FILED United States Court of Appeals PUBLISH Tenth Circuit
May 4, 2020 UNITED STATES COURT OF APPEALS Christopher M. Wolpert Clerk of Court FOR THE TENTH CIRCUIT _________________________________
STEVEN A. STENDER; INFINITY CLARK STREET OPERATING, LLC, on behalf of themselves and all others similarly situated,
Plaintiffs - Appellants,
and
HAROLD SILVER,
Plaintiff, No. 18-1432
v.
ARCHSTONE-SMITH OPERATING TRUST; ARCHSTONE-SMITH TRUST; ERNEST A. GERARDI, JR.; RUTH ANN M. GILLIS; NED S. HOLMES; ROBERT P. KOGOD; JAMES H. POLK, III; JOHN C. SCHWEITZER; R. SCOT SELLERS; ROBERT H. SMITH; STEPHEN R. DEMERITT; CHARLES MUELLER, JR.; CAROLINE BROWER; MARK SCHUMACHER; ALFRED G. NEELY; LEHMAN BROTHERS HOLDINGS, INC.; TISHMAN SPEYER DEVELOPMENT CORPORATION; RIVER HOLDING, LP; RIVER TRUST ACQUISITION (MD), LLC; RIVER ACQUISITION (MD), LP; ARCHSTONE- SMITH MULTIFAMILY SERIES I TRUST; ARCHSTONE, INC.; AVALONBAY COMMUNITIES, INC.; ARCHSTONE ENTERPRISE, LP; ERP OPERATING LIMITED PARTNERSHIP; EQUITY RESIDENTIAL,
Defendants - Appellees. _________________________________
Appeal from the United States District Court for the District of Colorado (D.C. No. 1:07-CV-02503-WJM-MJW) _________________________________
Daniel Townsend, Gupta Wessler PLLC, Washington, D.C. (Mathew W.H. Wessler, Gupta Wessler PLLC, Washington, D.C., and Kenneth A. Wexler and Kara A. Elgersma, Wexler Wallace LLP, Chicago, Illinois, and Lee Squitieri, Squitieri & Fearon, LLP, New York, New York, with him on the briefs), for Plaintiffs-Appellants.
Adam B. Banks, Weil, Gotshal & Manges LLP, New York, New York (Jonathan D. Polkes, Caroline Hickey Zalka, and Justin D. D’Aloia, Weil, Gotshal & Manges LLP, New York, New York, and Frederick J. Baumann and Alex C. Myers, Lewis Roca Rothgerber Christie LLP, Denver, Colorado, with him on the brief) for Defendants- Appellees. _________________________________
Before HARTZ, SEYMOUR, and MATHESON, Circuit Judges. _________________________________
HARTZ, Circuit Judge. _________________________________
This appeal presents the question whether a federal district court exercising
diversity jurisdiction can award costs under a generally applicable state law when those
costs are prohibited by Federal Rule of Civil Procedure 54(d). The district court used a
Colorado statute governing costs to award more than $230,000 in costs that would not be
allowable under Rule 54(d). Exercising jurisdiction under 28 U.S.C. § 1291, we vacate
the costs award and remand for recomputation. The Supreme Court majority in Shady
Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393, 399 (2010),
2 held that a valid Federal Rule of Civil Procedure governs over a state procedural rule if
the two rules “answer the same question.” Because Rule 54(d) answers the same
question as the Colorado statute, and Rule 54(d) is not “ultra vires” (that is, applying it
does not exceed statutory authorization or Congress’s rulemaking power), there was no
role left for the Colorado law. Id.
I. BACKGROUND
Disappointed with the outcome of a merger, minority-shareholder Plaintiffs
brought a class action against Defendants for breach of contract and fiduciary duties. The
parties litigated their dispute for over ten years across proceedings in arbitration and
federal court. In the end the district court granted summary judgment in Defendants’
favor, and this court affirmed. See Stender v. Archstone-Smith Operating Trust, 910 F.3d
1107, 1117 (10th Cir. 2018). Defendants then moved for costs under Rule 54(d). The
district court awarded costs totaling $479,666.22, which included $230,250.01 in costs
for electronic legal research and for attorney travel and lodging under a state cost-shifting
statute.
