The opinion
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ORLANDO GARCIA, No. 21-55926
Plaintiff-Appellant, D.C. No.
2:20-cv-10752-
v. PA-GJS
GATEWAY HOTEL L.P., a
California Limited Partnership, OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
Argued and Submitted February 13, 2023
Pasadena, California
Filed September 15, 2023
Before: A. Wallace Tashima, Andrew D. Hurwitz, and
Bridget S. Bade, Circuit Judges.
Opinion by Judge Bade;
Dissent by Judge Hurwitz
2 GARCIA V. GATEWAY HOTEL L.P.
SUMMARY*
Americans with Disabilities Act / Costs
The panel affirmed the district court’s award of costs to
the defendant in an action brought under the Americans with
Disabilities Act (“ADA”).
Federal Rule of Civil Procedure 54(d)(1) allows courts
the discretion to award costs to prevailing parties unless a
federal statute “provides otherwise.” The panel held that
Brown v. Lucky Stores, Inc., 246 F.3d 1182 (9th Cir. 2001)
(addressing the ADA standard for awarding costs to
defendants), was effectively overruled by Marx v. General
Revenue Corp., 458 U.S. 371 (2013) (holding that an award
of costs in an action brought under the Fair Debt Collection
Practices Act is governed by Rule 54(d)(1)). The panel held
that, accordingly, the fee- and cost-shifting provision of the
ADA, 42 U.S.C. § 12205, does not “provide otherwise”
within the meaning of Rule 54(d)(1). Rule 54(d)(1)
therefore governs the award of costs to a prevailing ADA
defendant and allows such an award in the court’s discretion.
The panel concluded that in Green v. Mercy Housing, Inc.,
991 F.3d 1056 (9th Cir. 2021) (applying Brown in a suit
under the Fair Housing Act), the court did not hold, sub
silentio, that Brown and Marx are reconcilable. Because
Rule 54(d)(1) controls whether defendants may be awarded
costs in this ADA action, the district court did not abuse its
discretion in denying the plaintiff’s motion to retax costs,
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
GARCIA V. GATEWAY HOTEL L.P. 3
thereby keeping the court’s prior award of costs to the
defendant intact.
Dissenting, Judge Hurwitz agreed with the majority that
after Marx, Rule 54(d)(1) controls the award of costs to a
prevailing defendant in an ADA action and that prior
caselaw holding that the ADA “provides otherwise” than
Rule 54(d)(1) cannot be reconciles with Marx. Judge
Hurwitz, however, wrote that the three-judge panel was not
free to reach those conclusions because it was bound by
Green’s holding regarding an identical costs provision in the
Fair Housing Act.
COUNSEL
Dennis J. Price II (argued), Seabock Price APC, Pasadena,
California; Russell C. Handy, Potter Handy LLP, San
Francisco, California; for Plaintiff-Appellant.
Phillip H. Stillman (argued), Stillman & Associates, Miami
Beach, Florida, for Defendant-Appellee.
OPINION
BADE, Circuit Judge:
This case requires us to clarify the circumstances under
which a defendant may be awarded its costs in an action
brought under the Americans with Disabilities Act of 1990
(“ADA”), 42 U.S.C. § 12101 et seq. Appellee Gateway
Hotel L.P. (“Gateway”) contends that the standard for
awarding costs to ADA defendants is governed by Federal
Rule of Civil Procedure 54(d)(1), which allows courts the
4 GARCIA V. GATEWAY HOTEL L.P.
discretion to award costs to prevailing parties “[u]nless a
federal statute . . . provides otherwise.” Relying on Brown
v. Lucky Stores, Inc., 246 F.3d 1182, 1190 (9th Cir. 2001),
which extended the Christiansburg standard1 for awarding
defendants’ attorney’s fees to awarding costs, Appellant
Orlando Garcia contends that the ADA’s fee- and cost-
shifting statute “provides otherwise” because it permits
ADA defendants to receive their costs only where there is a
showing that the action was frivolous, unreasonable, or
groundless. Therefore, he contends that the district court
should have granted his motion to retax costs, which would
have, in effect, denied Gateway’s application for costs.
The district court denied Garcia’s motion because it
concluded that our decision in Brown is irreconcilable with
the United States Supreme Court’s intervening opinion in
Marx v. General Revenue Corp., 568 U.S. 371 (2013), and
was therefore effectively overruled. See Miller v. Gammie,
335 F.3d 889, 900 (9th Cir. 2003) (en banc). Thus, the
district court concluded that Rule 54(d)(1) governs the award
of costs to a prevailing ADA defendant and allows such an
award in the court’s discretion.
