UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

__________________________________________ 

 ) 

JACK BEAM and RENEE BEAM, ) 

 ) 

 Plaintiffs, ) No. 07-cv-1227 (RRP) 

 ) 

 v. ) 

 ) REPLY 

MATTHEW S. PETERSEN, FEDERAL ) 

ELECTION COMMISSION CHAIRMAN, ) 

 ) 

 Defendant. ) 

__________________________________________) 

FEDERAL ELECTION COMMISSION’S REPLY 

IN SUPPORT OF ITS BILL OF COSTS 

I. INTRODUCTION 

The Federal Election Commission (“Commission” or “FEC”) — the prevailing party in 

this case — timely filed its bill of costs. (Doc. 213.) “Federal Rule of Civil Procedure 54(d)

provides that costs should be allowed as a matter of course to the prevailing party,” Little v. 

Mitsubishi Motors N.A., Inc., 514 F.3d 699, 701 (7th Cir. 2008), and “where Rule 54(d) applies, 

. . . the losing party must overcome that presumption.” Delta Air Lines, Inc. v. Colbert, 692 F.2d 

489, 490 (7th Cir. 1982). Nevertheless, plaintiffs filed numerous objections to the Commission’s 

bill of costs, arguing that the Court should either deny costs altogether or disallow certain costs. 

(Doc. 215.) Plaintiffs’ opposition does not overcome the “strong presumption” created by Rule 

54(d). Mother & Father v. Cassidy, 338 F.3d 704, 708 (7th Cir. 2003). Plaintiffs’ brief relies 

upon arguments that this Court has rejected, appears to misunderstand the applicable law, and 

mischaracterizes or misinterprets facts in a failed effort to demonstrate Commission misconduct. 

In itemizing its costs, the Commission asked for amounts within the limits set by federal law and 

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sought less than all the costs to which it is entitled.1

 The amounts the Commission has been 

forced to expend in this case, which plaintiffs initiated in March 2007 and pursued with two 

amended complaints, are public funds. The Court should award the full amount sought. 

II. PLAINTIFFS FAIL TO OVERCOME THE STRONG PRESUMPTION THAT 

THE COMMISSION SHOULD BE AWARDED THE COSTS IT HAS CLAIMED 

A. Plaintiffs Have Failed to Carry Their Burden to Show that They Should Not 

Be Taxed for Any of the Commission’s Costs 

Neither legal precedent nor the facts support denying the Commission’s bill of costs in 

toto. The Beams wrongly characterize the Commission’s vigorous defense of this lawsuit as 

evidence of “unclean hands.” And, despite their disclaimer to the contrary (Opp. 3), plaintiffs 

use their opposition to raise arguments that the Court earlier rejected. 

Although a district court has discretion in deciding whether to award costs, the Seventh 

Circuit has held that the discretion is “narrowly confined” because of the strong presumption 

created by Rule 54(d). Contreras v. City of Chicago, 119 F.3d 1286, 1295 (7th Cir. 1997). The 

Seventh Circuit recognizes “only two situations in which the denial of costs might be warranted: 

the first involves misconduct of the party seeking costs, and the second involves a pragmatic 

exercise of discretion to deny or reduce a costs order if the losing party is indigent.” Mother & 

Father, 338 F.3d at 708; see also, e.g., Rivera v. City of Chicago, 469 F.3d 631, 634 (7th Cir. 

2006).2

 The Beams do not claim they are indigent, but they do assert that the Commission has 

“unclean hands,” in effect accusing the Commission of what the Seventh Circuit calls 

 

1

 The Supreme Court has concluded that 28 U.S.C. § 1920 defines the term “costs” in 

Federal Rule of Civil Procedure 54(d). Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 

441 (1987). 

2

 In explaining these circumstances, the Seventh Circuit assumed that the prevailing party 

complied with the procedural requisites for filing a bill of costs, e.g., filing timely. A failure to 

comply may also result in denying the bill. See, e.g., In re Gallo, 585 F.3d 304 (7th Cir. 2009). 

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“misconduct.” However, that term applies only in “exceptional circumstances.” Overbeek v. 

Heimbecker, 101 F.3d 1225, 1228 (7th Cir. 1996). 

Courts of this circuit have rarely found circumstances so “exceptional” as to justify 

completely denying a prevailing party’s bill of costs. “[O]nly misconduct by the prevailing party 

worthy of a penalty (for example, calling unnecessary witnesses, raising unnecessary issues, or 

otherwise unnecessarily prolonging the proceedings) . . . will suffice to justify denying costs.” 