II. DISCUSSION
Our analysis begins with a description of federal and Colorado law on costs. Next,
we review the law governing when a Federal Rule of Procedure prevails over state law in
diversity cases, and apply it to the present dispute. Finally, we address preservation.
3 A. Federal Law on Costs
Rule 54(d) provides that “costs—other than attorney’s fees—should be allowed to
the prevailing party.” 1 Fed. R. Civ. P. 54(d)(1). The language appears open-ended. But
relying on the history behind the provision, the Supreme Court has placed strict limits on
what can be awarded.
In the Founding era congressional legislation permitted costs to prevailing parties
provided by state law. See Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 564 (2012).
Although that statute expired in 1799, “the practice of referring to state rules for the
taxation of costs persisted” for half a century. Id. at 565. But two problems led Congress
in 1853 to “standardize the costs allowable in federal litigation”: (1) the “great diversity
in practice among the courts,” and (2) the “exorbitant fees” that had been imposed on
losing litigants. Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 251
(1975). In relevant part, the 1853 statute said “[t]hat in lieu of the compensation now
allowed by law to attorneys, solicitors, and witnesses in the several States, the following
and no other compensation shall be taxed and allowed.” Crawford Fitting Co. v. J.T.
Gibbons, Inc., 482 U.S. 437, 440 (1987) (emphasis added, ellipsis and internal quotation
1 Rule 54(d)(1) provides in full:
Unless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party. But costs against the United States, its officers, and its agencies may be imposed only to the extent allowed by law. The clerk may tax costs on 14 days’ notice. On motion served within the next 7 days, the court may review the clerk’s action.
4 marks omitted). The statute “specif[ied] in detail the nature and amount of the taxable
items of cost in the federal courts,” Alyeska Pipeline, 421 U.S. at 252, thereby
“comprehensively regulat[ing] fees and the taxation of fees as costs in the federal courts,”
Crawford Fitting, 482 U.S. at 440. The “substance of this Act was transmitted” through
various statutory recodifications and is now codified as 28 U.S.C. § 1920, “without any
apparent intent to change the controlling rules.” Taniguchi, 566 U.S. at 565 (internal
quotation marks omitted). Today, § 1920 enumerates six categories of costs that may be
taxed: (1) clerk and marshal fees, (2) fees for “recorded transcripts necessarily obtained
for use in the case,” (3) expenses for printing and witnesses, (4) expenses for
exemplification and necessary copies, (5) docket fees, and (6) compensation of
interpreters and court-appointed experts. 28 U.S.C. § 1920; see Taniguchi, 566 U.S. at
573 (“[T]axable costs are limited by statute and are modest in scope . . . .”).
Most importantly, the Supreme Court has construed Rule 54(d) to be limited by
§ 1920. As it held in Crawford Fitting, “§ 1920 defines the term ‘costs’ as used in Rule
54(d).” 482 U.S. at 441 (emphasis added). The discretion provided by Rule 54(d) is
“solely a power to decline to tax, as costs, the items enumerated in § 1920.” Id. at 442.
