Second Circuit vacates Chanel costs award that included ESI hosting

The Second Circuit on November 3 vacated a $560,978.97 litigation-expense award to Chanel that included electronic-discovery hosting and online legal research. In its nonprecedential summary order in Chanel, Inc. v. What Comes Around Goes Around LLC, the panel said the costs decision was premature because Chanel had sought the expenses through an unsuccessful attorneys’ fee motion rather than a separate bill of costs. It remanded the costs issue while otherwise affirming the judgment and post-trial order. Chanel, Inc. v. What Comes Around Goes Around LLC; Chanel, Inc. v. What Comes Around Goes Around LLC

The district court had denied attorneys’ fees after finding that the Lanham Act case was not exceptional. It nevertheless awarded expenses for Lexis and Westlaw research and hosting electronically stored information, describing them as costs routinely awarded by courts. Those items had been included in Chanel’s fee application, according to the appellate order. Chanel, Inc. v. What Comes Around Goes Around LLC

The parties disputed what could ultimately be recovered. WGACA argued that legal-research and ESI-hosting expenses were recoverable only as part of attorneys’ fees, rather than statutory costs. Chanel maintained that a large portion of the award could qualify under 28 U.S.C. § 1920. Both agreed that the district court had confused attorney expenses with statutory costs. The panel agreed with that distinction and directed that Chanel be allowed to file a bill of costs with the clerk, supported by evidence and subject to objections. Chanel, Inc. v. What Comes Around Goes Around LLC; Chanel, Inc. v. What Comes Around Goes Around LLC

The order does not identify how much of the $560,978.97 was for ESI hosting, and it does not resolve which individual expenses will survive a properly presented bill of costs. Its stated disposition leaves that process for the district court. The separate $4 million statutory-damages award was affirmed; the costs remand should not be read as undoing that award. Chanel, Inc. v. What Comes Around Goes Around LLC; Chanel, Inc. v. What Comes Around Goes Around LLC

Analysis. For e-discovery budgeting, the decision illustrates why incurring a hosting expense and establishing a basis for shifting it to an opponent are separate questions. A useful record connects each requested expense to the asserted recovery category and its supporting evidence. This order supplies no universal rule that hosting is always recoverable or never recoverable; its practical significance is the need for the proper application and an opportunity to contest the claimed costs. Chanel, Inc. v. What Comes Around Goes Around LLC

The summary order expressly has no precedential effect. This report concerns that appellate disposition, not a later decision on Chanel’s costs. The underlying fee application, invoices, trial record and future bill of costs were not independently examined. Public-index history checks are limited and do not establish whether a mandate, rehearing request or later district-court costs ruling exists. Chanel, Inc. v. What Comes Around Goes Around LLC; Chanel, Inc. v. What Comes Around Goes Around LLC

Chanel, Inc. v. What Comes Around Goes Around LLC. U.S. Court of Appeals for the Second Circuit. 25-722. Filed 2026-11-03. Unpublished.

AI-assisted reporting based on court records retrieved through CourtListener. This analysis is produced by eDiscovery Decoder; it is not reviewed or endorsed by Free Law Project.