Smith v. Bradley Pizza, Inc. et al

Filing 254

OPINION AND ORDER denying 245 Plaintiff Scott Smith's Motion for Review of Taxation of Costs. See Order for additional details and specifics. (Written Opinion). Signed by Judge Eric C. Tostrud on 12/6/2019. (RMM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Scott Smith,

File No. 17-cv-02032 (ECT/KMM)
Plaintiff,

v.
OPINION AND ORDER
Bradley Pizza, Inc. and
Pamela M. Dahl,
Defendants.

Padraigin Browne, Browne Law LLC, Lake Elmo, MN, for Plaintiff Scott Smith.
Brian J. Linnerooth and Edward P. Sheu, Best & Flanagan, LLP, Minneapolis, MN, for
Defendants Bradley Pizza, Inc. and Pamela M. Dahl.

In this case brought under the Americans with Disabilities Act and the Minnesota
Human Rights Act, Plaintiff Scott Smith seeks review of the Clerk of Court’s entry of an
amended cost judgment for Defendants in the amount of $1,118.21. Am. Cost Judgment
[ECF No. 244]; Mot. for Rev. [ECF No. 245]. Smith’s motion will be denied because
Smith has not shown that the judgment is erroneous or inequitable under the circumstances.
The facts and procedural history relevant to Smith’s motion may be described
briefly. In an opinion and order dated June 12, 2019, summary judgment was entered in
Defendants’ favor for lack of subject-matter jurisdiction because the record did not show
that Smith suffered an injury sufficient to give him Article III standing. Smith v. Bradley
Pizza, Inc., No. 17-cv-02032 (ECT/KMM), 2019 WL 2448575 (D. Minn. June 12, 2019).

After entry of judgment [ECF No. 229], Defendants submitted a bill of costs to the Clerk
of Court seeking to recover $6,980.02; this amount included transcript fees, docket fees,
expert fees, and courier expenses. Bill of Costs [ECF No. 236]; Sheu Decl. [ECF No. 237].
Smith objected, challenging Defendants’ entitlement to costs and, alternatively, the amount
of the costs. ECF No. 240. On September 4, 2019, the Clerk entered a cost judgment of
$2,359.20 for Defendants. ECF No. 241. The Clerk allowed Defendants’ claimed
expenses for transcript and docket fees but denied their claimed expenses for expert fees
and courier services. Id. On September 13, the Parties filed a stipulation to amend the
amount of the cost judgment based on corrections made to Defendants’ claimed transcript
costs. ECF No. 243. As part of the stipulation, Smith preserved his right to seek review
of the cost judgment. Id. at 3. On September 18, pursuant to the Parties’ stipulation, the
Clerk entered an amended cost judgment in the amount of $1,118.21. Am. Cost J. Smith
seeks review of the amended cost judgment. ECF No. 245.
“Unless a federal statute, [the Federal Rules of Civil Procedure], or a court order
provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing
party.” Fed. R. Civ. P. 54(d)(1); see also 28 U.S.C. § 1920 (listing appropriate costs for
taxation). The Americans with Disabilities Act has a cost and fee-shifting provision, and
it does not conflict with Rule 54(d)(1):
In any action or administrative proceeding commenced
pursuant to this chapter, the court or agency, in its discretion,
may allow the prevailing party, other than the United States, a
reasonable attorney’s fee, including litigation expenses, and
costs, and the United States shall be liable for the foregoing the
same as a private individual.