We agree with the district court and conclude that our
decision in Brown cannot be reconciled with the Court’s
decision in Marx, and therefore it has been effectively
overruled. Accordingly, we hold that Rule 54(d)(1) governs
the award of costs to a prevailing ADA defendant, and such
costs may be awarded in the district court’s discretion.
1
See Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)
(concluding that “a district court may in its discretion award attorney’s
fees to a prevailing defendant in a Title VII case upon a finding that the
plaintiff’s action was frivolous, unreasonable, or without foundation,
even though not brought in subjective bad faith”).
GARCIA V. GATEWAY HOTEL L.P. 5
I.
On October 2, 2020, Garcia filed a complaint in the state
court challenging Gateway’s “reservation policies and
practices,” specifically “the lack of information provided on
[Gateway’s] website that would permit [Garcia] to
determine if there are rooms” that would accommodate his
disability. Garcia contended that Gateway’s failure to
provide this information violated the ADA and California
law.
Gateway removed the case to federal court, and Garcia
subsequently amended his complaint, dropping his claim
based on California law. Gateway then moved to dismiss
under Federal Rule of Civil Procedure 12(b)(6), and the
district court granted the motion after concluding that the
information on Gateway’s website complied with the ADA’s
requirements. Gateway then sought an award of attorney’s
fees, which the court denied because it could not “conclude
on the record before it that [Garcia]’s case was frivolous or
unreasonable” and because there was no “clear indication
that [Garcia]’s lawsuit was vexatious.”
Gateway then filed an application for costs, which the
court awarded. After filing two motions to retax costs that
the court denied on procedural grounds, Garcia filed a third
motion to retax costs, arguing that costs may be awarded to
defendants under the ADA only if the action was frivolous,
unreasonable, or without foundation. The court denied this
motion after concluding that Brown—the legal authority
cited in support of Garcia’s position—was irreconcilable
with the Supreme Court’s intervening decision in Marx. The
district court followed “the Supreme Court’s intervening
decision in Marx rather than the Ninth Circuit’s earlier
precedent” in Brown, and determined that Rule 54(d)(1)
6 GARCIA V. GATEWAY HOTEL L.P.
governed the award of costs in ADA actions. And because
Rule 54(d)(1) provides that costs may be awarded to a
prevailing party at the district court’s discretion, the court
concluded that Gateway properly received its costs in the
action and denied Garcia’s motion to retax costs.
This appeal timely followed.
II.
We review an award of costs for an abuse of discretion.
Resnick v. Netflix, Inc. (In re Online DVD-Rental Antitrust
Litig.), 779 F.3d 914, 924 (9th Cir. 2015) (citing Arakaki v.
Lingle, 477 F.3d 1048, 1069 (9th Cir. 2007)). “A district
court abuses its discretion if it does not apply the correct law
or if it rests its decision on a clearly erroneous finding of
material fact.” Id. (quoting Jeff D. v. Otter, 643 F.3d 278,
283 (9th Cir. 2011)). We review de novo the threshold
question of the applicable legal standard for awarding costs.
See Tutor-Saliba Corp. v. City of Hailey, 452 F.3d 1055,
1059–60 (9th Cir. 2006) (reviewing de novo whether the
district court applied the correct legal standard in awarding
attorney’s fees).
III.
A.
Under Rule 54(d)(1), “[u]nless a federal statute, these
rules, or a court order provides otherwise, costs—other than
attorney’s fees—should be allowed to the prevailing party.”
The issue in this case is whether the fee- and cost-shifting
provision of the ADA, 42 U.S.C. § 12205, “provides
otherwise” and thus that statutory standard, rather than Rule
54(d)(1), governs the award of costs to prevailing ADA
defendants.
GARCIA V. GATEWAY HOTEL L.P. 7
In Marx, the Supreme Court was asked to clarify when a
federal statute “provides otherwise.” 568 U.S. at 373–74.
Marx involved a suit brought under the federal Fair Debt
Collection Practices Act (“FDCPA”), which, like the ADA,
includes a provision for awarding fees and costs. See id.
That provision—15 U.S.C. § 1692k(a)(3)—permits a court
to “award to the defendant attorney’s fees . . . and costs” if it
finds that the plaintiff brought its FDCPA action “in bad
faith and for the purpose of harassment.”
After the petitioner in Marx was ordered to pay the costs
of the action following an unsuccessful FDCPA suit, she
appealed, arguing that the district court lacked authority to
award the defendant’s costs because § 1692k(a)(3) “sets
forth the exclusive basis for awarding costs in FDCPA
cases” and “the court had not found that she brought the case
in bad faith and for the purposes of harassment.” 568 U.S.
at 375. The Tenth Circuit concluded that the district court
could award costs under Rule 54(d)(1) because “nothing in
the text, history, or purpose of § 1692k(a)(3) indicated that
it was meant to displace” that Rule. Id. at 375–76.
