Whitesell Corporation v. Whirlpool Corporation et al

Filing 779

OPINION ; signed by Judge Robert Holmes Bell (Judge Robert Holmes Bell, kcb)

UNITED STATES DISTRICT COURT F O R THE WESTERN DISTRICT OF MICHIGAN S O U T H E R N DIVISION

W H I T E S E L L CORPORATION, P l a in tif f , C a se No. 1:05-CV-679 v. H O N . ROBERT HOLMES BELL W H I R L P O O L CORPORATION, W H IR L P O O L MEXICO S.A. de C.V., a n d JOSEPH SHARKEY, D e f e n d a n ts , and W H I R L P O O L CORPORATION, C o u n te r- P l a in tif f , v. W H I T E S E L L CORPORATION, C o u n ter -D e f e n d a n t. / O P IN IO N T h is matter is before the Court on Defendant's motion for a partial disallowance of W h ite se ll Corporation's bill of costs. (Dkt. No. 759.) Rule 54(d) of the Federal Rules of C iv il Procedure states: "[u]nless a federal statute, these rules, or a court order provides o th e rw is e , costs--other than attorney's fees--should be allowed to the prevailing party." T h e Supreme Court has held that 28 U.S.C. § 1920 defines the term "costs" as used in Rule

5 4 (d ). Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987). Section 1920 e n u m e r a te s six categories of costs that may be taxed: (1) fees of the clerk and marshal; (2) f e es for printed or electronically recorded transcripts necessarily obtained for use in the case; (3 ) fees and disbursements for printing and witnesses; (4) fees for exemplification and the c o sts of making copies of any materials where the copies are necessarily obtained for use in th e case; (5) docket fees under 28 U.S.C. § 1923; (6) compensation of court appointed e x p e rts , compensation of interpreters, and salaries, fees, expenses, and costs of special in te rp re ta tio n services under 28 U.S.C. § 1828. The party opposing the clerk's taxation of c o sts -- in this case, Whirlpool--bears the burden of persuading the Court that the expenses a re either not allowable under § 1920, or that they are not "necessarily obtained for use in the c a s e ," if such necessity is required. BDT Prods., Inc. v. Lexmark Int'l, Inc., 405 F.3d 415, 4 2 0 (6th Cir. 2005); see also Manor Healthcare Corp. v. Lomelo, 929 F.2d 633, 639 (11th C ir. 1991) ("[Rule 54(d)] creates a presumption in favor of awarding costs to the prevailing p a rty which [the non-prevailing party] must overcome."); James v. Wash Depot Holdings, In c ., 242 F.R.D. 645, 650 (S.D. Fla. 2007) (placing the burden on "the party opposing ta x a tio n " ). Plaintiff seeks to recover approximately ten categories of costs: (1) fees of the Clerk; (2 ) fees for service of summons and subpoena on witness Scott Thiele; (3) deposition tra n sc rip ts ; (4) trial transcripts; (5) summary jury trial exhibits; (6) jury trial exhibits; (7) fees f o r witness depositions; (8) fees for witnesses incurred in relation to the summary jury trial;

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(9 ) fees for witnesses incurred in relation to the trial; and (10) fees for exemplification and c o p ie s . (Dkt. No. 751, Pl.'s Proposed Bill of Costs.) Defendant challenges all of these c a te g o rie s of claims for costs with the exception of the fees of the Clerk and the fees for the s e rv ic e of summons and subpoena on witness Scott Thiele. 1. Deposition Transcripts C o s ts for deposition transcripts are allowable under 28 U.S.C. § 1920(2), but are s u b je c t to a necessity requirement. Defendant argues that, because Plaintiff deposed thirtys ix different witnesses, but only called six live witnesses during trail, the majority of the d e p o sitio n s were not "necessarily obtained for use in the case." However, "[n]ecessity is d e te rm in e d as of the time of taking, and the fact that a deposition is not actually used at trial is not controlling." Sales v. Marshall, 873 F.2d 115, 120 (6th Cir. 1989); see also Javetz v. B d . of Control, Grand Valley State Univ., 164 F.R.D. 447, 448 (W.D. Mich. 1996); In re K u lic k e & Soffa Indus., Inc., Sec. Litig., 747 F. Supp. 1136, 1147 (E.D. Pa. 1990) (" D e f en d a n ts will not be limited to recovery of costs for the deposition transcripts of in d iv id u a ls who testified at trial since effective trial preparation and the ability to respond a d e q u ate ly to plaintiff's pretrial motions depended in large part on the review of deposition t e s t i m o n y. " ) . The Court is not convinced that Defendant has satisfied its burden of showing that any o f the depositions were unnecessary. At the time of the depositions, Defendant could have re a s o n a b ly believed that each of its thirty-six witnesses would play an integral role in the

