaning of ‘making copies’ in § 1920(4) in the context of electronic discovery.”  Under this approach, the court will award e-discovery costs only for the copying of electronic data, including copying metadata and hard drives.

Thus, the court first rejected WARF’s request for $115,475.55 for costs of storing its e-discovery database because the purpose was not copying.  The court then reduced WARF’s request for $147,757.00 by 50% ($73,878.50) for the e-discovery bill from Irell & Manella because, the court said, the cost of data management is not reimbursable under § 1920.  The court found that a reduction by 50% was appropriate in light of the commingling of the tasks on the bill and the “difficulty, if not impossibility,” of determining which costs are reimbursable and which costs are not.  The court finally rejected WARF’s request for $30,616 in data purchases made by two of WARF’s experts because these costs do not constitute copying under § 1920.

Wisconsin Alumni does not create new law in the field of e-discovery recovery costs, but the decision does advance the law.  With Split Pivot, and now Wisconsin Alumni, we now have two district court decisions in the Seventh Circuit with a rather strict interpretation of § 1920 and its “exemplification and copying” provision.  Perhaps most importantly, this decision continues to tell us just what e-discovery costs are recoverable to a prevailing party.

Samantha Monteleone is a third year law student at Seton Hall University School of Law (Class of 2018).  She was born and raised in New Jersey and has plans to practice in the state after graduation.  She has a passion for all things family law but enjoys reading and writing about all vanguard topics in the law.

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