Turning the Tables: Effective Strategies for Shifting the Burden of Attorneys’ Fees
TABLE OF CONTENTS
I. EXCEPTIONS TO THE AMERICAN RULE
A. Fee-Shifting Statutes Make Prevailing Parties Whole and Deter Bad Faith Misconduct in Litigation
B. Well-Drafted Contractual Provisions Assist in Enforcing the Terms of the Contract
C. Fee Shifting in the Court Rules
D. The Court’s Inherent Authority to Shift Attorneys’ Fees May Compensate For An Opponent’s Egregious Behavior
II. DETERMINING THE AMOUNT OF ATTORNEYS’ FEES
A. Attorneys’ Fees May Be Recovered Even if Not Wholly Successful On All Claims
B. Conscientious Recordkeeping is Essential to Maximizing Fee Recovery
III. FEE AGREEMENTS AND ALTERNATIVE RECOVERY PROVISIONS
A. A Clear Representation Agreement With the Client May Ensure Payment of Recovered Fees
B. An Alternative Fee Recovery Clause Allows An Attorney to Recover Market Rates Even If Charging Reduced Rates to the Client
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INTRODUCTION
In the American judicial system, each party bears its own costs and attorneys’ fees in litigation – win or lose – leaving the matter of attorneys’ fees to be resolved in accordance with the contractual arrangement between attorney and client.[1] Following this “American Rule,”[2] the United States is unique among the western hemisphere in its refusal to shift attorneys’ fees to the prevailing party in litigation.[3] Many countries follow the so-called “English Rule,” under which the losing party bears the burden of paying attorneys’ fees for both parties.[4] To some, the American Rule seems unfair and harsh. Others view the contrary system, an award of attorneys’ fees to the winner in every case, as problematic. In any event, the rule has been the subject of much debate for decades.[5]
The practice of law is big business, and it continues to grow. In 2023, 54 American law firms grossed more than $1 billion in annual revenue and other key metrics, an 8% increase over the prior year.[6] Moreover, U.S. law firms overall showed very strong performance in 2024, with firm revenues increasing by 12.5% in 2024, up from 6% in 2023.[7] Injured or damaged plaintiffs understandably fear the powerful deterrence of mounting attorneys’ fees and litigation costs and often forego judicial remedies due purely to its prohibitive costs, even if they ultimately prevail in litigation. On the flip side, exorbitant litigation costs are an equally motivating consideration for parties defending a lawsuit. Oftentimes, these considerations precipitate a much earlier compromise or settlement of the dispute than may have ensued under the English Rule, as success in litigation does not guarantee recovery of attorneys’ fees incurred in litigation. The American Rule, then, arguably fosters negotiation and compromise by maintaining an incentive for both parties to quickly and inexpensively resolve legal disputes without protracted litigation.
Not every case, however, invokes the American Rule. With careful planning and proper legal strategy, a litigant may be able to recover fees if: (1) a state or federal statute allows for the recovery of attorneys’ fees; (2) the parties have contracted to pay costs of litigation and attorneys’ fees in the event of litigation; (3) court rules allow for attorneys’ fees as a sanction for the other party’s conduct; or (4) the court invokes inherent common law powers to sanction misconduct in the court system. While fee-shifting statutes and contractual costs of collection clauses are more prevalent, they are necessarily limited to those cases in which they specifically apply. However, every case, regardless of subject matter, presents the opportunity that task-based fees incurred by your client to address improper, frivolous, or ill-motivated actions by the opposing party or its counsel. This paper illustrates various statutory, contractual, and rule-based remedies available to relieve your client of the burden of paying fees unnecessarily incurred in the course of litigation.
I. EXCEPTIONS TO THE AMERICAN RULE
A. Fee-Shifting Statutes Make Prevailing Parties Whole and Deter Bad Faith Misconduct in Litigation
Fee-shifting statutes are among the most common exceptions to the American Rule. To invoke the exception, a statute must be explicit, with clear and unequivocal language stating the right to seek attorneys’ fees.[8] At both the state and federal level, numerous statutes currently allow a prevailing party to recover fees from the losing opponent.
Commentators have noted six main justifications for fee-shifting statutes: (1) fairness; (2) making a party financially whole; (3) punishment and deterrence; (4) to encourage lawsuits that benefit the public; (5) to level the playing field between parties; and (6) incentivizing behavior of the parties.[9] An awareness of the purposes justifying fees statutes is not merely an academic exercise. From the outset of litigation, the party seeking fees pursuant to statute must be mindful of the purpose for which the statute was enacted because any application for fees should be tailored to that purpose.[10] If a specific statute seeks to encourage suits benefitting the public, for example, the fee application should focus on the public interest of the result obtained, rather than the economic inequities between the parties. The court must apply the relevant statute to the case before it and should closely scrutinize the fee award to ensure it is properly supported by both the language and intent of the statute.
1. Federal Fee-Shifting Statutes
At the federal level, hundreds of statutes allow a prevailing party to recover fees from an opponent.[11] Because many of these fee-shifting statutes have been enacted to further a public policy goal and/or to level the playing field between parties, they predominately arise in the civil rights, environmental protection, and consumer protection contexts.[12] Examples include the Civil Rights Act of 1964,[13] the Voting Rights Act Amendments of 1975,[14] and the Civil Rights Attorneys’ Fees Awards Act of 1976.[15] Other statutes, discussed below, apply more broadly.
In 1980, Congress passed the Equal Access to Justice Act (“EAJA”), which opened a wide door to recovery of attorneys’ fees in suits against the federal government. Prior to passage of EAJA, a party could not recover fees against the United States, even when a statutory provision would allow for the recovery of fees against a private party. Under EAJA, the United States must pay attorneys’ fees to the same extent as other parties.[16] The EAJA permits the prevailing party to recover attorneys’ fees from the United States in all adversary adjudications and civil actions brought by or against the United States, except for tort and tax cases, unless an award would be unjust.[17] Awards are, however, limited. The permissible hourly rate is capped at $125 per hour, and awards are not available to individuals with a net worth of $2 million or more or entities with a net worth exceeding $7 million.[18] In an interesting twist to the American Rule, EAJA also provides for fees to the losing party in particular circumstances. Under EAJA, where the United States, as plaintiff, made a demand that was substantially higher than what was actually recovered by judgment, the losing defendant may recover reasonable attorneys’ fees associated with defending against the unreasonably excessive demand.[19]
Federal law also permits the recovery of fees when the opposing attorney engages in outrageous conduct in federal litigation. “Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.”[20] This statute applies generally in any type of action, but the attorney’s conduct must evidence “bad faith” or “reckless disregard” of an attorney’s duties to the court[21] for fees to be awarded. This is a fairly high standard to meet.[22] In one case, the court sanctioned a party who filed a motion to disqualify opposing counsel because the court deemed the motion frivolous and was offered only to harass and delay.[23] In another case, the court awarded sanctions where actions were pursued despite being clearly time-barred.[24] More recently, following dismissal of the lawsuit by Plaintiff, the Federal Circuit Court affirmed a district court award of over $360,000 in costs and attorneys’ fees against a non-practicing entity, citing the need to “deter future abusive litigation.”[25]
Attorneys’ fees in public policy litigation
Public policy litigation in the private-sector setting focuses on civil enforcement investigations and litigation, most commonly in government transparency, consumer protection, and false claims cases involving the financial, mortgage, pharmaceutical, and education industries, with more than 200 federal statutes allowing for fee-shifting, the Freedom of Information Act (“FOIA”)[26] among them. According to the American Bar Association, fee shifting provisions “are designed to attract lawyers to public interest cases that would otherwise not seem worth the investment.”[27] Indeed, the Supreme Court has ruled that fee-shifting provisions are designed to encourage worthy plaintiffs to hire an attorney to press their claims. In Kay v. Ehrler, 499 U.S. 432 (1991), the Court ruled that an attorney representing himself in a civil rights action was not eligible for attorney fees.
Contrary to the traditional rule for apportioning costs in the United States stating that both parties to litigation should bear their own costs, an exception exists under fee shifting provisions which holds that where the government waives its sovereign immunity, a prevailing plaintiff may recover its fees, including attorneys’ fees.
Even if a party may be eligible for a fee award, an award of fees is not necessarily automatic. While some fee shifting statutes provide that the prevailing party “shall” be entitled to recover his or her fees,[28] other statutes give the court discretion in determining whether to make an award. For example, in civil rights actions, the court “in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs”.[29] Even when the language of a fee shifting statute is mandatory, the court may find reasons not to make an award. The EAJA provides that a prevailing party is entitled to an award of his or her attorney’s fees “unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.”[30] While to government bears the burden of proving that its position was substantially justified, there is no firm guidance for the courts to use in deciding the issue. There is no dispositive factor or factors for the court to decide justification. A position will be found “justified” if it was justified in substance or in the main; “that is, justified to a degree that could satisfy a reasonable person.”[31] Decisions on fee requests under the EAJA are reviewed under an “abuse of discretion” standard.[32]
Finally, because plaintiffs are required to set out all their initial claims when they file their complaint with the district court, nearly everyone who believes that they are eligible for a fee award includes such a claim in their complaint. As a practical matter, most requesters who file a suit do so as a result of the agency’s failure to respond within the 20-day statutory time limit. This means that claims for attorneys’ fees must be made before there is any basis for accessing the agency’s final response to a request.
