WILLIAM T. WALSH, District Judge.
This matter has come before the Clerk on the motion [Dkt. Entry 584]
This is the first of two motions to be considered by the Clerk in these consolidated cases. A second opinion will address the separate motion of Plaintiff Grunenthal GmbH ("Grunenthal") to tax costs against these same Defendants.
In these six consolidated Hatch-Waxman cases, Depomed and Grunenthal (together, "Plaintiffs") asserted that three of their patents were infringed by the Defendants' filing of Abbreviated New Drug Applications.
The Clerk, who is somewhat hampered by the sealing of many of the docket entries, gives a very cursory procedural history herein. As in the normal course of Hatch-Waxman litigation, the Defendants filed counterclaims for declaratory judgments of non-infringement, invalidity and/or unenforceability of the patents. The cases were governed by a Stipulated Discovery Confidentiality Order [Dkt. Entry 127] and a Stipulation and Order Concerning Protocol for Discovery of Electronically Stored Information [Dkt. Entry 154]. They proceeded through a Markman hearing on the claims of the RE593 and '364 patents on November 25, 2014 [Dkt. Entry 180], and the filing of in limine motions on January 11, 2016 [Dkt. Entries 301-04].
By January 25, 2016, all six cases were consolidated for all purposes, including trial. [Dkt. Entry 326]. The various in limine motions were denied on February 22, 2016 [Dkt. Entry 364], and so too were Plaintiffs' and Roxane's motions for summary judgment, and Plaintiffs' motion to dismiss Actavis Elizabeth's third counterclaim to correct or delete the use code for the '130 patent on March 4, 2016. [Dkt. Entries 390-94].
Also on March 4, 2016, the parties entered into a Stipulation and Order of Infringement, whereby they agreed that the Defendants would be liable for infringement of each asserted claim of the RE593 and '364 patents found to be not invalid. [Dkt. Entry 400].
On March 6, 2016, the parties consented to the bifurcation of Actavis Elizabeth's third counterclaim from the trial. [Dkt. Entry 407].
The Court conducted a 10-day bench trial on March 9-11, 14-17, 21-23, 2016 [Dkt. Entries 409, 412, 414, 416-19, 421-23]. Between the conclusion of the trial and closing arguments on April 27, 2016 [Dkt. Entry 460], the parties filed post-trial briefs and proposed findings of fact and conclusions of law [Dkt. Entries 448-49, 451-52, 454-57].
On May 18, 2016, the Court enjoined the Defendants from launching their allegedly infringing products pending the earlier of the entry of the Court's trial decision or September 30, 2016. [Dkt. Entry 468].
The Court issued its trial order on September 30, 2016 [Dkt. Entry 537], finding no invalidity of the three patents, or unenforceability of the '364 patent. Therefore, pursuant to the Stipulation and Order of Infringement, all Defendants were found to have infringed the RE593 and '364 patents. Alken alone, not Actavis Elizabeth or Roxane, was determined to have induced infringement of the '130 patent. The injunction was renewed, pending the Court's entry of final judgment. Also, Actavis Elizabeth's third counterclaim was severed from the action and returned to the reopened Civ. A. No. 15-6797.
On October 28, 2016, Alkem filed a notice of appeal to the Federal Circuit [Dkt. Entry 540] but the appeal was deactivated due to Actavis' pending severed third counterclaim [Dkt. Entry 560]. However, the FDA changed the use code for the '130 patent and consequently, on January 30, 2017, Actavis and Depomed consented to the withdrawal of Actavis Elizabeth's third counterclaim without prejudice. Civ. A. No. 15-6797 [Dkt. Entry 87].
Thereafter, the parties exchanged letters concerning the proposed form of final judgment, disagreeing on the taxation of costs. Actavis asserted that taxation should be stayed pending the appeal and that it was also premature because the judgment to be entered would be certified pursuant to Fed. R. Civ. P. 54(b) due to the pending, stayed proceedings on the `060 patent. [Dkt. Entries 556, 566, 569]. Actavis argued that taxation should await final judgment as to all claim against all parties. Alternatively, it maintained that Plaintiffs were not the prevailing party because Roxane and Actavis Elizabeth prevailed on the infringement of the '130 patent, a central issue in the case. Further, Actavis argued that the Court could find that neither party prevailed or that even if Plaintiffs were deemed the prevailing party, the Court should exercise its discretion in this case of mixed judgment and not award Plaintiffs any costs. [Dkt. Entry 569].
Depomed's position was that Plaintiffs were the prevailing party because they prevailed on all but one adjudicated issue and that in accordance with this Court's local rule, a judgment on costs should not be stayed pending the appeal. [Dkt. Entry 565, 570]. Rather, the Court was required to make the determination of the prevailing party following the trial on the merits and there was no just reason to delay an award in this costly litigation. Also, piecemeal litigation could be avoided by including the appeal of this Court's cost decision with the appeal on the merits of the case.
The Court ultimately accepted Depomed's position. On April 11, 2017, the Court entered its Final Judgment and Injunction [Dkt. Entry 582], reflecting the findings of its September 30 order in favor of Plaintiffs on all claims except the claims of infringement of the '130 patent by Actavis Elizabeth and Roxane. Due to the pending `060 patent proceedings, the Court certified pursuant to Fed. R. Civ. P. 54(b) that there was no just reason for delay in entering final judgment as to all claims adjudged in that final judgment. The Court further ordered that "[p]ursuant to Fed. R. Civ. P. 54, Plaintiffs are the Prevailing Party entitled to costs" and that "Plaintiffs shall serve and file their Bill of Costs and Disbursements in accordance with Local Rule 54.1."
