Balance Point Divorce Funding, LLC v. Scrantom et al

Filing 140

MEMORANDUM AND ORDER granting 128 Motion for Reconsideration. For the foregoing reasons, Juridica's request to tax costs against Balance Point is GRANTED to the extent that the Court holds that costs of the conversion of native files into T IFF of documents actually produced to a requesting party and costs for uploading responsive documents to FTP may be taxed as "costs of making copies of any materials where the copies are necessarily obtained for use in the case." 28 U.S .C. § 1920(4). Thus, the Clerk is ordered to tax $493.97 in costs in favor of Juridica, in addition to the $690.00 the Clerk previously awarded to Juridica. The $493.97 amount reflects the $335.93 in costs of TIFF conversi on, at a rate of $0.02 per page, for the 16,630 pages of documents Juridica produced to Balance Point, plus a 1.00 percent sales tax; $6.54 for the conversion of 324 documents from PDF to TIFF at a rate of $0.02 per page, plus a 1. 00 percent sales tax; and $151.50 in costs of uploading documents to FTP for production of responsive files to Balance Point, including a 1.00 percent sales tax. Juridica's request for the remaining costs associated with electronic discovery and deposition transcripts is DENIED. (Signed by Judge P. Kevin Castel on 3/6/2015) (spo)

Clerk is ordered to tax $493.97 in costs in favor of Juridica in addition to the $690.00 previously
awarded to Juridica for costs for fees of the Clerk and fees for service of summons and subpoena.
The Court otherwise denies Juridica’s application.
BACKGROUND
Plaintiff Balance Point Divorce Funding, LLC (“Balance Point”) brought this
action against defendants Juridica and Timothy D. Scrantom, asserting claims of tortious
interference with contract, tortious interference with business relations, and misappropriation of
trade secrets. Juridica and Scrantom filed motions to dismiss pursuant to Rule 12(b)(6), Fed. R.
Civ. P., and the Court dismissed plaintiff’s tortious interference with contract claim. Balance
Point Divorce Funding, LLC v. Scrantom, 978 F. Supp. 2d 341 (S.D.N.Y. 2013). The parties
conducted discovery as to the remaining claims and by letter dated September 19, 2014, plaintiff
informed the Court of its intention to voluntarily dismiss the action with prejudice. Pursuant to
Rule 41(a)(2), Fed. R. Civ. P., the Court entered an Order of voluntary dismissal of the action
against all defendants with prejudice and directed the Clerk to tax costs in favor of the
defendants. (Docket # 120.)
On October 21, 2014, Juridica submitted a Bill of Costs in the amount of
$50,913.74. The Clerk awarded Juridica $690.00 in costs for fees of the Clerk and fees for
service of summons and subpoena. (Docket # 124.) The Clerk declined to award $43,140.95 in
costs associated with electronic discovery, which Juridica categorized as “[f]ees for
exemplification and copies of papers necessarily obtained for use in the case.” (Id.) The Clerk
also declined to award $7,082.79 in costs for copies of deposition transcripts. (Id.) Juridica
categorized the deposition transcript costs as “[f]ees of the court reporter for all or any part of the

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transcript necessarily obtained for use in the case.” (Id.) Juridica requests that the Court review
the Clerk’s denial of costs and award Juridica costs in the amount of $50,913.74.
DISCUSSION
I.

Legal Standard
Federal Rule of Civil Procedure 54(d)(1) states “[u]nless a federal statute, these

rules, or a court order provides otherwise, costs – other than attorney’s fees – should be allowed
to the prevailing party.” Under Rule 54(d)(1) the “[C]lerk may tax costs on 14 days’ notice” and
the district court, on timely motion made, may review the action of the Clerk. “Where an
unsuccessful litigant appeals the Clerk of the Court’s award of costs, the district court reviews
the award de novo.” Karmel v. City of New York, No. 00-CV-9063 (KMK), 2008 WL 216929,
at *1 (S.D.N.Y. Jan. 9, 2008) (citing Whitfield v. Scully, 241 F.3d 264, 269 (2d Cir. 2001) (“A
district court reviews the clerk’s taxation of costs by exercising its own discretion to decide the
cost question itself.”) (internal quotation marks and citations omitted)). Although the decision
whether to award costs is within the district court’s discretion, “federal courts have no authority
to award costs in excess of statutory limits.” Carmody v. City of New York, No. 05 Civ. 8084
(HB), 2008 WL 3925196, at *1 (Aug. 26, 2008) (citing Crawford Fitting Co. v. J.T. Gibbons,
Inc., 482 U.S. 437, 445 (1987)).
Interpreting Rule 54(d)(1), “the Supreme Court has held that the term ‘costs’
includes only the specific items enumerated in 28 U.S.C. § 1920 (1994).” Whitfield, 241 F.3d at
269 (citations omitted). 28 U.S.C. § 1920 contains six categories of taxable costs: (1) fees of the
clerk and marshal; (2) fees for printed or electronically recorded transcripts necessarily obtained
for use in the case; (3) fees and disbursements for printing and witnesses; (4) fees for
exemplification and the costs of making copies of any materials where the copies are necessarily

