Opinion analysis

Thursday’s decision City of San Antonio v Hotels.com Clearly resolved what seemed to be a basic procedural issue: how the court should determine the “costs” that the winning party can recover from the losing party.Justice Samuel Alito’s View Because a unanimous court tells us the answer: the court to resolve the appeal is the district court, not the district court.

The case involved appeal litigation costs. According to the “U.S. Rules”, in the United States, the successful party in a lawsuit usually has to pay its own attorney’s fees, and there are no regulations that require different results. On the contrary, the winning party will usually be compensated for many other litigation costs. Rule 39 The provisions of the “Federal Appeal Procedure Rules” govern the federal court’s determination of these litigation costs. First, Rule 39(a) lists four different default rules to determine the winning party, “the winning party has the right to recover these costs.” [appellate] The court issued an order. “Secondly, Rule 39(e) lists four types of expenses: “The district court shall be taxed on the benefit of the party entitled to the expenses in this rule.” “Related to this is the third item, “the premium paid for deposits or other guarantees to preserve the rights of pending appeals.” This covers the cost of “replacement” of deposits: if the appellant wishes to prevent If the judgment becomes effective, a “replacement” deposit will be obtained, and the judgment will be retained until the end of the appeal.

The specific case before the judge involved a dispute between the City of San Antonio and various online travel companies (including the defendant Hotels.com). San Antonio persuaded the court of first instance that the two companies had not paid the hotel occupancy tax. The two companies appealed and issued replacement bonds, so they did not have to pay taxes immediately. In the end, these companies won the appeal and are therefore entitled to receive fees under Rule 39 of the Listing Rules. The specific dispute involved the cost of the bond, which exceeded US$2 million. San Antonio asked the district court to reduce the amount payable, and the district court refused to do so, depending on a decision of the U.S. Court of Appeals for the Fifth Circuit that the district court had no power to rule to reduce or eliminate Rule 39 (e ).

Alito’s agile views are in full agreement with the Fifth Circuit’s practice, rejecting the opposite practice of most other lower courts. Alito stated in Rule 39 that “a cohesive plan for taxation of appeal costs”. The “default rule” of the scheme originated from “the ancient presumption that the parties are entitled to the fee”, but it must be authorized by the court of appeal to issue an order.

Alito rejected San Antonio’s argument that the Court of Appeal can rule on “who can collect the fees”, but lacked the argument that “authorized cost sharing”. For Alito, it “decisively” opposed San Antonio. The rule directly “shows that the Court of Appeal does not need to follow the default rules.” From the default rules of partial confirmation and partial overturning, this is most obvious. Taxation” [of appeals] command. He gave an example: if “the appellant won essentially 75% of the victory, then the appellant will receive 75% of his expenses. “Therefore, for other departments (one party or the other party completely wins the case), “If the default rule allocates 100% of the cost to the winning party, then it is natural to understand that the Court of Appeal has the right to’order in other ways’, including other parties. Assigned permissions. “

For Alito, Rule 39(e) “points in the same direction.” Refers to “party” qualified He wrote that the rule refers to the parties determined by the Court of Appeal under Rule 39(a). Therefore, the parties “have the right to obtain rather than just seek them after an appropriate application in the district court.” In short, Alito tells us that “rule 39 gives the appellate court the discretion to allocate appeal costs”, which is not available in the district court. There is room for “second-level discretion.” He provided another example in which the Court of Appeal “ruled that the successful appellee shall pay 70% of his expenses”. For Alito, a decision of the district court was to “halve these expenses”, which means that “the appellee will only receive 35% of his expenses”, which is “a direct violation of the Court of Appeal’s instructions.”

The main textual argument of the City of San Antonio is that the District Court referred to the fees in Rule 39(e) as “taxable”, which means that they are “possible but not necessarily taxable.” Alito explained that this simply means that the parties will not receive fees unless they provide the necessary “verification” of the amount of fees they are due. In addition, he explained that the “actual work” of the clause is to stipulate that the local court is actually the place where these fees are “taxed”. This “makes sense” because it means that the expenses incurred in the court of appeal (printing of the summary of appeals, etc.) should be taxed in the court of appeal, and the specific types of expenses incurred in the district court (preparation of records) should be taxed in the court of appeal. The cost of filing an appeal, etc.) is taxed in the District Court. The most important of the latter category is usually the cost of the bond, which is properly taxed in the district court because the district court previously approved the bond under the Federal Rules of Civil Procedure 62.

Alito’s argument ended by rejecting the various practical arguments that San Antonio intervened. For example, the city of San Antonio argued that the inappropriate location of the appeals court may depend on the cost sharing of factual disputes; Alito believes that this concern is “excessive” because appeal costs are “easy to estimate and rarely disputed. Frankly speaking, it is not enough to trigger litigation in most cases.” He acknowledged that the biggest exception is the cost of replacement bonds, but that these bonds will “have been negotiated by the parties, as happened here.” Although in hindsight, the cost of bonds may seem high, Alito noted: “San Antonio admits that in this case, the cost of bonds is clear at the time of approval.”

The most troubling issue raised by the City of San Antonio is that “if the district court is unable to provide relief after the matter is returned to court, the parties will not be able to review their objections to Rule 39(e) fees.” Alito admitted. “Existing rules and related regulations can more clearly specify the procedures that the party should follow to submit its arguments to the Court of Appeal, but this does not lead to the conclusion that the District Court can redistribute these costs.” Instead, he pointed out that it may apply. And suggested that if the problem persists, the court of appeal may adopt local rules.

To me, this situation is clearly a question category. For these questions, the clarity of the answer is far more important than the importance of the answer. At this point, Alito’s decisive interpretation of Rule 39 seems to provide the lower courts with due guidance.