Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-02320/USCOURTS-cand-4_05-cv-02320-23/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332 Diversity-Petition for Removal

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

STEPHEN WHITEWAY, et al.,

Plaintiffs,

 v.

FEDEX KINKOS OFFICE &

PRINT SERVICES, INC.,

Defendant. 

No. C 05-2320 SBA

ORDER

[Docket No. 193]

Before the Court is plaintiff Stephen Whiteway’s Motion for Review of the Clerk’s Taxation of

Costs [Docket No. 193]. Whiteway seeks to vacate or reduce the Clerk’s taxation of $56,788.68 in costs

after judgment was entered in favor of defendant FedEx Kinko’s Office and Print Services, Inc. After

reading and considering the arguments presented by the parties, the Court finds this matter appropriate

for resolution without a hearing. See FED. R. CIV. P. 78. For the reasons that follow, the motion is

DENIED.

BACKGROUND

On May 19, 2005, Whiteway, individually and on behalf of others similarly situated, filed a

complaint against FedEx Kinko’s in the Superior Court of the State of California. The complaint

alleged that FedEx Kinko’s misclassified its California Center Managers as exempt from California

overtime laws. Accordingly, Whiteway sought to recover wages and penalties. On June 8, 2005, FedEx

Kinko’s removed the case to federal court.

On September 14, 2006, this Court granted class certification of “current and former Fed Ex

Kinko’s [Center Managers] who were classified as exempt employees at any time between April 18,

2002, and the present.” The class consisted of approximately 500 Center Managers. FedEx Kinko’s

filed a motion for summary judgment, or in the alternative, for class decertification, which was granted

on August 21, 2007. See Docket No. 184. Judgment was entered in favor of FedEx Kink’s on the same

day. See Docket No. 185.

Case 4:05-cv-02320-SBA Document 201 Filed 12/18/07 Page 1 of 6
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On September 4, 2007, FedEx Kinko’s filed a Bill of Costs in the amount of $56,947.68. See

Docket No. 186. Ten days later, Whiteway filed an objection to the Bill of Costs. See Docket No. 188.

On September 24, 2007, the Clerk of this Court assessed costs in the amount of $56,788.68, disallowing

$160.00 of certain costs as outside those allowed under Civil Local Rule 54-3(c). See Docket No. 191.

LEGAL STANDARDS

Federal Rule of Civil Procedure 54(d)(1) provides: “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 . . . .” Rule 54(d)(1)

creates a presumption that the prevailing party will be awarded its taxable costs. See Delta Airlines, Inc.

v. August, 450 U.S. 346, 352 (1981); Dawson v. City of Seattle, 435 F.3d 1054, 1070 (9th Cir. 2006).

The Ninth Circuit has described this as a “strong presumption.” Miles v. State of Cal., 320 F.3d 986,

988 (2003). The Ninth Circuit has also noted that only “in the rare occasion where severe injustice will

result from an award of costs” does a district court abuse its discretion by failing to conclude that the

presumption has been rebutted. Save Our Valley v. Sound Transit, 335 F.3d 932, 945 (9th Cir. 2003).

To overcome this presumption, a losing party must establish a reason to deny costs. Dawson,

435 F.3d at 1070; Save Our Valley, 335 F.3d at 944-45. Factors that the Ninth Circuit has approved in

refusing to award costs to a prevailing party include: the losing party’s limited financial resources;

misconduct on the part of the prevailing party; the importance and complexity of the issues; the merit

of the plaintiff’s case, even if the plaintiff loses; and, in civil rights cases, the chilling effect on future

litigants of imposing high costs. See Champion Produce, Inc. v. Rudy Robinson Co., 342 F.3d 1016,

1022-23 (9th Cir. 2003); Save Our Valley, 335 F.3d at 945; Association of Mexican-Am. Educators v.

California, 231 F.3d 572, 593 (9th Cir. 2000) (en banc).

A district court need not give reasons for abiding by the presumption and taxing costs to the

losing party. Save Our Valley, 335 F.3d at 945. On the other hand, a district court must “specify

reasons” for refusing to tax costs to the losing party. Id. The court must “explain why a case is not

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‘ordinary’ and why, in the circumstances, it would be inappropriate or inequitable to award costs.”

