There are some filings in the SCO v. Novell litigation. SCO is objecting to some of Novell's Bill of Costs. If you recall, Novell filed their Bill of Costs back on December 10, 2008, after final judgment was entered in the SCO v Novell litigation. SCO then moved the Court to stay taxation of costs, a motion Kimball recently denied. In that Order, Kimball gave SCO ten days to file this objection, and here we are. And in the second filing, the court tried to mail something to Jonathan Lee Riches, but the post office evidently couldn't find him. In prison. "Mail returned as undeliverable... unable to forward." Uh oh.
: D
SCO's argument is based on characterizing certain items as not covered by the statute, 28 U.S.C. § 1920, saying some of the costs are unnecessary, being for Novell's convenience and comfort only. Like transcripts. They are covered by the statute, but Novell listed $7,592.11 for costs for renting deposition rooms. "These costs are not taxable under the statute," SCO asserts. SCO would like Novell to be put through the very educational experience of being sued for absolutely no wrongdoing whatsoever, according to what the court decided, and then having to pay the expenses for defending itself.
Then there are the video synchronization fees. SCO objects. The statute says you can get reimbursed for the following, among other things:
(2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case; Read literally, it says you get only the fees paid to the court reporter. I guess they stand on that, but if you video the deposition, and most people do nowadays, and you want the deposition to match up with the written transcript, thus making the deposition easily searchable by keyword and so you can find your place readily at trial, who pays for that? Not us, says SCO:
Novell does not even attempt to show that these costs are taxable under the statute. Section 1920 "does not allow a prevailing party to recover costs for materials that merely added to the convenience of counsel or the district court." In re Williams Secs. Litig.-WCG Subclass, No. 08-5100, 2009 WL 514097, at *3 (10th Cir. March 3, 2009)(Ex.D).
They also want the court to disallow costs for "rough" or "ascii" transcripts. Like what you might want so you can work quickly on the latest stupid SCO motion and have a deadline to meet, while you wait for the perfect copy to arrive after the deadline.
Yes, these are the nicest folks on Planet Earth. They sue you when you did nothing worthy of being sued, according to the outcome of the litigation, and then look for ways to make *you* pay for it. Just loverly.
But here's the funny part. That case they cite -- it's actually a case that helps Novell, because it was a challenge to a bill of costs, and it failed. Methinks some lawyers quickly read descriptive headers and forget to read the rest. It could happen. It's happened before.
I'll tell you what the case actually says, but first here are the filings, so you can follow along meaningfully:
03/27/2009 - 592 - Mail Returned as Undeliverable. Mail sent to Jonathan Lee Riches, unable to forward. (djs) (Entered: 03/27/2009)
03/27/2009 - 593 - OBJECTIONS to 573 Bill of Costs filed by Counter Defendant SCO Group. (Attachments: #1 Exhibit 1-6, #2 Exhibit A-D (Unpublished Opinions))(Normand, Edward) (Entered: 03/27/2009)
The Exhibit you want, the In re Williams ruling, begins on page 17 of Exhibit A-D. And notice, please, the descriptive header on that page on the right column, "(2) Federal Civil Prodecure 170A [key] 2740". Beneath it, you'll find "Cited Cases" and the quotation SCO used. These headers are helpful items that Westlaw provides to its subscribers, and they do indeed help you to quickly find the cases that will help you. But you have to be careful to also read the cases themselves, to make sure you don't cite a case that isn't so helpful after all. Let's see what appears to have happened here.
The actual ruling, as opposed to all the reference resources from Westlaw, begins on page 19 of the PDF. It was a securities fraud class action, and so part of the issue here was who pays what portion of the bill of costs. In discussing the ruling being appealed, the court reviewed the standard for paying costs. And here's the relevant section:
Pursuant to 28 U.S.C. § 1920 and Fed. R. Civ. P. 54(d)(1), the district court awarded the WCG Subclass Defendants costs. Plaintiffs now challenge the district court's costs awards on three separate grounds. First, Plaintiffs allege Defendants failed to prove that the transcripts and copies for which the district court awarded costs were "necessarily obtained for use in the case." 28 U.S.C.§1920(2) & (4).... Satisfied that the district court acted within the broad confines of its discretion, we affirm....
II.
[1]Rule 54(d)(1) provides that costs, other than attorney's fees, should generally "be allowed to the prevailing party." We have recognized that the district court's discretion in taxing costs is limited in two ways...First, "Rule 54 creates a presumption that the district court will award costs to the prevailing party." Id. at 459. Second, the district court "must provide a valid reason" for denying such costs." Id; see also Klein v. Grynberg, 44 F.3d 1497, 1507 (10th Cir.1995) (stating that denying costs to a prevailing party is a "severe penalty" and explaining that "there must be some apparent reason to penalize the prevailing party if costs are to be denied").
