Attorney Fee Awards
I have fielded a few nervous calls about my SB 53 Awarding of Attorneys Fees. I’ll explain the bill.
Typically, jurisdictions in the US, including Utah, require that each side to litigation pay its own attorney fees (a.k.a. the “American Rule”). (This contrasts with the “English Rule” – where the loser typically pays). The big exceptions to that rule are (1) when some agreement of the parties (e.g., a contract) specifies that the loser should pay the other side’s legal fees in the event of a lawsuit, (2) when one of the parties acts in bad faith (brings a ridiculous lawsuit or acts irresponsibly in prosecuting a lawsuit), and (3) when a statute specifies that attorney fees can be awarded (e.g., this one).
Sometimes – without contract, bad faith, or statutory authorization – courts determine that a loser should pay, because, in the court’s opinion, the lawsuit was brought in the public interest (a common-law private attorney general theory).
The bill clarifies that the English Rule will only apply where specified by statute. Some are concerned that this would do away attorney fee awards pursuant to contract and bad faith. It would not. Contractual and bad faith attorney fees would be alive and well under this bill. Currently, statutes allow attorney fee awards for bad faith and where specified by agreement; those provisions would not change.
Typically, jurisdictions in the US, including Utah, require that each side to litigation pay its own attorney fees (a.k.a. the “American Rule”). (This contrasts with the “English Rule” – where the loser typically pays). The big exceptions to that rule are (1) when some agreement of the parties (e.g., a contract) specifies that the loser should pay the other side’s legal fees in the event of a lawsuit, (2) when one of the parties acts in bad faith (brings a ridiculous lawsuit or acts irresponsibly in prosecuting a lawsuit), and (3) when a statute specifies that attorney fees can be awarded (e.g., this one).
Sometimes – without contract, bad faith, or statutory authorization – courts determine that a loser should pay, because, in the court’s opinion, the lawsuit was brought in the public interest (a common-law private attorney general theory).
The bill clarifies that the English Rule will only apply where specified by statute. Some are concerned that this would do away attorney fee awards pursuant to contract and bad faith. It would not. Contractual and bad faith attorney fees would be alive and well under this bill. Currently, statutes allow attorney fee awards for bad faith and where specified by agreement; those provisions would not change.
posted by steve u. at 1/30/2009
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6 Comments:
So, what's wrong with "courts determin[ing] that a loser should pay, because, in the court’s opinion, the lawsuit was brought in the public interest"? Equitable judicial decisions about things like this have been a part of the judicial process since America became a country (and before that in the colonies and England).
Recently, a law professor here in Utah wrote this about your proposed statute:
Frankly, this is an example of ambiguous, unnecessary, and poorly-drafted legislation. In truth, the impact this statute will have on most practicing attorneys will be minimal because of the statutes [that allow attorneys' fees by contract and for "bad faith" suits].... Life will go on pretty much as usual.
What will be effected will be lawsuits brought by private citizens to protect the environment, to effect necessary and needed social change, to force public utilities to follow legislative rules. In short, the statute will have a chilling effect, seeking to discourage citizens from taking action when the State attorneys cannot (because the necessary social legislation has not yet been enacted) or will not (for political reasons).
[end quote]
Yea, great idea Urquhart.
When a judge determines that a lawsuit is brought in the public interest, the judge simply is enacting public policy. Without being elected. Without public involvement. Without facing potential veto or referendum. And without facing voters in a contested election to explain the policy determination.
It simply is legislation without public input, recourse or review.
It is interesting that the commenter (or the unnamed law professor) opines that judicial activism promotes policies that “will not [be enacted] (for political reasons).” In a constitutional government, wouldn’t those political reasons be called democracy?
I understand the (oft-merited) cynicism of the times, but, fundamentally, things do and don’t appear in statutorily-enacted policies because they do/don’t or can/can’t muster support of the citizenry. Looking to have one person decide what is or isn’t in the public interest on an ad hoc basis (again, without public input, recourse or review) doesn’t strike me as a superior alternative.
The comment might speak more toward the political bent of activist judges than to the inherent power of judicial activism. Whether liberal or conservative policy interests were being promoted through attorney fee awards would depend solely on the political view of the judges in those cases. Right?
Of course, I can’t know who an anonymous poster and an unnamed professor are. But, from the tenor of the comment, the commenter and professor might be upset if a judge were to award attorneys fees (1) to an oil company for promoting energy independence by successfully overcoming an environmental group’s challenge to drilling or (2) to a power company for promoting economic prosperity by successfully overcoming regulations aimed at curbing global warming or (3) to a conservative think tank for promoting traditional families by successfully defeating domestic partner benefits or (4) to a school choice organization for promoting educational excellence by successfully challenging policies of an education union. You get the picture. Discretion can be quite discretionary.