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r e so l u tio n of the case. Defendant's argument that the depositions were unnecessary because n o t all of the witnesses were called at trial is especially unpersuasive in light of the Court's d ec isio n to limit the amount of time given to each side to present its case (Dkt. No. 680), w h ic h necessarily limited the amount of witness testimony each side was able to offer during tria l. At the time of the depositions, Plaintiff was not aware that it would be subject to the C o u rt-im p o s e d time limitation. Defendant also argues that the costs associated with deposition testimony relating to p re -2 0 0 2 matters should be disallowed. Again, at the time this deposition testimony was g iv e n , Plaintiff was not aware that the Court would limit the introduction of evidence of pre2 0 0 2 matters. Further, while the Court did hold that evidence of pre-2002 matters was lar g e ly inadmissable, it also recognized that evidence of the parties' relationship prior to 2 0 0 2 could be used to clarify ambiguities in the 2002 SAA and to establish a course of d e a l in g or a usage of trade between the parties. (Dkt. No. 653.) For these reasons, D e f e n d a n t's pursuit of discovery related to pre-2002 matters was reasonably necessary to P la in tif f 's case. Defendant also argues that costs related to deposition testimony regarding Plaintiff's f ra u d claim should be disallowed because Plaintiff's fraud claim was dismissed before trial. H o w e v e r, the testimony was given before the claim was dismissed, and Plaintiff was not a w a re that it would be dismissed. At the time the testimony was given, it was reasonably n e c es s a ry for use in the case. Plaintiff is entitled to recover all of its claimed costs for d e p o s itio n transcripts. 4

2 . Trial Transcripts B y mutual agreement, the parties retained an independent court reporter to produce a n unofficial daily record of the trial. Like the costs for deposition transcripts, the costs for tria l transcripts are recoverable if they are "necessarily obtained for use in the case." 28 U .S .C . § 1920(2). The Court holds that the daily trial transcripts were necessarily obtained f o r use in the case. In civil cases, the notice of appeal must be filed within thirty days after th e judgment is entered, but the expiration of this deadline is stayed if there are certain posttria l motions pending. Fed. R. App. P. 4(a). It would have been extremely difficult, if not im p o s s ib le , for the parties to file properly supported post-trial motions prior to the expiration o f the time for appeal in the absence of an unofficial trial record. This trial was lengthy and c o m p lex , and courts have recognized that in such a case daily transcripts are "necessarily o b ta in e d for use in the case." Majeske v. City of Chicago, 218 F.3d 816, 825 n.3 (7th Cir. 2 0 0 0 ) (citing cases); Manildra Milling Corp. v. Ogilvie Mills, Inc., 76 F.3d 1178, 1184 (Fed. C ir. 1996) ("[A] district court may overlook the lack of prior approval if the case is complex a n d the transcripts proved invaluable to both the counsel and the court."); In re Kulicke & S o ffa Indus., Inc., Sec. Litig., 747 F. Supp. 1136, 1146-47 (E.D. Pa. 1990) ("[D]efendants w o u ld have been severely handicapped in responding to plaintiff's post-trial motions had th e y not obtained the trial transcripts."). 3. Summary Jury Trial Exhibits P lain tiff may recover the cost of copies of materials made in relation to the summary ju ry trial as long as the copies were "necessarily obtained for use in the case." 28 U.S.C. 5

§ 1920. The Court required, not requested or encouraged, that the parties participate in the s u m m a ry jury trial held in November of 2009. Copies of exhibits and jury deliberation b in d e rs made in connection with the summary jury trial are therefore copies "necessarily o b ta in e d for use in the case." 4. Jury Trial Exhibits D e f e n d a n t argues that it was unnecessary for Plaintiff to incur the costs to compile tw o sets of exhibits for each juror. Plaintiff counters that "this was done solely for the b e n e fit of the jury," but does not explain why one set would not have been sufficient. The C o u rt is satisfied that Defendant has carried its burden of demonstrating that the second set o f exhibits for the jury was not necessary to the case, and the Court will accordingly deduct $ 5 7 9 .4 7 from Plaintiff's bill of costs. 5 . Fees for Witness Incurred in Relation to Depositions, the Summary Trial, and Trial W h ile recoverable under 28 U.S.C. § 1920(3), the recoverability of fees for witnesses to attend depositions and trial is governed by 28 U.S.C. § 1821. Defendant first argues that th e costs related the depositions of John Grey and Guy Avellon should not be allowed b e c a u se those witnesses did not testify at trial, and thus the costs were not reasonably n e c es s a ry to the case. It is not entirely clear to the Court that necessity is required under 28 U .S .C . § 1821. However, even if it is, as discussed above necessity is not determined by w h e th e r a witness testifies at trial. The depositions of Grey and Avellon were necessarily o b ta in e d for use in the case because they were directly related to issues that were reserved f o r jury determination and they were the subject of various pre-trial motions. 6

