Whether a statute that allows a prisoner-plaintiff’s lawyer to be awarded attorney’s fees grants discretion to the district court to apportion up to 25% of the prisoner-plaintiff’s monetary judgment towards attorney’s fees, or prevents the district court from exercising discretion and instead requires that the prisoner-plaintiff’s attorney receive exactly 25% of the judgment?
Charles Murphy, an inmate at Vandalia Correctional Center in Vandalia, Illinois, was choked, physically struck, and pushed head-first into a metal toilet—after already losing consciousness—by two correctional officers, Robert Smith and Gregory Fulk. Murphy successfully sued both correctional officers and was awarded a monetary judgment; the district court then held that 10% of the judgment would be applied to attorney’s fees pursuant to 42 U.S.C. § 1997e(d)(2). On appeal, the Seventh Circuit affirmed the correctional officers’ liability but reversed the district court’s apportionment of the plaintiff’s attorney’s fees, holding that the text of the statute required that exactly 25% of the judgment be awarded as attorney’s fees. Murphy argues that both the plain text and the legislative history of the statute indicate that courts have discretion when apportioning attorney’s fees. Smith and Fulk counter that the statute’s text and history point to an exact 25% requirement. In addition to legal analysis, the Supreme Court might also consider wisdom of giving district courts discretion in this context, particularly with regard to the impact discretion would have on deterring government officials from violating prisoners’ federal rights and on discouraging frivolous litigation.
Questions as Framed for the Court by the Parties
When a prisoner obtains a monetary judgment in a suit under 42 U.S.C. § 1983 and the prisoner’s lawyer is awarded attorney’s fees, “a portion of the judgment (not to exceed 25 percent) shall be applied to satisfy the amount of attorney’s fees awarded against the defendant.” 42 U.S.C. § 1997e(d)(2). The defendant pays the remainder of the attorney’s fees.
The question presented is whether the parenthetical phrase “not to exceed 25 percent” means any amount up to 25 percent (as four circuits hold), or whether it means exactly 25 percent (as the Seventh Circuit holds).
Petitioner Charles Murphy was an inmate at Vandalia Correctional Center in Vandalia, Illinois. Murphy v. Smith, 844 F.3d 653, 655–56 (7th Cir. 2016). On July 25, 2011, Respondents Robert Smith and Gregory Fulk, both correctional officers, physically struck Murphy and then left him in a cell without medical assistance. Id. Among Murphy’s injuries were the loss of consciousness as a result of a choke hold, a crushed eye socket, and blurred vision as a result of being pushed head-first into a metal toilet while his hands were handcuffed behind his back. Id. In July 2012, Murphy filed suit against Smith and Fulk for violation of his Eighth Amendment rights and state law. Id. at 656.
The district court awarded attorney’s fees of $108,445.54 and held that 10% ($30,773.48) of the judgment would be applied to the attorney’s fees under 42 U.S.C. § 1997e(d)(2), and the balance would be paid by the Respondents. Brief for Petitioner, Charles Murphy at 5. The district court cited the particular brutality of the Respondents’ conduct in holding that only 10% of the judgment would be applied to the award of attorney’s fees. Brief for Petitioner at 5. The Respondents appealed. Murphy at 656.
The Seventh Circuit affirmed the Respondents’ liability, but reversed the district court’s apportionment of the attorney’s fees. Murphy at 660–61. The Seventh Circuit held that “the most natural reading” of § 1997e(d)(2) grants no discretion to the district courts and requires that exactly 25% of the judgment be applied to the attorney’s fees award; this way, only if the attorney’s fees are greater than 25% of the judgment would the defendant be required to pay attorney’s fees in addition to the judgment. Id. at 660. The Seventh Circuit remanded the case to the district court to modify the portion of attorney’s fees Murphy must pay out of his damages from 10% ($30,773.48) to 25% ($76,933.46). Id. at 660–61.
