Moore v. Saniefar, Case No. 1:14-cv-01067-SKO

RONALD MOORE, Plaintiff, v. FATEMAH SANIEFAR, d/b/a ZLFRED'S; GHOLAMREZA SANIEFAR d/b/a ZLFRED'S;ZLFRED'S, INC., a California corporation; ALIREZA SANIEFAR, Trustee of the BOST TRUST, Defendants.

Case No. 1:14-cv-01067-SKO

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

October 2, 2017

ORDER DENYING PLAINTIFF'S REQUEST FOR COSTS AND GRANTING IN PART DEFENDANTS' REQUEST FOR COSTS

(Docs. 110 & 112)

Before the Court are Plaintiff's Bill of Costs ("Plaintiff's Request for Costs"), (Doc. 112), and Defendants' Bill of Costs ("Defendants' Request for Costs"), (Doc. 110). For the reasons that follow, the Court DENIES Plaintiff's Request for Costs, (Doc. 112), and GRANTS IN PART Defendants' Request for Costs, (Doc. 110).

I. BACKGROUND

This action involved allegations that features of a restaurant owned or operated by Defendants violated certain provisions under the Americans with Disabilities Act (the "ADA") and California state law. Plaintiff filed the operative Second Amended Complaint on June 4, 2015. (Doc. 32.) In Plaintiff's First Claim, he alleged that Defendants violated the ADA. (See id. ¶¶ 17-38.) Plaintiff's Second Amended Complaint also included two state law claims, in which Plaintiff alleged that Defendants violated certain provisions of California's Unruh Act and the California Health and Safety Code. (See id. ¶¶ 39-51.)

Defendants filed their answer to the Second Amended Complaint on June 22, 2015. (Doc. 33.) Defendants' answer included a counterclaim, in which Defendants alleged that Plaintiff and other Counter-Defendants violated the Racketeer Influenced and Corrupt Practices Act (the "RICO Counterclaim"). (See id. ¶¶ 58-84.)

Plaintiff and Counter-Defendants filed a motion to dismiss Defendants' RICO Counterclaim on July 20, 2015. (Doc. 41.) In its order entered on May 12, 2016 (the "Dismissal Order"), the Court granted this motion to dismiss. (Doc. 79 at 18.) In its Dismissal Order, the Court stated that Defendants' RICO Counterclaim "is dismissed without leave to amend at this time, but without prejudice." (Id.) The Court further stated that Defendants' RICO Counterclaim "may be brought in the future." (Id.)

Defendants subsequently filed a Motion for Summary Judgment, or Alternatively Summary Adjudication on November 23, 2016. (Doc. 90.) In its order entered on May 29, 2017 (the "Summary Judgment Order"), the Court granted summary judgment in favor of Defendants. (Doc. 108.) As to Plaintiff's ADA claim, the Court found that "this claim is moot" and, as such, "the Court lacks subject-matter jurisdiction over Plaintiff's ADA claim." (Id. at 14.) The Court therefore dismissed Plaintiff's ADA claim with prejudice. (Id.) The Court further "decline[d] to exercise supplemental jurisdiction over Plaintiff's remaining state law claims" and dismissed these state law claims without prejudice. (Id. at 18.) The Court noted that "Plaintiff remains free to file his state law claims in state court." (Id.)

On April 6, 2017, Defendants filed Defendants' Request for Costs. (Doc. 110.) Plaintiff filed an opposition brief to Defendants' Request for Costs on April 12, 2017, (Doc. 111), and Defendants filed a responsive brief in favor of Defendants' Request for Costs on April 18, 2017, (Doc. 113).

On April 12, 2017, Plaintiff filed Plaintiff's Request for Costs. (Doc. 112.) Defendants filed an opposition brief to Plaintiff's Request for Costs on April 19, 2017, (Doc. 115), and Plaintiff filed a responsive brief in favor of Plaintiff's Request for Costs on April 24, 2017, (Doc. 116).

Thus, both Plaintiff's Request for Costs and Defendants' Request for Costs are fully briefed and ready for disposition.

II. PLAINTIFF'S REQUEST FOR COSTS

Turning first to Plaintiff's Request for Costs, Plaintiff requests costs associated with his defense of Defendants' RICO Counterclaim. (See, e.g., Doc. 111 at 4-5.) For the reasons that follow, the Court finds that Plaintiff's request lacks merit.