Pursuant to the False Claims Act (“FCA”)(31 U.S.C. §3729), a qui tam whistleblower may recover attorneys’ fees, costs and expenses. The qui tam whistleblower, not the qui tam whistleblower’s counsel, has standing to request attorney’s fees under the FCA. Furthermore, the general rule is that these fees are paid to the qui tam whistleblower, not to the qui tam whistleblower’s attorney. A qui tam whistleblower may not request fees unless there is an attorney-client relationship, even if the qui tam whistleblower is an attorney.
2. State Fee-Shifting Statutes
An attorney practicing in state court would be wise to examine the relevant state code to determine which, if any, fee-shifting statutes exist, and might be surprised to find a statute applicable to their case. There are nearly 2000 state statutes allowing for recovery of attorneys’ fees,[33] and the statutes vary widely from state to state. At the state level, fee-shifting statutes run the gamut from “loser pays in civil actions” to “fees for prevailing parties in cases involving injured stock.”
At one end of the spectrum, Alaska has a unique statute that allows a prevailing party in a civil lawsuit to recover a portion of its attorneys’ fees. This statute applies to most civil cases and allows either party to be the prevailing party.[34] The prevailing party receives a percentage of the final judgment as compensation for attorneys’ fees. In a case decided at a trial, the prevailing party recovers 20% for the first $25,000 of the judgment, and 10% of the remaining judgment amount.[35] Other scenarios, such as cases resolved without trial, also provide for compensation amounts detailed in the statute.
Other state statutes do not apply to all civil actions, but nonetheless have the potential to be broadly utilized. California Civil Procedure Code § 1021.5, for instance, allows for fees in “any action which has resulted in the enforcement of an important right affecting the public interest.”[36] While statutes of this flavor could apply to a whole host of actions, most state fee shifting statutes apply only to a particular type of case. Under New York Real Property Law §234, for example, where the lease allows the landlord to recover fees if the tenant defaults there is an implied reciprocal right to fees for the residential tenant. Even more specific, California Civil Procedure Code § 1021.9 provides for fees in “any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.”[37]
Attorneys must always review the statutory terms closely. Some statutes prescribe particular requirements, beyond winning the case, which must be satisfied in order to recover fees. In Texas, one statute allows for fee-shifting in a set of unrelated and distinct categories of claims, including claims for: “(1) rendered services; (2) performed labor; (3) furnished material; (4) freight or express overcharges; (5) lost or damaged freight or express; (6) killed or injured stock; (7) a sworn account; or (8) an oral or written contract.”[38] While this statute could apply to any number of cases, in order to recover fees, the party must follow specific rules governing the fee application.[39] In a similar vein, Washington allows a prevailing party to recover fees in cases alleging less than $10,000 in damages.[40] The defendant, or the party resisting relief, is the “prevailing party” if the plaintiff, or party seeking relief recovers nothing, or if the recovery, exclusive of costs, is the same or less than the amount offered in settlement by the defendant.[41] Offers of settlement must be served at least ten days prior to trial, and may not be served until thirty days after the completion of the service and filing of the summons and complaint.[42]
Taken together, the federal and state fee-shifting statutes create a patchwork of available avenues to recover fees from an opposing party. The lesson for every attorney is to fully research possible statutes, be keenly aware of any statutory prerequisites to fee recovery, and prepare the fee application consistent with the purpose of all applicable statutes.
Attorney’s fees in Anti-SLAPP litigation
“Speech concerning public affairs is more than self-expression; it is the essence of self-government.” Garrison v. Louisiana, 379 U.S. 64, 74-75 (1964).
To protect their citizens’ rights to participate freely in self-government, thirty-five states and the District of Columbia have enacted “anti-strategic lawsuits against public participation” (or “anti-SLAPP”) statutes to deter lawsuits that chill speech and engagement about matters of public concern without denying a legitimate day in court to valid good faith claims. Nearly every jurisdiction which has enacted an anti-SLAPP statute has provided for an award of attorneys’ fees to a prevailing defendant including the fees and costs enforcing the right to mandatory fees and additional fees incurred on appeal.[43]
Generally, anti-SLAPP statutes feature four mechanisms to protect against SLAPP suits: (1) it requires “expedited” consideration of a defendant’s motion to dispose of the case, (2) modification of the standard of proof on such a motion, (3) a stay discovery while an anti-SLAPP motion is pending, and (4) an award of attorneys’ fees to a defendant who invokes the statute as a defense and obtains dismissal.
The fee-shifting provision provides that the statute may be raised as an affirmative defense and that where a defendant raises the rights afforded by the statute and prevails on a motion to dismiss, the court will award reasonable attorneys’ fees and costs incurred by the moving party in defending the action.
B. Well-Drafted Contractual Provisions Assist in Enforcing the Terms of the Contract
In today’s world, many parties opt to work around the American Rule by inserting attorneys’ fees provisions into their contracts. For example, in Loughlin v. Meghji,the Plaintiff and Defendant were 50/50 owners of a consulting firm and an investment company.[44] The Plaintiff bought out the Defendant for $7.5 million, and entered into a purchase and sale agreement (PSA).[45] The PSA prohibited the Defendant from competing with the business for two years and stated that if litigation arouse out of the PSA, “the substantially prevailing party shall be entitled to an award of the costs and expenses of such litigation, including two times reasonable attorneys’ fees.”[46] The trial court awarded Plaintiff $755,160 in attorneys’ fees but refused to apply the “double attorneys’ fee provision” ruling that it would be an unenforceable penalty.[47] However, the Appellate Division overturned the trial court’s decision and approved the Plaintiff’s recovery to twice the amount of its attorneys’ fees based on the parties’ contract.[48]
Although courts routinely enforce contractual fees provisions, enforcement remains subject to the court’s interpretation of the provision. The more restrictive rules of contract construction, rather than the somewhat liberal rules of statutory interpretation, govern the court’s analysis of a contractual provision. At times, this can result in a distortion of the parties’ intentions.
While the terms of an agreement may, at first blush, appear to cover a claim, closer examination may reveal ambiguities or gaps in the language. One commonly used attorney’s fees clause provides for fees “in any action or proceeding brought to enforce any provision of this Agreement.” A relatively recent case from Idaho demonstrates the limitations inherent in that language and the narrow fashion in which courts apply these provisions. In Henderson v. Henderson Investment Properties, LLC, the parties owned a business governed by a LLC operating agreement.[49] An attorneys’ fees provision in the agreement stated, “In any action or proceeding brought to enforce any provision of this Agreement, or where any provision is validly asserted as a defense, the successful party is entitled to recover reasonable attorneys’ fees in addition to any other available remedy.”[50] When one of the parties unsuccessfully sought to dissolve the LLC, the responding party moved to recover its fees in defending against the dissolution action.[51] The Idaho Supreme Court held that the defendants were not entitled to fees because, according to the court, dissolution is a statutory remedy which does not qualify as an action “to enforce any provision of the Agreement.”[52]
Overbroad language regarding “costs,” without specific reference to “attorneys’ fees” may be equally problematic. In Midland Property Partners, LLC v. Watkins, the contract between the parties included an attorneys’ fees provision stating that Midland Property was entitled to recover “all reasonable costs incurred by [the Respondents] in collecting or enforcing payment.”[53] When Midland Property sought to recover its fees based on that clause, the court held that the term “costs” did not include attorneys’ fees.[54]
Similarly, the fee shifting language should be reviewed to determine what types of actions are covered by that language. Attorney fees may be awarded in an action in tort if the action is based on a contract containing an attorney fee provision.[55] An action is deemed to be “based on a contract” if (a) the action arose out of the contract; and (b) if the contract is central to the dispute.”[56] Fee shifting language in a contract may also be broad enough to provide for fees to be paid to a defendant who successfully defends against a tort claim that arose out of a contract.[57]
In many cases, litigators are forced to play the hand they are dealt and must attempt to secure fees under an existing provision. A critical eye is important here. The attorney must closely examine the contract language, all the while assuming a restrictive interpretation, to assess whether any of the deficiencies identified above, or other possible vulnerabilities, impinge enforcement of the clause. Does the provision cover the claim my clients want to file? Does it clearly allow for recovery of attorneys’ fees, or is the intent to allow attorneys’ fees stated clearly? This valuable insight may color the direction and structure of the litigation to maximize the provision’s effect. Any number of strategic decisions, from the types of claims filed and the parties named in the suit, to the client’s settlement posture, rely on a complete understanding of the enforceability and likely effect of the provision.
State statutory authority may also play a role in enforcement of a contractual provision. One prevalent issue is the unilateral or reciprocal nature of the fee’s clause. Some state statutes effectively rewrite the contract and convert a unilateral provision into a reciprocal one.[58] In Florida, for instance, the statute states “if a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract.”[59] In other states, a fee provision is unenforceable unless it is reciprocal.[60] Some statutes may bar the recovery of fees by one party in particular types of litigation. For example, Delaware law provides that corporate bylaws may not include any provision that would impose liability on a stockholder for the attorneys’ fees or expenses of the corporation or any other party in connection with an internal corporate claim.[61] Again, thorough research is crucial to determine if any state statutes impact the client’s position on fee recovery.
