C.A. Sticks With 1993 View That Access Fees Charged by Lexis Aren’t Recoverable as Costs

Friday, May 29, 2026

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C.A. Sticks With 1993 View That Access Fees Charged by Lexis Aren’t Recoverable as Costs
Contrary U.S. District Court Opinions Prove Unpersuasive

By a MetNews Staff Writer

Fees charged by Lexis for conducting research on its databases are not recoverable as costs, Div. One of this district’s Court of Appeal has held, rejecting a prevailing defendant’s contention that a contrary 1993 California appellate opinion should be repudiated and the reasoning of two U.S. District Court memorandum opinions should be adopted.

Presiding Justice Frances Rothschild authored the unpublished opinion, filed Tuesday. It reverses a Nov. 6, 2024 order by Los Angeles Superior Court Judge Bradley S. Phillips to the extent that it denies a motion to tax an item in a memorandum of costs for $12,662.30 based on research fees.

Appellant David Max, who unsuccessfully sued for $6.3 million in an action alleging stock fraud, contended that fees charged the defendants by Lexis are not recoverable as costs, citing the 1993 decision by Div. Two of the First District Court of Appeal in Ladas v. California State Automobile Association. That case, in a sketchy discussion, reversed a $5,697.40 award of costs, declaring that “[f]ees for legal research, computer or otherwise, may not be recovered” under Code of Civil Procedure §1033.5.

The opinion points out that §1033.5(b)(2) disallows an allowance of expenses tied to “[i]nvestigation expenses in preparing the case for trial.” It also notes that “attorney fees are not compensable as costs in the absence of an agreement of the parties or statutory authority,” which is spelled out in §1033.5(a)(10).

(In 1993, the section authorized an award of fees pursuant to “contract” or “statute”; it now adds by “law.”)

Rothschild sided with Ladas to the extent it likened the expense of online legal research to noncompensible attorney fees.

The defendants/appellants in the case before Div. One argued that Ladas should be abandoned in favor of the view expressed by then-U.S. District Court Judge Dale S. Fisher (now a senior judge) in her 2005 opinion in Moore v. IMCO Recycling of CA, Inc. Under a California court rule, although state Superior Court decisions and unpublished Court of Appeal opinions may not be cited, except under limited circumstances, U.S. District Court decisions may be noted for their persuasive value.

Fisher said in Moore:

“The Court finds that computerized research is not only ‘reasonably necessary,’ it is essential, to effective representation. The courts themselves regularly rely on computerized research tools to prepare opinions and orders. The Court recognizes that the single reported California case discussing this issue, Ladas v. California State Auto. Ass’n…, found that such expenses were not recoverable…presumably because they were precluded ‘investigation expenses.’…The court in Ladas did not specify the basis for its conclusion that legal research was an ‘investigation expense.’ ”

Evidence of Purpose

The judge acknowledged that online research could be used with investigative objectives, but said that “there is no indication that that was the purpose here,” noting: “Numerous legal issues were raised and motions were filed that obviously contained the results of the research.”

She declared:

“To the extent that Ladas holds that computerized research is always the equivalent of ‘investigation expenses,’ this Court respectfully disagrees. Moreover, section 1033.5 was enacted well after computerized research became standard. If the legislature had wanted to preclude such fees in all cases, it could easily have used that phrase. The cost for automated research will be allowed.”

Fisher said in a footnote that “[t]o the extent that…language in Ladas suggests that…research costs would be recoverable as ‘attorney’s fees’ if there were a contractual provision allowing attorney’s fees, there is such a provision here, and the cost would be recoverable even under Ladas.”

On March 31, 2008, a U.S. District Court magistrate, in a case applying California law, also deviated from Ladas, finding “the reasoning of Moore to be persuasive,” allowing $7,743.27 in costs sought by the prevailing plaintiff for legal research.”

Rothschild’s Opinion

Rothschild wrote:

“[W]e need not decide whether Ladas is correct regarding investigation expenses, because we agree they are akin to nonallowable attorney fees.

“Respondents argue that we should reject Ladas and instead rely on unpublished federal cases respondents cite. They are not binding, nor do we find the reasoning of these cases persuasive.”

The presiding justice did not elaborate.

The case is Max v. 8E6 Corp., B339116.

West Los Angeles attorney Ralph Rogari represented Max. Benjamin P. Pugh and Michelle D. Brunson of the Newport Beach firm of Newmeyer & Dillion acted for the defendants/respondents.