MARX v. GENERAL REVENUE CORPORATION

NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

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No. 11–1175

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OLIVEA MARX, PETITIONER v. GENERAL REVENUE CORPORATION

on writ of certiorari to the united states court of appeals for the tenth circuit

[February 26, 2013]

Justice Thomas delivered the opinion of the Court.

Federal Rule of Civil Procedure 54(d)(1) gives district courts discretion to award costs to prevailing defendants “[u]nless a federal statute . . . provides otherwise.” The Fair Debt Collection Practices Act (FDCPA), 91Stat. 881, 15 U. S. C. §1692k(a)(3), provides that “[o]n a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.” This case presents the question whether §1692k(a)(3) “provides otherwise” than Rule 54(d)(1). We conclude that §1692k(a)(3) does not “provid[e] otherwise,” and thus a district court may award costs to prevailing defendants in FDCPA cases without finding that the plaintiff brought the case in bad faith and for the purpose of harassment.

I

Petitioner Olivea Marx defaulted on a student loan guaranteed by EdFund, a division of the California Student Aid Commission. In September 2008, EdFund hired respondent General Revenue Corporation (GRC) to collect the debt. One month later, Marx filed an FDCPA enforcement action against GRC. 1 Marx alleged that GRC had violated the FDCPA by harassing her with phone calls several times a day and falsely threatening to garnish up to 50% of her wages and to take the money she owed directly from her bank account. Shortly after the complaint was filed, GRC made an offer of judgment under Federal Rule of Civil Procedure 68 to pay Marx $1,500, plus reasonable attorney’s fees and costs, to settle any claims she had against it. Marx did not respond to the offer. She subsequently amended her complaint to add a claim that GRC unlawfully sent a fax to her workplace that requested information about her employment status.

Following a 1-day bench trial, the District Court found that Marx had failed to prove any violation of the FDCPA. As the prevailing party, GRC submitted a bill of costs seeking $7,779.16 in witness fees, witness travel expenses, and deposition transcript fees. The court disallowed several items of costs and, pursuant to Federal Rule of Civil Procedure 54(d)(1), ordered Marx to pay GRC $4,543.03. Marx filed a motion to vacate the award of costs, arguing that the court lacked authority to award costs under Rules 54(d)(1) and 68(d) because 15 U. S. C. §1692k(a)(3) sets forth the exclusive basis for awarding costs in FDCPA cases. 2 Section 1692k(a)(3) provides, in relevant part: “On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.” Marx argued that because the court had not found that she brought the case in bad faith and for the purpose of harassment, GRC was not entitled to costs. The District Court rejected Marx’s argument, concluding that §1692k(a)(3) does not displace a court’s discretion to award costs under Rule 54(d)(1) and that costs should also be awarded under Rule 68(d).

The Tenth Circuit affirmed but agreed only with part of the District Court’s reasoning. In particular, the court disagreed that costs were allowed under Rule 68(d). 668 F. 3d 1174, 1182 (2011). It explained that “Rule 68 applies only where the district court enters judgment in favor of a plaintiff” for less than the amount of the settlement offer and not where the plaintiff loses outright. Ibid. (citing Delta Air Lines, Inc. v. August, 450 U. S. 346, 352 (1981) ). Because the District Court had not entered judgment in favor of Marx, the court concluded that costs were not allowed under Rule 68(d). 668 F. 3d, at 1182. Nevertheless, the court found that costs were allowed under Rule 54(d)(1), which grants district courts discretion to award costs to prevailing parties unless a federal statute or the Federal Rules of Civil Procedure provide otherwise. Id., at 1178, 1182. After describing the “venerable” presumption that prevailing parties are entitled to costs, id., at 1179, the court concluded that nothing in the text, history, or purpose of §1692k(a)(3) indicated that it was meant to displace Rule 54(d)(1), id., at 1178–1182. Judge Lucero dissented, arguing that “[t]he only sensible reading of [§1692k(a)(3)] is that the district court may only award costs to a defendant” upon finding that the action was brought in bad faith and for the purpose of harassment and that to read it otherwise rendered the phrase “and costs” superfluous. Id., at 1187 (emphasis in original).

We granted certiorari, 566 U. S. ___ (2012), to resolve a conflict among the Circuits regarding whether a prevailing defendant in an FDCPA case may be awarded costs where the lawsuit was not brought in bad faith and for the purpose of harassment. Compare 668 F. 3d, at 1182 (case below), with Rouse v. Law Offices of Rory Clark, 603 F. 3d 699, 701 (CA9 2010). We now affirm the judgment of the Tenth Circuit.

II

As in all statutory construction cases, we “ ‘assum[e] that the ordinary meaning of [the statutory] language accurately expresses the legislative purpose.’ ” Hardt v. Reliance Standard Life Ins. Co., 560 U. S. ___, ___ (2010) (slip op., at 8) (quoting Gross v. FBL Financial Services, Inc., 557 U. S. 167, 175 (2009) (alteration in original)). In this case, we must construe both Rule 54(d)(1) and §1692k(a)(3) and assess the relationship between them.

A

Rule 54(d)(1) is straightforward. It provides, in relevant part: “Unless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party.”

As the Tenth Circuit correctly recognized, Rule 54(d)(1) codifies a venerable presumption that prevailing parties are entitled to costs. 3 Notwithstanding this presumption, the word “should” makes clear that the decision whether to award costs ultimately lies within the sound discretion of the district court. See Taniguchi v. Kan Pacific Saipan, Ltd., 566 U. S. ___, ___ (2012) (slip op., at 4) (“Federal Rule of Civil Procedure 54(d) gives courts the discretion to award costs to prevailing parties”). Rule 54(d)(1) also makes clear, however, that this discretion can be displaced by a federal statute or a Federal Rule of Civil Procedure that “provides otherwise.”

A statute “provides otherwise” than Rule 54(d)(1) if it is “contrary” to the Rule. See 10 J. Moore, Moore’s Federal Practice §54.101[1][c], p. 54–159 (3d ed. 2012) (hereinafter 10 Moore’s). Because the Rule grants district courts discretion to award costs, a statute is contrary to the Rule if it limits that discretion. A statute may limit a court’s discretion in several ways, and it need not expressly state that it is displacing Rule 54(d)(1) to do so. For instance, a statute providing that “plaintiffs shall not be liable for costs” is contrary to Rule 54(d)(1) because it precludes a court from awarding costs to prevailing defendants. See, e.g., 7 U. S. C. §18(d)(1) (“The petitioner shall not be liable for costs in the district court”). Similarly, a statute providing that plaintiffs may recover costs only under certain conditions is contrary to Rule 54(d) because it precludes a court from awarding costs to prevailing plaintiffs when those conditions have not been satisfied. See, e.g., 28 U. S. C. §1928 (“[N]o costs shall be included in such judgment, unless the proper disclaimer has been filed in the United States Patent and Trademark Office”).

Importantly, not all statutes that provide for costs are contrary to Rule 54(d)(1). A statute providing that “the court may award costs to the prevailing party,” for example, is not contrary to the Rule because it does not limit a court’s discretion. See 10 Moore’s §54.101[1][c], at 54–159 (“A number of statutes state simply that the court may award costs in its discretion. Such a provision is not contrary to Rule 54(d)(1) and does not displace the court’s discretion under the Rule”).

Marx and the United States as amicus curiae suggest that any statute that specifically provides for costs displaces Rule 54(d)(1), regardless of whether it is contrary to the Rule. Brief for Petitioner 17; Brief for United States as Amicus Curiae 11–12 (hereinafter Brief for United States). The United States relies on the original 1937 version of Rule 54(d)(1), which provided, “ ‘Except when express provision therefor is made either in a statute of the United States or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs.’ ” Id., at 12 (quoting Rule). Though the Rules Committee updated the language of Rule 54(d)(1) in 2007, the change was “stylistic only.” Advisory Committee’s Notes, 28 U. S. C. App., p. 734 (2006 ed., Supp. V). Accordingly, the United States asserts that any “express provision” for costs should displace Rule 54(d)(1).

