N.J. Mfrs. Ins. Grp. v. Electrolux, Inc., Civil Action No. 10-1597 (AET)

NEW JERSEY MANUFACTURERS INSURANCE GROUPA/S/O KECIA ELLIS and KATHLEEN BRAND, Plaintiff, v. ELECTROLUX, INC., Defendant.

Civil Action No. 10-1597 (AET)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

Date: October 21, 2013

CLERK'S OPINION GRANTING

IN PART AND DENYING IN PART

DEFENDANT'S MOTION

TO TAX COSTS

This matter comes before the Clerk on the motion of Defendant Electrolux Home Products, Inc. (improperly named as "Electrolux, Inc.") ("Defendant," "Electrolux") [Dkt. Entry 184] to tax costs against Plaintiff New Jersey Manufacturers Insurance Group ("Plaintiff," "NJM") pursuant to Federal Rule of Civil Procedure 54(d) and Local Civil Rule 54.1. Plaintiff opposes this motion [Dkt. Entry 185].

In this diversity case, filed on March 26, 2010 [Dkt. Entry 1], Plaintiff alleged that a fire which occurred in the home of its insured, Kecia Ellis, and spread to the neighboring residence of its insured, Kathleen Brand, originated from a Frigidaire dryer manufactured by Defendant. The complaint states claims of strict products liability and breach of warranty.

A six-day jury trial, held on April 22 - April 29, 2013, culminated in a verdict for Defendant. On May 7, 2013, this Court entered final judgment in Electrolux's favor and ordered that costs be taxed against NJM [Dkt. Entry 159]. Plaintiff's motion for a new trial [Dkt. Entry 162] was denied by the Court on August 20, 2013 [Dkt. Entry 183].

Electrolux filed the within motion on September 6, 2013, requesting total costs of $91,665.25, consisting of the fees of: service of subpoena ($59.95); hearing ($3,777.70) anddeposition transcripts ($3,461.85); witnesses ($237.00 + $1,379.52); experts (Affiliated Engineering - $54,644.00, the Wright Group - $6,015.28, Patrick McGinley - $453.75 and ESI - $1,539.37); copies ($11,157.89); the docket fee ($20.00); expenses of defense counsel ($7,602.84); and fees for moving trial materials ($1,316.10).

I. Standards for Awarding Costs

A prevailing party may recover certain costs of suit under Fed. R. Civ. P. 54(d) (1), which provides in relevant part: "[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."

A prevailing party is "one in whose favor a judgment is rendered, regardless of whether the party has recovered its entire claim or a portion thereof." Garonzik v. Whitman Diner, 910 F. Supp. 167, 168 (D.N.J. 1995) (citing Fahey v. Carty, 102 F.R.D. 751 (D.N.J. 1983)). Stated otherwise, a prevailing party is one who "succeeds on 'any significant issue in litigation which achieved some of the benefit sought in bringing suit.'" Reichhold, Inc. v. U.S. Metals Ref. Co., Civ. A. No. 03-453, 2009 WL 3761828, at *1 (D.N.J. Nov. 6, 2009) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)).

There is such a strong presumption that costs should be awarded to the prevailing party that, " '[o]nly if the losing party can introduce evidence, and the district court can articulate reasons within the bounds of its equitable power, should costs be reduced or denied to the prevailing party.' " Reger v. Nemours Found., Inc., 599 F.3d 285, 288 (3d Cir. 2010) (quoting In re Paoli R.R.Yard PCB Litig., 221 F.3d 449, 468 (3d Cir. 2000)). The rationale behind this presumption is that the denial of costs is tantamount to a penalty. Id. at 288-89 (citing ADM Corp. v. Speedmaster Packaging Corp., 525 F.2d 662, 665 (3d Cir. 1975)).

Despite the "venerable presumption that prevailing parties are entitled to costs," Marx v. Gen. Revenue Corp., 133 S. Ct. 1166, 1172 (2013), courts do not have unfettered discretion to grant costs under Rule 54(d). Absent express statutory authorization, the Clerk and district court may reimburse only those costs enumerated in 28 U.S.C. § 1920:

(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.

Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987).

The Supreme Court reinforced its Crawford Fitting holding in Taniguchi v. Kan Pacific Saipan, Ltd., 132 S. Ct. 1997 (2012), wherein it limited the provision in §1920 (6) for the "compensation of interpreters" to the cost of oral translation. In denying the cost of document translation, the Court stated that its decision was "in keeping with the narrow scope of taxable costs," which are "limited to relatively minor, incidental expenses." Id. at 2006.

Therefore, while a prevailing party is entitled to costs under Rule 54(d), those costs " 'almost always amount to less than the successful litigant's total expenses in connection with a lawsuit.' 10 Wright & Miller §2666, at 203." Id. Furthermore, despite the presumption of granting costs to a prevailing party, that party must provide sufficient information to carry its burden of showing that the costs sought fall within the limits of § 1920. Romero v. CSX Transp., Inc., 270 F.R.D. 199, 201-202 (D.N.J. 2010).

