Opinion
CIVIL ACTION NO: 01-3625, SECTION "R" (2)
September 11, 2003
ORDER AND REASONS
Before the Court is the motion of plaintiff, Warren Reuther, to review taxation of defendant Corporations' costs, in accordance with Federal Rule of Civil Procedure 54(d)(1) and Local Rule 54.5. For the following reasons, the Court GRANTS in part and DENIES in part plaintiff's motion.
The Corporations named as defendants in this lawsuit are Airport Holdings, Inc., Airport Shuttle, Inc., Airport Shuttle Colorado, Inc., Chicory Building, Inc., Delta Transit, Inc., Destination Management, Inc., Hospitality Enterprises, Inc., Lodging, Inc., New Orleans International Cruise Ship Terminal, Inc., New Orleans Paddlewheels, Inc., New Orleans Tours, Inc., On the Town, Inc., RSC Management, Inc., and Visitor Marketing, Inc. (hereinafter collectively referred to as the "Corporations").
I. Background
A. Factual Background
This lawsuit involved a family dispute between Reuther and his nephew, James Smith, Jr., over control of a number of closely-held Corporations created by Reuther and Smith's father. Reuther alleged that James Smith, Jr. engaged in fraudulent conduct to wrest control of the Corporations from Reuther and to use his power unlawfully to divert corporate assets to himself in the form of executive compensation. The facts of this lawsuit are set forth in detail in Reuther v. Smith, No. Civ. A. 01-3625, 2003 WL 1955167 (E.D. La. 2003).
B. Procedural Background
Plaintiff filed suit in federal court asserting both federal and state law claims. In October, 2002, all of the defendants filed their respective motions for summary judgment, seeking dismissal of plaintiff's federal and state law claims. ( See Smith's Mot. for Summ. J. and Corporations' Mot. for Summ. J., Rec. Docs. 206-207.) On April 22, 2003, this Court dismissed plaintiff's federal suit against the Corporations, James E. Smith, and Smith Martin, APLC. ( See Rec. Doc. 297.)
On May 16, 2003, the Corporations filed an Application for Bill of Costs in the amount of $7,698.21 to assess the costs associated with defending plaintiff's action. ( See Rec. Doc. 301.) On June 17, 2003, the Clerk of Court taxed plaintiff all costs requested by defendant Corporations. ( See Rec. Doc. 306.)
Defendant James E. Smith, Jr. also submitted an Application for Bill of Costs. See Rec. Doc. 304. At this time, no hearing date has been scheduled for his request of $8,983.49. Id.
Plaintiff now seeks review of the Clerk of Court's taxing of (1) fees for service of subpoenas duces tecum on plaintiff Reuther, plaintiff's attorney Graymond Martin, and Martin's law firm, Halpern, Banner, Martin Miles, L.L.C.; (2) fees of the court reporter for all or any part of the deposition transcripts necessarily obtained for use in the case; and (3) fees and disbursements for obtaining copies of records requested by plaintiff in discovery. (See Pl.'s Mot. to Review Taxation of Def. Corporation's Costs, p. 2-3, Rec. Doc. 307.)
II. Discussion
A. Legal Standard
Federal Rule of Civil Procedure 54(d)(1) provides that:
Except when express provision therefor is made either in a state of the United States or in these rules, costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs . . . Such costs may be taxed by the clerk on one day's notice. On motion served within 5 days thereafter, the action of the clerk may be reviewed by the Court.