We are not persuaded, however, that the original version of Rule 54(d) should be interpreted as Marx and the United States suggest. The original language was meant to ensure that Rule 54(d) did not displace existing costs provisions that were contrary to the Rule. Under the prior language, statutes that simply permitted a court to award costs did not displace the Rule. See 6 J. Moore, Moore’s Federal Practice §54.71[1], p. 54–304 (2d ed. 1996) (“[W]hen permissive language is used [in a statute regarding costs] the district court may, pursuant to Rule 54(d), exercise a sound discretion relative to the allowance of costs”). Rather, statutes had to set forth a standard for awarding costs that was different from Rule 54(d)(1) in order to displace the Rule. See Friedman v. Ganassi, 853 F. 2d 207, 210 (CA3 1988) (holding that 15 U. S. C. §77k(e) is not an “express provision” under Rule 54(d) because it does not provide an “alternative standard” for awarding taxable costs). The original version of Rule 54(d) is consistent with our conclusion that a statute must be contrary to Rule 54(d)(1) in order to displace it. 4

B

We now turn to whether §1692k(a)(3) is contrary to Rule 54(d)(1). The language of §1692k(a)(3) and the context surrounding it persuade us that it is not.

1

The second sentence of §1692k(a)(3) provides: “On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.” 5

GRC contends that the statute does not address whether costs may be awarded in this case—where the plaintiff brought the case in good faith—and thus it does not set forth a standard for awarding costs that is contrary to Rule 54(d)(1). In its view, Congress intended §1692k(a)(3) to deter plaintiffs from bringing nuisance lawsuits. It, therefore, expressly provided that when plaintiffs bring an action in bad faith and for the purpose of harassment, the court may award attorney’s fees and costs to the defendant. The statute does address this type of case—i.e., cases in which the plaintiff brings the action in bad faith and for the purpose of harassment. But it is silent where bad faith and purpose of harassment are absent, and silence does not displace the background rule that a court has discretion to award costs.

Marx and the United States take the contrary view. They concede that the language does not expressly limit a court’s discretion to award costs under Rule 54(d)(1), Brief for Petitioner 10; Brief for United States 19, but argue that it does so by negative implication. Invoking the expressio unius canon of statutory construction, they contend that by specifying that a court may award attorney’s fees and costs when an action is brought in bad faith and for the purpose of harassment, Congress intended to preclude a court from awarding fees and costs when bad faith and purpose of harassment are absent. They further argue that unless §1692k(a)(3) sets forth the exclusive basis on which a court may award costs, the phrase “and costs” would be superfluous. According to this argument, Congress would have had no reason to specify that a court may award costs when a plaintiff brings an action in bad faith if it could have nevertheless awarded costs under Rule 54(d)(1). Finally, the United States argues that §1692k(a)(3) is a more specific cost statute that displaces Rule 54(d)(1)’s more general rule.

The context surrounding §1692k(a)(3) persuades us that GRC’s interpretation is correct.

2

The argument of Marx and the United States depends critically on whether §1692k(a)(3)’s allowance of costs creates a negative implication that costs are unavailable in any other circumstances. The force of any negative implication, however, depends on context. We have long held that the expressio unius canon does not apply “unless it is fair to suppose that Congress considered the unnamed possibility and meant to say no to it,” Barnhart v. Peabody Coal Co., 537 U. S. 149, 168 (2003) , and that the canon can be overcome by “contrary indications that adopting a particular rule or statute was probably not meant to signal any exclusion,” United States v. Vonn, 535 U. S. 55, 65 (2002) . In this case, context persuades us that Congress did not intend §1692k(a)(3) to foreclose courts from awarding costs under Rule 54(d)(1).

First, the background presumptions governing attorney’s fees and costs are a highly relevant contextual feature. As already explained, under Rule 54(d)(1) a prevailing party is entitled to recover costs from the losing party unless a federal statute, the Federal Rules of Civil Procedure, or a court order “provides otherwise.” The opposite presumption exists with respect to attorney’s fees. Under the “bedrock principle known as the ‘ “American Rule,” ’ ” “[e]ach litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise.” Hardt, 560 U. S., at ___ (slip op., at 9) (quoting Ruckelshaus v. Sierra Club, 463 U. S. 680, 683 (1983) ). Notwithstanding the American Rule, however, we have long recognized that federal courts have inherent power to award attorney’s fees in a narrow set of circumstances, including when a party brings an action in bad faith. See Chambers v. NASCO, Inc., 501 U. S. 32 –46 (1991) (explaining that a court has inherent power to award attorney’s fees to a party whose litigation efforts directly benefit others, to sanction the willful disobedience of a court order, and to sanction a party who has acted in bad faith, vexatiously, wantonly, or for oppressive reasons); Alyeska Pipeline Service Co. v. Wilderness Society, 421 U. S. 240 –259 (1975) (same).

It is undisputed that §1692k(a)(3) leaves the background rules for attorney’s fees intact. The statute provides that when the plaintiff brings an action in bad faith, the court may award attorney’s fees to the defendant. But, as noted, a court has inherent power to award fees based on a litigant’s bad faith even without §1692k(a)(3). See Chambers, supra, at 45–46. Because §1692k(a)(3) codifies the background rule for attorney’s fees, it is dubious to infer congressional intent to override the background rule with respect to costs. The statute is best read as codifying a court’s pre-existing authority to award both attorney’s fees and costs. 6

Next, the second sentence of §1692k(a)(3) must be understood in light of the sentence that precedes it. 7 The first sentence of §1692k(a)(3) provides that defendants who violate the FDCPA are liable for the plaintiff’s attorney’s fees and costs. The second sentence of §1692k(a)(3) similarly provides that plaintiffs who bring an action in bad faith and for the purpose of harassment may be liable for the defendant’s fees and costs.

If Congress had excluded “and costs” in the second sentence, plaintiffs might have argued that the expression of costs in the first sentence and the exclusion of costs in the second meant that defendants could only recover attorney’s fees when plaintiffs bring an action in bad faith. By adding “and costs” to the second sentence, Congress foreclosed that argument, thereby removing any doubt that defendants may recover costs as well as attorney’s fees when plaintiffs bring suits in bad faith. See Ali v. Federal Bureau of Prisons, 552 U. S. 214, 226 (2008) (explaining that a phrase is not superfluous if used to “remove . . . doubt” about an issue); Fort Stewart Schools v. FLRA, 495 U. S. 641, 646 (1990) (explaining that “technically unnecessary” examples may have been “inserted out of an abundance of caution”). The fact that there might have been a negative implication that costs are precluded, depending on whether Congress included or excluded the phrase “and costs,” weighs against giving effect to any implied limitation.

Finally, the language in §1692k(a)(3) sharply contrasts with other statutes in which Congress has placed conditions on awarding costs to prevailing defendants. See, e.g., 28 U. S. C. §1928 (“[N]o costs shall be included in such judgment, unless the proper disclaimer has been filed in the United States Patent and Trademark Office prior to the commencement of the action” (emphasis added)); 42 U. S. C. §1988(b) (“[I]n any action brought against a judicial officer . . . such officer shall not be held liable for any costs . . . unless such action was clearly in excess of such officer’s jurisdiction” (emphasis added)).

Although Congress need not use explicit language to limit a court’s discretion under Rule 54(d)(1), its use of explicit language in other statutes cautions against inferring a limitation in §1692k(a)(3). These statutes confirm that Congress knows how to limit a court’s discretion under Rule 54(d)(1) when it so desires. See Small v. United States, 544 U. S. 385, 398 (2005) (Thomas, J., dissenting) (explaining that “Congress’ explicit use of [language] in other provisions shows that it specifies such restrictions when it wants to do so”). Had Congress intended the second sentence of §1692k(a)(3) to displace Rule 54(d)(1), it could have easily done so by using the word “only” before setting forth the condition “[o]n a finding by the court that an action . . . was brought in bad faith and for the purpose of harassment . . . .” 8

3

As the above discussion suggests, we also are not persuaded by Marx’s objection that our interpretation renders the phrase “and costs” superfluous. As noted, supra, at 11, the phrase “and costs” would not be superfluous if Congress included it to remove doubt that defendants may recover costs when plaintiffs bring suits in bad faith. But even assuming that our interpretation renders the phrase “and costs” superfluous, that would not alter our conclusion. The canon against surplusage is not an absolute rule, see Arlington Central School Dist. Bd. of Ed. v. Murphy, 548 U. S. 291 , n. 1 (2006) (“While it is generally presumed that statutes do not contain surplusage, instances of surplusage are not unknown”); Connecticut Nat. Bank v. Germain, 503 U. S. 249, 253 (1992) (“Redundancies across statutes are not unusual events in drafting . . . ”), and it has considerably less force in this case.

