After a trial is over, summary judgment awarded, or an appeal decided, the next battle looming on the horizon can sometimes be equally contentious. If a prevailing party seeks recovery of the fees it paid to obtain those favorable results – whether through a statutory attorney fee clause, a prevailing party clause in a contract, or, in the most extreme of cases, a sanction for contumacious conduct by an opposing party – the ensuing dispute can turn into a battle even bigger than the underlying case itself. Indeed, the monetary stakes can at times be higher in a dispute over fee shifting than in the merits dispute.

This article provides a refresher on some of the basics of requesting fees, then addresses a few specific strategy considerations for parties to a fee dispute. The discussion on strategy is by no means exhaustive, as there are many considerations when supporting and challenging a request for fees, and the type of case, basis for fee shifting, and history of the litigation may affect litigants’ strategy decisions.

The Basics

Since 2004, Wisconsin courts have followed the “lodestar methodology” for evaluating requests for attorney fees, after the Wisconsin Supreme Court expressly adopted the method in Kolupar v. Wilde Pontiac Cadillac Inc.¹ In that decision, the court fell in line with the U.S. Supreme Court’s influential and often-cited decision on attorney fees in Hensley v. Eckerhart.² According to the lodestar methodology, in determining a reasonable attorney fee award, “[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.”³ With that lodestar amount as the starting point, courts then make any appropriate adjustments after considering a list of factors.

In Kolupar, the court encouraged lower courts to apply the factors laid out in SCR 20:1.5 (part of the Wisconsin Rules of Professional Conduct), noting those factors were not originally intended to be used by courts to assess fee petitions but that the factors would “serve to ferret out unreasonable fees.”⁴

In 2011, the list of factors was expanded and codified with the passage of Wis. Stat. section 814.045. Except when awarding the almost comically nominal attorney fees of between $100 and $500 as an element of costs, courts “shall, in determining whether to award attorney fees and in determining whether the attorney fees are reasonable, consider all” listed factors.⁵ Those factors are:

(a) The time and labor required by the attorney.

(b) The novelty and difficulty of the questions involved in the action.

(c) The skill requisite to perform the legal service properly.

(d) The likelihood that the acceptance of the particular case precluded other employment by the attorney.

(e) The fee customarily charged in the locality for similar legal services.

(f) The amount of damages involved in the action.

(g) The results obtained in the action.

(h) The time limitations imposed by the client or by the circumstances of the action.

(i) The nature and length of the attorney’s professional relationship with his or her client.

(j) The experience, reputation, and ability of the attorney.

(k) Whether the fee is fixed or contingent.

(L) The complexity of the case.

(m) Awards of costs and fees in similar cases.

(n) The legitimacy or strength of any defenses or affirmative defenses asserted in the action.

(p) Other factors the court deems important or necessary to consider under the circumstances of the case.⁶

Strategy Considerations for the Requesting Party

Strategically, an important consideration faced by a party seeking to file a fee petition relates to timing. In many cases, it will make sense to strike while the iron is hot, and parties seeking to file fee petitions may choose to do so promptly, sometimes long before applicable deadlines may require.

The applicable deadline for requesting fees is found in Wis. Stat. section 806.06(4), which states: “If the party in whose favor the judgment is rendered causes it to be entered, the party shall perfect the judgment within 30 days of entry or forfeit the right to recover costs. If the party against whom the judgment is rendered causes it to be entered, the party in whose favor the judgment is rendered shall perfect it within 30 days of service of notice of entry of judgment or forfeit the right to recover costs.”⁷ The statutory language alone is not entirely clear, but the Wisconsin Supreme Court has ruled that this deadline applies to requests for attorney fees recoverable under statute,⁸ and in 2001, the Wisconsin Court of Appeals reached the same result for fee requests based on a contractual fee-shifting clause.⁹

Until recently, yet another ambiguity lurked regarding what a party must do to perfect the judgment within the allotted 30 days. “A judgment is perfected by the taxation of costs and the insertion of the amount thereof in the judgment.”¹⁰ By its plain language, this could mean a court would have to rule on a request for costs or fees within the allotted time.

According to the lodestar methodology, in determining a reasonable attorney fee award, “[t]he most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.”

But in 2019, the court of appeals found it “absurd” to construe the statute literally and concluded it “can only reasonably be read to require a prevailing party to submit its bill of costs to the clerk of circuit court within the thirty-day limit.”¹¹ Based on this clarification, a party seeking fees should file a bill of costs and motion requesting fees, with supporting materials, within the 30-day deadline. However, rather than rely on this new and unsettled case law, parties seeking attorney fees would be wise to file their requests at the earliest opportunity.

