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Ariel Investments, LLC v. Ariel Capital Advisors LLC

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

July 17, 2017

ARIEL INVESTMENTS, LLC, Plaintiff,
v.
ARIEL CAPITAL ADVISORS LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          MATTHEW F. KENNELLY UNITED STATES DISTRICT JUDGE

         Ariel Investments, LLC, an investment management firm that owns registered trademarks for various iterations of the term "Ariel, " sued Ariel Capital Advisors LLC, a wealth management firm, alleging trademark infringement, unfair competition, and cybersquatting in violation of the Lanham Act, and unfair trade practices in violation of the Illinois Deceptive Trade Practices Act and Illinois common law. Before trial, the Court granted summary judgment for Ariel Capital on the cybersquatting claim.

         After a bench trial, the Court found for Ariel Investments on its remaining Lanham Act and state law claims. Ariel Invs., LLC v. Ariel Capital Advisors, LLC, No. 15 C 3717, 2017 WL 839481 (N.D. Ill. Mar. 3, 2017). The Court entered a permanent injunction barring Ariel Capital from continuing to use the term Ariel in connection with its business. The Court overruled Ariel Investments' request for disgorgement of Ariel Capital's profits, concluding that Ariel Capital had shown that it did not earn its profits by infringing on Ariel Investments' marks. The Court later denied Ariel Capital's request for a stay of the injunction pending appeal. Ariel Invs., LLC v. Ariel Capital Advisors, LLC, No. 15 C 3717, 2017 WL 1049464 (Mar. 20, 2017).

         In this decision, the Court considers Ariel Investments' request to recover costs.

         Discussion

         Ariel Investments has moved for nearly $110, 000 in costs. Federal Rule of Civil Procedure 54(d) states that "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). Expenses in six categories are available, three of which are relevant here: 1) fees for transcripts necessarily obtained for use in the case; 2) fees for disbursements for printing and witnesses; and 3) fees for the exemplification and the costs of making copies of any materials where the copies are necessarily made for use in the case. 28 U.S.C. §1920.

         The Seventh Circuit has long recognized the "presumption that the prevailing party will recover costs, and the losing party bears the burden of an affirmative showing that taxed costs [are inappropriate]." Beamon v. Marshall & Ilsley Trust 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). Although the Supreme Court has ruled that the "concept of taxable costs under the Federal Rules of Civil Procedure" is "limited, " the non-prevailing party must nevertheless demonstrate the inappropriateness of any taxed costs. Taniguchi v. Kan.Pac. Saipan, Ltd., 132 S.Ct. 1997, 2006 (2012).

         Ariel Capital contends that no costs should be awarded because Ariel Investments only partially prevailed. Ariel Investments argues that it was the prevailing party because it was awarded substantial relief.

         The prevailing party for purposes of Rule 54(d) is the party that prevails with regard to a substantial part of the litigation. Testa v. Vill. of Mundelein, 89 F.3d 443, 447 (7th Cir. 1996); see also, First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007, 1015 (7th Cir. 1985). There is no question that Ariel Investments prevailed with regard to a substantial part of the litigation. Indeed, it was the prevailing party on all of its claims other than the cybersquatting claim. Although the Court did not order disgorgement of Ariel Capital's profits, it found that Ariel Capital had infringed Ariel Investments' trademarks and entered a permanent injunction in favor of Ariel Investments, which was the main relief it sought.

         In a trademark infringement case like this one, permanent injunction against the alleged infringer represents a substantial part of the litigation, because "damage to a trademark holder's goodwill can constitute irreparable injury for which the trademark owner has no adequate legal remedy." Re/Max North Cent., Inc. v. Cook, 272 F.3d 424, 432 (7th Cir. 2001). Furthermore, the Court held that the factors of similarity between marks, similarity in services, similarity in area and manner of concurrent use between plaintiff and defendant, the strength of plaintiff's mark, and evidence of actual confusion all weighed in favor of a finding of a likelihood of confusion arising from Ariel Capital's use of the term Ariel. Because Ariel Investments prevailed with regard to a substantial part of the litigation, the Court concludes that it is the prevailing party and is therefore entitled to recover costs.

         A. Costs relating to depositions

         Ariel Investments requests taxation of costs totaling $11, 194.28 for deposition-related expenses, including transcript costs, video costs, and witness fees. "Fees for printed or electronically recorded transcripts necessarily obtained for use in the case" are recoverable as costs under section 1920(2).

         Ariel Capital does not object to $7, 903.53 of the requested deposition-related costs. It argues, however, that the costs relating to the depositions of Ms. Kosier and Mr. Bray exceed what was reasonably necessary and should be reduced.

         With regard to Ms. Kosier's deposition, Ariel Investments seeks to recover $3, 594.41. This represents a higher per-page rate than the one approved by the Judicial Conference, but Ariel Capital, which took the deposition, chose the court reporter, and this is the rate that the reporter charged Ariel Investments for a copy of the deposition. Ariel Capital argues that the rate should be reduced to what it paid- $2, 228.40-but it is undisputed that Ariel Capital got a preferred rate from the court reporter that was not available to Ariel Investments. When the party that has to bear the costs chose the court reporter, it cannot object to the rates the reporter charged. See Montanez v. Simon, 755 F.3d 547, 558 (7th Cir. 2014) ("Several decisions from the Northern District of Illinois sensibly suggest that [the limitation to Judicial Conference-approved rates] does not ...


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