The U.S. Supreme Court held on Tuesday that legal fee awards resulting from acts of bad faith in litigation must be causally linked to the underlying misconduct.
In a unanimous 13-page opinion, Justice Elena Kagan reversed a $2.7 million fee award against the Goodyear Tire & Rubber Co. finding that sanctions in civil cases “must be compensatory rather than punitive in nature.” The upper end of fee award sanctions, Kagan wrote in Goodyear v. Haeger, should be “limited to the fees the innocent party incurred solely because of the misconduct—or put another way, to the fees that party would not have incurred but for the bad faith.”
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