By: Troy Hornsby, Miller, James, Miller & Hornsby, L.L.P., Texarkana
Under the “American Rule”, each party to litigation is generally responsible for their own attorney fees. Camachov. Texas Workforce Comm’n, 445 F.3d 407 (5th Cir. 2006) (citing
Buckhannon Bd. & CareHome, Inc. v. W Va. Dep’t Health & Human Res., 532 U.S. 598, 602 (2001)). However, in some circumstances, federal law can serve as a basis for attorney fee awards, often but not always, for prevailing parties. See, e.g., Gibbs v. Gibbs, 210 F.3d 491, 501 (5th Cir. 2000). “A long and consistent line of Fifth Circuit precedent allows awards of attorneys’ fees” to include appellate work. Norris v. Hartmarx Specialty Stores, Inc., 913 E2d 253, 257 (5th Cir. 1990). Additionally, state attorney fee laws, which “embodies a substantive policy” can also serve as a basis for attorney fees awards in federal court. Camacho, 445 E3d at 412. In that situation, one must look to that state’s law to determine whether such an award should include attorney fees for appeal. See, e.g., DPSolutions,Inc. v. Rollins, Inc., 353 F.3d 421, 433 (5th Cir. 2003).
This article explores the contours of the substantive Fifth Circuit law governing the award of such fees.
Appellate attorney fees recoverable based upon substantive law are awarded as damages and must be properly pled in the complaint. See U. Indus. v. Simon-Harley, Ltd., 91 F.3d 762, 764 (5th Cir. 1996) (citing FED. R. CIV. P. 9(g)). An award of costs generally does not include attorney fees unless a rule or statute provides otherwise. 448 F.3d 783, 793 (5th Cir. 2006). However, attorney fees can sometimes be a cost under specific federal substantive law. See Sole v. Wyner, 551 U.S. 74, 77 (2007); Buckhannon, 532 U.S. at 602; see, e.g. 42 U.S.C. §1988(b).
Some statutes authorize attorney fees only for prevailing parties. In an appellate context, this means the party must “prevail” in the appeal in order to be entitled to appellate attorney fees. See Heasley v. C.IR., 967 E2d 116, 125 (5th Cir. 1992). When a party prevails on some but not all issues on appeal, the court should consider the balance of the party’s success. See Powers v. C.LR. Service, 43 F.3d 172, 184 (5th Cir. 1995); Heasley, 967 F.2d at 125. Specifically, the court determines whether, on balance, these losses are “of such magnitude as to deprive [them] of prevailing party status.” Bode v. U.S., 919 F.2d 1044, 1052 (5th Cir. 1990) (quoting Leroy v. City of Houston, 906 F.2d 1068, 1082 n.24 (5th Cir. 1990)). However, in such a situation, a prevailing party should not be reimbursed for all their appellate attorney fees. Bode, 919 F.2d at 1052 (citing Comm’r, Immigration and NaturalizationServ. v. Jean, 496 U.S. 154, 163 n.10 (1990)). The fees awarded should address only to the fees relating to the issues prevailed upon. Bode, 919 F.2d at 1052 (5th Cir. 1990); see, e.g., Powers, 43 F.3d at 184. If the issues prevailed upon and the issues not prevailed upon are hopelessly intertwined, a good faith allocation of compensable hours may suffice. Bode, 919 E2d at 1054 n.7.
In the Fifth Circuit, attorney fees are usually denied to non-attorney pro se litigants. See Mclean v. Internat’l Harvester Co., 902 F.2d 372, 374-75 (5th Cir. 1990); see also Galle v. Director,Office of Workers’ Comp. Programs,246 E3d 440, 451 (5th Cir. 2001)(examining attorney fees in a case brought under the Longshore and Harbor Worker’s Compensation Act, 33 U.S.C. §901 et seq.); Hexamer v. Foreness, 997 E2d 93, 94 (5th Cir. 1993) (attorney fees at issue in case brought under the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A)). However, a pro-se attorney litigant can be entitled to attorney fees. Cazalas v. U.S. Dep’t of Just., 709 F.2d 1051, 1056 (5th Cir. 1983)(adjudging attorney fees under the Freedom of Information Act).
