Van Duppen v. Mylan N.V. et al
Filing
481
MEMORANDUM AND ORDER re: 478 MOTION for Leave to File Surreply In Support of Plaintiffs' Objection to Defendants' Bill of Costs . filed by Menorah Mivtachim Insurance Ltd., Phoenix Insurance Company Ltd., Menorah Miv tachim Pensions and Gemel Ltd., Meitav DS Provident Funds and Pension Ltd. For the foregoing reasons, Plaintiffs' objections to the Corrected Bill of Costs are SUSTAINED in part and OVERRULED in part. The Clerk of Court is directed to tax costs in the amount of $82,080.80, and to close the motion at ECF No. 478. SO ORDERED. (Signed by Judge J. Paul Oetken on 1/28/2025) (jjc) Transmission to Finance Unit (Cashiers) for processing.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
16-CV-7926 (JPO)
In re Mylan N.V. Securities Litigation
MEMORANDUM
AND ORDER
J. PAUL OETKEN, District Judge:
Defendants, having prevailed in this class action concerning alleged securities fraud, now
seek costs pursuant to 28 U.S.C. § 1920 and Local Rule 54.1. (ECF No. 469 (“Corrected Bill of
Costs”).) Plaintiffs filed timely objections to the Corrected Bill of Costs. (ECF No. 470
(“Obj.”).) In response to the objections, Defendants withdrew several items from their request,
resulting in a current request for $430,165.61 in deposition-related, demonstrative, and document
conversion and production costs. (See ECF No. 474 (“Reply”) at 5.) 1 For the reasons that
follow, Plaintiffs’ objections to Defendants’ Corrected Bill of Costs are sustained in part and
overruled in part.
I.
Discussion
“Federal Rule of Civil Procedure 54(d)(1) provides that ‘unless a federal statute, these
rules, or a court order provides otherwise, costs—other than attorney’s fees—should be allowed
to the prevailing party.’” Phx. Light SF DAC v. U.S. Bank Nat’l Ass’n, No. 14-CV-10116, 2023
WL 5498928, at *1 (S.D.N.Y. Aug. 25, 2023) (quoting Fed. R. Civ. P. 54(d)(1)). The term
“costs,” as used in Rule 54(d), “includes only the specific items enumerated in 28 U.S.C.
1
Plaintiffs filed a motion for leave to file a surreply on July 19, 2024. (See ECF No.
478.) Because the proposed surreply aids the Court in assessing the credibility of apparently
contradictory declarations submitted by Defendants, the motion to file a surreply is granted.
1
§ 1920.” Whitfield v. Scully, 241 F.3d 264, 269 (2d Cir. 2001), abrogated on other grounds,
Bruce v. Samuels, 577 U.S. 82 (2016), (citing Crawford Fitting Co. v. J.T. Gibbons, Inc., 482
U.S. 437, 441 (1987)). In this Court, the award of costs to the prevailing party—“the normal
rule . . . in civil litigation,” id. at 270—is governed by Local Rule 54.1. In particular, bills of
costs “must include an affidavit that the costs claimed are allowable by law, are correctly stated
and were necessarily incurred.” Loc. R. 54.1(a). Consistent with Section 1920, Local Rule
54.1(c) enumerates several categories of taxable costs, including “depositions,” “exemplification
and copies of papers,” and “maps, charts, models, photographs and summaries.” Local Rule
54.1(c)(2), (5) & (6) (capitalization omitted). “In exercising its discretion [to award costs], a
district court is free to consider a variety of equitable factors,” though the reasons for denying an
award “must be articulated.” Karmel v. City of New York, No. 00-CV-9063, 2008 WL 216929,
at *2 (S.D.N.Y. Jan. 9, 2008). The Court addresses each of Plaintiffs’ objections to the
Corrected Bill of Costs in turn.
A.
Affidavit Requirement
Plaintiffs first object on the ground that Defendants did not submit with the Corrected
Bill of Costs “an affidavit that the costs claimed are allowable by law, are correctly stated and
were necessarily incurred.” (Obj. at 2 (citing Loc. R. 54.1).) A prevailing party requesting costs
is required by both 28 U.S.C. § 1924 and Local Rule 54.1 to include with the request an affidavit
that the costs were necessarily incurred. See S. Indus. of Clover, Ltd. v. Zenev Textiles S.A., No.
