§ 9.5 FEDERAL COST STATUTE

• Jurisdiction: Arizona

§ 9.5 Federal Cost Statute

While the focus of this chapter is on Arizona law, the practitioner should also be aware of the procedures that must be followed in federal court with respect to the taxation of costs. The principal costs statute, 28 U.S.C. § 1920, provides that "[a] bill of costs shall be filed in the case and, upon allowance, included in the judgment or decree." Fed. R. Civ. P. 54(d), states that "costs¾other than attorney's fees¾should be allowed to the prevailing party" unless "a federal statute, these rules, or a court order provides otherwise." Under Rule 54(d), costs can be imposed against the United States, its officers, and its agencies only to the extent permitted by law.

"Rule 54(d) creates a presumption in favor of awarding costs to prevailing parties, and it is incumbent upon the losing party to demonstrate why the costs should not be awarded." Stanley v. Univ. of S. Cal., 178 F.3d 1069, 1079 (9th Cir. 1999). If a district court departs from the presumption in favor of awarding costs, it must give reasons for doing so by explaining "why a case is not 'ordinary' and why, in the circumstances, it would be inappropriate or inequitable to award costs." Ass'n. of Mexican-American Educators v. Cal., 231 F.3d 572, 593 (9th Cir. 2000). A district court may consider a variety of factors in determining whether to exercise its discretion to deny costs to the prevailing party, including great economic disparity between the parties, meritorious claims, public importance of the issues, and the losing party's limited financial resources. Id.

Previously, the clerk of the court could tax costs on one day's notice, and such taxation could be reviewed on a motion served within five days after the clerk's ruling. Id. However, Congress ultimately deemed these time periods unrealistically short. Accordingly, a 2009 Amendment to Fed. R. Civ. P. 54 provided that the clerk of the court may tax costs on fourteen days' notice and a motion to review must be served within seven days after the clerk's ruling.

The Local Rules of the United States District Court for the District of Arizona provide detailed guidance on the procedures for filing a bill of costs. Local Rule 54(a) requires a party entitled to costs to file with the Clerk of Court and serve upon all parties a bill of costs on a form provided by the Clerk within fourteen days after the entry of final judgment, unless time is extended. The bill of costs must be verified and shall include an itemized memorandum of costs and must attach documentation of requested costs in all categories.

Local Rule 54(b) provides a party objecting to any cost item fourteen days to file an itemized objection in writing with the Clerk, who then has thirty days to tax costs. In exceptional cases, an objecting party may file a motion for a taxation hearing before the Clerk, or the Clerk may order the parties to appear for such a hearing. If no objection is filed, the Clerk may exercise discretion to tax any item listed. The Clerk must mail a copy of the taxation order to all parties. Any objecting party then has seven days to file a motion asking the court to review the Clerk's taxation order. If no such motion is filed within seven days, the Clerk's taxation order becomes final.

The Local Rules also provide guidance on how to identify the party entitled to costs. Local Rule 54(c) provides that the prevailing party is entitled to costs, and the "prevailing party" is the party in whose favor a judgment is issued. If summary judgment is entered, the party who requested summary judgment is the prevailing party, and a party need not prevail on every issue to be entitled to costs. The court will not determine the party entitled to costs in settled cases; instead, the parties must agree on how, if at all, costs will be apportioned.

The federal statute generally governing the taxation of costs, 28 U.S.C. § 1920, enumerates the following allowable items:

(1) fees of the clerk and marshal;

(2) fees for printed or electronically recorded transcripts necessarily obtained for use in the case;

(3) fees and disbursements for printing and witnesses;

(4) fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;

(5) docket fees under § 1923 of this title;

(6) compensation of court-appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under § 1828 of this title.

Local Rule 54(e) provides additional guidance with respect to the various categories of costs that are taxable and how those categories of costs are to be calculated. Therefore, the practitioner should consult Local Rule 54(e) prior to submitting a bill of costs.