Items proposed by prevailing parties "as costs should always be given careful scrutiny." U.S. Indus., Inc. v. Touche Ross & Co., 854 F.2d 1223, 1245 (10th Cir.1988), overruled on other grounds as recognized by Anixter v. Home-Stake Prod.Co., 77 F.3d 1215, 1231 (10th Cir.1996). The costs statute allows a judge or clerk of any court in the United States to tax costs for transcripts and copies "necessarily obtained for use in the case." 28 U.S.C.§ 1920(2) & (4). Both parties agree that this standard governs the costs at issue in this appeal.
The "necessarily obtained for use in the case" standard does not allow a prevailing party to recover materials that merely "added to the convenience of counsel" or the district court. Touche Ross, 854 F.2d at 1245. To be recoverable, a prevailing party's transcription and copy costs must be "reasonably necessary to the litigation of the case." Mitchell v. City of Moore, 218 F.3d 1190, 1204 (10th Cir. 2000). Materials produced "solely for discovery" do not meet this threshold... At the same time, we have acknowledged that materials may be taxable even if they are not "strictly essential" to the district court's "resolution of the case." Id. The "realities of litigation occasionally dispense with the need of much of the discovery already taken by the parties when, for instance, a dispositive motion is granted by the trial court." Callicrate v. Farmland Indus., Inc., 139 F.3d 1336, 1340 (10th Cir. 1998). Our cases establish that if deposition transcripts or copies were "offered into evidence," were "not frivolous," and were "within the bounds of vigorous advocacy," costs may be taxed. Id. (citing Furr, 824 F.2d at 1550). This standard recognizes that "caution and proper advocacy may make it incumbent on counsel to prepare for all contingencies which may arise during the course of litigation," including the "possibility of trial." Id.
Thus, we do not "employ the benefit of hindsight" in determining whether materials for which a prevailing party requests costs are reasonably necessary to the litigation of the case.Id. We base this determination, instead, solely "on the particular facts and circumstances at the time the expense was incurred." Id.; see also Allison v. Bank One-Denver, 289 F.3d 1223, 1249 (10th Cir.2002) (recognizing that as long as the expense "appeared to be reasonably necessary at the time it was" incurred, "the taxing of such costs should be approved"). The standard is one of reasonableness. ... If "materials" or services are reasonably necessary for use in the case", even if they are ultimately not used to dispose of the matter, the district court "can find necessity and award the recovery of costs."... Thus, we will not "penalize a party who happens to prevail on a dispositive motion by not awarding costs associated with that portion of discovery which had no bearing on the dispositive motion, but which appeared otherwise necessary at the time it was taken for proper preparation of the case." Id. at 1340.
There's more. But it's a very new case, and I had to type it by hand, and this is enough to give you the flavor. It goes on to mention the court's broad discretion in awarding costs, so that on appeal, as in this matter, the court reviews only for abuse of discretion. And here's the point: did you notice that SCO misquoted from the In re Williams case? SCO quoted like this:Section 1920 "does not allow a prevailing party to recover costs for materials that merely added to the convenience of counsel or the district court." In re Williams Secs. Litig.-WCG Subclass, No. 08-5100, 2009 WL 514097, at *3 (10th Cir. March 3, 2009)(Ex.D).
What the case actually said was this:
The "necessarily obtained for use in the case" standard does not allow a prevailing party to recover materials that merely "added to the convenience of counsel" or the district court. Touche Ross, 854 F.2d at 1245.
Do you see the difference? SCO made it look like it was the Williams case that said the bit about "added to the convenience of counsel", and it did, but only by quoting that phrase from another case, Touche Ross. It may look like a small point, but it's not. It's a signal, to me, that they quoted from the descriptive header, which follows the SCO pattern:
"Necessarily obtained for use in the case" statutory standard for taxing costs for transcripts and photocopies does not allow prevailing party to recover costs for materials that merely added to convenience of counsel or district court, or for materials produced solely for discovery;...
Now, it's not a sin to quote a header, I suppose, but I was taught never to do it, as it was not considered best practice, and it can lead to mistakes, as happened here, assuming good faith and not a deliberate misquote. I've seen lawyers make fun of lawyers who get caught doing it. And the reason is because the descriptions of what the case stand for are written by Westlaw employees, not by the court. So that is why it's an aid, but not something you are really supposed to quote as your citation.