The Supreme Court affirmed. Id. at 376. Although
“Rule 54(d)(1) codifies a venerable presumption that
prevailing parties are entitled to costs,” the Court explained
that “the word ‘should’ makes clear that the decision
whether to award costs ultimately lies within the sound
discretion of the district court.” Id. at 377. Thus, because
Rule 54(d)(1) “grants district courts discretion to award
costs, a statute is contrary to the Rule”—and thus “provides
otherwise”—“if it limits that discretion.” Id. “A statute,”
the Court continued, “may limit a court’s discretion in
several ways”: for example, a statute might “preclude[] a
court from awarding costs to prevailing defendants” at all, or
it might preclude a court from awarding costs when certain
8 GARCIA V. GATEWAY HOTEL L.P.
conditions have not been satisfied. Id. at 377–78. But a
“statute providing that ‘the court may award costs to the
prevailing party’ . . . is not contrary to the Rule because it
does not limit a court’s discretion.” Id. at 378.
Applying this principle, the Court concluded that
§ 1692k(a)(3) was not contrary to Rule 54(d)(1). Id. at 380.
The petitioner in Marx argued that, while § 1692k(a)(3) did
“not expressly limit a court’s discretion to award costs,” it
did so “by negative implication.” Id. By “specifying that a
court may award attorney’s fees and costs when an action is
brought in bad faith and for the purpose of harassment,” the
petitioner reasoned that “Congress intended to preclude a
court from awarding fees and costs when bad faith and
purpose of harassment are absent.” Id. at 381.
The Court rejected this argument for reasons that are
instructive here. “First, the background presumptions
governing attorney’s fees and costs” cut against the
petitioner’s negative-implication argument. See id. at 381–
82. The Court explained that, unlike costs—which are
presumptively awarded to prevailing parties—the “opposite
presumption exists with respect to attorney’s fees,” which
are generally paid by each litigant, “win or lose.” Id.
(citation omitted). That general rule, however, was subject
to the federal courts’ “inherent power to award attorney’s
fees in a narrow set of circumstances, including when a party
brings an action in bad faith.” Id. at 382. Because
§ 1692k(a)(3) “provides that when the plaintiff brings an
action in bad faith, the court may award attorney’s fees to
the defendant,” it left “the background rules for attorney’s
fees intact,” making it “dubious to infer congressional intent
to override the background rule with respect to costs.” Id.
(emphases added). Instead, § 1692k(a)(3) was “best read as
GARCIA V. GATEWAY HOTEL L.P. 9
codifying a court’s pre-existing authority to award both
attorney’s fees and costs.” Id.
Second, the structure of § 1692k(a)(3) confirmed the
conclusion that Congress did not intend to override the
background rule for costs. See id. at 383–84. In its entirety,
§ 1692k(a)(3) provided for fees and costs in two
circumstances: to plaintiffs upon a showing that the
defendants violated the FDCPA, and to defendants upon a
showing that the plaintiff brought the action “in bad faith and
for the purpose of harassment.” Id. at 383. “If Congress had
excluded ‘and costs’” from the second sentence of
§ 1692k—which governs awards of fees and costs to
defendants—“the expression of costs in the first sentence
and the exclusion of costs in the second sentence [would
mean] that defendants could only recover attorney’s fees
when plaintiffs bring an action in bad faith.” Id. at 383. But
Congress did not draft the statute that way. And Congress’s
decision to draft the statute without “a negative implication
that costs are precluded” weighed against reading the statute
in a way that gave “effect to any implied limitation.” Id. at
384.
Third, the Court noted that “the language in
§ 1692k(a)(3) sharply contrasts with other statutes in which
Congress has placed conditions on awarding costs to
prevailing defendants.” Id. (citing 28 U.S.C. § 1928 and 42
U.S.C. § 1988(b)). While “Congress need not use explicit
language to limit a court’s discretion under Rule 54(d)(1), its
use of explicit language in other statutes caution[ed] against
inferring [such a] limitation in § 1692k(a)(3).” Id. “Had
Congress intended” § 1692k(a)(3)’s cost-shifting provision
“to displace Rule 54(d)(1), it could have easily done so by
using the word ‘only’ before” providing for costs on a
10 GARCIA V. GATEWAY HOTEL L.P.
finding that the suit was brought in bad faith and for the
purpose of harassment. Id.
Finally, the United States, as amicus curiae, argued in
favor of the petitioner that § 1692k(a)(3) displaced Rule
54(d)(1) based on the canon of construction that a precisely
drawn statute controls over a general rule. Id. at 386–87
(citing EC Term of Years Trust v. United States, 550 U.S.
