CNH Industrial America LLC v. Jones Lang LaSalle Americas Inc

Filing 240

ORDER signed by Judge J P Stadtmueller on 9/19/2019 GRANTING in part and DENYING in part 232 Plaintiff's Motion for Statutory Interest, Double Costs, and Review of the Clerk of Court's Taxation of Costs. Plaintiff's request for revi ew of taxation of costs is GRANTED insofar as the Court increased as provided the amount taxed by the Clerk. Plaintiff's claim for double taxable costs pursuant to Wis. Stat. § 807.01(3) is GRANTED. Plaintiff's request for statutory interest pursuant to Wis. Stat. § 807.01(4) is DENIED; Plaintiff to recover post-judgment interest at the rate dictated by 28 U.S.C. § 1961(a). See Order. (cc: all counsel) (jm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
CNH INDUSTRIAL AMERICA LLC,

v.

Plaintiff,

Case No. 15-CV-981-JPS-JPS

JONES LANG LASALLE AMERICAS,
INC.,

ORDER

Defendant.
1.

INTRODUCTION
On September 30, 2016, after a trial to the Court, judgment was

entered in this matter in favor of the plaintiff, CNH Industrial America LLC
(“CNH”), for approximately $3 million. (Docket #179). This judgment
exceeded by several hundred thousand dollars the amount for which CNH
offered to settle with the defendant, Jones Lang LaSalle Americas, Inc.
(“JLL”), a month and a half earlier. (Docket #187-7).
Following trial, on October 13, 2016, CNH timely submitted its bill
of costs totaling $304,153.49. (Docket #186). JLL objected to some of those
costs, including the biggest-ticket item: photographs of the signs at all of
CNH’s dealerships. (Docket #197). CNH responded to JLL’s objections.
(Docket #201). On February 6, 2017, the Clerk of Court issued its taxation of
costs, taxing costs in the amount of only $24,695.50. (Docket #212).

Both parties appealed. (Docket #193 and #203).1 During the pendency
of the appeal, CNH filed motions before this Court seeking an amendment
of the judgment to include statutory interest and double taxable costs
pursuant to Wisconsin law, as well as review of the taxation of costs issued
by the Clerk of the Court on February 6, 2017. (Docket #189 and #213). The
Court agreed to review the issues presented in CNH’s motions, but not
before the appeal was resolved. (Docket #222).
On March 12, 2018, the Court of Appeals issued its mandate,
affirming this Court’s judgment. (Docket #223). The parties attempted to
resolve their disputes about costs and interest without resort to further
motion practice in this Court, including by mediating their issues before
Magistrate Judge David E. Jones, but those efforts were not successful. See
(Docket #230 and #231). In light of this, CNH has again filed a motion for
statutory interest, double costs, and review of the Clerk of Court’s taxation
of costs. (Docket #232).
The parties’ briefing reveals that they agree that CNH is entitled to
double its taxable costs, but they dispute the amount of those costs. The
parties also disagree as to the rate of interest to be applied to those costs. In
this Order, the Court resolves those issues, finally putting this case to bed.
2.

BACKGROUND
This lawsuit arose out of a contract dispute. In 2007, CNH began a

corporate rebranding program for its New Holland Agriculture line of
products (the “Rebranding Program”). (Docket #174 at 4, Proposed
Findings of Fact; Docket #178 at 5, Transcript of Bench Trial Decision

1

#221).

Plaintiff voluntarily dismissed its cross-appeal on June 7, 2017. (Docket

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wherein the Court adopted the parties’ proposed facts). The Rebranding
Program would involve, among other things, the manufacture and
installation of new signs at more than one thousand CNH dealers in the
United States and Canada. (Docket #174 at 4). CNH retained JLL as its
project manager for the Rebranding Program. Id. at 5. CNH and JLL entered
into a service agreement under which JLL was obligated to research and
document warranty information for all raw materials and sub-components,
oversee manufacturing that met JLL’s and CNH’s expectations for quality
control, negotiate the best possible warranty program for the signs, disclose
all elements of the warranty program to CNH, and provide ongoing
management services for warranties for one year following installation. Id.
at 5–6.
At trial, CNH proved that JLL breached these obligations, causing
CNH to suffer $5,482,735.00 in damages in replacing failed signs
manufactured with defective vinyl. (Docket #178 at 20; Docket #179). The
Court further determined that a contractual limitation on liability provision
contained in the parties’ agreement was enforceable, and, in accordance
with its terms, CNH’s recovery was limited to such amounts as CNH
previously paid as project management fees to JLL, which amounted to
$3,026,361.60, together with any additional amounts that JLL may
successfully recover from third-party service providers. Id.
3.

