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Awarding Attorneys' Fees

You represent a defendant in a protracted and costly race discrimination case. You just received a copy of the court's decision granting your motion for summary judgment. After hearing the news, your client asks, "Can I recover my attorneys' fees for defending this lawsuit?" This article will help you answer that question.

Under the so-called "American Rule," a prevailing litigant is ordinarily not entitled to collect a reasonable attorney's fee from the loser. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247 (1975). However, this presumption may be overcome if an award of attorneys' fees is provided by statute or contract. Id. at 257.

One of the congressionally created exceptions to the "American Rule" can be found in Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e, et seq. ("Title VII") which prohibits discrimination in employment on the basis of race, sex, national origin and religion. Section 706(k) of Title VII provides for the award of attorney's fees as follows: "In any action or proceeding under this subchapter, the court, in its discretion, may allow the prevailing party, other than the [Equal Employment Opportunity] Commission or the United States, a reasonable attorney's fee (including expert fees) as part of the costs, and the [Equal Employment Opportunity] Commission and the United States shall be liable for costs the same as a private person." 42 U.S.C. §2000e-5(k).

The California Fair Employment and Housing Act ("FEHA") represents another statutory exception to the general rule that each party bears its own costs in litigation. Section 12965(b) of FEHA provides that "the court, in its discretion, may award to the prevailing party reasonable attorney fees and costs. . . ." Cal. Gov't Code §12965(b)(West 1992).

Although the term "prevailing party" in §706(k) of Title VII does not distinguish between plaintiffs and defendants, courts interpreting this statute apply different standards to prevailing plaintiffs and prevailing defendants in evaluating motions for attorneys' fees in Title VII cases. The standard for awarding attorneys' fees under 42 U.S.C. §1988 is identical to that under Title VII. Hensley v. Eckerhart, 461 U.S. 424, 433 n.7. Whereas a prevailing plaintiff may be awarded attorneys' fees if he succeeds on any significant issue in litigation which achieves some benefit sought in bringing the suit -- in Texas State Teachers Association v. Garland In-dependent School District, 489 U.S. 782, 791-92, (1989), the Supreme Court described the minimum threshold for a fee recovery: "If the plaintiff has succeeded on 'any significant issue in litigation which achieve[d] some of the benefit the parties sought in bringing suit,' the plaintiff has crossed the threshold to a fee award of some kind" -- Hensley v. Eckerhart, 461 U.S. 424, 433 (1983), a prevailing defendant has the additional burden of demonstrating that the plaintiff's action was "frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith." Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978).

In Independent Federation of Flight Attendants v. Zipes, 491 U.S. 754, 761 (1989), the Supreme Court held that district courts may also award Title VII attorneys' fees against losing intervenors but only if the intervenors' action was frivolous, unreasonable or without foundation. See also Davis v. City & County of San Francisco, 890 F.2d 1438, 1452 (9th Cir. 1989) (attorneys' fees were not awarded against an intervening union whose intervention was not frivolous, unreasonable, or without foundation), cert. denied 498 U.S. 897 (1990).

Only the prevailing party, not the party's attorney, has standing to seek attorneys' fees under Title VII. See Soliman v. Ebasco Servs. Inc., 822 F.2d 320, 323 (2d. Cir. 1987). Because the "language, purpose, and intent of the California FEHA are virtually identical to the federal anti-discrimination acts" such as Title VII, a court's discretion in granting attorney fees to a prevailing defendant under the FEHA is also governed by the Christiansburg standard. Moss v. Associated Press, __ F.Supp. ____, 1996 WL 660610 (C.D. Cal. 1996); see also Delaney v. Superior Fast Freight, 14 Cal.App.4th 590, 18 Cal.Rptr.2d 33 (1993).

In rejecting the argument that a prevailing defendant in a Title VII case should be entitled to an award of attorneys' fees on the same basis as a prevailing plaintiff, the Supreme Court reasoned as follows: "First, . . . the plaintiff is the chosen instrument of Congress to vindicate a policy that Congress considered of the highest priority. Second, when a district court awards counsel fees to a prevailing plaintiff, it is awarding them against a violator of federal law . . . [T]hese policy considerations which support the award of fees to a prevailing plaintiff are not present in the case of a prevailing defendant. A successful defendant seeking counsel fees under §706(k) must rely on quite different equitable considerations." 434 U.S. at 418-19 (internal quotations and citations omitted).

However, the Supreme Court also reasoned that "in enacting §706(k) Congress did not intend to permit the award of attorney's fees to a prevailing defendant only in a situation where the plaintiff was motivated by bad faith in bringing the action." Id. In Christiansburg, the Supreme Court went on to explain that its attorneys' fees test could be applied to both when the litigation was initially filed and also as it evolved. Thus, attorneys' fees may be awarded to a prevailing defendant if "a court finds that [the plaintiff's] claim was frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so. . . . if a plaintiff is found to have brought or continued such a claim in bad faith, there will be an even stronger basis for charging him with the attorney's fees incurred by the defense." 434 U.S. at 422 (emphasis added); see also Moss v. Associated Press, __ F.Supp. ____, 1996 WL 660610 (C.D. Cal. 1996) (attorneys' fees awarded to prevailing defendant where after deposition, plaintiff was aware of facts that demonstrated absence of age discrimination but continued to litigate).

However, the Supreme Court warned district courts to "resist the understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation." 434 U.S. at 422.

