Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-03518/USCOURTS-cand-4_04-cv-03518-11/pdf.json

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

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

AMERICAN COLOR GRAPHICS, INC.,

Plaintiff,

 v.

TRAVELERS PROPERTY CAS. INS. CO.,

Defendant. 

No. C 04-3518 SBA

ORDER

[Docket Nos. 414, 427]

Defendant Travelers Property Casualty Insurance Co. (Travelers) has filed a Motion for Review

of the Clerk’s Taxation of Costs [Docket Nos. 414, 427] requesting the Court reduce the taxable costs

assessed against Travelers from $82,989.94 to $22,124.70. 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 Court GRANTS in PART Travelers’s motion.

BACKGROUND

In August of 2004, plaintiff American Color Graphics, Inc. (ACG) filed a complaint against

Travelers alleging breach of contract and breach of good faith and fair dealing. A jury trial was held

in September 2006. The jury found that Travelers breached the contract and awarded nominal damages

of seven cents. See Docket No. 335 (Jury Verdict). The jury also found that Travelers breached its

implied obligation of good faith and fair dealing and awarded AGC $140,000.00. Id. AGC filed its

original Bill of Costs on November 3, 2006, seeking $99,667.01 in taxable costs. See Docket No. 357.

Travelers objected to the bill of costs on November 13, 2006. See Docket No. 373. On November 21,

2006, ACG filed an Amended Bill of Costs for $94,980.41. See Docket No. 376. On November 30th,

Travelers filed further objections. See Docket No. 383.

On December 14, 2006, the Clerk of Court assessed costs against Travelers in the amount of

$82,989.94. 

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LEGAL STANDARDS

Rule 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 . . . .” FED. R. CIV. P. 54(d)(1). Rule 54(d)(1) thus

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).

To overcome this presumption, a losing party must establish a reason to deny costs. Dawson, 435 F.3d

at 1070. 

In Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-42 (1987), the Supreme Court

held that federal courts are limited to assessing those costs enumerated under 28 U.S.C. § 1920. Section

1920 provides that:

A judge or clerk of any court of the United States may tax as costs the following:

(1) Fees of the clerk and marshal;

(2) Fees of the court reporter for all or any part of the stenographic transcript

necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exemplification and copies of papers necessarily obtained for use in the

case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and

salaries, fees, expenses, and costs of special interpretation services under section

1828 of this title. 

The Local Rules outline the procedures for requesting and objecting to costs. Rule 54-1(a)

provides that “No later than 14 days after entry of judgment or order under which costs may be claimed,

a prevailing party claiming taxable costs must serve and file a bill of costs.” N.D. Cal. Civ. R. 54-1(a).

Local Rule 54-2(a) declares that “Within 10 days after service by any party of its bill of costs, the party

against whom costs are claimed must serve and file any specific objections to any item of cost claimed

in the bill, succinctly setting forth the grounds of each objection.” N.D. Cal. Civ. R. 54-2(a). Rule 54-

4(a) adds that “The Clerk may require and consider further affidavits and documentation as necessary

to determine allowable costs.” N.D. Cal. Civ. R. 54-4(a). Rule 54-4(b) continues that “No sooner than

10 days after a bill of costs has been filed, the Clerk shall tax costs after considering any objections filed

pursuant to Civil L.R. 54-2.” N.D. Cal. Civ. R. 54-4(b).

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Federal Rule of Civil Procedure 54(d)(1) provides that “On motion served within 5 days

thereafter [after costs are taxed by the clerk], the action of the clerk may be reviewed by the court.”

Local Rule 54-5 similarly provides for review of the Clerk’s taxation of costs. This rule stipulates that

Pursuant to FRCivP 54(d)(1), any motion for review of the Clerk’s taxation of costs must

be filed within 5 days of the entry of the notice of taxation of costs. The motion must

conform to the requirements of Civil L.R. 7-2 through 7-5. If no motion is filed within

15 days of the Clerk’s taxation of costs, the Clerk’s determination of costs shall be final.

N.D. Cal. Civ. R. 54-5.

ANALYSIS

Travelers’s specific objections to costs are addressed in turn. 

1. Timeliness

Travelers objects that ACG’s Amended Bill of Costs was untimely and therefore should not be

considered. Rule 54-1(a) provides that a bill of costs must be served and filed within fourteen days of

the judgment or order under which costs are claimed. In this case, judgment was entered on October

24, 2006. See Docket No. 352. The original bill of costs was timely filed on November 3, 2006. See

Docket No. 357. Travelers objected on November 13, 2006. See Docket No. 373. ACG filed its

amended bill of costs on November 21, 2006. See Docket No. 376. On November 30th, Travelers filed

further objections. See Docket No. 383.

