New Mexico Oncology and Hematology Consultants, Ltd. v. Presbyterian Healthcare Services et al
Filing
882
PROPOSED FINDINGS AND RECOMMENDED DISPOSITION by Magistrate Judge Gregory B. Wormuth re 869 Opposed MOTION to Review Clerk's Order Settling Costs filed by Presbyterian Network, Inc., Presbyterian Healthcare Services. Objections to PFRD due by 4/9/2020. (ts)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
NEW MEXICO ONCOLOGY &
HEMATOLOGY CONSULTANTS, LTD.,
Plaintiff,
v.
Civ. No. 12‐526 MV/GBW
PRESBYTERIAN HEALTHCARE
SERVICES, et al.,
Defendants.
PROPOSED FINDINGS AND RECOMMENDED DISPOSITION
THIS MATTER comes before me on Defendants’ Motion to Tax Costs (doc. 855),
Defendants’ Motion for Review of Clerk’s Order Settling Costs (doc. 869) and the
Court’s Order of Reference (doc. 865), referring the matter to me for analysis, proposed
findings, and recommended disposition. Having reviewed the briefing (docs. 855, 861,
863), the Clerk’s Order Settling Costs (doc. 868), and the applicable law, I recommend
that the Court award taxable costs in the amount of $85,188.98.
I.
PROCEDURAL POSTURE
On November 14, 2019, the Court granted Defendants’ Motion for Summary
Judgment, dismissing Plaintiff’s monopolization claims and declining to exercise
supplemental jurisdiction over the remaining state law claims. Doc. 848. On December
12, 2019, Plaintiff filed a notice of appeal. Doc. 851. On December 16, 2019, Defendants
filed a Motion to Tax Costs pursuant to Federal Rule of Civil Procedure 54(d), seeking
taxation of expenses necessary to the litigation as the prevailing party. Doc. 855. In
accordance with Local Rule 54.1, Defendants attached an itemized cost bill and an
affidavit by Defendants’ Counsel, Charles K. Purcell, declaring that the itemized costs
are correctly stated, allowable by law, and necessary to the litigation. Docs. 855‐1, 855‐2.
Defendants request $145 in service of process fees and $85,690.43 in deposition
costs, for a total of $85,835.43 taxable costs. Doc. 855‐2. On February 18, 2020, the clerk
of court reviewed Defendants’ itemized costs and entered an order setting the allowed
costs at $57,590.87. Doc. 868. The clerk determined that Defendants’ service of process
fees were fully allowable. Id. at 2. The clerk also determined that depositions on which
the parties relied in briefing the motion for summary judgment were reasonably
necessary and thus allowable. Id. However, the clerk determined that depositions not
cited by either party were not reasonably necessary and disallowed those costs. Id.
On February 25, 2020, Defendants filed a Motion for Review of Clerk’s Order
Settling Costs, relying on their original briefing to supply the reasons for overruling the
clerk’s order. Doc. 869. Plaintiff did not seek review of the clerk’s order but asks the
Court to review its original briefing in connection with Defendants’ Motion. Doc. 879.
II.
LEGAL STANDARDS
Federal Rule of Civil Procedure 54(d)(1) provides that “costs—other than
attorney’s fees—should be allowed to the prevailing party.” The clerk of court may tax
costs in the first instance. Fed. R. Civ. P. 54(d)(1). On a motion filed within seven days,
the court may review the clerk’s order. Id. Review of the clerk’s order is de novo. Furr
v. AT&T Techs., 824 F.2d 1537, 1550 n.11 (10th Cir. 1987) (citation omitted).
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The decision to award costs rests within the district court’s discretion; however,
the discretion to deny costs is limited in two respects. In re Williams Sec. Litig.‐WCG
Subclass, 558 F.3d 1144, 1147 (10th Cir. 2009). First, Rule 54 creates a presumption in
favor of awarding costs. Cantrell v. Int’l Bhd. of Elec. Workers, 69 F.3d 456, 458–59 (10th
Cir. 1995). Second, a denial is “in the nature of a severe penalty,” such that the court
must state its reasons. Debord v. Mercy Health Sys. of Kan., Inc., 737 F.3d 642, 659 (10th
Cir. 2013) (quoting Marx v. Gen. Revenue Corp., 668 F.3d 1174, 1182 (10th Cir. 2011)).
