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SUPREME COURT OF THE UNITED STATES
_________________
No. 11–1175
_________________
OLIVEA MARX, PETITIONER
v. GENERAL
REVENUE CORPORATION
on writ of certiorari to the united states
court of appeals for the tenth circuit
[February 26, 2013]
Justice Thomas delivered the opinion of the
Court.
Federal Rule of Civil Procedure 54(d)(1) gives
district courts discretion to award costs to prevailing defendants
“[u]nless a federal statute . . . provides
otherwise.” The Fair Debt Collection Practices Act (FDCPA),
91Stat. 881, 15 U. S. C. §1692k(a)(3), provides that
“[o]n a finding by the court that an action under this
section was brought in bad faith and for the purpose of harassment,
the court may award to the defendant attorney’s fees
reasonable in relation to the work expended and costs.” This
case presents the question whether §1692k(a)(3)
“provides otherwise” than Rule 54(d)(1). We conclude
that §1692k(a)(3) does not “provid[e] otherwise,”
and thus a district court may award costs to prevailing defendants
in FDCPA cases without finding that the plaintiff brought the case
in bad faith and for the purpose of harassment.
I
Petitioner Olivea Marx defaulted on a student
loan guaranteed by EdFund, a division of the California Student Aid
Commission. In September 2008, EdFund hired respondent General
Revenue Corporation (GRC) to collect the debt. One month later,
Marx filed an FDCPA enforcement action against GRC.[
1] Marx alleged that GRC had violated the
FDCPA by harassing her with phone calls several times a day and
falsely threatening to garnish up to 50% of her wages and to take
the money she owed directly from her bank account. Shortly after
the complaint was filed, GRC made an offer of judgment under
Federal Rule of Civil Procedure 68 to pay Marx $1,500, plus
reasonable attorney’s fees and costs, to settle any claims
she had against it. Marx did not respond to the offer. She
subsequently amended her complaint to add a claim that GRC
unlawfully sent a fax to her workplace that requested information
about her employment status.
Following a 1-day bench trial, the District
Court found that Marx had failed to prove any violation of the
FDCPA. As the prevailing party, GRC submitted a bill of costs
seeking $7,779.16 in witness fees, witness travel expenses, and
deposition transcript fees. The court disallowed several items of
costs and, pursuant to Federal Rule of Civil Procedure 54(d)(1),
ordered Marx to pay GRC $4,543.03. Marx filed a motion to vacate
the award of costs, arguing that the court lacked authority to
award costs under Rules 54(d)(1) and 68(d) because 15
U. S. C. §1692k(a)(3) sets forth the exclusive basis
for awarding costs in FDCPA cases.[
2] Section 1692k(a)(3) provides, in relevant part:
“On a finding by the court that an action under this section
was brought in bad faith and for the purpose of harassment, the
court may award to the defendant attorney’s fees reasonable
in relation to the work expended and costs.” Marx argued that
because the court had not found that she brought the case in bad
faith and for the purpose of harassment, GRC was not entitled to
costs. The Dis- trict Court rejected Marx’s argument,
concluding that §1692k(a)(3) does not displace a court’s
discretion to award costs under Rule 54(d)(1) and that costs should
also be awarded under Rule 68(d).
The Tenth Circuit affirmed but agreed only with
part of the District Court’s reasoning. In particular, the
court disagreed that costs were allowed under Rule 68(d). 668 F.3d
1174, 1182 (2011). It explained that “Rule 68 applies only
where the district court enters judgment in favor of a
plaintiff” for less than the amount of the settlement offer
and not where the plaintiff loses outright.
Ibid. (citing
Delta Air Lines, Inc. v.
August,
450 U.S.
346, 352 (1981)). Because the District Court had not entered
judgment in favor of Marx, the court concluded that costs were not
allowed under Rule 68(d). 668 F. 3d, at 1182. Nevertheless,
the court found that costs were allowed under Rule 54(d)(1), which
grants district courts discretion to award costs to prevailing
parties unless a federal statute or the Federal Rules of Civil
Procedure provide otherwise.
Id., at 1178, 1182. After
describing the “venerable” presumption that prevailing
parties are entitled to costs,
id., at 1179, the court
concluded that nothing in the text, history, or purpose of
§1692k(a)(3) indicated that it was meant to displace Rule
54(d)(1),
id., at 1178–1182. Judge Lucero dissented,
arguing that “[t]he only sensible reading of
[§1692k(a)(3)] is that the district court may
only
award costs to a defendant” upon finding that the action was
brought in bad faith and for the purpose of harassment and that to
read it otherwise rendered the phrase “and costs”
superfluous.
