East Coast Test Prep LLC v. Allnurses.com, Inc.

Background

East Coast Test Prep, LLC, doing business as Achieve Test Prep, and Mark Olynyk sued Allnurses.com, Inc. and others for defamation based on posts on the Allnurses.com website and actions or inaction by site moderators and administrators. The action was ultimately dismissed.

During discovery, the plaintiffs served a request seeking computers, servers, devices, storage, and other electronic information belonging to or used by Brian Short, the founder and president of Allnurses.com. Defendants preserved 18 of 35 devices by creating forensic images, which cost $7,150. They also incurred storage and data-transfer expenses. The defendants later transferred the images to external hard drives at a cost of $10,430, reducing the ongoing storage charges.

The defendants asked the court to shift the electronic-discovery costs to the plaintiffs, impose sanctions based on allegedly unreasonable discovery requests, and issue a protective order. A magistrate judge recommended denying that motion. The defendants objected. Separately, the Clerk denied the defendants’ request to tax certain electronic-information costs against the plaintiffs, and the defendants asked the district court to review that decision.

Protective Order and Sanctions

The court reviewed the magistrate judge’s recommendation for clear error. It held that the defendants’ request for a protective order was not timely or seasonable because they waited until after judgment and more than a year after beginning to incur the costs. The court noted that the defendants could have sought protection while the costs were accumulating or used a less expensive storage method.

The court also upheld the recommendation denying sanctions. Although the plaintiffs had delayed identifying the information they wanted, the record did not clearly support the defendants’ assertions that the discovery request was baseless. Because Short had used the devices to work for Allnurses.com from home, the devices could have contained relevant information.

The court therefore overruled the defendants’ objections, adopted the report and recommendation, and denied the defendants’ Motion for Sanctions and a Protective Order.

Review of Taxed Costs

The court denied the defendants’ request for $400 in clerk fees because those fees were paid to the U.S. District Court for the District of New Jersey rather than the District of Minnesota, and the defendants did not show that the Clerk’s decision was inequitable.

The court concluded that the initial imaging of the devices and the transfer of the images to hard drives were costs for making copies necessarily obtained for use in the case. It allowed $7,150 for imaging and $10,430 for transferring the images, for a total of $17,580. The court denied the motion as to all other requested costs, including preservation and storage costs.

The court held that the defendants’ Motion for Review of Clerk’s Action was granted in part and denied in part. It ordered the Clerk to amend the cost judgment to allow taxation of $17,580 under “Fees for Copies.”