Eagle Forum v. Phyllis Schlafly's Am. Eagles

• Decision Date: 30 October 2020
• Docket Number: Case No. 16-CV-00946-NJR
• Citation: 498 F.Supp.3d 1024
• Parties: EAGLE FORUM, an Illinois Not-for-Profit Corporation, Plaintiff, v. PHYLLIS SCHLAFLY'S AMERICAN EAGLES, a Virginia Not-for-Profit Corporation, Defendant.
• Court: U.S. District Court — Southern District of Illinois

498 F.Supp.3d 1024

EAGLE FORUM, an Illinois Not-for-Profit Corporation, Plaintiff,

v.PHYLLIS SCHLAFLY'S AMERICAN EAGLES, a Virginia Not-for-Profit Corporation, Defendant.

Case No. 16-CV-00946-NJR

United States District Court, S.D. Illinois.

Signed October 30, 2020

Brian M. Wacker, James P. Sanders, John T. Walsh, Zachary R. McMichael, SmithAmundsen LLC, St. Louis, MO, for Plaintiff.

Henry Elster, Bick & Kistner, Nelson L. Mitten, P. Tyler Connor, Randall D. Grady, Riezman Berger, P.C., St. Louis, MO, John D. Stobbs, II, Stobbs Law Offices, Alton, IL, for Defendant Phyllis Schlafly's American Eagles.

Dawn A. Sallerson, Hinshaw & Culbertson, Belleville, IL, Adam Robert Vaught, Thomas P. McGarry, Hinshaw & Culbertson, Chicago, IL, for Defendant Joel Rohlf.

MEMORANDUM AND ORDER

ROSENSTENGEL, Chief Judge:

Pending before the Court are the Bill of Costs (Doc. 233) and Motion for Attorneys’ Fees and Nontaxable Expenses (Doc. 234) filed by Defendant Phyllis Schlafly's American Eagles ("PSAE"). PSAE seeks $11,073.65 in costs and $610,243.80 in attorneys’ fees and nontaxable expenses. Plaintiff Eagle Forum ("EF") has filed an Objection (Doc. 236) to PSAE's Bill of Costs and an Opposition (Doc. 240) to PSAE's Motion for Attorneys’ fees and Nontaxable Expenses. For the reasons set forth below, PSAE's Bill of Costs are granted in part and denied in part, and PSAE's Motion for Attorneys’ Fees and Nontaxable Expenses is granted in part and denied in part.

FACTUAL & PROCEDURAL BACKGROUND

After four years in the trenches, six separate legal battles in jurisdictions across the country,¹ media campaigns,² and a never-ending army of lawyers, politicians, and entities, this Court is still working to untangle just one section of the legal web between these battling powers.

The battle here is between PSAE and EF. PSAE and EF are both nonprofit organizations formed by Phyllis Schlafly that support causes related to the modern conservative political ideology. (Doc. 43, p. 6; Doc. 203-2, pp. 2-6). EF was created in 1975 (Id. ). PSAE, formally named Citizen Empowerment League, was created in 2015 (Doc. 43, p. 9). As discussed in Eagle Forum v. Phyllis Schlafly's Am. Eagles , 451 F. Supp. 3d 910, 914 (S.D. Ill. 2020), Citizen Empowerment League's name was changed to PSAE, after Phyllis Schlafly's own daughter, Anne Schlafly Cori, and other members of EF's directors held an illegal April 11, 2016 board meeting,³ voted to change leadership and ultimately took control of EF's assets (Doc. 203-12, 50-51; Doc. 43, p. 9).

PSAE was comprised mostly of the minority board members, including Phyllis Schlafly, and ex-leadership from EF (Id. at 10). According to EF, PSAE solicited support and funds from EF's donors without permission and used EF's assets and resources—including EF's money; intellectual, real, and personal property; mailing lists; and P.O. Box (Doc. 43, p. 11). PSAE denied the allegation, but admitted to using Schlafly's name and image along with employing phrases like "Our Eagle Leaders," "my American Eagles," and "loyal supporters" who have been fighting "for decades" (Id. at p. 11). EF also alleges that PSAE registered two unauthorized websites, www.psamericaneagles.org and www.psamericaneagles.com, using its e-mail address on its behalf (Id. at pp. 10-11). PSAE admits registering the websites and states that it never intended to sell, transfer, or assign the websites to a third party for gain (Doc. 203, p. 5).

After three years of discovery, ten hearings and conferences (Docs. 25, 44, 53, 63, 67, 73, 97, 109, 139, 193), and a multitude of briefing and orders over the course of this case, the Court was under the impression that the parties finally produced all documents responsive to each other's written discovery requests. In April 2019, Magistrate Judge Daly ordered PSAE to provide the documents identified in Doc. 161 for inspection by the Court (Doc. 171). PSAE timely responded and indicated that it had already produced many of those documents to EF's directors (Doc. 172). For four months , EF did not contest PSAE's production, but when PSAE filed its Motion for Summary Judgment (Doc. 202), EF woke up and filed its Rule 56(d) Motion to Deny or Defer Consideration of PSAE's Motion for Summary Judgment (Doc. 206) noting that "it is essential that [EF] be able to review all of the documents to which it is entitled, especially those that PSAE has improperly refused to produce for years" (Id. at p. 4). As a result, Magistrate Judge Daly ordered that further documents referred to in Doc. 161 be produced to EF in her order of November 13, 2019 (Doc. 212).

