Kirk Ludlow v. BNSF Railway Company

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 14-2486
___________________________
Kirk J. Ludlow
lllllllllllllllllllll Plaintiff - Appellee
v.
BNSF Railway Company
lllllllllllllllllllll Defendant - Appellant
____________
Appeal from United States District Court
for the District of Nebraska - Lincoln
____________
Submitted: February 10, 2015
Filed: June 4, 2015
____________
Before LOKEN, SMITH, and COLLOTON, Circuit Judges.
____________
LOKEN, Circuit Judge.
Former Claims Representative Kirk Ludlow sued BNSF Railway for wrongful
termination in violation of Nebraska public policy and whistleblower retaliation in
violation of the Nebraska Fair Employment Practices Act (NFEPA), Neb. Rev. Stat.
§ 48-1114(3). A jury found BNSF liable on the NFEPA claim and awarded Ludlow
damages. The district court1 denied BNSF’s pre- and post-verdict motions for
judgment as a matter of law (JMOL) and granted Ludlow $206,514.13 in attorney’s
fees and $22,202.16 in nontaxable costs. On appeal, BNSF argues the district court
erred in denying JMOL, in instructing the jury, and in determining the amount of
attorney’s fees and costs. We affirm.
I. Background
In reviewing the denial of JMOL, because sufficiency of the evidence in
support of the jury’s verdict is at issue, we must view all facts and resolve any
conflicts in favor of Ludlow, giving him the benefit of all reasonable inferences. We
will not reweigh the evidence or consider the credibility of witnesses, and we will
affirm “if a reasonable jury could differ as to the conclusions that could be drawn.”
Lawrence v. CNF Transp., Inc., 340 F.3d 486, 491 (8th Cir. 2003); see Reed v.
Malone’s Mech., Inc., 765 F.3d 900, 913 (8th Cir. 2014). The fact assertions in
BNSF’s briefs on appeal repeatedly ignore these well-established appellate principles.
Ludlow became a Claims Representative in BNSF’s Law/Claims Department
in 2000. Prior to the July 2010 termination, no disciplinary issues were recorded in
his employment history transcript. In September 2009, Ludlow discovered his forged
signature on documents submitted to the Department of Veterans Affairs (VA)
certifying that coworker Larry Fernandes was eligible to receive VA training program
benefits. Ludlow reported the forgery to his supervisor, Barry Wunker, opining that
Fernandes may have been responsible. Wunker did not investigate the claimed
forgery or report it to his superiors, contrary to what Ludlow believed the BNSF code
1
The Honorable Richard G. Kopf, United States District Judge for the District
of Nebraska.
-2-
of conduct required. In April 2010, Ludlow reported the forgery to the BNSF police,2
notifying Wunker the following day. Wunker expressed displeasure, and at a meeting
the next day told Ludlow that his immediate superior, Bill Renney, was angry that
Ludlow was shedding negative light on the Claims Department. Wunker expressed
concern that the forgery’s disclosure could cost him his job.
Following Ludlow’s report to BNSF police, Wunker began sending complaints
regarding Ludlow’s workplace behavior to BNSF Human Resources. Wunker told
Renney that Ludlow’s forgery claim was motivated by jealousy of Fernandes.
Renney relayed this to his superior, Dennis Cannon, and added that Brian Williams,
the investigating BNSF police officer, also viewed Ludlow as jealous -- a statement
Williams denied at trial. Wunker, Renney, and Cannon then drafted an e-mail
ordering Ludlow to “immediately cease and desist” from independently participating
in the forgery investigation and ordering him to route all future communications
related to the investigation through Renney. Renney later pressured Williams to close
the forgery investigation, and wrote the VA explaining that Ludlow’s forgery
accusation was motivated by dislike of Fernandes. Williams testified that Renney
appeared to be looking for a reason to terminate Ludlow.