ANALYSIS
3.1

REVIEW OF COSTS

Federal Rule of Civil Procedure 54(d)(1) permits courts to award
costs to a prevailing party. The Court may award costs that “fall into one of
the categories of costs statutorily authorized for reimbursement.” Cefalu v.
Vill. of Elk Grove, 211 F.3d 416, 427 (7th Cir. 2000). Under 28 U.S.C. § 1920, a
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court may tax the following expenses as costs: (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 copies of papers
necessarily obtained for use in the case; (5) docket fees under 28 U.S.C. §
1923; and (6) compensation of court appointed experts, compensation of
interpreters, and salaries, fees, expenses and costs of special interpretative
services under 28 U.S.C. § 1828.
In the instant motion, CNH asks this Court to review the Clerk’s
taxation of costs and increase the taxed amount by $279,457.99. With the
strictures of Section 1920 in mind, the Court turns to the specific categories
of costs CNH seeks to recover.
3.1.1

Photographs of signs installed at dealer locations

By far the greatest cost for which CNH seeks compensation is the
amount it spent to obtain photographs of the signs at more than 700 dealer
locations—$208,611.30 in total. CNH argues that this is a compensable
“exemplification” cost. See 28 U.S.C. § 1920(4).
The Seventh Circuit construes the term exemplification broadly to
include a “wide variety of exhibits and demonstrative aids.” Cefalu, 211 F.3d
at 427–28; see also EEOC v. Kenosha Unified Sch. Dist. No. 1, 620 F.2d 1220,
1227 (7th Cir. 1980) (exemplification includes, for example, the preparation
of “maps, charts, graphs, photographs, motion pictures, photostats, and
kindred materials[]”) (quotation omitted). However, the cases also draw a
line “between the cost of conducting the research and analysis eventually
reflected in the exhibit, and the cost of actually preparing the exhibit itself.”
Cefalu, 211 F.3d at 427–428. The latter expense is compensable under Section
1920(4), while the former is not. Id. at 427 n. 5.
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Further, the court cannot award costs for exemplification unless it
determines that the particular exemplifications were “necessarily obtained
for use in the case.” Id. at 428 (quoting 28 U.S.C. § 1920(4)). In making this
determination, the court may consider whether the exemplification was
“vital to the presentation” or “merely a convenience or, worse, an
extravagance.” Cefalu, 211 F.3d at 428–429.
CNH contends that to prove at trial the precise number of failed
signs at issue and the extent of CNH’s damages in replacing them, CNH
was constrained to hire a vendor to take 14,604 photographs of the signs
installed at 740 dealer locations. (Docket #233 at 10). It cost CNH $208,611.30
to do so. Id. Before undertaking these efforts, CNH says that it attempted to
negotiate with JLL a less expensive method of developing the evidence to
present at trial. Id.; see also (Docket #202-1, #210). CNH accuses JLL of
refusing to even discuss any less expensive method. (Docket #233 at 10).
The full story is not quite as one-sided as CNH tells it. Although
CNH did suggest to JLL early in the case that the parties jointly develop a
protocol for determining the nature and extent of the defective signs, see
(Docket #12 at 5 and #202-1), CNH did not send a proposal to this effect
when JLL asked for one, see (Docket #210 at 2–3). Further, although CNH
dispatched its vendor to photograph the signs at all of its dealership
locations, only 686 of those locations were found to have defective signs.
(Docket #167-11 at 2 and #174 at 1). Finally, by the time of trial, only 260
dealers had assigned to CNH their claim and right to recover replacement
costs for the failed signs at a total of 270 dealer locations. (Docket #174 at 2).