The Court explained: “If Rule 54(d) grants courts discretion to tax whatever costs may
seem appropriate, then § 1920, which enumerates the costs that may be taxed, serves no
role whatsoever.” Id.; see 10 James Wm. Moore et al., Moore’s Federal Practice
§ 54.103 at 185–86 (3d. ed. 2011) (“The Crawford Fitting rule that only those costs
expressly allowed by statute may be awarded under Rule 54(d)(1) implicitly rejected a
line of authority recognizing other possible sources for an award of costs, including local
5 rules, the custom of the district, and the court’s general equitable powers.”). Crawford
concluded: “Any argument that a federal court is empowered to exceed the limitations
explicitly set out in [28 U.S.C.] §§ 1920 and 1821 [setting limits on witness fees] without
plain evidence of congressional intent to supersede those sections ignores our
longstanding practice of construing statutes in pari materia.” 482 U.S. at 445. Thus, it
held “that absent explicit statutory or contractual authorization for the taxation of the
expenses of a litigant’s witness as costs, federal courts are bound by the limitations set
out in 28 U.S.C. § 1821 and § 1920.” Id. Within the last decade the Supreme Court has
reaffirmed its rejection of “the view that the discretion granted by Rule 54(d) is a separate
source of power to tax as costs expenses not enumerated in § 1920.” Taniguchi, 566 U.S.
at 565 (internal quotation marks omitted). These cases make it crystal clear that Rule
54(d)(1) would not permit the award of costs for electronic legal research or for attorney
travel and lodging.
B. Colorado Law on Costs
Colorado law is much more generous in awarding costs, although the letter of the
law does not appear to be that different from federal law. Colorado Revised Statutes
§§ 13-16-104 and –105 allow recovery of costs by plaintiffs and defendants respectively. 2
2 Section 13-16-104, entitled “When plaintiff recovers costs,” states in full:
If any person sues in any court of this state in any action, real, personal, or mixed, or upon any statute for any offense or wrong immediately personal to the plaintiff and recovers any debt or damages in such action, then the plaintiff or demandant shall have judgment to recover against the defendant 6 And Colorado Revised Statute § 13-16-122 provides a limited list of appropriate costs
that a state court “may include.” See also Colo. R. Civ. P. 54(d) (“Except when express
provision therefor is made either in a statute of this state or in these rules, reasonable
costs shall be allowed as of course to the prevailing party considering any relevant factors
which may include the needs and complexity of the case and the amount in
controversy.”). But unlike the United States Supreme Court, the Colorado Supreme
Court has treated the list of costs in its statute, § 13-16-122, as merely “illustrative rather
than exclusive.” Cherry Creek Sch. Dist. No. 5 v. Voelker, 859 P.2d 805, 813 (Colo.
1993). In Colorado, “absent a specific prohibition, the trial court has discretion over the
awarding of costs.” Id. (internal quotation marks omitted); accord Roget v. Grand
Pontiac, Inc., 5 P.3d 341, 348 (Colo. App. 1999) (“Absent a specific prohibition in the
statute, a trial court has the discretion to award any reasonable costs requested.”). The
his costs to be taxed; and the same shall be recovered, together with the debt or damages, by execution, except in the cases mentioned in this article.
Section 13-16-105, entitled “When defendant recovers costs,” states in full:
If any person sues in any court of record in this state in any action wherein the plaintiff or demandant might have costs in case judgment is given for him and he is nonprossed, suffers a discontinuance, is nonsuited after appearance of the defendant, or a verdict is passed against him, then the defendant shall have judgment to recover his costs against the plaintiff, except against executors or administrators prosecuting in the right of their testator or intestate, or demandant, to be taxed; and the same shall be recovered of the plaintiff or demandant, by like process as the plaintiff or demandant might have had against the defendant, in case judgment has been given for the plaintiff or demandant. 7 district court relied on Colorado precedent to award costs for electronic legal research
and attorney travel and lodging—none of which is listed in § 13-16-122. See Cherry
Creek, 859 P.2d at 813–14 (expenses of taking discovery depositions); Valentine v.
Mountain States Mut. Cas. Co., 252 P.3d 1182, 1193–94 (Colo. App. 2011) (travel for
depositions and meetings with experts and clients); Roget, 5 P.3d at 348–49
(computerized legal research).
C. Does Rule 54(d) Govern? / Shady Grove
Given that some costs permitted under Colorado law are not permitted under Rule
54(d), we must ask whether they are nonetheless permissible in a diversity case. Much of
the answer can be found in the opinion in Shady Grove.
