The Supreme Court on Tuesday sided with Goodyear Tire in a case challenging whether the company had to pay the full $2.7 million in attorneys fees that two married couples incurred in litigation stemming from a faulty tire.
In an 8-0 ruling, the justices said a court can only require a company to pay for the legal fees that incurred as a result of its misconduct.
The case centers on Leroy and Donna Haeger and Barry and Suzanne Haeger, who found out after they settled their initial lawsuit against the company that Goodyear had withheld information about a tire that caused the motorhome they were in to swerve off an Arizona highway and flip over.
A district court ordered Goodyear to pay the Haegers $2.7 million — the entire sum they had spent in legal fees and costs from the moment early in the litigation when Goodyear made its first dishonest discovery response.
The lower court said attorneys fees are typically limited to the amount of legal fees caused by the misconduct, but in cases of particularly egregious behavior, a court can award all of the attorneys fees incurred in a case. The 9th Circuit Court of Appeals agreed, but the Supreme Court Tuesday reversed that decision and remanded the case back to the lower court.
“A district court has broad discretion to calculate fees awarded under the standard,” Justice Elena Kagan wrote in delivering the opinion of the court. “But because the court here granted legal fees beyond those resulting from the litigation misconduct, its award cannot stand.”
Newly sworn-in Justice Neil Gorsuch took no part in considering the case.