Gatx/Airlog Company, et al v. Evergreen Intl, et al

Filing 2264

ORDER by Judge Claudia Wilken GRANTING IN PART PLAINTIFF'S 2241 MOTION FOR REVIEW OF CLERK'S NOTICE OF TAXABLE COSTS AND GRANTING STAY. (ndr, COURT STAFF) (Filed on 12/5/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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KALITTA AIR, LLC,

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United States District Court
For the Northern District of California

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No. C 96-2494 CW

Plaintiff,
v.
CENTRAL TEXAS AIRBORNE SYSTEMS,
et al.,

ORDER GRANTING IN
PART PLAINTIFF'S
MOTION FOR REVIEW
OF CLERK'S NOTICE
OF TAXABLE COSTS
AND GRANTING STAY

Defendants.
________________________________/

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Plaintiff Kalitta Air moves for review of the Clerk’s notice

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of taxable costs and an order setting taxable costs in this matter

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at $177,000.

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of costs pending the outcome of its appeal.

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Texas Airborne Systems (CTAS) opposes the motion, arguing that all

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but a few items in the Clerk's award of $691,591.783 were proper.

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CTAS does not oppose Kalitta's request for a stay, but argues that

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Kalitta should be required to post a supersedeas bond in the

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amount of 150 percent of the costs awarded. The matter was decided

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without oral argument.

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by the parties, the Court GRANTS IN PART Plaintiff's motion for

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review of the Clerk's taxation of costs, and GRANTS Plaintiff's

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request to stay collection of costs pending appeal.

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orders Plaintiff to post a supersedeas bond in the amount of fifty

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percent of the taxable costs or $311,018.19.

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Kalitta also requests that the Court stay collection
Defendant Central

Having considered all of the papers filed

The Court

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BACKGROUND
In 1996, Kalitta Air filed a lawsuit against numerous

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Defendants, including CTAS.

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favor of CTAS.

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costs, and, on Kalitta's motion, the Court reduced the taxable

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costs to $355,370.08.

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pending Kalitta's appeal, and ordered Kalitta to post a

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supersedeas bond in the amount of 50 percent of the taxable costs.

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In 2003, the Ninth Circuit affirmed in part and reversed in part

In 2001, a jury rendered a verdict in

The Clerk awarded CTAS $489,319.37 in taxable

The Court stayed collection of those costs

United States District Court
For the Northern District of California

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this Court's decision and remanded the case.

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jury trial resulted in a mistrial, and the Court granted in part

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CTAS's motion for judgment as a matter of law.

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and CTAS cross-appealed.

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affirmed in part and reversed in part this Court's decision and

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remanded the case.

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favor of CTAS.

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Circuit.

In 2005, a second

Kalitta appealed

In 2008, the Ninth Circuit again

In 2012, a third jury rendered a verdict in

Kalitta has filed a notice of appeal to the Ninth

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On April 10, 2012, CTAS sought $724,021.37 in costs.

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8, 2012, the Clerk awarded CTAS $691,591.73 in taxable costs.

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Clerk found that CTAS was entitled to $1,310 in Fees of the Clerk,

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$300,632.78 for exemplification and copies, $20.00 for docket

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fees, $34,178.87 for depositions subsequent to the first trial,

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and the $355,370 awarded by the Court after the first trial.

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Civil L.R. 54-3(c), (d), (f).

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On May
The

See

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DISCUSSION
I.

Taxable Costs

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A.

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Kalitta first argues that it is inequitable to tax costs at

Equity Argument

the level awarded by the Clerk.

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54(d)(1) creates a presumption in favor of awarding a prevailing

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party its costs other than attorneys' fees, but vests in the

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district court the discretion to refuse to award such costs if the

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district court gives specific reasons explaining why the case is

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United States District Court
For the Northern District of California

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not ordinary and why it would be ‘inappropriate or inequitable to

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award costs.’”

