Energy Intelligence Group, Inc. et al v. Kayne Anderson Capital Advisors, LP et al, No. 4:2014cv01903 - Document 391 (S.D. Tex. 2018)
Court Description: MEMORANDUM OPINION AND ORDER granting in part and denying in part 314 MOTION for Costs (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
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Energy Intelligence Group, Inc. et al v. Kayne Anderson Capital Advisors, LP et al Doc. 391 United States District Court Southern District of Texas ENTERED August 01, 2018 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ENERGY INTELLIGENCE GROUP, INC. and ENERGY INTELLIGENCE GROUP (UK) LIMITED, § § § § § § § § § § § § § Plaintiffs, v. KAYNE ANDERSON CAPITAL ADVISORS, LP and KA FUND ADVISORS, LLC, Defendants. David J. Bradley, Clerk CIVIL ACTION NO. H-14-1903 MEMORANDUM OPINION AND ORDER Energy Intelligence Group, Inc. and Energy Intelligence Group (UK) Limited (together, "Plaintiffs" or "EIG") sued Kayne Anderson Capital Advisors, LP "Defendants" or "Kayne") U.S.C. § U.S.C. §§ and KA Fund Advisors, LLC (together, for violations of the Copyright Act, 17 106, and the Digital Millennium Copyright Act ("DMCA"), 17 1202-03. Pending before the court is Defendants' Motion for Costs Pursuant to Rule (Docket Entry No. Defendants' 314), 68 ("Defendants' Plaintiffs' Motion for Costs Motion for Costs") Memorandum in Opposition to ("Plaintiffs' Opposition") (Docket Entry No. 324), Defendants' Reply in Support of Their Motion for Costs to Pursuant Rule 68 ("Defendants' Reply") (Docket Entry No. 328), and Plaintiffs' Sur-Reply Opposing Defendants' Motion for Costs ("Plaintiff's Sur-reply") (Docket Entry No. 390). For the reasons stated below, Kayne's Motion for Costs will be GRANTED IN PART and DENIED IN PART. Dockets.Justia.com Background I . A detailed history of the parties' business relationship as related to the present litigation is provided in a prior opinion. 1 In short, EIG alleged that Kayne copied and distributed Oil Daily, a subscription newsletter published by EIG, in violation of EIG's subscription purchased a agreements. 2 single employee, Jim Baker. annual From at least 2004 subscription to Oil to 2013 Kayne for Kayne Daily That subscription was routinely forwarded to Kayne employees and others who were not subscribers. In 2013 Kayne entered into a multi-user license agreement with EIG, paying for five Kayne employees to receive Oil Daily. Kayne But EIG alleged that continued to distribute unauthorized copies of Oil until at least May 21, 2014. On July 8, 2014, Daily EIG filed this action against Kayne for copyright infringement and for violations of the DMCA. This case was the subject of a four-day jury trial held from December 4-7, 2017. 3 The jury found that Kayne infringed 1,646 individual Oil Daily works between December 29, 2004, and July 8, 2014, and awarded $15,000.00 in statutory damages for each work 1 Memorandum Opinion and Order, Docket Entry No. 68. 2 Plaintiffs' Second Amended Complaint for Copyright Infringement, Contributory Copyright Infringement, Vicarious Copyright Infringement, and Violation of the Integrity of Copyright Management Information, Docket Entry No. 38. 3 Courtroom Minutes for Nos. 261, 264, 267, 269). the -2- four-day trial, (Docket Entry infringed. 4 The jury found that EIG knew or should have known on or before July 8, 2011, that Kayne was infringing their copyrights of Oil Daily; 5 that Kayne fraudulently concealed their copying of Oil Daily and that EIG failed to discover the copying despite exercising due diligence; 6 but that EIG failed to mitigate their damages 7 and could have avoided 1,607 acts of infringement had EIG used reasonable diligence to mitigate their damages. 8 to EIG' s DMCA claims, the jury found that Kayne With respect intentionally removed or altered copyright management information for Oil Daily a total of 425 times having reasonable grounds to know that it would induce, infringement. 