Seventh Circuit rules indigency excuses payment of costs.

• Author: Ziemer, David

Byline: David Ziemer

The Seventh Circuit on Nov. 21 declined to make the award of costs against a losing party pursuant to FRCP 54(d)(1) mandatory. However, the court did place a greater burden on trial courts if they exercise discretion not to award costs because of indigence, and a concurrence suggested that courts should not have discretion to deny costs. In 2001, former Chicago police officer Mario Morales went to Emily Rivera's apartment, identified himself as a police officer and demanded that Rivera let him in. Morales was wearing a bulletproof vest and a badge pouch. Rivera opened the back door and Morales forcibly entered the apartment. Once inside, Morales led Rivera upstairs, handcuffed her hands behind her back and placed her on a bed. While Rivera was handcuffed upstairs, Morales ransacked the apartment and then left. Following the incident, Morales pled guilty to numerous federal felonies, for which he is currently incarcerated. Rivera brought suit against Morales in federal court, alleging a violation of her Fourth Amendment rights under Section 1983, and a state law battery claim. She obtained a $175,000 default judgment. Rivera then attempted to collect this judgment from the city through a supplemental collection proceeding under FRCP 69, arguing that the city was liable, because Morales was a city employee and acted under color of state law. The district court granted summary judgment to the city, after which the city submitted its bill of costs. The court found Rivera indigent and denied costs, based on her affidavit, stating that she is a single mother of four children, earns a salary of $1,800 per month, has only a nominal amount of money in her checking account, receives food stamps, and has no other assets. The affidavit did not list her expenses or include the $175,000 judgment against Morales among her assets. The city appealed, and the court of appeals vacated the order in an opinion written by Judge Joel M. Flaum, and joined by Judge William J. Bauer. Judge Frank H. Easterbrook wrote a concurrence. Statutory Language The court first rejected the city's argument that it should abolish the exception that allows indigent losing parties to avoid paying costs under Rule 54(d)(1). The rule provides in pertinent part, "[e]xcept when express provision therefore is made either in a statute of the United States or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise...