## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 11

- 3305 J AS ON H ALA SA, Plai nt i f f

-Appe l l ant, v. I TT E DUC ATI ONA L S ERVICES, I NC ., D efend a nt-A pp ellee.

Appeal from the United States District Court fo r the S outhernDi stricto f Indian a, Indian apolisDiv isi on. No . 1:10- cv-00437-WTL-MJD

—WilliamT. Lawrence , Judg e.
A RG UE D J UNE 6, 2012

— D ECI DE D A UGUS T 14, 2012

Befo re E A S T E RB R OO K, C hief Ju dg e, an d W OO D a nd S YKES, C ircu it Judges. W OO D , C ircu it Judge. I TT Edu c a t i o na l S e r v i c e s i s a f or - profi t cor pora ti on that r uns “I TT T echni calInsti tutes ” i n sev er all oca ti ons th roughout the U ni ted S tat es, i ncl ud i ng Lathr op, Cal i f or ni a. Pl ai nti ffJ aso n H al asa w as th e Lathro p Cam pu s’ s Col l ege Dir ecto r f or si x m onths in 20 09
. The pa r ti es pr o vi de co m p eting ac co unt s o fthe end H al asa’ s t enure: I TT says that H ala sa w as fi re d fo r2 N o. 11

- 3305

e xh ib i t i ngp o o r ma na g e men ts k i l l s a nd de l i v e r i ngi na dequate re su lts ; H al asa al l ege s that he w as fi re d i n vi ol ati on o fthe Fa lse Cl ai m s Act, 31 U
. S. C. § 3 730( h), after i den ti fy i nga nd r epo r tings ev er ali r r egul ar i ti es i n the way I TT was ha ndl i ngi ts fede r all y s ubs i di ze d l o an s an d gra n ts for s tu d en ts . W e c on c lu d e t h at e v e n if H al asa did enga ge i n prot ecte d conduct und erthe A ct, he h a s n o ts h o wnth a th e wa s fi r e d b e c a u s e o fth i s c o nd uc t. T hu s, w e affirm the d ecisions of the d istric t cou rt gran ting su m m ary j ud gm en t and costs in I T T ’s f avor.

I I TT is a f or - profi t corp orati on that o perat es Technica l I ns titute s throu gh ou t the cou nt ry. Like m an y suc h forprofit insti tuti ons, near l y three

- quarte rs o fi ts tot al cash r ecei pts co m e fro m the federa l tr eas ury by w ay of st u d en t loa n s an d g ra n ts . Se e S. C om m . On H ea lth , E d u c ., L ab or an d P en sio n s, ForPr of i tH ighe rEduc at i on: The Fa ilure to Sa

fegu a r d th e Federa l Inv estm ent a nd E nsu re Stu den t Su ccess , S. P RT . N O . 112-37, at 30 (J uly 30, 2012). Stud ents enro l l i n I TT’s Insti tutes , and theyo ften pay f o r tho s e p r o g r a ms wi th fe de r a l l y - fun de d s t ud e nta i d. I n ord er t o quali fy t o re cei ve thi s a i d on behal fo fi ts students, I TT m ust c om p l y with cer tain re gul ato ryr equir em ents, so m e o fwh i ch ar e incor po ra te d i nto a Pr og r am Pa r ti cipa ti o n Agr ee m en t ( PPA) b etwee n I TT a nd th e U. S

. De par tmento fEduc at i o n. Draw i ng al l i nfe re nc es i n H al asa’ s f avo r, as we m ust at th is s ta ge of th e litig a t i on , C hic ago R eg’l C o un cil o f C a rpen ters v. Village o

f S c h a um burg, 644 F.3d 353 , 356 (7th C ir.N o. 11

- 3305 3 2011 ) , we sum m ar i ze the e vents underl yi ng thi s ca se. O n M arch 9 , 2009, H alasa bega n em p loym en t at I T T ’s Lathro p Cam pu s a s i ts C oll ege Dir ecto r. A ccor ding to H ala sa , th e c am p u s w as in d isa rra y w h e n h e a rriv ed . I t w as u nd er going a l ar ge re m odel i ng proj ect, and sev er al i m port ant l eader shi p pos itio ns were vacant
. H al asa c o nt e nd s tha t thi s ha d c r e a t e d a v a c uu m o fl ea de r s hi p. I n the abse nce o fpro per ove rs i ght, he sa i d, som e Lathr op empl o y e e s h a d b e g u n e n g a g i n gin a v a r i e t y o fu n l awful recru iti ng and reportin g pra ctices. Stud en t recru iters ( th a ti s , e mpl o y e e s r e s po ns ib l e f o r p e r s ua di ngp r o s pe ctive stu d en ts to en rolli n Institu te p rogram s) w ere p aid on an inc en tiv e b as is

