NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not citable as precedent. It is a public record.
United States Court of Appeals for the Federal Circuit
05-1483
JON E. KINZENBAW and KINZE MANUFACTURING, INC.,
Plaintiff/Counterclaim Defendants- Appellants,
and
JAMES J. HILL and EMRICH & DITHMAR,
Counterclaim Defendants,
v.
CASE LLC (formerly known as Case Corporation, now known as CNH America LLC) and NEW HOLLAND NORTH AMERICA, INC. (now known as CNH America LLC),
Defendants / Counterclaimants- Appellees.
__________________________
DECIDED: April 26, 2006 __________________________
Before SCHALL, BRYSON, and DYK, Circuit Judges.
SCHALL, Circuit Judge.
DECISION
Jon E. Kinzenbaw and Kinze Manufacturing, Inc. (collectively “Kinze”) appeal
from the order of the United States District Court for the Northern District of Iowa awarding costs to Case LLC and New Holland North America, Inc. (collectively “Case”)
in the amount of $303,826.12. Kinzenbaw v. Case, LLC, No. C01-133-LRR, slip op.
(N.D. Iowa July 14, 2005) (“Costs Decision”). Because we conclude that the district
court erred with respect to some of the costs that it awarded, we affirm-in-part and
reverse-in-part.
DISCUSSION
I.
Kinze sued Case in the Northern District of Iowa alleging infringement of claims
1, 2, 3, 9, and 22 United States Patent No. 4,721,168 (the “‘168 patent”). In its answer,
Case counterclaimed for a declaratory judgment of noninfringement and invalidity with
respect to all five claims. In Kinzenbaw v. Case, LLC, Nos. 05-1269, 05-1270, decided
today, we affirm the district court’s judgments of noninfringement and non-invalidity.
Case filed a Bill of Costs with the Clerk of Court seeking $320,458.49 in costs.
Kinze’s reply challenged almost all of the costs that Case sought to recover. In
response, Case agreed to reduce the amount and type of certain costs, and Case filed
an amended Bill of Costs seeking $309,800.22. Kinze again objected to most of the
costs in the amended Bill of Costs, but the Clerk of Court awarded the costs set forth in
the amended Bill of Costs to Case. Kinze then filed a Motion to Vacate the Clerk of
Court’s taxation of costs. In due course, the district court ruled that Case was entitled to
$303,826.12.1 The following table sets forth the costs allowed by the district court, the
1 The district court reduced the amount of costs for producing copies of exhibits for trial by $5,929.60 because that amount was attributable to the cost of document production, which the court denied as not recoverable under 28 U.S.C. § 1920(4). Costs Decision, slip op. at 10 n.5. The district court also reduced the amount awarded for deposition transcripts by $44.00.
05-1483 2 amount of costs that Kinze does not challenge, and the amount to which we hold Case
is entitled.
Amount Allowed by Amount Not Amount Allowed by Disputed Cost the District Court Disputed by Kinze the Federal Circuit
Fees for Exemplifications and Copies of Papers Trial Consulting Service $156,122.38 $0.00 $0.00 Video of Prior Art $10,892.59 $0.00 $0.00 Renting Prior Art Devices $5,550.00 $0.00 $0.00 Physical Models $86,195.38 $0.00 $0.00 Trial Boards $3,359.50 $0.00 $0.00 Copies of Exhibits $6,924.98 $0.00 $6,924.98 Undisputed costs $10,174.54 $10,174.54 $10,174.54 Exemplification Totals $279,219.37 $10,174.54 $17,099.52
Witness Fees Witness Fees $8,892.75 $2,742.00 $8,892.75
Deposition Transcripts Ingemar Anderson $346.00 $0.00 $346.00 Kregg Raducha $346.00 $0.00 $346.00 John R. Carlson $156.50 $136.50 $136.50 Edward Caulfield $856.80 $777.60 $807.60 Harry Manbeck $232.75 $194.50 $217.00 Dr. Allyn Strickland $742.25 $696.50 $726.50 Harry Deckler (8/18/04) $1,479.00 $944.00 $1,445.00 Creighton Hoffman $1,413.00 $748.00 $1,403.00 Jon O. Nelson $638.50 $372.75 $613.00 Harry Deckler (10/24/03) $597.50 $199.50 $199.50 Jon E. Kinzenbaw $1,386.00 $200.00 $1,380.00 (10/23/03) Undisputed costs $671.60 $671.60 $671.60 Depo Transcript Totals $8,865.902 $4,940.95 $8,291.70
Trial Transcripts Realtime Trial Transcripts $6,828.60 $0.00 $6,828.60
Docket Fee Docket Fee (undisputed) $20.00 $20.00 $20.00
Overall Totals $303,826.12 $17,877.49 $41,132.57
2 It appears that the deposition transcript amounts used by the parties total $0.50 more than the amount taxed by the district court. For simplicity, we will use the deposition transcript amounts provided by Kinze.