On May 17, 2010, Ludlow told Wunker and Renney that a VA investigator had
called; Ludlow asked their permission to speak with the investigator. He was
instructed to comply with the cease-and-desist order and direct future inquiries to
Renney. On July 8, Williams notified Wunker, Renney, and Cannon that the VA’s
Office of Inspector General (OIG) intended to contact Ludlow to discuss the forgery.
On July 19, Ludlow or Williams notified Renney that the OIG would meet with
Ludlow the next week.
2
Federal law grants railroad police officers broad law enforcement powers to
protect the railroad’s operations. See 49 U.S.C. § 28101(a).
-3-
On July 13, Ludlow and Mary Adamson, a janitor, were engaged in workplace
banter when Ludlow made a karate kick motion towards her, lightly striking
Adamson’s head and neck when he slipped. Adamson did not report the incident,
which she considered accidental, but Fernandes learned of the incident from another
employee and reported it to Wunker on July 16. On July 21, after learning of
Ludlow’s scheduled meeting with OIG, Wunker and Renney drafted an e-mail
recommending that Ludlow be terminated due to the kick incident. Renney sent the
e-mail to Cannon, who forwarded it to his immediate superior, Richard Lifto. Cannon
acknowledged that Wunker and Renney were his sole sources of information
regarding Ludlow’s workplace behavior. Renney sent Lifto an e-mail describing
various incidents of inappropriate workplace behavior by Ludlow that Renney or
Wunker had observed. Ludlow testified that Renney’s version of the incidents was
either false or heavily distorted.
On July 28, Wunker, Renney, Cannon, and Lifto participated in a conference
call with Charles Shewmake, BNSF’s Vice President and General Counsel. The
others told Shewmake that Ludlow had demonstrated a “roundhouse” kick on
Adamson and gave Shewmake a report of past incidents similar to the one that
Renney had e-mailed Lifto. Shewmake testified that Wunker brought up the forgery
investigation during the call and accused Ludlow of “something improper involving
the VA.” Shewmake testified that he based the decision to terminate Ludlow solely
on the information obtained from the participants in the phone call, and claimed that
Wunker’s comments about the VA forgery investigation were made after Shewmake
decided to terminate Ludlow. Ludlow was fired the next day.
Ludlow filed this action in state court in May 2012. BNSF timely removed.
After substantial discovery, BNSF moved for summary judgment on the NFEPA-
retaliation claim, arguing no protected activity, no “causal connection” between any
protected activity and the termination because decision-maker Shewmake was not an
unwitting “cat’s paw” for unlawful retaliation by Wunker and Renney, and no
-4-
evidence that BNSF’s legitimate non-retaliatory reason for discharge was pretextual.
The district court3 denied the motion in a lengthy July 2013 Memorandum and Order.
The case was reassigned to Judge Kopf, and an eight-day trial commenced in
November 2013. Judge Kopf denied BNSF’s written pre-verdict motion for JMOL.
See Fed. R. Civ. P. 50(a). After the jury returned its verdict for Ludlow on the
NFEPA-retaliation claim, the district court denied BNSF’s Rule 50(b) renewed
motion for JMOL, entered judgment on the NFEPA claim, and awarded Ludlow
attorney’s fees and nontaxable costs. This appeal followed.
II. Sufficiency of the Evidence
On appeal, BNSF argues the district court erred in denying JMOL because
Ludlow failed to present sufficient evidence for the jury to find two essential
elements of an NFEPA-retaliation claim: (A) that Ludlow was engaging in protected
activity when he suffered an adverse employment decision (termination); and (B) that
there was a causal link between the protected activity and the adverse decision.
(A) NFEPA prohibits retaliation against an employee because he “has opposed
any practice or refused to carry out any action [by the employer that is] unlawful
under the laws of the United States or this state.” Neb. Rev. Stat. § 48-1114(3). Prior
to trial, BNSF moved for summary judgment on this issue, arguing that instructing
employee Ludlow not to assist a VA forgery investigation that did not involve BNSF
assets was not an unlawful action under Nebraska or federal law. In denying this
motion, Judge Urbom explained:
In summary, Ludlow has produced evidence that BNSF used its
power over him to attempt to dissuade him from assisting with a federal
3
The Honorable Warren K. Urbom, United States District Judge for the District
of Nebraska.
