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Lg Electronics U.S.A., Inc v. Whirlpool Corporation

October 20, 2011

LG ELECTRONICS U.S.A., INC., PLAINTIFF,
v.
WHIRLPOOL CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:

MEMORANDUM OPINION AND ORDER

Plaintiff LG Electronics U.S.A., Inc., ("LG") brought this lawsuit against Defendant Whirlpool Corporation ("Whirlpool") in connection with Whirlpool's advertising of its steam dryers. Before the Court are both LG's and Whirlpool's Bills of Costs pursuant to Federal Rule of Civil Procedure 54(d)(1). Because LG is not a prevailing party in this lawsuit under Rule 54(d)(1), the Court declines to award it any costs or fees. On the other hand, the Court, in its discretion, awards Whirlpool -- as the prevailing party to this lawsuit -- $411,029.12 in costs and fees under Rule 54(d)(1).

BACKGROUND

In January 2008, LG sued Whirlpool for false advertising in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), among other claims. The litigation was complex and hard-fought. After a three-week trial that ended on October 20, 2010, a jury returned a verdict largely in favor of Whirlpool and against LG. Specifically, the jury found in favor of Whirlpool on LG's claim of false advertising under the Lanham Act. The jury also found in favor of Whirlpool on LG's claim under the Illinois Consumer Fraud and Deceptive Business Practices Act. The jury, however, did find in favor of LG on its claim under the Illinois Uniform Deceptive Trade Practices Act, which provides only for injunctive relief, but the Court later denied LG's motion for a permanent, nationwide injunction on May 9, 2011, and granted Whirlpool's motion for judgment as a matter of law on this claim.

LEGAL STANDARD

Rule 54(d)(1) provides that "costs other than attorney's fees shall be allowed as of course to the prevailing party unless the court otherwise directs." See Fed.R.Civ.P. 54(d)(1). 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 fees and expenses, (4) fees for copies of papers necessarily obtained for use in the case, (5) docket fees under 28 U.S.C. § 1923, and (6) compensation for court-appointed experts and interpreters. See U.S. Neurosurgical, Inc. v. City of Chicago, 572 F.3d 325, 333 (7th Cir. 2009); Republic Tobacco Co. v. North Atl. Trading Co., Inc., 481 F.3d 442, 447 (7th Cir. 2007). Rule 54(d)(1) "provides 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); see also U.S. Neurosurgical, 572 F.3d at 333. Taxing costs against the non-prevailing party requires two inquiries -- whether the cost is recoverable and whether the amount assessed is reasonable. See Little v. Mitsubishi Motors N. Am., Inc., 514 F.3d 699, 702 (7th Cir. 2008) (per curiam). District courts have considerable discretion in determining whether a particular cost is reasonable and necessary. See U.S. Neurosurgical, 572 F.3d at 333.

ANALYSIS

I. Prevailing Party

Although the jury returned a verdict largely in favor of Whirlpool and the Court denied LG's permanent injunction motion and vacated the jury's verdict on the only count in which it found in favor of LG, LG argues that it is a prevailing party to this lawsuit because Whirlpool voluntarily dismissed its counterclaims. "A party prevails for purposes of Rule 54(d) when a final judgment awards it substantial relief." Smart v. Local 702 Int'l Bhd. of Elec. Workers, 573 F.3d 523, 525 (7th Cir. 2009); see also Testa v. Village of Mundelein, Ill., 89 F.3d 443, 447 (7th Cir. 1996) ("the 'prevailing party' is the party who prevails as to the substantial part of the litigation"). The fact that Whirlpool voluntarily dismissed its counterclaims does not support the conclusion that LG prevailed as to a substantial part of this litigation, especially because the dismissal of the counterclaims is negligible compared to the jury verdict that was in Whirlpool's favor on the central issue in this lawsuit, namely, whether Whirlpool's dryers use steam. See Northbrook Excess & Surplus Ins. Co. v. Procter & Gamble Co., 924 F.2d 633, 642 (7th Cir. 1991); see also Republic Tobacco Co., 481 F.3d at 446 ("a determination of who is the prevailing party for purposes of awarding costs should not depend on the position of the parties at each stage of the litigation but should be made when the controversy is finally decided.") (citation omitted). Therefore, the Court denies LG's request for costs because LG was not a prevailing party in this lawsuit under the dictates of Rule 54(d)(1) and Seventh Circuit authority. Instead, Whirlpool was the prevailing party, and thus the Court turns to Whirlpool's Bill of Costs.