Often times, parties and their attorneys use standard boilerplate language[62] and fail to focus on careful drafting of an attorneys’ fees provision, ultimately disputing its meaning and applicability after litigation commences. Taking the time to think through, research, and discuss these issues during contract creation is imperative to clearly capturing the parties’ intent and averting prolonged litigation over the attorneys’ fees provision itself.
The first issue for consideration is whether an attorneys’ fees provision should be included in the contract at all. Although standard practice is to include one, the parties in a given situation may decide otherwise. If the parties determine an attorneys’ fees provision is appropriate, there are several key areas the drafter should address:
- The definition of “prevailing party.” The parties may wish to define what constitutes a prevailing party. Does a party need to be successful on all claims, or just successful on one claim? A substantial portion of the claims? What if the parties settle? The parties should clearly state what it means to be a prevailing party.
- Type of actions to which the contractual provision is to apply. The contract language should be clear as to the types of actions covered by the fees provision. The parties may wish to provide for fees in any action related to the contract. In other circumstances, the parties may wish to limit the fees provision to actions to enforce particular provisions of the contract. What about tort actions? In any event, the drafter should contemplate the myriad types of claims that could arise between the parties, and craft the provision to address the parties’ wishes.
- Is the provision unilateral or reciprocal? As noted above, some states imply a reciprocal clause into unilateral fees provisions.[63] Other states will only enforce reciprocal fees provisions.[64]
- Does the agreement specify that attorneys’ fees, and not merely costs, are recoverable? If the parties want attorneys’ fees to be recoverable, the provision should specifically state that language. Should the parties define other types of fees and costs intended to be covered by the provision? For instance, should the costs include electronic research charges, investigator fees, or mediator fees?
If the parties focus on these issues at the time of drafting the agreement, they may avoid litigation, unexpected results, and disappointment down the road, which ultimately leads to a satisfied client.
C. Fee Shifting in the Court Rules
In the era of electronic records and all-encompassing discovery, pre-trial processes can be expensive and protracted, often with minimal oversight. These converging forces can prompt bad behavior and abuse of the process at the hands of an opposing party. Under certain circumstances, a party may be able to recover attorneys’ fees as a sanction for an opponent’s violation of court rules. Here, the purpose of the award is to deter the sanctioned party from engaging in specific behaviors, such as filing frivolous papers, failing to participate in scheduling conferences, and various other discovery abuses. The focus is on the inappropriate conduct of the other party.
1. Federal Rules of Civil Procedure
Through a series of different rules, the Federal Rules of Civil Procedure regulate many elements of the discovery process. Each rule governs specific behavior and contains its own limitations. Therefore, a party seeking attorneys’ fees under the Federal Rules of Civil Procedure must carefully examine the language, applicability, and requirements of each rule. These rules provide for the recovery of fees in distinct phases of the litigation, resulting in recovery of only fees incurred in that phase of the action.
Rule 11. Rule 11 allows for the recovery of attorneys’ fees against the opposing party, but is very limited in its scope. Rule 11 applies only to papers filed with the court. As a starting point, Rule 11 requires an attorney who presents a pleading, written motion, or other paper to a court to certify that (1) the paper is not presented for an improper purpose, and (2) reasonable inquiry has been made into the factual and legal contentions.[65] Sanctions are imposed when the certification is deemed false.[66]
After serving the opposing party with a Rule 11 motion, the moving party must wait 21 days before filing the motion with the court, giving the other party an opportunity to cure the alleged violation.[67] Furthermore, “the main objective of the Rule is not to reward parties who are victimized by litigation; it is to deter baseless filings and curb abuses.”[68] The amendments to the rules make clear that a court is discouraged from awarding monetary sanctions to the other party except in “unusual circumstances.”[69] Courts have awarded fees under Rule 11 where a party filed a motion stating untrue facts and did not properly investigate whether the court had jurisdiction to consider the motion[70] and where a party filed a frivolous action in which they continued to pursue allegations that had been dismissed in previous actions.[71] All in all, Rule 11 may provide an option to recover fees where the other party files a non-meritorious paper, but is not a viable option for recovering fees in most circumstances.[72]
In addition to sanctions under Rule 11, courts have the inherent power to impose sanctions on a party for perpetrating a fraud on the court. Such sanctions are warranted if it is established by clear and convincing evidence that a party has deliberately set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability to impartially adjudicate the action. As a general matter, sanctions will not be imposed pursuant to a court’s inherent authority unless there is clear and convincing evidence that the party or attorney knowingly submitted a materially false or misleading pleading, or knowingly failed to correct false statements, as part of a deliberate and unconscionable scheme to interfere with the Court’s ability to adjudicate the case fairly.[73]
Rule 16. Rule 16 applies to scheduling and pretrial orders. A party may be sanctioned for failure to appear at a scheduling or pretrial conference,[74] even if the failure to appear was unintentional.[75] A court-ordered mediation session is regarded as a type of “pretrial conference” for purposes of Rule 16.[76] Sanctions may also be awarded for failure to prepare or participate in good faith in a pretrial conference.[77] Good faith participation requires attendance by individuals with authority on behalf of the party.[78] Fee awards are mandatory for a Rule 16 violation, unless noncompliance was substantially justified or an award of fees would otherwise be unjust. Rule 16 sanctions have also been awarded where a party violated a court order by filing an amended complaint different than the one attached to the party’s motion to amend.[79]
Rule 26(g). Rule 26(g) sanctions are mandatory, but an award of attorneys’ fees is not. Rule 26 applies to initial disclosures and written discovery requests, responses, and objections. A party or attorney must certify that its disclosures are accurate, and that its responses and objections to discovery requests are warranted, not provided for an improper purpose, and are not unreasonable nor unduly burdensome or expensive.[80] If that certification is deemed improper, the court must impose sanctions against the offending party, unless the violation was justified or harmless.[81] Courts have awarded fees pursuant to Rule 26 for a party’s failure to sign responses to requests for production and interrogatories,[82] to produce an obviously applicable insurance policy in its initial disclosures,[83] to disclose witnesses until after the close of discovery,[84] and to provide a deposition date.[85]
Rule 30(d). Rule 30(d) provides sanctions for certain misconduct during depositions. The court may impose “appropriate sanctions” against a person who “impedes, delays or frustrates” the examination of a witness.[86] The rule specifically allows the award of reasonable expenses and attorneys’ fees.[87] However, the rule does not sanction bad-faith or other improper questioning. It only applies where a witness is being examined during a deposition and the other party interferes with that examination.[88] Practitioners should note that a party may not seek fees under Rule 30(d) for any delay or interference by the questioning party when defending a witness at deposition. Sanctionable conduct includes the answering of questions on a witness’ behalf,[89] making improper objections,[90] instructing a witness not to testify,[91] and failure to provide a witness with adequate knowledge to answer questions noticed in the deposition notice.[92]
Filing a Rule 30 motion for fees exposes the party to some risk and requires confidence in one’s position. Under this rule, the party must stop the deposition and move to terminate the deposition or seek a protective order.[93] If the motion is granted, the moving party may recover its fees related to the motion from the opponent.[94] The court may not order fees if the moving party failed to make a good faith attempt to obtain the disclosure or discovery without court action, the opposing party’s action was substantially justified, or other circumstances make an award of expenses unjust.[95] If the motion is denied, the moving party owes fees to the other party, unless the court determines “the motion was substantially justified or other circumstances make an award of expenses unjust.”[96]
Rule 37. Rule 37 allows for an award of attorneys’ fees if the opposing party fails to satisfy specified discovery-related obligations. An attorneys’ fees award may be granted if the other party fails to: (a) obey a discovery order; (b) provide information or identify a witness as required under Rule 26; (c) attend its own deposition; (d) serve answers to interrogatories; (e) respond to requests for inspection; or (f) participate in creating a joint discovery plan.[97] While the rule suggests the award is mandatory, it is not appropriate if the court finds that the nondisclosure was substantially justified or that “other circumstances make an award of expenses unjust.”[98] If you are the moving party, you must confer with the opposing party—failure to do so can also preclude the award.[99]
Rule 41. Rule 41 allows the court to award costs when a plaintiff dismisses a case and then files a later action “based on or including the same claim against the same defendant.”[100] Its purpose is to deter forum shopping and vexatious litigation.[101] There is a split of authority among jurisdictions as to whether an award of “costs” under this rule includes attorneys’ fees.[102]
Rule 56. Under Rule 56, the court may impose a variety of sanctions against a party who submits an affidavit or declaration in bad faith. The rule focuses specifically on reasonable expenses, including attorneys’ fees that are incurred as a result of the bad-faith submission, but also specifies that the court may impose “other appropriate sanctions.”[103] Sanctions under Rule 56 are discretionary. In practice, “courts seldom invoke the independent Rule 56 authority to impose sanctions.”[104] Although sanctions are scarcely awarded under Rule 56, parties have recovered attorneys’ fees for an opponent’s “egregious” conduct,[105] such as forging a signature on an affidavit,[106] filing an affidavit to “obfuscate or delay,[107] or submitting an affidavit which contradicts prior testimony.[108]
Rule 68. The federal rules discussed thus far all operate as a possible source by which a party may recover fees from an opponent. Another rule – Rule 68 – does the opposite. Where applicable, Rule 68 has the potential not only to limit the amount of fees recoverable, but also to place the plaintiff on the hook for a portion of the fees.
