                              UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                              No. 09-1622


RICHARD A. RINALDI,

                Plaintiff - Appellee,

          v.

CCX, INCORPORATED,

                Defendant – Appellant,

          and

BARRY SILVERSTEIN; DENNIS MCGILLICUDDY,

                Defendants.



                              No. 09-1671


RICHARD A. RINALDI,

                Plaintiff - Appellant,

          v.

CCX, INCORPORATED,

                Defendant – Appellee,

          and

BARRY SILVERSTEIN; DENNIS MCGILLICUDDY,

                Defendants.
Appeals from the United States District Court for the Western
District of North Carolina, at Charlotte.     Robert J. Conrad,
Jr., Chief District Judge. (3:05-cv-00108-RJC-DSC)


Argued:   May 13, 2010                    Decided:   July 16, 2010


Before DUNCAN and KEENAN, Circuit Judges, and Arthur L. ALARCÓN,
Senior Circuit Judge of the United States Court of Appeals for
the Ninth Circuit, sitting by designation.


Affirmed in    part,   reversed  in   part,   and  remanded  with
instructions by unpublished opinion.      Judge Keenan wrote the
opinion, in which Judge Duncan and Senior Judge Alarcón joined.


ARGUED: John Robbins Wester, Kate E. Payerle, ROBINSON, BRADSHAW
& HINSON, PA, Charlotte, North Carolina, for Appellant/Cross-
Appellee.    Kenneth Todd Lautenschlager, JOHNSTON, ALLISON &
HORD, Charlotte, North Carolina, for Appellee/Cross-Appellant.
ON BRIEF: John C. Lindley III, JOHNSTON, ALLISON & HORD,
Charlotte, North Carolina, for Appellee/Cross-Appellant.


Unpublished opinions are not binding precedent in this circuit.




                                2
KEENAN, Circuit Judge:

       This is an appeal of a judgment entered after a bench trial

in   an    action    brought       under       the       Employee     Retirement    Income

Security Act (ERISA), 29 U.S.C. §§ 1001-1461.                              The defendant,

CCX,    Inc.    (CCX),    appeals       from       the     district   court’s     award   of

severance benefits to Richard Rinaldi, CCX’s former president

and chief executive officer (CEO).                       Rinaldi has filed a cross-

appeal, primarily challenging the district court’s denial of his

request for attorneys’ fees and costs.                           For the reasons stated

below,     we    affirm    the     district          court’s       award    of   severance

benefits and its order denying Rinaldi’s request for attorneys’

fees.      However, we reverse the district court’s order denying

Rinaldi’s       request      for     costs           and     remand     the      case     for

reconsideration of an award of costs.



                                           I.

       The evidence at trial showed that CCX, a privately held

Delaware        corporation,        manufactures             metal      and      fiberglass

screening mesh for use in windows, doors, and other building

products.       In May 1991, CCX hired Rinaldi as its president and

CEO.      Almost three years later, Rinaldi and CCX entered into the

“First      Amendment     to     Employment           Agreement”       (the      Employment

Agreement), which remained in effect during the remainder of

Rinaldi’s       employment       with     CCX.             The    Employment     Agreement

                                               3
provided       that     Rinaldi         was    entitled         to     certain     severance

benefits,      including      salary,         term    life      insurance,       and   medical

insurance,      if      his   employment             was    terminated       involuntarily

“[o]ther than for cause,” or if CCX sold substantially all its

assets.

       As CEO, Rinaldi was required to “report and be responsible

to”    CCX’s    board    of   directors.              Dennis     McGillicuddy          was    the

chairman of the board, which included Rinaldi and three other

directors.        According        to    McGillicuddy,           Rinaldi    “had       done    an

exceptional job running the company.”

       In early 2004, CCX began efforts to sell its Mesh Division,

a business unit that represented about ninety percent of CCX’s

assets    and    employed      a    majority          of   the     company’s      personnel.

