### INTHE UNI TED S TATESCOU RT OFAPPEALS FORTHE FIFTH CIRCU IT

N o. 08- 40711
S &D TRADI NG ACADEM Y, L LC ; S &D GLOBAL T RADI NG I NC P l ai n t i f fs - A pp el l an t s v. AAF I S I NC D efen da n t- A pp el l ee
Cons o l i da t e d wi t h N o. 08- 40776
S &D T RA DI NG A CA DE M Y , L L C; S &D G L OB ALT RA DI NG I NC P l ai n t i f fs - A pp el l ees v. AA F I S I NC D e fe nda nt- Appe l l ant

A p p ea lf

rom the U n i tedS tates D i stri ct C ou rt f or t h e Sou t h ern D i st ri ctof T exas U SD C N o. 3: 06- C V

- 739

B ef ore R E AV L E Y , W IE N E R , an d S O U T H W IC K , C i rcui tJu dg es . United States Court of App eals

Fifth Circuit 

### F I L E D Jul y 1, 2009 Cha rl es R. F ulb ru g e II I ClerkN o. 08- 40711 c/w N o. 08- 40776

Pursuant to 5 T H C IR . R. 47.5 , the court has determined that this opinion should not * be publishe d and is not precedent exceptunder the limited circu mstance s set forthin5 T H C IR . R. 47.5 .4. 2 P E R C U R IA M: * S& D Tradi ng A c adem y, LL C and S& D G l obalTradi ng, I nc. (c ol l ec t ively,

“ S& D ” ) a ppe alt he di s t r i c tc o ur t ’ s g r anto f s um m ar y j udg m e nt i n fav o ro f AA FI S, In c . o n S & D ’ s co n tr a c tu a l a n dq u a s i-c o n tr a c tu a l cla im s . AA F IS cr o s s -a p p e a ls
r e ga r di ng t he a w ar d o f c o s t s . Fo rt he r e as o ns t hatf o l l o w , w e AFF I RM t he di st ri ctcourt ’ s r u l i n g w i t h res pect t o each i ssue. I
. B AC KGR OUND I n e ar l y 20 05 , AA FI S a ppr o ac he d Dona l d J
. Cl e ar y ab o utg ivi ng t r ai ni ng on t he day t r adi ng of st oc ks. AA FIS, a Los A ngel es bas ed i nves t m entc om pany, i s a n a c t ive t r ad e ri n t he U ni t e d St at e s st o c k m ar ke t s . I te m pl o ys ac o m pa ny b a sed i n C h i n a ca l l ed A sian A m erican A sso ci a ti on , S h en Y a n g, L i m i t L i a b i l i ty C om p a n y (“A S Y”)

. A S Yem p l oy s C h i n ese ci ti ze n s to trad e on AA F IS ’ s ac cou n t, butASY ’ s e m pl o ye e s f i r s tne e d t o b e t r ai ne d. Cl e ar y w as t o t r ai n t w e nt y- e i ght of A S Y ’ s C h i n ese trad ers. C l ea ryrecru i tedR ob ert C om p h er to a ssist h i m w i th t he t r ai ni ng. Those t w o f or m ed S& D Tradi ng A c adem y, LL C and S& D G l obal Tr ad i ng, I nc . , t hr o ughw hi c h t he y w o ul d p r o vi de t he i rs e r vi c e s t o AA FI S. S& D e nt e r e d i nt o a n orala gr e e m e ntw i t h AA FI S t o t r ai n t he ASY
em pl oyees. S& D w ou l d receive a ba se c om pen sati on of one d ol l ar f

or every th ou sa n ds h a r e s t ra d ed du ri n g a si x-m on th pr ob a ti on a rype ri od an df or u p to th i rty-si x m on th s th ere a ft er. B on u s com p en sa ti on w ou l db e b a sed on the pr ofi ts g e n e r a te db y th e tr a d e r s . T r a in in g o c c u r r e d b o th in T e x a s a n dC h in a . W h ile in T ex a s, S & D p erform ed m ost of i ts train i n g i n a n a p a rtm en t fur n is h e d w i th t ab l e s a nd c o m put e r s ; t he Chi ne s e traders bo t h wor ke d a nd live d t he r e . The t r ai ni ng c o ns i s t e d o f Cl e ar y andCom phe r ’ s m o ni t o r i ng t he l ive , o nl i ne t r ad i ngN o. 08- 40711 c/w N o. 08- 40776

A AFISsub mits that duringthe trading hours, C leary and Compher would h ave the 1 traders who were not sittin g at computers be side them tellthem when the traders “got into a trade”so that C leary and Compher coul d review the trade and givefee dback regardingthe tran saction. The trader s sitting beside Clearyand Compher onany given dayrec eived more intense instruction . A AFISe xp lains th at Clearyan d C ompherwoul d watchthese trader s more closely and would provide advice priorto the traders enterin g in t o aparticular trade
. Th es e tra derscouldals o se e the tra de s Cle aryan d C ompherma de
. 3 ac t ivit i e s o f

t he ASYe m pl o ye e s w hi l e a l s o t r ad i ng o n t he i ro w n a c c ou n t s. 1 Cl e ar y andCom phe rf ur t he rprovi ded t he e m pl o ye e s w i t h m ar ke tr e s e ar c h,
s t o c k r e c o m m e nda t i o ns , a nd t r ad i ng s t r at e gi e s a tt he b e gi nni ng o f e ac h t r ad i ng da y. A n d they sett h e “ st op l oss” f or each t rader, w h i ch w as t h e m axim u m l oss a t r ad e rc o ul d s us t ai n b e f o r e t he t r ad e rw as r e quir e d t o ex i tt he m ar ke tfo rt he da y. C l eary an d C om ph er provi ded such trai n i n g f or a c on t i n u ou s peri od of ap p ro x im a te ly s ixt e e n m o n th s. D u rin gth e tra in in g , n e ith e r S & D n o r C l eary n or C o m p h e rh e lda n ys ta te o rfe d e r a l re g is tr a tio n s o rlice n s e s . The t r ai ni ng be ga n wi t h ou ta w r i t t e n a gr e e m e ntb e t w e e n S& D a nd AA F IS

