Stender v. Archstone-Smith

FILED
United States Court of Appeals
PUBLISH Tenth Circuit

May 4, 2020
UNITED STATES COURT OF APPEALS
Christopher M. Wolpert
Clerk of Court
FOR THE TENTH CIRCUIT
_________________________________

STEVEN A. STENDER; INFINITY
CLARK STREET OPERATING, LLC, on
behalf of themselves and all others
similarly situated,

Plaintiffs - Appellants,

and

HAROLD SILVER,

Plaintiff, No. 18-1432

v.

ARCHSTONE-SMITH OPERATING
TRUST; ARCHSTONE-SMITH TRUST;
ERNEST A. GERARDI, JR.; RUTH ANN
M. GILLIS; NED S. HOLMES; ROBERT
P. KOGOD; JAMES H. POLK, III; JOHN
C. SCHWEITZER; R. SCOT SELLERS;
ROBERT H. SMITH; STEPHEN R.
DEMERITT; CHARLES MUELLER, JR.;
CAROLINE BROWER; MARK
SCHUMACHER; ALFRED G. NEELY;
LEHMAN BROTHERS HOLDINGS,
INC.; TISHMAN SPEYER
DEVELOPMENT CORPORATION;
RIVER HOLDING, LP; RIVER TRUST
ACQUISITION (MD), LLC; RIVER
ACQUISITION (MD), LP; ARCHSTONE-
SMITH MULTIFAMILY SERIES I
TRUST; ARCHSTONE, INC.;
AVALONBAY COMMUNITIES, INC.;
ARCHSTONE ENTERPRISE, LP; ERP
 OPERATING LIMITED PARTNERSHIP;
EQUITY RESIDENTIAL,

Defendants - Appellees.
_________________________________

Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:07-CV-02503-WJM-MJW)
_________________________________

Daniel Townsend, Gupta Wessler PLLC, Washington, D.C. (Mathew W.H. Wessler,
Gupta Wessler PLLC, Washington, D.C., and Kenneth A. Wexler and Kara A. Elgersma,
Wexler Wallace LLP, Chicago, Illinois, and Lee Squitieri, Squitieri & Fearon, LLP, New
York, New York, with him on the briefs), for Plaintiffs-Appellants.

Adam B. Banks, Weil, Gotshal & Manges LLP, New York, New York (Jonathan D.
Polkes, Caroline Hickey Zalka, and Justin D. D’Aloia, Weil, Gotshal & Manges LLP,
New York, New York, and Frederick J. Baumann and Alex C. Myers, Lewis Roca
Rothgerber Christie LLP, Denver, Colorado, with him on the brief) for Defendants-
Appellees.
_________________________________

Before HARTZ, SEYMOUR, and MATHESON, Circuit Judges.
_________________________________

HARTZ, Circuit Judge.
_________________________________

This appeal presents the question whether a federal district court exercising

diversity jurisdiction can award costs under a generally applicable state law when those

costs are prohibited by Federal Rule of Civil Procedure 54(d). The district court used a

Colorado statute governing costs to award more than $230,000 in costs that would not be

allowable under Rule 54(d). Exercising jurisdiction under 28 U.S.C. § 1291, we vacate

the costs award and remand for recomputation. The Supreme Court majority in Shady

Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393, 399 (2010),

2
held that a valid Federal Rule of Civil Procedure governs over a state procedural rule if

the two rules “answer the same question.” Because Rule 54(d) answers the same

question as the Colorado statute, and Rule 54(d) is not “ultra vires” (that is, applying it

does not exceed statutory authorization or Congress’s rulemaking power), there was no

role left for the Colorado law. Id.

