Is the Cost of Bates Stamping Taxable under 28 U.S.C. § 1920? Circuit Split — Video Dep Fees Taxable If Incurred Close to Trial, for Unavailable Witnesses — Cost of Burning Docs onto Disk Taxable under 2008 Amendment

Azdel v C&D Zodiac, Inc., 2015 U.S. Dist. LEXIS 39329 (W.D. Va. Feb. 18, 2015):

a. Videographer Fees

C&D first seeks costs for obtaining video recordings of the depositions of witnesses who could not be subpoenaed and would not voluntarily come to trial. C&D requested videotaped depositions for three necessary witnesses and for an American Airlines interior [*9]  engineer, all of whom lived out of state, amounting to costs of $4,908. Azdel argues that such costs are not recoverable because they were not necessarily obtained and were only for the convenience of C&D's attorneys.

Videographer fees for depositions are recoverable as costs only if "necessarily obtained for use in the case." Amdocs (Israel) Limited, 2013 WL 1192947, at *3. This "concept of necessity for use in the case connotes something more than convenience or duplication to ensure alternative methods for presenting materials at trial." Cherry v. Champion Intern. Corp., 186 F.3d 442, 449 (4th Cir. 1999). In Cherry, the court recognized that "there surely are circumstances when both a videotape and a transcript of a deposition may be necessary," but ultimately held that a defendant's assertion that a video recording might be needed for effective impeachment at trial was insufficient. 186 F.3d at 449. Uncertainty about whether a witness can attend trial or an opposing party's assurances of a witness's availability can be sufficient to overcome the requesting party's alleged need for videotapes under § 1920. See Mann v. Heckler & Koch Defense, Inc., 2011 WL 1599580, at *6 (E.D. Va. Mar. 4, 2013) (holding videotaped deposition of officer was not reasonably necessary where Secret Service agreed to produce officer as a witness at trial); Nobel Biocare USA, 2013 WL 819911, at *3 (holding that uncertainty as to whether witnesses would be available [*10]  for trial does not adequately demonstrate why deposition transcripts would not have been sufficient). Courts consider videotaped depositions as necessary for use at trial when the witnesses are beyond the court's subpoena power and there is no assurance that the witnesses will attend the trial. See Mann, 2011 WL 1599580, at *6.

In this case, C&D argues that they are entitled to videographer fees because all of the witnesses with videotaped depositions were outside the subpoena power of the court, and it was known that the witnesses would be unavailable for trial. C&D also indicates that Azdel chose to videotape all of its depositions; in comparison, C&D ordered the videotapes of the depositions of necessary, unavailable witnesses only when it was necessary to prepare for trial. Moreover, C&D only ordered the depositions of third party witnesses whom both parties intended to have testify at trial. Dkt. No. 273, p. 7. The Court notes that the videotaped depositions were ordered on May 7, 2014 based on C&D's submitted invoices (Dkt. No. 260-2, p. 5), which was less than six weeks prior to the scheduled trial date of June 17, 2014. Dkt. No. 222.

I find that C&D has met its burden to prove that the videotapes of the [*11]  depositions were necessary for use in this case. C&D's professed reasons for obtaining a video recording of four depositions taken in the case suggest that they were limited to necessity, and not convenience or duplication to assure alternative methods for presenting materials at trial. C&D explained that the witnesses were known to not be available for trial and Azdel had not provided any information to suggest otherwise. See generally Dkt. No. 272, 274. C&D thus has demonstrated a need for the taped depositions in the event of trial. The only issue is whether C&D ordered them close enough to trial to suggest a sufficient need at the time of ordering. Although Cherry does not provide a per se rule that videotaped depositions should be allowed when trial approaches, C&D has shown that counsel waited until less than six weeks before trial to order the depositions. Considering that a four-day trial would require considerable preparation (Dkt. No. 222), it was reasonable for C&D to order the videotaped depositions prior to trial.

Accordingly, I find that C&D has adequately demonstrated why video recordings of the four depositions were necessary for use in the case, and thus, the amount [*12]  of costs of $4,908.00 should be awarded.

***

c. Bates Labeling and Electronic Image Capture

Azdel finally challenges C&D's request to tax their electronic Bates labeling and image capture work performed by Ricoh, which tallies to a total of $395.61. Dkt. No. 260-1, p. 2-3, 5. Azdel contends that Bates labeling and electronic image capture are not covered by § 1920 because they do not pertain to photocopying. Dkt. No. 272, p. 5. They further argue that these processes are more closely related to e-discovery production, which is not recoverable, and that C&D offered no explanation for "Image Capture D-Heavy" expenses. Id.; Dkt. No. 274, p. 5.

