UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 10-1509

GARY ELLIS,

Plaintiff – Appellee,

v.

GRANT THORNTON LLP,

Defendant – Appellant,

v.

FEDERAL DEPOSIT INSURANCE CORPORATION,

Party-in-Interest.

Appeal from the United States District Court for the Southern 

District of West Virginia, at Bluefield. David A. Faber, Senior

District Judge. (1:04-cv-00043)

Argued: May 10, 2011 Decided: June 15, 2011

Before GREGORY and DUNCAN, Circuit Judges, and HAMILTON, Senior 

Circuit Judge.

Affirmed in part, vacated in part, and remanded by unpublished 

per curiam opinion.

ARGUED: Stanley Julius Parzen, MAYER BROWN, LLP, Chicago, 

Illinois, for Appellant. Benjamin L. Bailey, BAILEY & GLASSER, 

LLP, Charleston, West Virginia, for Appellee. ON BRIEF: John H. 

Tinney, John H. Tinney, Jr., THE TINNEY LAW FIRM, PLLC, 
- 2 -

Charleston, West Virginia; Justin A. McCarty, MAYER BROWN, LLP, 

Chicago, Illinois, for Appellant. Eric B. Snyder, BAILEY & 

GLASSER, LLP, Charleston, West Virginia, for Appellee. 

Unpublished opinions are not binding precedent in this circuit.
- 3 -

PER CURIAM:

Following our reversal of the district court’s judgment in 

favor of the plaintiff, Gary Ellis, Grant Thornton LLP (Grant 

Thornton) sought $68,983.70 in costs in the district court. The 

amount sought included $7,026.25 in costs ordered by this court 

as part of our mandate to the district court. The Clerk of 

Court for the Southern District of West Virginia taxed 

$68,983.70 in costs against Ellis, and Ellis moved for review of 

this taxation pursuant to Rule 54(d)(1) of the Federal Rules of 

Civil Procedure. In ruling on this motion, the district court 

denied all costs sought by Grant Thornton, including the amount 

ordered by this court as part of our mandate. Grant Thornton 

appeals from this ruling. We affirm in part, vacate in part, 

and remand the case to the district court with instructions to 

tax costs against Ellis in the amount of $7,026.25.

I

Ellis brought a negligent misrepresentation claim under 

West Virginia law against Grant Thornton, alleging that Grant 

Thornton, an accounting firm that was retained by First National 

Bank of Keystone (Keystone) in response to an investigation by 

the Office of the Comptroller of the Currency into Keystone’s 

banking activities, owed a duty of care to Ellis, who allegedly 

relied on oral statements made by Stan Quay, a Grant Thornton 
- 4 -

partner, and a Grant Thornton audit report of Keystone’s 1998 

financial statements in deciding to accept the job as president 

of Keystone. Following a bench trial, the district court ruled 

in favor of Ellis and entered judgment in Ellis’ favor in the 

amount of $2,419,233.00. 

On appeal, we reversed the district court’s judgment. 

Ellis v. Grant Thornton, 530 F.3d 280, 292 (4th Cir. 2008). In 

our decision, we held that Ellis failed to offer sufficient 

proof at trial to support his negligent misrepresentation claim. 

Id. at 289-92. Following our decision, Grant Thornton filed a 

bill of costs in this court pursuant to Rule 39(d)(1) of the 

Federal Rules of Appellate Procedure (FRAP). After the time 

elapsed for Ellis to file an objection to the bill of costs 

pursuant to FRAP 39(d)(2), we awarded $7,026.25 in costs, and 

such costs were included in our mandate to the district court.1

On remand, Grant Thornton initially sought $38,983.70 in 

costs in the district court. This amount included the $7,026.25 

ordered by this court, $1,957.45 for the costs of obtaining a 

trial transcript, and $30,000.00 for premiums paid on a 

supersedeas bond (covering the March 28, 2008 to March 28, 2009 

 1 The $7,026.25 awarded in costs can be broken down as 

follows: (1) $450.00 for the docketing fee; (2) $6,285.00 for 

printing the joint appendix; (3) $244.00 for printing Grant 

Thornton’s opening brief; and (4) $47.25 for printing Grant 

Thornton’s reply brief.
- 5 -

time period). On August 27, 2008, Grant Thornton filed an 

amended bill of costs seeking an additional $30,000.00 for an 

earlier appeal bond premium it had neglected to include in its 

initial bill of costs. Thus, the amount of costs sought by 

Grant Thornton totaled $68,983.70.

On March 18, 2009, the Clerk of Court for the Southern 

District of West Virginia taxed $68,983.70 in costs against 

Ellis. Ellis sought review of this taxation, by filing a 

“Motion to Review and Reverse the Clerk’s Taxation of Costs” 

pursuant to Rule 54(d)(1) of the Federal Rules of Civil 

Procedure. On March 31, 2010, the district court granted Ellis’ 

motion, and denied all costs to Grant Thornton. In its ruling, 

the district court noted that Grant Thornton engaged in no 

misconduct, and further noted that the costs were neither 

excessive nor of limited value. The district court found that 

requiring Ellis to pay the requested costs would “work a 

substantial hardship on Ellis,” because, at the time of trial in 

2004, Ellis’ yearly salary was $52,630.00, and he is now 

retired. The district court further found that the issues in 

the case were “close and difficult,” because (1) the judgment 

was reversed on appeal, and (2) in the district court’s view, 

Ellis probably would have prevailed if the case had been 

remanded for a retrial. Because the case was close and 
- 6 -

difficult, the district court observed that Ellis brought the 

action in good faith.

