Celanese Corporation v. Coastal Water Authority et al

Filing 229

ORDER for COSTS denying 221 MOTION to Strike and Objections to Each Defendant's Bill of Costs. (Signed by Magistrate Judge Stephen Wm Smith) Parties notified. (jmarchand)

C e l a n e s e Corporation v. Coastal Water Authority et al

D o c . 229

U N I T E D STATES DISTRICT COURT S O U T H E R N DISTRICT OF TEXAS H O U S T O N DIVISION C ELANESE CORPORATION, P l a i n t i ff , vs. K ELLOGG, BROWN & ROOT, INC., AND M ARTIN K. EBY CONSTRUCTION CO., INC. D e fen d a n ts. § § § § § § § § § §

C IV IL ACTION NO. H-06-2265

O R D E R FOR COSTS P r e v a ilin g defendants Kellogg, Brown & Root, Inc. (KBR) and Martin K. Eby C o n s tru c tio n Co. Inc. (Eby) seek judgment for their taxable costs incurred in this case. KBR se e k s $85,799.41 1 (Dkt. 219), and Eby seeks $70,025.96 (Dkt. 220). Celanese moves to strik e KBR's and Eby's bills of costs and objects to certain categories of requested costs (D k t. 221). The court concludes that KBR and Eby are entitled to costs, but not in the full a m o u n ts requested. M o tio n to Strike Rule 54(d) of the Federal Rules of Civil Procedure states that unless federal law or a c o u rt order provides otherwise, costs other than attorneys' fees should be allowed to the p re v a ilin g party. This rule creates a presumption that the prevailing party will be awarded

1

This amount reflects an adjustment noted in KBR's response to Celanese's Objection (Dkt. 222), footnote 7.

Dockets.Justia.com

c o s ts absent a good reason for denying them. Pacheco v. Mineta, 448 F.3d 783, 794 (5th Cir. 2 0 0 6 ). Citing primarily cases from outside this jurisdiction,2 Celanese argues that there are g o o d reasons to deny costs in this case because (1) it pursued its claims in good faith; (2) the c a s e presented difficult and novel legal issues regarding "arranger" liability; (3) the case in v o lv e d a matter of vital public interest; and (4) defendants have significant financial r e so u r c e s. T h e court is not persuaded that any of the reasons put forth by Celanese overcome the s tro n g presumption in favor of awarding costs. Celanese concedes that the Fifth Circuit has h e l d that a losing party's good faith alone is not sufficient reason to deny costs. Pacheco, 4 4 8 F.3d at 796. Based on the facts before it, the Pacheco court declined to determine w h e th e r good faith in combination with the other circumstances listed above3 would be s u f f ic ie n t, and Celanese has cited no Fifth Circuit case that has so ruled. The court agrees that this case involved novel issues of law, as is evidenced by the S u p r e m e Court's issuance of its decision in Burlington Northern shortly after entry of ju d g m e n t in this case. Nonetheless, the defendants ultimately prevailed on this issue. While th is factor weighs in Celanese's favor, it does not outweigh the presumption. The court is n o t aware of any authority directing it to deny costs in every close case.

2

Celanese's motion and objections, at 2-3. The enumerated circumstances listed in Pacheco include misconduct by the prevailing party, a circumstance Celanese does not allege here. See id. at 794. 2

3

T h e court does not believe that this case was vital to the public interest in the way re c o g n iz e d by some courts as a grounds for denying costs. This case was not about whether a n environmental hazard would be remediated, or even by whom, but only which corporate e n tity would pay for it. The general public is not particularly concerned about whether under th e peculiar facts of this case, the economic burden falls on Celanese, KBR, or Eby. F in a lly, cases in which courts have denied costs based on the financial resources of th e prevailing party usually involve a losing party with very limited financial resources. See C h a m b e rs v. Joseph T. Ryerson & Son, Inc., 2007 WL 4302740 (N.D. Tex. Aug. 31, 2007) (e n o rm o u s disparity in financial resources between losing indigent plaintiff and corporate d e f en d a n t). This circumstance does not apply to Celanese. T h e court concludes that no good reason exists for denying KBR and Eby their taxable c o s ts . Celanese's motion to strike is denied. Celanese's Objections to Itemized Costs C e la n e se contends that certain items requested by KBR and Eby are not taxable under 2 8 U.S.C. § 1920. Section 1920 set forth the following items as taxable costs: (1) fees of th e clerk and marshal; (2) fees for printed or electronically recorded transcripts necessarily o b ta in e d for use in the case; (3) fees and disbursements for printing and witnesses; (4) fees fo r exemplification and the costs of making copies of any materials where the copies are n e c es s a rily obtained for use in the case; (5) docket fees under section 1923 of this title; and ( 6 ) compensation of court appointed experts, compensation of interpreters, and salaries, fees,