Travelers appears to be arguing that any amendment to a bill of costs must come within fourteen

days of judgment to be timely. While the Local Rules do not explicitly provide for amended bill of

costs, such amendments are common in federal court. In addition, Travelers has cited no authority that

the filing of an amended bill of costs must come within the time period for the filing of the original bill

of costs. Indeed, in the case cited by Travelers, Intermedics, Inc. v. Ventritex, Inc., 1993 WL 515879,

at *1 (N.D. Cal. 1993), the court considered a revised bill of costs that was submitted outside the timeframe for the filing of the original bill of costs. Moreover, Travelers’s position would seem to conflict

with Local Rule 54-4(a), which declares that “The Clerk may require and consider further affidavits and

documentation as necessary to determine allowable costs.” N.D. Cal. Civ. R. 54-4(a). The Court

therefore finds that the amended bill of costs, filed one week after Travelers’s objection, is not untimely

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and will therefore proceed to consider the substance of the parties’ contentions as to costs. 

2. Sanctions Software

Travelers contends that it should not be taxed $22,289.04 for ACG’s use of Sanctions software

at trial. It argues that not only did ACG mistakenly rely on Affymetrix, Inc. v. Multilyte Ltd., 2005 WL

2072113 (N.D. Cal. 2005), to support its position that the use of Sanctions software is the “type of cost

for visual aids [that] is routinely awarded by the Court,” but in fact this case disallowed costs for use

of animated PowerPoint presentations. The Affymetrix court found that “While using animated

PowerPoint presentations was admittedly a more engaging method of conveying information, it was not

necessary. Poster boards would have sufficed.” Affymetrix, 2005 WL 2072113, at *4 (emphasis in

original). 

The governing rule here is Local Rule 54-3. This states that “The cost of preparing charts,

diagrams, videotapes and other visual aids to be used as exhibits is allowable if such exhibits are

reasonably necessary to assist the jury or the Court in understanding the issues at the trial.” N.D. Cal.

Civ. R. 54-3(d)(5). ACG maintains that the Sanctions software was vital to the presentation of countless

documents given the number of documentary exhibits presented, and was critical because it enabled the

jury to view the exhibits with precision, detail, and speed. Travelers counters that this was a short trial

and that the “countless documents” introduced by ACG amounted to a total of just sixty-one.

Of the $22,289.04 of expenses incurred by the use of the Sanctions software, $12,375.00 was

for a video technician. In Coats v. Penrod Drilling Corp., 5 F.3d 877, 891 (5th Cir. 1993), cert. denied,

510 U.S. 1195 (1994), the Fifth Circuit disallowed fees for a video technician incurred for video

depositions because this was not an expense included in section 1920 and was therefore not recoverable.

Section 1920 lists six categories of recoverable costs. Fees for a video technician does not easily fit

within any of the enumerated categories and therefore the fees for the video technician will not be

allowed. 

As for the remainder of the Sanctions software costs, ACG has failed to demonstrate they were

reasonably necessary. Just as in Affymetrix, the use of the Sanctions software may in fact have been a

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useful means of conveying information, but it does not appear reasonably necessary to the sixty-one

documents shown to the jury. The $22,289.04 in costs for the Sanctions software will not be taxed. 

Travelers also requests that ACG’s overall costs be reduced by twenty percent because it argues

that ACG has misled the Court, specifically for the citation to Affymetrix. Counsel for ACG has

acknowledged misreading the case. There does not appear to be any pervasive misleading of the Court

or any evidence of bad faith on the part of ACG. Accordingly, a general reduction of overall costs does

not appear warranted. 

3. Fees for Service of Summons and Subpoena 

Travelers objects to the $977.78 taxed for service of summons and subpoenas, and requests that

it be taxed no more than $752.78. Travelers contends that $175.00 was for improper service of process

of trial witnesses on counsel for Travelers. It also objects to $50.00 for the expedited service of process

on Aiza Custodio. ACG does not address Travelers’s objections to these points, and therefore provides

no justification for awarding these costs. Accordingly, the Court will reduce these costs by $225.00.

4. Fees for Exemplification and Copies of Papers

Travelers objects to costs for exemplifications and copies of papers that ACG is seeking to

recover because Travelers asserts these costs are duplicative of fees and costs ACG is seeking in another

motion. ACG does not specifically respond to Travelers’s objection with regard to the charge of

duplication of costs. On the other hand, Travelers does not identify what costs it alleges overlap with

the other motion. Neither side identifies the specific costs in dispute here. Becaues Local Rule 54-2(a)

declares that “the party against whom costs are claimed must serve and file any specific objections to

any item of cost claimed in the bill, succinctly setting forth the grounds of each objection,” and

Travelers has not identified specific objection to the costs awarded by the Clerk for exemplification and

copies of papers, Travelers’s objection is overruled. N.D. Cal. Civ. R. 54-2(a) (emphasis supplied). In

addition, if ACG is seeking duplicative costs in another motion, Travelers may object to any such

duplication when that motion is filed and heard.