429, 433 (2007)). The Court rejected that argument and
reiterated that “the context of § 1692k(a)(3) indicates that
Congress was simply confirming the background rule that
courts may award to defendants attorney’s fees and costs
when the plaintiff brings an action in bad faith.” Id. at 387.
Because petitioner “did not bring th[e] suit in bad faith,” the
case fell outside the statutory provision, and Rule 54(d)(1)
therefore applied. See id. at 387–88.
With these background principles in mind, we now turn
to whether § 12205 is contrary to Rule 54(d)(1).
B.
1.
We begin, as we must, “with the language of the statute
itself.” United States v. Ron Pair Enters., Inc., 489 U.S. 235,
241 (1989).
The ADA’s fee- and cost-shifting provision states:
In any action or administrative proceeding
commenced pursuant to this chapter, the
court or agency, in its discretion, may allow
the prevailing party, other than the United
States, a reasonable attorney’s fee, including
litigation expenses, and costs, and the United
GARCIA V. GATEWAY HOTEL L.P. 11
States shall be liable for the foregoing the
same as a private individual.
42 U.S.C. § 12205. This is precisely the type of statute that
the Court in Marx held “is not contrary to the Rule because
it does not limit a court’s discretion.” See 568 U.S. at 378.
Because § 12205 does not “provide otherwise” than Rule
54(d)(1), the Rule controls the awarding of costs to
prevailing ADA defendants.
2.
As Garcia correctly notes, however, the Supreme Court
long ago imbued fee-shifting provisions in civil rights
statutes with a judicial gloss. In Christiansburg, the Court
concluded that, in Title VII cases, courts may award
attorney’s fees to a prevailing defendant only where the
plaintiff’s action was found to be “frivolous, unreasonable,
or without foundation.” 434 U.S. at 421. And in Brown, we
extended the Christiansburg standard for fees to an award of
a defendant’s costs in an action brought under the ADA.
Brown, 246 F.3d at 1190. Garcia contends that because
Christiansburg addressed fee shifting under Title VII, and
Brown addressed cost shifting under the ADA, these cases
involved “civil rights litigation,” while Marx, which
addressed cost shifting under the FDCPA, did not.
In Garcia’s view, because Congress enacted the ADA
after the Court decided Christiansburg, Congress intended
to apply the Christiansburg standard for an award of
defendant’s fees to an award of costs under the ADA. Garcia
observes that “the statutory language [in § 12205] makes
fees and costs parallel,” and argues that provides further
evidence of Congress’s intent to engraft the Christiansburg
standard for attorney’s fees onto costs awards. Thus, like the
12 GARCIA V. GATEWAY HOTEL L.P.
petitioner in Marx, Garcia argues by negative implication
that § 12205 “sets forth the exclusive basis for awarding
costs” to ADA defendants. See 568 U.S. at 375.
But Marx instructs that we must consider the
Christiansburg standard in light of the background
presumptions regarding awards for attorney’s fees and costs.
See Marx, 568 U.S. at 381. These background presumptions
convince us that § 12205 does not limit the district court’s
discretion in awarding costs and therefore is not contrary to
Rule 54(d)(1).
Christiansburg involved the fee- and cost-shifting
provision in Title VII of the Civil Rights Act of 1964. 434
U.S. at 413–14. Title VII included a section that, like
§ 12205, provided that a district court “in its discretion[]
may allow the prevailing party . . . a reasonable attorney’s
fee as part of the costs.” Id. at 413–14 n.1 (quoting 41 U.S.C.
§ 2000e-5(k)).
The Court in Christiansburg concluded that the most
straightforward reading of the statute—that “[a] prevailing
defendant is entitled to an award of attorney’s fees on the
same basis as a prevailing plaintiff”—failed to account for
“at least two strong equitable considerations” that supported
awarding fees to a prevailing Title VII plaintiff but were not
present in the case of a prevailing defendant. Id. at 418.
First, Congress intended for private rights of action to be the
primary enforcement mechanism for violations of civil
rights. See id. (“[T]he plaintiff is the chosen instrument of
Congress to vindicate a policy that Congress considered of
the highest priority.” (internal quotation marks and citation
omitted)). “Second, when a district court awards counsel
fees to a prevailing plaintiff, it is awarding them against a
violator of federal law.” Id. These two considerations led
GARCIA V. GATEWAY HOTEL L.P. 13
the Court to conclude that Congress could not have intended
to award defendants their attorney’s fees on the same basis
as a prevailing plaintiff. Id. at 418–19.