First, the canon against surplusage “assists only where a competing interpretation gives effect to every clause and word of a statute.” Microsoft Corp. v. i4i Ltd. Partnership, 564 U. S. ___, ___ (2011) (slip op., at 12) (internal quotation marks omitted). But, in this case, no interpretation of §1692k(a)(3) gives effect to every word. Both Marx and the United States admit that a court has inherent power to award attorney’s fees to a defendant when the plaintiff brings an action in bad faith. Because there was, consequently, no need for Congress to specify that courts have this power, §1692k(a)(3) is superfluous insofar as it addresses attorney’s fees. In light of this redundancy, we are not overly concerned that the reference to costs may be redundant as well.

Second, redundancy is “hardly unusual” in statutes addressing costs. See id., at ___ (slip op., at 13). Numerous statutes overlap with Rule 54(d)(1). See, e.g., 12 U. S. C. §2607(d)(5) (“[T]he court may award to the prevailing party the court costs of the action”); §5565(b) (2006 ed., Supp. V) (“the [Consumer Financial Protection] Bureau . . . may recover its costs in connection with prosecuting such action if [it] . . . is the prevailing party in the action”); 15 U. S. C. §6104(d) (2006 ed.) (“The court . . . may award costs of suit and reasonable fees for attorneys and expert witnesses to the prevailing party”); §7706(f)(4) (“In the case of any successful action . . . the court, in its discretion, may award the costs of the action”); §7805(b)(3) (“[T]he court may award to the prevailing party costs”); §8131(2) (2006 ed., Supp. V) (“The court may also, in its discretion, award costs and attorneys fees to the prevailing party”); 29 U. S. C. §431(c) (2006 ed.) (“The court . . . may, in its discretion . . . allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action”); 42 U. S. C. §3612(p) (“[T]he court . . . in its discretion, may allow the prevailing party . . . a reasonable attorney’s fee and costs”); §3613(c)(2) (“[T]he court, in its discretion, may allow the prevailing party . . . a reasonable attorney’s fee and costs”); 47 U. S. C. §551(f)(2) (“[T]he court may award . . . other litigation costs reasonably incurred”).

Finally, the canon against surplusage is strongest when an interpretation would render superfluous another part of the same statutory scheme. Cf. United States v. Jicarilla Apache Nation, 564 U. S. ___, ___ (2011) (slip op., at 22) (“ ‘As our cases have noted in the past, we are hesitant to adopt an interpretation of a congressional enactment which renders superfluous another portion of that same law’ ” (quoting Mackey v. Lanier Collection Agency & Service, Inc., 486 U. S. 825, 837 (1988) )). Because §1692k(a)(3) is not part of Rule 54(d)(1), the force of this canon is diminished.

4

Lastly, the United States contends that §1692k(a)(3) “establishes explicit cost-shifting standards that displace Rule 54(d)(1)’s more general default standard.” Brief for United States 17; see also EC Term of Years Trust v. United States, 550 U. S. 429, 433 (2007) (“ ‘[A] precisely drawn, detailed statute pre-empts more general remedies’ ” (quoting Brown v. GSA, 425 U. S. 820, 834 (1976) )). Were we to accept the argument that §1692k(a)(3) has a negative implication, this argument might be persuasive. But the context of §1692k(a)(3) indicates that Congress was simply confirming the background rule that courts may award to defendants attorney’s fees and costs when the plaintiff brings an action in bad faith. The statute speaks to one type of case—the case of the bad-faith and harassing plaintiff. Because Marx did not bring this suit in bad faith, this case does not “fal[l] within the ambit of the more specific provision.” Brief for United States 13; see also RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U. S. ___, ___ (2012) (slip op., at 9) (“When the conduct at issue falls within the scope of both provisions, the specific presumptively governs . . .” (emphasis in original)). 9 Accordingly, this canon is inapplicable.

III

Because we conclude that the second sentence of §1692k(a)(3) is not contrary to Rule 54(d)(1), and, thus, does not displace a district court’s discretion to award costs under the Rule, we need not address GRC’s alternative argument that costs were required under Rule 68.

The judgment of the Court of Appeals is affirmed.

It is so ordered.

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1  The FDCPA is a consumer protection statute that prohibits certain abusive, deceptive, and unfair debt collection practices. See 15 U. S. C. §1692. The FDCPA’s private-enforcement provision, §1692k, author-izes any aggrieved person to recover damages from “any debt collector who fails to comply with any provision” of the FDCPA. §1692k(a).

2  Under Rule 68(d), if a defendant makes a settlement offer, and the plaintiff rejects it and later obtains a judgment that is less favorable than the one offered her, the plaintiff must pay the costs incurred by the defendant after the offer was made. See Fed. Rule Civ. Proc. 68(d) (“If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made”).

3  Prior to the adoption of the federal rules, prevailing parties were entitled to costs as of right in actions at law while courts had discretion to award costs in equity proceedings. See Ex parte Peterson, 253 U. S. 300 –318 (1920) (“While in equity proceedings the allowance and imposition of costs is, unless controlled by statute or rule of court, a matter of discretion, it has been uniformly held that in actions at law the prevailing party is entitled to costs as of right, except in those few cases where by express statutory provision or by established principles costs are denied” (citation omitted)); Mansfield, C. & L. M. R. Co. v. Swan, 111 U. S. 379, 387 (1884) (“[B]y the long established practice and universally recognized rule of the common law, in actions at law, the prevailing party is entitled to recover a judgment for costs . . . ”).

4  The dissent provides no stable definition of “provides otherwise.” First, it argues that a statute “provides otherwise” if it is “different” from Rule 54(d)(1). Post, at 2 (opinion of Sotomayor, J.). That interpretation renders the Rule meaningless because every statute is “dif-ferent” insofar as it is not an exact copy of the Rule. Next, it argues that a statute “provides otherwise” if it is an “ ‘express provision’ relating to costs.” Post, at 2–3. Under that view, a statute providing that “the court may award costs to the prevailing party” would “provide otherwise.” We do not think such a statute provides otherwise—it provides “same-wise,” and the treatise on which the dissent relies supports our view. See 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §2670, p. 258 (3d ed. 1998 and Supp. 2012) (“[Statutes that] are permissive in character . . . are not inconsistent with the discretion given the district court by Rule 54(d)”). Finally,the dissent seems to implicitly accept that “otherwise” means “to the contrary” in the course of arguing that a doctor’s instruction to take medication “ ‘in the morning’ ” would supersede an instruction on the medication label to “ ‘take [it] twice a day unless otherwise directed,’ ” because the patient would understand the doctor’s advice to mean that he should take the medicine “once a day, each morning.” Post, at 4. If the patient understands the doctor to mean “once a day, each morning,” we agree that such advice would “provide otherwise,” because the doctor’s order would be “contrary” to the label’s instruction. For the reasons set forth in Part II–B, however, we are not convinced that §1692k(a)(3) is “contrary” to Rule 54(d)(1).

5  It is undisputed that GRC is not entitled to costs under §1692k(a)(3) because the District Court did not find that Marx brought this action in bad faith. But Rule 54(d)(1) independently authorizes district courts to award costs to prevailing parties. The question in this case is not whether costs are allowed under §1692k(a)(3) but whether §1692k(a)(3) precludes an award of costs under Rule 54(d)(1).

6  Indeed, had Congress intended §1692k(a)(3) to foreclose a court’s discretion to award costs, it could not have chosen a more circuitous way to do so. The statute sets forth the circumstances in which a court “may” award costs. But under Marx’s and the United States’ view, the only consequence of the statute is to set forth the circumstances in which it may not award costs.