Whether appellate attorney fees are a cost or a damage, appellate attorney fees are generally ripe for consideration after the appeal is complete. See Instone Travel Tech Marine v. Internat’lShipping, 334 F.3d 423, 433 (5th Cir. 2003). But see Campbell v. Bowlin, 724 F.2d 484, 486 (5th Cir. 1984) (conditional award of appellate attorney fees at trial). However, where the appellate attorney fees are a damage based upon Texas substantive law, appellate attorney fees may be submitted as a question of fact to the trier of fact at trial as is done under Texas law. See, e.g., FarmlandIndus. v. Andrews TransportCo., 888 F.2d 1066, 1068 (5th Cir.1989) (appellate attorney fees award based upon Texas state law). Regardless, the district court is not required to submit the appellate attorney fee issue to the jury because a party does not have an absolute right to have the issue decided by a jury. See Resolution Trust Corp. v. Marshall, 939 F.2d274, 279 (5th Cir. 1991).
Once the appeal is complete, to whom should you direct your request for appellate attorney fees? Both the district court and the Fifth Circuit have the legal authority to award appellate attorney fees. See Perkinsv.Standard Oil of Cal., 399 U.S. 222, 223 (1970); Stone v. City of Wichita Falls, 669 F.2d 233, 233-34 (5th Cir. 1982). Generally however, such determination is best made by the district court. Paniorv. Iberville Parish Sch. Bd., 543 F.2d 1117 (5th Cir. 1976). Therefore, the request should first be directed to the district court. See Stone, 668 F.2d at 233 (5th Cir. 1982) (citing United States v. Tex. Constr.Co., 237 F.2d 705, 707 (5th Cir. 1955)).
The Supreme Court has determined that attorney fee requests are collateral to the underlying decision in the case and should not be sought pursuant to Federal Rule of Civil Procedure 59(e). White v.New Hampshire,455U.S. 445 (1982). Rather, when a request for appellate attorney fees is directed to the district court, a motion making such request should be made pursuant to Federal Rule of Civil Procedure 54 whether classified as costs or damages. See, e.g., U Indus. v. Simon- Hartley, Ltd., 91 E3d 762, 764 (5th Cir. 1996). The motion should be filed within 14 days of entry of the district court’s judgment. Id. (citing FED. R. CIV. P.54). The motion must specify the legal basis for the award sought and the “amount or fair estimate of the amount sought.” Id.
However, in some particular circumstances, the appellate court will award attorney fees in the first place. See Stone, 668 F.2d at 234 (citing Hutto v. Finney, 437 U.S. 678, 693-700 (1978)). This is in instances where awards of appellate attorney fees are limited actions taken solely in that appellate court and the facts necessary to the determination are clear on the face of the record. See Stone, 669 E2d at 233; see also Rizzo v. Children’s World Learning Ctr., 173 F.3d 254, 263 (5th Cir. 1999)(appellate attorney fees awarded by appellate court); Davis v. Roadway Exp., Inc., 590 E2d 140, 143 (5th Cir. 1979). However, if the appellate attorney fees include work before the United States Supreme Court and/or the district court, then the district court should make the decision regarding the attorney fee award. Davis, 590 F.2d at 143; see also Universal Amusement Co., v. Vance, 559 F.2d 1286 (5th Cir. 1977) (appellate and trial court fees); Stone, 669 F.2d at 233.
Appellate attorney fees may be sought in an appellate court through a motion filed with the circuit clerk asking the appellate court to award appellate attorney fees. See FED. R. APP. P. 39. The motion must be within 14 days of the appellate court’s judgment pursuant to Federal Rule of Appellate Procedure 39. FED. R. APP. P. 39. But see Civil Rights Attorney’s Fees Awards Act, 42 U.S.C.A. §1988 (not subject to 14-day requirement). The motion must be supported by legal authority and evidence or it may be waived for inadequate briefing. See Burnley v. City of San Antonio, 465 F.3d 191, 201 n.9 (5th Cir. 2006) (citing L&A Contracting Co. v. S. Concrete Serps. Inc., 17 F.3d 106, 113 (5th Cir. 1994)). The appellate court then decides whether or not to grant appellate attorney fees.
