The opinion of the court was delivered by: WEINFELD
In this private antitrust suit involving State of Israel bonds traded in the secondary market in the United States, the jury returned a verdict in favor of the defendants and the judgment entered thereon was affirmed upon appeal without opinion.
The litigation extended over a substantial period beginning with pretrial discovery, during which scores of witnesses in this district, California and Israel were deposed to the verdict at the end of a five-week trial. The stenographic record of depositions totalled thousands upon thousands of pages and the documents and answers to interrogatories also ran to thousands of pages. Costs have been taxed in the total sum of $ 258,076.75 in favor of three defendants, Leumi Securities Corporation, Bank Leumi le-Israel B. M. (represented by one firm of attorneys) and Bank Leumi Trust Company of New York (represented by another firm of attorneys) (hereinafter "defendants"). The matter is now before the Court on plaintiff's exceptions to items that were allowed by the Clerk of the Court and on the defendants' exceptions to the disallowance of items in their proposed bill of costs. Rule 54(d) of the Federal Rules of Civil Procedure which provides "costs shall be allowed as of course to the prevailing party unless the court otherwise directs," vests the Court with discretion to allow or disallow costs
a discretion that invokes a judgment as to the necessity and reasonableness of the costs.
Under American jurisprudence, unlike that of English and other jurisdictions, as a general rule the prevailing litigant ordinarily is not entitled to collect reasonable attorneys' fees from the losing party.
While the issue here centers about taxable costs, authorized by statute, the Supreme Court has cautioned district judges to carefully scrutinize items proposed by winning parties, lest
(any) other practice would be too great a movement in the direction of some systems of jurisprudence that are willing, if not indeed anxious, to allow litigation costs so high as to discourage litigants from bringing lawsuits, no matter how meritorious they might in good faith believe their claims to be. Therefore, the discretion given district judges to tax costs should be sparingly exercised with reference to expenses not specifically allowed by statute.
Viewed in gross, the sum of $ 258,076.75 taxed by the Clerk of the Court in favor of the prevailing defendants appears to be a step in that direction. The fact that the parties engaged in a "bitter litigation" which objectively can be described as a war of attrition
with plaintiff itself bearing at least equal responsibility for the inordinate expenses incurred, does not require the Court to acquiesce in their extravagant indulgences. Based upon familiarity with the issues in the case and the activities of the lawyers throughout the litigation, the Court is of the view that the costs as taxed are egregiously excessive and far beyond reasonable
and justifies this Court's observation that
(undoubtedly), parties to a litigation may fashion it according to their purse and indulge themselves and their attorneys, but they may not foist their extravagances upon their unsuccessful adversaries. To sanction this policy may result not only in harassing a litigant, but may even deprive him of his day in court, particularly where, as in the instant case, there is great disparity in the financial resources of the parties. Fear of imposition of astronomical costs should not be a deterrent against the assertion of legitimate disputes; nor should one who in good faith brings an action be penalized because he has failed to carry his burden of persuasion.
While this Court, on the defendants' motion for summary judgment, expressed the view "that the factual underpinnings for plaintiff's Sherman and Clayton Act claims are somewhat shallow"
and the jury found in favor of the defendants, it does not follow that plaintiff should be penalized by staggering costs because it has failed to carry its burden of persuasion. This is so particularly in private antitrust suits. Such actions with their treble damage recovery, where plaintiff succeeds, not only serve to redress the private wrongs but constitute an auxiliary force in the protection of the public interest against those engaged in Sherman and Clayton Act violations.
That force should not be discouraged by the prospect of crushing costs in instances where plaintiffs do not prevail. Finally,
(the) policy of the Federal Courts has been to keep litigation costs down-as particularly enunciated in Rule 1 of the Federal Rules of Civil Procedure, "... to secure the just, speedy, and inexpensive determination of every action." The court's discretion should be exercised in conformity with that policy to avoid "... making the federal court a court only for rich litigants."
Against the background of those concepts, we consider the various items at issue.
Plaintiff's (losing party's) Objections to Allowances
The largest item in controversy is $ 187,588 (reduced by consent of the parties to $ 177,888). This was a charge for the services of a certified public accounting firm in collating and making an analysis of brokerage transactions in Israeli investment and tourist bonds from which a data base and computer runs were prepared so that market shares could be determined and price comparisons made. The accountants who had been engaged by the defendants had been advised that plaintiff was claiming that Leumi Securities had a monopolistic market share and that it was paying anticompetitive prices. The accounting firm, based upon information derived from records obtained from broker-dealers prepared data file charts and computer runs which purported to reflect, among other matters, market shares and price comparisons.
The parties dispute whether the computer runs were prepared for expert testimony upon the trial. This is significant since an expert's fee is not a taxable cost.
Although the accounting firm had been retained by the defendants, plaintiff called the partner under whose direction the computer program had been prepared and through his testimony introduced in its case one of the computer runs. The defendants rely upon this circumstance and also upon the nature of the material prepared, contending that the charts and computer runs were not for expert use but compiled for preparation of factual data for use in the case. This draws too fine a line. The totality of the evidence, including affidavits by defendants' counsel, as well as other documents, make it clear that the essential purpose of this study was for use by their expert. The computer cards were used by the defendants' economic expert in expressing his opinion.
The subject of his opinion was trade volume, price behavior and market share. Significantly, the bill of costs submitted by the defendants to the Clerk of the Court stated:
(The) computer keypunch cards which contain the factual information that comprised the data base were utilized by Professor Almarin Phillips in formulating his opinions as an expert witness on behalf of the defendants Leumi Securities Corporation and Bank Leumi le-Israel B. M.
The Court finds that the bulk of the accounting firms' services were for use by the defendants' expert. However, one item of the accounting firm's charges which amounts to $ 19,038 was for preparing items that plaintiff offered in evidence and that could not have been prepared without the compilation of the data file. Since plaintiff availed itself of this material, the ...