Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_99-cv-05583/USCOURTS-caed-1_99-cv-05583-59/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

UNITED STATES FIDELITY & )

GUARANTY COMPANY, )

)

)

)

Plaintiff, )

)

vs. )

)

)

LEE INVESTMENTS LLC dba THE )

ISLAND, et al., )

)

)

Defendants. )

)

)

No. CV-F-99-5583 OWW/SMS

MEMORANDUM DECISION AND

ORDER GRANTING IN PART AND

DENYING IN PART USF&G'S BILL

OF COSTS (Doc. 896)

United States Fidelity & Guaranty Company, American

Specialty Insurance Services, Inc., and American Specialty Risk

Management, LLC (collectively “USF&G”) have filed a Bill of

Costs, seeking to recover the following costs from Lee

Investments, LLC (“Lee”):1

Fees of the Clerk $150.00

Fees for service of summons

USF&G submitted a bill of costs on March 12, 2007 (Docs. 712- 1

716). The bill of costs submitted on August 14, 2009 (Doc. 896),

supercedes the earlier bill of costs.

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and subpoena $7,977.22

Fees of the court reporter

for all or any part of the 

transcript necessarily 

obtained for use in the case $35,514.80

Fees for witnesses $11,546.79

Fees for exemplification

and copies of papers

necessarily obtained for

use in the case $31,842.09

Docket fees under 28 U.S.C. 

1923 $20.00

Other costs $14,335.50

 $101,386.40

Lee has filed objections to the Bill of Costs, asserting

that it should be reduced by $64,986.64, resulting in a total

cost bill of $36,399.76. 

A. Fees for Service of Summons and Subpoena.

Lee objects to these costs on a number of grounds.

1. Deposition Subpoenas.

Lee objects to taxing the full costs of deposition subpoenas

in this action. Lee contends that the full amount, $1806.50,

should be reduced by half, to $903.25. In support of this

objection, Lee relies on the Declaration of Daniel O. Jamison:

2. I have been the lead attorney for Lee in

the above captioned matter since

approximately February 2006 and was the lead

attorney for Lee in the January/February 2007

jury trial and the April 2007 court trial in

this case. Since spring 2006, I have also

represented Lee as lead counsel in the

defense of the claim of ... USF&G ... in

California Workers’ Compensation Appeals

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Board (‘WCAB’) Case No. SB 0288749, entitled

Conley v. The Island, et al., that USF&G is

entitled to rescind the workers’ compensation

insurance policy that has been the subject of

the above captioned action.

3. Since becoming involved in these two

matters, I have read most, if not all, of the

depositions that were taken in the two cases

before I became involved. On the record in

several of the depositions, there were

stipulations between Lee and USF&G that the

deposition would be taken jointly in the two

proceedings and could be used in both

proceedings. Although USF&G may dispute the

application of the stipulation to expert

witness depositions, it is and was my

understanding that by stipulation and/or

notice all of the depositions taken in this

action were being taken in both proceedings. 

4. USF&G’s claim for rescission in WCAB Case

No. SB 0288749 has not yet been adjudicated

before the WCAB. There has been no

determination in the WCAB proceeding whether

or not USF&G is entitled to rescind the

subject insurance policy and no prevailing

party has been determined in that proceeding. 

At the present time, the above captioned

court has issued an injunction preventing Lee

from seeking to have the WCAB make a

determination whether or not USF&G is

entitled to rescind the subject policy.

Exhibit A to Mr. Jamison’s Declaration are partial copies of the

depositions of Richard Miler, Elaine Bartsch, and Stan Sheehan. 

The Miler and Bartsch depositions were taken in the Federal

action. The Miler deposition states:

MR. SMYTH: [¶] Let’s put a stipulation on the

record. This is going to be used in both -

potentially used in the Workers’ Compensation

and the Federal action, but we’ll stipulate

that the court reporter is relieved of her

obligations under the California Code of

Civil Procedure with respect to the Workers’

Compensation portion; that the witness can

sign the deposition under penalty of perjury

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and that if he doesn’t sign it within 30 days

of having received it for his signature, that

a certified copy may be used with the same

force and effect as a signed original. 

The same stipulation was entered into in the Bartsch deposition. 

In the Sheehan deposition, the following stipulation was entered

into:

MR SMYTH: Okay, while we were off the record,

we discussed the fact that this deposition

had been noticed only in the workers’

compensation action. We, among the

stipulations that I’ll propose here ... is

that the deposition may be used and should

have a duplicate cover page for not only the

workers’ compensation action, but the federal

court action. And that the deposition may be

used in ... both the federal court and the

workers’ compensation action. We

additionally propose ... for stipulation that

the witness may have 30 days after receipt of

the transcript to make any changes as are

appropriate and to sign the transcript. And

that if a signed copy is not received and

copies to the changes provided to counsel and

the signature page within 30 days, that a

certified copy may be used in all proceedings

in these two matters with the same force and

effect as a ... signed original. This

deposition is being taken in connection with

a case pending in the federal court in

California and in a California workers’

compensation action. To the extent that

there’s a stipulation required that the - in

the event that the deponent does not sign the

document in the presence of the court

reporter, the parties stipulate that that

requirement has been relieved and the

deponent may sign the document under penalty

of perjury.