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On the eve of trial, the parties were able to reach stipulations as to
the number of damaged signs and their replacement cost, obviating the
need for the photographic exhibits. (Docket #174).2
Based on the foregoing, and in light of the record in this case, the
Court finds that the photographs fall under the broad ambit of
“exemplification.” The signs that were at issue are large physical structures
installed at hundreds of dealer locations across the county. It would have
been impossible for CNH to present each of the signs in the courtroom
during trial and to move their admission as physical evidence to establish
that the signs had failed and needed replacing. The photographs would
have been vital substantive evidence, but for the eleventh-hour agreement
by JLL to stipulate to the number and nature of defective signs.
However, not all of the photographing costs are compensable. At the
time of trial, CNH had assignments to pursue damages for defective signs
at 270 dealer locations. Accordingly, the photographs of signs at those
locations, and no more, were “necessarily obtained for use in the case.” 28
U.S.C. § 1920(4). The photographs of any dealership from which CNH did
not have an assignment were simply not relevant to the claims CNH
actually pursued at trial. CNH argues that it needed to photograph all of its

The parties’ stipulation also obviated the need for the Court to resolve a
dispute about the photographs’ admissibility. Before trial, JLL moved in limine to
exclude all of the photographs from evidence on the basis that CNH did not intend
to call witnesses who could lay a foundation for the photographs. (Docket #145).
Instead, CNH intended to call the president of the vendor it hired to take the
pictures. See (Docket #146 at 2). Because the president did not have personal
knowledge regarding the photographs that his employees took, JLL argued, he
could not lay a foundation as to the photographs’ authenticity. Id. It seems JLL
would have preferred that CNH incur the extra expense of paying the individual
photographers to travel to Milwaukee to testify. Id. at 3.
2

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dealer locations in order to determine which has defective signs. But Section
1920 does not permit recovery for the costs a plaintiff incurs to conduct the
investigation it should have completed before even filing its complaint.
Therefore, the Court will award CNH the amount it paid its vendor to take
photographs at the 270 dealer locations for which CNH pursued damages
at trial.
The Court declines JLL’s entreaty to reduce this award further. JLL
argues, first, that CNH failed to obtain prior court approval under Local
Rule 54(b)(5) for the location photography and therefore should not be
compensated for any of it. See Civ. L. R. 54(b)(5) (“The Clerk of Courts will
not tax the cost of demonstrative evidence created for use in the case . . .
unless the party requesting taxation obtained Court approval before the
costs were incurred, and . . . before the evidence was used at trial.”). The
photographs of defective signs, had they not been made unnecessary by
stipulation, would have been substantive evidence necessary to prove an
element of CNH’s claim for damages. CNH did not need the Court’s prior
approval to collect those photographs as evidence.
JLL also argues that hiring a professional photographer to travel
across the country taking pictures was an unnecessary extravagance; CNH
could have simply asked its dealers to snap photos and send them to CNH
for use at trial, JLL says.3 This argument fails to account for the importance
of the evidence being collected. This was a multi-million-dollar case
premised on the quality of hundreds of signs; it is no surprise that CNH set

Given that JLL objected to the admissibility of the photographs taken by
CNH’s vendor, it is insincere for JLL to imply it would have consented without
objection to the admissibility of photographs taken by individual dealers who
CNH did not intend to call to testify as to the photographs’ authenticity.
3

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out to secure high-quality images of the signs’ alleged defects. See Myrick v.
WellPoint, Inc., 764 F.3d 662, 667 (7th Cir. 2014) (“a high-stakes suit does not
come cheap to either side”); Valmet Paper Mach., Inc. v. Beloit Corp., No. 93C-0587, 1995 WL 661241, at *2 (W.D. Wis. Aug. 15, 1995) (the reasonableness
of taxable costs is not measured “in isolation,” but rather is assessed “from
the perspective of a lawsuit in which millions of dollars are at stake”).
Moreover, CNH incurred the expense of a professional photographer
without any guarantee that it would prevail at trial and be awarded costs.
Where, as here, there are “market incentives to economize, there is no
occasion for a painstaking judicial review” of the reasonableness of fees a
party in fact has paid. Taco Bell Corp. v. Cont’l Cas. Co., 388 F.3d 1069, 1075–
76 (7th Cir. 2004).
Finally, JLL quibbles over the minutiae of the photographers’
invoices, arguing that CNH should not recover for the photographers’
mileage and per diem expenses. The Court rejects JLL’s invitation to wade
into the weeds on this issue. Taking photographs of fixed signs located
across the country necessarily involves travel, and the travel-related
expenses will be compensated.
3.1.2

