Hello friends! Team Legal is back with another edition of Boom! Lawyered.
We’ve covered quite a bit over the past eight months, and if you’ve read all 11 editions, kudos to you!
This week’s lesson is going to be an easy one: We’re going to talk about attorneys’ fees.
What are attorneys’ fees? Well, they’re fees that you pay your attorney. Clever, we know.
They are also fees that that every litigant needs to think long and hard about before deciding to file a lawsuit or defend one. And they’re fees that, even if you yourself aren’t involved in a lawsuit, you might find yourself on the hook for—through your tax dollars.
Litigation is expensive. Lawyers cost a lot of money. Good lawyers cost even more. Litigation can cost thousands, hundreds of thousands, and in some cases, millions of dollars in attorneys’ fees. And at the end of a case, even if you’ve won, you may be on the hook for those attorneys’ fees. That can bankrupt you or, at a minimum, put a serious dent in your wallet. That’s because in the American legal system, the general rule is that if you file a lawsuit, even if you win at trial, you are responsible for your own attorneys’ fees.
This is known as the American Rule—who doesn’t love a cute descriptive name, right?
It certainly seems unfair, doesn’t it? Imagine if we file a frivolous lawsuit against you that takes a year to litigate. (This is on the short side. Most lawsuits take years to resolve.) You spend $10,000 to defend yourself, and you end up winning at trial. You barely could find the money to pay your attorneys’ fees, and now you want to recoup that money from us. After all, you won! Why should you be out ten grand?
Or imagine if you’re a small business suing a large corporation for something or other. You have a solid case, but the large corporation inevitably is going to drown you in paper and frivolous court filings, thus driving up the cost of litigation. You sue Evil Corp., and you win, and you want Evil Corp., to pay your fees.
The American Rule says: Too bad! You have to pay your own fees. There’s a reason for this: If losing plaintiffs were required to pay defendants’ attorneys’ fees no matter what, people with legitimate claims might choose to avoid the risk of a lawsuit, out of fear that they’ll be on the hook not only for their fees, but the other side’s as well.
However, there are exceptions to the American Rule.
One of the most common exceptions is contractual. Sometimes, two parties—usually in a business context—agree that if the parties should end up suing one another, whichever party prevails can recoup its attorneys‘ fees from the losing side. These are often called fee-shifting agreements.
The second most common exceptions are statutory.
Many states have statutes that, in certain circumstances, require the losing party to pay the winning side’s legal fees. Environmental protection laws, consumer protection laws, and civil rights laws frequently contain provisions permitting attorneys’ fee awards. This makes it arguably more likely that plaintiffs won’t let fear of being unable to pay for lawyers’ fees keep them from fighting those laws—largely, a good thing.
In fact, almost all federal civil rights laws permit awards of attorneys’ fees. For example, Titles II and III of the Civil Rights Act of 1964—the provisions that prohibit discrimination in places of public accommodation and in the usage of public facilities—both contain provisions that permit fee awards against the United States and state governments.
Title VII, with which you are already intimately familiar if you read this edition of Boom! Lawyered, likewise provides for attorneys’ fee awards against federal and state governments.
Same goes for the Fair Housing Act, the Fair Labor Standards Act, the Age Discrimination in Employment Act of 1967, the Equal Credit Opportunity Act, the Voting Rights Act of 1965, the Americans with Disabilities Act of 1990, and on and on.
There’s even a statute called the Civil Rights Attorney’s Fees Awards Act of 1976, which permits a prevailing party other than the United States to recoup attorneys’ fees for lawsuits filed to enforce a variety of additional statutes. These include 42 U.S.C. § 1983, known in legal circles simply as “Section 1983″—which is the federal statute that permits you to file a civil action for deprivation of constitutional and federal statutory rights by persons acting under “color of law”—as well as the Religious Freedom Restoration Act and the “Civil Rights for Women” provision of the Violence Against Women Act of 1994.
These statutes bar fee awards in favor of the United States, which makes sense, right? Citizens should be able to file civil rights claims against the government without being worried that Uncle Sam is going to come knocking demanding reimbursement for its attorneys’ fees, even if the government wins the case.
In addition, some states give judges the discretion to award attorneys’ fees against a losing party who filed a lawsuit knowing there was no basis for it. This helps deter litigants from filing frivolous lawsuits in an effort to rack up their opponents’ attorneys fees.
Also, some judges will award attorneys’ fees to the winning party in a lawsuit that isn’t raised under those statutes, but was still brought to protect some public interest or enforce an important right. This is known as the private attorney general doctrine, and it encourages private parties to pursue lawsuits of societal importance that they might otherwise not pursue, out of fear of being bankrupted by attorneys’ fees. In California, this doctrine has been codified into law. For example, in California, a judge awarded a litigant more than $700,000 in a case where he challenged the City of Los Angeles’ policy of delegating the initial review of parking citations to an outside processing agency. According to an appellate court that confirmed the fee award, the lawsuit had provided a significant benefit by forcing the City to face accountability for its review of parking citations (rather than an outside agency), and that benefit was confirmed when the City changed its parking dispute process as a result of the lawsuit.
Most of the statutes permit awards to the “prevailing party” or to the “successful party.” This may be more complicated than it sounds: Oftentimes, lawsuits are made up of a bunch of claims and cross claims. A party may win on certain claims and lose on others. It’s up to the court to examine the parties’ claims and defenses and compare them to the actual outcome of the lawsuit, to determine if one party prevailed over the other at trial or was more successful than the other in vindicating their claims.
So, you may be asking yourself: How is this relevant to my life and why do I care?
As more and more states are passing flatly unconstitutional laws that—to name a few—reduce abortion access through unconstitutional abortion restrictions, prohibit transgender people from using the bathroom that aligns with their gender identity, or disenfranchise Black voters, more and more lawsuits will be filed by plaintiffs seeking vindication for their rights. And if those plaintiffs win, courts will award them attorneys’ fees.
For example, after losing its lawsuit defending HB 1456, the heartbeat ban that prohibited abortion after six weeks, North Dakota was required to pay the Center for Reproductive Rights—lawyers for the winning plaintiffs—almost a quarter million dollars.
North Carolina, meanwhile, is currently embroiled in two civil rights lawsuits—the lawsuit challenging the provisions in HB 2 that discriminate against transgender people, and the lawsuit challenging North Carolina’s voter ID law—which could result in it paying high attorneys’ fee awards to the winning plaintiffs. It was also recently ordered to pay $1 million to plaintiffs who successfully challenged the state’s ultrasound law.
One need only take a spin through Rewire’s Legislative Tracker to see the myriad laws infringing on various rights—the right to privacy, to religious freedom, to be free from discrimination based on race, sexual orientation. or gender identity—that may ultimately result in states taking a big hit in the coffers when they lose the lawsuit.
And how are those coffers filled? With your taxpayer dollars, of course.
So there you have it, citizen. States are wasting your money in their fervent effort to strip people of their civil rights, and they are forcing you to pay for it.
That might be something you want to take up with your local representative.