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Inc., 407 F.3d 1027, 1038 (9th Cir. 2005) (quoting Ass'n of

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Mexican-Am. Educators v. California, 231 F.3d 572, 591, 593 (9th

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Cir. 2000) (en banc)).

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“Federal Rule of Civil Procedure

Jack Russell Terrier Network v. Am. Kennel Club,

Kalitta bases its equity argument on its contentions that the

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case was close and difficult, it litigated in good faith, and, it

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asserts, many of the costs were caused by CTAS’s decision to

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change its trial strategy after the first trial.

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than half of the costs taxed are the costs already awarded by the

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Court following the first trial.

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case cited by Kalitta in support of its argument emphasizes the

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losing party’s financial resources as a factor in determining

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whether to deny costs.

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231 F.3d at 591.

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the costs is a significant factor in many cases in the Ninth

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Circuit.

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1038 (affirming the denial of costs where the district court noted

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the losing party’s “lack of financial resources”).

However, more

More importantly, the primary

See Ass’n of Mexican-American Educators,

Indeed, the losing party’s ability to pay for

See, e.g., Jack Russell Terrier Network, 407 F.3d at

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Kalitta is

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clearly able to pay CTAS’s costs in this case.

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Reply at 7 (“Kalitta’s financial condition is such that its

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ability to pay the costs in the event of an unsuccessful appeal

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are beyond question.”).

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See Plaintiff’s

The Court finds that the equities do not support a reduction
of CTAS’s costs.

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B.

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Kalitta next argues that various items in CTAS’s bill of

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costs should be reduced because they go beyond what is permitted.

United States District Court
For the Northern District of California

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Reduction of Costs Claimed by CTAS

1.

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Pro Hac Vice Admission

The Clerk awarded CTAS $1,310 for pro hac vice admission

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fees.

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There is no rule in the Ninth Circuit regarding such fees, and

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some courts have allowed such costs, while others have not.

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Competitive Technologies v. Fujitsu Ltd., 2006 U.S. Dist. LEXIS

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98312, at *12-13 (N.D. Cal.) (noting that “the Ninth Circuit has

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not addressed this issue” and that “a number of district courts in

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the Ninth Circuit have not allowed such fees to be recovered”);

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but see SEIU v. Rosselli, 2010 U.S. Dist. LEXIS 122202, at *10

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(N.D. Cal.) (allowing recovery of $1,260 in pro hac vice fees).

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The Clerk’s order awarding $1,310 for pro hac vice admission fees

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is affirmed.

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2.

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Kalitta argues such fees are not proper taxable costs.

See

Exemplification and Copying Costs

Under 28 U.S.C. § 1920, the court may tax “the costs of

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making copies of any materials where the copies are necessarily

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obtained for use in the case.”

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are “necessarily obtained” copies.

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copying disclosures or formal discovery documents is allowable,

Local Rule 54-3(d) clarifies what

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For example, the cost of

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while the cost of copying motions, pleadings and notices is not.

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CTAS claimed $318,457.19 in exemplification and copying costs.

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The Clerk reduced this amount to $300,632.78.

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this amount should be reduced further on several bases.

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a. In-House Copying Costs

Kalitta argues that

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CTAS has claimed $26,186.95 and $13,430.15 for in-house

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copying costs incurred by the two law firms that represented it.

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These amounts represent a voluntary fifty percent discount by

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CTAS.

Kalitta argues that CTAS has failed to establish that the

United States District Court
For the Northern District of California

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amount sought was for copies made for permissible purposes.

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responds generally that it need not provide “copy-by-copy

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documentation of costs.”

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CTAS

The invoices submitted by CTAS do not indicate the purpose of

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the copies made.

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firm does not even indicate the number of pages copied, or the

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amount charged per page.

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Pages 42-74.

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copies were made and the total amount charged.

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in-house copying by Steven Levitt & Associates, P.C. includes the

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page count and rate per page for some entries, but not all.

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Docket No. 2234, Exhibit B, Part 2, Pages 22-41.