02-CV-8022, 2004 WL 1444856, at *5 (S.D.N.Y. June 25, 2004). In particular, Plaintiffs argue
that the Corrected Bill of Costs does not state which deposition transcripts, demonstrative
exhibits, and document conversion costs were “necessarily incurred.” (See Obj.at 5-7.)
Defendants contend in response that “[t]he declaration” included with the Corrected Bill of Costs
“mirrors the statutory language of Section 1924 and satisfies the purpose of requiring those
2
seeking costs to provide a sworn written statement regarding the necessity of the costs incurred.”
(Reply at 3 (quoting Mickealson v. Cummins, Inc., No. 16-CV-75, 2018 WL 6046470, at *2 (D.
Mont. Nov. 19, 2018).)
Plaintiffs rely primarily on a report and recommendation issued by Magistrate Judge
Wang in Olaf Sööt Design, LLC v. Daktronics, Inc., which recommended denying costs because
the defendants had “not met their burden to show that they [were] entitled to costs for deposition
transcripts.” No. 15-CV-5024, 2022 WL 2530358, at *5 (S.D.N.Y. Mar. 31, 2022) (Wang, Mag.
J.), report and recommendation adopted, 2022 WL 3448693 (S.D.N.Y. Aug. 17, 2022). But
neither the report and recommendation nor the final opinion in Olaf Sööt Design concerned the
affidavit requirement; instead, that case concerned whether the defendants’ requests for
particular costs satisfied the substantive requirements under Section 1920 and Local Rule 54.1.
See 2022 WL 3448693, at *2 (awarding some of defendants’ requested costs after additional
submissions following the report and recommendation). Despite Plaintiffs’ characterization,
Olaf Sööt Design does not purport to apply any detailed affidavit requirement on prevailing
parties seeking costs. The Court is content that Defendants’ sworn declaration—submitted with
the Corrected Bill of Costs in the form prescribed by the Administrative Office—satisfies the
threshold affidavit requirement of Section 1924 and Local Rule 54.1. See Farberware Licensing
Co. LLC v. Meyer Mktg.Co., Ltd., No. 09-CV-2570, 2009 WL 5173787, at *4 (S.D.N.Y. 2009)
(“Meyer’s failure to strictly adhere to the requirements of Local Rule 54.1 will not preclude them
from recovering reasonable costs.”). That is not to say that every item in Defendants’ Corrected
Bill of Costs is necessarily taxable, but only that it should not “be denied in its entirety” (cf. Obj.
at 5) by virtue of the affidavit requirement.
3
B.
Equitable Considerations
Plaintiffs argue next that the Court should reject the Corrected Bill of Costs “as a matter
of equity.” (Id. at 7.) Courts, in exercising their discretion to decide whether to award costs,
consider a number of factors, including “misconduct by the prevailing party, the public
importance of the case, the difficulty of the issues, or the losing party’s limited financial
resources.” Whitfield, 241 F.3d at 270. Importantly, however, awarding costs is “the general
rule,” a departure from which requires a district court “articulate its reasons.” Id.; see also Endo
Pharms. Inc. v. Amneal Pharms., LLC, 331 F.R.D. 575, 578 (S.D.N.Y. 2019). Indeed, cases in
which any court in any district has categorically refused to award costs because of equitable
considerations are few and far between. See also Morales v. Smith, No. 94-CV-4865, 1998 WL
352595, at *1 (S.D.N.Y. June 26, 1998) (rejecting the argument “that taxation of all costs should
be denied on equitable or policy grounds”).
Plaintiffs contend that their good faith and initial success in prosecuting this action,
coupled with the public importance of enforcing the securities laws, demonstrate that equity
militates against an award of costs. (See Obj. at 7.) That the case “was based on multiple
investigations by the SEC and DOJ that settled for hundreds of millions of dollars as well as
extensive antitrust investigations by 46 state attorneys general” along with “plea agreements
admitting criminal liability and multiple Fifth Amendment pleas from deponents” (id. at 7), to
Plaintiffs, should remove this case from the ordinary category in which prevailing parties are
entitled to costs. Moreover, Plaintiffs argue that it would be “particularly inequitable” to award
costs against class representatives, which “would discourage future plaintiffs from taking on the
role of class representative in future meritorious class action suits of importance to the public.”
