Recovering Costs in Federal Court
In Federal Court, costs may be recoverable under Federal Rule of Civil Procedure 54(d) or a statute that expressly allows for recovery of costs. Except for cases against governmental entities, Rule 54(d) entitles a prevailing party to recover costs unless a federal statute dictates otherwise. See In Marx v. Gen. Revenue Corp., 133 S. Ct. 1166 (2013).
In cases against governmental entities, costs are permitted “only to the extent permitted by law.” Fed. R. Civ. P. 54(d)(1). A federal statute that is silent on costs would still permit recovery of Rule 54 costs. See United States ex rel. Lindenthal v. Gen. Dynamics Corp., 61 F.3d 1402, 1413–14 (9th Cir. 1995).
Generally, a “prevailing party” for purposes of attorney fees is also entitled to tax costs to the judgment. See Buckhannon v. West Virginia Dep. of Health & Human Resources, 532 U.S. 598 (2001). There is no time period in the rule by which the prevailing party must move for costs. However, a deadline for doing so is generally set by local rule. See White v. New Hampshire Dep. of Emp. Sec., 455 U.S. 445, 453 (1982).
In the absence of a local rule, the motion should be filed within a reasonable period of time after judgment is entered. The motion should include a bill of costs, which must be verified. 28 U.S.C. § 1924. The clerk of court has the initial responsibility for taxing costs. Fed. R. Civ. P. 54(d)(1). The opposing party has fourteen days to oppose the motion, and the losing party has seven days to seek review by the court. Id.
Even if Rule 54(d) or a federal statute provides for costs, courts have some discretion in imposing responsibility for payment. Rule 54(d)(1) states that costs “should be” allowed, but there is a strong presumption to tax costs for the prevailing party. Specifically, most courts permit the consideration of the losing party’s indigence in taxing costs. See Rivera v. City of Chicago, 469 F.3d 631, 634–37 (7th Cir. 2006).
The good faith of the losing party is not a reason to deny taxation of costs in Federal Court. See Pacheco v. Mineta, 448 F.3d 783, 793–95 (5th Cir. 2006). However, an indigent claimant who loses a case and is faced with a costs bill should appeal to the court’s discretion, but such indigence does not automatically exempt a losing party from paying costs. See Chapman v. AI Transport, 229 F.3d 1012, 1039 (11th Cir. 2000).
The ordinary costs recoverable in federal litigation under Rule 54(d) are set forth in 28 U.S.C. § 1920. The Supreme Court has viewed these costs as narrow in scope and, in sum, a fraction of the full expenses ordinarily incurred in federal litigation. See Taniguchi v. Kan Pacific Saipan, Ltd., 132 S. Ct. 1997, 2006 (2012). Even these modest costs, however, are limited in certain circumstances.
Deposition costs, for example, are recoverable only when the deposition is reasonably necessary to the litigation. For depositions not used in the litigation, courts are divided on whether to award deposition costs only upon a showing that the deposition materially advanced the development of the litigation or whether the deposition seemed necessary at the time it was taken. See, e.g., Sea Coast Foods, Incorp. v. Lu-Mar Lobster & Shrimp, Incorp., 260 F.3d 1054, 1061 (9th Cir. 2001); Stearns Airport Equip. Co. v. FMC Corp., 170 F.3d 518 (5th Cir. 1999); Cengr v. Fusibond Piping Systems, Incorp., 135 F.3d 445 (7th Cir. 1998); Callicrate v. Farmland Ind., Incorp., 139 F.3d 1336 (10th Cir. 1998).
Furthermore, although 28 U.S.C. § 1920(3) authorizes the inclusion of witness fees in an award of costs, 28 U.S.C. § 1821 limits witness fees to $40 per day. See 28 U.S.C. §§ 1920; Pinkham v. Camex Incorp., 84 F.3d 292, 295 (8th Cir. 1996) (per curiam) (“[E]xpert fees in excess of the 28 U.S.C. § 1821(b) $40 limit are not recoverable.”). Because ordinary costs are rather limited, counsel frequently look to fee-shifting statutes as a way to recover out-of-pocket expenses not covered by 28 U.S.C. § 1920.
However, the Supreme Court has imposed limitations on recoverable out-of-pocket expenses regarding expert fees by holding that “[Section] 1988 conveys no authority to shift expert fees. See West Virginia University Hospitals v. Casey, 499 U.S. 83, 102 (1991). When experts appear at trial, they are of course eligible for the fee provided by § 1920 and § 1821.” Id.
Partly in response to West Virginia University Hospitals v. Casey, Congress amended 42 U.S.C. § 1988 to permit a court to award expert witness fees in racial discrimination cases and intentional employment discrimination cases. Nonetheless, in most cases arising under a federal fee-shifting statute, a prevailing party may not recover full expert witness fees and other costs unless stated clearly in the statute.
A prevailing party may be entitled to post-judgment interest, calculated according to the method outlined in 28 U.S.C. § 1961. The question of whether prejudgment interest is available, however, is more complex. Generally, in diversity cases, the availability of prejudgment interest depends on state law. In federal question cases, prejudgment interest is generally favored by federal policy. See Kansas v. Colorado, 533 U.S. 1 (2001); Wilson v. Garcia, 471 U.S. 261 (1985); Burnett v. Grattan, 468 U.S. 42 (1984).
Nonetheless, prejudgment interest may be unavailable when the plaintiff recovers statutorily authorized liquidated damages. For example, the Age Discrimination in Employment Act authorizes back pay and, in the case of a willful violation, an equivalent amount as liquidated damages. 29 U.S.C. § 626(b).
Each circuit that has considered this question has agreed that a plaintiff who sues under the Act and does not recover liquidated damages is entitled to prejudgment interest. See Sharkey v. Lasmo, 214 F.3d 371 (2d Cir. 2000); Simpson v. Ernst & Young, 100 F.3d 436 (6th Cir. 1996); Downes v. VW of America, Incorp., 41 F.3d 1132 (7th Cir. 1994). Most circuits, however, prohibit the award to plaintiffs who recover liquidated damages.