9 enable, facilitate, or conceal copyright The jury did not find that Kayne distributed Oil Daily knowing that the copyright management information had been removed or altered without EIG's permission, should have known on or before July 8, 10 or that EIG knew or 2011, that Kayne was intentionally removing or altering copyright management information for Oil Daily or distributing Oil Daily knowing that the copyright 4 Verdict, Docket Entry No. 271, Questions 1 and 2 . 5 Id. at Question 3. 6 Id. at Question 4 . 7 Id. at Question 6. 8 Id. at Question 7 . 9 Id. at Questions 8 and 10. lOid. at Question 9. -3- management information had been removed or altered without EIG's permission. 11 The jury awarded $2,500 in statutory damages for each of Kayne's 425 violations of the DMCA. 12 But the jury also found that EIG failed to mitigate their DMCA damages, 13 and that EIG could have avoided all 425 DMCA violations had reasonable diligence been used to mitigate damages. 14 Following trial Kayne filed Defendants' Motion for Attorney's Fees and Costs Motion for (Docket Entry No. Post-Judgment 287), and EIG filed Plaintiffs' Relief (Docket Entry No. 289), and Plaintiffs' Application for Attorney's Fees (Docket Entry No. 290). In a May 2, 2018, Memorandum Opinion and Order (Docket Entry No. 312), the court denied Kayne's Motion for Attorney's Fees and Costs and EIG's Motion for Post-Judgement Relief, and granted in part and denied in part EIG's Application for Attorney's Fees. The court entered a Final Judgment (Docket Entry No. 313) awarding EIG statutory damages in the amount of $585,000.00; attorney's fees in the amount of $4,241,306.88; costs in the amount of $75,000.00, and post-judgment interest on such amounts at the rate of 2.25% per annum. 11 Id. at Question 11. 12Id. at Questions 14 and 15. 13 Id. at Question 13. 14Id. at Question 14. -4- II. Analysis Citing Federal Rule of Civil Procedure 68 and a February 21, 2017, offer of judgment that EIG rejected, Kayne moves for (1) a reduction in the amount of costs due to Plaintiffs under the Final Judgment of $1,692,748 (consisting of a reduction in attorneys' fees of $1,650,748 and a reduction in other costs of $42,000), and (2) an award of costs in favor of Defendants in the amount of $3,282,054 (consisting of $2,918,474 in attorneys' fees and $363,580 in other costs) . 15 EIG responds that Kayne's motion for costs should be denied as untimely, that Kayne is not entitled to recover attorney's fees under Rule 68 because it is not a prevailing party, and that even if Rule 68 shifts Kayne's post-offer attorney's fees to EIG, Kayne should not be able to recover its unreasonably incurred attorney's fees and costs. 16 A. Applicable Law Rule 68 states in pertinent part: (a) Making an Offer. . At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued. (b) Unaccepted Offer. Evidence of an unaccepted offer is not admissible except in a proceeding to determine costs. 15 Defendants' Motion for Costs, Docket Entry No. 314, p. 1. 16 Plaintiffs' Opposition, Docket Entry No. 324. -5- (d) Paying Costs After an Unaccepted Offer. If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made. Under Rule 68 a prevailing plaintiff is required to pay the costs of the defendant's litigation offer of if judgment the plaintiff that fails is more judgment the plaintiff ultimately obtains. district court discretion. Id. at 1151. favorable accept a than the Delta Air Lines, Inc. v. August, 101 S. Ct. 1146, 1149-50 (1981). 