Court Opinion

ID: 3207091
Source: CourtListenerOpinion
Date Created: 2016-05-26 16:01:09.155843+00
Date Added: 2024-06-11T09:18:02.519720
License: Public Domain

Note: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

               DEERE & COMPANY,
                 Plaintiff-Appellant

                           v.

  DUROC LLC, FKA BUSH HOG, LLC, ALAMO
 GROUP, INC., BUSH HOG, INC., GREAT PLAINS
    MANUFACTURING INCORPORATED,
              Defendants-Appellees
             ______________________

                      2014-1697
                ______________________

   Appeal from the United States District Court for the
Southern District of Iowa in No. 3:09-cv-00095-CRW-TJS,
Senior Judge Charles R. Wolle.
                 ______________________

                Decided: May 26, 2016
                ______________________

    STEPHEN PIERCE ANTHONY, Covington & Burling LLP,
Washington, DC, argued for plaintiff-appellant. Also
represented by RODERICK R. MCKELVIE, JAY I. ALEXANDER,
ROBERT JASON FOWLER.

   CRAIG C. MARTIN, Jenner & Block LLP, Chicago, IL,
argued for defendant-appellee Duroc LLC. Also repre-
2                            DEERE & COMPANY   v. DUROC LLC

sented by DAVID JIMENEZ-EKMAN, SARA TONNIES HORTON,
MICHAEL ANTHONY SCODRO, STEVEN R. TRYBUS.

   SCOTT W. HEJNY, McKool Smith, P.C., Dallas, TX, ar-
gued for defendants-appellees Alamo Group, Inc., Bush
Hog, Inc. Also represented by PHILLIP AURENTZ; JOEL
LANCE THOLLANDER, Austin, TX.

   SCOTT R. BROWN, Hovey Williams LLP, Overland
Park, KS, argued for defendant-appellee Great Plains
Manufacturing Incorporated. Also represented by
MATTHEW B. WALTERS.
               ______________________

    Before NEWMAN, PLAGER, and REYNA, Circuit Judges.
NEWMAN, Circuit Judge.
     The district court’s judgment on the merits has been
affirmed, Deere & Company v. Duroc LLC, Fed. Cir.
No. 14-1697 (“Deere I”) (decided concurrently). Deere also
appeals aspects of the district court’s taxation of costs
under 28 U.S.C. § 1920. On review, we conclude that the
district court’s rulings are within the scope of the court’s
discretion, and affirm.
                       BACKGROUND
    Deere sued the Defendants (including predecessor and
successor companies) for infringement of U.S. Patent No.
6,052,980. After claim construction, the district court
granted summary judgment of non-infringement, and
ordered the Clerk of Court to enter judgment for both
Defendants, with costs to be assessed against Deere. The
Defendants submitted their bills of costs, and the Clerk’s
assessment was reviewed and affirmed by the district
court. The court stated that it had “carefully studied the
parties’ submissions and held a telephonic hearing solely
to address these costs issues . . . .” Deere & Co. v. Bush
DEERE & COMPANY   v. DUROC LLC                           3

Hog, LLC, 3:09-cv-00095 (S.D. Iowa Jan. 27, 2012), ECF
No. 185, 1 at 2-3 (Order).
    Meanwhile, Deere appealed the summary judgment of
non-infringement, and the Defendants conditionally cross-
appealed on the issue of the district court’s dismissal of
their invalidity counterclaim in the event the non-
infringement ruling was overturned. We modified the
district court’s claim construction, vacated the summary
judgment of non-infringement, and remanded for trial.
Deere & Co. v. Bush Hog, LLC, 703 F.3d 1349 (Fed. Cir.
2012). In light of this decision, the parties agreed to
vacate the existing costs Order.
    After a thirteen-day trial, the jury found that the
Deere patent was not infringed, and the district court
entered judgment in favor of the Defendants and denied
post-trial motions. These judgments are affirmed in Deere
I. The Defendants submitted their bills of taxable costs,
and Deere objected to various requested costs as exces-
sive, beyond the authority of the district court to tax, or
lacking the required documentation. After receiving
memoranda from both sides, the Clerk resolved the dis-
puted costs issues.
    The district court reviewed the assessments and up-
held most of the costs, denying all but one of Deere’s
objections. The court approved the taxation as “supported
by 28 U.S.C. § 1920, legal authorities cited in the Defend-
ants’ briefs, and in view of the length and complexity of
the fourteen-day long patent trial.” Order at 1–2, Deere
ECF No. 586. This appeal followed.

   1   Further references to orders and other papers
from the district court proceedings will be referenced as
[Document Title], Deere, ECF No. [#].
4                            DEERE & COMPANY    v. DUROC LLC

