United States of America v. Cochran, et al
Filing
251
ORDER denying 229 Motion for Attorney Fees; denying 231 Motion for Bill of Costs; and granting 240 Motion for Disallowance of Costs - Signed by District Judge Louise Wood Flanagan on 10/26/2015. (Baker, C.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
EASTERN DIVISION
NO. 4:12-CV-000220-FL
UNITED STATES OF AMERICA,
Plaintiff,
v.
WILLIAM I. COCHRAN, III; WRC,
LLC; EKP, LLC; EMLAN
PROPERTIES, LLC; and RICHARD A.
COCHRAN,
Defendants.
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ORDER
This matter comes before the court on defendants’ motion for attorney’s fees and expenses
(DE 229), defendants’ motion for bill of costs (DE 231), and plaintiff’s motion for disallowance of
costs (DE 240). Plaintiff responded further in opposition to the motion for attorney’s fees and
expenses, and defendants replied. In this posture, the issues raised are ripe for ruling. For the
following reasons, defendants’ motions are denied and plaintiff’s motion is granted.
BACKGROUND
In September 2012, plaintiff commenced this action asserting a claim under the Fair Housing
Act (“FHA”), 42 U.S.C. §§ 3601-3619, against individual defendant William I. Cochran, III
(“Cochran”) and various entities under which he has managed residential rental properties, namely
defendants WRC, LLC; EKP, LLC; and EmLan Properties, LLC. Plaintiff sought damages on
behalf of certain tenants and associated persons asserted to be “aggrieved persons” allegedly injured
by defendants’ discriminatory conduct. Plaintiff also sought declaratory and injunctive relief, as
well as a civil penalty.
In February 2013, defendants filed a motion to dismiss for failure to state a claim and motion
for attorney’s fees. The court denied the motion to dismiss in May 2013, and subsequently
dismissed the motion for attorney’s fees without prejudice. On September 19, 2013, plaintiff filed,
with leave of court, an amended complaint, adding Richard A. Cochran (“Richard Cochran”),
Cochran’s brother, as a defendant.
Plaintiff moved to strike defense expert Dr. Kane on September 20, 2013, arguing that the
disclosure of Dr. Kane as a defense expert was untimely. The court denied the motion and allowed
an extension of discovery for deposition of Dr. Kane. On December 30, 2013, plaintiff moved for
leave to identify six additional witnesses on whose behalf it may seek damages as “aggrieved
persons.” In opposition, defendants moved to strike designation of two additional witnesses, Justice
Blow and Sterling Council, as “aggrieved persons.” The court denied the motion for leave, and also
denied defendants’ motion to strike.
Defendants moved for summary judgment on January 14, 2014, and plaintiff moved to
exclude defense expert Dr. Kane the next day. Defendants filed a motion for sanctions on February
13, 2014. On August 13, 2014, the court denied defendants’ motion for summary judgment, denied
defendants’ motion for sanctions, and denied without prejudice plaintiff’s motion to exclude. The
court directed the case to proceed to a bifurcated jury trial, where, in the first, liability, phase of trial,
plaintiff had the burden of establishing a prima facie case of a pattern or practice of discrimination
through denial of rights guaranteed by the FHA. The court directed that, in the event plaintiff met
its burden in the first phase of trial, the case would proceed to a second, remedy, phase of trial, at
2
which plaintiff would have the burden of establishing the right to damages and other relief, and the
extent thereof, for individual aggrieved persons.
The court set the matter for final pretrial conference on December 23, 2014, and for trial
commencing January 13, 2015. In the meantime, the parties proceeded to a court-hosted settlement
conference on October 21, 2014, which resulted in an impasse. On December 9, 2014, the parties
filed seven motions in limine, four by plaintiff and three by defendants, which motions were fully
briefed. At the pretrial conference on December 23, 2014, the court took up administrative trial
issues and objections noted in the parties’ proposed pretrial order, and the court rendered ruling on
several motions in limine. The court directed further briefing concluding January 9, 2015, on an oral
motion raised by defendants pertaining to the structure of the verdict form.
On December 30, 2014, the court denied defendants’ objection to plaintiff’s proposed use
of video deposition testimony of a defendant in plaintiff’s case-in-chief. On January 6, 2015, the
court denied plaintiff’s motion to exclude evidence pertaining to former landlords of aggrieved
person, Josette Cruz (“Cruz”), and took under advisement the motion as it relates to former landlords
of Lorrie Reddick (“Reddick”). On January 14, 2015, the court granted defendants’ motion to
exclude plaintiff’s arguments and contentions relating to defendants’ joint and several liability,
based upon an unpleaded theory of alter ego or piercing the corporate veil.
