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denying request for photocopying costs because party failed to provide the number of copies made, the cost per page or the reason for the copies
Summary of this case from ASIS INTERNET SERVICES v. OPTIN GLOBAL, INC.Opinion
CV-01-105-ST
June 14, 2002
OPINION AND ORDER
INTRODUCTION
Plaintiffs, Pierre Arboireau and his spouse, Sandrine Arboireau, originally filed this action on January 22, 2001, against defendants, adidas-Salomon AG and adidas America, Inc., for claims relating to the relocation of Pierre Arboireau from France to Oregon for a job that ended after only six months. On August 23, 2001, plaintiffs filed an Amended Complaint, alleging the following claims: (1) misrepresentation against both defendants; (2) intentional infliction of emotional distress against both defendants; (3) negligent misrepresentation against both defendants; (4) interference with economic advantage against only adidas-Salomon AG; (5) violation of ORS § 166.720(3) ("ORICO") against both defendants; (6) violation of 18 U.S.C. § 1962(c) ("RICO") against both defendants; (7) breach of contract against both defendants; and (8) promissory estoppel against both defendants.
On January 29, 2002, this court granted defendants' Motion for Summary Judgment (docket #110) and entered Judgment in favor of defendants on March 19, 2002 (docket #113).
Now before the court is Defendants' Motion for Attorney Fees (docket #114) incurred to defend plaintiffs' ORICO and interrelated fraud-based claims in the sum of $70,505.00 and Defendants' Cost Bill (docket #115) in the sum of $12,947.55. Plaintiffs object. For the reasons stated below, no attorney fees and costs are awarded, but defendants may file an Amended Cost Bill.
DISCUSSION I. Attorney Fees A. Failure to Confer Pursuant to Local Rule 7.1
As a threshold issue, plaintiffs object based on defendants' failure to comply with Local Rule ("LR") 7.1 which requires the filing party to make a "good faith effort" to confer to resolve a dispute prior to filing a motion. The court may deny any motion that fails to comply with certification of this rule.
Defendants' attempts to confer consisted of leaving two brief voicemail messages on April 2, 2002, before filing the motion that same day. Affidavit of Victoria Blachly, ¶ 2. The first voicemail message stated that defendants would like to confer and were seeking an award of attorney fees in the sum of $60,000.00; the second voicemail message corrected this amount to $70,505.00. Id. Neither message explained why defendants believed they were entitled to that amount, how that amount was calculated, or what documentation would be provided in support of that amount. Defendants' made no attempt to speak directly with plaintiffs' co-counsel or to locate Ms. Blachly through her secretary or through the firm's receptionist. Id. Ms. Blachly was in a meeting in the office and could have taken defendants' telephone call. Id. When Ms. Blachly returned the telephone call the next day, defendants' motion had already been filed.
This court agrees with plaintiffs that defendants did not make a good faith effort to confer. The purpose of LR 7.1 to resolve disputes by conferral is thwarted by waiting until the last minute and leaving a short message with insufficient time to respond before filing a motion. However, this court recognizes that in this case, conferral would have been futile. The parties would not have reached agreement on the right to recover attorney fees, much less the amount of those fees. Because this court does not require futile acts, plaintiffs' motion is not denied for failing to confer.
B. Exercise of Discretion
Defendants seek to recover their attorney fees for successfully defending the ORICO claim. A prevailing party in an ORICO claim "may" be awarded reasonable attorney fees. ORS § 166.725(14). Thus, the court has discretion whether to award fees to defendants. Plaintiffs urge this court to exercise that discretion and not award fees to defendants. However, the only reason given by plaintiffs is that defendants have cited no Oregon case, and plaintiffs have found none, awarding attorney fees in an ORICO claim to a defendant who prevails on summary judgment.