05-1483 3 II.
“Although a district court’s award of costs under Federal Rule of Civil Procedure
54(d)(1) is reviewed for abuse of discretion, the court’s discretion is limited to awarding
costs that are within the scope of 28 U.S.C. § 1920.” Summit Tech., Inc. v. Nidek Co.,
435 F.3d 1371, 1374 (Fed. Cir. 2006) (citing Crawford Fitting Co. v. J.T. Gibbons, Inc.,
482 U.S. 437, 445 (1987)). Whether a particular expense is within the scope of section
1920 is subject to de novo review because it is an issue of statutory construction.
Summit Tech., 435 F.3d at 1374. Section 1920 grants the district court the authority to
tax as costs any of the following:
(1) Fees of the clerk and marshal; (2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and copies of papers necessarily obtained for use in the case; (5) Docket fees under [28 U.S.C. § 1923]; ...
As was the case in Summit Technology and Kohus v. Cosco, Inc., 282 F.3d 1355 (Fed.
Cir. 2002), our interpretation of section 1920 is governed by the law of the regional
circuit, which is the Eighth Circuit in this case.
05-1483 4 III.
Kinze asserts on appeal that the district court abused its discretion by awarding
any costs to Case because Case is not a “prevailing party” within the meaning of
Federal Rule of Civil Procedure 54(d)(1).3 Kinze contends that even though it failed in
its claim for patent infringement, because Case also failed in its counterclaim for a
declaration of invalidity of the ‘168 patent, neither party is a “prevailing party.”
The district court was correct to find that Case was the “prevailing party.” In
Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., “Dutailier accused
Brooks of infringing its patent and demanded that Brooks cease producing the accused
chairs.” 393 F.3d 1378, 1381 (Fed. Cir. 2005). Brooks brought a declaratory judgment
action asserting invalidity and noninfringement. Id. The court granted summary
judgment of noninfringement and awarded Brooks attorney’s fees. Id. at 1380. Detailier
argued that Brooks was not a prevailing party because “many of Brooks’ claims were
dismissed by stipulation, and that the Dutailier patent remained valid.” Id.
We explained that “[d]etermination of the prevailing party is based on the relation
of the litigation result to the overall objective of the litigation, and not on a count of the
number of claims and defenses.” Id. (citing Tex. State Teachers Ass’n v. Garland
Indep. School Dist., 489 U.S. 782, 789 (1989) (quoting Hensley v. Eckerhart, 461 U.S.
3 Rule 54(d)(1) provides in relevant part: Costs Other than Attorneys’ Fees. Except when express provision therefor is made either in a statute of the United States or in these rules, costs other than attorneys’ fees shall be allowed as of course to the prevailing party unless the court otherwise directs; . . .
Fed. R. Civ. P. 54(d)(1) (emphasis added).
05-1483 5 424, 433 (1983))). Accordingly, we held that Brooks was the prevailing party. Id. We
reasoned,
Brooks brought this declaratory action to preserve its position, and succeeded in doing so. Brooks raised several defenses to the charge of patent infringement, any of which would have achieved Brooks’ goal. Thus when Brooks established its non-infringement of the Dutailier patent, it prevailed in the litigation. That other defenses, such as invalidity of the patent, were unsuccessful or withdrawn, does not change the outcome in Brooks’ favor.
Id.
Kinze’s objective in bringing this litigation was to obtain a verdict of patent
infringement. It did not obtain that verdict, even though its patent was ruled not invalid.
