Cataphora, Inc. v. Parker et al

Filing 334

ORDER by Magistrate Judge Bernard Zimmerman granting plaintiff nontaxable costs (bzsec, COURT STAFF) (Filed on 1/20/2012)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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Plaintiff(s),
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v.
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JERROLD SETH PARKER, et al.,)
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Defendant(s).
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CATAPHORA INC.,

No. C09-5749 BZ
ORDERING GRANTING PLAINTIFF
NONTAXABLE COSTS

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On December 27, 2011, the Clerk taxed costs in the amount

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of $17,565.76 against Defendants.1

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additional costs under the parties’ contract in the amount of

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$33,231.90, for expert witness fees, travel expenses, jury

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consultant fees, deposition costs, printing/copying costs and

Plaintiff now moves for

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The determination of taxable costs is governed by 28
U.S.C. § 1920 and, more particularly, Civil L.R. 54-3, which
specifically enumerates the standards for costs recoverable in
this District. This court may only tax costs explicitly
authorized by § 1920. See Alflex Corp. v. Underwriters Labs.,
Inc., 914 F.2d 175, 177-78 (9th Cir. 1990); see also Crawford
Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 442(1987).
Section 1920 permits the taxing of costs for various items,
such as deposition transcripts and copying of papers, if they
are “necessarily obtained for use in the case.” 28 U.S.C. §
1920.
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postage/messenger costs.

The contractual provision upon which

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Plaintiff relies states that the “prevailing party in any

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legal action ... shall be entitled ... to reimbursement for

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its costs and expense [sic] (including court costs and

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reasonable fees for attorneys and expert witnesses) incurred

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with respect to the bringing and maintaining of any such

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action.”

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Because Plaintiff is relying on the parties’ contract in

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order to recover costs beyond those permitted under 28 U.S.C.

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§ 1920, California law governs.

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jurisdiction, a federal court must follow the substantive law

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as derived from the state’s statutes and the state’s highest

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court decisions.

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1385, 1391 (9th Cir. 1994).

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the state’s highest court has not yet ruled on an issue, a

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federal court may consider state appellate court opinions,

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statutes and treatises to “determine what result the state

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supreme court would reach.”

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California Supreme Court has not yet ruled on whether a

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prevailing party may recover out-of-pocket expenses such as

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expert fees, postage and telephone/photocopying charges

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pursuant to contract (see Davis v. KGO-T.V., 17 Cal. 4th 436,

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446 fn. 5 (1998)), and there is a split of appellate authority

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on this issue.

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out-of-pocket costs to be recovered from the prevailing party,

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even items specifically not allowable as costs under Code Civ.

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Proc. § 1033.5(b).

When sitting in its diversity

See Vernon v. City of Los Angeles, 27 F.3d
In determining state law where

Id. (citations omitted).

The

One appellate court has allowed counsel’s

See Bussey v. Affleck, 225 Cal. App. 3d

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1162, 1165, 1167 (1990).2

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to statutory costs.

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4th 1616, 1619 (1994).3

Another court has limited recovery

See Ripley v. Pappadopoulos, 23 Cal. App.

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While an undefined general contractual provision

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entitling a prevailing party to “reasonable attorneys’ fees

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and costs” may not extend to expert fees, that is not the

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situation presented here.

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entered into a contract that entitles the prevailing party “to

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reimbursement for its costs and expense [sic] (including court

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costs and reasonable fees for attorneys and expert witnesses)

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... .”

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reported cases, this contract expressly allows for recovery of

Here, the parties negotiated and

Unlike the contracts in Ripley and Bussey and other

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In Bussey, the trial court refused to allow recovery
of expert witness fees to a prevailing plaintiff. The Court of
Appeal reversed, concluding that where a contract between the
parties provides for the payment of costs and attorney fees,
expenses of experts paid by counsel may be recovered as
attorney fees if they represent an expense ordinarily billed to
a client rather than an overhead component of the attorney’s
hourly rate. Id. at 1166.

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In Ripley, the court disagreed with Bussey and
concluded instead that because the express provisions of
section 1033.5 do not allow for recovery of expert witness
expenses as costs, except where the expert was ordered by the
court, such costs are not recoverable. Ripley, 23 Cal. App.
4th at 1624-25. Nearly every subsequent reported decision
considering the issue has followed Ripley and rejected Bussey,
concluding that “contractual costs provisions are presumed to
adopt the statutory definition [contained in section 1033.5]
absent evidence to the contrary.” Hsu v. Semiconductor
Systems, Inc., 126 Cal. App. 4th 1330, 1341-1342 (2005); see
also Arntz Contracting Co. v. St. Paul Fire & Marine Ins. Co.,
47 Cal. App. 4th 464, 491-492 (1996); Fairchild v. Park, 90
Cal. App. 4th 919, 931 (2001); Steiny & Co. v. California
Electric Supply Co., 79 Cal. App. 4th 285, 293-294 (2000);
First Nationwide Bank v. Mountain Cascade, Inc., 77 Cal. App.
4th 871, 878 (2000); Robert L. Cloud & Associates, Inc. v.
Mikesell, 69 Cal. App. 4th 1141, 1154 (1999); California
Housing Finance Agency v. E.R. Fairway Associates I, 37 Cal.
App. 4th 1508, 1514-1515 (1995).
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expert fees.

