Loser Pays Most Electronic Discovery Costs? Not So Fast

A recent opinion vacating most of the electronic discovery costs affirmed inRace Tires II provides clarity in the Third Circuit as to the limited scope of electronic discovery costs recoverable by a prevailing civil party.

The rapidly evolving area of the law regarding whether a prevailing party can recoup electronic discovery costs recently reversed course in the Third Circuit. In Race Tires America, Inc. v. Hoosier Racing Tire Corp. (Race Tires III),¹ the U.S. Court of Appeals for the Third Circuit sought to provide "definitive guidance" on "the extent to which electronic discovery expenses are taxable" and vacated the majority of a $365,000 award of electronic discovery–related costs. The court of appeals found that less than 10% of the costs the district court awarded for electronic discovery charges were in fact taxable, eliminating more than $335,000 of the award. The court of appeals allowed recovery only for the costs it deemed equivalent to "making copies"