See, e.g., Linn v. Chivatero, 790 F.2d 1270, 1273 (5th Cir. 1986); Hanrahan v. Hampton, 446 U.S. 754, 755-56 (1980) (per curiam) (considering whether an appellate court was authorized under 42 U.S.C. section 1988 to award attorney fees attributable to an appeal, and confining its analysis to whether the respondents qualified as prevailing parties under the terms of the statute); Hutto, 437 U.S. at 693 (considering whether an appellate court was authorized under Section 1988 to order that petitioners pay an additional sum to the prevailing parties’ counsel for services rendered on the appeal, and confining its analysis to whether the Arkansas Department of Corrections could be required to pay that sum under the Eleventh Amendment). 2
Once a decision has been made by an appellate court to award appellate attorney fees, the parties are encouraged by the Fifth Circuit Court of Appeals to reach agreement as to the amount of reasonable attorney fees. See, e.g., Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 720 (5th Cir. 1974); see also Linn, 790 E2d at 1273. If the parties
are unable to agree as to the amount of appellate attorney fees, the amount can either be determined by the appellate court or determined by the district court on remand. See, e.g., Stelly v. Comm’r, 804 F.2d 868, 870-72 (5th Cir. 1986); Linn, 790 F.2d at 1273. Alternatively, the issue can be determined by a special master appointed by the court of appeals. See FED. R. APP. P.48(a). However, remand of the issue of the amount of appellate attorney fees from the appellate court to the district court is preferred. Marston v.Red River Levee & Drainage Dist., 632 F.2d 466, 468 (5th Cir. 1980); see also Perkins, 399 U.S. at 223(an award of appellate attorney fees “should, as a general rule, be fixed in the first instance by the district court, after hearing evidence as to the extent and nature of the services rendered”). And generally, once the appellate court makes the decision to grant appellate attorney fees, it remands the issue of the amount of such fees to the district court for a factual determination. See, e.g., Norris v. Hartmarx Specialty Stores, Inc., 913 E2d 253, 257 (5th Cir. 1990).
Appellate courts can also award appellate attorney fees as a sanction for frivolous appeal pursuant to Federal Rule of Appellate Procedure 38. See, e.g., News-Texan, Inc. v. City of Garland,814 F.2d 216, 221 (5th Cir. 1987) (citing FED. R. APP. P. 38). Such fees are often determined by the court of appeals itself based upon filed affidavits filed in compliance with Fifth Circuit Rule 47.8. See, e.g, Baulch v. Johns, 70 F.3d 813, 818 (5th Cir. 1995); In reReed, 861 E2d 1381, 1383 (5th Cir. 1988).
If a district or appellate court decides to award appellate attorney fees it must then decide in what amount they should be awarded. If the basis for the attorney fee award is state law, that state’s law controls questions of reasonableness. Mathis v. Exxon, 302 F.3d 448, 461 (5th Cir. 2002). If the basis for the attorney fee award is federal law, federal law also controls questions of reasonableness. Id. Under federal law, a determination of reasonable attorney fees involves a two-step procedure. La. Power & Light Co. v. Kellstrom, 50 F.3d 319, 323-24 (5th Cir. 1995) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). Initially, the district court must determine the reasonable number of hours expended on the litigation, and then the reasonable hourly rates for the
participating lawyers. Kellstrom, 50 E3d at 324.
