Want to Pay Your Opponent’s Costs for Producing Your TIFF Images in Discovery?  Then Pay Attention.

Cha-ChingIn federal court, we all know that Rule 54(d)(1) allows a prevailing party to recover costs.  That taxation of costs can happen after a single claim is prevailed upon, or at the end of a case.  And those costs can be a real blow after your client has lost the case, especially if you have to pay the opposing party’s eDiscovery costs.

Say What?

How?

Why?

We never had to pay discovery costs before.

Well, you kinda did, if your opposing counsel was smart enough to realize copying costs were included in the Taxation of Costs statute and included them on the bill.

And now, the prevailing rule is that if the opposing party creates TIFF images for you in federal court and they win, you could end up paying for those TIFFs.

Meet section 28 U.S.C. § 1920(4):

A judge or clerk of any court of the United States may tax as costs the following  .  .  .  Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case.

According to the  3rd Circuit in Race Tires America, Inc. v. Hoosier Racing Tire, Corp., 674 F.3d 158 (3d Cir. 2012)  “making copies” means making TIFF images.  In that case, the 3rd Circuit vacated the District Court’s decision allowing recovery of ALL eDiscovery vendor services, but permitted recovery for just three categories of costs. So that’s kinda good, but the categories they left included in “making copies” are big ones:

1. Scanning of hard copy documents (i.e. converting paper to pdf or TIFF images)
2. Conversion of native files to TIFF images
3. Transfer of VHS tapes to DVD

Since Race Tires, the 4th Circuit has jumped on the “making copies” bandwagon in Country Vintner of N.C. LLC v. E&J Gallo Winery, Inc, 2013 WL 1789728, and several other courts have jumped on between then and now including district courts in Texas and Illinois. (For a complete listing of cases that address this issue, go to the Case Digests in the eDiscovery Assistant App for iPad and sort by 28 U.S.C. § 1920 under Tags).

So, what does that mean for you?  The ability to potentially recover the costs of TIFFs is the biggest issue, because for some reason, lawyers remain tied to them.  It’s to the point that I’m surprised if I hear that a party hasn’t requested them (or pdfs — don’t get me started on pdfs).

What kind of greenbacks are we talking about?  It’s not much, is it?

The cost to convert to TIFF is between $0.01 to $0.05 per page.  Yep, that’s per page, NOT per document.  Most providers use a 4-5 average for the number of pages per doc, but your mileage may vary.

One of my current cases has 10.6 GB of data in the QC set (that’s a subset of the data for review).  That data subset, which is mostly email and attachments, equates to just over 26,000 documents and 330,000 pages.  At $0.01/page, the cost of converting those native files to TIFF images for production would be around $3300 in costs.  Not chump change or money I’d throw around.

For every million pages you TIFF at $0.01/page, you’ll spend $10,000.  At $0.05/page it’s $50,000.    Are you ready to tell your client you have to pay that AFTER you lose?? (I would also argue that your client should never be paying this in the first place, but that’s another post.)

So, what’s a girl to do?

First, negotiate.  If you don’t want to take the risk that you’ll have to pay for TIFFs, don’t ask for them.  Ask for native. TIFFs are NEVER, EVER the native format in which a document is produced or saved.  Pdf, yes, TIFF, no. (If a doc exists as a pdf, that’s its native format.  No conversion is required.)

If the other side wants to produce in TIFF so that they can control bates numbers on the documents, so be it.  They can produce in native (WAY better for you to use with current technology) and TIFF, as long as they agree not to seek recovery of the costs of  the TIFF images if they prevail.

Negotiate it out, and put it in writing for the judge to sign off on.  Include it in the ESI Order that you create for the case.

Second, make sure you’re getting the best deal from the provider you are paying to create those TIFFs. In today’s market, paying for TIFF conversion is a cost you can negotiate and/or eliminate — many providers don’t even charge it anymore as it’s a click of a button.  That’s a cost savings feature for your client up front if you are the producing party.  If you are the requesting party, I’d want to know what the producing party is paying for TIFF images so I can argue it’s too much or be on the record should they ever try to stick me with a bill of costs for TIFFs.

Third, if you’re the requesting party, make sure that you aren’t using review software that requires TIFF images and a load file (the notion that you might still be doing that makes me somewhat sick to my stomach).  Most every software will take native data (the original format in which the document was created and stored) and allow you to do so much more with the data in that format.

Don’t forget that you can be on the hook for eDiscovery related costs under FRCP 54 and 28 U.S.C. § 1920.  Because if you do, and your client is asked to pay those costs, they may just look to you to know why you didn’t advise them of that risk at the outset.

Yikes.

Go Native.  Leave the TIFFs behind.  Do better discovery.

 

 

 

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