Ninth Circuit Remands For District Judge to Determine Whether Costs Should Be Awarded Under Rule 54(d)(1).
Resolving a split among federal district courts, the Ninth Circuit Court of Appeals in Quan v. Computer Sciences Corp., Case No. 09-56190 (9th Cir. Sept. 30, 2010) (for publication), decided that a prevailing party in an ERISA action can be awarded or denied costs by the district judge, in his/her discretion, under Federal Rule of Civil Procedure 54(d)(1). Nothing in the germane ERISA statute, 29 U.S.C. § 1132(g)(1), “provides otherwise” than Rule 54(d)(1) for purposes of awarding costs to a prevailing party.
The district judge refused to award the prevailing parties under Rule 54(d)(1), but stated no reasons for failing to do so on the record. However, when a district court refuses to award costs, there must be some indication in the record for the denial because the presumption is that Rule 54(d)(1) allows a costs award. (Save Our Valley v. Sound Transit, 335 F.3d 932, 944-945 (9th Cir. 2003).) A district judge can deny costs, among other things, due to (1) a losing party’s limited financial resources; (2) misconduct by the prevailing party; and (3) the chilling effect of imposing high costs on future civil rights litigants, as well as (4) whether the issues in the case were close and difficult, (5) whether the prevailing party’s recovery was nominal or partial, (6) whether the losing party litigated in good faith, and (7) whether the case presented a landmark issue of national importance. (Champion Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1022 (9th Cir. 2003).) The matter was remanded to consider awarding Rule 54(d)(1) costs “in light of the facts presented.”