— a s c h em e t h at is ex p re ss ly p ro h ibit ed b y th e PP A
. Se e 20 U .S.C

. § 10 94 (a)( 2 0 ) (p ro h ibi ting“ co m m i ss i o n, b o nus , or oth eri nc en ti ve pa y m en t base d dir ectly o r i nd i re ctl y o n succes s in sec uri ng en ro llm ents” )
. OtherI TT e m p loyees were al l ege dlypre ssur ed to cha nge the e nt r an ce e xa m s co r es o fpr o spe ct i ve s tu
d en ts , to a lte r th e g ra d es of st u d en ts to i m p r o ve th eir j o b pr o spe ct s, a nd t o mis r epo r t the e m pl o y m en t sta ti sti cs o fgr aduates. H al asa re port ed al l thes e obser vati ons to hi s di re ct s upervi so r, JeffOrte ga. H e a l so rep orted som e of th em to V a lory H em p hill, I T T ’s R egional D irector ofRec ru it m e nt, and Ch ris C arp en tier, i ts Dir ecto r ofCom pli ance. M eanw h ile, I TT w as experi enci ng so m e pr obl em s o f i ts own with Hala sa. I TT rece i ved se ver alco m pla ints ab o ut Ha l a s a ’ s b e ha v i o r v i a i t s Ethi c s Al e r t Li ne. A ccor ding to these co m pla i nts, H al asa sm oke d a hoo kah pi pe wi tho th erI TT e m pl o y ee s i n the c ampu s par k i ng4 N o. 11

- 3305 lotd u rin g a st u d en t o rie n ta tio n ev en t. H e a l s o alleg ed ly re fer re d to hi m sel fas the “King” and his co l l eagues a s th e “ M afia .” ( W e h a ve h igh ligh te d on ly a few su c h inc idents her e. There ar e o ther s. F or exam ple , H al asa al l eg edly ha tc he d a n i l l

- adv i se d pl ant o c l o se all of th e re str oo m s o n the Lathro p Cam pu s s i m ult an eo usl y. W hen em plo yee s nee ded to use thos e f aci l i ties , he pr opo se d tha t th eyt o g o t o a ne arbyArb y ’ s f as t- f o o d r es ta ura nt. ) Beyo nd thes e inci dents, the Lathro p cam pu s w as perf or m i ng be l ow expectati ons. Duri ng an opera ti onal re vie w co nd ucted i n M ay 2009 , I TT E xecuti ve Vice Pre siden t Gen e F ei ch tn er w as un im p resse d wi ththe c am p u s’s d ev elo p m en t u n d er H ala sa ’s m an ag em en t. A few m on th s la ter, i n A ugust 2 009, the cam pu s r ecei ved a l o w s c o r e i n a n i nt e r na l a ud i t, pr o mpt i ng I TT C EO Kev i n Modan y t o s en d a n e m ai l t o Hal as a i ndi ca ting hi s “ disa pp oi nt[ m ent] ” with the cam pu s’ s pro gr ess . Fi nal l y, o n Se ptem ber9, 20 09, se ver alvi ce pr esi dents and the CE O decided to te rm i nate H al asa’ s e m plo ym ent. The pa r ti es di sa g r ee abo utwhat p r o m pte d thi s. I TT ass er ts that i t fi re d H al asa beca use ith ad l ost“co nfi dence i n hi s ab ility to l ead the col l ege . ” Hala sa conte nd s that I TT end ed thei r re l ati onshi p because he ha d i denti fi ed and repor ted vi ol ati ons ofITT ’s l ega l o bl i gat i ons und er the PPA

. Bel i evi ng tha t thi s type o fr eta l i ati on vi ol ates th e False Claim s A ct, H alasa fi led s u it in th e U
. S. D istri ct C ou rt forthe Sou th ern D ist r ic t of I nd iana, w he re I T T i s h e a d qu a r t e r e d

. T h e d i s t r i c tc o u r tg r a n t e d s u mm ar y j ud gm ent in f avo r ofI TT. H al asa now appeal s.N o. 11