Rinaldi sent McGillicuddy a letter stating that a sale of the

Mesh     Division     would    activate            the     terms     of    the    Employment

Agreement granting Rinaldi severance benefits, if he chose to

end    his     employment      on       completion         of    the      sale.        Despite

McGillicuddy’s understanding that Rinaldi likely would leave CCX

and be entitled to severance benefits if the Mesh Division were

sold, CCX proceeded with its plans to sell that unit.

       Rinaldi led CCX’s negotiating team for the sale of the Mesh

Division.       He was assisted in his efforts by McGillicuddy and

Barry Silverstein, who owned a total of eighty percent of CCX’s



                                               4
stock.     McGillicuddy and Silverstein also hired other persons to

help Rinaldi effect a sale.

     By October 2004, a conflict had developed between Rinaldi

and other members of the negotiating team regarding Rinaldi’s

negotiating tactics and strategic approach.                    One team member

informed McGillicuddy and Silverstein about concerns regarding

Rinaldi’s approach, and suggested that Rinaldi be removed as

lead negotiator or be discharged from the company.

     The    tension     between   Rinaldi       and   other   members   of   CCX’s

leadership     culminated      in       an     October   6,    2004     telephone

conversation involving McGillicuddy, Silverstein, and Rinaldi.

During this conversation, Silverstein told Rinaldi that he was

not satisfied with Rinaldi’s efforts to sell the Mesh Division.

The parties dispute the exact words of Rinaldi’s response, 1 but

McGillicuddy      and   Silverstein          allegedly   understood     Rinaldi’s

statement    as   announcing      his    resignation.         McGillicuddy    and

Silverstein immediately drafted severance documents reflecting

Rinaldi’s purported action.             The locks on the doors of CCX’s




     1
       Rinaldi testified that he stated, “[i]f you don’t have
confidence in me, fine, I’m not involved [with the sale],” while
Silverstein recalled Rinaldi responding that “[i]f they were
trying to force Jim Shein [a possible replacement for Rinaldi as
lead negotiator for the sale] on him he was out of there.” All
the parties agreed that Rinaldi never used the words “I quit” or
“I resign” during this telephone conversation.



                                         5
headquarters were changed the next day, and Rinaldi was denied

entry to his office.

     Following         the   telephone    conversation        at    issue,      Rinaldi

repeatedly      stated       that   he   had    not     resigned,       and    he     took

immediate steps to correct any possible misunderstanding to the

contrary.       Nevertheless, CCX denied Rinaldi severance benefits

based    on    CCX’s    determination      that    he    voluntarily          ended   his

employment.

     Rinaldi      filed      a   complaint     against    CCX      in   the    district

court, initially alleging breach of contract and a violation of

the North Carolina Wage and Hour Act, N.C.G.S. §§ 95-25.1 to –

25.25.        The district court later entered an order converting

Rinaldi’s state law claims to an ERISA claim, pursuant to Singh

v. Prudential Health Care Plan, Inc., 335 F.3d 278, 290 (4th

Cir. 2003).

     The case proceeded to a bench trial, in which CCX raised

two main issues: (1) whether Rinaldi voluntarily resigned or was

terminated from his employment without cause; and (2) if Rinaldi

was discharged, whether his employment otherwise would have been

terminated      for    misconduct    because      of    his   questionable          travel

reimbursement requests allegedly discovered after his departure. 2


     2
       In this opinion, we will refer to this concept as the
“after-acquired evidence” defense.



                                          6
       After hearing the testimony of several witnesses, including

testimony by Rinaldi, McGillicudy, and Silverstein, the district

court   found       that    Rinaldi    did   not    resign    voluntarily     but    was

terminated from his employment.                    The district court concluded

that even under McGillicuddy and Silverstein’s version of the

October 6, 2004 telephone conversation, Rinaldi’s statement did

not constitute an offer of resignation.                   Moreover, the district

court reasoned, Rinaldi’s conduct following that phone call, as

well    as      the        financial     motivations         of     McGillicudy      and

Silverstein,          supported        the   conclusion           that   Rinaldi     was

involuntarily terminated from his employment.