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obtained for use in the case; (5) docket fees under 28 U.S.C. § 1923; and (6) compensation of
court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of
special interpretation services under 28 U.S.C. § 1828. Thus, “the discretion granted by Rule
54(d) . . . is solely the power to decline to tax, as costs, the items enumerated in § 1920.”
Taniguchi v. Kan Pac. Saipan, Ltd., 132 S. Ct. 1997, 2006 (2012) (internal quotation marks and
citations omitted).
“Local Civil Rule 54.1 further outlines those costs which are taxable in the
Southern District of New York.” Karmel, No. 00-CV-9063 (KMK), 2008 WL 216929, at *1
(S.D.N.Y. Jan. 9. 2008). Several judges of this Court have read Local Civil Rule 54.1 as merely
imposing supplemental constraints on Courts when awarding costs specifically discussed therein.
See In re Omeprazole Patent Litig., Nos. M-21-81 (BSJ), 00 Civ. 6749 (BSJ), 03 Civ. 6057
(BSJ), MDL Docket No. 1291, 2012 WL 5427849, at *2-3 (S.D.N.Y. Nov. 7, 2012); Universal
City Studios, Inc. v. Nintendo Co., Ltd., No. 82 Ci. 4259 (RWS), 1986 WL 11462, at *2
(S.D.N.Y. Oct. 6, 1986) (construing the Southern District of New York’s former Local Rule
11(c)(5) which governed taxation of costs for “Exemplification and Copies of Papers”). But see
Carmody v. City of New York, No. 05 Civ. 8084 (HB), 2008 WL 3925196, at *1 (S.D.N.Y. Aug.
26, 2008) (limiting the costs taxable in this district to those which the Local Civil Rule
addresses). This Court concludes that Local Civil Rule 54.1 governs to the extent that the Local
Rule addresses a particular cost; however, if the Local Rule does not speak to a specific cost,
then the Court must apply 28 U.S.C. § 1920’s more expansive standard.
Furthermore, taxing costs pursuant to Rule 54(d)(1), 28 U.S.C. § 1920, and Local
Rule 54.1 in favor of the prevailing party is the rule, not the exception, in civil litigation. See
Whitfield, 241 F.3d at 270 (citation omitted). “For this reason, the losing party has the burden to

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show that costs should not be imposed” and, “[i]n light of the general rule, when a prevailing
party is denied costs, a district court must articulate its reasons for doing so.” Id. (citation
omitted).
The Court recognizes that Rule 26(b)(2)(B), Fed. R. Civ. P., allows a party to
decline to produce electronically stored information in response to an opposing party’s discovery
request so long as the objecting party shows that the requested “information is not reasonably
accessible because of undue burden or cost.” If the requesting party shows good cause for the
discovery request, the Court may order the party from whom discovery is sought to produce the
information. Here, Juridica did not make any Rule 26(b)(2)(B) objections to Balance Point’s
discovery requests. The Court, in this opinion, limits its decision to the issue of whether
Juridica’s deposition and electronic discovery costs may be taxed pursuant to Rule 54(d)(1), Fed.
R. Civ. P., 28 U.S.C. § 1920, and Local Civil Rule 54.1.
II.

