Supremes rule against equal protection under bankruptcy law! (Congress, legal, attorneys)

[O.C. Ogilvy]

In a ruling today, SCOTUS signaled that perhaps equal protection under the law doesn't apply to everything. The case was Baker Botts LLP v Asarco LLC. The law in this case was bankruptcy law and the majority ruled that a bankruptcy court could not award attorney's fees for a defending a fee application. The ruling also touches on income inequality. In the U.S. government's amicus curie brief it states,

Absent this exception, it warns, fee-defense litigation will dilute attorney’s fees and result in bankruptcy lawyers receiving less compensation than nonbankruptcy lawyers, thereby undermining the congressional aim of ensuringthat talented attorneys will take on bankruptcy work.

http://www.supremecourt.gov/opinions...4-103_bpdg.pdf

If bankruptcy attorneys can't be treated equally under the law, who can claim that the 14th Amendment applies to all laws?

[greywar]

Title is misleading. basically click bait.

[O.C. Ogilvy]

Originally Posted by greywar

Title is misleading. basically click bait.

You don't agree that the attorney's are being treated unequally?

[katzpaw]

Originally Posted by greywar

Title is misleading. basically click bait.

" 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 filed 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. 3–13.
(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,’ ”

http://www.supremecourt.gov/opinions...4-103_bpdg.pdf

Wednesday’s oral argument caps several years of legal wrangling between Baker Botts and its one-time client, Asarco, that involves obscure laws governing whether bankruptcy attorneys should be paid in the event that their client disputes their legal bills and the firm must spend time and resources defending itself as a result. The amount they’re fighting over — $5.2 million — is far eclipsed by the $117 million Baker earned while representing Asarco during the course of the bankruptcy.

http://www.washingtonpost.com/busine...ca6_story.html

[O.C. Ogilvy]

Originally Posted by katzpaw

" 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 filed 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. "

http://www.supremecourt.gov/opinions...4-103_bpdg.pdf

Yes, the "American System" says that litigants should pay their own fees. However, the point seems valid that if bankruptcy attorney's are compensated less than non-bankruptcy attorney' then they are not being treated equally. Don't we hear all the time that equality is what we should strive for?

[O.C. Ogilvy]

Originally Posted by greywar

Title is misleading.

Title has been modified.

[katzpaw]

Originally Posted by O.C. Ogilvy

Yes, the "American System" says that litigants should pay their own fees. However, the point seems valid that if bankruptcy attorney's are compensated less than non-bankruptcy attorney' then they are not being treated equally. Don't we hear all the time that equality is what we should strive for?

It's a fight between two large corporations. The bankruptcy law firm got their base $113 million but wanted an additional $22 million in "fee enhancements" because of their "extraordinary work" for the client. ASARCO disagreed with the $22 million and fought it in court - and a judge awarded $4 million not the $22 million. The SCOTUS case was about the lawyers wanting ASARCO to pay an additional $5 million - the amount it cost them in legal fees to fight for the $22 million. SCOTUS sided with ASARCO.
(I believe I have the above correct).

[O.C. Ogilvy]

Originally Posted by katzpaw

It's a fight between two large corporations. The bankruptcy law firm got their base $113 million but wanted an additional $22 million in "fee enhancements" because of their "extraordinary work" for the client. ASARCO disagreed with the $22 million and fought it in court - and a judge awarded $4 million not the $22 million. The SCOTUS case was about the lawyers wanting ASARCO to pay an additional $ 5 million - the amount it cost them in legal fees to fight for the $22 million. SCOTUS sided with ASARCO.
(I believe I have the above correct).

All the above is true. The court was asked to make an exception to the rule that requires litigants to pay their own court costs, and by denying the exception the amicus curie (friend of the court) brief referenced above claims that bankruptcy attorney's may be at a disadvantage and not be willing to do bankruptcy work. That hardly seems fair.

[O.C. Ogilvy]

Support lawyer's rights! End bankruptcy attorney income inequality!