The Lawletter Vol 37 No 10
Parties who secure a favorable judgment in federal court may be happy with the outcome but should not forgo seeking their recoverable costs as well. The Federal Rules of Civil Procedure specifically provide that "[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney's fees—should be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). The threshold question for any court prior to awarding costs under Rule 54(d) involves a determination of who the "prevailing party" is in the lawsuit. In general, a party prevails for purposes of Rule 54(d) when a final judgment awards it "substantial relief." Smart v. Local 702 Int'l Bhd. of Elec. Workers, 573 F.3d 523, 525 (7th Cir. 2009). A party that gets substantial relief prevails "even if it doesn't win on every claim." Slane v. Mariah Boats, Inc., 164 F.3d 1065, 1068 (7th Cir.), cert. denied, 527 U.S. 1005 (1999).
In Sommerfield v. City of Chicago, No. 06 C 3132, 2012 WL 5381255, at *2 (N.D. Ill. Oct. 31, 2012), for example, the plaintiff was determined to be the prevailing party because the jury had returned a verdict in his favor on two counts, awarding him $30,000, even though the jury had found against him on a third count and two other counts had been dismissed at the summary judgment stage. Sommerfield also exemplifies the concept that "a determination of who is the prevailing party for purposes of awarding costs should not depend on the position of the parties at each stage of the litigation but should be made when the controversy is finally decided." Repub. Tobacco Co. v. N. Atl. Trading Co., 481 F.3d 442, 446 (7th Cir. 2007) (quoting 10 Charles A. Wright et al., Federal Practice and Procedure § 2667 (3d ed. 2006)); see also Smart, 573 F.3d at 525 (a "final judgment" awarding substantial relief is "one that resolves all claims against all parties"). In Republic Tobacco, the court held that a party that had succeeded on a posttrial motion in having damages awarded against it reduced from $18.6 million to $7.44 million was not a prevailing party that could recover its costs in the district court under Rule 54(d). 481 F.3d at 446-47.