I don't *know* that is what happened, but it looks like it to me. And if that is what happened, what would it indicate to me? Rushing, maybe, because of not getting paid to spend a lot of time on research? Or wanting to make Novell spend money to defend its bill of costs, even if it was likely they'd win in the end? We can only guess. I may not be able to help you see why it made me smile when I noticed this, but it did. It really did. Did you notice how broad the district court's discretion is to award costs, how much more broad than SCO's skimpy description of the allowance standard? When you read the full SCO Objections, this detail from the In re Williams ruling should make it easier for you to guess what SCO's odds of success are.
There's a filing in the bankruptcy too, but nothing apocalypic:
03/27/2009 - 729 - Certification of Counsel Regarding Supplemental Order Granting and Sustaining Debtors' First (Non-Substantive) Omnibus Objection to Claims Pursuant to 11 U.S.C. Section 502(b) and Bankruptcy Rule 3007 (related document(s) 574 ) Filed by The SCO Group, Inc.. (Attachments: #1 Exhibit A # 2 Exhibit B # 3 Exhibit C) (Makowski, Kathleen) (Entered: 03/27/2009) Here's the SCO filing as text, thanks to Steve Martin.
[Update: We also now have the full text of Exhibit D, the In re Williams ruling as text, thanks to feldegast doing the OCR for me. I have reformatted it, to make it more readable in a browser, instead of following the form of the Westlaw version, with its two column-format. I have also removed all their notes and links and headnotes. So for anything that matters, go by the PDF. And for emphasis, I've marked in red all the words that are not at all helpful to SCO, in my view. - End Update]
*************************************
Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE, PC
[address]
[phone]
[fax]
David Boies (admitted pro hac vice)
Robert Silver (admitted pro hac vice)
Edward Normand (admitted pro hac vice)
BOIES SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]
Stephen N. Zack (admitted Pro Hac Vice)
BOIES SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]
Stuart Singer (admitted pro hac vice)
BOIES SCHILLER & FLEXNER LLP
[address]
[phone]
[fax]
Devan V. Padmanabhan (admitted pro hac vice)
DORSEY & WHITNEY LLP
[address]
[phone]
[fax]
Attorneys for Plaintiff, The SCO Group, Inc.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
THE SCO GROUP, INC., a Delaware
corporation,
Plaintiff/Counterclaim-Defendant,
vs.
NOVELL, INC., a Delaware corporation,
Defendant/Counterclaim-Plaintiff.
|
SCO'S OBJECTIONS TO NOVELL'S
BILL OF COSTS
Civil No. 2:04 CV-00139
Judge Dale A. Kimball
Magistrate Brooke C. Wells |
(1)
Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. ("SCO"),
respectfully submits its Objections to Novell's Bill of Costs.
"[T]he burden is on the prevailing parties to establish the
amount of compensable costs and expenses to which they are
entitled. Prevailing parties necessarily assume the risks inherent
in a failure to meet that burden." English v. Colo. Dep't of
Corrections, 248 F.3d 1002, 1013 (10th Cir. 2001); Griffith
v. Mt. Carmel Med. Ctr., 157 F.R.D. 499, 502 (D. Kan.
1994).
Expenses not specifically authorized by 28 U.S.C. § 1920
are not recoverable as costs. Crawford Fitting Co. v. J.T.
Gibbons, Inc., 482 U.S. 437, 441-42 (1987); Bee v.
Greaves, 910 F.2d 686, 690 (10th Cir. 1990); Perry v. Taser
Int'l Corp., Civil No. 07-cv-00901-REB-MJW, 2008 WL 4829850, at
*1 (D. Colo. Nov. 4, 2008) (Ex. A). "The Court has the discretion
to award those costs specifically enumerated in section 1920, and
may not tax as costs any items not included in the statute."
Davis v. Sailormen, Inc., No. 6:05-cv-1497-Orl-22JGG, 2007
WL 1752465, at *1 (M.D. Fla. June 15, 2007) (Ex. B).
Section 1920(2) provides for taxation of fees for "printed or
electronically recorded transcripts necessarily obtained for use in
the case." 28 U.S.C. § 1920(2). This section authorizes
"recovery of costs with respect to all depositions reasonably
necessary to the litigation of the case." Mitchell v. City of
Moore, Okla., 218 F.3d 1190, 1204 (10th Cir. 2000).
SCO objects to $50,586.14 for the following categories of
deposition costs in Novell's Bill of Costs, as these costs are not
taxable under the statute.
1. Room Rental Fees. Novell seeks $7,592.11 in costs for
the rental of deposition rooms. (Ex. 1.) These costs are not
taxable under the statute. See, e.g., Boyer v. Cline,
No. 851562-C, 1989 WL 89935, at *4 (D. Kan. July 19, 1989)
(disallowing "the cost of the conference
(2)
room used to take depositions, as this item of cost is not
specifically allowed under § 1920") (Ex. C).
