San Antonio v. Hotels.com

Federal Rule of Appellate Procedure 39 governs the taxation of appellate “costs,” and the question in this case is whether a district court has the discretion to deny or reduce those costs.

Petitioner was awarded a judgment in federal district court against Respondents, a number of online travel companies (OTCs), because Respondents had allegedly been underpaying hotel occupancy taxes. The issue on appeal is whether a district court has discretion to deny or reduce appellate costs governed by Federal Rule of Appellate Procedure 39. The court of appeals disagreed with the district court and held that Respondents had not underpaid. Instead, it stated that their costs were "supersedeas bond premiums." The Supreme Court affirmed, holding that district courts cannot "alter a court of appeals’ allocation of the costs listed in subdivision (e) of that Rule." Both parties agree that Rule 39 refers to the appellate court but disagree on what that court has the power to do. Rule 39 gives clear and comprehensive discretion to the appellate court to allocate appellate costs. Appellate courts are well positioned to allocate the costs described in Rule 39, the Court sees no evidence that they have struggled to do so in the past. Even if a district court is in a better position, appellate courts have the authority to delegate the tasks and have done so before. AFFIRMED.