Milligan et al v. Dorel Industries, Inc. et al

Filing 87

ORDER re 83 Miscellaneous Objection, filed by Marsha Kocurek, Linda Chenault, Thomas Chenault, overruling in part and sustaining in part 82 Bill of Costs filed by Cosco Home & Office Products, Inc., Dorel Industries, Inc., Dorel Juvenile Group, Inc.; directing Clerk to tax costs of $43,798.35 against plaintiff Marsha Kocurek, in her capacity as U.S. Bankruptcy Trustee for Bankruptcy Estate of Thomas and Linda Chenault. Signed by Judge Sam Sparks. (mc2, )

K o c u r e k et al v. Dorel Industries, Inc. et al

D o c . 87

IN THE UNITED STATES DISTRICT COURT F O R THE WESTERN DISTRICT OF TEXAS A U S T IN DIVISION

U N IT E D STATES BANKRUPTCY TRUSTEE, MARSHA MILLIGAN, FOR THE B A N K R U P T C Y ESTATE OF THOMAS and L IN D A CHENAULT, et al., P l a i n tif f s , -v s D O R E L INDUSTRIES, INC., et al., D e f e n d a n ts . _ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ C a se No. A-08-CA-354-SS

ORDER

B E IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Defendants Dorel Industries, Inc.; Dorel Juvenile Group, Inc.; and Cosco Home and Office P ro d u cts, Inc.'s (collectively, "Defendants") Bill of Costs [#82]; the objections thereto filed by Plaintiffs Thomas Chenault; Linda Chenault; and Marsha Kocurek, United States Bankruptcy Trustee for the Bankruptcy Estate of Thomas and Linda Chenault (collectively, "Plaintiffs") [#83]; Defendants' respo nse to the objections [#84]; and Plaintiffs' reply [#85]. Having considered the aforementioned d o cu m en ts, the case file as a whole, and the relevant law, the Court enters the following opinion and o rd e rs . I. L ega l Standard A c co rd in g to Rule 54(d) of the Federal Rules of Civil Procedure, costs shall be allowed as of co u rse to the prevailing party in a civil action. A party does not have to prevail on all issues to be

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entitled to an award of costs.1 United States v. Mitchell, 580 F.2d 789, 793 (5th Cir. 1978). However, n o t all expenses incurred by a party can be reimbursed. West Wind Africa Line v. Corpus Christi M arine Servs., 834 F.2d 1232, 1236 (5th Cir. 1988) (finding Federal Rule of Civil Procedure 54(d) allow s trial courts to refuse to tax costs otherwise allowable, but "it does not give them the power to tax items not elsewhere enumerated."). Pursuant to 28 U.S.C. § 1920, a judge or clerk of any court o f the United States may tax as costs the following: (1) fees of the clerk and marshal; (2) fees for p rin ted or electronically recorded transcripts necessarily obtained for use in the case; (3) fees and disbu rsem ents 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 28 U.S.C. § 1923; and (6) compensation of court-appointed experts and interpreters, and salaries, fees, ex p en ses, and costs of special interpretation services under 28 U.S.C. § 1828. Courts may decline to award costs permitted by § 1920, but may not award costs which are not sp ecifically listed in the statute. Compton v. Taylor, 2006 WL 1789045 at *3 (S.D. Tex. 2006) (citing C raw ford Fitting Co. v. JT Gibbons, Inc., 482 U.S. 437, 442 (1987)). However, although § 1920 is an exhaustive list of the costs that may be routinely awarded under Federal Rule of Civil Procedure

