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Supreme Court Holds Defendants Were Only Entitled to Attorney's Fees for Costs That Would Not Have Been Incurred ''But For'' Plaintiff's Frivolous Civil Rights Claims, Bloomber

Wednesday, June 15, 2011

Fox v. Vice, No. 10-114, 2011 BL 147883 (U.S. June 6, 2011) The Supreme Court recently held that where a plaintiff asserted frivolous civil rights claims pursuant to 42 U.S.C. § 1983 as well as non-frivolous state law claims, the fee-shifting provision in 42 U.S.C. § 1988 only entitled the defendants to recover attorney’s fees for costs that would not have been incurred “but for” the frivolous claims. Though occurring in the context of a police chief’s action against his campaign opponent rather than a traditional employment relationship, the Supreme Court’s ruling resolves a circuit split and provides important guidance to employers regarding their rights to seek attorney’s fees from employees who bring frivolous lawsuits under federal anti-discrimination statutes.

Factual and Procedural History

In 2005, Ricky Fox challenged the incumbent, Billy Ray Vice, in an election for chief of police in the town of Vinton, Louisiana. Fox alleged that Vice engaged in various “dirty tricks” in an effort to force him out of the race, including sending an anonymous letter to Fox threatening to publish damaging charges against him if he remained a candidate. Vice also arranged for a third party to publicly accuse Fox of using racial slurs and then to file a criminal complaint against Fox repeating those allegations. When prosecutors ignored the criminal complaint, Vice leaked it to the press. Fox nevertheless won the election and Vice was ultimately convicted of criminal extortion for his conduct. Fox filed suit in Louisiana state court against Vice and the town of Vinton, asserting defamation and other state law claims, as well as § 1983 claims, including interference with his right to seek public office. The defendants removed the case to the United States District Court for the Western District of Louisiana on the basis of Fox’s § 1983 claims. When defendants moved for summary judgment on Fox's federal claims, Fox conceded that the claims were "no[t] valid," and the district court accordingly dismissed them with prejudice. Fox v. Vice, No. 2:06-cv-00135, 2007 BL 194131 (W.D. La. Oct. 16, 2007). The court then granted defendants’ motion for attorney's fees, holding that Fox's federal claims were frivolous, but did not require defendants to distinguish between the costs of their attorneys’ work on the frivolous federal claims and the non-frivolous state law claims. Fox v. Vice, No. 2:06-cv-00135, 2008 BL 212278(W.D. La. Sept. 21, 2008). The Fifth Circuit affirmed and the Supreme Court granted certiorari.

§ 1988’s Fee-Shifting Provision

The Supreme Court explained that although our legal system’s so-called “American Rule” generally requires each party to bear his or her own litigation expenses, § 1988, like other statutory fee-shifting provisions, permits the award of "a reasonable attorney's fee" to "the prevailing party" in civil rights cases, including suits brought under § 1983. However, prior to Fox, the federal circuits had not agreed upon a standard for awarding attorney’s fees to defendants in actions involving both frivolous and non-frivolous claims. The Supreme Court had, however, concluded that the standard for awarding fees to prevailing defendants involved “quite different equitable considerations” than the criteria governing the award of fees to successful plaintiffs. See Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978). While civil rights plaintiffs are typically entitled to attorney’s fees when they prevail on their claims, defendants must do more than simply prevail in the litigation to recover fees; they must show that the plaintiff’s claims were “frivolous, unreasonable, or without foundation." Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 (1968); Christiansburg, 434 U.S. at 416, 420-21.

Allocation of Attorney’s Fees between Frivolous and Non-Frivolous Claims

In view of these considerations, the Court determined that a “more meaningful standard” was necessary than the approach defendants advocated, which would have entitled them to fees for work that was “fairly attributable” to the frivolous portion of the lawsuit. Instead, the Court concluded that § 1988 permits a defendant to recover “only the portion of his fees that he would not have paid but for the frivolous claim.” Underscoring the rationale for its new standard, the Court explained that while defendants should not have to pay attorney’s fees occasioned by frivolous claims, “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.” In the Court’s view, allowing for more expansive fee-shifting would furnish windfalls to some defendants, making them better off because they were subject to a suit including frivolous claims, as the mere presence of the frivolous claim would cause the plaintiff to incur some of the costs of defending against regular, non-frivolous charges. The Court thus declined to apply the fee-shifting provision broadly, holding that § 1988 “provides no warrant for that peculiar result; that statute was ‘never intended to produce windfalls’ for parties.” See Farrar v. Hobby, 506 U.S. 103, 115 (1992).

Conclusion

The Court’s decision strikes a balance between providing excessive fee awards to defendants who are required to defend both frivolous and non-frivolous claims and giving a pass to plaintiffs who choose a “kitchen sink” litigation strategy, believing that the sheer volume of their allegations will eventually ensnare the defendant irrespective of the claims’ underlying merits. As such, the case serves as a warning to employees who sue their employers under federal anti-discrimination statutes that claims not asserted in good faith may come with a substantial price tag.

Legal Topics:

Employment Law Race & Color Discrimination Employment Litigation

Industry Topics:

Law Enforcement

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