I. BACKGROUND

Disappointed with the outcome of a merger, minority-shareholder Plaintiffs

brought a class action against Defendants for breach of contract and fiduciary duties. The

parties litigated their dispute for over ten years across proceedings in arbitration and

federal court. In the end the district court granted summary judgment in Defendants’

favor, and this court affirmed. See Stender v. Archstone-Smith Operating Trust, 910 F.3d

1107, 1117 (10th Cir. 2018). Defendants then moved for costs under Rule 54(d). The

district court awarded costs totaling $479,666.22, which included $230,250.01 in costs

for electronic legal research and for attorney travel and lodging under a state cost-shifting

statute.

II. DISCUSSION

Our analysis begins with a description of federal and Colorado law on costs. Next,

we review the law governing when a Federal Rule of Procedure prevails over state law in

diversity cases, and apply it to the present dispute. Finally, we address preservation.

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 A. Federal Law on Costs

Rule 54(d) provides that “costs—other than attorney’s fees—should be allowed to

the prevailing party.” 1 Fed. R. Civ. P. 54(d)(1). The language appears open-ended. But

relying on the history behind the provision, the Supreme Court has placed strict limits on

what can be awarded.

In the Founding era congressional legislation permitted costs to prevailing parties

provided by state law. See Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 564 (2012).

Although that statute expired in 1799, “the practice of referring to state rules for the

taxation of costs persisted” for half a century. Id. at 565. But two problems led Congress

in 1853 to “standardize the costs allowable in federal litigation”: (1) the “great diversity

in practice among the courts,” and (2) the “exorbitant fees” that had been imposed on

losing litigants. Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 251

(1975). In relevant part, the 1853 statute said “[t]hat in lieu of the compensation now

allowed by law to attorneys, solicitors, and witnesses in the several States, the following

and no other compensation shall be taxed and allowed.” Crawford Fitting Co. v. J.T.

Gibbons, Inc., 482 U.S. 437, 440 (1987) (emphasis added, ellipsis and internal quotation

1
Rule 54(d)(1) provides in full:

Unless a federal statute, these rules, or a court order provides otherwise,
costs—other than attorney’s fees—should be allowed to the prevailing
party. But costs against the United States, its officers, and its agencies may
be imposed only to the extent allowed by law. The clerk may tax costs on
14 days’ notice. On motion served within the next 7 days, the court may
review the clerk’s action.

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marks omitted). The statute “specif[ied] in detail the nature and amount of the taxable

items of cost in the federal courts,” Alyeska Pipeline, 421 U.S. at 252, thereby

“comprehensively regulat[ing] fees and the taxation of fees as costs in the federal courts,”

Crawford Fitting, 482 U.S. at 440. The “substance of this Act was transmitted” through

various statutory recodifications and is now codified as 28 U.S.C. § 1920, “without any

apparent intent to change the controlling rules.” Taniguchi, 566 U.S. at 565 (internal

quotation marks omitted). Today, § 1920 enumerates six categories of costs that may be

taxed: (1) clerk and marshal fees, (2) fees for “recorded transcripts necessarily obtained

for use in the case,” (3) expenses for printing and witnesses, (4) expenses for

exemplification and necessary copies, (5) docket fees, and (6) compensation of

interpreters and court-appointed experts. 28 U.S.C. § 1920; see Taniguchi, 566 U.S. at

573 (“[T]axable costs are limited by statute and are modest in scope . . . .”).

Most importantly, the Supreme Court has construed Rule 54(d) to be limited by

§ 1920. As it held in Crawford Fitting, “§ 1920 defines the term ‘costs’ as used in Rule

54(d).” 482 U.S. at 441 (emphasis added). The discretion provided by Rule 54(d) is

“solely a power to decline to tax, as costs, the items enumerated in § 1920.” Id. at 442.