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Ripley and other courts, of conflating attorney fees with

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expert fees.

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App. 4th 1330, 1342 (2005) (“Nor may the disputed costs be

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awarded to plaintiff as an element of attorney fees under the

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rationale that the expenses were disbursed by the attorneys in

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the course of litigation.”).4

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is entitled to recover the costs of its expert witnesses

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pursuant to the parties’ contract, which specifically itemizes

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There is thus no concern, as expressed by

Cf. Hsu v. Semiconductor Systems, Inc., 126 Cal.

I therefore find that Plaintiff

reasonable expert witness fees as a recoverable expense.
With respect to the other costs sought by Plaintiff, I

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choose to follow Bussey for a number of reasons.

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the better reasoned case.

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on many occasions, parties are free to enter into contracts

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which shift attorneys’ fees and costs to the prevailing party.

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See, e.g., Alyeska Pipeline Co. v. Wilderness Society, 421

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U.S. 240, 257 (1975); Fleischmann Distilling Corp. v. Maier

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Brewing Co., 386 U.S. 714, 717 (1967).

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provision which expressly permits the prevailing party to

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recover costs in addition to court costs as limiting the

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prevailing party to statutorily recoverable court costs would

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undermine this long standing rule for no apparent purpose.

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agree with the Bussey court that to prevent parties from so

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contracting would “impair the effectiveness of contractual ...

First, it is

As the Supreme Court has recognized

To construe a

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Indeed, given the express itemization of expert
witness fees in this contract as a recoverable expense separate
and apart from attorneys’ fees, the parties perhaps drafted
this provision to contract around the issues presented in
Ripley.
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costs provisions and prevent the prevailing party from being

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made whole.”

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Arntz, 47 Cal. App. 4th at 491-92 (“While it is reasonable to

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interpret a general contractual cost provision by reference to

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an established statutory definition of costs, we do not

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discern any legislative intent to prevent sophisticated

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parties from freely choosing a broader standard authorizing

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recovery of reasonable litigation charges and expenses.”).

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rule that limits parties that incorporate express cost-

Bussey, 225 Cal. App. 3d at 1166; see also

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shifting provisions in their contracts, to the costs permitted

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by section 1033.5 would negate the contract provision, since

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the prevailing party is already entitled to statutory taxable

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costs.

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Second, permitting parties to contract for reimbursement

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of reasonable litigation costs beyond those authorized by

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statute is consistent with federal law.

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Vision Tech. Sec. Litig, 913 F. Supp. 1362, 1366 (N.D. Cal.

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1995) (costs and expenses “are subject to a test of relevance

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and reasonableness in amount . . . . The judge must look at

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the practical and reasonable needs of the party in the context

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of the litigation.”); see also In re Immune Response Sec.

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Litig., 497 F. Supp. 2d 1166, 1177-78 (S.D. Cal. 2007)

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(awarding expenses for travel costs, filing fees, photocopies,

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messenger services, and computerized legal research).

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Finally, as stated above, the cost provision in this contract

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is broader than the provisions in Ripley and Bussey, and

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therefore also supports an award of reasonable costs beyond

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those costs itemized in section 1033.5.
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See, eg., In re Media

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Defendants also contend that Plaintiff may not recover

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non-taxable costs because it did not prove them at trial as

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damages, citing Hsu and Arntz.

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the context of an indemnification action such as Arntz, is

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unsound.

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indemnification provision, in which the plaintiff seeks to

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recover litigation costs incurred because of the breach as an

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element of damages, it makes sense for costs to be proven at

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trial.

To apply these cases outside

In a suit for breach of a contractual

But in cases such as this one, where reimbursement

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hinges on which party is the “prevailing party,” requiring

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costs to be pleaded and proven at trial would waste judicial

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resources and inject confusion because both parties would be

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required to put on evidence of their respective costs.5

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Again, this contract – negotiated and executed by

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sophisticated parties – includes specific language entitling

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the prevailing party to reasonable costs and expenses

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(including court costs and reasonable expert and attorney

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fees).

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recovery of attorney fees and the recovery of costs, there is

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no risk of an “unwarranted conflation of fees and costs.”

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Hsu, 126 Cal. App. 4th at 1342.

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to recover its reasonable costs of litigation because they

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“represent expenses ordinarily billed to a client and are not

Since the contract clearly distinguishes between the

Plaintiff should be entitled

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Moreover, the procedure for obtaining attorneys’ fees
and costs when those amounts are not being sought as an element
of damages is by way of a memorandum of costs, which is timely
so long as submitted no more than 10 days after entry of the
judgment. See Cal. Rules Ct., Rule 3.1700(a)(1); Cal. Code
Civ. Proc. §§ 1033, 1034(a); see also Silverado Modjeska
Recreation & Park Dist. v. County of Orange, 197 Cal. App. 4th
282 (2011).
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included in the overhead component of counsel’s hourly rate.”

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Bussey, 225 Cal. App. 3d at 1166.
IT IS THEREFORE ORDERED that, Plaintiff is entitled to

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recover nontaxable costs in the amount of $33,231.90.6

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Dated: January 20, 2012

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Bernard Zimmerman
United States Magistrate Judge

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G:\BZALL\-BZCASES\CATAPHORA V. PARKER\ORDER ON NONTAXABLE COSTS.wpd

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Defendants did not challenge any specific cost as
unreasonable.
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