Federal Rule of Civil Procedure 68 provides for cost shifting if: (1) the defendant serves a settlement offer on the plaintiff more than 10 days before trial; (2) the plaintiff does not accept the offer within 10 days of its service; and (3) the judgment ultimately received is less favorable to the plaintiff than the offer. In such a case, the litigation costs incurred by the defendant after the offer was made must be payed by the plaintiff. At first blush, this Rule appears to only apply to the general class of litigation costs (filing fees and the like) that pale in comparison to the expense of attorney fees. However, in certain cases, it can have a dramatic effect on the ability of the victorious plaintiff to recover otherwise available attorney fees from the defendant.
The key factor in determining the impact of Rule 68 on Attorney Fee Recoveries is the source of the authority for fee shifting in the underlying case. For example, if the authority for fee shifting is a statute that provides for the recovery of attorney fees as a part of costs, then Rule 68 can operate to cut off the shifting of fees under the fee shifting provisions of the statute for services performed in the post offer period.
The rule will operate this way even if the offer exceeds the judgment by a tiny amount, and even if the judgment was brought lower than the offer by the closest of legal questions or factual determinations. On the other hand, courts may consider the intrinsic value of certain forms of injunctive relief when deciding whether the value of the judgment exceeded the value of the offer.
Notably, even where the underlying fee shifting statute does not define attorney fees as an element of costs, the improvident rejection of a Rule 68 offer could have a deleterious effect where the statute merely provides that the court may award the plaintiff attorney fees, or gives the court broad discretion in quantifying the award. On the one hand, the court must be mindful that the fee shifting provisions of statutes are designed to encourage and enable plaintiffs to bring meritorious suits that they otherwise could not afford. At the same time, however, the court could be sympathetic to the plaintiff in a case where the defendant's post offer work resulted in a relative loss to the defendant (i.e. where the post offer work cost the defendant more than the difference between the parties' settlement positions).
The take away here is that, in any federal case involving a fee shifting statute, it is important to understand how Rule 68 can affect the plaintiff’s ability to recover attorney 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.
Sunday, February 28, 2010
Monday, February 8, 2010
RICO Enterprises and Associations in Fact
This blog entry continues my discussion of the circumstances under which you may procede with a civil RICO suit. As discussed in prior entries, civil RICO provides for, among other things, the recovery of attorney fees.
Where the alleged RICO enterprise is not a legal entity, but an association-in-fact, plaintiff must show: (1) that there exists or existed an organization, whether formal or informal; (2) that the various associates of the organization function or functioned as a continuing unit; and (3) that the organization has or had an existence separate and apart from the pattern of racketeering activity. Such an enterprise need not have a chain of command. It may make its decisions on an ad hoc basis, by any number of methods, including general consensus. The requirement that the organization (i.e. the RICO enterprise) have an existence apart from the pattern of racketeering activity simply means that the alleged enterprise must: (1) be more than an association of individuals conducting the normal business functions of a corporation; and (2) have some level of existence beyond what is necessary to engage in the alleged acts of racketeering. However, it is not necessary that the enterprise have any function wholly unrelated to the racketeering activity.
Because the rules that require pleading the organization’s identity, its mode of functioning, and its existence apart from the racketeering activity appear more onerous than they are, defendants often attack the adequacy of plaintiff’s pleadings on those specific requirements. However, where a true association-in-fact exists, there is usually a basis for at least tentatively asserting enough about how it operates to get past this defense. Of course, if the plaintiff does not have sufficient facts to allege these requirements, defendant’s counsel should waste no time moving for a quick dismissal.
For authorities supporting the above discussion, see e.g., Boyle v. United States, 129 S.Ct. 2237, 2245 (2009); United States v. Turkette 452 U.S. 576, 583 (1981); United States v. Console, 13 F.3d 641, 651-651 (3rd Cir. 1993).
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.
Where the alleged RICO enterprise is not a legal entity, but an association-in-fact, plaintiff must show: (1) that there exists or existed an organization, whether formal or informal; (2) that the various associates of the organization function or functioned as a continuing unit; and (3) that the organization has or had an existence separate and apart from the pattern of racketeering activity. Such an enterprise need not have a chain of command. It may make its decisions on an ad hoc basis, by any number of methods, including general consensus. The requirement that the organization (i.e. the RICO enterprise) have an existence apart from the pattern of racketeering activity simply means that the alleged enterprise must: (1) be more than an association of individuals conducting the normal business functions of a corporation; and (2) have some level of existence beyond what is necessary to engage in the alleged acts of racketeering. However, it is not necessary that the enterprise have any function wholly unrelated to the racketeering activity.