Prevailing Party
Here, Juridica is a prevailing party for purposes of taxing costs pursuant to Rule

54(d). By letter dated September 19, 2014, Balance Point informed the Court of its intention to
voluntarily dismiss the lawsuit against all defendants with prejudice. (Docket # 110.)
Subsequently, the Court dismissed the action with prejudice pursuant to Rule 41(a)(2), Fed. R.
Civ. P., and directed the Clerk to tax costs in favor of the defendants. (Docket # 120.)
A “prevailing party” under Rule 54(d) is one who achieves a “’judicially
sanctioned change in the legal relationship of the parties’” in its favor. Dattner v. Conagra Foods
Inc., 458 F.3d 98, 101 (2d Cir. 2006) (quoting Buckhannon Bd. & Care Home, Inc., v. W. Va.
Dep’t of Health and Human Res., 532 U.S. 598, 605 (2001) (construing fee-shifting statutes)). A
voluntary dismissal of an action with prejudice satisfies the Buckhannon test “because it

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constitutes ‘an adjudication on the merits for purposes of res judicata’ and any action so
dismissed could not be brought again.” Carter v. Inc. Village of Ocean Beach, 759 F.3d 159,
165 (2d Cir. 2014) (quoting Chase Manhattan Bank, N.A. v. Celotex Corp., 56 F.3d 343, 345 (2d
Cir. 1995)); see also Power Mosfet Techs., L.L.C. v. Siemens AG, 378 F.3d 1396 (Fed. Cir.
2004) (holding that where a plaintiff voluntarily dismissed its case against one defendant with
prejudice, that defendant was a prevailing party under Rule 54(d), Fed. R. Civ. P.); Mother &
Father v. Cassidy, 338 F.3d 704, 708 (7th Cir. 2003) (“[A] voluntary dismissal with prejudice
renders the opposing party a ‘prevailing party’ within the meaning of Rule 54.”). Therefore,
because the action was voluntarily dismissed against Juridica with prejudice, Juridica is a
“prevailing party” under Rule 54(d)(1).
III.

Costs
As a prevailing party under Rule 54(d)(1), Juridica argues that they are entitled to

$43,140.95 in costs associated with the production of electronically stored information (“ESI”) in
response to Balance Point’s discovery requests. Juridica argues that the electronic discovery
costs constitute “fees for exemplification and the costs of making copies of any materials where
the copies are necessarily obtained for use in the case” and are therefore taxable under 28 U.S.C.
§ 1920(4). For the reasons explained below, the Court concludes that the conversion of native
files into TIFF format is analogous to “making copies” and, therefore, Juridica’s costs of TIFF
conversion of documents actually produced to Balance Point may be taxed. Additionally,
Juridica may recover costs of uploading responsive documents through the use of a File Transfer
Protocol (“FTP”). The Court further declines to award the remaining charges associated with
electronic discovery because those costs are not recoverable as costs of “making copies” under
section 1920(4).

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In addition to costs associated with electronic discovery, Juridica requests
$7,082.79 for deposition transcripts. Juridica argues that the costs of deposition transcripts are
awardable as “fees for printed or electronically recorded transcripts necessarily obtained for use
in the case” under 28 U.S.C. § 1920(2). For reasons that will be explained, the Court declines to
award costs for deposition transcripts to Juridica.
a. Electronic Discovery Costs
Juridica urges the Court to award the Juridica-related defendants various costs
associated with electronic discovery. Juridica asserts that each step of the electronic document
production process, including the gathering, review, processing, and copying of ESI in response
to Balance Point’s discovery requests, 1 are recoverable as costs under 28 U.S.C. § 1920(4).
Specifically, Juridica requests an award of costs for Processing Initial Dataset, Hosting Active
Data, culling and posting the resulting data subset, Optical Character Recognition processing,
project management, ID and conversion of non-searchable documents to searchable formats, data
collection, document production upload to FTP, electronic embedding, importing images to
ViewPoint, document unitization, creation of a defensibility binder, and TIFF conversion. (Aff.
of Robert D. MacGill in Supp. of the Juridica-Related Defs.’ Bill of Costs Ex. B.) [hereinafter
“MacGill Aff.”].
Prior to Congress’s amendment of 28 U.S.C. § 1920(4) in 2008, section 1920(4)
authorized the taxation of “[f]ees for exemplification and copies of papers necessarily obtained
for use in the case.” 28 U.S.C. § 1920(4) (2007). In 2008, Congress substituted the phrase “the
costs of making copies of any materials where the copies are” in place of the phrase “copies of
At oral argument, Juridica referenced the electronic document production process outlined in CBT Flint Partners,
LLC v. Return Path, Inc., 737 F.3d 1320 (Fed. Cir. 2013), and argued that costs associated with each step of that
process are taxable under section 1920(4). Although Juridica referred to this process as involving five steps, the
Federal Circuit in CBT Flint actually described the process as involving three stages.
1