PLAIN TEXT OF THE STATUTE
Murphy asserts that the plain text of 42 U.S.C. § 1997e(d)(2) clearly grants courts discretion to determine what portion of a judgment should be applied to the attorney’s fees. Brief for Petitioner, Murphy at 9. Indeed, Murphy contends that the parenthetical phrase “not to exceed 25 percent” is equivalent in meaning to “less than or equal to,” and accordingly allows courts discretion to apportion from the monetary judgment a range of attorney’s fees, provided that those fees do not exceed 25% of the judgment amount. Id. at 9–10. In fact, as Murphy points out, every court of appeals that has addressed this issue has similarly held that the statute grants district courts discretion to apportion attorney’s fees. Id. at 12. Moreover, Murphy notes that Congress could have easily written § 1997e(d)(2) to eliminate any district court discretion by, for example, requiring that a plaintiff pay “all” of the attorney’s fees “except to the extent they exceed 25 percent of the judgment,” but Congress did not do so. Id. at 10. Additionally, Murphy asserts that even if the text of the statute was ambiguous, the Seventh Circuit’s interpretation of the ambiguity is unpersuasive: the determination that the defendant must pay a portion of the plaintiff’s attorney’s fees “only if 25 percent of the award is inadequate” contradicts the language of § 1997e(d)(2), which only provides that the portion of the judgment not exceed 25%, but it does not require that the portion equal 25%. Id. at 13–14.
Smith and Fulk counter that § 1997e(d)(2), contrary to Murphy’s assertion, does not grant the district court discretion to apportion attorney’s fees but rather requires that the plaintiff’s attorney’s fees must first be satisfied from the judgment, and that the defendant is simply liable for any fees exceeding 25% of the judgment. Brief for Respondents, Smith and Fulk at 7. Additionally, Smith and Fulk argue that phrase “to satisfy” is used in law generally and the United States Code specifically to indicate complete fulfillment of an obligation; here, the entire phrase “to satisfy the amount of attorney’s fees awarded” would mean complete payment of attorney’s fees. Id. at 8–9. In other words, Smith and Fulk contend that § 1997e(d)(2) require that courts must attempt to cover the plaintiff’s attorney’s fees completely from the judgment. Id. Smith and Fulk acknowledge that there may be instances in which the plaintiff’s attorney’s fees cannot be satisfied from the judgment alone, but assert that, in those instances, the defendant may be liable for the plaintiff’s attorney’s fees in excess of 25% provided that the plaintiff’s attorney’s fees are not greater than 150% of the judgment awarded. Id. at 9–10. Smith and Fulk contend that this interpretation of the statute, contrary to Murphy’s interpretation, gives meaning to each part of the statute and does not render any words superfluous. Id. at 10–11. Finally, Smith and Fulk note that § 1997e(d) as a whole supports their interpretation of § 1997e(d)(2) because the other four subparts of § 1997e(d) operate to restrict attorney’s fees and limit the defendant’s liability in different ways. Id. at 16. For example, Smith and Fulk explain that § 1997e(d)(4) safeguards the defendant from additional fees that the plaintiff may have agreed to pay his or her attorney. Id. at 16–17. These provisions indicate that § 1997e(d)(2) does not grant the district court discretion to apportion the plaintiff’s attorney’s fees but rather restricts the district court and limits the defendant’s liability. Id.
LEGISLATIVE HISTORY AND CONTEXT OF THE STATUTE
Murphy asserts that the legislative history behind this statute indicates that Congress did not intend to bar district courts from using their traditional discretion regarding attorney’s fees. Brief for Petitioner at 16–17. Murphy states that other fee-shifting statutes that Congress has enacted—statutes that permit courts to apportion attorney’s fees—generally grant district courts broad discretion to apportion attorney’s fees. Id. Courts have previously recognized, Murphy points out, that this discretion is beneficial because attorney’s fees are generally factual matters, and the district court is most familiar with the facts of each case. Id. at 17–18. Indeed, Murphy notes that § 1997e(d)(2) contains language that is “identical or nearly identical” to other statutes that grant district courts discretion over attorney’s fees. Id. at 18. Finally, Murphy contends that Congress has considered modifying § 1997e(d)(2) since its enactment over twenty years ago, but has chosen not to do so; this fact evinces congressional intent toward allowing district courts to continue using discretion under § 1997e(d)(2) in apportioning attorney’s fees. Id. at 15.
