United States District Court, E.D. Virginia, Alexandria Division
UNITED STATES OF AMERICA ex rel., JON H. OBERG, Plaintiff,
NELNET, INC., ET AL., Defendants.
M. HILTON, UNITED STATES DISTRICT JUDGE.
MATTER comes before the Court on Defendant's Bill of
Costs (Dkt. 981) and Motion to Strike (Dkt. 992}.
Oberg (Relator) brought this suit against Pennsylvania Higher
Education Assistance Agency (Defendant) and numerous other
student loan financing and related companies under the False
Claims Act. Relator alleged that the defendants fraudulently
claimed hundreds of millions of dollars in federal
student-loan interest-subsidy payments from 2002 to 2006.
Relator alleged that Defendant used pre-October 1, 1993
tax-exempt bond proceeds to unlawfully make or buy additional
loans that were guaranteed the minimum 9.5% yield, which was
prohibited by the 1993 repeal of the 9.5% Special Allowance
Payments and regulations put in place by the Department of
Education that were meant to phase out the Payments.
found in favor of Defendant in December 2017 and the Fourth
Circuit affirmed that verdict in January 2019. Defendant now
seeks its Bill of Costs affirmed.
prevailing party may recover costs, other than attorney's
fees, under Fed.R.Civ.P. 54(d)(1); however, this rule does
not give a district court "unrestrained discretion to
tax costs to reimburse a winning litigant for every expense
he has seen fit to incur in the conduct of his case."
Farmer v. Arabian Am. Oil Co., 379 U.S. 227, 235
(1964). Instead, a court may tax only those costs authorized
by statute. See Crawford Fitting Co. v. J.T. Gibbons,
Inc., 482 U.S. 437, 441-42 (1987). The statute for
general taxation of costs, 28 U.S.C. § 1920, provides
six categories of costs that may be taxed: (1) clerk and
marshal fees, (2) printed or electronically recorded
transcript fees, (3) printing and witness fees, (4)
exemplification and copying fees, (5) docket fees under 28
U.S.C. § 1923, and (6) compensation of court appointed
experts, interpreters, and special interpretation services.
Within those categories, "the court has wide latitude to
award costs." See, e.g., Francisco v.
Verizon S., Inc., 272 F.R.D. 436, 441 (E.D. Va. 2011).
prevailing party "bears the burden of showing that the
requested costs are allowable under § 1920."
Francisco, 272 F.R.D. at 441 (citing Cofield v.
Crumpler, 179 F.R.D. 510, 514 (E.D. Va. 1998)). Once the
prevailing party has met this burden, the burden shifts to
the non-prevailing party to identify any improprieties.
Id. A court "must justify its decision [to deny
costs] by 'articulating some good reason for doing
so.'" Teague v. Bakker, 35 F.3d 978, 996
(4th Cir. 1994) (quoting Oak Hall Cap and Gown Co. v. Old
Dominion Freight Line, Inc., 899 F.2d 291, 296 (4th Cir.
raises objections to nearly all of the costs sought. Relator
challenges the amount of (1) pro hac vice fees; (2) costs for
printing, scanning, and copying; (3) costs of witnesses; (4)
costs and fees related to electronic discovery (ESI); and (5)
deposition related costs. Each will be addressed seriatim.
begin, Relator challenges the $675.00 of pro hac vice fees
that Defendant incurred. The parties agree that pro hac
vice fees are recoverable under the statute, 28 U.S.C.
§ 1920(1). See, e.g.. Synergistic Intern.,
L.L.C. v. Korman, 2:05-cv-49, 2007 WL 517676 *2 (E.D.
Va. Feb. 8, 2007). Relator, however, states that there were
numerous motions to be admitted pro hac vice by
attorneys that did not make actual appearances in court, in
fact one of the attorneys that received admission never
appeared in court or at a deposition. As a result, they
believe that only the four attorneys that appeared during the
merit phase of the case should have their costs reimbursed.