-5-
forgery investigation; that BNSF’s conduct is of the type that is
prohibited under 18 U.S.C. § 1512 and Revised Statutes of Nebraska
§ 28-919; and that Ludlow opposed BNSF’s conduct by seeking his
supervisor’s permission to speak with investigators, and, after being told
to continue to refer all investigators to Renney, scheduling an interview
with Investigator Jourdan despite the “cease and desist” orders. The
evidence is sufficient to establish the first element of a prima facie case
under § 48-1114(3).
In its written Rule 50(a) motion, BNSF again thoroughly briefed this no-protected-
activity contention. Judge Kopf again denied it. In submitting this issue to the jury,
Judge Kopf instructed, without objection:
When considering both of [Ludlow’s] claims, you are instructed
that an individual employee has no right to communicate with criminal
investigators on behalf of his employer unless authorized by his
employer to do so. . . . On the other hand, an individual employee has a
right to communicate with criminal investigators on behalf of himself
alone. Thus, a direction from BNSF supervisors that Kirk Ludlow was
not to communicate with criminal investigators on behalf of himself
individually . . . would have been unlawful. It is for you to decide the
nature and extent of the instructions, if any, given to Kirk Ludlow by
BNSF supervisors about communications with criminal investigators.
Following the adverse jury verdict, BNSF filed a Rule 50(b) Renewed Motion for
Judgment as a Matter of Law. The Motion argued the causation element of a NFEPA
claim at length but did not address the no-protected-activity issue.
On appeal, BNSF argues it was entitled to JMOL because requesting Ludlow
“to cease and desist from pursuing his allegations of forgery . . . as an employee of
BNSF . . . does not constitute an unlawful practice under the NFEPA as a matter of
law.” Ludlow argues that BNSF failed to preserve this issue because, while raised
-6-
in BNSF’s pre-verdict JMOL motions, it was not addressed in BNSF’s post-verdict
Rule 50(b) motion.
Without question, when the verdict loser fails to file a Rule 50(b) motion
renewing its pre-verdict Rule 50(a) JMOL motion, “there [is] no basis for review of
[the party’s] sufficiency of the evidence challenge in the Court of Appeals.” EEOC
v. Sw. Bell Tel., L.P., 550 F.3d 704, 708 (8th Cir. 2008), quoting Unitherm Food
Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 407 (2006). In Southwestern Bell, we
held that the rule in Unitherm precludes review of all “sufficiency of the evidence
challenges” relating to a claim or affirmative defense. “[F]iling a Rule 50(b) motion
is a prerequisite for appealing the denial of a Rule 50(a) motion because it allows the
district court, which has ‘first-hand knowledge of witnesses, testimony, and issues,’
an opportunity after the verdict to review the legal sufficiency of the evidence.” Id.
at 710, quoting Unitherm, 546 U.S. at 401 n.3.
In Unitherm and Southwestern Bell, no Rule 50(b) renewed JMOL motion had
been filed. Here, on the other hand, BNSF filed a Rule 50(b) “renewed” motion, but
it did not explicitly address this issue. But in Moore v. American Family Mutual
Insurance Co., 576 F.3d 781, 785 (8th Cir. 2009), and in Nutrisoya Food, Inc. v.
Sunrich, LLC, 641 F.3d 282, 290 (8th Cir. 2011), we extended our Southwestern Bell
ruling to sufficiency of the evidence challenges that are based on issues that were not
raised in an appellant’s renewed Rule 50(b) motion.