II

Rule 54(d)(1) of the Federal Rules of Civil Procedure 

provides in pertinent part: “Unless a federal statute, these 

rules, or a court order provides otherwise, costs—other than 

attorney’s fees—should be allowed to the prevailing party.” 

Fed. R. Civ. P. 54(d)(1). Pursuant to this rule, prevailing 

parties may move for an award of costs, and we review the grant 

or denial of such costs for an abuse of discretion. Cherry v. 

Champion Int’l Corp., 186 F.3d 442, 446 (4th Cir. 1999). 

We have recognized that the language of Rule 54(d)(1) gives 

rise to a “presumption that costs are to be awarded to the 

prevailing party.” Id. Accordingly, it is incumbent upon the 

unsuccessful party to show circumstances sufficient to overcome 

the presumption favoring an award of costs to the prevailing 

party. Teague v. Bakker, 35 F.3d 978, 996 (4th Cir. 1994).

Although the district court has the discretion to deny an 

award of costs, it must “articulat[e] some good reason” for its 

denial. Cherry, 186 F.3d at 446 (citations and internal 

quotation marks omitted); Constantino v. American S/T Achilles, 

580 F.2d 121, 123 (4th Cir. 1978) (reversing the district 

court’s denial of costs where the district court stated no 
- 7 -

reason for its action). In essence, that reason must be that 

“there would be an element of injustice in a presumptive cost 

award.” Cherry, 186 F.3d at 446. Among the factors that 

justify denying an award of costs are: (1) misconduct by the 

prevailing party; (2) the unsuccessful party’s inability to pay 

the costs; (3) the excessiveness of the costs in a particular 

case; (4) the limited value of the prevailing party’s victory; 

or (5) the closeness and difficulty of the issues decided. Id. 

Moreover, although the unsuccessful party’s “good faith in 

pursuing an action is a virtual prerequisite to receiving relief 

from the normal operation of Rule 54(d)(1), that party’s good 

faith, standing alone, is an insufficient basis for refusing to 

assess costs against that party.” Id. (internal quotation marks 

omitted).

Grant Thornton contends that the district court abused its 

discretion when it failed to award them $68,983.70 in costs. 

Grant Thornton principally takes issue with the district court’s 

analysis of Ellis’ inability to pay the $68,983.70 in costs.

We begin our analysis by noting that the district court 

abused its discretion when it refused to award the $7,026.25 in 

costs that were ordered by this court as part of our mandate to 

the district court. See Invention Submission Corp. v. Dudas, 

413 F.3d 411, 415 (4th Cir. 2005) (noting that, under the 

mandate rule, a lower court generally may not consider questions 
- 8 -

that the mandate has laid to rest).2

With regard to the remaining $61,957.45 in costs, the 

district court correctly found that the issues in the case were 

close and difficult. The case was hotly contested at trial and 

in the previous appeal. The legal issues in the case were not 

as clear cut as Grant Thornton would have us believe. And 

although the judgment in favor of Ellis was vacated on the basis 

of a lack of proof to support Ellis’ negligent misrepresentation 

claim, such conclusion was reached with difficulty and only 

after a thorough and careful evaluation of West Virginia law. 

Moreover, even though Grant Thornton is correct that the 

district court did not discuss in detail the presence of other 

assets in Ellis’ name, held individually or jointly, which could 

be used to satisfy the award of costs, there was sufficient 

evidence admitted at trial to allow the district court to 

carefully evaluate Ellis’ financial condition and assess his 

ability to pay the award of costs. In sum, we find no abuse of 

discretion in the district court’s refusal to award the 

 Accordingly, we vacate this 

portion of the district court’s judgment and remand with 

instructions to the district court to tax costs against Ellis in 

the amount of $7,026.25.

 2 Although deviation from the mandate rule is permitted in a 

few exceptional circumstances, Dudas, 413 F.3d at 415, such 

circumstances are not present here.
- 9 -

remaining $61,957.45 in costs to Grant Thornton. Cf. Teague, 35 

F.3d at 996-97 (“We cannot say that the district court abused 

its discretion in [denying costs,] considering plaintiffs’ good 

faith in pursuing claims against Taggart and DH & S, the 

closeness of the outcome, or the equities in conducting its 

analysis; nor do we find any abuse in the district court's 

conclusion.”).

III

For the reasons stated herein, the judgment of the district 

court is affirmed in part and vacated in part, and the case is 

remanded to the district court with instructions to tax costs 

against Ellis in the amount of $7,026.25.

AFFIRMED IN PART,

VACATED IN PART,

AND REMANDED