Kmart Corporation v. The Kroger Co. et al

Filing 397

MEMORANDUM OPINION re 396 Order on Motion for Bill of Costs,. Signed by Senior Judge Glen H. Davidson on 7/24/14. (rel)

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF MISSISSIPPI

ABERDEEN DIVISION

KMART CORPORATION

v.

PLAINTIFF
CIVIL ACTION NO. 1:II-cv-00103-GHD-DAS
DEFENDANTS

THE KROGER CO. et al.

MEMORANDUM OPINION GRANTING IN PART AND DENYING IN PART

DEFENDANT KANSAS CITY SOUTHERN RAILWAY COMPANY'S

MOTION FOR BILL OF COSTS

On May 2, 2011, Plaintiff Kmart Corporation commenced this suit against the Federal
Emergency Management Agency; the City of Corinth; Fulton Improvements, LLC; Kansas City
Southern Railway Company; E & A Southeast Limited Partnership; and The Kroger Co. On
January 22,2014, the Court entered an Order [358] and memorandum opinion [359] granting the
motion for summary judgment [253] filed by Defendant Kansas City Southern Railway
Company ("KCSR") against Plaintiff Kmart Corporation ("Kmart"). Specifically, the Court
found that Kmart failed to raise a genuine dispute of fact on its claims against KCSR. Thus, the
Court dismissed KCSR as a party.'
KCSR has now filed a petition for costs [375 & 376] with attached bill of costs and
supporting documentation? Kmart has filed objections [377] to the petition for costs. For the

I All other Defendants have been dismissed, as well.
The Court dismissed the Federal Emergency
Management Agency and the City of Corinth on immunity grounds. See Ct.'s Order [50] & Mem. Op. [51]
Granting FEMA's Mot. Dismiss; Ct.'s Order [209] & Mem. Gp. [210] Granting City of Corinth's Mot. Dismiss.
The Court granted summary judgment to Fulton Improvements, LLC; E & A Southeast Limited Partnership; and
The Kroger Co. See Ct.'s Order [354] & Mem. Op. [355] Granting Fulton's MSJ; Ct.'s Order [358] & Mem. Op.
[359] Granting KCSR's MSJ; Ct.'s Order [360] & Mem. Op. [361] Granting E & A's MSJ; & Ct.'s Order [368] &
Mem. Op. [369] Granting The Kroger Co.'s MSJ.
2 KCSR has apparently filed two identical bills of cost [375 & 376]. Throughout this memorandum
opinion, the Court will refer to these documents as one document.

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following reasons, the Court finds that KCSR' s request for costs shall be granted in part and
denied in part.
Rule 54(d)(1) of the Federal Rules of Civil Procedure controls where a party seeks to
recover costs, and it provides in relevant part that "costs--other than attorney's fees-should be
allowed to the prevailing party." FED. R. CN. P. 54(d)(1). "Rule 54(d)(1) codifies a venerable
presumption that prevailing parties are entitled to costs. Notwithstanding this presumption, the
word 'should' makes clear that the decision whether to award costs ultimately lies within the
sound discretion of the district court," Marx v. Gen. Revenue Corp.,

U.S. - , - , 133 S. Ct.

1166, 1172, 185 L. Ed. 2d 242 (Feb. 26, 2013). "The trial court has broad discretionary powers
in taxing costs. . .. While [Rule 54(d)(1)] does not prevent a trial court from requiring a
prevailing party to bear its own costs, the language of the rule reasonably bears the intendment
that the prevailing party is prima facie entitled to costs." Kent v. Vicksburg Healthcare, L.L.c.,
534 F. App'x 229, 230 (5th Cir. 2013) (per curiam) (quoting Walters v. Roadway Express, Inc.,
557 F.2d 521, 526 (5th Cir. 1977) (citations and internal quotation marks omitted». "[I]t is
incumbent on the losing party to overcome that presumption." Id. (quoting Walters, 557 F.2d at
526) (citation and internal quotation marks omitted). If the party against whom costs are taxed
objects, the party seeking costs has the burden of supporting its request with evidence
documenting the costs incurred, and proof, if applicable, as to whether the challenged amount
was necessarily incurred in the case. Fogleman v. ARAMCO, 920 F.2d 278, 285-86 (5th Cir.
1991).
The following six categories of costs are recoverable:
(1) Fees ofthe clerk and marshal;
(2) Fees for printed or electronically recorded transcripts
necessarily obtained for use in the case;
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(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies of any
materials where the copies are necessarily obtained for use in
the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of
interpreters, and salaries, fees, expenses, and costs of special
interpretation services under section 1828 of this title.
28 U.S.C. § 1920. A district court may decline to award costs within the statutory categories, but
it may not award costs outside those categories. Crawford Fitting Co. v. J.T Gibbons, Inc., 482
U.S. 437, 441-42, 107 S. Ct. 2494, 96 L. Ed. 2d 385 (1987). The "Supreme Court has indicated
that federal courts may only award those costs articulated in [S]ection 1920 absent explicit
statutory or contractual authorization to the contrary." Cook Children's Med. Ctr. v. The New

England PPO Plan ofGen. Consolidation Mgmt. Inc., 491 F.3d 266,274 (5th Cir. 2007).
Costs related to the taking of depositions are allowed under Section 1920(2) and (4) "if
the materials were necessarily obtained for use in the case." Stearns Airport Equip. Co., Inc. v.