(Id. at 8.)
4
Plaintiffs’ arguments for an extraordinary departure from ordinary practice are
insufficient. As for success against early dispositive motions, that Section 1920 and Local Rule
54.1 explicitly contemplate the award of costs for expenses incurred at trial undercuts Plaintiffs’
contention that proceeding past dispositive motions constitutes a sufficient basis for denying the
award of costs. And as to the importance of the legal issues in this case, Plaintiffs identify not
one case denying costs to prevailing defendants in a case concerning the securities laws. Even if
they could, as Judge Rakoff observed in a similar context, the “ongoing flood of such actions
casts doubt on such alleged ‘chilling effect’ of Rule 54.” Morales, 1998 WL 352595, at *1. And
though in this case costs may ultimately be borne by class representatives, that does not change
the analysis, for “costs are frequently awarded even against parties who are proceeding in forma
pauperis.” Id. (collecting cases). Counsel for Plaintiffs do not argue that their clients are
indigent or even that their clients, as opposed to counsel themselves, will be required by the
terms of their engagement to pay any award of costs.
“The Court must be mindful in exercising its discretion that all litigants should be
required to assess the relative merits and risks of litigation before they proceed.” Goldstein v.
Robert Half Int’l, No. 04-CV-10201, 2010 WL 11651400, at *1 (S.D.N.Y. Sept. 10, 2010). One
merit of serving as a class representative is the prospect of an incentive award. See Moses v. N.Y.
Times Co., 79 F.4th 235, 245 (2d Cir. 2013) (parenthetically quoting 5 Newberg and Rubenstein
on Class Actions §§ 17:3-4 for the proposition that incentive awards help offset the “particular
risks” faced by class representatives). And one risk, borne out in this case, is the prospect of
paying costs to a prevailing defendant.
In sum, this case does not involve an indigent losing party or misconduct by the
prevailing party. And though the issues involved are important and at times difficult, they are
5
not so difficult or complex as to depart from the ordinary practice of awarding costs to prevailing
parties.
C.
Objections to Particular Costs
1.
Deposition Costs
Local Rule 54.1(c)(2) permits the Clerk to tax “the original transcript of a deposition,
plus one copy” “if the deposition was used or received in evidence at trial.” Loc. R. 54.1(c)(2).
Other “[c]osts 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.” Id. But “[c]osts for
depositions taken solely for discovery are not taxable.” Id. “[C]ourts in this District have
repeatedly construed the local rules as authorizing a court to tax the costs of a deposition
transcript if, at the time the deposition was taken, the deponent’s testimony appeared to be
reasonably necessary to the litigation.” Endo Pharms. Inc., 331 F.R.D. at 582 (quotation marks
omitted) (collecting cases). Plaintiffs argue that, should deposition transcripts and copies be
taxable in this case, they total $34,774.25. (See Obj. at 11; ECF No. 471-3.)
Plaintiffs do not dispute that the depositions themselves at issue are covered by Rule
56.1. Instead, they argue that Defendants seek more than mere transcripts and copies, but
“[a]dditional expenses” that are “unnecessary and duplicative, and are therefore not taxable.”
(Obj. at 10.) Defendants contend that other categories of deposition costs, such as those
contested here, are taxable when they are “necessary, as opposed to merely convenient or
helpful, to the prosecution of their case.” (Reply at 6 (quoting AIG Glob. Sec. Lending Corp. v.
Banc of Am. Sec. LLC, No. 01-CV-11448, 2011 WL 102715, at *2 (S.D.N.Y. Jan. 6, 2011).)
After filing the original Corrected Bill of Costs, Defendants, “in the spirit of compromise,”
withdrew their request “for some of the less necessary costs.” (Reply at 6.) Those remaining are
summarized in a chart in Defendants’ Reply and include costs for certified transcripts and related
6
court reporter fees, expenses related to virtual attendance at depositions, expenses related to the
handling of exhibits at the depositions, expedited delivery, shipping and handling of transcripts,
and the costs of preparing video testimony in preparation for use of trial. (See id. at 7-8.) That
puts Defendants’ total requested deposition costs at $119,387.47. (Id. at 8.)