In the present case, it is undisputed Defendants were the prevailing party. This case proceeded to trial on J u n e 8, 2009. On June 10, 2009, Plaintiffs rested their case and Defendants moved for judgment as a matter of law. The Court granted the motion on behalf of Defendants Dorel Industries, Inc., Wal-Mart Stores, Inc., and Sam's E a s t, Inc. On June 10, 2009, Defendant Dorel Juvenile Group rested its case and all parties closed. Once again, D e f e n d a n t Dorel Juvenile Group (on its behalf and on behalf of its department Cosco Home and Office Products) m o v e d for judgment as a matter of law. The Court overruled the motion, and the case was submitted to the jury. On June 11, 2009, the jury returned its verdict answering the questions as follows: Q u e s tio n No. 1: Y e s . Q u e s tio n No. 2: Y e s . Q u e s tio n No. 3: Y e s . Q u e s tio n No. 3.a.: 4 0 percent Q u e s tio n No. 3.b.: 6 0 percent T h e Court accepted and filed the verdict and entered a final judgment ordering Plaintiffs shall "TAKE N O T H I N G in this cause against" Defendants, and that Defendants "have judgment for all costs for which let e x e c u tio n issue." See Judg. [#75].

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5 4 (d), "the item sought need not be expressly mentioned in that statute, for Crawford Fitting does not p reclu d e the courts from construing the provisions of § 1920." 10 Moore's Federal Practice, § 5 4 .1 0 3 [ 3 ] [ a ] . I. P la in tiffs' Objections O n July 23, 2009, Defendants submitted a Bill of Costs claiming a total of $47,882.51 in costs.2 See Defs.'s Bill Costs [#82]. Plaintiffs raise the following general objections to the Bill of C o sts: (1) Defendants have failed to demonstrate the enumerated photocopying and printing costs were necessary for the litigation; (2) Defendant Dorel Juvenile Industries, Inc. ("Dorel") may not recover the costs associated with the electronic database; (3) Defendants should be denied their costs under R u l e 54 for "equitable" reasons; and (4) Plaintiffs should be awarded the costs associated with d ep o sin g their expert witnesses. The Court considers these objections in turn. a. P h o toc o p y ing and printing costs

S ectio n 1920(4) permits an award of costs for "exemplification and copies of papers n ecessarily obtained for use in the case." 28 U.S.C. § 1920(4). However, a necessary condition for reco v ery of costs under § 1920(4) is that such items were "necessarily obtained" for use in the trial. H o lm e s v. Cessna Aircraft Co., 11 F.3d 63, 64 (5th Cir. 1994). Thus, the Court must make an express fin d in g of fact that the expenses were actually necessary, "rather than obtained simply for the con ven ience of counsel." Fogleman v. ARAMCO, 920 F.2d 278, 286 (5th Cir. 1991); Coats v. Penrod D r illin g Corp., 5 F.3d 877, 892 (5th Cir. 1993).

This amount represents the amount on Defendants' revised Bill of Costs. See Attachs. to Defs.' Resp. [ # 8 4 ] . Defendants originally sought $50,080.39, but in response to Plaintiffs' objections, they have voluntarily w i th d r a w n $2,154.28 in transcript costs and $43.60 for PACER print-outs. Thus, Plaintiffs' objections regarding th e PACER costs and the $900.00 in copying fees which were erroneously listed as incurred on June 30, 2009 are n o t discussed, as these objections have been answered by Defendants' actions in either deleting the claimed costs or c o r r e c t i n g the date on which the costs were incurred.

