Murphy v. The Allen Company, Inc.
Filing
188
MEMORANDUM OPINION & ORDER: DENYING The Allen Company's 167 MOTION for Attorney Fees; DENYING pla's 170 MOTION to Dismiss the 167 Motion for Attorney fees. Signed by Judge Jennifer B Coffman on 12/18/12.(KJR)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON
CIVIL ACTION NO. 09-69-JBC
MARY MURPHY,
V.
PLAINTIFF,
MEMORANDUM OPINION AND ORDER
THE ALLEN COMPANY, INC., ET AL.,
DEFENDANT.
**********
This matter is before the court on The Allen Company’s motion for
attorneys’ fees (R. 167). The Allen Company moves the court to grant its motion
pursuant to 28 U.S.C. § 1927 and the court’s inherent powers on the grounds that
Murphy filed a meritless lawsuit and then multiplied the proceedings unreasonably
and vexatiously by electing not to withdraw claims when it became clear they were
not supported by facts. However, this case is not as one-sidedly clear as The Allen
Company asserts, and the actions of Murphy and her former and current counsel
do not justify the extraordinary remedy of awarding attorneys’ fees, particularly in
the amount requested. Accordingly, the court will deny the motion.
In its order of May 23, 2012, the court granted summary judgment in this
matter to The Allen Company, finding that Murphy could not establish a prima facie
case of sex discrimination, and that though she could establish a prima facie case
of retaliation under the Kentucky Civil Rights Act, she could not prove that The
Allen Company’s stated reason for terminating her was merely pretextual. In that
same order, the court also disposed of claims that Murphy advanced in her
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complaint but did not defend in her response, including her claims of discrimination
with regard to work assignments and breaks and her claims of retaliation in
violation of union policies. The Allen Company then filed the present motion
requesting an award of $325,912.61, which represents the entirety of its
attorneys’ fees, costs, and expenses.
Murphy’s former counsel, Debra Doss and David Sproull, filed a response on
their own behalf. Murphy, however, filed via her current counsel, Ed Dove, a
“motion to dismiss” The Allen Company’s motion for fees. A motion to dismiss
under Fed. R. Civ. P. 12(b)(6) is properly filed only in response to a pleading that
fails to state a claim upon which relief can be granted. The Allen Company’s
motion for fees is not a pleading pursuant to Fed. R. Civ. P. 7. The court will thus
deny the motion as filed. This document is, however, the only responsive filing
that Murphy’s current attorney put forth on either Murphy’s behalf or his own. The
court will therefore construe the “motion to dismiss” as a response on behalf of
both Dove and Murphy to The Allen Company’s motion for fees.
The court will deny The Allen Company’s motion because Murphy’s case,
though unsuccessful, was not meritless, and because neither Murphy nor her
former or current attorneys engaged in behavior that would justify a fee award
either under 28 U.S.C. § 1927 or the court’s inherent powers. The “American
rule” generally prohibits fee-shifting in civil cases; this rule is “deeply rooted in our
history and in congressional policy.” BDT Products, Inc. v. Lexmark Int’l Inc., 602
F.3d 742, 752 (2010) (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc'y,
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421 U.S. 240, 271 (1975)). Congress has, however, implemented exceptions to
the “American rule,” such as 28 U.S.C. § 1927, which provides that “[a]ny
attorney . . . who so multiplies the proceedings in any case unreasonably and
vexatiously may be required by the court to satisfy personally the excess costs,
expenses, and attorneys' fees reasonably incurred because of such conduct.”
The Allen Company is not entitled to its requested relief because Murphy’s
attorneys did not act in such an egregious manner as to justify relief under section
1927.
Simple inadvertence or negligence that frustrates the trial judge will
not support a sanction under section 1927. There must be some
conduct on the part of the subject attorney that trial judges, applying
the collective wisdom of their experience on the bench, could agree
falls short of the obligations owed by a member of the bar to the court
and which, as a result, causes additional expense to the opposing
party.