Permissible reasons to deny costs include: (1) the prevailing party is only partially
successful, (2) the prevailing party was obstructive or acted in bad faith in the course of
litigation, (3) damages are only nominal, (4) the non‐prevailing party is indigent, (5) the
costs are unreasonably high, or (6) the issues were close and difficult. Id. at 659–60.
The prevailing party has the burden of proving that the itemized costs are
taxable and that the amounts are reasonable. In re Williams Sec. Litig., 558 F.3d at 1148.
When that burden is met, the non‐prevailing party has the burden of overcoming the
presumption in favor of awarding costs. Id.
III.
ANALYSIS
A. Defendants’ Entitlement to Costs
As Defendants point out, Plaintiff did not seek review of the Clerk’s Order
Settling Costs, thus Plaintiff has waived its arguments for denying or deferring costs.
Bloomer v. United Parcel Serv., Inc., 337 F.3d 1220, 1220–21 (10th Cir. 2003); Williams v.
W.D. Sports N.M., Inc., 2005 WL 8163527, at *1 (D.N.M. Aug. 3, 2005). Nonetheless, I
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will briefly address Plaintiff’s original arguments. See Williams, 2005 WL 8163527, at *2.
I find them without merit and therefore recommend awarding Defendants’ costs at this
time.
Plaintiff first argues that costs should be denied because Defendants were only
partially successful. Doc. 861 at 2. Plaintiff relies on a case from the District of Kansas
in which the court denied costs because it had declined to exercise supplemental
jurisdiction over Plaintiff’s state law claims and because the federal claims involved
close and difficult questions of law. See Phalp v. City of Overland Park, 2002 WL
31778781, at *2 (D. Kan. Nov. 21, 2002)). In rebuttal, Defendants point to a case in which
this District declined to deny costs on the basis of unaddressed state law claims, finding
that the prevailing party was “overwhelmingly successful.” See Billy v. Curry Cty. Bd. of
Cty. Comm’rs, 2015 WL 12990789, at *3 (D.N.M. Sept. 11, 2015). I recommend declining
to find that Defendants were only partially successful. As Defendants observe, the
antitrust claims dismissed by the Court were the central focus of Plaintiff’s complaint.
Like the prevailing party in Billy, Defendants were overwhelmingly successful.
Plaintiff alternatively argues that costs should be deferred until the state law
claims have been resolved by the state court. Doc. 861 at 3–5 (citing Seeds v. Lucero, 2002
WL 35649996 (D.N.M. May 21, 2002) and N. Am. Ins. Agency, Inc. v. Bates, 2015 WL
150803 (W.D. Okla. Mar. 31, 2015)). Defendants point out that the Tenth Circuit
declined to apply this reasoning in Allen v. Lang, 736 F. App’x 934, 945 (10th Cir. 2018)
(unpublished). There, the Tenth Circuit found that the defendant was entitled to costs
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incurred in prevailing on federal claims in federal court, notwithstanding the possibility
that the plaintiff would prevail on state claims in state court. Id. at 946. The Tenth
Circuit noted that if the plaintiff did prevail in state court, he would be able to seek his
own costs to the extent permitted by the state court. Id. I recommend following the
reasoning in Allen and finding that Defendants are presently entitled to an award of
costs for prevailing on the federal claims in this Court.
B. Allowable Costs
By statute, a party is entitled to tax, among other things, “[f]ees for printed or
electronically recorded transcripts necessarily obtained for use in the case.” 28 U.S.C. §
1920(2). Under District of New Mexico Local Rule 54.2, the prevailing party may tax the
cost of a deposition transcript when it is “reasonably necessary to the litigation.”
D.N.M.LR‐Civ. 54.2(b)(1). A deposition is reasonably necessary to the litigation when:
(A) a substantial portion of the deposition is admitted into
evidence or used at trial for impeachment purposes;
(B) the deposition is used by the Court in ruling on a motion for
summary judgment; or
(C) the Court so determines.
D.N.M.LR‐Civ. 54.2(b)(2). When determining whether costs were reasonably necessary
to the litigation, the Court must not “employ the benefit of hindsight” but rather
consider the “particular facts and circumstances at the time the expense was incurred.”