In surreply, Plaintiffs appear to agree that—if costs are to be taxed for depositions—they
may be so only for the “Certified Transcript” ($37,081.25) and “Exhibits – Linked” ($2,525.35),
bringing the total to $39,606.60. (See Reply at 7, lines 1, 9; ECF No. 478-1 (“Surreply”) at 5.)
That leaves ten categories of disputed costs: “Surcharge,” “Production/Processing,” “Litigation
Package,” “Attendance,” “Veritext Virtual Participants,” “Veritext Exhibit Package,” “Exhibit
Share,” “Expedited Delivery,” “Electronic Delivery and Handling,” and “Deposition video
costs.” (See Reply at 7, lines 2-8, 10-12.) Plaintiffs maintain that those costs—in essence,
anything beyond a transcript, a copy, and linked exhibits—“are not taxable.” (Surreply at 5.) In
their original Objection, Plaintiffs identify by name only four categories of deposition costs they
oppose: “(i) expedited delivery; (ii) charges for scanned and hyperlinked exhibits; (iii) interactive
‘real-time’ transcript delivery; and (iv) rough ASCII transcripts.” (Obj. at 11.) After Plaintiffs
filed their Reply, Defendants removed from their Corrected Bill of Costs three of those
categories of costs, maintaining only their request for costs for expedited delivery. (See Reply at
7.) In Surreply, Plaintiffs raised additional arguments opposing other categories of requested
costs, including video costs, attendance, electronic delivery, and “Exhibit Share.” (Surreply at 56.) The Court takes each of the disputed categories of deposition-related costs in turn.
First, Defendants’ requested costs related to the surcharge paid to court reporters with
expertise was necessary to the preparation of the deposition transcripts and is thus taxable.
Though Plaintiffs argue the designation “surcharge” is “too vaguely described for the Court to
7
assess whether they were necessary to obtaining the original transcript” (Surreply at 6),
Defendants’ representation that the disputed costs include “a fee for when expertise is needed by
the reporter” (Reply at 6) is sufficient to establish the surcharge’s necessity. Though the briefing
does not explain directly that the surcharge covered expertise, the original records submitted with
the Corrected Bill of Costs make that clear. (See, e.g., Corrected Bill of Costs at 25 (including
the line item “Surcharge-Expert/Medical/Technical”), 36 (same), 77 (same), 102 (same).) The
only non-expertise-based reference to a surcharge in the records submitted with the Corrected
Bill of Costs includes fees paid to a court reporter for “Extended Hours” (id. at 44) which,
though not an expert fee, was necessary to the production of the transcript from the entire length
of the deposition.
Second, Defendants’ requested costs related to “Production/Processing” of the deposition
transcripts were necessary to “generating and distributing the transcript in one electronic file”
(Reply at 6) and are thus taxable. Plaintiffs argue, again, that that category is too vague, but
Defendants adequately explain that the requested costs stemmed from the creation of the
deposition transcripts.
Third, Defendants’ request for costs associated with the “Litigation Package” is too
vague to sustain an award of costs, as neither the briefing nor the supplied records explain what
the “Litigation Package” is or why it was necessary to a deposition that was used or to the
production of a deposition transcript and copy. Here, “Defendants make no separate argument as
to why [the Litigation Package] should be taxed.” Cf. Olaf Sööt Design, 2022 WL 2530358, at
*5.
Fourth, Defendants’ requested costs for “Attendance,” explained by the supplied billing
records as the court reporters’ fee charged for attending depositions (see, e.g., Corrected Bill of
8
Costs at 25, 36, 77), are not taxable, as “courts in this District have determined that court reporter
appearance fees . . . are not taxable.” In re Omeprazole Patent Litig., No. 00-CV-6749, 2012
WL 5427849, at *4 (S.D.N.Y. Nov. 7, 2012) (collecting cases). Though Defendants make
arguments in their Reply about the taxability of most of the costs included in their billing
records, they make no such specific argument about court reporter “Attendance.” The Court
concludes that those costs are not taxable.
