Sanchez v. Rowe
| Decision Date | 18 April 1989 |
| Docket Number | No. 87-1439,87-1439 |
| Citation | 870 F.2d 291 |
| Parties | Jose Piedad SANCHEZ, Plaintiff-Appellant, v. Bill ROWE, In his Individual and Official Capacities as a U.S. Border Patrol Agent, et al. Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Lee J. Teran, San Antonio, Tex., for plaintiff-appellant.
Robert K. Rasmussen, Atty., U.S. Dept. of Justice, Appellate Staff, William Kanter, Atty., Civil Div., Washington, D.C., for defendants-appellees.
Appeal from the United States District Court for the Northern District of Texas.
Before CLARK, Chief Judge, TIMBERS * and RUBIN, Circuit Judges.
This case raises issues concerning the recovery of costs and attorney's fees under the Equal Access to Justice Act when the underlying claim is based on the Federal Tort Claims Act. We hold that an award of attorney's fees and expenses is barred as a matter of law under 28 U.S.C. 2412(b) and (d)(1)(A), but remand for an award of costs under 28 U.S.C. 2412(a).
Plaintiff Jose Sanchez prevailed at trial on his claim against the United States under the Federal Tort Claims Act 1 and on his Bivens claim 2 against Bill Rowe, an agent of the U.S. Border Patrol, Immigration and Naturalization Service. The court found that Rowe maliciously beat Sanchez after arresting him in Vernon, Texas. Because a judgment under the FTCA bars a plaintiff from also recovering against the government employee whose actions gave rise to the claim, 3 the court ordered Sanchez to elect between the two claims. Pursuant to his election, judgment was entered against the United States for $25,000 in compensatory damages on the FTCA claim. Thereafter Sanchez submitted a motion for attorney's fees, expenses, and costs under the Equal Access to Justice Act. 4 Without explanation, the district court denied the motion and Sanchez appealed. We remanded the case to the district court for a statement of reasons why the motions were denied. Now with the benefit of its opinion, we consider Sanchez's attack.
A prevailing party may recover attorney's fees and expenses against the United States on only two bases: The trial court has the discretion to award fees and expenses when they would be available to any other party under common law or a specific statutory provision. In addition, the trial court shall award fees and expenses in cases "other than [those] sounding in tort" unless the court finds that the government's position was substantially justified. Sanchez cannot recover fees and costs against Rowe personally under the EAJA. To recover under that Act one must be a "prevailing party." 5 The judgment in a FTCA action constitutes "a complete bar to any action by the claimant, by reason of the same subject matter, against the employee of the government whose act or omission gave rise to the claim." 6 Since Sanchez elected to recover against the United States under the FTCA rather than against Rowe on the basis of his constitutional claims, he did not "prevail" against Rowe and cannot meet the threshold requirement of the Act. We therefore affirm the district court's denial of attorney's fees, expenses, and costs against Rowe.
Section 2412(b) of the EAJA authorizes an award of attorney's fees against the government, unless expressly prohibited by statute, when such fees would be available against other parties at common law. Under the "American Rule," established almost two hundred years ago by the Supreme Court 7 and still adhered to, 8 the prevailing litigant ordinarily may not collect attorney's fees from the loser. Sanchez relies on a well-established exception that allows recovery of attorney's fees "when the losing party has 'acted in bad faith, vexatiously, wantonly, or for oppressive reasons.' " 9 With support from the Ninth Circuit, 10 Sanchez claims that Rowe's malicious conduct in beating him constitutes bad faith under this exception. With support from the Sixth 11 and Eleventh 12 Circuits, the government contends that the district court correctly found as a matter of law that "bad faith in the underlying conduct alone is insufficient for an award of attorney's fees under the common law;" and that, even if an award of attorney's fees were available based on the bad faith of the underlying conduct, such an award is barred by the FTCA prohibition against punitive damages. 13
To further buttress his contention that the malice with which a tort was inflicted can itself constitute the bad faith requisite to an award of attorney's fees, Sanchez points to the Supreme Court's statement in Hall v. Cole "that 'bad faith' may be found, not only in the actions that led to the lawsuit, but also in the conduct of the litigation." 14 Hall, however, was decided on the common-benefit exception to the American Rule, not on the bad-faith exception. 15
