Raytheon Company v. Indigo Systems Corporation et al

Filing 871

MEMORANDUM OPINION AND ORDER - GRANTING IN PART 849 MOTION for Bill of Costs filed by Indigo Systems Corporation, Flir Systems Incorporated. The Defendants are awarded costs in the amount of $161,177.08 ($40,000 for witness fees + $121,177.08 for all other agreed upon fees). The Plaintiff's payment of all costs shall be stayed pending the outcome of the appeal. Signed by Judge Richard A. Schell on 3/30/2017. (baf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
RAYTHEON COMPANY, a Delaware
corporation,
Plaintiff,
v.
INDIGO SYSTEMS CORPORATION, a
California corporation, and FLIR SYSTEMS,
INCORPORATED, an Oregon corporation,
Defendants.

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Case No. 4:07-CV-109

MEMORANDUM OPINION AND ORDER GRANTING IN PART
DEFENDANTS’ MOTION FOR APPROVAL OF THEIR PROPOSED BILL OF COSTS
The following are pending before the court:
1.

Defendants’ motion for approval of their proposed bill of costs (docket entry #849);

2.

Plaintiff Raytheon Company’s objections and response to Defendants’ motion for
approval of their proposed bill of costs (docket entry #850);

3.

Reply in support of Defendants’ motion for approval of their proposed bill of costs
(docket entry #851); and

4.

Plaintiff Raytheon Company’s sur-reply to Defendants’ motion for approval of their
proposed bill of costs (docket entry #870).

Having considered the motion and the responsive briefing thereto, the court finds that the motion
should be granted in part.
On March 31, 2016, the court entered a final judgment in this matter. The court ordered that
the Plaintiff take nothing from the Defendants. The court further ordered that costs of court should
be taxed against the Plaintiff. On April 14, 2016, the Defendants filed their proposed bill of costs;

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however, the Defendants advised the court that the Plaintiff needed additional time to review the
proposed bill of costs. On April 29, 2016, the Plaintiff filed its notice of appeal. On May 11, 2016,
the Defendants filed their notice of appeal. The parties’ respective appeals are currently pending
before the United States Court of Appeals for the Federal Circuit.
Thereafter, on July 20, 2016, the Defendants filed the instant “Motion for Approval of Their
Proposed Bill of Costs.” In their motion, the Defendants explained that the parties conferred on the
Defendants’ cost application and reached an agreement on all categories of recoverable costs (in an
amount totaling $121,177.08) except for the category concerning fees for witnesses. In their motion,
the Defendants sought to recover costs for witnesses in the amount of $74,898.64. On August 3,
2016, the Plaintiff filed its response in opposition to the Defendants’ request. In its opposition, the
Plaintiff advised the court that the parties had reached an agreement in the amount of $40,000 for
witness fees. However, the Plaintiff requested that the Defendants agree to abate payment of all
costs until after the appeal was resolved. The Defendants do not agree to the abatement.
In the Defendants’ reply brief, the Defendants abandoned their original $74,898.64 witness
fee request and now currently seek an amount of not less than $40,000 for witness fees. While the
Defendants’ updated witness fee request is in accord with the agreement reached among the parties,
the request is a randomly agreed upon number that does not correspond to the documentation
attached to the Defendants’ motion or reply brief.
The court notes that the Plaintiff, in its response and sur-reply briefs, objects to certain
categories contained in the Defendants’ request for witness fees. The Plaintiff filed an umbrella
objection, arguing that the Defendants are not entitled to recover any witness fees (except for the $40
attendance fees for the days of testimony and travel) because all of the witnesses were employees
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of the Defendants at the time of the trial and testified in their capacities as employees. The Plaintiff
notes that 28 U.S.C. § 1920 prohibits parties from recovering witness fees and related travel and
subsistence expenses as costs. The Plaintiff argues that this prohibition extends to employees of
corporate defendants who provide testimony on behalf of the corporate defendants. The Plaintiff
explains, then, that such witnesses are, therefore, only entitled to statutory witness fees and
subsistence allowances for the days they appeared as witnesses. The Plaintiff relies on Hodge v.
Seiler 558 F.2d 284, 287 (5th Cir. 1977) and Honestech, Inc. v. Sonic Sols., 725 F. Supp. 2d 573,
583-84 (W.D. Tex. 2010).
The court notes that 28 U.S.C. § 1920(3) provides that “A judge or clerk of any court of the
United States may tax as costs the following: (3) Fees and disbursements for printing and witnesses.”
In Hodge, the court cited to the general rule that “‘[t]he expenses of witnesses who are themselves
parties normally are not taxable.’” Hodge, 558 F.2d at 287, quoting WRIGHT & MILLER, FEDERAL
PRACTICE AND PROCEDURE: CIVIL § 2678 p. 229. The Hodge case, however, is distinguishable from
the instant case because the Hodge court denied an individual plaintiff’s request for travel costs. The
Hodge case did not involve the reimbursement of fees to a corporate defendant. However, the Hodge
case relied on WRIGHT & MILLER, supra., which provides, in part, as follows:
The expenses of witnesses who are themselves parties normally are not taxable. For
example, real parties in interest or parties suing in a representative capacity are not
entitled to fees or allowances as witnesses. The expenses of a director or officer of
a corporation who is not personally involved in the litigation may be taxable,
however, even if that individual is testifying on behalf of the organization and the
latter is a party to the suit.
WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL § 2678, citing Electronic Specialty
Co. v. International Controls Corp., 47 F.R.D. 158, 162 (S.D.N.Y. 1969) (“The expenses of a