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not provide a description for each individual page copied, its

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documentation provides no basis for determining which, if any, of

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the in-house copying costs are taxable.

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The invoice for in-house copying by the Sedgwick

See Docket No. 2234, Exhibit B, Part 2,

The invoice indicates only the date on which the
The invoice for

See

While CTAS need

Moreover, because CTAS has failed to provide documentation of

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the number of copies made or the rate charged for those pages, it

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is impossible for the Court to make any determination of the

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reasonableness of these costs.

Cf. Meier v. United States, 2009
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U.S. Dist. LEXIS 31391, at *6-7 (N.D. Cal.) (finding that party’s

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claim of costs “for approximately 5,000 pages of in-house copying

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taxed at a rate often cents per page” was reasonable).

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CTAS’s argument that it has voluntarily discounted its in-

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house copying costs by fifty percent is unavailing in light of the

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amount sought and the lack of documentation of the number of

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copies made, the amount charged per copy, and the purpose of the

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copies.

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distinguishable.

The cases it cites in support of this argument are
Cf. Langston v. N. Am. Asset Dev. Corp. Group

United States District Court
For the Northern District of California

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Disability Plan, 2010 U.S. Dist. LEXIS 12507, at *28 (N.D. Cal.)

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(reducing by twenty-five percent a claim of $539 for 3,850 pages

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at a rate of fourteen cents per page to $404.25); Saberi v. BFS

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Retail & Commer. Operations, LLC, 2011 U.S. Dist. LEXIS 54864, at

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*23 (N.D. Cal.) (accepting a twenty percent voluntary discount on

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non-discovery-related copying costs where the party “scrupulously

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detailed the costs sought to be recovered as best it could” and

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submitted a table “specifying cost [and] specific statute

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authorizing cost”).

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The Court grants Kalitta’s motion with respect to CTAS’s inhouse copying costs and disallows $39,617.10 in costs.

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b.

Visual Aid Development

Civil Local Rule 54-3(d)(5) provides, “The cost of preparing

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charts, diagrams, videotapes and other visual aids to be used as

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exhibits is allowable if such exhibits are reasonably necessary to

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assist the jury or the Court in understanding the issues at

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trial.”

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of the exhibits were required by a judge.

The cost of reproducing exhibits is allowable when copies

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Civil L.R. 54-3(d)(4).

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Kalitta challenges charges submitted for visual aid

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development by graphics consultants, first arguing that the

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exhibits were not reasonably necessary.

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complex engineering and financial concepts.

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the exhibits presented by CTAS were reasonably necessary to assist

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the jury and the Court in understanding the issues in the case.

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This case involved
The Court finds that

Kalitta next argues that CTAS is overreaching, attempting to

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recover for time spent developing the content of the exhibits

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rather than the physical creation and duplication of those

United States District Court
For the Northern District of California

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exhibits.

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only for the physical preparation and duplication of documents,

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not the intellectual effort involved in their production.”

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v. Shanahan, 80 F.3d 1366, 1371 (9th Cir. 1996) (internal

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quotations omitted).

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meetings, on-site trial support, case review, and coordination are

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not permissible because they “do not arise from the physical

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preparation of demonstratives.”

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Intel Corp., 2009 U.S. Dist. LEXIS 122596, at *7-8 (N.D. Cal.).

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“Fees for exemplification and copying are permitted

Zuill

Accordingly, costs for things such as

Computer Cache Coherency Corp. v.

The Court has reviewed the invoices from FTI Consulting,

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Fulcrum Legal Graphics and LegalEdge submitted by CTAS and found

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that there are multiple entries for meetings and telephone calls,

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trial consulting, on-site trial support, and other impermissible

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charges.

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much time was spent on the impermissible items.

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bears the burden of demonstrating the reasonableness of the costs

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incurred.

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reasonable.

It is not entirely clear from the invoices produced how
However, CTAS

The Court finds that a further reduction of $16,500 is

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c.