Champion Produce, 342 F.3d at 1022.

ANALYSIS

Whiteway does not specifically object to the necessity or amount of any particular cost. Rather,

he urges the Court to reduce or dismiss the costs on the ground that “they are excessive, and were

incurred by Defendant in an effort to litigate the claims of 493 individuals.” Docket No. 193, at 5. First,

Whiteway argues that the award of costs is inappropriate here because requiring a class representative

to shoulder the burden of all costs incurred in defending a class action, instead of only those costs

necessary to defend against the representative, would discourage future use of the class action

mechanism in wage and hour cases. Second, Whiteway maintains that he was seeking to vindicate an

important public policy, and the imposition of costs would have a chilling effect on other litigants

similarly enforcing wage and overtime laws.

1. Imposing Costs on a Lead Plaintiff in a Class Action

While there is very little case law directly considering the question of taxing costs against the

lead or named plaintiff in a class action, what little there is cuts against Whiteway’s position. For

instance, in Wright v. Schock, 742 F.2d 541, 542 (9th Cir. 1984), Henry and Helen Wright brought a

purported class action alleging violations of federal and state securities laws and common law fraud.

A class was not certified, and the Wrights were taxed $60,000 in costs. Id. at 545. The court noted, in

dicta, that even if class certification had been granted, the Wrights would “in all likelihood . . . have had

to bear this burden [of costs] alone, even if the class had been certified.” Id. The court noted that

“[a]bsent class members have no obligation to pay attorneys’ fees and litigation costs, except when they

elect to accept the benefit of the litigation.” Id.

And in Lamb v. United Security Life Co., 59 F.R.D. 44, 48 (S.D. Iowa 1973), the court

“concluded that members of the class other than plaintiffs, who do not request exclusion, are not parties

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and would not be liable for costs even though otherwise bound by the judgment, whether favorable or

unfavorable.”

Finally, in Van de Kamp v. Bank of America, 204 Cal. App. 3d 819, 869 (1988), a California

court of appeal held that a trial court abused its discretion in ruling that a prevailing defendants’ costs

should be borne by the entire class of plaintiffs, rather than the named plaintiffs alone. The Van de

Kamp court explained what it described as

the class representatives’ dilemma—they must balance the risk of liability against their

potential recovery . . . . While imposition of the entire cost burden on the named

plaintiffs may have a chilling effect on the willingness of plaintiffs to bring class action

suits, this effect easily may be outweighed by the potential recovery. All potential

litigants must weigh costs of suit against likelihood of success and possible recovery

before deciding to file suit. Those who choose to take the risks of litigation should be

the ones who bear the costs when they are unsuccessful . . . .

Id. 

The cases cited by Whiteway—Hughes v. Rowe, 449 U.S. 5 (1980) (per curiam) (fees should

not have been taxed against prisoner under 42 U.S.C. § 1983); Casa Marie Hogar Geriatrico, Inc. v.

Rivera-Santos, 38 F.3d 615 (1st Cir. 1994) (district court’s findings insufficient to support shifting

attorney fees pursuant to 42 U.S.C. § 1988); and Neider v. Comblo, 917 F. Supp. 262 (S.D.N.Y. 1996)

(defendant not entitled to attorney fees under section 1983)—involve statutory fee shifting provisions,

making them inapposite. What applies here is the default provision of Rule 54 and the presumption that

costs will be assessed against the losing party. Therefore, the few courts to consider this “class

representatives’ dilemma” have not found it inequitable to assess costs upon the lead or named plaintiff

in a class action.

2. Costs Specific to Defending Against Whiteway

In a related argument first asserted in his reply brief, Whiteway posits that the defendant has

failed to meet its burden of showing that its costs were “necessarily incurred” as required by 28 U.S.C.

§ 1924 and Civil Local Rule 54-1. This is because FedEx Kinko’s has not specified in its bill of costs

which expenses were particular to the defense against Whiteway, as opposed to costs incurred in

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defending against the class as a whole. See Docket No. 200, at 4-5.