In accordance therewith, on May 10, 2017, Plaintiffs each filed a bill of costs. [Dkt. Entries 584-1, 584-3].
On May 9 and 10, 2017, Alkem, Roxane and Plaintiffs all filed notices of appeal to the Federal Circuit. [Dkt. Entries 583, 586, 587]. The appellate court reactivated Alkem's appeal and consolidated them all on May 25, 2017. [Dkt. Entry 608]. They remain pending.
Now before the Clerk is Depomed's bill of costs, amounting to $282,666.33, and consisting of the fees for: filing ($1,600.00); service ($388.34); printed and electronically recorded transcripts ($41,320.43); witnesses ($58,151.92); exemplification and copies ($132,125.64); and trial support technicians ($49,080.00). [Dkt. Entry 584-1]. Defendants object to all categories of costs except for the filing and service fees.
Depomed's motion is controlled by Fed. R. Civ. P. 54(d) (1), which provides that "[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney's fees—should be allowed to the prevailing party."
In patent cases, the definition of "prevailing party" is governed by Federal Circuit law, which defines that term as one who obtains relief on the merits of its claim that materially alters the legal relationship between the parties by modifying its opponent's behavior in a way that directly benefits that party.
While the first inquiry of determining prevailing party status is a matter of Federal Circuit law, the second, i.e., that of whether and how much to tax, is a matter of regional circuit law.
In this Circuit, there is a strong presumption in favor of awarding costs to the prevailing party. "`Only if the losing party can introduce evidence, and the district court can articulate reasons within the bounds of its equitable power, should costs be reduced or denied to the prevailing party.'"
Despite the presumption favoring the prevailing party, the district court and Clerk may tax only those types of costs set forth in 28 U.S.C. § 1920:
More recently, the Supreme Court reiterated that § 1920 taxable costs are "limited to relatively minor, incidental expenses," and are "narrow in scope."
In applying the above principles, a prevailing party's costs "often fall well short of the party's actual litigation expenses."
In addition to Rule 54(d) and 28 U.S.C. § 1920, the Clerk's decision is guided by Local Civil Rule 54.1, which "establishes the general procedures to be followed in those cases where a party is entitled to recover costs" under § 1920. Lite,
Pursuant to
Additionally, Depomed has complied with the procedural requirements of L. Civ. R. 54.1, as mandated by the final judgment. It timely filed and served a notice of motion, verified AO 133 form, Plaintiff Depomed, Inc.'s Bill of Costs and Disbursements ("Depomed's Bill of Costs"), and the Declaration of Michael A. Sitzman, Esq. ("Sitzman Decl."), appending supporting invoices. [Dkt. Entry 584]. Therefore, the Clerk will now examine the specific costs requested by Depomed, in the order in which they appear in § 1920.
Under subsection (1) of § 1920, Depomed seeks the cost of filing five of the six complaints as a fee of the clerk and that of serving the complaints as a fee of the marshal. Defendants do not object to either cost.
Depomed asks for the cost of filing five of the six complaints, i.e., all but Civ. A. No. 13-6929 (for which Grunenthal asks), or $400.00 each. These fees consist of the $350.00 fee set forth in 28 U.S.C. § 1914(a) for the filing of a civil action, and the $50.00 administrative fee established in the Judicial Conference's "District Court Miscellaneous Fee Schedule." Subsection (b) of § 1914 allows the clerk to collect fees in addition to the $350.00 fee of subsection (a), as prescribed by the Judicial Conference. Accordingly, the entire $400.00 amount per complaint constitutes "fees of the clerk."
The Clerk notes that the $400.00 fee was paid for each of these five complaints, Sitzman Decl., Ex. 2, and yet, Depomed mistakenly asks for just $1,600.00. The Clerk will award
Depomed wishes to recoup a total of $388.34 paid to private process servers as a § 1920 (1) fee of the marshal. This consists of service of the summons and complaint in Civ. A. No. 13-4507 upon Ascend Laboratories ($120.00), the "Actavis Defendants" ($90.00), and Alkem ($95.00), and the summons and complaint in Civ. A. No. 14-4617 upon Watson ($83.34). Sitzman Decl., Ex. 3.
Subsection (1) explicitly authorizes taxation of the costs of just the "clerk and marshal." However, this Court has held that the fees of private process servers are taxable under the combined reading of § 1920 and § 1921, which allows the court to tax as costs the fees for serving a subpoena on a witness.
Therefore, the Clerk taxes this cost as well, with the exception of the $120.00 cost of service on Ascend. The Clerk will not tax against these Defendants the cost of service on a party which was dismissed from the lead case about two months after its filing. [Dkt. Entry 64]. The cost of service is taxed in the amount of
Combining the costs of filing and service, § 1920 (1) costs are taxed in the total amount of
Pursuant to § 1920 (2), Depomed requests the $41,320.43 cost of printed hearing transcripts and both printed and videotaped deposition transcripts. Defendants oppose both.
Of the requested total, $11,380.78 consists of the cost of the transcripts of the March 8, 2016 Pretrial Conference, the 10-day trial and summations on April 27, 2016.
