In re Paoli Railroad Yard PCB Litigation

Decision Date24 April 2000
Docket NumberNo. 99-1692,99-1692
Parties(3rd Cir. 2000) IN RE: PAOLI RAILROAD YARD PCB LITIGATION MABEL BROWN; GEORGE BURRELL; WALLACE D. CUMMINS; SYLVAN C. COHEN; K. LOUISE JONES; JAMES LAMENT; CHRISTOPHER S. BROWN; CATHLENE BROWN; CRAIG BROWN; MARGHERITA BARBETTA; MARY RETTA JOHNSON; CELESTE BROWN; CLEMMON BROWN; CLOYD BROWN; CURTIS BROWN; JOHN INGRAM; MARY ALICE KNIGHT; WILLIAM BUTLER; MATTHEW CUNNINGHAM, Appellants Argued:
CourtU.S. Court of Appeals — Third Circuit

On Appeal From the United States District Court For the Eastern District of Pennsylvania (D.C. Civ. Nos. 86-2229, 86-2235, 86-2669, 86-4037 86-5277, 86-5886, 86-7414, 86-7415, 86-7416, 86-7417, 86-7418, 86-7419, 86-7420, 86-7421, 86-7422, 86-7561, 87-0712, 87-2874, 87-5269), District Judge: Honorable Robert F. Kelly

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] JOSEPH C. KOHN, ESQUIRE MARTIN J. D'URSO, ESQUIRE (ARGUED) CRAIG W. HILLWIG, ESQUIRE Kohn, Swift & Graft, P.C. One South Broad Street, Suite 2100 Philadelphia, PA 19107, ARNOLD E. COHEN, ESQUIRE Klehr, Harrison, Harvey, Branzburg & Ellers 260 South Broad Street, Suite 400 Philadelphia, PA 19102, Counsel for Appellants Mabel Brown, George Albert Burrell, Wallace D. Cummins, Sylvan C. Cohen, K. Louise Jones, James Lament, John Ingram, Sr., Mary Alice Knight, William Butler, Matthew Cunningham.

D. BRUCE HANES, ESQUIRE D. Bruce Hanes, P.C. 117 South 17th Street, Suite 400 Philadelphia, PA 19103, Counsel for Appellants Christopher S. Brown, Cathlene Brown, Craig Brown, Margherita Barbetta, Mary Retta Johnson, Clemmon Brown, Cloyd Brown, Curtis Brown, Jr.

THOMAS M. GOODMAN, ESQUIRE DAVID E. SANDEL, JR., ESQUIRE (ARGUED) ROBERT TOLAND, II, ESQUIRE White and Williams, LLP 1800 One Liberty Place Philadelphia, PA 19103, Counsel for Appellee Monsanto Company

JEROME J. SHESTACK, ESQUIRE BARRY M. KLAYMAN, ESQUIRE Wolf, Block, Schorr & Solis-Cohen, LLP 1650 Arch Street, 22nd Floor Philadelphia, PA 19102, Counsel for Appellee CBS Corporation, formerly known as Westinghouse Electric Corporation

STEVEN R. KUNEY, ESQUIRE ROBERT SHAUGHNESSY, ESQUIRE Williams & Connolly 725 12th Street, NW Washington, DC 20005, STEPHEN M. McMANUS, ESQUIRE McCormick & Priore One Penn Square West, Suite 1500 30 South 15th Street Philadelphia, PA 19102-4815, Counsel for Appellee General Electric Company

JONATHAN W. MILLER, ESQUIRE Greitzer and Locks 1500 Walnut Street, 20th Floor Philadelphia, PA 19102, Counsel for Amicus Curiae Pennsylvania Trial Lawyers Association

Before: BECKER, Chief Judge, WEIS, and OAKES,* Circuit Judges.

OPINION OF THE COURT

BECKER, Chief Judge.

These consolidated appeals from an order of the District Court upholding a large award of costs against the losing parties after trial in a long-running toxic tort case present a number of issues pertaining to costs awards. Most of them are quite technical. Of especial interest and importance are questions dealing with the extent to which the court may consider the relative indigence of the losing party in determining the amount of the costs award, and the ability of the court to impose liability jointly and severally among losing parties.

The prevailing party in a federal civil action is entitled to costs, "as of course," except in cases in which either a federal rule or statute otherwise provides, or in cases in which the district court "otherwise directs." FED R. CIV. P. 54(d)(1). The clerk of court is charged with taxing such costs, but that decision "may be reviewed by" the district court, as it was here. Id. This appeal by the Plaintiffs arises from a district court order that reviewed the Clerk of Court's decision and awarded $154,129.30 in costs to the Defendants after the Defendants prevailed in the underlying litigation against the Plaintiffs. If the case caption seems familiar, it is because this is the fourth published opinion that this court has filed in the litigation.

