Eleventh Circuit Court of Appeals Rules That the Prevailing Party in a Dispute Arising From a Dredging Contract Is Not Entitled To an Award of Attorneys' Fees
In a recent decision, the Eleventh Circuit Court of Appeals affirmed the District Court's denial of the appellant's request for attorneys' fees, holding that the "American Rule" that each party bears its own attorneys' fees is a characteristic feature of maritime law, governing the dredging contract at issue. Misener Marine Construction, Inc. v. Norfolk Dredging Company, Docket No. 09-10083 (11th Cir. Jan. 21, 2010).
In Misener, the Appellant argued that attorneys' fees should be recoverable under a Georgia statute (the "GPPA") because (1) the case arose under diversity jurisdiction; (2) Eleventh Circuit precedent suggested that the GPPA should be applied to dredging cases; and (3) because the bar against shifting attorneys' fees is not a characteristic feature of maritime law and thus the GPPA could supplement substantive maritime law.
In rejecting the Appellant's arguments, the Court found that there was "no doubt" that the contract between the parties, which involved dredging a navigable waterway in a port servicing international and national commerce, fell within the federal courts' maritime jurisdiction. The Court then noted the well-established rule within the Eleventh Circuit that "[t]he prevailing party in an admiralty case is not entitled to recover its attorneys' fees as a matter of course", unless they are provided by the statute governing the claim; the non-prevailing party acted in bad faith during the litigation; or the contract governing the dispute provided for indemnification of attorneys' fees. (citing Natco Ltd. P'ship v. Moran Towing of Fla., Inc., 267 F.3d 1190, 1193 (11th Cir. 2001). The Court found that none of the three (3) exceptions applied.
Finally, the Court considered whether the GPPA could be incorporated into substantive maritime law. The Eleventh Circuit concluded that "the principle that each party bear its own attorneys' fees is a characteristic feature of maritime law", finding that the American Rule was consistently and continuously applied to maritime disputes by the Eleventh Circuit and others. Accordingly, the Court affirmed the district court's order denying the Appellant's request for attorneys' fees.
In a concurring opinion, Judge Black stated that application of the GPPA would disrupt the "proper harmony and uniformity" of admiralty law, as diverging from the American Rule would produce inconsistent and/or unpredictable results.
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