Petroliam Nasional Berhad v. GoDaddy.com, Inc.

Filing 190

RESPONSE (re 189 MOTION for Bill of Costs --Review of Clerk's Action Under Fed. R. Civ. P. 54(d)(1) ) filed byGoDaddy.com, Inc.. (Attachments: # 1 Proposed Order)(Fiorino, Joseph) (Filed on 4/25/2012) Modified on 5/3/2012 (vlk, COURT STAFF).

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JOHN L. SLAFSKY, State Bar No. 195513
DAVID L. LANSKY, State Bar No. 199952
JOSEPH G. FIORINO, State Bar No. 262787
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 Page Mill Road
Palo Alto, CA 94304
Telephone:
[phone]
Facsimile:
[phone]
Email:
[e-mail]

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Attorneys for Defendant,
GODADDY.COM, INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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PETROLIAM NASIONAL BERHAD,
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Plaintiff,
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vs.
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GODADDY.COM, INC.,
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Defendant.
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GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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CASE NO.: 09-CV-5939 PJH
GO DADDY’S OPPOSITION TO
PETRONAS’S MOTION UNDER
FED. R. CIV. P. 54(D)(1) FOR THE
COURT TO REVIEW THE CLERK’S
ACTION TAXING COSTS
Date:
Time:
Courtroom:

May 16, 2012
9:00 a.m.
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Honorable Phyllis J. Hamilton

Defendant GoDaddy.com, Inc. (“Go Daddy”) respectfully submits this Opposition to the

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Motion of Plaintiff Petroliam Nasional Berhad (“Petronas”) under Federal Rule of Civil Procedure

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54(d)(1) for the Court to review the Clerk’s action taxing costs filed April 11, 2012 (“Motion to

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Review”).

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After successfully defending an untenable lawsuit over a period of two years—culminating

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in this Court’s grant of Go Daddy’s Motion for Summary Judgment on January 3, 2012 (see Dkt.

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158)—Go Daddy filed a Bill of Costs on February 29, 2012 (“Bill of Costs”). See Dkt. 175. The

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Bill of Costs sought to recover a mere fraction of the financial outlays Go Daddy incurred in

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defending itself against Petronas’s claims. Petronas filed objections to the Bill of Costs on March

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14 (see Dkt. 176), and Go Daddy responded on March 16. See Dkt. 177. On March 28, 2012,

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pursuant to 28 U.S.C. Section 1920 and Civil Local Rule 54-3, the Clerk of the Court correctly

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awarded costs to be taxed in the amount of $13,697.63 in favor of Go Daddy. See Dkt. 180.

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Petronas’s Motion to Review is an unnecessary and unfounded attempt to evade responsibility for

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expenses imposed upon Go Daddy due to Petronas’s decisions and actions in prosecuting this

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lawsuit.1 Accordingly, Go Daddy respectfully requests that the Clerk’s taxing of costs in the

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amount of $13,697.63 be upheld.

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I.

THE CLERK’S AWARD OF COSTS IN FAVOR OF GO DADDY IS
APPROPRIATE

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Title 28 U.S.C. Section 1920 authorizes a judge or clerk of the district court to tax costs.

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Pursuant to Federal Rule of Civil Procedure 54(d), costs (other than attorney’s fees) should be

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awarded to a prevailing party unless a statute, rule, or court order provides otherwise. Fed. R. Civ.

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P. 54(d)(1). “Rule 54(d) creates a presumption in favor of awarding costs to prevailing parties,

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and it is incumbent upon the losing party to demonstrate why the costs should not be awarded.”

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Stanley v. Univ. of So. Cal., 178 F.3d 1069, 1079 (9th Cir. 1999). “The party objecting to the

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assignment of costs bears the burden of overcoming the presumption and establishing why the

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Petronas’s intention to litigate at every opportunity is further demonstrated by its March 16,
2012 notice of appeal to the United States Court of Appeals for the Ninth Circuit. See Dkt. 178.

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GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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prevailing party is not so entitled.” Van v. Wal-Mart Stores, Inc., No. 5:08-CV-05296, 2012 WL

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174944, at *5 (N.D. Cal. Jan. 20, 2012). Should the Court refuse to tax costs to the losing party, it

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must give specific reasons for so doing. Save Our Valley v. Sound Transit, 335 F.3d 932, 944-45

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(9th Cir. 2003). However, the Court “need not give affirmative reasons for awarding costs;

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instead, it need only find that the reasons for denying costs are not sufficiently persuasive to

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overcome the presumption in favor of an award.” Id. Here, the reasons offered by Petronas in

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support of its request to vacate the entire amount of costs taxed in favor of Go Daddy are not

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sufficient.

