DocketNumber: Civil Action No. 06-491-MPT
Citation Numbers: 855 F. Supp. 2d 244
Judges: Thynge
Filed Date: 4/11/2012
Status: Precedential
Modified Date: 11/26/2022
MEMORANDUM
I. INTRODUCTION
On August 8, 2006, plaintiff, Cordance Corporation (“Cordance”) filed this patent infringement matter against defendant, Amazon.com, Inc. (“Amazon”). After trial, motions for judgment as a matter of law, bench trial on inequitable conduct and patent misuse, and an appeal to the Federal Circuit, the matter was adjudicated in favor Amazon. Presently before the court is Amazon’s bill of costs in the amount of $591,824.69 filed on November 14, 2011.
On November 28, 2011, Cordance filed objections to Amazon’s bill of costs.
For the following reasons, the court will grant in part and deny in part Amazon’s request for costs and will deny Cordance’s request to have Amazon’s bill of costs denied in its entirety.
II. DISCUSSION
A. Dilatory Tactics by Amazon
Cordance argues Amazon engaged in dilatory tactics during litigation, and such
In support of its position, Cordance relies on In re Paoli R.R. Yard PCB Litig
Here, Cordance claims “Amazon repeatedly failed to provide basic discovery, violated the court’s discovery orders, made empty promises to produce discovery materials, and produced unprepared Rule 30(b)(6) deposition witnesses.”
Amazon denies using dilatory tactics and rejects Cordance’s accusations as unfounded. Amazon represents it always complied with court orders regarding production of financial documents. Amazon further notes Cordance’s 30(b)(6) deposition notice was extremely broad by including 223 topics (later reduced to 208 topics). Amazon maintains it worked with Cordance to produce witnesses “educated about the accused systems and if Cordance was not satisfied, [it] could move to compel further testimony.”
Cordance, maintains “Amazon’s dilatory tactics ... are evident.”
B. Cordance’s Inability to Pay
Cordanee argues inability to pay Amazon’s asserted costs due to indigency.
In deciding whether to award costs to a prevailing party, the Third Circuit allows a court to consider “the losing [party’s] potential indigency or inability to pay the full measure of a costs award levied against them.”
In support of its claim of indigency, Cordanee has submitted the affidavit of Brian E. Lewis, its General Counsel, which gives an overview of revenue, losses, assets and liabilities.
Amazon responds that courts routinely do not allow corporations to claim indigency,
Amazon relies on Reger v. Nemours Found., Inc.
In the instant matter, Cordance is not claiming a reduction due to disparity of wealth, but is asserting indigency and/or inability to pay. Therefore, the holdings of Reger and Smith do not apply. Cor-dance, however, has not provided any information to support its claim of indigency beyond the affidavit of its General Counsel. That affidavit fails to describe how the information was calculated. No copies of financial records, tax returns and/or bankruptcy filings were provided or explained.
C. Amazon’s Claims for Costs
Cordance further argues, in the event costs are taxed against it, Amazon’s request is improper and fatally unsubstantiated. Since Cordance does not object to Amazon’s printing and copying costs or filing fees, the court will not address those claims.
1. Ediscovery Costs
Amazon seeks ediscovery costs of $447,694.63 under D. Del. LR 54.1(b)(ll), which authorizes taxation of costs
At the time of Amazon’s original filing and all objections, the Third Circuit had not addressed the issue of whether ediscovery is a taxable cost. Recently, however, on March 16, 2012, the Third Circuit resolved the issue of ediscovery costs for this circuit in Race Tires Am., Inc. v. Hoosier Racing Tire Corp.
“[28. U.S.C.] Section 1920(4) does not state that all steps that lead up to the production of copies of materials are taxable. It does not authorize taxation merely because today’s technology requires technical experience not ordinarily possessed by the typical legal professional. It does not say that activities that encourage cost savings may be taxed. Section 1920(4) authorizes awarding only the cost of making copies.”36
However, “the costs of conversion to an agreed-upon production format are taxable as the functional equivalent of
In addition, the Third Circuit specifically distinguished Synopsys, Inc. v. Ricoh Co. (In re Ricoh Patent Litigation),
Here, neither party suggests they shared a document review database or otherwise had any agreement regarding ediscovery costs. Therefore, the ediseovery exchanged would be the functional equivalent of making copies and governed by the provisions of § 1920(4).
