International Woodworkers of America, AFL-CIO and its Local No. 5-376 v. Champion Intern. Corp.

Decision Date02 June 1986
Docket NumberAFL-CIO,No. 83-4616,83-4616
Parties43 Fair Empl.Prac.Cas. 385, 40 Empl. Prac. Dec. P 36,148, 54 USLW 2632, 4 Fed.R.Serv.3d 721 INTERNATIONAL WOODWORKERS OF AMERICA,AND ITS LOCAL NO. 5-376, Plaintiff-Appellee, v. CHAMPION INTERNATIONAL CORPORATION, Defendant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Jeffrey A. Walker, Fuselier, Ott & McKee, M. Curtiss McKee, Jackson, Miss., for defendant-appellant.

Michael B. Trister, Richard B. Sobol, Washington, D.C., for amicus curiae, The Pay Discrimination Institute.

Steven L. Winter, New York City, for amicus-N.A.A.C.P.

James E. Youngdahl, Youngdahl, Larrison & Agee, Little Rock, Ark., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Mississippi.

Before CLARK, Chief Judge, and WISDOM, GEE, RUBIN, REAVLEY, POLITZ, RANDALL, JOHNSON, WILLIAMS, GARWOOD, JOLLY, HIGGINBOTHAM, DAVIS, HILL and JONES, Circuit Judges. *

RANDALL, Circuit Judge:

Section 1920 of Title 28 allows the fees of witnesses to be taxed as costs in federal court, while section 1821 of the same title establishes the amount that may be so taxed. The case before us today asks whether--and if so, when--federal courts in non-diversity cases may tax as costs the fees of non-court-appointed expert witnesses in excess of the amount set forth in 28 U.S.C. Sec. 1821. We hold that the fees of non-court-appointed expert witnesses are taxable only in the amount specified by Sec. 1821, except that fees in excess of that amount may be taxed when expressly authorized by Congress, or when one of three narrow equitable exceptions to the American Rule applies. Our holding overrules those portions of Jones v. Diamond, 636 F.2d 1364 (5th Cir.) (en banc), cert. dismissed, 453 U.S. 950, 102 S.Ct. 27, 69 L.Ed.2d 1033 (1981); Copper Liquor Inc. v. Adolph Coors Co., 684 F.2d 1087 (5th Cir.1982) (Copper Liquor III ), modified on other grounds en banc, 701 F.2d 542 (5th Cir.1983), and their progeny approving the taxing of excess expert witness' fees as costs under standards different from that here announced.

I.

International Woodworkers of America, AFL-CIO, CLC ("IWA") and one of its local unions sued Champion International Corporation ("Champion") alleging racial discrimination in employment in violation of Title VII and 42 U.S.C. Sec. 1981. After a trial, the district court entered judgment on the merits dismissing the claims of all plaintiffs and assessing costs against IWA. We affirmed the district court's judgment on the merits.

After denying Champion's motion for attorneys' fees, the district judge referred all other cost questions to a magistrate. The magistrate awarded Champion $14,750.87 in costs, of which $11,807.16 were for a portion of the services of an expert witness employed by Champion for the statistical aspects of the case. IWA objected to certain parts of the award, particularly to the taxing of the expert witness' fees in an amount exceeding that provided for by Sec. 1821, and the case returned to the district judge.

The district judge sustained IWA's objections to the taxing of the excess expert witness' fees, concluding that this court in Jones v. Diamond had adopted for the purpose of defendants' excess expert witness' fees the Christiansburg standard set forth by the Supreme Court governing attorneys' fees. 1 Because IWA's suit did not meet that standard, the district court refused to grant Champion expert witness' fees in excess of the amount provided by Sec. 1821.

On appeal, a panel of this court affirmed, 752 F.2d 163 (5th Cir.1985), rejecting Champion's argument that Copper Liquor III authorized excess expert witness' fees to a prevailing defendant if the "expert testimony was necessary or helpful to the presentation of civil rights claims, or indispensable to the determination of the case." The district court's finding that IWA-Champion litigation failed to meet the Christiansburg standard remained unchallenged on appeal; the panel thus declined to reach the applicability of that standard. This court voted to rehear the case en banc, thereby vacating the panel opinion. See Fifth Circuit Local Rule 41.3.

II.

