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Delaware Federal Court Confronts Issue of First Impression – Claims for Recovery of Attorney’s Fees in Pursuit of Fees
ACLF of Delaware v. Department of Correction, State of Delaware
In ACLF of Delaware v. Department of Correction, State of Delaware, the United States District Court for the District of Delaware confronted an issue of fist impression in the Third Circuit – eligibility for compensation for services rendered for fee litigation. Citing Baker Botts L.L.P. v. ASARCO LLC, 135 S.Ct. 2158 (2015) and Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975), the Court concluded that because 42 U.S.C. § 1988(b) does not specifically authorize the award of fees for defending a fee application; it must decline to award such fees.
By way of factual background, on November 24, 2014, the United States District Court for the District of Delaware accepted the September 17, 2014, Report and Recommendation of Magistrate Judge Sherry R. Fallon that Plaintiff American Civil Liberties Union Foundation for Delaware ("ACLF") be awarded $125,269 in attorney’s fees for its motion to compel Defendant Delaware State Department of Correction’s ("DOC’s") compliance with the Court's September 16, 2011, Order. Due to the narrow scope of the issue at bar, the Court declined to restate the protracted history of this litigation. DOC objected to the Report and Recommendation and moved for reargument. On April 29, 2015, the Court denied DOC's motion. DOC did not appeal the Court's decision to accept the Report and Recommendation, nor its decision to deny the motion for reargument. ACLF subsequently filed a motion for attorney’s fees and expenses seeking $43,920 in attorney’s fees that were expended in response to DOC’s objection to the Report and Recommendation, and motion for reargument.
The Court began its analysis by noting that the "basic point of reference when considering an award of attorney’s fees is the bedrock principle known as the American Rule: each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise." Baker Botts, 135 S.Ct. at 2164 (citing Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252-53 (2010)). Consequently, the Court "will not deviate from the American Rule 'absent explicit statutory authority."' Id. Although “statutory changes to the American Rule take various forms," the Court explained that they tend to authorize the award of "a reasonable attorney's fee," "fees," or "litigation costs," and usually refer to a "prevailing party" in the context of an adversarial "action." See Baker Botts, 135 S.Ct. at 2164.
The Court further explained that Congress has not extended "roving authority to the Judiciary to allow counsel fees as costs or otherwise whenever the courts might deem them warranted," and therefore, “federal courts cannot, absent specific statutory authority, disturb the uniform system of cost-bearing created by Congress." See Alyeska, 421 U.S. at 260; Zambrano v. City of Tustin, 885 F.2d 1473, 1481 (9th Cir. 1989).
ACLF contended that, as the prevailing party in a civil rights suit, it was eligible for an award of reasonable attorney’s fees and out-of-pocket expenses under 42 U.S.C. § 1988(b), which included attorney’s fees for the time spent litigating a fee petition dispute. DOC countered that "claims for recovery of fees in pursuit of fees" are barred as a matter of law. The Court noted that this was an issue of first impression in the Third Circuit.
Citing Baker Botts, the Court noted that “in our legal system, no attorneys, regardless of whether they practice in bankruptcy, are entitled to receive fees for fee-defense litigation absent express statutory authorization." Baker Botts, 135 S.Ct. at 2168. The Court explained that in Baker Botts, the Supreme Court interpreted 11 U.S.C. § 330(a)(1) and determined that the scope of permissible compensation under the statute was limited to "reasonable compensation for actual, necessary services rendered for the benefit of an estate" in bankruptcy proceedings and, therefore, Congress did not expressly depart from the American Rule and permit compensation for fee-defense litigation. Id. at 2164. The Court noted that the Baker Botts Court held that time spent litigating a fee application against the administrator of a bankruptcy estate cannot be fairly described as "labor performed for" the benefit of an estate, for it is the lawyers who are benefitted. Id. at 2165. The Court found that in the case at bar, as in Baker Botts, seeking the reimbursement of fees expended in defending a fee-application does not benefit the former inmate plaintiff involved in the original suit or enforce a provision of the Civil Rights Act.
ACLF averred that the Supreme Court reached such a conclusion in Baker Botts because the statutory language of 11 U.S.C. § 330(a)(1) does not provide authority to depart from the American Rule; instead, the Supreme Court explicitly identified 42 U.S.C. § 1988(b) as one of the statutes that did supplant the American Rule and thus permit claims for attorney’s fees. Section 1988(b) states that "[i]n any action or proceeding to enforce a provision of section ... 1983 of this title ... 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." 42 U.S.C. § 1988(b) (emphasis added). The Court noted, however, that § 1988(b) contains no statutory provision for the recovery of attorney’s fees for defending a fee application. The Court further noted that the Supreme Court made clear in Baker Botts that “courts do not have the authority to simply rewrite a statute even if ‘they believed that uncompensated fee litigation would fall particularly hard on the bar.’” 135 S.Ct. at 2169. The Court explained that its job “is to follow the text even if doing so will supposedly undercut a basic objective of the statute,” and that the "court is not to invade the legislature's province by redistributing litigation costs beyond what the statute provides.” See Baker Botts, 135 S.Ct. at 2169; Alyeska, 421 U.S. at 271.
Because § 1988(b) does not authorize the award of fees for defending a fee application, the Court concluded that it must decline to award such fees. Accordingly, the Court denied ACLF's motion for attorney’s fees and expenses.
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