Id., at 1187 (emphasis in original).
We granted certiorari, 566 U. S. ___
(2012), to resolve a conflict among the Circuits regarding whether
a prevailing defendant in an FDCPA case may be awarded costs where
the lawsuit was not brought in bad faith and for the purpose of
harassment. Compare 668 F. 3d, at 1182 (case below), with
Rouse v.
Law Offices of Rory Clark, 603 F.3d 699, 701
(CA9 2010). We now affirm the judgment of the Tenth Circuit.
II
As in all statutory construction cases, we
“ ‘assum[e] that the ordinary meaning of [the
statutory] language accurately expresses the legislative
purpose.’ ”
Hardt v.
Re-
liance
Standard Life Ins. Co., 560 U. S. ___, ___ (2010) (slip
op., at 8) (quoting
Gross v.
FBL Financial Services,
Inc.,
557 U.S.
167, 175 (2009) (alteration in original)). In this case, we
must construe both Rule 54(d)(1) and §1692k(a)(3) and assess
the relationship between them.
A
Rule 54(d)(1) is straightforward. It provides,
in relevant part: “Unless a federal statute, these rules, or
a court or- der provides otherwise, costs—other than
attorney’s fees—should be allowed to the prevailing
party.”
As the Tenth Circuit correctly recognized, Rule
54(d)(1) codifies a venerable presumption that prevailing parties
are entitled to costs.[
3]
Notwithstanding this presumption, the word “should”
makes clear that the decision whether to award costs ultimately
lies within the sound discretion of the district court. See
Taniguchi v.
Kan Pacific Saipan, Ltd., 566 U. S.
___, ___ (2012) (slip op., at 4) (“Federal Rule of Civil
Procedure 54(d) gives courts the discretion to award costs to
prevailing parties”). Rule 54(d)(1) also makes clear,
however, that this discretion can be displaced by a federal statute
or a Federal Rule of Civil Procedure that “provides
otherwise.”
A statute “provides otherwise” than
Rule 54(d)(1) if it is “contrary” to the Rule. See 10
J. Moore, Moore’s Federal Practice §54.101[1][c], p.
54–159 (3d ed. 2012) (hereinafter 10 Moore’s). Because
the Rule grants district courts discretion to award costs, a
statute is contrary to the Rule if it limits that discretion. A
statute may limit a court’s dis- cretion in several ways, and
it need not expressly state that it is displacing Rule 54(d)(1) to
do so. For instance, a statute providing that “plaintiffs
shall not be liable for costs” is contrary to Rule 54(d)(1)
because it precludes a court from awarding costs to prevailing
defendants. See,
e.g., 7 U. S. C. §18(d)(1)
(“The petitioner shall not be liable for costs in the
district court”). Similarly, a statute providing that
plaintiffs may recover costs only under certain conditions is
contrary to Rule 54(d) because it precludes a court from awarding
costs to prevailing plaintiffs when those conditions have not been
satisfied. See,
e.g., 28 U. S. C. §1928
(“[N]o costs shall be included in such judgment, unless the
proper disclaimer has been filed in the United States Patent and
Trademark Office”).
Importantly, not all statutes that provide for
costs are contrary to Rule 54(d)(1). A statute providing that
“the court may award costs to the prevailing party,”
for example, is not contrary to the Rule because it does not limit
a court’s discretion. See 10 Moore’s
§54.101[1][c], at 54–159 (“A number of statutes
state simply that the court may award costs in its discretion. Such
a provision is not con- trary to Rule 54(d)(1) and does not
displace the court’s discretion under the Rule”).
Marx and the United States as
amicus
curiae suggest that any statute that specifically provides for
costs displaces Rule 54(d)(1), regardless of whether it is contrary
to the Rule. Brief for Petitioner 17; Brief for United States as
Amicus Curiae 11–12 (hereinafter Brief for United
States). The United States relies on the original 1937 version of
Rule 54(d)(1), which provided, “ ‘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.’ ”
Id., at 12 (quoting Rule).
Though the Rules Committee updated the language of Rule 54(d)(1) in
2007, the change was “stylistic only.” Advisory
Committee’s Notes, 28 U. S. C. App., p. 734 (2006
ed., Supp. V). Accordingly, the United States asserts that any
“express provision” for costs should displace Rule
54(d)(1).
