Wisnewski v. Champion Healthcare Corporation, Civil No. A3-96-72 (D. N.D. 1/16/2001)

• Decision Date: 16 January 2001
• Docket Number: Civil No. A3-96-72.
• Parties: Sister Juliana Wisnewski, on behalf of herself and others similarly situated, Plaintiffs, v. Champion Healthcare Corporation, a Delaware corporation, d/b/a "DHHS" and "Dakota Heartland Health System"; Champion Healthcare Corporation of North Dakota, Inc., a North Dakota corporation, individually and as a partner in Dakota/Champion Partnership, a North Dakota general partnership; Dakota Medical Foundation, a North Dakota non-profit corporation, individually and as a partner in Dakota/Champion Partnership, a North Dakota general partnership; and Dakota/Champion Partnership, a North Dakota general partnership, Defendants.
• Court: U.S. District Court — District of North Dakota

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Sister Juliana Wisnewski, on behalf of herself and others similarly situated, Plaintiffs, v. Champion Healthcare Corporation, a Delaware corporation, d/b/a "DHHS" and "Dakota Heartland Health System"; Champion Healthcare Corporation of North Dakota, Inc., a North Dakota corporation, individually and as a partner in Dakota/Champion Partnership, a North Dakota general partnership; Dakota Medical Foundation, a North Dakota non-profit corporation, individually and as a partner in Dakota/Champion Partnership, a North Dakota general partnership; and Dakota/Champion Partnership, a North Dakota general partnership, Defendants.

Civil No. A3-96-72.

United States District Court, D. North Dakota, Southeastern Division.

January 16, 2001.

ORDER

RODNEY S. WEBB, Chief District Judge.

Before the Court for review are plaintiffs' motions for taxation of disputed costs, (doc. #461), motion for attorneys' fees and related non-taxable expenses, (doc. #462), supplemental fee and cost request, (doc. #479), and defendant's, Champion Healthcare Corporation (Champion), motion for taxation of disputed costs, (doc. #465). These motions are taken up below.

As a preliminary matter the Court GRANTS Champion's motion for leave to exceed page limitation, (doc. #472), and DENIES Champion's motion for oral argument, (doc. #465(2)), and motion for hearing, (doc. #474). The Court further declares that Champion's motion to strike, (doc. #444) is MOOT.

The parties are well versed with the procedural and substantive history of this case; therefore, recitation by the Court is unnecessary.

I. COSTS

Both Champion and plaintiffs request costs as a prevailing party.¹ Federal Rule of Civil Procedure 54(d) provides:

Except when 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 . . . .

This rule codifies the presumption that the prevailing party is entitled to costs. Greaser v. State of Missouri, Dep't of Corr., 145 F.3d 979, 985 (8^th Cir. 1998). It remains, however, only a presumption, as the district court retains the discretion to refuse to tax costs in favor of a prevailing party. Computrol, Inc. v. Newtrend, L.P., 203 F.3d 1064, 1072 (8^th Cir. 2000) (citing Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 4637, 441-42 (1987)). Since the district court has the discretion to refuse costs, it goes without saying that the court also has substantial discretion in awarding the prevailing party an appropriate amount of costs. See id.

A prevailing party entitled to costs is the litigant in whose favor judgment is rendered regardless of whether the party is the plaintiff or defendant and regardless of the amount of damages awarded. Firefighters' Inst. For Racial Equality v. City of St. Louis, 220 F.3d 898, 905 (8^th Cir. 2000). See also 10 Wright, Miller & Kane, Federal Practice and Procedure § 2667 (3^rd ed. 1998). Additionally, the voluntary dismissal of an action is sufficient to confer prevailing party status to a defendant on those claims. Zenith Ins. Co. v. Breslaw, 108 F.3d 205, 207 (9^th Cir. 1997).

Reviewing this case, it is noted that on November 10, 1999, after over three years of litigation, eight of plaintiffs' claims were dismissed with prejudice (FLSA meal break claim, FLSA off-the-clock claim, FLSA exempt status claim, FLSA retaliation claim, FLSA willfulness claim, state law on-call claim, state law overtime claim, and state law retaliation claim) and three others were dismissed without prejudice (state law claims relating to meal break, Earned Time, and "Earned Time Plus"). The claims that were dismissed with prejudice were so dismissed upon the acquiescence and, in fact, insistence of the plaintiffs that they no longer pursued those claims. After the dismissal, the plaintiffs had two remaining claims in this action: an FLSA on-call claim; and an FLSA overtime claim. As correctly pointed out by Champion, plaintiffs prevailed on only one portion of their FLSA overtime claim relating to the failure to include on-call pay in the computation of overtime. Upon summary judgment consideration, the FLSA on-call claim and the FLSA overtime computation claim were resolved, in all other respects, in favor of Champion. In fact, at the time of summary judgment, the issue of including on-call pay in the overtime computation was moot since Champion had corrected its error in computation and paid all affected employees. Notwithstanding the correction, it was determined that plaintiffs were prevailing parties on this limited issue pursuant to the catalyst theory.² Upon consideration of these facts, it can only be concluded that, overall, Champion was predominantly the prevailing party in this action. See Head v. Medford, 62 F.3d 351, 355 (11^th Cir. 1995) (determining that defendants were the prevailing party where district court granted their motion for summary judgment on federal claims and declined to exercise supplemental jurisdiction on remaining state law claims).

