Posted on 07/30/2018 7:05:43 AM PDT by Jagermonster
Actual Title -- Nantkwest, Inc. v. Iancu
This is an except because it is too long to post in its entirety.
As its name suggests, the American Rule is a “bedrock principle” of this country’s jurisprudence. Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 253 (2010). It provides that, in the United States, “[e]ach litigant pays his own attorney’s fees, win or lose.” Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158, 2164 (2015) (quoting Hardt, 560 U.S. at 253). The American Rule may only be displaced by an express grant from Congress. Id. And it serves as the “basic point of reference” whenever a court “consider[s] the award of attorney’s fees.” Id. (quoting Hardt, 560 U.S. at 252–53).
The rationale supporting the American Rule is rooted in fair access to the legal system, as well as the difficulty of litigating the fee question:
[S]ince litigation is at best uncertain one should not be penalized for merely defending or prosecuting a lawsuit, and . . . the poor might be unjustly discouraged from instituting actions to vindicate their rights if the penalty for losing included the fees of their opponents’ counsel. Also, the time, expense, and difficulties of proof inherent in litigating the question of what constitutes reasonable attorney’s fees would pose substantial burdens for judicial administration.Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967) (citations omitted). In the context of this case, the American Rule preserves access to district courts for small businesses and individual inventors seeking to avail themselves of § 145’s benefits.
The American Rule traces its origins back to at least the late 1700s. In Arcambel v. Wiseman, the circuit court included $1,600 in counsel’s fees as part of the damages. 3 U.S. (3 Dall.) 306, 306 (1796). The assessment of attorneys’ fees, the Supreme Court concluded, could not be allowed because the “general practice of the United States is in opposition to it; and even if that practice were not strictly correct in principle, it is entitled to the respect of the court, till it is changed, or modified, by statute.” Id. “[O]ur courts have generally resisted any movement” toward the English system—which permits the award of attorneys’ fees to successful parties in litigation—ever since.2 Fleischmann, 386 U.S. at 717; see Runyon v. McCrary, 427 U.S. 160, 185 (1976) (“[T]he law of the United States . . . has always been that absent explicit congressional authorization, attorneys’ fees are not a recoverable cost of litigation.”).
Only Congress “has the power and judgment to pick and choose among its statutes and to allow attorneys’ fees under some, but not others.” Alyeska Pipeline, 421 U.S. at 263. Congress has not “extended any roving authority to the Judiciary to allow counsel fees as costs or otherwise whenever the courts might deem them warranted.” Id. at 260. Thus, the Supreme Court has held that the American Rule presumptively applies and any statutory deviations from it must be “specific and explicit.” Id. at 260–62, 269.
According to the Supreme Court, one “good example of the clarity . . . required to deviate from the American Rule” can be found in the Equal Access to Justice Act’s attorneys’ fees provision. Baker Botts, 135 S. Ct. at 2164. That provision commands courts to “award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action,” so long as certain conditions are met. Id. at 2164 (emphasis added) (quoting 28 U.S.C. § 2412(d)(1)(A)). As the Supreme Court explained, “there could be little dispute that this provision—which mentions ‘fees,’ a ‘prevailing party,’ and a ‘civil action’—is a ‘fee-shifting statut[e]’ that trumps the American Rule.” Id. (alteration in original).
Not all fee-shifting statutes follow this template though. For example, the Supreme Court has a separate line of precedent “addressing statutory deviations from the American Rule that do not limit attorney’s fees awards to the ‘prevailing party.’” Hardt, 560 U.S. at 254. In Hardt, the Court analyzed whether Congress deviated from the American Rule when it passed a statute providing that a “court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” Id. at 251–52 (quoting 29 U.S.C. § 1132(g)(1)). The same is true in Ruckelshaus v. Sierra Club, where the Court examined a provision of the Clean Air Act allowing a court to “award costs of litigation (including reasonable attorney and expert witness fees) whenever it determines that such an award is appropriate.” 463 U.S. 680, 682–83 (1983) (emphasis omitted) (quoting 42 U.S.C. § 7607(f)).
