Opinion ID: 787299
Heading Depth: 3
Heading Rank: 4

Heading: IR's Cross-Appeal for Costs as the Prevailing Party

Text: 78 As the final point that must be addressed, IR argues that it is entitled to its costs under Federal Rule of Civil Procedure 54(d)(1), which states that costs shall be awarded to the prevailing party as of course. Since a party dismissed with prejudice is a prevailing party, IR continues, it is entitled to its costs in the absence of an explanation by the district court justifying its denial. 79 The district court found that IR was not a prevailing party for purposes of Rule 54. The dismissal of a claim with prejudice, however, is a judgment on the merits under the law of the Federal Circuit. Hallco Mfg. Co. v. Foster, 256 F.3d 1290, 1297 (Fed.Cir.2001). 4 As this court has explained, whether a party is prevailing for the purposes of Rule 54 is a matter of federal circuit law. Manildra Milling, 76 F.3d at 1182. And, as we have further explained, [i]n those cases in which one party wins completely on every claim at issue, determining which party has prevailed is a straightforward task. Id. IR, which had all claims against it dismissed with prejudice, is therefore a prevailing party. 80 Even concluding that IR is a prevailing party, the district court still retains discretion over the award of costs under Rule 54. The Fifth Circuit, however, whose law governs this aspect of our review, applies a strong presumption that costs will be awarded. Schwarz, 767 F.2d at 131. Where a district court has provided no reason for a denial of costs, the Fifth Circuit has remanded for further explanation by the district court. Id.; see also Walters v. Roadway Express, Inc., 557 F.2d 521, 526-27 (5th Cir.1977). In the event that IR was a prevailing party, the district court explained that [b]y certifying that they would not file any opposition, the IR defendants showed the Court that while the motion was not agreed, there was an agreement between the parties concerning dismissal, and that the agreement was the reason that it was denying costs. 81 IR responds to the district court's justification by pointing out that the Certificate of Conference relied on by the district court is a requirement of the local rules for the Eastern District of Texas and, as a required filing, should not be construed as an agreement between the parties. 5 According to IR, therefore, it was merely complying with the Eastern District's local rules, and its compliance cannot also act as a basis for overcoming the presumption in favor of fees applied by the Fifth Circuit. We note, however, that Local Rule CV-7(h) imposes its requirements on only the party filing the motion. Furthermore, as IR itself points out in its brief, a district court has no choice but to grant a dismissal with prejudice if one is requested by a plaintiff. (Br. for Cross-Appellant IR at 18 n. 4 (quoting Schwarz, 767 F.2d at 129-30 n. 5)). IR's representations to the court, therefore, including its invitation for the court to act on this Motion without delay, were not required under the local rules or otherwise. 82 Viewed from the position of the district court, IR, although it maintained that it was not joining the motion, stated that it would not file any opposition, did not raise the issue of costs, and encouraged the district court to grant the order without delay. These representations were contained in the Certificate of Conference, which, along with a copy of the order to be entered by the district court — also lacking any mention of costs — were reviewed by IR and the Certificate signed prior to PMT's filing of the motion with the district court. In light of the needlessness of IR's representations to the district court, we cannot conclude that the district court abused its discretion in viewing the situation as an agreement between the parties regarding dismissal, and therefore denying costs.