Opinion
Case No. 13-1418 SC
05-13-2015
ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR REVIEW OF CLERK'S TAXATION OF COSTS
I. INTRODUCTION
Now before the Court is Plaintiff Fitbug Limited's ("Fitbug") motion for review of costs allowed by the Clerk of the Court ("Clerk"). ECF No. 108 ("Mot."); see also ECF Nos. 100 ("Bill of Costs"), 106 ("Cost Taxed"). The motion is fully briefed, ECF Nos. 112 ("Opp'n"), 114 ("Reply"), and appropriate for resolution without oral argument under Civil Local Rule 7-1(b). For the reasons set forth below, the motion is GRANTED in part and DENIED in part, and the Court taxes $63,660.94 in costs.
II. BACKGROUND
This is a trademark infringement case between two companies that manufacture and sell portable electronic fitness tracking devices. The Court granted summary judgment in favor of Defendant Fitbit, Inc. ("Fitbit") on all the trademark claims, finding they were barred by laches, ECF No. 96 ("SJ Order"), and thus entered judgment in Fitbit's favor. ECF No. 97 ("Judgment"). Pursuant to that judgment, Fitbit submitted a bill of costs as required by 28 U.S.C. Section 1920, which authorizes the Court or its Clerk to tax as "costs" various "minor, incidental [litigation] expenses . . . ." Taniguchi v. Kan Pac. Saipan, Ltd., 132 S. Ct. 1997, 2006 (2012).
In its bill of costs, Fitbit sought $88,888.86 in costs. Fitbug objected, ECF No. 103, and the Clerk ultimately taxed costs of $54,089.15. The Clerk declined to tax $16,997.12 as "outside the ambit of Civil Local Rule 54-3(c)," and $17,802.59 as "outside the ambit of Civil Local Rule 54-3(d)," which furnish the standards for allowable deposition costs and reproduction and exemplification costs, respectively. See Civ. L.R. 54-3(c)-(d).
Despite the Clerk's substantial reductions to Fitbit's costs, Fitbug believes the amount taxed includes non-taxable items. As a result, Fitbug asks the Court to either reject Fitbit's claimed costs entirely or, at a minimum, reduce them by a further $27,468.58. Fitbit opposes any further reductions in its costs.
III. LEGAL STANDARD
Awarding costs is discretionary; however there is a presumption in favor of awarding costs to prevailing parties. See Ass'n of Mexican-Am. Educators v. State of Cal., 231 F.3d 572, 591 (9th Cir. 2000) (en banc); see also Jefferson v. City of Fremont, No. C-12-0926 EMC, 2015 WL 1264703, at *2 (N.D. Cal. Mar. 19, 2015). Nonetheless, "[w]ith regard to individual itemized costs, the burden is on the party seeking costs . . . to establish the amount of compensable costs and expenses to which it is entitled." City of Alameda v. Nuveen Mun. High Income Opportunity Fund, No. C-08-4575 SI, 2012 WL 177566, at *1 (N.D. Cal. Jan. 23, 2012) (internal quotation marks and citation omitted).
Federal Rule of Civil Procedure 54 provides for a party to move for judicial review of costs taxed by the clerk. Fed. R. Civ. P. 54(d)(1). The Court reviews the Clerk's taxation of costs de novo. See Lopez v. San Francisco Unified Sch. Dist., 385 F. Supp. 2d 981, 1001 (N.D. Cal. 2005).
Taxable costs are listed in 28 U.S.C. Section 1920 ("Section 1920"), and include: (1) filing fees and other court fees, (2) fees for transcripts "necessarily obtained for use in the case;" (3) costs of exemplification and copies also "necessarily obtained," (4) certain fees for printing and witnesses, (5) docket fees under 28 U.S.C. Section 1923, and (6) costs of court-appointed experts or compensation for interpreters.
The Civil Local Rules provide additional guidance regarding bills of costs. See Civ. L.R. 54-1(a); Civ. L.R. 54-3. Specifically, the Local Rules require a party's bill of costs "state separately and specifically each item of taxable costs claimed." Civ. L.R. 54-1(a). Further, a party must provide an affidavit stating that the items listed are "correct and [have] been necessarily incurred in the case and that the services for which fees have been charged were actually and necessarily performed." 28 U.S.C. § 1924; see also Civ. L.R. 54-1(a) (requiring a supporting affidavit stating that "the costs are correctly stated, were necessarily incurred, and are allowable by law").