Smith and Fulk, on the other hand, contend that the legislative history behind the enactment of this statute lends support to their interpretation of § 1997e(d)(2). Brief for Respondents at 21. Smith and Fulk point to an earlier draft of § 1997e(d)(2) that contained the sentence: “If the award of attorney’s fees is greater than 25 percent of the judgment, the excess shall be paid by the defendant.” Id. This sentence, Smith and Fulk contend, clearly illustrates that the defendant is only liable for attorney’s fees if the award exceeds 25% of the judgment. Id. Smith and Fulk acknowledge that the currently-enacted version of § 1997e(d)(2) does not contain that sentence, but point to statements made by the bill’s congressional sponsors that indicate that the enacted version of § 1997e(d)(2) was intended to achieve the same purposes as the earlier version. Id. at 22. Indeed, Smith and Fulk claim that the most plausible reason for this revision is that legislators already felt that the first sentence—containing the parenthetical phrase—already sufficiently indicated that district courts do not have discretion to apportion attorney’s fees, and the legislators instead repurposed the second sentence for other reasons. Id. at 23.
NEED FOR DETERRENCE AND COMPENSATION VERSUS CONCERNS ABOUT FRIVOLOUS LITIGATION
The American Civil Liberties Union et al. (“ACLU”), in support of Murphy, argues that reading 42 U.S.C. § 1997e(d)(2) to mean exactly 25% undermines the two purposes of the statute—to deter government officials from violating citizens’ federal rights and to compensate such citizens when violations occur. Brief of Amici Curiae American Civil Liberties Union et al., in Support of Petitioner at 6–7. The ACLU asserts that the deterrence works on two levels: it deters the individual government officials from repeated violations while also incentivizing the government to institute policy changes to prevent future offenses in general. Id. at 7–8. The ACLU thus concludes that a reading of § 1997e(d)(2) to require a blanket 25% judgment reduction for attorney’s fees in all cases would undermine the deterrence and compensation functions of the statute by preventing district courts from imposing harsher penalties on individuals with higher culpability. Id. at 8–9. Providing district courts with discretion to punish government actors who mistreat prisoners on a level commensurate with their culpability is particularly important, according to the ACLU, because the level of prisoner abuse in American prisons is shocking; for example, one study found that at least one in every five prisoners suffered serious physical abuse over a six-month period. Id. at 10. Finally, the Roderick and Solange MacArthur Justice Center and Uptown People’s Law Center argue that a discretionary reading of § 1997e(d)(2) is necessary because it helps protect prisoners’ access to counsel. Brief of Amici Curiae Roferick and Solange MacArthur Justice Center and Uptown People’s Law Center, in Support of Petitioner at 2–3. They explain that many civil rights attorneys use retainer agreements which provide for a percentage of the damages to go to the attorney after the statutory fees have been distributed, therefore, increased statutory fee requirements would diminish the amount of damages-based fees the attorney could receive, decreasing attorney incentives to assist prisoners and limiting prisoner access to counsel. Id.
An amicus brief from sixteen states (collectively, the “States”), in support of Smith and Fulk, contends that a non-discretionary reading of § 1997e(d)(2) is necessary to uphold the congressional policy choice underlying the statute, namely to ensure that prisoners’ incentives are aligned with non-prisoners’ incentives by guaranteeing that prisoners bear some financial risk for litigation. Brief of Amici Curiae States of Michigan et al., in Support of Respondents at 10–11. The States argue that Congress intended § 1997e(d)(2) to place prisoner litigation in between the “American Rule” (that litigants pay their own attorney’s fees) and 42 U.S.C. § 1988 (which allows a plaintiff to pay no legal fees at all) because allowing prisoners to pay only nominal legal fees out of their judgment would create a perverse incentive for prisoners to bring frivolous litigation. Id. at 11–12. Moreover, the States argue that a discretionary reading of § 1997e(d)(2) would cause prisoners to be treated more favorably than non-prisoners in a way Congress did not intend. Brief of Michigan et al. at 16. The States explain that a discretionary reading means that the severity of the constitutional violation could be used to affect or decide the severity of the judgment as well as the extent that the judgment must be used to satisfy the attorney’s fees. Id. The States assert that this “double counting” treats prisoners more favorably than non-prisoners and, thus, defeats Congress’s policy choice to align the treatment and litigation incentives of prisoners and non-prisoners. Id. Finally, the States note that a non-discretionary reading of the statute limits the cost of prisoner litigation on both defendants and taxpayers, including both frivolous and meritorious claims. Id. at 20.
- Barbara Leonard, Beaten Inmate’s Fee Award Faces Supreme Scrutiny, Courthouse News Service (Sept. 5, 2017).
- Bernie Pazanowski and Jordan S. Rubin, SCOTUS Agrees to Hear Civil Rights Case; Timing ‘Unusual,’ Bloomberg BNA (Aug. 30, 2017).