Fifth, Defendants’ requested costs for “Veritext Virtual Participants” and “Veritext
Exhibit Package,” which Plaintiffs call “vague” (Surreply at 5), are not taxable. Defendants
explain that the costs arose from “fees to conduct depositions remotely, which the parties agreed
to.” (Reply at 6 (citing ECF No. 199).) But that does not explain why the fees paid to conduct
remote depositions were necessary to the creation of a transcript or copy, or, if Defendants
contend the depositions were used by the Court, that any virtual deposition was so used. And the
parties’ agreement, which does stipulate to the permissibility and procedure of remote
depositions in the case, does not clarify the applicability of Section 1920 or Local Rule 54.1.
Because the Court cannot discern whether the “Veritext Virtual Participants” and “Veritext
Exhibit Package” line items covered taxable activities or something else (e.g., virtual court
reporter appearance fees, which would not be taxable, see supra), the costs are not taxable based
on the records submitted.
Sixth, Defendants’ requested costs for “Exhibit Share,” referred to only by Defendants as
“exhibit fees” in their Reply, are not taxable as the Court cannot ascertain the services included
in that category of costs or whether they were necessary to the case. Plaintiffs explain that
“Exhibit Share,” “a software program for conveniently sharing exhibits with attorneys” is, “like
other real-time services for the convenience of attorneys such as LiveNote and Real
9
Time, . . . once again not taxable” because it is not necessary to the creation of a transcript. 2
(Surreply at 6.) As with the costs requested for Veritext services, “Defendant[s] [have] not
provided any information about what services are encompassed by the ‘Exhibit Share’ cost or
why it was necessary.” Alfaro v. Bank of Am., N.A., No. 19-CV-22762, 2021 WL 5920830, at *7
(S.D. Fla. Aug. 3, 2021), report and recommendation adopted, 2021 WL 5919022 (S.D. Fla.
Dec. 15, 2021) (recommending denying requests costs for Exhibit Share because the Court could
not “determine whether the fees were for the convenience of counsel”). Many other courts have
concluded that electronic exhibit sharing software used in depositions is not taxable. See, e.g.,
Pable v. Chi. Transit Auth., No. 19-CV-7868, 2024 WL 5145577, at *4 (N.D. Ill. Dec. 17, 2024)
(rejecting a request for costs under Section 1920 for “exhibit share fees” because “marking and
sharing exhibits in real time is not a transcript cost allowed under the statute and Local Rule
54.1, and they were not vital to conducting remote depositions”); Whyte Monkee Prods., LLC v.
Netflix, Inc., No. 20-CV-933, 2022 WL 16936038, at *3 (W.D. Okla. Nov. 14, 2022), reversed
on other grounds sub nom, Sepi v. Netflix, No. 22-6177, 2024 WL 1327788 (10th Cir. Mar. 28,
2024) (“[T]he Court is not persuaded on this record that the cost to utilize exhibit sharing
software qualifies as either a fee to obtain a deposition transcript or a fee for exemplification or
copying. . . . [A] transcript can be created without the use of an exhibit sharing platform.
Further, exhibit sharing software appears to go beyond merely generating electronic copies of
documents. Accordingly, this cost will not be taxed.”); see also Synchrony Bank v. Cabinets To
Go, LLC, No. 21-CV-21828, 2024 WL 4120722, at *5 (S.D. Fla. Aug. 5, 2024) (“The exhibit
technician costs were a convenience, not a necessity. As such, Plaintiff is not entitled under
2
Though Plaintiffs make this argument most thoroughly in their Surreply, Defendants
were on notice of Plaintiffs’ general objection to the deposition-related requested costs—i.e., that
they were not necessary to obtaining a transcript or a copy. (See Obj. at 10-11.)
10
§ 1920 to recover the $3,450.00 in ‘exhibit tech’ fees.”). Because the Court cannot ascertain the
services encompassed by “Exhibit Share” or whether those services were necessary, as opposed
to convenient, the Court denies this aspect of Defendants’ request for costs.
Seventh, Defendants’ requested costs for expedited delivery, which they argue were
“needed to urgently respond to Plaintiffs’ class certification motion” (Reply at 6), are taxable.
Fees for expedited delivery “are not necessary generally” and thus are usually not taxable.
