Attorney Fee Recoveries in Federal Consumer Product Warranty Cases

Chapter 50 of the federal commerce and trade laws, which starts at 15 U.S.C. 2301, sets certain standards that must be followed by suppliers, warrantors and service providers with respect to warranties, implied warranties and service contracts. Section 2310 (d) (2) of the Chapter provides that a prevailing consumer under in an action brought under Section 2310 (d) (1) may be awarded reasonable attorney fees as a part of their recovery. First I will discuss the kinds of consumer actions that are covered by this provision, and then I will discuss the parameters of the court’s discretion to grant or not grant attorney fees to the prevailing consumer.

The Attorney Fee Recovery provision applies, with a few carve outs, to any action by a consumer who has been damaged by the failure of a supplier, warrantor, or service provider to comply with an obligation under the Chapter or under a warranty, implied warranty or service contract.

The carve outs relate to a warrantor’s informal dispute settlement procedures and the opportunity to cure defects. The first carve out states that warrantors are allowed to establish informal procedures for solving warranty disputes that the consumer must follow before taking the warrantor to court. These procedures must meet standards established either directly in Chapter 50 or through the Federal Trade Commission. Therefore, where a valid informal settlement procedure is established, it must be followed before the consumer can proceed in court. The second carve out states that, before initiating a legal action, the consumer must allow the entity obligated under a warranty, implied warranty, or service contract a reasonable opportunity to cure any defect in their performance. (In either case, a court may allow a class action to be filed, and the procedure to determine the representative capacities of named plaintiffs to go forward, as exceptions to the carve outs.)

As to the court’s discretion to grant or not grant attorney fees, a sample of the case law shows the following: (1) there must be proof that the actual fees were expended (or that the specific work from which a reasonable fee was calculated was done); (2) the first mention of a demand for fees cannot come in a post trial motion (it should be inserted in the pleadings); (3) fees will only be paid for prosecuting causes of action brought under Chapter 50 that result in a judgment for the consumer (no fee awards for work done on dismissed causes of action or causes of action not authorized by Section 2310 (d) (1)); (4) settlements should explicitly state how attorney fees are to be handled; (5) only a prevailing consumer (not a prevailing defendant) can be awarded fees under section 2310 (d) (2); and (6) courts may limit attorney fees based on any determination that they are excessive (including the amount of the fees in proportion to the amount of damages) or may allow fee accelerators for high value/high risk cases.


The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.

Attorney Fee Recovery in Product Safety Whistle Blower Cases

Last week we looked at the federal code governing consumer product safety and the opportunity to recover attorney fees in cases arising out of safety violations under that code. This week we look at the opportunity to recover attorney fees in the event of related whistle blower litigation. This is a relatively new statute that lacks a body of case law to aid in its interpretation. Therefore, we will limit our review to a straight forward reading of he statute’s text. Though not within the scope of this blog entry, a person trying to predict what the courts will do with the statute would be well advised to seek out opinions under other, similarly worded, federal whistle blower statutes.

The salient point of the statute is that an employer may not treat an employee adversely as a result of the employee: (1) bringing attention to a violation of the Consumer Product Safety Act; (2) cooperating in an investigation or prosecution arising out of the Act; or (3) refusing to participate in or advocate a violation of the Act, or the hiding of a violation of the Act. 15 U.S.C. 2780(a). An employee so victimized has very little time—180 days from the adverse treatment—to file a complaint with the Secretary of Labor. 15 U.S.C. 2780(b). The Secretary shall undertake an investigation as described in the statute and, if it is determined that the whistle blower statute has been violated, order relief in he form of: (1) compensatory damages; and, (2) restoration of the victim to the position they would have been in but for the violation. The Secretary shall also award the victim all costs and expenses including attorney fees and expert witness fees, as determined by the Secretary. 15 U.S.C. 2780(b)(3)(B).

An employee considering action under this statute should, however, exercise caution as the statute can also provide limited relief for the wrongfully accused employer. Specifically, in the event the Secretary determines that the complaint was brought frivolously or in bad faith, the Secretary may award the employer reasonable attorney fees up to $1,000, to be paid by the complainant.

