Opposition ObjectionsCal. Super. - 6th Dist.September 21, 20161 2 3 4 5 PILLSBURY WINTHROP SHAW PITTMAN LLP ANDREW D. LANPHERE 191479 WILLIAM T. PALMER 312923 Four Embarcadero Center, 22nd Floor San Francisco, CA 94111-5998 Telephone: 415.983.1000 Facsimile: 415.983.1200 Attorneys for Defendants THE BOARD OF TRUSTEES OF THE 6 LELAND STANFORD JUNIOR UNIVERSITY (sued as Leland Stanford Junior University) and WILLIAM J. PERRY 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA MICHAEL HANNEKEN, Plaintiff, vs. LELAND STANFORD JUNIOR UNIVERSITY, WILLIAM J. PERRY, DOES 1-50, Defendants. Case No. 16-CV-300285 DEFENDANTS' OPPOSITION TO PLAINTIFF'S MOTION TO TAX COSTS Date: April 16, 2019 Time: 9:00 a.m. Department: 3 Judge: Hon. Patricia M. Lucas Complaint Filed: September 21, 2016 Trial Date: January 28, 2019 OPPOSITION TO MOTION TO TAX COSTS Electronically Filed by Superior Court of CA, County of Santa Clara, on 4/3/2019 3:21 PM Reviewed By: R. Burciaga Case #16CV300285 Envelope: 2715218 16CV300285 Santa Clara - Civil R. Burciaga 1 2 3 I. 4 II. 5 6 7 8 III. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 IV. 24 25 26 27 28 TABLE OF CONTENTS Page INTRODUCTION . .............................................................................................................. 1 FACTUAL BACI(GROUND .............................................................................................. 1 A. B. C. Defendants' Section 998 offer. ................................................................................ 1 Defendants' Memorandum of Costs and Supporting Declaration . .......................... 1 Expert-Related Costs Incurred By Defendants ........................................................ 1 ARGUMENT ....................................................................................................................... 4 A. B. The Court Should Not Tax Defendants' Claimed Expert Costs .............................. 5 1. 2. 3. 4. 5. Applicable legal principles .......................................................................... 6 All of Mr. Hazel's fees should be awarded to Defendants .......................... 9 All of Mr. Gotthardt's fees should be awarded to Defendants .................... 9 All of the fees associated with the FTI staff and employees who assisted Mr. Hazel and Mr. Gotthardt should be awarded ........................... 9 Defendants' right to recover the cost of taking Plaintiffs experts' depositions is undisputed ........................................................................... 10 Plaintiffs Remaining Objections To Defendants' Costs Should Also Be Denied .................................................................................................................... 10 1. Defendants are entitled to recover their share of the cost of the pro tempo re court reporters at trial. .................................................................. 10 2. Defendants should be awarded the cost of videotaping the depositions of Defendants' disclosed testifying experts ............................................... 11 3. Defendants should be awarded their messenger fees ............................... .. 11 4. Defendants should be awarded their costs associated with renting trial presentation equipn1ent .............................................................................. 12 CONCLUSION .................................................................................................................. 13 OPPOSITION TO MOTION TO TAX COSTS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) American Airlines v. Sheppard Mullin Richter & Hamilton (2002) 96 Cal.App.4th 1017 ................................................................................................... 12 Bates v. Presbyterian Intercommunity Hospital, Inc. (2012) 204 Cal.App.4th 210 ....................................................................................... 7, 8, 9, 10 County of Kern v. Ginn (1983) 146 Cal.App 3d 1107 .................................................................................................... 5 Culbertson v. R.D. Werner Co., Inc. (1987) 190 Cal.App.3d 704 ...................................................................................................... 7 Elrod v. Cummins Diesel, Inc. (1987) 194 Cal.App.3d 692 ...................................................................................................... 6 Evers v. Cornelson (1984) 163 Cal.App.3d 310 .............................................................................................. 6, 8, 9 Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899 ....................................................................................................... 7 Jones v. Dumrichob (1998) 63 Cal.App.4th 1258 ................................................................................................. 5, 7 Ladas v. California State Auto. Ass 'n. (1993) 19 Cal.App.4th 761 ....................................................................................... 