One of the first things litigators look for in a new case is some kind of fee-shifting provision. Whether statutory or contractual, fee-shifting provisions drastically change the value of a case and the strategy for defending or prosecuting a claim and fee-shifting provisions are becoming more prevalent in Minnesota.
In July 2015, the Research Department for the Minnesota House of Representatives published an informative brief entitled, “Attorney Fee Awards in Minnesota Statutes.” The piece recognized the typical “American Rule” whereby each party pays its own attorney fees, discussed the public policy interest behind the increased number of statutory attorneys’ fees provisions (furthering the public interest by encouraging “private attorneys general”) and set forTh44 pages of statutes providing for attorneys’ fees.
Another necessary first step with a new case is preliminary legal research to evaluate the relevant claims and defenses. While the provider might vary, nearly everyone will turn to online legal research at some stage in this process. Indeed, a 2014 ABA study reported that nearly 90 percent of legal research started online. Yet, when determining a party’s reasonable attorneys’ fees and costs, Minnesota Courts routinely decline to award the costs associated with computerized legal research. In fact, in 2012, the Special Redistricting Panel appointed by Minnesota Supreme Court Chief Justice Gildea held that “[a]ttorneys who are being compensated at hourly rates well into the three-figure-per-hour range cannot reasonably charge such rates plus charge as a cost the expense of electronic legal research.” (emphasis in original).
Whether by statute or contractual provision, attorneys’ fees provisions are topics of controversy. Some consider them one step above extortion, while others see them as a means to making sure necessary but otherwise financially-impractical claims are brought. On the other hand, computerized legal research is not seen as very controversial. Computerized legal research ought to reduce a client’s bill, as attorney time saved by computerized legal research should more than off set the additional cost associated therewith. Why, then, are courts routinely awarding attorneys’ fees in excess of a client’s recovery, while denying much smaller requests for computerized legal research costs on the basis that computerized legal research “must be factored into the attorney’s hourly rate”? Standley v. Chilhowee R-IV Sch. Dist., 5 F.3d 319, 325 (8ThCir. 1993). The answer, it seems, is that until recently billing for online research was seen as the exception in the community instead of the rule.
Consider Bernbeck v. Gale, 2015 WL 1540488 (D. Neb, April 8, 2015) where the court awarded plaintiff Bernbeck $87,915 for his reasonable and appropriate attorneys’ fees aft er prevailing on claims for the deprivation of his First and 14th Amendment rights. Bernbeck also sought $1,811.89 for computer-based legal research costs. Citing the EighThCircuit’s historical standard that “computer-based legal research must be factored into the attorney’s hourly rate,” the district court denied Bernbeck’s request for his computerized legal research costs. However, in a footnote nearly as long as the opinion, the district court cited to the prevailing views of other circuits “permit[ting] awards to reimburse counsel for the reasonable costs of online legal research.”
Now, a recent decision from the Eighth Circuit aligns it with the other circuits. In Hernandez v. Bridgestone Americas Tire Operations, LLC, – F.3d – (8ThCir. Aug. 4, 2016), the district court granted summary judgment in favor of Hernandez on his Family Medical Leave Act interference claim. Pursuant to statute, Hernandez was awarded his reasonable attorneys’ fees and costs, in the amount of $76,318. The district court, however, declined to award any costs for computerized legal research.
The Eighth Circuit reversed the district court on appeal. The court noted that previous precedent was based on the fact that it was not “the prevailing practice in a given community” for lawyers to bill computerized legal research expenses separately. The Hernandez court held that times have changed and computerized legal research “is now a common litigation expense.” Accordingly, “it may be reimbursable.” From a practical perspective, this means the practice of submitting affidavits from counsel of record and independent counsel attesting to the reasonableness of work performed and hourly rates must be expanded. Counsel should now establish that separately billing for computerized legal research is the “prevailing practice in a given community,” and that its costs for such are reasonable.
Knowing the extent of recoverable costs and fees is necessary to properly advise clients on litigation. Until recently, it was arguably more reasonable to spend days in the library than hours on a computer. This shift marks the Eighth Circuit joining the majority regarding the recovery of computerized legal research costs. It also represents the growing acceptance of technology in the legal profession. This is crucial as other categories of technological costs – those of e-discovery and electronically stored information – are generally not recoverable yet, but have the potential to be significantly larger than computerized legal research costs (or even attorneys’ fees).
Computerized legal research ought to reduce a client’s bill, as attorney time saved by computerized legal research should more than offset the additional cost associated therewith.
Kyle A. Eidsness