68 is mandatory; where the rule operates, to The language of Rule it leaves no room for The purpose of Rule 68 is Id. to encourage settlement of litigation. at 1150. See also Johnston v. Penrod Drilling Co., 803 F.2d 867, 869 (5th Cir. 1986) ("When it is likely that the plaintiff will obtain a judgment but the amount of such judgment is uncertain, the rule provides the plaintiff an additional incentive to settle the case by creating the possibility that the plaintiff will 'lose some of the benefits of victory if his recovery is less than the offer.'") (quoting Delta, nothing, 101 S. Ct. at 1150). "If however, Rule 68 does not apply." a plaintiff takes Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 333 (5th Cir.) (per curiam). cert. denied sub nom. L.K. Comstock & Co., Inc. v. Louisiana Power & Light Co., 116 S. Ct. 173 (1995). -6- Rule 68 does not define "costs." Observing that "it is very unlikely that this omission was mere oversight;" Marek v. Chesny, 105 S. Ct. 3012, 3016 (1985), the Supreme Court has stated that the most reasonable inference is that the term "costs" in Rule 68 was intended to refer to all costs properly awardable under the relevant substantive statute or other authority. In other words, all costs properly awardable in an action are to be considered within the scope of Rule 68 "costs." Thus, absent congressional expressions to the contrary, where the underlying statute defines "costs" to include attorney's fees, we are satisfied such fees are to be included as costs for purposes of Rule 68. Id. See also International Nickel Co. , Distribution Corp., 803 F.2d 150, 157 n. 2 Inc. v. Trammel (5th Cir. 1986) Crow ("Rule 68 serves only to prevent the plaintiff from recovering costs that would normally be his under [Rule] 54(d) ."). B. Application of the Law to the Facts 1. Kayne's Rule 68 Motion is Not Untimely EIG argues that Kayne's motion for costs should be denied as untimely because Federal Rule of Civil Procedure 54 (d) (2) (B) provides that a claim for attorney's fees and non-taxable expenses must be made within fourteen days after the entry of "[u]nless a statute or court order provides otherwise." 11 judgment Asserting that Kayne's motion is untimely because the court set a deadline of January 8, 2018, for filing motions for costs and fees, EIG argues: 17 Id. at 7 (emphasis in original). reply, Docket Entry No. 390, pp. 1-5. -7- See also Plaintiffs' Sur- On December 7, 2017, following dismissal of the jury, the Court specifically addressed the issue of Kayne's offers of judgment and recovery of attorney's fees, and ordered the parties to submit briefs on these issues within thirty days, by January 8, 2018. (D.E. 284 at 78:2479:12; 75:25-80:11.) See also D.E. 269 (December 7, 2017 Courtroom Minutes ordering that all "[p]ost-verdict motions shall be filed within thirty (30) days."). The Court's approach was consistent with its earlier deadlines set relating to the parties' motions for attorney's fees. During the October 12, 2017[,] docket call, the Court informed both parties that it intended to resolve the issue of attorney's fees prior to the entry of final judgment. (D.E. 258 at 27:13-18.) When the Court ordered EIG to provide documentation supporting its fee request to Kayne prior to trial, counsel for Defendants inquired whether the same deadline would apply to Kayne's Rule 68 motion, and the Court affirmed. (Id. at 24:4-6, 15-21.) 18 EIG argues that "the Court properly set a schedule for briefing attorney's fees and costs, including those under rule 68, and Kayne ignored the deadline. " 19 Kayne responds that its Rule 68 motion is timely because it was filed within 14 days of entry of the Final Judgment as required by Rule 54 (d) (2) (B) . 20 Asserting that "Rule 68 does not apply when the defendant prevails, " 21 Kayne argues that " [ d] efendants could not file their Rule 68 motion until the prevailing party status and the amount of the judgment were decided." 22 18 Plaintiffs' Opposition, Docket Entry No. 324, pp. 7-8. 19 Plaintiffs' Sur-reply, Docket Entry No. 390, p. 5. 20 Defendants' Reply, Docket Entry No. 328, p. 2. 21 Id. at 3. -8- Although the court set a deadline of January 8, 2018, for filing motions for attorney's fees, the court is not persuaded that the deadline makes Kayne's Rule 68 motion untimely. On January 8, 2018, in compliance with the court's deadline, the plaintiffs and the defendants filed prevailing party. 23 cross-motions for attorney's fees as the In their motion Kayne stated, "after entry of Final Judgment, Defendants will likely seek their costs, including their attorney's fees incurred after one of the numerous Rule 68 Offers of Judgment all refused by Plaintiffs." 