Background
After obtaining summary judgment against Healthestate, LLC and successfully defending that judgment on appeal, third-party defendant ASM Research LLC submitted a bill seeking $51,351.71 in costs and fees. ASM supported its request with a memorandum of law and a declaration.
Healthestate opposed the request, arguing that ASM was not automatically entitled to costs under Rule 54(d) of the Rules of the United States Court of Federal Claims. Healthestate also contended that ASM’s claimed expenses were either unavailable under 28 U.S.C. § 1920, unreasonable, or insufficiently documented.
The Court’s Holding
The court held that ASM qualified as a prevailing party eligible to recover costs from Healthestate. Although ASM was a third-party defendant, it had vigorously contested Healthestate’s claims, occupied a directly adverse position, and successfully defended against Healthestate’s breach-of-contract and copyright-infringement claims in both the trial court and the Federal Circuit.
The court rejected Healthestate’s unsupported contention that costs for a third-party defendant are typically unavailable unless uniquely necessary to that party’s defense. Finding no inequity in awarding ASM costs, the court directed the Clerk of Court to review Healthestate’s objections to the specific expenses and determine which costs should be taxed or disallowed on the existing record.
Key Takeaways
- A third-party defendant may qualify as a prevailing party against the plaintiff when it vigorously contests the plaintiff’s claims and occupies a directly adverse position.
- ASM’s success on summary judgment and appeal made it eligible for a discretionary cost award under RCFC 54(d)(1).
- The court decided ASM’s entitlement to costs but left the item-by-item taxation or disallowance of its $51,351.71 request to the Clerk of Court.
Why It Matters
The decision confirms that prevailing-party status for costs turns on the party’s actual adversarial role in the litigation, not merely its designation as a third-party defendant. A third-party defendant that actively and successfully defends against the plaintiff’s claims may recover allowable litigation costs directly from that plaintiff.