CHARLOTTE PHILLIPS and BOB MYRICK, individually and on behalf of all others similarly situated, Plaintiffs,
WELLPOINT INC., UNICARE NATIONAL SERVICES, INC., UNICARE ILLINOIS SERVICES, INC., UNICARE HEALTH INSURANCE COMPANY OF THE MIDWEST, RIGHTCHOICE MANAGED CARE, INC., and RIGHTCHOICE INSURANCE COMPANY, Defendants.
MEMORANDUM AND ORDER
J. PHIL GILBERT, District Judge.
This matter comes before the Court on defendants' bill of costs (Doc. 245). Plaintiffs filed an objection (Doc. 260) to defendants' bill of costs to which defendants responded (Doc. 261). For the following reasons, the Court reduces defendants' bill of costs in the amount of $56, 931.83.
Defendants filed their bill of costs seeking to recover costs for exemplification and the costs of making copies, transcripts, and witnesses for a total amount of $96, 001.97. In response, plaintiffs ask this court to deny costs to defendants on the basis of defendants' misconduct and plaintiffs' indigency. In the alternative, plaintiffs ask this Court to (1) hold its ruling on plaintiffs' objection to defendants' bill of costs in abeyance until after the plaintiffs' appeal; or (2) reduce the fees awarded to a nominal amount.
Federal Rule of Civil Procedure 54(d)(1) 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." Ordinarily the Clerk of Court taxes costs in favor of the prevailing party on 14 days' notice. Fed.R.Civ.P. 54(d)(1). Those costs may include:
(1) Fees of the clerk and marshal; (2) Fees for printed and electronically recorded transcripts necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case; (5) Docket fees under section 1923 of this title; (6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.
28 U.S.C. § 1920. The Court presumes that a prevailing party is entitled to costs as a matter of course, but has the discretion to deny or reduce costs where warranted. Krocka v. City of Chicago, 203 F.3d 507, 518 (7th Cir. 2000); Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-42 (1987). This presumption in favor of awarding costs is difficult for the non-prevailing party to overcome. Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d 926, 945 (7th Cir. 1997); see also Congregation of the Passion, Holy Cross Province v. Touche, Ross & Co., 854 F.2d 219, 222 (7th Cir. 1988) ("unless and until the losing party affirmatively shows that the prevailing party is not entitled to costs, the district court must award them, as of course'").
1. Denial of Costs on the Basis of Misconduct or Indigency
First, the Court will consider whether it should completely deny costs to defendants. The Seventh Circuit has recognized two situations that warrant the denial of costs: "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 and Father v. Cassidy, 338 F.3d 704, 708 (7th Cir. 2003).
To justify denying a bill of costs on the grounds of misconduct, the prevailing party must engage in misconduct "worthy of a penalty." Congregation of the Passion, Holy Cross Province, 854 F.2d at 222. The Seventh Circuit has suggested that misconduct worthy of a penalty may include calling unnecessary witnesses, raising unnecessary issues, or otherwise unnecessarily prolonging the proceedings. Id.
For example, in Overbeek, the Seventh Circuit found the prevailing party's conduct did rise to the level of misconduct worthy of a penalty where counsel:
inexplicably refused over a dozen offers of the policy limit, needlessly pursued a trial, appealed the jury's decision not to award punitive damages even though the defendants were judgment-proof, vanished for large periods of time, frivolously argued for dual coverage, and even wasted time and resources hailing [the losing party] into [a state] court for no apparent reason.
Overbeek v. Heimbecker, 101 F.3d 1225, 1228 (7th Cir. 1996). However, in Fairley, the Northern District of Illinois found that the prevailing party's conduct did not rise to misconduct worthy of a penalty where the court "presided over 146 contested motions - mostly concerning discovery disputes - the vast majority of which were resolved in Plaintiffs' favor, " found that defense counsel engaged in repeated obstreperous pretrial conduct, " and sanctioned defendants "for failure to comply with [that] Court's discovery orders on multiple occasions." Fairley v. Andrews, No. 03-C-5207, 2008 WL 961592, at *2 (N.D. Ill. Apr. 8, 2008).
Here, plaintiffs complain that defendants drove up their costs in this litigation by initially producing discovery in a format impossible to use. Specifically, plaintiffs state defendants produced tens of thousands of documents in separate [TIFF] files. Plaintiffs describe these documents as "a hundred thousand separate pictures of single pages, each by a non-informative serial number, requiring the user to individually open each page as an individual file, with no indication of topic, no way to locate documents, no way to know where any stopped or started, or in what order." Doc. 260, p. 10. As a result, plaintiffs had to hire, at great expense, electronically stored information ("ESI") consultants to manipulate this data.
The conduct described in Overbeek, finding denial of costs was warranted, and Fairley, finding denial of costs was not warranted, is far more egregious than producing single page files requiring plaintiffs to hire an ESI consultant. Further, plaintiffs have not suggested it is out of the ordinary that a litigant would hire an ESI consultant in a case involving the production of numerous electronic documents. Thus, the Court finds that the conduct plaintiffs describe does not rise to the level of misconduct ...