The lack of an Oregon case on point is not dispositive. This court perceives no difference between prevailing on summary judgment and prevailing on an ORICO claim at trial. However, prevailing on an ORICO claim does not entitle defendants to also recover attorney fees on the other "fraud based claims" of intentional misrepresentation and RICO. Claims for intentional misrepresentation and RICO do not allow a prevailing party to recover attorney fees. Since recovery of attorney fees is limited only to the ORICO claim, the question then becomes one of determining how to apportion fees solely to that claim.
C. Apportionment of Fees
The Amended Complaint alleges eight claims against defendants. The ORICO claim, dealing with defendants fraudulently obtaining signatures on seven documents, was but a small portion of this case. Defendants' 48-page Memorandum in Support of Motion for Summary Judgment devoted only 1 1/2 pages to the ORICO claim and their 29-page Reply Memorandum to the Motion for Summary Judgment contains a mere paragraph on the ORICO claim.
In determining fee petitions, the court must determine the reasonable number of hours expended by counsel. To claim 1553.4 hours for less than two pages of briefing on the ORICO claim is clearly excessive. In fact, as plaintiffs point out, of the 131 billing entries provided by defendants, only 10 even mention ORICO.
This court does not agree with defendants' contention that the "fraud based claims" are "intermingled." The elements of fraud are broad and require proof of: "(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted on by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; (9) and his consequent and proximate injury." Williams v. Philip Morris Inc., 2002 WL 1189763, *2 (Or App. 2002), quoting Conzelmann v. NWP D Prod. Co., 190 Or. 332, 350, 225 P.2d 757, 764-65 (1950) (internal quotations and footnote omitted). In contrast, RICO and ORICO claims are narrow. To state a RICO claim, plaintiffs must show: "(1) conduct; (2) of an enterprise; (3) through a pattern; (4) of racketeering activity." Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985) (footnote omitted). An ORICO claim is proven when: "A person commits the crime of fraudulently obtaining a signature if, with intent to defraud or injure another, the person obtains the signature of a person to a written instrument by knowingly misrepresenting any fact." ORS § 165.042.
Defendants' motion for summary judgment on the ORICO claim focused on whether plaintiffs had proven that an enterprise existed (referring to their discussion on the RICO claim) and whether predicate acts occurred, specifically focusing on the lease of plaintiffs' home and letters regarding plaintiffs' visas. Unlike the general fraud allegations, these are discrete issues. Defendants bear the burden of proving which attorney fees stem from the ORICO claim. Certain facts and elements relate to both the fraud, RICO, and ORICO claims, such as these documents. However, many more facts, research, and legal analysis distinguish the two claims. For example: (1) Pierre Arboireau's communications to Sandrine Arboireau about defendants' misrepresentations go to fraud, but not to RICO or ORICO; (2) defendants' continued fraud after hiring Pierre Arboireau go to fraud, but not to ORICO; (3) the 103 documents listed in Exhibit H of the Amended Complaint go to RICO, but not to ORICO; (4) the issue of the duration of racketeering activity goes to fraud and RICO, but not to ORICO; (5) the issue of a separate and unique "enterprise" is an element of RICO, but not ORICO; (6) the special relationship between plaintiffs and defendants was at issue in the fraud claim, but not in the ORICO claim; (7) a particular number of predicate acts must be proven for RICO or ORICO, but not for fraud; (8) criminal conduct must be established for RICO or ORICO, but not for fraud; (9) damages must be proven for fraud and causation must be proven for RICO, but damages is not an element of ORICO; and (10) justifiable reliance is an element for fraud, but not for RICO or ORICO.
In sum, the ORICO claim has separate and distinct elements that are not encompassed by the fraud or RICO claims. Defendants cannot place all of the "fraud based claims" into one pool. Rather, defendants should have segregated any overlapping issues when preparing their billings, which they did not. Instead, they used block billing which makes it impossible for this court to apportion the billings relating to the ORICO claim. For example, the billings vaguely refer to "draft summary judgment," "work on motion for summary judgment," and "review and revise motion for summary judgment." Defendants may have been working on the breach of contract claim, the intentional interference with economic relation claim, or the intentional infliction of emotional distress claim. There is no way to know what claims were involved with the vague billings. This problem encompasses the majority of defendants' billings.