Because the rules that require pleading the organization’s identity, its mode of functioning, and its existence apart from the racketeering activity appear more onerous than they are, defendants often attack the adequacy of plaintiff’s pleadings on those specific requirements. However, where a true association-in-fact exists, there is usually a basis for at least tentatively asserting enough about how it operates to get past this defense. Of course, if the plaintiff does not have sufficient facts to allege these requirements, defendant’s counsel should waste no time moving for a quick dismissal.
For authorities supporting the above discussion, see e.g., Boyle v. United States, 129 S.Ct. 2237, 2245 (2009); United States v. Turkette 452 U.S. 576, 583 (1981); United States v. Console, 13 F.3d 641, 651-651 (3rd Cir. 1993).
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.
Wednesday, January 27, 2010
A Closer Look at Civil RICO: the Person/Enterprise Distinction
Because civil RICO is both a powerful and complicated tool for recovering damages and attorney fees, the next several Blog Entries will be dedicated to further exploring the circumstances under which you can proceed with a civil RICO case. (For a brief introduction to civil RICO see my blog entry dated October 6, 2009.) Civil RICO claims are provided for in both state and federal statutes, which may differ. This blog entry will focus on RICO claims under the federal statute at 18 U.S.C. 1962(c).
To state a civil RICO claim, the plaintiff must allege that a “person” engaged in (1) “conduct,” (2) of an “enterprise” (3) through a “pattern”; (4) of “racketeering activity.” Camiolo v. State Farm, 334 F.3d 345 (3rd Cir. 2003). Each of the words or phrases in quotes must be understood in terms of definitions in the statute (if available) and in terms of definitions provided by the courts. The statute provides that the “person” (i.e. the defendant) can be “any individual or entity capable of holding a legal or beneficial interest in property.” 18 U.S.C. 1961(3). The term “enterprise” includes any individual, partnership, corporation, association, or other legal entity.” (18 U.S.C. §1961(4).) The enterprise “may be comprised of only defendants, or of defendants and non-defendants.” (U.S. v. Urban, 404 F.2d 754 (3rd Cir. 2005). It may be an association-in-fact, as opposed to a formal legal entity. Although there can be overlap between the defendant and the enterprise, they cannot be one in the same. Cedric Kushner Promotions v. King, 533 U.S. 158 (2001). This is part of what is referred to as the “distinctiveness requirement” in a RICO cause of action.
The above distinctiveness requirement is easily met if the RICO enterprise consists of more than one legal entity, or legal entities separate from the legal entity that is the enterprise. For example the RICO defendants can be all the partners of a RICO enterprise partnership. On the other hand, a RICO enterprise cannot consist of a RICO defendant corporation and its own employees. However the enterprise could consist of the defendant corporation and its network of independent, non-exclusive, agents. Likewise, a RICO enterprise can consist of a defendant corporation and its outside (but not in house) attorneys.
The take away from this blog entry is that the person/defendant distinction must be well understood to identify situations where civil RICO claims are appropriate. From the defendant’s perspective, it should also be understood to properly challenge RICO claims that should never have been brought.
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.
To state a civil RICO claim, the plaintiff must allege that a “person” engaged in (1) “conduct,” (2) of an “enterprise” (3) through a “pattern”; (4) of “racketeering activity.” Camiolo v. State Farm, 334 F.3d 345 (3rd Cir. 2003). Each of the words or phrases in quotes must be understood in terms of definitions in the statute (if available) and in terms of definitions provided by the courts. The statute provides that the “person” (i.e. the defendant) can be “any individual or entity capable of holding a legal or beneficial interest in property.” 18 U.S.C. 1961(3). The term “enterprise” includes any individual, partnership, corporation, association, or other legal entity.” (18 U.S.C. §1961(4).) The enterprise “may be comprised of only defendants, or of defendants and non-defendants.” (U.S. v. Urban, 404 F.2d 754 (3rd Cir. 2005). It may be an association-in-fact, as opposed to a formal legal entity. Although there can be overlap between the defendant and the enterprise, they cannot be one in the same. Cedric Kushner Promotions v. King, 533 U.S. 158 (2001). This is part of what is referred to as the “distinctiveness requirement” in a RICO cause of action.
The above distinctiveness requirement is easily met if the RICO enterprise consists of more than one legal entity, or legal entities separate from the legal entity that is the enterprise. For example the RICO defendants can be all the partners of a RICO enterprise partnership. On the other hand, a RICO enterprise cannot consist of a RICO defendant corporation and its own employees. However the enterprise could consist of the defendant corporation and its network of independent, non-exclusive, agents. Likewise, a RICO enterprise can consist of a defendant corporation and its outside (but not in house) attorneys.
The take away from this blog entry is that the person/defendant distinction must be well understood to identify situations where civil RICO claims are appropriate. From the defendant’s perspective, it should also be understood to properly challenge RICO claims that should never have been brought.
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.
