Smith v. SEPTA ( 1995 )

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
2-10-1995
Smith v SEPTA
Precedential or Non-Precedential:
Docket 94-1634
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Recommended Citation
"Smith v SEPTA" (1995). 1995 Decisions. Paper 39.
http://digitalcommons.law.villanova.edu/thirdcircuit_1995/39
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 94-1634
____________
ELIZABETH SMITH
v.
SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY,
Appellant
____________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. Civil No. 91-01409)
____________________
Argued: November 7, 1994
Before: BECKER, MANSMANN, and ALITO, Circuit Judges
(Opinion Filed: February 10, l995 )
LANIER E. WILLIAMS, ESQ. (Argued)
Post Office Box 6584
Philadelphia, PA 19138
Attorney for Appellee
ALFRED W. PUTNAM, JR., ESQ. (Argued)
Drinker, Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA. 19107-3496
NICHOLAS J. STAFFIERI
SEPTA Legal Department
714 Market Street, 7th Floor
Philadelphia, PA 19106-2385
Attorneys for Appellant
____________________
OPINION OF THE COURT
____________________
PER CURIAM:
In this appeal, the Southeastern Pennsylvania
Transportation Authority (SEPTA) has asked us to overturn a
district court decision reducing an award of costs under Fed. R.
Civ. P. 54(d). The district court made this reduction in large
measure because of the great disparity between the parties'
financial resources. We agree with SEPTA that the district
court's reduction was not proper, and we therefore reverse in
part.
Elizabeth Smith sued SEPTA under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000e et seq., and 42 U.S.C.
§ 1983, claiming that SEPTA had fired her because of race and
gender. The case was tried before a jury. SEPTA defended on the
ground that it had fired Smith because she failed a breathalyzer
test that was administered based on reasonable suspicion that she
was under the influence of alcohol. The jury returned a verdict
for SEPTA, and our court affirmed the district court's judgment.
SEPTA then filed a bill of costs in the district court.
SEPTA sought $8,715.12 -- $5,020.40 for court reporter fees and
$3,694.72 for photocopying costs. Smith objected, but the clerk
of court taxed the full amount that SEPTA had sought. Smith then
moved for review by the district court. Smith argued that
certain costs were not taxable, and she also "beseech[ed] the
Court, at the very least to reduce the award of costs to the
amount of $4.357.56 (which represents 50% of the amount sought by
defendant) in order to not punish plaintiff for filing suit and
in order to not discourage the filing of civil rights suits."
App. 206. After a hearing, the parties stipulated that the
correct amount of taxable costs was $6,928.17, and the district
court further reduced this amount to $4,618.78. The district
court noted that two recent decisions in the district had reduced
the costs taxed against the losing party based upon the
"disparities" between the parties' "financial resources." Dist.
Ct. Op. 2. The court then explained:
This action warrants a reduction of taxable costs for
reasons similar to [those in the two previous cases].
Plaintiff was employed as a cashier before termination
by defendant and has limited financial resources;
defendant is a large transportation authority with
significant financial resources. Plaintiff pursued a
legitimate claim in good faith and raised a serious
legal issue. . . . Under these circumstances, the
court finds that a one-third reduction in defendant's
revised requested costs will result in an equitable
distribution of costs. Judgment will be awarded in
favor of defendant and against plaintiff in the amount
of $4,618.78.
District Ct. Op. 3 (footnotes omitted). SEPTA responded by
taking the present appeal.
Before the adoption of the Federal Rules of Civil
Procedure, "in the absence of a statutory provision otherwise
providing, the prevailing party in an action at law was entitled
to costs as of right; while in equity the allowance of costs to
either party was subject to the court's discretion." 6 Moore's
Federal Practice ¶ 54.70[3] at 54-321 (2d ed. 1994) (citations
omitted). Melding these two rules, Rule 54(d) provided a new
standard for use in taxing costs1 in all cases. It states in
pertinent part:
Except when express provision therefor is made either
in a statute of the United States or in these rules,
costs other than attorneys' fees shall be allowed as of
course to the prevailing party unless the court
otherwise directs; but costs against the United States,
its officers, and agencies shall be imposed only to the
extent permitted by law.