While the first billing entry mentioning ORICO is dated April 20, 2001 ("Begin reviewing and analyzing RICO and ORICO claims"), defendants still seek $5,205.00 for time supposedly spent on ORICO prior to that date without any explanation. Other entries for "review message from opposing counsel," "address foreign discovery issues," and "review message from client" are all irrelevant to the ORICO claim. Similarly, an entry to "research and analyze cases regarding [Rule] 408 offers of compromise" does not relate to the ORICO claim.
In an attempt to apportion the time between ORICO and other claims, defendants reduced the total time on entries relating to depositions and summary judgment by "two-thirds because one-third of the total accurately reflects the amount of time devoted to plaintiffs' ORICO and inter-related fraud-based claims." Affidavit of Caroline R. Guest, ¶ 12. However, absent a fuller explanation, this court cannot conceive how defendants could have spent one-third of their time on the ORICO claim in this case.
Given the block billing and other unrelated billing entries, this court cannot properly apportion fees to the ORICO claim.
D. Other Factors
Another reason this court cannot calculate attorney fees in this case is that defendants fail to address the following necessary factors courts consider when awarding a discretionary attorney fee under ORS § 20.075.
ORS § 20.075 provides as follows:
(1) A court shall consider the following factors in determining whether to award attorney fees in any case in which attorney fees are authorized by statute and in which the court has discretion to decide whether to award attorney fees:
(a) The conduct of the parties in the transactions or occurrences that gave rise to the litigation, including any conduct of a party that was reckless, willful, malicious, in bad faith or illegal.
(b) The objective reasonableness of the claims and defenses asserted by the parties.
(c) The extent to which an award of an attorney fee in the case would deter others from asserting good faith claims or defenses in similar cases.
(d) The extent to which an award of an attorney fee in the case would deter others from asserting meritless claims and defenses.
(e) The objective reasonableness of the parties and the diligence of the parties and their attorneys during the proceedings.
(f) The objective reasonableness of the parties and the diligence of the parties in pursuing settlement of the dispute.
(g) The amount that the court has awarded as a prevailing party fee under ORS 20.190.
(h) Such other factors as the court may consider appropriate under the circumstances of the case.
(2) A court shall consider the factors specified in subsection (1) of this section in determining the amount of an award of attorney fees in any case in which attorney fees are authorized by statute and in which the court has discretion to decide whether to award attorney fees. In addition, the court shall consider the following factors in determining the amount of an award of attorney fees in those cases:
(a) The time and labor required in the proceeding, the novelty and difficulty of the questions involved in the proceeding and the skill needed to properly perform the legal services.
(b) The likelihood, if apparent to the client, that the acceptance of the particular employment by the attorney would preclude the attorney from taking other cases.
(c) The fee customarily charged in the locality for similar legal services.
(d) The amount involved in the controversy and the results obtained.
(e) The time limitations imposed by the client or the circumstances of the case.
(f) The nature and length of the attorney's professional relationship with the client.
(g) The experience, reputation and ability of the attorney performing the services.
(h) Whether the fee of the attorney is fixed or contingent.
(3) In any appeal from the award or denial of an attorney fee subject to this section, the court reviewing the award may not modify the decision of the court in making or denying an award, or the decision of the court as to the amount of the award, except upon a finding of an abuse of discretion.
(4) Nothing in this section authorizes the award of an attorney fee in excess of a reasonable attorney fee.
Defendants have not addressed any of the factors in ORS § 20.075. Even if they had, the objective reasonableness of the parties and the claims, and the lack of a need for a deterrent in an ORICO claim do not favor defendants. ORS § 20.075(1)(b), (c), (d), (e), and (f). In addition, the time and labor involved with the ORICO claim was minimal. ORS § 20.075(2)(a).