7  Section 1692k(a) provides: “Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person in an amount equal to the sum of— “(1) any actual damages sustained by such person as a result of such failure; “(2)(A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or “(B) in the case of a class action, (i) such amount for each named plaintiff as could be recovered under subparagraph (A), and (ii) such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and “(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.”

8  Marx also suggests that §1692k(a)(3) is similar to the PipelineSafety Act, 49 U. S. C. §60121(b), which provides: “The court may award costs to a prevailing defendant when the action is unreasonable, frivolous, or meritless.” We have never had occasion to interpret §60121(b) and its interaction with Rule 54(d)(1).

9  Marx, the United States, and GRC also spar over the purpose of §1692k(a)(3). Brief for Petitioner 14–16; Brief for United States 21–28; Reply Brief 11–14; Brief for Respondent 30–43. Marx and the United States contend that Congress intended to limit a court’s discretion to award costs to prevailing defendants because FDCPA plaintiffs are often poor and may be deterred from challenging unlawful debt collection practices by the possibility of being held liable for the defendant’s costs. This purposive argument cannot overcome the language and context of §1692k(a)(3), but even if it could, we find it unpersuasive. Rule 54(d)(1) does not require courts to award costs to prevailing defendants. District courts may appropriately consider an FDCPA plaintiff’s indigency in deciding whether to award costs. See Badillo v. Central Steel & Wire Co., 717 F. 2d 1160, 1165 (CA7 1983) (“[I]t is within the discretion of the district court to consider a plaintiff’s indigency in denying costs under Rule 54(d)”).

SUPREME COURT OF THE UNITED STATES

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No. 11–1175

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OLIVEA MARX, PETITIONER v. GENERAL REVENUE CORPORATION

on writ of certiorari to the united states court of appeals for the tenth circuit

[February 26, 2013]

Justice Sotomayor, with whom Justice Kagan joins, dissenting.

Federal Rule of Civil Procedure 54(d)(1) is a default standard that grants district courts discretion to award litigation costs to a prevailing party. This default, however, gives way when a federal statute includes a costs provision that “provides otherwise.” The Fair Debt Collection Practices Act (FDCPA), 91Stat. 874, 15 U. S. C. §1692 et seq., contains a costs provision, §1692k(a)(3), and it “provides otherwise.” That is apparent from the statute’s plain language, which limits a court’s discretion to award costs to prevailing defendants to cases “brought in bad faith and for the purpose of harassment.” In reaching the opposite conclusion, the Court ignores the plain meaning of both the FDCPA and Rule 54(d)(1) and renders the statutory language at issue in this case meaningless. I respectfully dissent.

I

The majority correctly recognizes, see ante, at 4, the fundamental principle of statutory construction that we begin “with the language of the statute itself.” United States v. Ron Pair Enterprises, Inc., 489 U. S. 235, 241 (1989) ; Ingalls Shipbuilding, Inc. v. Director, Office of Workers’ Compensation Programs, 519 U. S. 248, 255 (1997) ; Caminetti v. United States, 242 U. S. 470, 485 (1917) . We presume that Congress “means in a statute what it says there,” Connecticut Nat. Bank v. Germain, 503 U. S. 249, 254 (1992) , and “where . . . the statute’s language is plain, the sole function of the courts is to enforce it according to its terms.” Ron Pair, 489 U. S., at 241 (internal quotation marks omitted). This basic tenet is the appropriate starting point for interpreting both Rule 54(d)(1) and §1692k(a)(3). After invoking this principle, however, the majority casts it aside entirely in interpreting the statute and the Rule.

A

Rule 54(d)(1) states, as relevant here, that “[u]nless a federal statute . . . provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party.” The first question is what it means for a statute to “provid[e] otherwise” than Rule 54(d)(1).

Because the phrase “provides otherwise” is not defined in the Federal Rules of Civil Procedure, we look to its ordinary meaning. Asgrow Seed Co. v. Winterboer, 513 U. S. 179, 187 (1995) . In common usage, to “provide otherwise” means to “make a . . . stipulation” that is “differen[t].” Webster’s Third New International Dictionary 1598, 1827 (2002) (Webster’s Third) (defining “provide” and “otherwise,” respectively); see Random House Dictionary of the English Language 1372, 1556 (2d ed. 1987) (Random House) (“to arrange for or stipulate” “[i]n another manner”); 10 Oxford English Dictionary 984 (2d ed. 1989) (Oxford Dictionary); 12 id., at 713 (“to stipulate” “[i]n another way . . . ; in a different manner”). This reading of the plain text is confirmed by the original 1937 codification of the Rule, which made clear that any “express provision” relating to costs in a statute is sufficient to displace the default. 1

Accordingly, to displace Rule 54(d)(1), a federal statute need only address costs in a way different from, but not necessarily inconsistent with, the default. 2 The reason is straightforward. If Congress has enacted a provision with respect to costs in a statute, there is no longer any need for the default, so it gives way. This design of the Rule is sensible, because many statutes contain specific costs provisions. 10 Moore’s Federal Practice §54.101[1][c], p. 54–160 (3d ed. 2012) (noting that such statutes “are far too numerous to list comprehensively”). Rule 54(d)(1) is therefore consistent with the canon of statutory interpretation that “a precisely drawn, detailed statute pre-empts more general remedies.” Hinck v. United States, 550 U. S. 501, 506 (2007) ; Crawford Fitting Co. v. J. T. Gibbons, Inc., 482 U. S. 437, 445 (1987) ; United States v. Erika, Inc., 456 U. S. 201, 208 (1982) .

While purporting to interpret the “ordinary meaning” of Rule 54(d)(1), ante, at 4, the majority immediately abandons the ordinary meaning. The majority concludes that a statute provides otherwise for purposes of Rule 54(d)(1) only if it is “contrary” to the default. Ante, at 5. But the majority does not cite even a single dictionary definition in support of that reading, despite the oft-cited principle that a definition widely reflected in dictionaries generally governs over other possible meanings. 3 Lacking any dictionary support for its interpretation, the majority relies instead upon a treatise published nearly 60 years after the Rule’s adoption. See ante, 6–7 (citing 6 J. Moore, Moore’s Federal Practice, p. 54–304 (2d ed. 1996)).

“Otherwise” means “different.” Webster’s Third 1518; see supra, at 2–3. The majority’s preferred term of art, “contrary,” sets a higher bar; it signifies “the opposite,” or “a proposition, fact, or condition incompatible with another.” Webster’s Third 495 (emphasis added). See also American Heritage Dictionary of the English Language 399 (5th ed. 2011) (“Opposed, as in character or purpose”); 3 Oxford Dictionary 844 (“Opposed in nature or tendency; diametrically different, extremely unlike”); Random House 442 (“[O]pposite in nature or character; diametrically or mutually opposed”).

Indeed, the majority’s reading does not square with the everyday meaning of “otherwise.” Consider, for example, a medication labeled with the instruction, “take twice a day unless otherwise directed.” If a doctor advises her patient to take the medicine “in the morning,” the patient would understand her to mean that he should take the medicine once a day, each morning. Although the instruction to take the medication in the morning is not incompatible with taking it twice a day—it could be taken in the evening as well—an ordinary English speaker would interpret “otherwise” to mean that the doctor’s more specific instructions entirely supersede what is printed on the bottle. Rule 54(d)(1) is just the same: Its default is supplanted whenever Congress provides more specific instructions, not only when they are diametrically opposed to it.

B 1

Thus, the straightforward question in this case is whether §1692k(a)(3) implements a “different” standard with respect to costs than Rule 54(d)(1), and so “provides otherwise.” As relevant, §1692k(a)(3) states: “On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.”

It is readily apparent that this provision is different from the default of Rule 54(d)(1). In §1692k(a)(3), Congress described with specificity a single circumstance in which costs may be awarded. Far from merely restating a district court’s discretion to award costs, this provision imposes a prerequisite to the exercise of that discretion: a finding by the court that an action was brought in bad faith and for the purpose of harassment.