Amazon has provided numerous invoices regarding its ediseovery which total $447,694.69 for services by four different providers.
The first invoice from Fenwick and West totals $67,011.75.
The second invoice is from DatG in the amount $75,137.29.
The third invoice from eLit Litigation Solutions is in the amount $5,260.59.
The final invoice is from Cataphora for $300,285.00.
2. Exemplification/Demonstrative Exhibit Costs
Amazon also claims expenses for exemplifications in the amount of $51,323.62 under § 1920(4) and D. Del. LR 54.1(b)(5) and (6). Amazon cites Sobering Corp. v. Amgen, Inc.
Cordance relies on the standard set forth in Honeywell Int’l, Inc. v. Hamilton Sunstrand Corp.
Costs for exemplifications of exhibits will be granted only if the parties show that the requested costs 1) were necessarily sustained in connection with exhibits that were admitted into evidence or explicitly and specifically were requested by the court ...; 2) were for exhibits or documents prepared primarily in order to aid the finder of fact’s understanding of the issues in the case, and were not ‘essentially explanatory or argumentative, serving merely as an aid to the argument of counsel and the explanation of expert witnesses,’ ...; and 3) were for the actual presentation of the exhibits and documents, and not for the intellectual effort involved in their production.50
The Honeywell court specifically distinguished Sobering by concluding the award of costs related to the video only occurred “after finding the district court judge specifically ‘invited both parties submit videos to assist the court in understanding the technological issues involved.’ ”
Amazon argues copies of exhibits were specifically requested during the Mark-man hearing based on the court’s comment “if you have any presentation materials that you wish to hand up for the court to review or use during this process, please do so. I’d like a copy for myself and for my clerk.”
Amazon’s argument is unpersuasive. This court did not require any exhibits be prepared to assist in the understanding of the issues. Copies of the exhibits were only requested for later review of the transcript to analyze Amazon’s position after they were presented and used at the Markman hearing. Therefore, Sobering is not controlling.
In applying the Honeywell test, the maximum amount taxable is $600.00. Even assuming the exhibits were prepared primarily to assist the court, under the second and third prongs of the Honeywell test and D. Del. LR 54.1(b)(5) and (6), the only amount taxable is “for the actual presentation of the exhibits and documents,” and not for explanation or argument or “for the intellectual effort involved in their production.”
Taxation of the various expenses noted above would be contrary to the rule barring parties from recovering attorney and expert fees.
3. Costs for Depositions
Amazon seeks $62,353.24 for deposition costs incurred in this litigation. D. Del. L.R. 54.1(b)(3) governs taxation of costs of depositions by allowing “[t]he reporter’s reasonable charge for the original and one copy of a deposition and the reasonable cost of taking a deposition ... where a substantial portion of the deposition is used in the resolution of a material issue in the case.” In Honeywell, this court clarified “[t]he standard of 54.1(b)(3) [as focusing] on the actual use of a substantial portion of the deposition to resolve a material issue in the case; it does not focus on whether the parties’ attorneys use the depositions or subjectively view the depositions as important or unimportant.”
Amazon relies on Smith v. Tenet Healthsystem SL, Inc.,
In addition, Whittemore relies on the premise that substantial portions of deposition transcripts were designated for trial, but never shows any actual use. That substantial portions were designated, but not subsequently used at trial indicates they were not necessary to resolve a material issue, and would not be taxable under either the Honeywell standard of this court or the Smith standard of the Eighth Circuit.
In light of LR 54.1(b)(8) and Honeywell’s requirement of actual use, no costs will be allowed for the deposition transcripts of Dan Banay,
The depositions of Aron Levko, Diane Lye and Terry Musika were never designated for nor were they actually used at trial. Therefore, costs for those depositions are not recoverable.
The depositions of John Sitar and Thomas Vaughan, although designated, were not actually used at trial. Taxation of the costs for those depositions is denied.