The Court explained: “If Rule 54(d) grants courts discretion to tax whatever costs may

seem appropriate, then § 1920, which enumerates the costs that may be taxed, serves no

role whatsoever.” Id.; see 10 James Wm. Moore et al., Moore’s Federal Practice

§ 54.103 at 185–86 (3d. ed. 2011) (“The Crawford Fitting rule that only those costs

expressly allowed by statute may be awarded under Rule 54(d)(1) implicitly rejected a

line of authority recognizing other possible sources for an award of costs, including local

5
rules, the custom of the district, and the court’s general equitable powers.”). Crawford

concluded: “Any argument that a federal court is empowered to exceed the limitations

explicitly set out in [28 U.S.C.] §§ 1920 and 1821 [setting limits on witness fees] without

plain evidence of congressional intent to supersede those sections ignores our

longstanding practice of construing statutes in pari materia.” 482 U.S. at 445. Thus, it

held “that absent explicit statutory or contractual authorization for the taxation of the

expenses of a litigant’s witness as costs, federal courts are bound by the limitations set

out in 28 U.S.C. § 1821 and § 1920.” Id. Within the last decade the Supreme Court has

reaffirmed its rejection of “the view that the discretion granted by Rule 54(d) is a separate

source of power to tax as costs expenses not enumerated in § 1920.” Taniguchi, 566 U.S.

at 565 (internal quotation marks omitted). These cases make it crystal clear that Rule

54(d)(1) would not permit the award of costs for electronic legal research or for attorney

travel and lodging.

B. Colorado Law on Costs

Colorado law is much more generous in awarding costs, although the letter of the

law does not appear to be that different from federal law. Colorado Revised Statutes

§§ 13-16-104 and –105 allow recovery of costs by plaintiffs and defendants respectively. 2

2
Section 13-16-104, entitled “When plaintiff recovers costs,” states in full:

If any person sues in any court of this state in any action, real, personal, or
mixed, or upon any statute for any offense or wrong immediately personal
to the plaintiff and recovers any debt or damages in such action, then the
plaintiff or demandant shall have judgment to recover against the defendant
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And Colorado Revised Statute § 13-16-122 provides a limited list of appropriate costs

that a state court “may include.” See also Colo. R. Civ. P. 54(d) (“Except when express

provision therefor is made either in a statute of this state or in these rules, reasonable

costs shall be allowed as of course to the prevailing party considering any relevant factors

which may include the needs and complexity of the case and the amount in

controversy.”). But unlike the United States Supreme Court, the Colorado Supreme

Court has treated the list of costs in its statute, § 13-16-122, as merely “illustrative rather

than exclusive.” Cherry Creek Sch. Dist. No. 5 v. Voelker, 859 P.2d 805, 813 (Colo.

1993). In Colorado, “absent a specific prohibition, the trial court has discretion over the

awarding of costs.” Id. (internal quotation marks omitted); accord Roget v. Grand

Pontiac, Inc., 5 P.3d 341, 348 (Colo. App. 1999) (“Absent a specific prohibition in the

statute, a trial court has the discretion to award any reasonable costs requested.”). The

his costs to be taxed; and the same shall be recovered, together with the
debt or damages, by execution, except in the cases mentioned in this article.

Section 13-16-105, entitled “When defendant recovers costs,” states in full:

If any person sues in any court of record in this state in any action
wherein the plaintiff or demandant might have costs in case judgment
is given for him and he is nonprossed, suffers a discontinuance, is
nonsuited after appearance of the defendant, or a verdict is passed
against him, then the defendant shall have judgment to recover his
costs against the plaintiff, except against executors or administrators
prosecuting in the right of their testator or intestate, or demandant, to
be taxed; and the same shall be recovered of the plaintiff or
demandant, by like process as the plaintiff or demandant might have
had against the defendant, in case judgment has been given for the
plaintiff or demandant.
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district court relied on Colorado precedent to award costs for electronic legal research

and attorney travel and lodging—none of which is listed in § 13-16-122. See Cherry

Creek, 859 P.2d at 813–14 (expenses of taking discovery depositions); Valentine v.

Mountain States Mut. Cas. Co., 252 P.3d 1182, 1193–94 (Colo. App. 2011) (travel for

depositions and meetings with experts and clients); Roget, 5 P.3d at 348–49

(computerized legal research).

