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Smith v. Joy Technologies, Inc.

United States District Court, E.D. Kentucky, Southern Division, London

February 2, 2015



AMUL R. THAPAR, District Judge.

The plaintiffs, Anthony Smith, Jr., and Loretta Lynn Smith, have objected to the bill of costs filed by the defendant, Joy Technologies Inc. R. 243. In its bill of costs, Joy requests $9, 359.75 for expenses incurred in the lawsuit. R. 242. Under Federal Rule of Civil Procedure 54(d), "[u]nless a federal statute, these rules, or a court order provides otherwise, costs-other than attorney's fees-should be allowed to the prevailing party." Fed.R.Civ.P. 54(d). The rule "establishes a norm of action: prevailing parties are entitled to their costs as of course." White & White, Inc. v. Am. Hosp. Supply Corp., 786 F.2d 728, 731 (6th Cir. 1986) (internal quotation marks omitted). Taxable costs under Rule 54(d) are limited to the costs set out in 28 U.S.C. § 1920. See Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987). Section 1920 includes the following costs: (1) "[f]ees of the clerk and marshal"; (2) "[f]ees for printed or electronically recorded transcripts necessarily obtained for use in the case"; (3) "[f]ees and disbursements for printing and witnesses"; (4) "[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case"; (5) certain docket fees; and (6) compensation for court-appointed experts, interpreters, and other interpretive services.

Courts have discretion to decline awarding costs when "it would be inequitable under all the circumstances in the case." Andretti v. Borla Performance Indus., Inc., 426 F.3d 824, 836 (6th Cir. 2005) (internal quotation marks omitted). The Sixth Circuit has laid out a few situations where courts appropriately use their discretion to refuse costs: (1) where the prevailing party's costs are "unnecessary or unreasonably large"; (2) where the prevailing party has "unnecessarily prolong[ed] trial" or has "inject[ed] unmeritorious issues"; (3) where the prevailing party's victory is insignificant; and (4) in "close and difficult" cases. White & White, Inc., 786 F.2d at 730. Courts must also consider the plaintiff's indigency. Sales v. Marshall, 873 F.2d 115, 120 (6th Cir. 1989).

The plaintiffs allege that costs are inappropriate because Joy exhibited bad faith during the litigation, the case was close, the plaintiffs are indigent, and an appeal in this case is currently pending before the Sixth Circuit. R. 243-1 at 5-11, 17. The plaintiffs also specifically object to certain costs as not authorized under § 1920: costs for deposition transcripts, pro hac vice fees, removal fees, photocopying, and certain witness fees. Id. at 11-17. Joy is entitled to the majority of its costs, but before awarding those costs, the parties must rebrief the issue of plaintiffs' indigency.

I. The Defendant Did Not Exhibit Bad Faith

The plaintiffs assert that costs are not appropriate because Joy engaged in bad-faith settlement negotiations, hired new counsel after the summary jury trial, filed motions in limine that violated the Court's scheduling order, and used the bill of costs as a threat. R. 243-1 at 6-9. While the Sixth Circuit has not specifically included bad faith as a relevant factor in assessing costs, the Third Circuit has looked at whether the prevailing party had "unclean hands." In re Paoli R.R. Yard PCB Litig., 221 F.3d 449, 463 (3d Cir. 2000). Even assuming the Sixth Circuit would analyze the prevailing party's litigation conduct, there is no support in the record for the plaintiffs' allegations that Joy had unclean hands or exhibited bad faith.

Settlement Negotiations. Joy did not engage in bad faith during settlement negotiations. The plaintiffs insist that Joy had no intention of settling because Joy's initial settlement offer was too low. A low settlement offer, however, does not suggest that anything untoward occurred during negotiations. Indeed, Joy's actions are better characterized as run-of-the-mill negotiation strategy. It is the rare negotiating tactic to offer an amount that is immediately acceptable to the other side. Rather, it is commonplace, as the defendant, to start with an initial low offer. In response, the plaintiff usually comes back with a high offer, and the parties sometimes meet in the middle. That Joy thought the appropriate settlement offer should be much lower than the summary trial verdict is not unreasonable (the result of the actual jury trial demonstrates as much), but is instead the defendant's rightful negotiation position. Moreover, while settlement is often the preferable method of dispute resolution, parties are under no obligation to settle a case.

The plaintiffs also take issue with Joy's attorney attending the settlement conference instead of another representative from Joy. R. 243-1 at 7. Even assuming the absence of another representative was improper, there is no case law supporting a wholesale denial of costs because the defendant's attorney appeared at the settlement conference instead of another representative. Accordingly, the plaintiff has not demonstrated that Joy engaged in bad faith during and around the settlement conference.

