Taylor v. Autozone, Inc.

Filing 300

ORDER denying 292 plaintiffs' MOTION to review clerk's taxation of costs. The Clerk's taxation judgment of $66,599.02 against plaintiffs (doc. 291) is AFFIRMED. IT IS FURTHER ORDERED granting in part 297 plaintiff's Moti on to Seal. Pursuant to LRCiv 5.6(e), the lodged document (doc. 298) will not be filed. Instead, within five days of the date of this order plaintiffs shall file copies of the fee agreements with their social security numbers, telephone numbers, and addresses redacted. See PDF document for details and deadlines. Signed by Judge Frederick J Martone on 6/20/12.(LSP)

Download PDF
1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 17 Michael L. Taylor; Dilawar Khan; Volena) Glover-Hale; Manuel Montoya, on behalf) of themselves and other persons similarly) ) situated, ) ) Plaintiffs, ) ) vs. ) ) AutoZone Inc., a Tennessee corporation;) AutoZone Inc., a Nevada corporation;) ) AutoZoners LLC, ) ) Defendants. ) ) CV 10-08125-PCT-FJM ORDER 18 The court has before it plaintiffs' motion to review clerk's taxation of costs (doc. 292), 19 defendants' response (doc. 293), and plaintiffs' reply (doc. 294). In response to our order 20 dated June 8, 2012 (doc. 295), plaintiffs submitted declarations from the named plaintiffs and 21 plaintiffs' counsel (docs. 296, 299). Finally, we have before us plaintiffs' motion to seal (doc. 22 297). 23 As outlined in our June 8, 2012 order, we previously granted summary judgment to 24 defendants on plaintiffs' Fair Labor Standards Act ("FLSA") collective action. The Clerk 25 taxed $66,599.02 in costs against plaintiffs (doc. 291).1 Plaintiffs move this court to review 26 the costs taxed against them. Because it was unclear whether it was plaintiffs or their counsel 27 28 1 Plaintiffs do not challenge the Clerk's calculation of taxable costs. 1 who would ultimately be responsible for the payment of costs, we ordered plaintiffs to submit 2 updated declarations, a declaration from counsel, and copies of their fee agreements. These 3 documents confirm that it is plaintiffs' counsel, not plaintiffs, who will be ultimately 4 responsible for the payment of costs. 5 Although Rule 54(d)(1), Fed. R. Civ. P. presumptively awards costs to the prevailing 6 party, we may in our discretion deny or modify the award. Plaintiffs, as the losing party, bear 7 the burden of proving why we should not award costs. The Ninth Circuit lists a number of 8 reasons why costs may be appropriately denied, including "(1) a losing party's limited 9 financial resources; (2) misconduct by the prevailing party;" (3) "the chilling effect of 10 imposing [] high costs on future civil rights litigants;" (4) "the issues in the case were close 11 and difficult;" (5) "the prevailing party's recovery was nominal;" (6) "the losing party 12 litigated in good faith;" and (7) "the case presented a landmark issue of national importance." 13 Champion Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1022 (9th Cir. 2003) 14 (citations omitted). 15 Plaintiffs argue that we should refrain from taxing costs in this case because of (1) the 16 plaintiffs' limited financial resources, (2) the potential chilling effect on future litigants, (3) 17 the close and difficult issues in the case, and (4) the need for plaintiffs to file several motions 18 to compel during discovery. Although briefing on the motion for summary judgment 19 included lengthy submissions from both sides, we do not agree that the legal issue in the case 20 - whether or not plaintiffs were properly classified as managerial employees - was difficult. 21 This kind of case has been routinely decided by district and appellate courts by considering 22 established factors. That the question could be decided without a trial supports a finding that 23 the issues were neither close nor difficult. We are also not persuaded that plaintiffs' need to 24 file motions to compel in this action constitutes misconduct on the part of defendants to 25 justify setting aside a presumptive award of costs. Nor does the subject matter alone justify 26 rebuttal of the presumption. See Ass'n of Mexican-Am. Educators v. California, 231 F.3d 27 572, 593 (9th Cir. 2000) (presumption of awarding costs to prevailing party applies equally 28 -2- 1 in civil rights actions). 2 We turn to the cornerstone of plaintiffs' argument: their limited financial resources and 3 the potential chilling effect on future FLSA litigants. The motion originally included 4 declarations from each of the four named plaintiffs highlighting each plaintiff's "limited 5 financial means." They lamented that if a large judgment was enforced against them, each 6 "would be forced to seek bankruptcy protection," and that such a judgment would have a 7 chilling effect "because the risk of losing would be financially disastrous." (docs. 284, 285, 8 286, 287). Plaintiffs argued that the "vast economic disparity" between them and defendants 9 was an "important and obvious ground for not imposing costs in this case." Mot. to Review 10 Costs at 4. Plaintiffs urged us not to affirm an award of costs against them that, even if 11 divided equally among them, "would amount to 33% of [their] annual pay." Reply at 6. In 12 short, plaintiffs' argument about their limited financial resources and the chilling effect of 13 imposing a large award of costs on future FLSA litigation centered around the assumption 14 that the $66,599.02 would come out of plaintiffs' pockets. 