2. Video Synchronization Fees. In addition to reporting
costs, Novell seeks $20,201.00 in video synchronization fees. (Ex.
2.) Novell does not even attempt to show that these costs are
taxable under the statute. Section 1920 "does not allow a
prevailing party to recover costs for materials that merely added
to the convenience of counsel or the district court." In re
Williams Secs. Litig.-WCG Subclass, No. 08-5100, 2009 WL
514097, at *3 (10th Cir. March 3, 2009) (Ex. D).
3. Other Convenience Costs. In addition to reporting
costs, Novell also seeks $20,343.74 for "Interactive Realtime,"
"Expedited Delivery," "Rough" or "Ascii" transcripts, "Condensed
Transcripts," and other convenience costs. (Ex. 3.) Novell does not
even attempt to show that these costs are taxable under the
statute. Such convenience costs are disallowed. In Williams
Secs., 2009 WL 514097, at *3 (Ex. D); Sailormen, 2007 WL
1752465, at *4 (costs for expedited transcripts not taxable under
similar circumstances) (Ex. B).
4. Depositions from the IBM Litigation. Novell seeks
$2,450.29 for costs related to the depositions of Ed Chatlos and
Jack Messman in the IBM Litigation. (Ex. 4.) These costs were not
"necessarily obtained" or "reasonably necessary" because SCO
produced the transcript of the Chatlos deposition to Novell in
discovery (see Ex. 6.) and Novell could have obtained the
transcript of the Messman deposition from its co-defendant IBM or
from SCO, without incurring these costs. In addition, even if
Novell were entitled to costs for the transcripts, Novell also
seeks $689.00 for the rough transcript of the Chatlos deposition
and $437.89 for the videotape of the Messman deposition. (Ex. 4.)
The cost of the rough transcript is disallowed as a
(3)
convenience cost, and the cost of either the Messman transcript
or videotape is disallowed because Novell has not shown that it
reasonably needed both.1
Wherefore, for the reasons set forth above, SCO objects to
$50,586.14 of the costs Novell claims in its Bill of Costs, and
asks the Court to strike that amount from the Bill. (Ex. 5.)
DATED this 27th day of March, 2009.
HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark F. James
BOIES, SCHILLER & FLEXNER LLP
David Boies
Robert Silver
Stuart H. Singer
Edward Normand
DORSEY & WHITNEY LLP
Devan V. Padmanabhan
By: /s/ Edward Normand
(4)
CERTIFICATE OF SERVICE
Plaintiff/Counterclaim-Defendant, The SCO Group, Inc., hereby
certifies that on this 27th day of March, 2009, a true and correct
copy of the foregoing SCO Objections to Novell's Bill of Costs was
electronically filed with the Clerk of Court and delivered by
CM/ECF to:
Thomas R. Karrenberg
John P. Mullen
Heather M. Sneddon
ANDERSON & KARRENBERG
[address]
Michael A. Jacobs
Matthew I. Kreeger
MORRISON & FOERSTER
[address]
By: /s/ Edward Normand
(5)
|
The transcript of a videotaped deposition can be taxed only if
the transcript "had a legitimate use independent from or in
addition to the videotape which would justify its inclusion in an
award of costs." Tilton v. Capital Cities/ABC, Inc., 115
F.3d 1471, 1478 (10th Cir. 1997). Conversely, "only the cost of the
stenographic transcript is taxable, unless the witness also
testified at trial." Karsian v. Inter-Regional Fin. Group,
Inc., 13 F. Supp. 2d 1085, 1088 (D. Colo. 1998) ("Pursuant to
the test set out above, Defendants will be taxed for the
stenographic transcription but not for the videographing of the
[relevant] depositions.") |
*****************************************
*****************************************
EXHIBIT D
Submitted on the briefs.*...
United States Court of Appeals,
Tenth Circuit.
In re WILLIAMS SECURITIES LITIGATION WCG
SUBCLASS.
No. 08-5100.
March 3, 2009.
Before McCONNELL, ANDERSON, and
BALDOCK, Circuit Judges.
BALDOCK, Circuit Judge.