Because the text is plain, there is no need to proceed any further. Even so, relevant canons of statutory interpretation lend added support to reading §1692k(a)(3) as having a negative implication. That reading accords with the expressio unius, exclusio alterius canon, which instructs that when Congress includes one possibility in a statute, it excludes another by implication. See Chevron U. S. A. Inc. v. Echazabal, 536 U. S. 73 –81 (2002). This rule reinforces what the text makes clear. By limiting a court’s discretion to award costs to cases brought in bad faith or for the purpose of harassment, Congress foreclosed the award of costs in other circumstances. 4

Petitioner’s interpretation of the statute is also strongly favored by the rule that statutes should be read to avoid superfluity. Under this “most basic of interpretative canons, . . . ‘ “[a] statute should be constructed so that effect is given to all of its provisions, so that no part will be inoperative or superfluous, void or insignificant.” ’ ” Corley v. United States, 556 U. S. 303, 314 (2009) (quoting Hibbs v. Winn, 542 U. S. 88, 101 (2004) ). Respondent’s reading, as it mostly acknowledges, renders the entire sentence meaningless because it reiterates powers that federal courts already possess with respect to both costs and attorney’s fees. See Brief for Respondent 22–24.

The majority rejects this argument, citing the rule that this canon “ ‘assists only where a competing interpretation gives effect to every clause and word of a statute.’ ” Ante, at 13 (quoting Microsoft Corp. v. i4i Ltd. Partnership, 564 U. S. ___, ___ (2011) (slip op., at 12)). In its view, neither of the available interpretations can eliminate superfluity because the attorney’s fees provision is redundant under any reading. Ante, at 13. But the canon against superfluity surely counsels against an interpretation that renders the entire provision at issue superfluous when a competing interpretation would at least render part of the provision meaningful. Nor does the majority’s observation that redundancy is “ ‘hardly unusual,’ ” ante, at 14, in provisions relating to costs make the canon inapplicable. While Congress sometimes drafts redundant language with respect to costs, Congress did not do so in §1692(a)(3). 5 Instead, it drafted specific language that permits a court to award costs only on the satisfaction of a condition.

Interpreting §1692k(1)(3) as having a negative implication is consistent with our construction of another statute that includes similar language. In Cooper Industries, Inc. v. Aviall Services, Inc., 543 U. S. 157, 166 (2004) (opinion for the Court by Thomas, J.), we considered a provision in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U. S. C. §9613(f)(1) that provided: “[a]ny person may seek contribution . . . during . . . any civil action under section 9606 of this title” (emphasis added). We rejected the argument that the word “may” indicated that “during a civil action” was one but not the exclusive circumstance in which the right of contribution was available. 543 U. S., at 166. We instead adopted the natural reading of the text, holding that a party’s ability to seek contribution was limited by the phrase “during any civil action” and that contribution was only available while a lawsuit is pending. Ibid. The same logic applies here, because §1692k(a)(3) imposes a closely analogous condition on a court’s discretion to award costs.

2

The first sentence of §1692k(a)(3) underscores that Congress implemented a different rule than Rule 54(d)(1). That sentence provides that a debt collector who violates the FDCPA is “liable to” a prevailing plaintiff for “the costs of the action, together with a reasonable attorney’s fee as determined by the court.” This sentence makes a losing defendant always liable for the “costs of the action,” which is a clear departure from the Rule 54(d)(1) discretionary default. Cf. Taniguchi v. Kan Pacific Saipan, Ltd., 566 U. S. ___, ___ (2012) (slip op., at 4). Because Congress deviated from Rule 54(d)(1) in the first sentence of §1692k(a)(3), the most reasonable reading is that the sentence that immediately follows, which states the rule for prevailing defendants, takes a similar path.

The majority believes that its reading of the costs provision follows from the first sentence as well, but for a different reason. Ante, at 11–12. It suggests that if Congress had not included costs in the second sentence, a plaintiff might have been able to argue that the inclusion of costs in the first sentence and the exclusion of costs in the second indicated that defendants could recover only fees when an action is brought in bad faith. The majority then speculates that Congress included costs in the second sentence to foreclose that argument.

The text of the previous sentence makes plain, however, that the second sentence departs from the Rule 54(d)(1) default, and the majority offers no evidence in support of its supposition that Congress intended a different meaning. 6 Moreover, I see no basis for invoking potential confusion or indulging in speculation to explain away the words Congress chose. Ante, at 11–12. Some Members of the majority have expressed doubt about the relevance of legislative history, claiming that relying upon it is analogous to “entering a crowded cocktail party and looking . . . for one’s friends.” Conroy v. Aniskoff, 507 U. S. 511, 519 (1993) (Scalia, J., concurring in judgment). But speculating whole cloth about congressional intent, as the majority does, is surely more problematic. The majority is saved the trouble of having to look for its friends at the party; it simply invites them.

II

Reduced to its essence, the majority’s analysis turns on reading §1692k(a)(3) in the context of what it calls the “venerable presumption” that prevailing parties are entitled to costs. See ante, at 4. Even if it were appropriate to consider a background presumption rather than reading the plain text at issue, the majority’s characterization of the presumption is at best incomplete.

First, the Court’s suggestion that the presumption regarding costs is a “venerable” one in American law is an overstatement. Ibid. It is true, as the majority points out, that prior to the federal rules, “prevailing parties were entitled to costs as of right in actions at law while courts had discretion to award costs in equity proceedings.” Ante, at 4, n. 3; see Wright & Miller §2665, at 199. But the doctrine governing costs at law carved out an important exception for statutory provisions that set forth a different rule. 7 Where there was such a statute, courts would simply apply it. In its assessment of the background principles underlying its approach, the majority glosses over the longstanding expectation that Congress often enacts different rules with respect to costs, and when it does, these rules govern.

Second, Rule 54(d)(1) embraces this long-recognized exception because it specifies that a statute can displace its default rule. To repeat, Rule 54(d)(1) merely enacts a default standard that applies unless, among other things, a statute or rule “provides otherwise.” Here, for the reasons explained, Congress enacted exactly such a statute. That is clear from the text, because §1692k(a)(3) conditions the award of costs on the satisfaction of a condition, and because the previous sentence of the same provision breaks from the default.

*  *  *

The plain text of Rule 54(d)(1) and §1692k(a)(3) dictates the result in this case. Accordingly, I would reverse the Tenth Circuit and hold that §1692k(a)(3) “provides otherwise” than Rule 54(d)(1), such that a district court cannot award costs to a prevailing defendant in an FDCPA action except upon a showing that the action was brought in bad faith and for the purpose of harassment. I respectfully dissent.

__________________________________

1  The original codification of the Rule provided that “[e]xcept when express provision therefor is made either in a statute of the United States or in these rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs.” Ante, at 6 (quoting the Rule; emphasis added; internal quotation marks omitted). The language in the Rule was later revised to its current form in 2007, but as the majority acknowledges, the Rules Committee indicated the changes were “ ‘stylistic only.’ ” Ibid. (quoting Advisory Committee’s Notes, 28 U. S. C. App., p. 734 (2006 ed., Supp. V)).

2  See 10 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §2665, p. 200 (3d ed. 1998 and Supp. 2012) (hereinafter Wright & Miller) (Rule 54 “provides that ordinarily the prevailing party shall be allowed costs other than attorney’s fees unless . . . some other provision for costs is made by a federal statute or the civil rules” (emphasis added)).

3  See, e.g., MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 225 (1994) (opinion for the Court by Scalia, J.) (rejecting the argument that an alternative definition should control the meaning of “modify” where “[v]irtually every dictionary we are aware of says that ‘to modify’ means to change moderately or in minor fashion”).

4  The majority suggests that this canon does not apply to §1692k(a)(3) because it only aids where “ ‘it is fair to suppose that Congress considered the unnamed possibility and meant to say no to it.’ ” Ante, at 9 (quoting Barnhart v. Peabody Coal Co., 537 U. S. 149, 168 (2003) ). The best evidence of congressional intent, however, is the statutory text that Congress enacted. West Virginia Univ. Hospitals, Inc. v. Casey, 499 U. S. 83, 98 (1991) . And here, the plain language of §1692k(a)(3) makes it clear that Congress meant to foreclose other possible meanings. See supra, at 5.

