At the bottom of every complaint and answer is the prayer, which inevitably demands “cost.”  Cost is an often-overlooked aspect of the case evaluation and spoils of victory.  The California Supreme Court now made these “spoils” just a little larger.

California’s recoverable costs are all identified in Code Civil Procedure section 1033.5.  This list is extensive and includes,  but is not limited to, the following: filing, motion, and jury fees; taking, video recording, and transcribing necessary depositions; travel expenses to attend depositions; fees when ordered by the court or established by statute; and any other item that is required to be awarded to the prevailing party pursuant to a statute as an incident to prevailing in the action at trial or on appeal.[1]

California’s Supreme Court further evaluated cost in Segal v. ASICS America Corp., expanding on the victor’s ability to seek costs for the recovery.  The Court stated the following:

Models, the enlargements of exhibits and photocopies of exhibits, and the electronic presentation of exhibits, including costs of rental equipment and electronic formatting, may be allowed if they were reasonably helpful to aid the trier of fact.[2]

The Supreme Court held the “prevailing party is not entitled to recover costs associated with preparing photocopies of exhibits and demonstratives under section 1033.5(a)(13) if the items were not presented to the trier of fact.”[3]  Nevertheless, it is within the trial court’s discretion to “award costs incurred in preparing demonstratives and photocopies of trial exhibits, even though they were not ultimately used at trial.”[4]

In the unanimous ruling, the justices referred back to the statute, reinforcing expenses must be “reasonably necessary to the conduct of the litigation rather than merely convenient or beneficial to is preparation.”[5]

The underlying case involved ASICS, a Japanese multinational corporation which produces sports equipment, and a U.S. licensee who claimed ASICS withheld marketing support and inventory.  One of the issues in dispute involved expenses for interpreter fees, exhibits, and copies in the amount of $385,000.[6]

The chicken before the egg approach, i.e. a judge cannot allow the recovery of such costs, but if the judge does award such costs then they are recoverable, suggests the prevailing party at trial should include all of its costs for “enlargements of exhibits and photocopies of exhibits, and the electronic presentation of exhibits, including costs of rental equipment and electronic formatting,” whether these items are presented to the jury or not, in hopes the judge awards such costs.

Attorneys on the other side of the verdict should remember to tax these costs and should make clear the Supreme Court has held victors are not entitled to recover these costs.  Moreover, attorneys should be wary of opposing counsel who may include photocopying costs/electronic costs generated well before trial.  Attorneys should anticipate the judge’s discretion will consider factors such as the attorney’s civility and reasonableness at trial, the size of the verdict, and the opposing parties’ ability to pay such costs.

[1] Code Civ. Proc., § 1033.5.

[2] Id. at ¶ 13.

[3] Segal v. ASICS America Corp. (2022) 12 Cal.5th 651, 665.

[4] Id. at 667.

[5] Code Civ. Proc., § 1033.5.

[6] Segal v. ASICS Am. Corp., 50 Cal.App.5th 659, 264 Cal. Rptr. 3d 161 (Cal. Ct. App. 2020); Joyce E. Cutler, California Judges Get More Power Over Trial Lawyers’ Case Costs, Bloomberg Law, (Jan. 13, 2022), https://news.bloomberglaw.com/litigation/california-judges-get-more-power-over-trial-lawyers-case-costs

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