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In Re Application of Realnetworks, Inc., Yahoo! Inc. v. American Society of Composers

April 29, 2011

IN RE APPLICATION OF REALNETWORKS, INC., YAHOO! INC.
UNITED STATES OF AMERICA, PLAINTIFF,
v.
AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge:

AMENDED Related to OPINION AND ORDER

The American Society of Composers Authors and Publishers ("ASCAP") moved to review and vacate the Clerk of Court's taxation of costs as set forth in Yahoo!, Inc.'s ("Yahoo") January 6, 2011 Bill of Costs (the "January 6 Bill of Costs"). For the following reasons, the motion was granted on April 15, and the Clerk's January 24 judgment taxing ASCAP for the January 6 Bill of Costs was vacated.*fn1

BACKGROUND

The following facts are undisputed. On September 28, 2010, the Second Circuit affirmed the district court's ruling that downloads of musical works do not constitute public performances of those works, vacated the assessment of reasonable fees for the blanket ASCAP licenses sought by RealNetworks, Inc. and Yahoo, and remanded the case for further proceedings in light of the Second Circuit's guidance. United States v.

ASCAP (In re Application of RealNetworks, Inc. and Yahoo! Inc.), 627 F.3d 64, 68 (2d Cir. 2010) ("RealNetworks/Yahoo!"). The Second Circuit did not order that costs be taxed to any of the parties.

On October 12, Yahoo filed a Bill of Costs in the Second Circuit (the "October 12 Bill of Costs"). ASCAP objected to Yahoo's October 12 Bill of Costs on October 28, 2010. ASCAP's objection is still pending before the Second Circuit. On December 9, the Second Circuit issued its mandate, which did not refer to costs.

On January 6, 2011, pursuant to Rule 54, Fed. R. Civ. P. ("Rule 54"), and Local Rule 54.1, S.D.N.Y R.,*fn2 Yahoo served ASCAP with a Notice of Settlement of Bill of Costs to be taxed by this Court (the "January 6 Notice"). The January 6 Bill of Costs consists entirely of costs that Yahoo claims it is entitled to receive under Rule 39(e), Fed. R. App. P. ("Rule 39(e)"): the costs for filing notices of appeal ($910.00) and the premiums for supersedeas bonds ($189,000.00). The January 6 Notice set January 24 as the date for submission of the Bill of Costs to the Clerk of Court for taxation.

On January 20, pursuant to Rule 54(d)(1), and Local Rule 54.1(b), ASCAP filed its objections to the January 6 Notice. On January 24, the Clerk entered judgment taxing ASCAP $189,910.00 in costs. On January 28, ASCAP filed a motion to review and vacate the bill of costs. On February 16, ASCAP's motion became fully submitted.

DISCUSSION

Yahoo has moved pursuant to Rule 54 to recover the appeal costs to which it claims it is entitled under Rule 39(e). ASCAP argues that since the Realnetwork/Yahoo! decision affirmed, vacated, and remanded the district court's rulings, Rule 39(a) only permits this Court to award appeal costs pursuant to Rule 39(e) if the Court of Appeals makes an award of costs. It is undisputed that the Second Circuit has made no such award.

"A district court reviews the clerk's taxation of costs by exercising its own discretion to decide the cost question itself." Whitfield v. Scully, 241 F.3d 264, 269 (2d Cir. 2001) (citation omitted). Rule 54(d)(1) provides, in relevant part, that [u]nless a federal statute, these rules, or a court order provides otherwise, costs -- other than attorneys' fees -- shall be allowed as of course to the prevailing party unless the court otherwise directs . . . Such costs may be taxed by the clerk on one day's notice.

Fed. R. Civ. P. 54(d)(1) (emphasis supplied). Since "Rule 54(d) allows costs as of course . . . the losing party has the burden to show that costs should not be imposed." Whitfield, 241 F.3d at 270 (citation omitted). The costs that can be awarded pursuant to Rule 54(d) are limited to those enumerated in 28 U.S.C. § 1920 (2000), which does not include the costs that Yahoo seeks to recover here. See Rangolan v. Cnty. of Nassau, 370 F.3d 239, 250 (2d Cir. 2004) ("The term costs as used in Rule 54(d) is defined in 28 U.S.C. § 1920 (2000)." (citing Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987))).*fn3 In certain instances, however, a district court may award the costs that Yahoo seeks to recover -- the costs for filing notices of appeal and the premiums for supersedeas bonds -- pursuant to Rule 39(e).*fn4

Rule 39, entitled "Costs", provides, in pertinent part:

(a) Against Whom Assessed. The following rules apply unless the law provides or the ...


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