5, 7, 11, 12 Nelson v. Anderson (1999) 72 Cal. App. 4th 111 ..................................................................................................... 5 Regency Outdoor Advertising, Inc. v. City of Los Angeles (2006) 39 Cal.4th 507 ............................................................................................................... 9 Ripley v. Pappadopoulos (1994) 23 Cal.App.4th 1616 ................................................................................................... 12 Santantonio v. Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102 ......................................................................................... 7, 8, 9, 10 11 OPPOSITION TO MOTION TOT AX COSTS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Statutes and Codes Code of Civil Procedure Section 1032, et seq . ................................................................................................................. 4 Section 1033.5(a) .................................................................................................................. 4, 5 Section 1033.5(a)(12) ............................................................................................................. 12 Section 1033 .5( a)(3 )(A) .......................................................................................................... 11 Section 1033.5(b) ...................................................................................................................... 5 Section 1033.5(c) ...................................................................................................................... 5 Section 1033.5(c)(4) ................................................................................................................. 5 Section 2034.430 ....................................................................................................................... 2 Section 998 ....................................................................................................................... passim Section 998( c) ........................................................................................................................... 9 Section 998(c)(l) ...................................................................................................................... 6 Section 998(h) ........................................................................................................................... 8 Government Code Section 68086( c) ..................................................................................................................... 11 Section 68086(h) ..................................................................................................................... 10 Section 68092.5 ......................................................................................................................... 8 Section 68092.6 ......................................................................................................................... 8 Rules and Regulations Rule of Court Rule 3.l 700(b)(2) ...................................................................................................................... 5 Other Authorities Wenger et al., California Practice Guide: Civil Trials and Evidence (The Rutter Group 2019) ......................................................................................................... 11 1ll OPPOSITION TO MOTION TO TAX COSTS 1 Defendants1 The Board ofTrnstees of the Leland Stanford Junior University ("Stanford") 2 and William J. Perry ("Secretary Perry") hereby oppose Plaintiffs motion to tax costs. 3 I. INTRODUCTION. 4 Plaintiffs motion to tax the costs reflected in Defendants Costs Memorandum should be 5 denied in full. As discussed in detail below, each of the costs challenged by Plaintiff are 6 expressly authorized by statute and case law. By contrast, the arguments advanced by Plaintiff 7 are squarely contrary to this well-established law. Defendants accordingly should be awarded 8 their costs in the full amount claimed, of $228,005.56. 9 10 II. A. FACTUAL BACKGROUND. Defendants' Section 998 offer. 11 On July 5, 2018, Defendants made an offer to compromise to Plaintiff pursuant to 12 section 9982. (Lanphere Deel. Ex. A.) Defendants 998 offer was for $100,000, a portion of 13 Defendants' anticipated litigation costs through trial. (Id.) 14 Plaintiff never responded to Defendants' section 998 offer. (Lanphere Deel. ,i 4.) 15 B. Defendants' Memorandum of Costs and Supporting Declaration. 16 On Febrnary 22, 2019, Defendants timely filed their Memorandum of Costs (Summary), 17 with the attached Memorandum of Costs (Worksheet) (collectively, the "Costs Memorandum"). 