Important New California Case Helps Prevailing Injury Victims; Could Lead to Abuse
Prevailing parties just received help from the California Court of Appeals in obtaining full cost reimbursement after judgment. Our office wants to inform our clients, and other plaintiff attorneys, of this development so that they can maximize their hard won judgments.
In El Dorado Meat Co. v. Yosemite Meat and Locker Service, No. F049334, the Fifth Circuit Court of Appeal upheld a trial court's ruling to award Yosemite Meat (as the prevailing party), nearly $150,000 in costs pursuant to California Code of Civil Procedure (CCP) Section 1033.5(a)(12).
The facts of the case are these:
El Dorado filed suit against Yosemite Meat alleging a variety of causes of action, including violations of the California Unfair Competition Law . The lawsuit arose from El Dorado's claims that Yosemite Meats fraudulently sold boar meat to otherwise unsuspecting customers and illegally reduced their labor costs by employing undocumented immigrants. El Dorado claimed that these actions led it to be uncompetitive in the market and drove it out of business.
After trial before a jury (for some causes of action) and the court (for others), the court found in favor of Yosemite and entered judgment in favor of Yosemite.
As the prevailing party, Yosemite Meats served and filed a memorandum of costs seeking to recover $194,704. El Dorado filed a motion to strike and tax costs pertaining to Yosemite Meat's attempt to recover $143,809 for "models, blowups, and photocopies of exhibits."
These costs, if applicable, are recoverable as a matter of right pursuant to Section 1033.5(a)(12).
In defense of its' cost bill, Yosemite Meats provided a declaration by counsel that explained that the cost was almost entirely related to the costs of "preparing" trial exhibit 600 and displaying that exhibit at trial. Exhibit 600 was a 37 page document containing charts and graphs that were projected during trial. According to Yosemite, Exhibit 600 summarized voluminous records produced by both parties, including over 100,000 pages produced by Yosemite Meats.
Yosemite Meats broke down the $143,809 cost into three categories: (1) $111, 063 for payment to "personnel who compiled the data from the business records upon which the charts and graphs were based" (including $84,783 to Hemming Morse, Inc. as outside accounting consultants; the remainder was "time billed" by nonattorney personnel for data entry), (2) $30,495 for photocopying the source documents for the exhibit, and (3) $2,250 for projection equipment.
The Court noted that Yosemite Meats "hedged" the photocopying charge by claiming that the "figure represents 'bills from outside vendors, primarily but not exclusively, photocopy expenses incurred in the process of preparing Exhibit 600". El Dorado did not contest this claim, or that some of the pages copied were not admitted into evidence.
Yosemite argued that all these costs were recoverable under Section 1033.5(a)(12), or alternatively, that the $111,063 paid to personnel was recoverable under Section 1033.5(c)(4) which allows such costs in the Court's discretion.
The Court of Appeals applied an abuse of discretion standard in reviewing whether the trial court had commited reversible error. They concluded that the trial court had not. The Court first held that--even if the disputed personnel costs were not recoverable as a matter of right--the trial court could award them in its' discretion under (c)(4).
The trial court also rejected the argument that the fees paid to Hemming Morse should have been excluded pursuant to Section 1033.5(b) as impermissible "expert fees". In doing so, the Court did not find the cost of preparing a court exhibit--which presumably would have been introduced through expert testimony--to be akin to expert witness fees even though Yosemite's expert was a partner at Hemming Morse.
The Court also allowed the copying charges for trial exhibits pursuant to (a)(12)--even though the copy charge for 160,000 pages was 19 cents per page. The Court--perhaps looking at the cost of copying in the civil filing office of the court--found that 19 cents per page "is not abnormally high".
What are the ramifications for trial practitioners? Look for prevailing parties to try to push more, arguably excludable, costs through citing El Dorado. At the very least, trial lawyers should encourage their experts to be clear in their invoices whether a fee pertains to expert testimony or preparing a trial exhibit. According to El Dorado, "preparing a trial exhibit" could include work performed by an experts firm in reviewing underlying documents and preparing charts and graphs for the jury. For example, the cost of an economic expert witness's testimony might by excludable but the cost of that expert witness's assistant to review and summarize the underlying documentation, as well as preparing the ultimate exhibit the expert witness will testify to might be recoverable under the trial court's discretion.
