United States District Court, D. New Jersey
DEPOMED, INC. and GRUNENTHAL GMBH, Plaintiffs/Counterclaim Defendants
ACTAVIS ELIZABETH LLC and ALKEM LABORATORIES LIMITED, Defendants/Counterclaim Plaintiffs. AND CONSOLIDATED CASES
CLERK'S OPINION GRANTING IN PART AND DENYING IN
PART DEPOMED'S MOTION TO TAX COSTS
matter has come before the Clerk on the motion [Dkt. Entry
Plaintiff/Counterclaim Defendant Depomed, Inc.
(“Depomed”) to tax costs against
Defendants/Counterclaim Plaintiffs Actavis Elizabeth LLC,
Actavis UT (collectively, “Actavis”), Alkem
Laboratories Limited (“Alkem”), and Roxane
Laboratories, Inc. (“Roxane”) (collectively,
“Defendants”) pursuant to Fed.R.Civ.P. 54 (d) and
Local Civil Rule 54.1.
oppose this motion.
the first of two motions to be considered by the Clerk in
these consolidated cases. A second opinion will address the
separate motion of Plaintiff Grunenthal GmbH
(“Grunenthal”) to tax costs against these same
these six consolidated Hatch-Waxman cases, Depomed and
Grunenthal (together, “Plaintiffs”) asserted that
three of their patents were infringed by the Defendants'
filing of Abbreviated New Drug Applications . The patents-in-suit, i.e.,
U.S. Reissue Patent No. 39, 593 (the “RE593
patent”), U.S. Patent No. 7, 994, 364 (“the
‘364 patent”) and U.S. Patent No. 8, 536, 130
(“the ‘130 patent”) are directed to
compositions and methods relating to Plaintiffs'
NUCYNTA® tapentadol hydrochloride products.
Grunenthal owns the patents and licenses them to Depomed.
Plaintiffs asserted that Defendants' generic versions of
tapentadol hydrochloride products for which they sought
approval from the United States Food and Drug Administration
(“FDA”) infringed their patents.
Clerk, who is somewhat hampered by the sealing of many of the
docket entries, gives a very cursory procedural history
herein. As in the normal course of Hatch-Waxman litigation,
the Defendants filed counterclaims for declaratory judgments
of non-infringement, invalidity and/or unenforceability of
the patents. The cases were governed by a Stipulated
Discovery Confidentiality Order [Dkt. Entry 127] and a
Stipulation and Order Concerning Protocol for Discovery of
Electronically Stored Information [Dkt. Entry 154]. They
proceeded through a Markman hearing on the claims of the
RE593 and ‘364 patents on November 25, 2014 [Dkt. Entry
180], and the filing of in limine motions on January 11, 2016
[Dkt. Entries 301-04].
January 25, 2016, all six cases were consolidated for all
purposes, including trial. [Dkt. Entry 326]. The various in
limine motions were denied on February 22, 2016 [Dkt. Entry
364], and so too were Plaintiffs' and Roxane's
motions for summary judgment, and Plaintiffs' motion to
dismiss Actavis Elizabeth's third counterclaim to correct
or delete the use code for the ‘130 patent on March 4,
2016. [Dkt. Entries 390-94].
March 4, 2016, the parties entered into a Stipulation and
Order of Infringement, whereby they agreed that the
Defendants would be liable for infringement of each asserted
claim of the RE593 and ‘364 patents found to be not
invalid. [Dkt. Entry 400].
March 6, 2016, the parties consented to the bifurcation of
Actavis Elizabeth's third counterclaim from the trial.
[Dkt. Entry 407].
Court conducted a 10-day bench trial on March 9-11, 14-17,
21-23, 2016 [Dkt. Entries 409, 412, 414, 416-19, 421-23].
Between the conclusion of the trial and closing arguments on
April 27, 2016 [Dkt. Entry 460], the parties filed post-trial
briefs and proposed findings of fact and conclusions of law
[Dkt. Entries 448-49, 451-52, 454-57].
