Opinion
A152893
09-25-2019
IN RE AUTOMOBILE ANTITRUST CASES I AND II.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Francisco City & County, JCCP Nos. 4298 & 4303; CJC03004298)
After obtaining summary judgment in this coordinated antitrust action, defendant Ford Motor Company (Ford U.S.) sought to recover litigation costs. The trial court awarded $199,464.98 in costs, with most of that sum reflecting deposition costs. On appeal, plaintiffs argue (1) the deposition costs are not recoverable in this action because they were incurred in a related federal proceeding pursuant to an order coordinating discovery, (2) if deposition costs are allowed here, they should be apportioned among the several actions that were subject to the discovery coordination order, and (3) costs claimed by Ford U.S. as a prevailing party should be reduced to reflect that its codefendant Ford Motor Company of Canada, Ltd. (Ford Canada) has not prevailed in the litigation. We reject these arguments and affirm the award of costs to Ford U.S.
I. BACKGROUND
A. The Coordinated Proceeding in California State Court
In our opinions addressing other appeals in this matter, we described the underlying litigation, which began in 2003: "In this coordinated proceeding, certain purchasers of new automobiles in California (plaintiffs) brought state law claims against a number of automobile manufacturers and dealer associations under the Cartwright Act (Bus. & Prof. Code, §§ 16720-16728) and the unfair competition law (Bus. & Prof. Code, §§ 17200-17210). Specifically, plaintiffs allege that defendant manufacturers and associations conspired to keep lower-priced, yet virtually identical, new cars from being exported from Canada to the United States, thereby keeping new vehicle prices in California higher than they would have been in a properly competitive market." (In re Automobile Antitrust Cases I & II (2016) 1 Cal.App.5th 127, 131 (Automobile Antitrust Cases); see id. at p. 132; In re Automobile Antitrust Cases I & II (Sept. 25, 2019, A152295) [nonpub. opn.].) Multiple lawsuits filed in California state court were coordinated into this proceeding. (Automobile Antitrust Cases, supra, 1 Cal.App.5th at p. 132.)
B. The Federal Proceeding and the Coordination Order
"In addition [to the California state court proceeding], a similar lawsuit had been filed in federal court against many of the same defendants, alleging violation of federal antitrust laws. (See In re New Motor Vehicles Canadian Export (D.Me. 2004) 307 F.Supp.2d 136, 137-138 (the federal multidistrict litigation or federal MDL).) Parallel cases were also pending in a number of other state courts. In June 2004, the trial court issued an order, after consultation with Judge Hornby—the judge in the federal MDL [sitting in the District of Maine]—coordinating discovery among this action, the federal action, and other state actions." (Automobile Antitrust Cases, supra, 1 Cal.App.5th at p. 136.)
C. The Summary Judgment and the Denial of Costs in the Federal Proceeding
In July 2009, Judge Hornby granted summary judgment for the remaining defendants in the federal proceeding, including both Ford U.S. and Ford Canada (collectively, Ford). (In re New Motor Vehicles Canadian Export Antitrust Litigation (2009) 632 F.Supp.2d 42, 45, 63; see In re Automobile Antitrust Cases I & II, supra, (Sept. 25, 2019, A152295) [nonpub. opn.].) Ford and other defendants sought awards of litigation costs in federal court, but in April 2010, Judge Hornby declined to award costs to the defendants. In reaching his decision, Judge Hornby relied on federal case law establishing that, under Rule 54 of the Federal Rules of Civil Procedure, a district court may decline to award costs to a prevailing party if the case " 'presented a close question that required considered balancing[.]' "
D. The Summary Judgment and the 2012 Cost Order in the California Superior Court and the Appeals to this Court
In the present California state court proceeding, the trial court (Judge Kramer) certified a plaintiff class in May 2009. (Automobile Antitrust Cases, supra, 1 Cal.App.5th at p. 136.) In November 2011, Judge Kramer granted summary judgment in favor of Ford U.S. and Ford Canada (which were by then the last two remaining defendants), concluding plaintiffs had not presented sufficient evidence that Ford U.S. or Ford Canada participated in an unlawful conspiracy. (Id. at p. 140.) Judge Kramer entered separate judgments in favor of Ford U.S. and Ford Canada in January 2012.