With regard to the deposition of Lorenzo Alvisi, Amazon claims that “Cordance used portions of Dr. Alvisi’s deposition testimony in order to impeach ... a witness for Amazon.”
Amazon claims expenses for David Barth’s deposition because page 52 of the transcript was designated by Cordance and pages 52-54 were designated by Amazon to address the meaning of metadata “an important claim term.”
In seeking taxation of the deposition transcript of Jeff Bezos, founder of Amazon, Inc., Amazon has not cited its actual use at trial. It merely asserts “Cordance designated portions of Bezos’s December 19, 2008 deposition transcript.”
The cost of his videotaped deposition, however, is not quite as clear. Amazon actually used Bezos’s video deposition at the trial to “describe the value of [its] 1-click feature”
With regard to the deposition of Paul Davis, Amazon emphasizes the Federal Circuit’s reliance on his trial testimony in finding the '710 patent invalid.
The expenses for the depositions of Peter Heymann and Kevin Jones, both former Cordance employees, are also sought. Heymann and Jones are the inventors of Cordance’s patents in-suit. Both depositions addressed issues regarding infringement and are material. Further, Heymann and Jones, during the course of this litigation, resided in Asia, necessitating videotaping their testimony for trial. Although Amazon indicated substantial portions of their deposition transcripts were “designated” for trial, it does not indicate what portions of each deposition transcript were “actually used” at trial as required by LR 54.1(b)(3). Therefore, the request for costs for the deposition transcripts of Heymann and Jones is denied. However, since their videotaped depositions were used at trial and were necessitated by their physical location, whether to tax their videotaped depositions will be evaluated.
As previously indicated, in order to recover the expenses for a video deposition, a substantial portion must have been actually used to resolve a material issue. Here, Amazon has shown the video depositions of Heymann and Jones were used to resolve a material issue in the case. Taxation of costs, however, rests on whether the portion used was substantial. With regard to Heymann’s video deposition, his testimony encompassed approximately 19 pages of trial transcript. Jones’s video testimony constituted approximately 16 pages of trial transcript. The reporter’s bill indicates Heymann’s deposition transcript consisted of 226 pages and his video lasted nine hours. Likewise, Jones’s deposition transcript contained 197 pages and lasted for seven hours. Assuming the trial transcript reflects only video testimony and not objections or other comments by
Amazon also seeks taxation of costs for Stephen Mushero’s deposition transcript, referencing its designation of a large portion of his transcript for trial. However, Amazon does not indicate when, if ever, the transcript was actually used at trial. Mushero appeared live at the jury trial, and the portion of Mushero’s video deposition used during the bench trial consisted of less than a page of trial transcript. Therefore, Mushero’s deposition is not taxable.
With regard to the deposition of Jeffrey Oberlander, Amazon, again, references designating a large portion of the deposition transcript for trial. However, there is no indication his deposition transcript was actually used at trial. In addition, while Amazon claims it used a substantial portion of the videotaped deposition at trial, the portion identified consists only of eight pages of trial transcript. Assuming those pages pertained solely to the video deposition, that means eight pages out of 136 pages of the deposition transcript were used, which is not a substantial portion.
Amazon seeks taxation of costs for Brian O’Neill’s deposition. O’Neill’s deposition was at least 222 pages and Amazon designated most of the deposition for use at trial. Amazon further indicates it “read in substantial portions of O’Neill’s deposition to describe the operation of customer reviews on Amazon’s website.”
The deposition costs of Kyle Peterson are also requested. Amazon designated much of Peterson’s deposition transcript for use at trial. Amazon claims it “read in substantial portions of Peterson’s deposition to describe the operation of Amazon’s 1-click feature,”
Finally, Amazon seeks reimbursement for the deposition transcript of Drummond Reed, Cordance’s founder and inventor. Drummond Reed’s deposition consisted of three volumes. The first volume contained, at least, 448 pages and the second volume had at least 81 pages. Again, Amazon designated a large portion of Reed’s deposition for use at trial. Amazon further claims it “played portions of Reed’s first videotaped deposition” during the jury trial citing one page of that trial transcript, and four pages of the bench trial transcript.