In the meantime, on January 13, 2015, the court entered an amended joint pre-trial order,
which set forth 307 exhibits that plaintiff might seek to introduce at trial, and 415 exhibits
defendants might seek to introduce at trial. Plaintiff identified 32 witnesses it expected to call at
trial, and defendants identified 13 witnesses they expected to call at trial. The parties estimated
needing 16 days of trial time. Per section I.G. of the court’s amended scheduling order, the court
3
limited the parties to 32.5 hours per side in the liability phase and 19.5 hours per side in the remedy
phase of the trial.
Trial commenced on January 13, 2015, and ran until January 29, 2015. In the course of trial,
plaintiff spent 20 hours, 17 minutes, presenting its case, and defendants spent 28 hours, 34 minutes.
Plaintiff presented testimony of the following 19 witnesses:
1.
Earleen Windley
2.
Cynthia Grimes
3.
Lora Grimes
4.
Shenta Spencer
5.
Sara Peed
6.
Casey Canon
7.
Richard Cochran
8.
William Cochran, III (video deposition and live testimony)
9.
Josette Cruz
10.
David Caddigan
11.
Laurcretia Guilford
12.
Terisha Lynn
13.
Justice Blow
14.
Kila Whitfield
15.
Timothy Cox
16.
Tammy Grimes
17.
Tommy Clark
4
18.
Kathleen Maxwell
19.
Stephanie Allen
At the conclusion of the government’s case in chief on January 20, 2015, defendants moved for
directed verdict, pursuant to Federal Rule of Civil Procedure 50. The court heard argument from the
parties on the motion and took the motion under advisement. Defendants then proceeded to present
testimony of the following 22 witnesses:
1.
Clarence Gray
2.
Allen Pittman
3.
Catherine Biggs
4.
Stacey Pack
5.
Karla Jean Neal
6.
Dean Burbage
7.
Evonda Gibbs
8.
Malissa Silverthorne
9.
John Spencer
10.
Steven Wood
11.
Bart Ward
12.
Alton Ward
13.
Richard Cochran
14.
Anthony Hines
15.
Ronnie Stroud
16.
Robert Grimes
5
17.
Gina Horton
18.
Maurice Everett
19.
Kyle Cochran
20.
Justin Spruill
21.
Ruth Dudley
22.
William Cochran, III
On January 23, 2015, at a recess in the testimony, the court took up and denied defendants’
motion for directed verdict. (Tr. vol. 8 at 116). On January 27, 2015, after the conclusion of
defendants’ evidence, and plaintiff’s rebuttal evidence, defendants renewed their oral motion for
directed verdict under Rule 50. The court took the motion under advisement.
Jury deliberations began in the afternoon on January 28, 2015. On January 29, 2015, after
having deliberated a total of approximately 5 hours, the jurors posed a question to the court
requesting a list of names of aggrieved persons, and asking whether the aggrieved persons stand to
benefit financially from the outcome of the case. After hearing argument from the parties, the court
instructed the jury as follows:
If you find that the defendants violated the Fair Housing Act, then you will be called
upon to determine whether the defendants caused damages to any of the aggrieved
persons who testified in this case. The persons designated by the plaintiff as
aggrieved include: Della Boyd, Tommy Clark, Tammy Grimes, Josette Cruz, Cynthia
Grimes, Lora Grimes, Laurcretia Guilford, Terisha Lynn, Justice Blow, Shenta
Spencer, Kila Whitfield and Earlean Windley.
(Tr. vol. 12 at 21).
Following the court’s response to their question, after approximately 40 minutes of additional
deliberations, the jury returned a verdict of no liability, finding that plaintiff had not proved that
defendant William Cochran engaged in a pattern or practice of discrimination, or denial of rights,
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under the FHA. According to the form of verdict, the jury thus did not reach the question of liability
as to the other defendants acting as agents of defendant William Cochran, III.
In light of the verdict, the court terminated the Rule 50 motion and other motions in limine
not ruled on in the course of trial as moot. On February 10, 2015, the court entered judgment in
favor of defendants. Plaintiff did not appeal. On May 11, 2015, defendants filed an “application
for costs, fees, and other expenses in accordance with the [EAJA],” seeking a total of $792,025.99,
in costs, attorney’s fees, and expenses. (DE 227). This document was corrected and re-filed on May
12, 2015, as two separate motions: (1) the instant motion for attorney’s fees and expenses (DE 229),
and (2) the instant motion for bill of costs (DE 231). On May 22, 2015, plaintiff moved to disallow
costs as untimely sought. (DE 240).
In their motion for attorney’s fees and expenses, defendants note that they seek a total of
$792,025.99 in “costs, attorney’s fees, and expenses.” (See DE 229 at 1). Of this total amount,
however, $714,535.50 is requested as attorney’s fees, $16,733.52 as taxable costs, and $60,755.97
as non-taxable costs and other client expenses. (See DE 229 at 1; DE 235-1 at 5). On June 16, 2015,
defendants updated the amount requested as attorney’s fees to $727,046.50, which brings the grand
total amount of requested costs, attorney’s fees, and expenses, to $804,535.99. In their motion for
bill of costs, defendants reiterate that they seek taxable costs in the amount of $16,733.52. (DE
231).
