writers joseph decker for appellants race tires america inc at all i'd like to reserve two minutes of my time for band plays thank you this is a taxation case but it's a case of national importance to every citizen every lawyer who brings a case to this federal court were to any federal court it's about access to the courts it's about the american rule this court has in fact led the way in this area chief courts and this court in philadelphia mortgage versus touche ross followed the united states supreme court's crawford fitting case and held that the courts may only tax items specifically  no your honor we did not the copying of materials can be taxed as costs because that's exactly what section one nine hundred twenty four says you're a reference your honor is to the case management order in this case and the case management order in this case deals with a lot of things other than the copying of materials there's one section in the case management order that does in fact deal with the copying of materials and that section nine section nine specifically says that the parties agree to exchange  discoverable and responsive electronically stored information in a particular format and it was the to format which is the tagged image file format that's a copy race times america has always said that's a copy of the mix of materials certainly so the cost of the copying of the materials that were exchanged by the parties is in fact a cost of materials under section one nine hundred twenty prince four now that there are other things in the case management order your honor which are the also the agreement that the parties reach that the twenty six after conference that are certainly not copying for example related to electronically stored information there is the agreed upon procedure that if the parties were to use he words that is key words like a google search to search through relevant documents then if you'd used an agreed upon she would then your search would be deemed to be a reasonable search and that was cooperate fully agreed to among the parties nobody would say that the searching through information with keywords were with human eyes or eyeballs on the page is copying of materials it's simply not and i don't think that that's even the case here that that's that's really even contested here if it were paper and you were searching and you had a team of lawyers or paralegal searching through it to find relevant or really relevant documents to see which were responsive which were not responsive and to see which were privileged and which were not the that is not the copying of materials so you're either there and there are of course there are other things that are in the case manager order to like the pleadings or to be closed on may thirtieth of two thousand and nine or whatever it was not everything in the case management order is certainly is the is copying now the taxation statute was amended in two thousand and eight to change from making copies of paper to making copies of materials in the district court as i recollect relied upon that change and finding that each discovery costs here are indeed taxable why was the district court incorrect in recognizing the significance of that legislative change because the legislative change didn't taint the language of copying judge alaska it still requires the making of copies and that was clearly held in a very good opinion by the eastern district of in the eastern district of virginia virtually every case that was the side of this issue has decided after the two thousand and eight amendment the two thousand and eight amendment changed the words copies of papers to copying of material copies of materials and if you look at the two thousand and three judicial conference report which is the legislative history before this court in is in the record legislative history says that it was called the amendment was called the court room technology costs the context of that amendment was because federal courts in the eleventh circuit and on air and other places had denied taxation before electronically produced demonstrative evidence and that that was in two thousand and two thousand and one in two thousand and three that your digital conference took up that charge and decided we should we should  amend the statute and it and it said this is going to be a narrow amendment that amendment your honor it's perfectly clear had nothing at all to do with electrons discovery that amendment was implemented five years later your honor and so it's a total red herring in this case copying is still copying and the cost of copies of materials is what is what's at stake here and i don't read the agreed to production into format he saluted him and in order to get there you got to go through all the steps in order to get through there you have to get in people discover you have to go through all the steps to your honor it's the same thing with paper in order to produce a copy of a paper copy of a relevant document at the at at the end of the production stage you have to send people to the client's offices you have to gather a lot of things you have to gather a lots of files then you have to actually go through them sort through them see which ones are relevant or irrelevant and then which ones are responsive or not responsive and then you have to decide to produce those documents and it's not the entire process that is taxed of course it's the copies of materials that are taxed and the fallacy and the appellate argument is that they treat the entire discovery process as just one big copying job of it i guess you could say that at the end of the at the end of the road you produce a document the other side but that's not what the taxation federal circuit recently held in rico yes that in