C. Does Rule 54(d) Govern? / Shady Grove

Given that some costs permitted under Colorado law are not permitted under Rule

54(d), we must ask whether they are nonetheless permissible in a diversity case. Much of

the answer can be found in the opinion in Shady Grove.

At issue in Shady Grove was the applicability of a New York law limiting class

actions. A number of consumer-protection statutes provide a minimum penalty that can

be awarded to a consumer who was the victim of a violation. In a class action against a

violator, the total penalty could be immense. (A minimum penalty of $500 per consumer

for a class of 10,000 would total $5 million.) To avoid this result, New York enacted a

statute prohibiting class actions seeking statutory penalties. The effect of this statute in

federal court came into question when Shady Grove Orthopedic Associates, P. A.,

brought a putative class action against Allstate Insurance Co. in federal court under

diversity jurisdiction for failure to pay statutory interest penalties under a state insurance

law. See 559 U.S. at 397. The district court and the circuit court applied the state class-

action law and held that the suit could not proceed as a class action. Id. at 397–98. The

8
Supreme Court reversed, holding that Federal Rule of Civil Procedure 23 permitted the

class action despite the state law.

There were three opinions. Four Justices dissented. Justice Scalia wrote an

opinion joined in full by three Justices. Justice Stevens joined part of Justice Scalia’s

opinion (making that part a majority opinion) and wrote a separate concurring opinion.

The majority opinion set forth the framework for resolving the issue: a Federal Rule

governs over state law (1) when it “answer[s] the same question” as the state law, and (2)

it is not “ultra vires.” Id. at 399.

The majority opinion addressed the first step of the framework in a straightforward

fashion. “The question in dispute is whether Shady Grove’s suit may proceed as a class

action. Rule 23 provides an answer.” Id. at 398. It explained, “[The Rule] states that ‘a

class action may be maintained’ if two conditions are met: The suit must satisfy the

criteria set forth in subdivision (a) (i.e., numerosity, commonality, typicality, and

adequacy of representation), and it also must fit into one of the three categories described

in subdivision (b).” Id. at 398 (brackets and citation omitted). Thus, the Rule was

definitive: “By its terms this creates a categorical rule entitling a plaintiff whose suit

meets the specified criteria to pursue his claim as a class action.” Id.

The Court rejected the circuit court’s view that the state law and Rule 23 “do not

conflict because they address different issues.” Id. at 399. The circuit court said that

Rule 23 concerns the criteria for determining whether the class should be certified,

whereas the state statute “addresses an antecedent question: whether the particular type of

claim is eligible for class treatment in the first place.” Id. The Court provided an

9
explanation (which we need not repeat) of why it thought that “the line between

eligibility and certifiability is entirely artificial.” Id. But its rejection of the circuit

court’s analysis was more fundamental: “There is no reason, in any event, to read Rule

23 as addressing only whether claims made eligible for class treatment by some other law

should be certified as class actions.” Id. It continued: “Allstate asserts that Rule 23

neither explicitly or implicitly empowers a federal court to certify a class in each and

every case where the Rule’s criteria are met. But that is exactly what Rule 23 does.” Id.

(internal quotation marks omitted).

Allstate pointed out that the New York statute barring penalty class actions had

another subsection establishing certification criteria similar to those in Rule 23, and it

argued that this demonstrated that the provision at issue “concerns a separate subject”

from certification criteria. Id. at 400. The Court was unpersuaded. “[T]he question

before us,” it said, “is whether [the state statute] concerns a subject separate from the

subject of Rule 23.” Id. (emphasis added). The answer was easy: “Rule 23 permits all

class actions that meet its requirements, and a State cannot limit that permission by

structuring one part of its statute to track Rule 23 and enacting another part that imposes

additional requirements.” Id. at 401. The essential point was that “[b]oth of [the New

York statute’s] subsections undeniably answer the same question as Rule 23: whether a

class action may proceed for a given suit.” Id. (emphasis added).