At issue in Shady Grove was the applicability of a New York law limiting class
actions. A number of consumer-protection statutes provide a minimum penalty that can
be awarded to a consumer who was the victim of a violation. In a class action against a
violator, the total penalty could be immense. (A minimum penalty of $500 per consumer
for a class of 10,000 would total $5 million.) To avoid this result, New York enacted a
statute prohibiting class actions seeking statutory penalties. The effect of this statute in
federal court came into question when Shady Grove Orthopedic Associates, P. A.,
brought a putative class action against Allstate Insurance Co. in federal court under
diversity jurisdiction for failure to pay statutory interest penalties under a state insurance
law. See 559 U.S. at 397. The district court and the circuit court applied the state class-
action law and held that the suit could not proceed as a class action. Id. at 397–98. The
8 Supreme Court reversed, holding that Federal Rule of Civil Procedure 23 permitted the
class action despite the state law.
There were three opinions. Four Justices dissented. Justice Scalia wrote an
opinion joined in full by three Justices. Justice Stevens joined part of Justice Scalia’s
opinion (making that part a majority opinion) and wrote a separate concurring opinion.
The majority opinion set forth the framework for resolving the issue: a Federal Rule
governs over state law (1) when it “answer[s] the same question” as the state law, and (2)
it is not “ultra vires.” Id. at 399.
The majority opinion addressed the first step of the framework in a straightforward
fashion. “The question in dispute is whether Shady Grove’s suit may proceed as a class
action. Rule 23 provides an answer.” Id. at 398. It explained, “[The Rule] states that ‘a
class action may be maintained’ if two conditions are met: The suit must satisfy the
criteria set forth in subdivision (a) (i.e., numerosity, commonality, typicality, and
adequacy of representation), and it also must fit into one of the three categories described
in subdivision (b).” Id. at 398 (brackets and citation omitted). Thus, the Rule was
definitive: “By its terms this creates a categorical rule entitling a plaintiff whose suit
meets the specified criteria to pursue his claim as a class action.” Id.
The Court rejected the circuit court’s view that the state law and Rule 23 “do not
conflict because they address different issues.” Id. at 399. The circuit court said that
Rule 23 concerns the criteria for determining whether the class should be certified,
whereas the state statute “addresses an antecedent question: whether the particular type of
claim is eligible for class treatment in the first place.” Id. The Court provided an
9 explanation (which we need not repeat) of why it thought that “the line between
eligibility and certifiability is entirely artificial.” Id. But its rejection of the circuit
court’s analysis was more fundamental: “There is no reason, in any event, to read Rule
23 as addressing only whether claims made eligible for class treatment by some other law
should be certified as class actions.” Id. It continued: “Allstate asserts that Rule 23
neither explicitly or implicitly empowers a federal court to certify a class in each and
every case where the Rule’s criteria are met. But that is exactly what Rule 23 does.” Id.
(internal quotation marks omitted).
Allstate pointed out that the New York statute barring penalty class actions had
another subsection establishing certification criteria similar to those in Rule 23, and it
argued that this demonstrated that the provision at issue “concerns a separate subject”
from certification criteria. Id. at 400. The Court was unpersuaded. “[T]he question
before us,” it said, “is whether [the state statute] concerns a subject separate from the
subject of Rule 23.” Id. (emphasis added). The answer was easy: “Rule 23 permits all
class actions that meet its requirements, and a State cannot limit that permission by
structuring one part of its statute to track Rule 23 and enacting another part that imposes
additional requirements.” Id. at 401. The essential point was that “[b]oth of [the New
York statute’s] subsections undeniably answer the same question as Rule 23: whether a
class action may proceed for a given suit.” Id. (emphasis added).