the rico ca i c a o each case that the creation of a database for discovery purposes would be tax not quite your honor that's the but that's but that's this is a very important case three weeks ago the federal circuit held in the rico case to two things that are relevant to this appeal one is that the production of documents electronically through using a an online host a database is in fact the production of documents that's absolutely certainly consistent with our union and with that with all of you if you it doesn't have to be just a copy of a document if you take a document and scan it to kinko's and turn it into a digitized i'm sure that's a that's a copy that we've always said that's a copy if you do the same thing but you take the production of documents and instead you produce them online and load them up into a host a database of attorneys or a loan for the car the country can look at them that's an electronic production there's no question but it's the production that's not that's missing here because what the appellee is are requiring to be are requesting to be tax is everything that is the gathering of the documents themselves the imaging of the computers which is like imaging not only making kind of a copy of not only the paper inside a filing cabinet that's like actually making a copy of the drawers and it's like making a copy of the metal filing cabinet itself the copies everything there that's the gathering face they're trying they're taxing hundreds of thousands of dollars actually more like seventy five thousand dollars for the actual searching through the documents by using a key using keywords they they rely on the district the ones that don't analyze the statute and most of them don't frankly follow the district court's case here they cite race tires america  that was cited by the district court for this entire on mass discovery philosophy this entire theory that this is all just twenty first century copying was the northern district of georgia in the c b t case and as we know the federal circuit three months ago vacated the c v t case that c v t case was a case that's relevant on a number of points but that was that that was the genesis you rotter of a lot of these courts every single court that has this this issue just it doesn't come up a lot the but i will say that the rico case is important and i want to focus for a minute if i might on the second statutory criteria this is an independent grounds for personal and that is that the copies must be this is the site in the record see this is it's one thirty five one thirty five is a seven thousand plus for tipping your honor and it says that the ticket was going to be charged at one thousand two hundred fifty dollars a management six hundred dollars is for four hours of time at one hundred fifty dollars an hour that's what i guess with this with this caveat your honor because the western district of pennsylvania is one of the most strict districts in the country as t taxation of copying costs and the western district of pennsylvania says that you don't tax costs unless the document is introduced into evidence and that's part of the handbook that's the cross case decided in  six and interestingly enough that very rule was followed by the clerk in this court ok when he refused to tax the deposition transcripts in the case that we're not at noted on summary judgment necessarily obtained for use in the case necessarily obtained doesn't mean it was necessary because of the discovery process that's a police argument that everything in the discovery process is necessary and i haven't even gotten to the reasonable in the amount of approximately eighty million dollars and the district court judgment very found on summary judgment that hoosier had committed no antitrust violation as a matter of law that decision was then affirmed by this court and then subsequently what occurred was the case then went back to for a determination of a bill of costs and so two years a big bill of cool it's well your honor it's i used to be in any trust cases and we didn't have anything like hundreds of thousands of dollars of the well i'll portion of the cost on hoosier is actually one hundred twenty five thousand dollars and the clerk of the four s it is a lot of money it was a lot of money for our client to incur in complying with the court's discovery order and about twenty thousand dollars of that was actually taken out of the award so the clerk of the court exercise some discretion in finding that some of that you discovered costs were not recover fees for exemplification and the cost of making copies of any material not claiming there's any exemplification material here are there are certainly fees the courts have in traditionally looked at either fees illustrate by example and of course there's a long history on exemplification and to what degree exemplification costs are recoverable under the statute primarily in the context of court animations which is not a tissue here  what was the x ok yes and i want to be clear we're not relying on the fisa for exemplification as a freestanding argument but certainly anything we did from taking a hard drive and then actually  extracting the data processing the data making the data keyword search of all that all in the computer that we can't peek into is actually making copies so for example with the keyword search if you have a database full of twenty two gigabytes of information how do you pull out a document that is responsive to a particular discovery requests you pull that out by making a copy of it it's also an illustration it's also an example to use internal right exactly it's internal in the fight here hugel search of something that's in fact making copies of something that's available electronically but