Farberware Licensing, 2009 WL 5173787, at *5. However, “[a]n exception to this rule has been
found where the deadlines of the case and/or timing of the depositions illustrated that expedited
service was reasonably necessary.” Id. at *5 n.2 (citing Forest Lab’ys, Inc. v. Abbot Lab’ys, 96CV-1595, 2006 WL 7077571, at *2 (W.D.N.Y. May 17, 2006)). Plaintiffs do not challenge
Defendants’ representation that the fees for expedited delivery were justified by the timing of
class certification briefing. Accordingly, the Court determines the fees were reasonably
necessary and thus taxable.
Eighth, Defendants’ requested costs labeled “Electronic Handling and Delivery,” which
Defendants contend were expended on “shipping/handling fees to obtain the transcripts” (Reply
at 6-7), are not taxable. On this score, Defendants’ authority appears to conflict. In one of
Defendants’ earlier cited cases, Farberware Licensing, Judge Baer of this Court made clear that
though fees for expedited service may be taxable where necessary, “delivery costs” are
unnecessary and thus not taxable under Section 1920. 2009 WL 5173787, at *5. Defendants
also cite Petroliam Nasional Berhad v. GoDaddy.com, Inc., in which Judge Hamilton of the
Northern District of California held that “the charge for ‘shipping and handling’ can reasonably
be viewed as part of ‘the cost of an original and one copy of any deposition.’” No. 09-CV-5939,
2012 WL 1610979, at *2 (N.D. Cal. May 8, 2012). The balance of authority in this District
11
supports the Farberware approach. See, e.g., India.com, Inc. v. Dalal, No. 02-CV-111, 2010
WL 2758567, at *3 (S.D.N.Y. July 13, 2010) (“[T]he Clerk of Court should not have taxed the
additional costs for delivery fees . . . .”); see also Mobasher v. Bronx Cmty. Coll. of City Univ. of
N.Y., No. 01-CV-8636, 2008 WL 11492729, at *3 (S.D.N.Y. July 28, 2008) (refusing to tax costs
for deposition transcript fees); Sim v. N.Y. Mailers’ Union No. 6, No. 97-CV-2929, 1999 WL
674447, at *2 (S.D.N.Y. Aug. 30, 1999) (same); Yin v. Japan Soc., Inc., No. 99-CV-4806, 2000
WL 827671, at *2 (S.D.N.Y. June 27, 2000) (refusing to tax costs for transcript delivery but
considering whether costs sought for expedited delivery were “necessary”). Accordingly, the
Court determines the costs requested for “Electronic Delivery and Handling” are not taxable.
Finally, Defendants’ requested costs for costs arising from the videotaping of depositions
for “testimony to be presented at trial” (Reply at 6) are not taxable. Plaintiffs contend that those
costs are not taxable because “Defendants ‘have made no effort to establish with any specificity
that the parties reasonably believed that video testimony would be used at trial for the
depositions for which they charge video fees.’” (Surreply at 5-6 (quoting Omeprazole, 2012 WL
5427849, at *4).) 3 “[C]ourts in this district have found that video fees have been deemed taxable
where there was an expectation among the parties that the video of the testimony might be
presented at trial.” Phx. Light, 2023 WL 5498928, at *5 (cleaned up) (collecting cases).
Importantly, “[t]he party seeking costs must specifically explain why it expected to present
testimony by video.” Id. (citing Settlement Funding, LLC v. AXA Equitable Life Ins. Co., No.
09-CV-8685, 2011 WL 2848644, at *4 (S.D.N.Y. July 18, 2011) (emphasis added). In Phoenix
Light, Judge Broderick determined that a declaration stating that the defendant “ordered each
3
Again, though Plaintiffs make this argument most forcefully in their Surreply, they
maintained an objection to the taxing of costs for the videotaping of depositions in their original
Objection. (See Obj. at 5, 11.)
12
video in order to preserve the deponent’s testimony for later use, including for impeachment
purposes at trial and to the extent the witness would be unavailable at trial,” was “too generic to
provide grounds for an award of video costs.” Id. Here, Defendants provide even less,
explaining only that the video costs were for “testimony to be presented at trial” (Reply at 6), and
citing Omeprazole, a case in which Judge Jones rejected a request for the costs of videotaping
depositions where the requesting party “made no effort to establish with any specificity that the
parties reasonably believed that video testimony would be used at trial.” 2012 WL 5427791, at
*4. Because Defendants do not offer any specific justification for their request for deposition
video costs—i.e., that the parties reasonably expected the use of deposition video testimony at
trial—the Court determines that those costs are not taxable.