Congregation of the Passion, Holy Cross Province v. Touche, Ross, & Co., 854 F.2d 219, 222 

(7th Cir. 1988); see also, e.g., Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d 926, 945 (7th 

Cir. 1997) (same). For example, in Overbeek, the Seventh Circuit concluded that the district 

court did not abuse its discretion in denying all costs where the prevailing party’s counsel caused 

a decade of protracted and needless litigation. Counsel refused multiple settlement offers of an 

insurance policy limit, needlessly pursued a trial, appealed the jury’s decision not to award 

punitive damages (even though the defendants were judgment-proof), vanished for long periods, 

and made frivolous arguments. 101 F.3d at 1228. 

Unlike the prevailing party in Overbeek, the Commission engaged in no “misconduct . . . 

worthy of a penalty” during this litigation. Congregation of the Passion, 854 F.2d at 222. 

Indeed, as explained below, the Commission engaged in no misconduct at all. 

1. The Commission’s “Reason to Believe” Finding in the Pre-Litigation 

Administrative Proceedings Does Not Evidence Misconduct 

 

Plaintiffs’ opposition errs by relying (Opp. 3-4, 7) on the Commission’s pre-litigation 

vote to find “reason to believe” (“RTB”) that they may have violated the Federal Election 

Campaign Act (“Act” or “FECA”), 2 U.S.C. §§ 431-455. Plaintiffs offer no legal support, 

however, for their erroneous suggestion that pre-litigation action could support a claim of 

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litigation misconduct. Under the Seventh Circuit’s criteria for misconduct, plaintiffs’ arguments 

about the Commission’s RTB finding are irrelevant to the taxing of costs. See supra p. 3. 

Even if a party’s pre-litigation conduct were relevant, plaintiffs misunderstand the Act’s 

“elaborate and detailed administrative process.” Stockman v. FEC, 138 F.3d 144, 147 (5th Cir. 

1998); see 2 U.S.C. § 437g. An RTB finding is a preliminary determination that an investigation 

is warranted, a statutory prerequisite to the Commission’s initiating a formal investigation to 

determine whether there is “probable cause to believe” that the named individual has violated the 

Act. See 2 U.S.C. § 437g(a)(2); see also § 437g(a)(3)-(4). It does not represent a prejudgment 

of the issue. An “FEC[ ] investigation does not determine any rights of the person under review 

and merely leads to a possible FEC decision to seek de novo judicial review to enforce the 

provisions of the Act.” Stockman, 138 F.3d at 155. See also, e.g., FTC v. Standard Oil Co., 

449 U.S. 232, 240-41 (1980) (“By its terms, the [Federal Trade] Commission’s averment of 

‘reason to believe’ that [the respondent] was violating the Act is not a definitive statement of 

position. It represents a threshold determination that further inquiry is warranted . . . .”). 

The Commission made RTB findings about a number of individuals associated with the 

Fieger law firm and the firm’s principals, the focus of the agency’s enforcement proceedings in 

Matter Under Review (“MUR”) 5818. The Commission’s RTB finding as to plaintiffs was 

based in part on their affiliation with the Fieger firm and the fact that they had made substantial 

contributions to the Edwards for President campaign at roughly the same time as many Fieger 

firm conduits did so. (FEC’s Factual and Legal Analysis, dated Sept. 26, 2006, at 2 (Joint Trial 

Exhibit (“Exh.”) 2; see Trial Transcript (“Tr.”) at 44).) In fact, the Commission did not 

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ultimately find “probable cause” to believe that the Beams violated the Act.3

 Moreover, by 

voting to find RTB, the Commission did not, as plaintiffs assert (Opp. 7), “harass[ ]” and 

“threaten[ ]” them. Although the subject of an RTB finding may be inconvenienced, complying 

with an administrative investigation is not legally cognizable harm.4

 

2. The Commission’s Objections to Plaintiffs’ Discovery Requests Do 

Not Evidence Misconduct 

The Commission objected to some of plaintiffs’ discovery requests and explained why in 

an opposition (Doc. 119, filed January 28, 2009). Plaintiffs now allege (Opp. 4-5) that the 

Commission has “unclean hands” because it opposed the requested discovery. To support that 

allegation, however, plaintiffs rely (id.) on pejorative, conclusory assertions and refer to this 

Court’s discovery orders without mentioning the limits the Court imposed on discovery. 

