Diebold Enterprises Security Systems, Inc. v. Low Voltage Wiring, Ltd.
Filing
84
ORDER granting 79 Defendant's Motion for Review of Clerk's Taxation of Costs, ECF No. 77 . The Court shall amend the Bill of Costs [# 77 ] to increase the amount awarded to Defendant to $4,007.85. By Magistrate Judge Kristen L. Mix on 5/9/2014.(klyon, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 13-cv-00505-REB-KLM
DIEBOLD ENTERPRISES SECURITY SYSTEMS, INC., a New York corporation,
Plaintiff,
v.
LOW VOLTAGE WIRING, LTD., a Colorado corporation doing business as LVW
Electronics, Inc.,
Defendant.
______________________________________________________________________
ORDER
______________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KRISTEN L. MIX
This matter is before the Court on Defendant’s Motion for Review of Clerk’s
Taxation of Costs, ECF No. 77 [#79]1 (the “Motion”). Plaintiff filed a Response [#81] in
opposition to the Motion, and Defendant filed a Reply [#82]. The Court has reviewed the
Motion, the Response, the Reply, the entire docket, and the applicable law, and is
sufficiently advised in the premises. For the reasons set forth below, the Motion [#79] is
GRANTED.
I. Background
On December 10, 2013, the Court granted Defendant’s Motion for Summary
Judgment and awarded Defendant its costs pursuant to Fed. R. Civ. P. 54(d)(1) and
D.C.COLO.LCivR 54.1. See Order Granting Defendant’s Motion for Summary Judgment
1
“[#79]” is an example of the convention I use to identify the docket number assigned to
a specific paper by the Court’s case management and electronic case filing system (CM/ECF). I
use this convention throughout this Order.
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[#64] at 7-8. As a result, on December 24, 2013, Defendant filed its proposed Bill of Costs
[#66], listing a total of $5,920.70 in costs associated with litigating this case. On January
8, 2014, Defendant filed a proposed Amended Bill of Costs [#69], listing a total of $5,920.70
in costs associated with litigating this case and Defendant’s Reasonable Effort Statement
Regarding Bill of Costs [#70]. Defendant included $4,007.85 for court reporter fees and the
cost of obtaining deposition transcripts. See generally Proposed Amended Bill of Costs,
Ex. 1 [#69-1]. The remaining $1,912.85 was attributed to “copies of papers necessarily
obtained for use in the case.” Proposed Amended Bill of Costs, Ex. 2 [#69-2] at 1;
Proposed Amended Bill of Costs [#69] at 1. On January 28, 2014, the Clerk of the Court
taxed Plaintiff $0.00 in costs, noting that the motion for summary judgment was filed on
May 24, 2013, before the depositions for which Defendant sought costs were taken and
that those depositions were “not a part of the dispositive motion; nor was a Final Pretrial
Order entered listing witnesses, where depositions would be necessary for effective
preparation for trial.” Bill of Costs [#77] at 2. The Clerk also noted that the $1,912.85
included “copying charges incurred for discovery [and] case records management; not used
as part of the summary judgment motion.” Id. at 3.
In the instant Motion [#45], Defendant challenges the Clerk’s conclusion that the
$4,007.85 relating to deposition expenses sought in the proposed Amended Bill of Costs
should not be awarded to Defendant. See Motion [#79] at 1. Defendant argues that based
on the facts and circumstances at the time the deposition expenses were incurred, they
were reasonably necessary to the litigation of the case. Id. at 4-5. Defendant further
argues that the portion of the costs associated with depositions taken by Plaintiff should be
awarded. Id. at 5. In addition, Defendant notes that it “is not seeking costs for the
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deposition of some extraneous third-party, but a corporate deposition of [Plaintiff] and
individual deposition of its expert witness,” which, Defendant maintains, were necessary
at the time. Id. at 6. Further, Defendant states that “not long before the Court’s Order
Granting Defendant’s Motion for Summary Judgment, counsel for [Plaintiff] told
[Defendant’s counsel] that [Plaintiff] intended to call at least two of the seven corporate
representatives at trial . . . . [Defendant] would have used the deposition transcripts of
these corporate representatives . . . to prepare for trial,” and Defendant “would have used
the other deposition[ ] transcripts at trial pursuant to [Fed. R. Civ. P.] 32.” Id. at 6-7.
Finally, Defendant argues that it “could not list witnesses in the Final Pretrial Order because
the Court entered its Order Granting Defendant’s Motion for Summary Judgment more than
two weeks before the” deadline to submit the proposed order. Id. at 6.