In the United States, contrary to the English practice, a rule of limited recovery of the expenses of litigation has developed to discourage costly litigation and guarantee access to the courts. See, e.g., Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718, 87 S.Ct. 1404, 1407, 18 L.Ed.2d 475 (1967). The "American Rule" draws a distinction between expenditures incurred by order of the court to facilitate consideration of the case, and expenditures incurred merely to aid one party in the presentation of his side. See Ex Parte Peterson, 253 U.S. 300, 316, 40 S.Ct. 543, 548, 64 L.Ed. 919 (1920). The former, in times past referred to as costs "between party and party," and now known as taxable costs, are recoverable by the prevailing party under the American Rule; the latter, denominated costs "as between solicitor and client" and including such items as attorneys' fees and "other expenses entailed by the litigation not included in the ordinary taxable costs recognized by statute," see Sprague v. Ticonic National Bank, 307 U.S. 161, 164, 59 S.Ct. 777, 778, 83 L.Ed. 1184 (1939), such as expert witness' fees in excess of the amount provided for by statute, are generally borne by the litigants.

Before the merger of law and equity, courts at law awarded to the prevailing party costs "between party and party" as a matter of course. Courts sitting in equity had discretion to award such costs, or a portion thereof, as justice might demand. Federal courts sitting in equity also had limited discretion to award costs "as between solicitor and client" in certain exceptional cases. These exceptions to the American Rule were nearly identical to those recognized by the English High Court of Chancery: the "foundation for the historic practice of granting reimbursement for the costs of litigation other than the conventional taxable costs is part of the original authority of the chancellor to do equity in a particular situation." Sprague, 307 U.S. at 166, 59 S.Ct. at 780. The exceptions were limited to cases involving preservation of a common fund, vexatious or oppressive prosecution of a claim or maintenance of a defense, Hall v. Cole, 412 U.S. 1, 5-6, 93 S.Ct. 1943, 1946-47, 36 L.Ed.2d 702 (1972), or wilful disobedience of a court order. Toledo Scale Co. v. Computing Scale Co., 261 U.S. 399, 426-28, 43 S.Ct. 458, 465-66, 67 L.Ed. 719 (1923). Absent statute or equitable exception, however, under the American Rule litigants paid their own costs "as between solicitor and client."

In Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975), the Supreme Court decided against fashioning a far-reaching exception to the American Rule for attorneys' fees, determining instead that it would be "inappropriate for the judiciary, without legislative guidance, to reallocate the burdens of litigation...." The Court reasoned that 28 U.S.C. Sec. 1920(5) and Sec. 1923 controlled the amount that might be awarded as attorneys' fees. The Court examined the congressional intent behind the statutory predecessor of Sec. 1920 and Sec. 1923: the Fee Bill of 1853. In enacting the 1853 Act, Congress undertook to standardize and limit the costs allowable in federal litigation. Alyeska, 421 U.S. at 251-52, 95 S.Ct. at 1618-19. The 1853 Act did not permit courts to "tax against the losing party 'solicitor and client' costs in excess of the amounts prescribed" therein. Id. at 258 n. 30, 95 S.Ct. at 1621 n. 30. True to the American Rule, the Court concluded that "absent statute or enforceable contract, litigants pay their own attorneys' fees." Id. at 257, 95 S.Ct. at 1621. Despite its decision not to carve a broad exception to the American Rule, the Court nevertheless recognized the three judicially fashioned equitable exceptions which, as the Court noted, have not been repudiated by Congress. Id. at 260, 95 S.Ct. at 1623. A federal court might award reasonable attorneys' fees to the prevailing party in excess of the small sums permitted by Sec. 1923 when: (1) the trustee of a fund or property, or a party in interest, preserved or recovered the fund for the benefit of others in addition to himself; (2) a party acted in wilful disobedience of a court order; or (3) the losing party had acted in bad faith, vexatiously, wantonly, or for oppressive reasons. 2

The American Rule of limited recovery, although most often discussed in the context of attorneys' fees, is equally applicable in the context of excess expert witness' fees. Like the statutory provisions before the Alyeska Court, those before us today find their origins in the Fee Bill of 1853. Section 1920 states that the court may tax as "costs" the fees of witnesses. 3 Section 1821 establishes the maximum amount that may be allowed for witnesses' attendance fees. 4 These sections represent Congress' treatment of the taxing of witness fees as costs. Courts cannot, in the absence of other explicit statutory authority or one of the three limited equitable exceptions recognized in Alyeska, tax as costs expert witness' fees in excess of the amount set forth in Sec. 1821. Moreover, because the taxing of witness' fees as costs has been expressly provided for by federal statute, federal courts cannot tax excess fees as costs under Fed.R.Civ.P. 54(d), which provides for court discretion to tax costs "[e]xcept where express provision therefor is made either in a statute of the United States or in these rules" (emphasis added). 5

Our ruling is commanded by the Supreme Court's holding in Henkel v. Chicago, St. P., M. and O. Rwy., 284 U.S. 444, 52 S.Ct. 223, 76 L.Ed. 386 (1932). Citing a statutory predecessor to Sec. 1920 and Sec. 1821, the Court found that because federal law made express provision for the amount payable and...

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