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Guillory v. Starr Indemnity & Liability Co.

United States District Court, W.D. Louisiana, Monroe Division

July 11, 2019

DUFFY GUILLORY, JR.
v.
STARR INDEMNITY & LIABILITY COMPANY, ET AL.

          KAREN L. HAYES Judge

          RULING

          TERRY A. DOUGHTY UNITED STATES DISTRICT JUDGE.

         This is a diversity case involving a motor vehicle accident. The parties hotly contest liability. Pending before the Court is a Motion for Security for Costs [Doc. No. 34] filed by Defendants Starr Indemnity & Liability Company, Gulf Relay, LLC, and Adam D. Reed, Jr. (“Reed). Defendants move the Court pursuant to Local Rule 54.6 for an order requiring Plaintiff Duffy Guillory, Jr., (“Guillory”) to furnish security in the amount of $50, 000.00 for costs because Guillory will be “obligated to pay all or a portion of Defendants' costs” should Defendants obtain “a defense verdict or . . . Plaintiff's award . . . fall[s] within the parameters of Rule 68.” [Doc. No. 34-1, p. 3]. Guillory opposes this motion, contending that Defendants have not demonstrated that there is a substantial likelihood that a jury could impose 100% fault on him, that Reed is presumed at fault, and Defendants seek to recover costs unavailable under federal law. [Doc. No. 37].

         Because this is a diversity case, the Court applies Louisiana substantive law, but federal procedural law, including the Federal Rules of Civil Procedure and Local Rules.

         Defendants move the Court to order Guillory to pay a bond under Local Rule 54.6, which provides:

In any civil matter, the court, on motion or its own initiative, may order any party to file bond for costs or additional security for costs in such an amount and so conditioned as it may designate.

         However, no costs have been ordered in this case. Instead, Defendants move the Court to order Guillory to file a bond because they “anticipate” a verdict in their favor, and they are concerned that Guillory may not be able to pay their costs after trial.

         Defendants made an Offer of Judgment to Guillory on April 18, 2019, which was rejected. Pursuant to Federal Rule of Civil Procedure 68(d), “[i]f the judgment that the offeree [Guillory] finally obtains is not more favorable than the unaccepted offer, the offeree [Guillory] must pay the costs incurred [by Defendants] after the offer was made.” If Defendants obtain a complete defense verdict, Rule 68 simply does not apply. See Delta Air Lines, Inc. v. August, 450 U.S. 346, 351-52 (1981) (It is “clear that [Rule 68] applies only to offers made by the defendant and only to judgments obtained by the plaintiff. It therefore is simply inapplicable to this case [when] it was the defendant that obtained the judgment.”); see also Louisiana Power & Light Co. v. Kellstrom, 19');">50 F.3d 319, 333 (5th Cir. 1995) (“Rule 68 requires a prevailing plaintiff to pay the costs of litigation ‘in the single circumstance where the plaintiff does not accept the defendant's offer of judgment which is more favorable than the judgment the plaintiff ultimately obtains.' Johnston v. Penrod Drilling Co., 803 F.2d 867, 869 (5th Cir.1986). Consequently, when a plaintiff rejects a Rule 68 offer of judgment, ‘he will lose some of the benefits of victory if his recovery is less than the offer.' Delta, 450 U.S. at 352 . . . If a plaintiff takes nothing, however, Rule 68 does not apply.”). Rule 68 applies only if Guillory obtains a verdict in his favor, but one which is not more favorable than the Offer of Judgment.

         Further, if Guillory obtains a favorable verdict for less than the Offer of Judgment, Defendants cannot obtain costs without limit. Indeed, costs in the amount of $50, 000.00 would be unheard of in this Court. Rule 68 does not define costs, but the Court's discretion is limited by 28 U.S.C. § 1920 to awarding the identified fees, as further expounded upon by the case law:

1) Fees of the clerk and marshal;
(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the ...

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