4. Witness Fees
Finally, Amazon requests $27,575.37 for witness fees. Taxation of witness fees is allowable under 28 U.S.C. § 1920(3) and LR 54.1(4) and are fixed by 28 U.S.C. § 1821. “[Ajbsent 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.”
Cordance does not object to witness fees of $40.00 each for Ajay Madhock, Andrew Carey Currie and Bryan William Griffin, or the costs of Mark C. Divineenzo for the service of a subpoena in the amount of $205.00, pointing out recovery is permissible under § 1920(1), rather than § 1920(3). However, Cordance disputes the mileage fees of Bryan Griffin and Andrew Currie in the amount of $29.00 and $30.00, respectively, absent appropriate documentation. In addition, Cordance objects to the witness fees of Peter Heymann and Steven Mushero in the amount of $12,200.00 and $14,991.37, respectively, again due to lack of proper documentation.
Amazon does not address the sufficiency of Griffin and Currie’s total mileage expenses of $59.00. “A travel allowance equal to the mileage allowance which the Administrator of General Services has prescribed ... for official travel of employees of the Federal Government shall be paid to each witness who travels by privately owned vehicle.”
In response to Cordance’s objections to the reimbursement of Mushero and Heymann’s witness fees, Amazon submits emails wherein Amazon confirmed
III. CONCLUSION
For the reasons stated above, Cor-dance’s request that Amazon’s bill of costs be denied in its entirety due to dilatory tactics and indigency of Cordance is denied. In addition, Amazon’s request for ediscovery costs in the amount of $447,694.63 is reduced to $2,721.53. Should Amazon intend to pursue ediscovery expenses of Fenwick and West or Cataphora, it shall provide an appropriate itemization of the June 18, 2008 charge by Fenwick and West and the charges by Cataphora within thirty days of the date of this decision.
Amazon’s request for exemplification costs in the amount of $51,323.62 is denied. Amazon’s request for deposition expenses is granted in part and denied in part and $1,152.80 of those costs is awarded.
Amazon’s request for taxation of copying costs in the amount of $1,378.78, for taxation of filing fees in the amount of $1,498.99, and witness fees in the amount of $27,575.37, the above totaling $34,327.47, are granted.
Any expenses or costs awarded herein are with interest at the applicable post-judgment rate specified in 28 U.S.C. § 1961.
. -D.I. 601.
. D.I. 607.
. Id.
. Id.
. D.I. 611.
. 221 F.3d 449 (3d Cir.2000).
. Id. at 468.
. See Smith v. Southeastern Pa. Transp. Auth., 47 F.3d 97, 99 (3d Cir.1995); ADM Corp. v. Speedmaster Packaging Corp., 525 F.2d 662, 665 (3d Cir.1975); and Institutionalized Juveniles v. Secretary of Public Welfare, 758 F.2d 897, 926 (3d Cir. 1985).
. 176 F.2d 1, 11 (7th Cir.1949), cert. denied, 338 U.S. 948, 70 S.Ct. 486, 94 L.Ed. 584 (1950).
. ADM Corp., 525 F.2d at 665.
. Id.
. D.I. 607.
. D.I. 611.
. Id.
. D.I. 607 at 3.
. Id.
. Chicago Sugar, 176 F.2d at 11.
. In re Paoli R.R. Yard PCB Litig., 221 F.3d at 468.
. Id. at 463.
. D.I. 608.
. Id. at ¶ 3-4.
. D.I. 611 at 3.
. Cordanee filed bankruptcy in 2003 under Chapter 11. The valuation information is over eight years ago, before the jury trial and the Federal Circuit upheld certain claims invalid.
. The matter cited was voluntarily dismissed without prejudice on September 26, 2011, Cordance Corp. v. Apple, Inc., et al., C.A. No. 11-222-LPS, D.I. 20.
. D.I. 611.
. 678 F.Supp.2d 314 (E.D.Pa.2007).
. 599 F.3d 285 (3d Cir.2010).
. 47 F.3d 97 (3d Cir.1995).
. Id. at 100.
. Cordance did not advise it filed for bankruptcy; rather, Amazon notes Cordance’s 2003 bankruptcy petition.