FMC Corp., 170 F.3d 518, 536 (5th Cir. 1999).

The Fifth Circuit has stated: "We have

previously held that 'whether a deposition or copy was necessarily obtained for use in the case is
a factual determination to be made by the district court.

We accord great latitude to this

determination.' " Rundus v. City of Dallas, Tex., 634 F.3d 309, 316 (5th Cir. 2011) (quoting

Coats v. Penrod Drilling Corp., 5 F.3d 877, 891 (5th Cir. 1993)). "[I]t is not required that a
deposition actually be introduced in evidence for it to be necessary for a case--as long as there is
a reasonable expectation that the deposition may be used for trial preparation, it may be included
in costs." Stearns Airport Equip. Co., 170 F.3d at 536 (citing Fogleman, 920 F.2d at 285).
Stated another way, "such costs are recoverable if the party making the copies has a reasonable
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belief that the documents will be used 'during trial or for trial preparation.' " See Rundus, 634
F.3d at 316 (quoting Fogleman, 920 F.2d at 285) (emphasis added). "[C]osts incurred 'merely
for discovery' do not meet that standard." Id. (quoting Fogleman, 920 F.2d at 285-86) (internal
citations and quotation marks omitted». The Fifth Circuit explained in Marmillion v. American
International Insurance Co., 381 F. App'x 421, 430 (5th Cir. 2010) (per curiam): "We have

never required a prevailing party to demonstrate that a particular deposition was reasonably
necessary at the time it was taken for a party to recover the costs of the deposition transcript. ...
[T]he pertinent question is whether the transcript was necessarily obtained for use in the case."
KCSR claims it is entitled to recover $8,872.85 for eleven deposition transcripts obtained
in the case of the following deponents: Kelly Blake Mendrop, Robert H. Alexander, Robert Eley,
Jamie Monohan, Keith Davidson, Donna Earnhart, Wissam Shtaih, Michael Schmidt, David
Huwe, Dale Menendez, and John R. Krewson. 3 As stated above, KCSR, as a prevailing party, is
prima facie entitled to the costs of obtaining these deposition transcripts, but because Kmart has
objected to the costs, KCSR must support its request with evidence documenting the costs
incurred and proof that the deposition transcripts were necessarily obtained for use in the case.
Kmart objects to KCSR's bill of costs, arguing that because KCSR never provided Kmart
with a list of witnesses or deposition testimonies KCSR expected to present at trial, KCSR never
demonstrated which, if any, of the eleven deposition transcripts were actually necessary for
KCSR's trial preparation and thus that KCSR has failed to meet its burden in showing that these
deposition transcripts were necessarily obtained for use in the case. Kmart further argues that
even if some of the deposition transcripts were necessarily obtained for use in the case, the

3 Those requested deposition transcript fees are itemized as follows: Kelly Blake Mendrop-$363.50;
Robert H. Alexander-$361.75; Robert Eley-$324; Jamie Monohan-$271.25; Keith Davidson-$345.25; Donna
Earnhart-$587.50; Wissam Shtaih-$61O.75; Michael Schmidt-$561.75; David Huwe-$1,036.50; Dale
Menendez-$2,781.60; and John R. Krewson-$1,629. See Bill of Costs-Chart ofDep. Expenses [376-2] at 1.

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deposition transcripts of Robert EIey, Jamie Monohan, Keith Davidson, Donna Earnhart,
Wissam Shtaih, and Kelly Blake Mendrop were not, as the same were not even referenced in
KCSR's summary judgment motion and corresponding briefs.

Kmart further argues that

KCSR's objection to Kmart's motion to extend the discovery deadline to depose all of the
Defendants' corporate representatives and experts indicates that KCSR felt that these particular
deposition transcripts were not necessary for use in the case.

Kmart also argues that the costs

should be excluded because KCSR has not shown that these deposition transcripts were obtained
out of necessity or for KCSR's preparation for trial, rather than for investigative or discovery
purposes. Kmart also presents specific arguments against certain deposition transcripts which
are examined below.

1. Dale Menendez's and John R. Krewson's Deposition Transcripts
First, KCSR requests recovery of the costs incurred to obtain the deposition transcripts of
Dale Menendez and John R. Krewson.