IV. DISCUSSION
First, Fitbug argues that because Fitbit's declaration supporting its bill of costs, ECF No. 100-1 ("First Wakefield Decl."), does not state (as required by Civil Local Rule 54-1(a)) that its claimed costs are "allowable by law," all of Fitbit's costs should be denied. However, Fitbit's declaration states it is filed "in support of Fitbit's Bill of Costs" and is "in accordance with Federal Rule of Civil Procedure 54, Local Rules 54-1 and 54-3, and 28 U.S.C. § 1924." Id. at ¶ 2. While Fitbug apparently believes "[n]o other words can tell it half so clearly," the requirement a party say the "three little words," "allowable by law," is merely a reminder that the Court expects them to submit costs they believe are taxable, not a set of magic words necessary to receive any costs. Cf. Sarah Vaughan, Three Little Words, on Live at the London House (Mercury Records 1958), available at: https://www.youtube.com/watch?v=9WSZ6IRC-ys. As the language of Fitbit's declaration makes clear, Fitbit submitted these costs in good faith and understood that doing so was a representation to the Court and the Clerk that the costs were "allowed by law." Now the Court must decide whether Fitbit was right or not. The Court declines to elevate form over substance to avoid making that decision.
The balance of Fitbug's motion takes issue with Fitbit's claimed costs for shipping, electronic discovery and document production, preparing demonstrative exhibits, and certain office supplies. The Court also addresses the claimed costs for deposition transcripts and, finally, photocopying and scanning.
A. Shipping Charges
Shipping or expedited delivery charges are not allowable as costs. See SJA Amoroso Const. Co. v. Exec. Risk Indemn. Inc., No. C 06-2572-SBA, 2009 WL 962008, at *4 (N.D. Cal. Apr. 8, 2009). Fitbug rightly points out that Fitbit sought as costs $324.28 for FedEx shipping and messenger services. Further, Fitbug's objection notes that shipping and handling for deposition transcripts are also not allowable. See Obj. at 6-7; see also Blanton v. Cnty. of Sacramento, No. 2:09-cv-01832-MCE-CKD, 2013 WL 3283216, at *2 (E.D. Cal. June 27, 2013) ("[T]he court will not tax the cost of postage and handling of the deposition transcripts, since those costs are not enumerated in .") (internal quotation marks and citation omitted). As a result, Fitbug's motion for review is GRANTED and these costs will not be taxed.
B. Electronic Discovery and Document Production
Next, Fitbug takes issue with several costs associated with electronic discovery and document production.
Section 1920 was enacted in 1853 and as a result does not speak directly on the taxability of electronic discovery costs. See Alzheimer's Inst. of Am. Inc. v. Elan Corp. PLC, No. C-10-00482-EDL, 2013 WL 8744216, at *2 (N.D. Cal. Jan. 31, 2013). Nor has the Ninth Circuit or Supreme Court spoken on how Section 1920 should be interpreted in this context, aside from remarking that (in a distinct context, see id. at *1 (distinguishing this general statement)) "[t]axable costs are limited to relatively minor, incidental expenses." Taniguchi, 132 S. Ct. at 2006.
In this vacuum, courts have analogized the language of Section 1920(4), which authorizes the taxation of "[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case . . . ," to a variety of electronic discovery expenses. See, e.g., Ancora Techs., Inc. v. Apple, Inc., No. 11-CV-06357 YGR, 2013 WL 4532927, at *2-4 (N.D. Cal. Aug. 26, 2013) (allowing costs for converting electronic documents into usable formats while denying costs for hosting electronic data and technical support); Pacificorp v. Nw. Pipeline GP, No. 3:10-cv-00099-PK, 2012 WL 6131558, at *7-8 (D. Or. Dec. 10, 2012) (concluding that conversion of electronic documents into a database is taxable); Tibbie v. Edison Int'l, No. CV 07-5359 SVW (AGRx), 2011 WL 3759927, at *6 (C.D. Cal. Aug. 22, 2011) (taxing costs for technical experts required to prepare and produce electronic discovery documents).
