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<b><i>Online Extra:</b></i> Law Firm Takes e-Discovery Company to Court in $3M Fee Fight
A Washington litigation boutique is embroiled in a fight with an electronic-discovery company over who should pay $3 million in fees for e-discovery services that a federal judge found 'unreasonable.'
The firm, Kotchen & Low,'filed a lawsuit'on Feb. 10 in the U.S. District Court for the District of Columbia against Precision Discovery Inc., asking the court to declare that Precision couldn't take Kotchen to arbitration over the $3 million bill.
The firm's relationship with Precision began in 2012. Kotchen at the time was'and is still is'co-lead counsel for airline consumers suing Delta Air Lines Inc. and AirTran Airways Inc. in multidistrict litigation in Atlanta over an alleged baggage fee-fixing scheme. Delta was in trouble with the judge for mishandling evidence in the case. The judge ordered the plaintiffs to hire an expert to review the data at issue, at Delta's expense.
Kotchen hired Precision's computer-forensics division to review Delta's data and computer equipment. In 2013, the firm hired Precision's separate e-discovery unit to analyze Delta's computer files.
Kotchen said its contract with Precision's computer forensics team had an arbitration clause, but that the firm never signed such an agreement for the e-discovery work. According to Kotchen, the firm agreed to pay $27,300 for Precision to process 70 gigabytes of data. Instead, Precision processed thousands of gigabytes, pushing the fees into the millions.
The final bill for Precision's e-discovery work came to nearly $5 million. Delta balked. In September 2013, U.S. District Judge Timothy Batten Sr., presiding in the airline case,'cut those fees in half. Batten said Delta was partly to blame for the amount of work that Precision had to do, but that Precision was inefficient and performed unnecessary work.
Batten wrote that he had hoped that hiring an e-discovery team to review Delta's files would end the discovery problems in the case. 'Evidently,' he said, 'the road to discovery purgatory is paved with good intentions.'
According to Kotchen's lawsuit, Precision filed an arbitration against the firm in September 2014 seeking the $2.4 million that Batten declined to order Delta to pay, plus $485,558 in additional charges. The arbitration is pending.
Steven Cohen of Wachtel Missry in New York represents Precision Discovery and its president Jerry Barbanel. Cohen, reached by phone on Thursday, said Kotchen's claims'that Precision breached its contract with the firm and that the firm shouldn't have to go to arbitration'were 'false and baseless.'
'My clients will vigorously oppose the action in its entirety and prosecute Precision's claims in the arbitration, which is the proper forum for this dispute,' Cohen said. He also represents Precision in the arbitration proceedings.
Kotchen & Low partner Daniel Low, who represents the firm, said in an email that the firm was 'surprised' by Precision's decision to pursue arbitration after Batten determined its fees were unreasonable.
'We are confident that we will defeat Precision's unreasonable and meritless claims against us,' Low said.
Kotchen, in its lawsuit, said Batten addressed the possibility of Precision trying to recover fees from the firm at a hearing in July 2013.
'If Precision were to come after the plaintiffs' law firms, I think they could easily contest any effort to collect the difference between what I award and what is allegedly owed by asserting the defense that your fees weren't reasonable. You've got a federal judge who says that,' Batten said,'according to a transcript'of the hearing.
In the September 2013 order, Batten said Kotchen was partly to blame for Precision's high fees. He reduced the amount of money in attorney fees that Delta had to pay the plaintiffs lawyers and did so again in an'order in August 2015. Kotchen, in its lawsuit, blamed Precision for giving the court inaccurate information about the firm's involvement.
Zoe Tillman'is a Reporter with'The National Law Journal, an ALM affiliate of'LJN's Legal Tech Newsletter.'She can be reached at'[email protected].'
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