Sumotext Corp. -v- Zoove, Inc., et al
Filing
532
ORDER DENYING 530 DEFENDANT STARSTEVE, LLC'S MOTION FOR REVIEW OF THE CLERK'S TAXATION OF E-DISCOVERY COSTS. Signed by Judge Beth Labson Freeman on 8/23/2021. (blflc1S, COURT STAFF) (Filed on 8/23/2021)
Case 5:16-cv-01370-BLF Document 532 Filed 08/23/21 Page 1 of 6
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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SUMOTEXT CORP.,
Plaintiff,
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v.
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United States District Court
Northern District of California
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Case No. 16-cv-01370-BLF
ZOOVE, INC., et al.,
Defendants.
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ORDER DENYING DEFENDANT
STARSTEVE, LLC’S MOTION FOR
REVIEW OF THE CLERK’S
TAXATION OF E-DISCOVERY COSTS
[Re: ECF 530]
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Defendant StarSteve, LLC (“StarSteve”) has filed a Motion for Review of the Clerk’s
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Taxation of E-Discovery Costs, arguing that the Clerk improperly denied its request for
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$14,804.00 in electronic discovery costs. See Mot., ECF 530. No response to the motion has been
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filed by Plaintiff Sumotext Corporation (“Sumotext”) or any other party. The Court finds the
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motion suitable for decision without oral argument. See Civ. L.R. 7-1(b).
The motion is DENIED for the reasons discussed below.
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I.
BACKGROUND
Sumotext filed this case on March 21, 2016. See Compl., ECF 1. The case went to trial
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almost four years later, on February 24, 2020. Sumotext tried two antitrust claims to a jury,
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asserting that StarSteve and co-defendants Zoove, Inc., Virtual Hold Technology, LLC, and VHT
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StarStar LLC violated federal antitrust laws by seeking to exclude Sumotext from the markets for
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leasing and servicing StarStar numbers in the United States. The jury rendered a verdict for
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Defendants on March 6, 2020 and judgment was entered for Defendants on the same date. See
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Jury Verdict, ECF 470; Judgment, ECF 471.
Case 5:16-cv-01370-BLF Document 532 Filed 08/23/21 Page 2 of 6
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StarSteve filed a Bill of Costs on March 20, 2020. See BOC, ECF 485. Following meet-
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and-confer between StarSteve and Sumotext, StarSteve filed an Amended Bill of Costs on April 3,
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2020, requesting costs in the total amount of $26,046.10. See Am’d BOC, ECF 492. StarSteve
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requested $11,102.10 in costs for deposition transcripts, $140.00 in costs for deposition exhibits,
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and $14,804.00 in costs for disclosure/formal discovery documents. See id.
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As to the latter category of costs, StarSteve attached explanatory documents indicating that
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the $14,804.00 consisted of a portion of the monthly subscription fees paid by StarSteve’s counsel,
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Apex Law APC (“Apex”), to an electronic data discovery (“EDD”) vendor, Logikcull. See
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Attachment to Am’d BOC at 1-2, 19-63, ECF 492-1. It appears that Apex uses Logikcull’s cloudbased platform for its EDD needs in all its cases, paying Logikcull a monthly subscription fee of
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United States District Court
Northern District of California
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$1,500 for 100 GBs of data storage plus overages when additional data storage is needed or more
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than four users access the service. See id. A description of Logikcull’s platform explains that
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“[d]iscovery software that is cloud‐based has the added advantage of making it possible to upload,
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review, and produce documents online, without the delays, costs, and frustrations associated with
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eDiscovery approaches such as manual review, third‐party vendors, or legacy software.” Id. at 21.
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Apex “allocate[s] the portion of the charges to the clients based on their usage of the
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platform during the month.” Attachment to Am’d BOC at 19, ECF 492-1. A summary table
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attached to the Amended Bill of Costs reflects the portion of each month’s $1,500 subscription fee
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that Apex attributed to StarSteve. See id. at 1-2. For the months November 2016 through March
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2018, Apex allocated $300 of its monthly subscription fee to StarSteve. See id. For the months
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April 2018 through December 2018, the allocation was $400. See id. For the months January
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2019 through November 2019, the allocation to StarSteve ranged between $400 and $550. See id.
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Finally, for the months December 2019 and January 2020 the allocations were $717.20 and
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$697.20, respectively. See id. No declaration was included to explain how Apex arrived at those
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figures or to verify any of the facts included in the description of Logikcull’s services.
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The Clerk taxed costs for StarSteve on May 17, 2021, in the total amount of $10,927.30.
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See Taxed Costs, ECF 528. The Clerk allowed the bulk of the costs requested for deposition
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transcripts, denied the $140.00 requested for deposition exhibits, and denied the $14,804.00
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requested for Logikcull’s fees. As to the Logikcull fees, the Clerk indicated that “[s]upporting
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documentation does not itemize or support full amount claimed.” Id. StarSteve filed the present
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Motion for Review of the Clerk’s Taxation of E-Discovery Costs on May 25, 2021, seeking
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review of the Clerk’s denial of the $14,804.00 in Logikcull fees.