Notably, if the Secretary does not reach a determination within 120 days of the complaint, the complainant is free to pursue the above described relief (including attorney and expert witness fees) through the federal district courts—including, if requested, through a jury trial. 15 U.S.C. 2780 (b)(4).

Orders issued by the Secretary, pursuant to this statute, are themselves enforceable through the federal courts and attorney fees are also recoverable in those enforcement actions, by any party if the court so directs it. 15 U.S.C. 2780(b)(7)(B).

As in the case of countless other statutes, beware of the exceptions. The very last part of this statute excepts (maybe not all but a wide swath) of employers from any liability under the statute for the undirected violation of rogue employees.


The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.

Attorney Fee Recovery and Violations of the Consumer Product Safety Improvement Act

The Consumer Product Safety Improvement Act, set forth in the federal code at 15 U.S.C. 2051 to 15 U.S.C. 2089, sets forth various rules governing product safety for various categories of consumer products (basically all consumer products less some very substantial exceptions set forth in the code’s definition of “Consumer product” at 15 U.S.C. 2052). The rules in question require the disclosure of information regarding consumer products, mandate certain kinds of labeling for products, create performance requirements and ban certain products, or prohibit certain substances (or certain concentrations of substances) in products. Examples of product controls include prohibitions of lead paint in children’s toys, warnings on ATV vehicles, and procedures for registering the users of certain types of products in the event of a recall. The Act also created the Consumer Protection Agency, which is the body that promulgates most of the specific consumer safety rules that are enforced through the Act. For a better understanding of the Commission’s work, you can visit its website at www.cpsc.gov.

Section 2072 of the Act provides that any person who is injured “by reason of any knowing (including willful) violation of a consumer product safety rule, or any other rule or order issued by the Commission may sue any person who knowingly (including willfully) violated any such rule or order…” Further, if the plaintiff prevails and is awarded a sum in excess of $10,000, the plaintiff “may, if the court determines it to be in the interest of justice, recover the costs of suit, including reasonable attorneys’ fees … and reasonable expert witness fees.” (Costs, but not fees, could get shifted the other way in the event that a judgment exceeding $10,000 is not achieved.) Attorney fees are not recoverable if the defendant is the United States or any of its agencies, officers or employees who are sued for their actions or inactions in their official capacity.

As these remedies are in addition to those provided by any other federal or state law, it could serve product defect plaintiffs well to see if their state tort case also qualifies as a violation of this Act. Be aware that the case law regarding this section of the Act is sparse, the Act has its own pleading requirements in addition to what is necessary for a state common law action, the act does not provide for punitive damages, and availing yourself of the Act will put you in federal court.


The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.

Attorney Fee Recovery Through the Uniform Trade Secrets Act

The Uniform Trades Secret Act (“UTSA”), which has been adopted with variations by almost every state, provides for attorney fee recoveries under the circumstances described below. For illustration purposes, I will use Pennsylvania’s adoption of this statute, which starts at 12 Pa. C. S. § 5301.

The Pennsylvania’s UTSA displaces any conflicting common law tort based causes of action or remedies for the misappropriation of trade secrets. (In effect, it incorporates the theories of liability and provides a uniform structure with respect to the tort remedies.) It does not displace contract based remedies for the misappropriation of trade secretes. The Act provides for damages and injunctive relief in cases where a misappropriation of trade secrets is proven. Both the terms “misappropriation” and “trade secrets” are defined in the Act at Section 5302. Exemplary (i.e. punitive) damages may also be awarded, if warranted, in amounts of up to 2x compensatory damages.

With respect to attorney fees, the statute provides that the prevailing party may recover its fees as follows: (1) the defendant may recover its attorney fees if it is found that the matter was initiated in bad faith, or that defendant’s motion to terminate an injunction was resisted in bad faith; and (2) the plaintiff may recover attorney fees if it is found that the misappropriation was willful and malicious, or that defendant’s motion to terminate an injunction was made in bad faith. (12 P. C. S. 5305.) Even if the overall case is decided by a jury, the judge will decide matters of attorney fee recovery.


The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.

