Category Archives: costs

Rhodes v. Stewart

488 U. S. 1

October 17, 1988

Two prisoners sued to get magazines in prison. By the time the suit was decided, one prisoner was dead and the other had been paroled. Nonetheless, the living plaintiff sought to get attorneys fees under section 1988 as the prevailing party. The government argued that he could not be the prevailing party since the case was effectively moot and he had obtained effectively no relief.

The Supreme Court agreed that no 1988 fees could be awarded in a 6-3 per curiam decision. With reference to Hewitt v. Helms, the Court stated that declaratory judgment does not make you a prevailing party if you obtain no actual relief regarding your original complaint. As the plaintiff was out of prison, he got nothing by winning his court case. Marshall dissented because of his steadfast belief that the Court should never make summary judgment rulings. Blackmun, joined by Brennan, disagreed with the majority’s reading of Hewitt. Blackmun said that the ex-prisoner was still literally a prevailing party, even if he obtained no real relief for winning.


Pierce v. Underwood

487 U. S. 552

June 27, 1988

A law allowed citizens to recover attorneys fees against the government if the government’s position was not “substantially justified.” The attorneys fees awarded would be capped at $75 per hour, but that could be adjusted upward based on “special factors.” A lower court found for citizens who were suing the Department of Housing and Urban Development. The court found that HUD’s position was not substantially justified, and awarded large attorneys fees, ballooned greatly by “special factors.”

Scalia wrote the majority opinion, and Kennedy did not participate. It concluded 6-2 that lower courts findings that government positions were not “substantially justified” should be reviewed under an abuse of discretion standard. It concluded 5-3 that “substantially justified” meant that the position was basically reasonable, plausible, and arguable. It concluded 6-2 that the lower court did not abuse discretion in finding that the government’s position was not substantially justified. And it concluded 5-3 that the “special factors” cited by the lower court were not quite special enough, and it vacated the greatly ballooned award of attorneys fees. In the 6-2 parts, Scalia was joined by Rehnquist, Brennan, Marshall, Blackmun, and Stevens. In the 5-3 parts, he was joined by Rehquist, White, Stevens, and O’Connor.

To very briefly summarize, Scalia felt that abuse of discretion was better than allowing de novo review because of how weird the legal question of substantial justification was. He defined “substantially justified” by looking at how the word ‘substantial’ was used in other legal contexts. He noted that HUD’s string of losses in lower courts, together with some tough legal criticisms of HUD’s position, foreclosed any possibility that the lower court judge abused his discretion. Finally, he thought the lower court’s expansive reading of “special factors” was so broad as to virtually eliminate the $75 limit.

Brennan, joined by Marshall and Blackmun, though Scalia was too forgiving to the government in how it defined “substantially justified.” To Brennan, the government’s position had to be more than just reasonable – there had to be some true force and persuasion to the government’s position. He also felt Scalia was not recognizing enough “special factors,” and that things like the difficulty of the litigation should be reflected in an upward adjusted fee. White, joined by O’Connor, contended that questions of law were always reviewed de novo, and that questions of whether a government’s legal position was “substantially justified” ought to be no different. He further contended that, under a de novo standard, he would find enough justification for HUD’s position to absolve them of the duty to pay attorneys fees.

Monessen Southwestern R. Co. v. Morgan

486 U. S. 330

June 6, 1988

A railroad worker was permanently injured, allegedly due to the railroad’s negligence. He brought a federal action in Pennsylvania state court to recover lost future earnings. The court did two questionable things, the first based on a state law, and the second based on a state judicial ruling – first, it awarded ‘prejudgment interest,’ which gave the worker interest on damages that accrued prior to the verdict. Second, it instructed the jury not to find the present value of his lost future earnings, but the nominal value of it. Both these things were challenged as inconsistent with the federal law that formed the basis of the suit.

The Court ruled 7-2 that prejudgment interest could not be awarded. White said that state laws allowing prejudgment interest were substantial rules that could not be countenanced unless the federal law clearly allowed them. At the time the federal law was enacted, White contended, prejudgment interest was seen as suspect by most courts. Therefore, it could be presumed that Congress did not intend the law to allow prejudgment interest damages when it was passed. White also noted that Congress had ample opportunity in subsequent years to clearly include prejudgment interest within the law’s scope, but declined to do so.

Turning to the jury instruction question, the Court ruled unanimously that the Pennsylvania court had erred in instructing the jurors to merely find the nominal value. Precedents held that present value was the correct value to find for future earnings, and that the jury needed some freedom in determining the best formula for that calculation. By assuring the jury that the nominal value was legally presumed to be the same as the present value, the judge took this freedom away from the jury. O’Connor, joined by Rehnquist, only concurred in judgment on this issue. She felt that a judge could appropriately suggest that jurors compute nominal value if the judge had carefully studied the economics before doing so.

Blackmun, joined by Marshall, dissented from the prejudgment interest holding. He said the federal law should be interpreted liberally, and with an eye on its purpose of compensating injured workers with damages. Blackmun argued that prejudgment interest was an integral component of making the plaintiff whole, and that the alleged judicial aversion to interest at the time of the law’s passage was overblown. Finally, he felt prejudgment interest was especially appropriate given the rule that the present value should be found for future earnings – interest on pre-verdict lost earnings was simply the other side of that coin.