18 (Lanphere Deel. Ex. B.) Although not required to do so, Defendants at the same time filed a 19 detailed declaration by counsel providing information regarding certain of the costs claimed in 20 the Memorandum of Costs. (Lanphere Deel. Ex. C.) 21 22 23 24 25 26 27 28 C. Expert-Related Costs Incurred By Defendants. As reflected in Section 8 of the Costs Memorandum, in addition to other recoverable costs Defendants seek to recover their costs related to expert witnesses as a result of Plaintiffs failure to accept Defendants' section 998 offer. These expert-related costs include (a) costs associated with deposing the four (4) experts designated by Plaintiff; and (b) costs associated 1 "Defendants" refers collectively to defendants The Board of Trnstees of the Leland Stanford Junior University ("Stanford") and William J. Perry ("Secretary Perry"). 2 Unless otherwise noted, all statutory references in this memorandum are to the Code of Civil Procedure. 1 OPPOSITION TO MOTION TO TAX COSTS 1 with the expert witnesses retained by Defendants to respond to Plaintiffs designated experts, as 2 follows: 3 Costs associated with deposing the four ( 4) disclosed testifying experts designated by 4 Plaintiff. In his July 28, 2018 expert disclosure, Plaintiff designated four testifying experts for 5 trial: Susan Heinemann, William Fellers, John Swensson and Kurt Hillhouse. (Lanphere Deel. 6 Ex. D [Plaintiffs Expert Disclosure]) Ms. Heinemann and Mr. Fellers were identified as experts 7 related to damages (id. at 3-4), while Colonel Swensson and Major General Hillhouse were 8 identified as experts related to military issues (id. at 4-5). Defendants took the depositions of all 9 four of Plaintiffs experts and, pursuant to section 2034.430 of the Code of Civil Procedure, paid 10 Plaintiffs experts their reasonable and customary hourly fee spent for the time testifying at 11 deposition- a total of$8,739.33. (Lanphere Deel. ,r 8, Ex.Bat 4 [Mem. Costs Worksheet,§ 12 8(b)].) 13 As discussed below, Plaintiff has not challenged Defendants' right to recover these costs. 14 Costs associated with Defendants' disclosed testifying experts. The amounts listed in 15 Section Sb( 5) of the Worksheet (Lanphere Deel. Ex. B at 5) reflect the amounts incurred in 16 connection with the work of Defendants' disclosed testifying experts. (Lanphere Deel. ,r 9.) 17 Defendants retained and disclosed two experts to testify in this case: Steve Hazel and Greg 18 Gotthardt, both ofFTI Consulting. (Id.; Lanphere Deel. Ex. E.) As discussed in Defendants' 19 expert disclosure, Mr. Hazel was retained to offer opinions regarding the existence and causation 20 of Plaintiffs claimed damages; mitigation; market, industry and other factors affecting Plaintiffs 21 claimed damages; and to respond to opinions offered by Plaintiffs experts. (Lanphere Deel. ,r 9, 22 Ex.Eat 3.) Mr. Gotthardt was also retained to offer opinions related to causation and damages, 23 and to respond to opinions offered by Plaintiffs experts, but in addition was specifically retained 24 to offer opinions relating to Plaintiffs past or future participation in real estate projects and 25 markets, including but not limited to plaintiffs participation in so-called public-private 26 partnerships. (Lanphere Deel. ,r 9, Ex.Eat 4.) 27 Plaintiffs claimed damages in this case, as calculated by Plaintiffs economic expert 28 Susan Heinemann, with support from industry expert William Fellers, were substantial, and 2 OPPOSITION TO MOTION TO TAX COSTS 1 required a thorough and careful response by Defendants. (Lanphere Deel. ,r 10.) In her written 2 report, Ms. Heinemann presented six lost profit projections that purported to specify the amounts 3 Plaintiff would have eamed through his business RESS ifhe had dropped out of Stanford at the 4 conclusion of the 2013 Fall Quarter (i.e., at the end of 2013). (Lanphere Deel. Ex. F.) In her 5 report, Ms. Heinemann projected that Plaintiff's lost profits under this scenario would be 6 between a low figure of $4,449,237 and a high figure of $17,250,323. (Ms. Heinemaru1's six lost 7 profit projections are summarized on the first page of her report (Lanphere Deel. Ex. F), with 8 more detailed explanations following regarding each of the six alternative lost profit projections.) 9 As specified in the Memorandum of Costs, and Worksheet section 8b(5), the total expert 10 costs incurred by Defendants in connection with the work of Defendants' designated experts was 11 $158,858.30. (Lanphere Deel. ,r 11.) This amount reflects work billed on an hourly basis by 12 Mr. Hazel, Mr. Gotthardt, and other employees ofFTI who assisted them (at lower hourly rates) 13 in their work on this matter. (Id.) This amount also included a discount given by FTI in the 14 amount of $4,000. FTI' s invoices describing the foregoing expert work and associated costs, 15 along with associated time entry information, are Exhibit G of the Lanphere Declaration. 16 Upon taking the depositions of Plaintiff's experts, Defendants on August 24, 2018, 17 determined that, because Ms. Heinemann's damages calculations did not project revenues from 18 public-private partnership work, it would not be necessary for Mr. Gotthardt to offer opinion 19 testimony on that subject. (Lanphere Deel. ,r 11.) Accordingly, Defendants advised Plaintiff that 20 Mr. Gotthardt would not be appearing at deposition or offering opinions at trial. (Id.) Despite 21 his not ultimately testifying as an expert in this case, Mr. Gotthardt's work was important and 22 necessary to understand the scope of Ms. Heinemann's damages analysis, and to determine the 23 most effective response to Ms. Heinemann's opinions. (Lanphere Deel. ,r 12.) 