1. Charges for "FW Litigation Support -- Data Extraction and Processing
The first electronic discovery expense Fitbug disputes is five charges for "FW Litigation Support -- Data Extraction and Processing" apparently totaling $23,464.98. Mot. at 6. However, one of these charges, described in Fitbug's moving papers as $23.78 claimed for "FW Litigation Support -- Data Extraction and Processing," id., does not actually appear in Fitbit's submissions. On the contrary, the only $23.78 item Fitbit submitted is an already-disallowed shipping charge, dated November 18, 2013. See First Wakefield Decl. Ex. B at 8. Even though this charge is also wrongly dated in both Fitbug's objection and motion, the Court surmises that Fitbug likely meant to challenge a different charge (also for "FW Litigation Support -- Data Extraction and Processing") dated November 30, 2013 and totaling $8,840.85. As a result, the correct total for these objected-to charges is $32,282.05.
The First Wakefield Declaration avers that these costs relate "to collection, scanning and conversion of documents, and related processes necessary to the eDiscovery process," and these entries specifically "concern document collection, including scanning and related processes." In a subsequent declaration, Wakefield provides more information about these costs, stating that they were necessary to prepare discovery documents for production to Fitbug in the format to which the parties agreed. See ECF No. 112-1 ("Second Wakefield Decl.") at ¶¶ 9-10; see also ECF No. 23 (stating, in a joint case management statement, that the parties agreed to a particular format for electronic documents).
As Fitbit points out, several other courts have taxed similar electronic document processing costs where, as here, the parties agreed to a particular format for production and the costs incurred were necessary for compliance with that agreement. See Ancora, 2013 WL 4532927, at *2; eBay v. Kelora Sys., LLC, No. C 10-4947 CW (LB), 2013 WL 1402736, at *7-8 (N.D. Cal. Apr. 5, 2013). Initially, Fitbug argued that these costs were impermissible because they included non-taxable costs for data hosting, metadata extraction, and printing documents to serve on opposing counsel. See ECF No. 108-1 ("Rosenberg Decl.") ¶¶ 3-4. However, subsequent submissions by Fitbit have clarified that such charges are not included in Fitbit's claimed costs with the exception of metadata extraction, which Fitbit states was necessary to comply with the parties' agreement regarding the production of electronic documents. See Second Wakefield Decl. ¶ 9, 11, 18.
Fitbug believes the Court should disregard these subsequent documents because they provide details not included with Fitbit's submissions to the Clerk. However, the Local Rules allow the Clerk to "require and consider further affidavits and documentation as necessary to determine allowable costs." Civ. L.R. 54-4(a). If the Clerk may consider such supplemental submissions, the Court cannot imagine why it cannot do so as well. See Gutierrez v. Wells Fargo Bank, N.A., No. C 07-05923 WHA, 2011 WL 115481, at *2 (N.D. Cal. Jan. 13, 2011) ("First, [Fitbug] seeks to limit [Fitbit] to the attachment filed with the bill of costs, but the local rules explicitly provide for submission of supplemental documentation rebutting objections, and the federal rules provide for challenges to the taxing of costs.") (citations and emphasis omitted); see also Emblaze Ltd. v. Apple Inc., No. 5:11-cv-01079-PSG, 2015 WL 1304779, at *6 (N.D. Cal. Mar. 20, 2015) (considering arguably untimely supplementation of the record because it was a "good-faith attempt to provide the court with all information necessary to make a reasoned determination about whether to tax costs").
Thus, the Court finds these expenses are properly taxed as exemplification costs necessarily incurred in complying with the parties' agreement. Moreover, to the extent the costs of metadata extraction are included, these too are necessarily incurred, allowable exemplification costs because they were incurred not for the convenience of counsel, but to comply with the parties' agreement. Compare Computer Cache Coherency Corp. v. Intel Corp., No. C-05-01766 RMW, 2009 WL 5114002, at *4 (N.D. Cal. Dec. 18, 2009) (denying costs for metadata extraction costs merely for the convenience of counsel), with eBay, 2013 WL 1402736, at *12 (allowing such costs where the parties agreement provided for metadata extraction, Bates numbering, and native file links). As a result, Fitbug's motion for review of the Clerk's taxation of these costs is DENIED, and these $32,282.05 in costs will be taxed.