Case’s objective, however, was to avoid liability, and it achieved exactly that.
Employing the functional analysis described in Brooks Furniture, we hold that Case was
the “prevailing party” within the meaning of Rule 54(d)(1). We turn now to the various
costs at issue.
IV.
As seen from the table above, $279,219.37 of the costs allowed by the district
court arose from fees asserted for exemplifications and from copying costs, with the
largest of the allowed costs being for exemplifications. Section 1920(4) permits costs to
be awarded for “[f]ees for exemplification and copies of papers necessarily obtained for
use in the case.”
There exists a circuit split concerning the meaning of the word “exemplification,”
as used in section 1920(4). As we explained in Summit Technology, the Seventh
Circuit “has adopted a broad[ ] definition of exemplification, taken from standard English
language dictionaries.” 435 F.3d at 1377 (citing Cefalu v. Vill. of Elk Grove, 211 F.3d
05-1483 6 416, 427 (7th Cir. 2000) (interpreting “exemplification” to “signif[y] the act of illustration
by example, a connotation broad enough to include a wide variety of exhibits and
demonstrative aids”); Schering Corp. v. Amgen, Inc., 198 F.R.D. 422, 428 (D. Del.
2001) (holding that, in considering whether a video exhibit is taxable under section
1920(4), “the standard the court will apply to direct its discretion is whether the video
materially aided [the judge’s] understanding of the technological issues in the case”)).
Other circuits, however, employ the “narrow” definition of “exemplification” that is
set forth in Black’s Law Dictionary, which defines exemplification as “[a]n official
transcript of a public record, authenticated as a true copy for use as evidence.” Summit
Tech., 435 F.3d at 1375 (citing Kohus, 282 F.3d at 1355 (quoting Black’s Law Dictionary
593 (7th ed. 1999))). For example, the Eleventh Circuit explained in Arcadian Fertilizer,
L.P. v. MPW Industrial Services, Inc., 249 F.3d 1293, 1296-97 (11th Cir. 2001), that
“[b]ecause the videotape exhibits and the computer animation are neither copies of
paper nor exemplifications within the meaning of § 1920(4), . . . taxing these costs was
error.” The Fifth Circuit followed a similar approached in Coats v. Penrod Drilling Corp.,
5 F.3d 877, 891 (5th Cir. 1993), where the court reviewed a request for recovery of
travel expenses and enlargements related to trial exhibits and held that “these expenses
[we]re not included in § 1920 and therefore are not recoverable.”
When Summit Technology and Kohus were decided, neither the First Circuit nor
the Sixth Circuit had resolved the issue of whether to follow the narrow or broad
interpretation of “exemplification.” Consequently, in each case, the Federal Circuit had
to decide how that regional circuit would likely resolve the issue. Summit Tech., 435
F.3d at 1375. In Kohus, we held that the Sixth Circuit’s decision in Swan Carburetor
05-1483 7 Co. v. Chrysler Corp., 149 F.2d 476 (6th Cir. 1945), supported a narrow interpretation of
the statute with respect to trial exhibits. We therefore determined that the Sixth Circuit
would likely follow the definition in Black’s Law Dictionary and exclude video animations
from the scope of section 1920(4). 282 F.3d at 1359-61. We reached a similar
conclusion in Summit Technology, in which we held that the First Circuit would likely
also follow the narrow interpretation of “exemplification.” 435 F.3d at 1377-78.
Accordingly, we disallowed fees paid to a consulting company that assisted the
prevailing party “in preparing trial exhibits, including computer animations, videos,
Powerpoint presentations, and graphic illustrations.” Id. at 1374-75.
Counsel has not brought to our attention, and we have been unable to find, a
decision suggesting whether the Eighth Circuit would follow the broad or narrow
interpretation of “exemplification.” Under these circumstances, we conclude that
Summit Technology counsels in favor of following the narrow approach in this case.
Summit Technology quoted approvingly from Moore’s Federal Practice for the
proposition that “a video exhibit or a physical model may not qualify as an
‘exemplification’ if it is essentially explanatory and argumentative, serving merely as an
aid to the argument of counsel and the explanations of expert witnesses.” 435 F.3d at
1377.
