Supreme Court Makes It More Difficult for Employers to Recover Attorneys’ Fees
This week, the United States Supreme Court issued its decision in Fox v. Vice, limiting employers' ability to recover attorneys' fees incurred in defending claims that are to some degree frivolous. The Fox case is not an employment case, buta civil rights case brought under Section 1983 by acandidaterunning for public officewho claimed the incumbentengaged indirty tricks amountingto a violation of his civil rights (a federal claim). Healso suedfor defamation (a state law claim). The defendant made a motion to the court arguing that the federal Section 1983 claim was frivolous and should be dismissed. The plaintiff essentially conceded the claim was not valid and the court in turn granted the motion and threw out the federal claims. The court made no rulings on the state law claims, but instead remanded those claims to state court to proceed in that forum.
Following his victory on the Section 1983 claim in federal court, the defendant requested that he be awarded his attorneys' fees incurred to defend the claim. The standard for awarding a defendant attorneys' fees in a Section 1983 case is the same as the standard for awarding a prevailing employer attorneys' fees in a discrimination case brought under Title VII or FEHA--fees may only be awarded if the claims are found to be frivolous, unreasonable, or without foundation. In this case, the court found that the 1983 claim wasfrivolous and awarded the defendant his fees.
The case was appealed to theFifth Circuit, which upheld the award of fees. The Supreme Court then granted review and reversed the lower courts' decisions. TheSupreme Courtheld that recovery of attorneys' fees is based on a "but for" standard, meaning that the defendant must show that the fees would not have been incurred "but for" the frivolous claims. The Court noted that the entire case had not been found frivolous, just the federal Section 1983 claim. Indeed, the state law claims had not yet even been resolved. The court held that where only certain claims are found to be frivolous, the defendant can only recover fees spent exclusively defending the frivolous claim. If fees were incurred to simultaneously defend frivolous and non-frivolous claims, the fees may not be awarded. Stated differently, if the fees would have been incurred anyway in connection with defending non-frivolous claims, they cannot in any amount be awarded to the defendant for defending a frivolous claim.
The Supreme Court'sdecisionobviously makes recovery of fees very difficult for a prevailing defendantin a multi-claim case because most litigationtasks (e.g. a deposition) are devoted to defending all claims in a case, not just one. Although the Fox case is not an employment case, the standards applied by the Court will likely be applied in employment cases alleging statutory claims for discrimination and the like under Title VII and FEHA.