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Cary A. Jardin v. Datallegro

October 12, 2011

CARY A. JARDIN,
PLAINTIFF,
v.
DATALLEGRO, INC. AND STUART FROST,
DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief JudgeUnited States District Court

DENYING IN PART PLAINTIFF'S MOTION TO STAY, DENY,RE- OR CLERK'STAX TAXATION OF COSTS ORDER GRANTING IN PART AND [Doc. No. 239]

Presently before the Court is Plaintiff Cary A. Jardin's motion to stay, deny, or re-tax the Clerk's taxation of costs awarded to Defendants DATAllegro, Inc. and Stuart A. Frost, the prevailing parties in this action. [Doc. No. 239.] For the reasons stated below, the Court GRANTS IN PART DENIES IN PART Plaintiff's motion.

BACKGROUND

At the outset of this litigation, Plaintiff alleged certain products manufactured and sold by Defendant DATAllegro infringed U.S. Patent No. 7,177,874 (the "'874 patent").*fn1 Defendant Frost founded DATAllegro. Microsoft Corporation acquired the company in 2008, and DATAllegro remains a wholly-owned subsidiary of Microsoft. Microsoft, however, is not a party to this action.

With their answer, Defendants filed counterclaims seeking declaratory judgment of non-infringement, invalidity, and unenforceability of the '874 patent. [Doc. No. 44.] On April 1, 2011, the Court granted Defendants' motion for summary judgment of non-infringement. [Doc. No. 191.] On June 3, 2011, the Court granted Jardin's motion to dismiss Defendants' counterclaims. [Doc. No. 216.] The Clerk entered judgment in favor of Defendants three days later. [Doc. No. 217.]

On June 30, 2011, Jardin filed a notice of appeal to the Federal Circuit. [Doc. No. 227.] Jardin's appeal is currently pending. See Jardin v. DATAllegro, No. 2011-1471 (Fed. Cir.).

Following the Clerk's entry of judgment, Defendants each submitted a Bill of Costs to the Clerk, seeking taxation of costs allowed under Federal Rule of Civil Procedure 54, 28 U.S.C. § 1920, and Civil Local Rule 54.1. [Doc. Nos. 220 (DATAllegro's Bill of Costs) & 221 (Frost's Bill of Costs).] After conducting a telephonic hearing and receiving supplemental submissions from the parties, the Clerk taxed $55,726.49 in costs for DATAllegro and $78,448.34 for Frost. [Doc. Nos. 236, 237.] In this motion, Jardin challenges the Clerk's award of costs, arguing that (1) no award of costs is appropriate in this case; (2) if an award of costs is appropriate, then the award granted by the Clerk should be substantially reduced; and (3) if an award of costs is appropriate, it should be stayed pending Jardin's appeal before the Federal Circuit.

LEGAL STANDARD

"'Under the well-established Rule 54(d)(1) case law, the district court is charged with making a de novo review of the clerk's determination of the costs issue.'" ASIS Internet Servs. v. Optin Global,, No. C-05-5124 JCS, 2008 WL 5245931, at *3 (N.D. Cal. Dec. 17, 2008) (quoting In re Paoli R.R. Yard PCB Litig., 221 F.3d 449, 461 (3d Cir. 2000)). "Unless 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)(1). "Rule 54(d) creates a presumption in favor of awarding costs to prevailing parties, and it is incumbent upon the losing party to demonstrate why the costs should not be awarded." Stanley v. Univ. of S. Cal., 178 F.3d 1069, 1079 (9th Cir. 1999).

Rule 54(d) does not, however, authorize a court to award costs beyond those authorized by statute or contract. Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-45 (1987). Thus, the court's discretion in awarding costs under Rule 54(d) is limited to awarding costs that are within the scope of 28 U.S.C. § 1920. See Grove v. Wells Fargo Fin. Cal., Inc., 606 F.3d 577, 579 (9th Cir. 2010) (citing W. Va. Univ. Hosps., Inc. v. Casey, 499 U.S. 83, 86 (1991)); Summit Tech., Inc. v. Nidek Co., Ltd., 435 F.3d 1371, 1374 (Fed. Cir. 2006). Section 1920 lists the following as taxable costs:

(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; see also Civ. L.R. 54.1 (outlining specific items for which the Court customarily allows the award of costs "not otherwise allowed or prohibited by statute or by specific order"). "Although the Court is restricted in awarding costs to the categories enumerated in § 1920, '[d]istrict courts are free to interpret the meaning of the cast of categories listed within § 1920.'" Tibble v. Edison Int'l, No. CV 07-5359 SVW AGRX, 2011 WL 3759927, at *7 (C.D. Cal. Aug 22, 2011) (quoting Taniguchi v. Kan Pacific Saipan, Ltd., 633 F.3d 1218, 1221 (9th Cir. 2011)). "'Once it is established that an item falls within 28 U.S.C. § 1920, the prevailing party is presumed to be entitled to recover costs, and the burden is on the losing party to show impropriety of an allowance.'" Id. (quoting Cofield v. Crumpler, 179 F.R.D. 510, 514 (E.D. Va. 1998)).

Because of Rule 54(d)'s presumption in favor of awarding costs to a prevailing party, "a district court need not give affirmative reasons for awarding costs; instead, it need only find that the reasons for denying costs are not sufficiently persuasive to overcome the presumption in favor of an award." Save Our Valley v. Sound Transit, 335 F.3d 932, 945 (9th Cir. 2003). "The presumption itself provides all the reason a court needs for awarding costs, and when a district court states no reason for awarding costs, [the Ninth Circuit] will assume it acted based on that presumption." Id.

A court that declines to award costs, however, must justify its decision by explaining "why a case is not 'ordinary' and why, in the circumstances, it would be inappropriate or inequitable to award costs." Ass'n of Mexican-Am. Educators v. State of Cal., 231 F.3d 572, 593 (9th Cir. 2000) (en banc); see Save Our Valley, 335 F.3d at 945 ("A district court deviates from normal practice when it refuses to tax costs to the losing party, and that deviation triggers the requirement to 'specify reasons.'"). "Proper grounds for denying costs include (1) a losing party's limited financial resources;

(2) misconduct by the prevailing party; and (3) the chilling effect of imposing . . . high costs on future civil rights litigants, as well as (4) whether the issues in the case were close and difficult; (5) whether the prevailing party's recovery was nominal or partial; (6) whether the losing party litigated in good faith; and (7) whether the case presented a landmark issue of national importance." Quan v. Computer Sciences Corp., 623 F.3d 870, 888 (9th Cir. 2010) (quoting Champion ...


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