The statute, the Constitution, the caselaw, and the appellate lawyer as sleuth.

AuthorHyman, Leslie

The Texas Commission on Human Rights Act, (1) like the federal employment statutes on which it was modeled, provides for an award of "attorneys' fees as part of costs" for a successful plaintiff. In Texas, while entitlement to attorneys' fees is a question for the court, the amount of reasonable and necessary attorneys' fees is typically a question of fact for a jury to decide. The dramatic question addressed in this practice note is whether the Texas legislature's adoption of the phrase "as part of costs" from the federal statute reflects an intention to adopt the federal procedure for determining attorneys' fees as well.

ACT I, WHEREIN THE APPELLATE LAWYER IS PRESENTED WITH THE PROBLEM

It was a dark and stormy night.... Well actually, it's a sunny afternoon, and trial counsel for Bill Miller Bar-B-Q Restaurants has asked for a meeting with appellate counsel. He has gone to trial in state court on an employment-related claim under the Act, which states that one of its purposes is to "provide for the execution of the policies of Title VII of the Civil Rights Act of 1964 ... [and] the Americans with Disabilities Act." (2) It prohibits employment-related discrimination on the basis of "race, color, disability, religion, sex, national origin, or age" as well as retaliation against persons complaining about discrimination. (3) For purposes of our story, the key provision states that "a court may allow the prevailing party ... a reasonable attorney's fee as part of the costs." (4)

In the meeting with appellate counsel, Miller's trial counsel explains that the jury found in favor of the plaintiff and awarded $30,000 in actual damages. The jury had not been presented with evidence about attorneys' fees and the court's charge to the jury did not contain a question about the amount of attorneys' fees reasonably and necessarily incurred by the plaintiff. Postverdict, and nearly two months after the jury had been excused, plaintiffs counsel filed a motion to enter judgment, proposing a judgment containing an award of attorneys' fees. Over the objection of Miller's trial counsel, the trial court conducted a non-jury, evidentiary hearing on the amount of reasonable and necessary attorneys' fees and awarded the plaintiff $60,975 in attorneys' fees. Miller's trial counsel filed a motion for new trial that again objected to the court's determining the amount of fees, which the court denied. But Miller's trial counsel remained convinced that under Texas law, a jury should determine the amount of a fee award.

Miller's appellate lawyer has experience with federal litigation, so upon being presented with this scenario, and after reviewing section 21.259 of the Texas Labor Code, she suspects that the phrase "attorneys' fees as part of the costs" probably comes straight from the comparable federal employment law--Title VII of the Civil Rights Act of 1964. A quick bit of research confirms this suspicion. Title VII provides that "the court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee ... as part of the costs." (5)

The appellate lawyer knows that a federal law upon which a Texas law is based is persuasive, but not controlling, on the interpretation of a comparable statute adopted by the state. (6) What the appellate lawyer does not know is why Texas juries generally determine the amount of attorneys' fees to award and whether the Act's borrowed language changes the general practice.

ACT II, WHEREIN THE APPELLATE LAWYER BEGINS TO INVESTIGATE

Upon taking the case, the first thing the appellate lawyer does (after filing the notice of appeal), is research the current law on section 21.259 and jury trials. It's not good. The only two Texas intermediate appellate courts to consider whether a losing party is entitled to a jury trial on the reasonable amount of fees to be awarded under section 21.259 have come out the wrong way.

The first reported decision was Borg-Warner Protective Services Corporation v. Flores, a sexual-assault-by-co-worker case from the Corpus Christi Court of Appeals. (7) The jury found against the attacker and the employer, and awarded actual and punitive damages. (8) The court then awarded $340,000 in attorneys' fees, which represented a fifty percent enhancement of the actual hourly fees incurred. (9) The employer appealed, arguing that the attorneys' fees were improperly awarded by the judge.

The court of appeals disagreed. In a single paragraph, the court focused on "as part of costs," and held that because the "general rule" in Texas is that determination of costs is for the court, section 21.259 of the Act vests in the trial court the power to determine the amount of reasonable and necessary attorneys' fees. (11)

The other intermediate Texas appellate court to consider the issue was the El Paso Court of Appeals, in Union Pacific Railroad Company, v. Loa, a discrimination action involving harassment on the basis of national origin. (12) The trial court submitted the question of reasonable attorneys' fees to the jury over the defendant's objection, and the jury awarded fees of $460,000. (13) The defendant appealed, contending that the amount of attorneys' fees was for the court to decide. (14) The El Paso court agreed and, citing Borg-Warner and Gorges, held without further analysis that "[t]he trial court is the proper authority to determine ... attorneys' fees authorized as costs under [the Act]." (15) It reversed the jury's award and remanded so that the trial court could award reasonable attorneys' fees itself. (16)

Neither court addressed the basis of the right to jury trial in Texas or the source of the Act's language about attorneys' fees. And neither addressed whether, by borrowing the federal reference to attorneys' fees, the Texas legislature intended to change--or even had the power to change--Texas practice.

ACT III, WHEREIN THE APPELLATE LAWYER DIGS FURTHER INTO THE CASELAW

The appellate lawyer knew that in federal court attorneys' fees are generally awarded by the court under Rule 54 of the Federal Rules of Civil Procedure, which specifies that "unless the substantive law requires those fees to be proved at trial as an element of damages," a claim for attorneys' fees is to be made by motion to the court, typically "no later than 14 days after the entry of judgment." (17) The appellate lawyer also knew that if the opposing party objects, the court must allow a response; may hear evidence; (18) may hold oral argument or decide the matter on briefs; (19) and may also bifurcate the issue and decide liability for fees separately from the amount of fees. (20)

But the appellate lawyer also knew that in Texas state courts, the reasonableness of an attorneys' fees award was generally for the jury to decide. (21) What she did not know was why this was the case, and whether there was a reason why the procedure would be different in state court than it was in federal court. There was, she could see, more research to be done.

It was in this research phase that the appellate lawyer learned...

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