Once again, as in K mart v. Cartier, my brain is too taxed just from trying to understand this stupid decision to have much of an opinion about its soundness.

Buchanan v. Stanships, Inc.

485 U. S. 265

March 21, 1988

A widow and her child sued a cargo ships company (Stanships) for her husband’s wrongful death. She lost, but appealed. Shortly afterward, the ship company successfully filed a motion to be awarded court costs. When the widow did not subsequently renew her request for appeal, Stanships tried to get the case dismissed because the Federal Rules of Civil Procedure required re-filing when a court amends its final judgment.

The Supreme Court slapped down Stanships in an 8-1 per curiam decision. The aforementioned rule only applied when the judgment on the legal merits was altered or amended, not when the totally separate issue of costs was re-examined. A careful parsing of the Federal Rules related to court costs bolstered this conclusion. Thus, the widow could go ahead with her appeal without needing to re-file. Marshall, as always, dissented, and opined that the Court should have heard oral argument before reaching a verdict.

Usually, the Supreme Court is a cold and callous organization which does not care about establishing justice. But on very rare occasions, like in Rose, it will remember the Bible’s warning: “cursed [is] anyone who perverts the justice due to the sojourner, the fatherless, and the widow” (Deuteronomy 27:19). And so, on that beautiful day in March of 1988, eight Justices protected Mercilyn Buchanan against the abusive ship company, just as they had protected Carrie Rose sixteen months earlier. Obedience to God must not be so vanishingly rare, but I suppose a tiny amount of obedience is better than none.

Bowen v. Galbreath

485 U. S. 74

February 24, 1988

Mary Alice Galbreath successfully sued for $8,000 of extra Social Security money under Title XVI of the program. Her lawyer, Anthony Bartels, asked the court to award him one-fourth of the money for attorney’s fees. When this was awarded, the HHS Secretary protested that attorney’s fees could only be awarded under Title II actions.

Justice Brennan agreed, and wrote for a unanimous Court (Kennedy did not participate). Title II textually allowed for attorney’s fees, and Title XVI did not. A review of legislative history strongly suggested that this difference was intentional, and good public policy. In light of the textual differences, Brennan thought little of the argument that courts would always have an inherent power to award attorney fees. An old case had found such an inherent power, but the Social Security law had been amended so often since then that the will of Congress as to the court’s authority was now perfectly clear. I was glad to see straight textualism carry the day, and heartily support any ruling that cuts down on the rights of money-grubbing attorneys.

Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air

483 U. S. 711

June 26, 1987

After several years of legal wrangling, a group of annoying environmentalist busybodies forced Pennsylvania to take some green measures. Lawyers for the Council had worked on a contingent basis, and after victory, the court granted the Council attorney fees. The court tried to adjust the amount of fees dramatically upward to reflect the risky and contingent nature of the litigation. Pennsylvania protested that this upward adjustment was not within the court’s discretion.

The Court unanimously vacated the lower court’s fee award, but broke into three blocs about what to do next. White, also writing for Rehnquist, Powell, and Scalia, said that no adjustments should be allowed. Computation of fees already took into account lengthiness and difficulty of the litigation. Furthermore, deciding what cases are “risky” is totally arbitrary. Finally, the adjustment system would unfairly punish parties who lost very legally strong cases. White concluded by questioning whether the lawsuit even involved as much risk as was claimed, and said that in any event the upward adjustments were far too high.

Blackmun, joined by Brennan, Marshall, and Stevens, said that court-awarded contingency fees needed to be at least roughly equal to fees in the overall legal marketplace; otherwise, many good cases will never attract counsel. Blackmun then tried to explain how upward adjustment could be done in a fair and arbitrary manner that avoided most of the plurality’s doubts and what-ifs. He felt courts could come up with appropriate multipliers. Nonetheless, he still felt the factual record was underdeveloped, and thought the lower court should start from scratch in determining the appropriate amount of fees.

O’Connor’s opinion is an infuriating attempt to split the baby. She agreed with Blackmun that upward adjustment was sometimes necessary, and that having the fees be competitive with the general marketplace was of great importance. She agreed with White that multipliers should not be used, that “risk” should not be considered, and that some concerns about arbitrariness were well founded.

This case was argued twice, and it still failed to receive a half-decent conclusion. O’Connor should have picked a side. Her hemming and hawing only makes for more judicial headaches. I pity the poor judge who had to deal with this case on remand. With regard to the merits, I can only say that I’m in favor of anything that cuts down on massive attorney fees.

Hewitt v. Helms

482 U. S. 755

June 19, 1987

Aaron Helms was put in solitary confinement based on suspicions that he helped stir up a prison riot. Helms felt the evidence relied upon by the prison officials was insufficient, and that he should have been given a hearing. Accordingly, he filed a 1983 suit against the prison. One federal court found a due process violation, but remanded the case for determination as to whether the prison officials had immunity. The lower court found immunity, and also held the case moot because Helms had since been released on parole. At this stage, Helms tried to recover attorney’s fees under Section 1988, on the theory that a due process violation had been found.

