Court Awards Defendant Over $750K in TAR Costs Shifted to the Plaintiff: eDiscovery Case Law

We now know the amount that the Court has awarded to Spirit for TAR costs shifted to the plaintiff Lawson in this continuing dispute over discovery process and costs associated with it.

In Lawson v. Spirit Aerosystems, Inc., No. 18-1100-EFM-ADM (D. Kan. October 29, 2020), Kansas Magistrate Judge Angel D. Mitchell, having previously granted the defendant’s motion to shift the expenses it incurred in connection with TAR of approximately 322,000 documents (covered here), granted in part and denied in part the defendant’s Application for TAR Expenses, awarding the defendant $754,029.46 in TAR expenses (out of $791,700.21 sought).  Judge Mitchell also awarded the defendant its expenses incurred in connection with the application, allowing the defendant to file a renewed application with the required fee detail.

Case Background

The previous history of the case (including the motion previously granted by Judge Mitchell for cost shifting) is briefly synopsized here. After the parties could not reach agreement regarding the amount of those expenses, the defendant filed this application, broken down as follows:

  • $455,272.71 paid to its eDiscovery vendor;
  • $172,871.50 and $163,556 in attorneys’ fees paid to two different firms; and
  • $83,000 in costs and fees incurred leading up to and preparing the current application.

The plaintiff opposed the defendant’s application, arguing many of its expenses were unreasonable or outside the scope of the June 18th order and contended that reasonable TAR expenses should be reduced to no more than $330,000.  The plaintiff also contended that the defendant should have used a TAR 1.0 tool instead of the TAR 2.0 tool that it did use, that the eDiscovery vendor “conducted the first-level review at an unreasonably slow pace” and charged above-market rates and made various objections to the amount billed for various support activities such as training, downtime, meetings, management, metrics, privilege log preparation, project management fees, processing, hosting and production fees.  The plaintiff also objected to various attorney’s fees as well.

Judge’s Ruling

Judge Mitchell began by noting that since her June 18th order: “the parties’ cross motions for summary judgment reinforced the court’s determination that the TAR expenses were disproportionate to the needs of this case” as the defendant had noted in its summary judgment response brief that “[o]f the 95 exhibits Lawson submitted in connection with his Motion for Summary Judgment, only one is from Spirit’s TAR production.”

With regard to the plaintiff’s contention regarding the defendant’s TAR approach, Judge Mitchell stated: “The court is unpersuaded by Lawson’s argument that Spirit’s document review costs are unreasonable because Legility used a TAR 2.0 tool rather than a TAR 1.0 tool” and she also noted that “Lawson agreed to Spirit using (Legility’s tool) Predict” and that neither the plaintiff nor its eDiscovery vendor raised the issue of using TAR 1.0 beforehand.

As for the pace of document review, the plaintiff contended the eDiscovery vendor reviewed documents at an “unreasonable” rate of 15 per hour, but Judge Mitchell determined the pace to be “approximately 26 documents per hour”.  Noting the types of documents being reviewed (reported by the defendant to be “numerous lengthy presentations, multi-sheet Excel spreadsheets with sensitive financial data, technical data, specifications, and information, confidential information belonging to Spirit’s customers and/or subject to non-disclosure agreements, and highly sensitive business and strategy information.”), Judge Mitchell stated: “Under these circumstances, a 26-document-per-hour rate is not unreasonable. Indeed, it is not far from 30-document-per-hour rate that {the plaintiff’s expert} says is ‘typical’ for commercial litigation involving lengthy, complex documents.”  Judge Mitchell also found the review rates of the eDiscovery vendor to be “reasonable”, noting that “[c]ontract attorney rates vary widely”.

Judge Mitchell also found the plaintiff’s arguments regarding training, downtime, meetings, management, metrics, privilege log preparation to be “unpersuasive”.  She found the plaintiff’s objections regarding project management fees to be “largely without merit”, deducting $4,450 from the amount sought by the defendant for those fees. She also ruled that “[t]he processing, hosting, and production expenses that Spirit now seeks are properly allocated to Lawson under the June 18 order.”  As a result, the amount awarded for eDiscovery vendor services as $449,999.21.

Judge Mitchell also approved most of the attorney’s fees requested, awarding $304,030.25 out of the $336,427.50 requested amount.

So, what do you think?  Do these costs seem excessive for TAR related costs associated with approximately 322,000 documents?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by my employer, my partners or my clients. eDiscovery Today is made available solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Today should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

2 comments

  1. Thanks, Jeremy! I knew you’d have something to say about this one. Additional thoughts about the scorecard (with a link to an article and the actual proposed scorecard) with Christine and the co-author Michelle Six are also available. Part 1: https://ediscoverytoday.com/2020/05/06/an-interview-with-the-authors-of-a-new-tar-framework-ediscovery-best-practices/, Part 2: https://ediscoverytoday.com/2020/05/07/an-interview-with-the-authors-of-a-new-tar-framework-part-two-ediscovery-best-practices/

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