DISCUSSION
A.
Attorney’s Fees
The Equal Access to Justice Act (“EAJA”), provides for an award of reasonable attorney’s
fees and expenses in accordance with the following provision:
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Except as otherwise specifically provided by statute, a court shall award to a
prevailing party other than the United States fees and other expenses, in addition to
any costs awarded pursuant to subsection (a), incurred by that party in any civil
action (other than cases sounding in tort), including proceedings for judicial review
of agency action, brought by or against the United States in any court having
jurisdiction of that action, unless the court finds that the position of the United States
was substantially justified or that special circumstances make an award unjust.
28 U.S.C. § 2412(d)(1)(A) (emphasis added).1 In addition, the statute provides:
A party seeking an award of fees and other expenses shall, within thirty days of final
judgment in the action,2 submit to the court an application for fees and other
expenses . . . . The party shall also allege that the position of the United States was
not substantially justified. Whether or not the position of the United States was
substantially justified shall be determined on the basis of the record . . . which is
made in the civil action for which fees and other expenses are sought.
§ 2412(d)(1)(B) (emphasized).
The Supreme Court has interpreted the phrase “substantially justified,” emphasized in the
quotations above, to mean “justified to a degree that could satisfy a reasonable person.” Pierce v.
Underwood, 487 U.S. 552, 565 (1988). “[A] position can be justified even though it is not correct,
and . . . it can be substantially (i.e., for the most part) justified if a reasonable person could think it
correct, that is, if it has a reasonable basis in law and fact.” Id. at 566 n.2. The phrase, thus, does
not connote “‘justified to a high degree,’ but rather ‘justified in substance or in the main.’” Id. at
565. As such, the standard is comparable to one that is “satisfied if there is ‘a genuine dispute,’” or
“if reasonable people could differ as to the appropriateness of the contested action.” Id. “The
United States has the burden of showing that its position was substantially justified.” United States
v. 515 Granby, LLC, 736 F.3d 309, 315 (4th Cir. 2013).
1
A separate subsection, § 2412(a)(1), governs procedures for award of costs, and will be addressed in section B. of this
order, further below.
2
“Final judgment” is defined in the statute as “a judgment that is final and not appealable, and includes an order of
settlement.” § 2412(d)(2)(G).
8
“[W]hen determining whether the government’s position in a case is substantially justified,
we look beyond the issue on which the petitioner prevailed to determine, from the totality of
circumstances, whether the government acted reasonably in causing the litigation or in taking a
stance during the litigation.” Roanoke River Basin Ass’n v. Hudson, 991 F.2d 132, 139 (4th Cir.
1993). In so determining, the court may look to “objective indicia,” such as “the stage in the
proceedings at which the merits were decided,” although such indicia do not provide, in themselves,
a “conclusive answer.” Pierce, 487 U.S. at 569. “[M]erits decisions in a litigation, whether
intermediate or final . . . obviously must be taken into account both by a district court in deciding
whether the Government’s position, though ultimately rejected on the merits, was substantially
justified, and by a court of appeals in later reviewing that decision for abuse of discretion.” EEOC
v. Clay Printing Co., 13 F.3d 813, 815 (4th Cir. 1994).
The government opposes the motion for attorney’s fees in this case on the basis that its
litigation position was substantially justified. It points to numerous witnesses who testified at trial
consistent with the facts alleged in the complaint and proffered at summary judgment, as well as
significant documentary evidence supporting such facts. The government also points to this court’s
rulings in denying defendants’ motions to dismiss, for summary judgment, for sanctions, and for
judgment as a matter of law, as indicative of the substantial justification in the government’s
position. Considering the totality of the circumstances, in light of the requisite standard under the
EAJA, the court is compelled to find the government’s position substantially justified.
The court begins with its own rulings assessing the government’s case at various stages of
the proceedings. In denying defendants’ motion to dismiss the complaint in May 2013, the court
reasoned that “[w]here, as here, the government raises claims pursuant to pattern or practice and
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group of persons theories, courts have held that details about specific incidents of discrimination
need not be included in the complaint.” Order, May 10, 2013, at 5. “Accordingly, in this case
although the complaint does not contain details about specific incidents of discrimination, plaintiff
has alleged sufficient facts to support pattern or practice and group of person theories under the
FHA.” Id. at 6. “[T]he complaint lists acts which include refusing to perform and delaying
performance of maintenance or repairs and refusing to credit tenants for maintenance or repairs they
paid for and/or performed themselves, all in reference only to African-American tenants residing
at properties managed by defendant Cochran and owned by his co-defendants in this case.” Id.