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papers” in 28 U.S.C. § 1920(4). Juridica conceded at oral argument before this Court on
February 5, 2015, that, prior to the 2008 amendment, costs for the gathering, review, processing
and, and copying of ESI were not taxable under section 1920(4). The Court agrees with the
parties that the effect of the 2008 amendment’s addition of the word “materials” to section
1920(4) was to allow for the taxation of the costs of making copies of digital or electronically
stored information. See Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158, 166
(3d Cir. 2012) (“The most recent amendment to the statute, however, permitting an award to the
prevailing party of the cost of making copies of ‘materials,’ plainly signifies that [section]
1920(4)’s allowance for copying costs is not limited to paper copying.”). At oral argument,
however, Juridica argued that the 2008 amendment altered the standard to be applied when
considering which costs for various aspects of the document production process may be taxed
under section 1920(4); Juridica insisted that the 2008 amendment instituted a meaningful change
to the text of the statute and allows for the taxation of costs for the gathering, review, processing,
and copying of ESI. The Court disagrees.
i. “Fees for Exemplification”
First, the Court considers Juridica’s argument that the 2008 amendment provides
an implicit understanding that the term “fees for exemplification” incorporates the various steps
and processes that are involved in the production of ESI materials. In Race Tires, the Third
Circuit met and rejected a similar argument, differentiating between the terms “exemplification”
and “making copies.” 674 F.3d at 165-66. The Third Circuit noted that courts have come to
different conclusions about the meaning of the term “exemplification.” Id. at 166. Interpreting
Sixth Circuit law, the Federal Circuit in Kohus v. Cosco, Inc., 282 F.3d 1355, 1359 (Fed. Cir.
2002), applied the narrow definition of exemplification as “[a]n official transcript of a public

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record, authenticated as a true copy for use as evidence,” quoting Black’s Law Dictionary 593
(7th ed. 1999). 2 In contrast, the Seventh Circuit has applied a broader definition of
“exemplification” as “the act of illustration by example . . . broad enough to include a wide
variety of exhibits and demonstrative aids.” Race Tires, 674 F.3d at 166 (quoting Cefalu v. Vill.
of Elk Grove, 211 F.3d 416, 427 (7th Cir. 2000) (citing Merriam-Webster’s Collegiate
Dictionary 406 (10th ed. 1993)). This Court agrees with the Third Circuit’s conclusion that
[t]here is no need to decide whether Congress used the term
‘exemplification’ in its narrow ‘legal sense,’ or in the broader
sense adopted by the Seventh Circuit. The electronic discovery
vendors’ work in this case did not produce illustrative evidence or
the authentication of public records. Their charges accordingly
would not qualify as fees for ‘exemplification’ under either
construction of the term.
Id. Juridica offered no support from any court within this Circuit for the proposition that
expenses for the production of ESI in response to a discovery request may be taxed as “fees for
exemplification” under section 1920(4).
ii. “Costs of making copies of any materials necessarily
obtained for use in the case”
Although the 2008 amendment to section 1920(4) indisputably broadened the
application of the statute to allow Clerks to tax costs for making copies of materials other than
papers, the amendment did not substantially alter the standard for which aspects of the copying
process may be taxed as “copies” under 28 U.S.C. § 1920(4). The Supreme Court has held that
taxable costs under section 1920 are “modest in scope” and “limited to relatively minor,
incidental expenses.” Taniguchi, 132 S.Ct. at 2006. Furthermore, the Supreme Court has been
The most recent edition of Black’s Law Dictionary provides the same definition. Black’s Law Dictionary 692
(10th ed. 2014).
2