The majority opinion also rejected the dissent’s arguments that the state statute

and Rule 23 could be reconciled by interpreting Rule 23 to avoid the conflict. See id. at

437 (Ginsburg, J., dissenting); id. at 446–47 (Rule 23 “does not command that a

10
particular remedy be available when a party sues in a representative capacity”; it “allows

state law to control the size of a monetary award a class plaintiff may pursue”). The

majority opinion responded, “We cannot contort [Rule 23’s] text, even to avert a collision

with state law that might render it invalid.” Id. at 406 (majority opinion). Conflict could

not be avoided because “Rule 23 unambiguously authorizes any plaintiff, in any federal

civil proceeding, to maintain a class action if the Rule’s prerequisites are met.” Id.

Writing for a plurality of four Justices, Justice Scalia then proceeded to address

whether Rule 23 was constitutional and within the authority granted by the Rules

Enabling Act, 28 U.S.C. § 2072. On the constitutional issue he wrote that “Congress has

undoubted power to supplant state law, and undoubted power to prescribe rules for the

courts it has created, so long as those rules regulate matters rationally capable of

classification as procedure.” Id. (plurality opinion of Scalia, J.) (internal quotation marks

omitted). Under this power Congress enacted the Rules Enabling Act. The pertinent

limitation on those rules is stated in subsection (b) of the Act: “Such rules shall not

abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072(b). Noting that the

Supreme Court had “rejected every statutory challenge to a Federal Rule that has come

before us,” Justice Scalia said that the Court had “long held that this limitation means that

the Rule must ‘really regulat[e] procedure,—the judicial process for enforcing rights and

duties recognized by substantive law and for justly administering remedy and redress for

disregard or infraction of them.’” Shady Grove, 559 U.S. at 407 (plurality opinion of

Scalia, J.) (quoting Sibbach v. Wilson & Co., 312 U.S. 1, 14 (1941)). “The test is not

whether the rule affects a litigant’s substantive rights; most procedural rules do. What

11
matters is what the rule itself regulates: If it governs only the manner and the means by

which the litigants’ rights are enforced, it is valid; if it alters the rules of decision by

which the court will adjudicate those rights, it is not.” Id. (citation, brackets, and internal

quotation marks omitted).

The dissent did not question or otherwise address the validity of Rule 23. But

Justice Stevens’s concurrence departed from the plurality on this point, rejecting its

approach to determining validity. He viewed the plurality’s approach of looking only to

the Federal Rule itself as inconsistent with the text of the Rules Enabling Act. See id. at

424–25 (Stevens, J., concurring). To give teeth to the requirement that Federal Rules not

“abridge, enlarge or modify any substantive right,” 28 U.S.C. § 2072(b), Justice

Stevens’s analysis would “turn[] on whether the state law actually is part of a State’s

framework of substantive rights or remedies,” Shady Grove, 559 U.S. at 419 (Stevens, J.,

concurring). He would decline to apply a Federal Rule to the extent that it “would

displace a state law that is procedural in the ordinary use of the term but is so intertwined

with a state right or remedy that it functions to define the scope of the state-created

right.” Id. at 423. Justice Stevens nevertheless concluded that the New York law was not

intertwined with state rights or remedies, as shown by the textual reading of the New

York law; its applicability to all claims, regardless whether based on federal, New York,

or other state law; and analysis of the potential purposes behind the law. See id. at 432–

36.

As indicated by the dissent of four Justices stating that the majority opinion had

departed from Court precedent, see, e.g., id. at 442–43 (Ginsburg, J., dissenting), Shady

12
Grove was a turning point in the Supreme Court’s doctrine regarding the relationship

between the Federal Rules and state law. At the least, it represented a clarification of

prior opinions. Thus, this court has recognized that Shady Grove is a critical case on the

choice-of-law analysis. See Racher v. Westlake Nursing Home Ltd. P’ship, 871 F.3d

1152, 1162 (10th Cir. 2017) (“We believe the Supreme Court’s subsequent decision in

Shady Grove . . . informs the proper analysis of [whether state law or federal law governs

whether a statutory damage cap is an affirmative defense or a pleading

requirement] . . .”); Garman v. Campbell Cty. Sch. Dist. No. 1, 630 F.3d 977, 983 (10th

Cir. 2010) (“The Supreme Court, in Shady Grove . . . recently clarified the analysis for

determining whether a federal rule or state law governs.”). We now examine how Shady

Grove applies to the case before us.

