Baker Botts, LLP v. ASARCO, LCC
This is a Chapter 11 case that involves attorney fees. Towards the end of the Chapter 11 case, the Debtor’s attorney filed a fee application. However, the Debtor objected to the fees. The court granted the fee application and also awarded the attorney’s an additional $5 million for defending the fee application.
American Rule
The Debtor appealed the additional award for defending the fee application. The Court of Appeals reversed the decision and the US Supreme Court agreed. Attorneys cannot be awarded damages for defending challenges to fee applications. The simple explanation was the “American Rule” which provides that litigants pay for their own attorney’s fees.