24 Without objecting or arguing that a later-filed Rule 68 motion would be time barred, would cause prejudice, or otherwise be improper, EIG acknowledged in their response to Kayne's motion for attorney's fees that Kanye "may also Federal submit Rule judgment." 25 of a motion Civil for its Procedure 68 fees and costs following pursuant entry of to final Because in the motions filed on January 8, 2018, both the plaintiffs and the defendants argued that they were entitled to attorney's fees as the prevailing party, because Rule 68 does not apply when the defendant prevails, because EIG did not object to Kayne's stated intent to file a Rule 68 motion at a later date, and because Kayne's Rule 68 motion was filed within 14 days of the court's entry of Final Judgment as required by Rule 54 (d) (2) (B) (i), the court concludes that Kayne's Rule 68 motion is not untimely. 23 See Defendants' Motion for Attorney's Fees and Costs, Docket Entry No. 287, and Plaintiffs' Application for Attorney's Fees, Docket Entry No. 290. 24 Defendants' Motion for Attorney's Entry No. 287, p. 6 n.1. 25 Fees and Costs, Docket See Plaintiffs' Opposition, Docket Entry No. 298, p. 6 n.1. -9- 2. On EIG is Not Entitled to Recover Costs Incurred After Kayne's February 21, 2017, Offer of Judgment February 21, 2 017, Kayne extended a Rule 68 offer of judgment to EIG for "the amount of $5,000,000.00 plus $300,000.00 to fund a infringement ad campaign. " 26 copyright EIG does not dispute that Kayne's February 21, 2017, offer of judgment complied with Rule 68, that EIG refused Kayne's offer of judgment, or that as applied to the court's Final Judgment, Kanye's offer of judgment requires the court attorney's fees, judgment. to reduce EIG' s award of costs, including by amounts that EIG incurred after the offer of Nor does EIG dispute that Rule 68 operates to reduce the costs awarded to EIG by $42,000.00 to a total of $33,000.00, and the attorney's fees awarded to EIG by $1,692,748.00 to a total of $2,590,558.43. 3. The Final Judgment will be so amended. Kayne Is Entitled to Recover Its "Properly Awardable" Post-Offer Costs Kayne argues that Rule 68 entitles them to recover post-offer costs of $3,282,054.00, fees and $363,580.00 consisting of $2,918,474 for attorney's for other costs including taxable costs under 28 U.S.C. § 1920, as well as "$11, 979.00 [an] in additional $351,604.00 in costs recoverable under 17 U.S.C. § 505, which (as 26 Defendants' Motion for Costs, Docket Entry No. 314, p. 2. See also Declaration of Galyn Gafford, Exhibit A to Defendants' Motion for Costs, Docket Entry No. 314-1, p. 2 ~4, and Exhibit 1 thereto, Defendants' Rule 68 Offer of Judgment, Docket Entry No. 314-2. -10- this court has already held) are not limited to costs recoverable under Section 1920. (Dkt. No. 312, p. 65) ." 27 Asserting that " [a] 11 of these costs are reasonable and necessary, " 28 Kayne argues: Defendants incorporate by reference the arguments made regarding these fees in Defendants' original Motion for Attorney's Fees (Dkt. No. 287) with its attachments including the Mueller Declaration (and supporting invoices) and the Friedman Declaration (and supporting invoices) . In support of the taxable costs under 2 8 U.S.C. § 1920, Defendants incorporate by reference the Bill of Costs attached as Exhibit A to Defendants' original Motion for Attorney's Fees (Dkt. No. 287). In support of the additional reasonable and necessary costs awardable under 17 U.S.C. § 505, Defendants have attached the Declarations of Jason Mueller and Kody Kleber. These declarations set forth that these additional costs incurred were reasonable and necessary. . and provide 29 the documentary evidence of the costs incurred. EIG does not dispute that Kayne is entitled to recover its post-offer costs, but argues that Kayne's demand for costs is substantially comprised of expenses that are excessive, unreasonable and unnecessary for litigation of this case-specifically, Kayne's spending over $235,000 to retain four separate jury consulting companies to conduct numerous jury focus groups and mock trials. Any award of costs to Kayne should, at a minimum, be substantially reduced through the deduction of these expenses. 