D. Application of Shady Grove

The inescapable conclusion we draw from Shady Grove is that Colorado’s general

laws for assessing costs do not apply in this case. Under step one of the Supreme Court

majority’s analysis, the question is whether the state laws “answer the same question” as

the Federal Rule. Shady Grove, 559 U.S. at 399 (majority opinion); see also id. at 400

(“[T]he question before us is whether [the state laws] concern[] a subject separate from

the subject of [the Federal Rule].”). They certainly do. Rule 54(d) and Colorado’s

§§ 13-16-104 and -105 tell the courts what costs can be awarded to a prevailing party.

The subjects of the Federal Rule and the state statutes are the same. We cannot

artificially divide each Colorado statute and say that the statute (1) addresses the same

subject matter as the Federal Rule when it allows those costs permitted by the Federal

13
Rule and (2) then addresses a different subject when it allows costs for other expenses

incurred by litigants that are impermissible under the Rule. Both of these “components”

of the Colorado statute would still answer the same question as Rule 54(d). See id. at 401

(“Rule 23 permits all class actions that meet its requirements, and a State cannot limit that

permission by structuring one part of [its class-action] statute to track Rule 23 and

enacting another part that imposes additional requirements. Both of [the New York

statute’s] subsections undeniably answer the same question as Rule 23: whether a class

action may proceed for a given suit.”).

And the answers to the costs question given by the Federal Rule and the Colorado

statutes cannot be reconciled. If, say, Rule 54(d) or 28 U.S.C. § 1920 had stated that the

district court should ordinarily award certain types of costs but made clear that other,

unspecified types could also be awarded in the court’s discretion (which is how the

Colorado courts read § 13-16-122), we see no reason why the district court could not look

to state law to guide its discretion. But that is not the Federal Rule. Crawford Fitting and

Taniguchi have held that the only costs that can be awarded under Rule 54(d) are those

specified in § 1920, and neither attorney travel nor computerized legal research is so

specified. Allowing for a discretionary award of costs unavailable under Rule 54(d)

would run contrary to the Supreme Court’s interpretation of that Rule.

The second part of the Shady Grove analysis is determining whether application of

Rule 54(d) to override the Colorado costs statutes is valid under the Rules Enabling Act

and constitutional, or instead is ultra vires. Under the approach of the Shady Grove

plurality, that application clearly passes muster. The relevant restriction in the Act is that

14
a Rule “not abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072(b).

Following Sibbach, the plurality stated that the restriction means only that the Rule “must

really regulate procedure,— the judicial process for enforcing rights and duties

recognized by substantive law and for justly administering remedy and redress for

disregard or infraction of them.” Shady Grove 559 U.S. at 407 (plurality opinion of

Scalia, J.). (brackets and internal quotation marks omitted). As noted by the plurality,

the Supreme Court has thus far “rejected every statutory challenge to a Federal Rule that

has come before [it].” Id. Turning to this case, we need not belabor whether Rule 54(d)

is a procedural rule. We are aware of no authority suggesting that it is not. Awarding

costs has for centuries been part of “the judicial process for enforcing rights and duties

recognized by substantive law.” Sibbach, 312 U.S. at 14; see 10 Moore, supra

§ 54.103[2] at 184 (“The issue of what costs may be awarded incident to the judgment is

a procedural issue . . . .”). And because Rule 54(d) is a procedural rule, it unquestionably

is within Congress’s constitutional powers. See Hanna v. Plumer, 380 U.S. 460, 472

(1965) (the Constitution conveys “a power to regulate matters which, though falling

within the uncertain area between substance and procedure, are rationally capable of

classification as either”).) Under the approach of the plurality in Shady Grove, Rule

54(d) undoubtedly prevails.