The parties so stipulated.

Citing Parkerson v. Borst, 256 F. 827 (5 Cir.1919), for th

the proposition that “[u]ntil final judgment, the incidence of

costs is not determinable,” Lee argues that, because there has

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been no final determination in the WCAB case, the costs of the

depositions should be split between this action and the WCAB

case.

USF&G responds that Lee’s contention that these costs should

be halved because the parties agreed that the depositions would

be admissible in the WCAB proceeding is without merit:

Such costs were incurred in the District

Court action. More importantly, the judgment

of the District Court under which costs were

awarded constitutes a final judgment

resolving USF&G’s complaint in all forums and

is res judicata.

By Memorandum Decision filed on December 2, 2008, (Doc.

864), and by Order filed on December 19, 2008, (Doc.872), the

Court ruled that Lee was precluded by res judicata from

proceeding with the WCAB action. While this ruling is on appeal

to the Ninth Circuit, it nonetheless remains that there is a

final Judgment pursuant to Rule 54(b), Federal Rules of Civil

Procedure, in this action. Lee’s contention that the costs of

the deposition subpoenas should be halved because of the

possibility that the Ninth Circuit will reverse this Court’s

rulings has no basis in law. The requested deposition costs are

allowed as all three depositions were used in the federal case.

2. Witness Subpoenas.

Lee argues that the cost of witness subpoenas for those

witnesses who did not testify at trial should be disallowed,

seeking a reduction of $934.56. Specifically, Lee objects to the

following costs:

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Date Invoice Vendor Description Amount

1/27/07 1621 SoCal Trial

Subpoena

Attempt to

serve

Richard

Miler

110.00

1/26/07 1620 SoCal Trial

Subpoena

Subpoena of

Dawn Wilson

65.63

2/2/07 SoCal Trial

Subpoena

Subpoena of

Richard

Miler &

Witness Fee 

448.93

2/07/07 1662 SoCal Trial

Subpoena

Subpoena of

Nathan

Hoagland

100.00

2/11/07 1717 SoCal Trial

Subpoena

Attempt to

serve Mark

Stewart

100.00

3/2/07 1718 SoCal Trial

Subpoena 

Attempt to

serve Steve

Chadwick

110.00

“In order to award costs for service of subpoenas, the court

need only determine whether the subpoenas were reasonable and

necessary in light of the facts known at the time of service.” 

Movitz v. First National Bank of Chicago, 982 F.Supp. 571, 574

(N.D.Ill.1997), citing Shea v. Galaxie Lumber & Constr. Co., 1997

WL 51655 at *8 (N.D.Ill., Feb. 5, 1997)(costs of service of

subpoenas are “recoverable even if the witnesses do not testify

at trial; the relevant question is whether the plaintiff

‘reasonably believed ... that the testimony would be helpful.’”)

USF&G argues that these costs are recoverable, relying on he

Declaration of Bruce T. Smyth, counsel for USF&G:

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3. Three of the witnesses who are the

subject of Lee’s request for reduction for

costs for subpoenas for witnesses who did not

testify, Nathan Hoagland, Mark Stewart and

Steve Chadwick, were current or former Lee

employees who did not testify because they

could not be located by the process server. 

Since they were performing construction work

for Lee at the time of the injury to Diana

Conley, if we had located them, they would

have testified at trial. The other witness,

Richard Miler, a former Lee employee, would

have been called to testify except that the

testimony of another Lee witness, Lisa

Ehrlich, covered the same topics. Miler also

could have been called as a witness dependent

on the testimony introduced in Lee’s case for

its defense or counterclaims. 

Fees for service of potential trial witness subpoenas are

not made inadmissible if the witness is not called to testify if

it was necessary that the witness be available to give relevant

testimony. USF&G makes no showing that Miler’s testimony was not

cumulative. Miler’s witness and subpoena fees are disallowed. 

USF&G has demonstrated that the fees of the other challenged

witnesses were necessary.

USF&G is allowed costs of $7,418.29.

B. Fees of Court Reporter.

1. Motion and Trial Transcripts.

Lee seeks disallowance of $11,269.35 of the $35,514.80 of

costs of the court reporters, which pertain to daily trial

transcripts and motion hearing transcripts. Lee notes that USF&G

did not obtain prior court approval for these transcripts and did

not obtain Lee’s agreement that some or all of the costs of daily

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transcripts would be a recoverable cost by the prevailing party.2

Lee seeks disallowance of the following costs:

Date Invoice Vendor Description Amount

4/29/02 17738 VARS COD for

transcript of

hearing on

motion to

compel

discovery

286.00

5/1/02 51 Shavavian

Crump

Transcript of

hearing

57.00

5/20/02 990462 Robert R.

Molezzo

Transcript of

motion to

dismiss

amended

complaint

68.00

1/2/07 2814 Petrilla

Reporting

Hearing

transcript

441.60

1/04/07 31290 Karen Lopez Hearing

transcript

11/20/06

489.50

1/17/07 20070013 Karen Lopez Hearing

transcript

17.97

1/19/07 31290 Peggy

Crawford

Hearing

transcript

764.50

1/19/07 31290 Karen Lopez Motions in

limine

hearing

transcript

1,034.36

2/7/07 Peggy

Crawford

Trial

transcript

501.62

Although Lee notes that the Eastern District of California’s 2

Local Rules of Practice do not require prior Court approval for a

daily transcript, Lee refers to the local rules for the Northern

and Central Districts of California and the District of Arizona,

which provide that the cost of daily transcripts are not regularly

taxable without prior court approval or stipulation by the parties. 