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T h e party seeking recovery of its costs bears the burden of proving the amount and necessity o f its photocopying and printing expenses. Holmes v. Cessna Aircraft Co., 11 F.3d 63, 64 (5th Cir. 1 9 9 4). While the party seeking costs certainly is not expected "to identify every xerox copy made for use in the course of legal proceedings," the Fifth Circuit does "require some demonstration that rep ro d u ctio n costs necessarily result from that litigation"; for instance, the costs of "reproducing relevan t documents and exhibits for use in the case" is a necessary expense, whereas "multiple copies o f documents, attorney correspondence, or any of the other multitude of papers that may pass through a law firm's xerox machines" is not. Fogelman, 920 F.2d at 286. In the instant case, Defendants have claimed a total of $8,168.32 in printing and photocopying co sts pursuant to § 1920(4). Plaintiffs object that "Defendant has not identified what was copied and h o w it was necessary for the case [and] has provided no invoices for copying from third party v en d o rs." 3 Pl.'s Objs. [#83] at ¶ 6. Plaintiffs' objection is well taken. In the Bill of Costs, Defendants p ro v id e various line item lists of photocopy expenses; however, they do not provide any specific proof o f the necessity for these expenses. See Bill of Costs [#82]. The attachments to the Bill of Costs are sim p ly an amalgamation of undifferentiated receipts and invoices which the Court has neither the time n o r the inclination to decipher. However, in response to Plaintiffs' objection on this ground, Defendants have submitted the affid av its of Walter Greenough, who acted as lead counsel for Defendants in this litigation, and

Plaintiffs also make a passing objection that 15 cents and 25 cents per page-- w h ic h is what was charged b y the two law firms representing Defendants--are not reasonable copying costs. Pls.' Objs. at ¶ 9. However, a n o th e r court in this district, after making a "cursory inquiry" into copying costs at the Clerk's Office, Kinko's, and a local copying center, found in 2005 that "a market rate of $0.25 per copy is fair and reasonable." Canion v. U n i te d States, 2005 W L 2216881 at *4 (W.D. Tex. 2005). This Court does not disagree, and therefore overrules P la i n tiffs ' objection on this ground (for which it provides no support).

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A n th o n y Avey, who acted as local counsel for Defendants in this litigation. See Defs.' Resp. at Exs. A ("Greenough Decl."), B ("Avey Decl."). Mr. Greenough states under oath that the copying costs claim ed on behalf of his firm "represent copies from the following categories of documents: pleadings, d o cu m en ts produced by Defendants, documents produced by Plaintiffs, records subpoenaed by third parties, medical records, preparation materials for depositions, deposition transcripts and exhibits, ex pert records, expert file materials, trial briefs, trial exhibits, trial notebooks, and trial d em o n strativ es," and that "all of the copying costs were necessarily incurred for documents used in this case." Greenough Decl. at ¶ 3. Mr. Avey makes the same declaration under oath. Avey Decl. at ¶ 7. The Court considers these representations reliable, as they are made by officers of the Court, b u t finds nonetheless that they are too conclusory to be of great assistance. As stated above, the Fifth C ircu it requires "some demonstration that reproduction costs necessarily result from" the litigation in q u estio n . Fogelman, 920 F.2d at 286. For instance, the costs of "reproducing relevant documents and ex h ib its for use in the case" is without doubt a necessary copying expense, but the costs of making "m ultiple copies of documents, attorney correspondence, or any of the other multitude of papers that m ay pass through a law firm's xerox machines" is not. In the instant case, although Mr. Greenough an d Mr. Avey have both stated under oath what types of documents were copied, the Court has abso lutely no means of determining how many copies of each document was made, and whether that am o u n t was excessive. Defendants employed two large law firms and had three lawyers present d u rin g the trial of this case, and therefore many photocopies may have been made simply for the co n v en ien ce of the multiple attorneys in this case. The costs of those copies are not recoverable.

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A s stated above, once an objection to a bill of costs is lodged, the party seeking costs has the b u rde n of supporting its request with evidence documenting the costs incurred, and proof, if ap p licab le, as to whether the challenged amount was necessarily incurred in the case. Fogleman, 920 F.2 d at 285-86. Defendants have not carried that burden in this instance. Without more information, it is impossible for the Court to determine whether all the printing and photocopying costs claimed w ere actually necessary to the prosecution of this case. Mr. Greenough's and Mr. Avey's statements are too general to be of great assistance. See Auto Wax Co., 2002 WL 265091 (disallowing certain co sts because the prevailing party only made a blanket statement regarding necessity). Because the C o u rt cannot make a reasonable determination in this instance that all the claimed costs were necessary b ase d on the evidence that has been submitted, and because the printing and photocopying costs ap p ear on their face to be excessive for a relatively simple products liability case, the Court finds the co sts claimed in this category should be reduced by half, to account for the fact that they may include m u ltip le copies of the same documents, not all of which were strictly necessary. Accordingly, Plaintiffs' objection is SUSTAINED on this ground. Defendants' total claimed printing and photocopying costs ($8,168.32) are reduced by half, and Defendants are awarded a total o f $4,084.16 in costs under § 1920(4). b. E lectron ic database