24 The work of Defendants' experts and their assistants to respond to Ms. Heinemann's and 25 Mr. Fellers' damages analysis is reflected in FTI's invoices and time records. (Lanphere Deel. 26 Ex. G.) This work, which was supervised by Defendants' counsel, included: 27 • Gathering and analyzing infonnation regarding the case and its facts; 28 3 OPPOSITION TO MOTION TO TAX COSTS 1 • Preparing an affirmative damages analysis showing Plaintiff had suffered no damages as 2 a result of Secretary Perry not sending the Anny the letter ofrecommendation Plaintiff 3 claimed Secretary Perry had agreed to send; 4 • Reviewing and analyzing Ms. Heinemann's damages report and the backup provided by 5 Ms. Heinemann for that report; 6 • Assisting in the preparation for the depositions of Ms. Heinemann and William Fellers 7 (who provided opinions intended to bolster Ms. Heinemann's conclusions), including 8 through Mr. Hazel attending those depositions to assist further with the examination and 9 evaluate how best to respond to the opinions stated by Ms. Heinemann and Mr. Fellers; 10 • Researching, analyzing and formulating opinions responsive to those offered by 11 Ms. Heinemaim and Mr. Fellers; 12 • Preparing a written summary of opinions produced to Plaintiff in connection with 13 Mr. Hazel's deposition (Lanphere Deel. Ex. H); 14 • Preparing for Mr. Hazel's deposition; and 15 • Preparing Mr. Hazel to testify at trial twice, first in connection with the original 16 September 10, 2018 trial date, and again in connection with the subsequent, January 28, 17 2019 trial date. 18 (Lanphere Deel. ,r 13.) 19 The rates charged by Mr. Hazel and Mr. Gotthardt on this matter were in fact discounted 20 from their usual and customary hourly rate. (Lanphere Deel. ,r 15.) 21 III. ARGUMENT. 22 The right to recover costs is determined by statute. (Code Civ. Proc.§ 1032, et seq.) 23 Allowable costs include such items as filing, motion and jury fees, transcripts and videotape of 24 necessary depositions (including an original and one copy of those taken by the party claiming 25 costs and a copy of all others) plus travel expenses to attend deposition, service of process, 26 ordinary witness fees, court reporter fees, models, blowups of exhibits, and photocopies of 27 exhibits ifreasonably helpful to the trier of fact. (Code Civ. Proc. § 1033.5(a).) The Court has 28 discretion to award costs that are not specifically allowable under section 1033.5(a), but are not 4 OPPOSITION TO MOTION TO TAX COSTS 1 specifically prohibited under section 1033.5(b). (Code Civ. Proc. §1033.5(c)(4).) To be 2 recoverable, costs must be reasonable in amount and reasonably necessary to the conduct of the 3 litigation, and not within the prohibited categories enumerated in section 1033 .5(b ). (Code Civ. 4 Proc.§ 1033.5(b), (c).) 5 Where items listed on a memorandum of costs are expressly allowed by the statute, the 6 verified memorandum is prima facie evidence of their propriety, and "the burden is on the 7 objecting party to show them to be unnecessary or unreasonable." (Nelson v. Anderson (1999) 8 72 Cal. App. 4th 111, 131; see also Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1264; 9 Ladas v. California State Auto. Ass 'n. (1993) 19 Cal.App.4th 761, 774-776; County of Kern v. 10 Ginn (1983) 146 Cal.App 3d 1107, 1113.) Conclusory statements in points and authorities or 11 declarations of counsel are insufficient to rebut the prima facie showing of a verified 12 memorandum of costs. Rather, evidence must be proffered that provides a factual basis for the 13 objecting party's objections. 14 Thus, conclusory allegations that a cost item is not "reasonable in amount" (e.g., Mem. at 4) 15 do not satisfy the objecting party's burden of proof.3 Where the party seeking to tax costs fails to 16 meet its burden of presenting evidence showing that a particular cost is unnecessary, excessive, or 17 unrecoverable, the prima facie evidence of the cost memorandum is uncontroverted and the burden 18 of proof does not shift back to the party claiming the cost. (Ladas, supra, 19 Cal.App.4th at 774- 19 776.) Rule ofComi 3.1700(b)(2) incorporates this requirement for specific, substantive objections, 20 requiring the motion to "refer to each item objected to by the same number and appear in the same 21 order as the corresponding cost item claimed on the memorandum of costs and must state why the 22 item is objectionable." 23 24 25 26 27 28 A. The Court Should Not Tax Defendants' Claimed Expert Costs. As reflected in the Memorandum of Costs, and described in detail in the Lanphere Declaration, the expert witness costs claimed by Defendants in the Memorandum of Costs fall 3 See County of Kern v. Ginn, supra, 146 Cal.App.3d at 1113-1114; see also Jones v. Dumrichob, supra, 63 Cal.App.4th at 1267 [affirming denial of motion to tax costs where "no counter- declarations or other supporting documents were proffered ... to support factually the conclusory challenge to the necessity of the items in question"]. 