Petroliam Nasional Berhad v., 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, Inc.. (Attachments: # 1 Proposed Order)(Fiorino, Joseph) (Filed on 4/25/2012) Modified on 5/3/2012 (vlk, COURT STAFF).

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1 2 3 4 5 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: (650) 493-9300 Facsimile: (650) 493-6811 Email: 6 7 Attorneys for Defendant, GODADDY.COM, INC. 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 11 12 PETROLIAM NASIONAL BERHAD, 13 Plaintiff, 14 vs. 15 GODADDY.COM, INC., 16 Defendant. 17 18 19 20 21 22 23 24 25 26 27 28 GO DADDY’S OPPOSITION TO PETRONAS’S MOTION TO REVIEW ACTION TAXING COSTS Case No. 4:09-cv-05939-PJH ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) 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. 3 Honorable Phyllis J. Hamilton Defendant, Inc. (“Go Daddy”) respectfully submits this Opposition to the 1 2 Motion of Plaintiff Petroliam Nasional Berhad (“Petronas”) under Federal Rule of Civil Procedure 3 54(d)(1) for the Court to review the Clerk’s action taxing costs filed April 11, 2012 (“Motion to 4 Review”). 5 After successfully defending an untenable lawsuit over a period of two years—culminating 6 in this Court’s grant of Go Daddy’s Motion for Summary Judgment on January 3, 2012 (see Dkt. 7 158)—Go Daddy filed a Bill of Costs on February 29, 2012 (“Bill of Costs”). See Dkt. 175. The 8 Bill of Costs sought to recover a mere fraction of the financial outlays Go Daddy incurred in 9 defending itself against Petronas’s claims. Petronas filed objections to the Bill of Costs on March 10 14 (see Dkt. 176), and Go Daddy responded on March 16. See Dkt. 177. On March 28, 2012, 11 pursuant to 28 U.S.C. Section 1920 and Civil Local Rule 54-3, the Clerk of the Court correctly 12 awarded costs to be taxed in the amount of $13,697.63 in favor of Go Daddy. See Dkt. 180. 13 Petronas’s Motion to Review is an unnecessary and unfounded attempt to evade responsibility for 14 expenses imposed upon Go Daddy due to Petronas’s decisions and actions in prosecuting this 15 lawsuit.1 Accordingly, Go Daddy respectfully requests that the Clerk’s taxing of costs in the 16 amount of $13,697.63 be upheld. 17 I. THE CLERK’S AWARD OF COSTS IN FAVOR OF GO DADDY IS APPROPRIATE 18 19 Title 28 U.S.C. Section 1920 authorizes a judge or clerk of the district court to tax costs. 20 Pursuant to Federal Rule of Civil Procedure 54(d), costs (other than attorney’s fees) should be 21 awarded to a prevailing party unless a statute, rule, or court order provides otherwise. Fed. R. Civ. 22 P. 54(d)(1). “Rule 54(d) creates a presumption in favor of awarding costs to prevailing parties, 23 and it is incumbent upon the losing party to demonstrate why the costs should not be awarded.” 24 Stanley v. Univ. of So. Cal., 178 F.3d 1069, 1079 (9th Cir. 1999). “The party objecting to the 25 assignment of costs bears the burden of overcoming the presumption and establishing why the 26 27 1 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. 28 GO DADDY’S OPPOSITION TO PETRONAS’S MOTION TO REVIEW ACTION TAXING COSTS Case No. 4:09-cv-05939-PJH -1- 1 prevailing party is not so entitled.” Van v. Wal-Mart Stores, Inc., No. 5:08-CV-05296, 2012 WL 2 174944, at *5 (N.D. Cal. Jan. 20, 2012). Should the Court refuse to tax costs to the losing party, it 3 must give specific reasons for so doing. Save Our Valley v. Sound Transit, 335 F.3d 932, 944-45 4 (9th Cir. 2003). However, the Court “need not give affirmative reasons for awarding costs; 5 instead, it need only find that the reasons for denying costs are not sufficiently persuasive to 6 overcome the presumption in favor of an award.” Id. Here, the reasons offered by Petronas in 7 support of its request to vacate the entire amount of costs taxed in favor of Go Daddy are not 8 sufficient. 9 Due to the significant burden faced by a losing party seeking to avoid assignment of costs 10 by the Court, a mere identification of factors that could support a refusal to tax costs does not 11 compel the Court to do so. See Wal-Mart Stores at *5-6 (“[A]ssuming the accuracy of [plaintiff’s] 12 statements regarding her limited financial resources and the complexity and merits of her case, the 13 court does not find these reasons sufficient to overcome the presumption under Rule 54(d)(1).”). 