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Due to the significant burden faced by a losing party seeking to avoid assignment of costs

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by the Court, a mere identification of factors that could support a refusal to tax costs does not

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compel the Court to do so. See Wal-Mart Stores at *5-6 (“[A]ssuming the accuracy of [plaintiff’s]

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statements regarding her limited financial resources and the complexity and merits of her case, the

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court does not find these reasons sufficient to overcome the presumption under Rule 54(d)(1).”).

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Even the cases cited by Petronas in its Motion to Review are reflective of how high the hurdle is.

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See Save Our Valley at 946 (upholding district court’s taxing of costs despite the fact that

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plaintiffs’ case raised “issues of great public importance… to civil rights plaintiffs everywhere,”

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legal questions that are “close and complex,” and a “major question” over which “the circuits are

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split”); Quan v. Computer Sciences Corp., 623 F.3d 870, 889 (9th Cir. 2010) (reversing and

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remanding district court’s decision not to tax costs).

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Furthermore, the two cases cited by Petronas where a losing party actually succeeded in

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having costs denied fundamentally differ from this case. In Association of Mexican-American

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Educators v. State of California and Stanley v. University of Southern California, the plaintiffs in

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both cases were individuals and/or nonprofit organizations possessing limited financial resources

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who asserted important civil rights claims. See Association of Mexican-American Educators v.

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State of California, 231 F.3d 572, 593 (9th Cir. 2000) (“This is an extraordinary, and

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extraordinarily important, case. Plaintiffs are a group of individuals and nonprofit organizations.

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The record demonstrates that their resources are limited.”); Stanley v. University of Southern

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California, 178 F.3d 1069, 1079 (9th Cir. 1999) (remanding denial of motion to re-tax costs
GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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“particularly based on. . . two factors: Stanley’s indigency, and the chilling effect of imposing

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such high costs on future civil rights litigants”); see also Save Our Valley at 945 (noting that

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“Stanley only held that, in the rare occasion where severe injustice will result from an award of

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costs (such as the injustice that would result from an indigent plaintiff’s being forced to pay tens

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of thousands of dollars of her alleged oppressor’s legal costs), a district court abuses its discretion

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by failing to conclude that the presumption has been rebutted”). In light of Petronas’s reported

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revenues of more than $62.5 billion for fiscal year 2010 (see Petronas: Financial Results webpage

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at http://www.petronas.com.my/investor-relations/Documents/financial-

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results/FullYearEnded20100331-USD.pdf (last visited April 17, 2012)), it is hard to fathom that

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Petronas’s circumstances could ever be deemed comparable to those of plaintiffs possessing

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limited financial resources or worthy of similar accommodation by the Court. See Stanley at 945

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(“A district court deviates from natural practice when it refuses to tax costs to the losing party”).

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Petronas’s naked assertions are not sufficient to overcome the presumption costs are appropriate,

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and do not entitle Petronas to avoid responsibility for the taxable costs it forced Go Daddy to

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incur. See Mou v. City of San Jose, No. C 07-5740, 2010 WL 1486039, at *1 (N.D. Cal. April 13,

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2010).

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After all, Petronas’s expensive and protracted lawsuit was completely unnecessary.

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Petronas sued Go Daddy after Go Daddy informed Petronas that it could not take action against a

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website hosted by a third party based on Petronas’s trademark claim directed at the underlying

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domain name. See Declaration of Jessica Hanyen in Support of Go Daddy’s Motion for Summary

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Judgment (“Hanyen Decl.”), Exs. 8, 10. Rather, as Go Daddy promptly responded, such a dispute

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is properly addressed pursuant to the Uniform Domain Name Dispute Resolution Policy

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(“UDRP”) (see id.), which all domain name registrars are required to follow and which sets forth

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an expedited and inexpensive arbitration process for such disputes. See Declaration of Michael D.

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Palage in Support of Go Daddy’s Motion for Summary Judgment, ¶¶ 64, 65, 69.2 Had Petronas

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See also Am. Girl, LLC v. Nameview, Inc., 381 F. Supp. 2d 876, 883 (E.D. Wis. 2005) (“The
UDRP is an administrative alternative dispute resolution policy which creates a procedure
specifically designed to provide a fast and cheap means for resolving domain name disputes. . .
GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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(continued...)