5  See, e.g., 15 U. S. C. § 6104(d) (Telemarketing and Consumer Fraud and Abuse Prevention Act) (“The court . . . may award costs of suit and reasonable fees for attorneys and expert witnesses to the prevailing party”); 42 U. S. C. §3613(c)(2) (Fair Housing Act) (“In a civil action . . . the court, in its discretion, may allow the prevailing party . . . a reasonable attorney’s fee and costs”); see also 28 U. S. C. §1332(b) (failure to recover jurisdictional amount).

6  The majority does not explain why its speculation about legislative intent is more persuasive than the Solicitor General’s view that saddling potential plaintiffs with costs would undermine the FDCPA’s “ ‘calibrated scheme’ ” of enforcement. Brief for United States as Amicus Curiae 10 (quoting Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L. P. A., 559 U. S. 573 , ___ (2010) (slip op., at 29)). Under the Solicitor General’s interpretation, because the recoveries in these cases are not certain to be large, consumers may be deterred from bringing FDCPA claims if they are faced with the risk of paying costs. See Brief for United States 21–28. This outcome would thwart Congress’s expectation that the FDCPA was to be primarily enforced by consumers. Ibid.

7  See Ex parte Peterson, 253 U. S. 300, 318 (1920) (“[I]n actions at law the prevailing party is entitled to costs as of right . . . , except in those few cases where by express statutory provision or established principles costs are denied” (emphasis added)); see also United States v. Treadwell, 15 F. 532, 534 (SDNY 1883) (“[T]he prevailing party shall be entitled to costs in all cases, unless otherwise expressly provided by law” (emphasis added, internal quotation marks omitted)); Payne, Costs in Common Law Actions in the Federal Courts, 21 Va. L. Rev. 397, 430 (1934) (“By reason of the numerous changes in the acts of Congress respecting costs, many of the older cases are not now safe precedents. Care should be exercised, therefore, to make an intelligent use of the cases decided prior to the enactment of various statutes”).

Print this transcript Transcript: 

ORAL ARGUMENT OF ALLISON M. ZIEVE ON BEHALF OF THE PETITIONER

Chief Justice John G. Roberts: We will hear argument next in case 11-1175, Marx versus General Revenue Corporation.

Ms. Zieve.

Allison M. Zieve: Mr. Chief Justice, and may it please the Court:

Rule 54(d) provides a standard for an award of costs to a prevailing party that, by the rule's express terms, does not apply where Federal statute provides otherwise.

The Fair Debt Collection Practices Act provides otherwise because it states a different rule for awarding costs than does Rule 54(d).

Whereas Rule 54(d) gives district courts wide discretion toward cost-prevailing defendants, the FDCPA limits courts' discretion to cases brought in bad faith and for the purpose of harassment.

The text of the Act provides that on a finding that action was brought in bad faith and for the purpose of harassment, the court may award attorneys' fees of reasonable relation to the work expended and costs.

That's a matter of grammar.

The unmistakable meaning of that sentence is that an award of costs, like an award of attorney's fees, is subject to the condition that the plaintiff suit be brought--

Justice Antonin Scalia: Under -- under that provision, that's certainly true.

You can't -- you can't get costs under that provision unless there has been that prerequisite.

But it's -- it's ancient law that repeals by implication are not favored.

And what you're arguing here is that that provision effectively repeals another provision which allows costs in all cases, whether or not there has been misbehavior.

Now, why -- why is this an exception to our general rule?

I just don't -- this doesn't seem to me like the clear repealer.

Allison M. Zieve: --Well, there's no need to consider repeal by implication in this case, Your Honor, because Rule 54(d) expressly states that its presumption does not apply for a Federal--

Justice Ruth Bader Ginsburg: Yes, indeed, but -- but you are assuming a conflict.

You're saying either the -- the statute applies or Rule 54(d) applies, but the statute can be read to say,

"We're describing one category of case. "

"We are describing the worst case; the bad-faith harassing plaintiff. "

and the statute deals with that category of person and no other.

So if you're not a bad-faith harassing plaintiff, but you nonetheless lost, then you're under 54(d).

Allison M. Zieve: --Your Honor, if you look at Section k(a)(3) as a whole, the two sentences together confirm that this is not a provision about bad-faith plaintiffs, but, rather, the provision is addressing both fees and costs to -- to plaintiffs and defendants.

And if -- if the Congress merely wanted to state in that second sentence that fees were available and didn't mean to say anything about costs to defendants, there would have been no reason for Congress to have put costs in that sentence.

If--

Justice Ruth Bader Ginsburg: Well, there are a number of reasons.

One is symmetry, because they have costs in the part about defendants.

And the concern that, well, if we leave out costs for the bad-faith harassing plaintiff, then it -- it may be assumed that they get only attorney's fees and not costs.

So the statute's provisions like this may be redundant, but one can see that a drafter might very well want to say,

"Well, we said we're dealing with the defendant costs. "

"We want to put the same thing in a plaintiff. "

Allison M. Zieve: --Well, you've made a few points, and I'll try to address each of them.

First, there would be no reason to include costs in the second sentence just because it was in the first sentence, because the first and second sentences are not parallel.

The first sentence makes an award of costs mandatory, and, therefore, it does do some work beyond 54(d); it clearly has a function in that sentence.

Whereas the second sentence, the award is subject to the “ may ”; that is, that it's not mandatory that the court award them.

If -- if Congress was -- Congress would have no need to be concerned that if it left costs out of the second sentence there would be some negative implication, because there are several statutes that mention fees without costs.

And GRC has cited no instance in which a court has read a negative implication into that.

We, in our reply brief, cited a couple cases that do the opposite.

It's -- so, therefore, if Congress had omitted costs, left it out of the sentence, then Rule 54(d) would have continued to apply in cases where the defendants.

One more example--

Justice Sonia Sotomayor: Didn't -- don't district courts always have the authority to award costs for sanctionable behavior like bad faith?

So this provision is duplicate no matter how we read it.

It's either duplicative of a power the court already had to award costs for bad faith or it's duplicate of Rule 54.

Allison M. Zieve: --Well, if you read this sentence as a misconduct provision, then it does repeat the court's inherent authority; although, as this court has mentioned in a couple cases, sometimes statutes want to reiterate authority that exists elsewhere.

If you read it our way, however, the statute -- this provision does actually do some work that it wouldn't otherwise do.

That is, it limits cost awards to prevailing defendants of these circumstances.

Justice Sonia Sotomayor: It limits Rule 54.

Allison M. Zieve: Right.

Justice Sonia Sotomayor: I think your -- your answer is always that Rule 54 obligates court to give costs.

And this rule, as you read it, is a permissive grant only.

Even in bad faith litigations, a court could choose not to give costs.

Allison M. Zieve: Well, Rule 54 doesn't obligate a court to give costs; it establishes a presumption--

Justice Sonia Sotomayor: True.

Allison M. Zieve: --and this says the presumption is limited to cases brought in bad faith and for purposes of harassment.

There are other statutes that do -- similarly do what we've -- what's done here.

Congress could have omitted -- if GRC is correct, Congress could have just omitted the words “ and costs ”, leaving the costs to be determined under Rule 54.

An example of that is 15 U.S.C. 15c(d)(2), which is actions by state attorneys general and provides that the court may award attorneys fees to a prevailing defendant upon a finding that the action was in bad faith.

Justice Ruth Bader Ginsburg: Ms. Zieve, when I look at other statutes, it seems to me we would want to look at statutes involving lenders, so we would look at the Truth in Lending Act and the -- what is it, the Credit Organizations Act--

Allison M. Zieve: Fair Credit?

Justice Ruth Bader Ginsburg: --and those do not provide for attorney's fees.

They are covered only under 54(d), which is costs, not fees.

Why should we read this act in a way that -- so -- so that a defendant under this act who can get attorney's fees is worse off with respect to costs than defendants under the other lending legislation, the ones that have only 54(d)?

Congress gave defendants something more here.

Why -- why would -- why should it be that 54(d) would apply to the lender under the Truth in Lending Act but not to the lender under this act?

Allison M. Zieve: Well, first, Your Honor, the Congress's purpose was not simply to -- this isn't just a defendant-friendly provision.