FED. R. Civ. P. 54(d). The Clerk of Court entered judgment on Tuesday, June 17, 2003. Plaintiff filed this Motion to Review Taxation on Tuesday, June 24, 2003, which is within the five-day period. Rule (54) (d) creates a strong presumption in favor of awarding costs to the prevailing party. Russian River Watershed Prot. Comm. v. City of Santa Rosa, 142 F.3d 1136, 1144 (9th Cir. 1998); see also Popeil Bros., Inc. v. Schick Elec., Inc., 516 F.2d 772, 776 (7th Cir. 1975). The presumption may be overcome if the losing party can demonstrate some impropriety on the part of the prevailing party that would justify a denial of costs. See Popeil Bros., 516 F.2d at 775; Lewis v. Pennington, 400 F.2d 806, 819 (6th Cir. 1968). This impropriety has been variously defined as bad faith or deliberate confusion on the part of the prevailing party, such as, for example, calling unnecessary witnesses, bringing in unnecessary issues or otherwise encumbering the record, or otherwise unnecessarily prolonging the trial. See Popeil Bros., 516 F.2d at 775; Lewis, 400 F.2d at 819. That a party has brought its case in "good faith and with meritorious intentions" or that a case has raised "close and difficult legal issues" is not a sufficient reason to justify the denial of costs to a prevailing party. National Info. Servs., Inc. v. TRW, Inc., 51 F.3d 1470, 1473 (9th Cir. 1994); see also Popeil Bros., 516 F.2d at 776 (7th Cir. 1975).
Section 1920 details the type of items that may be taxed as costs against the non-prevailing party. See 28 U.S.C. § 1920. Specifically, § 1920 states:
A judge or clerk of any court of the United States may tax as costs the following:
(1) Fees of the clerk and marshal; (2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and copies of papers necessarily obtained for use in the case; (5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation under 1828 of this title.
A bill of costs shall be filed in the case and, upon allowance, included in the judgment or decree.28 U.S.C. § 1920.
B. Analysis
1. Fees for Service of Summons and Subpoena
Defendant seeks to tax as costs (1) a $20 fee for the service of a subpoena duces tecum on Reuther, and (2) a $95 fee for the service of two subpoenas duces tecum, one on Graymond Martin and one on his law firm, Halpern, Danner, Martin Miles, L.L.C.
Plaintiff contends that he should not be taxed the $20 fee for service of a subpoena duces tecum on Reuther, arguing that the service of a subpoena upon a party to appear at a deposition is unnecessary. Further, plaintiff argues that the subpoena is unnecessary because the parties previously agreed to conduct the deposition on a particular date with the consent of the Magistrate.
Defendant contends that the subpoena issued was not directed at securing plaintiff's attendance at the deposition, but to compel plaintiff to produce documents at that time. Defendant also argues that according to Federal Rules of Civil Procedure 30, 34, and 45, the service of a subpoena is the proper procedural tool to compel production of documents at a deposition regardless of whether the person to whom the subpoena is directed is a party to the case.
Pursuant to 28 U.S.C. § 1920, defendant may recover costs incurred as a result of a service of summons and subpoena. See 28 U.S.C. § 1920 (1). Defendants, however, had no reason to subpoena plaintiff on October 16, 2002 because the Magistrate had recently and previously confirmed the deposition in his minute entry of October 8, 2002. (See Minute Entry of Magistrate Judge Wilkinson, p. 2, Rec. Doc. 178.) However, the Magistrate's Order did not mention the production of documents at the deposition. A subpoena duces tecum is the proper tool to compel a party to produce documents. Accordingly, this Court finds that the Clerk of Court did not err in taxing plaintiff with the corresponding $20 fee.
Plaintiff also objects to the $95 fee associated with service of subpoenas duces tecum on attorney Graymond Martin and his law firm for a records only deposition. Plaintiff asserts that Martin rightly refused to respond to the subpoena because of its lack of timeliness in giving Martin any reasonable notice.
Defendant contends that the subpoena, served on October 18, 2002 for a deposition to be held on October 22, 2002, was timely due to this Court's discovery deadline of October 23, 2002. Defendant proceeded by filing a Motion to Compel against Martin. The Magistrate denied the Motion to Compel because the subpoena duces tecum and notice of records deposition provided "wholly unreasonable notice" and also requested production of "an overly broad range of materials, including documents as to which privilege objections clearly should have been anticipated." ( See Minute Entry of Magistrate Judge Wilkinson, p. 9, Rec. Doc. 250.)
