Inline Packaging, LLC v. Graphic Packaging International, Inc.
MEMORANDUM OPINION AND ORDER Adopting 1061 Report and Recommendation; Plaintiff's Objection 1062 is OVERRULED; denying 1047 Plaintiff's Motion to Stay (Written Opinion). Signed by Judge Ann D. Montgomery on 3/6/2019. (TLU)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Inline Packaging, LLC,
Civil No. 15-3183 ADM/LIB
Graphic Packaging International, Inc.,
Robert R. Weinstine, Esq., Justice Ericson Lindell, Esq., and Brent Lorentz, Esq., Winthrop &
Weinstine, PA, Minneapolis, MN, on behalf of Plaintiff.
Felicia Boyd, Esq., Barnes & Thornburg LLP, Minneapolis, MN; David Hamilton, Esq.,
Womble Bond Dickinson (US) LLP, Baltimore, MD; Jason Hicks, Esq., and Amanda Norris
Ames, Esq., Womble Bond Dickinson (US) LLP, Washington, D.C., on behalf of Defendant.
This matter is before the undersigned United States District Judge for a ruling on Plaintiff
Inline Packaging, LLC’s (“Inline”) Objection [Docket No. 1062] to Magistrate Judge Leo I.
Brisbois’ January 11, 2019 Report and Recommendation (“R&R”) [Docket No. 1061]. In the
R&R, Judge Brisbois recommends denying Inline’s Motion to Stay Calculation of Costs [Docket
No. 1047]. For the reasons set forth below, the Objection is overruled and the R&R is adopted.
In July 2015, Inline filed this lawsuit against Defendant Graphic Packaging International,
LLC (“Graphic”) alleging antitrust violations, tortious interference, and misappropriation of
trade secrets. See Compl. [Docket No. 1]. On September 5, 2018, this Court issued a
Memorandum Opinion and Order [Docket No. 1035] granting summary judgment in Graphic’s
favor on all claims. Judgment for Graphic was entered on September 6, 2018. See J. [Docket
No. 1037]. Inline filed a Notice of Appeal [Docket No. 1040] on October 5, 2018.
Also on October 5, 2018, Graphic filed a Bill of Costs [Docket No. 1039] seeking
$304,930.89 in costs against Inline. Inline filed an Objection [Docket No. 1053] to Graphic’s
Bill of Costs, arguing that most of the costs are not taxable.
On October 19, 2018, Inline filed this Motion to Stay Calculation or Taxation of Costs
(“Motion to Stay”). Although the matter is a post-judgment issue that has not been referred by
the undersigned, Inline noticed the Motion to Stay to be heard by Magistrate Judge Brisbois.
R&R at 4; Hr’g Notice [Docket No. 1049].
In addressing the Motion to Stay, Judge Brisbois determined that the Motion fell outside
of his delegated duties under 28 U.S.C. § 636(b)(1)(A) because that provision is limited to
pretrial matters and the Motion to Stay is a post-judgment matter. R&R at 4. Judge Brisbois
also determined that he lacked authority to submit proposed findings and recommendations
under 28 U.S.C. § 636(b)(1)(B) because the Motion to Stay had not been designated to him by a
district court judge. Id. Nevertheless, in an attempt to conserve the time and resources of the
parties and the Court, Judge Brisbois addressed the issues raised in the Motion to Stay and issued
a Report and Recommendation to deny the Motion. Id. at 4, 8.
A. Standard of Review
The parties disagree over the applicable standard of review. The Motion to Stay is
nondispositive, and nondispositive motions are typically reviewed for clear error.
Fed. R. Civ. P. 72(a); 28 U.S.C. § 636(b)(1)(A). However, Inline argues that the de novo
standard should apply because the motion is not a “pretrial” matter under
28 U.S.C. § 636(b)(1)(A). The confusion stems from Inline’s procedurally improper scheduling
and noticing of this post-trial matter before Judge Brisbois. To avoid further procedural
confusion, the Court will conduct a de novo review.
B. Inline’s Objection
1. District of Minnesota’s Practice Regarding Staying Cost Awards Pending Appeal
Inline argues that the R&R erred in holding that this district’s typical practice is to allow
the calculation and taxation of costs to proceed even when an appeal is pending. Inline contends
that the taxation of costs pending appeal has been stayed in at least one case in this district. See
Obj. at 4–5 (citing Am. Infra-Red Radiant Co. v. Lambert Indus., Inc., 41 F.R.D. 161, 162 (D.
Minn. 1966)). Inline’s argument lacks persuasion because the case is over fifty years old. Far
more recently in 2009, Local Rule 54.3 was amended to “change the past practice of the Clerk of
Court not to tax costs until all applicable appeal periods have expired.” 2009 Advisory
Committee’s Note to L.R. 54.3.
As the Eighth Circuit recognized in 2011, costs may be awarded while an appeal on the
merits is pending. Blakley v. Schlumberger Tech. Corp., 648 F.3d 921, 930 (8th Cir. 2011)
(affirming costs awarded while an appeal was pending because plaintiff “cited no authority
prohibiting a district court from granting costs after a party has filed a notice of appeal”); see
also Abdel-Ghani v. Marketsource, Inc., No. 14-4136, 2016 WL 5952740, at *1 (D. Minn. Oct.
