# Baker Botts L.L.P. v. ASARCO LLC

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## Concurring Opinion

    Sotomayor

## Dissenting Opinion

    Breyer
BAKER BOTTS L. L. P. ET AL. v. ASARCO LLC
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 14–103. Argued February 25, 2015—Decided June 15, 2015
Respondent ASARCO LLC hired petitioner law firms pursuant to §327(a) of the Bankruptcy Code to assist it in carrying out its duties as a Chapter 11 debtor in possession. See 11 U. S. C. §327(a). When ASARCO emerged from bankruptcy, the law firms fled fee applications requesting fees under § 330(a)(1), which permits bankruptcy courts to “award … reasonable compensation for actual, necessary services rendered by” §327(a) professionals. ASARCO challenged the applications, but the Bankruptcy Court rejected ASARCO’s objections and awarded the law firms fees for time spent defending the applications. ASARCO appealed to the District Court, which held that the law firms could be awarded fees for defending their fee applications. The Fifth Circuit reversed, holding that §330(a)(1) did not authorize fee awards for defending fee applications.
Held: Section 330(a)(1) does not permit bankruptcy courts to award fees to §327(a) professionals for defending fee applications. Pp. 126–135.
(a) The American Rule provides the “ ‘basic point of reference’ ” for awards of attorney’s fees: “ ‘Each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.’ ” Hardt v. Reliance Standard Life Ins. Co., 560 U. S. 242, 252–253. Because the rule is deeply rooted in the common law, see, e. g., Arcambel v. Wiseman, 3 Dall. 306, this Court will not deviate from it “ ‘absent explicit statutory authority,’ ” Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, 532 U. S. 598, 602. Departures from the American Rule have been recognized only in “specific and explicit provisions,” Alyeska Pipeline Service Co. v. Wilderness Society, 421 U. S. 240, 260, usually containing language that authorizes the award of “a reasonable attorney’s fee,” “fees,” or “litigation costs,” and referring to a “prevailing party” in the context of an adversarial “action,” see generally Hardt, supra, at 253, and nn. 3–7. Pp. 126–127.
(c) Neither the law firms nor the United States, as amicus curiae, offers a persuasive theory for why §330(a)(1) should override the American Rule in this context. Pp. 129–135.
(1) The law firms’ view—that fee-defense litigation is part of the “services rendered” to the estate administrator—not only suffers from an unnatural interpretation of the term “services rendered,” but would require a particularly unusual deviation from the American Rule, as it would permit attorneys to be awarded fees for unsuccessfully defending fee applications when most fee-shifting provisions permit awards only to “a ‘prevailing party,’ ” Hardt, supra, at 253. P. 130.
(2) The Government’s argument is also unpersuasive. Its theory— that fees for fee-defense litigation must be understood as a component of the “reasonable compensation for [the underlying] services rendered” so that compensation for the “actual … services rendered” will not be diluted by unpaid time spent litigating fees—cannot be reconciled with the relevant text. Section 330(a)(1) does not authorize courts to award “reasonable compensation,” but “reasonable compensation for actual, necessary services rendered,” and the Government properly concedes that litigation in defense of a fee application is not a “service.” And §330(a)(6), which presupposes compensation “for the preparation of a fee application,” does not suggest that time spent defending a fee application must also be compensable. Commissioner v. Jean, 496 U. S. 154, distinguished.
The Government’s theory ultimately rests on the flawed policy argument that a “judicial exception” is needed to compensate fee-defense litigation and safeguard Congress’ aim of ensuring that talented attorneys take on bankruptcy work. But since no attorneys are entitled to such fees absent express statutory authorization, requiring bankruptcy attorneys to bear the costs of their fee-defense litigation under §330(a)(1) creates no disincentive to bankruptcy practice. And even if this Court believed that uncompensated fee-defense litigation would fall particularly hard on the bankruptcy bar, it has no “roving authority … to allow counsel fees … whenever [it] might deem them warranted,” Alyeska Pipeline, supra, at 260. Pp. 131–135.
751 F. 3d 291, affirmed.
Aaron M. Streett argued the cause for petitioners. With him on the briefs were G. Irvin Terrell, Shane Pennington, Wm. Bradford Reynolds, Evan A. Young, Omar J. Alaniz, and Shelby A. Jordan.
Brian H. Fletcher argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Verrilli, Acting Assistant Attorney General Branda, Deputy Solicitor General Stewart, Michael S. Raab, Sydney Foster, Ramona D. Elliott, P. Matthew Sutko, and Robert J. Schneider, Jr.
Jeffrey L. Oldham argued the cause for respondent. With him on the brief were Bryan S. Dumesnil, Bradley J. Benoit, Heath A. Novosad, Paul D. Clement, and Jeffrey M. Harris.
This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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