As the parties recognize, fees for recorded transcripts are taxable under § 1920 (2) if the transcripts were "necessarily obtained for use in the case." Local Civil Rule 54.1(g) (6) identifies circumstances under which the transcripts will be deemed necessary:
Defendants maintain that none of the costs are recoverable because the transcripts merely served the convenience of counsel. They assert that Depomed has not segregated from an entire set of transcripts those pages which were actually used, that the invoices do not separate taxable from non-taxable services and further, that there is a discrepancy between the rates charged by different court reporters. Defs.' Opp. at 2-4.
The Clerk is satisfied with the explanations given by Depomed for the necessity of the hearing and trial transcripts. As for the hearing transcript, Defendants have not refuted Depomed's statement that "[d]uring the Pretrial Conference, the Court provided direction as to several evidentiary matters that later arose during the trial," Dep.'s Bill of Costs at 4-5 n.6.
Regarding the daily trial transcripts, Depomed has indicated several uses of them. It has cited specific instances where the daily trial transcripts were used at trial. Dep.'s Reply at 3. Both sides cited heavily to the trial transcripts in their Proposed Findings of Fact, upon which the Court relied in writing its opinion, as well as citing to the individual trial witnesses' testimony. [Dkt. Entry 536]. Furthermore, due to the large number of exhibits to be admitted into evidence, the Court and the parties adopted a procedure whereby the daily transcript of the prior days of trial would be used to admit exhibits into evidence. As stated by Depomed's counsel on the third day of trial, "I think we agree and all the defendants seem to agree we would like to refer to the transcript to enter some exhibits." [Dkt. Entry 427] 3/11/16 Tr. 4:7-10. By requiring the parties' submission of Proposed Findings of Fact and adopting this procedure for evidence admission, the Court implicitly requested that the parties order the daily trial transcripts.
However, the Clerk cannot find the transcript of the closing arguments necessary. Depomed's justification consists entirely of its counsel's averment that the "[t]ranscripts of the pretrial hearing and summations were utilized during the trial, for trial preparation, as well as for briefings and post-trial submissions and were therefore necessarily obtained for this case as a part of the daily trial transcripts." Sitzman Decl. ¶ 5. The transcript of the pretrial hearing may have been used for those trial purposes but the transcript of summations, which occurred on April 27, 2016, a week after the parties submitted their Proposed Findings of Fact on April 19, 2016 [Dkt. Entries 449, 452], was not. Accepting the well-known legal precept that summations do not constitute evidence, the Clerk denies this $670.95 cost. Dep.'s Bill of Costs, Ex. 4.
Having found the transcripts of the Pretrial Conference and trial necessary, the Clerk must still address the specific arguments made by Defendants for denying their costs. First, Defendants make the impractical suggestion that the prevailing party must parse those pages of the transcripts actually used from those not, so that the Clerk can tax the cost of the former and not the latter. No support for this argument is given and the Clerk rejects it out of hand.
Secondly, Defendants object to taxing the full requested amounts on the ground that the invoices do not break out charges for non-taxable services. The Clerk has no reason to believe that services other than an original transcript were charged by court reporters Robert Tate and Charles P. McGuire. The Tate invoice merely shows the number of pages priced at $2.42 per page for the "original." Charles P. McGuire likewise charged the rate of $2.41 per page. The amounts of $1,834.01 and $537.24 invoiced by these two reporters will be taxed.
While two reporters used reasonable rates, Yvonne Davion's rate of $9.65 per page for the transcript of the Pretrial Conference and eight whole or partial days of trial is four times as much, as Defendants point out. Depomed responds that "[t]he higher-cost reporter, Yvonne Davion, was this Court's regular reporter at the time of the March 2016 trial, and Defendants have certainly not alleged that Plaintiffs should have procured a different reporter." Dep.'s Reply at 4. The Davion invoice does not indicate any special services, but the Clerk finds this rate to be too high for just an original of the transcript. If no other services were procured at that rate, it was incumbent upon Depomed to inquire why the rate was so high.
Davion's rate of $9.65 per page is exactly four times the rate of $2.41 per page and would appear to constitute the total amount charged to four parties. Depomed seeks to recoup $8,338.58 of the $18,354.30 total invoiced by Davion and does not explain the basis for this apportionment. Depomed paid a $5,000.00 deposit and then 25% of the balance of $13,354.30, or an additional $3,338.58. The requested amount constitutes approximately 45% of the total. Therefore, the Clerk taxes these pages at the $2.41 per page rate and allows Depomed 45% of the adjusted total of $4,583.82 (1902 pages @$2.41 per page) or $2,062.72.
Hearing and trial transcripts are allowed in the total amount of
Also pursuant to § 1920 (2), Depomed asks the Clerk to tax the $29,939.65 cost of printed and electronically recorded transcripts of the depositions of Defendants' experts ($9,983.95), Plaintiffs' experts ($10,562.90) and fact witnesses ($9,392.80). Its request in connection with printed transcripts for all of these witnesses excludes the costs of realtime, rough drafts, expedition, shipping and handling, exhibits and litigation support services. Depomed also seeks the videotaping costs for the depositions of Plaintiffs' testifying experts and fact witness, Jack Anders. For those same witnesses, Depomed requests the costs of video synchronization as well. Sitzman Decl., ¶¶ 6-8.
Defendants initially objected to taxing most of the deposition transcripts, citing L. Civ. R. 54.1(g) (7), which limits the costs to those of "taking and transcribing depositions
In its reply, Depomed discusses the broad view, accepted not only by this Court, but nationwide, that "[f]or the costs to be taxable, the depositions need not have been used at trial, and must only `appear reasonably necessary to the parties in light of a particular situation existing at the times they were taken.'"