The local rules of other jurisdictions have no application or

relevance in the Eastern District of California.

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2/13/07 Peggy

Crawford

Trial

transcript

637.40

2/16/07 Peggy

Crawford

Trial

transcript

46.20

2/16/07 Karen Lopez Trial

transcript

222.44

2/21/07 Peggy

Crawford

Trial

transcript

110.00

2/21/07 Karen Lopez Trial

transcript

96.80

3/26/07 20070047 Karen Lopez Hearing

transcript

27.39

3/26/07 03232007C Peggy

Crawford

Hearing

transcript

47.31

4/1/07 04012007A Peggy

Crawford

Trial

transcript

62.50

4/4/07 041122007A Peggy

Crawford

Trial

transcript

1,949.20

5/31/07 53107 Peggy

Crawford

Trial

transcript

2,522.64

6/1/07 20070085 Karen Lopez Trial

transcript

1,840.92

11/5/08 3333 Petrilla

Reporting

Hearing

transcript

45.80

28 U.S.C. § 1920(2) allows taxation of “[f]ees for printed

or electronically recorded transcripts necessarily obtained for

use in the case.” As explained in Wright, Miller & Kane, Federal

Practice and Procedure: Civil 3d § 3677, pp. 438-440:

The basic standard applied by the courts in

determining whether to allow the expense of a

transcript as a taxable cost is whether the

transcript was ‘necessarily obtained for use

in the case.’ This does not mean that the

transcript must have been ‘indispensable’ to

the litigation to satisfy this test; it

simply must have been ‘necessary’ to

counsel’s effective performance or the

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court’s handling of the case. The transcript

may have been procured either for use at the

trial or after the trial. But the words ‘use

in the case’ in Section 1920 mean that the

transcript must have a direct relationship to

the determination and result of the trial. 

Taxation will not be allowed if the

transcript was procured primarily for

counsel’s convenience. 

“As a general rule, daily trial transcript costs should not

be awarded absent court approval prior to the trial ... However,

a District Court may overlook the lack of prior approval if the

case is complex and the transcripts proved invaluable to both the

counsel and the court.” Manildra Mill. Corp. v. Ogilvie Mills,

Inc., 76 F.3d 1178, 1184 (Fed.Cir.1996); see also Maris

Distributing Co. v. Anheuser-Busch, Inc., 302 F.3d 1207, 1226

(11 Cir.2002), cert. denied, 537 U.S. 1190 (2003): th

Although we do not believe that the costs

associated with expedited trial transcripts

should be allowed as a matter of course, lest

litigation costs be unnecessarily increased,

the district court found that expedited

transcripts were necessary in this case given

its length and complexity. Under the

circumstances, we cannot say that the

district court clearly abused its discretion

by reaching this conclusion. 

But see Battenfield of America Holding Co., Inc. v. Baird, 196

F.R.D. 613, 618 (D.Kan.2000):

While the court expresses no opinion as to

whether daily copy was necessary for counsel

at trial, the court is in the best position

to assess the value of the daily copy to it

... Suffice it to say, daily copy was not

necessary for the court’s handling of the

case ... The court cannot recall any

occasions in which it even looked to daily

copy for guidance in analyzing an evidentiary

issue. While daily copy may have aided the

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parties in resolving various disputes amongst

themselves, the court is fairly confident

that it could have resolved those issues for

the parties in the absence of daily copy. In

short, this case was neither so complex nor

so lengthy as to justify imposing such

‘special costs’ on BKD. 

In arguing that the challenged costs should be allowed,

USF&G relies on Mr. Smyth’s Declaration:

4. The trial and hearing transcripts

referenced in Exhibit 3 to the cost bill were

utilized for motions to the Court prior to

and during trial and for preparation for

motions for judgment and closing argument

....

5. Most of the trial transcript costs to

which Lee objects included only selected

portions of testimony utilized for trial or

specific hearings necessary for preparation

of motions before the Court. The first

challenged hearing transcript, for April 29,

2002, was the transcript of the hearing

before Magistrate Judge Snyder on motions by

USF&G to compel further responses by Lee to

interrogatories. The transcript of the

hearing was necessary to understand the scope

of the Court’s rulings. The next challenged

transcript, for May 1, 2002, was for the

hearing on the motions for summary judgment. 

The transcript obtained for May 20, 2002,

concerned the 2000 motion by USF&G to dismiss

the amended counterclaim.

6. The next series of transcripts which Lee

challenges, dated January 2, 4, 17 and 19,

2007, are for transcripts of the hearings

before the Court on November 13 and 20, 2006

and on the hearings on the motions in limine

on January 17 and 18, 2007. Those

transcripts were necessary to understand the

Court’s rulings on key issues concerning the

pretrial proceedings, and in particular, on

the motions in limine. Indeed, the parties

agreed to split the costs of the transcript

of the hearing on motions in limine three

separate ways, in order to prepare orders on

the motions and to understand the scope of

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the Court’s rulings in order to instruct

witnesses as to the scope of their testimony

and to conduct examination and crossexamination.

