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Arce v. Chicago Transit Authority

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

February 23, 2017

ISRAEL ARCE, Plaintiff,


          Judge Gary Feinerman

         After the Chicago Transit Authority (“CTA”) terminated him, Israel Arce brought this suit against CTA and two of his supervisors under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., the Fourteenth Amendment's Equal Protection Clause, and Illinois law. Doc. 44. The court dismissed all of Arce's claims against the two supervisors and some of his claims against the CTA, Docs. 102-103 (reported at 2015 WL 3504860 (N.D. Ill. June 2, 2015)), and then granted summary judgment on the remaining claims against the CTA, Docs. 217-218 (reported at 193 F.Supp.3d 875 (N.D. Ill. 2016)).

         CTA filed a bill of costs seeking $13, 291.62. Doc. 233. Arce opposes any cost award and, in the alternative, objects to various entries in CTA's bill. Doc. 238. For the following reasons, CTA will be awarded costs, but-because several of Arce's specific objections have merit and/or met no response-the award will be reduced to $9, 964.75.

         Rule 54(d)(1) provides, in relevant part: “Unless a federal statute, these rules, or a court order provides otherwise, costs-other than attorney's fees-should be allowed to the prevailing party.” Fed.R.Civ.P. 54(d)(1). The Rule “creates a presumption in favor of awarding costs to the prevailing party.” Myrick v. WellPoint, Inc., 764 F.3d 662, 666 (7th Cir. 2014); see also Beamon v. Marshall & Ilsley Tr. Co., 411 F.3d 854, 864 (7th Cir. 2005); M.T. Bonk Co. v. Milton Bradley Co., 945 F.2d 1404, 1409 (7th Cir. 1991).

         Like most presumptions, this one can be overcome-including by losing parties who demonstrate indigence. “Since 1983, [the Seventh Circuit] has held that it is within the discretion of the district court to consider a plaintiff's indigency in denying costs under Rule 54(d).” Rivera v. City of Chicago, 469 F.3d 631, 634 (7th Cir. 2006) (internal quotation marks omitted). Rivera directs district courts to undertake a two-step analysis when presented with a claim of indigence:

First, the district court must make a threshold factual finding that the losing party is incapable of paying the court-imposed costs at this time or in the future. The burden is on the losing party to provide the district court with sufficient documentation to support such a finding. This documentation should include evidence in the form of an affidavit or other documentary evidence of both income and assets, as well as a schedule of expenses. Requiring a non-prevailing party to provide information about both income/assets and expenses will ensure that district courts have clear proof of the non-prevailing party's dire financial circumstances. Moreover, it will limit any incentive for litigants of modest means to portray themselves as indigent.
Second, the district court should consider the amount of costs, the good faith of the losing party, and the closeness and difficulty of the issues raised by a case when using its discretion to deny costs. No one factor is determinative, but the district court should provide an explanation for its decision to award or deny costs.

Id. at 635-36 (citations and internal quotation marks omitted).

         Here, Arce has provided the necessary financial documentation, but the financial hardships reflected therein do not rise to the level of indigence. Arce's financial statement shows that he and his family have a monthly income of $4, 266 in unspecified benefits, Doc. 238-1 at 1, or more than $50, 000 per year-roughly two and a half times the federal poverty guideline for a family of three. See Dep't of Health and Human Servs., Annual Update of the HHS Poverty Guidelines, 81 Fed. Reg. 4036 (Jan. 25, 2016). Setting aside for a moment Arce's two largest liabilities-various home repair expenses and significant credit card debt-Arce's family's financial means do not suggest indigence.