The Third Circuit had held ten years earlier that the "used at trial" language of our local rule, upon which Defendants rely, had to yield to the less restrictive standard in § 1920 (2) of "necessarily obtained."
The relevance of all of the deponents cannot be doubted. In connection with each of Defendants' and Plaintiffs' experts, Depomed asserts that the printed deposition transcript was used in preparation for cross-examination and during examination at trial. Dep.'s Bill of Costs at 5-8. In its bench opinion, the Court cites the testimony of every one of these experts, on both sides, as well as the testimony of fact witness, Jack Anders, as having been given live at the trial. [Dkt. Entry 536]. The testimony of the remaining ten fact witnesses was included in the final deposition designations. Dep.'s Bill of Costs at 8-10.
In the event that Defendants still press their initial arguments, the Clerk addresses the two specific objections made by them. First, they contend that the invoices for the printed transcripts do not separate out the charges for videotaping services. A review of the invoices reveals that this is incorrect, as does the declaration of Lauren Grossman, Billing Manager of Veritext Legal Solutions ("Grossman Decl."), submitted with Depomed's reply. [Dkt. Entry 609-1].
Second, they maintain that the charges for expedition of the Anders transcript should be denied. Depomed bases the necessity of expedition on the fact that this fact witness, Depomed's Vice President of Finance, was deposed only 12 days before the commencement of trial and it argues that this Court has allowed such costs when exigencies so demand.
As noted above, for these printed transcripts, Depomed asks for only the costs of the original plus certified copy or a certified copy, along with reporter attendance fees, and not extraneous charges which the Clerk has previously determined serve only attorney convenience or are in the nature of attorney's fees. All requested fees for printed transcripts are granted.
In addition to the above § 1920 (2) charges for printed transcripts, Depomed asks the Clerk to tax the videotaping charges of the depositions of Plaintiffs' experts, i.e., Joel Bernstein, Michelle Brown, Michael Ossipov and William Roush, as well as fact witness, Jack Anders. Requested charges include the costs of both the video-transcripts and synchronization and Ms. Grossman has clarified that the $95/hr. charge for "Video-Transcript Synchronization" consists of $60/hr. for the video-transcript and $35/hr. for the digitization and synchronization. Grossman Decl. ¶ 5.
In their sur-reply, Defendants maintain their objection to taxing any of these videotaping charges on the grounds that § 1920 (2) allows for the cost of either the printed transcript or the videotaped version but not both. Defs.' Sur-Reply at 2. Defendants also point out that the Clerk has previously found that the costs of video-synchronization are non-taxable. Defs.' Opp. at 7.
Depomed emphasizes that it is not requesting videotaping charges of depositions noticed by Plaintiffs, but only of those video depositions taken at the insistence of Defendants. Dep.'s Bill of Costs at 6-8 nn.8-9. As this Court has noted, "Defendants' actions alone, of serving video deposition subpoenas, seems to mean that the video depositions of these witnesses were considered by Defendants to be necessary for trial."
The Clerk agrees with Defendants, however, that the costs of video-synchronization are another matter. Video synchronization is a service which times the videotape to the lines of the transcript and facilitates the editing of the videotape. The Clerk has previously held that this is a non-taxable convenience to counsel which falls outside of the bounds of § 1920.
Therefore, from the total § 1920 (2) costs, the Clerk will deduct just the $35/hr. charges for the video-synchronization of the depositions of Plaintiffs' experts and Jack Anders, noticed by Defendants, as follows: Joel Bernstein, 8/14/14-4 hrs. ($140.00); Joel Bernstein 10/1/15-7 hrs. ($245.00); Michelle Brown-6.5 hrs. ($227.50); Michael Ossipov-5 hrs. ($175.00); William Roush, 9/10/15-8 hrs. ($280.00); William Roush, 11/18/15-4.5 hrs. ($157.50); and Jack Anders-5.5 hrs. ($192.50). Dep.'s Bill of Costs, Exs. 6, 7. Deducting this $1,417.50 sum from the requested total costs of $29,939.65, the costs of printed and electronically recorded deposition transcripts are taxed in the amount of
Combining the costs of hearing ($4,433.97) and deposition ($28,522.15) transcripts, costs granted pursuant to § 1920 (2) amount to
Depomed wishes to recoup $58,151.92 as § 1920 (3) witness fees for the appearance at trial and deposition of its expert witnesses Joel Bernstein, Michelle Brown, Michael Ossipov and William Roush, as well as fact witnesses Jack Anders, Helmut Buschmann, Thomas Christoph, Michael Gruss and Juergen Haeussler. Dep.'s Bill of Costs, Ex. 8.
Defendants oppose portions of all of the requested fees except for those of Jack Anders (save for a typographical error), Juergen Haeussler and William Roush's September 5, 2014 deposition.
As noted in our local court rule, allowable witness fees are controlled by § 1821:
L. Civ. R. 54.1(g) (1).
L. Civ. R. 54.1(g) (7) further provides that "[f]ees for the witness at the taking of a deposition are taxable at the same rate as for attendance at trial. (
The Clerk first addresses the non-controversial items. He has confirmed that Depomed asks for a reasonable number of days of attendance for each witness, including necessary days of travel. Defendants do not contest this category, and therefore, those costs are granted in full.