The majority opinion also rejected the dissent’s arguments that the state statute
and Rule 23 could be reconciled by interpreting Rule 23 to avoid the conflict. See id. at
437 (Ginsburg, J., dissenting); id. at 446–47 (Rule 23 “does not command that a
10 particular remedy be available when a party sues in a representative capacity”; it “allows
state law to control the size of a monetary award a class plaintiff may pursue”). The
majority opinion responded, “We cannot contort [Rule 23’s] text, even to avert a collision
with state law that might render it invalid.” Id. at 406 (majority opinion). Conflict could
not be avoided because “Rule 23 unambiguously authorizes any plaintiff, in any federal
civil proceeding, to maintain a class action if the Rule’s prerequisites are met.” Id.
Writing for a plurality of four Justices, Justice Scalia then proceeded to address
whether Rule 23 was constitutional and within the authority granted by the Rules
Enabling Act, 28 U.S.C. § 2072. On the constitutional issue he wrote that “Congress has
undoubted power to supplant state law, and undoubted power to prescribe rules for the
courts it has created, so long as those rules regulate matters rationally capable of
classification as procedure.” Id. (plurality opinion of Scalia, J.) (internal quotation marks
omitted). Under this power Congress enacted the Rules Enabling Act. The pertinent
limitation on those rules is stated in subsection (b) of the Act: “Such rules shall not
abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072(b). Noting that the
Supreme Court had “rejected every statutory challenge to a Federal Rule that has come
before us,” Justice Scalia said that the Court had “long held that this limitation means that
the Rule must ‘really regulat[e] procedure,—the judicial process for enforcing rights and
duties recognized by substantive law and for justly administering remedy and redress for
disregard or infraction of them.’” Shady Grove, 559 U.S. at 407 (plurality opinion of
Scalia, J.) (quoting Sibbach v. Wilson & Co., 312 U.S. 1, 14 (1941)). “The test is not
whether the rule affects a litigant’s substantive rights; most procedural rules do. What
11 matters is what the rule itself regulates: If it governs only the manner and the means by
which the litigants’ rights are enforced, it is valid; if it alters the rules of decision by
which the court will adjudicate those rights, it is not.” Id. (citation, brackets, and internal
quotation marks omitted).
The dissent did not question or otherwise address the validity of Rule 23. But
Justice Stevens’s concurrence departed from the plurality on this point, rejecting its
approach to determining validity. He viewed the plurality’s approach of looking only to
the Federal Rule itself as inconsistent with the text of the Rules Enabling Act. See id. at
424–25 (Stevens, J., concurring). To give teeth to the requirement that Federal Rules not
“abridge, enlarge or modify any substantive right,” 28 U.S.C. § 2072(b), Justice
Stevens’s analysis would “turn[] on whether the state law actually is part of a State’s
framework of substantive rights or remedies,” Shady Grove, 559 U.S. at 419 (Stevens, J.,
concurring). He would decline to apply a Federal Rule to the extent that it “would
displace a state law that is procedural in the ordinary use of the term but is so intertwined
with a state right or remedy that it functions to define the scope of the state-created
right.” Id. at 423. Justice Stevens nevertheless concluded that the New York law was not
intertwined with state rights or remedies, as shown by the textual reading of the New
York law; its applicability to all claims, regardless whether based on federal, New York,
or other state law; and analysis of the potential purposes behind the law. See id. at 432–
36.
As indicated by the dissent of four Justices stating that the majority opinion had
departed from Court precedent, see, e.g., id. at 442–43 (Ginsburg, J., dissenting), Shady
12 Grove was a turning point in the Supreme Court’s doctrine regarding the relationship
between the Federal Rules and state law. At the least, it represented a clarification of
prior opinions. Thus, this court has recognized that Shady Grove is a critical case on the
choice-of-law analysis. See Racher v. Westlake Nursing Home Ltd. P’ship, 871 F.3d
1152, 1162 (10th Cir. 2017) (“We believe the Supreme Court’s subsequent decision in
Shady Grove . . . informs the proper analysis of [whether state law or federal law governs
whether a statutory damage cap is an affirmative defense or a pleading
requirement] . . .”); Garman v. Campbell Cty. Sch. Dist. No. 1, 630 F.3d 977, 983 (10th
Cir. 2010) (“The Supreme Court, in Shady Grove . . . recently clarified the analysis for
determining whether a federal rule or state law governs.”). We now examine how Shady
Grove applies to the case before us.