3

e x p e n s e s , and costs of special interpretation services under section 1828 of this title. See M o ta v. University of Texas Houston Health Science Ctr, 261 F.3d 512, 529-30 (5th Cir. 2 0 0 1 ). A court cannot award any costs not authorized by the statute. Louisiana Power & L ig h t Co. v. Kellstrom, 50 F.3d 319, 334 (5th Cir. 1995); Coats v. Penrod Drilling Corp., 5 F .3 d 877, 891 (5th Cir. 1993). The court must give careful scrutiny to the items proposed as c o s ts by the prevailing party. Louisiana Power & Light Co., 50 F.3d at 335. An award of c o s ts will be overturned only for a clear abuse of discretion. Id. at 334; Coats, 5 F.3d at 891. 1. K B R 's Bill of Costs

C o u r t reporter fees. Celanese objects to KBR's request for $3,022.73 for court re p o rte r fees for daily transcripts and audio recordings from trial. A court does not abuse its discretion in declining to tax the costs of daily trial tra n s c rip ts obtained primarily for the convenience of counsel. Brumley Estate v. Iowa Beef P r o c e ss o r s , Inc., 704 F.2d 1362, 1363 (5th Cir. 1983). KBR explains that it "used the audio re c o rd in g s and transcripts to prepare for examination of witnesses and closing argument, to ad d ress points raised by Celanese, to successfully rebut Celanese's cases, and to prepare p o st-trial Proposed Findings of Fact and Conclusions of Law." 4 While these uses are re a so n a b le and it is clear the recordings and transcripts were obtained by KBR for use in the c a se , the court cannot say that the daily recordings and transcripts were "necessarily

4

KBR's response (Dkt. 222), at 7-8. 4

o b ta in e d " for use in the case. The court will sustain Celanese's objection to this item of K B R ' s bill of costs. F e e s and disbursements for printing. KBR seeks $6,508.69 for this item of costs. C e la n e se contends that KBR has not met its burden to show these costs were necessary for tria l. KBR responds that it does not have to "identify every xerox copy made for use in the c o u rs e of legal proceedings," but only needs to make "some demonstration that reproduction c o s ts necessarily result from that litigation." Fogleman v. ARAMCO, 920 F.2d 278, 286 (5th C i r . 1991) (emphasis supplied by KBR). But, Fogleman also makes clear that the losing p a rty "should not be held responsible for multiple copies of documents, attorney co rresp o n d en ce , or any of the other multitude of papers that may pass through a law firm's x e ro x machines." Id. Thus, while KBR certainly does not have to specifically identify every ite m of paper, it must at least show that the papers were necessary for trial and not part of the v o lu m in o u s copying that takes place in the course of a legal proceeding for the convenience o f parties and counsel. KBR has not met that burden here. It offers no description whatever of the documents th a t were printed, other than that they were "for litigation." KBR responds that is request re f le c ts copying from high-volume printers that require a case-specific billing code, and that th e s e printers were used only for large jobs such as document productions and trial exhibits. K B R notes that counsel and staff used printers for convenience copies that are not part of this c a se -s p e c if ic billing code system. Moreover, KBR discounted its bill by 25% to account for

5

th e possibility that some copying was arguably not necessary.5 These measures are no su b stitute for the required showing that the printing was necessary for trial. Celanese's o b je c tio n to this item is sustained. E x e m p lific a tio n and copies. KBR's request for $36,186.53 6 in this vaguely labeled c a te g o ry includes costs for converting "native" electronic files, outsourced printing and c o p yin g , and preparation of trial exhibits by its vendor, Carlock Design. K B R has not pointed the court to any case awarding the cost of converting electronic f ile s as taxable costs. It seems a stretch to categorize such costs as "exemplification and co p ies." Even if such costs were "necessary," the court is simply not convinced they are t a x a b le under § 1920. Neutrino Dev. Corp. v. Sonosite, Inc., No. H-01-2482, 2007 WL 9 9 8 6 3 6 (S.D. Tex. March 30, 2007), cited by both sides, does not provide much guidance. In that case, $541.25 was taxed as costs for preparing documents to be produced e le c tro n ic a lly rather than by paper production. In other words, the document production was re p ro d u c e d electronically rather than on hard copy. Here, Celanese produced the documents e le c tro n ic a lly, and the KBR performed a costly conversion to put the electronic files in a m o re usable form. This may have been an efficient method of managing a large production, b u t the court is not convinced it was necessary exemplification or copying of the production