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reluctant to “stretch the ordinary meaning of the cost items Congress authorized in § 1920.” Id.
(holding that “compensation of interpreters” in section 1920(6) does not include the cost of
document translation). The 2008 amendment to section 1920(4) did not so significantly change
the meaning of the statute to allow for the taxation of costs for the gathering, review, processing,
and copying of ESI when, prior to the amendment, the statute limited recovery to costs for
“copies of papers” at the exclusion of other costs associated with those copies. See, e.g., CBT
Flint Partners, LLC v. Return Path, Inc., 737 F.3d 1320, 1326 (Fed. Cir. 2013) (citing the
preamendment general principle that “section 1920(4) ‘allows recovery only for the reasonable
costs of actually duplicating documents, not for the cost of gathering those documents as a
prelude to duplication’”) (citing Allen v. U.S. Steel Corp., 665 F.2d 689, 697 n. 5 (5th Cir. Unit
B 1982)). To allow for the taxation of costs for the gathering, review, processing, and copying
of any material would expand the scope of the statute beyond “relatively minor, incidental
expenses.” Analyzing the effect of the 2008 amendment’s insertion of the phrase “the cost of
making copies of any materials” (emphasis added), the Federal Circuit, applying Eleventh Circuit
law, explained:
[b]ut that language leaves for the courts the task of defining what
constitutes ‘making copies’ for purposes of sifting the activities
that go into producing electronic documents. For that crucial task,
we see no significance in the change from ‘copies’ to ‘making
copies,’ a change that appears to reflect no more than the linguistic
aim of using activity-describing phrases (‘exemplification,’
‘making copies’) on both sides of the conjunction in section
1920(4).
CBT Flint, 737 F.3d at 1326. See also, Race Tires, 674 F.3d at 170 (concluding that although the
2008 amendment to section 1920(4) substituted “materials” for “papers,” the statute “still
requires copying” (internal citations and quotation marks omitted)). Thus, the 2008 amendment

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provided for the taxation of costs of making copies of non-paper documents; however, the
addition of the word “making” to precede “copies” did not significantly alter the standard for
allowing taxation of costs for processes other than the actual duplication of any materials.
Accordingly, the Court next considers which steps in the process of producing electronically
stored information may be considered “making copies” under section 1920(4).
The Court concludes that, of Juridica’s requested costs, costs of converting native
files to TIFF are considered “costs of making copies of any materials” under section 1920(4).
Electronic documents may be stored as images in a static format, such as TIFF or PDF. Sedona
Conference, The Sedona Conference Glossary: E-Discovery & Digital Information Management
15 (4th ed. Apr. 2014) [hereinafter “Sedona Conference Glossary”]. TIFF, or Tagged Image File
Format, is “[a] widely used and supported graphic file formats for storing bit-mapped images,
with many different compression formats and resolutions.” Id. at 46. In contrast, the PDF,
Portable Document Format, is “[a] file format technology developed by Adobe Systems to
facilitate the exchange of documents between platforms regardless of originating application by
preserving the format and content.” Sedona Conference Glossary at 35. If stored in TIFF
format, “[i]mages are stored in tagged fields, and programs use the tags to accept or ignore
fields, depending on the application.” Id. at 46. By converting a native image into a different
format, such as TIFF, one has simply duplicated the image and provided a new, modified copy.
Courts that have considered the issue commonly agree that costs for the conversion of native
files to TIFF are taxable as “making copies” under section 1920(4). See Race Tires, 674 F.3d at
167 (holding that the conversion of native files to TIFF is generally recognized as “making
copies of material”); Country Vintner of North Carolina, LLC v. E. & J. Gallo Winery,Inc., 718
F. 3d 249, 261 (4th Cir. 2013) (holding that the conversion of native files to TIFF constitutes

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“making copies” under section 1920(4)); CBT Flint, 737 F.3d at 1329 (recognizing that TIFF
conversion is a step “fairly considered costs of making copies of the requested documents”).
Balance Point concedes that costs for the conversion of native files to TIFF
format may be taxed under section 1920(4); however, Balance Point argues that, of the electronic
discovery costs the Court finds taxable under section 1920(4), only the costs for documents
actually produced by Juridica are recoverable. The Court agrees.
Both in a paper-only world and in the world of ESI, a party is not required to
make copies of documents or ESI for the requesting party. The producing party has the option of
producing materials for inspection by the requesting party and the requesting party need not
request copies of the documents produced. Here, in fact, Balance Point requested that all paper
documents “be produced in hard copy, or, in the alternative, as scanned, .TIFF with a load file.”
(First Req. of Pl. Balance Point to Juridica Defs. For the Produc. of Docs. 2.) A party may
recover costs for making copies of requested documents in a particular format when the
requesting party requests that the documents be produced in that particular format. See CBT
Flint Partners, 737 F.3d at 1328. However, “only the costs of creating the produced duplicates
are included, not a number of preparatory or ancillary costs commonly incurred leading up to, in
conjunction with, or after duplication.” Id. Furthermore, if a party converts a set of documents
to TIFF before reviewing the documents and removing from the subset those which are not to be
produced, then the conversion to TIFF of the non-produced documents was not “making copies
of any materials where the copies are necessarily obtained for use in the case” under section
1920(4). A party has the ability to review and cull documents in their native format and
subsequently convert to TIFF only those documents that are to be produced. If it elects to
convert all documents to a TIFF format for its own convenience, it may not recover as a taxable

