Second Circuit: Costs on Appeal

Pursuant to Rule 39 of the Federal Rules of Appellate Procedure an award of costs can be made to the party prevailing on an appeal.

The United States Court of Appeals for the Second Circuit ruled yesterday in Moore v. The County of Delaware that while the award of costs to the prevailing party is "the norm and not the exception," an appeals court retains the discretion to determine whether the award of costs is appropriate in a particular case. The decision can be found here.

The plaintiff sued law enforcement personnel for an illegal search. While the Second Ciruit had concluded in a prior ruling that the plaintiff's constitutional rights were violated, it also concluded that in the circumstances here the defendants were entitled to qualified immunity from suit, and, therefore, they are the prevailing party on the appeal.

In yesterday's decision the court concluded that in light of the fact that the litigation was brought in good faith by the losing party--he had shown constitutional wrongdoing--and in light of the "meager financial resources" of the losing party, it would not award costs to the prevailing party.

U.S. Supreme Court to Hear Attorney Fees Case

Some federal statutes contain fee-shifting provisions under which the prevailing party is entitled to an award of attorney's fees to be paid by the losing party. These fee-shifting provisions are present, for example, in federal civil rights, employment discrimination, and age discrimination statutes.

In determining the attorney fee to be awarded to the prevailing party, the "lodestar" calculation is used by federal district courts: the number of hours expended by the attorney is multiplied by what the court considers to be the appropriate hourly rate for the attorney. The court can then adjust the fee to take into consideration such factors as the financial risk taken by the attorney in litigating the matter.

Tomorrow morning the United States Supreme Court will hear oral argument in Perdue v. Kenny A., which raises the question of whether a court can enhance the lodestar calculation based on the quality of counsel's performance and the results obtained for the client.

The case has attracted wide attention and fifteen amicus briefs have been filed with the Court. Seven of the amicus briefs are on behalf of governments or government agencies which must pay prevailing party legal fees when they lose the case. As is to expected, they oppose the enhancements to the lodestar calculation. For example, one amicus brief was submitted on behalf of 30 states. New York did not join in this brief.

The remaining amicus briefs were filed on behalf of an assortment of organizations and law firms which often bring suit under statutes which have fee shifting provisions. These briefs support enhancements to the lodestar calculation.