. T h e p a rti es re a ch ed a n im p a sse i n the i r n eg oti a ti on s ab ou t a con tract. AA FIS t er m i nat ed it s ar r angem entw i t h S& D , C l ear y, and C om pher , ef fec t ive O ct o b e r 2 0 0 6. S& D ha d been paid peri odi cal l y f or it s w ork, bu ti tbel i eved ad di t i on alcom pen sati o n w as du e. I n N ovem ber 200 6, S& D f i l ed su i tagainst AA F I S , a l l e g i n g b r e a c h o f c o n t r a c ta n dmi s a p p r o p r i a t i o n o f t r a d e s e c r e t s . S &D l a t e ra me n d e di t s c o mp l a i n t , d r o p p i n gt h e t r a d e s e c r e t s c l a i m a n da d d i n gc l a i ms f o rq uant um m e r ui t , unj us te nr i c hm e nt , a nd m o ne y hada nd r e c e ive d. I n A p r il2 0 0 8 , AA F I S m o v e dfo rs u m m a r yju d g m e n t . I ta ll e g e dth a tS & D ’s fai l u re t o regi st er as an i n vest m en tadv i ser or broker/ dea l er w i t h t h e p ro per st at e a ndfe d e r a la ut ho r i t i e s p r e c l ud e dS&D f r o m r e c o v e r i ngu nd e rt he o r al agreem en tbetw een t h e parti es. S& D res pon ded t h at itw as not a broker/ dea l er an d that i tqu al i f

i ed u n d e r a “t each er” excepti on t o t h e i n vest m en tadv i ser r e g is tr a tio n re q u ir e m e n ts
.N o. 08- 40711 c/w N o. 08- 40776

4 T h e di st ri ctcourtagreed w i t h AA F IS an d granted i t s m ot i on f or s u m m ary j udgm entsol ely bec ause S & D h ad fai l ed t o r egi st eras an i nves t m entadvi se ras r equi r ed byt he Texas Sec uri t i es A c t
. The c our tr ej ec t ed S& D ’ s c ont ent i on t hat i tf i ti nt o a n ex c e pt i o n t o t he st at ut e ’ s r e gi s t r at i o n r e quir e m e ntf o rt e ac he r s . The
cou r tl oo ked t o aSec uri t i es and E xc hange C om m i ss i on no- ac t i on l et t er . Th at l e t t e ri nt e r pr e t e d a n a l m o s ti de nt i c ale xc e pt i o n t o t he i nve s t m e nta dv i s er provi si on of

t h e federalIn vest m en tA dv i ser A ct
. I tconcl u ded t h at t h e t each er excepti on “ on l y cove rs a ctua lt each ers w h o w ork f or acc redi t ed an d cert i f i ed in s tit u tio n s o rs c h o o ls o f h ig h e rle a r n in g .” S & D d idn o t q u a lify

. Th e c our tent er ed a f i nalj udgm en ti n favorof AA FIS i n June 2008,
awar di ng c o s t s f

o rde fe ndi ng t he a c t i o n. AA FI S s ubm i t t e d ab i l lof c o s t s . The di s t r i c tc o ur tc l e r k o r i gi nal l y t ax e d S&D w i t h t he f ul lam o unto f

c o s t s r e que s t e d. H o w e v e r , S & D file da n o bje c tio n t o t h e b ill o f c o s ts , a r g u in gth a t AA F IS s h o u ld
n otrec over t h e cos t s of ob t ai n i n g si x vi deo d eposi t i on s. Foll ow i n g a h eari n g on t h e i ss u e , th e di st ri ctcourtdi sal l ow ed the vi deo d eposi t i on cos t s and aw arded
c o s ts a t a lo w e ra m o u n t t h a n o r ig in a llyre q u e s te d
. Both pa r t i e s t i m e l y ap pe al e d, S& D a s t o t he c o ur t ’ s s um m ar y j udg m e nt andAA FI S r e ga r di ng t he a w ar d of co s t s . The i ra ppe al s ha ve b e e n c o ns o l i da t e d. I I
. D I S CUS S I ON A. I nv e s t m e ntAdvi s e rReg i s t r at i o n W e rev i ew a g r a n t o f s u m m a ryj u d gm en t de no vo , a p p l y i n gt h e s a me stan d a rdas th e d i str ic t c o u r t. Noble E n ergy, I n c. v. B i t u m i n ou s Cas. Co. , 529 F. 3d6 42 , 6 45 ( 5t h Ci r . 2 008 )

. Sum m ar y j udg m e nti s pr o pe rw he n t he “plea d i n g s , the discov eryan ddiscl osu re m a terial s on f i l e, a n dan y a ff

i d a vits
s ho w t hatt he r e i s no g e nui ne i s s ue a s t o a ny m at e r i alfac ta nd t hatt he m o va nt i s enti tled to j u dg m en tas a m att er of l aw . ” Fed
. R
. C iv. P
. 56(c)

. Adi st ri ct court’ s s u m m ary j u dg m en tm ay be a f f i rm ed on an y ground thatw as rai sed bel owN o. 08- 40711 c/w N o. 08- 40776

5 a n dis s u p p o r te db yth e re c o r d
. Ary ai n v. Wa l

- Ma r tSt o r e s Tex . LP , 534 F. 3d 4 7 3 , 4 7 8 (5t h C ir. 2 0 0 8 ). Th e Texas S ec uri t i es A c t , al so k now n as a “ B l ue S ky Law , ” pr ovi des t hat

“ a perso n m a ynot, di rect l y or t h rough an i n vest m en tadv i ser representat ive, r e n d e rs e r v ic e s a s a n in v e s tm e n t a d v is e rin th is s ta te u n le s s th e p e r s o n is
r egi st er ed undert hi s A c t
. . . ori s ot her w i se ex em ptunder t hi s A c t
. ” Tex. R ev. C iv. Sta t. A n n . art. 58 1 -12 B
. Itf u rth er sta tes th a t [ n] o p e r s o n wh o h a s mad e o re n g a g e di n t h e p e r f o r m a n c e o f

a ny contracti n vi ol ati on of an y provi si on of t h i s A ct or an y rul e or or der o rr e quir e m e nthe r e unde r , o rw ho has ac quir e d anypur po r t e d r i ght u n der an y such contr actw i t h kn ow l edg e of the fact s by reason of w hi c h i t s m ak i ng o rpe r f o rm an ce w as i n v i o l at i o n, m ayb as e a ny s u it o n th e co n tr a c t. I d. a ta r t
. 5 81

- 33 K
. Thus , a n unr e gi s t e r e d i n divi dua lo re nt i t y pr o vi di ng i n ve stm en t ad viser se rv i ces m a y n ot l eg a llyen force a con tract en tered i n to
r e g a r d in gth e p r o v is io n o f s u c h s e r v ic e s . T h e T exas S ecuri t i es A ctdef i n es “i n vest m en tadv i ser” as f ol l ow s: a pe r s o n w ho , fo rco m pe ns at i o n, eng ag e s i n t he b us i ne s s o f a dv i s i ng a n oth er, eit h er d i rectly or th rou gh pu b lic a ti on s or w ri ti n gs , w i th r e s pe c tt o t he v al ue o f sec ur i t i e s o rt o t he a dv i s ab i l i t y o f i nve s t i ng i n , pu rchasi n g, or sel l i n g securi t i es ora person w h o , f or com p en sa ti on an das p a rt of a re gu l a r bu sine ss, i ssu es o r ad op ts an al ys e s o r a r e po r t c o nc e r ni ng s e c ur i t i e s . . . . The t e r m do e s not i n cl u de:

