Cost-Shifting Could Be a Pleasant Surprise After Litigation

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An article by Kevin F. Brady and Jill Agro posted on law.com on the Legal Intelligencer webpage.

This article discusses cost-shifting at the close of a litigation, and provides information as to the federal statutes that enables prevailing parties to seek eDiscovery costs from the opposing side.

The article states, "Cost-shifting is available under Rule 54(d) only where a federal statute, the Federal Rules of Civil Procedure or a court order expressly provides for an award of costs to a prevailing party. Winners wanted cost-shifting and losers were grateful that it was not a viable option. But a seldom-used 2008 amendment to federal statute 28 U.S.C. § 1920(4) changed the game for litigants in federal court.

Section 1920(4) allows federal courts to tax the costs "for exemplification and the cost of making copies of any materials where the copies are necessarily obtained for use in the case." Prior to the 2008 amendment to the statute, § 1920(4) permitted cost-shifting for the exemplification and copying of "papers"; the amendment changed "papers" to "any materials," to reflect that the costs of e-discovery are recoverable."

The article further references a recent specific case, in which other precedent cases for cost-shifting were addressed.  The article states, "The recent decision in In re Aspartame Antitrust Litigation is one of the first decisions providing exhaustive detail on the topic and explains the factors courts will consider in deciding whether to shift costs and which costs are taxable to the nonprevailing party. There, the U.S. District Court for the Eastern District of Pennsylvania awarded more than $500,000 for the costs of e-discovery to the prevailing parties in an antitrust litigation matter."  The article references additional cases that were cited in the Aspartame litigation.