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42 U.S.C. § 12205. Within a prescribed time after entry of a cost judgment, a party may
file a motion for review of the Clerk’s action. Fed. R. Civ. P. 54(d)(1); LR 54.3(c)(3).
Judicial review of the taxation of costs “is a de novo determination addressed to the sound
discretion of the court.” E. Coast Test Prep, LLC v. Allnurses.com, Inc., No. 15-cv-3705
(JRT/ECW), 2019 WL 1487812, at *6 (D. Minn. Apr. 4, 2019) (quotation and citation
omitted). The party seeking review bears the burden of showing that a cost judgment is
“inequitable under the circumstances.” Concord Boat Corp. v. Brunswick Corp, 309 F.3d
494, 498 (8th Cir. 2002).
Smith argues that Defendants are not prevailing parties because his claims were
dismissed without prejudice for lack of subject-matter jurisdiction based on Smith’s failure
to show that he possessed Article III standing. But the law favors the conclusion that a
defendant who achieves a dismissal on this basis is a prevailing party. Neither the Federal
Rules nor the ADA define “prevailing party.” Nonetheless, “Congress has included the
term ‘prevailing party’ in various fee-shifting statutes, and it has been the [Supreme]
Court’s approach to interpret the term in a consistent manner.” CRST Van Expedited, Inc.
v. E.E.O.C., 136 S. Ct. 1642, 1646 (2016). “[T]he touchstone of the prevailing party
inquiry must be the material alteration of the legal relationship of the parties[.]” Texas
State Teachers Assn. v. Garland Indep. Sch. Dist., 489 U.S. 782, 792–93 (1989). This
alteration must be marked by “judicial imprimatur.” Buckhannon Bd. & Care Home, Inc.
v. West Va. Dept. of Health & Human Res., 532 US. 598, 605 (2001). “[E]nforceable
judgments on the merits and court-ordered consent decrees create the ‘material alteration
of the legal relationship of the parties’ necessary to permit an award[.]” Id. at 604 (citing
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Texas State Teachers Assn., 489 U.S. at 792–93). However, “a defendant need not obtain
a favorable judgment on the merits in order to be a ‘prevailing party.’” CRST, 136 S. Ct.
at 1651 (stating a defendant “may prevail even if the court’s final judgment rejects the
plaintiff’s claim for a nonmerits reason”). A defendant has “fulfilled its primary objective
whenever the plaintiff’s challenge is rebuffed, irrespective of the precise reason for the
court’s decision.” Id. This is so because “[p]laintiffs and defendants come to court with
different objectives. A plaintiff seeks a material alteration in the legal relationship between
the parties. A defendant seeks to prevent this alteration to the extent it is in the plaintiff’s
favor.” Id. In concluding that a defendant may prevail “even if the court’s final judgment
rejects the plaintiff’s claim for a nonmerits reason,” the Supreme Court did not distinguish
between jurisdictional and non-jurisdictional victories, and the Court explicitly declined to
consider whether a defendant must obtain a preclusive judgment in order to prevail. Id. at
1651, 1653. A dismissal for lack of subject-matter jurisdiction based on the absence of an
injury-in-fact is, therefore, sufficient to confer prevailing party status on Defendants
because it is a judicially-sanctioned action that “rebuffs [Smith’s] attempt to effect a
‘material alteration in the legal relationship between the parties.’” Raniere v. Microsoft
Corp., 887 F.3d 1298, 1303–07 (Fed. Cir. 2018) (quoting CRST, 136 S. Ct. at 1646, 1651);
see also Small Justice LLC v. Xcentric Ventures LLC, 873 F.3d 313, 327–28 (1st Cir. 2017)
(affirming conclusion that defendant prevailed in case resolved on standing grounds);
Amphastar Pharms., Inc. v. Aventis Pharma SA, 856 F.3d 696, 709–10 (9th Cir. 2017)
(applying CRST to conclude defendant prevailed and “permanently changed the legal

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relationship of the parties” in action dismissed for lack of subject-matter jurisdiction
(quotation omitted)).1
Smith argues that, if Defendants are prevailing parties, the amended cost judgment
should be vacated nonetheless based on his financial condition. Mem. in Supp. at 5. A
non-prevailing party’s financial status may be considered when determining whether to tax
costs. See Poe v. John Deere Co., 695 F.2d 1103, 1108 (8th Cir. 1982). However, a
“nonprevailing party must be facing dire financial circumstances” to avoid paying costs.
Kaplan v. Mayo Clinic, No. 07-cv-3630 (JRT/JJK), 2011 WL 3837095, at *2 (D. Minn.
Aug. 29, 2011). “Furthermore, ‘[i]t is not just a matter of being unable to presently pay the
costs; it must also be shown that the litigant is not likely to be able to pay the costs in the
future.’” Id. (quoting Denson v. Ne. Ill. Reg. Commuter R.R. Corp., No. 00 C 2984, 2003
WL 21506946, at *1 (N.D. Ill. June 27, 2003)). The only record evidence Smith identifies
to show his inability to pay costs is his deposition testimony that he does not currently have
a job and has not had one since 2001. Mem. in Supp. at 5. That statement says nothing
about Smith’s overall financial condition or other sources of income. The testimony Smith
identifies does not justify concluding that Smith cannot pay a cost judgment.

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Smith seeks also to vacate the amended cost judgment by invoking the standard
established in Christiansburg Garment Co. v. E.E.O.C., 434 U.S. 412 (1978). Mem. in
Supp. at 3–5 [ECF No. 247]. In Christiansburg, the Supreme Court held that a defendant
who is a prevailing party in a Title VII action may not be awarded attorney’s fees under
Title VII’s fee-shifting provision “unless a court finds that [the plaintiff’s] claim was
frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it
clearly became so.” 434 U.S. at 422. The Eighth Circuit has rejected the application of
the Christiansburg standard to consideration of cost awards under Rule 54(d). Poe v. John
Deere Co., 695 F.2d 1103, 1108 (8th Cir. 1982) (“Costs, unlike attorney’s fees, are awarded
to a prevailing party as a matter of course.”).

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ORDER
Based on the foregoing, and all of the files, records, and proceedings herein, IT IS
ORDERED THAT:
1.

Plaintiff Scott Smith’s Motion for Review of Clerk’s Action [ECF No. 245]
is DENIED.

2.

The Clerk’s Amended Cost Judgment [ECF No. 244] in the amount of
$1,118.21 for Defendants Bradley Pizza, Inc. and Pamela M. Dahl is
AFFIRMED.

Dated: December 6, 2019

s/ Eric C. Tostrud
Eric C. Tostrud
United States District Court

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