Defendants do not contest the lodging costs either and the Clerk has verified that Depomed has used the correct GSA rates except in two instances: 1/ the applicable rate for the August 14, 2014 Bernstein deposition in New York is $229.00/night, not $303.00; 2/ the correct rate for the September 10, 2015 Roush deposition in Washington, D.C. is $222.00/night, not $179.00. These corrections will be made below.
Defendants protest that most of the airfares requested are for first- or business-class travel, as specifically indicated in the submitted invoices or inferable therefrom, based upon the low assigned seat number. Depomed defends these airfares on the grounds that several flights were long-distance, international flights, some of the witnesses were of advanced age and "allowing such witnesses to travel in business- or first-class is the considerate and expected course." Dep.'s Reply at 9. Nonetheless, the Clerk agrees that due to the § 1821(c) requirement of using the "most economical common carrier," he must deny 50% of the requested first- or business-class airfare, as he has done in the past.
Next, the Clerk addresses Defendants' objections to the fees of Dr. Bernstein, who testified at depositions in New York on August 14, 2014 ($6,656.31) and in Washington, D.C. on October 1, 2015 ($7,941.63), and at trial in Newark on March 21 and 22, 2016 ($13,439.96). Defendants complain that for his trial testimony, rather than book a round-trip ticket, this witness flew out of one location, i.e., Shanghai, and back to a different location, i.e., Abu Dhabi. For his August 2014 and October 2015 depositions, Dr. Bernstein traveled round-trip between Tel Aviv and New York, and round-trip between Tel Aviv and Washington, D.C., respectively. Defendants press for the denial of all such airfares on the ground that based upon the foregoing, the place of Dr. Bernstein's residence is ambiguous and § 1821(c) restricts travel to and from the witness' "residence" and to the "shortest practical route." They argue alternatively for a reduction in taxation because the class of the tickets was either business-class, as shown on the receipts, or presumably so, given the high price tags. Defs.' Opp. at 10-12. The Clerk rejects Defendants' argument for outright denial of the airfares. Depomed has explained that Dr. Bernstein teaches in both Abu Dhabi and Shangai, Dep.'s Reply at 10, and Defendants themselves admit that Dr. Bernstein testified to splitting his time between those two locations, Defs.' Opp. at 10. Therefore, he takes part-time residence at both places and had a legitimate reason to fly to Abu Dhabi after the trial. The Clerk will not read the statute to require that a witness neglect his professional obligations due to litigation commitments. Also, Depomed points out that the Newark to Abu Dhabi distance is shorter than the Newark to Shanghai distance and Defendants have not shown that a round-trip Newark/Shanghai ticket would have been cheaper. Dep.'s Reply at 10. As for Tel Aviv being the point of departure for this witness' depositions, Depomed explained in its reply that Dr. Bernstein's home address is in Tel Aviv.
However, the Clerk does find the airfares to be expensive and will tax them at only 50%. The remaining costs of ground transportation for Dr. Bernstein's three appearances, undisputed by Defendants, have been supported and will be granted.
Depomed requests travel fees for Dr. Roush's trial testimony on March 22, 2016 ($1,311.83), and his depositions in Washington, D.C. on September 10, 2015 ($2,128.40) and November 18, 2015 ($735.70). Defendants ask the Clerk to tax only $75.00, $1,158.65 and $530.40, respectively. Defs.' Opp. at 15. Depomed also asks for $527.20 in travel costs for Dr. Roush's September 5, 2014 deposition, and Defendants do not oppose that cost, which consists of an economy class airfare of $430.20, a $52.00 taxicab fare and a $45.00 parking fee.
Regarding the contested deposition travel costs, the Clerk accepts Defendants' argument that the three of the four flights that were first-class should be taxed at only 50%. The costs of ground transportation have not been challenged and they will be taxed in full.
As for Dr. Roush's travel costs for his trial testimony, Defendants ask the Clerk to tax only the $75.00 cost of the car from the Palm Beach International Airport to his home after the trial, stating, "Depomed's request for Dr. Roush's March 2016 travel expenses violate [sic] L. Civ. R. 54.1(b) in that the invoices appear to be incorrect, the natures of the charges cannot be readily ascertained and no proper invoice (or explanation) is provided." Defs.' Opp. at 13.
Depomed replies, "[t]he bottom line is that Depomed seeks costs for exactly what Dr. Roush invoiced with respect to his
After trying to piece together the various receipts filed, the Clerk agrees with Defendants that Depomed's submissions are confusing. There is no receipt for a flight into Newark before the trial and the two requested airfares consist of the Jet Blue return flight actually taken by Dr. Roush and the originally scheduled return Delta flight, which was cancelled in favor of the earlier Jet Blue flight. The Clerk grants just the $483.60 cost of the Jet Blue "Blue Plus" flight, which was basically a coach fare with an allowance for one free bag, but denies the cost of the Delta airfare.
Also, Depomed states that there is a "$244.13 expense for a car for Dr. Roush's trip to the airport following the trial." Dep.'s Reply at 11. However, Dr. Roush testified on March 22 and went to the airport that same night for his return flight, but the trip date for that car invoice is March 14. Due to this inconsistency, the Clerk will deny that cost as well. Taxed costs for Dr. Roush's travel consist of only the $483.60 Jet Blue airfare and the $75.00 car fare from the airport to Dr. Roush's home on March 22, or a total of $558.60.
