United States of America v. American Society of Composers, Authors and Publishers

Filing 646

OPINION AND ORDER: ASCAP's January 28, 2011 motion to review and vacate the bill of costs is granted. The Clerk of Court shall vacate the January 24, 2011 judgment taxing ASCAP for the January 6 Bill of Costs. (Signed by Judge Denise L. Cote on 4/15/2011) (jpo)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------- X
IN RE APPLICATION OF REALNETWORKS,
:
INC., YAHOO! INC.
:
-------------------------------------- :
Related to
:
:
UNITED STATES OF AMERICA,
:
:
:
Plaintiff,
-v:
:
AMERICAN SOCIETY OF COMPOSERS, AUTHORS :
AND PUBLISHERS,
:
:
Defendant.
:
-------------------------------------- X
APPEARANCES:

09 Civ. 7760 (DLC)

OPINION AND ORDER

41 Civ. 1395 (DLC)

For ASCAP:
Jay Cohen
Lynn B. Bayard
Darren W. Johnson
1284 Avenue of the Americas
New York, NY 10019
-andRichard H. Reimer
Sam Mosenkis
Christine A. Pepe
American Society of Composers, Authors, and Publishers
One Lincoln Plaza
New York, NY 10023
For applicant Yahoo! Inc.:
Michael S. Elkin
Thomas Patrick Lane
Robert C. Turner
Winston & Strawn LLP
200 Park Ave.
New York, NY 10166
DENISE COTE, District Judge:
The American Society of Composers Authors and Publishers
(“ASCAP”) has moved to review and vacate the Clerk of Court’s

1

taxation of costs as set forth in Yahoo!, Inc.’s (“Yahoo”)
January 6, 2011 Bill of Costs (the “January 6 Bill of Costs”).
For the following reasons, the motion is granted and the Clerk’s
January 24 judgment taxing ASCAP for the January 6 Bill of Costs
is vacated.

BACKGROUND
The following facts are undisputed.

On September 28, 2010,

the Second Circuit affirmed the district court’s ruling that
downloads of musical works do not constitute public performances
of those works, vacated the assessment of reasonable fees for
the blanket ASCAP licenses sought by RealNetworks, Inc. and
Yahoo, and remanded the case for further proceedings in light of
the Second Circuit’s guidance.

United States v. ASCAP (In re

Application of RealNetworks, Inc. and Yahoo! Inc.), 627 F.3d 64,
68 (2d Cir. 2010) (“RealNetworks/Yahoo!”).

The Second Circuit

did not order that costs be taxed to any of the parties.
On October 12, Yahoo filed a Bill of Costs in the Second
Circuit (the “October 12 Bill of Costs”).

ASCAP objected to

Yahoo’s October 12 Bill of Costs on October 28, 2010.

ASCAP’s

objection is still pending before the Second Circuit.

On

December 9, the Second Circuit issued its mandate, which did not
refer to costs.

2

On January 6, 2011, pursuant to Rule 54, Fed. R. Civ. P.
(“Rule 54”), and Local Rule 54.1, S.D.N.Y R.,1 Yahoo served ASCAP
with a Notice of Settlement of Bill of Costs to be taxed by this
Court (the “January 6 Notice”).

The January 6 Bill of Costs

consists entirely of costs that Yahoo claims it is entitled to
receive under Rule 39(e), Fed. R. App. P. (“Rule 39(e)”):

the

costs for filing notices of appeal ($910.00) and the premiums
for supersedeas bonds ($189,000.00).

The January 6 Notice set

January 24 as the date for submission of the Bill of Costs to
the Clerk of Court for taxation.
On January 20, pursuant to Rule 54(d)(1), and Local Rule
54.1(b), ASCAP filed its objections to the January 6 Notice.

On

January 24, the Clerk entered judgment taxing ASCAP $198,910.00
in costs.

On January 28, ASCAP filed a motion to review and

vacate the bill of costs.

On February 16, ASCAP’s motion became

fully submitted.
1

Rule 54 is discussed in detail, infra.
provides, in relevant part, that

Local Rule 54.1

within thirty (30) days after the final disposition of
the appeal . . . any party seeking to recover costs
shall file with the clerk a request to tax costs
annexing a bill of costs and indicating the date and
time of taxation. . . . A party objecting to any cost
item shall serve objections in writing prior to or at
the time for taxation.
S.D.N.Y. R. 54.1. It is undisputed that both Yahoo’s
submission of its Bill of Costs and ASCAP’s objections were
timely.

3

DISCUSSION
Yahoo has moved pursuant to Rule 54 to recover the appeal
costs to which it claims it is entitled under Rule 39(e).

ASCAP

argues that since the Realnetwork/Yahoo! decision affirmed,
vacated, and remanded the district court’s rulings, Rule 39(a)
only permits this Court to award appeal costs pursuant to Rule
39(e) if the Court of Appeals makes an award of costs.

It is

undisputed that the Second Circuit has made no such award.
“A district court reviews the clerk’s taxation of costs by
exercising its own discretion to decide the cost question
itself.”

Whitfield v. Scully, 241 F.3d 264, 269 (2d Cir. 2001)

(citation omitted).

Rule 54(d)(1) provides, in relevant part,

that
[u]nless a federal statute, these rules, or a court
order provides otherwise, costs -- other than
attorneys’ fees -- shall be allowed as of course to
the prevailing party unless the court otherwise
directs . . . Such costs may be taxed by the clerk on
one day’s notice.
Fed. R. Civ. P. 54(d)(1) (emphasis supplied).

Since “Rule 54(d)

allows costs as of course . . . the losing party has the burden
to show that costs should not be imposed.”
at 270 (citation omitted).