. . . (2 ) a la w y e r , a c c o u n ta n t, e n g in e e r , tea cher , or geol ogi stw h ose pe r f o r m anc e o f

t he s e r vi c e s i s s o l e l y i nc i de nt alt o t he pr ac t i c e o f t he p e r s o n ’ s p r o fe s s io n . . . . I d. at art
. 581

- 4N ( em ph asi s add ed). I tdoes n ot , h ow ever, i n cl u de a d ef i n i t i on o f th e te r m “t e a c h e r .” T h e In vest m en tA dv i ser A ctof 19 40, a federalstat u t e, si m i l arl y requ i res t he r e gi s t r at i o n o f i nve s t m e nt ad vi s e r s and pr o vi de s t hat“ [ e ] ve r y c o nt r ac tm ad e i n vi ol ati on of an y provi si on of t h i s sub cha pter
. . . , t h e perf orm an ce of

w h i chN o. 08- 40711 c/w N o. 08- 40776

6 in v o lv e s th e v io la tio n o f, o rth e co n tin u a n c e o f a n yr e la tio n s h ip o rp r a c tic e in vi ol ati on o f

a ny pr o vi s i o n o f

t hi s s ubhc ap t e r , o ra ny r ul e , r e gul at i o n, o ro r der t he r e unde r , s hal lb e vo i d .
. . . ” 15 U
. S. C. § 8 0b

- 15 (b)

. Li ke t he Te xa s Ac t , t he Investm en tA dv i ser A ctdef i n es “i n vest m en tadv i ser” as a n yp e rson w h o, f

or c om pen sati on , eng ages i n t h e bu si n ess of advi si ng ot her s, ei t her di r ec t l y or t hro ugh publ i c at i ons orw r i t i ngs as t o t he v al ue o f

se c ur i t i e s o ra s t o t he a dv i s ab i l i t y o f i nve s t i ng i n, purc hasi ng, ors ell i ng s ec uri t i es , orw ho, f orc om pensa t i on and as p a rt of a re gu l a r bu sine ss, i ssu es or p rom u l ga tes a n a l ys es o r rep orts concerni n g securi t i es; bu tdoes not i n cl u de .
. . ( B ) a n yl aw yer, accoun t an t , eng i n eer, or t eacherw h ose perf orm an ce of

such servi ces is s o le lyin c id e n ta l to th e p r a c tic e o f h is p r o fe s s io n . . . . Id
. § 8 0 b -2(a)( 1 1 ) (em p h a sis a d d ed ). T h e f ed era l A ct, h ow ev er, ex em p ts from i ts registra t i on requi rem en tan “ i n vest m en tadv i ser t h at i s r egu l ated or requ i red to be reg u l a ted a s a n i n ve stm en t a d viser i n th e Sta te i n w h i ch i t m a i n tain s i ts pri nci palof

f i c e a nd pl ac e of busi nes s, . . . unl es s t he i nves t m entadvi se r. . . has
a sse ts u n d er m a n a ge m en t of n ot l ess tha n $2 5 , 0 0 0 , 0 0 0
. . . . ” Id
. § 8 0 b -3 a (a )(1).

“‘ [A]ssets u n d er m a n a ge m en t’m ea n s th e se cu ri ti es p ortfol i os w i th re sp ect to
w h i c h an i nve s t m e nt ad vi s e r pr o vi de s c o nt i nuo us and r e gul ar s upe r vi s ory or
m a n a ge m en t serv i ces.” I d. § 8 0 b -3 a (a )(2). S& D m ai nt ai ns t hatt he di st r i c tc our ter r ed i n co ncl udi ng th a t itw as req u i red to reg is te r as an i n ve stm en t ad viser u n d er th e T ex a s S ecu ri ti es A ct. It con ten d s th a t an y in ve s tm e n t ad visi n g se rv i ces itpr ov i d ed u n d er it s ag r e e m e ntw i t h AAF I S w e r e so l e l y i nc i de nt alt o i t s pr i m ar y pur po s e o f t e ac hi ng AA F IS ’ s e m p lo y e e s h o w to d a ytr a d e o n th e N e w Y o r k S to c k E x c h a n g e , a n dit t h eref ore qua l i f

i ed f or t h e t each er ex ce p tion t o t h e i n vest m en tadv i ser r e g is tr a tio n re q u ir e m e n t. Ini t i al l y, S& D att acks the basi s f or t h e di st ri ctcourt ’ s deci si on . I tnotes t hatt he s ol e a ut hor i t y t hatt he c our tc i t ed i s an SE C n o- ac t i on l et t erf r om 1977,
w h i ch i s not bi n di n g w i t h respect t o t h e proper i n t erpret ati on of a T exas st atute.N o. 08- 40711 c/w N o. 08- 40776

7 S & D subm i t s t h at r eversali s ap propri ate because t h e courtrel i ed excl u sivel y on a fe de r al , a dm i ni s t r at ive - l e ve lo pi ni o n i nt e r pr e t i ng t he f e de r al r at he r t han t he Texas st at ut e. S& D ex pl ai ns t hatev en tho ugh t he pos i t i on o f t he adm i ni st r at ive a ge n cych a rg ed w i th en forcem en t of a sta tu te i s en ti tl ed to su b stan ti a lw eigh t, i ti s not concl u sive. Fu rt h erm ore, S& D poi n t s o u t t h a t t h e court ’ s r el i an ce on fe d e r a l a u th o r ity d e p r iv e s th e T e x a s co u r ts o f th e o p p o r tu n ityto d e v e lo p th e ir
o w n d e fin itio n o f th e te a c h e re x c e p tio n . Rat he rt han r e l yi ng o n t he no - ac t i o n l e t t e r , S& D m ai nt ai ns t hatt he di st r i c tc our ts houl d have si m pl y given t he t er m “ t eac her” i t s c om m on m eani ng. S & D s u b m its th a t a T e x a s s ta tu te re q u ir e s th a t t e r m s n o t o th e r w is e d e fin e din
a s t at ut e b e g iven t hei ror di nary m eani ng. Sec t i on 311. 011 o f t he Texas G o ve r nm e ntCod e pr o vi de s : “ ( a) W o r ds and phr as e s sha l lbe re adi n c o nt e xta nd
c o ns t r ue d ac c o r di ng t o t he rul e s of gr am m arand c o m m o n us ag e . (b) W o r ds a nd phras es t hathave ac qui r ed a tec hni c alorpar t i c ul arm eani ng, w het herby l egi sl ative defi n i t i on or ot h erw i se, s h a llbe const rued accor di n gl y. ” M oreover, case s ap pl yi ng Se c t i o n 31 1. 01 1 hav e s t at e d t hat s t at ut o r y t e r m s “ t hatare not oth erw i se d efi n ed a re typ i ca l l y g ive n the i r ord i n a rym ea n i n g.” G ui t arHo l di ng Co ., L .P. v . H u d s