18, 2016, the Court enjoined the Defendants from launching
their allegedly infringing products pending the earlier of
the entry of the Court's trial decision or September 30,
2016. [Dkt. Entry 468].
Court issued its trial order on September 30, 2016 [Dkt.
Entry 537], finding no invalidity of the three patents, or
unenforceability of the ‘364 patent. Therefore,
pursuant to the Stipulation and Order of Infringement, all
Defendants were found to have infringed the RE593 and
‘364 patents. Alken alone, not Actavis Elizabeth or
Roxane, was determined to have induced infringement of the
‘130 patent. The injunction was renewed, pending the
Court's entry of final judgment. Also, Actavis
Elizabeth's third counterclaim was severed from the
action and returned to the reopened Civ. A. No. 15-6797.
October 28, 2016, Alkem filed a notice of appeal to the
Federal Circuit [Dkt. Entry 540] but the appeal was
deactivated due to Actavis' pending severed third
counterclaim [Dkt. Entry 560]. However, the FDA changed the
use code for the ‘130 patent and consequently, on
January 30, 2017, Actavis and Depomed consented to the
withdrawal of Actavis Elizabeth's third counterclaim
without prejudice. Civ. A. No. 15-6797 [Dkt. Entry 87].
the parties exchanged letters concerning the proposed form of
final judgment, disagreeing on the taxation of costs. Actavis
asserted that taxation should be stayed pending the appeal
and that it was also premature because the judgment to be
entered would be certified pursuant to Fed.R.Civ.P. 54(b) due
to the pending, stayed proceedings on the ‘060 patent.
[Dkt. Entries 556, 566, 569]. Actavis argued that taxation
should await final judgment as to all claim against all
parties. Alternatively, it maintained that Plaintiffs were
not the prevailing party because Roxane and Actavis Elizabeth
prevailed on the infringement of the ‘130 patent, a
central issue in the case. Further, Actavis argued that the
Court could find that neither party prevailed or that even if
Plaintiffs were deemed the prevailing party, the Court should
exercise its discretion in this case of mixed judgment and
not award Plaintiffs any costs. [Dkt. Entry 569].
position was that Plaintiffs were the prevailing party
because they prevailed on all but one adjudicated issue and
that in accordance with this Court's local rule, a
judgment on costs should not be stayed pending the appeal.
[Dkt. Entry 565, 570]. Rather, the Court was required to make
the determination of the prevailing party following the trial
on the merits and there was no just reason to delay an award
in this costly litigation. Also, piecemeal litigation could
be avoided by including the appeal of this Court's cost
decision with the appeal on the merits of the case.
Court ultimately accepted Depomed's position. On April
11, 2017, the Court entered its Final Judgment and Injunction
[Dkt. Entry 582], reflecting the findings of its September 30
order in favor of Plaintiffs on all claims except the claims
of infringement of the ‘130 patent by Actavis Elizabeth
and Roxane. Due to the pending ‘060 patent proceedings,
the Court certified pursuant to Fed.R.Civ.P. 54(b) that there
was no just reason for delay in entering final judgment as to
all claims adjudged in that final judgment. The Court further
ordered that “[p]ursuant to Fed.R.Civ.P. 54, Plaintiffs
are the Prevailing Party entitled to costs” and that
“Plaintiffs shall serve and file their Bill of Costs
and Disbursements in accordance with Local Rule
accordance therewith, on May 10, 2017, Plaintiffs each filed
a bill of costs. [Dkt. Entries 584-1, 584-3].
9 and 10, 2017, Alkem, Roxane and Plaintiffs all filed
notices of appeal to the Federal Circuit. [Dkt. Entries 583,
586, 587]. The appellate court reactivated Alkem's appeal
and consolidated them all on May 25, 2017. [Dkt. Entry 608].