Rule 68’s goal is to encourage settlement. Fourteen days prior to a scheduled trial, the defendant may make an offer of judgment to the other party.[109] If plaintiff accepts the offer, judgment is entered on those terms.[110] If plaintiff rejects the offer and eventually obtains a less favorable outcome, the plaintiff must pay costs incurred after the settlement offer was made.[111] In other words, if plaintiff rejects the offer and does not do better at trial, recoverable fees are cut off as of the time of the offer, and plaintiff must now pay defendant’s costs from the time the offer was made. Costs are recoverable only if a judgment is entered in favor of a plaintiff. Thus, if a defendant makes a Rule 68 offer that is refused, and judgment is entered in favor of the defendant at trial, the defendant may not recover costs under Rule 68.[112]
Rule 68 specifically states that “costs” are recoverable. The term costs, however, may include attorneys’ fees, depending on the statute under which fees are sought. If the relevant statute includes attorneys’ fees in its definition of costs, then Rule 68 applies to attorneys’ fees as well.[113] If the relevant statute requires a separate application for recovery of fees, then Rule 68 applies only to costs.[114] Thus, plaintiffs must thoughtfully consider any valid offer of judgment presented by the opposing party to avoid any negative ramifications under Rule 68.
2. State Rules of Civil Procedure
For those practicing in state courts, many state codes provide a state counterpart to the federal rules. In fact, many states directly modeled their rules on the Federal Rules of Civil Procedure.[115] Rule 11, in particular, has numerous state-law analogues. Like Federal Rule 11, these rules require an attorney to certify pleadings and motions filed with the court, and the certifying party is sanctioned with attorneys’ fees if the certification is unfounded.[116] Other state court rules permit the sanction of attorneys’ fees for a party’s failure to appear at a pretrial conference or if an attorney is grossly unprepared to participate in the conference,[117] failure to appear at a deposition,[118] failure to obey court orders on discovery issues,[119] failure to certify that discovery requests, responses, and objections are warranted under existing law,[120] and failure to serve responses to discovery requests and interrogatories,[121] all of which have a corollary in the federal rules. Additionally, when tasked with applying and interpreting the state rules, state courts may seek guidance in case authority addressing the federal rules.[122]
In one point of departure from the federal rules, some of the state schemes address discovery issues with prohibitions more general than the very specific federal dictates. In California, “misuse of the discovery process” is sanctionable via an award of attorneys’ fees and encompasses a wide range of potential conduct, including “using a discovery method in a manner that does not comply with its specified procedures,” “employing a discovery method in a manner or to an extent that causes unwarranted annoyance,” and “making an evasive response to discovery.”[123] Similarly far-reaching state statutes allow attorneys’ fees if a party abuses the discovery process “in seeking, making or resisting discovery.”[124]
In the event of an appeal, state rules of appellate procedure may also implicate a party’s recovery of fees. Generally, a prevailing party may recover attorneys’ fees for work performed on an appeal, under the same statutory or contractual provision under which fees are sought at the trial level.[125] In some states, the appellate court may grant fees to a party who prevailed on appeal, but who was not yet deemed the prevailing party at the trial level. Typically, these awards are provisional, pending final resolution of the case.[126] In Oregon, for example, detailed state rules of appellate procedure provide that an “appellate court may condition the actual award of attorney fees on the ultimate outcome of the case.”[127] The appellate court may determine an award is appropriate, but remand the case to the lower court to assess the award if the prevailing party on appeal is the ultimate prevailing party.[128] The rules of appellate procedure may also contain specific filing requirements or deadlines regarding an application of fees. Just as with the state rules regarding discovery, attorneys must check the rules of appellate procedure to ensure all applicable requirements are met.
Certainly, a party cannot rely on the sanctions under the rules of civil procedure to fund a lawsuit. Under the right circumstances, however, a knowledgeable attorney well-versed in the rules and their applicability may successfully recover fees from the opposing party.
D. The Court’s Inherent Authority to Shift Attorneys’ Fees May Compensate for An Opponent’s Egregious Behavior
The Federal Rules of Civil Procedure attempt to rein in common misdeeds practiced in the discovery process, but do not, and cannot, adequately patrol every aspect of the process. By the same token, sanctionable behavior does not occur only in the discovery process. Indeed, in certain circumstances, the Federal Rules and federal statutes fall woefully short in addressing bad behavior of the parties and attorneys in litigation. If an attorney encounters particularly egregious behavior on behalf of the opponent, the court’s inherent sanctions power may come into play.
Under common law, courts are vested with the inherent authority to police the legal process and sanction misconduct in the court system.[129] As part of this power, a court may award attorneys’ fees to a successful party where “his opponent has acted ‘in bad faith, vexatiously, wantonly, or for oppressive reasons.’”[130] A showing of bad faith is a prerequisite to a fee award under this power.[131] Although a high standard to meet, it is not impossibly so. Bad faith has been found where a party engages in fraud, delays or disrupts the litigation, or fails to follow a court order.[132] In Chambers v. Nasco, Inc., for instance, the losing party was required to pay attorneys’ fees to the opposing party because of his outrageous conduct.[133] The losing party attempted a scheme to place property at issue outside the jurisdiction of the court, denied access to corporate records, filed meritless papers and engaged in tactics to delay the proceedings, violated court orders, and interfered with equipment on the property.[134] In that instance, the court noted that exercise of its inherent power was “particularly appropriate when the offending parties have practiced a fraud upon the court.”[135] Moreover, the court may award sanctions under its inherent power even if a rule of civil procedure could also sanction the conduct.[136]
The court’s inherent power, of course, is not a cure-all for attorneys seeking to recover fees. Indeed, in most cases, the court will likely be reluctant to exercise its power. The inherent power is to be invoked judiciously, as the Supreme Court cautioned that the power “must be exercised with restraint and discretion.”[137] Furthermore, the court retains discretion to fashion remedies that are appropriate to the situation, which may or may not involve attorneys’ fees. A court may choose from numerous available remedies directed to punishing or deterring the party’s conduct. Presumably, then, an award of attorneys’ fees is most likely in those situations where the other party’s conduct has resulted in prolonged litigation, needless pleadings and proceedings, and increased expenses for their opponent. Any motion for fees under the inherent power should focus on the other party’s egregious conduct and its impact on the litigation. If a party is confronted with out-of-line, inexcusable conduct of the other party, the inherent power may provide a viable option for a client to recoup the increased expense.[138]
II. DETERMINING THE AMOUNT FOR ATTORNEYS’ FEES
While successfully establishing a fee-shifting remedy is a substantial milestone in litigation, it is only half the battle. Two essential steps remain: (1) demonstrating that your client is the prevailing party in the litigation, and (2) proving the reasonableness of the fee award sought.
A. Attorneys’ Fees May Be Recovered Even if Not Wholly Successful on All Claims
Prevailing Party. Most fee-shifting statutes and contractual fee provisions award attorneys’ fees only to the “prevailing party.”[139] Often, the party prevailing in an action is obvious. Other times, however, both parties can claim some success in the litigation, rendering the “prevailing party” less apparent. Generally, a prevailing party need not be successful on every contention in the lawsuit, but rather may recover fees as a prevailing party if they win on any significant issue in the case[140] or receive at least some relief on the merits of their claim.[141] Even a party who recovers only nominal damages may be a prevailing party for fee recovery purposes.[142]
Prevailing party status is not reserved only for successful plaintiffs. Defendants who prevail in a lawsuit governed by a fee-shifting statute requiring “prevailing party” status may also move to recover their fees. A successful defendant, however, must satisfy a higher standard. In order to recover fees as a defendant, the party must ordinarily prove they are the prevailing party and show that plaintiff’s lawsuit was “frivolous, unreasonable, or without foundation.”[143]
A party may be a prevailing party for purposes of fee-shifting statutes even if the case settles.[144] As it currently stands, the availability of a fee award to a settling party is in a state of flux. For a number of years, courts allowed fee-shifting, even if the parties settled, under the catalyst theory. Under that theory, recognized by most courts, a plaintiff could recover fees as a prevailing party if a consent decree or other agreement brought about some goal of the litigation.[145] The rationale behind the theory was that the lawsuit acted as a “catalyst” in bringing about the defendant’s changed behavior or relief sought by plaintiffs.