p e th Co u n ty Un d e rg r o u n dW a te rCo n s e r v a tio n D is t. No .1 , 263 S .W .3 d9 1 0 , 9 1 5 (T e x . 2 0 0 8 ). Ci t i ng an o nl i ne di c t i o nar y, S& D co nc l ude s t hatt he co m m o n usa ge of t he
w o r d “t e ac he r” i s to de s c r ibe s o m e o ne w ho t e ac he s , a nd e s pe c i al l y s o m e o ne w h ose oc cup ati on i s i n st ructi n g. It argu es t h at a t each er n eed not be a professor o rl e c t u r e ra ta n a c c r e d i t e da n dc e r t i f i e di n s t i t u t i o n o f

hi g he rl e a r n i n g . S &D sugge st s t hati f

t he l egi sl at ure had i nt ended s uch a r equi r em ent , i tw oul d have
u s e dth e w o r d“p r o fe s s o r” in s te a do f th e w o r d“t e a c h e r .” A l t h ou gh t h ere i s n o a u t h ori t y constr u i n g t h e T exas provi si on , t h ere are a num be rof S E C no - ac t i o n l e t t e r s c o nc e r ni ng t he t e ac he re xc e pt i o n t o t he fe de r al i nve s t m e nt ad vi s e r s t at ut e . S& D i s c o r r e c tt hatt he s e a r e no tc o nt r o l l i ngN o. 08- 40711 c/w N o. 08- 40776

8 aut hor i t y r egar di ng t he m eani ng of t he Texas ex c epti on . H ow eve r , t he Texas provi si on i s nearl y i den t i calt o it s federalcou n t erpart, w h i ch w as prom u l gated
n e a r lys ix tyy e a r s e a r lie r . M or eo ver , be c ause t her e i s ver y l i t t l e a ut hor i t y i nt er pre t i n g th e T exas p rov i sion i tself, th e “T ex a s cou rts g en era l l y l oo k to d ecisi on s of th e fede ra lcou rts t o i n t erprett h e T exas S ecuri t i es A ct becau se of t h e obvi ou s s i m i l ari t i es bet w een th e sta te an dfed era ll a w s. ” A ki n v. Q

- L I n vs. , I n c. , 959 F
. 2d 521 , 532 ( 5th C i r. 1992) (c i t i ng S t ar S upp ly Co. v. Jon es , 665 S. W
. 2d 194, 196 (Tex. A pp. — San A nt oni o 1 984, no w r i t) )

. I ndeed, t he Texas Suprem e Courthas expl ai ned t hat th e T e x a s le g is la tu r e in te n d e dth e T e x a s S e c u r itie s A c t “ to b e in te r p r e te din h a rm on y w i th fed era lsecu ri ti es law
. ” S t erl i ng TrustCo. v. A d d erley , 168 S. W
. 3d 83 5, 8 40 (Tex
. 2 00 5)

. The Ac ti t s e l f s t at e s t hati t“ m ay be constr ue d a nd i m p l em en tedto eff

ectu a te i ts gen era lpu rp ose to m a x i m i ze coor d i n a ti on w i th fe d e r a l a n do th e rs ta te s ’la w a n da d m in is tr a tio n , p a r tic u la r lyw ith re s p e c t t o . . . exem pti on s. ” T ex. R ev. C iv. S t at. A n n . art
. 581

- 10-1A

. Final ly, t h ou gh no-act i on l et t ers ar e no tb i ndi ng o n t he c o ur t s o rt he SEC , fe de r alc o ur t s m ayc o ns i der t hem per suas ive au t hor i t y r egar di ng t he pr ope ri nt er pre t at i on o f t he f ede r al p r o v is io n . Se eAl lai r eCor p. v . O kum us , 4 3 3 F .3d 2 4 8 , 2 5 4 (2d C ir. 2 0 0 6 ). W h a te v e r o u r d e c is io n h e r e , th e T e x a s c o u r ts o b v io u s ly r e t a i n t h e ir
a u th o r ityto d e fin e th s s ta te s ta tu to r y te r m d iffe r e n tly
. W e p r o c e e dto d e fin e it ba s e d o n whati s a va i l ab l e f o ro urc o ns i de r at i o n. In t he SEC no - ac t i o n l e t t e rr e l i e d o n b y t he di s t r i c tc o ur t , a n a t t orney soug h tt o deter m i n e t h e regul ati on s gov e rn ing a cl i en tw h o w i shed “ t o t each in d iv id u a ls h o w to in v e s t in th e s to c k m a r k e t a n dch a r g e s o m u c h p e rle s s o n .” J o s e p h P . C a n o u s e E s q u ir e , S E C N o -A c tio n L e tt e r , 1 9 7 7 W L 1 0 6 5 7 , a t * 1 (J u ly 15 , 1 97 7)

. Th e cl i entdi d no tpl an t o i s s ue ne w s l e t t e r s o ra dv i s o r y l e t t e r s , b ut
m e r e l y i nt e nde d t o “ i ns t r uc ti ndivi dua l s o n t he v ar i o us m ar ke tt i m i ng d ev i ces— D ow Jo n es th eo ry , etc. ” I d. In response t o t h e i n qu i ry, t h e C om m i ssi onN o. 08- 40711 c/w N o. 08- 40776

9 e xp l ai ne d t he s c o pe o f t he t e ac he re xc e pt i o n t o t he i nve s t m e nta dvi ser r e g is tr a tio n re q u ir e m e n t a s fo llo w s : Am o ng t he fac t o r s w e ha ve i n t he p ast c o ns i de r e d i n de c i di ng w h e th e ra n in d iv id u a l is e lig ib le fo r th is e x c lu s io n a r e w h e th e rh is c o m pe ns at i o n f

o rt e ac hi ng i s pai d b y an e duc at i o nali ns t i t ut i o n, w h eth er t he c our se w hi c h he i s t eac hi ng i s par tof a pr ogr am regularly of

fered by an edu cat i on ali n st i t u t i on , w h et h er t h e sc h ool o rin s tit u tio n is a c c r e d ite d , a n d th e m a n n e rin w h ic h th e co u r s e is of fered t o t h e pu bl i c. Id
. The Com m i s s i o n c o nc l ude d t hat ba s e d o n t he i nf o r m at i o n c o nt ai ne d i n t he att orney’ s l et t er, i tapp eared that hi s “ cl i en t ’ s proposed activi t i es w ou l d p l ace h i m w i t h i n t h e def

i n i t i on of

investm en ta dv i ser” a n d t h at the t each er except i on w o u ldn o t b e a v a ila b le to h im
. I d. In an ot h er no- act i on l et t e r, a n in d ivi du alw as pl an n i n g t o st arta “ st ock
m a rk et sch oo l” an dreq u es te d gu i d a n ce re ga rd i n g w h eth er h e w a s req u i red to
r egi st erw i t h t he S E C