The text of Rule 50(b) does not call for a categorical rule in this situation, and
in prior cases we have noted that “technical precision is not necessary in stating
grounds for the [Rule 50(b)] motion so long as the trial court is aware of the movant’s
position.” Rockport Pharm., Inc. v. Digital Simplistics, Inc., 53 F.3d 195, 197 (8th
Cir. 1995) (quotation omitted). There may be cases where an issue not expressly
addressed in a Rule 50(b) renewed motion is appropriate for appellate review because
it was “inexplicably intertwined” with an issue presented to and decided by the
-7-
district court. See id. at 198 . But here, BNSF does not simply attack the legal basis
for Judge Urbom’s summary judgment ruling, which Judge Kopf upheld in denying
BNSF’s Rule 50(a) motion. Rather, BNSF urges us to conclude that the evidence at
trial failed to establish the factual predicate for Judge Urbom’s prior analysis, as
reflected in Judge Kopf’s instructions. The trial evidence established, BNSF argues,
that Ludlow’s supervisors told him to cease and desist from pursuing his allegations
of forgery as a BNSF employee, without the unlawful intent required to show
violations of the statutes cited by Judge Urbom. That is a fact-based sufficiency of
the evidence challenge for which an appellate court needs the district court’s post-
verdict analysis. Therefore, we agree with Ludlow that this issue was not preserved
for appellate review.
Moreover, even if preserved for appellate review, we conclude that the no-
protected-activity contention is without merit on this trial record. We agree with
Judge Urbom’s interpretation of the Nebraska whistleblower statute. See Wolfe v.
Becton Dickinson & Co., 662 N.W.2d 599, 604 (Neb. 2003). Judge Kopf’s
instruction was consistent with Judge Urbom’s analysis and fairly submitted BNSF’s
agency defense to the jury. The evidence, viewed most favorably to the verdict, was
sufficient to satisfy this element of Ludlow’s NFEPA retaliation claim as clarified by
the instruction.
(B) At trial, the district court instructed the jury -- without objection -- that
Ludlow must prove that BNSF attempted to cause him not to talk to criminal
investigators, and that his refusal to comply was a “motivating factor” in BNSF’s
decision to terminate. On appeal, BNSF argues that the Supreme Court of Nebraska
would instead adopt the but-for “determining factor” causation standard adopted by
the Supreme Court for federal Title VII retaliation claims, see Univ. of Tex. Sw. Med.
Ctr. v. Nassar, 133 S. Ct. 2517, 2534 (2013); and that the evidence was insufficient
to show that unlawful retaliation was the but-for cause of Shewmake’s decision to
terminate Ludlow because of the karate-kick incident.
-8-
Ludlow argues that BNSF failed to preserve this sufficiency issue because its
pre-verdict Rule 50(a) motions did not raise it. BNSF responds that it “repeatedly and
consistently challenged whether Mr. Ludlow met the causation element for his
NFEPA [claim] before the District Court.” Without question, BNSF’s summary
judgment and Rule 50(a) motions argued that Ludlow could not and had not proved
the requisite “causal connection” between protected activity and termination. But
BNSF never raised whether “motivating factor” or “determining factor” was the
proper causation standard, an issue that has bedeviled Title VII courts and Congress
for twenty-five years. Rather, that issue was first noted in BNSF’s Rule 50(b) motion
and then emphasized on appeal, no doubt an attempt to avoid the deferential standard
of judicial review of an adverse jury verdict.
We cannot put the causation standard aside altogether because, in “determining
whether the district court erred in denying a motion for [JMOL], it is the applicable
law which is controlling, and not what the court announced the law to be in its
instructions.” Grand Labs., Inc. v. Midcon Labs of Iowa, 32 F.3d 1277, 1280 (8th
Cir. 1994) (quotation omitted). Here, the trial context is critical. Ludlow’s NFEPA
retaliation claim proceeded on a “cat’s paw” theory, arguing to the jury that biased
BNSF subordinates -- primarily Wunker and Renney – used final decision-maker
Shewmake “as a dupe in a deliberate scheme to trigger a [retaliatory] employment
action.” Qamhiyah v. Iowa State Univ. of Sci. & Tech., 566 F.3d 733, 742 (8th Cir.
2009) (quotation omitted). The Supreme Court considered a cat’s paw retaliation
claim in a pre-Nassar decision, Staub v. Proctor Hospital, 131 S. Ct. 1186 (2011).
