Court of Appeals Dismisses Plaintiffs for Failure to Preserve and Increases Defendant’s Taxable Costs (5th Circuit)

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Moore v. Citgo Co., LP, 735 F.3d 309 (5th Cir. 2013).

In this appellate Fair Labor Standards Act litigation, the class of plaintiffs sought overtime pay for work hours that had been misclassified by the defendant employer. At the trial level, the court dismissed twenty-one of the twenty-four plaintiffs’ claims for failing to preserve documents and other discovery violations. In a separate order, the court granted summary judgment against the remaining members of the class based on the plaintiffs’ inability to prove damages. After final judgment was entered, the defendant submitted a bill of costs for more than $50,000, but the court awarded only $5,000 based on a finding of the defendant’s “enormous wealth” in relation to the plaintiff’s “limited resources.” Both parties appealed. The plaintiffs argued that their discovery abuses were only negligent and the court inferred willfulness in their failure to preserve, while the defendant asserted that the court erred in reducing the cost award. The Fifth Circuit upheld the trial court’s decision to grant the defendant’s motion for summary judgment because the plaintiffs’ failure to preserve emails disadvantaged the defendant by not providing information that may have been essential for the defense. With regard to taxable costs, the Fifth Circuit increased the amount awarded to the defendant. The Fifth Circuit relied on language from Fed. R. Civ. P. 54(d), which does not call for a comparison of the parties’ financial strength, to conclude that “the fact that the prevailing party is substantially more wealthy than the losing party is not a sufficient ground for denying or limiting costs to the prevailing party.” As such, the Fifth Circuit affirmed the trial court’s order for summary judgment and increased the cost award in favor of the defendant to $53,000.

Topics:  Fee Awards, Legal Costs, Record Preservation, Unpaid Overtime

Published In: Civil Procedure Updates, Civil Remedies Updates, Electronic Discovery Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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