Based on the lack of acceptable supporting documentation, this court finds no basis on which to award attorney fees to defendants for prevailing on the ORICO claim.
II. Cost Bill
Plaintiffs also object to the Cost Bill submitted by defendants as not supported by the required documentation and as unreasonable.
A. Legal Standard
Pursuant to FRCP 54(d)(1), "costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs[.]" The trial judge has wide discretion in awarding costs under FRCP 54(d)(1). Trans Container Serv. (Basel) A.G. v. Security Forwarders, Inc., 752 F.2d 483, 488 (9th Cir. 1985); K-S-H Plastics, Inc. v. Carolite, Inc., 408 F.2d 54, 60 (9th Cir.), cert denied, 396 U.S. 825 (1969). However, "a district court cannot punish a [prevailing] party by denying costs unless the party has done something to deserve it." National Info. Serv. Inc. v. TRW, Inc., 51 F.3d 1470, 1472 (9th Cir. 1995) (en banc) (holding that defendants in an antitrust action were entitled to costs, even if plaintiff had brought the action in good faith). Unless otherwise authorized by statute or contract, the types of costs that may be awarded under FRCP 54(d)(1) are limited to those enumerated in 28 U.S.C. § 1920 and 1821, and a court may decline to award costs as listed in those statutes. See Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445 (1987).
B. Lack of Verification
Pursuant to LR 54.1(a)(1)(A) and (B), defendants must provide a "detailed itemization of all claimed costs" and "appropriate documentation." In addition, LR 54.1(a)(2) states that the cost bill must be verified as required by 28 U.S.C. § 1924, which requires an affidavit that the items within the cost bill are correct, have been necessarily incurred in the case, and that the services for which fees have been charged were actually and necessarily performed.
Defendants' affidavit only identifies that the costs were incurred. Affidavit of Caroline R. Guest, ¶¶ 3-5. Defendants did not verify their cost bill or provide a detailed itemization. However, these defects can easily be remedied. Accordingly, defendants' Cost Bill is denied with leave to file an Amended Cost Bill complying with LR 54.1.
C. Reasonableness of Costs
Assuming that defendants file an Amended Cost Bill complying with LR 54.1, this court can only award reasonable costs. Plaintiffs argue that if any costs are awarded, the amount of $12,947.55 is unreasonable. In particular, plaintiffs assert that the three items listed as costs (depositions fees, translation fees, and reproduction costs) should be significantly reduced, if not completely eliminated. Because this court anticipates that the Amended Cost Bill will include these same costs, it will address these objections by plaintiffs.
1. Deposition Costs
Defendants seek $4,435.40 for court reporting, transcription fees, and/or videotaping eight depositions. While 28 U.S.C. § 1920(2) allows recovery of court reporter fees for stenographic transcripts, such transcripts must be "necessarily obtained for use in the case."
Depositions are "necessary" if introduced into evidence or used at trial for impeachment or cross-examination. Independent Iron Works, Inc. v. United States Steel Corp., 322 F.2d 656, 678 (9th Cir.), cert denied, 375 U.S. 922 (1963). The cost of a deposition not used at trial may be taxed if taking the deposition was reasonable as part of the pretrial preparation of the case, rather than merely discovery for the convenience of counsel, or if the deposition was required for a dispositive motion. Id at 678-79; Principe v. McDonald's Corp., 95 F.R.D. 34, 37 (E.D. Va 1982). In other words, to be taxable, depositions must not be merely for discovery. See Murphy v. Amoco Prod. Co., 558 F. Supp. 591, 594 (D N.D. 1983), aff'd 729 F.2d 522 (8th Cir. 1984) (prevailing parties' "[c]opies of depositions . . . are more in the nature of an expense than of a taxable cost").
Two of the eight transcripts listed within the cost bill are for plaintiffs' depositions, excerpts of which were submitted in connection with the summary judgment motion. The cost of those transcripts is recoverable.
