Court Opinion

ID: 6989017
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:21:32.612666+00
Date Added: 2024-06-11T16:09:33.161169
License: Public Domain

FERNANDEZ, Circuit, Judge,
with whom RYMER, Circuit Judge, joins, Concurring in part and Dissenting1 in part:
I concur in the majority opinion with the exception of part IV, where the majority determines that a district court can refuse to award costs to the prevailing party simply because the court decides that the losing parties do not have much money, and are worthy because they have presented an important issue which is close and has some merit. As to that, I dissent.
To my mind, reasoning along that line bespeaks an improper bias in favor of plaintiffs. If the issue is important, both sides have a hand in seeing to it that the true public interest is vindicated, and, as it turns out, a defendant may well be the party correctly representing that public interest. Here we deal with the public’s interest in having competent people running its schools and teaching its children, and Defendants showed that it is Plaintiffs who erred when they incorrectly thought that a competency test was overly burdensome and improper. That is to say, Plaintiffs’ claim that they and those they represent should not have to meet the minimal competency requirements of the CBEST was wrong. The public interest has been vindicated, but not by them. Rather, Defendants properly represented the public’s desires and aspirations for California’s children. They were right, and should not be denied their costs.
Thus, I support the reasoning found in National Information Services, Inc. v. TRW, Inc., 51 F.3d 1470, 1471 (9th Cir.1995), which recognized, as does the majority opinion, that “Rule 54(d)(1) creates a presumption in favor of awarding costs to the prevailing party.” Because of that strong presumption, “[a] district court therefore generally must award costs unless the prevailing party is guilty of some fault, misconduct, or default worthy of punishment.” Id. at 1472; see also Zenith Ins. Co. v. Breslaw, 108 F.3d 205, 207 (9th Cir.1997). As we noted in National Information Services, 51 F.3d at 1471, it does not matter that the plaintiff sued in good faith and with no vexatious purpose, and *599even raised “ ‘important and intricate’ legal questions and included claims that were ‘not meritless.’ ” That is no reason to punish the defendant.
When a prevailing party is denied costs, that party is punished,2 but the punishment should not be exacted unless “the party has done something to deserve it.” Id. at 1472. Of course, the district court should have broad equitable discretion to decide whether the prevailing party “deserves it,” but that is where the discretion should generally3 stop. Therefore, all of the other reasons cited by the district court and the majority to justify denying costs to the prevailing parties in this case are improper. They, in fact, represent an abuse of discretion by the district court.
The majority opinion correctly notes that some of our prior decisions have upheld district courts’ decisions to deny costs to the prevailing parties on the basis of the losing parties’ limited financial conditions. See, e.g., Wrighten v. Metropolitan Hospitals, Inc., 726 F.2d 1346, 1358 (9th Cir.1984); Moore v. Hughes Helicopters, Inc., 708 F.2d 475, 486 (9th Cir.1983); National Organization for Women v. Bank of California, 680 F.2d 1291, 1294 (9th Cir.1982). However, they did so without much explanation, and, unlike the majority, I would overrule those decisions instead of National Information Services.
The fact, if it is a fact,4 that Plaintiffs do not have access to much money is hardly a good reason to allow them to impose enormous costs upon Defendants, which have shown themselves to have been correct in the first place. I see nothing especially extraordinary about plaintiffs who are of modest means but still sufficiently well funded to carry out lengthy litigation. I see no reason to encourage them to cause great expense to their adversaries, safe in the knowledge that there is little downside to their efforts. Again, that is why this court has properly “recognized that denial of Rule 54(d) costs operates to punish the prevailing party for some impropriety during the course of litigation,” and should otherwise be eschewed. Zenith, 108 F.3d at 207; see also Cherry v. Champion Intern. Corp., 186 F.3d 442, 447-48 (4th Cir.1999) (holding that there should not be an exception to the presumption in favor of awarding costs to prevailing party because losing plaintiff is of “modest means,” and disparity of resources is likewise an improper basis); Smith v. Southeastern Pennsylvania Transp. Authority, 47 F.3d 97, 100 (3d Cir.1995) (holding that disparity in financial resources between the parties is not a valid basis to exempt losing party from paying costs).
Nor should it matter that Defendants are public entities. See Smith, 47 F.3d at 99 (denying costs would be unfair to taxpayers who subsidize prevailing defendant); Burroughs v. Hills, 741 F.2d 1525, 1538 (7th Cir.1984) (Posner, J., concurring) (The plaintiffs’ limited means claim “is en*600titled to little weight in a ease such as this where the defendants are ... public officials whose expenses of suit were borne by the United States, which is to say by the federal taxpayer. Most taxpayers are persons of limited means; most government revenue is raised from such persons, and not from the wealthy few. The denial of costs to the defendants in this case will not contribute, however slightly, to a more egalitarian distribution of the nation’s wealth.”).
I find it regrettable that the majority is using this case for the purpose of overruling National Information Services and enshrining a kind of plaintiffs-are-good-defendants-are-not test in its place. While the majority does not specifically say that it is taking that position, the denial of costs to Defendants surely has that effect. That is most unfortunate. See Mitchell v. City of Moore, 218 F.3d 1190, 1204 (10th Cir.2000) (rejecting argument that “presumption in favor of costs should be relaxed when the prevailing party is the defendant in a civil rights case”); Cherry, 186 F.3d at 448 (holding that presumptive award of costs to prevailing party cannot be overcome because of “public interest” nature of the litigation); Contreras, 119 F.3d at 1295 (holding that civil rights plaintiffs do not warrant special treatment with respect to payment of costs to prevailing party); Jones, 789 F.2d at 1233 (same). In many cases, it is inequitable to require prevailing parties to bear their own attorney’s fees. National Information Services ’ holding that unless the prevailing parties did something wrong, we should not impose the further inequity of depriving them of costs may not be all encompassingly perfect. However, it is much closer to perfect than the position we now adopt.
Thus, while I agree with most of the fine majority opinion, I must respectfully dissent from its decision regarding costs.

. Surely any lay person sees the winner’s litigation expense as a punishing exaction. That, indeed, is a common complaint about our justice system; even if you win, you lose.

. National Information Services used the word "generally,” and while I see no real use for that loophole, perhaps there is some unforeseen additional consideration. For example, some courts have indicated that actual indigency might be a factor. See, e.g., Contreras v. City of Chicago, 119 F.3d 1286, 1295 (7th Cir.1997); Jones v. Continental Corp., 789 F.2d 1225, 1233 (6th Cir.1986). While I do not see why that should be so, perhaps there is no point in cost judgments against indigents, and granting costs would just waste the resources of everyone (including the courts). Thus, I, too, have used that destabilizing word.

.There is no evidence in the record of the exact financial condition of any of the plaintiffs. The majority opinion's conclusion that Plaintiffs have limited resources seems to be inferred from evidence in the record which merely indicates what jobs are held by the individual plaintiffs and the amount of dues the organization plaintiffs receive from their members. The district court merely found a disparity of resources between the State and the Plaintiffs. Presumably that disparity would almost always exist, regardless of who litigated against the State.