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PCT International Incorporated v. Holland Electronics LLC

United States District Court, D. Arizona

April 8, 2016

PCT International Incorporated, Plaintiff,
Holland Electronics LLC, Defendant.


James A. Teilborg Senior United States District Judge

Pending before the Court is Plaintiff PCT International, Inc. (“PCT”)’s motion for review of judgment on taxation of costs. (Doc. 447). The Court now rules on the motion.

I. Background

On September 8, 2015, the Court entered judgment in favor of PCT and against Holland Electronics LLC (“Holland”) in the amount of $576, 027.53. (Doc. 433). Plaintiff filed a bill of costs with the Court on September 22, 2015, for $148, 753.74. (Doc. 436). Then on October 16, 2015, the Clerk of Court entered judgment on taxation of costs to Plaintiff and against Defendant in the amount of $20, 188.23. (Doc. 445). Subsequently, on October 23, 2015, Plaintiff moved the Court for an additional $111, 152.19 in taxable costs pursuant to Federal Rule of Civil Procedure (“Rule”) 54(d) and Local Rule of Civil Procedure for the District of Arizona (“Local Rule”) 54.1(e). (Doc. 447). Defendant responded on November 9, 2015, contesting all taxable costs Plaintiff moved for, except the requested $524.10 Plaintiff paid to third-party record custodians. (Doc. 450). Having briefly summarized the relevant procedural background, the Court now turns to the pending motion.

II. Legal Standard

Title 28, Section 1920 of the United States Code authorizes a judge or clerk of the district court to tax several classes of enumerated costs. 28 U.S.C. § 1920 (2008). Pursuant to Rule 54(d)(1), authorized costs should be allowed to the prevailing party unless a court, federal statute, or federal rules otherwise direct. Fed.R.Civ.P. 54(d)(1) (2009). Upon motion for review of a clerk’s taxation of costs, a district court reviews de novo the clerk’s judgment. United States ex rel. Lindenthal v. General Dynamics Corp., 61 F.3d 1402, 1412 n.13 (9th Cir. 1995). Furthermore, “[t]he general rule on the taxation of costs is that the district court has discretion to fix the costs.” Johnson v. Pac. Lighting Land Co., 878 F.2d 297, 298 (9th Cir.1989) (citing Farmer v. Arabian Am. Oil Co., 379 U.S. 227, 233 (1964)). However, “such court discretion does not include the authority to tax costs beyond those authorized by statute.” Johnson., 878 F.2d at 298 (citing Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-43 (1986)).

The Court’s taxation of costs must also comport with the Local Rules. Importantly, Local Rule 54.1(e) specifies the items that the prevailing party may receive as taxable costs. LRCiv 54.1(e) (2015). Moreover, local rules “have the ‘force of law’ and are binding upon the parties and upon the court, and a departure from local rules that affects ‘substantial rights’ requires reversal.” Prof’l Programs Group v. Dep’t of Commerce, 29 F.3d 1349, 1353 (9th Cir. 1994) (quoting Martel v. Cnty. of Los Angeles, 34 F.3d 731, 737 (9th Cir.1994)). Namely, a departure from a court’s local rules is “justified only if the effect is so slight and unimportant that the sensible treatment is to overlook [it].” Prof’l Programs, 29 F.3d at 1353 (citing Allen v. U.S. Fid. & Guar. Co., 342 F.2d 951, 954 (9th Cir. 1965).

III. Analysis

The Court will proceed to analyze whether each of the costs that Plaintiff requests are properly taxable under the authority binding upon this Court.

A. Fees for Exemplification and Copying

Plaintiff moves the Court to award it $108, 547.74 in taxable costs for exemplification and copying. (Doc. 447 at 2-4). PCT argues that this amount equates to the reasonable cost of document copies ordered to be produced in discovery, which “were necessarily obtained for use in the case.” (Doc. 447 at 2 (quoting 28 U.S.C. § 1920)). Holland argues that Local Rule 54.1(e) narrows the permissible costs that may be taxed under 28 U.S.C. § 1920 and that PCT has not established that the said document copies fall within the scope of Local Rule 54.1(e).