The Court ruled 5-4 that Helms could not take advantage of Section 1988. The law allowed attorney’s fees only for ‘prevailing parties’, and because Helms never got a single shred of actual relief for his alleged grievances, he did not qualify. Scalia’s majority opinion downplayed the significance of the due process ruling, noting that it gained Helms absolutely nothing in the end. One does not ‘prevail,’ Scalia said, merely because a court treats a single aspect of a petitioner’s overall case favorably. That the prison changed its rules afterward did not matter either, since Helms himself obtained nothing of value from this alteration. Ultimately, some direct redress of a claimed violation must occur before 1988 may be invoked.

Marshall dissented, and was joined by Brennan, Blackmun, and Stevens. He pointed out that no court ever disagreed with the finding of a due process violation. Even though immunity and mootness prevented remedial relief, the judicial declaration still stood that Helms had his legal rights infringed. Furthermore, Marshall argued that the prison’s rule change did benefit Helms, because he was actually back in prison by the time the case reached the Supreme Court. Marshall’s dissent tries hard, but I must side with Scalia on this one. The line had to be drawn somewhere, and the dissenters stretched the term ‘prevailing’ way too far.

Crawford Fitting Co. v. J. T. Gibbons, Inc.

482 U. S. 437

June 15, 1987

An old law from 1853 said that federal courts could require losing parties to pay up to $30 per day to cover the expenses of expert witnesses. Since expert witnesses are a wee bit more expensive these days, some courts interpreted Rule 54(d) from the Federal Rules of Civil Procedure as giving courts discretion to go above that statutory limit in awarding court costs.

Rehnquist wrote for seven Justices, rejecting the claim that Rule 54(d) allowed courts to exceed the $30 per day limit from the 1853 Fee Act. To allow courts that kind of discretion, he said, would make the provisions of the Fee Act entirely without meaning. Furthermore, the discretion that Rule 54(d) allowed was not incompatible with the Fee Act’s limits, because of the possibility of downward (rather than upward) discretion. To round out this analysis, Rehnquist showed how consistent all of this was with precedents over the years. Blackmun added a one sentence concurrence which left open the possibility that Section 1988 might allow for higher expert witness fees.

Marshall tossed off a baffling dissent that was joined by Brennan. Observing that the Fee Act did not purport to be an exhaustive list of allowable costs, he said that Rule 54(d) gave courts basically unlimited discretion in awarding costs. He also pointed out that Rule 54(d) had no real meaning under the majority’s analysis, since the Fee Act had already made awarding the enumerated costs discretionary. Marshall further argued that principles of equity required the ability to impose higher costs.

I call the dissent “baffling” because it never once even attempts to explain away or even address the plain $30 limit in the statutory text. In conservative circles, Marshall and Brennan have a reputation of being unprincipled activist hacks. This looks like precisely the sort of dissent which ultimately garnered them that reputation. What’s so frustrating is that it isn’t even good activism. The last thing this nation needs is more civil lawsuits, more overpaid expert witnesses, and more vindictive court cost shifting.

Ray v. United States

481 U. S. 736

May 18, 1987

Ray was convicted on two counts of cocaine possession. He was sentenced to seven years in prison on each count, but those sentences would be served simultaneously – he would only be in prison for seven years rather than fourteen. Ray challenged these convictions. The Court of Appeals found one conviction valid, and declined to address the other, finding its validity irrelevant in light of the simultaneous time in prison.

Unanimously, the Supreme Court reversed in a per curiam opinion. In addition to the prison time, Ray had to pay a nominal fine for both convictions. Due to that tiny fine, the second conviction was thus not completely irrelevant and needed to be addressed. The case was remanded accordingly.

FCC v. Florida Power Corp.

480 U. S. 245

February 25, 1987

In the 1980s, cable television providers often ran their cables along telephone pollsĀ  with the consent of utility companies. Congress passed the Pole Attachment Act to allow the FCC to regulate the rates that utility companies could charge cable companies in the absence of any state regulation. When the FCC required Florida Power to lower the costs that it charged cable providers, Florida Power argued that the FCC’s regulations violated the Fifth Amendment’s takings clause.

Unanimously, the Court rejected this Fifth Amendment challenge. Marshall wrote that the Pole Attachment Act did not mandate that utility companies allow cable companies to occupy its property. Because utility companies retained the right to refuse arrangements with cable companies, the law and regulations did not amount to a takings clause violation. Marshall also upheld the rates imposed by the FCC in this particular case, since the rates it mandated were sufficient to cover the costs of carrying television cables. Powell, in a brief concurrence joined by O’Connor, grumbled that Marshall should have written more analysis about an agency’s power to set rates.

Based simply on the established precedents, the Court appears to have gotten it right. Nonetheless, I’m very uncomfortable about unelected agencies being able to set prices for economic transaction, especially with such minimal judicial control to insure fair pricing. I would be very interested in a broader challenge to the authority of the FCC and other agencies to regulate in such a fashion. Bottom line: I find the entire regulatory state Constitutionally dubious.