. J. H
. R odgas , Jr
. , SE C N o- A c t i on Let t er , 1974 W L 10941, at *1 ( S ept. 7, 197 4)

. Th e sc h oolw as described as f ol l ow s: [ T] he c o ur s e w i l lb e c o m pl e t e l y andpur e l y i ns t r uc t i o nali n c o nc e pt a n de x e c u tio n . S tu d e n ts w i ll n e v e rb e a d v is e dto b u yo rs e ll s e c u r itie s o r to co m m it fu n d s to a n yk in do f in v e s tm e n t. . .
. W e w ill te a c h th e m w h e r e to fin da n dh o w to [e ]v a lu a te a v a ila b le i n f orm ati on bu tem ph asi ze t h at t h e fi n ald eci si on to b u y or s el lm u st be thei rs al on e. . . . I n sum m ary, our pl an n ed course of i n st ructi on i s n ot an ad v i soryserv i ce a n dn o p rom i ses or p red i cti on s as to p erform a n ce of an y stoc k or gr ou p of stock s w i l lev er b e m a d e to s t ude nt s . I ns t e ad , t he s t ude nt s w i l lb e sho w n a l lo f t he v ar i o us f o r c e s a c t i ng o n t he m ar ke t , w i l lb e t aughtho w t o i de nt i f y and e v a l u a t e t h o s e f

o r c e s a n dw i l lb e s h o wn h o w t o ma k e t h e i ro wn evaluati on s and t h ei r ow n m arket deci si on s. I d. The Com m i s s i o n de t e r m i ne d t hatt he s c ho o lw o ul d q ual i f y as a n i nve s t m e nt
a d viser a n dthe refore w ou l dbe req u i red to re g is te rb efore e n ga gin g in i ts p r o p o s e da c tiv itie s . I d. at *4. Fu rt h erm ore, t h e t each er except i on w o u ld not
a p p lyb e c a u s e th e s c h o o ld idn o t “ a p p e a rto h a v e th e a tt r ib u te s n o r m a llyN o. 08- 40711 c/w N o. 08- 40776

See also Walter H. Shap ir o, S ECNo-ActionLetter, 197 8 WL 117 03, at *2 (July 26, 2 197 8) (“We have constru ed the term ‘te acher’ to me an a person whoi sa member of the 10 a sso ci a tedw i th an ed u ca ti on a li n stitu ti on . ” I d. The C om m i ss i on not ed t hat t h ere w as no i n di cat i on t h at t h e sc h oolha d been app roved byan au t h ori zed
s ta te o rfe d e r a l a g e n c yo rt h a t it w a s a n a c c r e d ite de d u c a tio n a l in s tit u tio n . I d. M o r e o ve r , t he i nduc e m e nto f fe r e d b y t he s c ho o lt o po t e nt i alst u de nt s w as “ t he abil i t y t o use t h e course i n a m a n n e r t h at w i l lena bl e t h em t o prof i tf rom i n ve stm en ts i n secu ri ti es.” I d. T h e S E C a g a in e m p h a s iz e dth e n a r r o w s c o p e o f th e te a c h e re x c e p tio n in
a n o- act i on l et t er i n volvi n g an assi st an t professor of f i n an ce at th e W h a rton S ch oo l
. H e a sk ed the S E C f o ra r u li n g re ga rd i n g w h eth er h e w a s req u i red to
r egi st eras an i nves t m entadvi se rf orc onduct i ng a s er i es of i nves t m ents t r at egy se m i nars f

orex t r a m oney. D avi d A

. U m st ead, SE C N o- A c t i on Let t er , 1976 W L 12 17 6, at * 1 (Aug. 13 , 19 76 )

. The o ne - da y s e m i nar s t hat he i nt e nde d t o t each i nc l ude d a di s c us s i o n o f t he t he o r e t i c al de ve l o pm e nt o f i nve s t m e nts t r at e gya nd
a g e n e r a ld e s c r ip tio n o f th e d iffe r e n t k in d s o f in v e s tm e n t s e c u r itie s . I d. “ In
sum m ary, t h e overal li n t en tof the course [w as] to buil d an an al yti calf ram ew ork f or m ak i n g l on g run i n vest m en tdeci si on s and t o m ak e a gen eralassess m en tof th e cu rren t op p ortu n i ti es a va i l a b l e i n the secu ri ti es m a rk ets. ” I d. Itw a s n ot “a
c o u r s e o f ‘ h o t tip s ’ w ith u p to th e m in u te a s s e s s m e n ts o n in d iv id u a l s e c u r itie s .” I d. The C o m m i s s i o n co nc l ude d t hatt e ac hi ng t hi s co ur s e w o ul d c o ns t i t ut e a c t i ng a s a n in v e s tm e n t a d v is e ra n dth e r e fo r e re q u ir e dare g is tr a tio n . I d. at*2

. F u rt h erm ore, t h e t each er exception w ou l d n otapp l y f or a nu m ber of

reasons. I d. F i rst, com p en sa ti on for th e se m i n a rs w ou l dbe sep a ra te an di n ad d i ti on to th e u s u a l te a c h in gs a la r y . I d. Sec ond, al t hough pa rti c i pant s i n t he s em i nar w oul d r ec eive c er t i f

i c at es f r om t he W hart on Scho ol , t her e w as no i ndi c at i on t hat t he cour s e was a“ p a r to f t he r e g ul a rc ur r i c ul um o f s t ud yo f

fe r e da tt hat i n sti tu ti on . ” I

d. F in a lly , th e in v e s tm e n t c o u r s e w a s “b e in go ffe r e dto th e p u b lic 2N o. 08- 40711 c/w N o. 08- 40776