KCSR maintains that the deposition transcripts of

Menendez, Kmart's corporate representative, and Krewson, Kmart's expert witness were
necessarily obtained because KCSR relied on those deposition transcripts in drafting its Daubert
and summary judgment motions, and thus that KCSR had a reasonable expectation that these
transcripts would be used in trial preparation. KCSR documents these expenses by its bill of
costs, as well as an attached chart of deposition expenses [375-2] at 1 and invoices supporting
that these costs were incurred [375-2] at 24-27.
Kmart objects to the inclusion of these deposition transcripts in the bill of costs, because
it maintains that the costs incurred by KCSR to obtain these deposition transcripts is significantly
higher than the costs incurred by both Defendant E & A Southeast Limited Partnership ("E &
A") and Defendant Fulton Improvements, LLC ("Fulton"), and that KCSR offers no explanation

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for these inflated prices. Kmart points out that KCSR paid $2,781.60 for Menendez's deposition
transcript, but E & A paid only $842 and Fulton paid only $798 for the same transcript. Kmart
further points out that KCSR paid $1,629 for Krewson's deposition transcript, but E & A paid
only $782 and Fulton paid only $752 for the same transcript. Finally, Kmart maintains that the
invoices attached to KCSR's petition for costs show that KCSR obtained both an original and a
copy of these transcripts from the court reporter and maintains that it should not have to pay for
both an original and a copy of these transcripts. However, Kmart does not request that the bill of
costs be reflected by any specific amount.
The Court finds that KCSR has shown that the deposition transcripts of both Menendez
and Krewson were necessarily obtained for use in the case, as the same provided evidentiary
support for its position relative to summary judgment and were key players in Kmart's case.
However, the Court finds that KCSR is not entitled to recover the requested $4,410 for the
deposition transcripts of Menendez and Krewson and instead is entitled to recover one-half of the
requested amount for each transcript: $1,390.80 for Menendez and $814.50 for Krewson, a total
of $2,205.30 for the deposition transcripts of Menendez and Krewson.
2. Other Deposition Transcripts

Next, KCSR requests recovery of the costs incurred to obtain the deposition transcripts of
Kelly Blake Mendrop, Robert H. Alexander, Robert Eley, Jamie Monohan, Keith Davidson,
Donna Earnhart, Wissam Shtaih, Michael Schmidt, and David Huwe. KCSR specifically sets
out that Kmart believed the depositions of all of the Defendants' corporate representatives and
experts were necessary to the case because Kmart noticed their depositions, specifically, Kelly
Blake Mendrop, KCSR's engineering expert; Robert H. Alexander, KCSR's damages expert;
Robert Eley, the other Defendants' engineering expert; Jamie Monohan, the other Defendants'

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engineering expert; Keith Davidson, E & A's corporate representative; Donna Earnhart, Fulton's
corporate representative; Wissam Shtaih, Defendant The Kroger Co.'s corporate representative;
Michael Schmidt, KCSR's corporate representative; and David Huwe, the City of Corinth's
corporate representative. It appears undisputed that the foregoing nine depositions were taken at
Krnart's behest.

Although Krnart argues this justification is not sufficient to meet KCSR's

burden, Krnart offers no case law in support of its argument. Further, although Krnart argues
that its claims against KCSR are separate and distinct from those against the other Defendants,
KCSR specifically maintains that these individuals are each either a corporate representative or
expert witness of the litigants, that their testimonies were necessary to KCSR's trial preparation,
and that KCSR used the deposition testimony of its own experts in drafting its Daubert and
summary judgment motions. Thus, KCSR maintains that it had a reasonable expectation that
these transcripts would be used in trial preparation. KCSR documents these expenses by its bill
of costs, as well as an attached chart of deposition expenses [375-2] at 1, and invoices supporting
that these costs were incurred [375-2] at 1-23. The Court finds that KCSR has demonstrated that
it is entitled to recover for these nine deposition transcripts.
Kmart points out that the cost incurred by KCSR to obtain the deposition transcript of
David Huwe is substantially higher than the other Defendants incurred for the same transcript;
KCSR paid $1,036.50 to obtain Huwe's deposition transcript, while E & A paid only $593.75
and Fulton paid only $608.75 for the same transcript. KCSR's documentation supporting this
cost indicates that KCSR obtained only one certified copy of Huwe's deposition transcript for
this amount. Thus, the Court finds that KCSR is entitled to recover the full amount requested for
Huwe's deposition transcript.

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For all the foregoing reasons, the Court finds that these eleven transcripts were
necessarily obtained for use in this case, as KCSR has demonstrated to this Court that KCSR had
"a reasonable expectation that ... the transcripts would be used for trial preparation." See
Marmillion, 381 F. App'x at 430. The Court further finds that the bill of costs should be reduced

by $2,205.30, as explained above with respect to the deposition transcripts of Dale Menendez
and John R. Krewson.
Conclusion

In sum, Defendant Kansas City Southern Railway Company's petition for costs [375 &
376] is GRANTED IN PART AND DENIED IN PART.

The bill of costs is reduced by

$2,205.30. PlaintiffKmart Corporation is taxed $6,667.55 as costs in this action.
An order in accordance therewith shall issue this day.

THIS, the ()

'f

~

day of July, 2014.

SENIOR JUDGE

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