“The pervasive nature of the alleged discriminatory conduct permits the inference that these are the
types of acts the government has authority to enforce through civil suit.” Id. at 6-7.
In evaluating defendants’ motion for summary judgment, the court addressed both strong
points and weak points in plaintiff’s case, concluding that plaintiff had forecasted sufficient evidence
to proceed on nearly all of its legal theories of relief. The court reasoned:
This case presents a close question regarding the application of a pattern or practice
of discrimination. Unlike many pattern or practice cases evaluated by the Supreme
Court and the Fourth Circuit, plaintiff has not introduced any statistical evidence of
discrimination. Rather, plaintiff seeks to prove a pattern or practice by anecdotal
evidence of failures to repair and racially derogatory statements. Despite the limited
range of evidence forecasted, considered cumulatively in the light most favorable to
plaintiff, the evidence in its entirety supports an inference of a systematic practice
or policy to deprive black Americans’ rights guaranteed under the Fair Housing Act
on the basis of their race.
Order, August 13, 2014, at 17. The court identified testimony by seven individuals providing
plaintiff’s “most compelling evidence” of discrimination in housing: Lynn, Cruz, Blow, Council,
Boyd, Cynthia Grimes, Lora Grimes. Id. at 17-18. The court identified additional testimony by
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three individuals permitting an inference of discrimination: Reddick, Windley, and Casey Cannon.
Id. at 18. Finally, the court identified further circumstantial evidence of discrimination. Id. at 18-19.
Furthermore, the court rejected defendants’ argument in favor of summary judgment and
sanctions under Rule 11, based on defendants’ assertion that plaintiff’s evidence was
uncorroborated, incredible, or contracted by other evidence in the record. Id. at 22 & 28. The court
observed that the testimony proffered by plaintiff was specific, plausible, and grounded in specific
instances of conduct. Id. at 22. Accordingly, the court held that inconsistencies in the testimony were
“categorically within the province of the fact finder to weigh and consider.” Id.
Prior to trial, the court denied plaintiff’s motion to exclude testimony at trial by former
landlords of aggrieved person, Cruz, and took under advisement the motion as it relates to former
landlords of Reddick. The court reasoned that such testimony pertaining to Cruz could support the
legitimacy of defendant Cochran’s actions and could be used to attack the credibility of Cruz,
rejecting, among other arguments, plaintiff’s contention that the testimony would be unfairly
prejudicial. Order, January 6, 2015, at 5-8.
Following presentation of plaintiff’s case at trial, the court considered and denied
defendants’ motion for directed verdict, noting:
[The court] finished going through the transcript considering the Defendant’s [sic]
Rule 50 motion made at the close of the Government’s case and [the court is]
compelled to deny it.
(Tr. vol. 8 at 116). Following presentation of defendants’ evidence at trial, and again following
closing arguments, the court took under advisement defendants’ renewed motion for directed
verdict, allowing the case to proceed to jury deliberations.
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In sum, the court’s orders allowing plaintiff’s case to proceed through to verdict in this
matter provide objective indicia that the government was substantially justified in continuing with
bringing and continuing to pursue the case through trial. The court’s summary judgment ruling
confirmed that plaintiff had “affirmatively demonstrate[d] with specific evidence that there exist[ed]
a genuine issue of material fact requiring trial.” Order, August 13, 2014, at 9. The court’s ruling
on defendants’ motion for directed verdict necessarily entailed a determination that “a reasonable
jury would . . . have a legally sufficient evidentiary basis to find for the” plaintiff. Fed. R. Civ. P.
50(a)(1).
Further, although the court did not decide defendants’ renewed motions for directed verdict
following presentation of defendants’ evidence, review of the evidence presented at trial confirms
that the government had a reasonable basis in both law and fact to proceed through trial to verdict.
Testimony presented at trial was consistent with much of the testimony proffered in response to
defendants’ motion for summary judgment. For example, Windley testified that she withheld rent
due to lack of repairs and Cochran stated “I thought you people knew how to get money.” (Tr. vol.
1 at 51 & 54). Cynthia and Lora Grimes testified that Cochran argued with her about a rental unit,
calling them “nigger,” and “black bitch,” (id. at 83, 98, 120, 127-29, 135), including in reference
to a broken refrigerator “You niggers always needing something, got to have something fixed.” (Id.
at 129).