Callicrate v. Farmland Indus., Inc., 139 F.3d 1336, 1340 (10th Cir. 1998). Where a
deposition “appeared to be reasonably necessary at the time it was taken,” the
associated costs should be allowed. Allison v. Bank One‐Denver, 289 F.3d 1223, 1249
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(10th Cir. 2002). On the other hand, costs are not recoverable if they “merely added to
the convenience of counsel.” In re Williams Sec. Litig., 558 F.3d at 1147 (citation and
internal quotation marks omitted).
Consistent with 28 U.S.C. § 1920 and Local Rule 54.2, the clerk awarded the costs
of service of process fees and depositions that were cited by the parties in briefing the
motion for summary judgment. Doc. 868 at 2. Because these costs are properly
awarded by statute and local rule, and because Plaintiff did not seek review of the
clerk’s order, I recommend awarding these costs in full.
Defendants timely requested review of the clerk’s denial of the remaining
deposition costs. Based on my own de novo review, I find that several additional
depositions were cited by the Court in granting Defendants’ summary judgment. These
depositions are as follows: Lora Allpass, see doc. 848 at 26 n.9 (citing Pl.’s Ex. 1‐18); Clark
Haskins, M.D., id. at 27–28 (citing Pl.’s Ex. 1‐20); Brian Potts, M.D., id. at 59; and Peter
Snow, id. at 22–23. Pursuant to Local Rule 54.2(b)(2)(B), these costs should be awarded.
As outlined by Defendants, several of the remaining depositions were taken by
Plaintiff. In Callicrate, the Tenth Circuit affirmed costs for depositions taken by the non‐
prevailing party, even when they were not used in any dispositive motions. 139 F.3d at
1341. The Tenth Circuit found that it was particularly reasonable for the prevailing
party to request copies where the individuals deposed were the party’s own employees
or representatives. Id. Excluding the depositions allowed by the clerk, Defendants
identified the following as taken by Plaintiff: Michael Applegate; Dennis Batey, M.D.;
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Gail Blackwell; Thomas Burke, M.D.; Juan Candelaria; Jennifer Ellis; Mark Epstein,
M.D.; Anna Marie Garcia; Donna Garcia; Gregory Hamilton; Jim Hinton; Sara Matlock;
Ramona Moseley and Ann Greenberg (combined bill); Jay Olive; Todd Sandman; David
Scrase, M.D.; Franklin Stevens; Stacey Tovino, Ph.D.; and Bernadette Wittner. See doc.
855‐2 at 3–11. Of these depositions, several were of Defendants’ current or former
employees and officers, including Mr. Batey and Ms. Blackwell, see doc. 848 at 29; Mr.
Hinton, id. at 22; and Mr. Scrase, id. at 42. See also doc. 85 at 18–24. Because it would
have appeared reasonably necessary to Defendants to review depositions taken by
Plaintiff to prepare for litigation, I recommend allowing these costs.
Next, Defendants note that some of the depositions not cited by the parties were
identified as Plaintiff’s experts, including Bradley Reiff, Ph.D., and Louis Rossiter, Ph.D.
Although not cited by the parties in their briefing, depositions of Plaintiff’s experts
would have appeared reasonably necessary to Defendants in order to prepare for
litigation. See Nieto v. Kapoor, No. CIV 96‐1225 MV/JHG, 2001 U.S. Dist. LEXIS 27600, at
*4 (D.N.M. June 12, 2001). Therefore, I recommend allowing these costs.
Defendants also argue that the depositions of Nina Chavez and Stephen
Quesada, both employees of Plaintiff, were reasonably necessary at the time.