Form 8:2, Chapter Eight-A, is an example of a bill of costs application used in the United States District Court for the District of Arizona. The practitioner should keep in mind that many federal statutes contain specific rules concerning the recovery of costs in the particular matters governed by those statutes.¹²

Aida Renta Trust v. Maricopa County, 221 Ariz. 603, 212 P.3d 941 (App. 2009)....................................... 9-2

Altfillisch Constr. Co. v. Torgerson Constr. Corp., 120 Ariz. 438, 586 P.2d 999 (App. 1978)..................... 9-3

Arc Electric Co. v. Esslinger-Lefler, Inc., 121 Ariz. 501, 591 P.2d 989 (App. 1979).................................. 9-19

Arizona Cotton Ginning & Mfg. Co. v. Sims, 29 Ariz. 198, 240 P. 341 (1925).......................................... 9-19

Ass'n of Mexican-American Educators v. Cal., 231 F.3d 572 (9th Cir. 2000).............................................. 9-25

Assyia v. State Farm Mut. Auto Ins. Co., 229 Ariz. 216, 273 P.3d 668 (App. 2012)...................... 9-2, 3, 19

Ayala v. Olaiz, 161 Ariz. 129, 776 P.2d 807 (App. 1989)..................................................................... 9-4, 5, 7

Barrett v. Melton, 112 Ariz. 605, 545 P.2d 421 (1976)................................................................................... 9-15

Berry v. 352 E. Virginia, L.L.C., 228 Ariz. 9, 261 P.3d 784 (App. 2011).......................................... 9-2, 4, 5

Berry v. Solomon, 60 Ariz. 333, 137 P.2d 386 (1943)...................................................................................... 9-16

Best Choice Fund, LLC v. Low & Childers, P.C., 228 Ariz. 502, 269 P.3d 678 (App. 2011)................... 9-7

Best Western Int'l v. Patel, 2008 WL 544820 (D. Ariz. 2008).......................................................................... 9-5

Bishop v. Pecanic, 193 Ariz. 524, 975 P.2d 114 (App. 1998)........................................................................ 9-20

Boltz & Odegaard v. Hohn, 148 Ariz. 361, 714 P.2d 854 (App. 1985)...................................................... 9-23

Brant v. Hargrove, 129 Ariz. 475, 632 P.2d 978 (App. 1981)....................................................................... 9-18

Britt v. Steffen, 220 Ariz. 265, 205 P.3d 357 (App. 2008................................................................................. 9-9

Burns v. Wheeler, 103 Ariz. 525, 446 P.2d 925 (1968)................................................................................... 9-18

City of Phoenix v. Kenly, 21 Ariz. App. 394, 519 P.2d 1159 (1974)............................................................ 9-20

City of Phoenix v. Long, 158 Ariz. 59, 761 P.2d 133 (App. 1988).................................................................. 9-4

City of Sedona v. Devol, 196 Ariz. 178, 993 P.2d 1142 (App. 1999).............................................................. 9-8

Commercial Standard Ins. Co. v. Cleveland, 86 Ariz. 288, 345 P.2d 210 (1959).......................................... 9-12

Copper State Bank v. Saggio, 139 Ariz. 438, 679 P.2d 84 (App. 1983)................................................. 9-14, 23

Cypress Bagdad Copper Corp. v. Arizona Dep't of Revenue, 188 Ariz. 345, 935 P.2d 923 (App. 1997)... 9-17

Dahn World Co., Ltd. V. Chung, 2006 WL 3313951 (D. Ariz. 2008).......................................................... 9-9

Davis v. Discount Tire, Co., 182 Ariz. 571, 898 P.2d 520 (App. 1995)....................................................... 9-22

Davis v. Tavasci, 1 Ariz. App. 380, 403 P.2d 315 (1965)....................................................................... 9-14, 22

De Montiney v. Desert Manor Convalescent Center, Inc., 144...