Farmer v. Arabian American Oil Company

• Decision Date: 06 November 1963
• Docket Number: No. 240,Docket 27893.,240
• Citation: 324 F.2d 359
• Parties: Howard FARMER, Plaintiff-Appellee, v. ARABIAN AMERICAN OIL COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

324 F.2d 359 (1963)

Howard FARMER, Plaintiff-Appellee, v. ARABIAN AMERICAN OIL COMPANY, Defendant-Appellant.

No. 240, Docket 27893.

United States Court of Appeals Second Circuit.

Argued February 1, 1963.

Submitted March 18, 1963.

Decided November 6, 1963.

Chester Bordeau, New York City (White & Case and William D. Conwell, New York City, on the brief), for defendant-appellant.

Kalman I. Nulman, New York City (William V. Homans, New York City, on the brief), for plaintiff-appellee.

Before LUMBARD, Chief Judge, and CLARK, WATERMAN, MOORE, FRIENDLY, SMITH, KAUFMAN, HAYS and MARSHALL, Circuit Judges.

Submitted to the in banc court March 18, 1963.

LUMBARD, Chief Judge (with whom Judges MOORE, FRIENDLY, KAUFMAN and MARSHALL concur).

This appeal presents a question of importance in the administration of civil litigation, namely the power of a district judge to tax costs for the transportation of witnesses to trial from places without the judicial district and more than 100 miles distant from the place of trial. We hold that costs for such travel may be allowed and in the light of that holding we examine the rulings with respect thereto made by the district judges at the two trials of Farmer's suit for an alleged breach of his contract of employment.

Howard Farmer instituted this litigation on May 24, 1956, in the Supreme Court, New York County, against the Arabian American Oil Company (Aramco). Aramco removed the cause to the United States District Court for the Southern District of New York, there being diversity of citizenship. A trial was had before Judge Palmieri and a jury, which terminated in a jury disagreement. Thereafter, Aramco's motion for a directed verdict was granted, 176 F.Supp. 45 (1959), but this determination we reversed, 2 Cir., D.C., 277 F.2d 46, cert. denied, 364 U.S. 824, 81 S.Ct. 60, 5 L.Ed.2d 53 (1960), necessitating a second trial. Farmer failed to comply with an order directing him to post security for costs, and the action was dismissed. We again reversed, holding that the order constituted an abuse of discretion, as it effectively precluded the plaintiff from prosecuting his action because of the expense of procuring the bond, 2 Cir., 285 F.2d 720 (1960). A second jury trial, before Judge Weinfeld, resulted in a verdict for the defendant. The Clerk taxed costs of $11,900.12 which on Farmer's motion were reduced by Judge Weinfeld to $831.60, and from this order Aramco appeals. After the appeal was heard by a panel consisting of Judges Lumbard, Smith and Hays, the active judges of this court agreed that the appeal should be considered in banc.

Some earlier decisions cast doubt on the appealability of a judgment solely for costs. See Newton v. Consolidated Gas Co., 265 U.S. 78, 44 S.Ct. 481, 68 L.Ed. 909 (1924); The James McWilliams, 49 F.2d 1026 (2 Cir. 1931); Walker v. Lee, 71 F.2d 622 (9 Cir. 1934). However, Rule 54(d) of the Federal Rules of Civil Procedure now governs the granting of costs. It states: "Except when an express provision therefor is made either in a statute of the United States or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs * * *." The effect of this provision, combined with 28 U.S.C. § 1920,¹ is to make the right to statutory costs subject to judicial discretion. Within the careful statutory scheme, no hint of intent to create an element of uncontrolled discretion can be found, nor is one lightly to be implied. Furthermore, it is unquestionably true that the portion of the judgment relating to costs may be reviewed on appeal, for abuse of that discretion, if other issues are also raised. See, e. g., Chemical Bank & Trust Co. v. Prudence-Bonds Corp., 207 F.2d 67 (2 Cir. 1953), 347 U.S. 904, 74 S.Ct. 429, 98 L.Ed. 1063 (1954); Chicago Sugar Co. v. American Sugar Refining Co., 176 F.2d 1 (7 Cir. 1949), cert. denied, 338 U.S. 948, 70 S.Ct. 486, 94 L.Ed. 584 (1950). We see no reason why we should not hear an appeal from this element alone. It is surely a final judgment within the meaning of 28 U.S.C. § 1291. See Donovan v. Jeffcott, 147 F.2d 198 (9 Cir. 1945). We hold that when, as here, the question is not whether the district judge should have allowed or disallowed particular items of costs, but is rather whether he exceeded, and therefore abused, his discretion, a judgment solely for costs is appealable. Lichter Foundation, Inc. v. Welch, 269 F.2d 142 (6 Cir. 1959); Kemart Corp. v. Printing Arts Research Laboratories, 232 F.2d 897 (9 Cir. 1956); Prudence-Bonds Corp. v. Prudence Realization Corp., 174 F.2d 288 (2 Cir. 1949); Harris v. Twentieth Century-Fox Film Corp., 139 F.2d 571 (2 Cir. 1943); 6 Moore, Federal Practice 1309 (1953).