7. The next series of transcripts which Lee

challenges all involve portions of relevant

testimony and statements in the case,

invoices dated February 1, 13, 16, 21, and

March 26 and April 1, 2007. All of those

invoices were provided for extremely limited

portions of the trial or testimony, such as

opening statements, the hearings on the Rule

50 motions and copies of specific testimony. 

In most cases, the invoices were for copies

of testimony ordered by other parties, Lee or

Aon. All of these costs were necessarily

incurred in the trial. In the case of copies

of transcripts ordered by other parties, the

copies were necessary to prepare responses to

the issues likely raised by other parties in

the testimony. For example, if other parties

intended to raise issues before the Court

based on the trial testimony, USF&G required

its own copy to verify the correctness and

immediate context of the testimony cited. 

Portions of the opening statements and

transcripts of the testimony of Lee’s key

witness, Lisa Ehrlich, were needed for

preparation of closing argument and crossexamination.

8. The April 7, 2007 invoice, for a copy of

the transcript of the April 4-6 trial, was

necessary for the preparation of proposed

Findings of Fact and Conclusions of Law for

submission to the Court. 

9. The charges in invoices for May 31, 2007

and June 1, 2007, were for USF&G’s copies of

the transcripts of the entire trial obtained

by Lee in connection with its appeal. 

Although such copies would be needed in the

appeal, USF&G obtained the copies in response

to any portions of those transcripts which

might be referenced by Lee in any future

trial of other trial phases, although the

other phase issues were subsequently resolved

by summary judgment.

10. The invoice dated November 5, 2008 was

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for USF&G’s copy of the hearing on its motion

for summary judgment on the remaining of

Lee’s claims in its counterclaim and that of

the Rexford Parties (as well as of the motion

for injunction) and were needed in case of a

challenge to the Court’s rulings.

Based on the standards set forth above, the transcripts for

April 29, 2002, May 1, 2002, May 20, 2002, and November 5, 2008,

were not necessarily obtained for use in the case. All of these

transcripts were hearings on motions that were subsequently

resolved by Court orders and USF&G provides no valid reasons why

the transcripts were necessary after the motions were taken under

submission. These costs, totaling $458.80, are disallowed. 

The transcripts of the hearings on the motions in limine and

the partial transcripts of the jury trial and the court trial

were necessarily obtained for use in the case. The motions in

limine were voluminous and complex and counsel was required to

submit proposed orders based on the Court’s oral rulings. Both

the jury trial and the Court trial involved complicated issues

and, as to the Court trial, the transcript was necessary to

prepare Findings of Fact and Conclusions of Law. 

However, the cost of the entire trial transcript described

in paragraph 9 of Mr. Smyth’s declaration has not been shown to

have been necessarily obtained for use in the case because the 

remaining issues in the case were resolved by summary judgment

motions. Mr. Smyth’s declaration makes clear that these costs

were incurred on the possibility that reference to them might

become necessary. These costs, totaling $4,363.56, are

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disallowed.

2. Deposition Transcripts.

Lee objects to the $24,245.80 in costs for deposition

transcripts.

Lee argues that only half of these costs should be taxed

because of the stipulation that the depositions could be used in

both the Federal action and the WCAB action.

For the reasons stated above, Lee’s objection is without

merit.

Lee contends that $1,681.85 of these costs should be

disallowed because certain of the depositions were taken purely

for investigative purposes and not for trial preparation:

DATE INVOICE DESCRIPTION AMOUNT

9/29/00 85747 Mark Stewart 388.50

8/09/01 97523ELA Richard Miler 796.45

4/3/02 85312 Deborah Long 269.80

4/26/02 85615 D. Wilson 74.80

4/30/02 17738 Pamela Lilly 152.30

In response, USF&G relies on Mr. Smyth’s Declaration:

11. Although Lee has asserted that costs of

the transcripts of the depositions it

challenges were not necessarily taken in

preparation for trial, portions of the

deposition testimony of Debra Long, Dawn

Wilson and Richard Miler were designated for

trial in the designation of transcripts filed

with the Court by USF&G. Lee counterdesignated substantial portions of that

testimony ....

This averment is substantiated by Exhibit A to Mr. Smyth’s

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declaration. In addition, Mr. Smyth avers:

12. Although Lee complains that the costs of

the transcripts ... were not prepared for

trial, as to the depositions of Debra Long,

Dawn Wilson and Pamela Lilly, those

depositions were all noticed by Lee in this

matter. 

That Lee noticed the depositions of Debra Long and Pamela Lilly

is substantiated by Exhibit B to Mr. Smyth’s Declaration. Mr.

Smyth further avers:

13. Although Lee objects to the costs of

transcripts of Mark Stewart and Richard

Miler, both were employed by Lee or

affiliated entities. Mr. Stewart had

responsibility for construction in the water

park. We did not call him as a witness

because we were unable to serve him with a

subpoena and because we subsequently

determined that his testimony would be

duplicative of that of Bruce Calomires, who

did testify. Mr. Miler was knowledgeable

about the payment of water park construction

expenses and of water park construction

employees. USF&G was prepared to call him at

trial and in fact had subpoenaed him for

testimony, but determined that his testimony

would be duplicative of that of Lisa Ehrlich

after she testified.