D. Application of Shady Grove
The inescapable conclusion we draw from Shady Grove is that Colorado’s general
laws for assessing costs do not apply in this case. Under step one of the Supreme Court
majority’s analysis, the question is whether the state laws “answer the same question” as
the Federal Rule. Shady Grove, 559 U.S. at 399 (majority opinion); see also id. at 400
(“[T]he question before us is whether [the state laws] concern[] a subject separate from
the subject of [the Federal Rule].”). They certainly do. Rule 54(d) and Colorado’s
§§ 13-16-104 and -105 tell the courts what costs can be awarded to a prevailing party.
The subjects of the Federal Rule and the state statutes are the same. We cannot
artificially divide each Colorado statute and say that the statute (1) addresses the same
subject matter as the Federal Rule when it allows those costs permitted by the Federal
13 Rule and (2) then addresses a different subject when it allows costs for other expenses
incurred by litigants that are impermissible under the Rule. Both of these “components”
of the Colorado statute would still answer the same question as Rule 54(d). See id. at 401
(“Rule 23 permits all class actions that meet its requirements, and a State cannot limit that
permission by structuring one part of [its class-action] statute to track Rule 23 and
enacting another part that imposes additional requirements. Both of [the New York
statute’s] subsections undeniably answer the same question as Rule 23: whether a class
action may proceed for a given suit.”).
And the answers to the costs question given by the Federal Rule and the Colorado
statutes cannot be reconciled. If, say, Rule 54(d) or 28 U.S.C. § 1920 had stated that the
district court should ordinarily award certain types of costs but made clear that other,
unspecified types could also be awarded in the court’s discretion (which is how the
Colorado courts read § 13-16-122), we see no reason why the district court could not look
to state law to guide its discretion. But that is not the Federal Rule. Crawford Fitting and
Taniguchi have held that the only costs that can be awarded under Rule 54(d) are those
specified in § 1920, and neither attorney travel nor computerized legal research is so
specified. Allowing for a discretionary award of costs unavailable under Rule 54(d)
would run contrary to the Supreme Court’s interpretation of that Rule.
The second part of the Shady Grove analysis is determining whether application of
Rule 54(d) to override the Colorado costs statutes is valid under the Rules Enabling Act
and constitutional, or instead is ultra vires. Under the approach of the Shady Grove
plurality, that application clearly passes muster. The relevant restriction in the Act is that
14 a Rule “not abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072(b).
Following Sibbach, the plurality stated that the restriction means only that the Rule “must
really regulate procedure,— the judicial process for enforcing rights and duties
recognized by substantive law and for justly administering remedy and redress for
disregard or infraction of them.” Shady Grove 559 U.S. at 407 (plurality opinion of
Scalia, J.). (brackets and internal quotation marks omitted). As noted by the plurality,
the Supreme Court has thus far “rejected every statutory challenge to a Federal Rule that
has come before [it].” Id. Turning to this case, we need not belabor whether Rule 54(d)
is a procedural rule. We are aware of no authority suggesting that it is not. Awarding
costs has for centuries been part of “the judicial process for enforcing rights and duties
recognized by substantive law.” Sibbach, 312 U.S. at 14; see 10 Moore, supra
§ 54.103[2] at 184 (“The issue of what costs may be awarded incident to the judgment is
a procedural issue . . . .”). And because Rule 54(d) is a procedural rule, it unquestionably
is within Congress’s constitutional powers. See Hanna v. Plumer, 380 U.S. 460, 472
(1965) (the Constitution conveys “a power to regulate matters which, though falling
within the uncertain area between substance and procedure, are rationally capable of
classification as either”).) Under the approach of the plurality in Shady Grove, Rule
54(d) undoubtedly prevails.