       Critically, in deciding the issue whether Rinaldi departed

voluntarily, the district court found that “several aspects of

Silverstein and McGillicuddy’s testimony [were] not credible.”

The district court also found that McGillicuddy and Silverstein

“seized      upon     an    opportunity      to     remove”       Rinaldi   once    they

concluded that the sale of the Mesh Division could occur more

quickly without Rinaldi’s involvement.                 In finding the testimony

of McGillicuddy and Silverstein not credible, the district court

relied in part on its observation of these witnesses’ demeanor

while testifying, as well as the district court’s conclusion

that McGillicuddy and Silverstein’s version of the events was

implausible.



                                             7
       After     rejecting     CCX’s     contention      that     Rinaldi       resigned

voluntarily, the district court considered CCX’s after-acquired

evidence     defense.         According    to    CCX,    it     first    became       aware

during      discovery    in    this     case    that    Rinaldi     sometimes         used

“frequent flyer miles” for business travel, but later sought and

obtained cash        reimbursement       from    CCX    for   the   listed      cost    of

those trips.         Rinaldi engaged in this practice seventeen times

during his six-year tenure as CEO, and received about $22,000 in

“reimbursements” for alleged expenses that he did not actually

incur.

       Rinaldi    testified      that    he    selectively       used    his    frequent

flyer miles in this manner for “very rich reward situation[s],”

such   as    expensive    flights       from    Charlotte,       North    Carolina      to

Pittsburgh, Pennsylvania.             For ten such trips between Charlotte

and    Pittsburgh,      Rinaldi    sought       cash    reimbursement          from    CCX

despite     having    used     frequent       flier    miles,    and     received,      on

average, $877.42 for each of these trips.                        Rinaldi also used

frequent flyer miles, but sought cash reimbursement, for trips

to Milan, Italy, and Cologne, Germany, obtaining reimbursements

of $4,089.37 and $5,226.55, respectively.

       Rinaldi did not dispute that he engaged in this practice,

but instead claimed that he discussed the practice with company

auditors and with CCX’s Chief Financial Officer (CFO).                          However,

Rinaldi did not report these payments as taxable income to the

                                           8
Internal Revenue Service (IRS).                 After reviewing this evidence,

the district court found that Rinaldi’s “frequent flyer scheme

is dishonest on its face.”                The district court also rejected

Rinaldi’s       explanation     regarding       why   he     did   not    report   this

income to the IRS, finding Rinaldi’s testimony on this issue

“not credible.”

        Upon agreement of the parties, the district court applied a

test requiring that CCX prove its claim of after-acquired

evidence by establishing the following three elements:

        (1) Rinaldi was guilty of some misconduct of which CCX
        was unaware;
        (2) the misconduct constitutes “acts of dishonesty” in
        connection with CCX’s business, “gross neglect” of his
        obligations, or “illegal acts;” and
        (3) []CCX would have discharged Rinaldi for cause had
        it known of the misconduct.

        The district court held that CCX failed to establish the

first    and    third   elements     of    this   test.        The   district      court

concluded that CCX failed to prove the first element, because

CCX   did      not   show   that    it    was    unaware     of    Rinaldi’s    travel

reimbursement requests before CCX discharged him.                         The district

court based this conclusion on its finding that the CFO had

knowledge of Rinaldi’s travel reimbursement requests, and that

the CFO’s knowledge was imputed to CCX.

