6th Circuit Affirms Award of All Expert Fees, Despite Limiting Attorney's Fees

By IMS ExpertServices

Can an award of expert witness fees that exceeds a time limitation placed upon an award of attorney’s fees stand?

In an opinion issued October 7, the 6th Circuit faced this sticky question when it was tasked with reviewing a lower court’s decision to award over $500,000 in expert witness fees to a prevailing corporate defendant in a case involving Title VII allegations brought by the Equal Employment Opportunity Commission (EEOC).

As part of the appeal, the 6th Circuit reviewed whether the district court abused its discretion when it awarded the expert fees under 42 U.S.C. § 2000e-5(k), which authorizes a court to award reasonable attorney’s fees to the prevailing party in a Title VII action.

The Case

The dispute arose after the EEOC lodged a complaint in 2005 against the corporate defendant, a temporary employment agency.  The EEOC filed a Title VII action in September of 2008, and the following events transpired:

  • By the fall of 2009, the defendant had provided more than 176,000 documents in discovery, and the EEOC had filed three motions for extending the deadline for its expert reports.
  • Granting the EEOC’s third motion to extend the deadline for its expert reports in part, and denying it in part, the judge “found that the Commission was dilatory in prosecuting the case.”   The magistrate judge nevertheless extended the deadline for filing expert reports to the end of the year, December 31, 2009.  Defendant later timely filed its expert report in February of 2010.
  • A month later the case came to an end.  In sum, the parties agreed to voluntarily dismiss the case, with the dismissal providing that, for the purposes of determining fees under the applicable statute, defendant was the prevailing party.
  • The defendant then brought a motion for attorney’s fees.  The lower court awarded the defendant fees in the amount of more than $750,000, which included over $200,000 in attorney’s fees and more than $500,000 in expert witness fees.

Can an Award of Expert Fees Exceed Time Limitations Placed on an Award of Attorney’s Fees?

In ruling on the motion, the magistrate judge made a crucial finding, determining that “the complaint turned out to be without foundation from the beginning.”  With regard to the expert reports, the magistrate judge concluded it was unreasonable for the EEOC to continue litigation after it knew it could not present an expert report.

This led the court to the next logical question in the fee analysis:  When should the EEOC have known the case was groundless? The magistrate judge determined October 1, 2009, to be the operative date for the imposition of attorneys’ fees, as this date “provided the Commission a little over a month to have reviewed the vast majority of the documents produced by [defendant].”

But with respect to the award of expert witness fees, the court held something else – the defendant was entitled to all of its expert’s fees – even including those incurred before the October 1 date.

The Appeal to the 6th Circuit -  The Decision with Respect to Fees in This Case

As part of the appeal, the 6th Circuit was tasked with reviewing an interesting question – from which date was it proper to award the expert fees?  Did the lower court abuse its discretion when it imposed all of the experts’ fees, even those incurred prior to the October 1 date for the attorney’s fees?

In other words, does the precept that expert fees are awarded as a subset of attorney’s fees preclude an award of expert fees not concurrent in time with awarded attorney’s fees?

As to this issue the court stated, “It would be tempting to hold that a court may only award expert fees temporally concurrent with awarded attorney’s fees.  While it may well be reasonable in some cases for a district judge to award expert fees – as a subset of attorney’s fees – for the same time period that attorney’s fees are awarded, this does not mean that awarding expert fees incurred during a different period is always unreasonable.”

Rather, the court found that the benchmark under the applicable statute in this case to be one of reasonableness.  The court quoted 42 U.S.C. § 2000e-5(k), stating, “[A] court may award “a reasonable attorney’s fee (including expert fees.)”  However, the appellate court found that “there is nothing in the statute as written that requires temporal concurrence between expert and attorney’s fees.”

The 6th Circuit was clear in its holding: No temporal concurrence was required.  Referencing the requirements of FRCP 26(a)(2)(B), the court explained:

Preparing an expert report will often require a considerable amount of time.  Once an expert report deadline is set, an expert must promptly begin her work in order to complete the required report by the deadline, particularly in a complex case with stringent deadlines. An expert often works independently of the attorney to gather, convert into a reviewable format, and review the documents and other materials considered in forming the opinion that will underlie her opinion.

Because a failure to timely complete the report will prevent the expert from testifying at trial, which may be fatal to a party’s claim, experts cannot wait and see if a disposition motion is granted or if a case becomes frivolous before beginning their work.”

The court determined that under the body of law applicable to this Title VII action, “In our view, so long as the prevailing party acted reasonably in hiring the expert, the fees incurred were reasonable, the work conducted was reasonable, and the [applicable] standard . . .  permits an award of expert fees, a court should be permitted to award a prevailing party’s expert fees independent of limitations on the award of attorney’s fees.”

With that, the court upheld the lower court’s award of all of the expert fees, including those that the defendant incurred prior to October 1.

Not all of the justices hearing the appeal agreed with the majority decision, however.  The opinion triggered an almost 50 page dissent by a judge sitting in designation, who meticulously detailed the reasons underlying his “definite and firm conviction that the trial court committed a clear error of judgment” when it awarded attorney’s fees to the defense at all in this case.

Do you agree with majority decision that all of the expert fees should have been awarded in this case, in spite of the limitations on the attorney’s fees?

For those who would like to explore this case further, the citation is Equal Emp’t Opportunity Comm’n v. Peoplemark, Inc. , Case. No. 11-2582 (6th Cir.  Oct. 7, 2013).

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