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Oklahoma Accidentally Abolishes the American Rule for Attorney Fees

May 17, 2017 | Posted in : Contingency Fees / POF, Fee Award, Fee Shifting, Prevailing Party Issues

A recent the Above the Law story by Joe Patrice, “State Accidentally Abolishes ‘American Rule’ for Attorney Fees,” reports that Oklahoma has mistakenly abolished the "American Rule" in attorney fees.  The story reads:

The so-called “American Rule” always kicks off a lively if obnoxiously hypothetical gunnerstorm in Torts.   One gunner will ask, “Why doesn’t the loser pay — why should access to justice come with a price tag?”  Then another will point out that the alternative would actually chill claims because victims would always fear being left holding the bag.  Another will talk about the relative virtue and vice of contingency fees, and before you know it, the whole class has whisked by and the only substantive lessons you managed to glean from the last hour and a half are that (a) America generally makes both sides pay their own fees, (b) none of this will be on the exam, and, (c) you hate everyone in your section.

Because no one seriously expects the American Rule to go away any time soon.  Unless, of course, you live in a state that populates its state legislature with stuffed shirts whose policy curiosity runs as deep as drive-time talk radio.  Those states might just overturn a foundational aspect of American civil litigation by accident.

How is that even possible?

Well, Oklahoma managed to dig deep and pull off the impressive feat in a bill signed into law by Governor Mary Fallin last week.  This is the sort of thing that happens when there are only five lawyers in the entire state legislature…and one of them decides to blow up the landscape of civil litigation.

It all began with a bill expanding rights for child victims of sexual abuse, which is the sort of wildly popular measure that mischievous bulls**t always gets attached to because no one wants to go back to Bumbledydick County and face a campaign about how they voted against abused kids.

Now one might think that an error like this is surely the fault of Byzantine overlapping statutes and vestigial clauses that only a seasoned expert could have noticed.  But you’d be wrong.

The law in question set limitations periods for all “Civil actions other than for the recovery of real property” and enumerates contract actions, trespass, a variety of personal property torts, libel, slander, assault, etc. and then concludes with:

In any action brought pursuant to the provisions of subsection A of this section, the court shall award court costs and reasonable attorney fees to the prevailing party.

Oklahoma lawyers are understandably shocked by this turn of events.  From NonDoc:

“It’s called the American Rule for a reason.  To my knowledge, there’s not a single jurisdiction in the United States that awards fees to the prevailing party in all civil cases,” said one Oklahoma attorney asked about the situation.  “This would change the way that law is practiced in such a fundamental way that I don’t think anyone in this market can really predict its consequences.”

Senator Anthony Sykes, a graduate of the University of Oklahoma College of Law, who uses this legal acumen to pass obviously unenforceable abortion bans and restrictions on the non-existent threat of Sharia law, authored the bill and apparently thinks most “tort reform” efforts just don’t go far enough.  It’s hard to imagine the rest of the legislature even understood what was going on.

According to NonDoc, legislators are slowly starting to figure out what happened:

Shortly thereafter, attorneys around the state began to realize the American Rule had been terminated, thus forcing the losing party in civil cases to pay the legal fees of the prevailing party.  Functionally, that would disincentivize citizens — especially low-income ones — from filing lawsuits in Oklahoma courts.

The saga could dramatically change the Oklahoma legal arena if lawmakers — now aware of what they really voted on — fail to repeal 28 words of new law that they appear to have misunderstood initially.

At this point, Oklahoma should just close up shop and turn everything over to a rooster that can play bingo.  Admittedly the rooster is softer on Medicare expansion efforts than most Oklahoma voters would like, but even he understands the dynamics of personal injury.  It’s why he’s never crossed the road.

On the plus side, law professors out there may finally get a chance to throw this into an issue-spotter on top of some choice-of-law questions next year.  That’ll make the gunners happy.