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MONTGOMERY COUNTY v. MICROVOTE CORPORATION

May 13, 2004.

MONTGOMERY COUNTY, Plaintiff,
v.
MICROVOTE CORPORATION, CARSON MANUFACTURING COMPANY, INC., and WESTCHESTER FIRE INSURANCE COMPANY, Defendants, CIVIL ACTION



The opinion of the court was delivered by: ROBERT KELLY, Senior District Judge

MEMORANDUM

Presently before the Court are the Objections to the Clerk's Taxation of Costs filed by Defendant, Westchester Fire Insurance Company ("Westchester"). For the reasons stated below, this Court will affirm in part and reverse in part the Clerk's Taxation of Costs.

I. BACKGROUND

  Plaintiff, Montgomery County ("the County"), brought this diversity action against Defendants, Microvote Corporation ("Microvote"), Carson Manufacturing Company, Inc. ("Carson") and Westchester. The action stems from a written contract entered on May 25, 1994, whereby the County purchased voting machines, hardware, software and support services from Microvote for the price of approximately $3.8 million.*fn1 The voting machines malfunctioned during several primary and general elections which engendered disputes regarding the parties actions and obligations pursuant to the contract. As a result, the County filed a lawsuit contending that both Microvote and Carson were liable for negligence (Count I), breach of warranty (Count II), and fraud (Count IV). In addition, the County asserted that Microvote was solely liable for breach of contract (Count III) and wrongful use of civil proceedings (Count V). The final Count of the Complaint was an action by the County against Westchester under the performance bond (Count VI).

  Following a ten day jury trial, the jury returned a verdict in favor of the County in the amount of $1,048,500.00.*fn2 Specifically, the County prevailed on its breach of warranty claim against Microvote (Count II) and its breach of the performance bond claim against Westchester (Count VI). On November 3, 2000, a final judgment was entered in favor of the County and against Westchester and Microvote for $1,048,500.00. (See Doc. No. 386). The parties filed post trial motions which were denied by this Court. Westchester and Microvote appealed the denials of their post trial motions and the Court of Appeals for the Third Circuit ("Third Circuit") affirmed the judgments. Westchester paid the principal amount of the judgment, $1,048,500.00, plus post-judgment interest of $182,106.28, for a total payment of $1,230,606.28. The County filed its Bill of Costs on March 6, 2003. Following a telephone conference, the Clerk of Court awarded costs in the amount of $107,780.81 on February 18, 2004.

 II. STANDARD

  The taxation of costs by the Clerk of Court is subject to de novo review. City of Rome, Italy v. Glanton, 184 F.R.D. 547, 548 (E.D. Pa. 1999) (citations omitted). In reviewing a bill of costs, the court applies the standards set forth in Federal Rule of Civil Procedure 54(d). Id. (citing Fed.R.Civ.P. 54(d)). Rule 54(d) provides, in pertinent part, that "[e]xcept 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. . . ."*fn3 Fed. R. Civ. P. 54(d)(1). "By mandating that, subject to court intervention, costs be allowed to a prevailing party as of course, the rule creates the strong presumption that costs are to be awarded to the prevailing party." In re Paoli R.R. Yard PCB Litig., 221 F.3d 449, 462 (3d Cir. 2000) (citations omitted). Under Rule 54(d), "a prevailing party generally is entitled to an award of costs unless the award would be `inequitable.'" Smith v. SEPTA, 47 F.3d 97, 99 (3d Cir. 1995) (citation omitted). In light of the strong presumption towards the awarding of costs, "the losing party bears the burden of making the showing that an award is inequitable under the circumstances." Paoli, 221 F.3d at 462-63 (citation omitted). Regarding the limitations on a district court's discretion to deny costs to a prevailing party, the Third Circuit has 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." Smith, 47 F.3d at 99 (citations omitted).

 III. DISCUSSION

  Westchester objects to the Clerk's Taxation of Costs on several grounds.*fn4 First, Westchester makes a general argument that the awarding of costs to the County is improper because it was not a prevailing party as required by Rule 54.

  Second, Westchester objects to specific items taxed in the Bill of Costs. The County argues that the Clerk's awarding of costs was proper because it was the prevailing party in this case. The County also asserts that the Clerk correctly taxed all of the specific items included in its Bill of Costs. Lastly, in addition to upholding the Clerk's Taxation of Costs, the County seeks post-judgment interest on its costs. Each of the parties' arguments will be addressed seriatim. A. Westchester's General Objection

  1. Prevailing Party Status

  Westchester argues that the County is not a prevailing party because it only had limited success at trial.

  Westchester's argument is premised upon the basis that the County was not successful on all of its claims and that the award of $1,048,500.00 was not the full amount of the original damages demand. "As is apparent from the language of Rule 54(d)(1), `the determination of who qualifies as a prevailing party is central to deciding whether costs are available.'" Barber v. T.D. Williamson, Inc., 254 F.3d 1223, 1233-34 (10th Cir. 2001)(quoting Wright & Miller, Federal Practice & Procedure § 2667). "Ordinarily, a prevailing party for Rule 54(d) purposes is no different from a prevailing party in other circumstances." City of Rome, 184 F.R.D. at 549 (citation omitted). In the Third Circuit, "the standard used for determining prevailing party status is `whether plaintiff achieved some of the benefit sought by the party bringing the suit.'" Id. (quoting Institutionalized Juveniles v. Sec'y of Pub. Welfare, 758 F.2d 897, 910 (3d Cir. 1985)). According to the Third Circuit, in order "to apply the prevailing party standard, the court must identify the relief plaintiff sought and sometimes the legal theories on which the relief was based." Id. (citing Institutionalized Juveniles, 758 F.2d at 911). The Third Circuit has "clarified this inquiry by indicating that the court should also evaluate whether the litigation had a material effect in bringing about that benefit or change in legal relationships." Id. (citing Metro. Pittsburgh Crusade for Voters v. Pittsburgh, 964 F.2d 244, 250 (3d Cir. 1992); N.J. Rooming and Boarding House Owners v. Ashbury Park, 152 F.3d 217, 225 n.5 (3d Cir. 1998)).

  Evaluating whether the litigation had a material effect in bringing about the benefit sought by the County, this Court concludes that the County is a prevailing party. In light of the judgment entered in the County's favor, and the award of $1,048,500.00, the County did receive some of the relief that it sought by bringing its lawsuit.*fn5 The County did not succeed on all of its claims, and did not receive the full amount of the damages it requested; however, total success is not warranted for purposes of prevailing party status under Rule 54(d). See Institutionalized Juveniles, 758 F.2d at 910 (stating that the standard in determining prevailing party status is "whether plaintiff achieved some of the benefit sought by the party bringing suit")(emphasis added); see also Garonzik v. Whitman Diner, 910 F. Supp. 167, 168 (D.N.J. 1995)(declaring that "[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"); 10 Wright, Miller & Kane, Federal Practice and Procedure: Civil 3d § 2667 at 212, n. 16 (collecting cases)(stating that "a claimant who has obtained some relief usually will be regarded as the prevailing party even though he has not sustained all of his ...


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