Callicrate v. Farmland Industries, Inc., s. 96-3075

• Decision Date: 27 March 1998
• Docket Number: 96-3100 and 96-3101,Nos. 96-3075,s. 96-3075
• Citation: 139 F.3d 1336
• Parties: 98 CJ C.A.R. 1520 Michael CALLICRATE, dba Callicrate Cattle Company, Plaintiff-Appellant-Cross-Appellee, v. FARMLAND INDUSTRIES, INC., a Kansas corporation, Defendant-Appellee, Jim Thomas, an individual, Defendant-Appellee-Cross-Appellant, and The Co-Operative Union Mercantile Company, a Kansas Co-Operative, Defendant-Appellee-Cross-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1336

139 F.3d 1336

98 CJ C.A.R. 1520

Michael CALLICRATE, dba Callicrate Cattle Company Plaintiff-Appellant-Cross-Appellee, v. FARMLAND INDUSTRIES, INC., a Kansas corporation, Defendant-Appellee Jim Thomas, an individual, Defendant-Appellee-Cross-Appellant and The Co-Operative Union Mercantile Company, a Kansas Co-Operative, Defendant-Appellee-Cross-Appellant.

Nos. 96-3075, 96-3100 and 96-3101.

United States Court of Appeals Tenth Circuit.

March 27, 1998.

T.J. Carney, Bradley, Campbell, Carney & Madsen, Golden, CO (Lee Turner, Great Bend, KS, with him on the brief), for Plaintiff-Appellant-Cross-Appellee, Michael Callicrate, dba Callicrate Cattle Company.

Lee M. Smithyman, Smithyman & Zakoura, Overland Park, KS (David J. Roberts of Smithyman & Zakoura, Overland Park, KS, and John J. Joslin, Kansas City, MO, with him on the brief), for Defendant-Appellee, Farmland Industries, Inc.

Brian W. Wood, Hampton, Royce, Engleman & Nelson, Salina, KS (Clarence L. King, Jr. of Hampton, Royce, Engleman & Nelson, Salina, KS, and Timothy B. Mustaine of Foulston & Siefkin, Wichita, KS, on the brief), for Defendants-Appellees-Cross-Appellants, Jim Thomas and The Co-Operative Union Mercantile Company.

Before KELLY, HOLLOWAY and HENRY, Circuit Judges.

HOLLOWAY, Circuit Judge.

Plaintiff-Appellant-Cross-Appellee, Michael Callicrate, brought this action against defendants Farmland Industries, Inc., Jim Thomas, and The Co-Operative Union Mercantile Company (Co-Op) in the United States District Court for the District of Kansas, alleging diversity jurisdiction pursuant to 28 U.S.C. § 1332. Callicrate asserted claims of breach of contract, breach of warranty strict liability, fraud, and for punitive damages. Upon finding a lack of diversity between the parties, the district court dismissed the action without prejudice on defendants' motions for want of subject matter jurisdiction. ¹

Following its order of dismissal, the district court awarded costs in favor of all defendants, but imposed a stay of such award with respect to Defendants-Appellees-CrossAppellants Jim Thomas and The Co-Operative Union Mercantile Company. ² On appeal, in No. 96-3075 Callicrate contends that the district court clearly erred by finding the costs proper for necessary depositions and documents and abused its discretion by imposing excessive costs. In No. 96-3100 Thomas' cross-appeal seeks reversal of the stay of the cost award in his favor. The Co-Operative in its cross-appeal in No. 96-3101 says that the district court correctly taxed costs but erred in staying execution of the order taxing costs. ³ We have jurisdiction by virtue of 28 U.S.C. § 1291.

I

Plaintiff Michael Callicrate brought this action in November of 1993 alleging various state-law claims arising out of a dispute involving the sale of protein feed supplement by defendant, The Co-Operative (Co-Op), to Callicrate. Callicrate based subject matter jurisdiction on diversity of citizenship under 28 U.S.C. § 1332. In his complaint, Callicrate stated that he was a resident of Wyoming, that defendant Farmland was believed to be a Kansas corporation with its principal place of business in Kansas City, Missouri, that defendant Thomas was believed to be a resident of Kansas, and that defendant Co-Op was a Kansas corporation with its principal place of business in Kansas. Supp.App. 1.

In January and February of 1995, Callicrate filed two separate motions for partial summary judgment against Co-Op and Thomas, to which these defendants eventually filed a response. All defendants additionally filed motions to dismiss for lack of subject matter jurisdiction in March of 1995, alleging that Callicrate was, in fact, a resident of Kansas. The depositions of ten individuals were cited or used by the parties in these jurisdictional motions and briefs and in Callicrate's motions for partial summary judgment. ⁴ In July of 1995, the district court granted defendants' motions to dismiss for want of subject matter jurisdiction, finding that Callicrate was a citizen of Kansas rather than Wyoming and concluding that complete diversity between the parties was therefore lacking. In its order of dismissal, the district court referenced five of the depositions submitted by the parties. Callicrate subsequently refiled his action in a Kansas state court in September of 1995 against Co-Op and Thomas, but not against Farmland.

