Page:Baker Botts L.L.P. v. ASARCO LLC.pdf/2

Syllabus

phrase “ ‘reasonable compensation for services rendered’ necessarily implies loyal and disinterested service in the interest of” a client, Woods v. City Nat. Bank & Trust Co. of Chicago, 312 U. S. 262, 268. Time spent litigating a fee application against the bankruptcy estate’s administrator cannot be fairly described as “labor performed for”—let alone “disinterested service to”—that administrator. Had Congress wished to shift the burdens of fee-defense litigation under §330(a)(1), it could have done so, as it has done in other Bankruptcy Code provisions, e. g., §110(i)(1)(C). Pp. 127–129.

(c) Neither the law firms nor the United States, as amicus curiae, offers a persuasive theory for why §330(a)(1) should override the American Rule in this context. Pp. 129–135.

(1) The law firms’ view—that fee-defense litigation is part of the “services rendered” to the estate administrator—not only suffers from an unnatural interpretation of the term “services rendered,” but would require a particularly unusual deviation from the American Rule, as it would permit attorneys to be awarded fees for unsuccessfully defending fee applications when most fee-shifting provisions permit awards only to “a ‘prevailing party,’ ” Hardt, supra, at 253. P. 130.

(2) The Government’s argument is also unpersuasive. Its theory— that fees for fee-defense litigation must be understood as a component of the “reasonable compensation for [the underlying] services rendered” so that compensation for the “actual … services rendered” will not be diluted by unpaid time spent litigating fees—cannot be reconciled with the relevant text. Section 330(a)(1) does not authorize courts to award “reasonable compensation,” but “reasonable compensation for actual, necessary services rendered,” and the Government properly concedes that litigation in defense of a fee application is not a “service.” And §330(a)(6), which presupposes compensation “for the preparation of a fee application,” does not suggest that time spent defending a fee application must also be compensable. Commissioner v. Jean, 496 U. S. 154, distinguished.

The Government’s theory ultimately rests on the flawed policy argument that a “judicial exception” is needed to compensate fee-defense litigation and safeguard Congress’ aim of ensuring that talented attorneys take on bankruptcy work. But since no attorneys are entitled to such fees absent express statutory authorization, requiring bankruptcy attorneys to bear the costs of their fee-defense litigation under §330(a)(1) creates no disincentive to bankruptcy practice. And even if this Court believed that uncompensated fee-defense litigation would fall particularly hard on the bankruptcy bar, it has no “roving authority … to allow counsel fees … whenever [it] might deem them warranted,” Alyeska Pipeline, supra, at 260. Pp. 131–135.