DYK, Circuit Judge.
Defendants-Appellants Mylan Laboratories and Mylan Pharmaceuticals (collectively
BACKGROUND
This appeal concerns an award of costs stemming from a patent dispute. Daiichi is the owner of U.S. Patent No. 5,053,407, which is directed to an antibiotic compound known as levofloxacin. Levofloxacin is a pioneer drug registered with and approved by the United States Food and Drug Administration under the trade name "Levaquin." Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., 267 F.Supp.2d 533, 536 (N.D.W.Va.2003). In November 2001, Mylan submitted an abbreviated new drug application to the Food and Drug Administration seeking approval to manufacture and sell levofloxacin tablets, together with a so-called "Paragraph IV" certification contending that Daiichi's patent was invalid. See 21 U.S.C. § 355(j)(2)(A)(vii)(IV). Daiichi brought a Hatch-Waxman infringement suit against Mylan.
As the prevailing party in the action, Daiichi submitted to the district court a bill of costs pursuant to Federal Rule of Civil Procedure 54(d)
On August 18, 2008, the district court entered a thirty-one page "Order Reducing Daiichi's Bill of Costs and Awarding Costs" awarding costs to Daiichi, but in a lesser amount than sought by Daiichi. Ortho-McNeil, No. 1:02-CV-32, slip op. at 1 (N.D.W.Va. Aug. 18, 2008) ("Order"). After reducing Daiichi's requested costs by approximately 40% (including most notably a substantial reduction in translation costs awarded), the district court awarded costs, which are summarized as follows:
Fees of Clerk .............................. $ 75.00 Service of summons & subpoena .............. $ 1,676.81 Court reporter fees: Trial transcripts ...................... $ 31,225.18 Pre-trial hearing transcripts .......... $ 4,924.20 Deposition transcripts ................. $ 112,911.70 Witness fees ............................... $ 53,939.94 Exemplification & copying fees ............. $ 89,424.20 Interpretation ............................. $ 24,512.36 Translation ................................ $1,011,712.00 Total ...................................... $1,330,401.39
DISCUSSION
We apply the law of the regional circuit, here the Fourth Circuit, in reviewing the award of costs under Rule 54(d) and 28 U.S.C. § 1920. See Summit Tech., Inc. v. Nidek Co., 435 F.3d 1371, 1374 (Fed.Cir.2006). Under Fourth Circuit law, Rule 54(d) "creates the presumption that costs are to be awarded to the prevailing party," and we review a district court's award of costs for abuse of discretion. Cherry v. Champion Int'l Corp., 186 F.3d 442, 446 (4th Cir.1999).
On appeal, Mylan essentially restates many of the same arguments it made to the district court opposing Daiichi's bill of costs. With regard to the large majority of the costs, we see no basis to disturb the judgment of the district court. Thus, we affirm the district court's award of translation costs for potential trial exhibits, translation costs for privilege log documents, and other costs not discussed below.
One issue, however, requires further discussion. The district court here rejected Mylan's argument that the joint discovery costs should have been apportioned between this action and the parallel levofloxacin case in the District of New Jersey brought against Teva. Order, slip op. at 29-30; see Ortho-McNeil Pharm., Inc. v. Teva Pharms. USA, No. 3:02-CV-02794 (D.N.J. filed June 12, 2002). On appeal Mylan argues that this was erroneous.
Although no formal joint-discovery agreement appears to have been entered on the docket of either court, the parties do not dispute that for Daiichi's convenience the depositions of Daiichi's witnesses were in fact taken jointly by Mylan and Teva, with attorneys for both Mylan and Teva present, and with the captions of both cases on the transcripts. In other words, the depositions were formally taken in both cases. There is also no dispute that the depositions at issue were necessary in both cases. Indeed, Daiichi admits that the New Jersey district court could have properly taxed the deposition costs, and it acknowledged at oral argument that, had the New Jersey district court done so, Daiichi could not have also recovered those same costs in this action.
However, Daiichi points out that costs were not awarded in the New Jersey action against Teva. Rather, Daiichi and Teva executed a settlement agreement. As described by Daiichi, "in exchange for Teva agreeing not to appeal the New Jersey district court's grant of summary judgment [to Daiichi on the issue of inequitable conduct], Daiichi agreed not to seek to recover its otherwise taxable costs in that case." Pl.-Appellee's Br. 15. The stipulated order of dismissal entered by the New Jersey district court reflected this arrangement, stating that "all parties shall bear their own costs and attorneys' fees."
Daiichi argues that because it did not in fact receive its costs at the conclusion of the New Jersey action, it was appropriate for the district court here to award all of the shared deposition costs without reduction. In contrast, Mylan argues that Daiichi effectively received half of the shared
The parties cite (and we have found) no governing Fourth Circuit precedent on whether costs must be apportioned in such circumstances; accordingly, we rely on general principles of law enunciated by our sister circuits. As a general rule, it is well established that in multiparty proceedings before a single judge (as where multiple losing parties are joined in one case, or where multiple cases are consolidated into a single proceeding), the district court has discretion to apportion payment of jointly incurred costs among the losing parties
The governing rules are less clear, however, where joint discovery is conducted in
We see no basis for treating a settlement situation differently. Here it is apparent that Daiichi has in effect already recovered some amount of costs through its settlement agreement with Teva. Although Teva did not actually pay costs to Daiichi in cash, the taxable costs in the New Jersey action (including deposition costs) were unquestionably taken into account by the parties' settlement, in which Daiichi agreed not to seek actual payment of costs as consideration for Teva foregoing its appeal. Having recovered the value of those costs in the form of the foregone appeal, Daiichi cannot now recover more than its total entitlement by obtaining those same costs again from Mylan. See Chisholm, 205 F.3d at 737; see also Anderson, 397 F.3d at 523; In re Air Crash Disaster at John F. Kennedy Int'l Airport on June 24, 1975, 687 F.2d 626, 629-30 (2d Cir.1982). Because the district court here did not apportion costs between the two actions, we vacate the award of costs in this one respect and remand for further proceedings.
The record before us does not indicate what taxable costs were included in the settlement (and hence were effectively recovered or waived). In this regard, we find persuasive the Second Circuit's approach in somewhat similar circumstances in In re Air Crash Disaster, 687 F.2d at 629-30. There, numerous suits involving one defendant were filed. All but thirty-six plaintiffs settled before a consolidated trial, in which the defendant was found liable. Id. at 629. Seventeen of the remaining plaintiffs then settled with the defendant after trial (but before costs were taxed), subject to the stipulation that the settlement was "without costs." Id. Four more then settled with the same stipulation after costs were taxed. Id. The district court awarded all of the costs of the trial to the remaining non-settling plaintiffs. The Second Circuit reversed, holding that a pro-rata reduction was required to account for the share of the joint costs associated with the "plaintiffs who agreed that [the defendant] would not be required to pay their costs." Id. We agree that as a default rule, a mechanical allocation by the number of parties sharing those costs is reasonable, but there may be other considerations that could make such a mechanical allocation inappropriate. Although the parties here have not identified any such factors, we remand for the district court to make the apportionment determination in the first instance.
We therefore vacate the judgment of the district court with regard to the portion of the award of costs related to jointly taken depositions, and remand to the district court to apportion in this action the disputed deposition costs.
AFFIRMED-IN-PART, VACATED-IN-PART, and
COSTS
Each party shall bear its costs on appeal.
FootNotes
We note that at oral argument, counsel indicated that some costs itemized under witness fees and interpretation might also be attributable to the joint depositions. If on remand the district court determines this to be the case, it should apportion those costs as well.
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