Howard v. Cassity

• Decision Date: 21 February 2020
• Docket Number: Case No. 4:09-CV-01252 ERW
• Parties: JO ANN HOWARD AND ASSOCIATES, P.C., et al., Plaintiffs, v. J. DOUGLAS CASSITY, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

JO ANN HOWARD AND ASSOCIATES, P.C., et al., Plaintiffs, v. J. DOUGLAS CASSITY, et al., Defendants.

Case No. 4:09-CV-01252 ERW

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

February 21, 2020

MEMORANDUM AND ORDER

This matter is before the Court on Plaintiffs' Amended Bill of Costs and Plaintiffs' Amended Motion for Award of Attorneys' Fees. ECF Nos. 2989, 2991. The motions are fully briefed and ready for disposition.

I. BACKGROUND

This cause of action commenced on August 6, 2009, alleging violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961-1968, violations of the Lanham Act, 15 U.S.C. §§ 1051-1141n, state law claims concerning intentional and negligent fraudulent misrepresentations, negligence and gross negligence, breach of fiduciary duties, and violations of the Texas Receivership Act, Tex. Ins. Code §§ 443.202-443.205. In March 2015, the matter proceeded to a jury trial on Plaintiffs'¹ claims against the remaining Defendants PNC Bank, N.A. ("PNC") and National City Bank, N.A. ("NCB") (collectively "PNC"). The jury determinedPNC was liable to Plaintiffs under negligence and breach of fiduciary duty theories in the amount of $355.5 million in compensatory damages and $35,550,000 in punitive damages.

Both Plaintiffs and PNC appealed the Court's decisions. The Eighth Circuit affirmed the judgment in part, reversed in part, and remanded for further proceedings. Jo Ann Howard & Assoc., P.C. v. Cassity, 868 F.3d 637 (8th Cir. 2017). The Eighth Circuit concluded Plaintiffs' claims arose under trust law in equity rather than tort law and held the claims were properly tried to the Court. Id. at 651. This Court then held a bench trial which commenced on November 28, 2018 and concluded on January 11, 2019. On July 3, 2019, the Court found PNC liable for breach of fiduciary duty by a trustee. ECF No. 2953 pp. 265-278. That same date the Court entered judgment in favor of Plaintiffs and against PNC in the amount of $102,135,293.07. ECF No. 2954. The Court issued an Amended Judgment on December 4, 2019 entering a total amount of damages of $99,497,290.24. ECF No. 3035.

After obtaining judgment in their favor, Plaintiffs filed a Bill of Costs and a Motion for Award of Attorneys' Fees. ECF Nos. 2962, 2965. PNC moved to defer ruling on Plaintiffs' motions for costs and attorneys' fees pending the outcome of its appeal to the Eighth Circuit Court of Appeals. ECF No. 2973. On August 19, 2019, the Court denied PNC's motion to defer ruling and issued a Scheduling Order setting forth a discovery and briefing schedule related to Plaintiffs' Bill of Costs and Motion for Award of Attorneys' Fees. ECF No. 2985. The Court further announced it would award attorneys' fees and costs to the Plaintiffs, "but only after August 17, 2017, the date of the Eighth Circuit's remand to this Court." ECF No. 2985 p. 2.

Thereafter, Plaintiffs filed an Amended Bill of Costs, seeking a total of $3,108,810.73 in taxable costs, and Amended Motion for Award of Attorneys' Fees, requesting an award of $13,206,942 as reasonable attorneys' fees, including fees incurred pre-remand. ECF Nos. 2989,2991. PNC opposes the amounts requested by Plaintiffs and further argues the Court lacks discretion to award attorneys' fees in equity. PNC also filed two separate motions to strike Plaintiffs' Amended Motion for Award of Attorneys' Fees. ECF Nos. 2996, 3001.

II. DISCUSSION

A. Bill of Costs

Rule 54(d) of the Federal Rules of Civil Procedure provides "costs—other than attorney's fees—should be allowed to the prevailing party." See also In re Derailment Cases, 417 F.3d 840, 844 (8th Cir.2005) ("A prevailing party is presumptively entitled to recover all of its costs."). A district court has broad discretion over awarding costs to a prevailing party. Blakley v. Schlumberger Technology Corp., 648 F.3d 921, 930 (8th Cir. 2011) (citation omitted). Before any bill of costs is taxed, the party claiming any item of cost or disbursement must attach an affidavit, having knowledge of the facts, that such item is correct and has been necessarily incurred in the case and that services for which fees have been charged were actually and necessarily preformed. 28 U.S.C. § 1924. Pursuant to 28 U.S.C. § 1920, costs which may be taxed include:

(1) Fees of the clerk and marshal;

(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;

(5) Docket fees under section 1923 of [Title 28 U.S.C.];

(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of [Title 28 U.S.C.].