Ford U.S. and Ford Canada then filed a joint memorandum of costs in the trial court, seeking $210,598.23 in costs, including $181,898.62 in deposition costs. Plaintiffs filed a motion to tax costs, but after holding a hearing, Judge Kramer denied the motion in large part, ruling in a July 2012 order that Ford U.S. and Ford Canada were entitled to a total of $199,464.98 in costs, including $172,390.37 in deposition costs (the 2012 cost order).
At the hearing before Judge Kramer, counsel for Ford stated the amount requested for deposition costs had been reduced from $181,898.62 to $172,390.37, a decrease of $9,508.25. Judge Kramer's subsequent written order awarding costs reflects that the total costs requested by Ford had been reduced by that amount, from $210,598.23 to $201,089.98. Judge Kramer disallowed one category of non-deposition costs amounting to $1,625, resulting in his final award of $199,464.98.
Plaintiffs appealed the judgments in favor of Ford U.S. and Ford Canada (No. A134913). (Automobile Antitrust Cases, supra, 1 Cal.App.5th at p. 140.) They also filed a separate appeal of the 2012 cost order (No. A136383). In July 2016, in the merits appeal, this court affirmed the judgment for Ford U.S. but reversed and remanded as to Ford Canada, concluding triable issues of material fact precluded summary judgment on the question whether Ford Canada participated in an unlawful conspiracy. (Automobile Antitrust Cases, supra, 1 Cal.App.5th at pp. 172-173.)
Plaintiffs moved in December 2016 to dismiss the appeal of the 2012 cost order, arguing it was moot in light of the reversal of the judgment for Ford Canada. In January 2017, this court granted the motion to dismiss, stating "[t]he granting of this motion is without prejudice to the parties raising any issues relating to costs in the trial court in connection with further proceedings below following remand of [the merits appeal, No. A134913]."
E. The 2017 Cost Order
On remand, Ford U.S. and plaintiffs litigated the cost issue before the trial court (Judge Karnow, to whom the case had been reassigned). Ford U.S. contended that, since it still was a prevailing party, it was entitled to recover the $199,464.98 in costs awarded by Judge Kramer in 2012. Ford U.S. also sought to recover interest on that amount from the date of the 2012 cost order. Plaintiffs filed a motion to tax the costs claimed by Ford U.S., arguing costs incurred in the federal MDL were not allowable, objecting to the claimed interest on the costs, and seeking apportionment of costs between the different cases involved and between Ford U.S. and Ford Canada.
After holding a hearing, Judge Karnow issued an order on August 22, 2017 denying plaintiffs' motion in part and granting it in part (the 2017 cost order). As we discuss further below, Judge Karnow rejected plaintiffs' challenges to the costs claimed by Ford U.S., and he held Ford U.S. was entitled to recover the $199,464.98 awarded by Judge Kramer. As to interest, however, Judge Karnow agreed with plaintiffs' position. He held that, in light of this court's dismissal of the earlier cost appeal and our contemplation of further cost proceedings on remand, interest did not run from the date of the 2012 cost order but instead would run from the date of his new cost order.
Plaintiffs appealed the 2017 cost order, initiating the present appeal.
Also in 2017, Judge Karnow entered judgment for Ford Canada on the ground that the 2009 summary judgment in the federal MDL has claim-preclusive effect here. We address plaintiffs' appeal of that judgment (No. A152295) in a separate opinion. (In re Automobile Antitrust Cases I & II, supra, (Sept. 25, 2019, A152295) [nonpub. opn.].)
II. DISCUSSION
A. The Governing Statutes and the Standard of Review
Under section 1032 of the Code of Civil Procedure, a prevailing party such as Ford U.S. is entitled to recover costs "as a matter of right," unless a statute expressly provides otherwise. (§ 1032, subd. (b).) Allowable costs include certain deposition expenses. (§ 1033.5, subd. (a)(3).) Costs are allowable if they are "incurred, whether or not paid," "reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation," and "reasonable in amount." (Id., subd. (c)(1)-(3).)
Undesignated statutory references are to the Code of Civil Procedure.