. In re Paoli R.R. Yard PCB Litig., 221 F.3d at 462-63.
. D. Del. LR 54.1(b)(ll) provides "Other costs: Claims for costs other than those specifically mentioned in the preceding paragraphs of subpart (b) of this Rule ordinarily will not be allowed, unless the party claiming such costs substantiates the claim by reference to a statute or binding decision.” Discovery or ediscovery expenses are not specifically itemized under LR 54.1(b).
. Id.
. D.I.608.
. 674 F.3d 158 (3d Cir.2012).
. Id. at 169. (emphasis added).
. Id. at 171.
. 661 F.3d 1361 (Fed.Cir.2011).
. Race Tires Am., Inc., 674 F.3d at 171, n. 11.
. Id.
. D.I. 602 at Ex. D-4.
. Id. at Ex. D-5.
. Id. at Ex. D-6.
. Id. at Ex. D-7.
. Id.
. Id. at Ex. D-3.
. 198 F.R.D. 422 (D.Del.2001).
. Id. at 428.
. C.A. No. 99-309-GMS, 2009 WL 3153496 (D.Del. Sept. 30, 2009).
. Id. at *5 (first emphasis in original) (second and third emphasis added) (citations omitted).
. Id. at n.4.
. D.I. 204 at 4:21-24.
. Id. at 144:15.
. Honeywell, 2009 WL 3153496, at *5.
. D.I. 602 at Ex. E-l.
. Although Amazon purportedly is not seeking reimbursement for these charges, the only reduction applied was $1,592.38 for “other.”
. D.I. 602 at Ex. E-l. An additional charge of $1,592.38 for “other” was itemized as "airfare, hotel, taxi to SFO airport, meals, fed ex,” which Amazon is not seeking.
. Honeywell, 2009 WL 3153496, at *5.
. $600 represents the difference between $925 Amazon was charged for leased equipment by ACT less Cordance’s contribution to that expense.
. D.I. 602 at 5.
. If reimbursement for equipment leasing costs were sought, the request would likely be denied because the burden rests on Amazon to substantiate its expense. See Synopsys v. Ricoh, 661 F.3d 1361, 1367 (Fed.Cir.2011). All equipment Amazon leased from ACT is available from the court. Amazon fails to explain why it did not use the court’s equipment during the Markman hearing, and instead rented the equipment.
. 2009 WL 3153496, at *2.
. Id.
. 436 F.3d 879, 889 (8th Cir.2006).
. D.I. 611 at 9.
. D.I. 602.
. Honeywell, 2009 WL 3153496, at *2 (emphasis in original).
. Amazon initially asserted the Banay deposition was not used. D.I. 602 at Ex. F. Subsequently, in its reply brief, it represented portions of Banay’s deposition were read into the record. Despite Amazon's conflicting statements, six pages out of a 173 page transcript equates to a little over 3% and is not substantial. Honeywell, 2009 WL 3153496, at *2.
. D.I. 602 at Ex. F.
. D.I. 612 at 2. Dr. Alvisi was Amazon’s expert witness on non-infringement and invalidity. D.I. 602 at ¶ 11.
. D.I. 612 at 2.
. Id. at 3.
. Id.
. Id.
. The total number of pages of Bezos’s deposition transcript is unknown. However, Cor-dance designated up to page 138 of the transcript, which indicates the minimum number of pages that the transcript could be.
. D.I. 612 at 4.
. Honeywell, 2009 WL 3153496, at *2.
. D.I. 612 at 8.
. Id.
. Id.
. Id.
. Id. at 9.
. Id.
. Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 444, 107 S.Ct. 2494, 96 L.Ed.2d 385 (1987) (emphasis in original).
. 28 U.S.C. § 1821(c)(2).
. Kinzenbaw v. Case LLC, - Fed.Appx. -, -, C.A. No. 05-1483, 2006 WL 1096683, at *5, 2006 U.S.App. LEXIS 10711, at *15 (Fed.Cir. Apr. 26, 2006).
. D.I. 612 Ex. 1.
. Crawford, 482 U.S. at 444, 107 S.Ct. 2494.