Summit Technology also addressed how transcripts and the services
surrounding their production should be treated under section 1920(2). Id. at 1380-81.
The court explained that under First Circuit law, “if depositions are either introduced in
evidence or used at trial, their costs should be taxable to the losing party.” 435 F.3d at
1380 (citing Templeman v. Chris Craft Corp., 770 F.2d 245, 249 (1st Cir. 1985)).
05-1483 8 However, “convenience services, such as expedited transcripts and video services,
[are] not within the scope of section 1920(2). See, e.g., Paul N. Howard Co. v. P.R.
Aqueduct & Sewer Auth., 110 F.R.D. 78, 81 (D.P.R. 1986) (citing cases from various
circuit and district courts).” Id. This approach is not inconsistent with the Eighth
Circuit’s approach. See Smith v. Tenet Healthsystem SL, Inc., 436 F.3d 879, 889 (8th
Cir. 2006) (“Even if a deposition is not introduced at trial, a district court has discretion
to award costs if the deposition was necessarily obtained for use in a case and was not
‘purely investigative.’”) (internal quotation marks omitted); see also Slagenweit v.
Slagenweit, 63 F.3d 719, 721 (8th Cir. 1995) (upholding the district court’s taxing of
costs under section 1920(2) with respect to a deposition transcript that was not
introduced at trial because it was “not shown that the deposition was purely
investigative” or that the transcript was obtained “for reasons other than trial
preparation”); McDowell v. Safeway Stores, Inc., 758 F.2d 1293, 1294 (8th Cir. 1985)
(“Before awarding such costs, the court should determine that transcripts were not
obtained primarily for the convenience of parties but were necessary for use in the
case.”).
Applying the narrow interpretation of “exemplification,” the award of costs in the
amount of $156,122.38 that Case paid a trial consulting service, Trial Graphix, Inc., to
prepare, manage, and present exhibits and graphics presentations at trial is reversed.
These services are similar to the costs rejected in Summit Technology, where a
consulting firm “assisted Nidek’s counsel in preparing trial exhibits, including computer
animations, videos, Powerpoint presentations, and graphic illustrations.” 435 F.3d at
05-1483 9 1375. This cost seems to be far outside the scope of “[a]n official transcript of a public
record, authenticated as a true copy for use as evidence.” Id.
We also reverse the award of costs for demonstrative videos ($10,892.59) and
the costs for renting and transporting two prior art machines that were the subject of the
demonstrative videos ($5,550.00). Video production costs were consistently excluded
in the cases discussed above, and the actual machines are even more removed. See,
e.g., Arcadian Fertilizer, 249 F.3d at 1296-97 (“Because the videotape exhibits and the
computer animation are neither copies of paper nor exemplifications within the meaning
of § 1920(4), . . . taxing these costs was error.”); Summit Tech., 435 F.3d at 1375. The
demonstrative physical models ($86,195.38) and trial boards ($3,359.50) seem to be
functionally similar to video presentations and animation. Although these models of the
planters at issue, charts, photographs, illustrations, and similar graphic aids were likely
of significant importance to the judge and jury, videos and animation can be equally
important. Because physical models and trial boards do not seem to plausibly fit within
the narrow definition of “exemplification” as “[a]n official transcript of a public record,
authenticated as a true copy for use as evidence,” id., the award of these costs too is
reversed.
Kinze also challenges the taxing of $6,924.98 for copying of trial exhibits. While
Kinze acknowledges that photocopying charges of this nature are not excluded by case
law or statute, Kinze argues that Case’s Bill of Costs failed to sufficiently describe the
nature or use of the photocopied documents. Kinze reasoned that without sufficient
information, the court could not have distinguished copies “necessarily obtained” for use
in the case from other copies. See In re San Juan DuPont Plaza Hotel Fire Litig., 142
05-1483 10 F.R.D. 41, 47 (D.P.R. 1992) (“Although it is clear that there are instances where
photocopying charges are properly taxable, defendant has failed to provide sufficient
detail of this cost in its filing for a factual determination to be made, thereby, warranting
outright denial of reimbursement for these costs.”). Case responds by pointing to the
invoices in the record. Given that these types of costs are within the scope of section
1920(4), we review the district court’s award of these costs for abuse of discretion.