not without going to my printer oil that is true you are making some sort of so mr decker made a point of talking about as if hoosier were trying to recover for the entirety of the document production there is unfortunately still a lawyer a roomful of lawyers who looks at these documents there was one point about thirty one videos being converted to digital format but only ten videos were produced that you claim costs for all thirty one videos how is that recoverable was taxable cost even if never produced well because it's electronically stored information we went out as attorneys and we had to determine and make some good faith terminations as what you could potentially be to be relevant for this case that is what the trial court's order dictated that we do part of what we did then was not exclude things that could pet potentially have relevant information including videotapes so even though never produced as part of the discovery in the in the case you claim that there taxable we claim that costs for materials  copies of materials that we made to comply with the court's order as was agreed to by s t a are recoverable in this case and your honor i will say i've been somewhat frustrated because i have been unable to track s t s argument on that point to see more specifically what these videos were and so the argument in my view would be waived as well how is mitigated extraction is copying in the same way that anything is copying search terms so many data is actually an additional and i polish and i grew up a little bit under the old regime as well but  process where you actually have copying of additional materials that have never been for you so meditative file will tell you when a document was actually created when it was last access to will tell you a number of different different information same thing you are looking for documents that are in the database looking for the documents that appear more than once and some of those are then extracted and pulled over into you know for the turn you sent to review are pretty there but they certainly could be printed out which is an interesting point as well it seems sort of out of place for s t a to be complaining about you know a lot of these documents were not or a lot of the information was not produced under stas view of the world we could print this all out in raw image form and then that would be somehow compensable under the statute of course that wouldn't make any sense and that's one reason why the approach actually does o for example but you can produce it so that wouldn't be taxable well that what i'm saying in your honor is we could take those hard drives and we could literally try to print everything out on that hard drive and hand it over to the other side and that's an approach that would make a lot of sense no it wouldn't it would be an reasonable it might be a good example right yes and so that is exactly why the court's order is put into place so as to come up with a process that the parties agree to the court orders is going to make sense and it makes sense for this process to be put into place at a time where no one knows what the prevailing party is mean that's the sound policy behind specifically the rule that the federal circuit has now embraced that we've seen also from the sixth circuit and from the fifth circuit and from the second circuit and that is namely if you put parties in the position of being a little bit responsible a little bit behind this rising in veil of ignorance where they don't know who's going to have to bear the cost at the end of the day then they'll be reasonable in that process i know this is kind of hindsight but shouldn't this have been a subject that you discussed with your original a rule twenty six conference you were sixteen conference before you got the case management order you know are these going to be taxable cost your honor i think that that that's a it's a great question and it's perhaps something that the district courts can address as part of this process when we met in conferred we were meeting and conferring under this new regime that had the parties talk about yes i and quite frankly at that time we thought that the order had a great amount of detail and allowed the parties to discuss a number of things that were very very important in this case in hindsight sure if the district courts wanted to require that that's a great suggestion what were you looking for i mean what was hundreds of thousands of dollars distraction from the merits of the case and so we agreed to this order to provide the full scope of discovery so that he went very into what what kind of documents what was it it was they sought  information from basically all of our managers out in the field who had any at interaction with any race track around the country that's what they sought and so we have many many people who have interactions with racetracks around the country to find some sort of behavior that they thought was not appropriate now attorney and paralegal time spent reviewing documents for purposes of looking at whether privilege material is has been at least made available but not copied that's not compensable is taxable cost and your honor i see the red light answer my question no we have and judgment very found this is well we have not sought any compensation how is this time no different that the vendor spends for example doing word searches to eliminate privileged documents different than an attorney's time doing well the attorney's time is still necessary in terms of determining what the scope of the privilege search is going to be and then reviewing those documents when that once those come into play but i as an attorney am not at all qualified to do what the technical experts do that would be a boon perhaps