5 OPPOSITION TO MOTION TO TAX COSTS 1 into four categories: 2 3 4 5 6 7 Categories of Expert Witness Costs Amount 1. Steve Hazel ofFTI - disclosed testifying damages expert $74,412.80 2. Greg Gotthardt ofFTI- disclosed testifying damages expert $11,002.50 3. FTI employees and staff assisting Mr. Hazel and Mr. Gotthardt $77,443.00 4. Depositions of Plaintiff's disclosed testifying experts $8,739.33 TOTAL (with $4,000 discount) $167,597.63 8 For the reasons discussed below, all of these expert costs were reasonably incuned by 9 Defendants, and should be awarded by the Court. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. Applicable legal principles. Plaintiff having failed to accept Defendants' 998 offer, the Court has broad discretion to "require the plaintiff to pay a reasonable sum to cover postoffer costs of the services of expe1i witnesses .... actually incuned and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant." (Code Civ. Proc. § 998( c )( 1 ).) "Section 998 seeks to penalize a litigant who, in refusing a reasonable settlement offer, causes the other party to suffer the expenses of expe1i witnesses reasonably necessary in either, or both, the preparation or trial of the case."4 (Evers v. Cornelson (1984) 163 Cal.App.3d 310, 317, internal quotations and citation omitted.) In applying section 998, courts have recognized a number of principles directly relevant to the various objections raised by plaintiff to Defendants' expert costs. First, courts recognize that a defendant may recover expert costs pursuant to section 998 even if the settlement offer is modest in size and less than the amount of the defendant's expe1i costs: When a defendant perceives himself to be fault free and has concluded that he has a very significant likelihood of prevailing at trial, it is consistent with the legislative purpose of section 998 for the defendant to make a modest settlement 4 Plaintiff has not attempted to argue that Defendants' 998 offer was somehow unreasonable or a "token" offer, an argument for which Plaintiff bears the burden of proof. (See Elrod v. Cummins Diesel, Inc. (1987) 194 Cal.App.3d 692, 700 ["Where, as here, the offeror obtains a judgment more favorable than its offer, the judgment constitutes prima facie evidence showing the offer was reasonable and the offeror is eligible for costs as specified in section 998. The burden is therefore properly on plaintiff, as offeree, to prove otherwise."]) 6 OPPOSITION TO MOTION TO TAX COSTS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 offer. If the offer is refused, it is also consistent with the legislative intent for the defendant to engage the services of experts to assist him in establishing he is not liable to the plaintiff. It is also consistent with the legislative purpose under such circumstances to require the plaintiff to reimburse the defendant for the costs thus incurred. (Bates v. Presbyterian Intercommunity Hospital, Inc. (2012) 204 Cal.App.4th 210,220 [quoting Culbertson v. R.D. Werner Co., Inc. (1987) 190 Cal.App.3d 704, 710-711].) In Bates, the Court of Appeal affirmed an award of $84,713.43 in costs, including $64,826.75 in expert witness fees, after the plaintiff failed to accept the defendant's 998 offer of $0, a waiver of costs, and refraining from pursing malicious prosecution. (Bates, supra, 204 Cal.App.4th at 214-215.) Thus, Plaintiffs apparent contention that expert fees recoverable pursuant to section 998 cannot exceed the amount of the 998 offer5 ( and other costs) is wrong. Second, as noted above, "the verified memorandum of costs is prima facie evidence of their propriety, placing the burden of proof on the party attacking them." (see Sanantonio, supra, 25 Cal.App.4th at 121; see also Ladas, supra, 19 Cal.App.4th at 774-776.) Mere statements in points and authorities or a declaration of counsel objecting to a cost item in the verified memorandum is insufficient to rebut this prima facie showing. (See Jones v. Dumrichob, supra, 63 Cal.App.4th at 1266.) Here, Plaintiff has not met his burden of submitting evidence demonstrating that Defendants' claimed expert costs were somehow unnecessary or unreasonable. Nor could he. As noted above, Plaintiff disclosed/our testifying experts, and put forward six alternative lost profits models seeking damages of between $4.5 million and $17 million. The expert costs Defendants incurred in response to Plaintiffs proffered expert testimony detailing his substantial and complicated damages claim are entirely reasonable. Third, it is undisputed that the Court has discretion to award expert costs by Defendants for the parties' disclosed experts. (See Mot. at 4-5 [ citing Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899,910 (holding defendant may recover costs associated with experts designated by the parties).]) Here, there were six disclosed experts - four disclosed by Plaintiff (Heinemann, Fellers, Swensson and Hillhouse) and two by Defendants (Hazel and Gotthardt). 