When a federal lawsuit ends, the apportionment of costs in federal litigation follows a two-track rule: under Federal Rule of Civil Procedure 54(d)(1), the prevailing party is presumed to recover taxable costs from the loser, but each side still pays its own attorney fees under the American Rule unless a statute says otherwise.1Legal Information Institute. Federal Rules of Civil Procedure Rule 54 – Judgment; Costs2United States Department of Justice. Civil Resource Manual 220 – Attorneys Fees The gap between those two tracks — a narrow list of recoverable expenses on one side, uncovered lawyer bills on the other — is where most cost fights happen, and where the judge’s discretion carries the case.
What Counts as Taxable Costs
Federal law limits recoverable costs to specific categories listed in 28 U.S.C. § 1920. A judge or clerk may tax:
- Clerk and marshal fees for filing and service.
- Printed or electronically recorded transcripts, but only when necessarily obtained for use in the case rather than ordered for convenience.
- Printing and witness fees.
- Copies and exemplification of materials necessarily obtained for use in the case.
- Docket fees under 28 U.S.C. § 1923.
- Compensation for interpreters and court-appointed experts.
Courts stick closely to this list.3Office of the Law Revision Counsel. 28 USC 1920 – Taxation of Costs Witness compensation runs on a separate schedule under 28 U.S.C. § 1821: $40 per day of attendance plus travel time, mileage at the GSA rate ($0.725 per mile as of January 1, 2026) for witnesses who drive, and reimbursement at the most economical reasonable rate for those using public transportation. Tolls, parking, and taxi fares between lodging and terminals are covered in full.4Office of the Law Revision Counsel. 28 USC 1821 – Per Diem and Mileage Generally; Subsistence
Conspicuously absent from § 1920: expert witness fees beyond the $40 attendance rate. Retaining a medical expert or forensic accountant can cost thousands, and the winner usually eats that expense. Legal research subscriptions, attorney travel, and most e-discovery processing costs are also outside the list. Converting native files into a production format can qualify as “making copies,” but the collection, review, and processing work that precedes it generally does not. In modern litigation those upstream costs can dwarf everything else on a bill, and the loser cannot be made to pay them.
How the Prevailing Party Actually Collects
Cost recovery does not happen on its own. The prevailing party has to file AO 133, the Bill of Costs, in the district court.5United States Courts. Bill of Costs (District Court) The filing deadline is set by each district’s local rules, so check them immediately after judgment.
Under Rule 54(d)(1), the clerk may tax costs after giving 14 days’ notice. A party who disagrees with the clerk’s line items has 7 days to move for court review.1Legal Information Institute. Federal Rules of Civil Procedure Rule 54 – Judgment; Costs Precise itemization matters here. Every expense tied cleanly to a specific § 1920 category is harder to challenge; lumped or vague entries invite objections and reductions.
Who Counts as the Prevailing Party
The whole framework depends on identifying a prevailing party, and mixed results complicate that. In Hensley v. Eckerhart (1983), the Supreme Court held that a plaintiff with only limited success should recover fees and costs proportionate to the results obtained. Time and expense spent on losing claims that were unrelated to the winning ones should be excluded, but a plaintiff who won substantial relief on interrelated claims is not penalized just because the court did not accept every argument.6Justia Law. Hensley v Eckerhart, 461 US 424 (1983)
Judges look for a meaningful change in the legal relationship between the parties. A plaintiff who wins a $1 nominal verdict after seeking millions may technically prevail and still recover nothing in costs. There is no formula; the analysis is case-specific.
When Judges Reduce, Deny, or Shift Costs Based on Conduct
Even with a clear winner, several rules let a judge move costs around based on how the parties behaved.
Discovery Sanctions Under Rule 37
If a party forces the other side to file a motion to compel and the court grants it, the resisting party or its attorney generally must pay the reasonable expenses of the motion, including attorney fees. The same logic runs in reverse when a motion to compel is denied.7Northern District of Illinois. Federal Rules of Civil Procedure Rule 37 – Failure to Make or Cooperate in Discovery; Sanctions
Frivolous Filings Under Rule 11
Every pleading and motion carries an implicit certification that it has a proper basis. When a court finds a violation, it can order sanctions calibrated to deter repetition, including payment of the opposing party’s reasonable attorney fees and expenses caused by the filing. Rule 11 includes a 21-day safe harbor letting the offending party withdraw the paper before sanctions attach.8Legal Information Institute. Federal Rules of Civil Procedure Rule 11 – Signing Pleadings, Motions, and Other Papers; Representations to the Court; Sanctions
Vexatious Attorneys Under 28 U.S.C. § 1927
An attorney who unreasonably and vexatiously multiplies the proceedings can be ordered to personally pay the excess costs, expenses, and attorney fees caused by that conduct.9Office of the Law Revision Counsel. 28 USC 1927 – Counsels Liability for Excessive Costs This provision reaches the lawyer’s own wallet, not the client’s, and covers patterns of obstruction rather than a single filing.