We are not persuaded, however, that the original
version of Rule 54(d) should be interpreted as Marx and the United
States suggest. The original language was meant to ensure that Rule
54(d) did not displace existing costs provisions that were contrary
to the Rule. Under the prior language, statutes that simply
permitted a court to award costs did not displace the Rule. See 6
J. Moore, Moore’s Federal Practice §54.71[1], p.
54–304 (2d ed. 1996) (“[W]hen permissive language is
used [in a statute regarding costs] the district court may,
pursuant to Rule 54(d), exercise a sound discretion relative to the
allowance of costs”). Rather, statutes had to set forth a
standard for awarding costs that was different from Rule 54(d)(1)
in order to displace the Rule. See
Friedman v.
Ganassi, 853 F.2d 207, 210 (CA3 1988) (holding that 15
U. S. C. §77k(e) is not an “express
provision” under Rule 54(d) because it does not provide an
“alternative standard” for awarding taxable costs). The
original version of Rule 54(d) is consistent with our conclusion
that a statute must be contrary to Rule 54(d)(1) in order to
displace it.[
4]
B
We now turn to whether §1692k(a)(3) is
contrary to Rule 54(d)(1). The language of §1692k(a)(3) and
the context surrounding it persuade us that it is not.
1
The second sentence of §1692k(a)(3)
provides: “On a finding by the court that an action under
this section was brought in bad faith and for the purpose of
harassment, the court may award to the defendant attorney’s
fees reasonable in relation to the work expended and
costs.”[
5]
GRC contends that the statute does not address
whether costs may be awarded in this case—where the plaintiff
brought the case in good faith—and thus it does not set forth
a standard for awarding costs that is contrary to Rule 54(d)(1). In
its view, Congress intended §1692k(a)(3) to deter plaintiffs
from bringing nuisance lawsuits. It, therefore, expressly provided
that when plaintiffs bring an action in bad faith and for the
purpose of harassment, the court may award attorney’s fees
and costs to the defendant. The statute does address this type of
case—
i.e., cases in which the plaintiff brings the
action in bad faith and for the purpose of harassment. But it is
silent where bad faith and purpose of harassment are absent, and
silence does not displace the background rule that a court has
discretion to award costs.
Marx and the United States take the contrary
view. They concede that the language does not expressly limit a
court’s discretion to award costs under Rule 54(d)(1), Brief
for Petitioner 10; Brief for United States 19, but argue that it
does so by negative implication. Invoking the
expressio
unius canon of statutory construction, they contend that by
specifying that a court may award attorney’s fees and costs
when an action is brought in bad faith and for the purpose of
harassment, Congress intended to preclude a court from awarding
fees and costs when bad faith and purpose of harassment are absent.
They further argue that unless §1692k(a)(3) sets forth the
exclusive basis on which a court may award costs, the phrase
“and costs” would be superfluous. According to this
argument, Congress would have had no reason to specify that a court
may award costs when a plaintiff brings an action in bad faith if
it could have nevertheless awarded costs under Rule 54(d)(1).
Finally, the United States argues that §1692k(a)(3) is a more
specific cost statute that displaces Rule 54(d)(1)’s more
general rule.
The context surrounding §1692k(a)(3)
persuades us that GRC’s interpretation is correct.
2
The argument of Marx and the United States
depends critically on whether §1692k(a)(3)’s allowance
of costs creates a negative implication that costs are unavailable
in any other circumstances. The force of any negative implication,
however, depends on context. We have long held that the
expressio unius canon does not apply “unless it is
fair to suppose that Congress considered the unnamed possibility
and meant to say no to it,”
Barnhart v.
Peabody
Coal Co.,
537 U.S.
149, 168 (2003), and that the canon can be overcome by
“contrary indications that adopting a particular rule or
statute was probably not meant to signal any exclusion,”
United States v.
Vonn,
535 U.S.
55, 65 (2002). In this case, context persuades us that Congress
did not intend §1692k(a)(3) to foreclose courts from awarding
costs under Rule 54(d)(1).
First, the background presumptions governing
attorney’s fees and costs are a highly relevant contextual
feature. As already explained, under Rule 54(d)(1) a prevailing
party is entitled to recover costs from the losing party unless a
federal statute, the Federal Rules of Civil Procedure, or a court
order “provides otherwise.” The opposite presumption
exists with respect to attorney’s fees. Under the
“bedrock principle known as the ‘ “American
Rule,” ’ ” “[e]ach litigant pays
his own attorney’s fees, win or lose, unless a statute or
contract provides otherwise.”
Hardt, 560 U. S.,
at ___ (slip op., at 9) (quoting
Ruckelshaus v.
Sierra
Club,
463 U.S.
680, 683 (1983)). Notwithstanding the American Rule, however,
we have long recognized that federal courts have inherent power to
award attorney’s fees in a narrow set of circumstances,
including when a party brings an action in bad faith. See
Chambers v.