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cost the cost of converting to TIFF those documents which were not actually produced. This
view is consistent with the Federal Circuit’s analysis in CBT Flint. 737 F.3d at 1330 (“[I]f a
vendor does its chargeable work (i.e., work covered by the statute if performed on a single
document) on a large volume of documents before culling to produce only a subset, the awarded
copying costs must be confined to the subset actually produced.”).
Moreover, although costs for TIFF conversion may be taxable as “costs of making
copies of any materials” under section 1920(4), the copies must have been “necessarily obtained
for use in the case” in order to be taxable under the statute. In the world of non-electronic
discovery, photocopying costs may be awarded if the prevailing party copied materials in order
to respond to an opposing party’s discovery request. See, e.g., In re Omeprazole Patent Litig.,
Nos. M-21-81 (BSJ), 00 Civ. 6749 (BSJ), 03 Civ. 6057 (BSJ), MDL Docket No. 1291, 2012 WL
5427849, at *8 (S.D.N.Y. Nov. 7, 2012) (awarding photocopying costs of documents produced
by the prevailing party in response to opposing counsel’s discovery requests); U.S. Equal Emp’t
Opportunity Comm’n v. W&O, Inc., 213 F.3d 600, 623 (11th Cir. 2000) (concluding that copies
of documents produced pursuant to a discovery request, so long as they were necessarily
obtained for use in the case, are copies recoverable under §1920(4)) (citing U.S. for the Use &
Benefit of Evergreen Pipeline Constr. Co, Inc. v. Merritt Meridian Constr. Corp., 95 F.3d 153,
173 (2d Cir. 1996)). The Court is satisfied that the documents that Juridica converted from their
native formats to TIFF in response to Balance Point’s discovery request and actually produced to
Balance Point were “necessarily obtained for use in the case.” 28 U.S.C. § 1920(4). Juridica
produced 16,630 pages of documents in TIFF format to Balance Point. (Pl. Mem. of Law in
Opp’n to Def. Juridica’s Mot. to Reconsider Clerk’s Entry on Bill of Costs 8.) Accordingly, the
Clerk may tax $335.93 in favor of Juridica for the costs of TIFF conversion of 16,630 pages at a

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rate of $0.02 per page, plus a 1.00 percent sales tax. 3 In addition, Juridica may recover $6.54 for
the conversion of 324 documents from PDF to TIFF at a rate of $0.02 per page, plus a 1.00
percent sales tax. (MacGill Aff. Ex. B.)
Furthermore, Juridica’s costs for “Document/Production Upload to FTP” may be
taxed as “costs of making copies of any materials necessarily obtained for use in the case.”
§1920(4). FTP is “an internet protocol that governs the transfer of files between computers over
a network or the Internet.” Sedona Conference Glossary at 20. Copying electronic documents to
a production media is a necessary component of the electronic discovery process and costs for
various methods of transferring files to a production media have been taxed by courts pursuant to
section 1920(4). See, e.g., CBT Flint, 737 F.3d at 1332 (analyzing electronic discovery
processes under section 1920(4) and concluding that “the costs of copying responsive documents
to production media are recoverable under 1920(4)”); Country Vintner, 718 F.3d at 261 (holding
that “the transfer of files onto CDs[] constituted ‘making copies’ under § 1920(4)”); Bonillas v.
United Air Lines Inc., No. C-12-06574(EDL), 2014 WL 7247215, at *3 (N.D.Cal. Dec. 19,
2014) (determining that costs for loading final production onto an FTP site are recoverable under
section 1920(4)). In the case of hard-copy paper documents, a delivery charge could be avoided
by physically travelling to the producing party’s office and picking up the documents. That is
not feasible in the case of a TIFF file; a delivery medium, such as a CD-Rom, DVD, or FTP,
would be necessary. Juridica utilized FTP in order to produce responsive documents to Balance
Point. (MacGill Aff. Ex. B.) Therefore, Juridica may recover $151.50, the charges specified in
the invoices plus a sales tax of 1.00 percent, for costs of copying and uploading responsive
documents to FTP in order to produce those documents to Balance Point. (MacGill Aff. Ex. B.)
Both the documentary evidence and counsel’s concession at oral argument confirm the accuracy of these figures.
(MacGill Aff. Ex. B.)