15 16 17 18 19 20 21 22 23 24 25 26 27 Plaintiffs did not divulge to the Court, until ordered to do so, that counsel will foot the bill. With this information come to light, we find that plaintiffs' personal financial situation does not support setting aside the presumptive award of costs. See Jardin v. DATAllegro, Inc., 08-CV-1462-IEG (WVG), 2011 WL 4835742, at *4 (S.D. Cal. Oct. 12, 2011) (denying motion to deny costs in part because plaintiff "has not argued that he—as opposed to his counsel, pursuant to a fee agreement—will have to pay the cost award himself"). Moreover, the chilling effect on future FLSA litigants is minimal at best. Tibble v. Edison Int'l, CV-075359-SVW (AGRx), 2011 WL 3759927, at *3 (C.D. Cal. Aug. 22, 2011) (chilling effect minimal because plaintiffs not liable for costs under the fee arrangement). Indeed, potential FLSA litigants of "limited financial means" reading our ruling may be encouraged to seek counsel to pursue their claims, knowing that they may be able to enter an agreement where they will not be personally responsible for costs should their claims fail. After considering all of the Champion Produce factors, we conclude that plaintiffs have not shown that Rule 28 -3- 1 54(d)(1), Fed. R. Civ. P.'s presumptive award of costs should be set aside. 2 Ultimately, plaintiffs' references to bankruptcy, their limited resources, and the 3 disparity of wealth between the parties are hypothetical concerns. Of great concern, 4 however, is that plaintiffs' arguments and original declarations, which strongly implied that 5 plaintiffs would be responsible for payment of costs, were misleading to the Court. These 6 kinds of documents are crafted by lawyers, not clients. Accordingly, plaintiffs' counsel will 7 show cause why they should not be required to pay defendants' attorneys' fees and costs 8 incurred in defending plaintiffs' motion to review clerk's taxation of costs as a sanction. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Finally, plaintiffs move to file copies of their fee agreements under seal. Although there is a strong presumption in favor of public access to court records, documents attached to a non-dispositive motion may be sealed if the moving party shows good cause. Kamakana v. City & Cnty. of Honolulu, 447 F.3d 1172, 1180 (9th Cir. 2006). Plaintiffs have offered no specific reasons to seal the agreements, suggesting only that these documents are usually kept private. The fee agreements do contain plaintiffs' social security numbers, phone numbers, and addresses, information that we agree should be kept private. However, while plaintiffs' counsel see no necessity for the fee agreements to become public, we do. Specifically, plaintiffs' counsel declared under penalty of perjury in the declaration we ordered him to file that "[n]one of the representation agreements specifically address the payment of Defendants' costs." Samson Decl. ¶ 3 (doc. 296, ex. 1). This statement is contradicted both by the fee agreements and the remainder of the declaration. As plaintiffs' counsel recognizes, the fee agreements state that if plaintiffs' claims are unsuccessful, plaintiffs are "not responsible for the payment of any attorney fees, costs or expenses." Samson Decl. ¶ 3 (emphasis added). Despite the absence of the word "defendants," the language of the provision appears plain to us. Indeed, plaintiffs themselves understand the agreement as requiring their lawyers to pay the costs taxed against them. Samson Decl., ex. B. 27 28 Despite our June 8, 2012 order requiring plaintiffs' counsel to "affirmatively stat[e] -4- 1 who is responsible for payment of the costs. . . under the fee arrangement," Order at 3 (doc. 2 295), plaintiffs' counsel appears content to rely on semantics to deny that the fee agreements 3 address the issue of who pays defendants' costs. Under these circumstances, we do not find 4 there is good cause to seal the agreements, other than to redact the social security numbers, 5 addresses, and phone numbers of the plaintiffs. 6 IT IS ORDERED DENYING plaintiffs' motion to review clerk's taxation of costs 7 (doc. 292). The Clerk's taxation judgment of $66,599.02 against plaintiffs (doc. 291) is 8 AFFIRMED. 9 10 11 12 IT IS ORDERED GRANTING IN PART plaintiffs' motion to seal (doc. 297). Pursuant to LRCiv 5.6(e), the lodged document (doc. 298) will not be filed. Instead, within five days of the date of this order plaintiffs shall file copies of the fee agreements with their social security numbers, telephone numbers, and addresses redacted. 13 14 15 16 17 18 19 20 21 22 23 IT IS FURTHER ORDERED that within fourteen (14) days of the date of this order, plaintiffs' counsel shall file a memorandum showing cause why they should not be required to pay defendants' fees and costs in responding to the motion to review taxation of costs. Defendants shall file a response within fourteen (14) days of the filing of the memorandum. The response shall include an itemization of attorney's fees incurred in connection with plaintiffs' motion for review of taxation of costs along with any supporting documentation. Plaintiffs counsel will then have seven (7) days to reply if desired. Their reply should include any objections to the reasonableness of the fees. The memorandum, response, and reply shall each be limited to ten pages. DATED this 20th day of June, 2012. 24 25 26 27 28 -5-

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?