In the Bill of Costs, Defendants also claim a total of $27,171.88 under "other costs" for the co st of an electronic database. See Bill of Costs. Mr. Greenough states the database was "created to resp o n d to Plaintiffs' discovery demands," which undisputedly included a request for every email p ertainin g to the type of ladder at issue in this case: the 20-217 series ladder. Greenough Decl. at ¶ 4. Mr. Greenough states Dorel initially produced all emails relating or referring to the 20-217 series

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lad d er which were on the computer of anyone with "significant involvement" in the case. Id. H ow ever, he states Plaintiffs demanded Dorel produce all emails relating to or referring to the 20-217 series ladder, regardless of the location of those emails. Id. Ultimately, Dorel's search of all possible em ails yielded an estimated 30 gigabytes of materials, consisting of approximately 50,000 emails with attach m en ts. Id. at ¶ 5. That number was whittled down to 20,000 emails with attachments (a total o f approximately 800,000 pages) once Dorel bought a program that was able to perform a more so p h isticated search. Id. Plaintiffs object to the cost of this electronic database because "[c]reation of a database is not a cost that is recoverable under 28 U.S.C. § 1920[.]" Pls.' Objs. at ¶ 22. Notably, Plaintiffs do not dispu te they demanded the emails in discovery, but nonetheless argue "Defendant could have avoided p ro d u cin g the documents and/or shifted the cost of producing the documents by way of objections or discov ery motions." Plaintiffs conclude by arguing that "[s]ince Defendant did not object and seek a ruling from the Court prior to the production of the database, Defendant has waived any claim to recov er the database." Id. at ¶¶ 24-25. Plaintiffs do no dispute that by producing the 800,000 pages of emails electronically, D efend ants saved the costs of printing and copying some 800,000 pages of email. This was a reaso n ab le calculation, as it would have cost--at a price of $0.15 per page--approximately $120,000 to print the emails in response to Plaintiffs' discovery request. As explained above, reproduction costs necessarily obtained for use in the case are recoverable, provided the prevailing party demonstrates th at necessity. Fogleman, 920 F.2d at 286. In this case, the electronic data was produced in lieu of ex trem e ly costly paper production. Defendants state they were seeking to save costs by not printing o u t thousands of pages of documents which would have otherwise been required in response to

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P laintiffs' discovery request. Therefore, the Court finds the expense falls within the category of costs reco v erab le for "fees and disbursements for printing" under § 1920(3). See Neutrino Devel. Corp. v. So no site, Inc., 2007 WL 998636 at *4 (S.D. Tex. 2007) (overruling an objection to taxing costs a s so ciated with an electronic database because the discovery "was produced in lieu of costly paper p ro d u ctio n " under § 1920(3), and the prevailing party had "save[d] costs by not printing out hundreds o f documents"). Therefore, because the Court finds the cost of the electronic database was in lieu of expending m uch more in fees and disbursements for printing under § 1920(3), the Court OVERRULES Plaintiffs' ob jection to the cost of that database. c. E q u ita b le considerations