Sara Peed offered testimony regarding prompt fixing of maintenance issues for herself as a
white tenant, with Cochran allowing reimbursement of expenses as rent reduction. (Tr. vol. 2 at 59
& 66). Cochran completed repairs promptly for the Cannons, who were white, and also made the
comment that “it did not surprise him that there were roaches in the house because the people that
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lived there before . . . were black and they weren’t clean.” (Id. at 77). Boyd testified that Cochran
treated white tenants “with much more dignity and respect than he did us,” (id. at 107), and “heard
him use ‘nigger’ all of the time.” (Id. at 108). Further, he testified that Cochran stated “[t]hese
niggers don’t know how to keep my house,” “[a]nd I’ll get their asses out of here, and I wish I had
never put them in here.” (Id. at 108). Plaintiff offered videotaped testimony of Cochran to
demonstrate inconsistencies in testimony, including with respect to accounting for repairs, and
statements made to tenants. (E.g., id. at 148-154, 159-160).
Cruz testified that Cochran was unresponsive to her repair requests (Tr. vol. 3 at 59-67),
placed a ghost at her front door (id. at 84), told her “you’re black, I’m white, you’re in the South
now, you’ll never beat me,” (id. at 85), and “[o]nce you move out, another ignorant nigger is going
to move in.” (Id. at 87). Caddigan, a legal aid attorney, corroborated Cruz’s testimony, and stated
that Cochran said Cruz “allows her children to run around like a bunch of monkeys.” (Id. at 178).
Lynn testified that Cochran withheld repairs and Cochran said “he wasn’t buying no nigger no
refrigerator,” (Tr. vol. 4 at 10-19), which testimony was corroborated by testimony of her son. (Id.
at 114). Tammy Grimes testified that, upon withholding rent due to failure to repair, Cochran said
“[t]hat’s why I don’t like renting to black people because they don’t pay.” (Id. at 228).
In sum, the evidence that the court identified as the most compelling evidence in support of
plaintiff’s case at the summary judgment stage was presented during testimony at trial. Although
defendants presented significant countervailing evidence in presenting their defense, plaintiff’s
evidence was sufficient in terms of corroboration and individual numbers to create a genuine issue
of fact for the jury, and thus a “reasonable basis both in law and fact” for supporting plaintiff’s case.
Pierce, 487 U.S. at 565. Where the case was heavily dependent upon competing testimony regarding
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reputation, credibility, and bias of witnesses testifying as to both parties, plaintiff has demonstrated
that it was “substantially justified” in proceeding forward with trial, despite the significant and
vigorous defense offered.
Defendants’ arguments seeking to characterize plaintiff’s case as lacking in substantial
justification are unavailing. Defendants assert broadly, for example, that “the DOJ brought this case
without conducting a proper pre-suit inquiry and refused to end the harassment campaign even when
formal discovery revealed its claims meritless.” (DE 232 at 4). In support of this proposition,
defendants cite to their own motions to dismiss, for summary judgment, and for sanctions. The
court’s orders, however, denying each such motion, belie defendants’ suggestion that plaintiff’s case
had no reasonable basis to proceed. In particular, the court’s order on summary judgment is
inconsistent with defendants’ assertion that formal discovery revealed plaintiff’s claims meritless.
Defendants also contend that weaknesses in plaintiff’s case demonstrate that plaintiff was
not substantially justified in bringing or continuing the litigation to trial. Defendants point out that
plaintiff’s case was “supported by very little but anecdotes.” (DE 244 at 3). In addition, defendants
point to “testimony of city and housing authority professionals, whose testimony demonstrates the
incredulity and implausibility of the aggrieved persons’ stories.” (Id.) (internal quotations omitted).
This court, however, already addressed the anecdotal nature of plaintiff’s evidence in evaluating the
merits of the claims at the summary judgment stage of the case. (DE 130 at 17). The court also
recognized that defendants had presented “evidence of considerable weight and probative force”
that tended to show “Cochran never made the challenged statements and in fact treated all of his
tenants fairly and with respect.” (Id. at 22-23). Such evidence, the court determined, “is sufficient
to meet [their] burden of production to counter plaintiff’s prima facie case, . . . but it is not sufficient
14
for judgment as a matter of law in their favor.” (Id. at 23 (citing Int’l Bhd. of Teamsters v. United
States, 431 U.S. 324, 360 (1977)). “Rather, it creates a jury issue as to whether plaintiff has
established a pattern or practice of discrimination.” (Id. (citing Teamsters, 431 U.S. at 360 n.46 &
n.50)).
Defendants also suggest the possibility that, even where claims survive dispositive pretrial
motions, a trial may “reveal[] profound weaknesses in the government’s case,” (DE 232 at 5 n.23),
and the substantial justification standard requires consideration of the evidence notwithstanding the
outcome of pretrial motions. (See DE 244 at 4-5). In the present case, however, the parties’ trial
evidence tracked closely the evidence offered at summary judgment. The evidence presented at trial
in favor of defendants was presented also at the time of summary judgment, as discussed in the
court’s order on summary judgment. (DE 130 at 22-23). Thus, while it is conceivable that a case
could survive summary judgment but later turn out to be lacking in any reasonable basis in fact and
law, this is not such a case.
