Faludi v. US Shale Solutions LLC
MEMORANDUM OPINION AND ORDER sustaining in part and over-ruling in part 47 Objection to Defendant's Bill of Costs. (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
United States District Court
Southern District of Texas
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
U.S. SHALE SOLUTIONS, LLC,
April 28, 2020
David J. Bradley, Clerk
CIVIL ACTION NO. H-16-3467
MEMORANDUM OPINION AND ORDER
On November 30, 2017, the court granted defendant U.S. Shale
Solutions, LLC ("U.S. Shale" or "Defendant") 's Motion for Summary
Judgment against plaintiff Jeff Faludi's claim asserted under the
Fair Labor Standards Act. 1
In accordance with that opinion, the
prejudice, and the court ordered each party to be responsible for
its own costs. 2
The United States Court of Appeals for the Fifth
Circuit vacated the order on costs and remanded the action on
March 9, 2020, ordering the court "to either award costs to U.S.
Shale or state its reasons for declining to do so." 3
filed a Bill of Costs (Docket Entry No. 46) on March 24, 2020.
Faludi filed his Plaintiff's Objection to Defendant's Bill of Costs
Memorandum Opinion and Order, Docket Entry No. 34, p. 34.
Final Judgment, Docket Entry No. 35.
Docket Entry No. 44, p. 11.
("Plaintiff's Objection") (Docket Entry No. 47) on April 7, 202 o.
On April 14, 2020, U.S. Shale replied and submitted an Amended Bill
of Costs.4 For the reasons explained below, Plaintiff's Objection
will be sustained in part and overruled in part.
Standard of Review
Federal Rule of Civil Procedure 54 (d) (1) states that "[u] nless
otherwise, costs - other than attorney's fees - should be allowed
to the prevailing party."
There is a "' strong presumption'" in
favor of awarding costs.
Energy Management Corp. v. City of
Shreveport, 467 F.3d 471, 483 (5th Cir. 2006).
this presumption, the word 'should' makes clear that the decision
whether to award costs ultimately lies within the sound discretion
of the district court." Marx v. General Revenue Corp., 133 S. Ct.
1166, 1172 (2013).
Nevertheless, "if the court does not award
costs to the prevailing party, [the Fifth Circuit] require[s] the
district court to state its reasons." Energy Management Corp., 467
F.3d at 483.
The court may only tax as "costs" those expenses
listed in 28 U.S.C. § 1920:
Fees of the clerk and marshal;
Fees for printed or electronically recorded
transcripts necessarily obtained for use in the
Defendant's Reply in Support of Its Motion for Costs
("Defendant's Reply"), Docket Entry No. 48; Amended Bill of Costs,
Exhibit B to Defendant's Reply, Docket Entry No. 48-2. The Amended
Bill of Costs corrected a clerical error.
Fees and disbursements for printing and witnesses;
Fees for exemplification and the costs of making
copies of any materials where the copies are
necessarily obtained for use in the case;
Docket fees under section 1923 of this title;
compensation of interpreters, and salaries, fees,
expenses, and costs of special interpretation
services under section 1828 of this title.
Allowable costs are limited to these categories, and expenses that
are not authorized by statute or contract must be borne by the
party incurring them.
Crawford Fitting Co. v. J.T. Gibbons, Inc.,
107 S. Ct. 2494, 2497-98 (1987).
If the party being taxed has not specifically objected to a
necessarily incurred for use in the case and will be taxed.
Embotelladora Agral Regiomontana, S.A. de C.V. v. Sharp Capital,
Inc., 952 F. Supp. 415, 417 (N.D. Tex. 1997) ("[I]n the absence of
a specific objection, deposition costs will be taxed as having been
necessarily obtained for use in the case.").
However, once an
objection has been raised, the party seeking costs bears the burden
of verifying that the costs were necessarily incurred in the case
rather than just spent in preparation and litigation of the case.