We reach several separate holdings on our way to affirming in part and vacating in part the costs order of the District Court. First, although we conclude that Eastern District of Pennsylvania Civil Procedure Local Rule 54.1(b) is invalid insofar as its limitations provision conflicts with that of Federal Rule of Civil Procedure 54(d)(1), we hold that the District Court properly exercised its discretion under Rule 54(d)(1) to hear the Plaintiffs' challenge, which was untimely under the federal rule, but timely under the local rule.

Second, we hold that the District Court erred in concluding that it did not have the power to consider evidence that the Plaintiffs submitted to the Court in support of their motion, but did not present to the Clerk of Court. A district court reviewing a clerk's taxation of costs has the power to consider such evidence. In the costs award context, the district court is conducting a de novo review of an essentially ministerial act of the clerk of court. It is important that the district court have access to all evidence relevant to help it insure that the imposition of a costs award is equitable.

Third, while we reaffirm that a district court may not consider the disparity in wealth between the prevailing and non-prevailing parties in imposing costs, see Smith v. Southeastern Pa. Transp. Auth., 47 F.3d 97, 99 (3d Cir. 1995) (per curiam), we hold that a district court may consider the non-prevailing party's indigency (or inability to pay costs) in fashioning a costs award. In this case, it appears the District Court misapprehended its power when it declined to consider the Plaintiffs' indigency in imposing the large costs award that it did. We also conclude that a district court may not consider the good faith of the losing party or the closeness or complexity of the underlying case in awarding costs. These factors are only relevant insofar as they relate to the prevailing party's bad faith or unclean hands, a separate costs award factor described herein.

Finally, although a district court generally has broad discretion in imposing costs, we hold that the District Court abused its discretion in one aspect of its imposition of joint and several liability for the costs award among the nineteen Plaintiffs. As our prior opinions in this case reflect, see infra note 1 (collecting these opinions), this toxic tort case has primarily involved a host of personal injury and medical monitoring claims. Plaintiffs Sylvan Cohen and James Lament sued only for property damages, not personal injuries or medical monitoring, and it was in defending against the latter two classes of claims that the Defendants incurred close to 94% of their costs. We conclude that it was inequitable to saddle Cohen and Lament with one hundred percent of the Defendants' costs (or $154,129.30 in joint and several liability), when they were responsible for only a discrete and recognizable fraction of that sum, and that to do so amounted to an abuse of discretion. As for the other seventeen (personal injury/medical monitoring) Plaintiffs, we hold that the District Court did not abuse its discretion in imposing liability jointly and severally. Even though these Plaintiffs' cases were consolidated for efficiency's sake and several of the seventeen Plaintiffs appear unable to pay any portion of the costs award, the costs that the Defendants incurred in defending against these Plaintiffs' actions appear so intertwined with each other that the District Court did not abuse its discretion by not disaggregating them.

In accordance with these holdings, the order of the District Court will be affirmed in part and vacated in part, and the case remanded for still further proceedings.

I. Factual and Procedural History

The Plaintiffs are nineteen individuals who either live, formerly lived, or owned property near the Paoli Railroad Yard (the "Rail Yard"). The named Defendants in this appeal (Monsanto Co., Westinghouse Electric Corp., and General Electric Co.), as well as several other defendants, were accused by the Plaintiffs of releasing large quantities of toxic chemicals, including polychlorinated biphenyls, or PCBs, at the Rail Yard. The Plaintiffs alleged that these toxic chemicals injured them personally and/or harmed their property. The Plaintiffs' cases were consolidated for trial, but depending on their harm--personal injuries or property damages--involved requests for distinctly different remedies. Those that suffered personal injuries asked, inter alia, for medical monitoring and money damages to compensate them for their personal injuries. Those that did not live near the site and suffered only injuries to their property, such as Cohen and Lament, asked only for money damages to compensate for their property losses.

A.

As we noted above, this case has been before this court a number of times.1 After some thirteen years of litigation, the Defendants ultimately prevailed at trial, and we affirmed the judgment entered on that verdict. See Paoli IV, 113 F.3d at 464. Thus, the federal case is at an end except for this costs award dispute. The same cannot be said for Paoli Rail Yard litigation pending in the Pennsylvania state courts; several individual actions and a class action are still in the pre-trial stage in the Chester County Court of Common Pleas.2

Having prevailed at trial in the District Court, the Defendants filed their bill of costs with the Clerk of Court, as was their right under FED. R. CIV. P. 54(d)(1). After the Plaintiffs lost their appeal to this court challenging the outcome of the trial, they filed objections to the bill of costs. On the following day, the Clerk held a telephonic conference regarding the taxing of costs. Briefing followed, and the Clerk entered an order taxing costs in favor of Defendants in the amount of $184,675.12. The Clerk stated that the Plaintiffs were jointly and severally liable for this amount.

B.

Both sides filed motions with the District Court seeking review of the...

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