Based upon all of the foregoing, the Clerk taxes the following witness fees, with* denoting travel costs that include at least one first- or business-class airfare, taxed at 50%:
Pursuant to § 1920 (3), witness fees are granted in the amount of
The balance and bulk of Depomed's requested costs, amounting to $181,205.64, fall under the § 1920 (4) category of "[f]ees for exemplification and the costs of making copies." Subsection (4) consists of two different prongs and under them, Depomed asks for: 1/ exemplification fees in the amount of $128,390.45 for visual aids ($77,310.45) and the multimedia equipment ($2,000.00) and trial support technicians to display them ($49,080.00) (listed as "other costs" on Depomed's AO 133 form); and 2/ the costs of making copies in the amount of $52,815.19, consisting of the cost of producing documents through the scanning of hard copy documents and conversion of native electronic files to TIFF ($26,699.68) and copying costs incurred for the preparation of trial materials ($26,115.51). Dep.'s Bill of Costs at 14-17. As set forth in Depomed's briefing, the Clerk addresses the latter of the two first and Defendants' assertion that none of these costs should be taxed.
There are two components to Depomed's costs of making copies, i.e., the cost of production of documents and the cost of copying trial materials.
Under § 1920 (4), the costs of making copies are taxable only to the extent that the copies were "necessarily obtained for use in the case." As enunciated in the case law cited by the parties, a dichotomy exists between copies which are deemed necessary and those which merely serve the convenience of counsel. The cost of copies produced in discovery, and provided to opposing counsel and the court are taxable, as are the costs of trial exhibits, whereas the costs of general copying and copies made for the prevailing party are not.
Depomed describes this particular cost as "the scanning of hard copy documents and conversion of native electronic files to TIFF format for production to Defendants, totaling $26,699.67." Sitzman Decl. ¶10. As the Clerk noted earlier, this case was governed by a Stipulation and Order Concerning Protocol for Discovery of Electronically Stored Information ("ESI Order"), under which electronic files were to be "converted to *.tif image format with extracted or OCR text." [Dkt. Entry 154, ¶ 11a.].
The parties recognize that the taxability of discovery materials is here governed by the Third Circuit's ruling in the well-known case of
The costs sought to be taxed here are described in the supporting invoices of Merrill Communication LLC as those for "Electronic Processing — File Conversion to TIFF," "Scan — Medium," "Labor — Technical Labor," "Scan — Color," "Scan — 11" × 17" — B/W," "Copy — Glasswork," "Scan — Difficult Heavy," "Scan — 11" × 17" — Color," "Scan — Oversize B/W Per Sq Ft," "Scan — Heavy." Dep.'s Bill of Costs, Ex. 9. The charged services shown on the invoices of Lighthouse eDiscovery are for "Native Export for Review," "Image to Image Conversion," "Native Conversion to TIFF or PDF," and "Production — PDF Conversion."
Defendants object to all of the costs on the grounds that the charges for technical labor are non-recoverable, the requested costs include extraneous ESI charges which also fall outside of the costs permitted by the
The Clerk is bound by the Third Circuit's decision and will deny all costs not falling squarely within that ruling. These include the costs of labor, previously denied by the Clerk in
All charges for copying and scanning as well as the costs of "Electronic Processing — File Conversion to TIFF" and "Native Conversion to TIFF or PDF" are granted. Defendants point out that the Clerk has previously denied costs described by the prevailing party as scanning costs, but in the one cited case, none of the invoice charges were for the scanning of hard copy documents for the losing party.
In the month preceding the Prometheus Labs. decision, the Third Circuit clarified its earlier
In the case at bar, Depomed's counsel has averred that this $26,699.68 cost was for "the scanning of hard copy documents and conversion of native electronic files to TIFF format for production to Defendants" under the ESI Order, Sitzman Decl. ¶ 9, not the scanning of electronic documents for Depomed's own benefit. Therefore, the Clerk grants
The other § 1920 (4) "cost[s] of making copies" sought by Depomed is the $26,115.51 cost of photocopies incurred during the trial, consisting of $7,373.16 in charges of third party PCTechnologies and the $18,742.35 cost of Equitrac copies made in-house. Depomed's counsel describes this category of costs as including "the expense of preparing copies of deposition transcripts and materials for witness binders provided to witnesses, submitted to the Court, and provided to opposing counsel during trial, as well as ordinary copying expenses reasonably incurred in the trial of this complex patent case." Sitzman Decl. ¶ 11. Depomed further explains in its reply that "Depomed set up in-house copy facilities at the Marriot International Hotel in Newark solely for the purposes of trial in this matter" and therefore, the "copies were necessarily made for the trial." Dep.'s Reply at 15.
Defendants would have the Clerk deny all such costs for lack of sufficient detail as to what documents were copied, why the copies were necessary and the cost per page. Defs.' Sur-Reply at 4. They point out that "Depomed's invoices, representing the copying of many thousands of pages, stand in contrast to the approximately 390 exhibits admitted in this case." Defs.' Opp. at 18. They argue that "28 U.S.C. 1920(4) and Local Rule 54.1(g)(10) do not permit the prevailing party to recover the cost of every page photocopied in the month of the trial" and that "Depomed fails to meet its burden of explaining why the ordinary copying expenses were necessary for trial and were not simply for the convenience of counsel."