D e f en d a n t also challenges various costs claimed by Plaintiff in connection with the d e p o sitio n s of Neil Whitesell. First, Defendant argues that the $1,219.50 spent on airfare for M r. Whitesell on October 8, 2008, is not the "most economical rate[] reasonably available," a s required by 28 U.S.C. § 1821(c)(1). However, Defendant submits no evidence to give the C o u rt an idea of what a reasonable rate would have been for this flight. Defendant bears the b u rde n of convincing the Court that costs should be disallowed, see BDT Prods., Inc. v. L e x m a r k Int'l, Inc., 405 F.3d 415, 420 (6th Cir. 2005), and it has failed to carry this burden. N e v e rth e les s, Plaintiff offers to reduce the cost claimed for the October 8, 2008, flight to $ 1 ,0 2 5 .5 0 to match the cost of a flight taken by Mr. Whitesell on August 26, 2008, a cost that P l a in tif f claims Defendant does not challenge. The Court will enforce this reduction of $ 1 9 4 .0 0 as offered. Second, Defendant seeks to disallow "over $1,500 for a two day car re n ta l" by Mr. Whitesell in relation to one of his depositions. The Court has not discovered w h e re Plaintiff is claiming this charge in its bill of costs. Plaintiff seeks travel costs for only th re e of Neil Whitesell's ten 30(b)(6) deposition volumes, and none of the expenses appear to reflect this charge. Defendant also claims that "Whitesell seeks to recover costs for meals running to h u n d re d s of dollars." Witness subsistence fees, which reflect the costs of meals, are limited to "the maximum per diem allowance prescribed by the Administrator of General Services, p u rs u a n t to section 5702(a) of title 5, for official travel in the area of attendance by e m p lo ye e s of the Federal Government." 28 U.S.C. § 1821(d)(2). Plaintiff seeks subsistence f e es ranging from $133.00 to $160.00 per witness per day, depending on the location of 7

a tte n d a n ce . (Dkt. No. 751 Ex. E.) These fees accurately reflect the rate allowed to traveling g o v e rn m e n t employees, and are not excessive. See U.S. General Services Administration, p e r diem rates, available at http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId= 1 7 9 4 3 & c o n t e n t T yp e = G S A _ B A S I C . F in a lly, Defendant argues that it should not be required to pay for the hotel stays of W h ite se ll witnesses on Friday and Saturday nights, when trial was not scheduled for the f o llo w in g day. Specifically, Defendant disputes the overnight fees paid on January 29, 2010, F e b ru a ry 5, 2010, and February 12, 2010. Witness subsistence fees, which reflect the costs o f a hotel stay, shall be paid "when an overnight stay is required at the place of attendance b ec au se such place is so far removed from the residence of such witness as to prohibit return th e r e to from day-to-day." 28 U.S.C. § 1821. The trial took place in Grand Rapids, M ic h ig a n . All of Whitesell's witnesses for whom Whitesell is requesting a subsistence fee o n the dates challenged by Defendant reside outside of Michigan. For these witnesses, an o v e rn ig h t stay was required in Grand Rapids, even on the weekends, because Grand Rapids is so far removed from Florida, Alabama, and Ohio -- the residences of the witnesses -- as to prohibit return to these residences on the weekends between trial weeks. The costs of the w e e k e n d hotel stays, as reflected by the subsistence allowance, is taxable under 28 U.S.C. § 1821(d)(1). 6. Fees for Exemplification and Copies of Documents U n d e r 28 U.S.C. § 1920(4), the prevailing party may recover the costs associated with m a k in g photocopies, as long as the copies are "necessarily obtained for use in the case." 8