The Supreme Court’s decision in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources[146] muddied the waters on this issue. In Buckhannon, the Supreme Court determined that fee award eligibility requires a “judicial imprimatur” and a “material alteration of the legal relationship of the parties.”[147] A “court-ordered consent decree” satisfies this standard.[148] Whether other settlement agreements also give rise to a fee award is less clear. A few references in the opinion mention judicially enforceable and “court-approved” or “court-endorsed” settlements,[149] but there is some discrepancy in later decisions as to when settlement agreements are sufficient to permit fee recovery.[150]
A recent Supreme Court decision that limits when an award of fees may be made could provide some clarity with regard to settlements. In Lackey v. Stinnie,[151] the Court held that attorney fees are not recoverable when the litigation terminated with a preliminary injunction, and no further action was possible. The plaintiffs in Lackey challenged the constitutionality of a Virginia statute[152] that directed the courts in that state to suspend the license of any driver who failed to pay “any fine, costs, forfeitures, restitution, or penalty lawfully assessed against him” for violation of a federal, state, or local law. In 2018, the District Court granted a preliminary injunction, prohibiting the enforcement of the statute. That injunction was never appealed. Shortly before the case was to be heard at trial, the Virginia General Assembly repealed the statute and directed the reinstatement of licenses suspended under the law. The plaintiffs moved for their attorney fees, on the grounds that they were a “prevailing party.”
The Supreme Court held that the plaintiffs were not a prevailing party. Preliminary injunctions do not conclusively resolve legal disputes. In awarding preliminary injunctions, courts determine if a plaintiff is likely to succeed on the merits—along with the risk of irreparable harm, the balance of equities, and the public interest. A preliminary injunction is “transient,” and does not conclusively resolve the rights of parties on the merits. For that reason, a preliminary injunction does not confer prevailing party status.
While Lackey dealt with a preliminary injunction, and not a settlement, it is probable that the Court would look at the nature of a settlement – whether it is “transient” or “non-transient” – in considering an award of attorneys’ fees based on a settlement. A court-ordered or approved settlement, or a settlement that is somehow tied to a court enforcement mechanism, such as a specific statement in the agreement providing for court enforcement of the agreement or incorporating the agreement into a court order or stipulation filed with the court, may also be sufficient to support fee-shifting.[153] To further protect its right to seek fees, the party seeking fees should address the issue of fees in the settlement agreement. If the agreement is silent on fees, the court may conclude fee recovery was waived or implicitly incorporated into the settlement amount, or simply determine there was no prevailing party. The party should propose and include a clear and unambiguous statement in the agreement identifying that party as the prevailing party for fee recovery purposes to avoid prolonged fee disputes later.
B. Conscientious Recordkeeping is Essential to Maximizing Fee Recovery
Reasonable Attorneys’ Fees. Attorneys’ fees awards are held to a reasonableness standard. The lodestar method is the touchstone for determining the amount of a reasonable attorneys’ fee award.[154] Under the lodestar method, the court multiplies the number of hours spent on the litigation by a reasonable hourly rate for those services.[155] While seemingly a straightforward rule, both components of the calculation are subject to intense debate and competing evidentiary support. Because the party seeking fees has the burden to establish reasonableness of the requested fee award,[156] that party must prepare and provide compelling evidence of the hourly rate in the market. In addition to the attorney’s own affidavit, this evidence might include affidavits from other attorneys in the area, hourly rate survey information, rate information from other fee awards in the area, or evidence of fees actually charged to the client.[157] Moreover, the other half of the equation—number of hours expended on the litigation—depends largely, if not exclusively, on the attorney’s documentation. Both the court and the opposing party can be expected to heavily scrutinize all billing records and related documents submitted in support of the fee request. The court may deduct time spent on claims that were ultimately unsuccessful, duplicative or unnecessary entries, time spent in numerous meetings, or time spent without adequate documentation.[158]
Accurate and complete time records are crucial to a fee award. From the outset of litigation, an attorney must be a diligent timekeeper. To minimize deductions of time due to poor recordkeeping, an attorney should:[159]
- Keep specific and complete time records;
- Record time contemporaneously;
- Make sure all entries are understandable and clearly state the work performed;
- Avoid block entries;[160]
- Exercise billing judgment, just as when billing directly to a client; and
- Proofread time entries.
Paralegals should maintain similarly detailed time records, as their time spent on the matter may also be compensable.[161] Time records must provide sufficient information to enable the court to determine what activity was performed and whether the time spent was reasonable.[162] An entry stating “research regarding motion to compel deposition” is likely to pass muster, while vague entries merely indicating “research” likely will not.[163]
After determining the lodestar figure, the court may, in limited circumstances, adjust the award upward or downward by applying a multiplier. Although the United States Supreme Court has recognized that the lodestar method captures most of the factors relevant to determining a reasonable fee award,[164] courts retain discretion to apply a multiplier in three circumstances: (1) where the hourly rate does not reflect the attorney’s true market value; (2) the litigation was protracted and required a significant outlay of expenses; and (3) there was a delay in recovery of the fees.[165] Where the party is successful on some claims, but not others, the court may reduce the fee award to reflect the level of success.[166]
III. FEE AGREEMENTS AND ALTERNATIVE RECOVERY PROVISIONS
A. A Clear Representation Agreement with the Client May Ensure Payment of Recovered Fees
Most practitioners understand and appreciate the need for a clear and comprehensive representation agreement, which sets expectations and requirements for the payment of attorneys’ fees, with their clients. When an attorney anticipates a potential fee recovery from the other party, however, he or she may overlook the necessity for a provision addressing attorneys’ fees. An understanding with the client regarding recovered fees is equally important as an agreement regarding fees paid directly by the client.
As an initial matter, the representation agreement should make clear that the attorney’s right to payment from the client is not contingent upon a fee award from the other side. In addition, under fee-shifting statutes, the client has the right to recover fees, not the attorney. To ensure payment of fees to the attorney, the fee agreement should plainly state that, in the event of a fee award, the attorney is entitled to be paid from attorneys’ fees recovered from the opposing party. The agreement may also specify how the attorney is to be paid if the parties settle the case. Moreover, so-called “fees on fees,” or fees awarded for time spent in preparing and presenting the fee application, may be recovered in a reasonable fee award.[167] But what if fee recovery is not granted? The representation agreement might address who is responsible for the “fees on fees” if the application is not successful.
B. An Alternative Fee Recovery Clause Allows an Attorney to Recover Market Rates Even If Charging Reduced Rates to the Client
Likewise, practitioners should consider including an alternative fee recovery agreement in any representation agreement with clients. An alternative fee recovery agreement provides that an attorney is entitled to the greater of: (1) the fees charged to the client or (2) the reasonable amount of fees as determined by the Court. This type of contractual provision has arisen in response to court decisions stating that a reasonable hourly rate, for purposes of recovering attorneys’ fees, could not exceed the rate agreed to by the client.[168] Such decisions posed problems for attorneys providing reduced-rate services for some clients.[169] An alternative fee recovery agreement allows the attorney to negotiate a reduced rate with the client, while leaving open the possibility of a market rate recovery pursuant to a fee-shifting statute or contract.
If drafting such a provision, attorneys could consider language such as the following, which has been approved by the Florida courts:
[Name of client] and I have a fee agreement in which I provide legal services at a discounted hourly rate. In accordance with that fee agreement, my hourly rate is $XXX.XX. The hourly rate for associates is $XXX.XX. And the hourly rate for paralegals is $XXX.XX.
[Name of client] and I have also agreed that should anyone other than [Name of client] be required to pay attorneys’ fees, the hourly rate for attorneys’ fees would be at a reasonable rate as is determined by the court and [Name of client] would be obligated to then pay me that court-awarded reasonable amount.[170]
Because this type of agreement does not alter the amount paid by the client, most clients should be amenable to this clause.
If operating under a contingency agreement, the representation agreement is equally, if not more, significant, and should address the possibility of a fee award. The attorney must spell out exactly how fees are payable to the attorney. An “alternative fee recovery” clause similar to that stated above and subject to ethical rules may be appropriate. In the contingency context, a typical representation agreement might state that the lawyer’s contingent recovery applies only to the amount recovered, not including attorneys’ fees awarded by the court. An alternative fee recovery clause in the representation agreement might state that the attorney’s compensation shall be the amount of attorneys’ fees awarded by the court, or the contingent percentage of recovery, whichever is greater.
CONCLUSION
While the American Rule remains the baseline assumption with respect to the payment of attorneys’ fees in the United States, several exceptions to the rule provide parties the opportunity to recover fees from an opposing party. These exceptions continue to grow. State legislatures and the federal government regularly enact new statutes permitting fee recovery, and more and more contracts include an attorneys’ fees provision. Although the exceptions have not yet swallowed the rule, in many ways, we effectively have a modified or hybrid system. For all parties and practitioners, awareness of the available statutes, court rules, and relevant case law is essential to maximizing potential recoveries.
ABOUT THE AUTHORS
Randall Holbrook, LegalResearch.com Senior Research Attorney, is a cum laude graduate of Hamline University School of Law (Mitchell Hamline School of Law). After graduation, he was a law clerk for the Ninth District Court, and later worked in private practice and as general counsel for a group of agricultural finance companies. Randy has also focused his work for a number of years on legislative and regulatory monitoring, as an attorney in private practice, and as a member of LRC’s research team.
Kristen Letich, LegalResearch.com Senior Research Attorney, graduated with honors from the University of Minnesota Law School. She holds significant litigation & regulatory compliance experience in contract law, workers’ compensation, healthcare, unfair business practices, and employment law.