And while the American Rule sets a high bar for shifting attorneys’ fees, it does not impose a magic words requirement so long as Congress’s intent is “specific and explicit.” See Summit Valley Indus., Inc. v. Local 112, United Bhd. of Carpenters, 456 U.S. 717, 721–22 (1982). As the Supreme Court acknowledged in Key Tronic Corp. v. United States, “[t]he absence of [a] specific reference to attorney’s fees is not dispositive if the statute otherwise evinces an intent to provide for such fees.” 511 U.S. 809, 815 (1994); see Baker Botts, 135 S. Ct. at 2165 (discussing statute providing for “reasonable compensation for actual, necessary services rendered by” various “professional person[s],” including “attorney[s]” (emphasis omitted) (quoting 11 U.S.C. § 330(a)(1)(A))).
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2. The Supreme Court has carved out several equitable exceptions to further the interests of justice. See F. D. Rich Co. v. U.S. for Use of Indus. Lumber Co., 417 U.S. 116, 129 (1974) (acknowledging availability of attorneys’ fees where party “has acted in bad faith, vexatiously, wantonly, or for oppressive reasons”); Toledo Scale Co. v. Computing Scale Co., 261 U.S. 399, 426–28 (1923) (allowing attorneys’ fees as part of penalty for willful disobedience of court order); Trustees v. Greenough, 105 U.S. 527, 532–33, 537 (1882) (permitting party recovering fund for the benefit of himself and others to seek attorneys’ fees from the fund itself or directly from other parties who enjoyed the benefit); see generally Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 257– 59 (1975). None of these exceptions are implicated here.
The richest men in our city belong to our local ambulance chasing lawyer firm. One constantly reads in the paper about the houses they are buying, the houses their children are buying. Their ads are constantly on the TV and radio.
They have giant billboards across from the local country hospital where all the medicaid patients go.
They produce nothing, and merely drive up costs for the middle class, and turn doctors and hospitals into lawyers and extreme bureaucrats. Its disgusting.
Across the board “loser pays” would be horrible. However, the idea that, on a case by case basis, the loser pays, is a great idea. It would stop frivolous lawsuits.
That is, if a jury can be convinced that not only did you lose, but you were so obviously wrong to sue in the first place, that maybe forcing you to pay attorney’s fees would be a good idea.
Not awake enough for the content. The problem with this system is it can of course be abused. Just keep suing someone till they go bankrupt defending against nothing.
Because it would cost the lawyers money.
Easy for them to make such a decision, THEY ARE ALL LAWYERS.
THEY ALL HAVE A BUILT IN CONFLICT OF INTEREST.
Around here the sole supporter of television seems to be ambulance chasing law firms or the my pillow guy or drugs and drug rehab outfits.
Perhaps what is needed is the ability to sue for damages if someone can be shown to abuse the legal system to harass and bankrupt?
>>, the circuit court included $1,600 in counsel’s fees as part of the damages. 3 U.S. (3 Dall.) 306, 306 (1796)<<
$1,600 in 1796 is $30,544 now.
Pretty good chunk of change. Good to see lawyers stuck it to their clients back that far. ;)
The US doesn't have a loser pays system because it discourages lawsuits. The legislators are lawyers and would do nothing to damage their profession.
[Lawyers shouldn't be permitted to be legislators (or judges) as this is the ultimate conflict of interest; and not just as it concerns discouraging lawsuits.]
ML/NJ
I don’t agree. Loser pays should be the default ruling in civil trials. In criminal trials the state should be on the hook for the defendant’s attorney if the state fails to secure a conviction.
because our justice system is so fair?