Defendants point out that Nina Chavez was identified by Plaintiff as a potential witness
in the parties’ Joint Status Report. See doc. 85 at 10. Because a deposition of one of
Plaintiff’s own potential witnesses would have appeared reasonably necessary to
Defendants at the time, I recommend allowing the cost of Ms. Chavez’s deposition. See
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Nieto, 2001 U.S. Dist. LEXIS 27600, at *4. However, I recommend declining to award the
cost of Mr. Quesada’s deposition. Defendants’ bare statement that Mr. Quesada was
Plaintiff’s “former pharmacy manager,” doc. 855 at 5, does little to clarify the purpose
for which his deposition was reasonably necessary. Defendants state that Plaintiff’s
“drug prices and pharmacy practices played . . . a prominent part” in the case, id., but
they do not explain what particular information Mr. Quesada was thought to possess
on the subject or why none of Plaintiff’s other deposed employees could provide the
same information. Defendants have failed to meet their burden of justifying the cost of
obtaining a transcript of Mr. Quesada’s deposition. I therefore recommend disallowing
this cost ($646.45).
The total deposition costs excluding Mr. Quesada’s deposition are $85,043.98.
With the costs of executing service of process, the total costs are $85,188.98. Although
the total costs are quite high, they are not unreasonable considering the complexity of
the issues involved and the protracted length of the litigation. Therefore, I recommend
awarding costs in the amount of $85,188.98.
C. Plaintiff’s Entitlement to a Stay of Enforcement
Plaintiff asks this Court to stay enforcement of the award of costs during the
pendency of the appeal and either permit Plaintiff to purchase a bond in lieu of
payment or waive the requirement of a bond. Doc. 861 at 9–11. Defendants do not
oppose a stay of execution or a waiver of the bond requirement, asserting that they are
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“satisfied that [Plaintiff] is good for the full amount of the costs . . . whether now or
with interest at the end of the appellate road.” Doc. 863 at 9.
Federal Rule of Civil Procedure 62(b) allows a party to obtain a stay on
enforcement of a judgment by providing a supersedeas bond. Vreeland v. Schwartz, 2019
WL 5623307, at *1 (D. Colo. Oct. 30, 2019). The Court may waive the bond requirement
if it finds that the judgment creditor’s interest would not be harmed. Miami Int’l Realty
Co. v. Paynter, 807 F.2d 871, 873–74 (10th Cir. 1986); Dillon v. City of Chicago, 866 F.2d 902,
904 (7th Cir. 1988). The Court looks to several factors, including
(1) the complexity of the collection process; (2) the amount of
time required to obtain a judgment after it is affirmed on
appeal; (3) the degree of confidence that the district court has
in the availability of funds to pay the judgment; (4) whether
the defendant’s ability to pay the judgment is so plain that
the cost of a bond would be a waste of money; and (5)
whether the defendant is in such a precarious financial
situation that the requirement to post a bond would place
other creditors of the defendant in an insecure position.
United States v. Melot, 2012 WL 2914224, at *2 (D.N.M. May 23, 2012) (quoting Dillon, 866
F.2d at 904–05); see also Dutton v. Johnson Cty. Bd. of Cty. Comm’rs, 884 F. Supp. 431, 435
(D. Kan. 1995).
The parties are in full agreement that Plaintiff has the funds to pay the costs.
Doc. 861 at 10; doc. 863 at 9. In the event the Court’s judgment is affirmed on appeal,
Defendants are unlikely to face a complex or time‐consuming collection process.
Plaintiff has provided an affidavit of its Chief Financial Officer attesting to Plaintiff’s
financial ability to pay costs up to Defendant’s full requested amount. Doc. 861‐1.
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Because it does not appear that a stay would harm Defendants’ interest, I recommend
granting a stay of execution of the award of costs pursuant to Rule 62(b) and waiving
the requirement to post a supersedeas bond.
IV.
CONCLUSION
For the foregoing reasons, I recommend awarding Defendants costs in the
amount of $85,188.98. Further, I recommend staying execution of the award until
resolution of the appeal in the Tenth Circuit and waiving the requirement to post a
supersedeas bond.
_____________________________________
GREGORY B. WORMUTH
UNITED STATES MAGISTRATE JUDGE
THE PARTIES ARE FURTHER NOTIFIED THAT WITHIN 14 DAYS OF SERVICE of
a copy of these Proposed Findings and Recommended Disposition they may file written
objections with the Clerk of the District Court pursuant to 28 U.S.C. § 636(b)(1). A party
must file any objections with the Clerk of the District Court within the fourteen‐day
period if that party wants to have appellate review of the proposed findings and
recommended disposition. If no objections are filed, no appellate review will be
allowed.
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