The question of the amount of compensable hours spent is a question of fact. Kellstrom, 50 E3d at 324. The court determines compensable hours from the attorney time records, including only hours reasonably spent. Alberti v. Klevenhagen, 896 F.2d 927,930 (5th Cir. 1990) (citing Hensley, 461 U.S. at 434). The Supreme Court has also determined that, at least under 2 U.S.C. § 1988(b), the time of paralegals and law clerks should be considered in determining the amount of a fee award. Missouri v. Jenkins, 491 U.S. 274 (1989). Counsel is required to “exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission.” Id.; Alberti, 896 E2d at 927 (citing Hensley, 461 U.S. at 434). Ideally, billing judgment is reflected in the fee application, showing not only hours claimed, but also hours written off. Alberti, 896 E2d at 930. The burden is on the fee petitioner to prove that the hours claimed were reasonably expended. See Hensley, 461 U.S. at 437. The question of the reasonableness of the rate is also a question of fact. Kellstrom, 50 E3d at 324. The district court determines “an appropriate hourly rate based on prevailing community standards for attorneys of similar experience in similar cases.” Alberti, 896 F.2d at 930 (citing Sims v. Jefferson Downs Racing Ass’n, 778 F.2d 1068, 1084 (5th Cir. 1985). Reasonable rates and hours can be established by expert testimony through the opinion of members of the bar who have become familiar through experience and practice with the character of such services. See, e.g., Primrose Operating Co. v. Nat’lAm. Ins., 382 F.3d 546 (5th Cir. 2004). The appellate court, like the district court, can also consider its own knowledge and experience concerning reasonable and proper fees with or without witness testimony. B-M-G Inv. Co. v. Cont’l/Moss Gordin, Inc., 437 F.2d 892, 893 (5th Cir. 1971).
The number of compensable hours is then multiplied by the selected hourly rate to produce the “lodestar.” Kellstrom, 50 F.3d at 324. There exists a strong presumption of the reasonableness of the lodestar amount. Heidtmanv. Cny. ofEl Paso,171 F.3d 1038, 1043 (5th Cir. 1999). However, the court can adjust upward or downward the lodestar, depending on the circumstances of the case. Id. Specific factors to be considered by the fact finder in determining any upward or downward departure include: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Johnson v. Georgia Highway Express, Inc., 488 E2d 714, 717-19 (5th Cir. 1974) (establishing the so-called “Johnson factors”). The lodestar may not be adjusted due to a Johnson factor, however, if the creation of the lodestar amount already took that factor into account; to do so would be impermissible double counting. Migis v. Pearle Vision, 135 F.3d 1041, 1047 (5th Cir.1998) (citing Von Clark v.Butler, 916 E2d 255, 258 (5th Cir.1990)). Finally, when a party, who has agreed to a contingent fee, is entitled to an attorney fee award, they are still entitled to a “reasonable” attorney fee, Blanchard v. Bergeron,489 U.S. 87 (1989), even if the reasonable fee is higher than the actual contingent fee, Venegas v. Mitchell, 495 U.S. 82 (1990).
The Supreme Court has found that an award of attorney fees is not “per se ‘unreasonable’ (within the meaning of the applicable statute) if it exceeds the amount of damages recovered by the plaintiff in the underlying action.” City of Riverside v. Rivera, 477 U.S. 561, 564 (1986) (under 42 U.S.C. § 1988(b)). Nevertheless, the Supreme Court has held that a party establishing a violation, and therefore establishing themselves as a prevailing party, who recovers only nominal damages because the plaintiff failed to establish an essential element for monetary relief “the only reasonable fee is usually no fee at all.” Farrarv. Hobby, 506 U.S. 103, 112- 15 (1992) (also under 2 U.S.C. §1988(b)).
Obviously, any of the factors discussed in this article can be a possible ground for disputing appellate attorney fees such as (1) the reasonableness of the hourly rate; (2) the number of hours devoted to the case; (3) the number or qualifications of the attorneys on appeal; (4) the quality or competence of the evidence supporting the request; and (5)the fact that requesting party “prevailed.” Est. of Perry v. C.I.R., 931 F.2d 1044, 1045 (5th Cir. 1991); Gandy Nursery, Inc. v. United States, 412 F.3d 602, 609 n.8 (5th Cir. 2005). Additionally, in Alizadeh v. Safeway Stores, Inc., the appellate court concluded that the responsible party’s financial condition is a relevant factor to consider in fixing the amount of the attorney fees award. See Alizadeh v. Safeway Stores, Inc., 910 E2d 234, 238 (5th Cir. 1990) (citing Knighton v. Watkins, 616 E2d 795 (5th Cir. 1980)).