Jerry v. Fluor Corp., Civil Action No. H-10-1505, 2012 WL 4664423,
at *2 (S.D. Tex. Oct. 2, 2012) (citing Fogleman v. ARAMCO, 920 F.2d
278, 286 (5th Cir. 1991)).
U.S. Shale seeks $8,846.64 in total costs. 5
the court to exercise its discretion and decline to award costs.
Faludi also objects to U.S. Shale's Bill of Costs, arguing that the
depositions were not necessary for the case.6
The Court Will Award Costs
prevailing party will be awarded costs."
F.3d 783, 793 (5th Cir. 2006).
nature of a penalty."'
Pacheco v. Mineta, 448
"Denial of costs [is]
Id. (quoting Schwarz v. Folloder, 676 F.2d
125, 131 (5th Cir. 1985)).
The court may but is "not required to
excuse a losing party from paying costs only if he brought suit in
good faith and can demonstrate" a factor justifying relief.
v. Peterson, 416 F. App'x 354, 356 (5th Cir. 2011).
Faludi argues the court should not award costs because the
action was brought in good faith and presented a "difficult and
close legal issue."7
See Pacheco, 488 F.3d at 794.
But the court
is not persuaded that departure from the presumption that the
prevailing party should be awarded costs is warranted.
Amended Bill of Costs, Exhibit B to Defendant's Reply, Docket
Entry No. 48-2, p. 2; Bill of Costs, Docket Entry No. 46, p. 3.
Plaintiff's Objection to Defendant's Bill
("Plaintiff's Objection"), Docket Entry No. 47, p. 1.
will award U.S. Shale its costs, subject to the court's rulings on
Faludi's objections explained below.
Objections to the Bill of Costs
U.S. Shale seeks $8,376.80 in deposition costs necessarily
obtained for use in the case.8
"Whether a deposition or copy was
necessarily obtained for use in the case is a factual determination
to be made by the district court."
Fogleman, 920 F.2d at 285-86.
Actual use of a deposition in the case or in a pretrial proceeding
satisfies the statutory requirement that it be necessary. Baisden
v. I'm Ready Productions, Inc., 793 F. Supp. 2d 970, 976 (S.D. Tex.
But even if not used, a deposition may satisfy the
requirement "[i]f, at the time it was taken, a deposition could
reasonably be expected to be used for trial preparation, rather
than merely for discovery."
Fogleman, 920 F.2d at 285.
U.S. Shale seeks costs for the depositions of Faludi and four
of its former officers:
Jerrit M. Coward, Stephen L. Douglas,
Patrick C. Schneider, and R.M. "Mike" Stophlet. 9
I t also seeks
costs for video recordings of the Coward and Douglas depositions
and obtaining records from third parties. 10
Faludi objects that
Amended Bill of Costs, Exhibit B to Defendant's Reply, Docket
Entry No. 48-2, p. 2; Invoices, attachments 1-3 to Exhibit B (Bill
of Costs), Docket Entry No. 46-2, pp. 4-18.
Invoices, attachment 1 to Exhibit B (Bill of Costs), Docket
Entry No. 46-2, pp. 4-9.
Id. attachments 2-3, pp. 10-18.
U.S. Shale has not shown that the costs for the deposition
transcripts or video recordings were necessarily incurred for the
Faludi also states that the costs of third-party records
should be categorized as deposition, but otherwise does not object
Necessity of the Depositions
Faludi objects that the depositions were not reasonably
necessary because they were not used in U.S. Shale's MSJ and the
deponents were not listed as trial witnesses.12 But U.S. Shale must
only show a nexus between the depositions and the litigation as a
Ihsan v. Weatherford U.S., L.P., Civil Action No. H-17-
2546, 2019 WL 3935975, at *7 (S.D. Tex. Aug. 20, 2019).
