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Milam v. Fleetwood Homes of N.C.

West Virginia's Top Court Defers Consideration of Fee-Shifting Statute

    

West Virginia’s highest court forced to postpone ruling on propriety of attorneys fees award when defendant filed for bankruptcy.

Background


Carl and Terri Milam won a jury verdict against the manufacturer of a defective mobile home. Pursuant to the state consumer protection statute the court also awarded litigation costs and attorneys fees against the defendant. Defendants appealed, arguing attorneys fees should be calculated as a percentage of damage awards contrary to the language in the statute and abundant court precedent that calculates attorneys fees awards based on the hours expended times the reasonable hourly rate.

In the American legal system, each party typically pays its own legal fees. A winning party may be awarded compensation for injuries, but it does not automatically receive compensation for the costs and attorneys fees incurred in bringing the lawsuit.

In order to ensure the protection of important rights without burdening taxpayers for the cost of enforcement, however, legislatures enact “fee-shifting” statutes that allow successful plaintiffs to recover costs and attorneys fees from defendants who have violated the law. West Virginia’s consumer protection statutes carry a fee-shifting provision. But the manufacturer of Milam’s home argued that fee awards should not be based on the reasonable hourly rate multiplied by the time spent on the case because that method produced an award “disproportionate” to the compensation awarded the Milams.

AARP Foundation Litigation attorneys filed AARP’s friend-of-the-court brief joined by other national organizations. The brief emphasized the critical role fee-shifting statutes play in curbing marketplace abuses, supplementing regulatory oversight by enabling consideration in a judicial venue and advancing the public interest. The brief detailed instances in which Congress and the West Virginia legislature have carefully and with much deliberation enacted fee-shifting statutes. Imposing a requirement that the awards be proportionate to the award of damages undermines the purpose of such awards: to ensure that consumers can find attorneys to take their cases and enforce the law.

What’s at Stake

A right that cannot be enforced is no right at all. Tying attorney fees to damage awards would eviscerate the statutory framework legislatures have enacted. Attorneys fees are supposed to enable plaintiffs to find attorneys willing to represent them to bring meritorious claims, however small the monetary damage might be, because the rights at issue have been deemed by the legislature to be extremely important. A proportionality rule would create an incentive to bring only those civil rights and consumer cases that would produce large damage awards — a conflict with the very purpose of the underlying statutes.

The case is also important to AARP because of the underlying dispute. Manufactured homes provide affordable housing to many older people, particularly in rural areas, but it is not a viable option unless it meets minimally acceptable standards of quality. Unfortunately, many unsuspecting buyers purchase homes that do not meet required standards from manufacturers who do not honor their warranties. Fee-shifting statutes provide a means for consumers to find attorneys to represent their interests and protect their financial security.

Case Status


Milam v. Fleetwood Homes of N.C. is before the West Virginia Supreme Court of Appeals. It has been stayed because defendant filed for bankruptcy.

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Our legal advocacy initiatives  - conducted by AARP Foundation Litigation (AFL) - reflect more than 15 years of work in federal and state courts across the country. Through our efforts, we support the Foundation’s four priority areas: Hunger, Income, Housing and Isolation, and ensure that those 50 and older have a voice in the laws and policies that affect their daily lives.