Following the district court's order of dismissal, all defendants submitted a bill of costs and Callicrate filed objections to the requested costs. In January of 1996, the Clerk awarded Farmland $8,146 for copying expenses, Thomas $31,088.69 for deposition transcripts, copying and printing expenses, and Co-Op $9,735.93 for deposition transcripts and copying expenses. Callicrate subsequently moved to retax the costs, and the district court entered an order upholding the costs assessed by the Clerk. However, recognizing that some of the assessed costs may be reassessed in the state court action, the district court imposed a stay on the execution of the award of costs with respect to Co-Op and Thomas, pending disposition of the state court action. ⁵ The district court further stated that if Callicrate should prevail in state court, or if the costs are waived by defendants, no costs will be due. The district court held, however, that if defendants prevail in state court or do not waive the costs in the event a settlement is entered, the costs awarded in the federal court will be due by Callicrate.

II

We must keep in mind the fact that in the instant case we are dealing with what are "just costs" under 28 U.S.C. § 1919, and not with costs allowed under § 1920 or Fed.R.Civ.P. 54(d). See Edward W. Gillen Co. v. Hartford Underwriters Ins. Co., 166 F.R.D. 25, 27-28 (E.D.Wis.1996). Nevertheless the standards applied under § 1920 are helpful, we feel. See Signorile v. Quaker Oats Co., 499 F.2d 142, 145 (7th Cir.1974). ⁶ The taxing of costs rests in the sound judicial discretion of the district court, cf. U.S. Industries, Inc. v. Touche Ross & Co., 854 F.2d 1223, 1245 (10th Cir.1988) (reviewing rulings on requests for costs sought under 28 U.S.C. § 1920), and we therefore review the district court's award of costs and its order imposing the stay of execution for an abuse of discretion. See U.S. Industries, 854 F.2d at 1245; Jane L. v. Bangerter, 61 F.3d 1505, 1509 (10th Cir.1995). "An abuse of discretion occurs only when the trial court bases its decision on an erroneous conclusion of law or where there is no rational basis in the evidence for the ruling." In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 669 F.2d 620, 623 (10th Cir.1982). Moreover, even if the court finds the costs sought were for materials or services necessarily obtained, the amount of the award requested must be reasonable. U.S. Industries, 854 F.2d at 1245. And though use at trial by counsel or the court demonstrates necessity, if materials or services are reasonably necessary for use in the case even though not used at trial, the court can find necessity and award the recovery of costs. Id. at 1246.

The costs at issue here involve expenses covering the transcribing and/or copying of twenty depositions. ⁷ Callicrate argues that the defendants made no showing that the depositions were necessarily obtained for use in the case. Further, Callicrate maintains that the majority, if not all, of the depositions taken by defendants were purely investigatory in nature, and, as such, should not have been taxed as costs. In support of his argument that the depositions were not necessary for use in this case, Callicrate points out that only approximately 150 pages out of 5,860 pages of deposition transcripts were submitted by defendants. Moreover, although each defendant requested costs for the transcript copies of the eleven depositions taken by Callicrate, no portion of nine of these depositions was ever submitted to the district court. Callicrate therefore argues that the award of costs was excessive, improper, and constituted an abuse of discretion.

We disagree. The costs of taking and transcribing depositions reasonably necessary for litigation are generally awarded to the prevailing party under 28 U.S.C. § 1920. As noted earlier, when an action is dismissed by a district court, or a few other enumerated courts, for want of jurisdiction as was the case here, the payment of "just costs" may be ordered. 28 U.S.C. § 1919. Although depositions taken merely for discovery are not taxable as costs, a deposition is not obtained unnecessarily even if not strictly essential to the court's resolution of the case where the deposition is offered into evidence, is not frivolous, and is within the bounds of vigorous advocacy. Furr v. AT & T Technologies, Inc., 824 F.2d 1537, 1550 (10th Cir.1987).

Whether materials are necessarily obtained for use in the case is question of fact to be determined by the district court. U.S. Industries, 854 F.2d at 1245. However, "items proposed by winning parties as costs should always be given careful scrutiny." Id. (quoting Farmer v. Arabian American Oil Co., 379 U.S. 227, 235, 85 S.Ct. 411, 416, 13 L.Ed.2d 248 (1964)). "Necessarily obtained" does not mean that the materials obtained added to the convenience of the parties or made the task of the trial judge easier, and the "most direct evidence of 'necessity' is the actual use of materials obtained by counsel or by the court." U.S. Industries at 1245-46. However, if materials are reasonably necessary for use in the case although not used at trial, the court is nonetheless empowered to find necessity and award costs. Id.

We have recognized that it is ordinarily best to judge reasonable necessity under § 1920 in light of the facts known to the parties at the time the expenses were incurred, Merrick v. Northern Natural Gas Co., 911 F.2d 426, 434 (10th Cir.1990) (citing Copper Liquor, Inc. v. Adolph Coors Co., 684 F.2d 1087,...