In Vaughan v. Atkinson, 16 the Supreme Court allowed a seaman to recover attorney's fees as an item of damages for the shipowner's failure to pay maintenance and cure. Fees were awarded on the basis of the shipowners' bad-faith response to the seaman's underlying claim. The Court explained that the shipowners
were callous in their attitude, making no investigation of [the seaman's] claim and by their silence neither admitting nor denying it. As a result of that recalcitrance, [the seaman] was forced to hire a lawyer and go to court to get what was plainly owed him under laws that are centuries old. The default was willful and persistent. 17
Similarly, in cases the Supreme Court has cited as examples of the bad-faith exception, the bad-faith conduct was in response to the underlying claim. 18 As the Sixth Circuit has observed, "[c]are must be taken to distinguish a defendant's bad faith in necessitating that an action be filed or in maintaining a defense from a defendant's bad faith in the acts giving rise to the claim." 19 While there is some authority to the contrary, we agree with Moore's treatise that the better view is that the requisite bad faith may be found only in bringing an action or causing an action to be brought. 20
We have allowed fees only for bad-faith conduct related to the litigation, either in response to a claim before a suit has been filed or in the course of the litigation after a suit has been filed. In Carter v. Noble we held that when a defendant's "patently frivolous claim" forced a plaintiff to employ counsel and file an action, attorney's fees were awardable. 21 In Baker v. Bowen, 22 in the context of an administrative adjudication, we also relied on litigation-related conduct as requisite to the allowance of fees. This is consistent with our characterization of the Supreme Court's bad-faith cases such as Vaughan as allowing attorney's fees "against defendants whose prelitigation conduct left plaintiff no alternative but litigation, despite defendants' duty to deal fairly with the respective plaintiffs." 23 We reject Sanchez's reliance on our decision in Miller v. Carson, 24 a case involving a fee award based on a statutory right, not federal common law.
Extending the bad-faith exception to include bad faith in the acts giving rise to the substantive claim is inconsistent with the rationale behind the American Rule. As the Sixth Circuit explained in Shimman v. International Union of Operating Engineers:
By refusing to penalize a litigant whose judgment concerning the merits of his position turns out to be in error, the American Rule protects the right to go to court and litigate a non-frivolous claim or defense. The unsuccessful litigant is not penalized even when an injured party whose claim is upheld is not made completely whole because of the cost of litigation. The unsuccessful litigant may be penalized, however, if the litigation was not maintained in good faith. In such a case, the successful party has ordinarily suffered two wrongs: one in the events giving rise to the litigation, and another in the wrongful conduct or instigation of the litigation. Attorney fees incurred while curing the original wrong are not compensable because they represent the cost of maintaining open access to an equitable system of justice. That policy is not served, however, by denying fee awards when the justice system has been wrongfully used. There is no need to maintain open access for those who abuse the system. The bad faith exception applies when the need for open access is absent....
The rationale behind the American Rule remains intact when there is bad faith in the event underlying the substantive claim. A person who harms another in bad faith is nonetheless entitled to defend a lawsuit in good faith. "A party is not to be penalized for maintaining an aggressive litigation posture...." 25
We hold that the requisite bad faith may be found in a party's conduct in response to a substantive claim, whether before or after an action is filed, but it may not be based on a party's conduct forming the basis for that substantive claim. Therefore Rowe's viciousness cannot itself justify an award of attorney's fees. As Sanchez conceded at oral argument, the government's litigation posture was not in bad faith, so there is no basis for him to recover fees under Sec. 2412(b).
Having found that the bad-faith exception is inapplicable, we do not reach the issue whether an award of attorneys fees would also be barred by the FTCA prohibition against punitive damages.
Section 2412(d)(1)(A) of the EAJA requires a court to award attorney's fees against the United States to any prevailing party "in any civil action (other than cases sounding in tort) ... unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." The district court found that Sanchez's FTCA cause of action was one "sounding in tort" and that, therefore, it did not warrant an award. Sanchez alleges that Agent Rowe committed a constitutional tort and that such torts are not considered part of the...
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