Whitfield, 241 F.3d

The costs that can be awarded

pursuant to Rule 54(d) are limited to those enumerated in 28
U.S.C. § 1920 (2000), which does not include the costs that

4

Yahoo seeks to recover here.

See Rangolan v. Cnty. of Nassau,

370 F.3d 239, 250 (2d Cir. 2004) (“The term costs as used in
Rule 54(d) is defined in 28 U.S.C. § 1920 (2000).” (citing
Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441
(1987))).2

In certain instances, however, a district court may

award the costs that Yahoo seeks to recover -- the costs for
filing notices of appeal and the premiums for supersedeas bonds
-- pursuant to Rule 39(e).3
Rule 39, entitled “Costs”, provides, in pertinent part:
(a) Against Whom Assessed. The following rules apply
unless the law provides or the court orders otherwise:
(1) if an appeal is dismissed, costs are taxed against
the appellant, unless the parties agree otherwise;
2

Section 1920 provides, in relevant part, that:
A judge or clerk of any court of the United States may
tax as costs the following: (1) Fees of the clerk and
marshal; (2) Fees for printed or electronically
recorded transcripts . . . ; (3) Fees and
disbursements for printing and witnesses; (4) Fees for
exemplification and the costs of making copies of any
materials . . .; (4) Docket fees under section 1923 of
this title; (6) Compensation of court appointed
experts, compensation of interpreters . . . .”

28 U.S.C. § 1920.
3

“[B]ecause Rule 39(e) expressly authorizes the taxation of
supersedeas bond costs, it is binding on district courts
regardless of whether § 1920 authorizes an award of those costs.
By contrast, Rule 54(d) does not outline any specific costs
taxable by the district court, and therefore, as discussed in
Crawford, remains limited by § 1920.” Republic Tobacco Co. v.
North Atlantic Trading Co., 481 F.3d 442, 448 (7th Cir. 2007).

5

(2) if a judgment is affirmed, costs are taxed against
the appellant;
(3) if a judgment is reversed, costs are taxed against
the appellee;
(4) if a judgment is affirmed in part, reversed in
part, modified, or vacated, costs are taxed only as
the court orders. . . .
(e) Costs on Appeal Taxable in the District Court.
The following costs on appeal are taxable in the
district court for the benefit of the party entitled
to costs under this rule . . . .
(3) premiums paid for a supersedes bond or other bond
to preserve rights pending appeal; and
(4) the fee for filing the notice of appeal.
Fed. R. App. P. 39 (emphasis supplied).
In L-3 Communications Corp. v. OSI Systems, Inc., 607 F.3d
24 (2d Cir. 2010), the Second Circuit considered the
relationship between Rule 39(a)(4), which states that “if a
judgment is affirmed in part, reversed in part, modified, or
vacated, costs are taxed only as the court orders,” and Rule
39(e), which describes those appeals costs which are taxable in
the district court.

Id. at 28.

The Second Circuit held that

“once a party is entitled to costs, whether pursuant to Rules
39(a)(1) through (3), or by order of the appellate court under
Rule 39(a)(4), it is entitled to seek costs in the district
court pursuant to Rule 39(e).”

Id. at 29 (emphasis supplied).

Similarly, the Eighth Circuit has held that “none of the costs

6

listed as taxable under Rule 39(e) are recoverable in an
affirmed-in-part/reversed-in-part case unless the appellate
court so indicates.”

Reeder-Simco GMC, Inc. v. Volvo GM Heavy

Truck Corp., 497 F.3d 805, 808 (2d Cir. 2007).
The costs Yahoo seeks to recover in its January 6 Bill of
Costs are not among those enumerated in § 1920.

Thus,

regardless of whether ASCAP or Yahoo is the “prevailing party”
within the meaning of the Rule 54(d), that rule is a legally
inadequate basis on which to award the costs that Yahoo seeks.
Furthermore, additional action by the Second Circuit is required
before ASCAP can be taxed under Rule 39(e) with supersedeas bond
premiums and notice of appeal fees.

In Realnetwork/Yahoo!, the

Second Circuit “affirm[ed] . . . vacate[d] . . . and remand[ed]”
the district court’s rulings, Realnetwork/Yahoo!, 627 F.3d at
68, bringing this case within the scope of Rule 39(a)(4).

Since

the Second Circuit has not ordered that costs be taxed against
any party, this Court cannot enter costs against ASCAP under
Rule 39(e).

ASCAP’s motion to vacate the January 6 Bill of

Costs is therefore granted.
Yahoo has not identified any legal support for its position
that district courts can award costs under Rule 39(e) in cases
that fall under Rule 39(a)(4), and in which the court of appeals
has not entered an order permitting taxation of costs or
referenced costs in its mandate.

Indeed, all of the cases on

7

which it relies are distinguishable.

See,~,

North Atlantic

Trading Co., 481 F.3d at 445, 449 (court of appeals "ordered
each party to bear its own costs ll but district court retained
significant discretion to award costs under Rule 39(e))
J.C. Penney Co., Inc., 570 F.2d 679, 681
on appeal awarded by court of appeals)
F.2d 587, 596 (2d Cir. 1967)

i

i

(7th Cir. 1978)

Guse v.
(costs

Scaduto v. Orlando, 381

(court of appeals clerk included

costs in the mandate) .

CONCLUSION
ASCAP's January 28, 2011 motion to review and vacate the
bill of costs is granted.

The Clerk of Court shall vacate the

January 24, 2011 judgment taxing ASCAP for the January 6 Bill of
Costs.

SO ORDERED:
Dated:

New York, New York
April 15, 2011

United

8

tates District Judge