But critical to this case, the Court also explained that
Congress could not have intended for defendants to be
limited to a fee award “only in a situation where the plaintiff
was motivated by bad faith in bringing the action.” Id. at
419. After all, “if that had been the intent of Congress, no
statutory provision would have been necessary, for it has
long been established that even under the American
common-law rule attorney’s fees may be awarded against a
party who has proceeded in bad faith.” Id.; see Marx, 568
U.S. at 382 (“[W]e have long recognized that federal courts
have inherent power to award attorney’s fees in a narrow set
of circumstances, including when a party brings an action in
bad faith.”). Considering this background presumption
alongside legislative history that demonstrated Congress
“wanted to protect defendants from burdensome litigation
having no legal or factual basis,” the Court concluded that
“a district court may in its discretion award fees to a
prevailing defendant . . . upon a finding that the plaintiff’s
action was frivolous, unreasonable, or without foundation,
even though not brought in subjective bad faith.”
Christiansburg, 434 U.S. at 420–21.
Thus, in announcing the rule that defendants could only
recover their attorney’s fees on a showing that the action that
was frivolous, unreasonable, or without foundation, the
Court gave force to Congress’s intent to protect both
plaintiffs’ interests in bringing civil rights actions without
fear of ruinous financial consequences and defendants’
interests in avoiding defending against patently meritless
suits. See id. These competing interests led the Court to
adopt a test for awarding defendants attorneys’ fees that is
14 GARCIA V. GATEWAY HOTEL L.P.
less demanding than the background presumption. See id. at
419.
Under Garcia’s reading, however, defendants do not
receive their costs upon meeting a less demanding standard
than the background presumption that “prevailing parties are
entitled to costs,” Marx, 568 U.S. at 377; indeed, under
Garcia’s reading, defendants do not receive costs even upon
meeting the background presumption. Instead, Garcia
insists that Congress intended for defendants to demonstrate
that an action was frivolous, unreasonable, or without
foundation in order to receive costs. This reading leads to
the illogical conclusion that Congress intended for attorney’s
fee awards to be governed by a less demanding standard than
the background rule but for cost awards to be governed by a
more demanding standard than the background rule. The
better reading, as the Court explained in Marx, is that
Congress intended for the less demanding standard to apply
to an award of attorney’s fees while leaving the background
rule for costs intact. 568 U.S. at 382 (“Because
§ 1692k(a)(3) codifies the background rule for attorney’s
fees, it is dubious to infer congressional intent to override the
background rule with respect to costs.”). And this reading
finds particular force when, as here, the statute parallels Rule
54(d)(1) in providing that costs “should be allowed to the
prevailing party.” Compare Fed. R. Civ. P. 54(d)(1), with
42 U.S.C. § 12205 (permitting the court to allow costs to
“the prevailing party”); see also Marx, 568 U.S. at 386
(explaining that other fee- and cost-shifting provisions in
Title 42 “overlap with Rule 54(d)(1)” by providing for an
award of costs to prevailing parties (citing, e.g., 42 U.S.C.
§§ 3612(p) and 3613(c)(2))).
In short, the background presumptions for awarding fees
and costs, combined with congressional intent as explained
GARCIA V. GATEWAY HOTEL L.P. 15
in Christiansburg, demonstrate that, in permitting fee
awards for civil rights defendants only on a showing that an
action was “frivolous, unreasonable, or without foundation,”
Congress did not intend to displace the background
presumption that costs may be awarded to prevailing parties.
3.
Garcia next argues that § 12205 is contrary to Rule
54(d)(1) because it is akin to “other statutes in which
Congress has placed conditions on awarding costs to
prevailing defendants.” See Marx, 568 U.S. at 384. A
cursory review of these statutes demonstrates they are
distinguishable. For example, 28 U.S.C. § 1928 provides
that costs may not be included in a judgment for patent
infringement “unless the proper disclaimer has been filed in
the United States Patent and Trademark Office prior to the
commencement of the action.” Similarly, 42 U.S.C.
§ 1988(b) provides that costs are not available “in any action
brought against a judicial officer for an act or omission taken
in such officer’s judicial capacity . . . unless such action was
clearly in excess of such officer’s jurisdiction.” Thus, unlike
§ 12205 and Rule 54(d)(1), these statutes presume that costs
are unavailable, and the plaintiff must show certain
conditions have been met to recover costs. And the
conditions imposed on collecting costs in these statutes have
no relation to the background presumptions related to fees
and costs, and thus do not indicate congressional intent to
specifically displace those presumptions. Because Garcia
fails to demonstrate that Congress specifically intended to
place conditions on awarding costs to prevailing ADA
defendants in § 12205, we again conclude that section is not
contrary to Rule 54(d)(1).