teaching profession[,] and we haveconsidere d advisory services performe d by a teacher to b e solely incidental to the practice of a teacher’ s profe ssion, and, thu s, not to cau se the te acher to come within the definition of investment adviser, when theyare rendere d inthe course of instructionina studywhich is given under the auspices of an academic institution .”); Frank T. Hines, SECNo-ActionLetter, 197 2 WL 825 0, at *1 (Aug . 21, 197 2) (respon ding to a question regardingwhether SECregistra tio n would be required to conduct acollege course in stock market strategy, theC ommissionexplained, “we woul d beh appyto consi der a request for interpretationfrom an accre dited institution whichprovi des in detail adescriptionof the cour se, and the backgroundon the individuals whoare conductin g the cour se, inclu ding a brief de scriptionof their oth eraca de mic re sp on sib ilitie s”). 11 n otpri m ari ly a s a n ed u cat i on alexperi en ce, bu trat h er f or t h e pu rpose of i n f l u en ci n g i n vest m en tdeci si on m ak i n g an d assi st i n g pa rt i ci pa n t s t o m axim i ze p rofi ts f or th eir i n ve stm en ts .
. . . ” I d. T h e S E C n o- act i on let t ers constr u i n g t h e federalp rovi si on a re persuasive. W e concl u de t h at t h e t each er except i on does not app l y t o t h e t rai n i n g provi ded by S & D
. N ei t h er C l eary n or C om ph er w ere prof essi on alt each ers. Th ey w ere n ot as s o c i at e d w i t h an ac c r e di t e d s c ho o l o r c o ur s e , and t he i r t r ai ni ng w as not pa rtof a program regul arl y of fered by an edu cat i on ali n st i t u t i o n . M oreover, th eir t ra i n i n g w a s n ot aca d em i c i n n a tu re. T h eypr ov i d ed the trad ers w i th
m ar ketr es ear c h, s t oc k r ec om m endat i ons , and t r adi ng s t r at egi es f orap a r t i c ul ar da y o rpa r t i c ul ars t o c k. The g o alo f t he t r ai ni ng w as t o i nf l ue nc e t he i nve s t m e nt d e c is io n m a k in go f th e C h in e s e tr a d e r s a n dto e n a b le th e m to m a x im iz e th e ir prof i t s. A pp l yi n g t h e teacher excepti on u n der t h ese ci rcum st an ces w ou l d all ow al m ost an y i n vest m en t ad vi ser t o qu al i f y f or t h e excepti on so l on g as t h ey a c c o m p a n ie dth e ira d v ic e w ith aju s tify i n ge x p l a n a tio n . T h is re s u lt w o u ld
u n derm i n e t h e gen eralpu rpose of t h e T exas S ecuri t i es A ct , w h i ch i s “t o prot ect in v e s to r s .” T e x . R e v . C iv . S ta t. A n n . a r t. 5 8 1 -1 0 -1 B
. W e are not convinced by S & D ’ s argum en tt h at w e shou l d gi ve t h e t erm

“ t each er” i t s pl ai n an d ordi n ary m ean i n g. A l t h ou gh t h e T exas code contai n s a c a n o n o f in te r p r e ta tio n s u g g e s tin gt h a t u n d e fin e dw o r d s s h o u ldb e g iv e n th e ir ord i n a rym ea n i n g, t h e d efi n i tio n S & D pr op ose s i s ci rcu l a r an di m p recise. ItN o. 08- 40711 c/w N o. 08- 40776

12 m ak es a t each er any on e w h o t each es. C on t rary to the ci t ed can on , w h i ch st ates t h at w ords shou l d be read i n context , t h i s proposed defi n i t i on i s divorced f rom t h e con t ext of

the T exas S ecuri t i es A cta n d w ou l d contraven e t h e overal lpu rpose of t h e A ct , as di scussed abov e. B ecau se S& D does not qua l i f y f or t h e t each er except i on a n d w as not reg i stere das a n i n ve stm en t ad viser as req u i red u n d er t h e T ex a s S ecu ri ti es A ct, t h e d istr i ctcourtproperl y gran t ed su m m ary j u dg m en ti n favor of AA F IS on S &D’ s c o n t r a c t u a la n dq u a s i

- c o n t r a c t u a lc l a i ms . Be c a u s e o f t h i s c o n c l u s i o n , w e need no tc ons i der AA FIS’ s al t er nat ive ar gum ent s t hat sum m ar y j udgm entw as proper f or ot h er r eason s. B
. A w a rdof Co sts A“ di st ri ctcourtha s broad dis cret i on i n t axing cost s, a n d w e w i l lrevers e on l y u p o n a c le a r sh ow i n g o f a b u se o f d i scre ti on . ” Migi s v. Pearle V i si on , I n c. , 1 3 5 F
. 3 d 1 0 4 1 , 1 0 4 9 (5th C i r. 1 9 9 8 ). M ore ov er, w i th i n i ts w i d e discretio n , a d is tr ic t c o u r t m a yo r d e re a c h p a r tyto b e a r its o w n c o s ts
. Hallv. S t ateF arm Fi re & Cas. Co. , 9 3 7 F .2d 2 1 0 , 2 1 6 (5t h C ir. 1 9 9 1 ). AA F IS argu es t h at t h e cos t s i ti n curred i n obtai n i n g copi es of vi deotaped de po s i t i o ns s ho ul d b e t ax e d a ga i ns tS& D
. I tadm i t s t hata tt he t i m e o f t he di s t r i c tc o ur t ’ s r ul i ng o n c o s t s , c o nt r o l l i ng Fi f t h Ci r c ui tl aw pr e c l ude d t he
r e c o v e r yo f s u c h co s ts
. S ee Mot a v. Un i v. of T ex. Hou st on Heal t h S ci
. C t r. , 261 F .3 d5 1 2 , 5 2 9 -3 0 ( 5 th C ir . 2 0 0 1 ); Mig is , 13 5 F
. 3 dat 10 4 9
. N ev erth eless, AA F IS
m ai n t ai n s t h at t h e st atute u pon w h i ch our pri or cases w ere based h as b een a m en d ed , an dit con ten d s th a t w e sh ou l dretroa ctive l y a p p l y th e a m en d m en t t o al l ow f or vi deo d eposi t i on cos t s i n t h i s c ase. Pr i o rt o i t s r e c e nta m e ndm e nt , t he U ni t e d St ates C o de s e c t i o n de al i ng w i t h t he ta xat i on of

l i t i gat i on cos t s pr ovi ded t hata j udge orcour tc l er k m ay t ax th e fo llo w in gite m s a s co s ts :N o. 08- 40711 c/w N o. 08- 40776

13 ( 1) F ees of

t h e cl erk an d m arsha l ; (2) F ees of the court report er f

or al lor an y pa rt of

t h e st en ograp h i c t ran scr i pt necessaril y obtai n ed f o rus e i n t he c as e ; ( 3) Fe es an d di s bur s e m e nt s f o rpr i nt i ng and w i t n esses ; ( 4) F ees f or exem pl i f

ica ti on an d copi es of pap ers n ecess ari l y obtai n ed f or use i n t h e case; ( 5) D ocket fees un der sectio n 1 923 of

t h i s t i t l e; ( 6) C om pen sati on of courtapp oi n t ed ex p erts, com p en sa ti on o f i n terp reters , a n ds a l a ri es, fees, an dcosts of speci ali n t erpret ati on servi ces u n der sect i on 182 8 of t h i s t i t l e. 28 U
. S. C

. § 1920 ( 2007)