to the client or a loss but i am not i'm simply not qualified to do that thank you thank you your honors here for mr jo you understood within the context of the five minutes mr decker opened by saying that this is an access to the courts case and it's not it's not at all for a couple of reasons number one there are equitable remedies for the taxation of costs so if this was an appropriate case where a litigant couldn't afford to get into the courthouse there's case law in the circuit that gives them equable remedies if they can afford to pay but essentially over to made the point that you know taxation of costs and i was a trial attorney and i tax cost and had tax cost against man never saw a bill for three hundred sixty seven thousand dollars well again that's a bill that our clients had to pay and they were not happy with it let me explain the american rule is that unfortunately i mean if you claim that the discovery was burdensome you have the opportunity to ask the judge to shift the cost during the discovery process itself under rule twenty six if if you thought the discovery was th a statute that covers vexatious that a geisha in tactics which pursuit to recover these costs but how are these taxable as making copies of materials well agreed your honor that there is an opportunity to seek relief earlier in the proceeding under rule twenty we motor sports took advantage of that rule and we filed a motion for protective order before the trial judge in this case we sought relief from the tremendous cost of the discovery and one of the primary reasons that we argued in our motion for relief from that you discover cost was inability to pay and we put in record evidence of our kind of our client's financial position etc and at the end of the day the judge denied our motion he gave us a little bit more time but he made us comply with all of the onerous discovery  sets the rules for dirt track racing but the point out the main point i want to make is that the judgment various decision at the trial level is viewed as under the views discretion standard and in order for the court to shew is whether or not there taxable as a matter of law does the statute allow for the taxation will this that another review is yeah the statute certainly doesn't and the as ms that you talked about making cut costs for making copies of material well in the four which could be awarded under section one nine hundred twenty some four but on the facts of that case they held some of the costs sought were not compatible right and that piece of the decision is what i want to talk about and that's that it is an abuse of discretion standard in order for this court to decide whether or not the court made an abuse of discretion the court really asked understand the context of the case what did the trial judge know what the trial judge here was the trial judge understand this was a case with a trial judge was intimately involved in the case from start to finish is involved in managing the discovery he heard eleven discovery motions it was a case where damages were in excess of ninety million dollars it was bet the company case for the litigants the parties were constantly before the trial judge on the z discovery issues the judge was involved in setting this case management or so at the end of the day this judge was in a very good position to evaluate whether or not the costs were necessarily incurred for the case which is really the standard and he made a very careful and well reasoned opinion on that point and it shouldn't be disturbed lightly given the magnitude of the case i think there was a question earlier about why were the dollar amount so large well the dollar amounts were so large because that the plaintiffs in the case in the underlying case and imposed over four hundred search terms were our client had to produce four reasonable he reviewed them and found them very small that i want basis to what was the evidentiary basis for him to find the reason he was involved of that in the magnitude of what was produced which is really the issue number one number two he looked at what courts had awarded in other cases and whether they're completely how many minutes to see how much of the croissants were electronic evidence experts assessment of their electronic discovery procedures assessment in other words i think how much this was expert and how much was actually copying of materials twenty thousand dollars was copying of materials you're on it was expert and the rest of the rest of it was searching for gathering putting them into piles searching through them processing them which means the duping which means taking the duplicate out and taking the things that were collected like the entire file system of the computer and every software program on it which we're not interested in copying taking those out that's called the misting that's processing it's taking them into piles twenty thousand dollars was the scanning costs and there are six thousand dollars o were and i'm not sure we will but if we were to say that we're not going to defer to the district or the trial court who knew a lot about this would we need to send this back for master to go through well to go to important point about what was actually produced because that's the important point of the rico case that was decided three weeks ago by the federal circuit the rico case said that you we cannot your only can charge for it's the copies that were necessarily obtained for the did this record unfortunately mixed his words with the necessary part he didn't say that the copies were necessarily obtained that the judge said that the activities he said that the  experts were necessary to go through the and collect the documents now that you mr decker you read like thank you r