"The standard of review applicable to a cost order depends on the issue raised on appeal. When the question is whether a claimed cost comes within the general cost statutes and is recoverable at all, the question is one of statutory interpretation, subject to de novo review. [Citation.] Whether a cost item was reasonably necessary to the litigation, however, ' " 'presents a question of fact for the trial court and its decision is reviewed for abuse of discretion.' " ' " (Coalition for Adequate Review v. City and County of San Francisco (2014) 229 Cal.App.4th 1043, 1050-1051.)
B. Allowability of Deposition Costs
Plaintiffs contend the deposition costs awarded to Ford U.S. are not recoverable because those costs were incurred in the federal proceeding, not in this state court action. We disagree. In light of the coordination of discovery in these related actions, the costs of conducting discovery cannot be characterized as having been incurred in just one action and not in the others.
The discovery coordination order entered in 2004 in this action and in the federal MDL includes detailed provisions governing the taking and use of discovery in the two proceedings (and in any other state court actions in which the order was subsequently entered). The order (in §§ A.1-A.2) states the federal proceeding is "the lead case for discovery and discovery-related pretrial scheduling" and discovery is to be conducted in accordance with the Federal Rules of Civil Procedure. But the order then provides for what amounts to joint discovery (including depositions) in the covered actions. The order includes general provisions stating that (1) parties and counsel in each action may participate in discovery in the other actions (§ A.2), (2) counsel representing a party in one action is entitled to receive all discovery taken in the other actions (§ B.4), and (3) depositions taken in one action may be used in the other actions (§ B.6).
The coordination order also includes a more detailed series of provisions devoted specifically to depositions. The order states that plaintiffs in the federal and state actions are to coordinate in noticing depositions "so that all depositions shall be jointly scheduled, noticed and conducted" (§ D.13). Counsel for a party in a state action may attend and ask questions and pose objections at any deposition scheduled in the federal action (subject to rules designed to avoid duplication of questioning) (§§ D.13-D.14). Significantly for purposes of this appeal, "[d]epositions noticed by counsel in the [federal action] shall be deemed to have been noticed in each of the [state actions]" (§ D.16). Counsel and parties in any action "who do not attend a jointly noticed deposition are prohibited from re-taking that deposition except for good cause shown" (§ D.17). Finally, if notice of a deposition is provided, the deposition may be used in each action, even if counsel for the parties in that action did not attend or cross-examine at the deposition (§ D.19).
It appears that some or all of the depositions for which Ford U.S. seeks to recover expenses were noticed in the federal MDL, and the appellate record includes cover pages for the transcripts of some of the depositions at issue, which bear the caption of the federal proceeding. But as noted, under the terms of the coordination order, such depositions were deemed to have been noticed in the California state court action as well. Counsel for the California parties were free to attend and examine witnesses at the depositions, and the depositions could be used in the California case. Since the depositions were (or were deemed to be) jointly scheduled, noticed and conducted, we cannot agree with plaintiffs' position that the associated costs should be treated as having been incurred solely in the federal case. Instead, in our view, the deposition costs also were "incurred" in the California action (§ 1033.5, subd. (c)(1)) and thus are recoverable here.
Although not dispositive to our interpretation of the coordination order, we note that Judge Kramer (who along with Judge Hornby drafted the order in 2004) rejected plaintiffs' argument on this point when he awarded costs in 2012, stating it was his understanding that the depositions were to be "joint activities." At the 2012 cost hearing, Judge Kramer stated he disagreed with plaintiffs' view "that this is MDL material that got borrowed into or used in the state court case." Instead, he and Judge Hornby decided "everything ought to be viewed as occurring in both cases because we couldn't possibly parse it down." As discussed, we agree that the coordination order achieves that result.
