Litigation Costs and Fee-Shifting in U.S. Courts

Civil litigation in U.S. courts generates substantial financial obligations beyond attorney fees, including filing fees, expert witness costs, deposition expenses, and document production charges. This page covers how those costs are allocated between parties, the legal doctrines and statutes that allow courts to shift fees from one side to another, and the procedural boundaries that govern when such awards are available. Understanding cost and fee structures is essential to evaluating the full economic stakes of any civil litigation process.

Definition and scope

Litigation costs, as recognized under Federal Rule of Civil Procedure 54(d), divide into two distinct categories: "costs" as a defined statutory term and attorney's fees, which are treated separately and require independent legal authorization.

Statutory costs under 28 U.S.C. § 1920 — the federal statute enacted by Congress and administered through the federal judiciary — are a specific, enumerated list of expenses that a prevailing party may recover as a matter of course. The six categories listed in § 1920 are:

1. Fees of the clerk and marshal
2. Fees for printed or electronically recorded transcripts necessarily obtained for use in the case
3. Fees and disbursements for printing and witnesses
4. Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained
5. Docket fees under 28 U.S.C. § 1923
6. Compensation of court-appointed experts and interpreters

Attorney's fees are governed separately. Under the foundational American Rule, each party bears its own attorney's fees regardless of outcome. This default distinguishes U.S. practice from the English Rule, under which the losing party typically pays both sides' attorney's fees. The American Rule is not constitutional doctrine but a judicially recognized default that Congress can and frequently does override by statute (Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975)).

How it works

Fee-shifting occurs through three primary mechanisms: statutory authorization, contractual agreement, and court-imposed sanctions.

Statutory fee-shifting is the dominant mechanism in U.S. practice. Congress has enacted fee-shifting provisions in over 200 federal statutes, according to the Administrative Office of the U.S. Courts. Major examples include:

• 42 U.S.C. § 1988 — authorizes fee awards to prevailing parties in civil rights litigation brought under statutes including 42 U.S.C. § 1983
• Title VII of the Civil Rights Act of 1964 — allows fee recovery for prevailing plaintiffs in employment discrimination suits
• The Clean Air Act, 42 U.S.C. § 7604(d) — provides for fee awards in citizen-suit provisions
• The Copyright Act, 17 U.S.C. § 505 — grants district courts discretion to award fees to the prevailing party

Contractual fee-shifting arises when parties include attorney's fee provisions in agreements. Courts generally enforce these clauses, subject to state contract law. California, for instance, limits enforcement of one-sided fee clauses through California Civil Code § 1717, which makes contractual fee provisions reciprocal.

Sanctions-based fee awards under Federal Rule of Civil Procedure 11, 28 U.S.C. § 1927, and the court's inherent authority permit fee-shifting as a penalty for misconduct. Rule 11 applies specifically to signed filings; § 1927 targets attorneys who unreasonably and vexatiously multiply proceedings; inherent power reaches bad-faith conduct not covered by those rules. The sanctions framework in U.S. litigation operates as a distinct procedural track from merits-based fee awards.

The process for recovering fees follows a structured sequence:

1. The court enters a final judgment establishing the prevailing party
2. The prevailing party files a motion for costs (within 14 days under FRCP 54(d)(2)(B)) or a bill of costs with the clerk
3. The opposing party may object to specific items
4. For attorney's fees, the moving party submits billing records supporting the "lodestar" calculation — reasonable hours multiplied by a reasonable hourly rate (Hensley v. Eckerhart, 461 U.S. 424 (1983))
5. The court adjusts the lodestar figure based on factors including the degree of success and complexity of the litigation

Common scenarios

Fee-shifting applies with the highest frequency in four categories of litigation:

Civil rights and employment cases — § 1988 and Title VII generate the largest volume of fee petitions in federal court. Prevailing plaintiffs recover fees as a matter of course; prevailing defendants recover fees only when the plaintiff's case was frivolous, unreasonable, or without foundation under Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978).

Intellectual property disputes — The Copyright Act's § 505 creates discretionary fee-shifting. Patent litigation under 35 U.S.C. § 285 allows fee awards in "exceptional" cases — a standard clarified by the Supreme Court in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) to require only that the case stands out from others in unreasonableness or litigation conduct.

Class action litigation — In class action cases, attorney's fees are subject to court approval under FRCP 23(h), which requires the court to independently evaluate fee requests regardless of any agreed settlement terms. Fee awards in class actions may be calculated as a percentage of the common fund or using the lodestar method.

Discovery misconduct — Courts routinely shift the costs of electronic discovery motions practice when one party fails to comply with preservation or production obligations. FRCP 37 explicitly authorizes expense-shifting, including attorney's fees, as a sanction for discovery failures.

Decision boundaries

Not all costs and fees are recoverable, and the distinctions are precise.

Taxable vs. non-taxable costs — Only items enumerated in § 1920 qualify as taxable costs absent a separate statute. Expert witness fees beyond the statutory witness rate of $40 per day (28 U.S.C. § 1821) are not recoverable as costs unless a fee-shifting statute independently authorizes them — a limitation confirmed in Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437 (1987).

Prevailing party status — Fee-shifting statutes universally require the claimant to establish "prevailing party" status. Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health and Human Resources, 532 U.S. 598 (2001) held that a defendant's voluntary change in conduct — without a court-ordered judgment or consent decree — does not confer prevailing party status on a plaintiff.

Proportionality of success — Courts reduce fee awards when a party prevails on only a portion of its claims. A plaintiff who wins 2 of 8 claims may not recover the full lodestar if the unsuccessful claims consumed a substantial portion of counsel's time and were not related to the successful claims (Hensley, 461 U.S. at 434–435).

Appellate cost allocation — On appeal, Federal Rule of Appellate Procedure 39 governs taxable costs in the courts of appeals. If the judgment is affirmed, costs go to the appellee; if reversed, costs go to the appellant. The U.S. Courts of Appeals follow this rule independently of any fee-shifting disposition in the trial court.

The interaction between damages awards and fee-shifting creates an important strategic boundary: a nominal damages verdict may produce a "prevailing party" entitled to fees, but courts retain discretion to limit fees when the degree of success was minimal relative to the relief originally sought.

References

• 28 U.S.C. § 1920 — Taxation of Costs (Cornell LII)
• 28 U.S.C. § 1821 — Per Diem and Mileage Generally (Cornell LII)
• 28 U.S.C. § 1923 — Docket Fees (Cornell LII)
• Federal Rule of Civil Procedure 54 — Judgment; Costs (Cornell LII)
• Federal Rule of Civil Procedure 11 — Signing of Pleadings (Cornell LII)
• Federal Rule of Appellate Procedure 39 — Costs (Cornell LII)
• 42 U.S.C. § 1988 — Attorney's Fees in Civil Rights Cases (Cornell LII)
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