To summarize, Defendants are entitled to deposition-related costs from the following
categories: “Certified Transcript,” “Surcharge,” “Production/Processing,” “Exhibits – Linked,”
and “Expedited Delivery.” The remaining categories of deposition-related costs are not taxable.
As further illustrated by the chart below, the Clerk of Court should tax $42,062.05 in deposition
costs.
Summary of Defendants’ Requested Deposition-Related Costs
1.
Certified Transcript
$37,081.25
Taxable
2.
Surcharge
$1,385.95
Taxable
3.
Production/Processing
$192.00
Taxable
4.
Litigation Package
$230.00
Not Taxable
5.
Attendance
$1,190.00
Not Taxable
6.
Veritext Virtual Participants
$8,385.00
Not Taxable
7.
Veritext Exhibit Package
$1,938.00
Not Taxable
8.
Exhibit Share
$14,835.00
Not Taxable
9.
Exhibits – Linked
$2,525.35
Taxable
10.
Expedited Delivery
$877.50
Taxable
11.
Electronic Delivery and Handling
$1,400.00
Not Taxable
12.
Deposition Video Costs
$49,347.42
Not Taxable
Total Taxable Deposition Costs:
$42,062.05
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2.
Exemplification Costs
Next, Defendants seek $15,418.75 in costs for demonstrative exhibits for use at the
summary judgment hearing. (See Reply at 7.) Courts in this District “have consistently awarded
costs for audio-visual aids in light of [Local Rule 54.1], which provides that the ‘[c]osts of maps,
charts, and models, including computer generated models,’ are taxable to the losing party at the
discretion of the court.” Chain v. N.E. Freightways, Inc., No. 16-CV-3371, 2021 WL 1611953,
at *2 (S.D.N.Y. Apr. 26, 2021); see also DiBella v. Hopkins, 407 F. Supp. 2d 537, 539-40
(S.D.N.Y. 2005). In neither their original Objection nor their Surreply do Plaintiffs object to
taxing costs for exemplification of demonstrative exhibits made in preparation for and use at the
summary judgment hearing. Accordingly, those costs may be taxed.
3.
Document Production Costs
Finally, Plaintiffs object to Defendants’ proposed costs for file conversion and production
services. (Obj. at 8-10, Surreply at 2-4.) Defendants request $295,358.79 in such costs (Reply at
10), based on a rate of $0.03 per page, multiplied by 9.84 million pages of produced documents,
as calculated by Paul Ramsey, the Senior Director of Strategic Client Solutions with Consilio
LLC (“Consilio”), Mylan’s e-discovery vendor (Corrected Bill of Costs at 125). Plaintiffs’
objections comprise two criticisms of Defendants’ proposed amount: first, that the rate of $0.03
per page is purely hypothetical (and too high), since Mylan paid a “bundled” rate for a variety of
e-discovery services, only some of which are taxable; and second, that the number of pages is
inflated, since many documents were converted to TIFF format in other litigation. (Surreply at
2-4.) Plaintiffs contend that, as a result of those two issues, the Clerk cannot be certain of the
true rate Mylan paid for the taxable services Consilio performed or the number of pages by
which that rate should be multiplied. (See id. at 3.) Defendants rely on two declarations from
Ramsey attesting that the rate is correct even though the true amount Mylan paid was a bundled
14
fee; and that the page number is correct because even for documents that were converted to TIFF
for other litigation, Consilio still provided several costly services in this case, and that in any
event, the amount requested is an underestimation. (Corrected Bill of Costs at 7-9.) Plaintiffs
are correct that the file conversion and production costs are, in the amounts requested by
Defendants, too speculative to be taxed.
Begin with the rate Defendants argue should apply: $0.03 per page. That number comes
not from any bill Mylan paid nor a survey of the industry standard. Instead, it is a hypothetical
rate that Ramsey declares is the one Consilio would have charged for “converting produced files
to TIFF.” (Id. at 125-26.) Plaintiffs argue that that number is far too high, citing a declaration
from Jared Harary, Chief Revenue Officer at vdiscovery, another e-discovery provider, which
says: “In keeping with the industry standard . . . [f]or a project requiring the conversion of
approximately 10 million pages, vdiscovery would have discounted the conversion services
referenced in the Ramsey Declaration to $0.005 or less, in order to bid competitively on this
project in the electronic discovery services market.” (ECF No. 479 at 3.) Plaintiffs point out
also that Ramsey offers a different version of Mylan’s hypothetical rate across two declarations.