Ridder v. City of Springfield, 109 F.3d 288, 298 (6th Cir. 1997). In Ridder, for
instance, the court awarded the defendant the entirety of its fees against the
plaintiff because the plaintiff’s counsel for five years failed to put forth any
evidence that established a basis on which the defendant could possibly be liable.
That is not the case here.
Murphy presented colorable allegations of sex discrimination and retaliation.
Though Murphy and her attorneys were unable to establish enough credible proof
to create a genuine dispute of material fact in support of her particular theory of
sex discrimination, it does not follow that Murphy had absolutely no justification to
bring her suit. Murphy was paid at a rate less than men around her with equal or
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lesser experience, and she perceived discrimination in job assignments and other
aspects of her work for The Allen Company. She also presented a colorable
argument that The Allen Company misused the KAHC Training Program as an
excuse to pay her less than it paid men to do similar work. The Allen Company
was not responsible for any alleged KAHC misclassification of Murphy, and the
circumstances surrounding that classification and The Allen Company’s use of the
KAHC Training Program with regard to Murphy served as the grounds for summary
judgment in its favor. At the time the suit was filed, however, those
circumstances did not so clearly insulate The Allen Company from liability or so
discredit Murphy’s claims of sex discrimination as to make it unreasonable for
Murphy’s previous attorneys to file her suit. Nor does the fact that The Allen
Company prevailed on summary judgment make it unreasonable for Murphy’s
present attorney to have pursued her sex discrimination claims to resolution.
Furthermore, in her response to The Allen Company’s motion for summary
judgment, Murphy and her counsel effectively abandoned her claims to
discrimination in work assignments and breaks by electing not to defend them.
This is also true of Murphy’s retaliation claims that would have needed to be
argued under the Labor Management Relations Act. Though Murphy’s counsel did
not formally renounce those claims, the choice not to defend them comports with
an attorney’s affirmative duty to withdraw a claim once it becomes clear that it has
no factual support. See id. at 299.
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Finally, The Allen Company’s assertion that Murphy’s retaliation claims were
“completely preempted” is false. Murphy established a prima facie case of
retaliation that is separate from issues of classification or union regulations.
Murphy and her attorneys had good cause to pursue her retaliation claim, even
though they were ultimately unsuccessful.
In this context, and particularly in light of the animosity between these
parties and their attorneys, the motion and discovery practice undertaken was not
unreasonably or vexatiously multiplicative. Both parties in this action are culpable
in drawing out the discovery process, see, e.g., Magistrate Judge Robert E. Wier’s
discovery orders at R. 58 and R. 97, and the court has already addressed the
discovery practices of both sides. Further sanctions against Murphy’s attorneys
are not justified under section 1927.
Likewise, the court will not award attorneys’ fees to The Allen Company
under its own inherent powers because the actions of Murphy and her attorneys in
bringing the action do not demonstrate bad faith. The court is empowered to
award attorneys’ fees under its own inherent powers only in cases that fall under
the bad-faith exception to the “American rule,” or in other words, where all of the
following are true: that Murphy’s “claims advanced were meritless; that counsel
knew or should have known this; and that the motive for filing the suit was for an
improper purpose such as harassment.” BDT Products, 602 F.3d at 752. As
discussed above, Murphy’s claims were not meritless, and The Allen Company has
not shown that Murphy or her attorneys filed the suit for an improper purpose.
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The Allen Company incurred substantial fees and expenses in defending this
suit, and it prevailed against all of Murphy’s claims. However, an award of fees
and costs is not justified under section 1927 or the court’s inherent powers,
because the Murphy’s suit was not without merit, because Murphy did not bring
the suit in bad faith, and because Murphy’s attorneys did not unnecessarily or
vexatiously multiply the proceedings to a degree that would justify relief.
Accordingly,
IT IS ORDERED that The Allen Company’s motion (R. 167) is DENIED.
IT IS FURTHER ORDERED that Murphy’s motion to dismiss (R. 170) is
DENIED.
Signed on December 18, 2012
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