"[T]he award of costs is governed by federal law under Rule 54(d)" as "a general proposition." In re Merrill Lynch Relocation Mgmt., Inc., 812 F.2d 1116, 1120 n.2 (9th Cir. 1987); see, e.g., United States v. Safeco Ins. Co. of Am., 116 F.3d 487, at *2 (9th Cir. 1997) ("As a general proposition, an award of costs is governed by federal law . . . under Rule 54(d)." (citations omitted)); United Cal. Bank v. THC Fin. Corp., 557 F.2d 1351, 1361 (9th Cir. 1977) (applying federal law as to costs and California state law on the issue of attorneys' fees); Bmo Harris Bank N.A. v. Singh, Case No. 1:16-cv-00482-DAD-SAB, 2016 WL 5798841, at *14 (E.D. Cal. Oct. 4, 2016) ("In a diversity action, federal not state law controls the issue of costs." (citing Aceves v. Allstate Ins. Co., 68 F.3d 1160, 1167 (9th Cir. 1995))); Am. Boat Racing Ass'n v. Richards, No. 2:14-cv-1909-KJM-KJN, 2015 WL 1320956, at *8 (E.D. Cal. Mar. 24, 2015) ("[F]ederal law governs the award of costs even in a diversity action." (citing DCI Sols. Inc. v. Urban Outfitters, Inc., No. 10cv0369-IEG (BGS), 2012 WL 1409610, at *2 (S.D. Cal. Apr. 23, 2012))). Federal Rule of Civil Procedure 54(d)(1) provides that, "[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." "By its terms, [Rule 54(d)(1)] creates a presumption in favor of awarding costs to a prevailing party, but vests in the district court discretion to refuse to award costs." Ass'n of Mexican-Am. Educators v. California, 231 F.3d 572, 591 (9th Cir. 2000) (citing Nat'l Info. Servs., Inc. v. TRW, Inc., 51 F.3d 1470, 1471 (9th Cir. 1995)). However, "[t]o permit proper review, a district court may not deny costs to a prevailing party without specifying reasons for the refusal." Miles v. California, 320 F.3d 986, 988 (9th Cir. 2003) (citation omitted).

Defendants argue that Plaintiff lacks the requisite "prevailing party" status to receive costs under Rule 54(d)(1). (See Doc. 115 at 2-5.) The Court agrees. "The issue of whether [a party] isentitled to its costs . . . turns on the definition of a prevailing party," as this term is used in Rule 54(d)(1), "and whether [the party] meets this definition." Phillips v. P.F. Chang's China Bistro, Inc., Case No. 15-cv-00344-RMW, 2016 WL 3136925, at *2 (N.D. Cal. June 6, 2016). The Supreme Court has noted that "prevailing part[ies]" include those parties who "received a judgment on the merits or obtained a court-ordered consent decree." Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 605 (2001) (citations omitted). Such judgments or consent decrees "create the material alteration of the legal relationship of the parties necessary to permit an award of attorney's fees." Id. at 604 (citation omitted).

As to the types of judgments that give rise to prevailing-party status, the Ninth Circuit "has stated that 'a dismissal with prejudice is tantamount to a judgment on the merits.'" Pickman v. Am. Express Co., No. C 11-05326 WHA, 2012 WL 1357636, at *4 (N.D. Cal. Apr. 17, 2012) (quoting Zenith Ins. Co. v. Breslaw, 108 F.3d 205, 207 (9th Cir. 1997), abrogated on other grounds by Ass'n of Mexican-Am. Educators, 231 F.3d 572). A dismissal without prejudice, on the other hand, "does not alter the legal relationship of the parties because the [party] remains subject to the risk of re-filing." Oscar v. Alaska Dep't of Educ. & Early Dev., 541 F.3d 978, 981 (9th Cir. 2008). Consequently, a "dismissal without prejudice [does] not confer prevailing party status upon [a party]." Id. at 982.

Here, in its Dismissal Order, the Court dismissed Defendants' RICO Counterclaim "without prejudice" and stated that this claim "may be brought in the future." (Doc. 79 at 18.) As such, Plaintiff remained subject to the risk of Defendants re-filing this claim in this Court¹ and this dismissal did not alter the legal relationship of the parties. The Court's dismissal of Defendants' RICO Counterclaim therefore did not confer prevailing-party status upon Plaintiff. Oscar, 541 F.3d at 981 (stating that a dismissal without prejudice "does not alter the legal relationship of the parties because the [party] remains subject to the risk of re-filing")

Plaintiff nonetheless argues that the Court's Dismissal Order altered the legal relationship of the parties because the Court dismissed Defendants' RICO Counterclaim without leave toamend. (See Doc. 116 at 9-11.) The Court is not persuaded by this argument. While the Court denied Defendants leave to amend their RICO Counterclaim at that time, this portion of the ruling was immaterial to whether Plaintiff was a prevailing party. The pertinent consideration is not whether Plaintiff faced risk of Defendants again presenting this counterclaim in the same action, but whether Plaintiff continued to face the future risk of Defendants filing this claim against Plaintiff before the same court. See Oscar, 541 F.3d at 981-82 (stating that a dismissal without prejudice does "not confer prevailing party status upon" a party because the party "remains subject to the risk of re-filing"). Here, Plaintiff faced the same risk both before and after the Dismissal Order—specifically, regardless of the ruling, Plaintiff remained subject to the same claim before the same court. See generally Semtek Int'l, Inc v. Lockheed Martin Corp., 531 U.S. 497, 505 (2001) ("The primary meaning of 'dismissal without prejudice' . . . is dismissal without barring the plaintiff from returning later, to the same court, with the same underlying claim."). In other words, the legal relationship of the parties as to Defendants' RICO Counterclaim was not altered by the Court's Dismissal Order. Consequently, Plaintiff was not a prevailing party, regardless of whether Defendants were granted leave to amend their RICO Counterclaim at that time.

For these reasons, the Court finds that the Court's Dismissal Order did not confer prevailing-party status upon Plaintiff. As Plaintiff was not the...