Wednesday, June 15, 2011

Let's hear it for rough justice!

Some Supreme Court decisions are unremarkable, but they contain language that guides the courts in follow-up cases. I wonder if that is the case in the Court's recent attorneys' fees ruling, which notes in passing that trial courts in ruling on fee motions need only provide "rough justice."

The case is Fox v. Vice, decided on June 6. The issue was whether a prevailing defendant in a civil rights case may recover attorneys' fees for all work expended in a case that included a frivolous issue. While prevailing plaintiffs routinely recover attorneys' fees under 42 U.S.C. sec. 1988, prevailing defendants only recover fees if the case was totally frivolous. So the issue here was, can the defendant in that circumstance get all his fees even if only one issue was frivolous?

Here's how the Justice Kagan writes for a unanimous court: "a court may grant reasonable fees to the defendant in this circumstance, but only for costs that the defendant would not have incurred but for the frivolous claims." As a former law professor, Justice Kagan was probably sick and tired of vague Supreme Court holdings that created more questions than answers, so she provides some examples of how this ruling would apply in the real-world:

Section 1988 allows a defendant to recover reasonable attorney’s fees incurred because of, but only because of, a frivolous claim. Or what is the same thing stated as a but-for test: Section 1988 permits the defendant to receive only the portion of his fees that he would not have paid but for the frivolous claim. Recall that the relevant purpose of §1988 is to relieve defendants of the burdens associated with fending off frivolous litigation. So if a frivolous claim occasioned the attorney’s fees at issue, a court may decide that the defendant should not have to pay them. But if the defendant would have incurred those fees anyway, to defend against non-frivolous claims, then a court has no basis for transferring the expense to the plaintiff. Suppose, for example, that a defendant’s attorney conducts a deposition on matters relevant to both a frivolous and a non-frivolous claim—and more, that the lawyer would have taken and committed the same time to this deposition even if the case had involved only the non-frivolous allegation. In that circumstance, the work does not implicate Congress’s reason for allowing defendants to collect fees. The defendant would have incurred the expense in any event; he has suffered no incremental harm from the frivolous claim. In short, the defendant has never shouldered the burden that Congress, in enacting §1988, wanted to relieve.

This is not the end of Justice Kagan's analysis. She comes up with more examples of how the new fee-shifting rule works, much like a practice treatise would, except that these examples have the force of law and expert commentaries do not. The Court explains how the "but for" standard might require the plaintiff to pay all of the defendants' fees even if there were non-frivolous claims:

Suppose, for example, that a plaintiff asserts one frivolous and one non-frivolous claim, but that only the frivolous allegation can legally result in a damages award. If an attorney performs work useful to defending against both, but did so only because of the defendant’s monetary exposure on the frivolous charge, a court may decide to shift fees. Or similarly, imagine that the frivolous claim enables removal of the case to federal court, which in turn drives up litigation expenses. Here too, our standard would permit awarding fees for work relevant to both claims in order to reflect the increased costs (if any) of the federal forum. And frivolous claims may increase the cost of defending a suit in ways that are not reflected in the number of hours billed. If a defendant could prove, for example, that a frivolous claim involved a specialized area that reasonably caused him to hire more expensive counsel for the entire case, then the court may reimburse the defendant for the increased marginal cost. As all these examples show, the dispositive question is not whether attorney costs at all relate to a non-frivolous claim, but whether the costs would have been incurred in the absence of the frivolous allegation. The answers to those inquiries will usually track each other, but when they diverge, it is the second that matters.

What is remarkable about this decision is that the Court issues a new rule for the lower courts to follow, and then it provides examples of how that rule would shake out. This will save the lower courts years of agonizing litigation and conflicting rulings. Instead, federal judges will know what to do if confronted with a case where the defendant is entitled to attorneys' fees.

Federal litigators know that defendants rarely recover fees from a losing plaintiff. The Supreme Court decided a long time ago that fee-shifting is really a one-way street. The winning plaintiff gets them, but the defendant only gets fees if the case is frivolous. So the practical application of this ruling may be limited. But in summarizing how federal judges should apply the fee-shifting statute in general, Justice Kagan does suggest that the trial courts do not have to issue precise attorneys' fees awards. This is important language that will apply in all attorneys' fees cases and make life easier for trial courts that want to issue a ruling without bean-counting. It's worth reprinting here, as the Court uses some colorful language about "rough justice" that hits the nail on the head:

The fee applicant (whether a plaintiff or a defendant) must, of course, submit appropriate documentation to meet “the burden of establishing entitlement to an award.” But trial courts need not, and indeed should not, become green-eyeshade accountants. The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection. So trial courts may take into account their overall sense of a suit, and may use estimates in calculating and allocating an attorney’s time.

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