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Production of Deposition Clips to Be Played
Before the Jury

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Kalitta argues that CTAS should not recover costs associated

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with the production of deposition clips to be played for the jury

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because these costs are in excess of the “cost of an original and

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one copy of any deposition” permitted by Local Rule 54-3(c)(1).

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However, as discussed above, Local Rule 54-3(d)(5) allows recovery

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of costs for “videotapes and other visual aids to be used as

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exhibits.”

Courts have allowed costs for the production of

United States District Court
For the Northern District of California

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deposition clips pursuant to Local Rule 54-3(d)(5) because such

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clips can “assist[] the jury in understanding the evidence.”

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of Alameda v. Nuveen Mun. High Income Opportunity Fund, Nos. 08-

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4575, 09-1437, 2012 U.S. Dist. LEXIS 7403, at *10 (N.D. Cal.),

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citing BDT Prods, Inc. v. Lexmark Int’l, 405 F.3d 415, 419-20 (6th

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Cir. 2005); see also Hynix Semiconductor Inc. v. Rambus Inc., 697

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F. Supp. 2d 1139, 1150-51 (N.D. Cal. 2010) (allowing the taxation

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of costs related to video synchronization).

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City

The Court finds that the costs for preparing deposition clips

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to be played for the jury are allowable.

However, the invoice to

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which Kalitta objects includes costs beyond the production of

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those deposition clips.

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support, duplication and shipment of hard drives, trial

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preparation, setting up and striking a war room, meetings and

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reviewing outlines are not recoverable.

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related to exhibits are only recoverable to the extent that they

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“arise from the physical preparation of demonstratives.”

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Cache Coherency Corp., 2009 U.S. Dist. LEXIS 122596, at *7-8.

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CTAS has applied a voluntary thirty percent reduction to the

These costs, including trial presentation

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As discussed above, costs

Computer

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relevant invoice to account for any expenses not directly related

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to the physical preparation of the deposition clips.

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after reviewing the invoice, the Court finds that the thirty

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percent reduction is not sufficient.

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that a fifty percent reduction is more appropriate.

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the Court disallows an additional $9,906.90 in costs.

However,

Instead, the Court finds
Accordingly,

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3.

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CTAS claimed $48,864.27 in costs for depositions after the

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Deposition Costs

first trial in this matter.

United States District Court
For the Northern District of California

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$14,685.40.

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The Clerk then reduced this amount by

reduced on several grounds.

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a.

Kalitta now argues that these costs should be further

Costs Beyond Exemplification or an Original and One
Additional Copy of Depositions

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Kalitta objects to CTAS’s claim for costs related to the

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following items that appear on various invoices:

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videoconference and internet streaming fees for depositions; $225

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for ASCII discs; $1,127 for “Condensed Transripts,” “E-mail of e-

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trans,” “Interactive Realtime,” and “LEF File”; and $112.75 for

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next day air delivery.

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Accordingly, the Court reduces the bill of costs by $3,477.25.

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$2,012.50 in

CTAS waives its request for these costs.

Kalitta also objects to two additional items related to these

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invoices: “DVD Copy” and “Compact Disc transferred from VHS.”

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Kalitta argues that allowing recovery for the cost of a DVD copy

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of a videotaped deposition in addition to the written transcript

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exceeds the allowable cost.

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"The cost of an original and one copy of any deposition (including

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video taped depositions) taken for any purpose in connection with

Local Civil Rule 54-3(c)(1) provides,

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9

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the case is allowable.

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costs for videotaped depositions.

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CTAS points to this Rule's allowance of

Several courts in this district have interpreted Rule 54-

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3(c)(1) to allow a party to recover the cost of one DVD copy in

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addition to the stenographic transcript for videotaped

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depositions.

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Dist. LEXIS 23834, at *7-8 (N.D. Cal.); Pixion Inc. v. PlaceWare

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Inc., 2005 U.S. Dist. LEXIS 11351, at *5-6 (N.D. Cal.); MEMC Elec.

