Opinion ID: 3000372
Heading Depth: 2
Heading Rank: 3

Heading: Securing Judgment on Appeal

Text: Republic next argues that the district court erred by awarding NATC the costs that it expended by securing 10 No. 05-3634 Republic’s judgment on appeal. Republic first contends that the district court erred by not following this Court’s September 1, 2004 order, which stated that each party should bear its own costs. We reject this argument. In Guse v. J.C. Penney Co., 570 F.2d 679, 681 (7th Cir. 1978), we held that a district court has discretion not to award a party costs under Federal Rule of Appellate Procedure 39(e), despite an order by the appellate court awarding costs to that same party. The Court said that when it awarded costs, its ruling only referred to those costs taxable in the appellate court under Rule 39(c) and did not preclude the district court from awarding (or declining to award), in its discretion, costs taxable under Rule 39(e). Id. Our September 1, 2004 order in this case cited Guse, plainly indicating that the district court was permitted to award costs under Rule 39(e). Republic also maintains that the district court abused its discretion by awarding NATC all of its appellate costs under Rule 39(e) because Republic, not NATC, won the majority of relief on appeal. The Court rejects this argument as well. Rule 39(a) says, (1) if an appeal is dismissed, costs are taxed against the appellant, unless the parties agree otherwise; (2) if a judgment is affirmed, costs are taxed against the appellant; (3) if a judgment is reversed, costs are taxed against the appellee; (4) if a judgment is affirmed in part, reversed in part, modified, or vacated, costs are taxed only as the court orders. Rule 39(e) then provides that a district court may tax, “for the benefit of the party entitled to costs under this rule . . . premiums paid for a supersedeas bond or other bond to preserve rights pending appeal.” No. 05-3634 11 Few cases have discussed how Rules 39(a) and 39(e) work together, but we have held that a district court has broad discretion to deny costs to a successful appellee under Rule 39(e). See Guse, 570 F.2d at 681. In Guse, the Court said that “unless . . . the court orders otherwise” language in Rule 39(a) confirms that a district court may, in its sound discretion, depart from the default awards set out in Rule 39(a)(1)-(3) when assessing costs under Rule 39(e). We believe that similar discretionary language found in Rule 39(a)(4) affords district courts broad discretion to allocate costs where, as here, an appellate court modifies a district court’s judgment. Our conclusion is supported by a decision from the Eighth Circuit. See Emmenegger v. Bull Moose Tube Co., 324 F.3d 616, 626-27 (8th Cir. 2003). In Emmenegger, the plaintiffs won a multi-million dollar judgment, and the defendant had to secure the judgment with a supersedeas bond to avoid execution pending appeal. The Eighth Circuit affirmed the judgment for the plaintiffs on one claim but vacated the judgment on another claim and remanded for a new trial. The plaintiffs recast the vacated claims, but the new jury awarded less damages the second time around. After trial, the district court allowed the defendant the cost of its supersedeas bond, concluding that it “would not have had to pay for a supersedeas bond in the first instance but for the plaintiffs’ pursuit of their claims under the wrong legal theory.” Id. at 627. The Eighth Circuit held that the district court did not abuse its discretion. The disposition of the original appeal in this case, as in Emmenegger, falls into the category described in Rule 39(a)(4). We affirmed summary judgment in favor of Republic on its defamation claim and NATC’s antitrust claims, but we modified the large damages award. Given the district court’s broad discretion in this area, see Guse, 570 F.2d at 681, it did not err by awarding appellate costs 12 No. 05-3634 to NATC, particularly where the costs at issue stemmed from Republic’s defense of an unreasonably large damages award that we ultimately modified on appeal. That said, the district court, on remand, has discretion to revisit its award of appellate costs and may elect—after hearing more from the parties on this issue—to award NATC only a percentage of its appellate costs given that Republic did retain a significant judgment.