The Court finds that Plaintiff’s request for $108, 547.74 in taxable costs for exemplification and copying is not authorized by Local Rule 54.1(e). The language of the Local Rule explicitly outlines two categories of copying costs that are authorized: “the reasonable costs of copies of papers necessarily obtained from third-party records custodians” and “the reasonable cost of documentary exhibits admitted into evidence at hearing or trial.” LRCiv 54.1(e)(5). Importantly, the language explicitly states, “[a]ll other copy costs are not taxable except by prior order of the Court.” Id.

The precedent that Plaintiff relies upon in its argument to receive said copying fees as taxable costs is distinguishable in that the cited cases do not apply Local Rule 54.1 because of a variance in jurisdiction. For example, Plaintiff cites numerous cases from the Northern District of California to support its contention for these costs but the local rules that govern that jurisdiction are much broader than Local Rule 54.1, which is at issue here. Compare U.S. Ethernet Innovations, LLC v. Acer, Inc., No. 4:10-cv-03724-CW, 2015 U.S. Dist. LEXIS 118807, at *27 (N.D. Cal. Sept. 4, 2015) (abiding by the Local Rules of Civil Procedure for the Northern District of California that permit courts to tax “[t]he cost of reproducing disclosure or formal discovery documents when used for any purpose in the case”) (emphasis added) (quoting Civil L.R. 54-3(d)(2)), and Parrish v. Manatt, Phelps & Phillips, LLP, No. C 10-03200 WHA, 2011 U.S. Dist. LEXIS 41021, at *6-7 (N.D. Cal. Apr. 11, 2011) (finding that taxable copying costs under Civil L.R. 54-3(d)(2) include the costs of collecting the documents to be copied, reviewing them, and determining which of them are relevant), with Foraker v. Apollo Group, Inc., No. CV-04-2614-PHX-DGC, 2007 WL 2301269, at *1 (D. Ariz. Aug. 9, 2007) (disallowing copying costs under Local Rule 54.1(e) because the requesting party failed to specify which of the copies were for documents admitted in evidence or to address why the asserted copying cost per page was reasonable). Thus, because the Northern District of California has more permissive local rules regarding copying costs than the District of Arizona, the cases that Plaintiff cites from the former jurisdiction do not support taxing said copying costs in the instant matter.

Moreover, the central authority Plaintiff relies upon in its argument for copying costs, Doe v. Cargol, No. CV 03-248-PHX-SMM, 2006 U.S. Dist. LEXIS 90162 (D. Ariz. Dec. 11, 2006), is distinguishable because in that case the plaintiff claimed a civil rights violation, which resulted in a modification of the applicable legal standard. See 42 U.S.C. § 1988 (2000). The Ninth Circuit has held that expenses awarded specifically in civil rights proceedings under Title 42, Section 1988 of the United States Code may exceed normal taxable costs and are recoverable if reasonable. Harris v. Marhoefer, 24 F.3d 16, 20 (9th Cir. 1994) (noting that pursuant to 42 U.S.C. § 1988, the prevailing plaintiff received taxable costs for necessary and reasonable expenses including “copying costs, hotel bills, meals, messenger service, and employment record reproduction”). Thus, successful civil rights plaintiffs, pursuant to this statute, may recover a broader range of costs than other successful plaintiffs who do not fall within the scope of this particular allowance. Similarly, in Cargol, the court relied upon § 1988’s more extensive reach regarding taxation of costs in awarding the plaintiff a broader range of taxable costs. See Cargol, 2006 U.S. Dist. LEXIS 90162 at *5-6, *8, *13-14 (referencing § 1988 in its discussion of the applicable legal standard to determine taxable costs as well as in its analysis of taxation of deposition exhibit copies, court reporter appearance fees, and under the heading of “Fees for Copying, Editing, Archiving, Expediting, and Shipping/Handling”). In this way, Plaintiff’s claim that “the Cargol court’s decision regarding the cost of copies of documents necessarily obtained for use in the case is expressly based solely on an application of LRCiv 54.1(e)(5) and 28 U.S.C. § 1920(4), ” (Doc. 452 at 6), is a constricted interpretation. Indeed, the Cargol court relies upon § 1988 several sentences after Plaintiff’s ...

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