Deposition transcripts are taxable as costs under 28 U.S.C.

§ 1920(2). Here, from the record, all of the challenged

depositions were taken for trial preparation. Lee’s challenge is

disallowed.

USF&G is awarded costs for fees of the court reporter in the

amount of $30,692.44.

C. Fees for Witnesses.

1. Directors or Officers of American Specialty.

Lee objects to the taxation of fees for the following

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witnesses on the ground that each is an officer or director of

American Specialty:

Witness Amount

Stan Sheehan (senior vice-president &

chief underwriting officer

1,800.49

Dan Weir (chief financial officer) 1,362.38

Lowell Gratigny (senior vicepresident of litigation)1,800.87

Parties are generally not able to recover witness fees for

their own trial attendance. Barber v. Ruth, 7 F.3d 636, 646 (th

Cir.1993). Lee contends that, where a party is a corporation,

generally its officers or directors are required to be present at

trial as the corporation’s representative or to manage the

litigation. Citing Kemart Corporation v. Printing Arts Research

Lab., 232 F.2d 897, 901-902 (9 Cir.1956), Lee asserts that, if th

such representatives are personally involved in the litigation,

the cost to attend the trial should not be recoverable.

In Kemart, the Ninth Circuit adopted the reasoning of

Perlman v. Feldmann, 116 F.Supp. 102, 115 (D.Conn.1953), which

allowed witness fees as costs for corporate officers:

‘No recovery [in the action to which they

were called as witnesses] was sought from

them individually; their interest was not

shown to be other than the natural concern of

an officer for the welfare of his

corporation. The Clerk’s ruling [allowing

the fees] was amply supported by the cases

which he cited ... Though these were

admiralty cases the principle involved is

equally applicable to the situation here.

See also El Dorado Irrigation Dist. v. Traylor Bros., Inc., 2007

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WL 512428 at *9 (E.D.Cal., Feb. 12, 2007)(“[I]t is proper for the

court to assess witness fees for directors and officers of a

corporate party who are not personally involved in the

litigation.”)

In response to Lee’s objections, Mr. Smyth avers:

14. Although Lee seeks to exclude some of

the costs of witnesses who were also officers

of American Specialty, USF&G seeks recovery

only for the costs where those witnesses

testified or were made available for

testimony. Both Dan Weir and Stan Sheehan

testified during the trial. Although Lowell

Gratigny attended large portions of the

trial, the only expenses submitted are those

for which he was available for testimony,

after having been subpoenaed for his trial

testimony by Lee. Although it was ultimately

determined that he need not testify, Mr.

Gratigny was available for testimony.

Here, none of these witnesses was personally involved in

this action; none were named as parties. Lee’s objection is

without merit.

Although not raised by Lee in its objections to USF&G’s bill

of costs, several of the witness fee costs sought by USF&G exceed

the amounts allowed by Section 1920(3) and 28 U.S.C. § 1821.

Stan Sheehan is listed on Exhibit 4 as attending the trial

for two days, incurring a total witness fee of $80.00. However,

Exhibit 4 seeks subsistence (hotel/meals) for seven days in the

amount of $1,133.49. The Minutes of the jury trial show that

Stan Sheehan testified in the jury trial on February 7, 2007

(Doc. 627). Exhibit 4 shows that Mr. Sheehan arrived in Fresno

on February 1, 2007 and departed on February 9, 2007. USF&G is

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entitled to the witness fee for the two days sought in the bill

of costs pursuant to 28 U.S.C. § 1821(b):

A witness shall be paid an attendance fee of

$40 per day for each day’s attendance. A

witness shall also be paid the attendance fee

for the time necessarily occupied in going to

and returning from the place of attendance at

the beginning and end of such attendance or

at any time during such attendance.

Section 1821(d) provides for a subsistence allowance to a witness

“when an overnight stay is required at the place of attendance

because such place is so far removed from the residence of such

witness as to prohibit return thereto from day to day” “in an

amount not to exceed the maximum per diem allowance prescribed by

the Administrator of General Services.” In 2007, the GSA per

diem for Fresno, California was $79 for lodging and $54 for meals

and entertainment. USF&G is entitled to costs for lodging and

meals for Mr. Sheehan in the total amount of $266.00. USF&G is

allowed costs of $1,013.00 for Mr. Sheehan’s attendance at trial

as a witness, disallowing $876.00 of the $1,880.00 in costs

sought by the bill of costs.

Dan Weir is listed on Exhibit 4 as attending the trial for

one day, incurring a total witness fee of $40.00; Exhibit 4 seeks

subsistence for three days in the amount of $489.79. Mr. Weir

testified in the jury trial on February 9, 2007. (Doc. 629) 

Exhibit 4 includes a hotel bill for the Radisson Hotel,

Indianapolis Airport for the night of February 7, 2007 ($142.60). 

Mr. Weir arrived in Fresno on February 8, 2007 and departed on

February 9, 2007. USF&G is entitled to the cost of Mr. Weir’s

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witness fee, lodging in the amount of $158 and meals in the

amount of $32.66 (the actual costs sought). USF&G is allowed

costs of $1,066.25, disallowing $566.13 of the $1,362.38 in costs

sought by the bill of costs.