In determining whether a suit is "frivolous, unreasonable or without foundation," a district court must focus on the question of whether the case is so lacking in arguable merit as to be groundless or without foundation rather than whether the claim was ultimately successful. See Sullivan v. School Bd. of Pinellas County, 773 F.2d 1182, 1189 (11th Cir. 1985).

Moreover, a "court must carefully scrutinize a defendant's claim that the plaintiff's action was frivolous in a 'pattern or practice' case under Title VII." EEOC v. Sears Roebuck and Co., 114 F.R.D. 615, 628 (N.D. Ill. 1987). Courts of Appeal review district courts' decisions on attorneys' fees for abuse of discretion. See Crowe v. Wiltel Communications Systems, 103 F.3d 897, 900 (9th Cir. 1996).

"Cases where findings of 'frivolity' have been sustained typically have been decided in the defendant's favor on a motion for summary judgment or a Fed.R.Civ.P. 41(b) motion for involuntary dismissal. In these cases, the plaintiffs did not introduce any evidence to support their claims. In cases where the plaintiffs introduced evidence sufficient to support their claims, findings of frivolity typically do not stand." Sullivan v. School Bd. of Pinellas County, 773 F.2d 1182, 1189 (11th Cir. 1985).

By comparison, courts have often found a plaintiff's action not to be frivolous where the plaintiff has established a prima facie case, the plaintiff's case has survived a motion for judgment as a matter of law or where the defendant failed to file a dispositive motion prior to trial.

See, e.g., Warren v. City of Carlsbad, 58 F.3d 439, 444 (9th Cir. 1995) (district court's conclusion that plaintiff's case was frivolous was incorrect where plaintiff made a prima facie showing of Title VII disparate treatment); EEOC v. Tarrant Distributors Inc., 750 F.2d 1249, 1251 (5th Cir. 1984) (establishment of prima facie case by the EEOC defeats claim that case was frivolous); AFSCME v. County of Nassau, 96 F.3d 644, 651 (2d Cir. 1996) (case was not frivolous to justify fee award where union and individual employees established prima facie case of gender-based discrimination under Title VII by introducing statistics tending to show unexplained differential in wages); LeBeau v. Libbey-Owens Ford Co., 799 F.2d 1152, 1160 (7th Cir. 1986) (reversing grant of fees where EEOC established a prima facie case and trial court denied defendant's motions for summary judgment and directed verdict); EEOC v. Kenneth Balk & Associates Inc., 813 F.2d 197, 198 (8th Cir. 1987) (award of fees to prevailing defendant reversed because EEOC's claim "was not so baseless that [defendant] sought a pretrial dismissal or summary judgment").

Lower courts have also held that a defendant's presentation of its own extensive evidence at trial in an attempt to rebut the plaintiff's prima facie showing of discrimination indicates that the plaintiff's case was not frivolous. See, e.g., EEOC v. Sears Roebuck and Co., 114 F.R.D. 615, 631 (N.D. Ill. 1987). Indeed, "the more time and effort a defendant spends in defending a . . . case, the less likely it is that the case was frivolous and that a fee award is appropriate in the first place." Hamilton v. Daley, 777 F.2d 1207, 1211-12 (7th Cir. 1985).

The fact that a trial court is not persuaded by the plaintiff's witnesses at trial does not necessarily support a conclusion that the plaintiff's lawsuit was frivolous. EEOC v. Bruno's Restaurant, 13 F.3d 285, 289-90 (9th Cir. 1992); see also AFSCME v. County of Nassau, 96 F.3d 644, 652 (2d Cir. 1996) ("a claim is not necessarily frivolous because a witness is disbelieved or an item is discounted, disproved or disregarded at trial"). Indeed, the Ninth Circuit has stated that to justify an award of attorneys' fees to a prevailing defendant in a Title VII action, a trial court must find not that the plaintiff failed to present credible evidence, but that it "should have anticipated at the outset that none of its evidence of discriminatory conduct was credible." EEOC v. Bruno's Restaurant, 13 F.3d at 290.

Even if a court rules that the plaintiff's claim or lawsuit was "frivolous, unreasonable or without foundation," it may, in its discretion, deny the defendants' request for attorneys' fees if it finds the fee application defective or excessive. See Crowe v. Wiltel Communications Systems, 103 F.3d 897, 900 (9th Cir. 1996) (prevailing defendant's fee application denied, in part, because claims were so interrelated that fees could not be attributed to Title VII claim alone); Fair Housing Council of Greater Washington v. Landow, 999 F.2d 92, 94 (4th Cir. 1993) (when attorney's fee request is outrageously unreasonable, denial of entire request is justified).

In determining the reasonable fee amount, the trial court is required to set forth what it has determined to be reasonable hours and the reasonable rate, with an explanation as to how the court reached its conclusion. D'Emmanuele v. Montgomery Ward, 904 F.2d 1379, 1386 (9th Cir. 1990).

The Supreme Court in Christiansburg explicitly held that a prevailing defendant in a Title VII action may be entitled to attorneys' fees if the plaintiff's action was "frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith." Whether a defendant can meet this heavy burden will depend on the facts of the underlying litigation.

Luis A. Lavin, senior trial attorney with the U.S. Department of Justice, Civil Rights Division, Employment Litigation Section, is an advisor to the Labor and Employment Law Section executive committee. The views expressed in the article do not necessarily represent the views of the Department of Justice.