Civil Procedure Class Notes
They
didn’t fix the other projector! Boooo! Fairman’s not surprised.
Fairman’s starting late again.
Next
Monday, we’ll meet at
More
on financing litigation! We talked about
contingency fees. We also talked about
hourly fees. That’s how a lot of
corporate work is done. Some basic work
is done by flat fee, like divorce, petty crime, wills,
and stuff like that. Some legal work is
done pro bono. Insurance is also a
source of funding.
Fee
shifting
The
American Rule says that everyone pays for their own lawyers. However, we have some elements of fee
shifting (like the English Rule) embedding in our fee structure. The clearest example is in civil rights litigation. 42 U.S.C. § 1988(b)
says that the court may allow the prevailing party in a civil rights suit to
get the opposing party’s attorney’s fees.
The Supreme Court has interpreted “the prevailing party” to mean “the prevailing
plaintiff”.
Why
would Congress create a statute like this? Maybe
Congress is trying to create incentives.
Congress favors civil rights and favors civil rights litigation as a way
to achieve civil rights. Therefore, they’ll
give you extra incentive to bring these kinds of lawsuits. Congress also wants to “pile on” the defendant.
Remember
that fees are not the same thing as costs!
Say you have a client who was fired from their job. They were fired both in breach of an
employment contract and in violation of his civil rights. So you sue under both, and you make sure that
you include the civil rights claim so you can get your fees. The thing is, if you
file the civil rights claim in state court, it could get removable to federal
court. If that’s not what you want, you
better watch out. In fact, it’s probably
better to file in federal court in the first place.
FRCP Rule
54(d) says that generally you’ll get costs other than fees if you win
(whether you’re the plaintiff or the defendant). You would never bother filing a motion for
costs because the costs they’ll let you recover are so minimal.
Rule 68 and Fee
Shifting Statutes
FRCP Rule 68 allows
defendants to cap their liability for certain costs by making a settlement offer
before trial. Say a defendant makes you
an offer of judgment under Rule 68. If I
accept, we’re done. If I reject it, we’re
done. If, at trial, I get more
than the defendant offered to settle for, then that’s fine. But, on the other hand, if I get less
than the defendant offered, I don’t get my costs, and in fact I must pay the defendant
his costs. The idea is that I
should have taken the offer when I should have.
This
rule doesn’t explicitly say “attorney’s fees”.
But what if we put this rule in a civil rights context? We’ll get back to that.
In
an ordinary piece of federal litigation, the defendant makes a good faith offer
of judgment. If the plaintiff accepts,
that’s the end of the case. If not, the
case goes on to judgment. There are two
possible results: the plaintiff gets more than the offer and recovers
costs. If the plaintiff gets less than
the offer, the plaintiff gets their costs up to the point of the offer, but not
any of their costs after that offer. In
fact, the plaintiff has to pay the defendant’s costs from that point on.
This
doesn’t usually have a big impact, but it could if we’re dealing with a
fee shifting statute.
Say
you’re under 42
U.S.C. § 1988(b). Fees are defined
as costs. Say you reject a Rule 68 offer
and then there’s a judgment for the plaintiff.
If the judgment is for more than the initial offer, the plaintiff gets
costs including attorney’s fees.
However, if the judgment for the plaintiff is less than the initial
offer, the plaintiff gets costs, including fees, up to the time of the offer,
but the plaintiff pays the defendant’s costs not including fees for the
post offer period. In that way, the defendant,
by making an offer, can avoid paying the plaintiff’s attorney’s fees
after the offer.
“Courts
are hostile to civil rights litigation in general.”
Given
the structure of litigation, as you get closer and closer to trial, the trial
will become a huge part of your attorney’s fees.
Civil
rights plaintiffs are also jeopardized by things like the Jeff D. offer.
I
get called on! Johnson, with Legal Aid,
sues
Idaho
Legal Aid initially wants him to reject the offer, because they need money to
help them to represent other clients.
Johnson
accepts the offer, but goes to the court to review the class settlement offer.
What’s
the impact of this? What are Johnson’s
incentives?
If
this had been a Rule 68 offer, the class still would have received their fees
up to the offer. Rule 68 just blocks the
fees earned after the date of the offer.
On the other hand, this offer is intended to avoid trial altogether by
making an attractive settlement offer.
There’s
an ethical dilemma! Well…or not. The Supreme Court says that you have to
accept the offer, even if you don’t get paid. Johnson’s ethical duty is to serve his
clients.
People
in civil rights litigation hate this case!
It gives civil rights violators a blueprint for how to avoid attorney’s
fees! What’s the motivation on the part
of Idaho to settle this way?
Who
are the real losers? Johnson doesn’t
lose. The kids don’t lose. It’s the future legal aid clients who are
hurt! The state of
We’ll
have a bit more on this tomorrow. Then
it’s Fuentes!