- 3305 5 II W e r evi ew the dist ri ct c ourt ’ s g ra nt o fsum m ar y j ud gm ent deno vo . Village o f Sch a um burg, 644 F.3d at35 6. In op p os i n g IT T ’s s u m m ar y jud gm en t m ot ion on h is c laim f orunl aw ful re tal i ato rydi schar ge und erthe A ct, H al asa ne e d e d t o p o i n t t o e v i d e n c e s h o wi n g fi r s t th a t he engag ed i n prot ecte d conduct and then thathe was fi re d “b ec au se of” th at co n d u c t . 3 1 U .S.C . § 37 30 (h )(1) ; Bran don v . A nesth esia & P a in M gm t. Asso cs. , 2 7 7F
. 3 d 9 3 6 , 94 4 (7th C ir. 2002). Se cti on 3 730( h)( 1) prot ects two cat ego ri es ofco nd uct. The sta tute ha s l ong preve nted em plo yer s fro m te rm i nati ng em plo ym ent forco nd uct that i s “i n further ance o f an a ct i o n un derthi s se ct i o n. ” I n Bran don , we e xp l a i ne d th a t th i s l a n g u a g e r e a c h e d c o n d u c t th a t p u t a n e mplo yer“o n noti ce o fpote nti al[ Fals e C l ai m s Act] l i ti gati o n. ” 27 7 F
. 3d at9 45. In 2009 , Co ng r es s amende d the statu te to prot ect em p loyees fr om being fi r e d f or un d ertak i ng “o thereff or ts to sto p” vi ol ati ons ofthe A ct, such as rep orting su sp ecte d m iscond uc t t o i nt erna l su p ervi sor s. Fo r th e p u rp ose s o fthi s a pp eal, we proce ed on th e as su m pti o n tha t H al as a’ s cond uct f al l s wi th i n the sco pe o fthe sta tute’ s a m ended la nguage. A s we note d ab ov e, re c ru ite rs att h e L at h ro p C am p u s w er e a lleg ed ly com pensated o n the basi s o fthei r re crui tm ent su c cess i n vi ol ati on o f20 U
. S. C. § 1 094( a)(20 ), a r equi re m ent that w as speci fi cal l y incor pora te d i nto I TT’s PPA
. S ee i d. at § 1 094( a)
. Fur ther m or e, so m e pr ospect i ve students w er e a l l ege dlyr ecei vi ng i napp ro pri ate as si sta nce o n pla cem ent e xam s ( so- cal l ed “abi l i ty to benefi t” exam s)6 N o. 11

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o r h a d the i r s c o r e s a l t e r e d pos t hoc so th at th ey co u ld quali fy t o recei ve fi nanci alai d. Se e i d. at § 1091(d )( 1). H ala sa inv es tig at ed th es e c laim s a n d rep or te d h is fi nd i ngs t o Orteg a, H em phil l, and Carpenti er, pre su m ab l y t o e ns ur e th atITT e nde d the se pr ac ti ce s an d to preve nt I TT fr om m aking a n y fa l se cer ti fi cati ons to the U. S. Departm ent o fEdu cati on in con n ecti on with its P P A . W e a r e s at isfie d th at H ala sa ’s e vid en c e w ou ld perm i t a tr i ero ff act to fi nd thathe e ngaged i n “eff or ts to sto p” potenti alFCA vi ol ati ons. Even ass um i ng tha t hi s co nd uct was p ro tect ed by the Ac t, h o we v e r, Ha l a s a f a c e s a s e c o n d h u r d l e . He m ust s how thathi s pro tect ed conduc t w as co nnected to IT T ’s d ec isio n to fire h im . Pr ac tic ally , in ord er to av oid su m m ar y jud gm en t h e m u st h av e e vi d e n c e t h at w ou ld su p p or t a find in g t h at h e w as fired “ b e c a u se of” h is protect ed co nduc t. Tha t i s wher e hi s ca se f o unde r s. The re cor d i s undis pu ted thatthe deci si on t o fire H al asa w as m ad e b y V i ce Pr esi dent Barr y S i m i ch and approve d by Se ni orVi ce Pr esi dent N i na E sb in , Executi ve Vice Pres i de n t Fei chtner, and CE O M odany. Yet H al asa has no e vi dence thatany ofthes e d eci si onm ake rs knew of hi s p ro tect ed conduct. Rather, the re cor d show s that H ala sa rep or te d h is fin d in gs on ly to O rt eg a, H em p h ill, and C ar penti erand ther e i s no i nd i cati on that any o f th es e peop le pas se d a l o ngHal as a’ s fi ndi ng s to the deci s i o nma k e r s . Ha l a s a ’ s b e s te v i de nc e i s de po s i t i on testim ony stating th at allf orm al ethics com p lai nt s are re quired t o be for w ar ded to S i m i ch. But none o f H al asa’ s F al se Clai m s Act-r elated re port s was expre sse dN o. 11