                        DISCUSSION
    During oral argument of this appeal, the Defendants
conceded some of the objections raised by Deere. See
Joint Letter, No. 14-1697, ECF No. 65 (Oct. 22, 2015).
The adjusted costs assessed against Deere are
$291,166.38 for Duroc, $118,985.47 for Alamo, and
$94,176.64 for Great Plains. Deere raises three categories
of objections.
   In reviewing taxable costs under 28 U.S.C. § 1920, we
apply the procedural law of the regional circuit, here the
Eighth Circuit. See Ortho-McNeil Pharm., Inc. v. Mylan
Labs. Inc., 569 F.3d 1353, 1356 (Fed. Cir. 2009) (proce-
dural matters not unique to the Federal Circuit are
governed by regional circuit law).
    28 U.S.C. § 1920 defines the costs that a district court
may tax. Crawford Fitting Co. v. J.T. Gibbons, Inc., 482
U.S. 437, 441–42 (1987). District courts have discretion
over the assessment and calculation of costs under § 1920.
See Zotos v. Lindbergh Sch. Dist., 121 F.3d 356, 363 (8th
Cir. 1997) (reviewing costs for abuse of discretion). “An
abuse of discretion occurs where the district court rests its
conclusion on clearly erroneous factual findings or errone-
ous legal conclusions.” Lankford v. Sherman, 451 F.3d
496, 503–04 (8th Cir. 2006).
     Deere challenges the assessment of costs in three are-
as: (1) costs related to document copying, (2) costs related
to e-discovery, and (3) costs related to trial exemplifica-
tions. We address each in turn.
                 1. Document Copying
    Section 1920(4) grants discretion to the district court
to determine what copying costs were “necessarily ob-
tained for use in the case.” Deere states that the district
court included costs for copies of documents that were not
introduced at trial or not related to discovery. Deere also
DEERE & COMPANY   v. DUROC LLC                          5

argues that the requested copying costs lacked adequate
documentation.
    The Clerk, and the district judge on review, disal-
lowed copying costs that they found to be “primarily for
the convenience of counsel,” but allowed the major copy-
ing costs. See Taxation of Costs as to Duroc LLC at 1,
Deere, ECF No. 580; Taxation of Costs as to Alamo Group,
Inc. and Bush Hog, Inc. at 1, Deere, ECF No. 581. The
district court found that “the Clerk again painstakingly
reviewed defendants’ separate bills of costs, as well as
legal authorities all parties cited” in its “taxation of
defendants’ well-documented costs for copying and print-
ing.” Order at 1–2, Deere, ECF No. 586.
    The record demonstrates consideration of the copying
costs and a reasoned analysis of whether copies were
made for “reasons other than trial preparation.” See
Slagenweit v. Slagenweit, 63 F.3d 719, 721 (8th Cir.
1995). We discern no abuse of discretion in the taxation
of costs of copying documents found to be “necessarily
obtained for use in the case,” whether or not the docu-
ments were introduced into evidence.
                     2. e-Discovery
    The parties had entered into an electronically stored
information production agreement (“ESI Agreement”) that
provided that each document would be produced as a
Tagged Image File Format (“TIFF”) image and include
various specified metadata. Deere states that the e-
discovery costs taxed by the district court are (1) not
taxable as a matter of law, or (2) were erroneously calcu-
lated in that the costs presented by the Defendants in-
clude storage and hosting expenses for ESI storage which,
Deere asserts, are not taxable under § 1920.
    The Defendants’ concessions on appeal removed much
of the storage and hosting costs. Although not every
objection that Deere raises was conceded, compare Deere
6                           DEERE & COMPANY   v. DUROC LLC

Br. 34 with Letter Documenting Concessions (October 22,
2015), ECF No. 65, it appears that the issue of ESI stor-
age and hosting fees was generally resolved. Therefore
we address only the issue of whether e-discovery costs are
taxable as a matter of law.
    The parties agree that there is no controlling Eighth
Circuit precedent on this issue. Deere Br. 26; Duroc Br.
26; Great Plains Br. 25; Alamo Br. 20–21. Further com-
plicating the issue, various aspects of the e-discovery
process were governed by a negotiated ESI Agreement
that required various e-discovery actions to be undertak-
en. The ESI Agreement required that all documents be
produced electronically in a database format, product-
numbered, searchable, with OCR and metadata extracted
and identified, and produced on suitable storage media.
This Agreement set the base requirements for all docu-
ments produced during e-discovery.
    The district court held that when the costs of comply-
ing with the agreement are within the obligations of the
Agreement and reasonably incurred in complying with the
Agreement, they are recoverable.
    Generally, the costs incurred in actually copying and
producing in the required formats are considered a taxa-
ble “cost of creating the produced duplicate,” while the
costs incurred in preparing documents for copying and
production in the agreed formats are deemed “ancillary.”
See CBT Flint Partners, LLC v. Return Path, Inc., 737
F.3d 1320, 1329–1330 (Fed. Cir. 2013) (illustrating differ-
ences between costs related to copying and conversion and
costs outside that limited scope). The district court held
that the e-discovery costs incurred in procedures required
by the ESI Agreement are within the scope of § 1920.
Relying on the Agreement, the district court did not
separate the activities required by the e-discovery Agree-
ment. We conclude that the district acted within its
discretion.
DEERE & COMPANY   v. DUROC LLC                             7

                3. Trial exemplifications
    Deere argues that the district court improperly taxed
the Defendants’ “trial technology support” and the costs of
trial exhibit creation and presentation.
     Here, the district court held that “[t]he Clerk properly
taxed costs incurred by defendants for trial technology
specialists and demonstrative exhibits, necessary for
thorough presentation of the issues decided by the jury.”
Order at 2, Deere, ECF No. 586. It is appropriate for the
exemplifications prepared for and presented at trial to be
considered to fall within the statutory constraints of
§ 1920. Given that the taxed costs relate to and derive
from trial exhibit creation and presentation, and especial-
ly given that the district court found the exhibits to be
“necessary for thorough presentation of the issues decided
by the jury,” we conclude that the Eighth Circuit would
reasonably find the district court’s taxation to be within
its discretion and within the statute’s constraints.
                       CONCLUSION
    The district court’s taxation of the challenged costs
was within the district court’s discretion and in conformi-
ty with the statute. The judgment is affirmed.
    On this appeal, each party shall bear its costs.
                       AFFIRMED