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Schwartz v. Rent-A-Wreck of America

United States District Court, D. Maryland

July 14, 2016

DAVID SCHWARTZ, et at., Plaintiffs and Counter-Defendants
RENT-A-WRECK OF AMERICA, et at., Defendants and Counter-Claimants



         This case involves a dispute between Plaintiffs and Counter-Defendants David Schwartz and Rent A Wreck, Inc. (hereinafter, collectively "Schwartz") and Defendants and Counter-Claimants Rent-A-Wreck of America, Inc. and Bundy American, LLC (hereinafter, collectively "Rent-A-Wreck'"), over Schwartz's operation of a Rent-A-Wreck franchise in West Los Angeles. California. The Court issued a Final Order of Judgment on Remand in this matter on August 23, 2013. ECF No. 507.[1] On March 10, 2015, the United States Court of Appeals for the Fourth Circuit issued an opinion affirming the Judgment. ECF No. 517. That court's mandate issued on April 2, 2015. ECF No. 519.

         Thereafter, Schrelevant filed a Bill of Costs, seeking $32, 665.21 in costs from Rent-A-Wreck. ECF No. 518. On April 1, 2016, the Clerk of Court issued an Order Taxing Costs in favor of Schwartz and against Rent-A- Wreck in the amount of $13, 405.11. ECF No. 525. Now pending before the Court is Rent-A- Wreck's timely Motion to Review Clerk's Order Taxing Costs (ECF No. 526), in which Rent-A- Wreck asks that the Court reject Schwartz's Bill of Costs in its entirety or, in the alternative, reduce the Clerk's award of costs by $4, 442.83. Having considered Schwartz's Bill of Costs, the Clerk's Order Taxing Costs, and the parties' briefings with respect thereto, the Court DENIES Rent-A-Wreck's Motion to Review (ECF No. 526) and AFFIRMS the Clerk's Order Taxing Costs (ECF No. 525).


         Federal Rule of Civil Procedure 54(d) provides, in part: "Unless a federal statute, these rules, or a court order provides otherwise, costs-other than attorney's fees-should be allowed to the prevailing party." As the Fourth Circuit has stated, this "rule creates the presumption that costs are to be awarded to the prevailing party." Cherry v. Champion Intern. Corp., 186 F.3d 442, 446 (4th Cir. 1999) (citing Delta Air Lines, Inc. v. August, 450 U.S. 346, 352 (1981)) (emphasis added). Twenty-eight U.S.C. § 1920 sets forth the costs that a judge or clerk of any United States court may award.[2] These "costs are limited to relatively minor, incidental expenses." Taniguchi v. Kan.Pacific Saipan, Ltd., 132 S.Ct. 1997, 2006 (2012).

         In this District, the Clerk of Court is entrusted with the taxation of costs in the first instance. See U.S. District Court for the District of Maryland Guidelines for Bills of Costs § LA (2013) (hereinafter "Guidelines'': see also Fed. R. Civ. P. 54(d) (providing that the "clerk may tax costs on 14 days" notice"); Taniguchi, 132 S.Ct. at 2006 (noting that "the assessment of costs'' is often a "clerical matter" that can be "done by the clerk") (internal citations and quotations omitted). The Clerk's discretion to tax costs is limited, however: the Clerk may not tax costs not permitted by statute, case law, or Local Guidelines. See Guidelines § LA. Rule 54(d) provides that, if a party objects to the costs awarded by the Clerk, it may file a motion within seven days of the Clerk's order, asking a court to conduct a de novo review. See Fed. R. Civ. P. 54(d); see also Young v. United Parcel Service. Inc., No. CIV.A. DKC 08-2586, 2014 WL 858330, at *1 (D. Md. Mar. 4, 2014). If a district court ultimately chooses not to award costs, it "must justify its decision" by ''articulating some good reason" for not doing so. Cherry, 186 F.3d at 446 (internal citations and quotations omitted). "[O]nly misconduct by the prevailing party worthy of a penalty ... or the losing party's inability to pay will suffice to justify denying costs." Id. (quoting Congregation of the Passion, Holy Cross Province v. Touch, Ross & Co., 854 F.2d 219, 222 (7th Cir. 1988)).


