Thompson I.G., L.L.C. v. Edgetech I.G., Inc.

Filing 130

Memorandum and Order Granting in Part and Denying in Part Defendant/Counter-Plaintiff's 117 Motion to Recover Copying and Exemplification Costs and Granting Defendant/Counter-Plaintiff's 121 Motion to Review Clerk's Action. Signed by District Judge Avern Cohn. (SCha)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
THOMPSON, I.G., L.L.C.,
Plaintiff/Counter-Defendant,
vs.

Case No: 11-12839
HON. AVERN COHN

EDGETECH I.G., INC.,
Defendant/Counter-Plaintiff.
________________________________________/
MEMORANDUM AND ORDER GRANTING
IN PART AND DENYING IN PART
DEFENDANT/COUNTER-PLAINTIFF’S
MOTION TO RECOVER COPYING AND
EXEMPLIFICATION COSTS (Doc. 117) AND
GRANTING DEFENDANT/COUNTER-PLAINTIFF’S
MOTION TO REVIEW CLERK’S ACTION (Doc. 121)1
I.
This is a case involving a contract dispute between Plaintiff, Thompson I.G., L.L.C.
(“Thompson”), a fabricator of insulated glass windows, sometimes called double pane
windows, and Defendant, Edgetech, I.G., Inc. (“Edgetech”), a supplier of “Super Spacer®,”
a window sealant consisting of pliable solid material used in the assembly of insulated
glass.

On November 14, 2013, the Court granted Edgetech’s motion for summary

judgment (Doc. 110). A final judgment was entered in favor of Edgetech (Doc. 114).
On December 12, 2013, Edgetech filed a Bill of Costs seeking $76,571.04 (Doc.
118). Edgetech contemporaneously filed a motion for costs to recover “copying and
exemplification costs” in the amount of $65,652.94 (Doc. 117). These costs cannot taxed

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Although originally scheduled for hearing, the Court deems this matter appropriate for
decision without oral argument. See Fed. R. Civ. P. 78(b); E.D. Mich. LR 7.1(f)(2).

without an order of the Court.
Costs aside from the “copying and exemplification costs” were taxed in the amount
of $9,860.50 (Doc. 119). Thompson does not object to these costs. Edgetech filed a
motion to review the Clerk’s action denying $275.40 in costs related to court reporter fees
for deposition transcripts of two witnesses as will be explained below.
For the reasons that follow, Edgetech’s motion to recover copying and
exemplification costs totaling $65,652.94 (Doc. 117) will be granted in part and denied in
part and Edgetech’s motion to review the Clerk’s action (Doc. 121) denying $275.40 will be
granted.
Costs will be taxed in the amount of $10,161.38. This includes the $9,860.50 taxed
by the Clerk of the Court, and the $275.40 related to deposition transcripts of the two
witnesses. In addition, of the “copying and exemplification costs” requested, Edgetech will
be allowed the amount of $25.48, only.
II.
A.
Under the local rules, a party seeking costs must file a Bill of Costs no later than 28
days after entry of judgment. E.D. Mich. LR 54.1. The handbook provides that transcripts
used in support of a motion which are necessarily obtained for use in the case are taxable
costs. E.D. Mich. Bill of Costs Handbook, II.B.1.d.
B.
The Bill of Costs Handbook requires a court order authorizing the recovery of
exemplification and copy fees. E.D. Mich. Bill of Costs Handbook, II.F. As the handbook
states,
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The cost of securing translations for exemplification of matters before the court,
copies of papers necessarily obtained for use in a case, and the cost of obtaining
charts, models, photographs, etc., are not recoverable within the discretion of the
taxation clerk unless counsel has previously secured an order authorizing the
recovery of these costs. Routine copy expenses; those made for service, filing or
for the convenience of counsel are not taxable within the discretion of the taxation
clerk.
Id. (emphasis in original).
III.
A.
1.
Edgetech seeks to recover $65,652.94 as “copying and exemplification costs”
necessary for defending against Thompson’s claims. Of this amount, $5,080.33 represents
the cost of copying papers. Edgetech has attached as Exhibit A a list of the breakdown of
these costs. The list, however, is redacted.
The remainder of the amount Edgetech seeks as “copying and exemplification
costs”–$60,572.61–represents fees Edgetech paid to its e-discovery vendor, Advanced
Discovery. As explained in Thaddeus R. Warren’s (“Warren”)2 affidavit, Edgetech retained
Advanced Discovery to maintain its records. A review of the Advanced Discovery invoices
shows that Advanced Discovery charged Edgetech for electronic discovery processing and
hosting documents on its servers. The breakdown of the Advanced Discovery costs are
explained in Warren’s affidavit and supported by the invoices as follows:
Forensic consulting and collection:

$7,787.50

Early case assessment:

$27,654.73

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Warren is Vice President of Sales for Advanced Discovery, a company providing
electronic discovery services. Advanced Discovery provided services to Edgetech.
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Electronic discovery processing/hosting: $25,130.38
Labor charges:

$6,757.45
2.