5

KBR's response, at 8-9. KBR's response, at 12 n.7. 6

6

f o r use in the case. The court will sustain Celanese's objection to taxation of $19,663.00 for c o n v e r s io n of electronic files. K B R 's request for $6,242.51 for outsourced printing costs and copying is just as v a g u e and non-specific as its request for in-house printing, and will be denied for the same re a so n . K B R seeks to tax $10,281.02 billed by Carlock Design for displaying exhibits in the c o u rtro o m . Again, the court does not believe this item fits into any category of taxable costs a llo w e d under § 1920. The fact that the services were actually used in trial, and were an e f f ic ie n t and effective way of displaying exhibits, does not mean make them necessary fees f o r exemplification and copying. Again, KBR has presented no case awarding similar costs. T h e court will sustain Celanese's objection to the $10,281.02 Carlock Design invoice. Other costs. KBR seeks $39,268.21 in costs associated with taking depositions. This in c lu d e s costs for videographer fees in the amount of $4,465.00 and videotapes in the amount o f $830.00. KBR concedes that the cost of videotaped depositions are generally not taxable, b u t ask the court to make an exception in this case.7 KBR does not point out such

e x c ep tio n a l circumstances as might warrant an exemption from the usual rules governing ta x a tio n of costs in this circuit. The court will sustain Celanese's objection to videographer fees.

7

KBR response, at 13. 7

T h e court will also sustain Celanese's objection to KBR's request for $427.31 for a d d itio n a l copies of original transcripts. The remaining deposition costs in the amount of $ 3 3 ,5 4 5 .9 0 , which consists of original transcripts, first copies of transcripts, and witness c o s ts , will be taxed. See Fogleman, 920 F.2d at 285-86 (approving award of deposition co sts, but denying costs of multiple copies for the sake of convenience). C o n c lu s io n . Celanese's objections to KBR's bill of costs are overruled in part and s u s ta in e d in part. The court will enter judgment in favor of KBR for taxable costs in the a m o u n t of $34,359.15. 2. E b y 's Bill of Costs

C o u r t reporter fees. Eby seeks $33,544.19 for court reporter fees. Celanese objects th a t this request includes non-taxable fees for videotaped depositions, extra copies of d e p o sitio n s , and daily trial transcripts. The court sustains Celanese's objections. Eby can re c o v er costs for original deposition transcripts and first copies of deposition transcripts. The c o u rt has reviewed Eby's itemization of costs in this category, and determines that $ 2 6 ,7 8 0 .2 6 of the requested sum is taxable. F e e s and disbursements for printing. Celanese objects that Eby has not met its b u rde n to show that the $4,016.00 it seeks to tax was for printing costs that were necessary f o r this case. Eby responds that it has an accounting system for internal billing for high speed p h o t o c o p ie r costs and its request does not include charges for desktop printers used by c o u n s e l and their staff for convenience copies. Eby also responds that because most

8

d o c u m e n ts were digital, copies were only made when paper copies were necessary. Like K B R , Eby discounted its accounting records from the high speed printers by 25% to account f o r the possibility that arguably non-necessary copies may have been included. Again, these e x p la n a tio n s do not satisfy Eby's burden to show that these copies were necessary for use at tr ia l. The court will sustain Celanese's objection to this item on Eby's bill of costs. E x e m p l if ic a t io n and copies. Eby requests $24,310.06 for its costs to convert

e le c tro n ic documents from native format, for outsourced copying and printing of unspecified d o c u m e n ts, and for its share of the services of Carlock Design for displaying exhibits at trial. T h e court sustains Celanese's objections to these requests for the same reasons as discussed a b o v e in connection with KBR's bill of costs. Conclusion. Celanese's objections to Eby's bill of costs are overruled in part and s u s ta in e d in part. The court will enter judgment in favor of Eby for taxable costs in the a m o u n t of $34,935.97. S ig n e d at Houston, Texas on June 25, 2009.

9