14 Even the cases cited by Petronas in its Motion to Review are reflective of how high the hurdle is. 15 See Save Our Valley at 946 (upholding district court’s taxing of costs despite the fact that 16 plaintiffs’ case raised “issues of great public importance… to civil rights plaintiffs everywhere,” 17 legal questions that are “close and complex,” and a “major question” over which “the circuits are 18 split”); Quan v. Computer Sciences Corp., 623 F.3d 870, 889 (9th Cir. 2010) (reversing and 19 remanding district court’s decision not to tax costs). 20 Furthermore, the two cases cited by Petronas where a losing party actually succeeded in 21 having costs denied fundamentally differ from this case. In Association of Mexican-American 22 Educators v. State of California and Stanley v. University of Southern California, the plaintiffs in 23 both cases were individuals and/or nonprofit organizations possessing limited financial resources 24 who asserted important civil rights claims. See Association of Mexican-American Educators v. 25 State of California, 231 F.3d 572, 593 (9th Cir. 2000) (“This is an extraordinary, and 26 extraordinarily important, case. Plaintiffs are a group of individuals and nonprofit organizations. 27 The record demonstrates that their resources are limited.”); Stanley v. University of Southern 28 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 -2- 1 “particularly based on. . . two factors: Stanley’s indigency, and the chilling effect of imposing 2 such high costs on future civil rights litigants”); see also Save Our Valley at 945 (noting that 3 “Stanley only held that, in the rare occasion where severe injustice will result from an award of 4 costs (such as the injustice that would result from an indigent plaintiff’s being forced to pay tens 5 of thousands of dollars of her alleged oppressor’s legal costs), a district court abuses its discretion 6 by failing to conclude that the presumption has been rebutted”). In light of Petronas’s reported 7 revenues of more than $62.5 billion for fiscal year 2010 (see Petronas: Financial Results webpage 8 at 9 results/FullYearEnded20100331-USD.pdf (last visited April 17, 2012)), it is hard to fathom that 10 Petronas’s circumstances could ever be deemed comparable to those of plaintiffs possessing 11 limited financial resources or worthy of similar accommodation by the Court. See Stanley at 945 12 (“A district court deviates from natural practice when it refuses to tax costs to the losing party”). 13 Petronas’s naked assertions are not sufficient to overcome the presumption costs are appropriate, 14 and do not entitle Petronas to avoid responsibility for the taxable costs it forced Go Daddy to 15 incur. See Mou v. City of San Jose, No. C 07-5740, 2010 WL 1486039, at *1 (N.D. Cal. April 13, 16 2010). 17 After all, Petronas’s expensive and protracted lawsuit was completely unnecessary. 18 Petronas sued Go Daddy after Go Daddy informed Petronas that it could not take action against a 19 website hosted by a third party based on Petronas’s trademark claim directed at the underlying 20 domain name. See Declaration of Jessica Hanyen in Support of Go Daddy’s Motion for Summary 21 Judgment (“Hanyen Decl.”), Exs. 8, 10. Rather, as Go Daddy promptly responded, such a dispute 22 is properly addressed pursuant to the Uniform Domain Name Dispute Resolution Policy 23 (“UDRP”) (see id.), which all domain name registrars are required to follow and which sets forth 24 an expedited and inexpensive arbitration process for such disputes. See Declaration of Michael D. 25 Palage in Support of Go Daddy’s Motion for Summary Judgment, ¶¶ 64, 65, 69.2 Had Petronas 26 27 28 2 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 -3- (continued...) 1 initiated the UDRP arbitration proceeding at that time, Petronas would have likely obtained 2 ownership of the domain name within 60 days at a cost of less than $10,000, 3 inclusive of attorneys’ fees and filing fees. See Id. ¶ 82. Instead, Petronas made the conscious 4 choice to ignore the UDRP arbitration process—which it had successfully utilized on four 5 previous occasions (id. ¶ 70)—and pull Go Daddy into a financially draining litigation that would 6 carry on for two years prior to Go Daddy’s eventual vindication in summary judgment. 