Justice Stevens chose a different tack, although his approach led to the same result
in Shady Grove and leads to the same result here. In his view, whether application of a
Federal Rule violates the Rules Enabling Act requirement that “rules shall not abridge,
enlarge or modify any substantive right,” 28 U.S.C. § 2072(b), can depend on the state
15 law that the Rule would otherwise displace. He wrote that the Rules Enabling Act
forbids preemption of a state law that “is procedural in the ordinary use of the term but is
so intertwined with a state right or remedy that it functions to define the scope of the
state-created right.” 559 U.S. at 423 (Stevens, J., concurring). In Shady Grove he
decided that the state class-action provision regarding claims for penalties was not such a
law. He noted that it was not tied to a state right or remedy because it applied to “claims
based on federal law or the law of any other State.” Id. at 432. He said that “[i]t is
therefore hard to see how [the New York statute] could be understood as a rule that,
though procedural in form, serves the function of defining New York’s rights or
remedies.” Id.
That identical reasoning applies here. Nothing about the Colorado statutes
indicates a judgment about the scope of state-created rights or remedies. Sections 13-16-
104 and -105 are general cost-shifting statutes that apply in every case, even to “claims
based on federal law or the law of any other State.” Id.; see Archer v. Farmer Bros. Co.,
90 P.3d 228, 229, 232 (Colo. 2004) (affirming award of costs under C.R.C.P. 54(d) and
§ 13-16-105 to defendants who prevailed on claims under federal Age Discrimination in
Employment Act and Americans with Disabilities Act as well as state-law claims).
Again, “[i]t is therefore hard to see how [the Colorado statutes] could be understood as
. . . rule[s] that, though procedural in form, serve[] the function of defining [Colorado’s]
rights or remedies.” Id. Justice Stevens’s analysis might well reach a different
conclusion if the Colorado statute were restricted to costs in specific areas, such as in
16 civil-rights or employment-discrimination claims. Then it could be viewed as part of the
state remedy. But that is not our case.
This court has held that Justice Stevens’s concurrence states Supreme Court law
under the rule stated in Marks v. United States, 430 U.S. 188, 193 (1977) (“When a
fragmented Court decides a case and no single rationale explaining the result enjoys the
assent of five Justices, the holding of the Court may be viewed as that position taken by
those Members who concurred in the judgments on the narrowest grounds.” (internal
quotation marks and citation omitted)). See Los Lobos Renewable Power, LLC v.
Americulture, Inc., 885 F.3d 659, 668 n.3 (10th Cir. 2018); James River Ins. Co. v. Rapid
Funding, LLC, 658 F.3d 1207, 1217–18 (10th Cir. 2011); Garman, 630 F.3d at 983 n.6.
Others, including then-Judge Kavanaugh, think that the view of the plurality opinion
governs on step two of the analysis because it merely restates law settled by Sibbach and
no other Justice (including the dissenters) expressed agreement with the concurrence.
See Abbas v. Foreign Policy Group, LLC, 783 F.3d 1328, 1336–37 (D.C. Cir. 2015). But
we need not confront this disagreement. Simply put, a challenge in this case under the
Rules Enabling Act fails under any available Supreme Court doctrine. Because Rule
54(d) falls well within the statutory authorization of the Rules Enabling Act and its
displacement of Colorado state law would not impair any state substantive right, we hold
that a federal court exercising diversity jurisdiction has no power to award costs under
§§ 13-16-104 or -105.