In taxing costs, the Clerk included substantial amounts for air transportation of defendant's witnesses from as far away as Saudi Arabia to the place of trial. Judge Weinfeld reduced these assessments to a uniform allowance of $16.00 per witness, or the equivalent of 100 miles each way at $.08 per mile. Judge Weinfeld took this action as an exercise of judicial discretion, choosing not to rely upon the 100-mile limitation frequently imposed by the federal courts on their own power to assess transportation costs of witnesses brought from without the judicial district in which the trial court is sitting. We must therefore first determine the applicability of the 100-mile limitation. We hold the 100-mile rule inapplicable as a restraint upon the exercise of judicial discretion in the assessment of transportation costs for witnesses brought to trial.

The 100-mile rule appears to have evolved out of the limitation upon the subpoena power of a federal court to an area within the judicial district or 100 miles from the place of trial. See Federal Rules of Civil Procedure 45(e). There is not a shadow of a suggestion, however, in 28 U.S.C. § 1920(3), which provides simply that "fees and disbursements for * * * witnesses" may be taxed as costs, that the court's power to issue a subpoena has anything whatever to do with what constitutes a recoverable disbursement for a witness. Indeed, 28 U.S.C. § 1821 as amended in 1949 provides clear authorization for the taxation of the actual expenses of travel for witnesses who come from afar. Section 1821 expressly provides that in lieu of the usual mileage allowance, actual travel expenses shall be allowed to witnesses who are required to travel between "the Territories and possessions, or to and from the continental United States." The great bulk of judicial authority supporting the 100-mile rule is to be found in cases decided prior to the enactment of the 1949 amendment which added the above-quoted provision. Friedman v. Washburn Co., 155 F.2d 959 (7 Cir. 1946); Vincennes Steel Corp. v. Miller, 94 F.2d 347 (5 Cir. 1938). The vast majority of the more recent cases which approve the rule do no more than cite other cases, without considering the reasons which might lend support to it or weigh against it. Those cases decided subsequent to the 1949 legislation give it little or no attention. E. g., Ludvigsen v. Commercial Stevedoring Co., Inc., 228 F.2d 707 (2 Cir.) (dictum), cert. denied, 350 U.S. 1014, 76 S.Ct. 660, 100 L.Ed. 874 (1956); Kemart Corp. v. Printing Arts Research Laboratories, Inc., 232 F.2d 897 (9 Cir. 1956); Perlman v. Feldmann, 116 F.Supp. 102 (D.Conn. 1953), reversed on other grounds, 219 F.2d 173, 50 A.L.R.2d 1134 (2 Cir.), cert. denied, 349 U.S. 952, 75 S.Ct. 880, 99 L.Ed. 1277 (1955). Moreover, in some recent cases in the lower courts the 100-mile rule has been flatly rejected. Bennett Chemical Co. v. Atlantic Commodities, Ltd., 24 F.R.D. 200 (S.D.N.Y. 1959); Maresco v. Flota Mercante Grancolombiana, S.A., 167 F.Supp. 845 (E.D.N.Y.1958); Bank of America v. Loew's International Corp., 163 F. Supp. 924 (S.D.N.Y.1958).

Whatever the merits of the prior judicial rule, the Congress has not given any compelling evidence demonstrating an intention that it be continued. The reason for the addition of an express provision for actual travel expenses in the case of overseas travel is stated in the letter of the Assistant to the Attorney General, appended to and made part of the report of the Senate Committee discussing the 1949 bill: "For overseas travel, it is recommended that witnesses be allowed their actual expenses at the lowest first-class rate available. There have been times when witnesses have been required to engage in such travel at a personal financial sacrifice." S. Rep. No. 187, 81st Cong. 1st Sess., reprinted in 1949 U.S.Code Cong.Serv. pp. 1231, 1233.

The 100-mile rule finds as little support in reason as it does in the statutes. Whether a witness comes into court voluntarily or under the compulsion of a subpoena, he comes at the behest of the party for whom he appears as a witness. Either way, he serves the interest of the court in arriving at a just determination of the controversy. See United States v. Sanborn, 28 F. 299 (C.C.D.Mass.1886) (opinion by Mr. Justice Gray). The fact that a subpoena does not issue because the witness is outside the reach of the court has nothing to do with the problem of how to allocate the cost of his appearance at the trial.

Nor can the 100-mile rule be defended as an allocation of the expenses of litigation in keeping with the practice of our courts to let such expenses fall on the party who incurs them. Fees for legal services are usually the largest single expense of litigation. In most cases, the prevailing party must pay such fees himself, even if he has come into court only to defend against an unjust accusation. There is no reason to extend this practice further. Certainly there is no reason to extend it by the curious means of limiting the recovery of travel expenses to 100 miles, a figure which may bear no relation to the distance actually traveled. As this case well illustrates, a 100-mile limitation is an anachronism in a day when the facility of world-wide travel...