3

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The remaining costs which Juridica seeks to tax against Balance Point are not
taxable as “costs of making copies of any materials necessarily obtained for use in the case.”
Juridica seeks costs in the amounts of $12,014.86 for “Processing Initial Dataset, 4” $5,860.02 for
“Culling and Posting Resulting Data Subset,” $4,893.47 for “[Optical Character Recognition
(OCR)] Processing, 5” $589.76 for “ID/Conversion of Non-Searchable Docs to Searchable,” and
$454.50 for “Data Collection.” (MacGill Aff. Ex. B.). These processes involve collecting data,
extracting metadata from collected images, making the data searchable, and searching those
documents for relevant data. Juridica argues that such processing costs are recoverable under
section 1920(4) because such processes are necessary to make copies of electronically stored
information usable and intelligible. (Mem. in Supp. of Mot. to Reconsider Clerk’s Entry on Bill
of Costs Pursuant to Rule 54 at 5.) The Court disagrees.
The plain meaning of section 1920(4) awards costs solely for “making copies.”
Thus, only costs for the actual act of making a copy are taxable; costs associated with preparing
data to be copied or analyzing data post-copying are not covered by the statute. See, e.g., CBT
Flint, 737 F.3d at 1330 (“costs incurred in preparing to copy are not recoverable”). In holding
that certain processing costs are not taxable under § 1920(4), the Third Circuit noted that
[s]ection 1920(4) does not state that all steps that lead up to the
production of copies of materials are taxable. It does not authorize
taxation merely because today’s technology requires technical
expertise not ordinarily possessed by the typical legal professional.
. . . Section 1920(4) authorizes awarding only the cost of making
copies.

“Processing Data” is “[t]he automated ingestion of Electronically Stored Information (‘ESI’) into a program for
the purpose of extracting metadata and text; and in some cases, the creation of a static image of the source ESI files
according to a predetermined set of specifications, in anticipation of loading to a database.” Sedona Conference
Glossary at 36.
5
OCR Processing is “[a] technology process that captures text from an image for the purpose of creating a parallel
text file that can be associated with the image and searched in a database.” Sedona Conference Glossary at 32.
4

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Race Tires, 674 F.3d at 169. These processes may in fact be “essential to make a
comprehensive and intelligible production of ESI,” Country Vintner, 718 F.3d at 260 (analyzing
and rejecting the proposition that processing costs are taxable as making copies under § 1920(4))
(internal quotation marks and citations omitted); nevertheless, each of these processing costs are
not costs for “making copies” under section 1920(4). Rather, these costs are attributable to
collecting data, preparing that collected data to be copied, rendering documents searchable, and
searching those documents.
Likewise, costs for “Hosting Active-Data,” and “Project Management” are not
costs for making copies under section 1920(4). Costs for “Project Management” are not costs of
making copies. Juridica does not specify what tasks were involved in “Project Management;”
however, costs for managing the copying or production process, although perhaps necessary to
the copy making process, are not costs for the actual making of the copy. Moreover, just as
rental costs for storage of paper documents or housing and leasing photocopying equipment are
not taxable as “making copies,” costs for “Hosting Active-Data” are not costs for making copies.
Each of these costs may relate to the copying process, but they are not costs for “making copies”
under section 1920(4).
Similarly, costs for “document unitization” are not taxable under section 1920(4).
Document unitization is the process of assembling individually scanned pages into documents.
See Sedona Conference Glossary at 47. Although courts have held that costs for scanning
documents may be taxed as “making copies” under section 1920(4), see, e.g., Race Tires, 674
F.3d at 171; BDT Products, Inc. v. Lexmark Int’l, Inc., 405 F.3d 415, 420 (6th Cir. 2005),
document unitization is a process that occurs post-scanning. Just as assembling individually
photocopied papers into a document is not considered “making copies,” document unitization is