30 EIG also argues that Kayne is not entitled to recover post-offer attorney's fees because Kayne is not a prevailing party. 31 27 Defendants' Motion for Costs, Docket Entry No. 314, pp. 7-8. 28 Id. at 8. 29Id. 30 Plaintiff's Opposition, Docket Entry No. 324, p. 7. 31 Id. at 7, 13-15. -11- (a) Citing Kayne Is Not Entitled to Post-Offer Attorney's Fees Marek, 105 S. Ct. at 3012, and Jordan v. Time, Inc., 111 F.3d 102, 105 (11th Cir. 1997) defendants (per curiam), Kayne argues that should recover their attorney's February 21, 2017. 32 fees incurred after EIG responds that defendants are not entitled to recover attorney's fees incurred following the offer of judgment because defendants are not the prevailing party. 33 EIG argues: The clear weight of authority in the Fifth Circuit and nearly every other Circuit that has considered the issue demonstrates that, in order for a defendant to recover attorney's fees under Rule 68, they must be "properly awardable" to the defendant by the underlying statute. Under the Copyright Act, attorney's fees are only properly awardable to the prevailing party. As this Court has ruled that EIG is the prevailing party, Kayne cannot recover its attorney's fees. 34 In Marek, 105 S. Ct. at 3012, the Supreme Court held that a prevailing civil rights plaintiff who recovered an amount less than the defendant's Rule 68 offer of judgment, offer attorney's fees pursuant to 42 U.S. C. cannot recover post§ 1988. The Court based this holding on its determination that the term "costs" in Rule 68 refers to "all costs properly awardable under the relevant substantive statute or authority." § Id. at 3016. Because 42 U.S.C. 1988 permits a prevailing plaintiff to recover "a reasonable 32 3-8. Defendants' Motion for Costs, Docket Entry No. 314, pp. 1, See also Defendants' Reply, Docket Entry No. 328, pp. 5-6. 33 Plaintiff's Opposition, Docket Entry No. 324, p. 7, 13-15. -12- attorney's fee as part of the costs," the Court held that "such fees are subject to the cost-shifting provision of Rule 68." Id. at 3016-17. Although Marek precludes a prevailing plaintiff from recovering attorney's fees incurred after having rejected a Rule 68 offer of judgment, because the defendants in that case failed to appeal the district attorney's fees, court's order denying their request for the Marek Court did not address whether Rule 68 imposes the losing defendant's post-offer fees upon a prevailing plaintiff. Id. at 3014 n. 1. Most courts - including the Fifth Circuit - that have considered this issue in the context of civil rights actions, have held that losing defendants have no right to recover their plaintiff. post-offer attorney's fees from a prevailing See Equal Employment Opportunity Commission v. Bailey Ford , Inc . , 2 6 F . 3d 57 0 , 57 1 ( 5th Ci r. 1 9 9 4 ) (per curiam) ( citing Crossman v. Marcoccio, 806 F.2d 329 (1st Cir. 1986), cert. denied, 107 S. Ct. 1955 (1987)). Courts denying defendants the right to recover post-offer attorney's fees have observed that while Marek held that the term "costs" as used in Rule 68 includes attorney's fees where authorized by statute, Marek, also held that attorney's fees as costs are recoverable only if they are "properly awardable" under the relevant substantive statute. 