Opinion ID: 176297
Heading Depth: 2
Heading Rank: 5

Heading: the fiduciaries' costs

Text: The Fiduciaries cross-appeal the district court's failure to award them costs as prevailing parties pursuant to Rule 54 of the Federal Rules of Civil Procedure. Although the district court's summary judgment ruling was silent on the matter, the subsequent Judgment stated, without explanation, The parties shall bear their own costs. Rule 54 provides that  [u]nless 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) (emphasis added). ERISA § 502(g)(1) also provides for an award of costs: In any action under this subchapter... by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party.  29 U.S.C. § 1132(g)(1) (emphasis added). This court has not resolved the question of whether Rule 54(d)(1) is supplanted or supplemented by 29 U.S.C. § 1132(g)(1), nor has any other circuit court. But see Agredano v. Mutual of Omaha Cos., 75 F.3d 541, 543-44 (9th Cir.1996) (using Rule 54(d)(1) to assist in the interpretation of allowable costs under § 1132); Leonard v. Sw. Bell Corp. Disability Income Plan, 408 F.3d 528, 532-33 (8th Cir.2005) (considering whether an award of costs was appropriate pursuant to Rule 54(d)(1) in an ERISA case otherwise brought pursuant to 29 U.S.C. § 1132). Federal district courts to consider the question appear to be split. Compare Brieger v. Tellabs, Inc., 652 F.Supp.2d 925, 926-27 (N.D.Ill.2009) (awarding costs under § 1132(g)(1) because it provide[s] otherwise within the plain language of Rule 54(d)(1)), with MacLeod v. Procter & Gamble Disability Ben. Plan, 460 F.Supp.2d 340, 350-51 (D.Conn. 2006) (awarding costs under rule 54(d)(1) while recognizing that § 1132(g) allows an award of costs to either party, not just to a prevailing party). We hold § 1132(g)(1) does not plainly provide otherwise than Rule 54(d)(1) for the award of costs to a prevailing party. To provide otherwise than Rule 54(d)(1), the statute or rule would have to bar an award of costs to a prevailing party. Section 1132(g)(1), however, in no way precludes an award of costs to a prevailing party; it simply provides that, in any action by a plan participant pursuant to ERISA, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party.  29 U.S.C. § 1132(g)(1) (emphasis added). Thus, § 1132(g)(1) may apply to the award of costs where Rule 54(d)(1) does not, but it does not necessarily preclude an award of costs pursuant to Rule 54(d)(1) or make an award of costs pursuant to Rule 54(d)(1) superfluous. Rule 54(d)(1) applies here to determine whether the prevailing Fiduciaries were entitled to an award of costs. Although Rule 54(d)(1) does create[ ] a presumption for awarding costs to prevailing parties, it also places on the losing party the burden to show why costs should not be awarded. Save Our Valley v. Sound Transit, 335 F.3d 932, 944-45 (9th Cir.2003); see also Dawson v. City of Seattle, 435 F.3d 1054, 1070 (9th Cir.2006). In Save Our Valley, this court held that the district court must specify reasons only when it refuses to tax costs: [A] district court need not give affirmative reasons for awarding costs; instead, it need only find that the reasons for denying costs are not sufficiently persuasive to overcome the presumption in favor of an award. The presumption itself provides all the reason a court needs for awarding costs, and when a district court states no reason for awarding costs, we will assume it acted based on that presumption. Save Our Valley, 335 F.3d at 945; Ass'n of Mex.-Am. Educators v. State of California, 231 F.3d 572, 591-92 (9th Cir.2000). Proper grounds for denying costs include (1) a losing party's limited financial resources; (2) misconduct by the prevailing party; and (3) `the chilling effect of imposing ... high costs on future civil rights litigants,' as well as (4) whether the issues in the case were close and difficult; (5) whether the prevailing party's recovery was nominal or partial; (6) whether the losing party litigated in good faith; and (7) whether the case presented a landmark issue of national importance. Champion Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1022 (9th Cir.2003). Here, the district court stated no reasons for failing to award the Fiduciaries their costs as the prevailing parties. That omission was contrary to established law of this Circuit. Because the district court retains the discretion to deny an award of costs to a prevailing party under Rule 54(d)(1), the proper remedy is to reverse the portion of the Judgment requiring each party to bear its own costs, and to remand to the district court the limited question of whether or not to award costs to the Fiduciaries pursuant to Rule 54(d)(1) in light of the facts presented.