Following the breakup of AT & T in the 1980s,
the Williams Companies (WMB), an energy group,
devised a plan to run fiber-optic cables through some
of its decommissioned pipelines. Subsequently,
WMB used a subsidiary known as the Williams
Communications Group (WCG) to develop a large
fiber-optic network. WMB sold most of this network
to a competitor in 1995. Rapid growth in the Telecommunications
Index in the late 1990s, however,
spurred WMB to reenter the network communications
market through its WCG subsidiary. Indeed,
WMB stated its intention to invest vast sums in creating
a national fiber-optic network. But the Telecommunications
Index experienced a major downturn in
the spring of 2000. WMB subsequently spun off its
WCG subsidiary. Less than two years later, WCG's
stock was practically worthless and the company
filed for Chapter 11 bankruptcy.
As a result, some thirty securities fraud class action
suits were filed seeking $2.9 billion against three
defendant groups: (1) the WMB Defendants; (2) the
WCG Defendants; and (3) Ernst & Young, the outside
auditor to both WMB and WCG. The district
court consolidated these actions under the caption In
re Williams Securities, bifurcated the litigation into
two subclasses of plaintiffs-the WMB Subclass and
the WCG Subclass-and ordered coordinated discovery.
While the WMB Subclass Action settled, Defendants
in the WCG Subclass Action filed a motion for
summary judgment, which the district court granted.
Plaintiffs appealed the district court's ruling, which
we affirmed in In re Williams Securities Litigation-
WCG Subclass, No. 07-5119, ---F.3d ----, 2009 WL
388048 (10th Cir.2009).
Pursuant to 28 U.S.C. § 1920 and Fed.R.Civ.P.
54(d)(1), the district court awarded the WCG Subclass
Defendants costs. Plaintiffs now challenge the
district court's costs awards on three separate
grounds. First, Plaintiffs allege Defendants failed to
prove that the transcripts and copies for which the
district court awarded costs were "necessarily obtained
for use in the case." 28 U.S.C. § 1920(2) & (4).
Second, Plaintiffs maintain that many of the costs for
which Defendants seek reimbursement are equally
attributable to the WMB Subclass Action. Hence,
Plaintiffs argue the district court abused its discretion
in taxing them for the full amount of these costs.
Third, Plaintiffs suggest that the district court's
awards of costs are substantively unreasonable, even
assuming these costs are taxable under 28 U.S.C. §
1920. We have jurisdiction under 28 U.S.C. § 1291.
Satisfied that the district court acted within the broad
confines of its discretion, we affirm.
I.
After the district court granted summary judgment in
favor of Defendants, each defendant group filed a
timely bill of costs with the district court. The district
court clerk held a joint hearing on Defendants' bills of
costs. See Furr v. AT & T Techs., Inc., 824 F.2d
1537, 1550 n. 11 (10th Cir.1987) (recognizing that "a
bill of costs is initially filed with the clerk rather than
with the court"). Shortly thereafter, the clerk issued
three orders taxing Plaintiffs $231,549.08 in favor of
the WCG Defendants, $180,411.70 in favor of the
WMB Defendants, and $229,371.72 in favor of Ernst
& Young. Ultimately, the clerk reduced Defendants'
requested costs awards by $31,220.00 (WCG Defendants),
$3,287.45 (WMB Defendants), and
$97,339.05 (Ernst & Young) respectively. Defendants voluntarily withdrew their request for transcript
costs related to one deposition witness and the WMB
Defendants agreed to drop their request for approximately
$2,900.00 in copying costs.
Plaintiffs moved the district court to review the
clerk's awards under Fed.R.Civ.P. 54(d)(1), raising
substantially the same arguments they now press on
appeal. See id.("Should the party seeking costs be
dissatisfied with the clerk's actions, or should the
party against whom they are to be taxed object, on
motion served within 5 days thereafter, the action of
the clerk may be reviewed by the court. Such review
by the court is a de novo determination."). The district
court referred this motion to a United States
Magistrate Judge, who held another hearing on the
matter. Subsequently, the magistrate judge issued a
twenty-two page report and recommendation, substantially
affirming the clerk's awards of costs. The
magistrate judge did exclude, however, costs related
to four depositions for which the clerk awarded costs
to the WMB Defendants and Ernst & Young. This
reduced Defendants' costs awards by $6,135.45 (the
WMB Defendants) and $5,650.45 (Ernst & Young)
respectively. In total, the magistrate judge recommended
the district court tax Plaintiffs $231,549.08
in favor of the WCG Defendants, $174,276.25 in
favor of the WMB Defendants, and $223,721.27 in
favor of Ernst & Young.