To adequately address the statutory factors courts must analyze when considering a fee request, a party seeking fees must submit some information about their fee and the work performed. One of the simplest and most basic ways to submit that information may be to submit all of the invoices for that matter, but doing so can raise issues concerning lawyer-client privilege. “Billing records are communications from the attorney to the client, and producing these communications violates the lawyer-client privilege if production of the documents reveals the substance of lawyer-client communications.”¹²

The mere fact of representation, on the other hand, and some information about a fee arrangement and the nature of work performed is not typically considered privileged,¹³ though the contours of what strays into privileged territory has not been addressed by Wisconsin courts. Alternative options to balance privilege with the practical necessity of supporting a fee request include redacting privileged portions of invoices or submitting an affidavit summarizing the work and hours rather than the invoices themselves. Whether with or without additional materials, the fee request very likely will not be granted without an affidavit from counsel addressing some or all of the statutory factors.

Strategy Considerations for the Objecting Party

There are many ways to challenge a request for fees – beginning with whether the requesting party is a prevailing party entitled to fees at all. The amount of fees sought is also subject to challenge on various grounds, including billing errors, excessive time spent, overstaffing, billing for nonlegal work, unreasonably high rates, and statutory caps.

With all these options, the strategy when opposing a request for attorney fees may seem simple – challenge every point available to the extent reasonably possible. After all, that is a litigant’s typical and understandable reaction to defend almost any issue. That strategy would result in arguing that the amount of time spent by the opposing party’s attorneys was excessive and their hourly rates are unreasonable, applying some of the factors enumerated in Wis. Stat. section 814.045 that directly or indirectly relate to whether the time spent on the case by the prevailing party’s attorneys was reasonable in the context of the factual and legal issues in dispute and whether its attorneys’ hourly rates are reasonable.

Before following that instinct, however, litigants in this position should consider a potential negative ramification of taking that position: When such a challenge is made, the moving party may counter by seeking discovery of the objecting party’s attorney fees in the case.

This strategic move is controversial and divisive. On the one hand, attorneys have a visceral reaction to the thought of disclosing their rates and fees incurred in most circumstances. On the other, there is some intuitive appeal to allowing discovery into the opposing party’s fees. What better way is there to assess the reasonableness of the time spent by the moving party than to determine what the objecting party paid in litigating the same legal and factual issues in the case?

Case Law Discussing Discoverability of Objecting Party’s Fees

Wisconsin has not yet decided whether such discovery is permissible, but a 2013 court of appeals decision discussed a creative middle ground taken by a circuit court judge that was ultimately disapproved. In Sands v. Menard Inc.,¹⁴ the plaintiff requested an award of attorney fees of $671,062.38. The circuit court expressed concern over the high number and then ordered the following procedure:

“[I]nstead of denying [the plaintiff’s] fee petition, the court determined that [the plaintiff’s] attorney fee award should be limited to the amount [the defendant] spent on attorney fees. The court therefore ordered [the defendant] to submit an affidavit outlining its attorney fees since the date of the arbitration award. If [the defendant] failed to do so, the court would assume that [the defendant] had spent more than [the plaintiff], and it would therefore deem her request reasonable.”¹⁵

After the defendant submitted affidavits showing it had incurred fees of $576,469, the circuit court awarded the plaintiff fees equal to that reduced amount.¹⁶ The court of appeals reversed the circuit court’s underlying ruling in favor of the plaintiff on the merits. It also addressed the circuit court’s procedure in assessing the appropriate fees and concluded the court had not met its obligation to assess the appropriateness of the fee request:

“[T]he court acknowledged that [the plaintiff] had not met her burden of proof. However, instead of dismissing [the plaintiff’s] fee petition or requiring her to provide additional information, the court awarded [the plaintiff] the exact amount of attorney fees expended by [the defendant]. [The plaintiff] does not cite any authority allowing a court to relieve a litigant of its burden to prove the reasonableness of a fee request or to award fees based solely on the amount the opposing party spent. Moreover, the circuit court did not even attempt to determine a reasonable hourly rate or the number of hours reasonably expended on the litigation. The court therefore failed to apply the proper legal standards for awarding attorney fees.”¹⁷

This decision that the amount of the opposing party’s fees alone is not sufficient to support a fee request does not address the question whether discovery of information about an opposing party’s incurred fees would provide relevant evidence supporting a fee request and be allowed by a Wisconsin court.