Faludi's Motion for Partial Summary Judgment cited affidavits
from Schneider, Douglas, Stophlet, and himself.13
The fact that
Faludi relied on these witness statements to support his motion
shows that U.S. Shale needed to depose them to prepare its defense
Faludi's deposition states that Jerrit Coward, U.S.
Shale's CEO at the time, handled the conversations with Faludi that
set forth the terms, pay, and duties of Faludi's relationship with
Coward was also one of the officers Faludi reported
Plaintiff's Objection, Docket Entry No. 47, p. 6 n.1.
Id. at 6-7.
Plaintiff's Motion for Partial Summary Judgment ("Plaintiff's
Partial MSJ"), Docket Entry No. 19, p. 3 n.l.
Declaration of Jeffrey E. ("Jeff") Faludi, Jr.,
Exhibit A to Plaintiff's Partial MSJ, Docket Entry No. 19-1, p. 1
to. 15 It was therefore reasonable to expect that these depositions
would be needed for trial preparation.
That U.S. Shale ultimately
prevailed without needing to cite the depositions in its motion for
summary judgment or to call the witnesses at trial does not alter
920 F.2d at 285.
therefore DENIES Faludi's objection to the deposition costs.
Faludi objects to Defendant's request for costs incurred to
obtain videos of Coward and Douglas's depositions. 16
there must be a separate showing that a video deposition was
necessary in addition to the written transcripts. 17 This court has,
however, recognized that costs incurred for videotaped depositions
are properly taxable.
See Baisden, 793 F. Supp. 2d at 976-77.
U.S. Shale explains that video depositions of Coward and Douglas
were necessary because of uncertainty as to whether they would be
available to testify at trial and because there would be a likely
credibility issue as to their testimony. 18
This suffices to
establish that the video depositions were necessary.
See id. at
Accordingly, the court DENIES Plaintiff's objection to the
Id. at 1
Plaintiff's Objection, Docket Entry No. 47, p. 9.
Defendant's Reply, Docket Entry No. 48, pp. 4-5.
Faludi also objects to the inclusion of invoices for $1,725 in
"Post-Production Video Services" as to the video depositions of
Coward, Douglas, and Faludi.19
These invoices are separate from
those for "Original Video Services for the Deposition. 112 °
argues that the court should deny these costs because video-editing
services are not recoverable costs under
Miranda v. Schlumberger Technology Corp., Civ. Action No. 5:131057, 2015 WL 3651830, at *8 (W.D. Tex. June 11, 2015) (holding
that video-editing services are not recoverable costs). U.S. Shale
does not respond to this objection.
Given this silence and that
the burden is on U.S. Shale to demonstrate that these costs are
necessary, the court SUSTAINS Faludi's objection as to the invoices
for post-production video services.
For the reasons explained above, the court concludes that the
$8,846.64 that U.S. Shale seeks for costs should be reduced by the
$1,725 sought for post-production video services. The remainder of
Faludi's objections lack merit. Accordingly, the amount U.S. Shale
is entitled to receive as taxable costs is $7,121.64.
Plaintiff's Objection, Docket Entry No. 47, p. 9; see
Invoices, attachment 2 to Exhibit B (Bill of Costs), Docket Entry
No. 46-2, pp. 11, 13, 15.
Invoices, attachment 2 to Exhibit B (Bill of Costs), Docket
Entry No. 46-2, pp. 12, 14.
Conclusion and Order
For the reasons explained above, Plaintiff's Objection to
Defendant's Bill of Costs (Docket Entry No. 47) is SUSTAINED IN
PART and OVERRULED IN PART.
Defendants are entitled to recover costs of $7,121.64 for fees
for printed or electronically recorded transcripts necessarily
obtained for use in the case.
Jeff Faludi is ORDERED to pay this
amount to U.S. Shale Solutions, LLC.
SIGNED at Houston, Texas, on this 28th day of April, 2020.
SENIOR UNITED STATES DISTRICT JUDGE
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