Plaintiffs also objected to the magistrate judge's report
and recommendation on essentially the same
grounds they now raise on appeal. In a twenty-two
page order, the district court adopted the magistrate
judge's recommended awards of costs, with several
notable exceptions. The district court independently
reviewed the record and excluded transcription costs
related to seven deposition witnesses because it was
not satisfied that these depositions were "necessarily
obtained" for use in the case. Further, the district
court reduced the WCG Defendants' award for copy
costs by over $4,000.00. All together, the district
court reduced the costs awards recommended by the
magistrate judge by $8,795.30 (the WCG Defendants),
$5,785.30 (the WMB Defendants), and
$3,001.80 (Ernst & Young) respectively. Accordingly,
the district court taxed Plaintiffs $222,753.78
in favor of the WCG Defendants, $168,490.95 in
favor of the WMB Defendants, and $220,719.47 in
favor of Ernst & Young.
II.
Rule 54(d)(1) provides that costs, other than attorney's
fees, should generally "be allowed to the prevailing
party." We have recognized that the district
court's discretion in taxing costs is limited in two
ways. See Cantrell v. Int'l Bhd. of Elec. Workers, 69
F.3d 456, 458-59 (10th Cir.1995) (en banc). First,
"Rule 54 creates a presumption that the district court
will award costs to the prevailing party." Id. at
459. Second, the district court "must provide a valid
reason" for denying such costs. Id.; see also Klein v.
Grynberg, 44 F.3d 1497, 1507 (10th Cir.1995) (stating
that denying costs to a prevailing party is a
"severe
penalty" and explaining that "there must be
some apparent reason to penalize the prevailing party
if costs are to be denied").
Items proposed by prevailing parties "as costs
should always be given careful scrutiny." U.S. Indus.,
Inc. v. Touche Ross & Co., 854 F.2d 1223, 1245
(10th Cir.1988), overruled on other grounds as recognized
by Anixter v. Home-Stake Prod. Co., 77 F.3d
1215, 1231 (10th Cir.1996). The costs statute allows
a judge or clerk of any court of the United States to
tax costs for transcripts and copies "necessarily obtained
for use in the case." 28 U.S.C. § 1920(2) & (4).
Both parties agree that this standard governs the costs
at issue in this appeal.
The "necessarily obtained for use in the case"
standard does not allow a prevailing party to recover
costs for materials that merely "added to the convenience
of counsel" or the district court. Touche Ross,
854 F.2d at 1245. To be recoverable, a prevailing
party's transcription and copy costs must be "reasonably
necessary to the litigation of the case."
Mitchell v. City of Moore, 218 F.3d 1190, 1204 (10th
Cir.2000). Materials produced "solely for discovery"
do not meet this threshold. Furr, 824 F.2d at 1550. At
the same time, we have acknowledged that materials
may be taxable even if they are not "strictly essential"
to the district court's "resolution of the case." Id.
The "realities of litigation occasionally dispense with
the need of much of the discovery already taken by
the parties when, for instance, a dispositive motion is
granted by the trial court." Callicrate v. Farmland
Indus., Inc., 139 F.3d 1336, 1340 (10th Cir.1998).
Our cases establish that if deposition transcripts or
copies were "offered into evidence," were "not frivolous,"
and were "within the bounds of vigorous advocacy," costs may be taxed. Id. (citing Furr, 824 F.2d
at 1550). This standard recognizes that "caution and
proper advocacy may make it incumbent on counsel
to prepare for all contingencies which may arise during
the course of litigation," including the "possibility
of trial." Id.
Thus, we do not "employ the benefit of hindsight" in
determining whether materials for which a prevailing
party requests costs are reasonably necessary to the
litigation of the case. Id. We base this determination,
instead, solely "on the particular facts and circumstances
at the time the expense was incurred." Id.; see
also Allison v. Bank One-Denver, 289 F.3d 1223,
1249 (10th Cir. 2002) (recognizing that as long as the
expense "appeared to be reasonably necessary at the
time it was" incurred, "the taxing of such costs
should be approved"). The standard is one of reasonableness.
See Mitchell, 218 F.3d at 1204. If "materials
or services are reasonably necessary for use in the
case," even if they are ultimately not used to dispose
of the matter, the district court
"can find necessity
and award the recovery of costs." Callicrate, 139
F.3d at 1339.Thus, we will not "penalize a party who
happens to prevail on a dispositive motion by not
awarding costs associated with that portion of discovery
which had no bearing on the dispositive motion,
but which appeared otherwise necessary at the
time it was taken for proper preparation of the case."
Id. at 1340.
A prevailing party bears the burden of establishing
the amount of costs to which it is entitled. See
Allison, 289 F.3d at 1248. Our precedents establish
that the amount a prevailing party requests "must be
reasonable." Callicrate, 139 F.3d at 1339. Once a
prevailing party establishes its right to recover allowable
costs, however, the burden shifts to the "nonprevailing
party to overcome" the presumption that
these costs will be taxed. Rodriguez v. Whiting
Farms, Inc., 360 F.3d 1180, 1190 (10th Cir.2004).
