United States District Court, N.D. Illinois, Eastern Division
July 20, 2004.
MOTHER and FATHER, et al., Plaintiff,
JAMES CASSIDY, et al., Defendants.
The opinion of the court was delivered by: JAMES ZAGEL, District Judge
MEMORANDUM OPINION AND ORDER
In the summer of 1998, eleven-year-old Ryan Harris was
murdered.*fn1 Suspicion fell upon two young boys R.G. and
his eight-year-old companion E.H. A month after charges were
brought against the boys, it became clear that an adult had
committed the crime, and the charges were dropped. About a year
later, in May 1999, the parties known here as Mother and Father
(their true names are available to the court but under seal; I
refer to them as M&F for convenience) brought this suit in
federal court on behalf of their son R.G. against the City of
Chicago and several Chicago police officers, raising both federal
and state claims. The parents of E.H. brought similar proceedings
in state court. Despite the fact that many of the underlying
facts were likely to be identical, the parties had no interest in
coordinating their respective lawsuits. As a result, discovery
was duplicative and costly, involving for M&F's federal lawsuit
alone more than 70 depositions and 30,000 documents, at a cost of
more than $100,000.
In May 2001, nearly two years after the original complaints
were filed in federal and state court, M&F moved for voluntary
withdrawal of their federal claims pursuant to Federal Rule of Civil Procedure 41. In their motion, they stated their intention
to re-file their state-law claims in state court and to seek
consolidation with the related E.H. litigation. In an order dated
June 12, 2001, the Court agreed to dismiss the federal-law claims
"without prejudice" for the time being, but it indicated that the
dismissal would be converted to one "with prejudice" upon M&F's
state court filing. In addition, the district court ruled over
the City's objection that the costs of the federal case would not
be assessed at all in federal court, but instead would be
assessed by the state court at the conclusion of its proceedings.
The City moved for reconsideration, but the district court made
no material change in its ruling. On June 26, 2001, it announced
that the "Rule 54 costs would travel to the state court" and that
whichever party prevailed in state court would be entitled to an
award of costs from that court. The City appealed to the Seventh
Circuit Court of Appeals.
In Mother & Father v. Cassidy, 338 F.3d 704, 708 (7th Cir.
2003), the Seventh Circuit ruled that the conversion of M&F's
voluntary dismissal from "without prejudice" to "with prejudice"
rendered the defendants the prevailing party in this federal
action. Therefore, the Court held, the district court acted
beyond its authority when it precluded the City from requesting
costs and that the district court was not authorized to delegate
to the state court the issue of whether the City should be
awarded costs after M&F's clams were dismissed. Id.
Accordingly, the Seventh Circuit remanded the case for a
determination as to whether and to what extent costs should be
awarded to the defendants:
We emphasize, however, that we are not ruling here
and now that the City is entitled to an award of
costs. Because of the way this problem arose, M&F
have never had an opportunity to show that they might
be able to avoid either part or all of the awardable
costs here, based on either bad faith on the City's
part (which, we add, does not appear in the limited
record we have before us) or their own indigency and
inability to satisfy a costs order. On remand, the district court will be
entirely free to explore both these preliminary
issues and any detailed issues that may arise in the
request for costs that the City will file.
Id. at 710.
Rule 54(d) provides that "costs other than attorneys' fees
shall be allowed as of course to the prevailing party unless the
court otherwise directs." The Seventh Circuit has "recognized
only two situations in which the denial of costs might be
warranted: the first involves misconduct of the party seeking
costs, and the second involves a pragmatic exercise of discretion
to deny or reduce a costs order if the losing party is indigent."
Mother & Father, 338 F.3d at 708 (citing Contreras v. City of
Chicago, 119 F.3d 1286, 1295 (7th Cir. 1997); Weeks v. Samsung
Heavy Indus. Co., 126 F.3d 926, 945 (7th Cir. 1997);
Congregation of the Passion, Holy Cross Province v. Touche, Ross
& Co., 854 F.2d 219, 222 (7th Cir. 1988)).
M&F claim purported indigency as a basis for denying the
defendants' request for costs. The law recognizes that a party's
inability to pay may justify a denial of costs. See, e.g., id.
at 222. The losing party must demonstrate actual indigency, not
merely limited financial resources, before a court may exercise
its discretion to deny costs. Sanglap v. LaSalle Bank, FSB,
194 F. Supp.2d 798 (N.D. Ill. 2002). This means a party must not
only show an inability to presently pay costs, but also must show
that the party is not likely to be able to pay the costs in the
future. McGill v. Faulkner, 18 F.3d 456, 459 (7th Cir. 1974).
Moreover, the indigency of a party does not even require that the
court automatically waive costs. Id. at 459-60.
Although the record is sufficient enough to determine M&F's
present ability to pay any awarded costs, it is insufficient
for determining their future ability to pay such costs. As the
defendants acknowledge: Plaintiffs cannot foreclose the possibility that they
have no ability to pay in the future when they have a
pending civil lawsuit in the Circuit Court of Cook
County. In their pending lawsuit, Plaintiffs seek
millions of dollars in damages. Assuming arguendo
Plaintiffs prevail on their state court claims, then
Plaintiffs will have the ability to pay the costs in
However, for purposes of determining indigency, I should not
"assume arguendo." Accordingly, I enter and continue the
present bill of costs until resolution of M&F's pending lawsuit
on the same subject matter in the Circuit Court of Cook County. I
trust that when the time comes, the defendants will appropriately
For the reasons above, defendants' Amended Bill of Costs is
ENTERED AND CONTINUED.