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Jack Beam and Renee Beam v. Matthew S. Petersen

September 22, 2011

JACK BEAM AND RENEE BEAM, PLAINTIFFS,
v.
MATTHEW S. PETERSEN, FEDERAL ELECTION COMMISSION CHAIRMAN, DEFENDANT.



The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER

In this lawsuit, Plaintiffs Jack and Renee Beam ("Plaintiffs") claimed that Defendant, the Federal Election Commission ("FEC," "Commission," or "Defendant"), improperly obtained their private financial records from the Department of Justice ("DOJ") without following certain requirements outlined in the Right to Financial Privacy Act of 1978 ("RFPA"), 12 U.S.C. § 3401 et seq. The court denied FEC's motion for summary judgment but, after a two-day bench trial, concluded that Plaintiffs had not proven any violation. See Beam v. Peterson, No. 07 C 1227, 2010 WL 3894225 (N.D. Ill. Sept. 30, 2010). Defendant now seeks an award of costs in the amount of $8,300.64, including court reporter and transcript fees, witness fees, and certain other charges. (Bill of Costs at 1.) Plaintiffs object to any award, arguing that Defendant's request is barred by "unclean hands"-that is, that Defendant has engaged in what the Seventh Circuit generally refers to as "misconduct." (Pl.'s Objections to Def.'s Bill of Costs (hereinafter "Pl.'s Objs."), at 2.) Alternatively, Plaintiffs object to particular portions of Defendant's bill of costs. (Pl.'s Objs. at 4-8.) For the reasons explained below, these objections are overruled, and the court awards costs in the amount requested.

LEGAL STANDARDS

Rule 54(d)(1) provides that "costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs . . . " Cefalu v. Vill. of Elk Grove, 211 F.3d 416, 427 (7th Cir. 2000). There is a presumption in favor of the award of costs, and in order to overcome that presumption, "the losing party bears the burden of an affirmative showing that taxed costs are not appropriate." Beamon v. Marshall & Ilsley Trust Co., 411 F.3d 854, 864 (7th Cir. 2005) (citing M.T. Bonk Co. v. Milton Bradley Co., 945 F.2d 1404, 1409 (7th Cir. 1991)). Thus, Rule 54(d)(1) establishes "a presumption that the losing party will pay costs but grants the court discretion to direct otherwise." Rivera v. City of Chicago, 469 F.3d 631, 634 (7th Cir. 2006). The Seventh Circuit recognizes "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 v. Cassidy, 338 F.3d 704, 708 (7th Cir. 2003).

Although the prevailing party is, thus, presumptively entitled to costs, not all of the costs of litigation are recoverable. "[A] district court may not tax costs under Rule 54(d) unless a federal statute authorizes an award of those costs." Republic Tobacco Co. v. N. Atl. Trading Co., 481 F.3d 442, 447 (7th Cir. 2007). The list of recoverable costs pursuant to 28 U.S.C. § 1920 includes: (1) fees of the clerk and marshal, (2) fees for transcripts, (3) witness and printing fees and expenses, (4) fees for copies or papers necessarily obtained for use in the case, (5) docket fees, and (6) compensation for court-appointed experts and interpreters. 28 U.S.C. § 1920.Taxing costs against the non-prevailing party requires two inquiries: (1) whether the cost is recoverable, and (2) whether the amount assessed is reasonable. See Majeske v. City of Chicago, 218 F.3d 816, 824 (7th Cir. 2000).

ANALYSIS

As noted, Plaintiffs have objected to any award of costs on the ground that Defendant has "unclean hands." If any costs are recoverable, Plaintiffs contend, the amounts requested are excessive. The court addresses these objections in turn.

Alleged Litigation Misconduct

Plaintiffs have argued that Defendant is barred from recovering any costs under Rule 54(d)(1) based on the "unclean hands" doctrine. (Pl.'s Objs. at 2.) In support of this argument, Plaintiffs first point to the Commission's pre-litigation vote to find "reason to believe" ("RTB") that Plaintiffs might have violated the Federal Elections Campaign Act; that voted resulted in an investigation of Plaintiffs' conduct that, ultimately, failed to bear fruit. (Id. at 3-4.) Plaintiffs next detail various incidents that occurred during the course of litigation. (Id. at 4-5.) Specifically, Plaintiffs contend that defense counsel regularly objected to discovery requests without a legitimate basis. According to Plaintiffs, this "uncooperative" posture was a "strategy" that resulted in Plaintiffs' incurring substantial expense. (Id. at 5.) Plaintiffs note that they were required to move to compel discovery, and in various rulings, the court directed Defendant to comply with those discovery requests. (Id. at 4.) Finally, Plaintiffs go to great lengths to detail the perceived strength of their testimony and evidence, ultimately arguing that, although the court ruled in favor of Defendant on the merits, "Plaintiffs should not be penalized, again, with having to incur Defendant's taxable costs." (Id. at 2-4.)

The Seventh Circuit has held that, in order for misconduct of the prevailing party to require that costs be denied, that misconduct must be found "worthy of a penalty" and involve "exceptional circumstances." Congregation of the Passion v. Touche, Ross & Co., 854 F.2d 219, 222 (7th Cir. 1988); Overbeek v. Heimbecker, 101 F.3d 1225, 1228 (7th Cir. 1996). Plaintiffs' allegations regarding Defendant's behavior in this case do not approach this level. First, Plaintiffs' arguments tied to the Commission's RTB finding, and subsequent investigation, are irrelevant to the taxing of costs. These matters were the product of the FEC's administrative process and occurred prior to litigation. Although Plaintiffs may very well have been inconvenienced by this process, and found it unfair, it does not support a finding of misconduct in the instant case. Indeed, Plaintiffs offer no legal support for such an argument.

Plaintiffs are correct that obstruction of discovery might, in some context, constitute the type of "misconduct" that could warrant a denial of costs. The magnitude of Defendant's alleged obstruction in this case, however, falls far short of "exceptional." Discovery disputes are, by definition, contentious. The disputes in this case were, from the court's perspective, neither remarkably nor obviously motivated by anything more unsavory than a reasonably aggressive litigation posture.

Plaintiffs' final argument-essentially, that their case was sufficiently strong so as to merit a denial of costs in toto--fails, as well. In Popeil Bros., Inc. v. Schick Electronics, Inc., the Seventh Circuit specifically addressed the question of whether the good faith and credibility of the non-prevailing party's case can justify denial of costs. The answer is no: "If the awarding of costs could be thwarted every time the unsuccessful party is a normal, average party and not a knave, Rule 54(d) would have little substance remaining." 516 F.2d 772, 776 (7th Cir. 1975). In other words, "[m]ore than just a showing of good faith is necessary to immunize the losing party from paying costs." Muslin v. Frelinghuysen Livestock Managers, Inc., 777 F.2d 1230, 1236 (7th Cir. 1985).

Plaintiffs' objection to any award of costs in this case is overruled. Reasonableness of Claimed Costs

Plaintiffs urge, in the alternative, that this court should disallow certain costs requested by Defendant. (Pl.'s Objs. at 5.) In particular, Plaintiffs challenge Defendant's claim of costs for travel and lodging, for the videotaped deposition of an out-of-town deponent, and for assorted transcript expenses.* ...


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