In such a situation, Champion argues, the Court has three options: (1) award Champion all of its costs and refuse to award plaintiffs any costs based on their obstructive and haphazard manner of conducting this litigation; (2) apportion costs among the parties resulting in Champion receiving at least 13/14ths (93%) of its costs and plaintiffs receiving 1/14th of their costs; or (3) reduce the size of Champion's cost award to reflect its partial success, resulting in Champion receiving 93% of its costs. While any of these options would be appropriate in this case, the Court envisions a fourth approach: deny costs to both parties. See Computrol, 203 F.3d at 1072 (district court has discretion to refuse to tax costs); Johnson v. Nordstrom-Larpenteur Agency, Inc., 623 F.2d 1279, 1282 (8^th Cir. 1980) (concluding that where each of the parties has prevailed on one or more of its claims, defenses, or counterclaims, it is not an abuse of discretion to order each party to bear its own costs).

In the Court's view this is an appropriate case in which to make the parties bear their own costs. Several considerations have led to this conclusion. First, although plaintiffs, as a partial prevailing party, may be entitled to some award of costs under the FLSA, see 29 U.S.C. § 216(b), the Court cannot overlook their limited degree of success in this action. Plaintiffs request $54,753.66 for costs. It does not appear that plaintiffs have reduced their request based on their limited success. In fact, Champion points out that in several categories (service fees, deposition transcripts, witness fees, and photocopies) plaintiffs have requested costs that were not related to the limited issue upon which the class prevailed. The Court cannot accept the proposition, under the particular circumstances of this case, that plaintiffs are entitled to an award for all the costs incurred in this action despite their extremely limited success. Cf. Roy v. County of Lexington, 141 F.3d 533, 549 (4^th Cir. 1998) (recognizing that district court retains discretion to apportion costs under 29 U.S.C. § 216(b)).

Moreover, even if the Court were to award plaintiffs some of their costs, since 29 U.S.C. § 216(b) does not preclude a prevailing defendant from recovering costs under Federal Civil Rule of Procedure 54(d), see Davis v. City of Hollywood, 120 F.3d 1178, 1181 (11^th Cir. 1997), plaintiffs generally would be responsible to Champion for its costs. Champion, as explained above, is also a prevailing party since it received a partial judgment in its favor after successfully attacking plaintiffs' FLSA on-call claim and FLSA overtime computation claim on summary judgment. See Firefighters' Inst. For Racial Equality, 220 F.3d at 905 (prevailing party is a party in whose favor judgment is rendered). Thus, any award of costs would entail an apportionment among the parties. Instead of being consumed with apportioning costs, a much cleaner approach is to deny costs to both sides.

The Court is aware that this decision may seem to penalize Champion as the predominantly prevailing party. However, a district court's authority to deny costs is not limited to situations involving misconduct or other action worthy of penalty on the part of the prevailing party. See Greaser, 145 F.3d at 985 (declining to hold that the court's discretion to deny costs is limited to such situations); Association of Mexican-American Educators v. State of California, 231 F.3d 572, 592-93 (9^th Cir. 2000) (en banc) (overruling previous cases suggesting that the only proper reason for denying costs to a prevailing party is to punish misconduct by that party). And, in fact, the decision is not meant as a punishment to Champion. Rather it is a recognition that this litigation was poorly managed. Plaintiffs accuse Champion of taking a "scorched earth approach" to this litigation and defending in the tradition of total warfare. Champion counters by arguing that plaintiffs conducted this litigation in an "obstructive and haphazard manner, pursued unnecessary issues, and incurred unreasonably large costs." The Court believes there is a grain of truth to both allegations.

Certainly, plaintiffs' case could have been better focused. Instead, the claims were continually modified, class representatives for each claim were never clearly identified, actions were pursued in both state and federal courts by the plaintiff class, and initial damage disclosures were never produced. And certainly, counsel for the parties could have interacted more professionally. The docket is replete with numerous discovery motions, allegations of abuse, requests for sanctions, and motions to strike filed by the parties. The sheer number of such motions is an indication of a break down in the working relationship. An award of costs would deteriorate the relationship further. While this normally would not be an important consideration, the...