. I n l i ghto f Sup r em e Courtpr ec ede nti ndi c at i ng t hat t h i s provi si on shou l d be s t ri ct l y constr u ed, “ absen texpl i ci tst atutor y or contract uala ut ho r i z at i o n t o t he c o nt r ar y, ” w e ha ve c o ns i s t e nt l y he l d t hatt he
c o s ts a s s o c ia te dw ith v id e o ta p e dd e p o s itio n s m a yn o t b e a w a r d e d
. Mo ta , 261 F. 3d at 529- 30 (r ef

er enc i ng C raw f

ord Fi t t i ng Co. v. J. T
. G i bbon s, I n c. , 4 82 U
. S. 43 7, 4 44

- 45 ( 19 87 ) )

. H o w e ve r , i n Oct o be r2 00 8, a ppr o xi m at e l y t h ree m o nt hs af t er t h e cost s aw ard i n this case, C on gress pa ssed the Ju di ci alA dm i n i st rat i on and T ech n i ca lA m endm ent s A c tof 2008, Pu b. L. N o. 110- 406, 122 St at
. 4291, 429 2. Sect i on 192 0( 2) w as am en ded to stat e tha ta j u dg e m ay t ax as cost s “ [f ] ees fo rp r in te do re le c tr o n ic a llyre c o r d e dtr a n s c r ip ts n e c e s s a r ily o b ta in e d fo ru s e in th e ca se.” 28 U
. S

. C

. § 19 2 0 (2) (curr en t vers i on ). T h ere w a s n o effective d a te l i sted f or th i s am en d m en t. The Supr e m e Cour tha s s e tfo r t h t he f o l l o w i ng f

r am e w o r k f

o rde t e r m i ni ng
w h eth er a statu tory a m en d m en t m a y be a p p l i ed retroa ctive l y . S eegen er a lly L an dgraf v. USI Fi l m Prods. , 511 U
. S

. 244 ( 19 9 4 ). “W h en a case i m pl i cat es a fede ra lstatu te en a ctedafte r the ev en ts i n su i t, the cou rt’ s f i rst task i s to de t e r m i new he the rCongr e s s ha s expressl y prescr ibed t h e st atute’ s proper r e ac h. If C o n g r e s s h a s d o n e s o , o f c o u r s e , t h e r e is n o n e e dt o r e s o r t t o ju d ic ia l d e fa u lt
ru l es.” I

d. at 280
. If t h e st atute contai n s n o exp ress com m an d, t h en “ t h e court
m u s t d e te r m in e w h e th e rth e n e w s t a t u t e w o u ldh a v e re tr o a c tiv e e ffe c t, i
. e. , w h et h er itw o u ld im p ai r r i gh t s a party posses sed w h en he acted, i n crease a p a rty’ s l i a b i l ity fo rp a st con d u ct, or i m p ose n ew du ti es w i th resp ect toN o. 08- 40711 c/w N o. 08- 40776

14 tran sa cti on s alrea d y co m p l eted
. ” I d. Al so , i f t he st at ut e w oul d have r et r oac t ive ef fect , t h en a presum p ti on againstret roact ivi t y preven t s t h e new l y en act ed
s ta tu te fr o m a p p ly in ga b s e n t c le a rco n g r e s s io n a l in te n t o th e r w is e . Id
. R e g a r d in gp r o c e d u r a l ru le s , th e C o u r t fu r th e re x p la in e d : [ c ] hang e s i n pr o c e dur al r ul e s m ayo f t e n b e a ppli e d i n s ui t s a r i s i ng bef or e t hei rena c t m e ntwi t houtr ai si ng c onc er ns ab outr et r oac t ivi t y.

. . . B ec ause ru l es o f pr oc edur e r egul at e s ec ondar y r at hert han pri m ary cond u ct , t h e factt h at a new procedu ralru l e w as i n st i t u t ed af t er t h e condu ctgivi n g ri se t o t h e su it does not m ak e app l i cat i on of t h e rul e at t ri alret roact ive. I d. at 275
. I n a f

oot n ot e, how ever, i texpl ai n ed that “t h e m ere factt h at a new
ru l e is p roce d u ra l do es n ot m ea n tha t it ap p l i es to ev erype n d i n g ca se.” I d. at 27 5 n. 29
. I ns t e ad , t he ap pl i c ab i l i t y o f ne w pr o c e dur al r ul e s m ayde pe nd o n t he “po stu re of the pa rti cu l a r cas e.” I d. AA F IS rel i es on on e of t h e Su prem e C ou rt ’ s pre- Landg r af d e c is io n s in assert i n g t h at w e shou l d ap pl y t h e am en ded versi on of Secti on 192 0( 2) t o aw ard its v id e o d e p o s itio n co s ts in th is ca s e . Se eB r adley v. S c h. B d. of Ri c hm o nd , 416 U
. S. 6 96 ( 19 74 )

. I n B rad ley , t h e C ou rthel d that a st atute al l ow i n g f or t h e aw ard of att orney’ s f

ees, w h i ch w as ena ct ed aft er t h e case w as subm i t t ed to the C ou rt
o f A p p ea l s b u t b efore i ts d ecisi on , sh ou l d b e ap p l i ed to th e case on a p p ea l
. I d.
a t 7 2 4
. T h e C o u r t a n c h o r e dits h o ld in g“o n th e p r in c ip le th a t a co u r t is to a p p ly th e la w in e ffe c t a t t h e tim e it r e n d e r s it s d e c is io n , u n le s s d o in gs o w o u ldre s u lt i n a m a n i fest i nj u sti ce orthe re i s a statu torydirecti on or l eg i slative h i storyto th e con trary
. ” I

d. at711. I n Landg r af

, t he Cour tr e af

f i r m e d it s de c i s i o n i n Bra d l ey , s p e c ific a lly
n oti n g th a t B rad l ey di d no tr e s e m bl e t he c as e s i n whi c h i tha d i nvo ke d t he p r e s u mp t i o n a g a i n s ts t a t u t o r yr e t r o a c t iv i t y : “At t o r n e y ’ s fe e d e t e r mi n a t i o n s , we h a v e o b s e r v e d , a r e c o lla te r a l t o t h e m a in ca u s e o f a c tio n a n du n iq u e lys e p a r a b le from the cau se o f a cti on to be pr ov edat tri a l
. ” Landg r af , 511 U
. S

. at 277N o. 08- 40711 c/w N o. 08- 40776

15 (in te r n a l q u o ta tio n m a r k s a n dcit a tio n s o m itt e d ). AA F IS s u b m its th a t t a x a b le
c o s t s a r e s i m i l a rt o a t t o r n e y ’ s f e e s , a l s o c o l l a t e r a lt o t h e c a u s e o f a c t i o n a nd