7 Furthermore, Petronas litigated the case in a manner that was overly aggressive and 8 unwarranted under the circumstances. The disputed domain names— and 9 (“Disputed Domains”)—were initially registered by a third party through a 10 different registrar, eNom, on May 8, 2003. See Declaration of John Slafsky in Support of Go 11 Daddy’s Motion for Summary Judgment (“Slafsky Decl.”), Exs. 3-4. Both Disputed Domains 12 were pointed at an IP address associated with a pornographic website as early as May 29, 2004. 13 Id. ¶ 6 & Exs. 1-5. Four years later, on April 1, 2007, then registrant Heiko Schoenekess 14 transferred the Disputed Domains from eNom to Go Daddy. Mr. Schoenekess used Go Daddy’s 15 online dashboard to automatically forward the internet traffic for the Disputed Domains to the 16 same pornographic website they had been associated with in past years. Declaration of John 17 Roling in Support of Go Daddy’s Motion for Summary Judgment, ¶ 15 & Ex. 4; Slafsky Decl., ¶ 6 18 & Exs. 1-5. Two years later—despite the Disputed Domains by this time having been in public 19 use in connection with pornographic material for more than five years without any prior objection 20 by Petronas—Petronas took the extreme measure of bringing a Motion for a Temporary 21 Restraining Order (“TRO”) against Go Daddy on December 18, 2009. See Dkt. 2. Petronas made 22 this extraordinary request to the Court notwithstanding the passage of five years and the 23 availability of far more expedient and cost-effective resolution processes (discussed above). Go 24 Daddy successfully opposed the TRO on December 23, 2009. See Dkt. 21. However, Go Daddy 25 fully cooperated with Petronas to the fullest extent possible by promptly facilitating in rem 26 27 28 (...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 -4- 1 transfers of the Disputed Domains at the soonest possible dates – enabling Petronas to secure 2 control of as early as May 18, 2010 and as early as August 3 30, 2010. See Hanyen Decl., ¶¶ 24, 27. 4 Inexplicably, Petronas persisted in litigating its claims following the resolution of the in 5 rem actions. Petronas continued to subject Go Daddy and the Court to the burdens of litigation for 6 an additional 16 months despite the only potential legal remedy available being a far-fetched 7 statutory damages claim under the ACPA. See 15 U.S.C. § 1117(d). Indeed, during depositions 8 and in response to written discovery demands, Petronas was unable to state for the record any 9 harm it suffered in connection with the Disputed Domains, and even admitted that it was not 10 aware of a single complaint about the Disputed Domains from customers. Slafsky Decl., Ex. 9 11 (Gaik, 55:5-16). 12 Furthermore, the assertion in Petronas’s papers that questions in this case were “close” is 13 highly misleading. The statutory immunity provided to domain name registrars under the ACPA 14 is long established and widely recognized. See Palage Decl., ¶ 84 (the effect of Petronas 15 succeeding on its claims would be “the doing away with over a decade of established law 16 shielding registrars from liability in cybersquatting disputes like this one”); see also Brief for 17 Amicus Curiae Enom, Inc., 8 (“To hold GoDaddy liable for maintaining the third-party 18 registration of ‘’ and ‘,’ and for implementing a domain 19 forwarding function set up by the registrant, would run contrary to existing case law and create an 20 unsupported narrowing of the blanket exception applied to registrars under the ACPA.”); Brief of 21 Networks Solutions LLC and, Inc. as Amici Curiae in Support of Defendant 22’s Motion for Summary Judgment, 8 (if the Court holds that routing is not protected 23 under the ACPA immunity, “[t]he practical impact. . . would be to impose substantial liability on 24 domain name registrars who have traditionally considered routing a core function.”). Overturning 25 the existing law regarding domain names—on which registrars have long relied in the conduct of 26 their business—would have had a devastating impact on the Domain Name System Industry and 27 adversely affected millions of consumers. See Id. at 6-7 (“A finding of this Court that the 28 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 -5- 1 registrar industry by causing a wholesale overhaul of the current registration process. . . This 2 overhaul would have a chilling effect on commerce and undoubtedly result in an industry-wide 3 increase in the fees associated with registration in order to offset potential liability.”). 