Wednesday, August 02, 2006

Second Circuit Holds that a Forum Non Conveniens Dismissal Does Not Render Moving Party "Prevailing Party" for Rule 54(d) Purposes

Per Dattner v. ConAgra Foods, Inc., --- F.3d ---, 2006 WL 207707 (2d Cir. July 27, 2006):

[At trial, defendants' motion to dismiss on forum non conveniens grounds was granted; the dismissal was affirmed on appeal. Defendants then moved for costs pursuant to FRCP 54(d), which the district court granted.]

...[Plaintiff] Dattner did not specifically challenge defendants' prevailing party status. Instead, he argued that a forum non conveniens dismissal is not a "final judgment" within the meaning of Local Rule 54.1 so as to permit an award of costs. Alternatively, Dattner argued that if costs were properly awarded in his case, the amount imposed was "neither fair, nor reasonable" because the district court did not use, or need to use, all of the documents for which defendants sought costs.

After oral argument, this court, sua sponte, questioned whether, in any event, a defendant who successfully obtains a forum non conveniens dismissal qualifies as a "prevailing party" within the meaning of Rule 54(d), and we requested supplemental briefing from defendants on the issue. Upon review of defendants' submission, we conclude that a defendant who successfully obtains a forum non conveniens dismissal is not a "prevailing party" within the meaning of Rule 54(d).

In the context of fee-shifting statutes, the Supreme Court has held that, for a party to be "prevailing," there must be a "judicially sanctioned change in the legal relationship of the parties." Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep't of Health and Human Res., 532 U.S. 598, 605 (2001)... Defendants submit that Buckhannon's interpretation of "prevailing party" does not here apply because (1) this case concerns costs, not attorney's fees; and (2) Buckhannon's rule does not logically apply to dismissals obtained by defendants. Neither argument is persuasive.

A number of our sister circuits have ruled, and we agree, that, in general, a litigant who is a prevailing party for purposes of attorney's fees is also the prevailing party for purposes of costs. See Tunison v. Continental Airlines Corp., Inc., 162 F.3d 1187, 1189-90 (D.C. Cir.1998) (noting that meaning of "prevailing party" is generally same in either context-- attorney's fees or costs)... To the extent the Fifth Circuit concludes otherwise, see Dominguez-Cota v. Cooper Tire & Rubber Co., 396 F.3d 650, 654 (5th Cir.2005) (holding that forum non conveniens cannot be characterized "as a 'non-merits' issue" because in deciding issue district court "becomes entangled in the merits of the underlying dispute" (internal quotation marks omitted)), we are not convinced by its minority view, largely for the reasons detailed by the Third Circuit in Malaysia Int'l Shipping Corp. v. Sinochem Int'l Co., 436 F.3d at 359-61. [In that case, the Third Circuit found that] both the Supreme Court and the Fifth Circuit have concluded that forum non conveniens dismissals are not merits rulings (citing Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 148 (1988)).


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