Interactive map database and changes thereto

CNH also seeks as an exemplification cost the $43,525.00 it spent on
its Interactive Map Database. CNH says this database, which “linked the
photographs to the dealership location” was necessary to “allow the parties
to systematically review the sign photographs on a dealership-bydealership basis to determine which signs at which dealership had failed.”
(Docket #188 at 2).
It was CNH’s obligation as the plaintiff to investigate, accurately
allege, and ultimately prove the scope of its damages. A database used to
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facilitate that investigation is not a compensable exemplification cost. That
the database could also have been useful, though not essential, to present
photographic evidence to the Court does not upset this conclusion in this
case. This item of cost will not be taxed.
3.1.3

Trial exhibit binders

Next, CNH seeks $23,159.25 for costs it paid to prepare four sets of
binders containing its trial exhibits—three for the Court and one for JLL—
as required by the Court’s Trial Scheduling Order. See (Docket #188 at 2);
see also (Docket #19 at 2) (requiring submission of three sets of each party’s
exhibits along with the parties’ final pretrial report and requiring each party
to provide copies of its exhibits to opposing counsel). These are
compensable copying costs under Section 1920(4) and will be taxed.
JLL disputes the reasonableness of this high amount, taking issue
with CNH using photo paper for its exhibit copies and printing in color
instead of black and white. As explained above, the heart of the dispute in
this case involved alleged defects in the appearance of signage, including
their fading color. As the party with the burden to prove up its damages, it
was reasonable for CNH to present its photographic exhibits in high quality
to demonstrate the defects.
3.1.4

Discovery-related printing and electronic conversion

Finally, CNH seeks $4,162.44 for the costs it paid to copy documents
for use as deposition exhibits and to prepare TIFF images and native
electronic files for production to JLL in response to JLL’s discovery requests.
CNH contends these are taxable copying costs under Section 1920(4).
JLL did not dispute this item when CNH submitted its original bill
of costs and offers no substantive argument in its response to CNH’s instant
motion as to why the cost should not be taxed. The Court finds no
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independent basis for declining to tax the cost; instead, case law in this
circuit supports taxing the cost. See Hecker v. Deere & Co., 556 F.3d 575, 591
(7th Cir. 2009) (costs for converting computer data into a readable format in
response to discovery requests are compensable). The cost will be taxed.
3.1.5

Total taxable costs

In light of the foregoing, the Court will increase the amount taxed by
the Clerk, $24,695.50, to also include $23,159.25 for trial exhibit binders,
$4,162.44 for discovery-related printing and production, and the cost
associated with photographing the 270 dealer locations for which CNH
pursued damages at trial. The Court is confident that the parties can jointly
determine the latter amount without further intervention from the Court.
Finally, pursuant to Wisconsin law, Wis. Stat. § 807.01(3), CNH is
entitled to double the amount of taxable costs described above. See (Docket
#189 and #200 at 2) (no dispute from the parties on this issue).
3.2