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II.
LEGAL STANDARD
“As a general rule, costs and fees should be awarded to the prevailing party.” In re Online
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DVD-Rental Antitrust Litig., 779 F.3d 914, 926 (9th Cir. 2015) (citing Fed. R. Civ. P. 54(d)(1)).
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“The clerk may tax costs on 14 days’ notice.” Fed. R. Civ. P. 54(d)(1). “On motion served within
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the next 7 days, the court may review the clerk’s action.” Id.
“[A] district court’s discretion to award costs is limited to particular types of costs
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United States District Court
Northern District of California
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enumerated in 28 U.S.C. § 1920.” Id. Section 1920 lists six categories of costs that may be
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recovered by a prevailing party. See id. As relevant here, § 1920(4) provides that taxable costs
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include “[f]ees for exemplification and the costs of making copies of any materials where the
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copies are necessarily obtained for use in the case.” 28 U.S.C. § 1920(4). This district’s Civil
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Local Rules interpret that provision to mean that “[t]he cost of reproducing disclosure or formal
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discovery documents when used for any purpose in the case is allowable.” Civ. L.R. 54-3(d)(2).
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III.
DISCUSSION
StarSteve moves for review of the Clerk’s denial of its request for $14,804.00 in fees to
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Logikcull. Before turning to the substance of the motion, the Court notes StarSteve’s
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acknowledgement that the motion was due on May 24, 2021, seven days after the Clerk’s taxation
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of costs on May 17, 2021. See Fed. R. Civ. P. 54(d)(1). The motion was filed shortly after 1:30
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a.m. on May 25, 2021. StarSteve explains that its counsel worked diligently to file the motion
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before midnight on May 24, 2021, but counsel’s health issues and other circumstances prevented
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the timely filing. See Mot. at 1 n.1, ECF 530. StarSteve asks that the untimeliness of its motion
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be excused and that the motion be considered on the merits. See id.
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“Although a party may waive his right to move for review of costs by not filing the motion
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within the proper time limits, a court has discretion to review an untimely motion, notwithstanding
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the waiver.” Ashker v. Sayre, No. 05-03759 CW, 2010 WL 2991667, at *1 (N.D. Cal. July 29,
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Case 5:16-cv-01370-BLF Document 532 Filed 08/23/21 Page 4 of 6
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2010); see also U.S., ex rel. Meyer v. Horizon Health Corp., No. C 00-1303 SBA, 2007 WL
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518607, at *3 (N.D. Cal. Feb. 13, 2007) (“[T]he timeliness requirement of Rule 54(d)(1) is not
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jurisdictional and therefore a court has discretion to review it on the merits.”). The Court finds
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that StarSteve has shown good cause for the late filing, and in the exercise of its discretion the
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Court will consider StarSteve’s motion for review of the Clerk’s taxation of costs.
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The Court next turns to StarSteve’s contention that the subscription fees paid to Logikcull
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are taxable costs. StarSteve asserts that those fees constitute electronic discovery costs that
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properly may be taxed pursuant to § 1920(4), which provides that a court may tax “[f]ees for
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exemplification and the costs of making copies of any materials where the copies are necessarily
obtained for use in the case.” 28 U.S.C. § 1920(4). StarSteve also relies on Civil Local Rule
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United States District Court
Northern District of California
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54(d)(2), which interprets § 1920(4) to mean that “[t]he cost of reproducing disclosure or formal
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discovery documents when used for any purpose in the case is allowable.” Civ. L.R. 54-3(d)(2).
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The Ninth Circuit has made clear that some electronic discovery costs may be taxable
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under § 1920(4). See In re Online DVD-Rental Antitrust Litig., 779 F.3d at 932 (affirming in part
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and vacating in part district court’s taxing of e-discovery and data management costs). For
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example, when copies are made in a fashion necessary to comply with the parties’ agreed-upon
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e-discovery obligations, or with a court order, the costs are taxable so long as the copies also are
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“necessarily obtained for use in the case.” See id. at 928 (quoting § 1920(4). However, “fees are
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permitted only for the physical preparation and duplication of documents, not the intellectual
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effort involved in their production.” Id. (quotation marks and citation omitted).
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District courts within the Ninth Circuit “have allowed e-discovery costs for scanning or
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converting electronically-stored files into usable formats because such tasks fall within 28 U.S.C.