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initiated the UDRP arbitration proceeding at that time, Petronas would have likely obtained

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ownership of the petronastower.net domain name within 60 days at a cost of less than $10,000,

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inclusive of attorneys’ fees and filing fees. See Id. ¶ 82. Instead, Petronas made the conscious

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choice to ignore the UDRP arbitration process—which it had successfully utilized on four

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previous occasions (id. ¶ 70)—and pull Go Daddy into a financially draining litigation that would

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carry on for two years prior to Go Daddy’s eventual vindication in summary judgment.

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Furthermore, Petronas litigated the case in a manner that was overly aggressive and

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unwarranted under the circumstances. The disputed domain names—petronastower.net and

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petronastowers.net (“Disputed Domains”)—were initially registered by a third party through a

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different registrar, eNom, on May 8, 2003. See Declaration of John Slafsky in Support of Go

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Daddy’s Motion for Summary Judgment (“Slafsky Decl.”), Exs. 3-4. Both Disputed Domains

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were pointed at an IP address associated with a pornographic website as early as May 29, 2004.

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Id. ¶ 6 & Exs. 1-5. Four years later, on April 1, 2007, then registrant Heiko Schoenekess

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transferred the Disputed Domains from eNom to Go Daddy. Mr. Schoenekess used Go Daddy’s

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online dashboard to automatically forward the internet traffic for the Disputed Domains to the

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same pornographic website they had been associated with in past years. Declaration of John

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Roling in Support of Go Daddy’s Motion for Summary Judgment, ¶ 15 & Ex. 4; Slafsky Decl., ¶ 6

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& Exs. 1-5. Two years later—despite the Disputed Domains by this time having been in public

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use in connection with pornographic material for more than five years without any prior objection

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by Petronas—Petronas took the extreme measure of bringing a Motion for a Temporary

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Restraining Order (“TRO”) against Go Daddy on December 18, 2009. See Dkt. 2. Petronas made

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this extraordinary request to the Court notwithstanding the passage of five years and the

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availability of far more expedient and cost-effective resolution processes (discussed above). Go

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Daddy successfully opposed the TRO on December 23, 2009. See Dkt. 21. However, Go Daddy

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fully cooperated with Petronas to the fullest extent possible by promptly facilitating in rem

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(...continued from previous page)
[and] most likely will provide plaintiff with effective relief faster than any procedure available to
this court.”).
GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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transfers of the Disputed Domains at the soonest possible dates – enabling Petronas to secure

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control of petronastower.net as early as May 18, 2010 and petronastowers.net as early as August

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30, 2010. See Hanyen Decl., ¶¶ 24, 27.

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Inexplicably, Petronas persisted in litigating its claims following the resolution of the in

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rem actions. Petronas continued to subject Go Daddy and the Court to the burdens of litigation for

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an additional 16 months despite the only potential legal remedy available being a far-fetched

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statutory damages claim under the ACPA. See 15 U.S.C. § 1117(d). Indeed, during depositions

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and in response to written discovery demands, Petronas was unable to state for the record any

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harm it suffered in connection with the Disputed Domains, and even admitted that it was not

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aware of a single complaint about the Disputed Domains from customers. Slafsky Decl., Ex. 9

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(Gaik, 55:5-16).

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Furthermore, the assertion in Petronas’s papers that questions in this case were “close” is

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highly misleading. The statutory immunity provided to domain name registrars under the ACPA

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is long established and widely recognized. See Palage Decl., ¶ 84 (the effect of Petronas

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succeeding on its claims would be “the doing away with over a decade of established law

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shielding registrars from liability in cybersquatting disputes like this one”); see also Brief for

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Amicus Curiae Enom, Inc., 8 (“To hold GoDaddy liable for maintaining the third-party

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registration of ‘petronastower.net’ and ‘petronastowers.net,’ and for implementing a domain

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forwarding function set up by the registrant, would run contrary to existing case law and create an

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unsupported narrowing of the blanket exception applied to registrars under the ACPA.”); Brief of

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Networks Solutions LLC and Register.com, Inc. as Amici Curiae in Support of Defendant

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GoDaddy.com’s Motion for Summary Judgment, 8 (if the Court holds that routing is not protected

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under the ACPA immunity, “[t]he practical impact. . . would be to impose substantial liability on

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domain name registrars who have traditionally considered routing a core function.”). Overturning

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the existing law regarding domain names—on which registrars have long relied in the conduct of

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their business—would have had a devastating impact on the Domain Name System Industry and

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adversely affected millions of consumers. See Id. at 6-7 (“A finding of this Court that the

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provision of routing services. . . is outside the ACPA’s safe harbor provision, would. . . stifle the
GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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registrar industry by causing a wholesale overhaul of the current registration process. . . This

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overhaul would have a chilling effect on commerce and undoubtedly result in an industry-wide

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increase in the fees associated with registration in order to offset potential liability.”).