There are at least two difficulties with this argument. First, this precise argument was not made

in the briefing in support of the motion; it was raised for the first time in Whiteway’s reply. Courts

decline to consider arguments raised for the first time in reply. See, e.g., Stewart v. Wachowski, 2004

WL 2980783, at *11 (C.D. Cal. 2004); Dietrich v. Trek Bicycle Corp., 297 F. Supp. 2d 1122, 1128

(W.D. Wis. 2003); Grupo Gigante S.A. de C.V. v. Dallo & Co., 119 F. Supp. 2d 1083, 1103 n.15 (C.D.

Cal. 2000). Second, this point is really just a reformulation of Whiteway’s position that the lead or

named plaintiff in a class action should not be required to bear the costs of the class, a position that

Whiteway has not supported with relevant authority.

3. Public Policy and the Chilling Effect

The plaintiff argues that “California wage and hour laws were implemented to protect the rights

of low-wage workers, and should be analyzed in the same light as [civil rights cases].” Docket No. 193,

at 4. Whiteway cites Gentry v. Superior Court, 42 Cal. 4th 443, 464-65 (2007), for the propositions that

wage and hour laws are an important safeguard of low-wage workers’ rights and that the class action

vehicle is essential to the vindication of such rights. FedEx Kinko’s counters that “[w]hile California

wage and hour laws may serve an important public policy, not all wage and hour cases are ‘unique’ and

automatically exempted from the cost shifting provisions of Rule 54.” Docket No. 198, at 3. 

Whiteway rightfully maintains, and the defendant acknowledges, that wage and hour laws are

an important public policy under California law. Assuming for present purposes that wage and overtime

laws are analogous to civil rights laws, a court should consider the possible “chilling effects” that the

burden of costs may have. Taxing costs against unsuccessful wage and hour litigants may very well

result in some “chilling effect.” But the plaintiff does not explain how this potential “chilling effect”

would not be true for any plaintiff bringing a class action, and the defendant correctly points out that

neither a statute nor the Federal Rules provides any exemption from costs for named plaintiffs in a class

action.

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In addition, the possible “chilling effect” of costs is just one factor to be weighed against the

benefits of pursuing a case as a class action. It is no secret that the class action mechanism is used not

only to uphold the rights of those similarly situated, but is also a mechanism for gaining greater leverage

in a plaintiff’s pursuit of maintaining his own claims. While it is true that a class action may vindicate

the rights of an entire class, an individual plaintiff may also strategically pursue a class action for

reasons not completely altruistic. Thus, a plaintiff choosing to sue on behalf of others not only faces

the possibility of greater costs, but also may receive greater benefits from the class action procedure,

as noted by the Van de Kamp court.

Moreover, while California law does protect workers by providing wage and overtime

guarantees, a California court of appeal has addressed the precise issue of whether a named plaintiff

bears the costs of the class and resolved it against the position now advanced by Whiteway. See Van

de Kamp v. Bank of Am., 204 Cal. App. 3d 819, 869 (1988). Accordingly, a general appeal to the public

policy of California law is in tension with the specific decision of a California appellate court.

And Whiteway is unable to provide any federal authority to support his position. The limited

federal case law on point also suggests that a lead plaintiff bears the costs in a class action. See Wright,

742 F.2d at 545; Lamb, 59 F.R.D. at 48. So while Whiteway’s broad appeal to equity to reduce or

vacate costs is understandable, he does not establish reasons to deny costs. Dawson, 435 F.3d at 1070;

Save Our Valley, 335 F.3d at 945-46. In the absence of a reason to deny costs, the presumption of Rule

54 stands.

CONCLUSION

Accordingly, plaintiff Stephen Whiteway’s Motion for Review of the Clerk’s Taxation of Costs

[Docket No. 193] is DENIED. The taxation of costs is AFFIRMED.

IT IS SO ORDERED.

December 17, 2007 _________________________________

Saundra Brown Armstrong 

United States District Judge

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