Attorney Fee Recovery in Interstate Land Sale Cases

Chapter 42 of the Federal Code, dealing with interstate land sales, provides for the recovery of attorney fees for certain violations. Specifically, 15 U.S.C. 1709 provides that attorney fees may be included in the amount recoverable in actions brought for violations of section 1703. That section, in turn, provides rules that apply to non-exempt interstate land sales and leases, including:

(1) a statement of record comporting with 15 U.S.C. 1706 must be in effect before the land is sold or leased;

(2) a printed property report comporting with 15 U.S.C. 1707 must be provided to the purchaser or lessee before the land is sold or leased;

(3) none of the advertising or promotional materials and be inconsistent with the printed property report;

(4) there can be no “device, scheme, or artifice to defraud”;

(5) there can be no misleading statement of omission leading to the receipt of money

(6) there can be no representation “that roads, sewers, water, gas, or electric service, or amenities will be provided,” unless such is provided for in the contract for sale or lease;

(7) the purchaser or lessee must be given at least seven days to revoke the contract, and the contract must state this;

(8) if the purchaser or lessee did not receive a timely property report, the purchaser or lessee has 2 years to revoke the contract, and the contract must state this

(9) if certain other provisions that protect the purchaser or lessee are not in the contract, the purchaser or lessee has 2 years to revoke the contract.

It should be noted that the list of exemptions contained in section 1702 of this Chapter greatly limits the transactions to which the above rules are applicable.

The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.

Attorney Fee Recovery in Copyright Cases

The federal statutes that govern copyright infringement cases provide that “Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as a part of costs.” (17 U.S.C. 505) Under this provision, either the defendant or the plaintiff may recover their attorney fees if they are the prevailing party. Some courts have narrowly construed the provision to exclude the fees of experts retained by their attorneys to help them prevail. In cases where the plaintiff prevails with regard to some but not all of its claims, it will generally be allowed to recover some but not all of its attorney fees. The same does not appear to apply to defendants that are partially successful. However, awarding attorney fees up to the court’s discretion, and the court has a large measure of freedom to award fees or not based on its assessment of the overall equities of the case.

Unlike an award of attorney fees in patent and trademark cases, there is no requirement in a copyright case that fees be awarded only under “exceptional” circumstances. So, while fraudulent or unconscionable behavior on the part of the losing party will weight heavily toward an award of attorney fees, such behavior is not necessary. In that regard, it has been held that the purpose of the award is to encourage copyright holders to protect their rights. Still, in a cases where both parties acted in good faith and the matter ultimately turns on complex or novel issues of law, the court may decline to award fees.


The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.

Attorney Fee Recovery in Trademark Cases

The federal statutes governing trademark infringement cases contain provisions at 17 U.S.C. § 1117 that provide for the recovery of attorney fees under various circumstances. Under the first such provision, § 1117(a), defendants who violate section 1125(a), or willfully violate section 1125(c) may be charged with the plaintiff’s attorney’s fees “in exceptional cases.”

A 1125 (c) violation is, among other things, the use in commerce of names, symbols, devices, misleading descriptions or misleading representations that are likely to cause confusion as to the ownership, affiliations, origins, properties, and identities of goods or services. A 1125(c) violation occurs when the value of a well established trademark is damaged (the term of art is “diluted”) by someone else’s use of an impermissibly similar mark. The above descriptions are over simplifications, and the question of whether a trademark has been infringed can be a close one. However, cases where attorney fees are allowed under § 1117(a) are not the close ones. They are cases where strings of adjectives such as “deliberate, fraudulent, unconscionable, malicious and wanton” apply to defendant’s actions. Situations where the court has already issued an injunction against a defendant to stop infringing behavior, and the defendant persisted in the infringement, are also good candidates for attorney fee awards. Prevailing defendants can be awarded fees in cases where plaintiff’s claims were frivolous.

Section § 1117(b) sets forth circumstances where an assessment of damages under 1117(a) should automatically, unless there are extenuating circumstances, include treble damages and attorney fees. Those are circumstances where the defendant intentionally uses a counterfeit trademark or provides goods or services that enable the use of a counterfeit trademark with the intent that the goods and services be used that way.

Where attorney fees are recoverable under this statute, the court will review submitted fees for reasonableness. The court might consider the ability of the party to pay when determining the amount of attorney fees to award.

The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.