Judge Karnow adopted Judge Kramer's analysis of this question when he issued his cost order in 2017. --------
In seeking a contrary ruling, plaintiffs rely on Estate of Bauer (1943) 59 Cal.App.2d 161, 163 (Bauer), in which the court stated, "Costs are allowable only in the action in which the costs are incurred." We agree with that general proposition, but as noted above, in light of the discovery coordination order, the deposition costs at issue here were incurred in this action. We also are not persuaded by plaintiffs' argument that the facts in Bauer are similar to the situation here. In Bauer, depositions were taken in a declaratory relief action that was then dismissed. (Id. at p. 162.) When a related proceeding was subsequently filed, the parties stipulated the depositions taken in the first action could be used in the second. (Ibid.) The trial court disallowed costs relating to the depositions, and the appellate court affirmed, because the stipulation allowing use of depositions from the earlier action did not provide the costs of the depositions could be charged in the later action. (Id. at pp. 162-163.)
As discussed, in contrast to the apparently limited stipulation in Bauer allowing use of depositions from a concluded case in a later-filed action, the 2004 order entered by Judge Kramer and Judge Hornby provided for extensive coordination in the noticing, conduct and use of depositions in multiple active cases. In our view, the ensuing discovery occurred in all covered proceedings. In this different context, the absence of an express provision in the order addressing deposition costs does not alter our conclusion that the costs at issue were incurred in the California action.
Plaintiffs' remaining arguments on this point are not persuasive. Ford's statement in a submission to the federal court that it incurred certain deposition costs in the federal case does not show its costs were incurred only in that case. And Judge Hornby's discretionary denial of costs in the federal action does not provide a basis for declining to award costs under California law establishing a prevailing party is "entitled" to costs "as a matter of right." (§ 1032, subd. (b).) Finally, the coordination order's provision stating "[d]iscovery [d]ispute[s]" will be resolved by the federal court (§ F.24) does not preclude the California state courts from awarding prevailing-party costs (which include deposition costs (§ 1033.5, subd. (a)(3))) at the conclusion of the California case.
C. Apportionment of Deposition Costs Among Actions
Plaintiffs contend that, if any deposition costs are allowed, they should be "apportion[ed]" to reflect the fact that at least seven cases made use of the discovery taken pursuant to the coordination order (i.e., the federal and California proceedings, as well as actions in Arizona, Florida, Minnesota, New Mexico and Wisconsin). Plaintiffs argue that, to avoid unfairness, the award of deposition costs should be reduced to one-seventh of the total amount claimed by Ford. Plaintiffs also suggest that some depositions, such as those taken of plaintiffs from other states, were not reasonably necessary to Ford's defense of the California action. (See § 1033.5, subd. (c)(2)-(3) [costs must be "reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to its preparation" and "reasonable in amount"].)
The trial court did not abuse its discretion by declining to reduce the award on these grounds. As for splitting the deposition costs "seven ways," Judge Kramer stated his view at the 2012 cost hearing that "you didn't have seven separate cases of equal dignity and equal work." And as to whether depositions of out-of-state class representatives were relevant to the California litigation, Judge Kramer noted in part that the alleged conspiracy was a "singular conspiracy," so "what any class representative knew about that conspiracy was relevant to the existence of the conspiracy itself, which had impacts in other places." Judge Kramer's resolution of these issues (later adopted by Judge Karnow) was reasonable and was not an abuse of discretion.
In a related line of attack, plaintiffs argue that, because there were other cases, Ford U.S. would have incurred the deposition costs even if the California case had not been filed. We decline to reverse on this basis. In the context of multiple actions with coordinated discovery, plaintiffs' argument, if accepted, would lead to the denial of costs in every case because the discovery was also needed in the other cases. And the cases cited by plaintiffs on this point—Ducoing Management Inc. v. Superior Court (2015) 234 Cal.App.4th 306 (Ducoing) and Moreno v. City of King (2005) 127 Cal.App.4th 17 (Moreno)—do not establish a contrary result is required.
In Ducoing, the appellate court held that its own partial reversal in a prior appeal in the same case had the effect of reversing a cost award entered against two plaintiffs, one of whom might yet prevail against the defendants. (Ducoing, supra, 234 Cal.App.4th at pp. 315-317.) Ducoing did not address whether, as plaintiffs contend here, a court may apportion a prevailing party's costs if it would have incurred those costs in the absence of the underlying litigation. In Moreno, the trial court did tax deposition and service costs claimed by a prevailing defendant (Breskin) when the plaintiff argued in part that the costs were "not necessary" because another defendant (the City, a losing party) "needed the depositions and service regardless of Breskin." (Moreno, supra, 127 Cal.App.4th at pp. 23-24, 30.) But the appellate court affirmed only on the ground that Breskin had not provided an adequate record showing the reasons the trial court taxed the costs. (Id. at p. 30.) Moreno is not precedential authority requiring reduction of costs on the ground plaintiffs advance here.
