Order Code 94-970

Awards of Attorneys Fees by Federal Courts and Federal Agencies

Updated June 20, 2008

Henry CohenLegislative Attorney

American Law Division

Awards of Attorneys Fees by Federal Courtsand Federal Agencies

Summary

In the United States, the general rule, which derives from common law, is thateach side in a legal proceeding pays for its own attorney. There are many exceptions,however, in which federal courts, and occasionally federal agencies, may order thelosing party to pay the attorneys fees of the prevailing party. The major commonlaw exception authorizes federal courts (not agencies) to order a losing party that actsin bad faith to pay the prevailing partys fees.

There are also roughly two hundred statutory exceptions, which were generallyenacted to encourage private litigation to implement public policy. Awards ofattorneys fees are often designed to help to equalize contests between privateindividual plaintiffs and corporate or governmental defendants. Thus, attorneys feesprovisions are most often found in civil rights, environmental protection, andconsumer protection statutes.

In addition, the Equal Access to Justice Act (EAJA) makes the United Statesliable for attorneys fees of up to $125 per hour in many court cases andadministrative proceedings that it loses (and some that it wins) and fails to prove thatits position was substantially justified. EAJA does not apply in tax cases, but asimilar statute, 26 U.S.C. 7430, does.

Most Supreme Court decisions involving attorneys fees have interpreted civilrights statutes, and this report focuses on these statutes. It also discusses awards ofcosts other than attorneys fees in federal courts, how courts compute the amount ofattorneys fees to be awarded, statutory limitations on attorneys fees, and othersubjects. In addition, it sets forth the language of all federal attorneys feesprovisions, and includes a bibliography of congressional committee reports andhearings concerning attorneys fees.

In 1997, Congress enacted a statute allowing awards of attorneys fees to someprevailing criminal defendants.

Contents

I. Introduction: The American Rule and its Exceptions . . . . . . . . . . . . . . . . . . . . . 1

II. Common Law Exceptions to the American Rule . . . . . . . . . . . . . . . . . . . . . . . 2Common Benefit Doctrine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Bad Faith Exception . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Private Attorney General Doctrine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

III. The Equal Access to Justice Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

IV. The Dual Standard: Prevailing Plaintiffs and Prevailing Defendants . . . . . . 12

V. The Concept of Prevailing Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

VI. Awards of Attorneys Fees Incurred in Administrative Proceedings . . . . . . 19Awards of Attorneys Fees by Administrative Agencies . . . . . . . . . . . . . . . 23

VII. Awards of Attorneys Fees in Civil Rights Cases . . . . . . . . . . . . . . . . . . . . 25Civil Rights Act of 1964, Title II: Public Accommodations . . . . . . . . . . . . 25Civil Rights Act of 1964, Title III: Public Facilities . . . . . . . . . . . . . . . . . . 26Civil Rights Act of 1964, Title VII: Equal Employment Opportunities . . . 26Fair Housing Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Fair Labor Standards Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Age Discrimination in Employment Act of 1967 . . . . . . . . . . . . . . . . . . . . 28Equal Credit Opportunity Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Voting Rights Act of 1965 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Civil Service Reform Act of 1978 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Age Discrimination Act of 1975 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Civil Rights of Institutionalized Persons Act . . . . . . . . . . . . . . . . . . . . . . . . 30Rehabilitation Act of 1973 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Individuals with Disabilities Education Act . . . . . . . . . . . . . . . . . . . . . . . . 32Americans with Disabilities Act of 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Civil Rights Attorneys Fees Awards Act of 1976 . . . . . . . . . . . . . . . . . . . 33

42 U.S.C. 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3542 U.S.C. 1981a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3542 U.S.C. 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3542 U.S.C. 1983 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3542 U.S.C. 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3742 U.S.C. 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37Title IX of P.L. 92-318 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37Religious Freedom Restoration Act of 1993 . . . . . . . . . . . . . . . . . . . . 38The Religious Land Use and Institutionalized Persons Act

of 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38Civil Rights Act of 1964, Title VI: Federally Assisted Programs . . . . 39Violence Against Women Act of 1994 . . . . . . . . . . . . . . . . . . . . . . . . 39

VIII. Awards of Attorneys Fees in Tax Cases . . . . . . . . . . . . . . . . . . . . . . . . . . 39

IX. Awards of Attorneys Fees Against the States . . . . . . . . . . . . . . . . . . . . . . . . 41Awards of Attorneys Fees Against State Judges . . . . . . . . . . . . . . . . . . . . 45

X. Awards of Costs in Federal Courts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Awards of Costs For and Against the United States . . . . . . . . . . . . . . . . . . 48

XI. Determining a Reasonable Attorneys Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 48

XII. Rule 68 of the Federal Rules of Civil Procedure . . . . . . . . . . . . . . . . . . . . . 54

XIII. Negotiated Fee Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

XIV. Statutory Limitations on Attorneys Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 58

XV. Funding of Participants in Federal Agency Proceedings . . . . . . . . . . . . . . . 59

XVI. Some Arguments For And Against The American Rule . . . . . . . . . . . . . . 61

XVII. Awards of Attorneys Fees to Prevailing Criminal Defendants . . . . . . . . 62

Federal Statutes That Authorize Awards of Attorneys Fees . . . . . . . . . . . . . . . 64

Bibliography of Congressional Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . 115Committee Prints and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115Committee Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

1 Key Tronic Corp. v. United States, 511 U.S. 809, 814-815 (1994) (holding that the phraseany other necessary costs of response incurred by any other person in 107 of theComprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. 9607, does not include attorneys fees).2 See, CRS Report 92-237, Attorneys Fees: The Bush Administration Proposal to Adopt theEnglish Rule by Henry Cohen (archived, available from author); CRS Report 95-27,Common Sense Legal Reforms Act of 1995: Title I Civil Justice Reform (Attorneys Fees,Products Liability, Etc.), by Henry Cohen (archived, available from author). The AttorneyAccountability Act of 1995, H.R. 988, 104th Cong., which grew out of the Common SenseLegal Reforms Act of 1995 (which was part of the House Republicans Contract WithAmerica), passed the House. It would have required, among other things, the payment ofattorneys fees in connection with rejected settlement offers in diversity cases.3 The Supreme Court has noted a third exception: a court may assess attorneys fees as a

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Awards of Attorneys Fees byFederal Courts and Federal Agencies

I. Introduction: The American Rule and its Exceptions

In the United States, the prevailing litigant is ordinarily not entitled to collecta reasonable attorneys fee from the loser. Alyeska Pipeline Service Co. v.Wilderness Society, 421 U.S. 240, 247 (1975). This is known as the American rule(as opposed to the English rule, which routinely permits fee-shifting) and derivesfrom court-made law. It has, however, numerous statutory exceptions (listed at theback of this report) some, if not most, of which Congress enacted in order toencourage private litigation to implement public policy. Id. at 263. Under theseexceptions, a federal court (and sometimes a federal agency) may order the losingparty to a lawsuit to pay the winning partys attorneys fees. Although attorneysfees generally are not a recoverable cost of litigation absent explicit congressionalauthorization, ... [t]he absence of specific reference to attorneys fees is notdispositive if the statute otherwise evinces an intent to provide for such fees.1

Fee-shifting has been proposed, not only to encourage lawsuits, but todiscourage them, especially tort suits. The English loser pays rule was includedin tort reform legislation proposed by the Bush Administration in 1992, and in TheCommon Sense Legal Reforms Act, which is part of the Contra