Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Wireless carriers can recover discovery costs in text messaging price fixing action, (Sep 3, 2014)

By Linda O’Brien, J.D., LL.M.

In multi-district litigation against four of the nation's largest wireless carriers for allegedly conspiring to fix the price of pay-per-use (PPU) text messages, certain costs incurred by the defendants for making copies of documents for production during discovery were recoverable, the federal district court in Chicago has ruled. Thus, the defendants’ motions for costs were granted in part and denied in part (In re Text Messaging Antitrust Litigation, September 2, 2014, Kennelly, M.).

A group of consumers who purchased text messaging services on a fee-per-text message basis filed suit against four national wireless communications service providers—AT&T, Sprint, T-Mobile, and Verizon Wireless. The plaintiffs alleged that the wireless carriers, along with wireless trade association CTIA, entered into a conspiracy to fix prices for text messaging services sold in the United States in violation of Section 1 of the Sherman Act. In May 2014, the defendants were granted summary judgment on the consumers’ antitrust claims. Subsequently, each defendant submitted a bill of costs seeking recovery of various expenses incurred during the litigation.

Copying costs. The court determined that the defendants adequately substantiated their requested copying costs. Each defendant provided an affidavit that their costs were limited to those incurred for the documents actually produced to the plaintiffs. They were not obligated to justify their costs on a document-by-document basis, since it would be onerous to precisely identify each document copied during the litigation in light of the low cost of copies and high cost of attorney time.

E-discovery. T-Mobile was not entitled to recover processing services for electronically stored information (ESI), since the services lead up to the actual production and did not constitute the production of copies for discovery, according to the court. T-Mobile was also not entitled to reimbursement for charges relating to insuring that documents had optical character recognition (OCR) because making a document readable by a computer was not part of “making copies.”

CTIA could not recover expenses for software packages that were used to produce its electronic documents for the litigation. The software was used for convenience and was not reasonably necessary for making copies for discovery. AT&T and Verizon were not entitled to recover costs for data processing since the processes were related to preparing and producing e-discovery and did not constitute “making copies.” However, Sprint could recover costs for the creation of TIFF files as the process of converting native files to TIFF constituted making a copy.

Transcript fees. The defendants were not entitled to recover costs for more than one copy of the numerous deposition transcripts and costs for both a paper transcript and video recording of a deposition. However, the costs for expediting the production of certain deposition transcripts to meet discovery deadlines and the costs of copies transcripts of meet-and-confer discussions between the parties that were intended for use in court were recoverable.

Request for stay. Finally, it was not reasonable to postpone consideration of the defendants’ motion for costs. In rejecting the plaintiffs’ argument that judicial resources would be conserved by deferring consideration of the defendants’ bills for costs since the plaintiffs may win on appeal, the court noted that prompt action on the defendants’ motions promoted judicial economy. Any appeal from an order for costs could be consolidated with the appeal on the merits and heard at the same time. However, payment of the award of costs was stayed until the conclusion of the plaintiffs’ appeal.

The case is No. 08 C 7082 (MDL No. 1997).

Attorneys: Fred T. Isquith (Wolf Haldenstein Adler Freeman & Herz LLP) for Jim Morris, Aircraft Check Services Co., and Premiere Investment Consulting. Dan K. Webb (Winston & Strawn LLP) for Verizon Wireless. Charles H. R. Peters (Schiff Hardin LLP) for T-Mobile U.S.A., Inc. Dane H. Butswinkas (Williams & Connolly LLP) for Sprint Nextel Corp. Brian A. McAleenan (Sidley Austin LLP) for AT&T Mobility LLC.

Companies: Aircraft Check Services Co.; Premiere Investment Consulting; Verizon Wireless; T-Mobile U.S.A., Inc.; Sprint Nextel Corp.; AT&T Mobility LLC

Cases: Antitrust IllinoisNews