Rejected Settlement Offers Under Rule 68
Rule 68 lets a defendant serve a formal offer of judgment at least 14 days before trial. If the plaintiff rejects it and then obtains a judgment no more favorable than the offer, the plaintiff must pay the defendant’s post-offer costs.10Legal Information Institute. Federal Rules of Civil Procedure Rule 68 – Offer of Judgment In a standard case “costs” means only § 1920 taxable costs, which are usually modest. But when a fee-shifting statute defines attorney fees “as part of costs” — most notably federal civil rights cases under 42 U.S.C. § 1988 — the Supreme Court held in Marek v. Chesny (1985) that a rejected Rule 68 offer also cuts off the plaintiff’s ability to recover post-offer attorney fees. A civil rights plaintiff who turns down a reasonable offer and then does worse at trial can owe the defendant’s post-offer costs while forfeiting their own post-offer fees.
When a Statute Overrides the American Rule
Congress has carved hundreds of exceptions into the American Rule for litigation that serves public interests broad enough to justify shifting attorney fees.
Civil Rights Cases
Under 42 U.S.C. § 1988(b), a court may award reasonable attorney fees to the prevailing party in actions enforcing civil rights statutes including § 1983, § 1981, Title VI, Title IX, and the Religious Freedom Restoration Act.11Office of the Law Revision Counsel. 42 USC 1988 – Proceedings in Vindication of Civil Rights Courts apply § 1988 asymmetrically: a prevailing plaintiff recovers fees in most cases, while a prevailing defendant can recover only if the plaintiff’s case was frivolous. The asymmetry exists to keep the fee risk from deterring legitimate civil rights claims that turn on close questions.
Cases Against the Federal Government
The Equal Access to Justice Act, 28 U.S.C. § 2412, lets private parties recover fees and expenses when they prevail against the United States in civil litigation, unless the government’s position was substantially justified. Eligibility is capped: individuals must have a net worth of $2 million or less, and businesses must have a net worth of $7 million or less and no more than 500 employees. The application is due within 30 days of final judgment, and the government carries the burden of showing its position had a reasonable basis in law and fact.12Office of the Law Revision Counsel. 28 USC 2412 – Costs and Fees The EAJA’s definition of recoverable expenses explicitly includes reasonable expert witness fees, which the general § 1920 framework does not.
Environmental and Consumer Protection Statutes
Several environmental laws go further than § 1988 by allowing recovery of expert witness fees alongside attorney fees, including the Endangered Species Act, the Resource Conservation and Recovery Act, and the Toxic Substances Control Act. Consumer statutes such as the Consumer Product Safety Act include expert fee recovery as well.
Splitting Costs Among Multiple Losing Parties
When more than one party is on the losing side, the court has to decide how to distribute the bill, and the two main approaches produce very different outcomes.
Under joint and several liability for costs, any losing party can be held responsible for the entire award. The prevailing party collects from whoever is most able to pay, and the losing parties sort out reimbursement among themselves. This shields the winner from a judgment-proof co-defendant.
Alternatively, the judge can apportion costs proportionally based on each party’s role. A primary target might bear the bulk of costs while a peripheral defendant pays a smaller share. This is more equitable when involvement genuinely differed, but the collection risk shifts back onto the winner.
The analysis often turns on whether the losing parties shared legal resources. Co-defendants who filed joint motions and used the same lawyers tend to be treated as a single unit for cost purposes. Those who kept separate legal teams and pursued distinct defenses are more likely to see costs allocated individually.
Costs on Appeal
Cost apportionment continues into the appellate court under Federal Rule of Appellate Procedure 39:
- Appeal dismissed: costs against the appellant.
- Judgment affirmed: costs against the appellant.
- Judgment reversed: costs against the appellee.
- Affirmed in part and reversed in part, modified, or vacated: each party bears its own costs.
These defaults yield to statute, party agreement, or court order.13Fourth Circuit Court of Appeals. Federal Rules of Appellate Procedure Rule 39 – Costs The mixed-result default comes up often, because appellate panels routinely affirm on some issues and reverse on others, which leaves both sides carrying their own appellate costs. Taxable appellate costs cover items like printing briefs and appendices; the American Rule still keeps attorney fees on each side’s own tab.