5 See Mem. at 4 [ arguing that "defendants' offer of settlement was less than half the amount they now request"]. 7 OPPOSITION TO MOTION TO TAX COSTS 1 Fourth, as the language of section 998 quoted above makes clear, a disclosed expert does 2 not need to testify at trial for the defendant to recover costs associated with that expert; costs 3 associated with a disclosed expert may be recovered by the defendant even if the expert in 4 question does not testify at trial. (See Evers, supra, 163 Cal.App.3d at 317 [holding that costs 5 associated with disclosed expert whose services were obtained in preparation for trial are 6 recoverable under section 998 even though expe1i did not testify at trial]; Santantonio v. 7 Westinghouse Broadcasting Co. (1994) 25 Cal.App.4th 102, 124 [same].) Thus, while only one 8 of the parties' six designated testifying experts actually testified at trial, Defendants may recover 9 their costs associated with all six testifying experts. 10 Fifth, the defendant may recover the cost of an expert's employees and staff who assisted 11 the disclosed expert in preparing their analysis and testimony, even if those employees or staff 12 were not themselves disclosed as testifying experts. (See Santantonio, supra, 25 Cal.App.4th at 13 124 [holding that under section 998 defendant could recover not only the amounts charged by 14 disclosed testifying experts, but also "separately itemized charges for staff economists and other 15 skilled employees who helped them ... "]; see also Bates, supra, 204 Cal.App.4th at 222 16 [ affirming award of fees for expert "retained as a consultant only and never designated as a 17 witness"].) Thus, Defendants may recover the amounts incurred for FTI's staff and employees 18 who assisted Mr. Hazel's and Mr. Gotthardt's work in this matter. 19 Sixth, the statement in section 998(h) that "the costs for services of expert witnesses for 20 trial under subdivisions (c) and (d) shall not exceed those specified in Section 68092.6 of the 21 Government Code" means that the experts in question cam1ot charge more than their normal and 22 customary rate. (See Santantonio, supra, 25 Cal.App.4th at 123 ["The reference to Govermnent 23 Code section 68092.5 in section 998 subdivision (h) is interpreted to mean that any fees charged 24 for trial time must not exceed the expert's norn1al rate."]) Here, Mr. Hazel and Mr. Gotthardt 25 worked on this matter at a discount to their customary rates. (Lanphere Deel. ,r 15.) 26 Applying these legal principles here, the Court should award Defendants all of the expert 27 costs listed in the Cost Memorandum, as discussed below. 28 8 OPPOSITION TO MOTION TO TAX COSTS 1 2. All of Mr. Hazel's fees should be awarded to Defendants. 2 Despite being provided with FTI's invoices and a detailed description of his work along 3 with the Cost Memorandum, Plaintiff's only specific objection to the award of the costs incurred 4 by Defendants with respect to Mr. Hazel's work is that $1,478.40 of those costs should be taxed 5 as they were incurred before the 998 offer. (Mem. at 7:4-5.) However, the Supreme Court has 6 specifically rejected the argument that expe1i costs recoverable under section 998 are limited to 7 postoffer expert costs. (See Regency Outdoor Advertising, Inc. v. City of Los Angeles (2006) 39 8 Cal.4th 507, 532 [holding that "expert witness fees under Code of Civil Procedure section 998, 9 subdivision (c) have never been tied to when these fees were incurred relative to a compromise 10 offer."]; see also Bates, supra, 204 Cal.App.4th at 222 [same].) Mr. Hazel's fees should be 11 awarded in full. 12 3. All of Mr. Gotthardt's fees should be awarded to Defendants. 13 Plaintiff objects to Defendants recovering the fees they incurred with respect to 14 Mr. Gotthardt's work on the grounds that, although Mr. Gotthardt was disclosed as a testifying 15 expert, he did not actually testify at deposition or trial. However, as noted above, costs 16 associated with a disclosed testifying expert who is retained to assist with trial preparation are 17 recoverable under section 998 even if that expert does not testify at trial. (See Evers, supra, 163 18 Cal.App.3d at 317 [holding that costs associated with disclosed expert whose services were 19 obtained in preparation for trial are recoverable under section 998 even though expert did not 20 testify at trial]; Santantonio, supra 25 Cal.App.4th at 124 [same].) Mr. Gotthardt was disclosed 21 as a testifying expert and his work assisted in Defendants' preparation of the case for trial 22 (Lanphere Deel. ,r 12). Defendants accordingly should be allowed to recover the costs 23 associated with his work. 24 4. All of the fees associated with the FTI staff and employees who assisted Mr. 25 Hazel and Mr. Gotthardt should be awarded. 