Friday, January 15, 2010
Attorney Fee Recovery Under the Contractor and Subcontractor Payment Act
The Contractor and Subcontractor Payment Act (the “CSPA,” at 73 P.S.A. 501-516) applies to any construction project in Pennsylvania, excepting residential projects involving six or fewer units. It is intended to assure contractors prompt payment from owners, and subcontractors prompt payment from contractors and other subcontractors. It leaves substantial room for owners and contractors to reach their own payment arrangements, but lends additional enforcement teeth to those arrangements. When the prompt payment provisions (which allow for good faith disputes) are not met, and the matter goes to litigation, the substantially prevailing party is entitled to attorney fees.
Notwithstanding any agreement to the contrary, the substantially prevailing party in a proceeding to recover payment under this act shall be awarded a reasonable attorney fee in an amount to be determined by the court or arbitrator, together with expenses.
(73 P.S.A. 512(b), emphasis added.) As plainly set forth in the Act, the availability of this remedy cannot be contracted away.
It is, of course, possible for neither party to be “substantially prevailing.” This could happen, for example, where the plaintiff alleges that the defendant withheld $4 million in bad faith, and the court holds that only $1 million was withheld in bad faith. The plaintiff could be said to not have substantially prevailed because the majority of the disputed amount was found to have been withheld in good faith; and, the defendant could be said to not have substantially prevailed because it withheld $1 million in bad faith.
However, where the court does find that one of the parties substantially prevailed, reasonable attorney fees will be recoverable not only for the CSPA claim itself, but for any efforts reasonably expended to collect on the judgment, which in the case of a defendant’s victory could be the attorney fees required to collect attorney fees under the CSPA.
In that regard, note the “any proceeding to recover any payment” language in the Act, as contrasted with language that might read “any proceeding arising under the statute.” Although one might argue that either provision requires an award of attorney fees in the post judgment collection phase, the Pennsylvania courts have expressly held that the former language has that effect. Therefore, it pays to look for distinctions of this kind generally when evaluating attorney fee recovery provisions, and to be conscious of the distinction when writing your own provisions into contracts.
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.
Notwithstanding any agreement to the contrary, the substantially prevailing party in a proceeding to recover payment under this act shall be awarded a reasonable attorney fee in an amount to be determined by the court or arbitrator, together with expenses.
(73 P.S.A. 512(b), emphasis added.) As plainly set forth in the Act, the availability of this remedy cannot be contracted away.
It is, of course, possible for neither party to be “substantially prevailing.” This could happen, for example, where the plaintiff alleges that the defendant withheld $4 million in bad faith, and the court holds that only $1 million was withheld in bad faith. The plaintiff could be said to not have substantially prevailed because the majority of the disputed amount was found to have been withheld in good faith; and, the defendant could be said to not have substantially prevailed because it withheld $1 million in bad faith.
However, where the court does find that one of the parties substantially prevailed, reasonable attorney fees will be recoverable not only for the CSPA claim itself, but for any efforts reasonably expended to collect on the judgment, which in the case of a defendant’s victory could be the attorney fees required to collect attorney fees under the CSPA.
In that regard, note the “any proceeding to recover any payment” language in the Act, as contrasted with language that might read “any proceeding arising under the statute.” Although one might argue that either provision requires an award of attorney fees in the post judgment collection phase, the Pennsylvania courts have expressly held that the former language has that effect. Therefore, it pays to look for distinctions of this kind generally when evaluating attorney fee recovery provisions, and to be conscious of the distinction when writing your own provisions into contracts.
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.
Friday, January 8, 2010
Attorney Fee Recovery and the Federal Consumer Credit Transaction Laws
The federal consumer credit protection code, at 15 U.S.C. 1640(a)(3), provides for attorney fees as part of the recoverable amount for any violation of Parts B, D, or E of Subsection I of the code. (These code sections are parts of what is referred to as the Truth in Lending Act.) Part B deals with disclosures in consumer credit transactions and runs from 1631 to 1651. Part D deals with credit billing and runs from 1666 to 1666j. Part E deals with Consumer Leases and runs from 1677 to 1677f.
Although granting attorney fee to a prevailing plaintiff is mandatory, the court has discretion as to the amount of fees awarded. That said, courts have acknowledged that the purpose for awarding attorney fees is to make the plaintiff whole and encourage private enforcement actions. Attorney fees are quantified based on a reasonable hourly rate and a reasonable number of hours for work necessary to plaintiff’s representation. Plaintiff’s actual obligation to pay the fee is not a factor. Since a Plaintiff might be found to have prevailed on its action even where a cases settles, defendants should make sure settlements specifically address the attorney fee issue.
Things that can put a business at risk under the above laws (and this is a very abbreviated list) include:
(1) Failing to adhere to the ways in which certain kinds of disclosures need to be labeled and formatted (15 U.S.C 1632).