334 (holding that because 42 U.S.C. prevailing party, § See Crossman, 806 F.2d at 1988 awards costs only to a and because appellees were not the prevailing -13- party, "appellees' attorney's fees were not 'properly awardable' costs as defined by section 1988 and, therefore, were not part of the costs shifted to plaintiff by the operation of Rule 68") . Thus, in civil rights cases where costs and fees awardable only to the prevailing party, prevailed is not entitled to Saginaw, 757 F.3d 518, 528-31 a defendant who has not attorney's collect costs under Rule 68. are properly fees when seeking See also Hescott v. (6th Cir. 2014) to City of ("[W]e join those circuits in concluding that a losing civil-rights defendant cannot recover its post-offer attorneys' fees under Rule 68 because such a party does not satisfy the requirements for a fee award under § 198 8 • II) • Under the Copyright Act, as under § 1988, costs include an award of a reasonable attorney's fee to a prevailing party. U.S.C. § (1994). 505; Fogerty v. Fantasy, Inc., 114 S. Ct. 1023, 17 1027 Section 505 states: In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs. 17 U.S.C. § 505. The Fifth Circuit has not yet addressed whether a losing defendant in a copyright case is entitled to an award of attorney's fees incurred following a Rule 68 offer of judgment that exceeds the amount ultimately recovered by a prevailing plaintiff. Although there is a split of authority, the majority position is -14- that because the Copyright Act provides for an award of fees only to the prevailing party, non-prevailing defendants cannot recover attorney's fees as part of their Rule 68 costs. See Harbor Motor Company, Inc. v. Arnell Chevrolet-Geo, Inc., 265 F.3d 638, 647 (7th Cir. 2001); UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1034 F.R.D. 378, 380-82 (9th Cir. 2013); Boisson v. Banian Ltd., (E.D.N.Y. 2004); Bruce v. 221 Weekly World News, Inc., 203 F.R.D. 51, 54-56 (D. Mass. 2001). In Harbor Motor, 265 F.3d at 638, the Seventh Circuit analogized cases arising under the Copyright Act to those arising in the context of § 1988. Because both statutes include an award of attorney's fees as part of the costs, but only to a prevailing party, the court held that a non-prevailing defendant could not recover attorney's fees pursuant to Rule 68 because attorney's fees could not be properly awarded under such circumstances. 645-47. In Jordan, contrary position. 111 F.3d at 102, the Eleventh Circuit took a There the defendant made a Rule 68 offer of judgment that exceeded the amount ultimately awarded to plaintiff on a copyright infringement claim. Id. at 104. In a per curiam opinion, the Eleventh Circuit awarded defendant all attorney's fees incurred after the making of the Rule 68 offer. Id. at 105. Unlike Harbor Motor, however, the Jordan court failed to considered Marek's "properly awardable" language and, instead focused only on the Marek Court's observation that -15- "Rule 68 'costs' include attorneys' fees when the underlying statute so prescribes. Copyright Act so specifies." 3016-17) . Id. (citing Marek, The 105 S. Ct. at The Jordan court neither mentioned "Marek's limiting language that Rule 68 'costs' include attorneys' fees only when fees are properly awardable under the relevant statute[, n]or . examine[d] the Copyright Act's restriction that attorneys' fees may be awarded only to a prevailing party." Hescott, 757 F.3d at 529-30 (citing Jordan, 111 F.3d at 105, and stating: "We are not the first court to point out these shortcomings, nor the first to avoid relying on Jordan as a result."). See also Bruce, 203 F.R.D. at 56 (criticizing Jordan for interpreting "Rule 68 as providing a substantive gloss on the provisions of the Copyright Act," that "virtually compel[s] copyright plaintiffs . to accept an Offer of Judgment no matter how meritorious may be their case, for fear of resulting claims of analysis exposure attorney's in Harbor to what are fees"). Motor often, Finding more as the persuasive here, substantial Seventh than the Circuit's Eleventh Circuit's analysis in Jordan, the court concludes that defendants are not entitled to recover post-offer attorney's fees because, for the reasons Order, stated in the May 2, 2018, Memorandum Opinion and the court has already held that the prevailing party is EIG. 35 35 Memorandum Opinion and Order, Docket Entry No. 312, pp. 3544, 62, and 67. -16- (b) Kayne Is Entitled to Reasonable Post-Offer Costs Other than Attorney's Fees Defendants' Rule 68 motion seeks an award of costs other than attorney's fees in the amount of $363,580.00 consisting $11,979.00 in taxable court costs under 28 U.S.C. § of 1920, and an additional amount of "$351,604[.00] in costs recoverable under 17 U.S.C. § 505." 