Defendants May Have Another Chance at Recovering Attorneys’ Fees for Frivolous ADA Claims

When defendants win in a Title III ADA accessibility case, they are entitled to seek their reasonable attorneys’ fees.  To recover, defendants have to show that the claims were “frivolous, unreasonable or without foundation.”  While most claims that are dismissed on summary judgment would seem to meet this standard, district courts often deny fees to prevailing defendants.

The Ninth Circuit has now endorsed a second chance to seek fees against plaintiffs who pursue appeals of their claims.  In the very recent decision in Martinez v. Columbia Sportswear USA Corp and Eddie Bauer LLC, Case No. 12-16331 (9th Cir. June 9, 2014), the Ninth Circuit awarded the defendants all of their fees on appeal, because “it was clear at the time that the district court entered final judgment that the claims had no basis in law or fact.”  Thus, even though the district court had denied the defendants’ request for fees at the time of final judgment, the Ninth Circuit held that a case that did not seem frivolous at the time of summary judgment may later be found frivolous if the plaintiff pursues an appeal. 

Even better, the Ninth Circuit—which is often perceived as too friendly to the pursuit of ADA accessibility lawsuits—ordered that both the plaintiff and his counsel were both responsible for paying the defendants’ fees. 

So, if fees are denied by the district court, defendants may get a second chance to seek fees on appeal.  At the appellate level, a case may seem more frivolous and a fee award from an appellate court is likely to be very difficult to overturn.  To take advantage of this strategy, defendants should consider the following:

• Inform plaintiff’s counsel that defendants will seek fees on appeal, even if fees were denied by the district court
• Consider waiving fees on appeal in exchange for plaintiff’s dismissal of the appeal—given that fees on appeal are a realistic possibility
• Seek fees on appeal against both the plaintiff and the plaintiff’s counsel
• Seek fees based on a reasonable rate with precise documentation of the hours worked and the billing rates of the lawyers on the appeal—don’t give the court an excuse to cut the amount of fees requested

To be sure, a realistic threat of paying attorneys’ fees can help to deter entrepreneurial lawsuits.  While a threat of fees might have little impact at the inception of litigation, defendants now have more support for a subsequent chance at fees on appeal.  Plaintiffs beware.