Murphy v. Smith

PLAIN TEXT OF THE STATUTE

Murphy asserts that the plain text of 42 U.S.C. § 1997e(d)(2) clearly grants courts discretion to determine what portion of a judgment should be applied to the attorney’s fees. Indeed, Murphy contends that the parenthetical phrase “not to exceed 25 percent” is equivalent in meaning to “less than or equal to,” and accordingly allows courts discretion to apportion from the monetary judgment a range of attorney’s fees, provided that those fees do not exceed 25% of the judgment amount. In fact, as Murphy points out, every court of appeals that has addressed this issue has similarly held that the statute grants district courts discretion to apportion attorney’s fees. Moreover, Murphy notes that Congress could have easily written § 1997e(d)(2) to eliminate any district court discretion by, for example, requiring that a plaintiff pay “all” of the attorney’s fees “except to the extent they exceed 25 percent of the judgment,” but Congress did not do so. Additionally, Murphy asserts that even if the text of the statute was ambiguous, the Seventh Circuit’s interpretation of the ambiguity is unpersuasive: the determination that the defendant must pay a portion of the plaintiff’s attorney’s fees “only if 25 percent of the award is inadequate” contradicts the language of § 1997e(d)(2), which only provides that the portion of the judgment not exceed 25%, but it does not require that the portion equal 25%.

Smith and Fulk counter that § 1997e(d)(2), contrary to Murphy’s assertion, does not grant the district court discretion to apportion attorney’s fees but rather requires that the plaintiff’s attorney’s fees must first be satisfied from the judgment, and that the defendant is simply liable for any fees exceeding 25% of the judgment. Additionally, Smith and Fulk argue that phrase “to satisfy” is used in law generally and the United States Code specifically to indicate complete fulfillment of an obligation; here, the entire phrase “to satisfy the amount of attorney’s fees awarded” would mean complete payment of attorney’s fees. In other words, Smith and Fulk contend that § 1997e(d)(2) require that courts must attempt to cover the plaintiff’s attorney’s fees completely from the judgment. Smith and Fulk acknowledge that there may be instances in which the plaintiff’s attorney’s fees cannot be satisfied from the judgment alone, but assert that, in those instances, the defendant may be liable for the plaintiff’s attorney’s fees in excess of 25% provided that the plaintiff’s attorney’s fees are not greater than 150% of the judgment awarded. Smith and Fulk contend that this interpretation of the statute, contrary to Murphy’s interpretation, gives meaning to each part of the statute and does not render any words superfluous. Finally, Smith and Fulk note that § 1997e(d) as a whole supports their interpretation of § 1997e(d)(2) because the other four subparts of § 1997e(d) operate to restrict attorney’s fees and limit the defendant’s liability in different ways. For example, Smith and Fulk explain that § 1997e(d)(4) safeguards the defendant from additional fees that the plaintiff may have agreed to pay his or her attorney. These provisions indicate that § 1997e(d)(2) does not grant the district court discretion to apportion the plaintiff’s attorney’s fees but rather restricts the district court and limits the defendant’s liability.

LEGISLATIVE HISTORY AND CONTEXT OF THE STATUTE

Murphy asserts that the legislative history behind this statute indicates that Congress did not intend to bar district courts from using their traditional discretion regarding attorney’s fees. Murphy states that other fee-shifting statutes that Congress has enacted—statutes that permit courts to apportion attorney’s fees—generally grant district courts broad discretion to apportion attorney’s fees. Courts have previously recognized, Murphy points out, that this discretion is beneficial because attorney’s fees are generally factual matters, and the district court is most familiar with the facts of each case. Indeed, Murphy notes that § 1997e(d)(2) contains language that is “identical or nearly identical” to other statutes that grant district courts discretion over attorney’s fees. Finally, Murphy contends that Congress has considered modifying § 1997e(d)(2) since its enactment over twenty years ago, but has chosen not to do so; this fact evinces congressional intent toward allowing district courts to continue using discretion under § 1997e(d)(2) in apportioning attorney’s fees.

Smith and Fulk, on the other hand, contend that the legislative history behind the enactment of this statute lends support to their interpretation of § 1997e(d)(2). Smith and Fulk point to an earlier draft of § 1997e(d)(2) that contained the sentence: “If the award of attorney’s fees is greater than 25 percent of the judgment, the excess shall be paid by the defendant.” This sentence, Smith and Fulk contend, clearly illustrates that the defendant is only liable for attorney’s fees if the award exceeds 25% of the judgment. Smith and Fulk acknowledge that the currently-enacted version of § 1997e(d)(2) does not contain that sentence, but point to statements made by the bill’s congressional sponsors that indicate that the enacted version of § 1997e(d)(2) was intended to achieve the same purposes as the earlier version. Indeed, Smith and Fulk claim that the most plausible reason for this revision is that legislators already felt that the first sentence—containing the parenthetical phrase—already sufficiently indicated that district courts do not have discretion to apportion attorney’s fees, and the legislators instead repurposed the second sentence for other reasons.