“ uni que l y s e pa r ab l e f r o m t he c aus e o f

a c t i o n t o b e pr oved a tt r i al
. ” Thus , t he p resu m p tio n ag a i n st retroa ctivity sh ou l dn ot ap p l y, an dthe am en d m en ts t o S ection 19 2 0 (2) sh ou l dbe ap p l i ed to de term i n e th e cos ts t a xa b l e in th i s su i t. H ow ever, AA F IS’ s a rg u m en ti s f orecl osed by a d eci si on f rom t h i s c ou rt appl yi ng Landg r af an d c on cl u di n g t h at a provi si on al l ow i n g f or t h e pay m en tof exp ertw i t n ess fees as a courtcos tshou l d n otapp l y ret roact ivel y t o a case p e n d in go n a p p e a l a t t h e tim e o f th e p r o v is io n ’ s e n a c tm e n t. S h ip es v . Trin ity Ind u s. , 3 1 F. 3d3 47 , 3 47

- 48 ( 5t h Ci r . 1 99 4)

. I n S h i pes , w e consi dered w h et h er a sect i on of t h e 199 1 C ivi l R i gh t s A ct provi di n g f or pa ym en t of exp e rt w itn e ss fe e s a s apa r to f

c o s t s s hould a pp l y ret r o ac t ive l y t o ac as e i n whi c h b o t h t he rel evan tcondu ctan d the t ri al court’ s r u l i n g occurred bef ore t h e ef

fect ive da t e of th e A c t. I

d. at 347
. A f

t er noti n g t h at r u l es r e g a rd ing att orney’ s f ees are pr o c e dur ala nd o f

t e n subj e c tt o r e t r o ac t ive a ppli c at i o n, w e c i t e d Landg r af f o rt he pr o po s i t i o n t hat “ w he n a pr o c e dur alm at t e rha s b e e n pr o pe r l y de c i de d un de rt he old ru l e, a n da n ew pr oce d u ra lru l e is su b seq u en tl y e n a ctedw h i l e th e u l ti m a te
r es ol ut i on o f

t he c as e i s st i l lpendi ng, no r eve r sa li s r equ i red
. ” I d. a t3 4 9
. We concl u ded t h at because t h e di st ri ctcourt ’ s deci si on den yi n g exp ertw i t n ess fees w as pr o pe r l y de c i de d un de rt he l aw app l i cabl e a tt he t i m e , t he r e w as no
r e v e r s ib le e r r o r . I

d. AA F IS s u b m its tha t S h i pes does not c om pelaf f i rm an ce i n t h i s c ase be c a u s e t h e t a x a b i l i t y o f v i d e o d e p o s i t i o n c o s t s wa s n o t s e t t l e d a t t h e t i m e t he d is tr ic t c o u r t e n te r e dits co s ts a w a r d
. A lth o u g h th e ca s e la w in th is cir c u it cl earl y h el d that t h e cos t s assoc i ated w i t h vi deo d eposi tion s w ere not t axa bl e, AA F IS contend s t h at t h i s w as a m i n ori t y pos iti on not s h ared byf ive ot h er ci rcui t s andnu m erous di st ri ctcourt s. I tsugg est s t h at give n th is sp l i tof
a u t h o r i t y , t h e a me n d me n tt o S e c t i o n 1 9 2 0 ( 2 ) wa s ac l a r i f i c a t i o n o f

t h e l a w,N o. 08- 40711 c/w N o. 08- 40776

16 rat h er t h an a chan ge i n t h e l aw . T h u s, w e shou l d app l y t h e am en ded versi on of Se c t i o n 1 92 0( 2) , no ta s t he r e t r o ac t ive a ppli c at i o n o f ane w l aw, b uta s t he
a p p lic a tio n o f th e la w in e ffe c t a t t h e tim e o f th e a w a r d
. AA FI S o f

fe r s a s s upp o r tf

o rt hi s po s i t i o n a n opi ni o n f r o m t hi s c o ur ts t at i ng th a t “ch a n ge s i n statu toryl a n gu a ge n ee dn ot i pso f act o con sti tu te a ch a n g e in
m ea n i n g o r eff

ect. In d ee d , a l eg i slative bo d y m a y a m en dstatu toryl a n gu a ge to
m a k e w h a t w a s i n ten d ed allalon g e ve n m ore u n m i stak a b l y clea r. ” N CN BT ex. Nat’ lB an k v. Cow d en , 895 F
. 2d 148 8, 150 0 ( 5th C i r. 199 0) (i n t erna l quotat i on
m ar ks a nd c i t at i o ns o m i t t e d)

. I n N CN B T exasNat i o nalBank , w e f u rt h er ob serv ed tha t “th e ex i sten ce of a d i sp u te i n the cou rts, su ch as a ci rcu i t sp lit,
m a ys u g g e st th a t C o n g re ss w a s p ro v o k e dto e n a ct a n a m e n d m e n t to cla rify
r at he rt han c hang e t he l aw, ” e s pe c i al l y w he n t he r e i s no i n di cat i o n i n t he l e gi s l at ive hi s t o r y t hatCong r e s s i nt e nde d t o c hang e t h e law ort he r e i s no d is p o s itiv e le g is la tiv e h is to r ya t a ll. I d. at 150 0- 01. W e w ere not, how ever, dec i di ng w het her st at ut or y am endm ent s sho ul d be appl i ed ret r oac t ively. R at her , w e w er e c ons i der i ng w het herr ec entam endm ent s pro vi ded addi t i onal
s u p p o r t fo ro u rin te r p r e ta tio n o f th e p r e -a m e n d m e n t v e r s io n o f a s ta tu te
. I d. at 1 4 9 9 -1 5 0 1
. A s s u c h , N CN BTexasNat i onalB ank is in a p p o s ite h e r e . W e con cl u d e th a t S h i pes i s c o nt r o l l i ng. At t he t i m e t he di s t r i ctcourt
r u le d , th e co s ts a s s o c ia te dw ith v id e o ta p e dd e p o s itio n s w e r e cle a r lyn o t t a x a b le unde rt he l aw of

t hi s c i r c ui t
. Bec aus e t he di s t r i c tc o ur tpr o pe r l y de c i ded t he
c ost s i s s ue und e rt he l aw app l i c ab l e a tt he t i m e , o urde c i s i o n i n S h i pes pr o s c r ibe s r e t r o ac t ive a ppli c at i o n o f t he a m e ndm e nt s t o Se c t i o n 1 92 0( 2) i n t he p r e s e n t c a s e . A c c o r d in g ly , th e d is tr ic t c o u r t d idn o t a b u s e its d is c r e tio n in d e n y in gAA F IS th e co s ts a s s o c ia te dw ith th e v id e o ta p e dd e p o s itio n s . I I I
. C ONC L US I ON F or t h e f

oregoi n g reasons, w e A F F IR M t h e di st ri ctcourt ’ s grant of
s u m m a r yju d g m e n t a n dA F F IR M its a w a r do f c o s ts
.