The high court let stand a recent decision by the US 8 th Circuit Court of Appeals that overturned a previous Eighth Circuit presumption in favor of awarding the attorneys’ fees, Washington-based legal publisher BNA reported. All 10 of the court’s judges had ruled that the presumption in favor of fees as articulated in a 1980 case should be thrown out. Judges noted that most other federal appeals court had already likewise rejected the 1980 case.
According to the appeals court, the “American Rule” that each party normally bears the cost of litigation “pervade[d]” the court’s analysis of whether to overturn the presumption in the 1980 case. “While Congress did provide for fee shifting at the district court’s discretion in ERISA cases, the operation of the presumption in favor of fees undermines the ‘American Rule’ and should be employed only in extraordinary cases, such as civil rights litigation,” the appeals court said.
The case is Martin v. Arkansas Blue Cross and Blue Shield , U.S., No. 02-747, cert. denied 1/21/03.