Congress had dual purposes in enacting k(a)(3).

On the one hand, Congress wanted to deter nuisance suits, but on the other hand, Congress wanted to ensure that meritorious suits by impecunious debtors were not deterred by the prospect that an award of costs would exceed the value of the damage that could be recovered in a successful suit.

And the two provisions of k(a)(3) show the line Congress drew and how it balanced those two objectives.

As to the other statutes, the Truth in Lending Act, the Credit Repair Organizations Act, they were enacted at different times by different Congresses, they have different sorts of provisions, some better for plaintiffs, some better for defendants.

And -- but this category -- in enacting this statute, Congress emphasized that the widespread and national serious problem of collection abuse that Congress said inflicts substantial suffering and anguish, and noted specifically in the Senate report this Court has cited to in the Jerman case that consumers, the impecunious -- the people who can't even afford to pay their debts, are the primary enforcers of the statute.

The FTC got about 120,000 complaints from consumers about debt collectors last year, more than any other industry.

So Congress may reasonably have decided that the primary enforcers of this statute weren't going to be doing that work if they were -- if they were at risk of significant cost awards in cases that have frequently small value.

There are other ways, if Congress wanted to preserve Rule 54(d), that it could have done it that did not happen here.

For instance, in 49 U.S.C. 14707 (c), Congress has a similar provision about attorney's fees to prevailing -- attorney's fees to prevailing parties, and then states expressly that fee is in addition to costs allowable under the Federal Rules of Civil Procedure.

Congress didn't do that here.

Or Congress could have made it clear that it was not displacing Rule 54(d) as to cost awards by stating that the Court could award attorney's fees as part of the cost, therefore distinguishing fees and costs.

Congress has done that sort of thing frequently, including in a statute that provides for an award in cases of bad faith.

I'm looking at 28 U.S.C. 1875, that provides the courts may award fees as part of costs if an action was frivolous or in bad faith.

So -- but Congress did none of those things here.

Instead, what it did was draft a sentence that links the term “ cost ” to the term “ attorney's fees ” with the conjunction “ and ”, and subjects both of those objects of the sentence to the same condition, the condition that the plaintiff suit was brought in bad faith and for purpose of harassment.

GRC suggests that the reading -- that the statute the Justice mentioned, benefits plaintiffs.

But what Congress wanted to do here -- I mean, would benefit plaintiff -- what Congress wanted to do was to help defendants.

There's actually no legislative history about why this provision was put in there.

What we have instead, for what it's worth, is a markup later where this provision is discussed in response to concerns that frivolous suits should be deterred, and this provision, which is now already in the statute, is discussed as one means of deterring frivolous suits.

But the bad faith and harassment standard is the dividing line that Congress drew between nuisance suits and other suits.

This case is clearly on the non-nuisance side of the line, and cases on that side of the line are not subject to an award of costs.

If the Court has no further questions--

Justice Sonia Sotomayor: I would assume that if Rule 54, instead of saying what it currently does, said something like

"except as expressly repealed in another statute. "

would what happened here meet that express requirement of repeal?

It was Justice Scalia's question to you, but reformulated in a different way.

Allison M. Zieve: --If Rule 54(d) incorporated a requirement that a statute expressly referred to Rule 54(d)?

Justice Sonia Sotomayor: Expressly repealed 54(d).

Allison M. Zieve: That would be a very different case.

But of course, Rule 54(d) doesn't do that.

Instead, when Rule 54(d) was adopted, the Rules Committee actually -- the advisory committee notes list 25 statutes that it says will not be affected by the rule.

Those are statutes that allow fees, forbid fees, condition fees, allow fees in a broader scope of cases than Rule 54(d) does.

And of course, none of those would have mentioned Rule 54(d) because they preceded adoption of the rule.

I would reserve the balance of my time.

Chief Justice John G. Roberts: Thank you, counsel.

Mr. Feigin.

ORAL ARGUMENT OF ERIC J. FEIGIN, FOR UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE PETITIONER

Eric J. Feigin: Thank you, Mr. Chief Justice, and may it please the Court:

Rule 54(d) expressly codifies in absolute form the well-established principle that a specific provision displaces a more general one.

And I think that principle is very helpful here in answering a couple of the questions that have come up.

First of all, it makes clear that no express textual conflict is necessary.

This Court's never required one, and the specific governs the general cases.

Let's make even clearer, if you look at the pre-2007 version of the rule, which is meant to be substantively identical to the current version of the rule -- this is at page 12 of the government's brief -- and the original version of the rule said,

"except when express provision therefore is made either in a statute of the United States or in these rules, costs should be allowed as of course to the prevailing party unless the Court otherwise directs. "

I think that that makes quite clear that when, as the FDCPA does, there is a specific statutory provision that addresses an award of costs incident to the judgment, that specific statutory provision prevails over the default rule that Rule 54(d) contains.

Another point about the specific governing the general principle is it would apply here even if the Court believed that Section 1692k(a)(3) covered some type of circumstances that Rule 54(d) and other things don't.

And that's made quite clear by this Court's recent eight-Justice unanimous opinion in RadLAX Gateway Hotel v. Amalgamated Bank, in which the Court said, and I quote,

"We know of no authority for the proposition that the canon. "

--they're talking about the specific governance, the general canon --

"is confined to situations in which the entirety of the specific provision is a. "

--quote --

"“ subset ” of the general one. "

Justice Stephen G. Breyer: I mean, my problem with this is I don't -- I mean, I read the whole statute, and they have a good claim until I think you read the whole statute.

And I don't know what to say other than the impression -- the impression is that subsection 3, which is what's at issue, the whole thing is meant to say that the winner, when it's the plaintiff, is going to get attorney's fees.

You know, it mentions costs, but that's the background rule.

And then when you get to the second sentence of that, it means, and if you're in bad faith, the plaintiff, then the defendant gets attorney's fees.

It doesn't really mention costs.

That's the background rule.

So -- and I look at the legislative history, there's some staffer, at least, who's tried to find that interesting; the -- they're talking about what the point of this is, and say the whole point of this section is to help prevent frivolous suits.

Well, so there we are.

That's -- that's where I am at this moment.

Eric J. Feigin: Well, Justice Breyer, I think it does expressly mention costs both in the first and the second sentence.

Justice Stephen G. Breyer: I didn't say on some technical linguistic basis, it may do that, that's correct.

But perhaps I'm unique in this, but I don't just look at the language, I look at the context, I look at the purpose, and -- and I don't see anything in the language that gets rid of the background rule, and I don't see anything in the purpose that gets rid of the background rule, and I don't see anything in the history that gets rid of the background rule.

Eric J. Feigin: Well, Your Honor--

Justice Stephen G. Breyer: I don't see anything in the consequences that suggests that you get rid of the background rule.

I don't see anything in our traditions that says you should get rid of the background rule.

So, what do you do with some obstreperous judge who doesn't just look at the language?

I mean, I know uses it, but that's not the only thing.

Eric J. Feigin: --Well, Your Honor, if Congress were satisfied with the background rule, then I think it's strange that they added the words “ and costs ” to a sentence that is expressly--

Justice Stephen G. Breyer: Oh, why?

A person who is a drafter says, you know, you get your costs and you also get the attorney's fees.

They don't -- they don't know every statute, the people who draft this.

They -- they -- they just say, Senator, what are we trying to do?

He says, we're trying to give them attorney's fees.

They say, okay, we'll give them the costs and the attorney's fees.

Eric J. Feigin: --Your Honor, I think that gets back to Justice Ginsburg's question of why weren't they just saying “ and costs ” here just to make clear that not only fees would be available but also costs.

And I think that's an implausible hypothesis of what Congress was trying do for the following reason.

A congressperson who is concerned that a reference to fees alone in the second sentence of section 1692k(a)(3) would preclude application of the default rule in -- in Rule 54(d), couldn't possibly have thought that the way to make clear that Rule 54(d) applies in full was to add the words “ and costs ” in a sentence that's expressly--

Justice Stephen G. Breyer: And that's if you had been drafting it, perhaps.

But the people who actually draft these things are a whole section over in Congress, they don't know every statute, and you give them a general instruction.

