25 July 2018

Jones Day warns court of impending 'protracted' fee fights

Following a federal appeals court decision erasing a fee award, Jones Day lawyers warn of 'protracted' fee fights if ruling is upheld.

Jones Day lawyers, representing CVS Pharmacy Corp, raised the alarm saying the court misapplied legal standards and allowing the ruling to stand is inviting “protracted” litigation over compensation in future cases. In a warning to the US Court of Appeals for the Seventh Circuit, Jones Day's Eric Dreiband said that 'although this particular fee award may not be of great importance, the standard of review for all fee awards assuredly is.’ In June the seventh circuit overturned a $307,000 fee award for the law firm, which successfully challenged US Equal Opportunity Commission (EEOC) claims that a CVS severance agreement unlawfully interfered with protected workplace rights. The appeals court, finding the EEOC’s case against CVS had substance, vacated the legal fees awarded to Jones Day. The applicable fee statute, the court said, ‘does not punish a civil rights litigant for pursuing a novel, even ambitious theory.’

Court gets it wrong

The firm said the court should not have granted ‘fresh’ review but instead should have approached the dispute using a standard that gives greater deference to the trial court. Mr Dreiband, the Trump administration’s nominee to lead the US Justice Department’s civil rights division, wrote in court papers ‘the panel opinion gets it wrong and, worse, invites protracted fee litigation by promising de novo appellate review.’ He added, it would be ‘wasteful for appellate courts to redo a lower court’s analysis of how far from the correct legal position a party strayed.’ The firm also urged the Seventh Circuit to correct an alleged ‘legal misstatement, arguing the panel decision incorrectly stated the EEOC can litigate certain types of employment cases without an underlying charge. They also contend the appeals court strayed in saying it was ‘questionable whether legal fees can ever be awarded in scenarios where the EEOC violated a duty to try to resolve disputes before any lawsuit is filed.