Gradmann & Holler Gmbh v. Continental Lines, S.A., Gradmann & Holler Gmbh v. Continental Lines, S.A.

679 F.2d 272, 34 Fed. R. Serv. 2d 301, 1982 U.S. App. LEXIS 18879, 1983 A.M.C. 288
CourtCourt of Appeals for the First Circuit
DecidedMay 27, 1982
Docket80-1648, 80-1787
StatusPublished
Cited by30 cases

This text of 679 F.2d 272 (Gradmann & Holler Gmbh v. Continental Lines, S.A., Gradmann & Holler Gmbh v. Continental Lines, S.A.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gradmann & Holler Gmbh v. Continental Lines, S.A., Gradmann & Holler Gmbh v. Continental Lines, S.A., 679 F.2d 272, 34 Fed. R. Serv. 2d 301, 1982 U.S. App. LEXIS 18879, 1983 A.M.C. 288 (1st Cir. 1982).

Opinion

COFFIN, Chief Judge.

This appeal arises from two consolidated admiralty actions filed by appellants in the District Court for the District of Puerto Rico against two foreign marine carriers. Appellants sought to recover under the Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq., for wire damaged en route to Puerto Rico from Antwerp, Belgium, and Osawa, Japan. As the litigation progressed, it became apparent that the costs would be high. Appellees informed the court that their attorneys had already had to make a five-day trip to Europe to prepare for trial, and appellants said they would be bringing witnesses from Europe, Canada, and South America. Accordingly, on August 3, 1979, the court ordered that the prevailing party would recover the extraordinary costs incurred in the preparation or defense of the case. It also noted that the question of attorneys’ fees would be left until after the trial, when the court could determine whether either side had performed with contumacy or temerity. Neither party objected to the order. After trial the court dismissed the case and awarded $39,114.59 in costs and $32,865.00 in attorneys’ fees against appellants. Appellants challenge that award on appeal.

Attorneys’ Fees

The court awarded attorneys’ fees against appellants because it found “obstinacy, contumacy and temerity in the handling of this litigation”. Appellees concede that the local Puerto Rican rule allowing the award of fees for obstinacy is not applicable to an admiralty case. See Stephenson v. StarKist Caribe, Inc., 598 F.2d 676, 681-82 (1st Cir. 1977); American Union Transport Co. v. Aguadilla Terminal, Inc., 302 F.2d 394, 396 (1st Cir. 1962). They also agree that the general American rule allows for the award of attorneys’ fees primarily when specifically authorized by stat *274 ute, authorization that they acknowledge does not exist in this instance. See Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 257, 95 S.Ct. 1612, 1621, 44 L.Ed.2d 141 (1975); American Union Transport Co. v. Aguadilla Terminal, Inc., supra, 302 F.2d at 396.

Rather, appellees argue that the trial court’s award of fees was proper either because the general American rule against awards should be overruled or because the award was within the court’s equitable power. On the former point, we find no reason to disregard the general rule recognized by the Supreme Court, Alyeska Pipeline Co. v. Wilderness Society, supra, 421 U.S. at 257, 95 S.Ct. at 1621, and applied by other circuits to suits brought under the Carriage of Goods by Sea Act, as was this case, see Noritake Co., Inc. v. M/V Hellenic Champion, 627 F.2d 724, 730 (5th Cir. 1980); Dempsey & Associates, Inc. v. S.S. Sea Star, 500 F.2d 409, 411 (2d Cir. 1974).

On the latter point, we acknowledge that a court has inherent power in an admiralty suit to assess attorneys’ fees when a party has “acted in bad faith, vexatiously, wantonly, or for oppressive reasons”. F.D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U.S. 116, 129, 94 S.Ct. 2157, 2165, 40 L.Ed.2d 703 (1974). Nothing in appellees’ brief, however, convinces us that an exercise of the court’s equitable power was appropriate in this instance. Although the judge found that appellants had performed with obstinacy, contumacy and temerity, his finding consists of a reference to the appellees’ discussion of these points in a brief filed in the district court. Having read that brief, we do not believe that it sets out with sufficient specificity conduct that would fall within the Rich description. We are unwilling to allow a departure from the traditional American rule on the facts of this case without more detailed explanation of the reasons justifying that departure by the trial judge.

We do not find determinative the fact that appellants did not object when the judge mentioned before trial that he would consider the appropriateness of an award for contumacy at the close of the trial. The mere mention of the possibility does not require an objection. Moreover, appellants did object when appellees submitted their petition for reimbursement of fees. Accordingly, we vacate the district court’s order taxing attorneys’ fees against appellants in the amount of $32,865.00.

Extraordinary Costs

Appellants also challenge the award of $39,114.59 for extraordinary costs, an amount representing the total of the costs incurred when appellees’ attorneys made a trip to Europe in preparation for the trial, deposition and transcript expenses, fees and travel expenses for expert witnesses brought from Europe, and other costs such as telex communication charges, and international telephone, postage, and investigation charges. Appellants argue that the award of costs should be limited to those costs taxable under 28 U.S.C. § 1920, such as fees for the clerk, marshal, and court reporter, limited disbursements for printing and witnesses, the cost of copying necessary papers and docket fees. They also argue that the court’s August 3 order is not determinative because it was not based upon a specific determination of the necessity of the extraordinary costs of bringing expert witnesses to trial.

Ordinarily the taxation of costs would be limited to those ordinary costs authorized by § 1920. Extraordinary costs may be allowed, however, when specifically approved by the court prior to trial. See Euler v. Waller, 295 F.2d 765, 767 (10th Cir. 1961); Pizarro-de-Ramirez v. Grecomar Shipping Agency, 82 F.R.D. 327, 330 (D.P.R. 1976); Wade v. Mississippi Cooperative Extension Service, 64 F.R.D. 102, 105 (N.D.Miss.1974). In this instance the court in its August 3 order approved “extraordinary costs in the sense that the prevailing party to this litigation shall recover all extraordinary costs incurred in the prosecution or defense of this matter as the case may be, including, but not limited to, airfare of at *275 torneys, airfare of witnesses and/or experts to be called at trial and who live in other jurisdictions, as well as the fees that these witnesses will earn as a result of their engagement.”

Although a court would normally authorize extraordinary costs only upon a more detailed review of the anticipated expenditures and assessment of the necessity of each then occurred here, see Euler v. Waller, supra,

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679 F.2d 272, 34 Fed. R. Serv. 2d 301, 1982 U.S. App. LEXIS 18879, 1983 A.M.C. 288, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gradmann-holler-gmbh-v-continental-lines-sa-gradmann-holler-gmbh-ca1-1982.