Staub was not even cited, much less overruled, in Nassar. In Bennett v. Riceland
Foods, Inc., 721 F.3d 546, 551 (8th Cir. 2013), we applied Staub in deciding a post-
Nassar Title VII retaliation claim, explaining:
In a cat’s paw case, an employer may be vicariously liable for an adverse
employment action if one of its agents -- other than the ultimate decision
-9-
maker -- is motivated by discriminatory animus and intentionally and
proximately causes the action. [Staub, 131 S. Ct. at 1190-91.]
The Nebraska appellate courts have thus far defined this element of a
retaliation claim as requiring proof of a “causal link” between the employee’s
protected activity and the adverse employment action. See O’Brien v. Bellevue Pub.
Sch., 856 N.W.2d 731, 741 (Neb. 2014) (public policy retaliation); Helvering v.
Union Pac. R.R., 703 N.W.2d 134, 148 (Neb. App. 2005) (NFEPA retaliation). In
construing NFEPA, Nebraska courts are guided by federal courts’ interpretation of
Title VII. Zalkins Peerless Wiping Co. v. Neb. Equal Opp. Comm’n, 348 N.W.2d
846, 848 (Neb. 1984). We conclude that, however the Supreme Court of Nebraska
may ultimately resolve (or ignore) the Title VII motivating factor/determining factor
debate in resolving other types of NFEPA claims, it would apply the intentional and
proximate cause standard of Staub and Bennett to the unique causation problems
presented by a cat’s paw claim of vicarious employer liability.
Viewed from this perspective, we have no difficulty concluding that Ludlow
presented sufficient evidence for a reasonable jury to find BNSF liable for unlawful
retaliation under the cat’s paw theory. There was strong evidence that Wunker and
Renney harbored retaliatory animus against Ludlow for triggering and pursuing a
forgery investigation that shed negative light on the Claims Department and could
cost Wunker his job. The jury could find that, after Ludlow contacted BNSF police,
Renney and Wunker sent distorted reports to their superiors regarding Ludlow’s
behavior. Williams testified that Renney appeared to be looking for a reason to
terminate Ludlow. Within days of learning that Ludlow would meet with an OIG
inspector, Wunker and Renney brought the kick incident to the attention of their
superiors and recommended that Ludlow be terminated. During the conference call
that led to Ludlow’s termination, Wunker and Renney gave decision-maker
Shewmake distorted representations of the kick incident, Ludlow’s past workplace
behavior, and his involvement in the VA investigation. Wunker and Renney were the
-10-
source of all or nearly all of the information possessed by Shewmake when he made
the decision to terminate.
As the Court noted in Staub, 131 S. Ct. at 1193, “if the [employer’s]
independent investigation relies on facts provided by the biased supervisor -- as is
necessary in any case of cat’s paw liability -- then the employer (either directly or
through the ultimate decisionmaker) will have effectively delegated the factfinding
portion of the investigation to the biased supervisor.” When the material facts are
disputed, as here, that is a question for the jury. See Kramer v. Logan Cnty. Sch.
Dist. No. R-1, 157 F.3d 620, 624-25 (8th Cir. 1998). The trial evidence was
sufficient to permit a reasonable jury to find that Shewmake did not independently
investigate retaliatory misrepresentations made by Wunker and Renney in
recommending Ludlow’s termination, and therefore that Shewmake “merely serve[d]
as the conduit, vehicle, or rubber stamp by which [those supervisors] achieve[d their]
unlawful design.” Qamhiyah, 566 F.3d at 742.
For these reasons, we conclude the district court did not err in denying BNSF’s
Rule 50(b) motion for JMOL.
