U.S. EX REL SWAN v. COVENANT CARE, INC. (E.D.Cal. 2003)

LEVI DAVID, District Judge

Ila Swan ("Swan") and Violette King ("King") brought a qui tam action against Covenant Care ("Covenant") and related corporations under the False Claims Act ("FCA"), 32 U.S.C. § 3729 et seq., claiming that Covenant nursing homes falsified daily care records related to Covenant's federal funding. On August 5, 2002, the court granted Covenant's motion to dismiss for lack of subject matter jurisdiction and in the alternative granted Covenant's motion for summary judgment on the merits. Covenant moves for costs under Fed.R.Civ.P. 54(d)(1).

Plaintiffs argue that because the case was dismissed for lack of subject matter jurisdiction, 28 U.S.C. § 1919 governs the request for costs and that a cost award is not warranted under § 1919. A. Authority for Costs

Section 1919 provides, "Whenever any action or suit is dismissed in any district court . . . for want of jurisdiction, such court may order the payment of just costs."

Qui tam jurisdiction is a specialized form of subject matter jurisdiction, bounded by statutory limitations designed to prevent plaintiffs with no independent knowledge of the alleged fraud from bringing qui tam suits. The finding in this case of no qui tam jurisdiction involved a factual determination that plaintiffs were not involved in the public disclosure of the fraud. Such a determination of jurisdictional facts is equivalent to a finding on the merits. The court also ruled on the merits of plaintiffs' suit in the alternative, finding for Covenant. In view of these holdings, Covenant is entitled to receive costs under Rule 54(d)(1) as a prevailing party. Alternatively, ifss.1919 applies, a "just" award should mirror an award of costs under Fed.R.Civ.P. 54(d)

Jurisdiction over qui tam actions is limited by § 3730(e)(4)(A) of the FCA which provides that: "[n]o court shall have jurisdiction over [an FCA action] . . . based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing . . . unless the action is brought by the Attorney General or the person bringing the action is an original source of the information." 31 U.S.C. § 3730(e) (4)(A). The purpose of this provision is to discourage opportunistic FCA suits by individuals "with no independent knowledge of [the] fraud [who] use information already available to the government to reap rewards for themselves without exposing any previously unknown fraud." Seal 1 v. Seal A, 255 F.3d 1154, 1158 (9th Cir. 2001).

B. Specific Costs

Plaintiffs further object that many of the costs requested by Covenant are not permissible under 28 U.S.C. § 1920, which delineates costs that may be taxed.

1. Copying Costs

Covenant requests $2,035.72 in copying costs. In support of this request it submitted two invoices. The first was for copying medical records that Covenant was required to produce in discovery. Copies of these records are taxable, because they were necessary to the case. 28 U.S.C. § 1920 (copies of papers "necessarily obtained for use in the case" are taxable). The second invoice merely says "standard litigation" and bills for 6818 copies. This description makes it impossible to tell if these copies were necessary to the case, and Covenant did not respond to plaintiffs' objections to these costs. This portion of copying costs will not be taxed. Plaintiffs are taxed $757.98 for copies.

2. Costs of Depositions of Plaintiffs' Witnesses

Covenant requests $6,750 in costs for taking the depositions of three of plaintiffs' expert witnesses. Witness costs above the $40 per day attendance fee set by 28 U.S.C. § 1821(b) are not taxable as costs.Crawford Fittins Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-42, 107 S.Ct. 2494 (1987), superseded by statute on other grounds as stated inMcLauqhlin v. Boston School Committee, 976 F. Supp. 53 (D.Mass. 1997). Covenant is entitled to $120, a one day attendance fee for each witness. Covenant's cost request is reduced by $6,630.

3. Witness Fees and Travel Expenses for Defendant's Witnesses

Plaintiffs argue that Covenant improperly requests travel expenses for expert witnesses from outside the Eastern District. Because Covenant has not made any showing that it was necessary to bring experts from Southern California, instead of using local experts, the travel costs of its experts will not be taxed. However, mileage costs of 100 miles each way will be taxed for each expert in accord with the traditional rule. Farmer v. Arabian Am. Oil Co., 379 U.S. 227, 234, 85 S.Ct. 411 (1964) (100 mile subpoena rule properly considered in taxing costs), disapproved on other grounds by Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 107 S.Ct. 2494 (1987). Because it is not clear whether it was necessary to use out of area experts, the overnight and meal charges for expert Meyers are also disallowed. Plaintiffs will be taxed $244, which includes mileage for the three experts at $.36 per mile and parking and bridge tolls for expert Costa. See 28 U.S.C. § 1821 (bridge tolls and parking shall be paid to witnesses).

This amount will amply compensate Lori Costa also. She was a local expert, but was apparently deposed somewhere else. The 100 mile reimbursement would cover her mileage to San Francisco where both plaintiffs' and defendant's counsel are located.

Plaintiffs also assert that the requested costs for Covenant's witnesses include amounts that plaintiffs already paid to these witnesses and excessive amounts. (Pls.' Objs. to Bill of Costs at 8-10.) Covenant does not dispute that the amounts described by plaintiffs were already paid. Plaintiffs have already paid $750 to Meyers for her time at the deposition. They paid $600 for two hours of deposition time to Costa, who has billed $2400. The billed amount is excessive for a two hcur deposition, even including preparation time. Plaintiffs have sufficiently compensated Costa for her documented time. Plaintiffs paid $1250 to Lesnick, who billed $1625. The excess amount appears to be travel time, and plaintiffs will be taxed the additional $375.

Plaintiffs attached copies of checks indicating that they did pay the amounts asserted. (Pls.' Objs. to Bill of Costs Ex. G.)

4. Rouqh Disks and Rouqh Drafts of Deposition Documents

Plaintiffs argue that they should not have to pay for rough disks and rough drafts of the deposition transcripts of xitnesses Antonio, Locatell, Swan, and Feakins. (Pls.' Objs. to Bill of Costs at 10.) They assert that these rough copies were not necessary where Covenant also received a regular copy. Copies of papers and "fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case" are taxable, 28 U.S.C. § 1920(2) and (1), but Covenant did not respond to plaintiffs' argument and did not explain why a rough copy was necessary when it also received the official copy. The costs awarded will be reduced by the $679 spent on rough copies. C. Conclusion

Covenant's motion for costs is GRANTED in the amount of $13,123.48. This includes: $441 for service, $10,322 for court reporter fees, $160 for witness fees, $757.98 for copies, and $1442.50 in other costs. These other costs include the witness fees for Covenant's depositions of plaintiffs' witnesses, mileage for the experts, conference calls for depositions, and the unpaid portion of Lesnick's fee.

IT IS SO ORDERED.