D. Apportionment of Costs Between Ford U.S. and Ford Canada
Plaintiffs contend any costs awarded should be apportioned between Ford U.S. (a prevailing party) and Ford Canada (which, after this court's reversal of the summary judgment in its favor, remained a party to the ongoing litigation). "A prevailing party who is represented by the same counsel as a nonprevailing party may only recover those costs the prevailing party incurred and were reasonably necessary to the prevailing party's conduct of the litigation, not the other jointly represented parties' conduct of the litigation. [Citations.] Whether to award costs that were incurred by both the prevailing party and the nonprevailing party, and were reasonably necessary to the conduct of the litigation for both the prevailing and nonprevailing party, is left to the trial court's sound discretion based on the totality of the circumstances." (Charton v. Harkey (2016) 247 Cal.App.4th 730, 744.) Applying these principles here, we conclude the trial court did not abuse its discretion in declining to reduce the award of costs to Ford U.S.
In connection with the parties' litigation of the cost issue before Judge Karnow in 2017, Ford U.S. submitted a declaration from William Sherman, one of its attorneys, stating that (1) Ford U.S. incurred all the costs claimed in the 2012 memorandum of costs submitted by Ford U.S. and Ford Canada, and (2) all of those costs were reasonably necessary to Ford U.S.'s defense of the litigation. In their reply brief on appeal, plaintiffs argue the 2017 Sherman declaration is inconsistent with a declaration submitted by Margaret Zwisler, also an attorney for Ford, in 2012 when Ford U.S. and Ford Canada were jointly seeking costs. In that declaration, Zwisler used the term "Ford" to refer collectively to Ford U.S. and Ford Canada. Zwisler represented that "Ford" incurred all the claimed costs.
Plaintiffs should have raised this argument in their opening brief. (Neighbours v. Buzz Oates Enterprises (1990) 217 Cal.App.3d 325, 335, fn. 8.) But in any event, we agree with Judge Karnow's conclusion that the two declarations are "not logically inconsistent." As Judge Karnow noted, Zwisler "did not state whether [the] costs were incurred jointly or whether any costs were incurred separately." Judge Karnow concluded that the differences between the declarations "are insufficient to undercut [Ford U.S.'s] showing, in the Sherman Declaration, that [Ford U.S.] actually incurred the costs claimed and that those costs were reasonably necessary to [Ford U.S.'s] defense."
In light of the evidentiary showing that Ford U.S. incurred the claimed costs and the costs were reasonably necessary to Ford U.S.'s defense, plaintiffs have not established that Judge Karnow abused his discretion in declining to allocate costs between Ford U.S. and Ford Canada. (See Charton v. Harkey, supra, 247 Cal.App.4th at p. 744; accord, Kramer v. Ferguson (1964) 230 Cal.App.2d 237, 250-251 [prevailing defendant may recover costs it incurred, even though the cost items also benefited a losing codefendant].) Fennessy v. Deleuw-Cather Corp. (1990) 218 Cal.App.3d 1192, cited by plaintiffs, does not require a contrary result. In Fennessy, one of six jointly represented defendants (Gerulat) prevailed on summary judgment and obtained an award of costs. (Id. at p. 1194.) The appellate court reversed the cost award and remanded, holding that since the action was still pending as to the other defendants, Gerulat could only recover costs he actually incurred or those incurred on his behalf. (Id. at pp. 1196-1197.) Since Ford U.S. established that it incurred the costs at issue here, Fennessy did not require reduction of the cost award.
III. DISPOSITION
The August 22, 2017 order denying in part and granting in part plaintiffs' motion to tax costs of Ford U.S. is affirmed. Ford U.S. shall recover its costs on appeal.
/s/_________
STREETER, Acting P.J. We concur: /s/_________
TUCHER, J. /s/_________
BROWN, J.