Opinion ID: 472544
Heading Depth: 1
Heading Rank: 3

Heading: attorneys' fees in this case

Text: 31 One matter remains. Nepera seeks an award of attorneys' fees incurred in litigating the instant case. 99 Nepera recognizes that this effort falls squarely within the purview of the American Rule, but argues that Sea-Land's behavior brings it within the bad faith exception to the rule. That exception allows an assessment of attorneys' fees when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.... 100 Federal courts have applied this exception both when bad faith occurred in connection with the litigation 101 and when it was an aspect of the conduct that gave rise to the lawsuit. 102 Nepera bases its request for fees on the latter strand of the bad-faith exception. 103 32 The common law of the District of Columbia embraces these principles. The District of Columbia Court of Appeals has declared that an assessment of attorneys' fees is warranted  'when the losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'  104 Circumstances indicative of bad faith, the court has said, are present  'where a party brings or maintains an unfounded suit or withholds action to which the opposing party is patently entitled....'  105 Indeed, there appears to be little or no difference between District of Columbia and federal common law on the subject. 33 Crucial to evaluation of Nepera's request is the Supreme Court's admonition, which the District of Columbia Court of Appeals has cited with approval, 106 that the underlying rationale of fee-shifting upon a showing of bad faith is punishment of the wrongdoer rather than compensation of the victim. 107 For that reason, the standard for a finding of bad faith is stringent. 108 The cases, both federal 109 and District of Columbia, 110 hold that attorneys' fees will be awarded only when extraordinary circumstances or dominating reasons of fairness so demand. 34 The considerations underlying the bad-faith exception do not counsel fee-shifting here. Quite to the contrary, an award of attorneys' fees to Nepera could actually work an injustice. Nepera's bad-faith fee claim rests on the very same behavior 111 we have already held to be legally insufficient to permit an award of punitive damages 112 --damages which, like attorneys' fees in the present context, are designed to punish certain kinds of wrongdoing. 113 Just as we find, as a matter of law, that the record does not furnish an adequate foundation for punitive damages, we must conclude that it falls short of establishing Nepera's entitlement to recoupment of its attorneys' fees in litigating the case at bar. 35 We thus end our journey through this appeal. The Shipping Act does not bar Nepera's common-law action for compensatory damages, and those damages permissibly may include attorneys' fees and other expenses incurred by Nepera in its earlier litigation against the Commission. Accordingly, we reverse the District Court's judgment to that extent. We affirm, however, the District Court's holdings that Nepera's claim for punitive damages, and its claim for attorneys' fees incurred in the instant case, are legally unwarranted. The case is remanded to the District Court for further proceedings consistent with this opinion. 36 So ordered.