36 Because EIG does not dispute that $11,979.00 of the costs that Kayne seeks are allowable under § 1920, the court concludes that Kayne is entitled to recover that amount of costs. See Johnston, 803 F. 2d at 8 69 ("Rule 68 operates to require a prevailing plaintiff to pay the costs of the litigation . ."). At issue is whether Kayne is entitled to recover costs that are not taxable court costs under § 1920. For the reasons stated in the May 2, 2018, Memorandum Opinion and Order, the court has concluded that 17 U.S.C. § 505 authorizes an award of costs that is broader in scope and not limited to the categories of costs allowable under 28 U.S.C. § 1920. 37 The court is nevertheless not persuaded that Kayne should be awarded costs beyond those allowed under the amounts Kayne seeks § 1920. for EIG specifically argues that jury research ($235,000), for "Copyright Office Retrieval and Correspondence" ($10,575.00), and 36 Defendants' Motion for Costs, Docket Entry No. 314, p. 7. Kayne seeks $351,604.00, but subtracting taxable costs from 363,580.00 yields 352,601.00. 37 Memorandum Opinion and Order, Docket Entry No. 312, pp. 65. -17- 64- for a post-verdict unreasonable. 38 victory party ($311. 68) are excessive and In reply Kayne acknowledges that "Plaintiffs are correct that the cost for the post trial 'victory party' should not the amount of costs sought, " 39 but have been included [in] argues that "Plaintiffs do not offer any objection to $117,694 of 1140 reasonable and necessary costs EIG argues that Kayne's costs incurred for jury research are excessive and unreasonable because "Kayne retained four different jury consulting companies and paid them a total of approximately $235,00[.00] ." 41 Because for the reasons stated in the May 2, 2018, Memorandum Opinion and Order, the court has already concluded that this litigation was "not particularly complex given the ability and experience $235,000.00 of for the attorneys," 42 four different Kayne's jury expenditure consulting of companies over was unreasonable and excessive and therefore will not be allowed. 38 Plaintiff's Opposition, Docket Entry No. 324, pp. 7, 21-25 (citing Exhibit 1 to Declaration of Jason Mueller, Docket Entry No. 314-4, p. 18 as containing a line item entry of $311.68 for a "victory celebration with client."). EIG also argues that Kayne's redacted expense records frustrate the determination of whether Kayne's costs were reasonable, see id. at 25, but Kayne has since clarified that "Defendants redacted the expenses for which they are not moving." Defendants' Reply, Docket Entry No. 328, p. 8. 39 Defendants' Reply, Docket Entry No. 32 8, p. 8 n. 1. 4oid. 41 Plaintiff's Opposition, Docket Entry No. 324, p. 21. 42 Memorandum Opinion and Order, Docket Entry No. 312, p. 60. -18- EIG argues that Kayne's costs incurred for "Copyright Office Retrieval and Correspondence" were not necessary for litigating this case because the reimbursement for these costs is "dated May 30, 2017, which falls within the briefing period for Kayne's May 3, 2017[,] Motion for [R]eferral to the Register of Copyrights, and these costs were incurred in connection with Kayne's preparation of that motion. " 43 For Memorandum Opinion Defendants' Motion the and for reasons stated in the (Docket Order Referral to Entry the No. Register July 26, 248) 2017, denying of Copyrights Pursuant to 17 U.S.C. § 411(b) and a Concurrent Stay (Docket Entry No. 204), Kayne's expenditures for "Copyright Office Retrieval and Correspondence" were unnecessary for litigating this case and therefore will not be allowed. There remains an amount of $105,715.00 that defendants seek as reasonably and necessarily incurred costs. 