Lowell Gratigny is listed on Exhibit 4 as attending the

trial for one day, incurring a witness fee of $40.00; Exhibit 4

seeks subsistence for four days in the amount of $727.46. 

Exhibit 4 establishes that Mr. Gratigny submitted hotel bills for

only three nights. USF&G is entitled to lodging costs in the

amount of $237 ($79 x 3) and meals costs in the amount of $179.62

(the actual costs sought). USF&G is allowed costs of $1,540.03,

disallowing $350.84 in costs sought by the bill of costs.

The costs for lodging for Jack Zygner are reduced from

$352.28 to $158.00 ($79 x 2) and for meals from $230.45 to,

$162.00 ($54 x 3). USF&G is allowed costs of $642.90,

disallowing $262.73 in costs sought by the bill of costs.

As to the costs for Kathy Hacker, Ms. Hacker testified on

Friday, February 2, 2007 (Doc. 618) and on Tuesday, February 6,

2007 (Doc. 625). Exhibit 4 describes costs for hotel and meals

for six days (January 29, 2007, January 30, 2007, January 31,

2007, February 1, 2007, February 5, 2007 and February 6, 2007). 

Costs for hotel and meals on January 29-31, 2007 are disallowed. 

$237.00 for hotels on February 1, 5, and 6, 2007 are allowed. 

Costs for food in the amount of $56.43 (actual amount) are

allowed. USF&G is allowed costs $3,293.81, disallowing $643.97

in costs sought by the bill of costs.

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2. Expert Witnesses.

Lee objects to the witness fees for Bennett Bibel ($192.00)

and Stan Sheehan ($1,800.49) on the ground that these were expert

witnesses who were not appearing as such pursuant to contract,

statute, or appointment by the Court. Therefore, Lee contends,

these witness fees must be limited to the $40.00 per day fee paid

to other fact witnesses, citing 28 U.S.C. § 1920(6); Crawford

Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 442 (1987).

Exhibit 4 to USF&G cost bill establishes that Bibel was paid

a total of $80 for two days attendance at trial and $112.00 for

one day’s stay at a hotel. The cost for the hotel is reduced to

$79.00. Costs of $159.00 are allowed.

As to Mr. Sheehan, Mr. Smyth avers:

15. Although Lee objects to the recovery of

the expenses of Mr. Sheehan incurred in

connection with his testimony on the

additional ground that in testifying as a

percipient witnesses he also testified as an

expert on the areas of his percipient

testimony, as a key witness to the

circumstances under which the worker’s [sic]

compensation policy was issued, he would have

testified to the facts even if his testimony

as an expert had been excluded.

Lee’s objection is meritless. USF&G is entitled to recover

the costs set forth above for Mr. Sheehan’s attendance at trial.

USF&G is awarded fees for witnesses in the amount of

$8,814.12.

D. Copying Costs.

Lee objects to the $31,842.09 in copying costs on several

grounds. 

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28 U.S.C. § 1920(4) enables the Court to allow copying costs

for any document “necessarily obtained for use in the case” and

does not specifically require that the copied document be

introduced into the record to be an allowable cost. Haagen-Dazs

Co., Inc. v. Double Rainbow Gourmet Ice Cream, Inc., 920 F.2d

587, 588 (9 Cir.1990). “Fees for exemplification and copying th

‘are permitted only for the physical preparation and duplication

of documents, not the intellectual effort involved in their

preparation.’” Zuill v. Shanahan, 80 F.3d 1366, 1371 (9th

Cir.1996), cert. denied, 519 U.S. 1090 (1997), quoting Romero v.

City of Pomona, 883 F.2d 1418, 1428 (9 Cir.1989). Expert th

research expenses incurred in assembling and preparing the

content of exhibits are not recoverable costs. Romero, id.3

Lee asserts that “the majority of USF&G’s requests for

copies are without any reference or description as to what the

copy charges were incurred for or whether they are related to

this case” and that “Lee cannot discern whether the copy charges

Lee cites Coats v. Penrod Drilling Corp., 5 F.3d 877, 892 (5 3 th

Cir.1993) as stating, “The mere recitation with talismanic

regularity of the phrase ‘necessarily obtained for use in the case’

is not sufficient ... Some further showing is necessary.” However,

there is no such statement in Coats. Lee also cites Haroco, Inc.

v. American Nat’l Bank & Trust Co. of Chicago, 38 F.3d 1429, 1441

(7 Cir.1994), as holding that expenses for copies made solely for th

the convenience of counsel or the litigant’s own use are not

recoverable. Haroco does not so hold.

Lee also cites M.T. Bonk Co. v. Milton Bradley Co., 849 F.2d 1404,

1410 (7 Cir.1991) for the proposition that copying costs may be th

disallowed when there is no indication whether the charges were in

connection with pleadings, correspondence or other documentation in

the case or were for USF&G’s counsel’s own convenience. Again, the

case does not support Lee’s contention.

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were for USF&G’s counsel [sic] own convenience.” 