It is true that the prevailing party bears the burden of stating the general purpose of the photocopies, their necessity and their cost, but it need not give an economically unfeasible page-by-page justification. The Clerk appreciates the volume of copies which was necessary during the trial, especially because Depomed prepared a different witness binder for each witness and made nine copies thereof, i.e., one for the Judge, court reporter, witness, judge's staff, co-counsel for Plaintiff Grunenthal, Defendant Actavis, Defendant Roxane, Defendant Alkem and one copy for itself. Sitzman Decl. ¶ 11.
However, the Clerk finds that based upon Defendants' objections, deductions are warranted. First off, this Court and the Clerk have previously found that the costs of tabs, binders and the like are non-taxable as they do not constitute "copies" and fall rather under the rubric of attorney's fees.
Therefore, the Clerk will deduct off the top of the requested total of $26,115.51: the $1,461.94 cost of binding, drilling and binders ($1,366.30 + 7% tax of $95.64) in the PCTechnologies invoice; and the $1,779.15 in-house cost of same, or a total of $3,241.09. Dep.'s Bill of Costs, Ex. 10. The cost of the actual photocopies, for further consideration by the Clerk, totals $22,874.42.
The Clerk has some concerns with the requested cost of the photocopies themselves. First, Depomed's counsel admits that these photocopies include "ordinary expenses reasonably incurred in the trial of this complex patent case." Sitzman Decl. ¶ 11. As Defendants point out, "[t]hose copies could include anything from internal use documents to extra copy sets of materials to support counsel," Defs.' Opp. at 17, such as copies of deposition transcripts for Depomed's counsel who attended trial. The Clerk notes that on most days of the trial, six attorneys appeared on behalf of Depomed and Janssen. [Dkt. Entries 426-30, 433]. The costs of copies for the convenience of Depomed's counsel are not recoverable.
Also, Defendants point out that the Equitrac copies were made at the rates of both $.10 and $.20 per page and Depomed has failed to explain the reason for this variation. Defs.' Sur-Reply at 4 n.1. For example, the $.20 per page rate was applied in two entries on March 9 for 2,330 and 3,290 copies (charged at $466.00 and $658.00) and in two entries on March 16 for 2,618 and 2,728 copies (charged at $523.60 and $545.60). This rate is high for 8" × 11" black and white copies, which the Clerk usually taxes at the maximum rate of $.15 per page, and he is left to guess the reason for the unexplained $.20 rate, e.g., oversized or color copies. Without undertaking the tedious task of tabulation, the Clerk notes that a good percentage of the Equitrac copies were charged at the higher rate of $.20 per page.
Accordingly, in order to balance the presumption in favor of granting costs to prevailing party Depomed and its somewhat deficient justification, the Clerk will grant 50% of the total $22,874.42 cost of photocopies, or
Combining the granted cost of photocopies ($11,437.21) with that of producing discovery ($25,566.52), the § 1920 (4) costs of making copies are allowed in the amount of
The final costs for which Depomed seeks reimbursement are the § 1920 (4) "fees for exemplification," comprised of the costs of visual aids ($77,310.45), and the multimedia equipment ($2,000.00) and trial support technicians ($49,080.00) to display them, amounting to $128,390.45. Defendants oppose all such costs. Defs.' Opp. at 19-21, Defs.' Sur-Reply at 4-5.
Depomed seeks the costs of Suann Ingle Associates, LLC. for "decisive trial design," charged at the rate of $250.00/hr. Dep.'s Bill of Costs, Ex. 11. The services for which Depomed requests compensation are described in the supporting invoices as "created" and "edited" "PPT" and "images." Counsel explains that "[t]hese demonstratives and visual aids were prepared to aid the Court in viewing the evidence in the case and to ensure that witness examination proceeded efficiently given the complexity of the scientific topics covered and the large number of exhibits admitted into evidence." Sitzman Decl. ¶ 12.
Depomed argues that the preparation of demonstratives was reasonably and necessarily obtained for use in this case, and in support, it cites decisions by this Court in the
The taxation of "exemplification," which usually involves high costs, is a muddled area of law in which courts have ruled variously throughout the country. Two approaches have been taken, i.e., the strict construction of the term by certain circuits, as used in Black's Law Dictionary, of "an official transcript of a public record, authenticated as a true copy for use as evidence," and the broader construction of an "act of illustration by example," used by other circuit courts.
Unfortunately for this Clerk, the Third Circuit has endorsed neither position, as it has not yet defined "exemplification" for the purpose of applying § 1920 (4). Even so, the Clerk is ever mindful of the restrictive interpretation of § 1920 taken by the United States Supreme Court in the
Depomed points out that post-
The Clerk denies the cost of visuals in the instant case because Depomed has not fulfilled its burden of demonstrating their necessity to him. While Judge Cooper may have appreciated the value of the demonstratives in the
While the Clerk presumes that the invoice description of "PPT" refers to a powerpoint presentation, Depomed has not described the nature of the demonstratives. For example, the first entry appears to be a slide of a timeline. The subsequent four charges seem to include those for the creation and/or editing of slides showing the curriculum vitae of the experts involved, e.g., "created Bernstein CV PPT," "edited Steed Cross, Bernstein CV," "created C.V. PPT decks for expert witnesses Roush and McClurg," and "created and edited expert witness C.V. PPTs." The Clerk does not appreciate the necessity of slides prepared at the rate of $250 per hour to show a timeline or the experts' qualifications. Sometime in the past, such uncomplicated displays such as a timeline or curriculum vitae would have been prepared for the Court by legal staff on a poster board or 8" × 11" sheets. Further, the Clerk presumes that much of this material was presented in the binders addressed earlier.