- 3305 7

as a for m alethi cs c om plain t, an d ther e i s no ev i dence eit h er th at an y of t h es e re p or ts ev er rea c h ed a d ec isi onm ake r orthatany ofthem o th er w i se l ear ned ofH al asa’ s pro tect ed acti vi ty. U nabl e to prov e ca usati on a s a f actualm att er, H al asa a r g ue s th a twe s h o u l d fi n d c a u s a t i o n a s a ma t t e r o fl a w. H e s u gge sts thatwe i m pu te to I TT (and i ts age nts) any know l edge that Ort ega ga i ned w he n H al asa re p or te d p ot en tia l viola tio n s. T h is a rg u m en t s er iou sly m i sund er sta nd s the way l i abi l i ty rul es w or k i n the cor por at e se tti ng . The b r o ad ( an d unpr ec ede nt ed) do ct r i ne of c on st ru c tiv e k n ow led ge th at H al a s a u rg es w ou ld d e fe a tth e s p e c i fi c s t a t u t o r y r e q u i r e me n tth a ta n e mpl o y ee ’ s te r m i na ti o n be “b ec au se o f ” he r pr o te ct ed co nd u c t. T h e la w is cle ar th at it is t h e d ec isio n m ak er s’ k n ow ledg e th ati s cru ci al

. Apar t fr o m na r r o w exc ept i o ns l i k e t h e o n e th a th a s c o me t o b e c a l l e d th e “ c a t ’ s p a w” theo ry, se e Staub v. Proctor Hospit al, 13 1 S

. Ct. 11 86 ( 2011), which doe s no t a pp l y her e, co m panie s a re not l i abl e under the F al se Clai m s A ct forev er y s cra p of i nfo rm at ion that s om eone i n oro utsi de the chai n of re sponsibi l i ty m i ght ha ve. H al as a ha s no t sh o wn th atI TT fi r ed hi m b ec au se o fa ny p ro te c te d co n d u c t. T h e d i s tr ict co u rtth er efo re p ro p er ly gr anted sum m ar y j ud gm ent in ITT’s f avo r, bec ause H al as a f ai l ed to r es pond w ith e vi den ce o n o ne o fthe ess enti alel em ents ofh i s cl ai m f orr eta l i ato rydi schar ge i n vi ol ati on o fthe A ct.8 N o. 11

- 3305 III H al asa al so appeal s fro m di str i ct c ourt ’ s deci si on r equir i ng hi m to pay c ost s in the am ount o f$3 3, 401. 04 pu rs uant to 28 U
. S. C. § 1 920, and another $2, 975. 00 und erFe deralRule o fCi vi l Pro cedure 26(b)(4 )( E)( i ) f or th e d ep os itio n fee s o f an ex p er t w itn es s, D r . G er ald Lynch. W e fi rs t a dd re ss our ap pel l ate j uri sdic ti on o ver thi s par t o fthe case , and then the m er i ts ofthe tw o or ders.

A A s a lw ay s, w e m u st e n su re th at ou r j u ris d ict ion is secur e be f or e a dd re ssing t h e m er i ts ofa questi on. S ee Bluev. Int e r nat i onal Bhd. of E le c. Worke rs Lo ca l U ni on 159 , 676 F. 3d 579, 582 ( 7th Cir

. 2012 )
. H al asa’ s notic e of ap p ea l p re d at es th e d ist ric t c ou rt ’s o rd er for c os ts an d is thus noteffecti ve as to t hat o rder

. S ee Acke r m an v. Nor t hwes t e r n M ut
. Li

f eIns . Co. , 172 F. 3d 467, 46 8 (7 t h Cir. 19 99 ) ( “T he no ti ce o fa ppea l fr o m the o r derdi sm issi ng th eir su it could not bring u p an ord er ente red l ater.”). The no ti ce o fa ppea l, ho we ver, is no t th e o nl y do cum ent t h at can sa ti sfy the r equi re m ents ofA pp el l ate Rul es 3 a nd 4

. As the Su p rem e C o ur t st at ed i n Sm i t h v

. B a rry, 50 2 U.S

. 24 4, 248- 49 ( 1992 ) , “[ i ] fa docum ent fi l ed w i thi n the ti m e sp eci fi ed by Rule 4 g i ves the no ti ce r equir ed by Rule 3, i t i s e ffecti ve as a no ti ce o fappeal

. ” S ee al so In re Turn er, 574 F
. 3d 3 49 , 35 4 ( 7th Ci r. 20 09) ( “[ R]e quir em ents f orper fecting an a p p ea l thatdo not i nv o l ve de adl i ne s ar e no t j uri sdi ct i o na l ”)
. Thu s i n Sm ith the Court rul ed that a ti m el y fi l ed appell ate b rie f sub-N o. 11

- 3305 9 sti tuted f ora proper l y fi l ed noti ce o fappeal

. H er e, H al asa’ s o pening appell ate br i efwas fi l ed w i thi n 30 days ofthe dist ri ct c ourt ’ s co sts o rder, and i t cl ear l y g i ves not ice ofhis i nt en t to cont est t h a t ruling. W e the refore h av e jur isd ict ion ov er th is a sp ec t o f H ala sa ’s a p p ea l.