Lee further objects to $10,649.12 of the $31,842.09 copying

costs on the ground that USF&G has not substantiated that these

costs were for copies of papers necessarily obtained for use in

the case. Lee specifically objects to the following costs:

Date Invoice Description Amount

9/27/99 10480 Outside Document

Reproductions

Complex

601.05

10/8/99 10480 Outside Document

Reproductions

Complex

654.21

10/25/99 10480 Outside Document

Reproductions

Complex

101.40

11/8/05 CC-14004 Copying and

binding of

various documents

132.21

11/28/06 CC-144108 Heavy Litigation

Copies

276.77

11/30/06 282303-1 Document copy 138.03

1/18/07 CC-26311 Heavy Litigation

Copies

212.25

1/11/07 CC-26132 Medium Litigation

Copies

416.75

12/20/06 CC-25698 Heavy Litigation

Copies

71.45

12/29/06 CC-25852 Medium Litigation

Copies

261.88

12/30/06 CC-25864 Medium Litigation

Copies

792.45

12/31/06 CC-25891 Medium Litigation

Copies

517.91

1/9/07 CC-26105 Heavy Litigation

Copies

149.22

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2/2/07 23849 Heavy Litigation

Copies

354.80

2/2/07 9514 Printing Costs 1,028.30

2/5/07 9517 Imaging, Printing

& CD creation

381.97

2/5/07 9521 Imaging, Printing

& CD creation

109.10

2/6/07 9526 Imaging, Printing

& CD creation

110.22

2/8/07 9536 Imaging, Printing

& CD creation

138.26

2/15/07 29460 Messenger Service

to Secretary of

State

153.00

2/16/07 24039 Heavy Litigation

Copies

170.68

2/25/07 CC-26476 PDF, CD creating,

Blowbacks

51.00

1/30/07 29314 Messenger Service

Dept. of

Assessment and

Taxation for

USF&G corporate

records

294.70

1/31/07 Certificate of

Status via

Internet of USF&G

40.00

1/19/07 Expedited copies

of Articles of

Incorporation of

USF&G

79.00

2/27/07 466131 Meeting with

Bruce Smyth to

get case overview

and discuss

options for

graphics (2 hrs @

$195/hr)

390.00

2/2/07 466131 Prepared first

draft of graphics

780.00

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and scanned key

documents for use

in slides (4 hrs

@ $195/hr)

2/2/07 466131 Met with B. Smyth

to review

graphics (1 hr @

$195/hr

195.00

2/2/07 466131 Continued work on

slides (1 hr @

$195/hr)

195.00

2/2/07 466131 Met at client’s

office to revise

graphics;

continued work

back at office

(4.5 hrs @

$195/hr)

877.50

2/2/07 466131 GoPal revised

slides per

client’s notes

395.00

2/2/07 466131 Revised

slides/timeline

(3 hrs @ $195/hr)

585.00

In response, USF&G relies on Mr. Smyth’s Declaration:

17. All of the copying and exemplification

costs set forth in Exhibit 5 were incurred by

the counsel for USF&G and American Specialty

in connection with the litigation of the

case. The ‘litigants,’ American Specialty

and USF&G, are located in Indiana and the

East Coast and have their own copying

facilities for their own use. The costs of

copying in-house at Charlston, Revich &

Wollitz LLP and through outside vendors,

where necessary, were incurred to obtain

copies of documents from Lee Investments,

Rexford Properties, Aon Risk Services, GAB

and Diana Conley and providing service and

filing copies regarding the various and

numerous motions filed by USF&G and American

Specialty and in opposition to Lee’s various

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motions ....

18. Although Lee challenges the copy charges

as improperly including fees paid to experts

for intellectual efforts in assembling and

preparing the copies, the costs sought are at

the in-house rate of $.10 per page or the

actual charges of the copy service vendors

for the physical preparation and duplication

of documents.

19. Exhibit 5 also includes the cost of

obtaining certified copies of the articles of

incorporation of USF&G from the Maryland

Department of Assessment and Taxation to

establish that USF&G was in fact incorporated

in the State of Maryland. Although the

status of incorporation of USF&G in the State

of Maryland was determined from reliable

computerized research records, Lee refused to

accept that computerized information and

required USF&G to incur the expenses of

obtaining articles of incorporation on an

expedited basis and obtain copies.

20. Exhibit 5 also included sums included

for the preparation of a timeline of events

utilized in USF&G’s opening and closing

statements and referred to during the trial

and provided to the jury as well as for the

preparation of graphics setting forth the

relations of the parties from Paulson

Reporting. USF&G has sought recovery only

for the costs of the expenses utilized to

prepare and revise the presentation slides

and subsequently [sic] documentary timeline

in the sum of $3,412.50, and not the full

expenses of that vendor.

21. Although Lee objects to the in-house

charges for copies, the charges that reflect

the copying costs which were in fact charged

to USF&G and American Specialty in this

matter, for copies of documents produced,

pleadings, motions, service copies and

exhibits. The largest portion of the inhouse copy charges were incurred in the

filing and service of motions, pleadings and

deposition designations with this Court and

filings and exhibits utilized during the jury

trial. Thus, large charges were incurred

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with the pre-trial motions including USF&G’s

motion in limine to resolve the case, motions

to strike USF&G’s affirmative defenses and

its motion to dismiss the counterclaim of

Rexford Parties. See charges dated 9/28/2006

for $343.00 and 10/30/2006 for $960.00 (for a

total of $1,303.00).