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§ 1920(4).” Left Coast Wrestling, LLC v. Dearborn Int’l LLC, No. 17-cv-00466-LAB (NLS),
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2018 WL 2948532, at *2 (S.D. Cal. June 12, 2018), report and recommendation adopted, No. 17-
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cv-466-LAB (NLS), 2018 WL 3032585 (S.D. Cal. June 19, 2018). “Courts within the Northern
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District have awarded costs under this provision for scanning paper documents, electronic
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scanning and conversion to PDF, TIFF conversion, OCR, image endorsement/Bates stamping, slip
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sheet preparation, blowback scanning paper documents, media hardware used for production,
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electronically stamping Bates numbers, slipsheet preparation, blowback preparation, and OCR
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conversion.” Linex Techs., Inc. v. Hewlett-Packard Co., No. 13-CV-00159-CW (MEJ), 2014 WL
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5494906, at *4 (N.D. Cal. Oct. 30, 2014). “However, courts have not allowed recovery of costs
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for the hosting of electronic data or for e-gathering and e-processing costs akin to the intellectual
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effort involved in the production of documents or the research, analysis, and distillation of data.”
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Left Coast Wrestling, 2018 WL 2948532, at *2; see also Phoenix Techs. Ltd. v. VMWare, Inc., No.
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15-CV-01414-HSG, 2018 WL 4700347, at *5 (N.D. Cal. Sept. 30, 2018) (“Such e-discovery
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storage costs or hosting fees are not taxable.”); Linex Techs., 2014 WL 5494906, at *4
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(“Importantly, e-discovery hosting costs and associated fees are not compensable.”).
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StarSteve argues that the Logikcull platform is capable of performing many types of tasks
United States District Court
Northern District of California
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for which costs are taxable. Indeed, StarSteve attached to its Amended Bill of Costs a chart
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showing sixteen different types of tasks that generally are associated with electronic discovery and
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indicating which of those tasks can be performed by Logikcull. See Attachment to Am’d BOC at
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22, ECF 492-1. However, the chart does not show what tasks actually were performed on the
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Logikcull platform with respect to this case during any given month. Thus, it is impossible to
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determine which of each month’s fees constitute taxable costs, if any. Other courts have declined
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to tax costs in similar circumstances. See, e.g., Mendoza v. Lithia Motors, Inc., No. 6:16-CV-
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01264-AA, 2021 WL 354108, at *5 (D. Or. Feb. 2, 2021) (“[B]ased on the invoices submitted the
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Court cannot discern whether these costs involved some intellectual efforts or were part of normal
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discovery retention performed by attorneys, both of which are not taxable.”). Moreover, it is not
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clear that each month’s fees relate to documents that actually were produced in this litigation. “A
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narrow construction of the statute requires concluding that costs should be awarded based on what
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Defendant produced, not on what Defendant uploaded to its e-discovery platform.” Phoenix
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Techs., 2018 WL 4700347, at *5.
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StarSteve cites a decision from this district in which substantial e-discovery costs were
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found to be taxable under § 1920(4) and Civil Local Rule 54-3(d)(2). See Apple Inc. v. Samsung
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Elecs. Co., No. 11-CV-01846-LHK, 2014 WL 4745933, at *11 (N.D. Cal. Sept. 19, 2014). In
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Apple, “various Apple attorneys assert[ed] that Apple [sought] only the amounts associated with
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electronic preparation and duplication, not the intellectual effort involved in the production, such
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as searching or analyzing the documents.” Id. Additionally, the supporting declarations in Apple
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represented “that costs associated with hosting the data, software user license fees, and vendor
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consulting time have not been included.” Id. StarSteve did not submit any such attorney
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declarations to the Clerk.
StarSteve has submitted to this Court a declaration of its counsel, Thomas N. Fitzgibbon,
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who is the managing shareholder in Apex. See Fitzgibbon Decl., ECF 530. Mr. Fitzgibbon states
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that the $14,804.00 in fees to Logikcull “were required to use the service so I could efficiently and
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completely produce electronic documents in response to discovery propounded by the other parties
and comply with the E-Discovery Order (ECF No. 113).” Id. ¶ 5. Mr. Fitzgibbon represents that
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United States District Court
Northern District of California
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“[t]hese activities can all be recovered consistent with Section 1920 as explained in the table on
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pages 21-23 of the Amended Bill of Costs as they were not solely for the convenience of counsel
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and did not include any type of individual review charges by persons doing searching or
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manipulating the data.” Id. ¶ 2. As discussed above, the table provided with the Amended Bill of
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Costs does not show what activities actually were performed on the Logikcull platform with
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respect to this case, or when. Mr. Fitzgibbon’s declaration simply does not provide the Court with
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enough specificity to conclude that the $14,804.00 in fees to Logikcull constitute taxable costs
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under the authorities discussed above.
The Court finds that the Clerk properly disallowed the $14,804.00 in Logikcull fees.
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StarSteve’s Motion for Review of the Clerk’s Taxation of E-Discovery Costs is DENIED.
IV.
ORDER
(1)
DENIED; and
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StarSteve’s Motion for Review of the Clerk’s Taxation of E-Discovery Costs is
(2)
This order terminates ECF 530.
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Dated: August 23, 2021
______________________________________
BETH LABSON FREEMAN
United States District Judge
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