         Rent-A-Wreck first argues that the Clerk should have rejected Schwartz's entire Bill of Costs because (1) Schwartz was not "shown to be the prevailing party" in this litigation because he did not succeed on all claims, and, relatedly, (2) Schwartz did not "differentiate" the costs associated with his successful claims from those associated with his unsuccessful claims. Rent-A-Wreck's Mot. Objecting Clerk's Order Taxing Costs ("Rent-A-Wreck's Mot.") 3-5. ECF No. 526. In response, Schwartz asserts that, after two trials, he is unquestionably the prevailing party, having received a substantial amount of the relief sought: that is, a declaration that he has the exclusive right to operate the West Los Angeles Rent-A-Wreck franchise. Schwartz's Resp. in Opp'n 3-5, ECF No. 527. As Schwartz argues, a prevailing party need not succeed on all of its claims to be awarded costs. Id. Moreover, there is no requirement for differentiating costs between those associated with successful claims and those associated with unsuccessful claims. Id. 5.

         The Court agrees with Schwartz.

         A. Whether Schwartz Is a "Prevailing Party" "To be deemed a prevailing party"' for purposes of taxing costs under Rule 54(d), "a plaintiff must prevail on 'any significant claim affording some relief sought."' Broccoli v. Echostar Comm'ns Corp., 229 F.R.D. 506, 515 (D. Md. 2005) (quoting Tex. State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 2791 (1989)) (emphasis added); see also Buckhannon Bd. & Care Home, Inc. v. W.Va. Dep't of Health & Human Resources, 532 U.S. 598, 603 (2011)) (noting that a prevailing party is 'La party in whose favor judgment is rendered, regardless of the amount of damages awarded'"). Accordingly, a party need not recover on all of its claims for relief to be considered a "prevailing party" - just the "significant" ones. See Broccoli, 229 F.R.D. at 515; see also Fernandes v. Montgomery Cty., MD, No. CIV. SAG-10-752, 2013 WL 6330705, at *1 (D. Md. Dec. 3, 2013) (holding that the plaintiff was the prevailing party even though he succeeded on only one of his several constitutional and tort claims); Garonzik v. Whitman Diner, 910 F.Supp. 167, 168 (D.N.J. 1995) ("A prevailing party is the one in whose favor a judgment is rendered, regardless of whether the party has recovered its entire claim or a portion thereof") (internal citations omitted); All W. Pet Supply Co. v. Hill's Pet Products Div., Colgate-Palmolive Co., 153 F.R.D. 667, 669 (D. Kan. 1994) (noting that, in general, the prevailing party is "the party who won at trial, whether or not that party prevailed on all issues, and regardless of the amount of damages awarded") (internal citations omitted).

         In the most recent version of the Complaint, Schwartz sought (i) a declaratory judgment that he enjoys the exclusive right to operate a Rent-A-Wreck franchise in West Los Angeles and (ii) an order of specific performance, directing Rent-A-Wreck to make his franchise available to potential customers through its directories and webpages. Second Am. Complaint, ECF No. 167. After two jury trials and two appeals, Schwartz has obtained this relief. See Final Order Declaratory J., ECF No. 344; March 2, 2011 Order, ECF No. 382; Final Order J. Remand; USCA J., ECF No. 517. Although Rent-A-Wreck suggests that, in order to be considered the "prevailing party, " Schwartz had to prevail on each and every argument made or position taken throughout the course of this litigation, see Rent-A-Wreck's Mot. 3-4, such a contention does not accord with the law. Schwartz need only succeed on his significant claims, and he clearly has done so here. For these reasons, the Court concludes that Schwartz is thus unquestionably the "prevailing party" in this litigation.

         B. Whether Schwartz Is Required to Differentiate Costs

         Rent-A-Wreck points to no binding legal authority that requires a prevailing party to differentiate the costs associated with successful claims from those associated with unsuccessful claims, nor is the Court aware of any. Such a rule, moreover, would make little sense in the context of a party that has prevailed on its significant claims, but not all of its claims. Consider, for example, a plaintiff who succeeds on two out of three of his or her related claims in a tort suit. How would a clerk or a court tax an expense like the filing fee paid in the case? Would the plaintiff be entitled to reimbursement of only two-thirds of the filing fee? The Court rejects the suggestion by Rent-A-Wreck that Rule 54(d) operates in this manner.

         The presumption in the law is that the prevailing party is entitled to costs, regardless of the amount of damages awarded. See Buckhannon, 532 U.S. at 603. The presumption is not that a prevailing party is entitled only to partial costs which can be tied directly to a successful claim. The latter rule would be unworkable, especially in the present case. Here, the costs actually taxed by the Clerk of Court - filing fees, private process server fees, fees for transcripts of certain key witnesses, and costs for copies of documents filed with the Fourth Circuit, see Clerks' Order Taxing Costs - would be nearly impossible to parse or assign to Schwartz's successful or unsuccessful claims, especially in light of the fact that Schwartz's claims were all ...

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