28 U.S.C. § 1920(1)-(6). The losing party bears the burden of overcoming the presumption the prevailing party is entitled to recover all costs permitted by § 1920. Stanley v. Cottrell, Inc., 784 F.3d 454, 464 (8th Cir. 2015).

The Court may not award costs other than those authorized by § 1920, because this section "imposes rigid controls on cost-shifting in federal courts[.]" Brisco-Wade v. Carnahan, 297 F.3d 781, 782 (8th Cir. 2002) (internal citations omitted). However, upon objection by the opposing party as to authorized costs, the Court may exercise its discretion to grant or deny costs. Pershern v. Fiatallis N. Am., Inc., 834 F.2d 136, 140 (8th Cir. 1987).

1. § 1920(2) - Printed or Electronically Recorded Transcripts

Plaintiffs request $118,169.43 in fees for printed or electronically recorded transcripts necessarily obtained for use in the case. The total fees are comprised of $72,218.04 for costs of deposition transcripts and videos for post-remand deponents; $3,909.15 for costs of post-remand hearing transcripts; and $42,042.24 for costs of trial transcripts used in the second trial. In response, PNC states they do not object to Plaintiffs' requested fees for post-remand transcripts. Thus, the Court will tax costs in favor of Plaintiffs in the amount of $118,169.43 under § 1920(2).

2. § 1920(3)

a. Witnesses

As fees for witnesses under § 1920(3), Plaintiffs seek $2,798,832.86 for witness fees and contract employee fees. Specifically, Plaintiffs request $54.96 for post-remand witness Herbert Morisse's trial attendance and mileage fees; $3,380.35 for post-remand witness Tony Lumpkin's subsistence fees; $2,744,288.41 for post-remand expert witness fees; and $51,109.14 for post-remand Special Deputy Receiver ("SDR") contract employee fees. PNC does not object to feesand disbursements for post-remand witnesses Herbert Morisse and Tony Lumpkin in the total amount of $3,435.43. However, PNC argues post-remand expert witness fees and contract employee fees are not taxable as costs under § 1920(3). Plaintiffs, on the other hand, contend the expert witness and contract employee fees are taxable under the Missouri Uniform Trust Code ("MUTC"), Mo. Rev. Stat. § 456.10-1004, and the Court's inherent equitable power.

The MUTC provides, "[i]n a judicial proceeding involving the administration of a trust, the court, as justice and equity may require, may award costs and expenses, including reasonable attorney's fees, to any party, to be paid by another party or from the trust that is the subject of the controversy." Mo. Rev. Stat. § 456.10-1004. Plaintiffs argue the costs of post-remand expert fees and post-remand SDR contract employee fees, while not covered under § 1920, are properly awarded under the MUTC as "costs and expenses." PNC claims neither the MUTC nor equitable principles can expand the categories of costs that are taxable in federal court beyond those listed in § 1920.

The Court finds federal law governs the award of costs and expenses in this case. See Chaparral Res., Inc. v. Monsanto Co., 849 F.2d 1286, 1292 (10th Cir. 1988) ("Because federal procedural law governs the taxation of costs, any discretion afforded the trial court would arise under federal law, namely Fed. R. Civ. P. 54(d), and not under state law. That discretion is constrained by 28 U.S.C. §§ 1821 and 1920."). "[A]bsent explicit statutory or contractual authorization for the taxation of the expenses of a litigant's witness as costs, federal courts are bound by the limitations set out in 28 U.S.C. § 1821 and § 1920." Crawford Fitting Co. v. J. T. Gibbons, Inc., 482 U.S. 437, 445 (1987).

While Plaintiffs argue the MUTC provides for an award of expenses not limited by § 1821 and § 1920, the Court notes Plaintiffs motion unambiguously requests the Clerk tax "feesfor witnesses and other itemized costs" under Rule 54(d) and 28 U.S.C §§ 1920 and 1821. Further, the MUTC is discretionary and "not tantamount to an express statutory mandate" sufficient to override the limitations set forth in § 1821.² Chaparral Resources, 849 F.2d at 1292. Contrary to Plaintiffs' position, the Court does not find the itemized costs for expert witness fees and contract employee fees totaling nearly $3M to be a procedural technicality. To the extent Plaintiffs sought reimbursement of these fees as expenses under the MUTC, they should have requested those fees in an appropriate motion. See Fed. R. Civ. P. 54(d)(2)(A) ("A claim for attorney's fees and related nontaxable expenses must be made by motion [for attorney's fees]."). The Court will therefore deny Plaintiffs' motion for the costs of post-remand expert witness fees and post-remand contract employee fees set forth in its Bill of Costs.

b. E-Discovery Costs

Plaintiffs also request e-discovery fees. However, PNC argues these e-discovery fees are outside the Court's post-remand parameters for an award of costs. Plaintiffs respond e-discovery costs incurred before August 17, 2017 were necessary for the successful development and presentation of Plaintiffs' breach of trust claim in the second trial. PNC does not argue thesecosts...