In its Response, Plaintiff argues because the Court did not rely on the disputed
deposition transcripts when granting summary judgment, the costs associated with those
depositions should not be awarded to Defendant. Response [#81] at 4. Plaintiff maintains
that the disputed depositions were “merely used for discovery . . . and their expense should
be borne by the party taking them and ordering them as incident to normal preparation for
trial.” Id.
In its Reply, Defendant revisits the arguments expressed in the Motion and further
maintains that it “had no control over” Plaintiff’s designation of seven different employees
in response to the Fed. R. Civ. P. 30(b)(6) deposition notice Defendant served on Plaintiff,
and, therefore, the number of 30(b)(6) deposition transcripts included in the proposed
Amended Bill of Costs should not counsel against the imposition of costs. Reply [#82] at
3.
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II. Analysis
Fed. R. Civ. P. 54(d)(1) provides that “costs—other than attorney’s fees—should be
allowed to the prevailing party.” The district court has discretion in taxing costs but the
Tenth Circuit has recognized two limitations to that discretion. See In re Williams Sec.
Litig.-WCG Subclass, 558 F.3d 1144, 1147 (10th Cir. 2009). First, the language of the rule
creates a presumption in favor of an award of costs to the prevailing party. See id.
Second, “the district court must provide a valid reason for denying such costs.” Id. (internal
quotation marks and citation omitted). This is because denying the prevailing party costs
“would be in the nature of a severe penalty . . . and there must be some apparent reason
to penalize the prevailing party if costs are to be denied.” Klein v. Grynberg, 44 F.3d 1497,
1507 (10th Cir. 1995).
Pursuant to 28 U.S.C. § 1920(2) & (4), the Court may only tax costs for transcripts
and copies “necessarily obtained for use in the case.” In In re Williams, the Tenth Circuit
summarized this standard as follows:
The “necessarily obtained for use in the case” standard does not allow a
prevailing party to recover costs for materials that merely “added to the
convenience of counsel” or the district court. Touche Ross, 854 F.2d at
1245. To be recoverable, a prevailing party’s transcription and copy costs
must be “reasonably necessary to the litigation of the case.” Mitchell v. City
of Moore, 218 F.3d 1190, 1204 (10th Cir.2000). Materials produced “solely
for discovery” do not meet this threshold. Furr, 824 F.2d at 1550. At the
same time, we have acknowledged that materials may be taxable even if
they are not “strictly essential” to the district court’s “resolution of the case.”
Id. The “realities of litigation occasionally dispense with the need of much of
the discovery already taken by the parties when, for instance, a dispositive
motion is granted by the trial court.” Callicrate v. Farmland Indus., Inc., 139
F.3d 1336, 1340 (10th Cir.1998). Our cases establish that if deposition
transcripts or copies were “offered into evidence,” were “not frivolous,” and
were “within the bounds of vigorous advocacy,” costs may be taxed. Id.
(citing Furr, 824 F.2d at 1550). This standard recognizes that “caution and
proper advocacy may make it incumbent on counsel to prepare for all
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contingencies which may arise during the course of litigation,” including the
“possibility of trial.” Id.
Thus, we do not “employ the benefit of hindsight” in determining whether
materials for which a prevailing party requests costs are reasonably
necessary to the litigation of the case. Id. We base this determination,
instead, solely “on the particular facts and circumstances at the time the
expense was incurred.” Id.; see also Allison v. Bank One-Denver, 289 F.3d
1223, 1249 (10th Cir.2002) (recognizing that as long as the expense
“appeared to be reasonably necessary at the time it was” incurred, “the
taxing of such costs should be approved”). The standard is one of
reasonableness. See Mitchell, 218 F.3d at 1204. If “materials or services
are reasonably necessary for use in the case,” even if they are ultimately not
used to dispose of the matter, the district court “can find necessity and award
the recovery of costs.” Callicrate, 139 F.3d at 1339. Thus, we will not
“penalize a party who happens to prevail on a dispositive motion by not
awarding costs associated with that portion of discovery which had no
bearing on the dispositive motion, but which appeared otherwise necessary
at the time it was taken for proper preparation of the case.” Id. at 1340.
In re Williams, 558 F.3d at 1147-48. “Whether materials are necessarily obtained for use
in the case is a question of fact to be determined by the district court.” Callicrate v.
Farmland Indus., Inc., 139 F.3d 1336, 1340 (10th Cir. 1998) (citation omitted). A court may
find materials reasonably necessary for use in the case even when they are not used at
trial. See id.; Saiz v. Charter Oak Fire Ins. Co., No. 06-cv-01144-EWN-BNB, 2008 WL
2999558, at *3-4 (D. Colo. Aug. 1, 2008) (internal quotation marks and citations omitted)
(discussing Callicrate and finding that deposition of plaintiff taken while motion for summary
judgment was pending was necessarily obtained for use in the case because it appeared
to be reasonably necessary at the time it was taken).
