“The district court did not err in refusing to award costs, for neither party prevailed sufficiently to require an award of costs and make a decision not to do so an abuse of discretion.”
How later courts described this case
- “The district court did not err in refusing to award costs, for neither party prevailed sufficiently to require an award of costs and make a decision not to do so an abuse of discretion.”
- “In the event of a mixed judgment, however, it is within the discretion of a district court to require each party to bear its own costs.”
- “Our conclusion that there can only be one prevailing party in a given case is reinforced by the use of the definite article ‘the’ before ‘prevailing party.’”
- noting that “in cases in which ‘neither side entirely prevailed, or when both sides prevailed, . . . some courts have denied costs to both sides”
Written by the judges who cited it.
The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
UNIVERSITY ACCOUNTING Case No. 3:18-cv-1486-SI
SERVICE, LLC,
OPINION AND ORDER REGARDING
Plaintiff, COST BILLS
v.
ETHAN SCHULTON and
SCHOLARCHIP CARD, LLC,
Defendants.
Allyson B. Baker, Sameer P. Sheikh, Erin Z. Cass, Meredith L. Boylan, and Michael J. Marusak,
VENABLE LLP, 600 Massachusetts Avenue, NW, Washington, DC 20001; Ciaran P.A. Connelly,
BALL JANIK LLP, 101 SW Main Street, Suite 1100, Portland, OR 97204. Of Attorneys for
Plaintiff.
Scott R. Ast, SCHARNHORST AST KENNARD GRIFFIN PC, 1100 Walnut Street, Suite 1950, Kansas
City, MO 64106; Stephen P. Yoshida and Michael J. Farrell, MB LAW GROUP LLP, 117 Taylor
Street, Suite 200, Portland, OR 97204. Of Attorneys for Defendant Ethan Schulton.
Stephen Nakamura, MERLE BROWN & NAKAMURA PC, 90 Broad Street, Suite 2201, New York,
NY 10004; John C. Rothermich, K&L GATES LLP, One SW Columbia Street, Suite 1900,
Portland, OR 97258; G. William Shaw, K&L GATES LLP, 925 Fourth Avenue, Suite 2900,
Seattle, WA 98104. Of Attorneys for Defendant ScholarChip Card, LLC.
Michael H. Simon, District Judge.
In this lawsuit, Plaintiff University Accounting Service, LLC (“UAS”) asserted claims
against Defendants Ethan Schulton (“Schulton”) and ScholarChip Card, LLC (“ScholarChip”).
Against both Schulton and ScholarChip, UAS alleged misappropriation of trade secrets and
intentional interference with business relations. For those claims, UAS sought money damages
and equitable relief. UAS also alleged that ScholarChip was liable for breach of contract. For
that claim, UAS sought only an equitable remedy, asking for both prohibitory and mandatory
injunctive relief. After a nine-day trial, the jury returned its verdict in favor of both Defendants,
rejecting UAS’s claims of misappropriation of trade secrets and intentional interference. The
Court, as factfinder in the breach of contract claim, then found that ScholarChip had breached its
contract with UAS and entered permanent injunctive relief.
Regarding Defendant Schulton, the Court entered judgment against UAS and in favor of
Schulton on all claims. Regarding Defendant ScholarChip, the Court entered judgment in favor
of ScholarChip and against UAS on the two legal claims decided by the jury and in favor of UAS
and against ScholarChip on the equitable claim decided by the Court. UAS timely appealed, and
that appeal is continuing. Pending before the Court are: (1) Schulton’s cost bill (ECF 336),
seeking $2,312.32; (2) ScholarChip’s cost bill (ECF 339), seeking $96,907.92; and (3) UAS’s
cost bill (ECF 342), seeking $85,682.82.
Rule 54(d)(1) of the Federal Rules of Civil Procedure provides, in relevant part:
Unless a federal statute, these rules, or a court order provides
otherwise, costs—other than attorney’s fees—should be allowed to
the prevailing party.