Other Jurisdictions’ Considerations

Courts in other jurisdictions have considered the issue, with mixed results. The majority of courts that have addressed the issue have held that discovery of an objecting party’s attorney fees is permissible. In fact, some courts have found that to be the best measure of appropriateness of a fee request. As one court held, “the defendant’s fees may provide the best available comparable standard to measure the reasonableness of plaintiffs’ expenditures in litigating the issues of the case.”¹⁸ As another court held, “the time spent by the defense counsel … may well be the best measure of what amount of time is reasonable,” calling it a “logical yardstick.”¹⁹ Another court emphasized the value of “discourag[ing] hypocritical objections” to a fee request by allowing discovery of the opposing party’s fees.²⁰

Some courts have held the circumstances of the case and the objection to the fee petition affect whether discovery of the opposing party’s fees is appropriate, finding it particularly appropriate when a court is uncertain about the reasonableness of the hours spent or in cases that were especially contentious.²¹ In these cases and others, in a variety of jurisdictions, numerous courts have allowed discovery related to the objecting party’s fees.²² The U.S. District Court for the Northern District of Illinois even has a local rule requiring that, in the absence of an agreement on the amount of fees to be awarded, the party objecting to a fee request must disclose the amount of fees paid by its client on the matter, time and work records (with redactions allowed), hourly rates, and the amount of expenses incurred by the party.²³

In many cases, it will make sense to strike while the iron is hot, and parties seeking to file fee petitions may choose to do so promptly, sometimes long before applicable deadlines may require.

A minority of courts to address the issue have gone the other way, holding that what an objecting party paid in attorney fees to defend a case is not relevant to the issue whether the amount the prevailing party paid to prosecute the case is reasonable.²⁴ One of the most recent cases to so hold was a decision from the Texas Supreme Court, which stated the following:

“To the extent factual information about hourly rates and aggregate attorney fees is not privileged, that information is generally irrelevant and nondiscoverable because it does not establish or tend to establish the reasonableness or necessity of the attorney fees an opposing party has incurred. A party’s litigation expenditures reflect only the value that party has assigned to litigating the matter, which may be influenced by myriad party-specific interests. Absent a fee-shifting claim, a party’s attorney-fee expenditures need not be reasonable or necessary for the particular case. Barring unusual circumstances, allowing discovery of such information would spawn unnecessary case-within-a-case litigation devoted to determining the reasonableness and necessity of attorney-fee expenditures that are not at issue in the litigation.”²⁵

Seventh Circuit Court of Appeals’ Considerations

The Seventh Circuit has supported the minority view in at least two decisions. In an appeal addressing the fees awarded to a plaintiff who prevailed on an Illinois statutory claim, the Seventh Circuit noted some reasons an opposing party’s fees may not be relevant to a fee request, including that “a given case may have greater precedential value for one side than the other,” and a prevailing plaintiff could “press[ ] questionable claims and refus[e] to settle except on outrageous terms” and cause their opponent’s fees to increase.²⁶ A few years later, the Seventh Circuit reiterated that reasoning and found the district court did not err in refusing to compel an opposing party in an antitrust case to disclose the number of hours worked by its attorneys, though “[w]ithout suggesting that the court would have erred by compelling discovery.”²⁷

Wisconsin State Courts’ Considerations

It is hard to predict how a Wisconsin court would rule on the precise issue whether discovery of the fees an objecting party paid is allowable. Looking to the statutory factors in Wis. Stat. section 814.045 listed above, the hours spent and hourly rates that make up the fees paid by an opposing party arguably would be relevant to the factors that courts must weigh. The following factors are most likely to be relevant:

• Factor (a): The time and labor required by counsel for the party seeking fees would typically, though not always, be approximately commensurate with the time and labor required by an opposing party’s lawyer in the same case.

• Factor (c): The skill requisite for the attorney seeking fees might be comparable to the skill required by the objecting party. On the other hand, more skill might have been required to prevail, especially in a difficult case.

• Factors (e) and (m): A court could reasonably find there to be no better way to assess the fees charged in the locality and in similar cases than to determine the fees charged by opposing counsel in the exact same case.

The other factors are less likely to be informed by the opposing party’s fees.

Because Wisconsin has not decided this issue, and other jurisdictions are split on the issue, it may be risky to oppose an opponent’s request for attorney fees on the grounds that the time spent by its attorneys was excessive or its attorneys’ hourly rates are unreasonable, particularly if it is anticipated that the attorney fees the objecting party spent likely exceed the attorney fees spent by the prevailing party.

Conclusion

For better or worse, disputes can be far from over after the merits of a case are resolved. The U.S. Supreme Court has cautioned litigants that “[a] request for attorney’s fees should not result in a second major litigation.”28 Yet numerous strategy decisions and high financial stakes can make the battle over attorney fees just as contentious as the underlying case. Even after a long, hard-fought case, parties should not let their guard down for the reprise.

Cite to 94. Wis. Law. 24-29 (January 2021).

Endnotes

¹ 2004 WI 112, ¶¶ 28-30, 275 Wis. 2d 1, 683 N.W.2d 58.

² 461 U.S. 424 (1983).

³ 2004 WI 112, ¶¶ 28, 30, 275 Wis. 2d 1 (quoting Hensley, 461 U.S. at 433).

⁴ Id. ¶¶ 24-26.

⁵ Wis. Stat. § 814.045.

⁶ Id.