III.
The district court possesses "broad discretion" in
awarding costs. Touche Ross, 854 F.2d at 1247; see
also Callicrate, 139 F.3d at 1339 ("The taxing of
costs rests in the sound judicial discretion of the district
court."). Accordingly, we review costs awards
only for an abuse of that discretion. See Touche Ross,
854 F.2d at 1245.A district court abuses its discretion
where it (1) commits legal error, (2) relies on clearly
erroneous factual findings, or (3) where no rational
basis exists in the evidence to support its ruling. See
Elephant Butte Irrigation Dist. v. U.S. Dep't of the
Interior, 538 F.3d 1299, 1301 (10th Cir.2008).
A.
We first address Plaintiffs' assertion that Defendants
failed to provide sufficient evidence to show
that the taxed materials were "necessarily obtained
for use in the case." 28 U.S.C. § 1920(2) & (4).
Whether materials are necessarily obtained for use in
the case is "a question of fact" that we review "only
for clear error." Sorbo v. United Parcel Serv., 432
F.3d 1169, 1181 (10th Cir.2005). Clear error is established
if, "after reviewing all the evidence, we are left
with a definite and firm conviction that a mistake has
been made." Aquila, Inc. v. C.W. Mining, 545 F.3d
1258, 1263 (10th Cir.2008). Plaintiffs have not met
this threshold here.
Plaintiffs espouse an exceedingly narrow view of
the deposition expenses authorized under 28 U.S.C. §
1920. Indeed, they argue that a district court may
only award costs for depositions the district court
actually used in deciding summary judgment, or for
depositions that were, at the very least, designated for
trial. But all § 1920 requires is that the generation of
taxable materials be "reasonably necessary for use
in" the case "at the time the expenses were incurred."
Callicrate, 139 F.3d at 1340. As we explained in
Merrick v. Northern Natural Gas Company, 911 F.2d
426, 434 (10th Cir.1990), any "rule that permits costs
only for depositions received in evidence or used by
the court in ruling upon a motion for summary judgment
is narrower than [S]ection 1920." Plaintiffs' understanding
of the costs statute is thus surely
flawed.
1
The same is true of Plaintiffs' view of the burden
placed on prevailing parties to justify the taxation
of copy costs. We have specifically noted that the
burden of justifying copy costs is not "a high one."
Case v. Unified Sch. Dist. No. 233, 157 F.3d 1243,
1259 (10th Cir.1998). A prevailing party need not
"justify each copy" it makes. Id. All a prevailing
party must do to recoup copy costs is to demonstrate
to the district court that, under the particular circumstances,
the copies were "reasonably necessary for
use in the case." Touche Ross, 854 F.2d at
1246. Contrary to Plaintiffs' assertions, a description
of each copy, replete with an explication of its use, is
not necessarily required to satisfy this burden. Nor do
we think the fact that documents are available in a
central depository, as Plaintiffs allege here, inexorably
leads to the conclusion that copies made for an
attorney's use were not "reasonably necessary to the
litigation of the case." Ramos v. Lamm, 713 F.2d 546,
560 (10th Cir.1983), abrogated on other grounds by
Pennsylvania v. Del. Valley Citizens' Council for
Clean Air, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed.2d
585 (1987).
On appeal, we remain aware that we cannot hope
to match the district court's "first-hand sensitivity to
the proceedings" in this case. Sorbo, 432 F.3d at
1181. The district court ultimately approved the
awards of costs related to some seventy-four depositions.
Based on its familiarity with the "nature and
course" of the litigation, it concluded that these depositions
were "not taken merely for investigative purposes
or for the convenience of counsel." The district
court found, instead, that these depositions-based on
the information available to the parties at the time were
necessarily obtained for use in this case. Considering
that the parties presented a combined total of
sixty-nine fact witnesses, the district court's conclusion
hardly seems suspect.
Similarly, the district court examined Defendants'
requested copy costs and opined, in light of the fact
that over fifteen million pages were produced, that
Defendants selectively copied the documents at issue.
The number of copies made by each defendant group
necessarily varied, in the district court's view, because
Defendants adopted differing approaches to
fashioning a defense. After excluding some of the
WCG Defendants' requested copy costs, the district
court ruled that Defendants had shown the remaining
copies were necessarily obtained for use in the case.
Our examination of the record, gives us no reason to
doubt that conclusion. We, therefore, reject Plaintiffs'
first claim of error.
B.