Justice Stevens chose a different tack, although his approach led to the same result

in Shady Grove and leads to the same result here. In his view, whether application of a

Federal Rule violates the Rules Enabling Act requirement that “rules shall not abridge,

enlarge or modify any substantive right,” 28 U.S.C. § 2072(b), can depend on the state

15
law that the Rule would otherwise displace. He wrote that the Rules Enabling Act

forbids preemption of a state law that “is procedural in the ordinary use of the term but is

so intertwined with a state right or remedy that it functions to define the scope of the

state-created right.” 559 U.S. at 423 (Stevens, J., concurring). In Shady Grove he

decided that the state class-action provision regarding claims for penalties was not such a

law. He noted that it was not tied to a state right or remedy because it applied to “claims

based on federal law or the law of any other State.” Id. at 432. He said that “[i]t is

therefore hard to see how [the New York statute] could be understood as a rule that,

though procedural in form, serves the function of defining New York’s rights or

remedies.” Id.

That identical reasoning applies here. Nothing about the Colorado statutes

indicates a judgment about the scope of state-created rights or remedies. Sections 13-16-

104 and -105 are general cost-shifting statutes that apply in every case, even to “claims

based on federal law or the law of any other State.” Id.; see Archer v. Farmer Bros. Co.,

90 P.3d 228, 229, 232 (Colo. 2004) (affirming award of costs under C.R.C.P. 54(d) and

§ 13-16-105 to defendants who prevailed on claims under federal Age Discrimination in

Employment Act and Americans with Disabilities Act as well as state-law claims).

Again, “[i]t is therefore hard to see how [the Colorado statutes] could be understood as

. . . rule[s] that, though procedural in form, serve[] the function of defining [Colorado’s]

rights or remedies.” Id. Justice Stevens’s analysis might well reach a different

conclusion if the Colorado statute were restricted to costs in specific areas, such as in

16
civil-rights or employment-discrimination claims. Then it could be viewed as part of the

state remedy. But that is not our case.

This court has held that Justice Stevens’s concurrence states Supreme Court law

under the rule stated in Marks v. United States, 430 U.S. 188, 193 (1977) (“When a

fragmented Court decides a case and no single rationale explaining the result enjoys the

assent of five Justices, the holding of the Court may be viewed as that position taken by

those Members who concurred in the judgments on the narrowest grounds.” (internal

quotation marks and citation omitted)). See Los Lobos Renewable Power, LLC v.

Americulture, Inc., 885 F.3d 659, 668 n.3 (10th Cir. 2018); James River Ins. Co. v. Rapid

Funding, LLC, 658 F.3d 1207, 1217–18 (10th Cir. 2011); Garman, 630 F.3d at 983 n.6.

Others, including then-Judge Kavanaugh, think that the view of the plurality opinion

governs on step two of the analysis because it merely restates law settled by Sibbach and

no other Justice (including the dissenters) expressed agreement with the concurrence.

See Abbas v. Foreign Policy Group, LLC, 783 F.3d 1328, 1336–37 (D.C. Cir. 2015). But

we need not confront this disagreement. Simply put, a challenge in this case under the

Rules Enabling Act fails under any available Supreme Court doctrine. Because Rule

54(d) falls well within the statutory authorization of the Rules Enabling Act and its

displacement of Colorado state law would not impair any state substantive right, we hold

that a federal court exercising diversity jurisdiction has no power to award costs under

§§ 13-16-104 or -105.