III. Jury Instructions
BNSF argues the district court committed plain error in instructing the jury that
Ludlow need only prove that his protected activity was a “motivating factor” in the
termination. See Lopez v. Tyson Foods, Inc., 690 F.3d 869, 876 (8th Cir. 2012)
(standard of review). This contention borders on the frivolous. As we have
explained, the Supreme Court of Nebraska has held only that a “causal connection”
must be proved. The district court’s “motivating factor” instruction was not
inconsistent with that general statement of this element; any error in elaborating on
that standard would hardly be “plain.” Moreover, even if BNSF could show plain
error, it cannot show that the error “almost surely affected the outcome” of this cat’s
-11-
paw retaliation claim. Champagne v. United States, 40 F.3d 946, 947 (8th Cir. 1994)
(quotation omitted). The district court separately instructed the jury to find for BNSF
if it determined that BNSF proved by a preponderance of the evidence that it would
have fired Ludlow regardless of his involvement in the forgery investigation. Finally,
because the jury returned a general verdict -- at BNSF’s request -- “this court can only
speculate as to the effect” of the motivating-factor instruction, an insufficient basis
on which to conclude that BNSF’s substantial rights were affected by a plain error.
Lopez, 690 F.3d at 878.
IV. Attorney’s Fees and Nontaxable Costs
The jury awarded Ludlow damages of $235,369.00, substantially less than the
amount he sought. Ludlow moved for an award of $358,027.43 in attorney’s fees and
$24,670.15 in nontaxable costs. BNSF filed multiple objections the district court
placed in eleven categories. In a lengthy opinion, the court sustained six objections,
in whole or in part, including a one-third reduction of the fee request “[b]ecause the
case was significantly overvalued.” The court granted Ludlow $206,514.13 in
attorney’s fees and $22,202.16 in nontaxable costs. On appeal, BNSF argues the
court (i) abused its discretion in not further reducing the fee award by $72,759.50,
and (ii) erred in awarding nontaxable costs or not reducing those costs by $6,327.87.
“We review de novo the legal issues related to the award of attorney’s fees and costs
and review for abuse of discretion the actual award of attorney’s fees and costs.”
Sturgill v. United Parcel Serv., Inc., 512 F.3d 1024, 1036 (8th Cir. 2008).
The NFEPA provides that a “successful complainant shall be entitled to . . .
reasonable attorney’s fees, and costs.” Neb. Rev. Stat. § 48-1119(4). When a statute
mandates the award of reasonable attorney’s fees, Nebraska courts look to a broad
range of factors in determining the value of legal services rendered, including “the
customary charges of the bar for similar services.” Craig v. Farmers Mut. Ins. Co.,
476 N.W.2d 529, 535 (Neb. 1991) (quotation omitted). In interpreting the NFEPA’s
-12-
remedial provisions, the Supreme Court of Nebraska has been guided by federal case
law interpreting the NFEPA’s “parent federal legislation.” Airport Inn, Inc. v. Neb.
Equal Opp. Comm’n, 353 N.W.2d 727, 734 (Neb. 1984).
A. Attorney’s Fees. BNSF argues the attorney’s fees award should be
reduced for three reasons. First, the district court abused its discretion in awarding
fees for a second attorney to assist in preparing for and taking Wunker’s and
Renney’s depositions, work BNSF argues was “duplicative.” In response, Ludlow
submitted affidavits from “three highly respected trial attorneys” opining that the time
records reflected proper litigation management to avoid duplication of work. The
district court carefully evaluated this contention and concluded that the two attorneys
performed separate functions in preparing for and taking those depositions and that
the involvement of a second attorney was reasonable given the depositions’
complexity, length, and importance. There was no abuse of discretion. See Webner
v. Titan Distrib., Inc., 267 F.3d 828, 838 (8th Cir. 2001) (awarding fees for second
attorney whose participation in deposition was justified).
Second, BNSF argues that the district court erred in awarding attorney’s fees
for counsel’s travel time at a non-discounted rate. BNSF presented no evidence that
local attorneys “will not bill for travel time or will discount their hourly rates.” We
have long recognized a “presumption . . . that a reasonable attorney’s fee includes
reasonable travel time billed at the same hourly rate as the lawyer’s normal working
time,” Craik v. Minn. State Univ. Bd., 738 F.2d 348, 350 (8th Cir. 1984), absent a
showing the award would be unreasonable, for example, because “the lawyer did not
customarily charge clients for travel time, or . . . did not have other work that could
have been done during that time had he not been traveling,” Rose Confections, Inc.
v. Ambrosia Chocolate Co., 816 F.2d 381, 396 (8th Cir. 1987). As there was no such
showing by BNSF, there was no abuse of discretion.
