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Attorney-fee clauses for motion practice? “You miss 100% of the shots you don’t take” shouldn’t apply in litigation

In litigation, parties will sometimes file motions whose prospects of success are questionable at best. Such a motion might be a Hail-Mary pass when it appears that the case is going badly for the moving party. And on the other side of the coin: Parties sometimes oppose meritorious motions for little reason other than, let’s make them work for it.

(Sometimes such motions are filed out of fear of being second-guessed. A hard-headed client, looking to point fingers somewhere else after a loss, might say to counsel, after the fact: You should have filed a motion for [whatever]; sure, the odds of success were low, but now we’ll never know. No lawyer likes to hear that from the client; likewise, no business executive wants to hear that question from her superiors — or worse, from her board of directors.)

The Hail-Mary pass motivation might have been at work in a recent Federal Circuit case:

  • A party, Benton Energy Services (BESCO) was sued for breach of contract (and on other grounds) by Cajun Services.
  • For months, the parties did “discovery,” and eventually each party filed motions for summary judgment.
  • But then — with trial just weeks away — BESCO filed a motion to compel arbitration, as called for by the parties contract.
  • It’s not a big stretch to speculate that BESCO felt that its prospects at trial were not so great, and so it wanted to try for a fresh start in an arbitration proceeding.
  • Cajun opposed BESCO’s motion to compel arbitration, on grounds that under well-established precedent, BESCO had waived its right to arbitration. The trial court agreed and denied the motion to compel.
  • BESCO lost the ensuing jury trial.

BESCO appealed the trial judge’s refusal to compel arbitration, but the appeals court affirmed, holding that the trial judge had not clearly erred. See Cajun Serv. Unlimited, LLC v. Benton Energy Serv. Co., No. 2020-1367, slip op. (Fed. Cir. Mar. 12, 2021) (nonprecedential). (Hat tip: Chael Clark of Carlton Fields.)

We don’t know what was going through the minds of BESCO and its counsel when they belatedly moved to compel arbitration. But it’s easy to imagine that they might have thinking something like the following: Things aren’t looking great for us; there’s not much percentage in trying now to compel arbitration, but it’s probably our best shot — and the worst that can happen is that the judge says no. (To reiterate: We don’t know whether this actually was BESCO’s or its counsel’s thinking.)

This attitude brings to mind the saying attributed to Walter Gretzky, father of hockey legend Wayne Gretzky: You miss 100% of the shots you don’t take. In the litigation context, Gretzky père‘s saying could be paraphrased as: You’ll be denied on 100% of the motions (and oppositions) that you don’t file.

The problem, of course, is that in situations like this, taking the shot inflicts extra burden, expense, and delay on the other party and the court — often to no real purpose.

Oh, sure: The applicable rules typically exhort lawyers and parties to play nice, and judges have the power to impose sanctions when they don’t.

But in the real world, sanctions seldom happen, so any fear of being sanctioned is often outweighed by the fear of losing (and/or the fear of being second-guessed).

So: How to combat this take-the-shot tendency? One possibility — by no means a panacea — might be for contract drafters to include a prevailing-party attorney-fee clause for motion practice, perhaps along something like the following lines:

Attorney Fees in Motion Practice

(a) This provision is agreed to as an incentive for the parties to amicably resolve any subsidiary- or ancillary dispute that is brought before a tribunal in a case (each, a Motion).

(b) The prevailing party in the Motion will be entitled to recover its Dispute Expenses for the Motion unless the Tribunal, for good cause, rules otherwise; the Tribunal’s decision on the attorney-fee recovery issue for the Motion is final and nonappeable.

(c) Motion-related Dispute Expense recoveries may not be recaptured as part of a later recovery of Dispute Expenses for the overall action.

Such a clause would not be a cure-all: In a Hail-Mary pass situation, a party that thought it might be losing the case could cold-bloodedly decide that filing a sketchy motion was worth the risk.

But even so: A contract’s attorney-fees clause for motion practice would at least cause counsel to think twice before filing a motion, or before opposing a meritorious motion by the other side.

And suppose that a client’s decision-makers were indeed of the hard-headed breed mentioned above, implacably convinced of the rightness of their cause: They just might start to rethink their view if they were to be forced to pay attorney fees after losing in motion practice.

{ 1 comment… add one }
  • Kyle Mitchell 2021-04-17, 17:51

    Do any of the arbitration bodies’ rule sets implement something like this?

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