We now turn to Plaintiffs' contention that the district
court failed to properly apportion and tax the
costs attributable to them. In short, Plaintiffs allege
the district court abused its discretion in taxing them
for costs that are equally attributable to the WMB
Subclass of Plaintiffs. Due to the factual overlap between
the WCG and WMB Subclasses, the district
court determined that Defendants would have incurred
the costs at issue even in the absence of the
WMB Subclass action. The district court consequently
regarded the awarded costs as directly related
to the WCG Subclass action, in which Defendants
undisputably prevailed. A "rational basis in the evidence"
clearly supports this conclusion. Elephant
Butte Irrigation Dist., 538 F.3d at 1301. As such, we
cannot say that the district court abused its discretion
in refusing to reduce Defendants' costs awards on this
ground.
C.
Finally, we address Plaintiffs' argument that the
district court's costs awards are unreasonably high.
Aggregating the costs awarded to the three defendant
groups, Plaintiffs contend that the district court rendered
the highest costs award in the history of
American jurisprudence. We disagree with Plaintiffs'
characterization of the facts of this case.
The costs awarded in this case are undoubtedly
higher than the norm. But given the massiveness and
complexity of the litigation at issue, we do not regard
the magnitude of Defendants' costs awards as particularly
surprising. Plaintiffs sought $2.9 billion in damages
from three defendant groups, all of whom are
prevailing parties. Thus, we are now faced with three
separate costs awards.
Defendants' costs were, quite plainly, driven upward
by the cold, hard facts of this case. Plaintiffs'
litigation choices; including the number of defendants,
the high amount of damages sought, the broad
allegations asserted, the complexity of the claims at
issue, and Plaintiffs' aggressive course of discovery;
necessarily resulted in heightened defense costs. See
Klein, 44 F.3d at 1507 ("[Plaintiffs'] own actions
brought about the litigation."). We agree with the
district court that consideration of such factors does
not constitute disapproval or condemnation of Plaintiffs'
conduct; rather, these considerations go directly
towards the reasonable necessity of Defendants'
costs. See Mitchell, 218 F.3d at 1204 (noting that our
role is to measure "whether an incurred cost was reasonably
necessary under §1920"). In this case, the
stakes were indisputably high and "it was incumbent
on [D]efendants to fully prepare their case on the
merits." Callicrate, 139 F.3d at 1341.
Of course, we have recognized that certain circumstances
justify a district court in exercising its discretion
to deny otherwise recoverable costs, "including
when the prevailing party was only partially successful,
when damages were only nominal, when costs
were unreasonably high or unnecessary, when recovery
was insignificant, or when the issues were close
or difficult." Zeran v. Diamond Broad., 203 F.3d
714, 722 (10th Cir.2000). But the district court concluded
that none of these grounds apply here. We
cannot say that, in so ruling, the district court abused
its discretion.
Rule 54's presumption that a prevailing party will
recoup certain costs fully applies to class actions. See
White v. Sundstrand Corp., 256 F.3d 580, 585-86
(7th Cir.2001). Even if litigation is complex or
lengthy, instituted in good faith, and resolved early,
we have rejected attempts to deny prevailing parties
their otherwise taxable costs. See AeroTech, Inc. v.
Estes, 110 F.3d 1523, 1527 (10th Cir.1997). Plaintiffs
caused this litigation to be brought" and Defendants'
"costs to be incurred." White, 256 F.3d at 586. Thus,
absent Plaintiffs carrying their burden of showing
that Defendants' otherwise recoverable costs should
not be taxed, they must "make the prevailing [parties]
whole." Id. Plaintiffs have simply failed to meet this
burden in that they have failed to establish a valid
basis for penalizing Defendants with the denial or
reduction of their otherwise recompensable costs.
We, therefore, AFFIRM Defendants' costs awards for
substantially the reasons stated by the district court.
1 After examining the briefs and appellate
record, this panel has determined
unanimously that oral argument would not
materially assist in the determination of this
appeal. See Fed. R.App. P. 34(a)(2); 10th
Cir. R. 34.1(G). The case is therefore ordered
submitted without oral argument.
2 We reject Plaintiffs' assertion that the
district court's costs awards were impermissible
because they contravened the local
Clerk's Guidelines for Taxation of Costs. As
the district court correctly noted, the clerk's
guidelines do not purport to be an authoritative
exposition of the costs allowable under
applicable law and they are not binding on
the district court. The district court, therefore,
correctly analyzed Defendants' requested
costs under § 1920, Rule 54, and our
controlling precedents.
C.A.10 (Okla.), 2009.
In re Williams Securities Litigation-WCG Subclass
--- F.3d ----, 2009 WL 514097 (C.A.10 (Okla.))
|