-13-
Third, BNSF argues that the district court abused its discretion by awarding
$23,737.50 in attorney’s fees and $3,682.00 in nontaxable costs for counsel’s work
with focus groups and jury consultants in preparation for trial. The district court
rejected this objection, noting that, in support of his claim, Ludlow submitted expert
opinions “that it is reasonable for a law firm to utilize trial consultants and in-house
focus groups, that the two consultants were used in a reasonable manner, and that the
use of two focus groups was a reasonable expense.” BNSF presented no evidence to
the contrary.
No Nebraska case has expressly addressed this issue. There is federal case law
upholding awards for this type of preparatory work if it is reasonable. Planned
Parenthood of Cent. N.J. v. Attorney Gen., 297 F.3d 253, 269 (3d Cir. 2002) (moot
court preparation for oral arguments). We agree with the district court’s prediction
that the Supreme Court of Nebraska would hold that § 48-1119(4) authorizes the
award of nontaxable costs, just as out-of-pocket expenses “reasonably charged by
attorneys to their clients” may be recovered under comparable federal statutes.
Warnock v. Archer, 397 F.3d 1024, 1027 (8th Cir. 2005) (§ 1988); see Sturgill, 512
F.3d at 1036 (§ 2000e-5(k)). Thus, in awarding fees and costs for use of focus groups
and jury consultants, the district court did not abuse its substantial discretion to award
“reasonable attorney’s fees, and costs” under Neb. Rev. Stat. § 48-1119(4).
B. A Second Nontaxable Cost Issue. BNSF argues the district court erred in
awarding $2,645.87 in computerized legal research (CLR) costs. In response, Ludlow
submitted affidavits by three Nebraska attorneys opining that the actual cost of CLR
research is customarily charged to clients in Nebraska legal markets and that the
expenses incurred by Ludlow’s attorneys were reasonable. No Nebraska appellate
court has addressed whether CLR costs may be included in a fee award. The district
court noted that the Eighth Circuit has held that the cost of CLR research “cannot be
independently taxed as an item of cost in addition to the attorneys’ fee award.”
Leftwich v. Harris-Stowe State Coll., 702 F.2d 686, 695 (8th Cir. 1983). However,
-14-
because the prevailing view among other circuits is to the contrary, the court in
applying Nebraska law overruled BNSF’s objection.
On appeal, BNSF argues that, in the absence of contrary Nebraska authority,
the district court erred in refusing to follow Leftwich and awarding these expenses.
We disagree. Leftwich, decided when CLR was in its infancy, vacated an award of
$145.89 for Lexis research because “computer-aided research, like any other form of
legal research, is a component of attorneys’ fees and cannot be independently taxed.”
702 F.2d at 695. In general, an award of reasonable attorney’s fees may include
litigation expenses if it is “the prevailing practice in a given community” for lawyers
to bill those expenses separately. Missouri v. Jenkins, 491 U.S. 274, 287 (1989).
Consistent with that general principle, Leftwich reflected customary billing practices
at the time. But not today, when CLR research expenses are separately billed in many
communities, a practice that can be readily defended because “[t]he cost of online
research is normally matched with reduction in the amount of time an attorney
researches,” or with better quality research. In re UnitedHealth Group Inc. S’holder
Derivative Litig., 631 F.3d 913, 919 (8th Cir. 2011). On this record, we cannot
conclude the district court abused its discretion, applying Nebraska law, when it
permitted the recovery of Ludlow’s reasonable CLR costs, consistent with prevailing
practice in the Nebraska legal marketplace. Cf. Trustees of Constr. Indus. & Laborers
Health & Welfare Trust v. Redland Ins. Co., 460 F.3d 1253, 1258 (9th Cir. 2006).
The judgment of the district court is affirmed.
______________________________
-15-