Limited Right to Attorneys' Fees Under FRCP 41(d): Fourth Circuit | Practical Law

Limited Right to Attorneys' Fees Under FRCP 41(d): Fourth Circuit | Practical Law

In Andrews v. America's Living Centers, LLC, the US Court of Appeals for the Fourth Circuit held that a district court may award attorneys' fees under FRCP 41(d) only if either the underlying statute provides for attorneys' fees or the court finds that the plaintiff acted in bad faith, vexatiously, wantonly, or for oppressive reasons.

Limited Right to Attorneys' Fees Under FRCP 41(d): Fourth Circuit

Practical Law Legal Update w-002-7391 (Approx. 3 pages)

Limited Right to Attorneys' Fees Under FRCP 41(d): Fourth Circuit

by Practical Law Litigation
Law stated as of 28 Jun 2016 • USA (National/Federal)
In Andrews v. America's Living Centers, LLC, the US Court of Appeals for the Fourth Circuit held that a district court may award attorneys' fees under FRCP 41(d) only if either the underlying statute provides for attorneys' fees or the court finds that the plaintiff acted in bad faith, vexatiously, wantonly, or for oppressive reasons.
On June 28, 2016, in Andrews v. America's Living Centers, LLC, the US Court of Appeals for the Fourth Circuit held that a district court may award attorneys' fees under FRCP 41(d) only if either the underlying statute provides for attorneys' fees or the court finds that the plaintiff acted in bad faith, vexatiously, wantonly, or for oppressive reasons ( (4th Cir. June 28, 2016)).
Stella Andrews first sued the defendants under the Fair Labor Standards Act (FLSA) in 2010. The defendants moved to dismiss the complaint under FRCP 12(b)(6). Andrews ultimately decided to voluntarily dismiss her complaint under FRCP 41(a)(1) and filed a second complaint, which she served on the defendants in 2011. The defendants moved to stay the second action and for costs under FRCP 41(d), to recover the attorneys' fees and other expenses they incurred in defending the first action. The magistrate judge awarded the defendants fees related to their motion to dismiss in the first action. The district court affirmed, finding the award proper because Andrews' conduct amounted to vexatious litigation. The district court later dismissed the second action after Andrews failed to pay the attorneys' fees award. Andrews appealed.
The Fourth Circuit reversed the district court's order to pay attorneys' fees and vacated the dismissal. The Fourth Circuit acknowledged a split among its sister circuits about whether FRCP 41(d) permits recovery of attorneys' fees. Adopting the Seventh Circuit's reasoning, the Fourth Circuit held that a district court may award attorneys' fees under FRCP 41(d) if either:
  • The underlying statute provides for attorneys' fees.
  • The plaintiff acted in bad faith, vexatiously, wantonly, or for oppressive reasons.
The court concluded that Andrews' conduct did not warrant an attorneys' fees award under FRCP 41(d). There is no statutory basis for the award because the FLSA does not expressly provide for attorneys' fee awards to a prevailing defendant. Additionally, Andrews' voluntary dismissal of the first case to avoid an adverse ruling and re-filing of the action that same day is not so egregious as to rise to the level of vexatious conduct required for an award of attorneys' fees.