B H al asa’ s a pp ealfr om t he co sts o rderpre sents a novel que st i o n: How s ho ul d we r ec o nc i l e prov i si o ns i n the fede ral rules p roviding f or the cos t-shifti ng of ex p ert d isc ov er y w ith st at u te s t h at im p o s e lim its on p ay ab le fees f orexper t witnesse s? F or m al l y, this re quir es us to consi der whether the pay m en t pr ovi si ons ofFe deral Rule ofCi vi l Pro cedure 26(b) ( 4) ( E) s up ersede, byf or ce ofth e Rul es En abl i ng Act, 28 U
. S. C. § 2 072(b) , the rul es setf or th i n 28 U
. S. C. § 1 821 , wh i ch go ver ns witnes s expenses. T h e c os ts I TT w oul d l i ke to have re i m burse d ar e f o r Ly nc h’ s depo si ti o n pr epa r ation, t r av elt o a nd fr o m hi s de po si t i o n, a nd t i me s pe ntr e v i e wi ngh i s de posi ti on t ra nscri pt. T h e R ules E na bli ng A ct au th orizes the Su p rem e C ou rt to “p re sc rib e g en er al r u l e s of p ra c tic e a n d p ro c ed u re ,” 2 8 U. S

. C

. § 2 0 7 1 , a n d fu r th e r p r o v i d e s th a t“ [ a ] l l l a ws i n confl i c t w i th such r ule s s hal l be ofno furtherf or ce oreffect. ” Id. a t § 2 0 7 2 ( b )
. In o r d e r t o a s c e r t a i n th e c o mb in ed effect ofRule 26 ( b) ( 4) ( E) a nd § 1821 , we m ust fi rs t deter m i ne w h et her the pay m ent pr ovi si ons i n Rule 26 postdate the re l evantp rovi si ons of28 U
. S. C. § 1 821. S ee Jackson v. Sti nnett, 1 02 F
. 3d 13 2, 1 35 ( 5th Ci r. 1 996) ( The su p ersession clause tru m p s “on ly statu tes p assed before10 N o. 11

- 3305 th e eff e c t ive dat e of th e rule i n q ue stion.”). I f th is part ofR ul e 2 6 we nti nt o e ffe c ta ft e r the s t a t ut e wa s p a s s e d, then we m ust d ec i de w hetherther e i s a co nfl i ct b etween the rule and the sta tute. S ee Coll i ns v. Gor m an , 96 F. 3d 1057, 1 05 9 ( 7th Ci r. 19 96)
. I fther e i s s uch a co nfl i ct, then un d e r the su p ersession clause, the ru le controls; i f th ere is n o c on flict, th en w e m u st d et er m i n e h ow to ap p ly both the rul e a nd the sta tute. T h e fi r s tqu e s t i o n i s r e a d i l y an s we r e d

. A s th e S u p r e me C o u r te x p l a i n e d i n C r a w fo rd F itting C o . v. J. T . Gib bo ns, Inc. , 482 U
. S. 437, 439- 40 ( 1987 ) , Congre ss in 17 93 “e n ac te d a ge n er al p ro vis ion lin kin g som e tax ab le cos ts
. . . to the pra ct i ce o fthe c o ur t o fthe S ta te i n whi chthe fede r alc o ur t sa t. ” Di ss at i sfi ed wi ththe wi dely di ve r g en t p ra cti ces that persi ste d thro ugh the m i d-ni netee nth centur y, Congr ess passe d the Act ofFeb. 26, 1853 , 10 St at. 16 1, w hi chco m pr eh en si ve l y r egul at ed fee s an d c o st s i n the federa l co urts
. C raw

f or d F i t t i ng, 48 2 U.S

. at44 0; se e a l so Ta n ig u c h iv . Ka n Pa c . S a ip a n , Lt d. , 13 2 S

. Ct. 19 97, 20 01 (2012 )
. Tho se “ swe epingr efo r m s” ha ve “ ca r r i ed f o r wa rd to today, ” wit h o ccasi onalm odi fi cati ons by Congre ss. Crawf or d F i t t i ng, 48 2 U. S

. at 44 0. N o tabl y f o r o ur pu rposes , Con gr es s a m ended § 182 1 in 195 9 s peci fi cal l y t o in c lu d e “ th e t ak in g of a d ep os itio n p u rs u a n t t o a n y ru le o f a c o u r t o f th e Un i t e d S t a t e s . ” T h u s , s i n c e 1 9 5 9 t he l i m i tat i ons on r ei m burse m ent s et f or th i n § 1 821 have ap p lied noto nl y t o tr i alwitnes ses , but al so to deposi ti on wi tn ess es . ( Thi s di spo se s o fthe t i m i ngi ss ue tha t th e p ar tie s h av e d eb at ed : if § 1 8 2 1 a p p lies , th en it w ou ld gov er n an y aw ar d offees , wh etherthe m oti on was m ad e a t t h e p re -tr ial st ag e, d u rin g t h e t ria l, or p os t-t ria l.)N o. 11

