Seventh Circuit Reminds Attorneys to Conduct “Reasonable Amount of Legal Research” Before Filing Claims

20 October 2014 Wisconsin Appellate Law Blog

Under the federal civil rights statutes, plaintiffs who prevail ordinarily receive an award of attorneys’ fees that must be paid by the defendant. But, in order not to deter plaintiffs from filing such claims, the reverse is not true. Indeed, only in rare cases do courts award prevailing defendants their fees: an award is appropriate only where a plaintiff’s claim is frivolous, unreasonable, or without foundation. The Seventh Circuit, in an opinion by Judge Rovner, recently came across just such a case.

In Bluestein v. Central Wisconsin Anesthesiology, Nos. 13-1374, 14-1256 & 14-1257 (7th Cir. Oct. 15, 2014), the plaintiff was a practicing anesthesiologist who, along with 15 other physicians, was a shareholder of Central Wisconsin Anesthesiology. She alleged that she was fired from her position because of a disability and filed suit under the Americans with Disabilities Act. But the ADA, like other Civil Rights Statutes, protects employees, not employers. Because Bluestein had a vote on all major decisions (including the vote to terminate her from the practice), she was not an employee of Central Wisconsin, but rather an owner-employer. 

Because Bluestein was not an employee, her claims under the ADA were doomed from the start. And because Bluestein’s claims were frivolous, the district court (Judge Crabb of the Western District) awarded Central Wisconsin its attorneys’ fees spent defending the action. In addressing the legal shortfalls of Bluefield’s claim, the Seventh Circuit said that Judge Crabb had concluded that “a reasonable amount of legal research should have alerted counsel to the implausibility of success on any of plaintiff’s claims of discrimination.” Thus, it was not just Bluestein’s fault, but also her attorneys’, for bringing a frivolous claim, so the fee award was entered against both Bluestein and her attorney.

With one court already having found the claims frivolous, Bluestein and her attorney tempted fate by appealing. Like district courts, appellate courts have the authority to award fees for frivolous appeals. Judging by the Seventh Circuit’s opinion, Bluestein and her lawyer may have escaped further sanctions by the skin of their teeth. The Seventh Circuit affirmed the judgment and award of attorneys’ fees and appeared to agree with the district court’s opinion in its entirety. Yet despite finding that “[p]oor judgment may have driven the appeal here,” the court declined to add an award of appellate attorneys’ fees on top of the district court’s award. Noting that the decision to award attorneys’ fees on appeal is “permissive rather than mandatory,” the court said that “[t]he sanctions below were substantial and no useful purpose would be served in ordering the plaintiff to pay further attorneys’ fees to Central Wisconsin.” Having upheld Judge Crabb’s exercise of discretion to award fees, the Seventh Circuit exercised its own discretion not to pile on.

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