SAN FRANCISCO – A federal court has ruled that more than $40,000 in taxes are appropriate in a case regarding stocks.
On April 8, U.S. Magistrate Judge Laurel Beeler of the U.S. District Court for the Northern District of California found that Franklin Resources was entitled to more than $48,000 to cover taxes charged by the clerk of court in a lawsuit filed by Anthony P. Miele III.
Miele had sued Franklin alleging that the company and its former president, CEO and board chairman Charles Johnson had mishandled shares of Franklin stock purchased by his father for him in 1973. All of the claims against Johnson and most of the claims against Franklin were dismissed for failure to state a claim. Summary judgment was awarded to Franklin on the claims of wrongful registration and replacement of lost, destroyed or wrongfully taken security certificates.
Miele argued that the clerk costs should not be included at all because he has “very limited financial resources," adding that there is a "significant gap" between his finances and Franklin, "which has a market capitalization of over $24 billion," the ruling states.
Beeler found, however, that Miele failed to prove his "lack of resources" in relation to Franklin's worth.
According to the ruling, Franklin had asked the court to grant a tax in the amount of $53,417.24. Miele argued for a reduction or elimination based on deposition costs, reproduction costs, and costs for obtaining government records.
Beeler agreed that some of the costs be disallowed.
Miele argued in turn for a reduction in the amount of $15,166 arguing that "certain supplemental deposition costs (such as 'litigation package,' OCR scans, digitizing and transcript synchronization, and rough ASCI transcripts) are not allowable" under state code.
Franklin contended that the rough transcripts "were necessary because two attorneys took or defended more than 20 depositions in five states of critical witnesses, and the tight timeframe required the transcripts (and associated costs, such as expedited delivery fees)," the ruling states.