Plaintiffs have wrongly equated the Commission’s vigorous defense with “unclean hands” or 

misconduct. A court may not “penalize[ ] [a party] for maintaining an aggressive litigation 

posture.” Lipsig v. Nat’l Student Marketing Corp., 663 F.2d 178, 180-81 (D.C. Cir. 1980) (citing 

Adams v. Carlson, 521 F.2d 168, 170 (7th Cir. 1975)). 

The Commission acted reasonably in opposing plaintiffs’ discovery requests, which were 

broad and burdensome. As the Commission explained in its opposition, the Commission had 

furnished sworn declarations from knowledgeable government employees who stated that the 

agency had not received any personal financial information about the Beams from the 

 

3

 Plaintiffs appear to claim (Opp. 4) that the RTB finding was based on an error as to 

whether they had made campaign contributions in the past, but plaintiffs mistakenly assume that 

past contributions would eliminate the possibility that they had acted as conduits in the factual 

situation involved in MUR 5818. 

4

 See, e.g., Laird v. Tatum, 408 U.S. 1 (1972) (finding that plaintiffs could not challenge 

Army’s intelligence-gathering investigation because it did not threaten plaintiffs’ cognizable 

interests); Stockman, 138 F.3d at 154-55. Cf. Standard Oil, 449 U.S. at 244 (noting that the 

“expense and annoyance of litigation is part of the social burden of living under government” 

(internal quotation marks and citation omitted)). 

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Department of Justice. In response, plaintiffs even sought to depose litigation counsel 

representing the Commission in this very case. Moreover, plaintiffs did not limit their document 

requests to items relevant to the alleged violation of the Right to Financial Privacy Act — the 

only remaining claim at that time. And requested documents included confidential information 

about ongoing law enforcement proceedings. (FEC Opp. (Doc. 119) at 5-8, 11-13.) This Court 

ordered modified discovery — permitting some parts of plaintiffs’ requested discovery but 

denying others — and in doing so the Court did not find that the Commission’s objections were 

frivolous or sanctionable. (See Transcript of Jan. 7, 2009, hearing (Doc. 120); Transcript of Feb. 

11, 2009, hearing (Doc. 127), at, e.g., pp. 5, 7-12, 14.) 

3. Witness Olaya’s Testimony Does Not Evidence Commission 

Misconduct 

Contrary to plaintiffs’ allegation (Opp. 3), FEC staff attorney and witness Phillip Olaya 

did not “flip[ ]” his testimony at trial. Before trial, he executed a declaration explaining that he 

had mistakenly answered in the affirmative a question at his deposition about whether he had 

seen materials related to plaintiffs on a CD of public trial materials. See Trial Tr. at 304-08, 

333-34; Joint Trial Exh. 19. At trial, Mr. Olaya further explained that, in answering that 

question, he “perhaps was not paying attention or had lost . . . [his] concentration and just 

responded ‘Yes’ to seeing that information.” Trial Tr. at 324, lines 1-3; see also id. at 336. Mr. 

Olaya also stated that he is “not a litigator. I had never been part of a deposition. . . . So there 

were some nerves . . . .” Id. at 337, lines 9-12. Finally, he testified that he was not “pressured” 

to change his deposition testimony and that he himself had discovered his error. Id. at 318, 

334-35. In sum, an inexperienced and nervous deponent made a mistake in answering a question 

and corrected it before the bench trial began. This Court assessed his credibility in finding for 

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the FEC. (Memorandum Opinion (“Mem. Op.”) at 9 (Doc. 211).) The Commission engaged in 

no misconduct regarding Mr. Olaya. 

4. Plaintiffs’ Subjective Belief in Their Case Does Not Support Denying 

the Commission’s Bill of Costs 

 

Plaintiffs’ brief includes arguments why they believe their case against the Commission 

was strong. But to deny the prevailing party its bill of costs, the losing party must demonstrate 

something more than his good-faith belief in the strength of his case. “More than just a showing 

of good faith is necessary to immunize the losing party from paying costs.” Muslin v. 

Frelinghuysen Livestock Mgrs., Inc., 777 F.2d 1230, 1236 (7th Cir. 1985). “[I]t is insufficient 

that the losing plaintiff had a reasonable basis for her case.” Delta Air Lines, 692 F.2d at 491. 