Indeed, on November 27, 2019, EF represented to the undersigned in its Motion to Stay or In the Alternative for Continuance of Trial Setting "that PSAE has finally produced all the documents responsive to [EF]’s written discovery requests, [EF] is in a position to complete factual depositions" (Doc. 215, p. 6). On January 23, 2020, the Court denied both EF's Rule 56(d) Motion and Motion to Stay and ordered Eagle Forum Foundation ("EFF") to produce documents disclosing the "amounts and dates of individual donations and all other information encompassed within Requests 1, 2 and 5" (Doc. 228). EFF failed to comply with the Court's January 23, 2020 order. On March 16, 2020, this Court ordered EF to respond to PSAE's Motion for Contempt (Doc. 229) by March 23, 2020 and state why the Court should not hold EF in contempt for its failure to comply with the January Order (Doc. 230). Neither EF nor EFF complied with this Court's March 16, 2020 order.

Despite EF and EFF withholding documents from PSAE, this Court granted PSAE's Motion for Summary Judgment on April 1, 2020 (Doc. 232). PSAE filed its Bill of Costs (Doc. 233) and moved for attorneys’ fees and nontaxable expenses (Doc. 234). EF filed its Objections to PSAE's Bill of Costs (Doc. 236) and its Opposition to PSAE's Motion for Attorneys’ Fees (Doc. 240).

ANALYSIS

I. PSAE's Bill of Costs

A. PSAE is the Prevailing Party Under Federal Rule of Civil Procedure 54(d)

Although EF lost on all its claims, EF argues that PSAE is not a prevailing party because PSAE's counterclaims were dismissed with prejudice (Doc. 236, p 4). These counterclaims, according to EF, were substantial and EF prevailed, thus "it cannot be said that PSAE is the prevailing party ‘as to the substantial part of the litigation.’ " (Id. ). Accordingly, EF argues "[t]his mixed outcome requires the Court to exercise its discretion that both [EF] and PSAE bear their own costs." (Id. ). This Court disagrees.

"[U]nless 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). 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). "[W]hen one party gets substantial relief it ‘prevails’ even if it doesn't win on every claim." Slane v. Mariah Boats, Inc. , 164 F.3d 1065, 1068 (7th Cir. 1999).

The Seventh Circuit and some of its district courts have denied a litigant's bill of costs and ordered the parties to bear their own costs when a case is a "mixed outcome." Most of these decisions, however, recognize a case as a "mixed outcome" when the plaintiff prevails on at least one claim. See Testa , 89 F.3d at 447 (mixed outcome and court denied costs to the plaintiff when plaintiff lost on false arrest claim, but won $1,500 on malicious prosecution claim); Baker v. Lindgren , 856 F.3d 498, 502 (7th Cir. 2017) (mixed outcome and court denied costs to the plaintiffs even though plaintiffs recovered $30,000 on two claims); Ello v. Brinton , 2019 WL 6975093, at *2 (N.D. Ind. Dec. 20, 2019) (mixed outcome and court denied costs to defendant when plaintiff only won on breach of contract claim); Masud v. Rohr-Grove Motors, Inc. , 2016 WL 3418567, at *1 (N.D. Ill. June 22, 2016) (mixed outcome and court denied costs to plaintiff when "[plaintiff] won on one claim, her hostile work environment claim, but she received only modest relief in comparison with what she sought, and she lost on the two retaliation claims"); Thorncreek Apartments I, LLC v. Vill. of Park Forest , 123 F.Supp.3d 1012, 1014 (N.D. Ill. 2015) (mixed outcome and court denied costs to both plaintiff and defendants when plaintiff only won on several claims against two of eleven defendants); Ellis v. Cty. Club Hills , 2012 WL 4009701, at *2 (N.D. Ill. Sept. 12, 2012) (mixed outcome and court denied costs to plaintiff when plaintiff lost on summary judgment to one defendant, lost on excessive force claim as to another defendant, but won at least nominal damages on a separate excessive force claim); Gonzalez v. City of Elgin , 2010 WL 4636638, at *2 (N.D. Ill. Nov. 8, 2010) (mixed outcome and court denied costs to both plaintiff and defendant when "jury concluded that three of the seven [d]efendants violated two of the six [p]laintiffs’ constitutional state law rights"); Biomet Inc. v. TACT Med. Instruments Inc. , 2005 WL 1563429, at *8 (N.D. Ind. June 30, 2005) (mixed outcome and court denied costs to both plaintiff and defendant when plaintiff ultimately prevailed on the declaratory judgment claims, but lost on its claim for breach of best efforts clause).

At the same time, other district courts in the Seventh Circuit have granted a prevailing party's bill of costs when a case is a "mixed outcome." See Springer v. Ethicon, Inc. , 2018 WL 1453553, at *12 (N.D. Ill. Mar. 23, 2018) (granting costs to plaintiff though the "jury returned a verdict in [plaintiff's] favor on the negligent misrepresentation claim, [but] it found for defendants on the negligence and strict liability claims and declined to award punitive damages"); E.E.O.C. v. Wal-Mart Stores, Inc. , 2000 WL 1162029, at *1 (S.D. Ill. June 29, 2000) (granting costs to plaintiff though jury's verdict found for defendant on plaintiff's...