2. Charges for "FW Litigation Support -- Production Deliveries"
Next, Fitbug challenges seven items for "FW Litigation Support -- Production Deliveries" totaling $4,466.91. Initially, Fitbit argued these charges are taxable because they "relate to production of documents." First Wakefield Decl. at ¶ 5. Subsequently, Fitbit has elaborated that these charges include costs for converting document formats as required by the parties' agreement, as well as providing Bates numbers and confidentiality designation, preparing load files, and loading the information onto physical media for delivery to Fitbug. Second Wakefield Decl. at ¶ 14. Furthermore, contrary to Fitbug's chief objection, Fitbit now avers that the costs of shipping or physical deliveries of these materials are not included in these charges. Id. at ¶ 15.
These costs are properly taxed as well because they are expressly contemplated by the parties' agreement and are necessarily incurred exemplification costs. See eBay, 2013 WL 1402736, at *7, 12. As Magistrate Judge Beeler found, such costs are necessarily incurred because without the conversion and organization of these files, "any copy is relatively useless." Id. at *7. While Fitbug reiterates its complaints that Fitbit did not provide a fuller explanation of these charges in its initial submissions and again made statements in the parties' meet and confer that are contradicted by its subsequent submissions, the Court rejected these arguments as to the other discovery costs and does so here as well. See Civ. L.R. 54-4(a); Gutierrez, 2011 WL 115481, at *2. As a result, Fitbug's motion for review of the Clerk's taxation of these costs is DENIED and this $4,466.91 will be taxed.
C. Demonstrative Exhibit-Related Charges
Next, Fitbug challenges numerous costs related to Fitbit's preparation of demonstrative exhibits.
Civil Local Rule 54-3(d)(5) provides that the "costs of preparing charts, diagrams, videotapes, and other visual aids to be used as exhibits is allowable if such exhibits are reasonably necessary . . . ." The "costs of preparing" demonstrative exhibits are limited to "the cost of physical preparation of demonstratives," not "costs associated with the intellectual effort involved in creating the content of demonstratives." Ancora, 2013 WL 4532927, at *5 (quoting Computer Cache, 2009 WL 5114002, at *1-2) (additional citations omitted).
Here, only some of the costs claimed by Fitbit are taxable. For instance, generic entries like "Meeting with counsel" or "Travel to[]/from SF" are either not taxable or likely include both taxable and non-taxable components. Others, like "[a]ll-day meeting, review, and development of Defense slide deck" likely include some taxable expenses, however the Court finds Fitbit has not sufficiently shown that these costs stem from the physical preparation of the demonstrative exhibits and not the "creation and preparation of the content of demonstrative exhibits," which is not taxable. See Pixion Inc. v. Placeware, Inc., No. C 03-02909 SI, 2005 WL 3955889, at *4 (N.D. Cal. May 26, 2005). On the other hand, the charges labelled "Defense Template," "Cut depo clips," and "Database administration" all refer to the physical acts of preparing a slide template for use with Fitbit's demonstratives, or the physical act of editing videos of depositions and are thus taxable. Id.; see also Second Wakefield Decl. at ¶¶ 22, 24. Similarly, the physical acts of incorporating comments from counsel and making stylistic changes, referred to Fitbit's invoices as "Continue Slide Deck Revisions . . ." and "Review of PowerPoint Draft . . ." are taxable because they reflect the physical preparation of the contents separately decided upon by counsel. Second Wakefield Decl. ¶ 24. The remaining costs are either not taxable or not sufficiently described for the Court to determine if they are taxable, and thus will be excluded from the costs taxed. See In re Ricoh Co., Ltd. Patent Litig., 661 F.3d 1361, 1368 (Fed. Cir. 2011) (applying Ninth Circuit law in disallowing insufficiently described costs for document production). As a result, the motion for review is GRANTED in part and DENIED in part as to these charges, and $5,859.00 will be taxed.
D. Supplies
Next, Fitbug challenges Fitbit's claimed costs for the creation of folders, compact discs, index tabs, and other office supplies.