44 However, missing from 43 Plaintiff's Opposition, Docket Entry No. 324, p. 24. 44 The following table shows the calculations for this amount: Costs Kanye Seeks Amount Kayne seeks costs other than Attorney's Fees in amount of $363,580.00 (DE 314, pp. 1 and 7). $363,580.00 EIG objects and the court agrees that $235.000.00 is unreasonable and excessive for jury consultants (DE 324 pp. 21-24). ($235,000.00) $128,580.00 Subtotal EIG objects and the court agrees that $10,575.00 is unreasonable and excessive for Copyright Office Retrieval and Correspondence (DE 324, pp. 24-25). ($10, 575.00) $118,005.00 Subtotal Kayne acknowledges that $311.00 for "victory party" should not have been included in cost request (DE 328, p. 8 n. 4) . ($311.00) $117,694.00 Subtotal Costs Kayne asserts are taxable under 28 U.S.C. § 1920, and to which EIG does not object (DE 314, p. 7). ($11,979.00) $105,715.00 Remaining amount of costs that Kayne seeks. -19- defendants' briefing and from the affidavits that defendants have submitted in support of their motion for costs is a traditional bill of costs, an analysis, or an explanation of the specific costs that make up this amount. 2018, Memorandum Opinion Despite the fact that the court's May 2, and Order, criticized plaintiffs for interspersing billing records for costs with billing records for attorney's fees, and failing to submit detailed descriptions of the costs being sought, evidence, or analysis from which the court could conclude that costs beyond those taxable under 28 U.S. C. § 1920 were reasonable or necessarily incurred, 45 defendants have done the same, i.e., interspersed billing records for costs with billing records for attorney's fees, and failed to provide the court a detailed description of the costs being sought, evidence, or analysis that would allow the court either to distinguish costs that are taxable under 28 U.S.C. § 1920 from those that are not, or to conclude that any costs beyond those taxable under § 1920 were reasonable or necessarily incurred defending this case after the February 21, 2017, offer of judgment was made. In a case of this magnitude the court is neither able nor inclined to undertake the missing analysis, and currently has no basis on which to conclude that the costs the defendants seek are reasonable or were necessarily incurred defending this action after the February 21, 2017, offer of judgment was made. Accordingly, the court concludes that defendants should only be awarded $11,979.00 in costs that they acknowledge are taxable under 28 U.S.C. 45 § 1920. Memorandum Opinion and Order, Docket Entry No. 312, pp. 66- 67. -20- III. For the reasons Conclusions and Order discussed in § I I. B. 1, above, the court concludes that defendants' Rule 68 motion is not untimely. For the reasons discussed in§ II.B.2, above, the court concludes that plaintiffs are not entitled to recover costs or attorney's fees incurred after defendants' and therefore that the February 21, amount of 2017, offer of judgment, attorney's fees awarded to plaintiffs in the May 2, 2018, Final Judgment ($4,241,306.88) must be reduced by $1,650,748.00 to a total of $2,590,558.88, and that the amount of costs Judgment ($75,000) awarded to EIG in the May 2, 2018, must be reduced by $42,000.00 to a Final total of $33,000.00. For the reasons discussed in§ II.B.3, above, the court concludes that defendants are not entitled to recover attorney's fees incurred after their February 21, 2017, offer of judgment, but that defendants are entitled to recover taxable costs in the amount of $11,979.00, reasonably incurred after its February 21, offer of judgment. 2017, The amount of costs awarded to EIG ($33,000.00) will therefore be reduced by that amount for a total of $21,021.00. Accordingly, Defendants' Motion for Costs Pursuant to Rule 68, Docket Entry No. 314, is GRANTED IN PART and DENIED IN PART. SIGNED at Houston, Texas, on this the 1st day gust, 2018. SIM LAKE UNITED STATES DISTRICT JUDGE -21-
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