Defendant, as the prevailing party, bears the burden of establishing the amount of
reasonable costs to which it is entitled. In re Williams, 558 F.3d at 1148. “Once a
prevailing party establishes its right to recover allowable costs, however, the burden shifts
to the non-prevailing party to overcome the presumption that these costs will be taxed.”
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Id. (internal quotation and citation omitted). Here, Defendant seeks to recover a total of
$4,007.85 for the costs relating to 12 depositions. Proposed Amended Bill of Costs, Ex.
1 [#69-1] at 1; Proposed Amended Bill of Costs [#69] at 1. Five of the depositions were
noticed and taken by Plaintiff, with costs for those depositions totaling $1,149.40 of the
$4,007.85 sought in the Motion. See Proposed Amended Bill of Costs, Ex. 1 [#69-1] at 2.
The remaining seven depositions were noticed and taken by Defendant and were of
Plaintiff’s seven Rule 30(b)(6) designees.
Response [#81] at 4; Reply [#82] at 3.
Defendant provided receipts relating to the amounts it was charged by the court reporting
services to substantiate the costs it seeks relating to the depositions. See generally
Proposed Amended Bill of Costs, Ex. 1 [#69-1]. Plaintiff does not contest the amounts as
unreasonable, but rather focuses its attack on whether the depositions were necessarily
obtained for use in the case. The Court has reviewed the amounts and the receipts as part
of its analysis.
It is clear that deposition transcripts of individuals “who later testify at trial are
taxable” as are “depositions where deposition excerpts were exchanged for use at trial.”
Karsian Inter-Regional Fin. Grp., Inc., 13 F.Supp.2d 1085, 1088 (D. Colo. 1998). However,
while the categories discussed in Karsian “provide[ ] useful guidance, [they] should not be
applied to deny deposition costs that fall outside the designated categories but were
nevertheless reasonably necessary to the litigation of the case.” Home Design Servs., Inc.
v. Trumble, No. 09-cv-00964-WYD-CBS, 2011 WL 6440517, at *2 (D. Colo. Dec. 2, 2011)
(decision by Judge Daniel discussing his opinion in Karsian and awarding costs relating to
deposition of named defendant who did not testify at trial). Here, we have a situation in
which the Court’s order granting Defendant summary judgment was entered shortly before
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the parties’ proposed Final Pretrial Order was due and, therefore, the parties never formally
listed the witnesses they intended to call at trial or disclosed the deposition excerpts they
intended to rely on during the trial. See Motion [#79] at 6. However, given the facts that
these were depositions of Plaintiff’s 30(b)(6) designees, Plaintiff told Defendant that it
“intended to call at least two of the seven corporate representatives at trial, and Defendant
“would have used the other deposition[ ] transcripts at trial,” the Court finds that the seven
depositions taken by Defendant were reasonable and necessarily obtained for use in the
case because they appeared to be reasonably necessary at the time they were taken.
Motion [#79] at 6-7; see Saiz, 2008 WL 2999558, at *3-4.
With regard to the five depositions noticed and taken by Plaintiff, even though the
deposition transcripts were not used by the Court in granting the motion for summary
judgment, Plaintiff does not take the position that those depositions were not necessary at
the time they were taken. The Court finds that “it would be inequitable to impose on
[Defendant] the cost of depositions that [Plaintiff] [it]self believed were reasonably
necessary at the time they were taken.” Nero v. Am. Fam. Mut. Ins. Co., No. 11-cv-02717PAB-MJW, 2013 WL 5323262, at *3 (D. Colo. Sept. 23, 2013) (citing In re Williams, 558
F.3d at 1148). Accordingly, the Court finds that the five depositions taken by Plaintiff were
reasonable and necessarily obtained for use in the case because they appeared to be
reasonably necessary at the time they were taken.
III. Conclusion
For the foregoing reasons,
IT IS HEREBY ORDERED that the Motion [#79] is GRANTED. The Court taxes
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a total of $4,007.85 of costs, consisting of court reporter charges for depositions and
transcripts relating to the depositions listed in Exhibit 1 to Defendant’s proposed
Amended Bill of Costs [#69].
IT IS FURTHER ORDERED that the Clerk of the Court shall amend the Bill of
Costs [#77] to increase the amount awarded to Defendant to $4,007.85.
Dated: May 9, 2014
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