Notably, cases defendants rely upon where fees were awarded involve much different
circumstances than those presented here. For example, defendants point to EEOC v. Clay Printing
Co., 13 F.3d 813, 815 (4th Cir. 1994), where the Fourth Circuit affirmed an award of attorney’s fees
under the EAJA after summary judgment was granted to the defendants, and against the government,
in a discrimination case. The court relied largely on the district court’s and Fourth Circuit court’s
prior assessment of the evidence at summary judgment, noting their previous assessment that
“EEOC has made a vain attempt to create a triable issue of age discrimination out of little more than
thin air.” Id. The court noted “[i]t is hard to imagine how the district court could have used stronger
15
language to describe the weakness of EEOC’s case,” providing the following examples from the
district court’s summary judgment order:
The discharge claims advanced here are, to say the least, simply implausible . . . .
The evidence shows, without any doubt, that [the company’s] employees were
treated basically the same . . . . [EEOC’s evidence] reveals no tenable basis
whatsoever for the constructive discharge theory . . . . The record in this case is
characterized, repeatedly, by implausibility. The District Court noted that none of
the former employees had testified that he or she had any evidence or information
to support any claim of age discrimination. Moreover, the court noted that no
statistical evidence had been adduced. All in all, the unmistakable tenor of the
opinion is that EEOC wasted everybody’s time and was grasping at evidentiary
straws.
Id. at 816.
Thus, in Clay Printing, unlike in the present case, the court was able to draw upon its own
prior, contemporaneous, assessment of the evidence at summary judgment, which statements
revealed a complete lack of merit in the government’s cases, in determining whether the
government’s position was substantially justified. Moreover, unlike in the present case, there was
no reference to any direct evidence of discrimination or compelling evidence of discrimination as
the court found in this case, both based on evidence at summary judgment and at trial. For example,
there was no mention of multiple and repeated testimonial references to equivalent derogatory terms
such as “nigger,” “black bitch,” or “monkeys.” Further, while the evidence showed in Clay Printing
that “employees were treated basically the same,” plaintiff in the present case offered testimony by
both black and white tenants of differences in treatment in provision of maintenance on the basis of
race. Clay Printing, in sum, is wholly inapposite and instructively distinguishable from the present
case. The main factors that lead to an award of EAJA fees in Clay Printing, being the grant of
summary judgment and absence of plaintiff’s own evidence showing discrimination, are precisely
the factors lacking in the present case.
16
Defendants also cite to Hess Mechanical Corp. v. NLRB, 112 F.3d 146, 150 (4th Cir. 1997),
where the court reversed and remanded an administrative denial of attorney’s fees by the NLRB
after the plaintiff prevailed in administrative proceedings before an Administrative Law Judge. Hess
is inapposite for multiple reasons, however. First, Hess did not involve litigation in the district court
proceeding to jury trial following the denial of a summary judgment motion. Rather, it involved an
administrative complaint filed by the NLRB asserting that a company had violated the National
Labor Relations Act by firing an employee for union activities. Id. at 148. The matter proceeded
to a “one-day hearing,” after which “an administrative law judge recommended that the complaint
be dismissed in its entirety.” Id.
Second, the evidence of a violation in Hess was much more limited than that presented here.
“The ALJ found that the only evidence that [the fired employee] had engaged in or was fired for
union activity was [his] own uncorroborated testimony.” Id. The Fourth Circuit noted that the
government only pointed to potentially corroborating testimony on appeal, and did not even present
such testimony at hearing. Id. at 149. Third, the government never disputed the company’s
legitimate reasons for firing in any respect and “had no evidence to suggest otherwise.” Id. at 149
& 150. The court thus rejected the government’s argument that pre-hearing evidence was “not
conclusive,” determining instead that “[a]dditional inquiry in this case, of course, would have
uncovered only mounting evidence favoring [the company].” Id. at 150.
None of these factors are present in the instant case, where not one but multiple individuals
testified as to a pattern or practice of discrimination, and where the government disputed the nondiscriminatory reasons presented by defendants. (See, e.g., Tr. vol. 11 at pp. 17-19, 27, 32-34, 4951; 118-123). The government offered corroborating testimony at trial, much different from waiting
17
to assert it on appeal following denial of attorney’s fees, as was the case in Hess. In sum, Hess, like
Clay Printing, illustrates well the types of differences in procedural posture and substantive evidence
that are necessary to justify an EAJA award.