Moreover, plaintiffs will not be “penalized” (Opp. 3) by having to pay the winning defendant’s 

costs. Rule 54(d) is not a penalty or sanction; rather, it is a generally applicable modification of 

the former practice that each side bears its own costs. See, e.g., Anderson v. Griffin, 397 F.3d 

515, 522 (7th Cir. 2005). In contrast, denying the prevailing party all its costs does function, as 

the Seventh Circuit has said, as a “penalty.” See supra p. 3. Plaintiffs have failed to make the 

necessary showing that the Commission should be so penalized. 

B. Plaintiffs Have Failed to Carry Their Burden to Show that the Commission 

Is Not Entitled to Reimbursement for Certain Specific Costs 

1. Lodging and Per Diem Expenses for Commission Witnesses 

 Contrary to plaintiffs’ assertions (Opp. 5-6), the amounts the Commission seeks for the 

lodging and per diem expenses of witnesses are not excessive. Plaintiffs’ objection to those costs 

rests on the trial’s lasting two days. But whether a claim of costs is reasonable depends on the 

prevailing party’s assessment at the time the party made its plans, not in hindsight. See, e.g., 

Majeske v. City of Chicago, 218 F.3d 816, 825 (7th Cir. 2000) (stating that “the determination of 

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necessity must be made in light of the facts known when the transcript was requested”). The 

last pretrial order that Commission counsel submitted to the Court stated that plaintiffs believed 

the trial would take three or four days to complete and that the FEC expected the trial could last 

three days. See “Final Pretrial Order” at p. 4, attached to August 18, 2010, e-mail from 

Benjamin Streeter to Ena Ventura (with a copy to plaintiffs’ counsel), and provided here as Exh. 

1. The Commission therefore made hotel reservations for most of the government witnesses for 

three nights. By the time the Commission’s attorneys realized the trial would likely end some 

time in the afternoon of the second day — the trial transcript shows that the trial ended at 3:46 

p.m. on August 26 (Tr. at 361) — it was too late for the Commission to avoid incurring hotel 

charges for the third night. If the Commission had made hotel reservations for only two nights, 

the witnesses would have had to check out in the morning and, if the trial had not ended by the 

second day, they would have faced the difficult task of finding lodging at the last minute for the 

third night. For the same reasons, plaintiffs’ challenge to the award of the costs for meals and 

other per diem expenses for the third day also fails. The federal government sets the per diem 

rates, and the Commission seeks no more than the amounts allowed by federal law. See 

28 U.S.C. § 1821(d)(2), (3). 

2. Transportation Costs for Commission Witnesses

Although plaintiffs broadly dispute the claimed costs for ground transportation, they cite 

only the costs incurred by witness Roger Hearron. (Opp. 6.) However, the $50 charge for taxi 

service from O’Hare Airport was for transporting both Mr. Hearron and fellow witness Thomas 

Andersen, who shared the taxi. (See Declaration of Thomas Andersen, attached as Exh. 2; see 

also Bill of Costs, Exh. B at B-04 (showing that Andersen did not claim any amount for 

transportation from the airport to the hotel).) Plaintiffs’ counsel states (Opp. 6) that he usually 

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paid about $27 per trip from O’Hare to an unspecified hotel. Under plaintiffs’ apparent view, if 

the two FEC witnesses had traveled in separate taxicabs, a reasonable fare for each would have 

been $27, for a total of $54 — a sum greater than the amount Mr. Hearron actually paid. Going 

home, Mr. Hearron paid $47.55 for a taxi to O’Hare. (Bill of Costs, Exh. D at D-04.) Because 

traffic and other factors affect a taxi charge, this amount is reasonable for the trip involved. See, 

e.g., Chicago Taxi Fare Finder, http://chicago.taxiwiz.com (estimating the cost at “roughly $43” 

including tip, and noting that “[t]raffic and other factors will affect the actual fare”) (last visited 

Nov. 29, 2010). Plaintiffs ignore the cost-saving measures by two other witnesses who traveled 

between the airport and the hotel by train or other inexpensive means. (See, e.g., Bill of Costs, 

Exh. F at F-04.) 5

 In questioning the lack of taxi receipts (Opp. 6), plaintiffs also overlook the 

federal government’s travel regulations, which do not require government employees to get a 

receipt for a miscellaneous expense less than $75. See 41 C.F.R. §§ 301-11.25, 301-52.4. 

In challenging the witnesses’ overall transportation costs, plaintiffs again focus on Mr. 