The "Graphic Production" entries during the trial which might include charges for the physical preparation of demonstratives all also include charges for "on call for graphics requests throughout the day," or "on call all day," again, at the rate of $250/hr. for up to 14.5 hours. Additionally, Depomed has not explained what the "images" for "Bernstein direct," "Roush direct," "Brown direct," and "Christoph direct" entail. Further, the second invoice from Suann Ingle Associates, LLC. covers the charges of creating and editing slides and images for Depomed's closing, which merely illustrate argument of counsel. Nor does Depomed describe the five poster boards of which it seeks the costs.
The Clerk understands that this was a complex patent case which involved multiple parties and patents, and a 10-day trial, resulting in a 167-page bench opinion which addressed the testimony of 16 live witnesses and about 400 admitted exhibits [Dkt. Entry 536]. The Clerk can only surmise that the demonstratives included slides of chemical structures of compounds, tapentadol hydrochloride in particular, because, as Depomed points out, the Court cited to such demonstratives in its opinion. Dep.'s Reply at 17.
However, in that opinion, presiding Judge Claire C. Cecchi stated, "[s]ome of the citations in this Opinion contain the demonstratives presented by the witnesses at trial. The demonstratives do not constitute evidence." [Dkt. Entry 536 at 27 n.7]. Judge Cecchi further clarified, "[a]ny demonstrative included in the citations is for convenience and information purposes only and is to be understood in the context of the testimony given in conjunction with the demonstrative."
Our local rule, L. Civ. R. 54.1(g) (10), specifies that "[t]he reasonable expense of preparing visual aids . . . is taxable as costs when such visual aids are admitted into evidence" and Judge Cecchi noted that the demonstratives did not constitute evidence. Depomed points out that despite the constraint of that rule, the cost of visual aids has been granted in this district even when the demonstrative exhibits were not admitted into evidence. Dep.'s Reply at 17-18.
Nevertheless, even if the Third Circuit were to embrace the broader definition of "exemplification," under § 1920 (4), the demonstrative aids must still have been "necessarily obtained." This requirement has been interpreted to exclude the recovery of visuals which merely illustrated expert testimony or counsel's argument.
In addition to stating that the demonstratives were explanatory, in the sense that "they were prepared to aid the Court in viewing the evidence in the case," Sitzman Decl. ¶ 12, Depomed's counsel justifies this cost on the ground that the demonstratives "ensure[d] that witness examination proceeded efficiently given the complexity of the scientific topics covered and the large number of exhibits admitted into evidence,"
The Clerk cannot find that the visual aids in this case were necessary, particularly when Judge Cecchi herself described them as a "convenience." Therefore, he denies all such costs, noting that L. Civ. R. 54.1(g) (10) also advises counsel to obtain a court order before incurring the expense of such visual aids.
In order to present the visual aids, Depomed rented multimedia equipment during the two weeks of trial and now asks the Clerk to reimburse that $2,000.00 cost, described in the Suann Ingle Associates, LLC. invoice as: "SIA Equipment Rental for GDC trial team war room and courtroom. 2 weeks of trial @$1,000 per week (cables, printer, router, projector, monitor, switch, adapters)." Dep.'s Bill of Costs, Ex. 11. Defendants contest this cost as well, citing the Clerk's prior denial of this type of cost in his more recent
The Clerk must deny this cost for several reasons. First, if Depomed has failed to show the necessity of the visual aids, by logical extension, it has not shown the need of the equipment to display those aids. Secondly, as noted in the above-cited
The final, but not insignificant, expense requested by Depomed is the $49,080.00 cost of trial support technicians, described in the Suann Ingle Associates, LLC. invoices as "Trial Preparation," charged at rates of $200.00 and $250.00 per hour, and "Trial Presentation Consulting," charged at $200.00, $300.00 and $350.00 per hour.
Defendants contest this cost on the ground that the Clerk has previously denied this class of expense, finding it akin to expert fees, and also, because some of the entries, such as the one cited above, include the cost of developing visuals, which they maintain are non-taxable. Defs.' Opp. at 22-23.
In its reply, Depomed opines that "there is a relative dearth of cases addressing this subject in this district," Dep.'s Reply at 20, and relies instead upon cases outside of this district and a 2007 decision, rendered by our former Chief Judge Brown, at a time when costs were also granted for the cost of legal research, a clearly non-compensable cost today.
146 F. Supp. 3d at 1087-88.
Noting too the
In a fairly recent, very complex case in this district, a special master was appointed to address the prevailing party's motion for attorney's fees and non-taxable costs, as well as its bill of costs. Where Decision Quest's nearly $1.8 million charges for "trial consulting services" were requested, Special Master O'Keefe recommended that they be granted as a non-taxable cost within the attorney's fees motion, not as a taxable cost under Rule 54(d).
This final "exemplification" fee, like the others, is denied. Pursuant to § 1920 (4), the fees for exemplification and the costs of making copies are taxed in the amount of
In sum, the Clerk taxes the following costs in favor of Depomed and against Defendants:
For the reasons set forth above, the motion of Plaintiff/Counterclaim Defendant Depomed, Inc. to tax costs against Defendants/Counterclaim Plaintiffs Actavis Elizabeth LLC, Actavis UT, Alkem Laboratories Limited and Roxane Laboratories, Inc. is hereby
