W&T Offshore, Inc. v. Apache Corporation

The parties tried this contract dispute to a jury in December 2014 after three years of

litigation. The jury found that the plaintiff, W &T Offshore, Inc., failed to show that the defendant,

Apache Corporation, had breached the parties' Production Handling Agreement. Apache filed a bill

of costs seeking more than $650,000, including over $500,00 in fees for its expert witnesses to attend

trial. (Docket Entry No. 222). W &T objected to four of the cost categories, asking the court to tax

only $2,877.00 for Apache's expert witness costs. (Docket Entry No. 223). Apache argued in

response that its deposition and court transcript costs and its reproduction costs are properly taxed.

(Docket Entry No. 224 ). Apache did not respond toW &T' s arguments challenging the expert costs.

Based on the application, objections, and response; the record; and the applicable law, the

court denies in part the costs applied for, including the expert costs over the mandatory $40.00 per

day, and grants the remaining costs in part, awarding Apache a total of$160,130.37.

The reasons are explained below. I. The Expert Witness Costs

Apache seeks over $500,000 in costs for its experts, none of whom were court appointed, to

attend trial. Apache acknowledges that if federal law governs, it is limited to recovering $40.00 per

day for each expert's attendance at trial, including travel days. 28 U.S. C. §§ 182l(b), 1920; Fed. R.

Civ. P. 54(d)(l); Crawford Fitting Co. v. JT Gibbons, Inc., 482 U.S. 437, 442 (1987). Apache

argues that it may recover the costs for its expert witnesses to attend trial beyond the $40.00 per day

limit because a Louisiana statute, LA R.S. 13 :3666(A), applies to the issuen in this Outer Continental

Shelf Lands Act ("OCSLA") action as surrogate federal law. Apache does not argue that state law

governs the taxation of the other costs it seeks to recover as taxable costs.

Costs are generally considered procedural, not substantive. Cates v. Sears, Roebuck & Co.,

928 F.2d 679, 688-89 (5th Cir. 1991). The Fifth Circuit has held that the taxation of expert witness

costs is procedural and that federal law applies unless there is an "express indication" by the state

"legislature, or its courts, of [the state's] special interest in providing litigants with recovery of expert

witness fees" in a certain type of case. !d. The Fifth Circuit has recognized that "special state

constitutional interests operate in the realm of state condemnation proceedings," but has declined

to expand the area of state-law application beyond eminent domain. !d. at 689.

Under Cates, federal law governs taxable costs for expert witnesses to attend trial unless the

state legislature or courts have expressly indicated that the State has a special interest in awarding

those costs in disputes of this nature. No Louisiana statute or case so indicates. The only statute

Apache relies on is the general Louisiana statute on expert witness costs, LA Rev. Stat. 13 :3666(A),

which states that expert "[w]itnesses called to testify in court ... shall receive additional

compensation." This does not give the "express indication" required to displace federal law on costs.

The fact that OCSLA provided the basis for federal-question removal does not change this

outcome. OCLSA adopts state substantive-not procedural-law when there is a gap in federal law

and only ifthe state law is not inconsistent with federal law. GulfO.ffthore Co. v. Mobil Oil Corp.,

453 U.S. 473,486 (1981); Union Tex. Petroleum Corp. v. PLT Eng'g Inc., 895 F.2d 1043, 1050 (5th

Cir. 1990); Dozierv. Rowan Drilling Co., 397 F. Supp. 2d 837,854 (S.D. Tex. 2005). Taxing expert

witness costs is procedural and that federal law applies even when Louisiana state law governs

substantive issues. See, e.g., Carter v. Gen. Motors Co., 983 F.2d 40,43 (5th Cir. 1993) (federal law

on taxing trial expert witness costs applied in diversity case because the Louisiana statute did not

expressly indicate a special state interest in taxing the costs).

The federal law on taxing expert witness costs applies. Apache is limited to $40.00 per day

for each expert's attendance at trial. W&T's objection on this basis is sustained, and Apache's cost

application is denied to the extent it seeks to tax expert witness costs above this limit.

II. Deposition and Transcript Costs

Apache seeks $44,175.53 in deposition costs, including the costs of transcripts and video

recordings for 27 witnesses. Apache relies on 28 U.S.C. § 1920(2), which allows "fees for printed

or electronically recorded transcripts necessarily obtained for use in the case." Apache asserts that

the depositions were "reasonably expected to be used for trial preparation, rather than merely

discovery," (Docket Entry No. 224 at 2), making the transcript costs taxable. Apache deducted

$13 5.3 8 for the video recording of one deposition taken in connection with spoliation issues that the

parties expected would be resolved before trial. Apache argues, and the record shows, that the

remaining transcripts and video recordings were for depositions "necessarily obtained for use in the

case," 28 U.S.C. § 1920(2). W&T's objection to these costs is overruled.

To the extent, however, that Apache seeks to recover half of the daily transcripts during the

trial, W&T's objection is granted. Apache does not dispute that it agreed to divide the costs of these

transcripts.

Apache is awarded $54,978.15 for deposition transcript and video recording costs, and one

half of the daily trial transcript costs ($44,175.53 less $135.38, plus $10,938.00).

III. Printing and Copying Costs

Apache seeks $45,570.67 for outside document reproduction expenses and $10,188.30 for

in-house document reproduction expenses. Apache submitted the supporting invoices and reduced

the amounts for such nontaxable items as sales taxes and delivery fees.

W &T objects that Apache failed to show the necessity of the costs. Apache responds by

pointing to the record support for the costs and the need for the copies in the litigation. The record

and law support Apache's right to recover these expenses as taxable costs.

Under 1920(3) and ( 4), Apache may recover "fees and disbursements for printing" and "fees

for exemplification and the costs of making copies of any materials where the copies are necessarily

obtained for use in the case." Courts include electronic scanning and imaging and electronic

document production costs. See, e.g., Fast Memory Erase, LLC v. Spansion, Inc., No. 3-10-CV

0481-M-BD, 2010 WL 5093945, at *5 (N.D. Tex. Nov. 10, 2010) (awarding costs for creating

TIFF/OCR images of documents). The record shows that Apache incurred these expenses in

responding to document requests during discovery, to analyze W &T' s document production, and in

trial preparation and presentation.

Apache is entitled to recover $45,570.67 for outside document reproduction expenses and

$10,188.30 for in-house document reproduction expenses. W&T's objection is overruled

Apache's bill of costs is denied in part and granted in part. Apache is entitled to recover as taxable costs $350.00 in clerk fees; $2,527.00 for its experts to attend trial; $54,978.15 in deposition

transcription, video recording, and trial transcript costs; $55,758.97 in printing and copying costs; and $46,516.25 in exemplification costs.