Typically, it is a better idea to leave policy decisions to groups that are elected to enact policy and, with that, to the citizens who elect them and supervise them.
In any event, there’s plenty of room for discussion on this important issue. Thanks, anon., for weighing in.
Senator Urquhart:
My name is Ross McPhail and I am the “unnamed” professor (and librarian) at the S.J. Quinney Law School whose “argument” appears quoted in the previous comment.
The actually text of the statute, as presently drafted, states: A court may not award attorney fees in a civil action unless there is a statute that permits the award of attorney fees in the action under consideration.
I stand by my opinion that the statute is ambiguous, unnecessary, and poor-drafted legislation. It is ambiguous because it is not specifically tailored to address the issue of the award of attorneys' fees in public interest lawsuits. As drafted, it would prohibit any award of attorneys' fees in any civil action unless there was a statute (enacted by the legislature) allowing the award – so no order of attorneys' fees pursuant to the Utah Rules of Civil Procedure or any of the other Court rules (which are not enacted by the legislature).
The statute is unnecessary, in my opinion, because of the rarity in which a court will award attorneys' fees in cases such as this. I found only two appellate court cases (both cited in my original e-mail), although I did not do an exhaustive search and there may be more (your office, I assume, would already have this statistic). In ten years of practicing law, my experience has been that Utah courts are conservative in awarding attorneys' fees even when there is a specific statute so providing.
Finally, statute is poorly-drafted for two reasons. First, it allows the legislature to control the award of attorneys' fees in civil actions, and, in doing so, to assume some control over the operation of Utah Courts – a power reserved by the Utah Constitution to the courts themselves. Unlike statutes which provide that attorneys' fees “may” be awarded under certain circumstances, this statute specifically prohibits such an award in ALL circumstances – unless the legislature has spoken and regardless of the discretion of the judge. Second, as I noted early, the statute, as drafted, is potentially overbroad and can actually prohibit an award of attorney's fees in ways that you may not anticipate – or perhaps you do. The legislature, and note the Courts, would control the award of attorneys' fees in civil actions. Sanctions and contempt orders, for example, would no longer have the benefit of attorneys' fees under this statute.
Furthermore, in your e-mail, you state:
It is interesting that the commenter (or the unnamed law professor) opines that judicial activism promotes policies that “will not [be enacted] (for political reasons).” In a constitutional government, wouldn’t those political reasons be called democracy?
That is correct – which is precisely why the United States does not have a democratic form of government. The checks and balances specifically set forth in the United States Constitution are there for a reason – so that no one branch of the government can obtain too much power over another or over our nation's citizens.
Democracy, for the most part, works well. But before you judge my opinions as “cynical”, recall that those who wrote our Constitution clearly anticipated some limitations on legislative power and enacted the Bill of Rights. Moreover, it was state legislatures, elected pursuant to the Democratic process, that enacted Jim Crow laws in the South, as well as other equally restrictive legislation throughout our nation's history. Judicial activism (and Federal legislation) were necessary to bring an end to these inequities.
Am I accusing the Utah legislature of being biased or prejudiced? No. My political leanings aside, in order for the constitutional form of government employed by Utah and United States to work, then each branch of government must have the freedom to exercise it's power without interference from the other branches. This statute excees legislative power by granting the legislature control over a function best reserved to Utah courts.
Regards,
Ross E. McPhail
Assistant Librarian and Adjunct Professor of Law
S.J. Quinney Law School, University of Utah
332 South 1400 East
Salt Lake City, Utah 84112
I'll leave the policy debate on this to others, but the argument that the bill is poorly drafted is really about the policy of the bill, not the manner in which it is drafted. Technically, the bill's language is actually pretty well-written.
I have enjoyed many good discussions on this bill. On Tuesday, I met with the Bar Association's legislative affairs committee. I'm not new to legislating or dealing with lawyers, but, man, it was something to be on the hot seat in front of 30 lawyers.
As lawyers can be and should be, they were insightful and very helpful. I greatly appreciate their willingness to take a look at the bill. Along the lines of Professor McPhail's commentary above, they were concerned that the net cast by the bill potentially is too broad. I agree.
I am working to better specify that courts retain all their authority to manage the courtroom, while specifying that courts cannot award attorneys fees based on a private attorney general theory.
I'm interested to hear more about your changes. I find Mr McPhail's arguments persuasive and am inclined to disagree with the bill, but want to better understand what you mean by "private attorney general theory."
In civil suits, won't this have the effect of plaintiff attnys simply adding their fees under other damage descriptions rather than listing them separately?
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