        The district court also held that CCX failed to prove the

third    element,     because      CCX   did    not   show    that   it    would   have

terminated Rinaldi’s employment had it been aware of his travel

                                           9
reimbursement scheme.         In reaching this conclusion, the district

court      made   the         following       credibility          determination:

“McGillicuddy’s testimony alone is insufficient to establish the

third    [element].     The     Court   was   not     persuaded    by    the    self-

serving    statements   of    McGillicuddy      that    had   he   known       of   the

misconduct, he would have terminated Rinaldi for cause.” 3

     The    district    court    entered      final    judgment     in   favor       of

Rinaldi, awarding damages totaling $880,000.00, and prejudgment

interest in the amount of $140,221.25.                The district court also

denied Rinaldi’s requests for attorneys’ fees and costs.                            This

appeal and cross-appeal followed.



                                        II.

     We review the district court’s factual findings for clear

error, and we afford the “highest degree of appellate deference”

to those factual findings when they are based on assessments of

     3
       In further support of its conclusion, the district court
noted that CCX’s bylaws provide the mechanism for removal of
corporate officers.      Under the bylaws, the district court
observed, Rinaldi’s wrongdoing was required to have been
presented to the board of directors before Rinaldi could have
been terminated from his employment. However, Rinaldi’s conduct
was not presented to the board at any time.   Additionally, the
district court found significant the fact that CCX did not
terminate its CFO, even though CCX had been made aware that the
CFO knew about Rinaldi’s misconduct.   Thus, the district court
reasoned, CCX’s decision retaining the CFO rendered implausible
CCX’s claim that it would have discharged Rinaldi for engaging
in the conduct at issue.



                                        10
witness credibility.           United States v. Thompson, 554 F.3d 450,

452 (4th Cir. 2009) (applying Fed. R. Civ. P. 52(a)(1)(6)).                          We

review the district court’s legal conclusions de novo.                         Nelson-

Salabes, Inc. v. Morningside Dev., LLC, 284 F.3d 505, 512 (4th

Cir. 2002).

     CCX    does     not     challenge     on   appeal    the    district      court’s

holding    that     Rinaldi       was    terminated    involuntarily       from     his

employment.        Instead, CCX solely argues that the district court

erroneously concluded that CCX failed to establish its after-

acquired evidence defense.

     Although       we     have    not    previously      considered      an    after-

acquired evidence defense in an ERISA case, we have considered

this defense in other types of civil cases.                  In our decisions in

those     cases,    we     have    applied      a   three-part     test      that    is

essentially the same as the test employed here by the district

court.     See, e.g., Dotson v. Pfizer, Inc., 558 F.3d 284, 298

(4th Cir. 2009) (involving alleged violations of the Family and

Medical Leave Act of 1993, 29 U.S.C. §§ 2601-2654); Miller v.

AT&T Corp., 250 F.3d 820, 837 (4th Cir. 2001) (same); Russell v.

Microdyne Corp., 65 F.3d 1229, 1240 (4th Cir. 1995) (involving

alleged violations of Title VII of the Civil Rights Act of 1964,

42 U.S.C. §§ 2000e-2000e-17).               The three-part test used by the

district    court     also    is    essentially     the   same    as   the     Supreme

Court’s test for after-acquired evidence set forth in McKennon

                                           11
v. Nashville Banner Publishing Co., 513 U.S. 352, 362-63 (1995),

a case arising under the Age Discrimination in Employment Act of

1967 (ADEA), 29 U.S.C. §§ 621-634.

     The parties do not dispute the applicability of this test.

Therefore, in reviewing the district court’s holding that CCX

failed to establish the first and third elements of the after-

acquired evidence test, we must determine whether the district

court clearly    erred   in   finding   that   CCX   failed    to   establish

that:

     (1) Rinaldi was guilty of some misconduct of which CCX
     was unaware; [and]

     . . .

     (3) []CCX would have discharged Rinaldi for cause had
     it known of the misconduct.

     CCX was required to prove every element of its defense in

order to prevail.     Because we conclude that the district court

did not err in finding that CCX failed to establish element

three above, we need not review the district court’s finding on

element one.

