Opinion
Civil No. 3:04cv753 (JBA).
July 25, 2006
RULING ON BILL OF COSTS [DOC. # 70]
This Court having dismissed the complaint for lack of subject matter jurisdiction, see Tankship Int'l, LLC v. El Paso Merchant Energy-Petroleum Co., 428 F. Supp. 2d 93 (D. Conn. 2006), defendants seek costs for depositions and a status conference transcript prepared in connection with the case. See Bill of Costs [Doc. # 70]. Plaintiff objects to the bill of costs as unwarranted. For the following reasons, defendants' request will be denied.
I. Factual Background
Plaintiff filed the original complaint in this case on May 5, 2004, invoking this Court's diversity jurisdiction. See Complaint [Doc. # 1] at 1. Discovery was taken, concluding in July 2005, and a bench trial was initially scheduled for October 2005. However, it came to the parties' attention through discovery that complete diversity of citizenship was lacking, and in September defendants were given permission to file a motion to dismiss for lack of subject matter jurisdiction, which was granted on April 28, 2006. Tankship, 428 F. Supp. 2d at 101.
Simultaneous with their motion to dismiss for lack of subject matter jurisdiction, defendants filed a declaratory judgment action in Texas state court. See Pl. Mem. in Opp. to Mot. to Dismiss [Doc. #49] at 2. Plaintiff has also filed an action against the same defendants in the Connecticut Superior Court. Pl. Obj. to Def. Bill of Costs [Doc. # 71] at 3.
II. Standard
Title 28 U.S.C. § 1919 provides: "Whenever any action or suit is dismissed in any district court . . . for want of jurisdiction, such court may order the payment of just costs." This statute is an exception to the general rule that "dismissal of a case for want of jurisdiction deprives a court of the power to assess costs." Correspondent Servs. Corp. v. JVW Invest., Ltd., No. 99 Civ. 8934 (RWS), 2004 WL 2181087, at *14 (S.D.N.Y. Sept. 29, 2004). An award of just costs under this statute is within the sound discretion of the district court. Barron's Educ. Series, Inc. v. Hiltzik, 987 F. Supp. 224, 226 (E.D.N.Y. 1997); see also Correspondent Servs., 2004 WL 2181087, at *15. "There is nothing in § 1919 . . . that requires such an award; orders under this statute are purely permissive. Relig. Tech. Ctr. v. Liebreich, 98 Fed. Appx. 979, 986-87 (5th Cir. 2004) (unpublished) (citing Miles v. Calif., 320 F.3d 986, 988 n. 2 (9th Cir. 2003) (emphases in original).
The question to be answered in determining whether costs sought by a party are taxable under § 1919 is whether such an award, and how much, would be "fair" under the particular circumstances of the case. Ericsson FE Mobile Communs., Inc. v. Motorola Commons. Electronics, Inc., 179 F.R.D. 328, 331 (N.D. Ala. 1998). It is within the discretion of the district court to deny costs if it determines that the plaintiff "acted in a reasonable manner,"i.e., it had "plausible grounds for asserting the existence of federal jurisdiction" and "did not act in a vexatious or frivolous manner." Hygienics Direct Co. v. Medline Indus., Inc., 33 Fed. Appx. 621, 626 (3d Cir. 2002) (unpublished).
Additionally, an award of costs under § 1919 is inappropriate where parties to a case are "in active litigation in the state court" and may resolve there the issue of costs to be awarded to the prevailing party. Callicrate v. Farmland Indus., Inc., 139 F.3d 1336, 1342 (10th Cir. 1998).
III. Discussion
The parties in this case are engaged in simultaneous litigation in both the Connecticut and Texas state courts regarding the same issues that were presented in the federal complaint. As the Tenth Circuit held in Callicrate, 139 F.3d at 1342, where the merits of the controversy remain under litigation in state court, an award of costs after a decision declining federal jurisdiction would be "speculative and premature." In such a situation, the defendant may recover only "the portion of costs . . . that were directed to obtaining the dismissal of the action for lack of . . . jurisdiction." Id.
In this case, because discovery had closed in July 2005 and the motion to dismiss was not filed until September, the deposition transcripts and other evidence defendants proffered in support of their Rule 12(b)(1) motion to dismiss necessarily had already been taken in preparation for trial in this case. The parties did not engage in any discovery specifically for the purpose of the motion to dismiss, nor did they request to do so. Defendants merely state that "[a] good deal of the discovery undertaken during trial preparation ended up being relevant to the jurisdictional issue." Def. Mem. in Opp. [Doc. # 72] at 3. Both parties represent that they hope to use all of the discovery materials taken in connection with this case in the state court proceedings. Thus the Court cannot conclude that defendants incurred any of the requested expenses solely for the purpose of bringing their motion to dismiss for lack of subject matter jurisdiction.
Second, an award of just costs is not warranted in this case because plaintiff's position on subject matter jurisdiction, while ultimately rejected by the Court, was not frivolous or vexatious. The existence of admiralty jurisdiction here turned on the question of whether the oral contract between El Paso and Heidmar involved only brokerage services or a fuller range of "operational liaison services." Although the Court found that the contract was limited to brokerage services and consequently was not "maritime in nature," and also found an absence of evidence supporting the existence of a contract between Tankship and El Paso, plaintiffs had some evidence showing they had offered, and believed they were going to provide, a broader range of services to Heidmar that may have transformed the alleged contract into a "maritime" agreement.
Because plaintiffs' position was not wholly unsupported by the evidence; because the parties remain in active litigation in state court, where the issue of costs to the prevailing party may be determined; and because defendants did not incur any expenses solely in connection with the motion to dismiss, an award of costs under 28 U.S.C. § 1919 is unwarranted at this time.
IV. Conclusion
Accordingly, defendants' bill of costs [Doc. # 70] is DENIED.
IT IS SO ORDERED.