Thompson says that Edgetech’s copying and exemplification costs should be denied
in full.
First, Thompson argues that Edgetech’s request for $5,080.33 in copying costs
should be denied because Edgetech fails to show that these costs were reasonable and
necessary. The Court agrees.
Edgetech has failed to show that the copying costs were “necessarily obtained for
use in the case.” King v. Gowdy, 268 F. App’x 389, 391 (6th Cir. 2008) (citing 28 U.S.C.
§ 1920(4)). Edgetech’s Exhibit A details the following copying charges that it paid:
Copying Charges:

$3185.00

Copying Costs:

$165.33

Color Copies – PB center):

$1185.00

Pitney CD:

$195.00

Pitney Master DVD:

$125.00

Tech Services CD Charges:

$420.00

Edgetech says that in addition to Exhibit A, its counsel has declared, under penalty
of perjury, that the copying costs are correct and were necessarily incurred. This is not
enough.
There is no explanation by Edgetech of (1) the documents that were copied; (2) at
what stage in the case they were copied; (3) why they were copied; (4) the category of
documents copied; etc. Indeed, Edgetech has provided the Court with a highly redacted
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breakdown of “copying” costs. There is no explanation why the copying costs were
necessary to the case. Edgetech’s reliance on its counsel’s declaration is insufficient to
establish necessity. It appears that Edgetech has this information but has provided it in a
redacted format. Because Edgetech has failed to establish that the copying costs were
necessarily obtained for use in the case, these costs will be denied.
Second, Thompson argues that Edgetech’s request for $60,572.61 representing ediscovery costs paid to Advanced Discovery should be denied because e-discovery costs
are not “costs of making copies” as allowed by 28 U.S.C. § 1920(4). Thompson is correct.
The Court of Appeals for the Third Circuit recently dealt with this issue in Race Tires
America, Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir. 2012). In Race Tires
America, the court of appeals resolved the issue of “whether all charges imposed by
electronic discovery vendors to assist in the collection, processing, and production of
electronically stored information (“ESI”) are taxable against a losing party as ‘[f]ees for
exemplification [or] the costs of making copies of any materials where the copies are
necessarily obtained for use in the case.’” Id. at 159 (citing 28 U.S.C. § 1920(4)). The court
of appeals held that only a narrow portion of these costs are taxable:
Neither the language of § 1920(4), nor its history, suggests that Congress intended
to shift all the expenses of a particular form of discovery–production of ESI–to the
losing party. Nor can such a result find support in Supreme Court precedent, which
has accorded a narrow reading of the cost statute in other contexts. Although there
may be strong policy reasons in general, or compelling equitable circumstances in
a particular case, to award the full cost of electronic discovery to the prevailing party,
the federal courts lack the authority to do so, either generally or in particular cases,
under the cost statute.
In sum, we conclude that of the numerous services the vendors performed, only the
scanning of hard copy documents, the conversion of native files to TIFF, and the
transfer of VHS tapes to DVD involved “copying,” and that the costs attributable to
only those activities are recoverable under § 1920(4)’s allowance for the “costs of
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making copies of any materials.”
Id. at 171 (internal citations omitted).
As the Third Circuit held, federal courts have permitted taxing costs associated with
the copying of digital materials. El Camino Resources, Ltd. v. Huntington Nat. Bank, No.
07-598, 2012 WL4808741, at *5 (W.D. Mich. May 3, 2012) (citations omitted). The majority
of the costs Edgetech seeks are not associated with copying of digital materials. Edgetech
seeks to recover costs associated with “forensic consulting and collection,” “early case
assessment,” “electronic discovery processing and hosting, data collection, imaging,” and
the like. None of these are taxable under 28 U.S.C. § 1920. Quoting the Third Circuit in
Race Tires America, the court in El Camino explained:
Section 1920(4) does not state that all steps that lead up to the production of copies
of materials are taxable. It does not authorize the taxation merely because today’s
technology requires technical expertise not ordinarily possessed by the typical legal
professional. It does not say that activities that encourage costs savings may be
taxed. Section 1920(4) authorizes awarding only the cost of making copies.
El Camino Resources, 2012 WL4808741, at *7 (quoting Race Tires America, 674 F.3d at
169.
A review of the invoices submitted by Edgetech making up the $65,652.94 show that
only the following is taxable as “making copies” under 28 U.S.C. § 1920:
Electronic File Conversion (10/31/2012 invoice):

$25.48

The remaining costs, as detailed above, do not fall in the category of taxable costs
under 28 U.S.C. § 1920. For these reasons, costs related to e-discovery will be taxed only
in the amount of $25.48.
IV.
Next, Edgetech asks the Court to review the Clerk’s action in denying the court
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reporter fees totaling $275.40 incurred by Edgetech to obtain copies of deposition
transcripts for witnesses Zacharius Dekalita (“Dekalita”) and Paul Lewis (“Lewis”).
Edgetech says it relied on the deposition transcripts in support of its motion for spoilation
sanctions.
The Clerk denied costs related to Dekalita and Lewis on the grounds that copies of
their depositions were not attached in support of any motions filed by Edgetech. The Clerk
appears to have overlooked that the depositions were attached to Edgetech’s motion for
spoilation sanctions. (Doc. 77). Therefore, the Court will grant Edgetech’s motion and tax
costs totaling $275.40 related to Dekalita’s and Lewis’s depositions.
V.
For the reasons stated above, Edgetech’s motion to recover copying and
exemplification costs is GRANTED IN PART and DENIED IN PART and Edgetech’s motion
to review the Clerk’s action is GRANTED.
Specifically, related to the motion to recover copying and exemplification costs, costs
will be taxed in the amount of $25.48. The remainder of e-discovery costs are denied in
their entirety. As it relates to the motion to review the Clerk’s action, costs will be taxed in
the amount of $10,135.90 ($9,860.50 taxed by the Clerk and not challenged by Thompson
and $275.40 related to the challenged deposition transcripts).
In sum costs are taxed in the amount of $10,161.38.
SO ORDERED.
S/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE

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11-12839 Thompson v. Edgetech
Dated: February 25, 2014
I hereby certify that a copy of the foregoing document was mailed to the attorneys of record
on this date, February 25, 2014, by electronic and/or ordinary mail.

Sakne Chami
Case Manager, [phone]

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