Fed. R. Civ. P. 54(d) (emphasis added). Under this rule, a
prevailing party generally is entitled to an award of costs
unless the award would be "inequitable." Friedman v. Ganassi,
853 F.2d 207, 211 (3d Cir. 1988), cert. denied, 488 U.S. 1042
(1989).
In describing the limits on a district court's
discretion to deny costs to a prevailing party, we have
also held that "``the denial of costs to the prevailing
party . . . is in the nature of a penalty for some
defection on his part in the course of the
litigation.'" ADM Corp. v. Speedmaster Packing Corp.,
525 F.2d 662, 665 (3d Cir. 1975) (quoting Chicago Sugar
Co. v. American Sugar Refining Co., 176 F.2d 1, 11 (7th
Cir. 1949), cert. denied, 338 U.S. 948, 70 S. Ct. 486,
94 L. Ed. 584 (1950)). The Chicago Sugar case provides
the following examples of a "defection" that would
warrant denying costs to a prevailing party: "calling
unnecessary witnesses, bringing in unnecessary issues
or otherwise encumbering the record, or . . . delaying
1
. These "costs" are listed in 28 U.S.C. § 1920. "They do not
include such litigation expenses as attorney's fees and expert
witness fees in excess of the standard daily witness fee."
Friedman v. Ganassi, 853 F.2d 207, 209 (3d Cir. 1988), cert.
denied, 488 U.S. 1042 (1989).
in raising objection fatal to the plaintiff's case. . .
."
Institutionalized Juveniles v. Secretary of Public Welfare, 758
F.2d 897, 926 (3d Cir. 1985).
Here, the district court reduced the costs taxed in
favor of SEPTA based in large part on the disparity in the
parties' financial resources, but we hold that this decision
exceeded the district court's equitable discretion under Rule
54(d). We reject the general proposition that it is
"inequitable" to tax costs in favor of a prevailing party with
substantially greater wealth than the losing party. Acceptance
of this general proposition would mean that large institutions
such as SEPTA could be denied costs in most cases even when their
unsuccessful adversaries could well afford to pay for them. In
this instance this would be unfair to those who must ultimately
bear the burden of SEPTA's costs -- its customers and the
taxpayers of the jurisdictions that subsidize it, though the
public nature of SEPTA is not the basis for our discussion. If
the losing party can afford to pay, the disparity in the parties'
financial resources seems to us to be irrelevant for purposes of
Rule 54(d).
If the losing party cannot afford to pay, that party is
not automatically exempted from the taxation of costs. On the
contrary, 28 U.S.C. § 1915(e) and cases decided thereunder make
clear that costs may be taxed against a party who is permitted to
proceed in forma pauperis. See, e.g., Washington v. Patlis, 916
F.2d 1036, 1039 (5th Cir. 1990); Harris v. Forsyth, 742 F.2d
1277, 1278 (11th Cir. 1984); Flint v. Haynes, 651 F.2d 970, 973
(4th Cir. 1981), cert. denied, 454 U.S. 1151 (1982). While these
cases recognize that a district court may consider a losing
party's indigency in applying Rule 54(d), the losing party in
this case does not claim to be indigent, and the record does not
establish that she is unable to pay the full measure of costs.
We therefore hold that neither the disparity between
the parties' financial resources nor Smith's financial status
provided a basis for reducing the costs sought by SEPTA.
Moreover, after considering all of the factors cited by the
district court and by Smith, we are convinced that the district
court did not properly exercise its discretion in reducing the
costs taxed in SEPTA's favor, for none of SEPTA's conduct in this
litigation rendered the original fee award inequitable. We will
therefore reverse the order of the district court in part and
remand for the entry of a judgment taxing costs in SEPTA's favor
in the amount of $6,928.17. Costs on appeal will also be taxed
in favor of SEPTA.