Hiring New Counsel. Plaintiffs' contention that the defendant's hiring of new counsel after the summary jury trial constitutes bad faith is puzzling. R. 243-1 at 6. As the plaintiffs themselves explain, Joy had just "lost" a $4.6 million dollar verdict at the summary jury trial. A perfectly reasonable response by a losing party would be to hire new or additional counsel. The defendant did exactly that, and there is nothing problematic with that action.

Motions in Limine. Similarly, Joy's late filing of motions in limine and exhibits is not a sufficient reason to deny costs. The Court addressed this issue before the trial and agreed with the plaintiffs that the motions and exhibits were filed late. See R. 201. Because of the delayed filing of exhibits, the Court allowed the plaintiffs to file supplemental exhibits and jury instructions. Id. at 2. With regard to the late motions in limine, the Court also gave the plaintiffs the option of "whether they would prefer the Court to rule on the objections at the Final Pretrial Conference or when (and if) raised by the defendant at trial." Id. Motions in limine give the parties an opportunity to address evidentiary issues before trial instead of during trial-a late filed motion in limine does not preclude the party from objecting to that issue at trial. The plaintiffs responded that they "respectfully request that this Court rule on any pending motions in limine" at the Final Pretrial Conference. R. 204. The plaintiffs had the chance to wait until trial to deal with the defendant's motions, and nothing would have prevented Joy from raising its objections at trial. Instead, the plaintiffs requested rulings at the Final Pretrial Conference-many of which went their way. Had the plaintiffs requested otherwise, the Court would have waited for the defendant to object at trial before ruling. Because the plaintiffs had the option to avoid dealing with these issues until trial, their argument that they were "forced to expend significant time and energy to respond to unnecessary motions and other filings on the eve of trial" is without merit. R. 243-1 at 8. Accordingly, the defendant's late filings do not support a denial of costs.

Horse Trading. Finally, Joy's alleged offer to abstain from filing a bill of costs if the plaintiffs did not appeal does not support denying costs. The defendant has the right to file a bill of costs, just as the plaintiffs have the right to appeal. Where both parties engaged in permissible conduct, there is no bad faith.

II. Plaintiffs' Good Faith and Closeness of the Case Do Not Justify Denying Costs

There is no question the plaintiffs brought this case in good faith. While good faith is "a relevant consideration in Rule 54(d) deliberations, " it is not a sufficient independent ground to deny costs. White & White, Inc., 786 F.2d at 731. Plaintiffs supplement their good-faith argument by asserting that costs are inappropriate because the case was "close and hotly contested." R. 243-1 at 10. While a district court may deny costs in a "close and difficult" case, it is not required to do so. McDonald v. Petree, 409 F.3d 724, 732 (6th Cir. 2005).

This case was not close when one considers how the Sixth Circuit has defined that term in taxing costs. In White & White, Inc., the Sixth Circuit defined a close case "by the difficulty of discerning the law of the case" as well as the difficulty in analyzing the evidence. 786 F.2d at 732-33. Cases that courts have considered "close" include those involving patent validity and complex antitrust issues. Id. For example, the antitrust trial in White lasted 80 days, "required 43 witnesses, produced 800 exhibits, generated almost 15, 000 pages of transcript, and begat a 95 page opinion." Id. at 732. Thus, that district court did not abuse its discretion in factoring in the closeness of the case in denying costs. Id .; see also McHugh v. Olympia Entm't, Inc., 37 F.Appx. 730, 744 (6th Cir. 2002) (per curiam) (holding that district court did not abuse its discretion in finding that a trial was close where it lasted 23 days with 31 witnesses and nine expert witnesses and the jury had to "understand complex medical testimony on fractures and subluxation").

Here, the case did not reach the level of complexity involved in cases like those in patent or antitrust litigation. The main issue for trial was whether Anthony Smith's injuries were reasonably foreseeable to Joy. The trial lasted six days with fewer than twenty witnesses. The jury came back with a defense verdict in approximately two hours. The plaintiffs point to the denial of the defendant's motion for summary judgment as evidence of the case's complexity, but denial of summary judgment is not an adequate basis to deny costs. See Hunter v. Gen. Motor Corp., 161 F.Appx. 502, 504 (6th Cir. 2005) (per curiam) ("We conclude that the use of the summary judgment standard to deny the defendant's Rule 54 motion in this case constituted an abuse of discretion on the part of the district court."). Nor does it mean the case was "close"; rather, it simply means there was a material issue of fact ...

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