The Award of E-Discovery Costs to the Prevailing Party: An Analog Solution in a Digital World

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Against this backdrop of the spiraling cost and burden of the discovery process, an issue is percolating through the lower and intermediate courts—the recoverability of e-discovery expenses as a component of the costs awarded to the successful party under Rule 54(d). Two divergent approaches have emerged in the judicial opinions and in the limited scholarship addressing the application of Rule 54(d) to e-discovery costs. The first contingent contends that Rule 54(d) is only intended to reimburse the prevailing party for a small subset of the total costs that the party has incurred. These jurists and scholars reason that Congressional intent and Supreme Court authority so limit the intended scope of the Rule so as to advance the policies underlying the American Rule (providing that each party bears its attorney’s fees). The other camp argues for broad transfer of costs to the unsuccessful party, arguing that such transfer would help incentivize litigants to be more efficient and measured in the manner in which they conduct discovery. This article advocates for a third option—a middle ground between these two polar positions that vests the courts with discretion to balance the competing concerns and award the prevailing party a greater portion of its costs in appropriate circumstances. Such an approach would potentially influence the parties to be more measured in their e-discovery requests, and would equip the courts with the tools to allocate those costs appropriately among the parties at the end of an adjudication. Given the weight of case law that seems to be settling on the narrow interpretation of Rule 54(d), this proposal would likely require amendment of the rule, but the Supreme Court has not been reluctant to propose rules changes over the last eight years, and Congress has allowed each proposed change to go into effect.