(2) Failing to properly disclose the consumer’s right to rescind a consumer credit transaction within three days of its formation (15 U.S.C. 1635).
(3) Violating the disclosure requirements associated with an open ended consumer credit plan (including with respect to solicitations, opening accounts, renewing accounts, changing terms/rates, and furnishing statements, (15 U.S.C. 1637), with additional rules if the plan is secured by the consumer’s principal dwelling (15 U.S.C. 1637(a)).
(4) Violating the disclosure requirements associated with a non-open ended consumer credit transaction (15 U.S.C. 1638), with other specific disclosure requirements for certain mortgages (15 U.S.C. 1639).
(5) Violating the disclosure requirements associated with reverse mortgages (15 U.S.C. 1648).
(6) Violating the rules governing the handling of alleged billing errors. (15 U.S.C. 1066).
(7) Violating the rules governing the return of credit balances (15 U.S.C. 1066(d)).
(8) Violating the prohibition against credit card tie in services (15 U.S.C. 1666(g)).
(9) Violating the prohibition against offsets to pay credit card debt (15 U.S.C. 1666(h)).
(10) Failing to adhere to rules governing rate increases and amortization for credit card accounts (15 U.S.C. 1666(i)).
(11) Violating the rules governing disclosures in a consumer lease (15 U.S.C. 1667(a)).
(12) Violating the rules governing consumer liability at the termination of a lease (15 U.S.C. 1667(b)).
(13) Violating the rules governing disclosures in advertisements for consumer leases (15 U.S.C. 1677(c)).
Violations of the consumer credit protection code carry statutory penalties in addition to actual damages. Such penalties, including liability for the plaintiff’s attorney fees, can be triggered by unintentional violations even where the plaintiff has not incurred any actual damage. Moreover, violations may be the product of faulty procedures applied systematically across many transactions, making great fodder for class actions—especially if the class does not have to dilute their recovery to pay attorney 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.
Although granting attorney fee to a prevailing plaintiff is mandatory, the court has discretion as to the amount of fees awarded. That said, courts have acknowledged that the purpose for awarding attorney fees is to make the plaintiff whole and encourage private enforcement actions. Attorney fees are quantified based on a reasonable hourly rate and a reasonable number of hours for work necessary to plaintiff’s representation. Plaintiff’s actual obligation to pay the fee is not a factor. Since a Plaintiff might be found to have prevailed on its action even where a cases settles, defendants should make sure settlements specifically address the attorney fee issue.
Things that can put a business at risk under the above laws (and this is a very abbreviated list) include:
(1) Failing to adhere to the ways in which certain kinds of disclosures need to be labeled and formatted (15 U.S.C 1632).
(2) Failing to properly disclose the consumer’s right to rescind a consumer credit transaction within three days of its formation (15 U.S.C. 1635).
(3) Violating the disclosure requirements associated with an open ended consumer credit plan (including with respect to solicitations, opening accounts, renewing accounts, changing terms/rates, and furnishing statements, (15 U.S.C. 1637), with additional rules if the plan is secured by the consumer’s principal dwelling (15 U.S.C. 1637(a)).
(4) Violating the disclosure requirements associated with a non-open ended consumer credit transaction (15 U.S.C. 1638), with other specific disclosure requirements for certain mortgages (15 U.S.C. 1639).
(5) Violating the disclosure requirements associated with reverse mortgages (15 U.S.C. 1648).
(6) Violating the rules governing the handling of alleged billing errors. (15 U.S.C. 1066).
(7) Violating the rules governing the return of credit balances (15 U.S.C. 1066(d)).
(8) Violating the prohibition against credit card tie in services (15 U.S.C. 1666(g)).
(9) Violating the prohibition against offsets to pay credit card debt (15 U.S.C. 1666(h)).
(10) Failing to adhere to rules governing rate increases and amortization for credit card accounts (15 U.S.C. 1666(i)).
(11) Violating the rules governing disclosures in a consumer lease (15 U.S.C. 1667(a)).
(12) Violating the rules governing consumer liability at the termination of a lease (15 U.S.C. 1667(b)).
(13) Violating the rules governing disclosures in advertisements for consumer leases (15 U.S.C. 1677(c)).
Violations of the consumer credit protection code carry statutory penalties in addition to actual damages. Such penalties, including liability for the plaintiff’s attorney fees, can be triggered by unintentional violations even where the plaintiff has not incurred any actual damage. Moreover, violations may be the product of faulty procedures applied systematically across many transactions, making great fodder for class actions—especially if the class does not have to dilute their recovery to pay attorney 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.
Wednesday, December 30, 2009
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.
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.
Wednesday, December 23, 2009
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.
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.
Subscribe to:
Posts (Atom)