Fed. R. Civ. P. 54(d)(1). “By its terms, the rule creates a presumption in favor of awarding costs
to a prevailing party, but vests in the district court discretion to refuse to award costs.” Ass’n of
Mexican-Am. Educators v. State of California, 231 F.3d 572, 591 (9th Cir. 2000) (citing National
Info. Servs., Inc. v. TRW, Inc., 51 F.3d 1470, 1471 (9th Cir.1995)). This discretion, however, is
not unlimited. Id. “A district court must specify reasons for its refusal to award costs.” Id.
(citation and quotation marks omitted).
In some cases, it is easy to determine who is the “prevailing party” for purposes of
Rule 54. This is not one of those cases. In general, “the ‘prevailing party’ is the party who
prevails as to the substantial part of the litigation.” Testa v. Vill. of Mundelein, Ill., 89 F.3d 443,
447 (7th Cir. 1996). As the Ninth Circuit has explained:
A litigant need not prevail on every issue, or even on the “central
issue” in the case, to be considered the prevailing party. Texas
State Teachers Ass’n v. Garland Independent Sch. Dist., 489 U.S.
782, 790–91 (1989). It is enough that she succeeds “on any
significant claim affording some of the relief sought.” Id. at 791. If
the plaintiff is only partially successful in seeking the relief, and
achieves only some of the benefit sought by the litigation, she is
still considered the prevailing party. Stivers v. Pierce, 71 F.3d 732,
751 (9th Cir.1995) (citing Farrar v. Hobby, 506 U.S. 103, 111–12
(1992)). “The degree of success is irrelevant to the question
whether the plaintiff is the prevailing party.” Id.
Hashimoto v. Dalton, 118 F.3d 671, 677 (9th Cir. 1997). Under this analysis, Plaintiff UAS
might be properly considered to be the prevailing party.
On the other hand, UAS asserted three claims against ScholarChip, lost two of them
before the jury, and recovered only a portion of the injunctive relief that it requested on the third.
Thus, ScholarChip prevailed on the majority of claims brought by UAS. Under the law in some
circuits, that would be sufficient to make ScholarChip the prevailing party. See, e.g., Roberts v.
Madigan, 921 F.2d 1047 (10th Cir. 1990) (“We now hold that the district court in this case did
not abuse its discretion when it awarded full costs to the party [the defendant] prevailing on the
majority of claims and the central claims at issue.”). Further, at least under the law of the Federal
Circuit, there can only be one prevailing party in a case. See Shum v. Intel Corp., 629 F.3d 1360,
1367 (Fed. Cir. 2010) (“Our conclusion that there can only be one prevailing party in a given
case is reinforced by the use of the definite article ‘the’ before ‘prevailing party.’”).
In this case, it is unclear who is the “prevailing party” as between UAS and ScholarChip.
Both won a portion of this lawsuit, and both lost a portion. Under these circumstances, the Court
exercises its discretion to award prevailing party costs to neither UAS nor ScholarChip. See
Amarel v. Connell, 102 F.3d 1494, 1523 (9th Cir. 1996) (“In the event of a mixed judgment,
however, it is within the discretion of a district court to require each party to bear its own
costs.”); see also Ruiz v. A.B. Chance Co., 234 F.3d 654, 670 (Fed. Cir. 2000) (“The district
court did not err in refusing to award costs, for neither party prevailed sufficiently to require an
award of costs and make a decision not to do so an abuse of discretion.”); Barber v. T.D.
Williamson, Inc., 254 F.3d 1223, 1234-35 (10th Cir. 2001) (noting that “in cases in which
‘neither side entirely prevailed, or when both sides prevailed, . . . some courts have denied costs
to both sides”).
Defendant Schulton’s cost bill (ECF 336) is allowed in the amount of $2,312.32.
Defendant ScholarChip’s cost bill (ECF 339) and Plaintiff UAS’s cost bill (ECF 342) are each
denied without prejudice and with leave to renew if the Ninth Circuit’s resolution of the pending
appeal alters the analysis regarding whether UAS or ScholarChip is the prevailing party.
IT IS SO ORDERED.
DATED this 20th day of July, 2020.
/s/ Michael H. Simon
Michael H. Simon
United States District Judge