P laintiffs also make the global objection that Defendants should be denied their reasonable co sts for "equitable" reasons. Pls.' Objs. at ¶ 12. First, Plaintiffs argue any costs awarded "should be aw arded solely against the bankruptcy estate, as the cause of action was the property of the bankruptcy estate," and "[t]he bankruptcy estate has no assets." Id. at ¶ 15. They also make the following con cluso ry assertions in support of their argument: "Tom and Linda Chenault have limited financial reso u rces"; "the case involved close and difficult legal issues" and "[t]here is substantial benefit to the p u b lic to require a manufacturer of a defective product that causes injury to bear the cost of defending that defective product in court"; "Defendant has profited greatly" from its manufacture of the ladder in question; and "Defendant has the financial resources and the moral responsibility to bear the cost of defending its defective and injury-causing product." Id. at ¶¶ 13-20. A lth o u gh the Court has discretion in making the award of costs, the Fifth Circuit has held "R ule 54(d)(1) contains a strong presumption that the prevailing party will be awarded costs."

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P a ch eco v. Mineta, 448 F.3d 783, 793 (5th Cir. 2006) (emphasis added). Thus, the prevailing party is "prima facie entitled to costs," and a denial of costs is "in the nature of a penalty." Id. at 793-94 (q u o tin g Schwarz v. Folloder, 767 F.2d 125, 131 (5th Cir. 1985)). The limited circumstances which m ay justify withholding reasonable costs from a prevailing party are: "(1) the losing party's limited finan cial resources; (2) misconduct by the prevailing party; (3) close and difficult legal issues p resen ted ; (4) substantial benefit conferred to the public; and (5) the prevailing party's enormous finan cial resources." Id. at 794. The mere fact that a suit was brought in good faith is alone in su fficien t to warrant a denial of costs in favor of a prevailing defendant, as all federal litigants have an obligation to bring suit in good faith under Rule 11. Id. at 794-95. As the prevailing party is p resu m ed to be entitled to costs, the losing party bears the burden of overcoming the presumption and p ro v in g that one of the foregoing factors applies. Schwarz, 767 F.2d at 131. In the present case, none of Plaintiffs' conclusory arguments override the strong presumption tha t Defendants, as the prevailing party, are entitled to their reasonable costs. First, the fact Plaintiffs rep resen t the bankruptcy estate has "no assets" (according to Plaintiffs) is not determinative of the q u estio n of whether costs ought to be awarded under Rule 54.4 "[I]nability to pay does not

au to m atically warrant setting aside an otherwise documented fee award"; otherwise, "every losing p arty who qualified for in forma pauperis status would automatically be exempt from entry of a cost aw ard; a result contrary to 28 U.S.C. § 1915(f)(1)." Rosales v. City of San Antonio, Texas, 2002 WL 1 4 9 25 9 0 at *1 & n.11 (W.D. Tex. 2002). In this case, Plaintiffs never requested permission to bring

For the purposes of this analysis, the Court assumes Plaintiffs' representation that this cause of action is " th e property of the bankruptcy estate" is true, as there is nothing in the record which indicates the cause of action w a s exempted from the bankruptcy estate. See Pls.' Objs. at ¶ 15. Therefore, Plaintiffs are correct that costs shall b e awarded against the bankruptcy estate. Id.

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this suit in forma pauperis, nor did they request court-appointed representation. Instead, Plaintiffs w ere represented by private counsel, and appeared to have adequate resources to prosecute this case fully. The Court is simply without sufficient information to conclude the bankruptcy estate is wholly w ith o u t funds, and thus finds Plaintiffs have not overcome the strong presumption in favor of aw ard in g costs on this ground. Furthermore, during the litigation, the Court found no sanctionable conduct on the part of D e fen d an ts, and even granted a motion for judgment as a matter of law on behalf of three of the four D efend ants: Dorel Industries, Inc., Wal-Mart Stores, Inc., and Sam's East, Inc. "Costs are only denied in the most egregious circumstances to the prevailing party," and the Court does not find Defendants h av e engaged in any inappropriate behavior which would justify a denial of costs. Neutrino, 2007 WL 9 9 8 6 3 6 at *2; and see Sheets v. Yamaha Motors Corp., 891 F.2d 533, 539-40 (5th Cir. 1990) (taxing co sts against the prevailing party for "defendants' repeated and abusive hardball tactics," including "refu s[al] to produce documents in response to discovery, violating an order to compel," etc.). Likew ise, the Court very much disagrees with Plaintiffs that this simple products liability action inv o lve d "close and difficult legal issues." The jury, after hearing all of the evidence and arguments p resen ted by the Plaintiffs, found Mr. Chenault bore the greater responsibility for his injuries. This C ou rt will not disturb that verdict by deciding otherwise here. In short, Plaintiffs have not overcome the strong presumption that the prevailing party should recov er costs as a matter of course, and therefore the Court OVERRULES Plaintiffs' objection that costs must be denied for "equitable reasons."