Fitbug is right to object to the majority of these charges, which are simply non-taxable office supplies. See Oyarzo v. Tuolumne Fire Dist., No. 1:11-cv-01271-SAB, 2014 WL 1757217, at *21 (E.D. Cal. Apr. 30, 2014) ("[T]he costs of office supplies are not taxable under [S]ection 1920.") (citing Duhn Oil Tool, Inc. v. Cameron Int'l Corp., No. 1:05-cv-01411-MLHGSA, 2012 WL 4210104, at *5 (E.D. Cal. Sept. 12, 2012)). As a result, Fitbug's motion is GRANTED as to items such as "Manila Folder," "Copying:Custom Tabs on Folders," or "Index Tabs." Mot. at 7-8. These and other similar costs, for instance slipsheets and binders, will not be taxed. See, e.g., First Wakefield Decl. Ex. A at 14 (including $0.48 for slipsheets and $19.00 for three-ring binders).
Fitbug also objects to charges for two other items, "EDD:Folder Creation" and "EDD:CD Initial Master," arguing that these are non-taxable organizational or indexing tasks. See MEMC Elec. Materials v. Mitsubishi Materials, No. C-01-4925 SBA (JCS), 2004 WL 5361246, at *3, 12 (N.D. Cal. Oct. 22, 2004) (concluding that "Local Rule [54-3(d)] does not authorize costs for . . . special services such as indexing . . ."), report and recommendation adopted, 2004 WL 5363614 (N.D. Cal. Nov. 22, 2004). Fitbit does not defend charges for these items on a June 5, 2014 invoice, which it later discovered was erroneously included in the bill of costs. Second Wakefield Decl. at ¶ 29. Fitbit does, however, argue that two of these charges are appropriately taxed because they were "incurred . . . in scanning and otherwise organizing the documents collected" from a third-party former Fitbit employee, Mark Bult, for production in response to Fitbug's subpoena of Mr. Bult. Second Wakefield Decl. ¶ 27. These costs are permissible under both Civil Local Rule 54-3(d)(2), which states that the cost of reproducing "formal discovery documents . . . is allowable," and cases allowing for the taxation of the costs of producing discovery documents where those costs were necessarily incurred and do not include "intellectual efforts" involved in the production. See eBay, 2013 WL 1402736, at *5 (citations omitted). As a result, Fitbug's motion for review is GRANTED in part and DENIED in part, and only the $28.25 incurred in responding to the Bult subpoena will be taxed. The other folder or CD creation charges have not been sufficiently explained by Fitbit, and as a result will not be taxed. See In re Ricoh, 661 F.3d at 1368.
The Second Wakefield Declaration states that "one invoice for $53.75 billed on June 4, 2014 was assigned to the wrong case number and billed in error, and should not have been included in the bill of costs," id. at ¶ 29, however the invoice itself includes two other potentially taxable charges, one for scanning and the other for copying. See First Wakefield Decl. Ex. B at 34. Because the Court cannot determine from the record whether these remaining charges were properly included in the bill of costs or were also erroneously charged, these charges will not be taxed. See id.
E. Depositions
Finally, while Fitbug did not seek review of the Clerk's taxation of deposition costs, it did argue in its objection that certain deposition costs should not be taxed. Given that the Court reviews the Clerk's taxation of costs de novo, the Court addresses these costs as well.
Section 1920 provides for the taxation of "[f]ees for printed or electronically recorded transcripts necessarily obtained for use in the case . . . ." Id. at (2). Civil Local Rule 54-3(c) provides for the taxation of the costs of an original and one copy of deposition transcripts "including videotaped depositions," as well as "[n]otary fees incurred in connection with taking depositions . . . ." See Civ. L.R. 54-3(c)(1), (3).
First, Fitbug notes that Fitbit seeks costs for "Transcript Packages" from a vendor, Esquire Solutions, for the depositions of Mark Bult, James Park, and Amy McDonough. Fitbug argues these packages contain more than the single original and copy permitted by the Local Rules because, according to Esquire Solutions' website, the transcript packages contain a bound paper transcript, and a CD containing four versions of the full or condensed transcripts. See ECF No. 103-1 ("Second Rosenberg Decl.") Ex. 1. Although "the trend among courts in this District appears to allow a party to recover costs for the original deposition transcript and a copy -- no matter what format the copy is in," Fitbug is right that these transcript packages contain more than an original and a single copy, as permitted by the Local Rules, and accordingly cannot be fully taxed. See Hesterberg v. United States, -- F. Supp. 3d --, 2014 WL 7184246, at *4 (N.D. Cal. 2014). The Court finds that taxing only 40 percent of the transcript packages is the best potential solution because Esquire does not itemize the costs of each additional format. Accordingly, the Court taxes $348.15 for the deposition of Amy McDonough and $235.65 for the deposition of Mark Bult. As explained in footnote two, above, the Court taxes $1,471.80 for the deposition of James Park.
