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E-Discovery Project Management Fees included in Recoverable Costs for Prevailing Party

Created on January 5, 2012

Vice President, E-Discovery

In e-discovery, collaboration between multiple teams for tracking, monitoring and ensuring a defensible and comprehensive e-discovery process is essential. Project managers play the vital role of coordinating and managing this process so that matters stay on track and important information does not fall through the cracks. Courts are also beginning to recognize the importance of e-discovery project management, as seen in Jardin v. Datallegro, Inc. (S.D.Cal. Oct. 2011). In Jardin, it was ruled by the court that the project management costs used “exclusively to the process of converting data to .TIFF format" are recoverable for a prevailing party.

In this product infringement case, the defendant, Datallegro, was granted summary judgment of non-infringement. Plaintiff, Jardin, motioned the court challenging the award of costs with three claims including, “if an award of costs is appropriate, then the award granted by the Clerk should be substantially reduced." Under FRCP 54(d), there is a presumption that the prevailing party is awarded costs authorized by federal statute unless the losing party proves that costs should not be awarded. 28 U.S.C. § 1920 (US Code - Section 1920: Taxation of Costs) lists all of the available taxable costs, which include:

“Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case." These fees are only permitted “for the physical preparation and duplication of documents, not the intellectual effort involved in their production."

The Plaintiff contended that project management costs were not recoverable based on them being related to the “intellectual effort involved in [document] production." According to U.S.C. § 1920(4) intellectual efforts include discovery activities that are tied to “strategic, confidentiality, or other types of concerns typically entrusted to lawyers." The court rejected the Plaintiff's argument because the project manager never reviewed documents or provided any strategic advice. Rather, the project manager's role was to oversee the process to convert data to the .TIFF format and was limited solely to the accurate production of data.

Based on Jardin, costs associated with e-discovery project management are recoverable if they are used to coordinate the production of documents. This case displays that courts are paying closer attention to how organizations oversee the many moving parts of e-discovery projects.

Organizations need to assess their project management needs and recognize where both process and technology can help facilitate e-discovery process improvements. Developing clearly defined, e-discovery workflows enables legal teams to manage activities through one unified, transparent and repeatable process.

Best practices around e-discovery project management will be addressed on January 18 in an upcoming webcast, titled “Implementing Effective E-Discovery Workflows Between Inside & Outside Counsel." Learn more and register here.

Mike Hamilton, J.D. is a Sr. E-Discovery Analyst at Exterro, Inc., focusing on educating Exterro customers, prospects and industry experts on how to solve e-discovery issues proactively with technology. His e-discovery knowledge, legal acumen and practical experience give him a valuable perspective on bridging the gap between IT and legal teams. You can find him on Google+, Twitter and Linkedin.