26 Plaintiff argues at length that Defendants cam1ot recover costs associated with the FTI 27 employees and staff who assisted Mr. Hazel and Mr. Gotthardt in their work. As noted above, 28 this is wrong as a matter oflaw. (See Santantonio, supra, 25 Cal.App.4th at 124 [holding that 9 OPPOSITION TO MOTION TO TAX COSTS 1 under section 998 defendant could recover not only the amounts charged by disclosed testifying 2 experts, but also "separately itemized charges for staff economists and other skilled employees 3 who helped them ... "]; see also Bates, supra, 204 Cal.App.4th at 222 [affirming award of fees 4 for expert "retained as a consultant only and never designated as a witness"].) The individuals 5 in question provided support for Mr. Hazel's and Mr. Gotthardt's work at a cheaper hourly rate, 6 and thus allowed for the completion of that work at lower costs. (Lanphere Deel. Ex. G.) 7 Moreover, the use of staff to support a testifying expert's work is standard practice in connection 8 with the work of economic experts preparing damages analysis. (Id.) Thus, the work of the FTI 9 employees in question assisted Defendants' preparation for trial, and Defendants should be 10 allowed to recover those costs. 11 5. Defendants' right to recover the cost of taking Plaintiffs experts' depositions is 12 undisputed. 13 Plaintiff apparently agrees that Defendants should be awarded the costs they incurred in 14 taking the depositions of Plaintiffs four disclosed testifying experts. While Defendants' claimed 15 expert costs total $167,597.63 in the Costs Memorandum, Plaintiff is requesting the court tax 16 that amount by $158,858.30. (Mem. at 9:9.) The balance of $8,739.33 is the amount 17 Defendants' paid Plaintiffs experts for the their depositions. Thus, Defendants' right to recover 18 those costs is undisputed. 19 20 B. 1. Plaintiffs Remaining Objections To Defendants' Costs Should Also Be Denied. Defendants should be awarded their share of the cost of the pro tempo re trial 21 court reporters. 22 Defendants seek to recover the cost they paid for by the work of the court reporters who 23 recorded proceedings at trial, totaling $12,085. (Costs Memorandu, § 11.) By stipulation of the 24 parties and order of the Court, these court reporters were appointed official pro tempore court 25 reporters for trial. (See Requests for Appointment and Orders Appointing Martha Rubia and 26 Lucy Grnbbs Official Reporter Pro Tempore, entered by the Court on January 28, 2019.) 27 Defendants are expressly authorized to recover these court reporter costs under the 28 Government Code. Goverrnnent Code section 68086(h) provides: "That if an official comi 10 OPPOSITION TO MOTION TO TAX COSTS 1 reporter is not available, a party may arrange for the presence of a certified shorthand reporter to 2 serve as an official pro tempore reporter, the costs therefor recoverable as provided in 3 subdivision (c)." This is exactly what happened here. 4 Government Code section 68086(c) provides, in tum: "The costs for the services of the 5 official court reporter shall be recoverable as taxable costs by the prevailing party as otherwise 6 provided by law." Thus, Defendants by statute are entitled to recover their share of the costs of 7 the pro tempore comi reporters during trial. 8 2. Defendants should be awarded the cost of videotaping the depositions of 9 Defendants' disclosed testifying experts. 10 Plaintiff argues that the Court should tax the cost Defendants incurred in videotaping the 11 depositions of three witnesses, over four deposition sessions, because the witnesses did not 12 testify at trial. (Mem. at 8:13-20.) Each of the witnesses in question- William Fellers, Kent 13 Hillhouse and Suzanne Heinemann-was one of Plaintiffs disclosed testifying experts, and each 14 of them was listed on Plaintiffs trial witness list. (Lanphere Deel. Exs. D, J.) 15 Plaintiff cites no authority in support of this request to tax, and there is none. To the 16 contrary, by statute the prevailing party is entitled to recover the cost of "[t]aking, video 17 recording, and transcribing necessary depositions" (Code Civ. Proc. § 1033.5(a)(3)(A)), and this 18 right is not qualified by whether or not the deponent actually testifies at trial. Plaintiff has not 19 disputed these depositions were necessary - nor could they as these are depositions of Plaintiffs 20 disclosed testifying experts and trial witnesses. Accordingly, Defendants are entitled to recover 21 the cost of videotaping these depositions. 22 3. Defendants should be awarded their messenger fees. 23 "Messenger fees may be awarded where related to trial preparation ( e.g., where incurred 24 for filing documents with the court, complying with document demands, etc." (Wenger et al., 25 California Practice Guide: Civil Trials and Evidence (The Rutter Group 2019), Costs, ,r 17:350 26 [citing Ladas, supra, 19 Cal.App.4th at 776].) The messenger fees Defendants are seeking to 27 recover relate to documents filed with the Court or served on Plaintiff or third party witnesses 28 (Lanphere Deel., ,r 16) and thus are recoverable. (See Ladas, supra, 19 Cal.App.4th at 776 11 OPPOSITION TO MOTION TO TAX COSTS 1 [holding that messenger charges "for such matters as filing documents with the court, complying 2 with appellants' document demands, and transporting exhibits to and from the courtroom" were 3 related to trial preparation and recoverable].) 