NASCO, Inc.,
501 U.S.
32, 45–46 (1991) (explaining that a court has inherent
power to award attorney’s fees to a party whose litigation
efforts directly benefit others, to sanction the willful
disobedience of a court order, and to sanction a party who has
acted in bad faith, vexatiously, wantonly, or for oppressive
reasons);
Alyeska Pipeline Service Co. v.
Wilderness
Society,
421 U.S.
240, 257–259 (1975) (same).
It is undisputed that §1692k(a)(3) leaves
the background rules for attorney’s fees intact. The statute
provides that when the plaintiff brings an action in bad faith, the
court may award attorney’s fees to the defendant. But, as
noted, a court has inherent power to award fees based on a
litigant’s bad faith even without §1692k(a)(3). See
Chambers,
supra, at 45–46. Because
§1692k(a)(3) codifies the background rule for attorney’s
fees, it is dubious to infer congressional intent to override the
background rule with respect to costs. The statute is best read as
codifying a court’s pre-existing authority to award both
attorney’s fees and costs.[
6]
Next, the second sentence of §1692k(a)(3)
must be understood in light of the sentence that precedes
it.[
7] The first sentence of
§1692k(a)(3) provides that defendants who violate the FDCPA
are liable for the plaintiff’s attorney’s fees and
costs. The second sentence of §1692k(a)(3) similarly provides
that plaintiffs who bring an action in bad faith and for the
purpose of harassment may be liable for the defendant’s fees
and costs.
If Congress had excluded “and costs”
in the second sen- tence, plaintiffs might have argued that the
expression of costs in the first sentence and the exclusion of
costs in the second meant that defendants could only recover
attorney’s fees when plaintiffs bring an action in bad faith.
By adding “and costs” to the second sentence, Congress
foreclosed that argument, thereby removing any doubt that
defendants may recover costs as well as attorney’s fees when
plaintiffs bring suits in bad faith. See
Ali v.
Federal
Bureau of Prisons,
552 U.S.
214, 226 (2008) (explaining that a phrase is not superfluous if
used to “remove . . . doubt” about an issue);
Fort Stewart Schools v.
FLRA,
495
U.S. 641, 646 (1990) (explaining that “technically
unnecessary” examples may have been “inserted out of an
abundance of caution”). The fact that there might have been a
negative implication that costs are precluded, depending on whether
Congress included or excluded the phrase “and costs,”
weighs against giving effect to any implied limitation.
Finally, the language in §1692k(a)(3)
sharply contrasts with other statutes in which Congress has placed
conditions on awarding costs to prevailing defendants. See,
e.g., 28 U. S. C. §1928 (“[N]o costs
shall be included in such judgment,
unless the proper
disclaimer has been filed in the United States Patent and Trademark
Office prior to the commencement of the action” (emphasis
added)); 42 U. S. C. §1988(b) (“[I]n any
action brought against a judicial officer . . . such
officer shall not be held liable for any costs . . .
unless such action was clearly in excess of such
officer’s jurisdiction” (emphasis added)).
Although Congress need not use explicit language
to limit a court’s discretion under Rule 54(d)(1), its use of
explicit language in other statutes cautions against inferring a
limitation in §1692k(a)(3). These statutes confirm that
Congress knows how to limit a court’s discretion under Rule
54(d)(1) when it so desires. See
Small v.
United
States,
544 U.S.
385, 398 (2005) (Thomas, J., dissent- ing) (explaining that
“Congress’ explicit use of [language] in other
provisions shows that it specifies such restrictions when it wants
to do so”). Had Congress intended the second sentence of
§1692k(a)(3) to displace Rule 54(d)(1), it could have easily
done so by using the word “only” before setting forth
the condition “[o]n a finding by the court that an action
. . . was brought in bad faith and for the purpose of
harassment . . . .”[
8]
3
As the above discussion suggests, we also are
not persuaded by Marx’s objection that our interpretation
renders the phrase “and costs” superfluous. As noted,
supra, at 11, the phrase “and costs” would not
be superfluous if Congress included it to remove doubt that
defendants may recover costs when plaintiffs bring suits in bad
faith. But even assuming that our interpretation renders the phrase
“and costs” superfluous, that would not alter our
conclusion. The canon against surplusage is not an absolute rule,
see
Arlington Central School Dist. Bd. of Ed. v.
Murphy,
548 U.S.
291, 299, n. 1 (2006) (“While it is generally
presumed that statutes do not contain surplusage, instances of
surplusage are not unknown”);
Connecticut Nat. Bank v.