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5. Fees for Witnesses

Travelers objects to costs associated with ACG’s out-of-state witness (Floyd Childress, Michael

Spragge, and Pat Kellick) for five days of travel, meals, and lodging. The Clerk of Court assessed a

total of $6,221.92 for witness fees, which Travelers requests be reduced to no more than $3,087.20.

Travelers does not challenge the per diem rate charged for the witnesses, as the relevant statute

authorizes this to be set by the United States General Services Administration. It objects to the number

of days for which the costs are claimed. Travelers contends that five days of witness fees for Childress

and Spragge is excessive and unnecessary, and it maintains that three days for Kellick is likewise

excessive and unnecessary. Travelers argues that it was unnecessary for the witnesses to be available

for these numbers of days before trial and before their actual trial testimony occurred.

ACG counters that courts have routinely awarded costs for witnesses for the time they were

available for trial, not merely for the time the witnesses spend testifying at trial, citing to Haroco, Inc.

v. American National Bank and Trust Co. of Chicago, 38 F.3d 1429, 1442 (7th Cir. 1994), and Smith

v. Board of School Commissioners of Mobile County, 119 F.R.D. 440, 446 (S.D. Ala. 1988). Resolution

of this dispute hinges on a matter of statutory interpretation, which in this case clearly cuts in favor of

ACG’s position. Title 28 U.S.C. § 1821(b) provides that “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.” This would appear to cover any time

necessarily spent during attendance. 

ACG relates that Childress, Spragge, and Kellick are witnesses whose residences were in

Tennessee. ACG seeks to recover $2,132.76 for fees paid to Childress; $1,469.96 for fees paid to

Kellick; and $2,151.90 for Spragge, which include a per diem rate for each day the witnesses were

available for testifying at trial. Given that flights back and forth between California and Tennessee

would likely cost more than meals and lodging for five or three days during trial, the costs for the time

the witnesses were available to testify seems reasonable and necessary. Therefore, ACG will be allowed

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to recover these costs and Travelers’s motion is denied on this point. 

6. Additional Objections

Travelers objects to $377.86 in costs taxed for black-binder trial notebooks. Travelers requests

that these costs either be vacated or reduced to $161.94 for the costs of three binders rather than seven.

ACG’s response is that the notebooks were necessary because there were over 2,200 pages of

trial exhibits and it therefore needed to organize these materials. ACG also relies upon Intermedics, Inc.

v. Ventritex, Inc., 1993 WL 515879, at *7 (N.D. Cal. 1993), where the court stated that “Ventritex is

entitled to recover for reproduction costs of the five copies [of exhibits], plus the binders that were used

to organize the exhibits.” That case is not entirely persuasive. In Ventritex, the court required the party

to deliver three sets of exhibits to be provided to the court, and of necessity, the party also had to

provide a copy to opposing counsel and it made one copy for itself. Local Rule 54-3(d)(4) declares that

“The cost of reproducing trial exhibits is allowable to the extent that a Judge requires copies to be

provided.” This Court does expect that counsel will provide the Court with a copy of such materials and

a copy to be furnished to opposing counsel. Thus, the Court finds that the costs of three binders, one

for the Court, one for opposing counsel, and one for the producing party, to be reasonably necessary and

will allow for the costs of $161.94

7. ACG’s Withdrawal of Costs for Depositions

ACG has agreed to withdraw its request for the costs of various depositions. Namely, it is

withdrawing its request for $815.08 for the deposition of James Sevey; $1,646.96 for the deposition of

George Williams; $1,575.92 for the deposition of Alan Ghitterman; $279.89 for the deposition of

Russell Ghitterman; and $998.94 for the deposition of Thomas Sampson. This totals a voluntary

withdrawal of $5316.79 in costs. 

8. ACG’s Requests

ACG requests that it be allowed to recover for the costs of obtaining daily transcripts and

transcripts of various hearings. ACG’s requests are in the form of a response to Travelers’s motion.

ACG, however, does not have a properly submitted motion before the Court to review the Clerk’s

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assessment of costs. ACG’s requests are therefore denied. 

CONCLUSION

The Court reduce the costs taxed to Travelers by $28,046.75 to reflect those costs associated

with the Sanctions software, unopposed objections, four black-binder notebooks, and the voluntary

withdrawal of costs by ACG. This reduces the $82,989.94 imposed by the Clerk to a total award of

$54,943.19 in ACG’s favor. 

IT IS SO ORDERED.

March 19, 2007 _________________________________

Saundra Brown Armstrong 

United States District Judge

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