⁷ Wis. Stat. § 806.06(4).

⁸ Hartman v. Winnebago Cnty., 216 Wis. 2d 419, 428, 437-38, 574 N.W.2d 222 (1998).

⁹ Purdy v. Cap Gemini Am. Inc., 2001 WI App 270, 248 Wis. 2d 804, 637 N.W.2d 763.

¹⁰ Wis. Stat. § 806.06(1)(c).

¹¹ Soletski v. Krueger Int’l Inc., 2019 WI App 7, ¶ 37, 385 Wis. 2d 787, 924 N.W.2d 207.

¹² Lane v. Sharp Packaging Sys. Inc., 2002 WI 28, ¶ 40, 251 Wis. 2d 68, 640 N.W.2d 788.

¹³ See, e.g., Phaksuan v. United States (In re Osterhoudt), 722 F.2d 591, 593 (9th Cir. 1983); Chesapeake & Ohio Ry. Co. v. Kirwan, 120 F.R.D. 660, 665 (S.D. W. Va. 1988).

¹⁴ 2013 WI App 47, 347 Wis. 2d 446, 831 N.W.2d 805.

¹⁵ Id. ¶ 18.

¹⁶ Id. ¶ 19.

¹⁷ Id. ¶ 57.

¹⁸ Chicago Prof’l Sports Ltd. P’ship v. National Basketball Ass’n, No. 90 C 6247, 1996 WL 66111, at *3 (N.D. Ill. Feb. 13, 1996).

¹⁹ Pollard v. E.I. DuPont De Nemours & Co., No. 95-3010 M1V, 2004 WL 784489, at *3 (W.D. Tenn. Feb. 24, 2004).

²⁰ Fulmore v. Home Depot U.S.A. Inc., No. 1:03-CV-0797-DFH-JMS, 2007 WL 1246226, at *1 (S.D. Ind. Apr. 27, 2007).

²¹ Henson v. Columbus Bank & Tr. Co., 770 F.2d 1566, 1574-75 (11th Cir. 1985); Frommert v. Conkright, No. 00-CV-6311L, 2016 WL 6093998, at **2-3 (W.D.N.Y. Oct. 19, 2016).

²² See, e.g., In re Fine Paper Antitrust Litig., 751 F.2d 562, 587 (3d Cir. 1984); Mendez v. Radec Corp., 818 F. Supp. 2d 667, 668-69 (W.D.N.Y. 2011); Circle Y Constr. Inc. v. WRH Realty Servs. Inc., 721 F. Supp. 2d 1272, 1282 n.3 (N.D. Ga. 2010); Cohen v. Brown Univ., No. CA 92-197 L, 1999 WL 695235, at **2-4 (D.R.I. May 19, 1999); Murray v. Stuckey’s Inc., 153 F.R.D. 151, 153 (N.D. Iowa 1993); Coalition to Save our Children v. State Bd. of Educ., 143 F.R.D. 61, 6466 (D. Del. 1992); Real v. Continental Grp. Inc., 116 F.R.D. 211, 213-14 (N.D. Cal. 1986); Blowers v. Lawyers Coop. Publ’g Co., 526 F. Supp. 1324, 1325-28 (W.D.N.Y. 1981); Naismith v. Professional Golfers Ass’n, 85 F.R.D. 552, 562-64 (N.D. Ga. 1979); Stastny v. Southern Bell Tel. & Tel. Co., 77 F.R.D. 662, 663-64 (W.D.N.C. 1978); Vulcan Materials Co. v. Chandler, 992 So. 2d 1252, 1268 (Ala. 2008); Paton v. Geico Gen. Ins. Co., 190 So. 3d 1047, 1050-53 (Fla. 2016); Miller v. Kenny, 325 P.3d 278, 303 (Wash. Ct. App. 2014).

²³ N.D. Ill. R. 54.3(d)(5).

²⁴ See, e.g., Hernandez v. George, 793 F.2d 264, 268 (10th Cir. 1986); Ohio-Sealy Mattress Mfg. Co. v. Sealy Inc., 776 F.2d 646, 659-60 (7th Cir. 1985); Costa v. Sears Home Improvement Prods. Inc., 178 F. Supp. 3d 108, 113 (W.D.N.Y. 2016); Marks Constr. Co. v. Huntington Nat’l Bank, No. 1:05CV73, 2010 WL 1836785, at *7 (N.D. W. Va. May 5, 2010).

²⁵ In re Nat’l Lloyds Ins. Co., 532 S.W.3d 794, 799 (Tex. 2017).

²⁶ Mirabal v. General Motors Acceptance Corp., 576 F.2d 729, 731 (7th Cir. 1978).

²⁷ Ohio-Sealy Mattress Mfg. Co., 776 F.2d at 659-60.

²⁸ Hensley, 461 U.S. at 437.