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Materials v. Mitsubishi Materials, 2004 U.S. Dist. LEXIS 29359, at

See, e.g., Asyst Techs. v. Emtrak Inc., 2009 U.S.

United States District Court
For the Northern District of California

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*17-33, n.5-14 (N.D. Cal.), citing Tilton v. Capital Cities/ABC,

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115 F.3d 1471 (10th Cir. 1997); Meredith v. Schreiner Transport,

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814 F. Supp. 1004 (D. Kan. 1993).

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that a prevailing party may recover costs for both the

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stenographic and video copies of a videotaped deposition when both

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are reasonably necessary.

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This Court agrees and finds

It appears that the two entries for “DVD Transferred from

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VHS” and “Compact Disc transferred from VHS” are charges for the

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creation of a single video copy of a videotaped deposition and are

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therefore allowable.

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shows that CTAS received two DVD copies of the deposition for

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$110.

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However, the invoice for the “DVD Copy”

Accordingly, the Court reduces the bill of costs by $55.
b.

Transcript Synchronization for Depositions from the
First Trial

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Kalitta next objects to invoices for “Transcript

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Synchronization” of four depositions from 1999, arguing that these

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are costs for impermissible additional copies of depositions.

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However, as discussed above, such costs are recoverable as

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exemplification costs, because the purpose of the synchronization
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was to create deposition clips to show to the jury.

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requested reduction of costs related to video synchronization is

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denied.

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c.

Kalitta’s

Deposition Costs from the First Trial

Kalitta argues that certain deposition costs from the first
trial should be further reduced from the amount awarded by the

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Court in 2002.

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that order.

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first trial.

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United States District Court
For the Northern District of California

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d.

However, Kalitta provides no basis for revisiting

The Court will not further reduce the costs from the

Summary of Additional Reductions from the Clerk’s
Taxation of Costs

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1.

$39,617.10 in in-house copying costs

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2.

$16,500 in visual aid production costs

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3.

$9,906 in exemplification costs related to the
production of deposition clips

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4.

$3,477.25 in costs waived by CTAS

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5.

$55.00 for a second DVD copy of a deposition

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Total Reduction:

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Total Net Costs Awarded: $622,036.38

$69,555.35

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C.

Stay of Collection

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Federal Rule of Civil Procedure 62(d) provides that an

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appellant may obtain a stay of execution on the judgment of the

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district court after posting a supersedeas bond.

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a bond protects the prevailing party from the risk of a later

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uncollectible judgment and compensates him for delay in the entry

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of final judgment.”

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859 F.2d 818, 819 (9th Cir. 1988).

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staying collection of the judgment for costs without first posting

“The posting of

National Labor Relations Board v. Westphal,

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Kalitta moves for an order

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a supersedeas bond.

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judgment for costs is distinguishable from other judgments and

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should be stayed until the appellate process is complete, citing

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Brown v. American Enka Corp., 452 F. Supp. 154, 160 (E.D. Tenn.

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1976).

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Kalitta argues, as it did in 2002, that a

The Court again finds that there is nothing in the language

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of Rule 62 that suggests that a judgment for costs should be

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treated differently than any other judgment.

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Court requires Kalitta to post a supersedeas bond in order to stay

Accordingly, the

United States District Court
For the Northern District of California

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the enforcement of the judgment for costs.

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as to the amount of the bond that the Court should require.

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Court exercises its discretion to order a bond in the amount of

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fifty percent of the taxable costs.

The parties disagree
The

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CONCLUSION

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For the foregoing reasons, Kalitta’s motion for an order

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modifying the Clerk’s assessment of taxable costs and setting

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taxable costs is GRANTED in part and DENIED in part.

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costs of $622,036.38 are awarded.

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collection of costs pending appeal is GRANTED, on condition that

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Kalitta post a supersedeas bond in the amount of fifty percent of

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the taxable costs or $311,018.19.

Taxable

Kalitta’s request to stay

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IT IS SO ORDERED.

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Dated: 12/5/2012
CLAUDIA WILKEN
United States District Judge

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