Heather Menard, LegalResearch.com Senior Research Attorney, graduated with honors from UCLA School of Law, after which she became a litigation attorney with Sidley Austin before joining LegalResearch.com. Heather has worked with a range of legal issues, including contract law, constitutional claims, consumer protection, unfair business practices, employment law, accountant liability, and securities litigation.
[1] Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 247 (1975).
[2] Baker Botts L.L.P. v. ASARCO LLC, 576 U.S. 121, 126 (2015).
[3] Thomas D. Rowe, Jr., The Legal Theory of Attorney Fee Shifting: A Critical Overview, Duke L. J., 1982, available at http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2815&context=dlj (last visited Feb. 20, 2025).
[4] Id.
[5] Henry Cohen, Awards of Attorneys’ Fees by Federal Courts and Federal Agencies, Congressional Research Serv., June 20, 2008, available at https://fas.org/sgp/crs/misc/94-970.pdf (last visited Feb. 20, 2025).
[6] The American Lawyer, available at https://www.law.com/americanlawyer/am-law-100/ (last visited Feb. 20, 2025).
[7] Debra Cassens Weiss, “Very Strong Performance” Reported for Law Firms in 2024, with Revenue Increasing 12.5%, The ABA Journal (Jan. 29, 2025), available at: https://www.abajournal.com/news/article/very-strong-performance-reported-for-law-firms-in-2024-with-revenue-increasing-12.5 (last visited Feb. 20, 2025).
[8] Alyeska Pipeline, 421 U.S. at 247; see also Baker Botts L.L.P. v. ASARCO LLC, 576 U.S. 121 (2015).
[9] Thomas D. Rowe, Jr., The Legal Theory of Attorney Fee Shifting: A Critical Overview, Duke L. J., 1982, available at http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2815&context=dlj (last visited Feb. 20, 2025).
[10] Eric Watness, Making a Defensible Case For Your Attorneys’ Fee Award, JAMS, 2013, available at http://www.jamsadr.com/files/Uploads/Documents/Articles/Watness-Attorney-Fee-WSBA-2013.pdf (last visited Feb. 20, 2025).
[11] Henry Cohen, Awards of Attorneys’ Fees by Federal Courts and Federal Agencies, Congressional Research Service, June 20, 2008, available at https://fas.org/sgp/crs/misc/94-970.pdf (last visited Feb. 20, 2025).
[12] Id.
[13] 42 U.S.C. § 2000e-5(k).
[14] 52 U.S.C. § 10310(e).
[15] 42 U.S.C. § 1988.
[16] 28 U.S.C. § 2412(b).
[17] 5 U.S.C. § 504; 28 U.S.C. § 2412(d); Henry Cohen, Awards of Attorneys’ Fees by Federal Courts and Federal Agencies, Congressional Research Service, June 20, 2008, available at https://fas.org/sgp/crs/misc/94-970.pdf (last visited Feb. 20, 2025).
[18] 5 U.S.C. § 504; 28 U.S.C. § 2412(d); Henry Cohen, Awards of Attorneys’ Fees by Federal Courts and Federal Agencies, Congressional Research Service, June 20, 2008, available at https://fas.org/sgp/crs/misc/94-970.pdf (last visited Feb. 20, 2025).
[19] 5 U.S.C. § 504; 28 U.S.C. § 2412(d).
[20] 28 U.S.C. § 1927.
[21] Obeslo v. Empower Cap. Mgmt., LLC, 85 F.4th 991, 1005 (10th Cir. 2023).
[22] Amlong & Amlong v. Denny’s, Inc., 500 F.3d 1230, 1251 (11th Cir. 2006).
[23] See, e.g., In re Wis. Steel Co., 48 B.R. 753 (N.D. Ill. 1985); see also, e.g., Matter of Sherk, 918 F.2d 1170 (5th Cir. 1990).
[24] See, e.g., Steinle v. Warren, 765 F.2d 95 (7th Cir. 1985).
[25] Blackbird Tech LLC v. Health in Motion LLC, 944 F.3d 910, 917 (Fed. Cir. 2019).
[26] 5 U.S.C. §552.
[27] (American Bar Association. “Fee Shifting.” June 11, 2015. Available at: https://www.americanbar.org/groups/delivery_legal_services/reinventing_the_practice_of_law/topics/fee_shifting/) (last visited on Feb. 20, 2025).
[28] See, e.g., section 16 of the Fair Labor Standards Act, 29 U.S.C. § 216(b).
[29] 42 U.S.C. § 1988(b).
[30] 28 U.S.C. § 2412 (d)(1)(A).
[31] Pierce v. Underwood, 487 U.S. 552, 565 (1988).
[32] Id., 487 U.S. at 563.
[33] David A. Root, Attorney Fee-Shifting in America: Comparing, Contrasting, and Combining the “American Rule” and “English Rule,” Ind. Int’l & Comp. L. Rev., Vol. 15, Issue No. 3 (2005), available at http://mckinneylaw.iu.edu/iiclr/pdf/vol15p583.pdf (last visited Feb. 20, 2025).
[34] Alaska Civ. R. 82.
[35] Id.
[36] Cal. Civ. Proc. Code § 1021.5.
[37] Cal. Civ. Proc. Code § 1021.9.
[38] Tex. Civ. Prac. & Rem. Code § 38.001.
[39] Tex. Civ. Prac. & Rem. Code § 38.002 (“To recover attorney’s fees under this chapter: (1) the claimant must be represented by an attorney; (2) the claimant must present the claim to the opposing party or to a duly authorized agent of the opposing party; and (3) payment for the just amount owed must not have been tendered before the expiration of the 30th day after the claim is presented.”).
[40] Wash. Rev. Stat. § 4.84.250.
[41] Wash. Rev. Stat. § 4.84.270.
[42] Wash. Rev. Stat. § 4.84.280.
[43] See Ariz. Rev. Stat. Ann. § 12-752(D); Ark. Code Ann. § 16-63- 506(b)(1); Cal. Civ. Proc. Code § 425.16(c)(1); Colo. Rev Stat. § 13-20-1101(4)(b); Conn. Gen. Stat. § 52-196a(f); Del. Code Ann. tit. 10, § 8138(a)(1); D.C. Code § 16- 5504(a); Fla. Stat. § 768.295(4); Ga. Code Ann. § 9-11-11.1(b.1); Haw. Rev. Stat. § 634F-2(8)(B); 735 Ill. Comp. Stat. 110/25; Ind. Code § 34-7-7-7; Kan. Stat. Ann. § 60-5329(g); Ky. Rev. Stat. § 454.478; La. Code Civ. Proc. Ann. art. 971(b); Me. Rev. Stat. Ann. tit. 14, § 556; Mass. Gen. Laws ch. 231 § 59(H); Minn. Stat. § 554.04(1); Mo. Rev. Stat. § 537.528; Neb. Rev. Stat. § 25-21,243(1); Nev. Rev. Stat. § 41.670(1)(a); N.J. Stat. § 2A:53A-58; N.M. Stat. Ann. § 38-2-9.1(B); N.Y. Civ. Rights Law § 70-a(1)(a); Ohio Rev. Code § 2747.05; Okla. Stat. tit. 12, § 1438(A)(1); Or. Rev. Stat. § 31.152(3); 27 Pa. Cons. Stat. § 7707; R.I. Gen. Laws § 9-33-2(d); Tenn. Code Ann. § 4-21-1003(c); Tex. Civ. Prac. & Rem Code § 27.009(a)(1); Utah Code Ann. § 78B-6-1405(1)(a); Vt. Stat. Ann. tit. 12, § 1041(f)(1); Va. Code Ann. § 8.01-223.2(B); R.C.W. § 4.24.510. The Maryland anti-SLAPP statute, Md. Code Ann., Cts. & Jud. Proc. § 5-807, makes no provision for attorney’s fees.
[44] Loughlin v. Meghji, 186 A.D.3d 1633 (2d Dept. Sept. 30, 2020).
[45] Id. at 1634.
[46] Id. at 1635.
[47] Id. at 1636.
[48] Schlam Stone & Dolan LLP, Provision in Contract Awarding Double Attorneys’ Fees to Prevailing Party is Enforceable, Commercial Division Blog, October 10, 2020. Available at: https://www.schlamstone.com/provision-in-contract-awarding-double-attorneys-fees-to-prevailing-party-is-enforceable/ (last visited on Feb. 26, 2025).
[49] Henderson v. Henderson Inv. Props., LLC, 148 Idaho 638, 227 P.3d 568 (2010).
[50] Id. at 640-41, 227 P.3d at 570-71.
[51] Id. at 639-40, 227 P.3d at 569-70.
[52] Id. at 640-43, 227 P.3d at 570-73.
[53] Midland Prop. Partners, LLC v. Watkins, 416 S.W.3d 805, 817-18 (Mo. Ct. App. 2013).
[54] Id. at 818-19.
[55] Brooks v. Nord, 16 Wn. App. 2d 441, 446, 480 P.3d 1167, 1170 (Wash. App. Div. 2 2021).
[56] Id.
