Huntsville Golf Dev. Inc. v. Brindley Constr. Co.

HUNTSVILLE GOLF DEVELOPMENT, INC., Plaintiff, v. BRINDLEY CONSTRUCTION COMPANY, INC., et al, Defendants.

No. 1-08-00006

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF TENNESSEE COLUMBIA DIVISION

Dated: October 16, 2011

JUDGE HAYNES

MEMORANDUM

Plaintiff, Huntsville Golf Development, Inc., an Alabama corporation, filed this action under 28 U.S.C. § 1332, the federal diversity jurisdiction statute, against the Defendants: Brindley Construction, LLC (formerly The Brindley Company, LLC), a Tennessee limited liability company, Brindley Construction Group, L.L.C., a Tennessee limited liability company, The Brindley Company (formerly Brindley Development Corporation), a Tennessee corporation, Brindley & Associates, Inc., a Tennessee corporation, Brindley Development Company, L.L.C., a Tennessee limited liability company, Brindley Holdings, L.P., a Tennessee limited partnership, Brindley Homes Corporation, a Tennessee corporation, The Brindley Company, L.P., a Tennessee limited partnership, Brindley Construction Company, Inc., a Tennessee corporation, (collectively, the "Brindley entities"), Robert Brindley, Sr., a Tennessee citizen, and Ronald B. Brindley, a Tennessee citizen, (collectively, the "Individual Defendants").

Plaintiff asserted claims to enforce a judgment through piercing the corporate veil, improper dissolution and fraudulent conveyance of assets. The Court denied Defendants' motions to dismiss and lifted the stay and authorized discovery. (Docket Entry No. 31). After discovery and motions for summary judgment, the Court denied Defendants' motions for summary judgment. (Docket Entry No. 162). Plaintiff's claims proceeded to trial without the intervention of a jury, and on August 4, 2011, the Court entered judgment for Plaintiff against Defendants Brindley Construction, LLC (formerly The Brindley Company, LLC), Brindley Construction Group, L.L.C., The Brindley Company (formerly Brindley Development Corporation), Brindley & Associates, Inc., Brindley Development Company, L.L.C., Brindley Holdings, L.P., Brindley Homes Corporation, The Brindley Company, L.P., Brindley Construction Company, Inc., and Robert Brindley, Sr. in the amount of $376,316.75, plus attorney's fees, costs, and interest as further determined by the Court. (Docket Entry No. 236).

On August 7, 2011, Plaintiff filed its bill of costs requesting taxable costs in the amount of $26,693.29. Defendants objected, arguing that Plaintiff should only be awarded costs in the amount of $14,509.66. On September 6, 2011, the Clerk of Court entered a final taxation of costs in the amount of $14,509.66. The Clerk noted that Plaintiff raised "what may be potentially meritorious exceptions with respect to the taxation of costs," but that "[a]bsent controlling case law in this Circuit, the exercise of discretion in deciding whether costs not previously construed as taxable costs by this Court should now be taxed is not the role of the Clerk. That exercise of discretion is a matter for the Court." (Docket Entry No. 255).

Before the Court are Plaintiff s motion to review Clerk's final taxation of costs (Docket Entry No. 270) and motion for attorney's fees (Docket Entry No. 240). As a prevailing party, Plaintiffrequests an award of costs under Fed. R. Civ. P. 54(d) in the amount of $26,693.29 and attorney's fees in the amount of $581,026.31. Also, before the Court are Plaintiff's motion to determine the applicable rate of interest (Docket Entiy No. 238) and motion to reconsider (Docket Entry No. 267). The Court will address each motion in seriatim.

I. COSTS

In this diversity action, the granting of an award of costs is governed by Rule 54(d)(1) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1920. Williams v. Hevi-Dutv Elec. Co., 122 F.R.D. 206, 210 (M.D. Tenn. 1988) ("Title 28 U.S.C. § 1920 and Fed. R. Civ. P. 54(d) apply generally to all cases unless there is specific contrary guidance."); Gobbo Farms & Orchards v. Poole Chemical Co., Inc., 81 F.3d 122, 123 (10th Cir. 1996) ('"In a diversity case, federal law controls in regard to the assessment of costs."') (citation omitted); 10 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2669 (3d ed. 1998). Fed. R. Civ. P. 54(d) states that, "[ujnless a federal statute, these rules, or a court order provides otherwise, costs-other than attorney's fees-should be allowed to the prevailing party." The Sixth Circuit has interpreted this language to conclude that a presumption exists in favor of awarding costs, but a trial court may disallow such an award at its discretion. Knology v. Insight Communications Co. LP, 460 F.3d 722, 726 (6th Cir. 2006).¹ "[I]t is incumbent on the losing party to overcome such presumption, since thedenial of costs is in the nature of a penalty." Serena v. Manzano, 616 F.2d 1165, 1167 (10th Cir 1980).

