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Great Lakes Gas Transmission Limited Partnership v. Essar Steel Minnesota, LLC

United States District Court, D. Minnesota

May 26, 2017

Great Lakes Gas Transmission Limited Partnership, Plaintiff,
v.
Essar Steel Minnesota, LLC; Essar Steel Limited f/k/a Essar Steel Holdings, Ltd.; Essar Steel India Limited f/k/a Essar Steel Limited; and Essar Global Fund Ltd. f/k/a Essar Global Limited, Defendants.

          Brian A. Farlow, Hayley Ellison, Worthy W. Walker, Barbara L. Wohlrabe, and David W. Elrod, Elrod PLLC, Julian C. Zebot and Cooper S. Ashley, Maslon LLP, for Plaintiff.

          Douglas H. Flaum, Kevin P. Broughel, and Shahzeb Lari, Paul Hastings LLP, Lousene M. Hoppe and Nicole M. Moen, Fredrikson & Byron, PA, Thomas R. Thibodeau, David M. Johnson, and Ryan Stutzman, Thibodeau Johnson & Feriancek, PLLP, for Defendants.

          ORDER

          SUSAN RICHARD NELSON, United States District Judge

         Before the Court is a request for an award of costs associated with the appeal filed by Defendants Essar Steel Minnesota, LLC, [1] Essar Steel Limited f/k/a Essar Steel Holdings, Ltd., Essar Steel India Limited f/k/a Essar Steel Limited, and Essar Global Fund Ltd. f/k/a Essar Global. (ESML's Verified Bill of Costs on Appeal [Doc. No. 1037].) For the reasons set forth below, the Essar Defendants' request is granted.

         I. BACKGROUND

         On September 16, 2015, this Court entered judgment against Defendants in the amount of $32, 902, 183.00. (See Am. Order for Entry of Judgment at 4-5 [Doc. No. 977]; Am. Judgment [Doc. No. 979].) On September 18, 2015, Defendants filed a Notice of Appeal to the Eighth Circuit Court of Appeals. (Notice of Appeal [Doc. No. 987].) To stay execution of judgment pending the appeal, the parties entered into a stipulation requiring Defendants to deposit with the Clerk of this Court a supersedeas bond in the sum of $37, 837, 510.45, representing 115% of the judgment. (See Stipulation [Doc. No. 1006]; Order of 10/5/15 [Doc. No. 1007]; Bond [Doc. No. 1010].)

         In order to obtain the supersedeas bond, Defendants paid a premium of $756, 750.00 to their insurer, the Atlantic Specialty Insurance Company (“Atlantic”), and, in order to renew the bond for October 2016 through April 2017, they further paid Atlantic $474, 969.00. (Invoices, Ex. 1 to ESML's Verified Bill of Costs on Appeal [Doc. No. 1037-1 at 2-3].)

         Defendants' appeal to the Eighth Circuit was successful. Great Lakes Gas Transmission Ltd. P'ship v. Essar Steel Minnesota LLC, 843 F.3d 325, 334 (8th Cir. 2016). The Eighth Circuit instructed this Court to vacate judgment and dismiss the matter for lack of jurisdiction. Id.

         Shortly thereafter, Defendants filed a Bill of Costs with the Eighth Circuit, seeking an order requiring that Great Lakes reimburse them for a filing fee of $505.00, citing Rule 39 of the Federal Rules of Appellate Procedure and Rule 39A of the Eighth Circuit's Local Rules. (Appellants' Bill of Costs [Doc. No. 1040-1].) They further stated, “Appellants reserve the right to request taxation of the cost for preparation and transmission of the trial transcript and record, premiums paid for Appellants' supersedeas bond, and the filing fee for the notice of appeal, from the United States District Court, District of Minnesota, in accordance with Rule 39(e) of the Federal Rules of Appellate Procedure.” (Id. at 1-2) (emphasis added).

         On December 28, 2016, the Eighth Circuit issued a short order permitting Defendants to recover from Plaintiff Great Lakes Gas Transmission Limited Partnership (“Great Lakes”) the sum of $500.00 as taxable costs on appeal [Doc. No. 1040-2]. Pursuant to Federal Rule of Appellate Procedure 39(e)(4), the Eighth Circuit directed Defendants to recover the statutory filing fee of $5.00 with this Court. (Id.) The Order contained no language regarding Defendants' reservation of rights for the taxation of costs on the premiums paid for the supersedeas bond.

         Defendants now request that this Court award the $5.00 filing fee for their Notice of Appeal and the $1, 229, 719.00 in supersedeas bond premiums that they incurred, for a total of $1, 229, 724.00, to be paid by Great Lakes. (ESML's Verified Bill of Costs at 1.) Great Lakes objects to Defendants' request, arguing that Defendants did not seek an order regarding the taxation of supersedeas bond premium payments from the Eighth Circuit, nor did the Eighth Circuit address such costs. (Pl.'s Obj. at 1-2 [Doc. No. 1040].) Accordingly, Plaintiff contends that these costs are not recoverable under Rule 39(e). (Id.) Alternatively, even if they are recoverable, given the complexity of the jurisdictional issue on which Defendants prevailed on appeal and Defendants' conduct in “unnecessarily dr[agging] out this case for six years by asserting baseless defenses and engaging in otherwise dilatory litigation conduct, ” the Court should exercise its discretion and decline to award the supersedeas bond premium payments as costs. (Id. at 4.)

         II. DISCUSSION

         Under Rule 39, in cases in which the district court's judgment is affirmed in part, reversed in part, modified, or vacated by an appellate court, costs may be assessed against a party “only as the court orders.” Fed. R. App. P. 39(a)(4). This Court's judgment was vacated by the Eighth Circuit and Defendants timely filed their Bill of Costs within the fourteen day-period proscribed by Rule 39(d)(1). Under the rule, “premiums paid for a supersedeas bond or other bond to preserve rights pending appeal” are among the costs taxable in the district court. Fed. R. App. P. 39(e)(4).

         The leading Eighth Circuit authority on this issue is Reeder-Simco GMC, Inc. v. Volvo GM Heavy Truck Corp., 497 F.3d 805, 807 (8th Cir. 2007). At trial, Reeder-Simco prevailed on its claims brought under two separate federal statutes, alleging unfair price discrimination. Id. Volvo appealed. Id. As is the case here, in order to stay any collection of judgment pending appeal, Volvo posted a supersedeas bond and paid premiums during the pendency of the appeal. Id. On appeal, the Eighth Circuit affirmed the judgment as to one of the claims, but reversed as to the other. Id. Volvo, however, did not file a bill of costs with the Eighth Circuit within fourteen days of that court's entry of judgment. Id. Instead, it asked the district court to tax as costs the portion of the supersedeas bond premiums attributable to its prevailing claim. Id. Finding that it had no authority to do so, the district court denied Volvo's motion. Id. On appeal, the Eighth Circuit observed that under Rule 39, “the appellate court must specify whether one party or the other, or both, are entitled to costs, and if so, ...


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