                                                                                                                           Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


2-10-1995

Smith v SEPTA
Precedential or Non-Precedential:

Docket 94-1634




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Recommended Citation
"Smith v SEPTA" (1995). 1995 Decisions. Paper 39.
http://digitalcommons.law.villanova.edu/thirdcircuit_1995/39


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                                FOR PUBLICATION



            UNITED STATES COURT OF APPEALS
                FOR THE THIRD CIRCUIT
                     ____________

                     No. 94-1634
                     ____________

                   ELIZABETH SMITH

                          v.

SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY,
                      Appellant
                ____________________

  ON APPEAL FROM THE UNITED STATES DISTRICT COURT
     FOR THE EASTERN DISTRICT OF PENNSYLVANIA
             (D.C. Civil No. 91-01409)
                ____________________

              Argued: November 7, 1994
Before:   BECKER, MANSMANN, and ALITO, Circuit Judges

          (Opinion Filed: February 10, l995 )

                   LANIER E. WILLIAMS, ESQ. (Argued)
                   Post Office Box 6584
                   Philadelphia, PA 19138

                   Attorney for Appellee

                   ALFRED W. PUTNAM, JR., ESQ. (Argued)
                   Drinker, Biddle & Reath
                   Philadelphia National Bank Building
                   1345 Chestnut Street
                   Philadelphia, PA. 19107-3496

                   NICHOLAS J. STAFFIERI
                   SEPTA Legal Department
                   714 Market Street, 7th Floor
                   Philadelphia, PA 19106-2385

                   Attorneys for Appellant
                       ____________________

                       OPINION OF THE COURT
                       ____________________

PER CURIAM:



           In this appeal, the Southeastern Pennsylvania

Transportation Authority (SEPTA) has asked us to overturn a

district court decision reducing an award of costs under Fed. R.

Civ. P. 54(d).   The district court made this reduction in large

measure because of the great disparity between the parties'

financial resources.   We agree with SEPTA that the district

court's reduction was not proper, and we therefore reverse in

part.

           Elizabeth Smith sued SEPTA under Title VII of the Civil

Rights Act of 1964, 42 U.S.C. § 2000e et seq., and 42 U.S.C.

§ 1983, claiming that SEPTA had fired her because of race and

gender.   The case was tried before a jury.   SEPTA defended on the

ground that it had fired Smith because she failed a breathalyzer

test that was administered based on reasonable suspicion that she

was under the influence of alcohol.   The jury returned a verdict

for SEPTA, and our court affirmed the district court's judgment.

           SEPTA then filed a bill of costs in the district court.

SEPTA sought $8,715.12 -- $5,020.40 for court reporter fees and

$3,694.72 for photocopying costs.   Smith objected, but the clerk

of court taxed the full amount that SEPTA had sought.   Smith then

moved for review by the district court.   Smith argued that
certain costs were not taxable, and she also "beseech[ed] the

Court, at the very least to reduce the award of costs to the

amount of $4.357.56 (which represents 50% of the amount sought by

defendant) in order to not punish plaintiff for filing suit and

in order to not discourage the filing of civil rights suits."

App. 206.    After a hearing, the parties stipulated that the

correct amount of taxable costs was $6,928.17, and the district

court further reduced this amount to $4,618.78.    The district

court noted that two recent decisions in the district had reduced

the costs taxed against the losing party based upon the

"disparities" between the parties' "financial resources."    Dist.

Ct. Op. 2.    The court then explained:
            This action warrants a reduction of taxable costs for
            reasons similar to [those in the two previous cases].
            Plaintiff was employed as a cashier before termination
            by defendant and has limited financial resources;
            defendant is a large transportation authority with
            significant financial resources. Plaintiff pursued a
            legitimate claim in good faith and raised a serious
            legal issue. . . . Under these circumstances, the
            court finds that a one-third reduction in defendant's
            revised requested costs will result in an equitable
            distribution of costs. Judgment will be awarded in
            favor of defendant and against plaintiff in the amount
            of $4,618.78.


District Ct. Op. 3 (footnotes omitted).    SEPTA responded by

taking the present appeal.