[57] See, e.g., Nelson v. 15 White Barn Drive LLC, 2022 UT App 106, ¶¶ 25-26, 517 P.3d 1062; Hahn v. McElroy, 2023 IL App (2d) 220403, ¶ 47, 239 N.E.3d 792, 475 Ill. Dec. 894.
[58] See, e.g., Fla. Stat. § 57.105(7); Cal. Civ. Code § 1717.
[59] Fla. Stat. § 57.105(7).
[60] See N.C. Gen. Stat. § 6-21.6 (an attorneys’ fees provision in a contract is not valid and enforceable unless it is business contract, contains a reciprocal right to seek fees, and is signed by hand).
[61] 8 Del. Code § 109 (b).
[62] One commentator has suggested that boilerplate fees provisions make sense for parties in the following three situations: (1) the other party is more likely to violate the terms of the agreement; (2) it is a complex contract governing a long-term relationship; and (3) the parties wish to avoid litigation. Peter Smith, Boilerplate considerations: when to have an attorneys’ fees provision in your contracts, Apex Law Group LLP, Jan. 19, 2012, available at http://apexlg.com/?p=22 (last visited on Mar. 7, 2025).
[63] See, e.g., Fla. Stat. § 57.105(7); Cal. Civ. Code § 1717.
[64] See N.C. Gen. Stat. § 6-21.6 (an attorneys’ fees provision in a contract is not valid and enforceable unless it is business contract, contains a reciprocal right to seek fees, and is signed by hand).
[65] Fed. R. Civ. P. 11(a), (b).
[66] Fed. R. Civ. P. 11(c).
[67] Fed. R. Civ. P. 11(c)(2); see also Nuvasive, Inc. v. Madsen Med., Inc., 2015 WL 5638210, at *3 (S.D. Cal. Sept. 24, 2015); NCC Bus. Servs., Inc. v. Lemberg & Assocs., LLC, 2015 WL 5553773 (M.D. Fla. Sept. 18, 2015); Amity Digit. LLC v. Helix Digit. Inc., No. 23-CV-11044-LTS, 2025 BL 99294 *11 (S.D.N.Y. Mar. 25, 2025) (the 21-day “safe harbor” provision is a strict procedural requirement).
[68] Bus. Guides, Inc. v. Chromatic Commc’ns Enters., Inc., 498 U.S. 533, 553-54 (1991) (citations omitted).
[69] Fed. R. Civ. P. 11, Notes of Advisory Committee on Rules—1993 Amendment.
[70] Brown v. Asea Brown Boveria, Inc., 2015 WL 7289492, at *4-5 (S.D. Miss. Nov. 16, 2015).
[71] Margetis v. Ferguson, 2015 WL 6688063, at *15 (E.D. Tex. Sept. 29, 2015).
[72] See CT Install Am., LLC v. Boryszewski, No. 22-cv-4557, 2024 BL 383893, 2024 WL 4582885 (E.D. Pa. Oct. 25, 2024) (Rule 11 “is not a panacea intended to remedy all manner of attorney misconduct occurring before or during the trial of civil cases,” and it should not be sued as a basis for sanctions for the inappropriate filing of papers where other rules more directly apply).
[73] Almeciga v. Ctr. for Investigative Reporting, Inc., 185 F. Supp. 3d 401, 427 (S.D.N.Y. 2016).
[74] Fed. R. Civ. P. 16(f)(2).
[75] CLM Partners LLC v. Fiesta Palms, LLC, 2013 WL 6388760, at *2 (D. Nev. Dec. 5, 2013).
[76] United Pool Distrib. v. Custom Courier Sols., Inc., No. 22-CV-06314-FPG (W.D.N.Y. Feb. 04, 2025).
[77] Fed. R. Civ. P. 16(f)(1); Howe v. Cobb Mech. Contractors, Inc., 2010 WL 1413171, at *3 (D. Colo. Apr. 2, 2010).
[78] Falcon Farms, Inc. v. R.D.P. Floral, Inc., 2008 WL 3874598, at *3 (S.D. Fla. Aug. 14, 2008) (attorneys’ fees awarded where party failed to have representative with settlement authority present at mediation); Weir v. Forman Automotive Group, 2013 WL 756353 (D. Nev. Feb. 26, 2013) (attorneys’ fees awarded for party’s failure to have insurance company representative at the early neutral evaluation session).
[79] Burch v. Blue Cross Blue Shield of North Carolina, 2009 WL 4950578 (M.D.N.C. Dec. 14, 2009).
[80] Fed. R. Civ. P. 26(g)(1).
[81] See, e.g., David v. Caterpillar, Inc., 324 F.3d 851, 852 (7th Cir. 2003).
[82] Washington v. City of Detroit, 2007 WL 603379, at *2 (E.D. Mich. Feb. 22, 2007).
[83] Sakakibara v. Spectrum Gaming Group, LLC, 2010 WL 2947381, at *3 (D. Nev. July 22, 2010).
[84] Kwon v. Singapore Airlines, 2003 WL 25686535, at *2 (N.D. Cal. Nov. 7, 2015).
[85] Wake v. National R.R. Passenger Corp., 2013 WL 1316431 (D. Md. Mar. 27, 2013).
[86] Fed. R. Civ. P. 30(d)(2).
[87] Id.
[88] Id.
[89] Waddoups v. Noorda, 2013 WL 5426272, at *2 (D. Utah Sept. 26, 2013).
[90] Id.
[91] Id.
[92] Myrdal v. District of Columbia, 248 F.R.D. 315 (D. D.C. Feb. 25, 2008); Pioneer Drive, LLC v. Nissan Diesel Am., Inc., 262 F.R.D. 552 (D. Mont. Dec. 3, 2009).
[93] Fed. R. Civ. P. 30(d)(3).
[94] Fed. R. Civ. P. 37(a)(5).
[95] Id. See, e.g. McLaurin v. McDonough, No. 3:23-CV-281-TSL-RPM, 2025 BL 44023 (S.D. Miss. Feb. 11, 2025) (court would not impose sanctions on a pro se party who did not understand her obligations regarding production of a witness, particularly in light of the fact that the deposition was rescheduled and the witness was ultimately deposed).
[96] Fed. R. Civ. P. 37(a)(5).
[97] Fed. R. Civ. P. 37(a)(3); see also JSC Foreign Economic Assoc. v. Int’l Dev. & Trade Servs., Inc., 386 F. Supp. 2d 461 (S.D.N.Y. 2005) (party failed to produce thousands of pages of documents and withheld non-privileged documents under a blanket assertion of privilege); RBC Bank (USA) v. Epps, 2012 WL 3637834 (D.S.C. Aug. 22, 2012) (party failed to respond to discovery requests, motion to compel, and failed to produce documents in violation of court order).
[98] Fed. R. Civ. P. 37(a)(5).
[99] Fed. R. Civ. P. 37(a)(1); Pro Bono Invs., Inc. v. Gerry, 2005 WL 2429767 (S.D.N.Y. Sept. 30, 2013).
[100] Fed. R. Civ. P. 41(d).
[101] Garza v. Citigroup, Inc., 311 F.R.D. 111 (D. Del. 2015), aff’d 881 F.3d 277 (3d Cir. 2018).
[102] See, e.g., id.; Lee v. Townsend Farms, Inc., 2014 WL 7149613 (D. Idaho Dec. 15, 2014) (noting the split of authority on whether fees are recoverable; holding “costs” does not include attorneys’ fees); Reserve Place, LLC v. Regions Bank, 2010 WL 4854542 (N.D. Fla. Nov. 28, 2010) (attorneys’ fees may be recoverable).
[103] Fed. R. Civ. P. 56.
[104] Fed. R. Civ. P. 56(H), comments to 2010 amendments (citing Cecil & Cort, Federal Judicial Center Memorandum on Federal Rule of Civil Procedure 56 (g) Motions for Sanctions (April 2, 2007)); see also TCF Inventory Fin., Inc. v. Northshore Outdoor, Inc., 2012 WL 2576367 (N.D. Ohio July 3, 2012) (Rule 56 sanctions are rare).
[105] TCF Inventory Fin., Inc. v. Northshore Outdoor, Inc., 2012 WL 2576367 (N.D. Ohio July 3, 2012).
[106] Paniagua v. Max 18, Inc., 2013 WL 5907893 (N.D. Ill. Nov. 4, 2013).
[107] Bowers v. University of Virginia, 2008 WL 2346033 (W.D. Va. June 6, 2008).
[108] Anderson v. Chicago Land Trust Co., 2013 WL 5423848 (E.D. Ill. Sept. 27, 2013).
[109] Fed. R. Civ. P. 68(a).
[110] Id.
[111] Fed. R. Civ. P. 68(d).
[112] Marx v. Gen. Revenue Corp., 668 F.3d 1174, 1182 (10th Cir. 2011).
[113] Marek v. Chesny, 473 U.S. 1 (1985).
[114] See, e.g., Fegley v. Higgins, 19 F.3d 1126, 1134 (6th Cir. 1994) (plaintiff could recover attorneys’ fees despite recovering less at trial than Rule 68 offer by defendant because statute did not include attorneys’ fees as costs).
