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Bennett v. Unitek Global Services, LLC

United States District Court, N.D. Illinois, Eastern Division

April 2, 2014

JAMES BENNETT, et al., Plaintiffs,
v.
UNITEK GLOBAL SERVICES, LLC, et al., Defendants.

MEMORANDUM OPINION AND ORDER

HARRY D. LEINENWEBER, District Judge.

For the reasons stated herein, the Court awards Defendants the sum of $6, 045.75 pursuant to their Bill of Costs. The Court grants Plaintiffs' Motion for Instructions pursuant to Local Rule 54.3(g) and rules that Defendants are not entitled to collect attorneys' fees from Plaintiffs.

I. BACKGROUND

Plaintiffs James Bennett, Jerome Garrison, and Jermaine Litt brought this action against Defendants DirectSAT USA, LLC and Unitek Global Services, LLC for alleged violations of the Fair Labor Standards Act ("FLSA"), the Illinois Minimum Wage Law, and the Illinois Wage Payment and Collection Act. In September 2013, the Court granted summary judgment in favor of Defendants on the FLSA claim, finding that Plaintiffs were independent contractors and not employees of Defendant DirectSAT. The Court declined to exercise jurisdiction over Plaintiffs' remaining state law claims and dismissed those claims without prejudice. ECF No. 158 at 26.

Defendants filed this Bill of Costs and ask for $6, 562.60. Defendants claim that they are entitled to attorneys' fees as well, and sent Plaintiffs a letter seeking to confer on fees pursuant to Local Rule 54.3. Plaintiffs filed a Motion for Instructions pursuant to Local Rule 54.3(g) asking for a ruling that Defendants are not entitled to attorneys' fees.

II. BILL OF COSTS

The Federal Rules provide that a prevailing party should be able to recover its costs, other than attorneys' fees, from the other party. FED. R. CIV. P. 54(d)(1). The Court "must determine that the expenses are allowable cost items and that the costs are reasonable, both in amount and necessity to the litigation." Weihaupt v. Am. Med. Ass'n, 874 F.2d 419, 430 (7th Cir. 1989). This rule "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).

In addition to contesting specific cost items, Plaintiffs raise three other objections. They argue: (1) that Defendants are not prevailing parties, (2) that Plaintiff Bennett's obligation to pay costs was discharged in bankruptcy, and (3) that Plaintiffs Litt and Garrison should not be responsible for costs that were incurred before they joined the case as co-plaintiffs in January 2012. Because all three Plaintiffs have argued that they are not responsible for various portions of the costs, the Court must determine how it will apportion responsibility for any costs taxed. Each issue is addressed in turn, before the Court discusses specific costs.

A. Prevailing Party

Plaintiffs argue that Defendants are not entitled to costs because Defendants did not prevail in the case. "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). To prevail, a party need not win on every claim. Slane v. Mariah Boats, Inc., 164 F.3d 1065, 1068 (7th Cir. 1999). Under Rule 54(d), "where there is a dismissal of an action, even where such dismissal is voluntary and without prejudice, the defendant is the prevailing party." First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007, 1015 (7th Cir. 1985).

Here, the Court granted summary judgment in favor of Defendants on the FLSA claim and dismissed without prejudice Plaintiffs' remaining claims, all of which were brought under state law. Thus, the Defendants prevailed on every claim within the meaning of Rule 54(d) and are prevailing parties for purposes of taxing costs.

B. Bankruptcy

Plaintiffs argue that Bennett is not liable for any of the costs DirectSAT incurred in defending this action because such costs were discharged during Bennett's 2012 Chapter 7 bankruptcy proceedings. In May 2012, DirectSAT sued Bennett in Pennsylvania state court for breach of contract and sought $165, 754.63 in costs and attorneys' fees that it claimed to incur defending this case. The next month, Bennett filed for bankruptcy and, because of the pending litigation over fees and costs, listed DirectSAT as a creditor. In October 2012, the bankruptcy court issued an order that "granted a discharge under section 727 of title 11, United States Code." ECF No. 169, Ex. 4. DirectSAT filed an objection to the discharge of Bennett's debt and an adversary complaint. The bankruptcy court dismissed DirectSAT's adversary complaint, but the record before this Court does not explain why it did so. Bennett argues that the bankruptcy court proceedings absolved him of any responsibility for the costs of this case.

Bennett's Chapter 7 bankruptcy proceeding discharged "all debts that arose before the date of the order for relief." 11 U.S.C. § 727(b). The filing of a petition under Chapter 7 constitutes an "order for relief." 11 U.S.C. § 301. Thus, Bennett's Chapter 7 bankruptcy discharged only those debts that arose before June 26, 2012, the day he filed for bankruptcy. Bennett commenced this suit in August 2010, but pursued his claims in this Court for over a year after he filed the bankruptcy petition. Because this case spans both sides of that June 26, 2012 divide, the issue before this Court is whether Bennett is responsible for the costs of this case that arose before June 26, 2012, after that date, or both.

The Court could not locate any authority for the idea that Defendant can recover costs incurred before the bankruptcy discharge by virtue of the continuation of the litigation after the discharge. In addition, Defendant does not argue that it can recover those pre-petition costs from Bennett. Thus, the Court declines ...


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