Beware BIPA: Biometric Privacy Act Has Bite

• Author: Grant H. Hackley
• Pages: 22-23

Published in Litigation News Volume 47, Number 2, Winter 2022. © 20 22 by the American Bar A ssociation. Repro duced with permissio n. All rights reser ved. This informati on or any portion the reof may not be copie d or disseminated in any

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Prevailing Parties

Recover Some, Not

All, E-discovery

Costs

By William H. New man, Litigation

News Contributing Editor

A party that prevails in federal court

may be entitled to recover some e-dis-

covery costs, but only those directly

related to making copies. The U.S.

Court of Appeals for the D.C. Circuit is

the latest to weigh in on which tasks

constitute “the costs of making copies”

for the purpose of recovery pursuant

to 28 U.S.C. § 1920(4) (section 1920),

the statute that governs cost awards in

federal courts. It held in United States

ex rel. Barko v. Halliburton that section

1920 applies to electronic f‌ile conver-

sion costs, but not to hosting, orga-

nizing, or Bates stamping documents.

ABA Litigation Section leaders believe

this decision reveals that section 1920 is

out of touch with the practical realities

of e-discovery.

In Barko, defendant KBR defeated a

False Claims Act suit that it had inf‌lated

costs and accepted kickbacks while

administering military contracts. The

litigation was lengthy and contentious,

with 2.4 million pages of documents

produced. Accordingly, the district court

awarded KBR more than $100,000 in

costs pursuant to section 1920.

When the plainti appealed the

cost award, KBR argued that it was

entitled to reimbursement of more than

$65,000 for “the costs of making cop-

ies.” Part of its argument was that the

Judicial Administration and Technical

Amendments Act of 2008 (the 2008

Act) expanded section 1920 to include

electronic document discovery costs

when it replaced the word “papers”

with “materials.” The court held that the

2008 Act did not expand section 1920’s

application beyond “making copies”

that were “necessarily obtained for use

in the case.”

The court rejected taxation of costs

associated with “converting f‌iles from

their native formats into a format com-

patible with an e-discovery hosting

platform,” e-discovery hosting plat-

form subscription fees, “organizing,

keyword-searching, and Bates stamp-

ing” documents, and costs arising from

“drafting production cover letters and

shipping discovery materials to oppos-

ing counsel.”

The Barko decision aligns with sev-

eral other recent interpretations of

section 1920. For example, in CBT Flint

Partners, LLC v. Return Path, Inc., the

U.S. Court of Appeals for the Federal

Circuit vacated an award for more than

$240,000 in e-discovery costs because

some of the tasks (such as deduplica-

tion and keyword searching) were not

“the 21st Century equivalent of making

copies.” And in Race Tires America v.

Hoosier Racing Tire Corp., the U.S. Court

of Appeals for the Third Circuit vacated

an order taxing all of one prevailing par-

ty’s e-discovery costs, which exceeded

$240,000, for the same reason.

Litigation Section leaders do not

believe section 1920 has kept pace

with technological advancements in

discovery practice. “E-discovery and

electronic f‌ilings require dierent pro-

cesses than paper-based discovery and

practices,” observes Eleni C. vanRoden,

Bel Air, MD, Newsletter Subcommittee

editor of the Section’s Solo & Small

Firm Committee. “Section 1920 has

failed to bring the policy considerations

underlying taxation of costs into the

21stcentury, and the Barko court was

in the awkward position of f‌iguring

out which e-discovery functions mimic

more traditional functions,” says Marc

J. Zucker, Philadelphia, PA, cochair of

the Section’s Commercial & Business

Litigation Committee.

Some Section leaders believe that

the taxation of e-discovery costs

may aect settlement negotiations.

For example, it may now make more

sense for a litigant to ask an adversary

to consider settlement before incur-

ring taxable e-discovery costs, sug-

gests Ronald J. Hedges, New York, NY,

cochair of the Section’s Pretrial Practice

& Discovery Committee. Decisions like

Barko will “assist parties and attorneys

to be more realistic about their case

and the potential outcomes of it,” notes

vanRoden.

Decisions like Barko may put smaller

or less wealthy parties at a disadvan-

tage because it may pressure them “to

go on the oensive, seeking protec-

tive orders or trying to get the larger

businesses that are their adversaries

to share or cover e-discovery costs,”

notes Richard D. Rivera, Jacksonville,

FL, Membership Chair of the Section’s

Young Advocates Committee.

Beware BIPA:

Biometric Privacy

Act Has Bite

By Grant H. Ha ckley, Litigation News

Associa te Editor

A business is entitled to insurance cov-

erage for claims arising from violations

of the Illinois Biometric Information

Privacy Act (BIPA), even though the

policy excluded coverage for violations

of statutes, according to the Illinois

Court of Appeals. In West Bend Mutual

Insurance Co. v. Krishna Schaumburg

Tan, Inc., the court armed summary

judgment in favor of an insured seek-

ing coverage for a proposed class suit

asserting technical breaches of privacy

protections. ABA Litigation Section

leaders suggest, however, that the play-

ing f‌ield is changing for biometric infor-

mation breach claims, that insurance

coverage is case specif‌ic, and that the

end result is highly dependent upon

jurisdiction.

In 2008, Illinois enacted BIPA to

grant consumer privacy protections

for collected biometric information.

Among the protections aorded is a

requirement that written consent be

obtained before information is shared

with outside parties. In West Bend,

Klaudia Sekura brought a putative class

action against Krishna Schaumburg

Tan, a franchisee of a tanning salon, for

a technical BIPA violation. Ms. Sekura

claimed that when she registered for

membership, Krishna collected her

f‌ingerprint for use as a biometric key

to allow her access to the facility and

shared that biometric information with

a third-party vendor without f‌irst gain-

ing her written consent.

West Bend, Krishna’s insurer,

defended Krishna under a reservation

of rights and brought a declaratory

action seeking to deny coverage. West

Bend argued that the BIPA violation did

not constitute a personal injury under

the policy and also that the policy’s

exclusion for violations of statutes gov-

erning communications barred cover-

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