High Court Irons Out Attorneys’ Fees Debate

(CN) - A Louisiana police chief should not have to pay full attorneys' fees to his predecessor whom he accused of running a dirty-tricks election campaign to try and stay in office, the unanimous Supreme Court ruled Monday, calling for trial courts to apply a "but-for test" in cases where plaintiffs have alleged frivolous and nonfrivolous claims.

After beating the incumbent, Billy Ray Vice, in the election for police chief of Vinton, La., Ricky Fox filed a lawsuit that alleged various federal and state-law claims against Vice and the city of Vinton.

Fox claimed Vice tried to intimidate him during the election with an anonymous letter that threatened to publish damaging charges. Vice also allegedly arranged for a third party to publicly accuse Fox of using racial slurs. This third also sued over those allegations, and Vice apparently leaked the faux complaint to the press when prosecutors ignored it.

Ultimately, Vice, who was convicted of criminal extortion for his election-related conduct, convinced the District Court to dismiss the federal claims with prejudice. As the remaining claims became an issue for the state court, Vice asked the District Court to award him attorneys' fees.

Despite the mix of frivolous and nonfrivolous claims, the District Court awarded full attorneys' fees, and a divided panel of the 5th Circuit affirmed.

About eight months after the 5th Circuit decision, Vice died at the age of 64. The Supreme Court took up Fox's appeal, noting division among the circuit courts.

In a 13-page ruling Monday, the unanimous court ruled that the District Court applied the wrong standard in awarding full fees amounting to more than $48,600.

"These standards [for compensation] would be easy to apply if life were like the movies, but that is usually not the case," Justice Elena Kagan wrote for the court. "In Hollywood, litigation most often concludes with a dramatic verdict that leaves one party fully triumphant and the other utterly prostrate. The court in such a case would know exactly how to award fees (even if that anti-climactic scene is generally left on the cutting-room floor). But in the real world, litigation is more complex, involving multiple claims for relief that implicate a mix of legal theories and have different merits. Some claims succeed; others fail. Some charges are frivolous; others (even if not ultimately successful) have a reasonable basis. In short, litigation is messy, and courts must deal with this untidiness in awarding fees." (Parentheses in original)

Congress has taken steps to ensure that plaintiffs receive fees even if they are not victorious on every claim, but "the presence of reasonable allegations in a suit does not immunize the plaintiff against paying for the fees that his frivolous claims imposed," according to the ruling.

Ultimately, the District Court should have used a "but-for test" to determine the amount of fees Vice could recoup, Kagan wrote.

"But trial courts need not, and indeed should not, become green-eyeshade accountants," she added. "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. And appellate courts must give substantial deference to these determinations, in light of 'the district court's superior understanding of the litigation.' We can hardly think of a sphere of judicial decisionmaking in which appellate micromanagement has less to recommend it."

In this case, the District Court deferred to "the parties' 'focus' in the litigation," according to the ruling.

"[T]he court suggested that the close relationship between the federal and state-law claims supported Vice's request to recover all of his attorney's fees," Kagan wrote. "That reasoning stands the appropriate analysis on its head. It cannot be squared with the congressional policy of sparing defendants from the costs of frivolous litigation." (Emphasis in original.)

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