Accordingly, and in line with the opinion of the Magistrate, this Court finds the subpoenas duces tecum served on Martin and the firm of Halpern, Banner, Martin Miles, L.L.C. for a records only deposition unnecessary. The Clerk of Court erred in taxing plaintiff with the corresponding $95 fee.
2. Fees of Court Reporter for Transcripts Necessarily Obtained for Use in the Case
Defendant seeks to tax as costs 16 separate deposition transcripts and one transcript of a formal discovery conference, totaling $4,060.80. All deposition transcripts for which defendant seeks reimbursement are original copies. They consist of the following:
1. M. Claire Durio (deposed by plaintiff)
2. Ira J. Rosenzweig (deposed by plaintiff)
3. Anthony G. Moore (deposed by plaintiff)
4. Staci A. Rosenberg (deposed by plaintiff)
5. Shaun B. Rafferty (deposed by plaintiff)
6. James E. Smith, Sr. (deposed by plaintiff)
7. Glen G. Morris (deposed by plaintiff)
8. Graymond Martin (deposed by defendant)
9. Warren L. Reuther (deposed by defendant)
10. Dane S. Ciolino (deposed by defendant)
11. Robert Reuther, M.D. (deposed by defendant)
12. A. Philip Moss, Jr. (deposed by defendant)
13. Paul D. Cordes, Jr. (deposed by defendant)
14. James E. Smith, Jr. (deposed by plaintiff)
15. Duane P. Smith (deposed by plaintiff)
16. Robert J. D'Hemecourt (deposed by plaintiff)
Plaintiff does not dispute the necessity of the deposition transcript of Warren Reuther nor that of the discovery conference. Plaintiff does, however, dispute the necessity of obtaining an original copy of the 15 remaining transcripts, a cost of $3,203.65.
Plaintiff contends that the Corporations were only a nominal defendant in this litigation with a minimal role. Further, plaintiff disputes the necessity of obtaining a copy of all 15 depositions because defendant Corporations only attached the deposition of Mr. Reuther to their Motion for Summary Judgment. Plaintiff argues that the success of the Corporations' Motion for Summary Judgment is proof in and of itself of the lack of necessity of the majority of the court reporter fees.
Defendant asserts that plaintiff's contentions are contrary to 28 U.S.C. § 1920 and the law interpreting a prevailing party's rights to recover deposition transcript costs. Further, defendant contends that he reasonably anticipated using each deposition transcript for trial preparation and notes that all of the deponents were identified on the joint pre-trial order as witnesses for one or more parties. ( See Def.'s Memo, in Resp. to Pl.'s Mot. to Review Taxation of Def. Corporations' Costs, p. 6.)
Section 1920 provides that the prevailing party may recover the costs associated with fees for court reporter services for all or any part of a transcript necessarily obtained for use in the case. See 28 U.S.C. § 1920(4). Similarly, Rule 54 of the Federal Rules of Civil Procedure provides that costs shall be allowed as of course to the prevailing party. FED. R. Civ. P. 54(d).
The Fifth Circuit has held that the cost of the original depositions is taxable without any factual finding. Studiengesellschaft Kohle v. Eastman Kodak Co., 713 F.2d 128, 133 (5th Cir. 1983). Further, in determining whether expenses of depositions may be taxed as costs, the court must evaluate the facts of each case and determine whether any or all of the depositions was necessarily obtained for use in the case. A.C. Newman v. A.E. Staley Mfg. Co., 648 F.2d 330, 337 (5th Cir. 1981). A district judge has great latitude in determining whether a deposition was "necessarily obtained for use in the case" or was obtained merely for the convenience of the attorney. Id.
In the present case, all of the noted deposition transcripts were submitted as exhibits or evidence by the Corporations and/or other parties, including plaintiff, to the numerous filings made in this case. For example, plaintiff submitted the deposition testimony of Smith, Jr., Durio, Rosenzweig, Rafferty, Ciolino, Cordes, and Morris as exhibits and/or evidence in his own filings. ( See Rec. Docs. 225, 226, and 229.)
