From Casetext: Smarter Legal Research

Koch v. Hankins

United States Court of Appeals, Ninth Circuit
Oct 15, 1993
8 F.3d 650 (9th Cir. 1993)

Summary

holding that a district court must "differentiat[e] between work product which was rendered useless and that which might be of use in [future litigation]"

Summary of this case from Telegram Messenger Inc. v. Lantah, LLC

Opinion

No. 92-15302.

Submitted July 12, 1993.

The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a) and Ninth Circuit Rule 34-4.

Decided October 15, 1993.

Edward S. Zusman, Wilson, Ryan Campilongo, San Francisco, CA, for plaintiffs-appellants.

Montie S. Day and Christine Papanicolaou, Day Law Corp., Oakland, CA, for defendants-appellees.

Appeal from the United States District Court for the Northern District of California.

Before: CHOY, HUG, and LEAVY, Circuit Judges.



Appellants voluntarily dismissed this action in the district court pursuant to Fed.R.Civ.P. 41(a)(2). They appeal the district court's order taxing $32,440.95 in costs against them. We reverse the district court's judgment and remand for findings as to which costs arose from the preparation of work product rendered useless by the dismissal of this action, and which resulted from the preparation of work product which may be useful in pending state court litigation between the parties.

BACKGROUND

Appellants filed five actions, one in federal court and four in state court, arising from the allegedly fraudulent land transaction in Arizona. After remand from this court, see Koch v. Hankins, 928 F.2d 1471 (9th Cir. 1991), defendants moved for summary judgment. Appellants then moved for voluntary dismissal without prejudice. The district court did not grant appellants' motion. Instead, it gave them the option of receiving a ruling on the defendants' pending motion for summary judgment (which it indicated it would grant thereby subjecting plaintiffs to attorneys fees and costs), or accepting a voluntary dismissal with prejudice to their federal claim and without prejudice to their state court litigation. The district court conditioned the latter option on the payment of costs.

The district court gave appellants one week to consider their options. At that time, two of plaintiffs' four state court cases were pending. After considering the district court's offer, appellants chose to seek voluntary dismissal as conditioned by the court. Defendants then filed the following bill of costs:

1. Fees for Service of Process (Deposition $ 28.00 Service) 2. Fees for Depositions and Reporters 31,291.80 3. Fees for Witnesses 500.00 4. Fees for exemplifications and copies 334.30 of Court Pleadings (certified) necessarily obtained for use in this case 5. Costs for one copy each of certain 621.15 depositions and exhibits __________ TOTAL TAXABLE COSTS $32,775.25

(CR 404) (Citations omitted.) After a hearing, the district court allowed all of defendants' costs with the exception of costs for exemplifications and copies of court pleadings, resulting in an award of $32,440.95.

DISCUSSION

I. Standard of Review

Fed.R.Civ.P. 41(a)(2) provides in relevant part:

[A]n action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper.

The district court's determination of the terms and conditions of dismissal under Fed.R.Civ.P. 41(a)(2) is reviewed for abuse of discretion. Stevedoring Servs. of America v. Armilla Int'l, 889 F.2d 919, 921 (9th Cir. 1989).

II. Analysis

Appellants contend that, where a plaintiff seeks voluntary dismissal in one forum to pursue pending litigation against the defendant in another forum, this circuit, "looking to the District of Columbia Circuit," requires that the district court review evidence, including documentation, showing that an award of costs consists of those expenses incurred solely on account of the federal action. In support of this proposition, appellants rely upon Judge Reinhardt's concurrence in Lau v. Glendora Unified Sch. Dist., 792 F.2d 929 (9th Cir. 1986).

In his concurrence, Judge Reinhardt opined that

[w]here a plaintiff is granted a voluntary dismissal without prejudice to pursue a related action against the defendant in another forum, the defendant is not entitled to reimbursement of costs and legal fees incurred in preparing work product that may be useful in the continuing litigation.