            Before the adoption of the Federal Rules of Civil

Procedure, "in the absence of a statutory provision otherwise

providing, the prevailing party in an action at law was entitled

to costs as of right; while in equity the allowance of costs to
either party was subject to the court's discretion."    6 Moore's

Federal Practice ¶ 54.70[3] at 54-321 (2d ed. 1994) (citations

omitted).   Melding these two rules, Rule 54(d) provided a new

standard for use in taxing costs1 in all cases.   It states in

pertinent part:
          Except when express provision therefor is made either
          in a statute of the United States or in these rules,
          costs other than attorneys' fees shall be allowed as of
          course to the prevailing party unless the court
          otherwise directs; but costs against the United States,
          its officers, and agencies shall be imposed only to the
          extent permitted by law.


Fed. R. Civ. P. 54(d) (emphasis added).    Under this rule, a

prevailing party generally is entitled to an award of costs

unless the award would be "inequitable."   Friedman v. Ganassi,
853 F.2d 207, 211 (3d Cir. 1988), cert. denied, 488 U.S. 1042

(1989).
            In describing the limits on a district court's
            discretion to deny costs to a prevailing party, we have
            also held that "`the denial of costs to the prevailing
            party . . . is in the nature of a penalty for some
            defection on his part in the course of the
            litigation.'" ADM Corp. v. Speedmaster Packing Corp.,
            525 F.2d 662, 665 (3d Cir. 1975) (quoting Chicago Sugar
            Co. v. American Sugar Refining Co., 176 F.2d 1, 11 (7th
            Cir. 1949), cert. denied, 338 U.S. 948, 70 S.Ct. 486,
            94 L.Ed. 584 (1950)). The Chicago Sugar case provides
            the following examples of a "defection" that would
            warrant denying costs to a prevailing party: "calling
            unnecessary witnesses, bringing in unnecessary issues
            or otherwise encumbering the record, or . . . delaying

1
 . These "costs" are listed in 28 U.S.C. § 1920. "They do not
include such litigation expenses as attorney's fees and expert
witness fees in excess of the standard daily witness fee."
Friedman v. Ganassi, 853 F.2d 207, 209 (3d Cir. 1988), cert.
denied, 488 U.S. 1042 (1989).
           in raising objection fatal to the plaintiff's case. . .
           ."


Institutionalized Juveniles v. Secretary of Public Welfare, 758
F.2d 897, 926 (3d Cir. 1985).

           Here, the district court reduced the costs taxed in

favor of SEPTA based in large part on the disparity in the

parties' financial resources, but we hold that this decision

exceeded the district court's equitable discretion under Rule

54(d).   We reject the general proposition that it is

"inequitable" to tax costs in favor of a prevailing party with

substantially greater wealth than the losing party.     Acceptance

of this general proposition would mean that large institutions

such as SEPTA could be denied costs in most cases even when their

unsuccessful adversaries could well afford to pay for them.     In

this instance this would be unfair to those who must ultimately

bear the burden of SEPTA's costs -- its customers and the

taxpayers of the jurisdictions that subsidize it, though the

public nature of SEPTA is not the basis for our discussion.     If

the losing party can afford to pay, the disparity in the parties'

financial resources seems to us to be irrelevant for purposes of

Rule 54(d).

           If the losing party cannot afford to pay, that party is

not automatically exempted from the taxation of costs.     On the

contrary, 28 U.S.C. § 1915(e) and cases decided thereunder make

clear that costs may be taxed against a party who is permitted to

proceed in forma pauperis.   See, e.g., Washington v. Patlis, 916
F.2d 1036, 1039 (5th Cir. 1990); Harris v. Forsyth, 742 F.2d

1277, 1278 (11th Cir. 1984); Flint v. Haynes, 651 F.2d 970, 973

(4th Cir. 1981), cert. denied, 454 U.S. 1151 (1982).   While these

cases recognize that a district court may consider a losing

party's indigency in applying Rule 54(d), the losing party in

this case does not claim to be indigent, and the record does not

establish that she is unable to pay the full measure of costs.

          We therefore hold that neither the disparity between

the parties' financial resources nor Smith's financial status

provided a basis for reducing the costs sought by SEPTA.

Moreover, after considering all of the factors cited by the

district court and by Smith, we are convinced that the district

court did not properly exercise its discretion in reducing the

costs taxed in SEPTA's favor, for none of SEPTA's conduct in this

litigation rendered the original fee award inequitable.    We will

therefore reverse the order of the district court in part and

remand for the entry of a judgment taxing costs in SEPTA's favor

in the amount of $6,928.17.   Costs on appeal will also be taxed

in favor of SEPTA.
