Finnerty v. Stiefel Laboratories, Inc.

900 F. Supp. 2d 1317, 2012 WL 4933863, 2012 U.S. Dist. LEXIS 148532
CourtDistrict Court, S.D. Florida
DecidedOctober 16, 2012
DocketCase No. 09-21871-CIV
StatusPublished
Cited by3 cases

This text of 900 F. Supp. 2d 1317 (Finnerty v. Stiefel Laboratories, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Finnerty v. Stiefel Laboratories, Inc., 900 F. Supp. 2d 1317, 2012 WL 4933863, 2012 U.S. Dist. LEXIS 148532 (S.D. Fla. 2012).

Opinion

ORDER DENYING TAXATION OF COSTS FOR ELECTRONIC DATABASE

JAMES LAWRENCE KING, District Judge.

THIS MATTER comes before the Court upon Greenspoon Marder P.A.’s Bill of Costs (DE # 547), filed August 8, 2012, and Supplement to Its Request to Recover Costs Related to the Creation and Use of an Electronic Database Under 28 U.S.C. 1920(4) (DE #570), filed September 10, 2012. Therein, Greenspoon Marder, an assignee of Plaintiffs former counsel, recites $8,017.51 in costs that Defendant agreed to be taxed and also argues that it should be permitted to tax Defendants for the $73,764.82 related to creating and maintaining an electronic database that Plaintiffs former counsel used to manage documents it requested from Defendants in the above-styled action. For the reasons discussed below, the Court finds that the motion must be granted as to the agreed upon costs and denied as to costs related to the electronic database.

I. Background

This case has a long and involved procedural history. The original Complaint (DE # 1) was filed as a class action on July 6, 2009 and was dismissed in part, upon Defendants’ motion (DE # 21), on January 4, 2010, 677 F.Supp.2d 1331 (S.D.Fla.2010). (DE # 43). Plaintiffs Amended Complaint (DE # 47), filed February 8, 2010, also was dismissed in part. (DE # 69). Defendants then answered (DE # 75) four of the seven counts in the Amended Complaints,1 after which Plaintiffs moved for class certification. This Court denied class certification (DE # 257) on July 21, 2011, 275 F.R.D. 681 (S.D.Fla. 2011) and by November of that year, all Plaintiffs had been dismissed except Timothy Finnerty.2 The remaining claims were bifurcated so that the first phase would involve a jury trial on the securities fraud claim. See (DE # 390). Following a seven-day trial in May 2012, a jury found Defendants Stiefel Laboratories and Charles Stiefel liable for securities fraud and awarded damages to Finnerty of [1319]*1319$1,502,484.90. See (DE #515). Final judgment was entered July 9, 2012, after which Plaintiffs attorneys sought to recover taxable costs under 28 U.S.C. § 1920.

What followed was “a series of contradictory and highly confusing documents regarding Bills of Costs.” (DE # 566)1 This in part stemmed from the fact that Plaintiff had been represented by Ruden McClosky (“Ruden”) before the firm filed for bankruptcy and assigned its assets to Greenspoon Marder. Thereafter, Green-spoon Marder was not involved in the case. However, in the event that Plaintiff prevailed, Greenspoon Marder held a charging lien against Defendant as an assignee of Plaintiff s former counsel. See (DE # 532).

To simplify the multitude of confusing filings, the Court ordered counsel to confer pursuant to Local Rule 7.3(c). (DE # 566). Two weeks later, on September 5, 2012, counsel filed a Joint Notice of Status Regarding Bills of Costs Filed by Plaintiff and Plaintiffs Former Counsel. (DE # 569). The joint notice indicated that Plaintiffs former counsel and current counsel and Defendants’ counsel had resolved all but one issue in the various Bills of Costs.3 The sole remaining issue was “whether costs incurred by Ruden in creating and maintaining an electronic database are properly taxable as “fees for exemplification” under 28 U.S.C. § 1920(4).” (DE 569, ¶ 3).

Ruden had created the electronic database to manage 76,741 documents containing at least 1,830,477 pages. (Dec. Saulog, DE # 570-1, ¶ 4). To build and populate the database, Ruden hired temporary paralegals and secretaries whose sole job was to input data and code documents by date, name, title, topic, and keywords. The coding made the documents searchable. Id. at (¶¶ 4-7). The database creation and maintenance was overseen by Henry Saulog, then-in-house litigation database analyst for Ruden.4 In his Declaration, Saulog asserts that “[ojther than with this type of database management system, a production of this magnitude of over 1.8 million pages would have been more than untenable to realistically use and would have render their production virtually useless.” Id. at (¶ 6).

, In its supplemental brief now before this Court, Greenspoon Marder, as an assignee of Ruden, addresses both an agreed to amount of $8,017.51 for taxable costs and the outstanding issue of costs related to the electronic database. See (DE # 569). As an initial matter, the Court approves the $8,017.51 taxation of costs, pursuant to the stipulated agreement between Green-spoon Marder and Defendants’ counsel.

The Court now turns to whether Green-spoon Marder may'recover $73,764.82 for costs related to the electronic database.

II. Discussion

The prevailing party may tax costs against the losing party, as governed by 28 U.S.C. § 1920. Taxable costs are distinct from attorneys fees, see Fed. R. Civ. Pro. 54(d), and are limited to the actual costs of litigation. Costs may only be taxed if they fit within one of six categories, including costs for exemplification and making copies. 28 U.S.C. § 1920(4). These are the outer limits of taxable costs. Moreover, Federal Rule of Civil Procedure 54(d) provides the district court with “a power to decline to tax, as costs, the items enumerated in § 1920.” Crawford Fitting Co. v. J.T Gibbons, Inc., 482 U.S. 437, 442, 107 S.Ct. 2494, 96 L.Ed.2d 385 (1987); see also Loughan v. Firestone Tire & Rubber Co., [1320]*1320749 F.2d 1519, 1526 (11th Cir.1985) (“In the exercise of sound discretion, trial courts are accorded great latitude in ascertaining taxable costs.”).

In 2008, Congress amended the text of Section 1920(4) for the first time5 to allow for taxing of “fees for exemplification and the costs of making copies of any materials.” This amendment was based on the increasing prevalence of electronic discovery in federal actions and an understanding that not all legally relevant documents existed in physical form only. See LG Electronics U.S.A., Inc. v. Whirlpool Corp., No. 08-C-0242, 2011 WL 5008425 at *6 n. 1 (N.D.Ill. Oct. 20, 2011); Jardin v. DATAllegro, Inc., No. 08-CV-1462, 2011 WL 4835742, at *5 (S.D.Cal. Oct. 12, 2011). “This amendment to § 1920(4) originated with a recommendation of the Judicial Conference Committee on Court Administration and Case Management.” Race Tires America, Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158, 165 (3d Cir.2012).

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900 F. Supp. 2d 1317, 2012 WL 4933863, 2012 U.S. Dist. LEXIS 148532, Counsel Stack Legal Research, https://law.counselstack.com/opinion/finnerty-v-stiefel-laboratories-inc-flsd-2012.