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 E. Preservation of Issue

Despite our conclusion that the award of costs under Colorado law was error, we

may still need to affirm the award. In rejecting Plaintiffs’ motion for reconsideration of

the costs award, the district court ruled that they had not previously argued adequately

that federal law precluded a costs award under state law. If the issue was not properly

preserved in district court, we can reverse only if the requirements of the plain-error

doctrine are satisfied. See Singh v. Cordle, 936 F.3d 1022, 1041 (10th Cir. 2019). “To

obtain relief under that standard, the party must show (1) error, (2) that is plain, which (3)

affects substantial rights, and which (4) seriously affects the fairness, integrity, or public

reputation of judicial proceedings.” Id. (internal quotation marks omitted).

The issue is a close one, but we respectfully disagree with the district court and

believe that Plaintiffs adequately preserved their challenge to the award of costs under

Colorado law. In their motion to stay, deny, or reduce the cost calculation pending the

merits appeal, Plaintiffs argued that the court should award only those costs enumerated

in 28 U.S.C. § 1920, citing the United States Supreme Court’s decision in Crawford

Fitting. They argued that § 1920 does not authorize costs for electronic research or

attorney travel and lodging. Then, in a letter to the court clerk regarding the calculation

of costs, Plaintiffs asserted, citing Chaparral Resources v. Monsanto, 849 F.2d 1286,

1292 (10th Cir. 1988), that “a federal court has no discretion to award costs that are not

statutorily permitted under federal law unless such costs are statutorily mandated.” Id. at

1903–04. The letter specifically challenged the award of costs for electronic research.

Finally, in their motion for review of the clerk’s costs award, Plaintiffs again stated that

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the Court had “no discretion to award items as costs that are not set forth in § 1920 . . .

unless they are authorized by . . . state statute or agreement of the parties. Id. at 1828–29

(citing Crawford Fitting and Garcia v. Walmart Stores, Inc., 209 F.3d 1170, 1177 (10th

Cir. 2000).).

We recognize that Plaintiffs’ argument did not track the analysis we have applied.

They did not even cite Shady Grove. And they conceded, contrary to what we now

decide to be the applicable law, that costs can be awarded under state law if the specific

costs are “statutorily mandated” or “authorized” by the state law. Nevertheless, we think

that Plaintiffs did preserve (although barely) an argument that the challenged costs were

not permissible under this court’s decisions in Chaparral and Garcia. In Chaparral we

held that the district court had erred in awarding expert-witness fees beyond what was

allowed under federal law. In dictum we suggested, however, that a court could award

costs under state law if the award was under “an express statutory mandate.” 849 F.2d at

1292. As for Garcia, the state law in question was not a costs statute generally

applicable to prevailing parties but a Colorado statutory provision permitting an award of

actual costs to a plaintiff when the defendant rejected a pretrial settlement offer lower

than the eventual judgment. See 209 F.3d at 1173. We leave for another day a

determination of whether the state law would survive the asks-the-same-question test of

Shady Grove, which was decided a decade after Garcia. Relevant here, Garcia followed

Chaparral’s dictum in applying the state law. At one point it spoke in terms of whether

state law “authorizes” the costs award. Id. at 1177. But it later explained that the

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Colorado provision had been interpreted by the Colorado courts as “non-discretionary.”

Id. at 1178.

Thus, we could have seen our task on this appeal as evaluating whether the

challenged costs award was permissible under Chaparral and Garcia: that is, whether the

award would have been mandatory under Colorado law and therefore permissible or

whether it was discretionary and impermissible. Under that approach, Plaintiffs may very

well have prevailed. But the pertinent language of Chaparral and Garcia has been

superseded by later Supreme Court opinions. And we do not believe we would be

performing our duty to provide guidance to the lower courts if we resolved this appeal

under superseded doctrine. When, as here, a party argues that the district court’s ruling is

contrary to general law and does not satisfy a previously recognized exception to the

general law, we think it appropriate to point out that the previously recognized exception

is clearly no longer good law and then decide that the party is correct that the court’s

ruling was contrary to the general law. In short, Plaintiffs did just enough to preserve the

winning argument.

III. CONCLUSION

We VACATE the district court’s award of costs and REMAND for entry of a

revised costs award consistent with this opinion.

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