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In re Air Crash Disaster at John F. Kennedy International Airport on June 24

decided: August 23, 1982.

IN RE AIR CRASH DISASTER AT JOHN F. KENNEDY INTERNATIONAL AIRPORT ON JUNE 24, 1975. EASTERN AIR LINES, INC., DEFENDANT-APPELLANT


Appeal by a defendant airline from an order of the Eastern District of New York, Henry Bramwell, Judge, retaxing costs assessed by the Clerk of the Eastern District. Affirmed in part and vacated and remanded in part.

Mansfield, Meskill and Pratt,*fn* Circuit Judges.

Author: Mansfield

MANSFIELD, Circuit Judge:

Eastern Air Lines, Inc. ("Eastern") appeals from an order of the Eastern District of New York, Henry Bramwell, Judge, retaxing costs assessed by the Clerk of the Eastern District. We affirm in part and vacate and remand in part.

The appeal arises out of litigation concerning the June 24, 1975 crash of Eastern Flight No. 66 at New York's John F. Kennedy International Airport. All personal injury and wrongful death cases relating to the crash were transferred to the Eastern District for pretrial proceedings by the Judicial Panel on Multidistrict Litigation. 407 F. Supp. 244 (J.P.M.D.L. 1976). On December 15, 1977 Judge Bramwell, to whom the cases had been assigned, transferred all passenger cases to the Eastern District pursuant to 28 U.S.C. ยง 1404 and consolidated them for trial on the issue of the liability of the defendants Eastern and the United States of America. The United States elected not to contest its liability and offered to accept a consent judgment in each passenger case, to be entered "without interest and without costs." The plaintiffs accepted the offer and judgment was entered.

After Judge Bramwell denied an Eastern request that the cases against the government proceed to a damage trial, the parties proceeded to trial on the issue of Eastern's liability. On November 1, 1978 Judge Bramwell entered judgment upon a jury verdict finding Eastern liable. The judgment was affirmed by a 2-1 decision of this court. 635 F.2d 67 (2d Cir. 1980).

On October 27, 1981 the plaintiffs filed a Bill of Costs against Eastern with the Clerk of the Eastern District, claiming costs of $39,487.57. Eastern filed objections and after hearing both sides the Chief Deputy Clerk taxed costs in the amount of $22,211.81. Eastern and the plaintiffs both then moved before Judge Bramwell for the retaxing of costs. In an oral opinion delivered on December 11, 1981 Judge Bramwell increased the costs taxed against Eastern to $32,622.29. From that order Eastern appeals.

Discussion

Rule 54(d) of the Federal Rules of Civil Procedure provides in pertinent part:

"Except when express provision therefor is made either in a statute of the United States or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs. . . ."

On this review we are governed by the principle that the rule and the various statutory provisions relating to the awarding of costs leave the taxation of costs to the discretion of the district court, with that court's decision to be upset "only in the event of an abuse of that discretion." Mid-Hudson Legal Services, Inc. v. G & U, Inc., 578 F.2d 34, 38 n.3 (2d Cir. 1978). Accord, Farmer v. Arabian American Oil Co., 379 U.S. 227, 232-36, 13 L. Ed. 2d 248, 85 S. Ct. 411 (1964); Compania Pelineon De Navegacion, S.A. v. Texas Petroleum Co., 540 F.2d 53, 56-57 (2d Cir. 1976), cert. denied, 429 U.S. 1041, 50 L. Ed. 2d 753, 97 S. Ct. 741 (1977).

Reduction of Costs for Plaintiffs Who Settled "Without Costs "

Eastern's first and principal claim of error on this appeal is that the district judge erred by failing to make a pro rata reduction in costs for those plaintiffs who settled with it without costs. Throughout the course of these proceedings Eastern attempted to settle the many suits -- some 86 -- that arose out of the crash. After the trial, but before the Clerk taxed costs, 17 of the 36 plaintiffs who had gone to trial settled with the stipulation that the settlement was "without costs." After the Clerk taxed costs, an additional four plaintiffs settled with the same stipulation. The district judge rejected Eastern's argument that these settlements required a pro rata reduction in costs, stating that "the costs at issue here were incurred in connection with a general liability trial which would have gone forward had even one plaintiff remained." Instead he awarded costs "to those plaintiffs who had cases tried in the liability trial. . . ."

In our view the district court erred in not reducing the award of costs to reflect the agreement that the claims of certain plaintiffs were settled "without costs." It is beyond a district judge's discretion to alter the terms of or refuse to enforce a settlement agreement, absent special circumstances, such as a material breach of the agreement, see Warner v. Rossignol, 513 F.2d 678, 682-83 (1st Cir. 1975), or duress, see First National Bank of Cincinnati v. Pepper, 454 F.2d 626, 632-34 (2d Cir. 1972), appeal after remand, 547 F.2d 708 (2d Cir. 1976). See Kohr v. Allegheny Airlines, Inc., 504 F.2d 400, 405 (7th Cir. 1974), cert. denied, 421 U.S. 978, 95 S. Ct. ...


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