C&D rejects Azdel's argument because (1) Azdel requested the Bates labeling on the documents, and (2) C&D provided the documents on a readable CD instead of a paper copy format. Dkt. No. 273, p. 5. C&D can recover for the production of discovery [*32]  documentation onto CDs, which in this case is referred to as "image capture." The Fourth Circuit has held that "subsection (4) limits taxable costs to those identified by the district court: converting electronic files to non-editable formats, and burning the files onto discs." Country Vintner of N. Carolina, LLC v. E. & J. Gallo Winery, Inc., 718 F.3d 249, 260 (4th Cir. 2013). Documents can be produced electronically and still be taxed under § 1920. In re Ricoh Co., Ltd. Patent Litig., 661 F.3d 1361, 1365 (Fed. Cir. 2011) ("Notably, in 2008, Congress amended section 1920(4) by replacing the phrase 'copies of papers' with 'making copies of any materials,' Judicial Administration and Technical Amendments Act of 2008, Pub. L. No. 110-406, § 6, 122 Stat. 4291, 4292 (emphasis added), to reflect the idea that "electronically produced information [is] [re]coverable in court costs.") (citing 154 Cong. Rec. H10270, H10271 (daily ed. Sept. 27, 2008) (statement of Rep. Zoe Lofgren)); BDT Prods., Inc. v. Lexmark Int'l, Inc., 405 F.3d 415, 420 (6th Cir. 2005) ("[E]lectronic scanning and imaging could be interpreted as 'exemplification and copies of papers.'"). Although Ricoh's invoices provide limited information about "image capture," C&D sufficiently explained in its brief that Ricoh's image capture involved "copying to a CD the documents provided to Azdel in response to its discovery requests." Dkt. No. 273, p. 5. Because relaying discovery information on CDs is analogous to copying, Azdel's costs of "image capture" are taxable.

The taxability of Bates labeling [*33]  is a closer issue. The Fourth Circuit has not had an opportunity to decide whether electronic Bates labeling is a taxable cost under § 1920(4). Mezu v. Morgan State Univ., 775 F. Supp. 2d 801, 807 (D. Md. 2011) ("[T]here is currently no direction within the Fourth Circuit on whether these costs should be included in the 'reasonable' costs associated with copying documents for discovery production."). The circuits have split on whether Bates stamping is a taxable cost. Bisbano v. Strine Printing Co., No. CA 10-358ML, 2013 WL 3246089, at *2 (D.R.I. June 26, 2013) ("The First Circuit has not addressed whether the cost associated with Bates labeling of documents is a recoverable cost under 28 U.S.C. § 1920. Those courts that have addressed this issue are divided."); compare Envirocorp Well Servs., Inc. v. Camp Dresses & McKee, Inc., No. IP99-1575-C-T/G, 2001 WL 1112114, at *3 (S.D. Ind. Aug. 6, 2001) (taxing Bates labeling); Karsian v. Inter-Regional Fin. Group, Inc., 13 F.Supp.2d 1085, 1093 (D. Colo. 1998) (same); with Powell v. The Home Depot, U.S.A., Inc., No. 07-80435-CIV, 2010 WL 4116488, at *16 (S.D. Fla. Sept. 14, 2010) report and recommendation adopted, No. 07-80435-CIV, 2010 WL 4102933 (S.D. Fla. Oct. 18, 2010) (refusing to tax Bates labeling); Baxter Int'l, Inc. v. McGaw, Inc., No. 95-2723, 1998 WL 102668, at *3 (N.D. Ill. Mar. 3, 1998) (same).

Courts within the Fourth Circuit have taxed electronic Bates labeling. The Eastern District of Virginia has held that "although the costs of collecting, storing, and extracting electronically stored information may not be taxable, the costs of converting that information into the [*34]  agreed-upon format and electronically Bates stamping it are analogous to copying costs, and therefore are taxable." Nobel Biocare USA, LLC v. Technique D'usinage Sinlab, Inc., No. 1:12CV730 LMB/TCB, 2013 WL 819911, at *6-7 (E.D. Va. Mar. 4, 2013), appeal dismissed (Aug. 8, 2013); cf. D& B Countryside, LLC v. Newell, 217 B.R. 72, 80 (Bankr. E.D. Va. 1998) (denying costs for photocopying and Bates stamping documents produced in discovery). The District of Maryland taxes Bates stamping fees as well. Mezu v. Morgan State Univ., 775 F. Supp. 2d 801, 807 (D. Md. 2011). I find these districts' approaches persuasive. Moreover, Azdel requested Bates stamping, which tilts the balance for taxing in favor of the party who fulfilled the request. Alzheimer's Inst. of Am. Inc v. Elan Corp. PLC, No. C-10-00482-EDL, 2013 WL 8744216, at *5 (N.D. Cal. Jan. 31, 2013) ("[S]canning and converting the database documents into .TIFF format, Bates stamping, OCR, and loadfile generation are taxable costs where the other party requests documents in that format.").

Accordingly, I recommend awarding C&D the full cost of Bates labeling and electronic image capture, totaling to $395.61.

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