Furthermore, that the depositions are not included in the Corporations' Motion for Summary Judgment is irrelevant to the determination of whether the depositions are necessary. The Fifth Circuit faced a similar objection to a taxing of costs associated with deposition transcripts in Stearns Airport Equipment Co., Inc. v. FMC Corp. 170 F.3d 518, 536 (5th Cir. 1999). There, the prevailing party did not attach nor use the transcripts in its summary judgment. Id. The court held that a deposition need not be introduced into evidence in order to be necessary for a case. Id. As long as there is a reasonable expectation that it may be used for trial preparation, it may be included in the costs. Id.
The Tenth Circuit has noted that deposition transcripts are reasonably necessary for trial when the discovery period in the case has passed at the time the summary judgment motion is granted. Mitchell v. City of Moore, 218 F.3d 1190, 1205 (10th Cir. 2000). In the present case, the discovery period ended on October 23, 2002, well before April 22, 2003, the date this Court granted summary judgment. ( See Minute Entry of Magistrate Judge Wilkinson, p. 9, Rec. Doc. 250.)
Accordingly, this Court finds the 15 deposition transcripts ordered by defendant necessarily obtained for use in this case. The Clerk of Court did not err in taxing plaintiff this cost of $3,203.65.
3. Fees and Disbursement for Printing
Defendant also seeks recovery of $3,457.41 in fees for obtaining copies of documents from outside copy services. Defendant obtained these copies in order to comply with plaintiff's Interrogatories and Request for Production of Documents.
Plaintiff contends that the documents were not obtained until after defendant Corporations submitted their Motion for Summary Judgment on October 25, 2002. Further, plaintiff argues that defendant has failed to show how these documents could be considered necessary for trial purposes.
Defendant asserts that while some of the expenses arose after the close of discovery and the filing of the motions for summary judgment, an order by this Court obligated the corporations to produce the documents. Further, defendant argues that costs incurred in the discovery process which are reasonable and necessary are taxable against the non-prevailing party. Defendant maintains that the documents produced included voluminous financial and banking documents, corporate documents, billing statements, memoranda, and financing proposals. Defendant notes that plaintiff made such requests to all fourteen corporations in the lawsuit and that the records were absolutely necessary to this case, as the Magistrate ordered production of these materials in his Minute Entry of November 18, 2002. Finally, without citation to authority, defendant contends that plaintiff's failure to oppose defendant's request for fees before the Clerk of Court results in his waiver of the right to now contest these costs.
The award of costs for photocopying materials for document production is allowed for copies of materials that are necessarily obtained for use in the case. 28 U.S.C. § 1920; FED. R. Civ. P. 54(d)(1). Section 1920(3) specifically allows for fees and disbursements for printing. When taxing the non-prevailing party, the costs of copying documents other than deposition transcripts is subject to the same standard as that of copying depositions: copies necessarily obtained for use in the case are included within taxable costs, provided that the prevailing party demonstrate such necessity. Fogleman v. ARAMCO, 920 F.2d 278, 286 (5th Cir. 1991). One of the factors considered by the Fogleman court was whether an itemized breakdown of the copying costs is provided in the document supporting the request for costs. Id. In Stearns, the Fifth Circuit noted that multiple copies of relevant documents may not be charged to an opponent but stated that it has never held that a district court may not award a litigant a cost of preparing a single set of documents in a case. 170 F.3d 518 at 536.
In the present case, the defendant provided the Court with a breakdown of the costs incurred in fees for printing. Further, defendant is not seeking to recover costs for more than one copy of the materials.
Accordingly, this Court finds that the copies of materials ordered by defendant in response to plaintiff's discovery request were necessarily obtained for use in this case. The Clerk of Court did not err in taxing plaintiff this cost of $3,457.41.
III. Conclusion
Based on the foregoing, plaintiff's motion to review taxation of defendant Corporations' costs is GRANTED IN PART and DENIED IN PART. The Court GRANTS plaintiff's motion as to fees for service of the subpoenas duces tecum. The Court DENIES plaintiff's motion as to fees for deposition transcripts necessarily obtained for use in this case and as to fees for obtaining copies of documents for plaintiff's discovery request.