4 Plaintiff argues that Defendants "make no showing as to the necessity of these charges." 5 (Mem. at 8:22-23.) However, as noted above, the verified Costs Memorandum along with the 6 detailed list of the claimed messenger fees included in the Worksheet is prima fctcie evidence of 7 their propriety, and Defendants have further supplemented that showing through this opposition. 8 (See Lanphere Deel. ,i 16.) For his part, Plaintiff objects specifically only to two of Defendants' 9 claimed messenger fees. Plaintiff objects to the messenger fee incurred by Defendants in 10 connection with filing their motion for summary judgment on the basis that the motion was 11 ultimately denied; but the right to recover messenger fees merely requires that they be related to 12 litigation of the case (see Ladas, supra, 19 Cal.App.4th at 776), and is not contingent on the 13 particular procedural action to which they relate proving successful. Plaintiff also objects to 14 messenger fees incurred by Defendants in com1ection with serving a deposition subpoena on 15 Jenny Su, arguing she was not on Defendants' witness list or called to testify at trial; but Ms. Su l 6 was on Plaintiff's witness list. (Lanphere Deel. Ex. J.) 17 4. Defendants should be awarded their costs associated with renting trial 18 presentation equipment. 19 The cost of renting equipment used at trial to display evidence or testimony is 20 recoverable under section 1033.5(a)(12). (See American Airlines v. Sheppard Mullin Richter & 21 Hamilton (2002) 96 Cal.App.4th 1017, 1057 [holding recoverable cost of visual display 22 equipment used at trial]; Ripley v. Pappadopoulos (1994) 23 Cal.App.4th 1616, 1623 [allowing 23 recovery of cost ofrenting overhead projector used at trial].) During trial the equipment in 24 question was used by both Defendants and Plaintif.f'to display evidence and testimony; as such, 25 26 27 28 12 OPPOSITION TO MOTION TO TAX COSTS 1 Defendants should be awarded these costs. 6 2 IV. CONCLUSION. 3 For the foregoing reasons, Plaintiffs motion to tax costs should be denied, and 4 Defendants should be awarded all of the costs claimed in the Costs Memorandum, in a total 5 amount of $228,005.56. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: April 3, 2019. PILLSBURY WINTHROP SHAW PITTMANLLP /s/ Andrew D. Lan here Andrew D. Lanphere Attorneys for Defendants 6 Plaintiff argues Defendants should not be awarded these costs because they were "avoidable" or "unnecessary'' because Plaintiff offered Defendants the opportunity to use "their projector and other electronic equipment." (Mem. at 9:2-5.) But as it transpired Plaintiff did not use his own equipment at trial, but instead used the equipment Defendants installed in the courtroom. Plaintiff cites no authority that, under these circumstances, the prevailing party's normal right to recover these costs should not apply. 13 OPPOSITION TO MOTION TO TAX COSTS 2 3 4 Docket No. l 6CV300285 PROOF OF SERVlCE BY ELECTRONIC TRANSMISSION AND HAND DELIVERY I, Dei1·dre Campino, the undersigned, hereby declare as follows: 1. I am over the age of 18 years and am not a party to the within cause. lam 5 employed by Pillsbury Winthrop Shaw Pittman LLP in the County of San Francisco, State 6 of California. 7 2. My email and business adch-esses are deirdre.campino@pillsburylaw.com; 8 Four Embarcadero Center, 22nd Floor, San Francisco, CA 94111-5998. 9 10 3. 4. My mailing address is P.O. Box 2824, San Francisco, CA 94 I 26-2824. On April 3, 2019, at Four Embarcadero Center, 22nd Floor, San Francisco, 11 CA 94111 -5998, at approximately 2: 15 pm, I served a true copy of the attached 12 document(s) titled exactly DEFENDANTS' OPPOSITION TO PLAINTIFF'S 13 MOTION TO TAX COSTS by sending it/them via electronic transmission to the 14 following persons at the electronic-mail addresses so indicated: 15 [See Attached Service List] 16 17 18 19 20 21 22 23 24 25 26 27 28 5. On April 3, 2019, I also caused to be served by Nationwide Legal, LLC, a true copy of the above-named document(s) by placing it/them in an addressed, sealed envelope clearly labeled to identify the attorney bei11g served at the address shown below and delivering it to the attorney, or to the office of the attorney and leaving it with a receptionist or other person having cbru·ge thereof, or (if there was no such person at the office) by leaving it between 9:00 a.m. and 5:00 p.m. in a conspicuous place in the office. Such service was effected on the fo llowing attorneys on the attached Service List. I declare under penalty of pe1jury that the foregoing is true and correct. Executed this 3rd day of April, 2019, at San Francisco, California. - l - 4810-815 1-5922.v I 1 2 Service List 3 James McManis jmcmanis@mcmanislaw.com 4 Tyler Atkinson tatkinson@mcmanislaw.com 5 James Giacchetti j giacchetti@mcmanislaw.com 6 McManis Faulkner, APC 50 West San Fernando Street, 10th Floor 7 San Jose, CA 95113 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Tel: ( 408) 279-8700 - 2 - 4810-8151-5922.vl