T h is Court has recognized that § 1920(4) permits the recovery of a wide range of copying c o sts , including "copies attributable to discovery, copies of pleadings, correspondence, d o c u m e n ts tendered to the opposing party, copies of exhibits, and documents prepared for th e court's consideration." Whirlpool Corp. v. LG Elecs., Inc., No. 1:04-CV-100, 2007 U.S. D ist. LEXIS 62591, at *5 (W.D. Mich. Aug. 26, 2007). Plaintiff, however, does not seek to e x e rc ise the full extent of its rights to collect costs under 28 U.S.C. § 1920(4). Plaintiff only see k s to recover costs for copies of documents produced to Defendant pursuant to discovery re q u e sts from Defendant, and only to the extent the number of documents produced by P la in tif f to Defendant exceeds the number of documents produced by Defendant to Plaintiff. A t the early stages of this litigation, the parties agreed that the party that produced the most p a g e s would be entitled to five cents per page produced in excess of the pages produced by th e other party. (Dkt. No. 140, at 8-9, 11-12.) Plaintiff produced 1,437,454 total pages of d i sc o v e r y to Defendant, and Defendant produced 667,866 total pages to Plaintiff. Because P la in tif f produced 769,588 more pages that Defendant, Plaintiff seeks $38,479.40. Defendant argues that Plaintiff submitted discovery requests for many parts that were n o t necessary to Plaintiff's overall claim, and as a result, Defendant was forced to spend s ig n if ic a n t resources making unnecessary copies. Analyzed strictly within the context of the p a rtie s' copy cost agreement, Plaintiff's unnecessary document requests could not have re su lted in any quantifiable damages to Defendant. Unnecessary document requests would h a v e increased the total number of pages that Defendant had to produce, would have required D e f en d a n t to make more copies, and would have narrowed the gap between the number of 9

p a g e s that Plaintiff ultimately produced and the number of pages that Defendant ultimately p ro d u c e d . Under the parties' arrangement, on which Plaintiff is basing its claim for copy c o sts , a smaller gap between the total number of documents produced by Plaintiff as c o m p a re d to Defendant would have actually decreased the copy costs currently sought by P la in tif f , not increased them. D e f e n d a n t seems to be asking that this Court look beyond the parties' copy cost a g re e m e n t, however, and take into account the additional effort expended by Defendant to c o m p ly with the allegedly unnecessary discovery requests in determining the amount of costs to ultimately award to Plaintiff. The Court, however, does not believe that Defendant has c a rrie d its burden of demonstrating that these discovery requests were irrelevant or u n n e c es s a ry. Defendant first argues that because Plaintiff ultimately dropped its claim for p a rts with damages of less than $10,000, Defendant should be reimbursed for its efforts g a th e rin g discovery relating to these parts. However, it is not clear that Plaintiff knew that th e s e parts would involve de minimis damages claims, or that it would ultimately drop its c la im s for these parts, at the time the discovery requests were made. Defendant also argues that, though Plaintiff submitted discovery requests for 2,133 p a rts, Plaintiff only claimed damages for 54 parts, and for this reason many of the requests w e re unnecessary. The Court assumes that the 54 parts referred to by Defendant are the parts t h a t comprised Plaintiff's "dual-sourced/diverted" parts claim. However, Plaintiff's dual s o u rc e d /d iv e rte d parts claim was only one of approximately seven separate claims asserted b y Plaintiff (Dkt. No. 742), which, in the aggregate, encompassed claims involving hundreds 10

o f different part numbers. For example, Plaintiff's obsolescence claim alone involved d a m a g e s claims for hundreds of different part numbers. (Dkt. No. 549, Ex. 9.) Even if some o f Plaintiff's discovery requests did relate to parts for which Plaintiff did not ultimately claim d a m a g e s , this is no reason to reduce the amount of costs Plaintiff seeks under the parties' c o p y cost agreement. In accordance with that agreement, Plaintiff is entitled to recover $ 3 8 ,4 7 9 .4 0 in copy costs. T h e Court will allow Plaintiff the entirety of its claimed costs of $177,676.39, with th e exception of $579.47 spent on a duplicative copies of exhibits for the jury and a $194.00 re d u c tio n of the cost of Neil Whitesell's October 8, 2008, airfare, for total allowable costs o f $176,902.92. An order consistent with this opinion shall be entered.

Dated: May 10, 2010

/s/ Robert Holmes Bell ROBERT HOLMES BELL UNITED STATES DISTRICT JUDGE

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