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director or officer can be allowed even if they are testifying on behalf of a corporate party to the suit
‘so long as their interest in the litigation is no more than a natural concern for the welfare of the
corporation as opposed to actual participation in the litigation to the extent that they become
identifiable as a party in interest.’” ) (remaining citations omitted). Here, the Plaintiff is not alleging
that any of the Defendants’ employees who testified in the instant action could have been identifiable
as parties in the instant case.
The Plaintiff also relies on Honestech, supra. The Honestech court, however, involved the
recovery of costs incurred by a designated corporate representative. Since the instant Plaintiff is not
alleging that the Defendants’ witnesses were the Defendants’ designated corporate representatives,
Honestech is inapplicable.
Because the Plaintiff has failed to cite the court to applicable authority in support of its
proposition that a prevailing corporate party may not be awarded witness fees for the testimony of
its employees, the Plaintiff’s objection is denied. The Defendants, as the prevailing parties, may
recover as costs appropriate witness fees incurred by their employees. See Nissho-Iwai Co., Ltd. v.
Occidental Crude Sales, 729 F.2d 1530, 1551-53 (5th Cir. 1984); United Teachers Assoc. Ins. Co.
v. Union Labor Life Ins. Co., 414 F.3d 558, 574-75 (5th Cir. 2005).
Although the Plaintiff filed several other objections to the Defendants’ request to recover
witness fees, the court need not consider the same. In its sur-reply, the Plaintiff failed to advise the
court regarding the connection between its remaining objections and the Defendants’ reduction in
their request to recover witness fees. As such, the court finds that the Defendants may recover their
witness fees in the amount of $40,000. The court reminds the parties that they had reached an
agreement on this amount. The court also finds that the Plaintiff’s payment of the costs shall be
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stayed pending the outcome of the appeal. Based on the foregoing, it is hereby
ORDERED that the Defendants’ motion for approval of their proposed bill of costs (docket
entry #849) is GRANTED IN PART. The Defendants are awarded costs in the amount of
$161,177.08 ($40,000 for witness fees + $121,177.08 for all other agreed upon fees). The Plaintiff’s
payment of all costs shall be stayed pending the outcome of the appeal.
IT IS SO ORDERED.
.

SIGNED this the 30th day of March, 2017.

_______________________________
RICHARD A. SCHELL
UNITED STATES DISTRICT JUDGE

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