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d.

E xp ert witnesses

Fina lly, Plaintiffs claim they are entitled to recover reasonable fees for the depositions of their ow n experts under Federal Rule of Civil Procedure 26(b)(4)(C),5 and to that end they request D efen d an ts be ordered to pay for the time Plaintiffs' retained experts spent in depositions which were req u ested by Defendants. Pls.' Objs. at ¶¶ 33, 36. Plaintiffs claim Defendants' depositions of P lain tiffs' retained experts lasted a total of 11.25 hours (for three expert witnesses) and cost a total of $ 3 ,7 5 0 .0 0 . Id. at ¶¶ 34-35. Defendants strenuously object to this, arguing the parties agreed during the course of the litigatio n to bear their own expert fees. See Greenough Decl. at ¶ 7. Mr. Greenough states under oath th at this agreement exists, and is the reason neither side charged the other for these expert fees during the pendency of the case, and is also the reason Defendants do not seek recovery for the fees of their o w n expert in their Bill of Costs. Id. In their reply, Plaintiffs do not dispute the parties entered into su ch an agreement. See Pls.' Reply. Because Plaintiffs do not dispute the parties had an agreement o n this matter, and because Plaintiffs give no absolutely reason why the agreement should not be h on ored , the Court finds this objection on the part of Plaintiffs should be OVERRULED.

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Rule 26(b)(4)(C) states:

( C ) Paym e n t. Unless manifest injustice would result, the court must require that the party seeking d isc o v e ry: (i) pay the expert a reasonable fee for time spent in responding to discovery under Rule 2 6 ( b ) ( 4 ) ( A ) or (B); and (ii) for discovery under (B), also pay the other party a fair portion of the fees and expenses it reasonably incurred in obtaining the expert's facts and opinions. FED. R. CIV. P. 26(b)(4)(C).

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II.

C o n c l u s io n H a vin g considered all of Plaintiffs' specific objections, the Court presumes the remainder of

th e costs requested are necessary for the case. Neutrino, 2007 WL 998636 at *4 (holding if the party again st whom costs are taxed does not specifically object, the costs sought are presumed necessary for th e case). Therefore, in accordance with the foregoing, IT IS ORDERED that Plaintiffs' Objections to Bill of Costs [#83] is OVERRULED IN PART and SUSTAINED IN PART. Based on the objections, the Bill of Costs is reduced b y a total of $4,084.16. IT IS FURTHER ORDERED that the Clerk shall tax costs of suit in the amount of $ 43 ,7 98 .3 5 (FORTY-THREE THOUSAND, SEVEN HUNDRED AND NINETY-EIGHT D O LLA R S AND THIRTY-FIVE CENTS) against Plaintiff Marsha Kocurek, in her capacity as United States Bankruptcy Trustee for the Bankruptcy Estate of Thomas and Linda C h e n a u l t.6 S IG N E D this the 2 nd day of August 2010.

_ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ _ S A M SPARKS U N IT E D STATES DISTRICT JUDGE

This amount represents the amount of Defendants' modified request ($47,882.51), minus the amount the C o u r t has disallowed for printing and photocopying costs ($4,084.16).
F :\S P A R K S \T E X T \C V 0 8 \3 5 4 bill of costs mkr.wpd

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