4 For the reasons stated above, the presumption favoring an award of costs to Go Daddy 5 pursuant to Federal Rule of Civil Procedure 54(d) is not overcome. 6 II. THE SPECIFIC COST ITEMS AWARDED BY THE CLERK IN FAVOR OF GO DADDY ARE APPROPRIATE 7 8 Petronas has requested that the Court deny and/or reduce the costs awarded by the Clerk 9 for Items 4-6, 8-10, and 14-36 of Go Daddy’s Bill of Costs. Petronas’s objections to these specific 10 cost items ignore the testimonial and documentary evidence presented in Go Daddy’s Bill of Costs 11 (see Bill of Costs, Exs. A, C) and demonstrate an erroneous understanding of Civil Local Rule 54. 12 Petronas’s request should be denied. 13 A. 14 Civil Local Rule 54-3(c)(1) provides that, with respect to deposition transcripts, “[t]he cost Deposition Transcripts 15 of an original and one copy of any deposition (including videotaped depositions) taken for any 16 purpose in the case” is recoverable (emphasis added). Petronas’s objection to a recovery of costs 17 for the September 15, 2011 deposition of Ms. Yeoh Suat Gaik “because [Ms. Gaik] was 18 deposed. . . on issues related to GoDaddy’s counterclaim for trademark cancellation” (Spec. Obj. 19 to Item 4) is indefensible. As Petronas’s Rule 30(b)(6) witness, deposing Ms. Gaik was critical to 20 mounting an effective defense to the claims asserted by Petronas in this litigation. See Bill of 21 Costs, Ex. A (Declaration of Joseph G. Fiorino in Support of Go Daddy’s Bill of Costs (“Fiorino 22 Decl.”)) ¶¶ 4, 7. The Gaik deposition was essential for Go Daddy to assess the merits of 23 Petronas’s claims against it. Id. ¶ 4; see also, e.g., Slafsky Decl., Ex. 9 (Gaik, 55:5-16) (admitting 24 that Petronas was not aware of any complaints from customers regarding the Disputed Domains). 25 Information obtained during the Gaik deposition was utilized by Go Daddy in its successful 26 motion for summary judgment. See, e.g., Go Daddy’s Motion for Summary Judgment, 7, 17. 27 Since the costs of a deposition “taken for any purpose in the case”—such as for a pivotal summary 28 GO DADDY’S OPPOSITION TO PETRONAS’S MOTION TO REVIEW ACTION TAXING COSTS Case No. 4:09-cv-05939-PJH -6- 1 judgment motion—are recoverable under Civil Local Rule 54-3(c)(1), the Clerk’s award of costs 2 for Item 4 of Go Daddy’s Bill of Costs is proper. 3 Petronas also incorrectly objects to certain necessary costs involved in the taking of 4 depositions, including court reporter charges for rough drafts (Spec. Objs. to Items 4-6, 8-10), 5 shipping and handling costs (Spec. Objs. to Items 4-6, 8-10), and expedited processing (Spec. 6 Objs. to Items 5, 6, 10). It is common practice for court reporters to provide an invoice for a 7 deposition transcript listing the various services that go into processing of that transcript. These 8 natural costs—such as for rough disks (aka rough drafts), delivery, and expedited services—tied to 9 the transcribing of depositions are recoverable. See Service Employees Intern. Union v. Russel, 10 No. C 09-00404, 2010 WL 4502176, at *3-4 (N.D. Cal. Nov. 1, 2010) (overruling objections to 11 reporter’s invoices listing “‘rough disk’ fees, ‘expedited’ services charges, parking 12 reimbursements, charges for court reporter ‘waiting time,’ charges for court reporter ‘before/after 13 hours,’ delivery costs, appearance and travel fees, “video digitizing to DVD[s],’ and ‘video 14 synchronizing’”; awarding over $200,000 in costs). 15 B. 16 Petronas’s objections to the Clerk’s award of costs for Items 14-36 relating to the Exemplification and Reproduction of Documents 17 reproduction and exemplification of documents is without merit. Under Civil Local Rule 54- 18 3(d)(2), “[t]he cost of reproducing disclosure or formal discovery documents when used for any 19 purpose in the case is allowable.” As indicated in the Itemized Bill of Costs and the Fiorino Decl., 20 charges for reproduction were incurred to reproduce discovery documents, several of which were 21 also reproduced for use in depositions. See Bill of Costs, Ex. A ¶ 8; Ex. B, Items 14-36. Petronas 22 cites to no legal authority to support its insistence that Go Daddy must go further and specifically 23 identify each of the documents that were reproduced or “blown back.” See Spec. Objs. to Items 24 19, 20, 22-24, 31-33, 36. 