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For the reasons stated above, the presumption favoring an award of costs to Go Daddy

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pursuant to Federal Rule of Civil Procedure 54(d) is not overcome.

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II.

THE SPECIFIC COST ITEMS AWARDED BY THE CLERK IN FAVOR OF GO
DADDY ARE APPROPRIATE

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Petronas has requested that the Court deny and/or reduce the costs awarded by the Clerk

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for Items 4-6, 8-10, and 14-36 of Go Daddy’s Bill of Costs. Petronas’s objections to these specific

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cost items ignore the testimonial and documentary evidence presented in Go Daddy’s Bill of Costs

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(see Bill of Costs, Exs. A, C) and demonstrate an erroneous understanding of Civil Local Rule 54.

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Petronas’s request should be denied.

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A.

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Civil Local Rule 54-3(c)(1) provides that, with respect to deposition transcripts, “[t]he cost

Deposition Transcripts

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of an original and one copy of any deposition (including videotaped depositions) taken for any

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purpose in the case” is recoverable (emphasis added). Petronas’s objection to a recovery of costs

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for the September 15, 2011 deposition of Ms. Yeoh Suat Gaik “because [Ms. Gaik] was

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deposed. . . on issues related to GoDaddy’s counterclaim for trademark cancellation” (Spec. Obj.

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to Item 4) is indefensible. As Petronas’s Rule 30(b)(6) witness, deposing Ms. Gaik was critical to

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mounting an effective defense to the claims asserted by Petronas in this litigation. See Bill of

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Costs, Ex. A (Declaration of Joseph G. Fiorino in Support of Go Daddy’s Bill of Costs (“Fiorino

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Decl.”)) ¶¶ 4, 7. The Gaik deposition was essential for Go Daddy to assess the merits of

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Petronas’s claims against it. Id. ¶ 4; see also, e.g., Slafsky Decl., Ex. 9 (Gaik, 55:5-16) (admitting

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that Petronas was not aware of any complaints from customers regarding the Disputed Domains).

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Information obtained during the Gaik deposition was utilized by Go Daddy in its successful

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motion for summary judgment. See, e.g., Go Daddy’s Motion for Summary Judgment, 7, 17.

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Since the costs of a deposition “taken for any purpose in the case”—such as for a pivotal summary

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GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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judgment motion—are recoverable under Civil Local Rule 54-3(c)(1), the Clerk’s award of costs

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for Item 4 of Go Daddy’s Bill of Costs is proper.

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Petronas also incorrectly objects to certain necessary costs involved in the taking of

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depositions, including court reporter charges for rough drafts (Spec. Objs. to Items 4-6, 8-10),

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shipping and handling costs (Spec. Objs. to Items 4-6, 8-10), and expedited processing (Spec.

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Objs. to Items 5, 6, 10). It is common practice for court reporters to provide an invoice for a

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deposition transcript listing the various services that go into processing of that transcript. These

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natural costs—such as for rough disks (aka rough drafts), delivery, and expedited services—tied to

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the transcribing of depositions are recoverable. See Service Employees Intern. Union v. Russel,

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No. C 09-00404, 2010 WL 4502176, at *3-4 (N.D. Cal. Nov. 1, 2010) (overruling objections to

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reporter’s invoices listing “‘rough disk’ fees, ‘expedited’ services charges, parking

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reimbursements, charges for court reporter ‘waiting time,’ charges for court reporter ‘before/after

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hours,’ delivery costs, appearance and travel fees, “video digitizing to DVD[s],’ and ‘video

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synchronizing’”; awarding over $200,000 in costs).

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B.

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Petronas’s objections to the Clerk’s award of costs for Items 14-36 relating to the

Exemplification and Reproduction of Documents

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reproduction and exemplification of documents is without merit. Under Civil Local Rule 54-

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3(d)(2), “[t]he cost of reproducing disclosure or formal discovery documents when used for any

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purpose in the case is allowable.” As indicated in the Itemized Bill of Costs and the Fiorino Decl.,

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charges for reproduction were incurred to reproduce discovery documents, several of which were

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also reproduced for use in depositions. See Bill of Costs, Ex. A ¶ 8; Ex. B, Items 14-36. Petronas

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cites to no legal authority to support its insistence that Go Daddy must go further and specifically

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identify each of the documents that were reproduced or “blown back.” See Spec. Objs. to Items

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19, 20, 22-24, 31-33, 36.