     With regard to element three, the district court found that

Rinaldi’s    travel   reimbursement     requests     were     “dishonest    on

[their] face.”   We decline to disturb this factual finding. 4             The


     4
       We reject Rinaldi’s argument that the district court erred
in concluding, under the second element of the after-acquired
evidence test, that the travel reimbursement scheme was
(Continued)
                                   12
grounds   for    termination     for     cause   stated       in   the    Employment

Agreement    include     “[a]cts    of    dishonesty         (including    but    not

limited     to   theft   or    embezzlement)      in    connection        with    the

Company’s business.”           Therefore, the conduct at issue plainly

was a ground for termination with cause under the Employment

Agreement.

     Although CCX proved that it could have discharged Rinaldi

under the Employment Agreement, CCX also was required to prove

that it would have done so.               In concluding that CCX did not

prove that it would have discharged Rinaldi had it known of his

dishonest    conduct,    the    district      court    was    influenced     by   its

opinion of the witnesses’ credibility.                 The district court was

not persuaded by “the self-serving statements of McGillicuddy

that had he known of the misconduct, he would have terminated




“dishonest.”   Rinaldi’s primary contention is that subjective
dishonesty is required, and that his acts cannot be labeled
dishonest because he lacked the intent to deceive.          This
argument lacks merit, because the Employment Agreement prohibits
“acts of dishonesty,” and does not limit such acts to those
involving subjective intent on the part of the actor. Further,
even if the language at issue encompassed only acts of
subjective dishonesty, there is ample evidence in the record
that Rinaldi’s travel reimbursement requests were subjectively
dishonest.   As the district court observed, Rinaldi did not
report the airfare reimbursements as taxable income, and the
court found his explanation for failing to do so not credible.
Also, Rinaldi’s own testimony showed that he selectively used
his frequent flyer miles for “very rich reward situation[s]” and
high-value flights.



                                         13
Rinaldi for cause.”          Thus, the district court simply did not

believe      that    Rinaldi’s     actions      would    have      caused    CCX   to

discharge     him.      Because    the    district      court’s    conclusion      was

informed by its opinion that McGillicuddy lacked credibility,

that conclusion is entitled to the “highest degree of appellate

deference.”         Thompson, 554 F.3d at 452 (citing Fed. R. Civ. P.

52(a)(1)(6)).        For this reason, we will not disturb the district

court’s determination, and we hold that the district court did

not err in concluding that CCX failed to establish the third

required element of the after-acquired evidence defense.                           We

therefore affirm the district court’s holding that Rinaldi was

entitled to severance benefits under the Employment Agreement.

       Our holding is not altered by CCX’s additional argument

that   the    district    court    impermissibly        burdened    McGillicuddy’s

testimony with a “heavy cloak of skepticism” in violation of our

decision in Smallwood v. United Air Lines, Inc., 728 F.2d 614

(4th Cir. 1984).        We conclude that this argument lacks merit.

       In Smallwood, a case decided under the ADEA, we held that

the district court erred in rejecting an employer’s “after-the-

fact rationale” based on the district court’s statement that it

had a “duty” to view the employer’s “after-the-fact” evidence

with skepticism.         Id. at 623.       We emphasized that the district

court “made no specific findings of fact of [its] own” on the

after-acquired        evidence    issue   and   doubted     whether    the    after-

                                          14
acquired      evidence       was    admissible.            Id.        We    explained     that,

rather      than    burdening       such     “after-the-fact”              evidence    with    a

“heavy cloak of skepticism,” courts should weigh this type of

evidence by the same standards as other testimony.                             Id.

       This       principle        expressed         in    Smallwood,          however,        is

inapposite to the facts of this case.                            Although the district

court characterized McGillicuddy’s testimony as “self-serving,”

the     district      court        did   not    “burden”         such        testimony       with

skepticism or otherwise hold CCX to a higher standard of proof.