II. Fees for Summons and Subpoena -- 28 U.S.C. § 1920(1)

First, Whirlpool seeks costs associated with service fees pursuant to 28 U.S.C. § 1920(1). Service fees may not exceed amounts charged by the United States Marshal Service, which is $55.00 per hour, as well as any travel costs and out-of-pocket expenses. See Collins v. Gorman, 96 F.3d 1057, 1060 (7th Cir. 1996); see also 28 C.F.R. § 0.114(a)(3) (establishing fees for service of summons). The current hourly rate went into effect on December 19, 2008. See 28 C.F.R. § 0.114(a)(3). Prior to that date, the service fee was $45.00. See, e.g. Trading Tech. Int'l, Inc. v. eSpeed, Inc., 750 F.Supp.2d 962, 984 (N.D. Ill. 2010).

Although Whirlpool used a private process server that charged more than $55.00 per hour, Whirlpool has reduced its request under Section 1920(1) to $55.00 per service. Based on the record, however, 15 of Whirlpool's 19 witnesses were served prior to December 19, 2008. Therefore, the Court awards Whirlpool $675.00 for these 15 witnesses and $220.00 for the four witnesses served after December 19, 2008 for a total of $895.00, which are costs that are recoverable and reasonable. See Little, 514 F.3d at 702.

III. Court Reporting Fees -- 28 U.S.C. § 1920(2)

Whirlpool requests costs under 28 U.S.C. § 1920(2) for court reporting fees and costs related to deposition transcripts. Courts award deposition charges if the deposition appears reasonably necessary in light of the facts known at the time of the deposition. See Little, 514 F.3d at 702. Under Northern District of Illinois Local Rule 54.1(b), the costs of a transcript shall not exceed the regular copy rate established by the United States Judicial Conference. See N.D.Ill.L.R. 54.1(b). Judicial Conference rates for depositions conducted after November 1, 2007 are $3.65 per page for ordinary transcripts, $4.25 per page for fourteen day transcripts, $4.85 per page for seven day transcripts, $6.05 per page for daily transcripts, and $7.25 per page for hourly transcripts. See www.ilnd.uscourts.gov/CLERKS_OFFICE/CrtReporter/trnscrpt.htm. In addition, attendance fees are recoverable under Section 1920(2). See Extra Equipamentos E Exportacao Ltda. v. Case Corp., 541 F.3d 719, 727 (7th Cir. 2008); Little, 514 F.3d at 701-02.

A. Stenographic Transcripts

Whirlpool requests a total of $35,771.35 in costs associated with stenographic transcripts. In response, LG objects to Whirlpool's request for costs associated with exhibits and word indexes. The Court, however, rejects LG's argument because courts in this district have concluded that these costs are recoverable because both indexes and exhibits are essential to understanding the content of a deposition, especially in a complex and heavily litigated case such as this one. See, e.g., Harkins v. Riverboat Servs., Inc., 286 F.Supp.2d 976, 980 (N.D. Ill. 2003); see also AMC v. Intercontinental, No. 06 C 0063, 2010 WL 4735760, at *1 (N.D. Ill. Nov. 15, 2010). Meanwhile, Whirlpool agrees with LG's objection to the costs for Jim Birtz's deposition and withdraws its request for $297.65 related to this deposition. Despite LG's argument to the contrary, however, the deposition of Kwame Green was reasonably necessary in light of the facts known at the time of the deposition, especially because Whirlpool used Green's deposition at trial. See Little, 514 F.3d at 702. In addition, the Court will not tax LG the cost of the court reporter parking fees for Robert Reitter's and Timothy Kavanaugh's depositions and deducts the $72.60 from Whirlpool's request. As such, the Court awards Whirlpool $35,401.10 for stenographic deposition transcripts under Section 1920(2).

B. Videotaped Transcripts

Next, Whirlpool seeks a total of $45,806.20 related to videotaped depositions. Under Section 1920(2), costs for both video-recorded depositions and stenographic transcription may be taxed to the losing party if the video and transcript are necessarily obtained for use in the case. See Little, 514 F.3d at 702; see, e.g., National Diamond Syndicate, Inc. v. Flanders Diamond USA, Inc., No. 00 C 6402, 2004 WL 1557765, at *2 (N.D. Ill. July 8, 2004). Costs associated with digitalization and synchronization of videotaped depositions may also be taxed. See, e.g., Specht v. Google Inc., ...


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