Additional cases cited by defendants are inapposite for similar reasons. For example, EEOC
v. Propak Logistics, Inc., 746 F.3d 145, 147 (4th Cir. 2014), involved an award of attorney’s fees
after the district court granted summary judgment in favor of the defendant company, and because
“events that occurred during the EEOC’s administrative investigation precluded the EEOC from
obtaining either injunctive or monetary judicial relief.” Introcaso v. Cunningham, 857 F.2d 965,
967 (4th Cir. 1988), involved an award of attorney’s fees after the district court allowed the case to
proceed to trial, without mention of any prior summary judgment proceedings. The court of appeals
found no abuse of discretion in the fee award where the plaintiff was “fully aware of the evidence
brought out in the prior state administrative proceedings that, in discharging him, defendants were
motivated by the discovery of the missing school typewriter,” id. at 968, contrary to plaintiff’s
initial pleading allegation that the defendants knew “that there was not sufficient cause for
discharge.” Id. at 966.3
Both Propak and Introcaso also involved application of the Title VII standard for attorney’s
fees, under which the court must find plaintiff’s action was “frivolous, unreasonable, or without
foundation.” Id. at 151.
A more analogous case applying the same standard as Propak and
Introcaso is EEOC v. Great Steaks, Inc., 667 F.3d 510, 518 (4th Cir. 2012), where the Fourth Circuit
3
Similar comparison is warranted with the case Hutchinson v. Staton, 994 F.2d 1076, 1079 (4th Cir. 1993), not cited
by defendants, where at the close of plaintiff’s evidence at trial, the district court entered directed verdicts for defendants
“finding that the only evidence of election-rigging was ‘purely speculative’ and ‘mere suspicion.’” Although the district
court in Hutchinson denied a motion for summary judgment in allowing the claims to proceed to trial, there was no
discussion of the summary judgment order in the fee determination decision, much less whether it included the type of
detailed analysis included in the court’s summary judgment order in the instant case. See id. at 1081.
18
affirmed the denial of a fee award, and underscored the significance of denial of a dispositive
motion, stating:
If the district court denies the motion [for directed verdict], it signals that a jury
could reasonably find for the plaintiff. Although we do not preclude their existence,
we are hard-pressed to imagine circumstances where the district court could make
this determination and nevertheless deem the plaintiff’s case frivolous, unreasonable,
or groundless.
Id. (emphasis added). Furthermore, the court rejected the argument that inconsistencies in evidence
and contradictory testimony rendered the case groundless.
The court reasoned that “[t]he
inconsistencies in [the sole claimant’s] allegations and the contradictory affidavit from her coworker
simply created factual issues for a jury to resolve; they did not make her allegations frivolous,
unreasonable, or groundless.” Id. at 519. Although applying a different standard, the same
reasoning applies in the instant case, only with greater force, where not just one claimant but
multiple claimants testified as to discriminatory conduct.
In sum, based upon objective factors including the progression of the case and the court’s
prior orders, as well as the court’s renewed consideration of the evidence in support of and in
opposition to plaintiff’s case, the court finds that the government was substantially justified in its
litigation position. Therefore, the court must deny plaintiff’s motion for attorney’s fees under the
EAJA.
B.
Costs
Defendants seek an award of taxable costs in the amount of $16,733.52, in accordance with
the EAJA. Unlike the provision for award of attorney’s fees and expenses, the EAJA provides for
award of costs to the prevailing party, without need for inquiry into whether the position of the
19
government was substantially justified. In particular, the EAJA provides for an award of costs on
the basis of the following provision:
Except as otherwise specifically provided by statute, a judgment for costs, as
enumerated in section 1920 of this title,4 but not including the fees and expenses of
attorneys, may be awarded to the prevailing party in any civil action brought by or
against the United States or any agency or any official of the United States acting in
his or her official capacity in any court having jurisdiction of such action. A
judgment for costs when taxed against the United States shall, in an amount
established by statute, court rule, or order, be limited to reimbursing in whole or in
part the prevailing party for the costs incurred by such party in the litigation.
28 U.S.C. § 2412(a)(1). In this case, defendants seek in their bill of costs fees for service of
summons and subpoena, fees for transcripts, fees for printing, fees for witnesses, and fees for copies,
which fees are covered by the categories enumerated in § 1920. Accordingly, as prevailing party
in this litigation, defendants may claim such an award of costs, under the EAJA, in the amount of
$16,733.52.
Plaintiff moves, however, to disallow defendants’ application for costs on the basis that it
is untimely. Federal Rule of Civil Procedure 54(d)(1) provides:
Unless a federal statute, these rules, or a court order provides otherwise, costs – other
than attorney’s fees – should be allowed to the prevailing party. But costs against
the United States, its officers, and its agencies may be imposed only to the extent
allowed by law. The clerk may tax costs on 14 days’ notice.
Local Civil Rule 54.1 provides, in pertinent part:
4
Section 1920 provides:
“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 necessarily obtained for use in the case;
(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.
A bill of costs shall be filed in the case and, upon allowance, included in the judgment or decree.”
20
All applications for costs must be made within fourteen (14) days after the entry of
judgment. Objections to applications for costs must be filed within fourteen (14) days
after service of the application for costs.
(a)
Filing Bill of Costs.