- 3305 11 B y c on tr as t, th e p ro vis ion s n o w a p p ea rin g in C ivil Rule 26(b) ( 4) ( E) forthe paym ent o fexper t witne sses i n dis cove rywere add ed after the 1 959 am endm ent t o § 1 82 1. Subse cti on (b) ( 4) to Rule 26 was i ntro du ced w i th the 19 70 am endm ents to the Ci vi l Rule s; i t r equi re d a courtto i ssue an o rder“that the exper t be pai d a r easonab l e fee f or ti m e spent i n re sponding to d i sco ver y” and “that th e party w hose exper t i s m ade subj ect to d isc ov er y b e pa id a fair p or tio n of th e fe es an d ex p en se s . . . i ncurr ed. ” S ee F ED . R. C IV . P. 26 , adv. co m m . n. ( 1970 Am en dm en t)
. The se prov i si o ns t o o ko n the i r c ur r en t form i n 19 93, after a m aj or set of revis ion s, an d w ere then r enum ber ed as subsect i on (b) ( 4) ( E) in th e 2 010 am en d m en ts . F ED . R. C IV . P. 26 , adv. c om m . nn. ( 1993 Am en dm en ts , 2 01 0 Am en dm en ts )
. In s ho r t, b ec au se th e r el ev an t st atut o r y pr o vi si o n was ena ct ed i n 1 95 9 an d the r el evantr ule was prom ulg ate d i n 1970 ( and rev i sed i n 199 3) , the rul e pr evai l s o verany i nconsi ste nt par t o f the s tatute. Bu t i s there a confl i ct? There i s s u rp ris i ngl y l i ttl e l aw o n thi s i ss ue . The c as e th atc o m es cl o se stt o a ddr es sing thi s i ssue is fro m the D.C. Ci rcui t, but that cour t nev er sq u ar ely co n fro n t e d th e q u es tio n n ow be for e u s. It note d that “ § 1 821(b) does in f act l i m i t witness fees to $40 per day, ” Haarhuis v. K un na n Ente r . , Lt d. , 17 7 F. 3d 1007, 1 015 ( D.C. Ci r. 19 99) , but then i t went on to ass um e the answer to the quest i on be f or e us: wh ether that l i m i t car ri es ove r to an aw ar d m ade und er Rule 26 (then Ru le 26(b) (4)( C ))
. A fter n o t in g tha t the exp ert th er e w as se ek in g fe es u n d er R u le 2 6, it a p p ar en tly f ound that § 18 21 w as irrel evant, and then went on to12 N o. 11

- 3305

con clud e tha t the aw ard ofa f e e b ased on th e exp ert’s no r m alc h a r g e o f$ 3 0 0 p e r h o u r f o r th e t i me h e s pen t “r espondi ng to the o pp osing par ty’ s di sco ver y r equest” w as “r eas onabl e. ” Id.; see al so Trep a l v . R o a dw a y E xp ress, Inc. , 266 F.3d 41 8, 42 6-2 7 (6 th C ir. 20 01 ); An de rs on v . Ci ty of S t
. Louis , 2 2 0 F .3d 89 8, 90 5 (8 th C ir. 20 00 ); Lou i s i ana Pow e r& LightCo. v. Ke l l s t r om , 50 F .3d 319, 33 2- 33 ( 5th Ci r . 1 9 9 5 )
. T he di s t r i c tc o ur t s h a v e t a k e n di ffe r enta ppr o ac he s to the wayi n whi ch§ 1 82 1 appli es to m o ti o ns f orcost s un der Rul e 2 6( b) ( 4) ( E) when those part i cul ar ite m s a re als o a d d re ss ed in § 18 2 1 . C om p ar e, e . g. , U nited S tate s v. D avis , 8 7 F
. S u p p . 2 d 8 2 , 9 1 ( D. R
. I
. 2 00 0) ( “n o ne ed to d ep ar t fr o m th[ e] r ul e” s eto uti n C raw fo rd Fi t t i ngi n the c o nt ex t o fRul e 26 , a nd the r efo r e l i m i ting a tt en d an c e fe es to $4 0 p er d ay ); H m v. Ci ty of Cr e veCoe ur, N o. 4: 07- CV