Instead, unlike the district court in Smallwood, the district

court      here    made   specific       factual         findings,         supported    by    the

record,     that     justified       its   application           of   the     after-acquired

evidence doctrine.           Moreover, any degree of skepticism expressed

by    the   district      court      likely     was       derived      in    part     from    its

express findings that McGillicuddy lacked credibility on other

key issues. 5         Therefore, we conclude that the district court,

consistent         with   our      decision         in    Smallwood,         considered       the

testimony         relating    to     CCX’s     after-acquired              evidence    defense


       5
       CCX additionally contends, however, that the credibility
concerns of the district court relating to McGillicuddy’s
testimony on the “terminated or resigned” issue are not before
us, because CCX has not appealed from the court’s holding on
that issue.    We reject this argument, because it effectively
asks us to ignore the numerous occasions throughout the district
court’s opinion in which the court expressly found that
McGillicuddy was not a credible witness.



                                               15
according to the same standards that the district court applied

throughout the trial.



                                             III.

       Next, we address the remaining issues raised by Rinaldi in

his cross-appeal. 6             Rinaldi argues that the district court erred

in   denying        his    requests    for    attorneys’       fees   and    costs.    We

address these issues separately.

                                              A.

       As we stated in Williams v. Metropolitan Life Insurance

Co., a district court in an ERISA action may, in its discretion,

award reasonable attorneys’ fees to either party under 29 U.S.C.

§    1132(g)(1),          if   that   party    has    achieved    “‘some      degree   of

success on the merits.’”               ___ F.3d ___, No. 09-1025, slip op. at

17-18 (4th Cir. June 30 2010) (quoting Hardt v. Reliance Std.

Life Ins. Co., No. 09-448, ___ U.S. ___, 130 S.Ct. 2149, 2152

(2010)).          We review a district court’s award of attorneys’ fees

to   an     eligible       litigant    to     determine    whether     the    court    has

abused its discretion.                Williams, ___ F.3d at ___, slip op. at

17; Mid Atl. Med. Servs., LLC v. Sereboff, 407 F.3d 212, 221

(4th       Cir.    2005).       The   district       court’s    factual     findings   in

       6
       As discussed previously, we reject Rinaldi’s argument that
the district court erred in concluding that Rinaldi’s travel
reimbursement requests were “dishonest on [their] face.”



                                              16
support   of    such   an   award    are      reviewed   for     clear   error.

Williams, __ F.3d at __, slip op. at 17; Hyatt v. Shalala, 6

F.3d 250, 255 (4th Cir. 1993).

      As required by the decision in Hardt, we first consider

whether Rinaldi achieved “some degree of success on the merits”

in the district court.         Because the district court found in

Rinaldi’s favor and awarded him the severance benefits due under

the Employment Agreement, we conclude that Rinaldi was eligible

for an award of attorneys’ fees.              See Hardt, ___ U.S. at ___,

130 S.Ct. at 2158.

      Although Rinaldi was eligible for an award of reasonable

attorneys’ fees, the district court retained the discretion to

decline to award Rinaldi such fees.              In Williams, we restated

the   familiar    guidelines     that      assist    a   district        court’s

discretionary    determination      whether    attorneys’      fees   should   be

awarded to an eligible litigant.           These guidelines include the

following five factors:

      (1) degree of opposing parties’ culpability or bad
      faith;
      (2) ability of opposing parties to satisfy an award of
      attorneys’ fees;
      (3) whether an award of attorneys’ fees against the
      opposing parties would deter other persons acting
      under similar circumstances;
      (4) whether the parties requesting attorneys’ fees
      sought to benefit all participants and beneficiaries
      of an ERISA plan or to resolve a significant legal
      question regarding ERISA itself; and
      (5) the relative merits of the parties’ positions.


                                      17
Williams, __ F.3d at __, slip op. at 19 (quoting Quesinberry v.

Life Ins. Co. of N. Am., 987 F.2d 1017, 1029 (4th Cir. 1993) (en

banc)).

       In the present case, the district court considered these

factors,      and    concluded          that    Rinaldi        should      not     be    awarded

attorneys’ fees.         We disagree with Rinaldi’s contention that the

district court misapplied these factors.