Summit Tech., 435 F.3d at 1374. Because the documentation seems to be reasonably
consistent with documentation ordinarily accompanying a commercial photocopying
order, we think the district court acted within its discretion by allowing these costs.
Of the $8,892.75 taxed by the district court for witness fees, Kinze challenges
$6,150.75, which corresponds to all witness travel expenses. Similar to its challenge of
the costs for the copying of trial exhibits, Kinze attacked the sufficiency of Case’s
documentation for such expenses, as opposed to the legal permissibility of such costs
under section 1920(3). For its part, Case asserts that the invoices provided constitute
sufficient “evidence of actual costs” under 28 U.S.C. § 1821(c)(1).4 We agree. After
reviewing the documentation provided by Case, we hold that the district court acted
within its discretion in awarding Case the amount of these disputed travel expenses.
4 28 U.S.C. § 1821(c)(1) provides:
A witness who travels by common carrier shall be paid for the actual expenses of travel on the basis of the means of transportation reasonably utilized and the distance necessarily traveled to and from such witness’s residence by the shortest practical route in going to and returning from the place of attendance. Such a witness shall utilize a common carrier at the most economical rate reasonably available. A receipt or other evidence of actual cost shall be furnished.
(emphasis added).
05-1483 11 Of the $8,865.40 taxed by the district court related to deposition transcripts,
Kinze asserts that $3,924.45 was improperly taxed. Concerning the fees associated
with the deposition transcripts of Ingemar Anderson ($346.00) and Kregg Raducha
($346.00), Kinze argues that these costs were either delivery fees or convenience fees
associated with expedited delivery. We hold that the district court did not abuse its
discretion in finding such charges did not comprise delivery fees or convenience fees,
but were instead permissible under section 1920(2) as “[f]ees of the court reporter for all
or any part of the stenographic transcript necessarily obtained for use in the case.”
Of the $156.50 taxed by the district court concerning the deposition of Jon R.
Carlson, Kinze asserts that $20 corresponded to an expedited delivery fee. Because
we find that Kinze is correct, we reduce the amount allowed for this deposition to
$136.50. With respect to the costs associated with the depositions of Edward Caulfield
($856.80), Harry Manbeck ($232.75), and Dr. Allyn Strickland ($742.25), Kinze asserts
that the district court abused its discretion by including delivery fees and administrative
fees within each cost taxed. After reviewing the record, the delivery fees are reversed,
but not the administrative fees. Accordingly, Case may recover $807.60 associated
with the deposition of Mr. Caulfield, $217.00 for Mr. Manbeck’s deposition, and $726.50
for Dr. Strickland’s deposition. As far as the costs associated with the deposition of
Harry Deckler on August 18, 2004 ($1,479.00), Creighton Hoffman ($1,413.00), and Jon
O. Nelson ($638.50) are concerned, we find that these amounts include the cost of only
one transcript copy, as opposed to two copies, as argued by Kinze. However, while
Case is entitled to administrative fees, it is not entitled to delivery fees. Accordingly,
Case may recover $1,445.00 associated with the deposition of Mr. Deckler on August
05-1483 12 18, 2004, $1,403.00 for Mr. Hoffman’s deposition, and $613.00 for Mr. Nelson’s
deposition.
After reviewing the costs associated with Mr. Deckler’s October 24, 2003
deposition, for which the district court taxed $597.50, we reduce the taxed amount to
$199.50 because the district court did not specifically find that the realtime services
were necessary. However, because the court concluded that the realtime transcript
was necessary in the case of Mr. Kinzenbaw’s October 23, 2003 deposition, for which it
taxed $1,386.00, we uphold the taxed amount with the exception of $6.00, which was
attributable to postage charges. Thus, Case is entitled to receive $1,380.00 for this
deposition. Likewise, because the district court found that realtime trial transcription
was necessary, we uphold the district court’s tax of $6,828.60 for this service.
For the foregoing reasons, we reduce the amount of costs taxed against Kinze
from $303,826.62 to $41,132.57. We thus affirm-in-part and reverse-in-part.
Each party shall bear its own costs.
05-1483 13