- 0094 6, 20 10 W L 1816693 a t * 2 ( E.D. M o. M ay4 , 2 01 0) wi th Jo r d e n v . S t e v e n J
. G l a s s , MD , N o. 09

- 1715 , 201 0 W L 3 023347 at * 3 ( D.N.J
. J uly23 , 20 10) ( disti ngui shi ng be tw een fee payabl e to deposi ti on witness und er§ 1821 and fee payabl e t o expertdeposi ti on w itness un d er Ru le 26(b) (4))
. The r e ar e r es pec tabl e ar g um en ts b o thf o rr ec o nc il i ng the rule and the sta tute and for fi nd i ng a confl i ct that woul d r eq uire g i vingpr ec ede nc e to the r ul e. The f or m erco ncl usi on would fl ow fro m l i ter aladhere nce to C raw fo rd F itting, und erwh i ch one w oul d find that Rule 26 author i zes r eco upm ent o fexpenses and § 1 821 sim p ly c ap s t h e a m ou n t t h at m ay be aw ar d ed

. C raw fo rd Fi t t i ng in vo lve d th e c om p u ta tio n of co st s t ax ab le und erRule 54 ; i n that conte xt, the Court f ou n d a w ay to harm oni ze the rule and the sta tute. I t hel d that the effectN o. 11

- 3305 13 ofthe “l anguage and i nter re l ati on” of§ 182 1 an d Ru l e 5 4 (d i re cti ng the entry o fco sts f ora preva i l i ng par ty) was ( 1) thatthe ru le “p ro vi des thatthe cos t s hal l be taxed aga i nst the l osing par ty, ” ( 2) that a notherst atute

— 28 U
. S. C. § 1 920

— d i r e c t s th a t wi tn e s s fe e s we r e a m o ng the c ost s that co uld be ta xed, and final l y, ( 3) that“§ 18 21 speci fi es the a m ount o fthe [ w i tness ] fee th at m ust be tendere d.” 48 2 U.S

. at44 1. A l though Rul e 5 4 and Ru l e 2 6 p ro vid e d ist in c t a ve n u es of co st rec ov er y, Cham b e rs v. Ing r am , 8 5 8 F
. 2 d 3 5 1 , 3 6 0

- 6 1 ( 7 th C i r . 1 9 8 8 ) , th e s a me m etho dol ogy m i ght apply to both, especi al l y bec au se no th i ngi n § 1 82 1 l i m i ts i ts rules to a war ds to pr ev ai l i ng pa r t i e s . Und e r t hi s v i ew , o ne would sa y t hat Rul e 26 ( b) ( 4) ( E) di r ec ts a di st r i ctc o ur t to “ r equi re ” th e paym ent o fa re aso nabl e o r f ai r fee to com pensate the e xpert f orti m e s pent i n re sponding to disc ove ry, F ED . R. C IV . P
. 2 6 ( b ) ( 4 ) ( E ) , b u tth a tth e a mo u nt recove rable forcertain co m p one nt s of th e exp ert’s ex pen se s i s di ct at ed bys ta tu te
. Secti o n 1 82 1 se ts a mandat o r y c ap o n c er ta i n s pec i fi ed costs re l at ed to the tak i ng o fa “deposi ti on pursuant to any r ule o r or der o f a cou rt of th e U nited States.” 28 U

. S.C

. § 1821(a)(1)
. Those c osts incl ud e a n att endance fee of$4 0, actual ex pen se s o ft r av el, a nd a s ubsi sten ce a l l o wanc e co nsi ste nt with federa l l aw . S ee id. § 1821 (b), ( c), ( d ). The other approach w oul d rej ec t such a cl ose anal ogy to Crawf

or d F i t t i nga nd Rul e 54. To b eg i n wi th, the l an gu a g e of the tw o rules i s d ifferent. Ru le 54(d) refers to “co sts ” g ener i c al l y, wh i l e Rul e 2 6( b) ( 4) ( E)( i ) sa ys that “[ u]nl ess m ani festi nj ustic e w oul d res ult, the cour t m ust requ ire th at th e pa rty seeking d iscovery
. . . p ay th e exp ert14 N o. 11

- 3305

a re as onabl e fe e . . . . ” ( Em phasi s a dd ed. ) Thi s a m ounts to a m u c h m or e e x p licitex p en se -sh iftin g m an d at e, a n d it al so provi des so m e guidance on the am ou n t ofco sts ( i.e. , a “ r ea so nabl e” fee )
. In Coll i ns , we o bs er ved th atthe 1993 am endm ents to the rule s were “d es i gned to r edu ce the e xpe ns e o fl i ti g at i o n wi th o uta l te r i ngwho m ust be arthatexpense. ” 9 6 F
. 3d at 1060
. S ee al so G w in v. A m erica n R iver Tran sp. C o ., 482 F
. 3d 969, 975 ( 7th Cir