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a process separate from the actual act of making copies and cannot be taxed under section
1920(4). See CBT Flint, 737 F.3d at 1331-32 (concluding that deduplication is either a pre- or
post-copying activity that is not itself the making of copies and, therefore, is not taxed as a cost
of “making copies”).
Juridica also requests costs for creation of a “defensibility binder,” “electronic
embedding,” and “import[ing] images to ViewPoint.” (MacGill Aff. Ex. B.) Juridica has not
explained why costs for a defensibility binder ought to be taxed as “costs of making copies of
any materials” under section 1920(4) and they have not explained why a defensibility binder was
“necessarily obtained for use in the case.” As described above, the Court is satisfied that costs
for the conversion of native files into TIFF were necessarily incurred in this case because
Balance Point specifically requested that documents be produced in hard copy or .TIFF format.
Moreover, costs for uploading the responsive documents and files to FTP may be taxed as costs
of making copies under section 1920(4) because copying or transferring files to a production
media is a necessary component of the production of ESI in response to a discovery request.
However, Juridica has not adequately explained why costs for electronic embedding or importing
images to ViewPoint were “necessarily obtained for use in the case.” Thus, the Court declines to
award these costs to Juridica. Juridica’s request for any remaining costs associated with
electronic discovery is likewise denied.
b.

Deposition Transcripts

Juridica urges the Court to award the Juridica-related Defendants $7,082.69 for
costs for deposition transcripts in the case. For the reasons explained below, the Court declines
to award the deposition costs to Juridica.

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Section 1920(2) permits taxation of “[f]ees for printed or electronically recorded
transcripts necessarily obtained for use in the case.” Local Civil Rule 54.1(c)(2) addresses the
taxation of deposition costs and states, in relevant part,
Unless otherwise ordered by the Court, the original transcript of a
deposition, plus one copy, is taxable if the deposition was used or
received in evidence at the trial, whether or not it was read in its
entirety. Costs for depositions are also taxable if they were used
by the Court in ruling on a motion for summary judgment or other
dispositive substantive motion. Costs for depositions taken solely
for discovery are not taxable.
Regarding fees for transcripts, Juridica requested taxation of transcript costs for
nine depositions, each of which is described in the Itemization of Costs as a “[d]eposition used in
defense of litigation, including in connection with drafting anticipated motion for summary
judgment.” (MacGill Aff. Ex. A.) Juridica argues that they should be awarded these costs
because Juridica began incorporating those depositions into a motion for summary judgment, the
drafting of which was “well underway” when Balance Point requested a voluntary dismissal of
the case. (Mem. in Supp. of Mot. to Reconsider Clerk’s Entry on Bill of Costs Pursuant to Rule
54 at 2.)
Balance Point objects to Juridica’s request for the costs of the deposition
transcripts because neither a motion for summary judgment nor a pre-motion letter, a
precondition to the filing of a motion under this Court’s Individual Practices, was submitted to
the Court. (Pl. Mem. of Law in Opp’n to Def. Juridica’s Mot. to Reconsider Clerk’s Entry on
Bill of Costs at 10.) Balance Point further objects because, included in those costs, are additional
fees and expenses for services and products that extend beyond the cost of obtaining the
transcripts, including costs for obtaining copies of exhibits shown during the depositions. (Id. at
10-11.)

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This Court acknowledges that it has discretion to grant costs for any or all of the
transcripts, as reflected in the language “[u]nless otherwise ordered by the Court . . . ,” Local
Civil Rule 54.1(c)(2). Nevertheless, because none of the deposition transcripts at issue were
used on any actual motion or response to a motion and no premotion letter had been submitted,
the Court declines to tax the deposition costs in favor of Juridica.
CONCLUSION
For the foregoing reasons, Juridica’s request to tax costs against Balance Point is
GRANTED to the extent that the Court holds that costs of the conversion of native files into
TIFF of documents actually produced to a requesting party and costs for uploading responsive
documents to FTP may be taxed as “costs of making copies of any materials where the copies are
necessarily obtained for use in the case.” 28 U.S.C. § 1920(4). Thus, the Clerk is ordered to tax
$493.97 in costs in favor of Juridica, in addition to the $690.00 the Clerk previously awarded to
Juridica. The $493.97 amount reflects the $335.93 in costs of TIFF conversion, at a rate of $0.02
per page, for the 16,630 pages of documents Juridica produced to Balance Point, plus a 1.00
percent sales tax; $6.54 for the conversion of 324 documents from PDF to TIFF at a rate of $0.02
per page, plus a 1.00 percent sales tax; and $151.50 in costs of uploading documents to FTP for
production of responsive files to Balance Point, including a 1.00 percent sales tax.
Juridica’s request for the remaining costs associated with electronic discovery and
deposition transcripts is DENIED.

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