Germain,
503 U.S.
249, 253 (1992) (“Redundancies across statutes are not
unusual events in drafting . . . ”), and it
has considerably less force in this case.
First, the canon against surplusage
“assists only where a competing interpretation gives effect
to every clause and word of a statute.”
Microsoft
Corp. v.
i4i Ltd. Partnership, 564 U. S. ___, ___
(2011) (slip op., at 12) (internal quotation marks omitted). But,
in this case, no interpretation of §1692k(a)(3) gives effect
to every word. Both Marx and the United States admit that a court
has inherent power to award attorney’s fees to a defendant
when the plaintiff brings an action in bad faith. Because there
was, consequently, no need for Congress to specify that courts have
this power, §1692k(a)(3) is superfluous insofar as it
addresses attorney’s fees. In light of this redundancy, we
are not overly concerned that the reference to costs may be
redundant as well.
Second, redundancy is “hardly
unusual” in statutes addressing costs. See
id., at ___
(slip op., at 13). Numerous statutes overlap with Rule 54(d)(1).
See,
e.g., 12 U. S. C. §2607(d)(5)
(“[T]he court may award to the prevailing party the court
costs of the action”); §5565(b) (2006 ed., Supp. V)
(“the [Consumer Financial Protection] Bureau . . .
may recover its costs in connection with prosecuting such action if
[it] . . . is the prevailing party in the action”);
15 U. S. C. §6104(d) (2006 ed.) (“The court
. . . may award costs of suit and reasonable fees for
attorneys and expert witnesses to the prevailing party”);
§7706(f)(4) (“In the case of any successful action
. . . the court, in its discretion, may award the costs
of the action”); §7805(b)(3) (“[T]he court may
award to the prevailing party costs”); §8131(2) (2006
ed., Supp. V) (“The court may also, in its discretion, award
costs and attorneys fees to the prevailing party”); 29
U. S. C. §431(c) (2006 ed.) (“The court
. . . may, in its discretion . . . allow a
reasonable attorney’s fee to be paid by the defendant, and
costs of the action”); 42 U. S. C. §3612(p)
(“[T]he court . . . in its discretion, may allow
the prevailing party . . . a reasonable attorney’s
fee and costs”); §3613(c)(2) (“[T]he court, in its
discretion, may allow the prevailing party . . . a
reasonable attorney’s fee and costs”); 47
U. S. C. §551(f)(2) (“[T]he court may award
. . . other litigation costs reasonably
incurred”).
Finally, the canon against surplusage is
strongest when an interpretation would render superfluous another
part of the same statutory scheme. Cf.
United States v.
Jica-
rilla Apache Nation, 564 U. S. ___, ___
(2011) (slip op., at 22) (“ ‘As our cases have
noted in the past, we are hesitant to adopt an interpretation of a
congressional enactment which renders superfluous another portion
of that same law’ ” (quoting
Mackey v.
Lanier Collection Agency & Service, Inc.,
486 U.S.
825, 837 (1988))). Because §1692k(a)(3) is not part of
Rule 54(d)(1), the force of this canon is diminished.
4
Lastly, the United States contends that
§1692k(a)(3) “establishes explicit cost-shifting
standards that displace Rule 54(d)(1)’s more general default
standard.” Brief for United States 17; see also
EC Term of
Years Trust v.
United States,
550
U.S. 429, 433 (2007) (“ ‘[A] precisely drawn,
detailed statute pre-empts more general
remedies’ ” (quoting
Brown v.
GSA,
425 U.S.
820, 834 (1976))). Were we to accept the argument that
§1692k(a)(3) has a negative implication, this argument might
be persuasive. But the context of §1692k(a)(3) indicates that
Congress was simply confirming the background rule that courts may
award to defendants attorney’s fees and costs when the
plaintiff brings an action in bad faith. The statute speaks to one
type of case—the case of the bad-faith and harassing
plaintiff. Because Marx did not bring this suit in bad faith, this
case does not “fal[l] within the ambit of the more specific
provision.” Brief for United States 13; see also
RadLAX
Gateway Hotel,
LLC v.
Amalgamated Bank, 566
U. S. ___, ___ (2012) (slip op., at 9) (“When the
conduct at issue falls within the scope of
both provisions,
the specific presumptively governs . . .” (emphasis
in original)).[
9] Accordingly,
this canon is inapplicable.
III
Because we conclude that the second sentence
of §1692k(a)(3) is not contrary to Rule 54(d)(1), and, thus,
does not displace a district court’s discretion to award
costs under the Rule, we need not address GRC’s alternative
argument that costs were required under Rule 68.
The judgment of the Court of Appeals is
affirmed.
It is so ordered.