22. The next large group of charges centers

on the designation of deposition transcripts,

the preparation of drafts and responses

regarding the pretrial order and the briefing

in support of and oppositions to almost 40

motions in limine. See in-house charges

dated 12/27/2006 for $202.40, $217.70,

$448.70, and $12.80 (for a total of $886.60). 

The next grouping of charges for in-house

copies all took place for work shortly before

the trial and includes copies of trial

exhibits, trial briefs and copies of

deposition transcripts. See charges dated

1/29/2007 for $10.00, $155.30, $231.70,

$6.80, $553.10, $2.00 and $1652.40 and charge

dated 2/28/2007 for $906.50 (for a total of

$3,517.80). As a result, the in-house

copying charges in connection with the jury

trial total $5,707.40 alone.

23. The final large grouping of costs were

incurred in connection with the April 4-6,

2007 bench trial, the preparation of proposed

findings of fact and conclusions of law and

the responses to Lee’s various motions to

amend the judgment and for new trial. See

in-house copy charges dated 3/28/2007 for

$294.60 and 4/26/2007 for $289.40 (for a

total of $584.00).

24. Although Lee contends that various of

the changes of the outside vendors could have

been used for other purposes, the records of

those invoices demonstrates that such costs

were in fact incurred in obtaining documents

from third parties in the case or for trial. 

While in some circumstances, the charges or

billing invoices do not set forth the

specific documents copied, other available

information establishes that the copies were

necessarily made in and for the litigation in

the case. For example, the entries for

October 8, 1999 and October 25, 1999 for

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outside document reproductions, were incurred

at the time I worked on the production of

documents for USF&G to Lee and reviewed

documents produced by Lee.

25. Other document copying costs for outside

services, such as those for November 8, 2005

and November 28, 2006, December 20, 29, 30

and 31, 2006, were ordered by my legal

assistants at the time, Carsi Beechler and

Anna Tom. Other charges, dated January 18,

2007 and January 9, 2007, reference documents

bearing a ‘U’ prefix, the prefix utilized for

USF&G trial exhibits in exchanges of

documents among the parties. The entries for

January 11, 2007 were ordered by the

paralegal assigned only to the trial of the

case, Tom Hayden. One charge, dated February

2, 2007, was a copy charge for GAB Robbins

documents by another attorney in this office,

Chad Wooten, in connection with documents

obtained for use at trial. The invoices for

February 2, 5, 6, and 8, 2007 were costs of

copying in connection with the trial of this

matter ordered by the temporary trial

assistant, Jan Williams, located out of the

temporary Fresno office utilized by USF&G’s

counsel during the pendency of the trial.

The litigation involved an extended time period, a

construction project, and an injured employee who incurred over

$1,000,000 in medical expenses. There were three sides to the

case and a large volume of documents. Because the copying costs

were limited to 10¢ per page and all parties needed voluminous

documents to prepare for and to try the case, the copying costs

have not been shown to unnecessary or excessive. These costs are

allowed.

USF&G is awarded copying costs in the amount of $31,842.09.

E. OTHER COSTS.

Lee objects to $9,070.50 of the $14,335.50 of “other costs”

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listed on the bill of costs. These costs are expert witness fees

of Arthur Levine on April 25, 2006 ($2,655.00), June 2, 2006

($2,065.00), June 20, 2006 ($3,613.00, and September 9, 2006

($737.50). Lee asserts that Dr. Levine was not a court-appointed

expert nor was he authorized pursuant to any statute and that

these costs should be entirely disallowed. See 28 U.S.C. §

1920(6); Crawford Fitting Co., supra, 482 U.S. at 442.

In response, USF&G relies on Mr. Smyth’s Declaration:

24. USF&G and American Specialty also seek

the recovery in the interest of justice of

all, or at least part, of the expert witness

fees paid to Arthur Levine for his deposition

testimony, a sum which totaled $9,071.25. In

the case, USF&G and American Specialty were

unfairly forced to incur these fees to take

extremely lengthy depositions of Dr. Levine

necessitated by his repeated changes to his

testimony and his lengthy, exhaustive and

exhausting testimony about topics which were

not properly the subject of expert testimony. 

In the limited circumstances when such

testimony might be admissible, Dr. Levine’s

testimony was so obviously biased and lacking

in reasonable foundation that it had no

probative value. Most of the topics of Dr.

Levine’s testimony were excluded by this

Court on the motion in limine of USF&G and

American Specialty. In the limited areas

where Dr. Levine did testify, his testimony

was inherently unbelievable and involved

simply the biased taking of a side in

litigation rather than appropriate testimony

of an expert. USF&G respectfully request the

award of all or at least a portion of the

expert witness fees they were compelled to

pay in order to elicit largely inadmissible,

biased and inherently unbelievable testimony

of Dr. Levine.

USF&G cites no authority permitting the Court to award these

costs in the interests of justice and none has been found. 

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Crawford Fitting and Section 1920(6) preclude allowance of these

other costs. These costs are disallowed.

CONCLUSION

For the reasons stated, USF&G’s Bill of Costs is taxed at

the amount of $78,936.94.

IT IS SO ORDERED.

Dated: August 2, 2010 /s/ Oliver W. Wanger 

668554 UNITED STATES DISTRICT JUDGE

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