However, defendants make no showing that the other six transcripts were necessarily obtained to support the summary judgment motion. These six transcripts are for depositions taken by plaintiffs of defendants' employees, excerpts of which were not submitted in connection with the summary judgment motion. To support summary judgment, defendants could have obtained information from their own employees without the need of deposition transcripts. In fact, they obviously contacted their own employees when submitting the declarations Brian Mignano and Glenn Bennett in support of their motion for summary judgment. Thus, the costs listed by defendants for these six depositions are presumably for copies of the transcripts. Absent any showing, let alone a sufficient showing, of the necessity of each of the six depositions, the amounts claimed for those depositions will be disallowed.
As an additional matter, the deposition fees include an unknown amount for "videotaping fees." Affidavit of Caroline R. Guest, ¶ 3. Defendants videotaped plaintiffs' depositions, but do not explain why it was necessary. Plaintiffs obviously would be available to testify at trial, and the videotaping costs duplicate the costs for the transcript since both contain the same information. Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1049 (5th Cir. 1998) (requiring a showing that videotape, in addition to transcript, was necessarily obtained for use in the case). Therefore, absent a sufficient showing of the necessity for videotaping, the amount claimed for videotaping will be disallowed.
2. Translation Fees
Defendants seek $3,399.08 in translation fees, which are recoverable under 28 U.S.C. § 1920(6) as "compensation of interpreters." However, defendants have made absolutely no showing that an interpreter or translator was necessary in this case. Defendants have submitted no supporting documentation as to what was translated, when it was translated, why it was translated, who did the translations, and submitted no itemized billings.
Plaintiffs assert that the majority of French documents were from Salomon SA. Defendants were in contact with Salomon SA, provided legal advice to Salomon SA, traveled to Salomon SA in France to speak with Salomon SA employees, and surely could have utilized their assistance to translate any French documents. Indeed, defendants submitted declarations in English of Philippe Gambey, Yannick Morat, and Jochen Eckhold, all Salmon SA employees, in support of their summary judgment motion, thus demonstrating defendants' easy access to bilingual persons. Absent a sufficient showing, the entirety of the request for translation fees will be disallowed.
If defendants are claiming their translations costs include an interpreter present for plaintiffs' deposition, then this court agrees with plaintiffs that the interpreter was unnecessary. A review of the deposition excerpts submitted by plaintiffs reveal that the interpreter provided inaccurate translations and interrupted to correct minor issues, such as syntax.
3. Photocopy Fees
Defendants also seek $5,113.07 in reproduction costs. The list of recoverable costs under 28 U.S.C. § 1920(4) includes "copies of papers necessarily obtained for use in the case." While certain photocopy charges are recoverable, it does not follow that all photocopy charges incurred can be treated as taxable costs.
Copying costs for documents produced to opposing parties in discovery, submitted to the court for consideration of motions, and used as exhibits at trial are recoverable. Fressell v. AT T Tech., Inc., 103 F.R.D. 111, 115-16 (N.D. Ga 1984). However, recoverable copying costs do "not include extra copies of filed papers, correspondence, and copies of cases since these are prepared for the convenience of the attorneys." Id at 116; Erving Paper Mills v. Hudson-Sharp Mach. Co., 271 F. Supp. 1017, 1023 (E.D. Wis 1967). A party's conclusory assertion that all copies were reasonably necessary to its case is, by itself, insufficient. Goluba v. Brunswick Corp., Mercury Marine Div., 139 F.R.D. 652, 656 (E.D. Wis 1991).
Defendants' claim for photocopies is insufficient on its face. Defendants give no indication as to the number of copies made, the rate charged per page, what was copied, the reasons for those photocopies, nor are "outside copy service" bills presented for review. Absent a sufficient showing, the entirety of the reproduction costs will be disallowed.
ORDER
For the reasons stated above, Motion for Attorney fees (docket #114) is DENIED and the Cost Bill (docket #115) is DENIED with leave to file an Amended Cost Bill within 10 days.