25 Similarly, Petronas wrongly objects to costs for certain processes required to produce 26 electronic documents in response to Petronas’s own discovery demands, including costs for the 27 conversion of files (Spec. Obj. to Items 18, 35), scanning (Spec. Obj. to Item 34), image 28 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 -7- 1 Objs. to Items 14-17, 21, 22, 30, 32-35). Over the course of the litigation Petronas served 57 2 document requests on Go Daddy, requiring the Company to convert and reproduce documents 3 from multiple electronic databases to meet its discovery obligations. The costs associated with 4 reproduction of such discovery documents are recoverable under Rule 54-3(d)(2). See Parrish v. 5 Manatt, Phelps & Phillips, LLP, No. C 10-03200, 2011 WL 1362112, at *2 (N.D. Cal Apr. 11, 6 2011) (holding that costs incurred for “reproduction, scanning, [conversion,] and imaging of client 7 documents ‘for review and potential production’ or ‘for initial production’. . . are properly 8 recoverable”); In Re: Online DVD Rental Antitrust Litigation, No. 4:09-md-02029, Dkt. 615, at 2 9 (N.D. Cal. April 20, 2012) (declining to disallow clerk’s taxation of costs based on plaintiffs’ 10 objections to “TiFF conversion costs; copying/“blowback” costs purportedly not documented; 11 document productions purportedly not delivered; [and] professional fees re visual aids”); Cargill 12 Inc. v. Progressive Dairy Solutions, Inc., No. CV-F-07-0349, 2008 WL 5135826, at *6 (E.D. Cal. 13 Dec. 8, 2008) (where “case management was done electronically because of the volume of 14 documents, [and] scanning of documents was necessary to provide an adequate defense to the 15 several motions and trial presentation,” such costs were recoverable); Hecker v. Deere & Co., 556 16 F.3d 575 (7th Cir. 2009) (finding no abuse of discretion in district court awarding costs to 17 defendant in the amount of $164,814.43 for converting computer data into readable format in 18 response to plaintiffs’ discovery requests). In addition, Go Daddy has made a conscious effort to 19 be conservative in seeking costs for reproduction by only submitting the invoices of outside 20 vendors for recovery. See Bill of Costs, Ex. C at 15-37. Go Daddy has foregone seeking the 21 photocopying costs charged by its counsel Wilson Sonsini Goodrich & Rosati, in order to 22 specifically avoid seeking the cost of reproducing copies of motions, pleadings, notices, and other 23 routine case papers. 24 Petronas also implies that Go Daddy has improperly recovered costs for the assistance of 25 electronic document technicians in connection with the reproduction of electronic documents. See 26 Spec. Objs. to Items 14-17, 21, 22, 30, 32-35. This is incorrect, and Petronas fails to cite to any 27 legal authority involving electronic document technicians to support this point. Instead, Petronas 28 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 -8- 1 for obtaining documents from a copyright office (see Zuill v. Shanahan, 80 F. 3d 1366 (9th Cir. 2 1996)) and expert witness expenses. See Romero v. City of Pomona, 883 F.2d 1418 (9th Cir. 3 1989). Furthermore, the “intellectual effort” described by the court in Romero—and rejected as a 4 recoverable cost—is a reference to an expert witness’s preparation of various documents’ 5 contents. See Romero at 1428. Similarly, in Zuill, “intellectual effort” is a reference to attorneys’ 6 fees charged for helping prepare a production. See Zuill at 1371. In contrast, Go Daddy’s Bill of 7 Costs does not seek any recovery for its attorneys’ time in reviewing or preparing documents for 8 production or for the analysis of expert witnesses, only the necessary time spent by e-discovery 9 technicians in facilitating the reproduction of electronic documents. See Bill of Costs, Ex. C at 15- 10 11 12 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. 13 14 Dated: April 25, 2012 WILSON SONSINI GOODRICH & ROSATI Professional Corporation 15 16 By: /s/ Joseph G. Fiorino Joseph G. Fiorino 17 Attorneys for Defendant, GODADDY.COM, INC. 18 19 20 21 22 23 24 25 26 27 28 GO DADDY’S OPPOSITION TO PETRONAS’S MOTION TO REVIEW ACTION TAXING COSTS Case No. 4:09-cv-05939-PJH -9-

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