Inline Packaging, LLC v. Graphic Packaging International, LLC.

Background

Inline sued Graphic in July 2015, alleging antitrust violations, tortious interference, and misappropriation of trade secrets. In September 2018, the court granted Graphic summary judgment on all claims and entered judgment for Graphic. Inline filed a notice of appeal.

Graphic later submitted a bill of costs seeking $304,930.89. The clerk awarded Graphic $47,767.90, including $800 in clerk fees, $35,238.95 in transcript fees, $10,646.10 in witness fees, and $1,082.85 in copying fees. The clerk denied $226,137.53 in electronic-discovery expenses. Both parties asked the court to review parts of that cost judgment.

Graphic’s Electronic-Discovery Costs

Graphic sought reimbursement for fees charged by its electronic-discovery vendor, Integreon Discovery Solutions. The work included collecting and copying data from more than 80 sources into a single file, converting files into readable formats, removing duplicates, and creating searchable text through optical character recognition.

The court explained that federal law allows a prevailing party to recover certain costs, including the costs of making copies necessarily obtained for use in the case. It held that the statute does not cover every step involved in electronic discovery. Collection, preservation, extraction, deduplication, technical setup, and other preliminary or ancillary work are not automatically taxable copying costs.

The court denied Graphic’s request. It found that the forensic collection expenses involved gathering, preserving, and extracting electronic information, and also included files that were later removed as duplicates. Graphic did not allocate the costs to documents actually produced. The conversion charges included unidentified deduplication expenses and therefore could not be awarded. The technical setup charges were also denied. The optical-character-recognition charges were denied because the parties’ discovery protocol did not require that work for documents generally, and creating searchable text for counsel’s convenience was not necessarily required for use in the litigation.

Inline’s Challenge to Witness Fees

Inline challenged more than $10,000 in witness fees for airfare, meals, hotels, and related expenses for depositions held at Graphic’s counsel’s offices in Atlanta, Baltimore, and Washington, D.C. Inline argued that Graphic should pay those expenses because Graphic’s counsel selected the locations.

The court agreed that Graphic could not recover the travel and lodging expenses resulting from its counsel’s choice to hold the depositions at counsel’s offices rather than near the witnesses’ home locations. The court allowed $33 for Ray Gaffney’s parking expense and an uncontested $40 witness fee for Harry Gardner, limiting recoverable witness fees to $73.

Pro Hac Vice Fees

Inline also challenged $800 in fees for admitting eight of Graphic’s lawyers to practice in the case. The court followed controlling Eighth Circuit precedent holding that these fees are recoverable as clerk fees under the federal cost statute. The court therefore left the $800 award in place.

Order and Disposition

Judge Ann D. Montgomery denied Graphic’s Motion for Review of Clerk’s Cost Judgment. She granted in part and denied in part Inline’s Motion for Review of Clerk’s Cost Judgment. The court amended Graphic’s cost judgment to award $800 in clerk fees, $35,238.95 in transcript fees, $73 in witness fees, and $1,082.85 in copying fees, for a total of $37,194.80.