16 GARCIA V. GATEWAY HOTEL L.P.
IV.
Garcia’s arguments on appeal require us to consider our
holdings in two previous cases: Brown and Green v. Mercy
Housing, Inc., 991 F.3d 1056 (9th Cir. 2021). According to
Garcia, Brown held that “awards of costs are not permissible
against ADA plaintiffs without a showing of frivolousness,
lack of merits or unreasonableness.” He insists that Brown
remains binding precedent, notwithstanding Marx, and
points to our recent decision in Green as reiterating Brown’s
continued vitality. And because, in Garcia’s view, Brown
still controls, he concludes that the Christiansburg standard
applies to costs and displaces Rule 54(d)(1).
We first consider whether our holding in Brown can be
reconciled with Marx before briefly considering Green.
A.
In Brown, we primarily considered the application “of
the ADA’s so-called ‘safe harbor’ provision,” 42 U.S.C.
§ 12114(b)(2), which extends the Act’s protections to
individuals participating in supervised rehabilitation
programs who have ceased drug use. 246 F.3d at 1186. We
also briefly considered “the standard to be used in denying
costs to a prevailing defendant under the ADA.” Id. We
determined that the Christiansburg standard governed
awarding fees under § 12205 and concluded that, “[b]ecause
§ 12205 makes fees and costs parallel, . . . the
Christiansburg test also applies to an award of costs to a
prevailing defendant under the ADA.” Id. at 1190.
To harmonize Brown’s invocation of the Christiansburg
standard to determine an award of costs to an ADA
defendant with Marx, we would be required to read Brown
as applying only when an action was “frivolous,
GARCIA V. GATEWAY HOTEL L.P. 17
unreasonable, or without foundation,” see Brown, 246 F.3d
at 1190, and conclude that Rule 54(d)(1) governs costs in all
other circumstances. Thus, we would read Brown’s
invocation of Christiansburg in much the same manner as
the Court in Marx read § 1692k(a)(3)’s invocation of “bad
faith and for the purpose of harassment” as a basis for
awarding costs to prevailing defendants as limited to those
circumstances. See Marx, 568 U.S. at 374, 387. In Marx,
the Court explained that § 1692k(a)(3) may govern the
award of costs where the defendant shows the suit was
brough in bad faith and for purposes of harassment but that,
where this showing is not made, Rule 54(d)(1) would control
as the background rule. See id. Because we apply the
Court’s reasoning in Marx to reject the argument that
§ 12205 has a negative implication, we can similarly read
Brown’s invocation of the Christiansburg standard as simply
inapplicable where, as here, the district court did not make a
finding that the action was frivolous, unreasonable, or
without foundation. See Marx, 568 U.S. at 387 (“The statute
speaks to one type of case—the case of the bad-faith and
harassing plaintiff. Because Marx did not bring this suit in
bad faith, this case does not fall within the ambit of”
§ 1692k(a)(3) (internal quotation marks and alteration
omitted)). And because § 12205 does not apply to Garcia’s
action, Rule 54(d)(1) does. See id.
The problem with this reading is that in Brown we
explicitly stated that the Christiansburg standard permits an
award of attorney’s fees to the defendant “only if the
plaintiff’s action was frivolous, unreasonable, or without
foundation.” Brown, 246 F.3d at 1190 (emphasis added)
(internal quotation marks and citation omitted). We further
explained that “[b]ecause § 12205 makes fees and costs
parallel, we hold that the Christiansburg test also applies to
18 GARCIA V. GATEWAY HOTEL L.P.
an award of costs to a prevailing defendant under the ADA.”
Id. Thus, Brown is more reasonably read as holding that
ADA defendants are never permitted an award of costs
without a finding that the action was frivolous, unreasonable,
or without foundation. And that reading is irreconcilable
with Marx.
In Brown, we considered the standard for awarding fees
without the benefit of the Supreme Court’s guidance in Marx
that such standards are to be evaluated based on “the
background presumptions governing attorney’s fees and
costs.” Marx, 568 U.S. at 381. Had we decided Brown with
the benefit of that guidance, we likely would have concluded
that, although the statute considers awarding fees and costs
in parallel, it does so cognizant of the background
presumption that the standard for awarding defendants’ fees
is more demanding than the standard for awarding
defendants’ costs. And, for reasons explained above, see
supra § III.B.2, considering § 12205’s text in light of these
background presumptions compels the conclusion that costs
may be awarded to prevailing defendants without a showing
of frivolousness, unreasonableness, or a lack of foundation,
which is consistent with Rule 54(d)(1).