13, 2016) (“[Plaintiff’s] argument that costs cannot be taxed while an appeal is pending is not
only without support in the local rules, but also without support in the decisions of the Eighth
Circuit and this Court.”). As recently as November 2018, this Court denied a motion to stay the
calculation and taxation of costs pending appeal in a case that, like this one, involved complex
litigation spanning several years. See In re Wholesale Grocery Prods. Antitrust Litig., 09-2090
ADM/TNL (D. Minn.) [Docket No. 1335] at 2. Thus, the R&R correctly determined that
calculating and awarding costs while an appeal is pending is consistent with the practice in this
2. Relevant Factors
Inline also argues that the R&R did not analyze factors relevant to a stay, including
judicial economy, whether the movant has a strong showing of success on appeal, whether the
movant will suffer irreparable injury without a stay, and whether a stay harms the public interest.
Obj. at 6 (citing Waine-Golston v. Time Warner Entm’t-Advance/New House P’ship,
No. 11cv1057, 2013 WL 1899928, at *1 (S.D. Cal. May 7, 2013)). All of these factors weigh
against a stay.
Judicial economy is best served by reviewing this 3 ½ year complex antitrust case before
it fades to a distant memory. See Maytag Corp. v. Electrolux Home Prods., No. 04-4067, 2006
U.S. Dist. LEXIS 89383, at *6–7 (N.D. Iowa Dec. 11, 2006) (“The possibility that the
underlying judgment might be reversed, with the result that the award of costs must also be
reversed, is simply too speculative to outweigh the benefit of the trial court conducting a review
of the bill of costs while the case is still fresh.”); Epcon Gas Sys. v. Bauer Compressors, Inc.,
Case No. 98-75392, 2001 WL 363933, at *1 (E.D. Mich. Mar. 28, 2001) (“While there is always
the possibility that the Court of Appeals may disagree with the District Court’s judgment, it is in
the interest of judicial economy to resolve all of the remaining issues in this case at this time.”);
cf. 1993 Advisory Committee Note to Fed. R. Civ. P. 54(d)(2) (“Prompt filing affords an
opportunity for the court to resolve fee disputes shortly after trial, while the services performed
are freshly in mind.”).
Inline has not made a strong showing that it will succeed on appeal. Inline argues that
“its appeal raises substantial questions of fact and law,” but does not explain whether or why it is
likely to succeed on those questions. Obj. at 6–7.
Inline also has not shown that it will suffer irreparable injury absent a stay. Inline
contends that if costs were due immediately it may become insolvent and be forced out of
business. This harm is speculative on several grounds, including that Inline does not yet know
the amount of costs that will ultimately be taxed. R&R at 6 n.2.
Public interest also favors considering Graphic’s Bill of Costs without delay because
doing so preserves judicial economy and allows for the prompt resolution of the remaining issues
before the Court.
Inline argues that the R&R erroneously disregarded its offer to post a bond during the
stay. Although Inline initially sought a stay without posting a bond, it changed its position three
days after the motion hearing and informed Judge Brisbois by letter that it would post a bond for
up to $150,000 as security for Graphic’s claimed costs of $304,930.89.
“Federal Rule of Civil Procedure 62(d) permits an appellant to obtain a stay of the
enforcement of a judgment pending appeal by filing a supersedeas bond in the full amount of the
judgment plus interests, costs, and damages for delay.” Corp. Comm’n of the Mille Lacs Band
of Ojibwe Indians v. Money Ctrs. of Am., Inc., No. 12-1015, 2013 WL 6630905, at *1 (D. Minn.
Dec. 17, 2013) (emphasis added). A moving party bears the burden of demonstrating the reasons
for departing from the usual requirement of a full security bond. Heglund v. City of Grand
Rapids, No. 14-296, 2016 WL 7042065, at *2 (D. Minn. Dec. 2, 2016).
The bond offered by Inline is less than half the amount of the costs claimed by Graphic.
Inline argues a $150,000 bond is sufficient because at least $225,000 of Graphic’s claimed costs
are for non-taxable e-discovery. As Judge Brisbois recognized in the R&R, this argument
requires the Court to calculate Graphic’s taxable costs in the first instance, which contradicts
Local Rule 54.3(c)’s procedure of directing the clerk to tax costs. See R&R at 8 n.3. Inline’s
proposed bond is deficient for the additional reason that the amount offered is “a number
arbitrarily chosen by [Inline] based on its unilateral beliefs of the cost recoverable in the present
case.” Id. Inline has not met its burden of demonstrating a reason for departing from the usual
requirement of a full bond.
Based upon the foregoing, and all of the files, records and proceedings herein, IT IS
HEREBY ORDERED that:
Inline’s Objection [Docket No. 1062] is OVERRULED;
The R&R [Docket No. 1061] is ADOPTED; and
Inline’s Motion to Stay Calculation or Taxation of Costs [Docket No. 1047] is
BY THE COURT:
s/Ann D. Montgomery
ANN D. MONTGOMERY
U.S. DISTRICT JUDGE
Dated: March 6, 2019.
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