They remain pending.
before the Clerk is Depomed's bill of costs, amounting to
$282, 666.33, and consisting of the fees for: filing ($1,
600.00); service ($388.34); printed and electronically
recorded transcripts ($41, 320.43); witnesses ($58, 151.92);
exemplification and copies ($132, 125.64); and trial support
technicians ($49, 080.00). [Dkt. Entry 584-1]. Defendants
object to all categories of costs except for the filing and
Standards for Awarding Costs
motion is controlled by Fed.R.Civ.P. 54(d) (1), which
provides that “[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
patent cases, the definition of “prevailing
party” is governed by Federal Circuit law, which
defines that term as one who obtains relief on the merits of
its claim that materially alters the legal relationship
between the parties by modifying its opponent's behavior
in a way that directly benefits that party. Manildra
Milling Corp. v. Ogilvie Mills, Inc., 76 F.3d 1178,
1181-82 (Fed. Cir. 1996) (citing Farrar v. Hobby,
506 U.S. 103, 111-13 (1992)).
the first inquiry of determining prevailing party status is a
matter of Federal Circuit law, the second, i.e., that of
whether and how much to tax, is a matter of regional circuit
law. Id. at 1183. Therefore, Third Circuit law
controls the Clerk's decision as to the types and amount
of costs to be taxed.
Circuit, there is a strong presumption in favor of awarding
costs to the prevailing party. “‘Only if the
losing party can introduce evidence, and the district court
can articulate reasons within the bounds of its equitable
power, should costs be reduced or denied to the prevailing
party.'” Reger v. Nemours Found., Inc.,
599 F.3d 285, 288 (3d Cir. 2010) (quoting In re Paoli RR
Yard PCB Litig., 221 F.3d 449, 468 (3d Cir. 2000)).
the presumption favoring the prevailing party, the district
court and Clerk may tax only those types of costs set forth
in 28 U.S.C. § 1920:
(1) Fees of the clerk and marshal;
(2) Fees for printed or electronically recorded transcripts
necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies
of any materials where the copies are necessarily obtained
for use in the case;
(5) Docket fees under section 1923 of this title;
(6) Compensation of court appointed experts, compensation of
interpreters, and salaries, fees, expenses, and costs of
special interpretation services under section 1828 of this
Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S.
437, 441 (1987).
recently, the Supreme Court reiterated that § 1920
taxable costs are “limited to relatively minor,
incidental expenses, ” and are “narrow in
scope.” Taniguchi v. Kan.Pacific Saipan, Ltd.,
566 U.S. 560, 573 (2012). In Taniguchi, the Court
interpreted the “compensation of interpreters”
provision in § 1920 (6) as allowing for the cost of oral
translation but not document translation. While this specific
subsection of § 1920 is not invoked here, the Clerk is
cognizant of the Supreme Court's overriding concern with
curbing taxable costs.
applying the above principles, a prevailing party's costs
“often fall well short of the party's actual
litigation expenses.” In re Paoli, 221 F.3d at
458. Moreover, despite the presumption of granting costs to a
prevailing party, that party must provide sufficient
information to carry its burden of showing that the costs
sought fall within the limits of § 1920. Romero v.
CSX Transp., Inc. 270 F.R.D. 199, 201-202 (D.N.J. 2010).
addition to Rule 54(d) and 28 U.S.C. § 1920, the
Clerk's decision is guided by Local Civil Rule 54.1,
which “establishes the general procedures to be
followed in those cases where a party is entitled to recover
costs” under § 1920. Lite, N.J. Federal
Practice Rules, Comment 2 to Rule 54.1 (Gann 2018 ed.)
to Manildra Milling, Plaintiffs are the prevailing
party because the Court's finding of infringement of the
patents-in-suit materially altered the legal relationship of
the parties in a way that directly benefitted Plaintiffs.
Moreover, this Court already made such a determination, after
having reviewed the parties' letter submissions, and so
provided in its final judgment.
Depomed has complied with the procedural requirements of L.
Civ. R. 54.1, as mandated by the final judgment. It timely
filed and served a notice of motion, verified AO 133 form,
Plaintiff Depomed, Inc.'s Bill of Costs and Disbursements
(“Depomed's Bill of Costs”), and the
Declaration of Michael A. Sitzman, Esq. (“Sitzman
Decl.”), appending supporting invoices. [Dkt. Entry
584]. Therefore, the Clerk will now examine the specific
costs requested by Depomed, in the order in which they appear
in § 1920.