         The family's modest but livable income is in equipoise with its routine monthly expenses (roughly $4, 289, summing the various monthly payments Arce identifies), even when factoring in potentially transitory medical expenditures such as Arce's prescription drug and pain management regimen ($142/month) and his daughter's orthodontics ($250/month for twenty-four months). Doc. 238-1 at 1-2. Arce and his wife also own five vehicles (including two motorcycles valued at a combined $15, 000), have roughly $110, 000 in unencumbered equity in their home (its $169, 669 market value, less $60, 058 they owe), and have $5, 689 in the bank. Doc. 238-1 at 1-2. That said, Arce is currently on the hook for roughly $150, 000 in home renovation costs and more than $20, 000 in credit card debt. Doc. 238-1 at 1-2. In all, Arce identifies $218, 058 in assets and $247, 390 in liabilities. Doc. 238-1 at 1. The state of affairs in which the Arce family finds itself-in debt and underwater, but getting by-is typical of America's middle class. See Neal Gabler, The Secret Shame of Middle-Class Americans, The Atlantic (May 16, 2016), (setting forth statistics showing that “either a sizeable minority or a slim majority of Americans” are “on thin ice financially, ” unable to absorb even modest financial shocks without considerable hardship).

         Arce may be in a tight financial spot right now, but the evidence he puts forward does not establish his future inability to pay, which is a prerequisite to any finding of indigence under Rivera. See Sklyarsky v. ABM Janitorial Servs.-N. Cent., Inc., 494 F. App'x 619, 623 (7th Cir. 2012) (“Sklyarsky also argues that the district court should have declined to impose costs because of his indigence, but that exception applies only if a losing party shows that it is incapable of paying court-imposed costs at the time of judgment or in the future.”); Rivera, 469 F.3d at 636 (“To prove her indigence, Rivera was required to show not only that she was incapable of paying court-ordered costs at the time they were imposed but also that she will be incapable of paying them in the future.”). Even if all of Arce's home renovation expenses stemmed from unavoidable repairs rather than voluntary remodeling-which his affidavit does not aver, Doc. 238-2 at ¶ 5 (representing that the expenses were for “repair work on or about our real property including repair to the residence for water damage and necessary sanitation work”) (emphasis added)-once those one-time expenses are dealt with, Arce will likely have the means in the future to pay off a debt to CTA, given his assets and cash flow. That may be especially true if he returns to work-and he does not aver he cannot do so. See Bhat v. Accenture LLP, 473 F. App'x 504, 507 (7th Cir. 2012) (denying an indigency exception where the losing party's “two masters degrees, management experience, and continuing job search show that she is likely to be gainfully employed-and able to pay $765-in the future”).

         In sum, beyond the fact that he is currently unemployed and getting by on benefits, Arce offers no reason to think his circumstances will not improve in the future. He is precisely the kind of litigant that Rivera aimed to ferret out: a person of “modest means” incorrectly portraying himself as truly “indigent.” 469 F.3d at 635. It follows that Arce has failed to carry his burden at Rivera's first step. See Johnson v. Target Corp., 487 F. App'x 298, 301 (7th Cir. 2012) (affirming a $2, 500 cost award despite “documentation of below-poverty-line earnings” because the losing party had a job and “minimal documented monthly expenses”); Rivera, 469 F.3d at 636 (agreeing with decisions holding that the losing party was not indigent because her affidavit, which averred that “she had not worked for over eight months, she supported herself, her two children and a grandchild, she had no savings, and she received supplemental security income benefits, ” failed to “show whether [she] is unlikely to be able to pay costs in the future”). It therefore is unnecessary to examine Rivera's second step.

         The court turns next to Arce's objections to specific costs CTA seeks to recoup. A court awarding costs must ask first “whether the cost imposed on the losing party is recoverable” under 28 U.S.C. § 1920 and, “if so, whether the amount assessed for that item was reasonable.” Majeske v. City of Chicago, 218 F.3d 816, 824 (7th Cir. 2000). Recoverable costs include (1) “[f]ees of the clerk and marshal”; (2) fees for “transcripts necessarily obtained for use in the case”; (3) “[f]ees and disbursements for printing and witnesses”; (4) “[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case”; (5) “[d]ocket fees”; and (6) “[c]ompensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services.” 28 U.S.C. § 1920. “Although a district court has discretion when awarding costs, the discretion is narrowly confined because of the strong presumption created by Rule 54(d)(1) that the prevailing party will recover costs.” Contreras v. City of Chicago, 119 F.3d 1286, 1295 (7th Cir. 1997) (internal quotation marks and citation omitted).

         De ...

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