In addition to Rule 54(d) and 28 U.S.C. § 1920, the Clerk's decision is guided by Local Civil Rule 54.1, which "establishes the general procedures to be followed in those cases where a party is entitled to recover costs" under § 1920. Lite, N.J. Federal Practice Rules, Comment 2 to Rule 54.1 (Gann 2013 ed.) at 234.

Defendant is unquestionably the prevailing party as final judgment was entered in its favor. Additionally, Electrolux has followed the procedural requirements of L. Civ. R. 54.1 and 28 U.S.C. § 1924 by timely filing and serving a Bill of Costs [Dkt. Entry 184-1], verified through the Affidavit of David R. Kott, Esq. [Dkt. Entry 184-17], as well as supporting invoices.

II. Distinction between Fed. R. Civ. P. 54(d) (1) and Other Fee-Shifting Statutes

At the outset, the Clerk must draw the distinction between the costs permitted under Fed. R. Civ. P. 54(d) (1) versus other fee-shifting provisions. As noted above, when costs are sought pursuant to Rule 54(d) (1), as here, the Clerk can grant only those costs set forth in 28 U.S.C. § 1920, pursuant to the Supreme Court's holding in the Crawford Fitting case.

NJM correctly points out that Electrolux supports its motion by relying almost entirely upon cases in which fee-shifting provisions other than Rule 54(d) (1) were applied. Defendant cites class action cases in which Fed. R. Civ. P. 23(h) and common fund principles were applied: Dewey v. Volkswagen of Am., 728 F. Supp. 2d 546 (D.N.J. 2010), rev'd on other grounds, 681 F.3d 170 (3d Cir. 2012); Weber v. GEICO, 262 F.R.D. 431 (D.N.J. 2009); Yong Soon Oh v. AT & T Corp., 225 F.R.D. 142 (D.N.J. 2004); In re Cendant Corp., Deriv. Action Litig., 232 F. Supp. 2d 327 (D.N.J. 2002). Other cases cited by Defendant applied fee-shifting provisions found in the Resource Conservation and Recovery Act, 42 U.S.C. § 6972(e) (Interfaith Cmty.Org. v. Honeywell Int'l, Inc., 336 F. Supp. 2d 370 (D.N.J. 2004), vacatedin part on other grounds, 426 F.3d 694 (3d Cir. 2005)) and the Individuals with Disabilities Education Act ("IDEA"), 20 U.S.C. § 1415(i)(3)(B) (P.G. v. Brick Twp. Bd. of Educ., 124 F. Supp. 2d 251 (D.N.J. 2000)). Indeed, in the P.G. case, the court expressly distinguished between costs allowed under the IDEA and those permitted by § 1920. Id. at 266-67.

The Third Circuit has cogently explained the distinction between Rule 54 (d) taxable costs and non-taxable costs, arising under other provisions, as follows:

English courts have traditionally made awards to the prevailing party for two types of litigation expenses. The first, "costs between party and party," are litigation expenses incurred by order of the court to facilitate consideration of the case. The second, "costs as between solicitor and client," are expenses incurred merely to aid one party in the presentation of his side of the controversy. The latter include attorney's fees and "other expenses entailed by the litigation not included in the ordinary taxable costs recognized by statute." Sprague v. Ticonic National Bank, 307 U.S. 161, 164, 59 S.Ct. 777, 779, 83 L.Ed. 1184 (1939).

Friedman v. Ganassi, 853 F.2d 207, 210 (3d Cir. 1988).

A. Defense Counsel's Expenses & Moving Fees

The fee-shifting provisions at issue in Defendant's supporting case law, discussed above, allow non-taxable costs not contained within § 1920 or "costs as between solicitor and client," like charges for counsel's meals and travel, long-distance telephone calls, postage, legal research and the like. As a result, Electrolux's request for costs is over-inclusive. Some of the costs that it seeks fall outside of the ambit of § 1920 and are more appropriately categorized as attorney's fees. On this basis, the Clerk must deny all of defense counsel's expenses sought by Electrolux, totaling $7,602.84: lodging ($5,812.51); mileage ($1,213.89); parking ($159.75); and meals ($416.69) [Dkt. Entry 184-1, ¶¶ 7, 9, 10, 11].

For the same reason, Electrolux's fees for moving trial materials ($1,316.10) [Dkt. Entry 184-1, ¶ 8] are also denied.

B. Expert Witness Fees

The other type of cost which Electrolux wishes to recoup that must be addressed at this juncture is expert fees. Defendant requests reimbursement of charges by its experts, Affiliated Engineering ($54,644.00) and ESI ($1,539.37), and by Plaintiff's experts, Wright Group Inc. ($6,015.28) and Patrick McGinley ($453.75) [Dkt. Entry 184-1, ¶¶ 13-16].

In the remaining case cited by Defendant, Fahey v. Carty, 102 F.R.D. 751 (D.N.J. 1983), this Court actually applied Rule 54(d) and allowed the taxation of expert fees. However, that holding is...