Fees of the Clerk and Marshal, § 1920
subsection (1) of § 1920, Depomed seeks the cost of
filing five of the six complaints as a fee of the clerk and
that of serving the complaints as a fee of the marshal.
Defendants do not object to either cost.
asks for the cost of filing five of the six complaints, i.e.,
all but Civ. A. No. 13-6929 (for which Grunenthal asks), or
$400.00 each. These fees consist of the $350.00 fee set forth
in 28 U.S.C. § 1914(a) for the filing of a civil action,
and the $50.00 administrative fee established in the Judicial
Conference's “District Court Miscellaneous Fee
Schedule.” Subsection (b) of § 1914 allows the
clerk to collect fees in addition to the $350.00 fee of
subsection (a), as prescribed by the Judicial Conference.
Accordingly, the entire $400.00 amount per complaint
constitutes “fees of the clerk.”
Clerk notes that the $400.00 fee was paid for each of these
five complaints, Sitzman Decl., Ex. 2, and yet, Depomed
mistakenly asks for just $1, 600.00. The Clerk will award
$2, 000.00 in filing fees.
Service of Process
wishes to recoup a total of $388.34 paid to private process
servers as a § 1920 (1) fee of the marshal. This
consists of service of the summons and complaint in Civ. A.
No. 13-4507 upon Ascend Laboratories ($120.00), the
“Actavis Defendants” ($90.00), and Alkem
($95.00), and the summons and complaint in Civ. A. No.
14-4617 upon Watson ($83.34). Sitzman Decl., Ex. 3.
(1) explicitly authorizes taxation of the costs of just the
“clerk and marshal.” However, this Court has held
that the fees of private process servers are taxable under
the combined reading of § 1920 and § 1921, which
allows the court to tax as costs the fees for serving a
subpoena on a witness. Ricoh Corp. v. Pitney Bowes
Inc., Civ. No. 02-5639, 2007 WL 1852553, at *3 (D.N.J.
June 26, 2007); Hurley v. Atlantic City Police
Dep't, Civ. Nos. 93-260, 94-1122, 1996 WL 549298, at
*8 (D.N.J. Sept. 17, 1996).
the Clerk taxes this cost as well, with the exception of the
$120.00 cost of service on Ascend. The Clerk will not tax
against these Defendants the cost of service on a party which
was dismissed from the lead case about two months after its
filing. [Dkt. Entry 64]. The cost of service is taxed in the
amount of $268.34.
the costs of filing and service, § 1920 (1) costs are
taxed in the total amount of $2, 268.34.
Costs of Printed or Electronically Recorded Transcripts,
§ 1920 (2)
to § 1920 (2), Depomed requests the $41, 320.43 cost of
printed hearing transcripts and both printed and videotaped
deposition transcripts. Defendants oppose both.
requested total, $11, 380.78 consists of the cost of the
transcripts of the March 8, 2016 Pretrial Conference, the
10-day trial and summations on April 27, 2016.
parties recognize, fees for recorded transcripts are taxable
under § 1920 (2) if the transcripts were
“necessarily obtained for use in the case.” Local
Civil Rule 54.1(g) (6) identifies circumstances under which
the transcripts will be deemed necessary:
The cost of a reporter's transcript is allowable only (A)
when specifically requested by the Judge, master, or
examiner, or (B) when it is of a statement by the Judge to be
reduced to a formal order, or (C) if required for the record
on appeal. . . Copies of transcripts for an attorney's
own use are not taxable in the absence of a prior order of
the Court. All other transcripts of hearings, pretrials and
trials will be considered by the Clerk to be for the
convenience of the attorney and not taxable as costs.
maintain that none of the costs are recoverable because the
transcripts merely served the convenience of counsel. They
assert that Depomed has not segregated from an entire set of
transcripts those pages which were actually used, that the
invoices do not separate taxable from non-taxable services
and further, that there ...