Defendant responds by stating that while Defendant had nine
attorneys, Relator had eight, thus showing the complex nature
of the case and the need for significant man-power. The Court
finds that the entirety of the amount sought for pro hac
vice fees is reasonable and will approve them.
next challenges the costs for copying, scanning, and printing
which Defendant claims was $39, 544.10. Such costs are
allowed under the statute. 28 U.S.C. § 1920(4). Relator
argues that the invoices are not properly broken down to
ensure that the salaries of those doing the copying are not
included, see Taxation of Costs Guidelines at 4,
and, that as some expenses were incurred during the pendency
of appeals, they were not reasonably necessary at the time.
The Court recognizes that the modern copying of electronic
documents reguires certain work to be performed that was not
contemplated when Section 1920 was originally enacted. Thus,
some portion of the fees for copying must include the
technical work required to effectively produce the documents
in order to appropriately compensate the prevailing party.
the Court notes that it is not possible for the Court to
fully analyze whether costs for copying were reasonably
necessary while an appeal was pending as there are numerous
considerations that go into managing a case and the time and
resources expended in litigation. Also, the copying was
likely reasonably necessary for the case and thus the timing
may only have been delayed and the cost not eliminated.
Therefore, the Court will not attempt to second guess the
timing of copying or scanning as the case was ongoing even if
on appeal. As neither of these challenges demonstrate
impropriety in seeking costs for copying or printing fees,
the Court will approve the $39, 544.10 sought by Defendant.
Relator then moves to challenge Defendant's request for
$2, 121.69 in witness related costs and fees. Such fees are
generally taxable under the statute. 28 U.S.C. §
1920(3). Relator contends that the costs sought in this
instance are exorbitant. Defendant does not vigorously argue
the point and offered to reduce its request to $962.02 which
accounts for the witness fees and uses the federal per diem
rates for their travel related expenses. The Court finds this
reduction reasonable and will approve $962.02 in witness
related costs and fees.
Court next turns its attention to Relator's challenge to
Defendant's e-discovery (ESI) costs of $338, 248.84 which
it seeks under the category of copying and exemplification of
documents necessary for the case, 28. U.S.C. § 1920(4).
Relator raises two challenges to these costs: (1) that costs
for hosting and processing ESI are not taxable costs and (2)
that the costs were incurred while the case was on appeal due
to Defendant's rejected contention that it was an
"arm of the state."
associated with "converting electronic files to
non-editable formats, and burning the files onto discs"
are taxable under Section 1920(4). Country Vintner of N.
Carolina, LLC v. E. &J. Gallo Winery, Inc., 718 F.3d
249, 260 (4th Cir. 2013). This, however, does not extend to
actions such as "flattening," "indexing,"
data extraction, hosting, Bates Stamping, or other ESI
processing costs. Id. at 258-261. Here, Defendant
has sought costs for "Discovery Services" which the
invoices provided show to mean "Active Hosting,"
"Processing for Review," "User Access,"
and "Data Filtering" among other line items. These
types of costs are clearly excluded from the realm of copying
and exemplification by Country Vintner and many
courts have so found. See, e.g., BMG Rights
Mgmt. (US) LLC v. Cox Commc'ns, Inc., 234 F.Supp.3d
760, 782 (E.D. Va. 2017) stating that holding of Country
Vintner "does not extend to costs associated with
ESI processing"); Amdocs (Isr.) Ltd. v. Qpenet
Telecom, Inc., No. 1:10-cv-910, 2013 WL 1192947, at *7
(E.D. Va. Mar. 21, 2013) (denying costs for hosting fees and
other ESI costs); Francisco, 272 F.R.D. at 446
(holding that costs for ESI processing are not taxable unless
they involve direct copying of documents).
attempts to avoid the exclusion of these costs by arguing
that Relator asked for the documents to be produced in a
certain format, and that is why the costs were incurred. This
argument fails. In Country Vintner, the Fourth
Circuit recognized that parties were generally meant to bear
their own costs in complying with discovery obligations. 718
F.3d at 261 (quoting Oppenheimer Fund, Inc. v.
Sanders, 437 U.S. 340, 358 (1978)). This presumption is
not disturbed by a ...