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Race Tires America, Inc., A Division of v. Hoosier Racing Tire Corp.

May 6, 2011

RACE TIRES AMERICA, INC., A DIVISION OF SPECIALTY TIRES OF AMERICA, SPECIALTY TIRES OF AMERICA, INC., SPECIALTY TIRES OF AMERICA (PENNSYLVANIA), INC., AND SPECIALTY TIRES OF AMERICA (TENNESSEE), LLC, PLAINTIFFS,
v.
HOOSIER RACING TIRE CORP., AND DIRT MOTOR SPORTS, INC., D/B/A WORLD RACING GROUP, DEFENDANTS.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM OPINION AND ORDER OF COURT

Before the Court for disposition are the following:

(i) the MOTION TO APPOINT SPECIAL MASTER REGARDING E-DISCOVERY ISSUES filed by Plaintiffs Race Tires America, Inc., a Division of Specialty Tires of America, Inc.; Specialty Tires of America, Inc.; Special Tires of America (Pennsylvania), Inc.; and Specialty Tires of America (Tennessee), LLC (hereinafter referred to by the name of the parent company, "STA") (Document No. 290), the BRIEF IN OPPOSITION TO THE MOTION TO APPOINT SPECIAL MASTER REGARDING E-DISCOVERY ISSUES filed by Defendant Dirt Motor Sports, Inc. d/b/a World Racing Group (Document No. 291); and the OPPOSITION TO THE MOTION TO APPOINT SPECIAL MASTER REGARDING E-DISCOVERY ISSUES filed by Defendant Hoosier Racing Tire Corp. (Document No. 292); and

(ii) the MOTION TO REVIEW TAXATION OF COSTS, with brief in support filed by STA (Document Nos. 285 and 286), the OPPOSITION TO THE MOTION TO REVIEW TAXATION OF COSTS filed by Defendant Hoosier Racing Tire Corp. (Document No. 287); and the BRIEF IN OPPOSITION TO THE MOTION TO REVIEW TAXATION OF COSTS filed by Defendant Dirt Motor Sports, Inc. d/b/a World Racing Group (Document No. 288).

After the close of briefing on the Motion to Review Taxation of Costs, both Plaintiff and Defendant Hoosier Racing Tire Corp. have filed Notices of Supplemental Authorities. (See Document Nos. 294, 295, and 296.)

A. MOTION TO APPOINT SPECIAL MASTER REGARDING E-DISCOVERY ISSUES

STA has requested that the Court appoint a Special Master to "address the technical issues regarding the types of e-discovery fees claimed by defendants [ ] and the reasonableness and necessity of" the e-discovery fees claimed as "costs" by Defendants. Both Defendants object to the request.

The Court finds STA‟s request to appoint a Special Master is unwarranted. Federal Rule of Civil Procedure 53(a)(1)(B) provides that a court may appoint a special master only to: "make or recommend findings of fact on issues to be decided without a jury if appointment is warranted by: (i) some exceptional condition . . . ." (emphasis added). The Court finds that no such exceptional condition exists to warrant the appointment of a Special Master.

STA argues that the assessment of e-discovery costs requires a level of technical knowledge only available through an e-discovery special master. The Court does not agree. The only "special expertise" required to resolve STA‟s Motion to Review Taxation of Costs is an understanding that e-discovery has become a necessary and sometimes costly function of civil litigation. The Court is familiar with the costs associated with e-discovery and the techniques used by the parties to capture relevant information.

However, the Court is very cognizant that in certain cases and under certain circumstances the appointment of a Special Master is appropriate in cases involving electronic discovery. To that end, on November 16, 2010, the Board of Judges of this Court approved the establishment of a list attorneys with expertise in electronic discovery to serve as Special Masters upon appointment by the Court. Effective March 15, 2011, the Court‟s Electronic Discovery Special Masters program was fully implemented. This program, however, is designed for the appointment of Special Masters at the beginning of the discovery process, not post-discovery during costs assessment. Additionally, the program was not in effect at the commencement of discovery in this case.

Turning back to the instant case, discovery of electronically stored information was considered in depth by the attorneys in this case before discovery commenced and the attorneys agreed upon and submitted an extensive proposed e-discovery Case Management Order, which the Court essentially adopted at the behest of counsel. As reflected in the Case Management Order, the attorneys were significantly involved in orchestrating their case and their e-discovery requirements.

E-discovery commenced and continued in accordance with the agreement of the parties and costs were incurred accordingly. Numerous discovery disputes occurred about the way and timing of production of documents, as later described herein, but the war waged on. Throughout the litigation, the Court attempted to rule on the discovery issues in conformance with the original understanding of the parties as expressed by counsel in the Case Management Order.