STATUTORY INTEREST

Having determined the amount of taxable costs, the Court turns to
the parties’ dispute over the applicable rate of post-judgment interest. CNH
seeks post-judgment interest as provided by Wisconsin law, which would
be 4.5% per annum until the judgment is paid. See Wis. Stat. § 807.01(4). JLL
argues that Section 807.01(4) conflicts with the federal post-judgment
interest statute, which provides that “on any money judgment in a civil case
recovered in a district court[,] . . . interest shall be calculated from the date
of the entry of the judgment, at a rate equal to the weekly average 1-year
constant maturity Treasury yield, as published by the Board of Governors
of the Federal Reserve System, for the calendar week preceding.” 28 U.S.C.
§ 1961(a). JLL does not say what the actual interest rate would be in that
case, but the Court assumes it would be lower.
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This argument presents a problem under the Erie doctrine. If the
Wisconsin statute is considered substantive, it must be applied over the
federal law, and if procedural, vice versa. See Houben v. Telular Corp., 309
F.3d 1028, 1033 (7th Cir. 2002) (explaining Erie and its progeny). Happily,
the problem has already been resolved by the Seventh Circuit. In Travelers,
the Court of Appeals held that federal law controls an award of postjudgment interest in federal courts. Travelers Ins. Co. v. Transport Ins. Co.,
846 F.2d 1048, 1053 (7th Cir. 1988). This is true even when diversity is the
basis for the federal court’s jurisdiction. Id. (citing Weitz Co. v. Mo–Kan
Carpet, 723 F.2d 1382, 1386 (8th Cir. 1983)). As explained by the Eighth
Circuit, which the Travelers court quoted with approval:
The Erie doctrine does not require a different result.
Even if the rate of interest that a judgment will bear is in some
sense ‘substantive,’ in that it is a part of the damages
recovered by the winning side, it is also easily susceptible of
characterization as ‘procedural,’ since it has to do exclusively
with events that occur after a dispute gets to court. The
question of interest, therefore, is at most in ‘the uncertain area
between substance and procedure,’ and ‘rationally capable of
classification as either.’ Hanna v. Plumer, [380 U.S. 460, 472
(1965)]. It is therefore a subject with respect to which Congress
has full power to legislate, even as to cases that get into the
federal courts only because of diversity of citizenship.”
Weitz Co., 723 F.3d at 1386. Travelers reversed a district court’s application
of Indiana’s post-judgment interest statute, finding that it should have used
Section 1961. Travelers, 846 F.2d at 1054.
CNH argues that S.A. Healy dictates the opposite result, but this
stems from a misunderstanding of the scope of that decision. S.A. Healy
addressed an alleged conflict between Section 807.01(3), 807.01(4), and
Federal Rule of Civil Procedure 68, and the application of those rules in a

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diversity action under the Erie doctrine. S.A. Healy Co. v. Milwaukee Metro.
Sewerage Dist., 60 F.3d 305, 307 (7th Cir. 1995). The Seventh Circuit held that
Section 807.01(3)’s double taxation rule, which may affect any non-settling
party, does not conflict with Rule 68’s cost-shifting provision, which can
only be imposed on non-settling plaintiffs. Id. at 309–12. Thus, in diversity
cases, Section 807.01(3) must be applied. Id. This appears to be why JLL does
not contest the doubling of costs here.
S.A. Healy mentioned Section 807.01(4)’s post-judgment interest rule
but did not analyze it in much detail, and certainly does not opine on a
conflict between it and Section 1961. See generally id. CNH suggests that
there is no conflict, equating Section 807.01(4) to a sanction, separate and
apart from post-judgment interest, as S.A. Healy did with Section 807.01(3)’s
imposition of double costs. Wisconsin’s legislature, however, does not
agree. Section 807.01(4)’s language regarding interest is identical to that of
Wisconsin’s general post-judgment interest statutes. See Wis. Stat. §§
814.04(4), 815.05(8). The only difference is that Section 807.01(4) sets the
start date for interest as the date of the rejected settlement offer, not the date
of judgment. Id. § 807.01(4). Section 807.01(4) specifically provides that its
assessment of interest supersedes the other post-judgment interest
provisions. Id. As such, the Court finds that Section 807.01(4) and Section
1961 conflict. Both attempt to set a rate of post-judgment interest on federal
money judgments. Travelers requires that the Court apply Section 1961
notwithstanding the jurisdictional basis for this case.
4.

CONCLUSION
For the reasons given above, CNH’s motion will be granted in part

and denied in part. CNH’s request for review of the taxation of costs will
be granted insofar as the Court will increase the amount taxed by the Clerk,
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$24,695.50, to also include $23,159.25 for trial exhibit binders, $4,162.44 for
discovery-related printing and production, and the cost associated with
photographing signs at the 270 dealer locations for which CNH pursued
damages at trial. CNH’s claim for double taxable costs pursuant to Wis.
Stat. § 807.01(3) will be granted. CNH’s request for statutory interest
pursuant to Wis. Stat. § 807.01(4) will be denied; CNH shall recover postjudgment interest at the rate dictated by 28 U.S.C. § 1961(a).
Accordingly,
IT IS ORDERED that CNH’s motion for statutory interest, double
costs, and review of the Clerk of Court’s taxation of costs (Docket #232) be
and the same is hereby GRANTED in part and DENIED in part as reflected
in this Order.
Dated at Milwaukee, Wisconsin, this 19th day of September, 2019.
BY THE COURT:

____________________________________
J. P. Stadtmueller
U.S. District Judge

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