K7 Design Group, Inc. v. FIVE BELOW, INC.

CourtDistrict Court, E.D. Pennsylvania
DecidedJune 21, 2023
Docket2:21-cv-01406
StatusUnknown

This text of K7 Design Group, Inc. v. FIVE BELOW, INC. (K7 Design Group, Inc. v. FIVE BELOW, INC.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
K7 Design Group, Inc. v. FIVE BELOW, INC., (E.D. Pa. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

K7 DESIGN GROUP, INC. AND K7 CIVIL ACTION DESIGN GROUP, LLC, Plaintiffs,

v. NO. 21-1406 FIVE BELOW, INC., Defendant.

MEMORANDUM OPINION After a vigorously litigated trial concerning a purported agreement to produce hand sanitizer during the COVID-19 pandemic, the parties in this case energetically dispute the amount of costs that can be taxed against the Plaintiffs.1 Following a five-day trial, the jury found in favor of Defendant Five Below, Inc. (“Five Below”) on both counts of the Complaint— breach of contract and promissory estoppel. Judgment was entered in Five Below’s favor, and it subsequently filed a Bill of Costs seeking, pursuant to 28 U.S.C. § 1920, to tax Plaintiffs K7 Design Group, Inc. and K7 Design Group, LLC (collectively, “K7”) for five categories of expenses: service costs; witness costs; transcript costs; copying costs; and trial technician costs. In total, Five Below seeks $65,303.19. For the reasons that follow, Five Below’s Bill of Costs will be granted in part, with the amount taxable to be reduced to $28,665.35. I. LEGAL STANDARD Under the Federal Rules of Civil Procedure, “costs . . . should be allowed to the prevailing party” unless “a federal statute, these rules, or a court order provides otherwise.” Fed. R. Civ. P. 54(d)(1). Rule 54 “creates the ‘strong presumption’ that costs are to be awarded to the

1 “At times, [cost disputes] are mere whimpers, last gasps. At other times, cost disputes embody all the acrimony of hotly contested litigation, sometimes with great nitpicking and pettifogging, refusing to ‘go gently into that good night’ of the closed docket.” In re Matter of Penn Cent. Transp. Co., 630 F.2d 183, 191 (3d Cir. 1980). prevailing party” in “full measure.” In re Paoli R.R. Yard PCB Litig., 221 F.3d 449, 462, 468 (3d Cir. 2000). “[T]he losing party bears the burden of making the showing that an award is inequitable under the circumstances.” Id. at 462-63. “Thus, if a district court, within its discretion, denies or reduces a prevailing party’s award of costs, it must articulate its reasons for

doing so.” Reger v. Nemours Found., Inc., 599 F.3d 285, 288 (3d Cir. 2010). Recoverable costs are outlined in 28 U.S.C. § 1920, which provides: A judge or clerk of any court of the United States may tax as costs the following:

(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. Witnesses are to be paid an attendance fee for each day’s attendance as set forth in 28 U.S.C. § 1821, which also provides for travel expenses and a subsistence allowance when an overnight stay is required. II. DISCUSSION A. Service Costs Five Below seeks to tax $1,445.49 in costs incurred serving non-party subpoenas on the warehouses used by K7—California Distribution Center, High Tech Logistics, and HK Trans LLC—as well as subsequent motions and orders to enforce the subpoena of HK Trans LLC in 2021 and 2022. The subpoenas “sought records related to the shipment, transfer, and billing” of the products at issue in the litigation, information that Five Below argues was necessary to determine whether K7 could establish various elements of its claims.2 One document obtained through these subpoenas was eventually introduced as a trial exhibit. Five Below served these documents through private process servers. “Costs of serving testimonial and document subpoenas on witnesses and third parties may

be recovered” under Section 1920(1) if “the issuance of the subpoena was reasonable and necessary in light of the facts known at the time of service.” Sixth Angel Shepherd Rescue, Inc. v. Bengal, 2013 WL 5309269, at *10 (E.D. Pa. Sept. 23, 2013). However, as Section 1920(1) pertains to “fees of the clerk and the marshal,” courts in this district have limited costs of private process servers to the rate that the United States Marshals Service would have charged to effect service.3 See Kovalev v. Weiss, 2021 WL 1897761, at *6 (E.D. Pa. May 5, 2021), aff’d sub nom. Kovalev v. City of Philadelphia, 2021 WL 4490244 (3d Cir. Oct. 1, 2021); Herbst v. Gen. Accident Ins. Co., 2000 WL 1185517, at *3 (E.D. Pa. Aug. 21, 2000). The Marshals Service fees are “$65 per hour (or portion thereof) for each item served . . . plus travel costs,” 28 C.F.R. § 0.114; travel costs included mileage reimbursement at a rate of

$0.56 per mile in 2021 and $0.585 per mile in 2022. 5 U.S.C. § 5704: (a)(1); POV Mileage Rates (Archived), U.S. Gen. Servs. Admin., https://www.gsa.gov/travel/plan- book/transportation-airfare-pov-etc/privately-owned-vehicle-mileage-rates/pov-mileage-rates- archived (last visited June 16, 2023). Five Below has not provided hourly or mileage rates associated with the service costs it seeks to tax, but rather the un-itemized amounts charged by

2 These elements include whether K7 “could identify goods to the contract,” “was prepared to perform (tender goods identified to the contract),” “incurred any reliance damages,” and “paid storage costs it claimed as part of its damages.” At trial, K7 “abandoned its demand for storage costs”; however, Five Below argues, it was still reasonable and necessary to seek this information at the time it served its subpoenas. 3 Circuit courts are split on whether private process server fees are recoverable under Section 1920. See United States ex rel. Evergreen Pipeline Constr. Co. v. Merrit Meridian Constr. Corp., 95 F.3d 153, 172 (2d Cir. 1996). The Third Circuit has not yet decided the issue. its process server. As K7’s warehouses possessed information that could bear on issues in this litigation, these subpoenas were reasonable and necessary at the time of service, and these service costs—limited to the Marshals Service’s rates—are taxable. Because Five Below provides no hourly or mileage rates, these costs will be capped at the $65 minimum the Marshals

Service would have charged as summarized below: Date Amount Amount Taxable Invoiced 6/30/2021 $185.85 $65.00 $185.85 7/2/2021 $75.00 $65.00 10/29/2021 $11.00 $11.00 11/10/2021 $40.00 $40.00 1/4/2022 $41.75 $65.00 $40.00 3/18/2022 $41.75 $65.00 183.40 183.40 149.34 $41.75 $41.75 5/11/2022 $50.25 $04 6/16/2022 $174.40 $65.00 TOTAL $1,445.49 $376.00 The amount of taxable service fees will therefore be reduced to $376.00. B. Witness Costs K7 objects to two portions of the witness costs claimed by Five Below: meal expenses incurred by fact witness Idalia Farrajota in connection with a deposition appearance, and fees charged by expert witness Jay Kent.

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K7 Design Group, Inc. v. FIVE BELOW, INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/k7-design-group-inc-v-five-below-inc-paed-2023.