Id. at 932. In support of this statement, Judge Reinhardt cited two D.C. Circuit opinions, GAF Corp. v. Transamerica Ins. Co., 665 F.2d 364, 365, 369-70 (D.C. Cir. 1981) and McLaughlin v. Cheshire, 676 F.2d 855, 856-57 (D.C. Cir. 1982). These are the cases to which according to appellants, this circuit "looks."

Both GAF and McLaughlin stand for the proposition that a defendant is entitled only to recover, as a condition of dismissal under Fed.R.Civ.P. 41(a)(2), attorneys fees or costs for work which is not useful in continuing litigation between the parties. McLaughlin, 676 F.2d at 857; GAF, 665 F.2d at 369-70. See Taragan v. Eli Lilly and Co., 838 F.2d 1337, 1340 (D.C. Cir. 1988). This rule has also been adopted by the Seventh Circuit. See Cauley v. Wilson, 754 F.2d 769, 771-73 (7th Cir. 1985). Our circuit has not expressly adopted the rule in GAF, McLaughlin, or Cauley. We now do so.

The district court did not determine which costs arose from the preparation of work product which might be useful in the continuing litigation between the parties, and which costs arose from the preparation of work product rendered useless by the dismissal of appellants' federal action. Appellees' bill of costs sets forth lump sum amounts for such things as "Depositions and Reporters." It provides no basis for a finding as to whether the depositions were useful in the parties' continuing litigation. During the hearing on appellees' bill of costs, the district court specifically asked defense counsel whether the depositions were usable in appellants' state court actions. The response of appellees' counsel was equivocal, at best. The district court did not pursue the issue, choosing instead to award all of appellees' deposition costs "for the reasons" cited by appellants' counsel. While counsel's reasons were not necessarily irrelevant to the conditioning of the voluntary dismissal of appellants' action, none related to whether the depositions would be useful in the parties' continuing litigation.

CONCLUSION

The district court abused its discretion in finding the amount of costs without differentiating between work product which was rendered useless and that which might be of use in the state litigation. Only those costs incurred for the preparation of work product rendered useless by the dismissal should be awarded as a condition of the voluntary dismissal. We therefore REVERSE and REMAND.


Summaries of

Koch v. Hankins

United States Court of Appeals, Ninth Circuit
Oct 15, 1993
8 F.3d 650 (9th Cir. 1993)

holding that a district court must "differentiat[e] between work product which was rendered useless and that which might be of use in [future litigation]"

Summary of this case from Telegram Messenger Inc. v. Lantah, LLC

holding that a party is only entitled to recover, as a condition of dismissal under Rule 41, attorneys' fees and costs for work that is not useful in continuing litigation between the two parties

Summary of this case from InternMatch, Inc. v. NxtBigThing, LLC

adopting cases of other circuits holding that a defendant is entitled to recover attorneys fees or costs for work not useful in continuing litigation between the parties

Summary of this case from Esquivel v. Arau

stating that only fees for work that "might [not] be useful" and "might [not] be of use" are chargeable to the plaintiff

Summary of this case from Richardson v. Brother Int'l. Corp.

explaining that a defendant is only entitled to recover, as a condition of dismissal, costs for work in the present action that will not be useful in subsequent litigation

Summary of this case from DCI Solutions, Inc. v. Urban Outfitters, Inc.

In Koch, the Ninth Circuit held that a plaintiff who seeks Rule 41(a)(2) voluntary dismissal in one forum to pursue pending litigation in another forum can only be required to pay costs arising from "the preparation of work product rendered useless by the dismissal of [plaintiff's previous action]."

Summary of this case from Esquivel v. Arau
Case details for

Koch v. Hankins

Case Details

Full title:FLOYD KOCH; JANICE KOCH; WILLIAM LOWE; PHYLLIS LOWE; COLIN WONG; MARK…

Court:United States Court of Appeals, Ninth Circuit

Date published: Oct 15, 1993

Citations

8 F.3d 650 (9th Cir. 1993)

Citing Cases

Telegram Messenger Inc. v. Lantah, LLC

When a district court conditions voluntary dismissal on the payment of costs and fees, "defendants should…

Esquivel v. Arau

Thus, Esquivel was able to terminate the Southern District action without obtaining approval from the…