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SCOTUS Asked To Decide On Legal Fees In RIAA Cases
Fogerty's ghost notes that the Supreme Court has been asked to decide whether exonerated RIAA defendants should automatically be awarded attorneys' fees. Texas resident Cliff Thompson was sued by the RIAA, which subsequently dropped its copyright infringement lawsuit after it determined that his adult daughter was the culprit. Thompson was denied attorneys' fees by the district and appeals courts and is asking the Supreme Court to weigh in on the matter. "In the petition for certiorari filed with the Supreme Court, Thompson's attorney Ted Lee lays out the RIAA's legal strategy and notes what he describes as the 'inherent unfairness' of the lawsuits... The fight between the RIAA and alleged copyright infringers is inherently unbalanced due to the vast financial resources available to the record labels. The risk-reward ratio for defendants is seriously out of kilter, and mandating that a successful defense — even if it comes from the RIAA's decision to voluntarily dismiss a case — results in the record labels picking up the tab would even things out."
Let's not forget that this would widen the gap between the representation that the rich and the poor get even more. If I sue Tylenol because they filled my children's tylenol bottle with crack and wood alcohol, they can just throw 30 lawyers on the case and laugh their asses off. If they lose, their only additional cost would be my lawyer (likely a small percentage of the cost of settlement or their own lawyers); everything else would be the same as before attorney fees were regularly awarded. However, if I lost due to some technicality, I would have to pay for 31 lawyers in what was a legitimate case to begin with.
Let me start with: I'm a lawyer (and specifically, a civil litigator) in an adverse costs awarding jurisdiction (Ontario, Canada) and New York State, which has very limited use of adverse cost awards. Let me second with I'm on a horrific battery of anti-cold drugs, so this might not be very coherent or thorough.
The argument that you pay the balance of the fees for a defendant's representation when you lose is a straw man argument. The bulk of legal representation is sound advice, and actual courtroom time is unlikely in most cases, and a judgment is exceptionally rare. In my limited but professional experience, I have studied cost awards in some detail, as issues about them come up regularly in Ontario. Foremost, I've noticed that a risk of adverse cost awards does not decrease the likelihood of individuals bringing a lawsuit for a couple of reasons. They are:
1. Adverse cost awards can reduce the cost of litigation by encouraging settlement prior to trial. If going to a courtroom means potentially paying an adverse cost award, there is a greater incentive to resolve the dispute in advance of that. This promotes ADR (alternative dispute resolution), especially mediation. The vast, vast, vast majority of litigation is settled prior to trial.
2. Plaintiffs are often judgment proof (viz. unable to pay an adverse cost award). In this respect, ironically, the extremely poor with lawyers retained on a contingency agreement are better defended against adverse cost awards than the middle class.
3. Courts often prescribe costs on the standard of reasonableness. In Canada, a legal technicality typically gives rise to "a novel point of law", where the courts have for practical and philosophical reasons deemed it unfair to award adverse costs. Hence, if you lose on a legal technicality, you only pay your own legal fees. Some might say that costs are a way for the court to say "this person had a legitimate claim and you should have settled" or "your claim is frivolous and you've wasted these other people's time", but where you bring a new point to clarification, the waiving cost awards is a relief rewarded as all future litigants have the benefit of this clarification.
4. Litigation is generally black and white over liability, but gray on damages (a gross overgeneralization, but bear with me). If liability is clear, and your claim is legitimate as a plaintiff, then adverse cost awards generally only penalize the plaintiff for errant behaviour (such as unreasonable pie-in-the-sky/lottery-ticket expectations), or the defendant at partial indemnity (say 40% of the plaintiff's legal fees) for failing to settle before trial, or substantial indemnity (say 80% of the plaintiff's legal fees) where the defendant has demonstrated unwieldy behaviour (such as starving impoverished plaintiffs).
5. Costs are often discretionary. A judge or master can use costs to deter deviance, penalize bad behaviour, and compensate for losses arising from the acts of other parties. In effect, it becomes a mechanism for the court to impose fairness. However, being discretionary, without complex regulations dealing with a plethora of cases and a diligent educating of the judiciary, it has the potential to be inconsistent as between judges.
6. The legal fees charged in Canada are only a percentage (either, generally, 40% or 80%, depending on the reason the costs are being awar