Thus, while cognizant of our obligation to apply our
existing precedent consistently with higher authority when
possible, see Rodriguez v. AT&T Mobility Servs., LLC, 728
F.3d 975, 979–80 (9th Cir. 2013), we conclude that to the
extent Brown allows an award of costs to ADA defendants
only on a finding that the plaintiff’s action meets the
Christiansburg standard, that conclusion has been
“undercut” by the Supreme Court’s opinion in Marx “in such
a way that the [two] cases are clearly irreconcilable,” Miller,
335 F.3d at 900. Remaining faithful to the binding precedent
of the court of last resort, we conclude that Brown has been
GARCIA V. GATEWAY HOTEL L.P. 19
effectively overruled by Marx and hold that an award of
costs to ADA defendants is governed by Rule 54(d)(1).
B.
Finally, Garcia points to Green, in which we applied
Brown to hold that “a plaintiff bringing suit under the Fair
Housing Act should not be assessed fees or costs unless the
court determines that his claim is ‘frivolous, unreasonable,
or groundless.’” Green, 991 F.3d at 1058 (quoting
Christiansburg, 434 U.S. at 422). According to Garcia,
because Green was “decided nearly a decade after Marx”
and “applies the exact same rationale as Brown,” Green’s
holding demonstrates that Brown and Marx are reconcilable.
But there is no indication in Green that we considered Marx
when determining the proper standard for awarding
defendants their costs, and a review of the briefing and the
oral argument in that case reveals that the parties did not
raise Marx.2 Therefore, we reject Garcia’s suggestion that
2
See Consolidated Opening Brief for Appellant Rodney Green, Sr., at
48–49, Green v. Mercy Housing, Inc., 991 F.3d 1056 (9th Cir. 2021)
(Nos. 20-15134, 20-15358), ECF No. 20 (arguing that the court should
extend Brown to costs awards under the FHA because the “ADA and
FHA fee/costs statutes are strikingly similar,” but with no mention of
Marx); Consolidated Answering Brief for Appellee Mercy Housing, Inc.,
et al., at 56–57, ECF No. 31 (arguing that the court should not extend the
holding in Brown to an award of costs under the FHA because “the cost
provisions of the ADA and the FHA are fundamentally dissimilar,” with
no mention of Marx); Consolidated Reply Brief for Appellant Green at
12–14, ECF No. 41 (arguing that the Ninth Circuit should follow out-of-
circuit precedent to apply the Christiansburg standard to the recovery of
costs under the FHA, with no mention of Brown or Marx); see also Oral
Argument, Green v. Mercy Housing, Inc., (No. 20-15134),
http://www.ca9.uscourts.gov/media (argument focusing on several
issues on appeal, but only briefly addressing the award of costs without
any mention of Marx).
20 GARCIA V. GATEWAY HOTEL L.P.
in Green we concluded, sub silentio, that Brown and Marx
are reconcilable.
Moreover, “[q]uestions which merely lurk in the record,
neither brought to the attention of the court nor ruled upon,
are not to be considered as having been so decided as to
constitute precedents.” Cooper Indus., Inc. v. Aviall Servs.,
Inc., 543 U.S. 157, 170 (2004) (citation omitted). Or as we
recently reiterated, “[p]rior precedent that does not ‘squarely
address’ a particular issue does not bind later panels on the
question.” United States v. Kirilyuk, 29 F.4th 1128, 1134
(9th Cir. 2022).3 Because Green did not consider Marx in
the context of determining the appropriate standard for
awarding defendants their costs, we reject Garcia’s argument
that its holding evinces that Brown and Marx may be
reconciled.
V.
In conclusion, we hold that the fee- and cost-shifting
provision of the ADA, 42 U.S.C. § 12205, is not contrary to
Rule 54(d)(1) and that, consistent with that Rule, a
3
See also, e.g., Brecht v. Abrahamson, 507 U.S. 619, 630–31 (1993)
(rejecting argument that stare decisis required the application of a
particular harmless-error standard in habeas cases because “we have
never squarely addressed the issue, and have at most assumed the
applicability of the Chapman standard on habeas,” and concluding “we
are free to address the issue on the merits”); United States v. Ped, 943
F.3d 427, 433–34 (9th Cir. 2019) (concluding that even though prior
cases had stricken invalid sentencing provisions without remanding, that
did not mean the practice was appropriate because “[i]n none of those
cases did we discuss section 3742(f)(1) or consider how it affected our
authority to modify a sentence without remanding”); United States v.
Pepe, 895 F.3d 679, 688 (9th Cir. 2018) (“Just as cases are not
precedential for propositions not considered, . . . Clark does not foreclose
an interpretation of the statute that it didn’t consider . . . .”).