. 20 07) ( sta ti ng tha t the r el evantl anguage o f R u le 26, the n in s ubpa r t ( b) ( 4) ( C) , r equi r ed o nl y tha t “the e xpe rt’s fees m ust be r eas onabl e. ”) The Com m i tte e Notes th at ac c om p an ied th e a d d itio n o fs u b p ar t (4 )(E ) co n firm th is vi ew , st ating tha t “ [ c] oncerns r ega rdi ng the e x p ense of such deposi ti ons [ m eani ng th ose o fexper ts, wh ether testifyi ng o r j ust fortr i alpre parat i on] sho uld be mi t i g a t e d b y the f a c t tha t the e xp e r t ’ s fe e s f o r the de po si ti o n wi l l o r di na r i l y b e bo r ne b y the pa r tyt ak i ng the deposi ti on. ” F ED . R. C IV . P. 26 , adv. co m m . nn. ( 1993 A m en d m en ts, Sub d ivi sion (b))

. I n c ho o singb etwee n the se t wo a ppr o ac he s, w e th i nk i t i m port an t to p ay heed to the differ ences between Rule 54 and Ru l e 2 6. Both r ule s di re ct th e c ourtto shi fts som e co sts ; b u t as we have no ted, unl i ke Rule 54, R ule 26 sets out a su bsta nt ive st a nd ard

— a re as on ab le fee f o r ti m e spe nt i n r es po ndi ng to di sc o ve r y . W e thi nk it u n re alis tic in t h e e x tr em e t o a ss u m e t h at $4 0 is by defini ti on a “r eas onabl e” fee. R u le 26’ s fl exibl e r easo nabl en es s st an dar d i s “i r r ec o nc i l ab l [ e] ” wi th the h ar d -an d -fas t s c h e d u le e m b od ied in § 18 21
. He nde rs on v. U nited Sta tes , 51 7 U.S

. 65 4, 66 3 ( 1996 )
. Thi s i s not a c as e w h er e th e sta tu te an d th e ru le bot h c o n ta inN o. 11

- 3305 15 flex ible s t an d ar d s t h at ca n ea sily be rea d to ge th er . U nited State s v. M icrosoft, 1 65 F.3d 95 2, 959-60 (D
. C

. Cir. 1999). Rather, the rul e op er ate s t o gi ve cour ts the di scr eti on to aw ar d a fee that appropri ate l y c om pensates an ex per t wi tn ess, w hi l e appl i ca ti o n o fthe s ta tu te “ ex ti ngui sh[ es] all dis cre ti on. ” Crawf or d F i t t i ng, 482 U
. S. at 446 ( M ar shal l, J
. , d iss en ti ng)
. I m port antl y, § 1821 ackn ow led ge s t h at oth er law s m ay o v e r r id e it s t er m s: it begins with the phras e “ [ e] xcept as o ther w i se provi ded b y l a w. ” 2 8 U. S

. C. § 1 8 2 1 ( a ) ( 1 )
. R ul e 2 6 , the l a t e r - enacte d ofthe tw o, does “o ther w i se provi de[]

. ” Alth ou gh w e c on sid er it a c los e c all, w e c on c lu d e t h at th e fle x ible author i zati on f ora re aso nabl e fee conta i ne d in R ule 26 su p erse d e s th e sp ecifi c sch ed ule ou tli ne d i n § 182 1(b). T h is m ea n s, as t h e d ist ric t c ou rth eld , th at ce rt ain expenses and fe es ass oci ate d w i th exper ts ar e no t capped by§ 1821 wh en r eco ver ed und erRule 26
. I TT id en ti fi ed sev er ali tem s r el ating to Dr. Lynch f or w hi ch it w as see ki ng r ei m burse m ent: ( 1) deposi ti on pr epa rati o n, ( 2) t r av elt o a nd fr o m the de po si ti o n, a nd ( 3 ) t i me s p e n tr e v i e win gh i s d e p o s i t i o n t r a n s c r i p t
. We a g r ee w ith th e d ist ric t c ou rtth at th e fa c t t h at ITT d id not se ek th es e fee s unt i l i t fi l ed i ts b i l l o fc o st s i s o fno mo me n t ; i t s r e q u e s tw as t i me l y . O n th e me r i t s , we furth er find no abu se of discre t ion i n th e d istri ct cou rt’s concl usi on that Dr. Lynch’s to talfee of$2 , 975. 00 w as r ea so nabl e, o r i n i ts a war d o fc o st s i n the a m o unt of$3 3, 401. 04. W e A F F I RM the j ud gm ent o fthe dist ri ct c ourt
.
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