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The Missouri Supreme Court Weighs in on Recovery of Litigation Expenses by a Prevailing Party in a Discrimination Case under the Missouri Human Rights Act

On May 12, 2020, the Missouri Supreme Court issued its decision in Wilson v. City of Kansas City, a disability discrimination case brought by a former city employee, James Wilson (“Wilson”), against the City of Kansas City (the “City”). No. SC 97712, 2020 WL 2392483, at *1.

In 2011, Wilson began working for the City as an equipment operator in the solid waste division of its public works department. Id. Wilson injured his elbow on the job and was diagnosed with epicondylitis. Id. After some back-and-forth between Wilson and the City about how to reasonably accommodate him in the workplace, the City fired him in 2013 on the basis he “was unable to perform his regular job duties.” Id. at *2.

In 2014, Wilson sued the City for disability discrimination and retaliation under the Missouri Human Rights Act (“MHRA”). Id. The case proceeded to trial and the jury returned a verdict in favor of Wilson, awarding him actual and punitive damages. Id. Wilson thereafter filed a motion to amend the judgment to add attorney fees, injunctive relief, costs, expenses, front pay, and increased seniority. Id. The trial court sustained the motion in part and amended the judgment to award $308,308.75 in attorney fees and $9,644.56 in litigation expenses. Id. The City appealed and the Missouri Supreme Court accepted the case after a decision by the court of appeals. Id.

Before the Missouri Supreme Court, the City raised two claims of error, one of which asserted that the trial court erred in awarding Wilson litigation expenses “because no statute authorizes an award of litigation expenses in an MHRA case.” Id. at *3. In particular, the City argued “the MHRA permits a prevailing party to recover only its court costs and attorney fees and the MHRA’s provision for ‘court costs’ includes only court costs permitted by explicit statutory authority.” Id. at *4. In response, Wilson “agree[d] litigation expenses are generally available without statutory authorization but asserts an award of litigation expenses in an MHRA case is authorized by either section 514.060 as costs or by section 213.111.2 as court costs or attorney fees.” Id.

The Missouri Supreme Court began its analysis by noting “[c]ourts possess ‘no inherent power to award costs’” and costs “may b[e] awarded only pursuant to express statutory authority.” Id. at *5. Further, it noted “[s]tatutes conferring the power to tax costs are strictly construed.” Id. The Supreme Court noted section 514.060 was inapposite because it contained a specific exception for costs in civil cases that are covered by a different law, and the MHRA was a different law. Id. In distinguishing Section 514.060, the Court observed that the court of appeals, in several cases, erred in finding that both Section 514.060 and Section 213.111.2 could apply in an MHRA case. Id. (noting “[t]hese cases misstate the law”).

Turning to Section 213.111.2 of the MHRA, the Supreme Court noted Wilson “does not argue any statutory language in section 213.111.2 expressly authorizes litigation costs to be awarded as court costs.” Id. Instead, Wilson argued “litigation expenses, generally, may be awarded as court costs because a plaintiff in an MHRA case must be compensated for all the costs of going to court.” Id. Because Wilson failed to “cite any statute that identifies generalized litigation expenses as allowable court costs” and “[b]ecause no statute specifically identifies litigation expenses as court costs, litigation expenses cannot be taxed as costs under section 213.111.2.” Id.

However, the Supreme Court’s analysis did not end there. The Court then turned its attention to the question of whether litigation expenses could be recovered as part of attorney fees under the MHRA. Id. at *6. The City made similar arguments on this point: “the failure of the statute to expressly provide for the recovery of litigation expenses is evidence the legislature did not intend litigation expenses to be recoverable in an MHRA action.” Id. Wilson countered that “out-of-pocket expenses have long been recoverable as attorney fees in comparable Title VII cases in federal courts” and that “the meaning of section 213.111.2’s fee-shifting provision should be informed by” such federal decisions.” Id.

The Supreme Court began its analysis of this question with invocation of the “American Rule”—that is, “in the absence of statutory authorization or contractual agreement, with few exceptions, parties bear the expense of their own attorney fees.” Id. And the Court noted the MHRA is a statute that authorizes attorney fee awards. Id. Citing both Missouri and federal discrimination decisions, the Court noted that these statutory claims are intended to make victims of discrimination whole in bringing suit. Id. at *6-7. And the “MHRA makes a plaintiff whole only if section 213.111.2 authorizes an award of reasonable attorney fees that includes an attorney’s reasonable out-of-pocket expenses normally charged to a fee-paying client.” Id. at *7.

With this analysis, the Supreme Court turned to the facts of the case. The Court reasoned that, because the trial court awarded litigation expenses as separate from attorney fees (and thus did not determine whether the expenses requested were reasonable out-of-pocket expenses an attorney in the local community world normally charge to a fee-paying client), the trial court erred. Id. Accordingly, the Court reversed the award of litigation expenses in the judgment to give the trial court “the opportunity to consider which, if any, of the out-of-pocket expenses of [Wilson’s] attorneys can be awarded as attorney fees.” Id.

The takeaway from Wilson is that litigants should be careful in how they characterize and request certain expenses or fees incurred in the course of litigating a lawsuit to ensure that the statute under which a lawsuit is brought authorizes an award of said expenses or fees. If not properly handled or requested, such fees or expenses may be unrecoverable, even though they were necessarily incurred to bring the lawsuit to completion.