[115] Gerald F. Hess, Rule 11 Practice in Federal and State Court: An Empirical, Comparative Study, Marq. L. Rev., Vol. 75, Issue No. 2, 1992, available at http://scholarship.law.marquette.edu/cgi/viewcontent.cgi?article=1680&context=mulr (last visited Mar. 27, 2025).
[116] See, e.g., Tex. Civ. Prac. & Rem. Code § 10.001; Wash. Ct. R. 11; Minn. R. Civ. P. 11.01-11.04; Haw. R. Civ. P. 11.
[117] Ind. R. Tr. P. 16(K).
[118] See, e.g., Haw. R. Civ. P. 30(d)(3); Ill. S. Ct. R. 209(a); Ohio Civ. R. 37(A)(5)(a).
[119] See, e.g., Ohio Civ. R. 37.
[120] See, e.g., Haw. R. Civ. P. 30.
[121] See, e.g., Ohio Civ. R. 37; Tex. Court Rules § 215.1.
[122] See, e.g., NCC Bus. Servs., Inc. v. Lemberg & Assoc., LLC, 2015 WL 5553773 (M.D. Fla. Sept. 17, 2015) (using case law interpretation of Federal Rule of Civil Procedure to apply Florida state rule).
[123] Cal. Civ. Proc. Code § 2023.010.
[124] Tex. Court Rules § 215.3; Miss. R. Civ. P. 37.
[125] See, e.g., Fla. Stat. § 59.46 (“In the absence of an expressed contrary intent, any provision of a statute or of a contract entered into after October 1, 1977, providing for the payment of attorney’s fees to the prevailing party shall be construed to include the payment of attorney’s fees to the prevailing party on appeal.”); Wash. Rev. Code § 4.84.290 (statute permitting fees in small damages cases allows for fees on appeal); Ariz. R. Civ. App. P. 21 (party must state the statute, rule, or contract providing the basis for attorneys’ fees, and provide an itemized statement regarding those fees); McNiff v. Mazda Motor of Am., Inc., 384 Ill. App. 3d 401, 408, 322 Ill. Dec. 961, 968, 892 N.E.2d 598, 605 (2008) (allowing petition for fees for appellate work).
[126] See, e.g., Allstar Builders Corp. v. Zimmerman, 706 So. 2d 92 (Fla. Dist. Ct. App. 1998); Bogart v. Bogart, 163 Wn. App. 1007 (App. Div. 3 2011).
[127] Or. R. App. P. 13.10.
[128] Id.; see also Ariz. R. Civ. App. P. 21 (if decision is affirmed, vacated, modified, or reversed by Supreme Court, the Supreme Court may determine fees for appeal or remand the fees decision to the appellate court.); Fla. R. App. P. 9.400(b) (“The assessment of attorneys’ fees may be remanded to the lower tribunal”).
[129] Chambers v. Nasco, Inc., 501 U.S. 32 (1991). Courts have recognized another exception to the American Rule under common law, called the common fund doctrine. This doctrine has been applied to shift fees in limited circumstances, i.e., trust, class action, shareholder litigation, and insurance subrogation cases. See Johnny Parker, The Common Fund Doctrine: Coming of Age in the Law of Insurance Subrogation, Ind. L. Rev., vol. 31 (1998), available at http://digitalcommons.law.utulsa.edu/cgi/viewcontent.cgi?article=1212&context=fac_pub (last visited Mar. 28, 2025); see also US Airways, Inc. v. McCutchen, 569 U.S. 88, 104 (2013) (common fund doctrine authorizes a recovery of attorney’s fees to a successful ERISA litigant in the absence of contrary language in the plan).
[130] Hall v. Cole, 412 U. S. 1, 5 (1973); see also Hutto v. Finney, 437 U. S. 678, 689, n.14 (1978).
[131] Chambers, supra, 501 U.S. at 46-47.
[132] Id. at 31-42; Homer v. Rowan Cos., 153 F.R.D. 597, 599 (S.D. Tex. 1994) (finding sanctionable conduct where counsel misled opposing counsel); Bucci v. Kent, No. 2:22-cv-00604, 2024 BL 37409 (S.D. W. Va. Feb. 05, 2024)(imposing sanctions based on unreasonable multiplication of proceedings).
[133] Chambers, 501 U.S. at 42.
[134] Id. at 39-42.
[135] Id. at 42 (quotingdistrict court decision).
[136] Id. at 48-49.
[137] Id. at 43.
[138] Id. at 46.
[139] See, e.g., Civil Rights Act of 1976, 42 U.S.C. § 1988; Individuals with Disabilities Education Act, 20 U.S.C. § 1415(i)(3)(B)(i); Civil Service Reform Act of 1978, § 205(g)(1), 5 U.S.C. § 7701(g)(1).
[140] Hensley v. Eckerhart, 461 U.S. 424, 433 (1983), superseded by statute on other grounds, Prison Litigation Reform Act, 42 U.S.C. § 1997e.
[141] Hewitt v. Helms, 482 U.S. 755 (1987).
[142] Farrar v. Hobby, 506 U.S. 103 (1992).
[143] Hensley, 461 U.S. at 428 n.2 (citing Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)).
[144] Maher v. Gagne, 448 U.S. 122 (1980).
[145] See, e.g., Stanton v. Southern Berkshire Reg. Sch. Dist., 197 F.3d 574, 577 (1st Cir.1999).
[146] 532 U.S. 598 (2001).
[147] Buckhannon, 532 U.S. at 603-04.
[148] Id. at 603.
[149] Id. at 618-22.
[150] See, e.g., Christina A. ex rel Jennifer A. v. Bloomberg, 315 F.3d 990 (8th Cir. 2003) (settlement agreement that is not enforceable through contempt proceedings is not sufficient to allow for fees); Roberson v. Giuliani, 346 F.3d 75 (2d Cir. 2003) (court’s retention of jurisdiction over enforcement supports an award of fees).
[151] No. 23-621, 2025 BL 60099 (Feb. 25, 2025).
[152] Va. Code Ann. § 46.2-395(B) (2016) (repealed 2020).
[153] See Barrios v. California Interscholastic Federation, 277 F.3d 1128, 1134 n.5 (9th Cir. 2002) (parties agreed district court would retain jurisdiction over issue of attorneys’ fees; sufficient to support fee recovery); Skaff v. Meridien N. Am. Beverly Hills, LLC, 506 F.3d 832, 843 (9th Cir. 2007) (“judicially-sanctioned court-enforceable settlement agreement” sufficient to establish prevailing party for fees); Truesdell v. Phila. Hous. Auth., 290 F.3d 159, 165 (3d Cir. 2002) (stipulated settlement was judicially sanctioned because it was titled “Order,” had the judge’s signature, and provided for judicial enforcement); Cf. Doe v. Boston Pub. Schs., 264 F. Supp. 2d 65, 73 (D. Mass. 2003) (private settlement agreement not entered as an order does not permit attorneys’ fees).
[154] See Perdue v. Kenny A., 559 U.S.542, 549 (2010).
[155] Hensley, 461 U.S. at 433.
[156] Hensley, 461 U.S. at 434.
[157] Richard Rothschild, Attorneys’ Fees, Federal Practice Manual for Legal Aid Attorneys, 2013, available at https://abcdocz.com/doc/300802/federal-practice-manual-for-legal-aid-attorneys (last visited Mar. 28, 2025); Life Techs. Corp. v. Life Techs. Corp., 2012 WL 4748080 (D. Md. Oct. 2, 2012).
[158] Id.
[159] Eric Watness, Making a Defensible Case For Your Attorneys’ Fee Award, JAMS, 2013, available at http://www.jamsadr.com/files/Uploads/Documents/Articles/Watness-Attorney-Fee-WSBA-2013.pdf (last visited Mar. 28, 2025).
[160] See, e.g., Nwosuocha v. Glover, 2025 U.S.P.Q.2d 323 (S.D.N.Y. 2025) (“Although block billing is not forbidden, it does make it ‘difficult if not impossible for a court to determine the reasonableness of the time spent on each of the individual services or tasks provided.’ Given the block billing and numerous vague entries, the Court finds that an across-the-board reduction is appropriate here.”) (internal citations omitted); Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007) (“It was reasonable for the district court to conclude that Welch failed to carry her burden, because block billing makes it more difficult to determine how much time was spent on particular activities.”).
[161] Missouri v. Jenkins, 491 U.S. 274, 284 (1989).
[162] Richard Rothschild, Attorneys’ Fees, Federal Practice Manual for Legal Aid Attorneys, 2013, available at https://abcdocz.com/doc/300802/federal-practice-manual-for-legal-aid-attorneys (last visited Mar. 28, 2025).
[163] Id.
[164] Perdue, 559 U.S. at 551-52.
[165] Id. at 554-56.
[166] Hensley, 461 at 434-36.
[167] See, e.g., Bond v. Stanton, 630 F.2d 1231, 1235 (7th Cir. 1980).
[168] First Baptist Church of Cape Coral, Florida, Inc. v. Compass Constr., Inc., 115 So. 3d 978, 980-81 (Fla. 2013).
[169] Id.
[170] Kaufman v. MacDonald, 557 So.2d 572 (Fla. 1990).
Effective Strategies for Shifting the Burden of Attorneys’ Fees