       Initially, we observe that these factors provide “general

guidelines,” rather than a “rigid test.”                           Williams, ___ F.3d at

___,   slip    op.     at     19;       Quesinberry,         987    F.2d      at   1029.         In

determining         whether       to    award        Rinaldi       attorneys’      fees,        the

district court was entitled to consider the fact that Rinaldi

had engaged in some dishonest conduct to the prejudice of his

employer,      CCX.         The     district         court     also     was      permitted       to

consider     the     fact     that      because       the    Employment       Agreement         was

drawn uniquely for Rinaldi, there were no other members of that

plan   who    could     have      derived       a     benefit      from    Rinaldi’s          legal

action.      Further, because the plan was unique to Rinaldi, the

deterrent value that an award of attorneys’ fees would have for

“other    persons      acting          under   similar       circumstances”             was    less

significant.          Finally, the district court correctly concluded

that there was no “significant legal question regarding ERISA

itself” at issue.



                                                18
        In light of these considerations, we cannot conclude that

the district court abused its discretion in declining to award

Rinaldi    attorneys’    fees.       We    therefore      affirm    the     district

court’s holding denying Rinaldi’s request.

                                          B.

     We next address Rinaldi’s argument that the district court

erred in denying his request for costs.                  We agree with Rinaldi

that there is a presumption in favor of awarding costs to a

prevailing party.       Under Rule 54(d)(1) of the Federal Rules of

Civil    Procedure,    costs   “should         be   allowed   to   the   prevailing

party” unless a federal statute provides otherwise.                      See Cherry

v. Champion Int’l Corp., 186 F.3d 442, 446 (4th Cir. 1999).                        As

we stated in Williams, the ERISA statute does not alter this

general    rule   in   favor   of   presumptively        awarding    fees    to   the

prevailing party, and instead expressly permits a district court

to award costs in the court’s discretion.                ___ F.3d at ___, slip

op. at 22 (citing 29 U.S.C. § 1132(g)(1)).                    We therefore agree

with Rinaldi’s argument that he was entitled to a presumption in

favor of costs.

     We observe that the district court did not afford Rinaldi

this presumption.       We also note that the district court did not

conduct a separate analysis in declining to award Rinaldi costs.

Instead, the district court analyzed the appropriate standard

for an award of attorneys’ fees, concluded that Rinaldi was not

                                          19
entitled      to       attorneys’      fees,         and    then       summarily     rejected

Rinaldi’s request for costs.                   The district court’s treatment of

Rinaldi’s         request      for    costs,    therefore,          conflicts        with    our

holding      in    Teague      v.    Bakker,    in     which      we    stated   that       if   a

district court chooses to depart from the general rule favoring

an   award    of       costs    to    the   prevailing           party,   the    court      must

justify its decision by “articulating some good reason for doing

so.”      35 F.3d 978, 996 (4th Cir. 1994) (citations omitted).

Because the district court did not state any reason for its

decision,         we   reverse       the    district        court’s       holding      denying

Rinaldi’s request for an award of costs, and remand the case to

the district court for reconsideration of Rinaldi’s request in

light of the standard that we have discussed here.



                                               IV.

       For   these      reasons,       we   reverse        the    part    of   the    district

court’s judgment denying Rinaldi an award of costs, and remand




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the   case   to   the   district   court   for    reconsideration   of   that

issue.    We affirm the balance of the district court’s judgment. 7


                                                          AFFIRMED IN PART,
                                                      REVERSED IN PART, AND
                                                 REMANDED WITH INSTRUCTIONS




      7
        Rinaldi has also requested an award of reasonable
attorneys’ fees and costs that he incurred in responding to
CCX’s appeal and in pursuing his cross-appeal. We observe that
Rinaldi has failed to comply with the requirements of Federal
Rule of Appellate Procedure 39(d) and Local Rules 39(b) and
46(e).   Accordingly, we decline to consider Rinaldi’s requests
at this time.



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