(1)
A prevailing party may request the clerk to tax allowable costs, other
than attorney’s fees, in a civil action as part of a judgment or decree
by filing a bill of costs, on AO form 133, available on the court’s
internet website: http://www.nced.uscourts.gov/forms/Default.aspx.
(2)
The original bill of costs shall be filed with the clerk, with copies
served on adverse parties.
(3)
The failure of a prevailing party to timely file a bill of costs shall
constitute a waiver of any claim for costs.
Local Civil Rule 54.1(a) (emphasis added). The court entered judgment in this case on February 10,
2015. Accordingly, under Local Rule 54.1, plaintiff argues that defendants had until February 24,
2015, to file an application for costs. Defendants counter that Local Rule 54.1 does not govern their
application for costs, and that instead the 30 day time period under the EAJA, 28 U.S.C. §
2412(d)(1)(B), for filing an application for fees and other expenses should apply. Under this time
period, defendants would have 30 days from April 13, 2015 (the date of final judgment, defined as
the date the action became non-appealable), or until May 12, 2015, to file their application for costs.
As an initial matter, contrary to defendants’ contention, § 2412(d)(1)(B) does not provide
a 30 day time period for filing an application for costs. Rather, § 2412(d)(1)(B) provides a 30 day
time period to file an “application for fees and other expenses,” and § 2412(d)(1)(A) expressly
distinguishes such fees and other expenses, as being “in addition to any costs awarded pursuant to
[§ 2412(a)].” In contrast to the 30 day time period for an application for fees and other expenses,
§ 2412(a) does not provide any time limit on filing of an application for costs. See § 2412(a). Nor
does any other provision in the EAJA provide any time limit on an application for costs.
21
Thus, the issue presented is whether Local Rule 54.1, which mandates a 14 day time limit,
or the EAJA, § 2412(a), which mandates no time limit, controls. Neither party cites any Fourth
Circuit case addressing this question, and this court has not found any controlling law on point.
Nevertheless, other courts of appeals have addressed the question in addressing comparable rules.
For example, in Haselwander v. McHugh, 797 F.3d 1, 2 (D.C. Cir. 2015), the court determined that
a 14-day time limit for filing an application for costs in Federal Rule of Appellate Procedure 39
applied to an application of costs made pursuant to the EAJA. In so holding, the court recognized
the absence of a time limit in the EAJA, § 2412(a):
The omission of ‘costs awarded pursuant to subsection (a)’ from sub-paragraph
(d)(1)(B) [of the EAJA], which sets the 30-day time limit, indicates that the 30-day
limit applies only to an application for attorney’s fees and expenses. The statute does
not provide a similar time limit for an application for costs, thus the 14-day time
limit in Federal Rule of Appellate Procedure 39 applies and bars Haselwander’s
application for costs.
Id.
In Fruit v. Astrue, 604 F.3d 1217, 1220 (10th Cir. 2010), by contrast, the court determined
that a 14-day time limit imposed by local rule for filing costs “pursuant to 28 U.S.C. § 1920” did not
apply to an application for costs made pursuant to the EAJA. The court reasoned in dicta, however,
that other local rules, which do not specify the statute under which costs are sought, would remain
applicable. See id. at 1220-21.
In this case, the plain language of the local rule governs the analysis. The local rule
provides, without qualification, that “[a]ll applications for costs must be made within fourteen (14)
days after the entry of judgment.” Local Civil Rule 54.1 (emphasis added). In this respect, the local
rule is similar to the Federal Rule of Appellate Procedure applied in Haselwander and it is
distinguishable from the local rule applied in Fruitt. Unlike the local rule in Fruitt, the instant local
22
rule does not limit its application to applications for costs “pursuant to 28 U.S.C. § 1920.” Fruitt,
604 F.3d at 1220. Rather, like the Federal Rule of Appellate Procedure applied in Haselwander, the
instant local rule applies to all applications for costs. Local Civil Rule 54.1; cf. Fed. R. App. Proc.
39(d)(1) (“A party who wants costs taxed must – within 14 days after entry of judgment – file . . .
[a] bill of costs.”). Thus, the instant local rule requires all applications for costs, whether made
pursuant to § 1920 or the EAJA, to be made within 14 days of judgment.
In sum, under Local Rule 54.1, defendants’ failure to timely file a bill of costs constitutes
a waiver of any claim for costs. Accordingly, defendants’ motion for bill of costs must be denied,
and plaintiff’s motion for disallowance of costs must be granted.
CONCLUSION
Based on the foregoing, the court DENIES defendants’ motion for attorney’s fees and
expenses, DENIES defendants’ motion for costs, and GRANTS plaintiff’s motion for disallowance
of costs.
SO ORDERED, this the 26th day of October, 2015.
_____________________________
LOUISE W. FLANAGAN
United States District Judge
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