Fro mwhat i understand, the ACLU files cases via taxpayer funding and doesn’t pay if they lose- so they have a win win situation-
>
Lawyers shouldn’t be permitted to be legislators (or judges) as this is the ultimate conflict of interest; and not just as it concerns discouraging lawsuits.
>
Concur.
They create ‘law’ that their guild/class can nuance and parse (and ever-lasting turn-style of law > court > judgment cycle).
As (mostly) lawyers, they know how to generate ‘concrete’ verbiage ...but don’t.
Loser pays should be the default ruling in civil trials. In criminal trials the state should be on the hook for the defendant’s attorney if the state fails to secure a conviction.
= = = = = = = = = = = = =
Fully agree on the loser pays BUT should be some charge to the attorney taking a ‘bogus’ case. OUT OF HIS POCKET.
As to civil, WE ARE THE STATE, so the taxpayers would end up paying. NOW if it were to come out of the prosecutors pocket, different story.
“But we couldn’t get good ‘prosecutors’ then.
Well, bring GOOD cases, quit ‘picking on those that can’t defend themselves”..Questioned answered...
That list bit won’t happen...and, the voters are morally responsible for the actions of their employees. If the voters elect a prosecutor that costs the state money pursuing BS cases, the voters should fire him and get someone else.
I agree 100% with JamesP81 at post # 10.
“I don’t agree. Loser pays should be the default ruling in civil trials. In criminal trials the state should be on the hook for the defendant’s attorney if the state fails to secure a conviction.”
Part of what is wrong with our “adversary” system is it has become a game, where solid conviction that the facts are on your side is absent, if you want to sue, because its all about using the court system to make and publicize your claim, knowing the media is all about guult and conviction by allegation, and hoping to get the “defendent” to pay up, before your game, and your lack of sufficient facts, is exposed. Who convinces the “plaintiffs” to join in this game? The lawyers who stand to gain from how time is on their side in forcing the “defendent” to pay up, not because they are wrong, but just to avoid further court costs.
We not only need loser pays as the rule, but also that lawyers taking cases on contingency cannot charge the plaintiffs they represented for the legal costs the lawyers lost.
“Feeling aggrieved” and that “somewhat should have to pay” has become what it should not be, a de facto legal standard by which thousands of suits are initiated and by which many of them result in lucrative settlements FOR THE LAWYERS as the defendents calculate it is less than continuing to defend what they know is right.
Loser pays will end all that.
Lawyers will not take frivilous cases solely for obtaining lucrative settlements, when they know THEY will have to pay if they lose, and the defendent has a solid case; meaning they have lost the leverage to just get a settlement.
I would love for that to be a feature of every trial -- jury decides on guilt or innocence of the defendant, and after having done so, has an opportunity to determine that the lawsuit was frivolous or not, and if it was frivolous, order the loser to pay.
Yeah I disagree with this and much prefer the English Rule.
If you have a good enough case, you can get tort or contract lawyers to take your case on commission like they do now anyway. If your case is so weak it is very unlikely to prevail, then those same lawyers will be unlikely to take your case without you paying money up front. This will have the effect of reducing frivolous and nuisance lawsuits.
Our litigiousness not only costs us in terms of attorney’s fees and insurance costs but also all the added costs tacked on to products and services by companies to protect themselves from ridiculous lawsuits. Think of all the idiotic warning labels telling you not to do things like get in the bathtub and throw a live hairdryer in while standing in the water, etc.
Of course the Tort lawyers will be bitterly opposed to anything that reduces “business” for them.......
Besides a lot of donation money coming from lawyers to keep things just the corrupted way they are, there is also the fact that a great number of today’s political class at every level are themselves lawyers. I don’t know the exact number, but it’s a large one.
Your post is the first workable one I have seen on the thread. Loser pays punishes the plaintiff in an honest legal disagreement. For lawsuit lotto, it is perfect.
For multi party lawsuits, loser pays would help protect defendants added solely because of their deep pockets.
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