On March 19, 2014, in Family PAC v. Ferguson, the US Court of Appeals for the Ninth Circuit ruled as a matter of first impression that the term "costs" under FRAP 39 does not include attorneys' fees recoverable under 42 U.S.C. § 1988 and similar statutes (No. 12-35640, (9th Cir. Mar. 19, 2014)). Therefore, Family PAC, as the prevailing party, was not precluded from obtaining an award of appellate attorneys' fees under 42 U.S.C. § 1988.

Family PAC, a political committee, commenced a federal lawsuit against the state of Washington alleging that provisions of the state's election law violated the First Amendment. The district court granted in part and denied in part Family PAC's motion for summary judgment. The Ninth Circuit affirmed and ruled that each party should bear its own appellate costs under FRAP 39 because each side had been partly successful. Family PAC then moved the Ninth Circuit to transfer consideration of attorneys' fees on appeal to the district court. The Ninth Circuit granted the motion, stating that its "instruction that each party shall bear its own costs on appeal did not address whether any party is entitled to attorneys' fees under 42 U.S.C. § 1988."

On remand, Family PAC moved, under 42 U.S.C. § 1988, for attorneys' fees and expenses incurred on its successful claims. The State opposed this motion, arguing that because the Ninth Circuit had ordered the parties to bear their own costs, the issue was settled. The district court granted Family PAC's motion and awarded fees and expenses.

To determine the scope of "costs" recoverable under FRAP 39, the Ninth Circuit examined the interaction between FRAP 39, which governs the taxation of costs on appeal, and 42 U.S.C. § 1988 and similar statutes that allow a prevailing party to recover reasonable attorneys' fees as part of its costs. Although FRAP 39 does not define the term "costs," it specifically enumerates the costs associated with an appeal that may be awarded in the district court, and all of the costs listed are administrative. In addition, FRAP 39's statutory authority comes from 28 U.S.C. § 1920, which lists only administrative expenses, like filing fees, as taxable costs.

The Ninth Circuit indicated other reasons for rejecting the state's position, noting that it would undermine the purposes of § 1988. Under longstanding circuit practice, when there is a mixed judgment, the court may direct the parties to bear their own costs. However, in some mixed result cases, the partially prevailing plaintiff may be entitled to attorneys' fees under § 1988 or another fee-shifting statute, because it succeeded on a significant issue in the case and achieved some of the benefit sought by bringing suit.

The Ninth Circuit held that the district court properly awarded attorneys' fees in this case. In holding that the definition of "costs" under FRAP 39 does not preclude an award of attorneys' fees under § 1988, the Ninth Circuit joined the US Courts of Appeals for the Third, Fifth, Seventh and Eleventh Circuits. Practitioners should be aware that even if a court orders parties to pay their own costs on appeal, a party may still be liable for attorneys' fees if the appeal arises out of a fee-shifting statute.