The Sixth Circuit has '"identified several factors a losing party may put forward that may be sufficient to justify a district court in overcoming the presumption in favor of a cost award, including the losing party's good faith, the difficulty of the case, the winning party's behavior, and the necessity of the costs.'" Knology, 460 F.3d at 726-27 (citation omitted)' see White & White, 786 F.2d at 730 (describing circumstances where denial of costs was a proper exercise of a court's discretion where costs incurred by a prevailing party were "unnecessary or unreasonably large," cases where a prevailing party should be penalized for unnecessarily prolonging trial or for injecting unmeritorious issues, cases where a prevailing party's recovery is so insignificant that the judgment is practically a victory for the defendant and cases that are "close and difficult.") (citations omitted).

Factors that should be ignored by a district court when determining whether to exercise its discretion and deny costs include the size of a prevailing party's recovery and the ability of a prevailing party to pay his or her costs. White & White, 786 F.2d at 730; but see Singleton, 241 F.3d at 539 ("Although the ability of the winning party to pay his own costs is irrelevant, another factor weighing in favor of denying costs is the indigency of the losing party."). The good faith that a losing party demonstrates in filing, prosecuting or defending an action is a relevant factor that may be considered, but in the absence of other relevant factors is an insufficient basis for denying costs. Id.; see id. at 731 ("Good faith without more ... is an insufficient basis for denying costs to a prevailing party."); see also Goosetree v. State of Tennessee, 796 F.2d 854, 864 (6th Cir. 1986) (stating that the district court's denial of costs because the plaintiff's case was not frivolous was "clearly an incorrect standard."); Reed v. Cracker Barrel Old Country Store, Inc., 171 F. Supp.2d751, 756 (M.D. Term. 2001). Likewise, the propriety with which a losing party conducts the litigation is another relevant, but insufficient basis for denying costs. Id.

To determine which costs are recoverable, 28 U.S.C. § 1920 provides that a judge or clerk of any court of the United States may tax as costs the following:

(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 the costs of making copies of any materials where the copies are necessarily obtained for use in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.

28 U.S.C. § 1920. "In seeking costs under Rule 54(d), the prevailing party has the burden of establishing that the expenses he seeks to have taxed as costs are authorized by applicable federal law, including proof of necessity and reasonableness under 28 U.S.C. § 1920." Berryman v. Hofbauer, 161 F.R.D. 341, 344 (E.D. Mich. 1995). In making its determination to award or deny costs, a district court must make factual findings. Phelan v. Bell, 8 F.3d 369, 375 (6th Cir. 1993).

Defendants object to the following: the inclusion of pro hac vice fees in the amount of $150.00, PACER² charges in the amount of $371.28, and fees in the amount of $762.50 paid to clerks of other courts and to some of the fees to the clerk of this Court; costs for printing mediation briefing books in the amount of $115.85; and fees for in house copies in the amount of $10,784.00. The Court will address each objection in turn.

A. Fees of the Clerk

Neither Rule 54 nor § 1920 specifically authorize pro hac vice admission fees to be taxed as costs. The Sixth Circuit has not addressed whether pro hac vice fees are taxable costs. Some courts have awarded pro hac vice fees under § 1920. See Craftsmen Limousine, Inc. v. Ford Motor Co.. 579 F.3d 894, 898 (8th Cir. 2009); Glastetter v. Sandoz Pharms. Corp., No. l:97cvl31ERW, 2000 WL 34017154, at * 1 n. 2 (E.D. Mo. Oct.3,2000); Davis v. Puritan-Bennett Corp.. 923 F. Supp. 179, 181 (D. Kan. 1996) (awardingpro hac vice fees and noting, "Plaintiff selected the forum and compelled defendant to defend itself in this district."); Roll v. Bowling Green Metal Forming. LLC, No. 1:09-CV-00081-TBR, 2010 WL 3069106, at *2 (W.D. Ky. Aug. 4, 2010); Aerotech Res., Inc. v. Dodson Aviation. Inc.. 237 F.R.D. 659, 663 (D. Kan.2005).

Many courts, however, have elected not to award pro hac vice fees under § 1920. See Conn v. Zakharov. No. 1:09 CV 0760, 2010 WL 2293133, at *1 (N.D. Ohio June 14, 2010): Vistein v. American Registry of Radiologic Technologists. No. 1:05 CV 2441, 2010 WL 918081, at *5 (N.D. Ohio March 10,2010) (quoting Abrams v. Van Kampen Funds. Inc., 2006 U.S. Dist. LEXIS 6778, at * 14-15,2006 WL 452419 (ND 111. Feb. 21, 2006) (holdings hac vice fee unrecoverable as cost because "it is the attorney's choice as to where to seek...