Court Opinion

ID: 9499302
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:43:57.934643+00
Date Added: 2024-06-11T17:59:24.506833
License: Public Domain

EASTERBROOK, Circuit Judge,
concurring.
The court sensibly rejects Chicago’s proposal to overrule Badillo v. Central Steel & Wire Co., 717 F.2d 1160 (7th Cir.1983), and its successors, which allow district judges to excuse unsuccessful but indigent litigants from paying costs under Fed. R.Civ.P. 54(d). Whether indigent litigants must be ordered to pay statutory costs is a subject that has divided the circuits. Only the Supreme Court or an amendment under the Rules Enabling Act can produce national uniformity; there is little point in our moving restlessly from one side of the conflict to the other.
If we are to express an opinion on the subject, however, I would not endorse our current practice, as my colleagues do in Part II.A of the court’s opinion. (I do join Part II.B, which explains why a remand is appropriate under this circuit’s current approach.) It would be better to award costs “as of course” (which is what the Rule says) and leave to bankruptcy the question whether collection is possible. Discretion may be exercised against an award when the victor has run up costs or otherwise abused the judicial process, but the parties’ relative wealth is not a good reason to deny costs to the winner, any more than a losing litigant’s indigence would be a good reason to withhold an award of damages for battery, theft, or breach of contract.
If an indigent person hits someone with a car and causes a $1,000 loss, the court will award $1,000 without regard to the driver’s income. If an indigent person hits someone with a lawsuit and causes a $1,000 loss (in costs of defense), the same consequence should ensue: an award of $1,000. For either award, whether collection occurs is a question for bankruptcy (including the state law of exemptions).
When a debtor cannot pay all creditors in full, but can pay something, there is no reason why prevailing litigants who are out of pocket should receive nothing while other creditors retain valid claims. And when a debtor is so destitute that he cannot pay anything, there is no harm in the award of costs. It is only when a person can pay (but tries to persuade a court otherwise) that the award matters.
Instead of trying to administer debt relief one claim at a time, creating an odd *638(and extra-statutory) set of priorities, district judges should award costs and let the collective bankruptcy proceeding handle all debts and all creditors at one go, according to the Bankruptcy Code — which governs not only which claims are paid first but also how much a debtor with a given level of income must pay to creditors in the aggregate, and over how much time. All a district court can do by excusing the payment of costs is interfere with the Bankruptcy Code’s system. A judge should not use his office to favor “the deserving poor” or other litigants he likes, at the expense of victorious litigants (and to the potential benefit of creditors not before the court); justice must be administered without regard to persons.
Rule 54(d) must be read together with 28 U.S.C. § 1915, which says in subsection (a)(1) that an impoverished litigant may proceed without prepaying the filing fees. Only pre-payment is excused, as subsection (f)(1) shows: “Judgment may be rendered for costs at the conclusion of the suit or action as in other proceedings”. All costs — which include the filing fees, see 28 U.S.C. § 1920(1) — thus remain as debts of the losing side, to be paid if and when resources are available. See McGill v. Faulkner, 18 F.3d 456 (7th Cir.1994); Abdul-Wadood v. Nathan, 91 F.3d 1023 (7th Cir.1996).
Making the award of costs routine has three additional benefits: (a) It avoids the expense of suit-by-suit inquiries into indigence, which as this case shows may be complex. Why replicate a bankruptcy proceeding just to decide on an award of costs? (b) It avoids false positives. Some people who claim to be indigent aren’t. Indeed, the very assertion “I’m indigent, so please excuse me” implies solvency. Why seek to avoid an award that, if you are destitute, cannot harm you? (A pauper who fears that the award could be collected from future income may have it discharged in bankruptcy.) (c) It avoids disparate treatment of identically situated litigants. District judges differ substantially in how they use the discretion this court’s decisions give them. Some regularly excuse costs for indigents; some never do; some draw hard-to-articulate lines. Rights measured by the chancellor’s foot are not “rights” of any kind, and such a stochastic process is not the administration of justice. We need rules that apply in an even-handed fashion.