Hearron’s costs. His airline ticket cost $211.40, and the airline also charged a baggage check fee 

of $23 each way. (Bill of Costs, Exh. D at D-03, D-04.) For each witness, including Mr. 

Hearron, the Commission paid a travel agent fee of $28.50. (Bill of Costs, Exh. A at A-01.) 

Thus, adding in the taxi expenses described above, the costs for Mr. Hearron’s travel total 

$383.45, the sum for which the Commission is seeking reimbursement. 

3. Internet and ATM Fees 

As plaintiffs admit, the Commission stated it is not seeking reimbursement for any 

Internet and ATM fees. (Opp. 6; Summers Decl. at 2 ¶ 3.) Plaintiffs claim that the FEC is 

 

5

 In arguing that a $27 charge would be reasonable, plaintiffs incorrectly state that witness 

Olaya paid $27.10 for taxicab rides to and from O’Hare. In fact, Mr. Olaya did not travel by taxi 

to or from the airport and did not seek reimbursement from the Commission for his travel. (See

Bill of Costs, Exh. E at E-03.) 

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nonetheless seeking reimbursement for these expenses, but in fact, the Commission excluded 

(subtracted) those fees in calculating its bill of costs. 

4. Transcript Expenses 

Contrary to plaintiffs’ assertion (Opp. 6-7), the expenses for videotaping the deposition of 

Ms. Wassom Bayes were reasonable and necessary. The amount sought is within the limits set 

by this Court and the Judicial Conference of the United States, and the Commission has 

explained the important roles Ms. Wassom Bayes played. (Summers Decl. ¶ 4.) Because she 

was unable to travel to Chicago for the trial due to the recent birth of her child, the deposition 

was in lieu of her trial testimony. Submitting both a videotape of the deposition and a transcript 

would better allow the Court to evaluate the witness’s demeanor and credibility. As the Court’s 

opinion confirms, the credibility of the government’s witnesses was an important factor in the 

Court’s decision. (Mem. Op. (Doc. 211) at 9.) 

The Seventh Circuit has held that the Federal Rules authorize a district court to award the 

prevailing party the costs of both video-recording and stenographically transcribing the same 

deposition. Little v. Mitsubishi Motors, 514 F.3d at 702. Accord, e.g., Fairley v. Andrews, No. 

03 C 5207, 2008 WL 961592, at *11 (N.D. Ill. Apr. 8, 2008) (awarding fees for video recordings 

and stenographic transcripts in connection with the depositions of all non-parties because “there 

was a reasonable possibility that they would be unavailable for trial”). Most federal courts of 

appeals that have recently addressed this issue have reached the same conclusion.6

 

Plaintiffs also object (Opp. 7) to the Commission’s request for the costs of transcripts of 

two hearings. But plaintiffs merely assert (id.) that the costs (respectively $25.20 and $82.45) 

 

6

 See, e.g., Kurtis A. Kemper, Annotation, Taxation of Costs Associated with Videotaped 

Depositions under 28 U.S.C. § 1920 and Rule 54(d) of Federal Rules of Civil Procedure, 

156 A.L.R. Fed. 311 (1999; updated 2010); 4 John H. McElhaney & Vincent J. Hess, Bus. & 

Com. Litig. Fed. Cts. § 49:17 (2d ed. 2009) (“Types of costs — Videotape deposition”).

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were “unnecessary and served no purpose other than to add extra items to [the] bill of costs.” 

This bald statement of plaintiffs’ opinion fails to rebut the Commission’s detailed explanation. 

(See Summers Decl. ¶ 6.) A losing party must provide objective reasons to overcome the 

presumption in favor of awarding a cost. See, e.g., Rivera, 469 F.3d at 636. 

III. CONCLUSION 

 The Beams have failed to carry their burden to overcome the presumption in favor of 

awarding costs to the Commission as the prevailing party. Accordingly, this Court should award 

the Commission the full amount it seeks in its bill of costs. 

Respectfully submitted, 

 Phillip Christopher Hughey 

Acting General Counsel 

David Kolker 

Associate General Counsel 

Harry J. Summers 

Assistant General Counsel 

Benjamin A. Streeter III 

Attorney 

/s/ Holly J. Baker

Holly J. Baker 

Attorney 

November 30, 2010 FOR THE DEFENDANT 

FEDERAL ELECTION COMMISSION 

AND ITS CHAIRMAN 

999 E Street, N.W. 

Washington, D.C. 20463 

(202) 694-1650 

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