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Similarly, Petronas wrongly objects to costs for certain processes required to produce

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electronic documents in response to Petronas’s own discovery demands, including costs for the

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conversion of files (Spec. Obj. to Items 18, 35), scanning (Spec. Obj. to Item 34), image

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endorsing (Spec. Objs. to Items 34, 35), and assistance of electronic document technicians (Spec.
GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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Objs. to Items 14-17, 21, 22, 30, 32-35). Over the course of the litigation Petronas served 57

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document requests on Go Daddy, requiring the Company to convert and reproduce documents

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from multiple electronic databases to meet its discovery obligations. The costs associated with

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reproduction of such discovery documents are recoverable under Rule 54-3(d)(2). See Parrish v.

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Manatt, Phelps & Phillips, LLP, No. C 10-03200, 2011 WL 1362112, at *2 (N.D. Cal Apr. 11,

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2011) (holding that costs incurred for “reproduction, scanning, [conversion,] and imaging of client

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documents ‘for review and potential production’ or ‘for initial production’. . . are properly

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recoverable”); In Re: Online DVD Rental Antitrust Litigation, No. 4:09-md-02029, Dkt. 615, at 2

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(N.D. Cal. April 20, 2012) (declining to disallow clerk’s taxation of costs based on plaintiffs’

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objections to “TiFF conversion costs; copying/“blowback” costs purportedly not documented;

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document productions purportedly not delivered; [and] professional fees re visual aids”); Cargill

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Inc. v. Progressive Dairy Solutions, Inc., No. CV-F-07-0349, 2008 WL 5135826, at *6 (E.D. Cal.

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Dec. 8, 2008) (where “case management was done electronically because of the volume of

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documents, [and] scanning of documents was necessary to provide an adequate defense to the

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several motions and trial presentation,” such costs were recoverable); Hecker v. Deere & Co., 556

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F.3d 575 (7th Cir. 2009) (finding no abuse of discretion in district court awarding costs to

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defendant in the amount of $164,814.43 for converting computer data into readable format in

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response to plaintiffs’ discovery requests). In addition, Go Daddy has made a conscious effort to

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be conservative in seeking costs for reproduction by only submitting the invoices of outside

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vendors for recovery. See Bill of Costs, Ex. C at 15-37. Go Daddy has foregone seeking the

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photocopying costs charged by its counsel Wilson Sonsini Goodrich & Rosati, in order to

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specifically avoid seeking the cost of reproducing copies of motions, pleadings, notices, and other

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routine case papers.

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Petronas also implies that Go Daddy has improperly recovered costs for the assistance of

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electronic document technicians in connection with the reproduction of electronic documents. See

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Spec. Objs. to Items 14-17, 21, 22, 30, 32-35. This is incorrect, and Petronas fails to cite to any

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legal authority involving electronic document technicians to support this point. Instead, Petronas

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relies on cases that predate the era of e-discovery and that deal with the unrelated matters of costs
GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
Case No. 4:09-cv-05939-PJH

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for obtaining documents from a copyright office (see Zuill v. Shanahan, 80 F. 3d 1366 (9th Cir.

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1996)) and expert witness expenses. See Romero v. City of Pomona, 883 F.2d 1418 (9th Cir.

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1989). Furthermore, the “intellectual effort” described by the court in Romero—and rejected as a

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recoverable cost—is a reference to an expert witness’s preparation of various documents’

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contents. See Romero at 1428. Similarly, in Zuill, “intellectual effort” is a reference to attorneys’

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fees charged for helping prepare a production. See Zuill at 1371. In contrast, Go Daddy’s Bill of

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Costs does not seek any recovery for its attorneys’ time in reviewing or preparing documents for

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production or for the analysis of expert witnesses, only the necessary time spent by e-discovery

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technicians in facilitating the reproduction of electronic documents. See Bill of Costs, Ex. C at 15-

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18, 22, 23, 31, 33-36.
For the reasons stated above, Go Daddy respectfully requests that the Clerk’s award of
$13,697.63 in taxable costs in favor of Go Daddy be upheld.

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Dated: April 25, 2012

WILSON SONSINI GOODRICH & ROSATI
Professional Corporation

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By: /s/ Joseph G. Fiorino
Joseph G. Fiorino

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Attorneys for Defendant,
GODADDY.COM, INC.

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GO DADDY’S OPPOSITION TO PETRONAS’S
MOTION TO REVIEW ACTION TAXING COSTS
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