17 E. Preservation of Issue
Despite our conclusion that the award of costs under Colorado law was error, we
may still need to affirm the award. In rejecting Plaintiffs’ motion for reconsideration of
the costs award, the district court ruled that they had not previously argued adequately
that federal law precluded a costs award under state law. If the issue was not properly
preserved in district court, we can reverse only if the requirements of the plain-error
doctrine are satisfied. See Singh v. Cordle, 936 F.3d 1022, 1041 (10th Cir. 2019). “To
obtain relief under that standard, the party must show (1) error, (2) that is plain, which (3)
affects substantial rights, and which (4) seriously affects the fairness, integrity, or public
reputation of judicial proceedings.” Id. (internal quotation marks omitted).
The issue is a close one, but we respectfully disagree with the district court and
believe that Plaintiffs adequately preserved their challenge to the award of costs under
Colorado law. In their motion to stay, deny, or reduce the cost calculation pending the
merits appeal, Plaintiffs argued that the court should award only those costs enumerated
in 28 U.S.C. § 1920, citing the United States Supreme Court’s decision in Crawford
Fitting. They argued that § 1920 does not authorize costs for electronic research or
attorney travel and lodging. Then, in a letter to the court clerk regarding the calculation
of costs, Plaintiffs asserted, citing Chaparral Resources v. Monsanto, 849 F.2d 1286,
1292 (10th Cir. 1988), that “a federal court has no discretion to award costs that are not
statutorily permitted under federal law unless such costs are statutorily mandated.” Id. at
1903–04. The letter specifically challenged the award of costs for electronic research.
Finally, in their motion for review of the clerk’s costs award, Plaintiffs again stated that
18 the Court had “no discretion to award items as costs that are not set forth in § 1920 . . .
unless they are authorized by . . . state statute or agreement of the parties. Id. at 1828–29
(citing Crawford Fitting and Garcia v. Walmart Stores, Inc., 209 F.3d 1170, 1177 (10th
Cir. 2000).).
We recognize that Plaintiffs’ argument did not track the analysis we have applied.
They did not even cite Shady Grove. And they conceded, contrary to what we now
decide to be the applicable law, that costs can be awarded under state law if the specific
costs are “statutorily mandated” or “authorized” by the state law. Nevertheless, we think
that Plaintiffs did preserve (although barely) an argument that the challenged costs were
not permissible under this court’s decisions in Chaparral and Garcia. In Chaparral we
held that the district court had erred in awarding expert-witness fees beyond what was
allowed under federal law. In dictum we suggested, however, that a court could award
costs under state law if the award was under “an express statutory mandate.” 849 F.2d at
1292. As for Garcia, the state law in question was not a costs statute generally
applicable to prevailing parties but a Colorado statutory provision permitting an award of
actual costs to a plaintiff when the defendant rejected a pretrial settlement offer lower
than the eventual judgment. See 209 F.3d at 1173. We leave for another day a
determination of whether the state law would survive the asks-the-same-question test of
Shady Grove, which was decided a decade after Garcia. Relevant here, Garcia followed
Chaparral’s dictum in applying the state law. At one point it spoke in terms of whether
state law “authorizes” the costs award. Id. at 1177. But it later explained that the
19 Colorado provision had been interpreted by the Colorado courts as “non-discretionary.”
Id. at 1178.
Thus, we could have seen our task on this appeal as evaluating whether the
challenged costs award was permissible under Chaparral and Garcia: that is, whether the
award would have been mandatory under Colorado law and therefore permissible or
whether it was discretionary and impermissible. Under that approach, Plaintiffs may very
well have prevailed. But the pertinent language of Chaparral and Garcia has been
superseded by later Supreme Court opinions. And we do not believe we would be
performing our duty to provide guidance to the lower courts if we resolved this appeal
under superseded doctrine. When, as here, a party argues that the district court’s ruling is
contrary to general law and does not satisfy a previously recognized exception to the
general law, we think it appropriate to point out that the previously recognized exception
is clearly no longer good law and then decide that the party is correct that the court’s
ruling was contrary to the general law. In short, Plaintiffs did just enough to preserve the
winning argument.
III. CONCLUSION
We VACATE the district court’s award of costs and REMAND for entry of a
revised costs award consistent with this opinion.