In the first, Ramsey explains the services Consilio provided to Mylan as including “the collecting
and ingesting of electronic information, conversion of that information into required formats (for
example, TIFFs for production), associated storage and hosting services, and production of
documents,” and then specifies that the $0.03 rate would be for “converting produced files to
TIFF, had this service been unbundled and billed separately.” (Corrected Bill of Costs at 125.)
But in Ramsey’s second declaration, following Plaintiffs’ objection that many of the documents
produced had already been converted to TIFF for other litigation, Ramsey states that, in addition
to TIFF conversion, the $0.03 rate includes “encryption of the production, copying production to
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media, updating production log documentation, and performing quality control measures to
validate the production.” (ECF No. 475 at 2.) Plaintiffs are correct that Ramsey’s two
declarations contradict, or at least differ in a way that pivots away from one of Plaintiffs’ key
objections, only after that objection was made. As a result, the Court does not find Ramsey’s
proposed hypothetical rate credible and will rely instead on Plaintiffs’ proffered $0.005 per page
rate. The additional benefit of using Plaintiffs’ rate is that it is supported by a declaration
describing in detail the industry practice of volume discounts, rather than a hypothetical derived
without apparent consideration of any potential discounts.
There is an additional problem, however: It is unclear from Defendants’ materials which
of the 9.84 million pages were converted for this litigation, and which were converted for others.
Defendants’ only response is that the hypothetical rate encompasses other services besides TIFF
conversion, and that in any event, because Defendants have excluded costs elsewhere, this
potential overestimation is still “modest in scope compared to the number of services they
needed to obtain from Consilio to respond to Plaintiffs’ requests.” (Reply at 9-10.) But the
Court may award costs for TIFF conversion only for documents actually produced in litigation.
See Balance Point Divorce Funding, LLC v. Scranton, 305 F.R.D. 67, 74 (S.D.N.Y. 2015) (“If [a
party] elects to convert all documents to a TIFF format for its own convenience, it may not
recover as a taxable cost the cost of converting to TIFF those documents which were not actually
produced.”) Defendants’ contention that they are entitled to costs for TIFF conversion of
documents in other litigation because any overcharge is likely offset by other expenditures—not
presently sought and of an unknown amount—is too speculative.
Where bulk costs have been expended by a prevailing party for both litigation-related and
non-litigation-related purposes, and “there is no way to reasonably evaluate the purpose of [bulk]
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costs for copying and scanning,” it is appropriate to reduce the requested bulk amount to
approximate the amount actually spent on documents converted and produced in this litigation.
Grano v. Martin, No. 19-CV-6970, 2021 WL 3500164, at *7 (S.D.N.Y. Aug. 9, 2021)
(“[B]ecause some fraction was undoubtedly for exhibits or providing documents to the Court or
opposing counsel, I will reduce these costs by 90% rather than 100%.”). Plaintiffs contend that
“[e]stimated conservatively, such costs for TIFF conversions should be reduced by at least half.”
(Obj. at 10; Surreply at 5.) The Court finds that a 50% reduction in the total count of documents
is sensible, and as already discussed, that Plaintiffs’ proposed rate of $0.005 per page is the best
estimation of the costs associated with TIFF conversion for this litigation. Applying the $0.005
rate to 4.92 million taxable pages (half of 9.84 million pages (see Reply at 8)), Defendants are
entitled to $24,600 in costs for converting and producing documents in this case.
D.
Final Total
Defendants are entitled to $42,062.05 in deposition-related costs, $15,418.75 in
exemplification costs, and $24,600 in document conversion and production costs, for a total of
$82,080.80.
II.
Conclusion
For the foregoing reasons, Plaintiffs’ objections to the Corrected Bill of Costs are
SUSTAINED in part and OVERRULED in part.
The Clerk of Court is directed to tax costs in the amount of $82,080.80, and to close the
motion at ECF No. 478.
SO ORDERED.
Dated: January 28, 2025
New York, New York
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