Fitbit submitted two invoices from Esquire for the deposition of Mr. Park. One merely refers to a single copy of the transcript, while the other contains the same objectionable transcript package. See First Wakefield Decl. Ex. A at 16-18. The Court taxes the full cost of the single copy, 20 percent of the transcript package as the second copy, and a single set of exhibits, for a total of $1,471.80.
--------
For the remaining depositions, the Court finds the only allowable costs are one transcript copy, one additional copy (in most cases a video copy), exhibit costs, and a reporter certification if not otherwise included in the cost of the transcript. See Civ. L.R. 54-3(c)(1)-(4); Ancora, 2013 WL 4532927, at *5-6 (concluding there is "no reason to deny costs which conform to [Civil Local Rule 54-3(c)(1)], even if the second copy is a rough ASCII or a video"). Fitbug rightly objects that the other charges for shipping and handling of transcripts, "Interactive Realtime," rough ASCII copies, and transcript CDs either fall outside Section 1920 or exceed the number of copies permitted by Civil Local Rule 54-3(c)(1). Accordingly, the Court taxes the following deposition costs:
Deponent | Items | Amount |
---|---|---|
Mark Bult | Transcript Package(taxed at 40%) | $155.90 |
Exhibits | $79.75 | |
Dennis Skigen | Transcript | $1,050.00 |
Exhibits | $276.20 | |
Reporter Certification | $20.00 | |
Video | $570.00 | |
Paul Landau | Transcript | $1,527.20 |
Exhibits | $283.30 | |
Reporter Certification | $20.00 | |
Video | $760.00 | |
James Park | Transcript | $926.25 |
Exhibits | $357.10 | |
Transcript Package(taxed at 20%) | $188.45 | |
Fergus Kee | Transcript | $1,070.70 |
Exhibits | $233.80 | |
Reporter Certification | $20.00 | |
Video | $855.00 | |
Woody Scal | Transcript | $471.25 |
Exhibits | $11.75 | |
Video (1 of 4) | $125.00 | |
Eric Friedman | Transcript | $591.50 |
Exhibits | $193.10 | |
Video | $500.00 | |
Amy McDonough | Transcript Package(taxed at 40% | $240.40 |
Exhibits | $107.75 | |
Sundeep Sangany | Transcript | $1,657.50 |
Exhibits | $25.20 | |
Reporter Certification | $20.00 | |
Video | $760.00 | |
E. Deborah Jay | Transcript | $413.80 |
Exhibits | $106.00 | |
Bruce Issacson | Transcript | $1,306.40 |
Exhibits | $658.80 | |
Reporter Certification | $20.00 | |
David Haas | Transcript | $1,004.50 |
Exhibits | $140.50 | |
Video | $1,742.50 | |
Michael J.Jeffords | Videos (2 of 4) | $250.00 |
TOTAL DEPOSITION COSTS TAXED: | $18,739.60 |
---|
F. Remaining Exemplification Costs
In addition to the foregoing contested costs, Fitbit also sought $2,210.24 for photocopying and $74.89 for scanning. Because these costs are necessarily incurred exemplification costs, see 28 U.S.C. Section 1920(4), they will be taxed as well.
V. CONCLUSION
For the reasons set forth above, Fitbug's motion for review of the Clerk's taxation of costs is GRANTED in part and DENIED in part and the Court taxes the following costs:
Category | Amount |
---|---|
Deposition transcripts,video transcripts, reportercertifications, and exhibits | $18,739.60 |
Photocopying and scanning | $2,285.13 |
Electronic discovery anddocument production costs | $36,748.96 |
Preparation of demonstrativeexhibits | $5,859.00 |
Production costs for Bultsubpoena | $28.25 |
TOTAL COSTS TAXED: | $63,660.94 |
IT IS SO ORDERED.
Dated: May 13, 2015
/s/_________
UNITED STATES DISTRICT JUDGE