The Supreme Court established “a uniform rule that an unresolved issue of attorney’s fees for the litigation in question does not prevent judgment on the merits from being final,” where the court addresses the merits of the case and liability for attorney fees. Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988). Thus, a case can be appealed itself and the later award or denial of attorney fees can be appealed separately later. Deloach v. Delchamps, Inc., 897 F.2d 815, 826 (5thCir. 1990). While an appeal from a final judgment preserves all the prior orders intertwined with that final judgment, Fiess v. State Farm Lloyds, 392 F.3d 802, 806 (5th Cir. 2004), it does not include a subsequent attorney fee award. See Armour v. Knowles, 512 F.3d 147 (5th Cir. 2007). Thus, once such a subsequent attorney fee award is final, a notice of appeal (or cross-appeal) must be filed to challenge a district court’s decision regarding appellate attorney fees. See Armour, 512 F.3d 147. However, when an order determines liability for attorney fees, but does not establish the amount, it is not a final, appealable order. Echols v. Parker,909 F.2d 795, 798 (5th Cir. 1990). Only once has the court entered an order resolving both liability and the amount of the attorney fees is the order final and appealable. Echols, 909 F.2d at 798. The standard of review on appeal for the decision to grant or deny an attorney fee award depends upon the basis for which appellate attorney fees are granted or denied. If the attorney fee statute is discretionary, the decision to award or deny is reviewed for an abuse of discretion. MTO Mar. Transp. Overseas, Inc. v. McLendon Forwarding Co., 837F.2d215, 219 220 (5th Cir. 1988); e.g., Stewart v. RCA Corp., 790 F.2d 624, 633 (7th Cir. 1986) (denial of attorney fees in motion for summary judgment). However, if the attorney fee statute is mandatory, the decision to award or deny is reviewed de novo. See Tex. A&M Research Found. v. Magna Transp., 338 F.3d 394, 406 (5th Cir. 2003). Appellate courts review the district courts’ determination of the applicable hours and rate for clear error. Saizan v. Delta Concrete Products Co., Inc., 448 F.3d 795, 800 (5th Cir. 2006). However, the application of the Johnson factors (adjustment) is reviewed for abuse of discretion. Id.
When a case is reversed and remanded for new trial, the underlying attorney fee award generally becomes moot. See, e.g., Peel & Co., Inc. v. The Rug Market, 238 F.3d 391, 398 (5thCir. 2001). Likewise, a prevailing party, otherwise entitled to appellate attorney fees, does not lose such award because their damages are reduced on appeal. Dura Wood Treating Co. v. Century Forest Indus., 694 E 2d 112, 115 (5th Cir. 1982).
The law governing the award of attorney fees in the Fifth Circuit is both well-established and well-developed, and may be readily used by attorneys to recoup their attorney fees incurred in practice.
1 This article is a follow-up to an earlier piece examining appellate attorney fee awards in Texas courts, which appeared in the Fall 2006 issue of the Appellate Advocate. See Troy Hornsby, Appellat Attorney’s Fee Awards, 19 APP. ADVOC. 11 (Fall 2006).
2 However, “the routine allocation of appellate costs pursuant to Rule 39 of the Federal Rules of Appellate Procedure is distinguishable from the recovery of attorney’s fees.” Sciambrav. GrahamNes, 892 F.2d 411, 414 (5th Cir. 1990) (citing Chem. Mfrs. Ass’n v. US. Envtl. Prot.Agency, 885 F.2d 1276, 1278 (5th Cir. 1989). Therefore, an appellate court’s decision allocating costs does not preclude an award of appellate attorney fees by that court or another court. See id.