GARCIA V. GATEWAY HOTEL L.P. 21
prevailing ADA defendant may be awarded its costs at the
district court’s discretion and without a finding that the
action was frivolous, unreasonable, or without foundation.
To the extent that this holding conflicts with Brown, we
conclude that Brown is irreconcilable with, and effectively
overruled by, the Supreme Court’s opinion in Marx.
Because Rule 54(d)(1) controls whether defendants may
be awarded costs in this ADA action, the district court did
not abuse its discretion in denying Garcia’s motion to retax
costs, thereby keeping its prior award of costs to Gateway
intact.
AFFIRMED.
HURWITZ, Circuit Judge, dissenting:
I agree with the majority that after Marx v. General
Revenue Corp., 568 U.S. 371 (2013), Rule 54(d)(1) controls
the award of costs to a prevailing defendant in an ADA
action. I also agree with the majority that our prior caselaw
holding that the ADA “provides otherwise” than Rule
54(d)(1) cannot be reconciled with Marx. But, I part
company with my colleagues on whether our three-judge
panel is free to reach these conclusions.
I.
In Miller v. Gammie, we held that a three-judge panel is
bound by the opinion of a prior panel absent a conflicting
“subsequent” or “intervening” Supreme Court decision. 335
F.3d 889, 899–900 (9th Cir. 2003) (en banc). If Brown v.
Lucky Stores, Inc.—which held the ADA allowed an award
of costs to a prevailing defendant “only if the claim was
22 GARCIA V. GATEWAY HOTEL L.P.
frivolous, unreasonable or lacking foundation,” 246 F.3d
1182, 1186 (9th Cir. 2001)—were our only relevant
precedent, our task would be easy because Marx intervened
between Brown and this case.
But, Brown is not our only relevant precedent. In Green
v. Mercy Housing, Inc., decided after Marx, we held that an
identical costs provision in the Fair Housing Act only allows
a costs award to a prevailing defendant on the same
heightened showing. 991 F.3d 1056, 1057–58 (9th Cir.
2021).1 Because Green came after Marx, Marx plainly did
not “intervene” between Green and the case now before us.
See United States v. Eckford, 2023 WL 5210863, at *5 (9th
Cir. Aug. 15, 2023); CoreCivic, Inc. v. Candide Grp., LLC,
46 F.4th 1136, 1141 (9th Cir. 2022).
II.
The majority excuses the absence of an “intervening”
Supreme Court decision because the Green panel did not
address whether Marx had abrogated Brown. The majority
therefore concludes that Green is not precedential. But, the
very issue for decision before us today—whether a
prevailing defendant in an ADA action may be awarded
costs absent proof that the complaint was frivolous,
unreasonable, or lacking in foundation—is precisely the one
decided in Green. Put differently, Green is exactly on point;
whether correctly decided or not, it squarely stands for the
proposition that Rule 54(d)(1) does not apply.
1
In a subsequent memorandum disposition, a panel held, without citing
Marx, that Green controlled costs awards under the ADA and FHA. See
Yellowstone Womens First Step House, Inc. v. City of Costa Mesa, 2021
WL 4077001, *2 (9th Cir. Sept. 8, 2021).
GARCIA V. GATEWAY HOTEL L.P. 23
I am aware of no case—and the majority has cited
none—holding that a three-judge panel of this Court may
ignore an opinion expressly on point simply by finding that
it did not correspond with a prior Supreme Court opinion.
To be sure, we need not treat cases that do not expressly
decide an issue as implicitly doing so. Thus, United States
v. Kirilyuk, cited by the majority, held that prior opinions
interpreting an Application Note according to its terms did
not implicitly hold that the Note was consistent with the
governing Sentencing Guideline. 29 F.4th 1128, 1134–35
(9th Cir. 2022). But here, we need not imply a holding from
a prior opinion’s silence. Rather, Green expressly resolves
today’s issue—whether Rule 54(d)(1) applies to an award of
costs under the ADA.
III.
Because I agree with the majority that Marx is not
conciliable with our previous ADA and FHA costs
jurisprudence, my concern with following the Miller three-
judge panel rule may on the surface seem overly technical.
But, if we have a rule, we are required to follow it until
changed by the appropriate panel. And, if we today allow a
three-judge court not to follow Circuit precedent when it
conflicts with Supreme Court decisions handed down before
our precedent, future three-judge panels may well feel free
to abrogate Circuit precedent even when the conflict with a
non-intervening Supreme Court ruling is not as clear as it is
today. We avoid that potential problem by following Miller.
The proper course—even when the eventual outcome is, as
today, seemingly preordained—is to require an en banc court
to inter our previous decisions unless an intervening
Supreme Court abrogates them.