The Court finds that appointment of a Special Master at this late date in the litigation to review the reasonableness of the costs actually incurred by the parties would be unfair and unreasonable as the costs incurred by the parties were mandated by one another and very difficult to control due to the demands of the parties.

Although this Court did not have a Special Master program at the time and the discovery costs incurred were not predictable or discussed with the Court in advance, in hindsight, a Special Master may have been advisable, but not practicable under the circumstances, especially with the lawyers in mutual control of the e-discovery process at the outset.

The Court finds and rules that the appointment of a Special Master for a retrospective after-the-fact review of the e-discovery costs actually incurred by the prevailing parties in this case would not be reasonable. The technical and legal issues have been fully briefed by the parties and addressed by the Clerk of Court, and, therefore, will be reviewed de novo by this Court. The Court concludes that referring this case to a Special Master at this late date would only delay the ultimate resolution of the matter at hand and bring about considerable added expenses for all involved, without necessarily resulting in any corresponding benefit to the parties.

B. MOTION TO REVIEW TAXATION OF COSTS

Factual and Procedural History

The facts and procedural history of this case are well known to the parties and previous opinions issued by this Court and the United States Court of Appeals for the Third Circuit detail the background relevant to this antitrust lawsuit. Thus, it is not necessary for the Court to revisit same here. Suffice it to say that STA, a tire supplier, initiated this litigation on September 25, 2007 when it filed a five-count Complaint against defendant Hoosier Racing Tire Corp. ("Hoosier"), a tire supplier competitor. Less than a month later, STA filed an Amended Complaint in which it named Dirt Motor Sports, Inc. d/b/a World Racing Group ("DMS"), a motorsports racing sanctioning body, as an additional defendant.

Plaintiffs‟ claims arose out of the adoption of a so-called "single tire rule" by various sanctioning bodies in the sport of dirt oval track automobile racing, as well as the related exclusive supply contracts between some of these sanctioning bodies and Hoosier. STA claimed that it was owed damages in excess of $80 million*fn1 and that it was entitled to attorneys‟ fees.

On September 15, 2009, the Court granted summary judgment in favor of Hoosier and DMS finding that STA had failed to demonstrate that it had sustained an antitrust injury.

On October 23, 2009, STA filed a timely appeal to the United States Court of Appeals for the Third Circuit. On July 23, 2010, the Court of Appeals issued a fifty-one (51) page, precedential Opinion in which it affirmed this Court‟s rulings in favor of Hoosier and DMS.*fn2

On August 6, 2010, STA petitioned the appellate court for rehearing and rehearing en banc, which request was denied by the appellate court on August 18, 2010.

Hoosier and DMS each filed a Bill of Costs in which the majority of amounts requested involve e-discovery costs. Hoosier sought a total of $194,147.31, of which $143,007.05 was e-discovery costs. DMA sought a total of $274,765.13, of which $246,101.41*fn3 was e-discovery costs. STA filed objections to each Bill, the primary objection being that these costs were not taxable pursuant to Title 28, United States Code, § 1920(4), as the statute does not authorize e-discovery costs. After careful consideration of the submitted Bills of Costs, the objections and replies, and a review of the record, the Clerk of Court on January 24, 2011, issued his Taxation of Costs (Document No. 284). The Clerk of Court determined that Hoosier‟s e-discovery costs should be taxed in the reduced amount of $125,580.55 and that DMS‟s e-discovery costs should be taxed in the reduced amount of $241,788.81.

On January 30, 2011, STA filed its Motion to Review Taxation of Costs (Document No. 285), to which both Defendants have responded in opposition (Document Nos. 287 and 288), and STA has filed a Reply Brief (Document No. 289). STA seeks review of only one category of taxed costs that the Clerk of Court allowed: the e-discovery costs.

Standard of Review

The taxation of costs by the clerk of court is subject to de novo review by the district court. Reger v. Nemours Found. Inc., 599 F.3d 285, 288 (3d Cir. 2010).

Federal Rule of Civil Procedure 54(d) provides that "[u]nless a federal statute, these rules, or a court order provides otherwise, costs -- other than attorney‟s fees -- should be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). The Rule, as stated, is mandatory, and creates a "strong presumption" that all costs authorized for payment will be awarded to the prevailing party. Reger v. Nemours Found. Inc., 599 F.3d 285, 288 (3d Cir. 2010) (quoting In re Paoli R.R. Yard PCB Lit., 21 F.3d 449, 461 (3d Cir. 2000)). "The losing party, therefore, bears the burden of showing why costs should not be taxed against it." Adams v. Teamsters Local 115, 678 F.Supp.2d 314, 324 (E.D. Pa. 2007).

The court may assess the following costs:

(1) Fees of the clerk and marshal;

(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;

(5) Docket fees under section 1932 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation ...


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