Eric J. Feigin: --Well, Your Honor--

Justice Stephen G. Breyer: And the -- the general instruction would be add attorney's fees on the plaintiffs, and add attorney -- all right.

You understand the point.

Justice Antonin Scalia: We -- we have to assume ignorance of the drafter.

Justice Stephen G. Breyer: Yes, ignorance of other laws.

Justice Antonin Scalia: As a general principle.

Justice Stephen G. Breyer: That's right, general ignorance.

[Laughter]

Eric J. Feigin: --Your Honor, let me -- let me address that directly.

If we're presume that Congress is aware of Rule 54(d), then I think it's quite peculiar and, in fact, quite counterproductive to have added the words “ and costs ” to a sentence that's expressly conditioned on a finding of bad faith and purpose of harassment.

But if I accept your hypothesis that Congress was not aware of Rule 54(d), again, it's quite strange that when thinking about the cost-shifting rule that should apply in FDCPA cases, what Congress decided to do was put the words “ and costs ” into a sentence that's expressly--

Justice Stephen G. Breyer: Well, then they shouldn't have put those words in.

We're talking about the next sentence, and the next sentence doesn't put the words in.

So you're -- you're -- you're assuming from that fact that in a pro defendant, this is a pro-defendant provision they put in, that was their whole point apparently reading it, that what they decided to do is take away from defendants costs which they normally get without saying anything about it.

I mean, that's -- you understand the problem.

Eric J. Feigin: --Your Honor, the words “ and costs ” appear in both sentences.

I agree with Ms. Zieve that the legislative history does not indicate that this is a uniquely pro-defendant division -- provision, and that's what the Court found in Jerman.

Justice Stephen G. Breyer: It doesn't -- where does it say that?

Where was the--

Eric J. Feigin: Your Honor, first of all--

Justice Stephen G. Breyer: --I would like to read it.

Eric J. Feigin: --you can look at -- there is no legislative history directly addressing the sentence we're trying to interpret today.

But I think if you look at the Court's opinion in Jerman and the hearing cited at page 31 of the red brief, it reflects that Congress was trying to balance deterrence of nuisance suits and incentivizing good-faith consumer enforcement.

If I could, I would like to address the policy reasons why Congress would have found it particularly useful not to have plaintiffs pay cost rule circumstances.

Chief Justice John G. Roberts: Well, that's a pretty odd way to balance.

I mean, if you're -- if you're trying to balance, then you say, well, here's an idea, let's give them attorney's fees, but let's not give them costs.

Eric J. Feigin: Well, the reason not to give--

Chief Justice John G. Roberts: That's a very curious way to dilute what was otherwise a defendant-friendly provision.

Eric J. Feigin: --Well, Your Honor, I don't think the provision is uniquely defendant friendly.

I think it draws a dividing line between nuisance suits and non-nuisance suits premised on a finding of the suit being brought in bad faith and the purpose of harassment.

And the reason why Congress thought it was necessary to shield good-faith plaintiffs from costs here in order to incentivize enforcement, is, first of all, these are particularly low-value suits, especially when compared to other statutes in the CCPA.

They're the kind of suits that can be incentivized by a mere $1,000 in statutory damages.

And as this case demonstrates, the cost of a suit, if taxed against the plaintiff, can do much more than 1,000--

Justice Stephen G. Breyer: Did you look up -- did you try to do any sampling on that?

Because I did, actually, and -- and I discovered something that I think is not as strong for you, but it isn't too much against you.

We just did a random sample of 28 successful cases, and I think the average recovery, except for one outlier where it was very high, it was around $4,000, 3 to 4, and the average costs on the ones that the defendants won, I guess, was around a thousand.

So you have a point--

Eric J. Feigin: --Your Honor--

Justice Stephen G. Breyer: --But it isn't quite as good a point as you seem to suggest.

That is, it's a not so low value and the costs are not so high--

Eric J. Feigin: --Well, Your Honor, plaintiffs--

Justice Stephen G. Breyer: --in order to make it.

Eric J. Feigin: --Plaintiffs here are uniquely likely to be deterred because they're the kind of people who have been pursued by debt collectors.

They're going to be in debt themselves; they're not going to be able to pay costs.

That's why attorneys -- and that's why the statute provides for attorneys generally to take these cases on contingency, on the hope that they'll recover fees when the plaintiff is successful.

Now, if plaintiff's looking to bring this kind of case, the only out-of-pocket expense the plaintiff is facing is the potential that if it loses the case for some reason that it can't be aware of initially, such as a bona fide good-faith defense or the law being interpreted against them in an area where the law is unclear, they're going to have to pay out of pocket against the plaintiff himself, not the plaintiff's attorney, who are the people the defendant claims is -- are responsible for the abuses they allege in FDCPA cases.

This is going to come out via judgment directly against the plaintiff.

It's difficult to believe that Congress enacted a provision specifically because it believed the debt collection industry was forcing, among other things, personal bankruptcies and wanted the kind of plaintiffs who were going to be in a position to enforce the FDCPA to have to face the risk of incurring thousands of dollars in costs if they lose a suit that they bring in good faith.

And the reason--

Justice Sonia Sotomayor: Am I to understand your simple position to be that what Rule 54(d) says is if another provision deals with costs, you're relegated to that other provision.

Eric J. Feigin: --Well, Your Honor--

Justice Sonia Sotomayor: Unless, and this -- you're inverting the express -- unless that provision refers you back to 54.

Eric J. Feigin: --Well, no, Your Honor, I'd qualify that a little bit.

I think what -- we just think it codifies an absolute form of the specific governance to general principles.

So the first question you asked is whether they're covering the same territory, and they are here.

Both 1692k(a)(3) and 54(d) cover awards of costs incident to the judgment.

The second question you asked is the scope of the displacement.

So it's possible that you might have a provision, as the first sentence of 1692k(a)(3) does, that only governs in certain circumstances and mandates an award of costs in those circumstances.

We don't think a sentence like that standing alone would displace a court's discretionary authority under Rule 54(d) to award costs in other circumstances.

But we don't think there's any need -- may I finish the sentence, Your Honor?

Chief Justice John G. Roberts: Finish that sentence.

Eric J. Feigin: We don't think there's any need to adopt some new special rule for Rule 54(d) that's different from how this Court normally applies specific governance to general principle.

Thank you.

Chief Justice John G. Roberts: Thank you, counsel.

Ms. Blatt.

ORAL ARGUMENT OF LISA S. BLATT ON BEHALF OF THE RESPONDENT

Lisa S. Blatt: Thank you, Mr. Chief Justice, and may it please the Court:

Our position is that the second sentence of section 1692k(a)(3) is a pro-defendant provision that does not strip courts of their discretion under Rule 54 to award costs to prevailing defendants.

We think that first because of the text and structure, and second, because of the statutory history and purpose.

As to the text, the second sentence states that a court may award an affirmative grant of power rather than the court may award attorney's fees and costs if a plaintiff files a lawsuit in bad faith.

The text doesn't say that a court may not award costs in the absence of bad faith.

The text doesn't say or even address a court's discretion to award costs to prevailing defendants as an ordinary incident of defeat.

Justice Elena Kagan: Ms. Blatt, it -- it seems to me that the -- the most natural way to read this statute, and it's not -- it's not your way, it's, look, we have this Federal Rule of Civil Procedure that -- that contemplates that Congress sometimes doesn't write -- it writes statutes authorizing lawsuits without providing a cost provision.

And because we know that about Congress, we provide a default rule.

And the default rule is what's laid out in subsection D as to costs and then also later as to attorney's fees.

But, we know that Congress sometimes does address costs and fees, and where Congress in a particular statute has addressed costs and fees, we look to whatever Congress has said, you know, unless Congress has otherwise provided.

And here this is -- 1692k is a provision that addresses costs and fees.

It addresses them comprehensively and specifically.

Lisa S. Blatt: Yes.

I disagree with everything you said for the following reasons--

Justice Elena Kagan: I expected you might.

[Laughter]

Lisa S. Blatt: --This is not a field preemption case.

Justice Elena Kagan: It's not a question of field preemption.

Lisa S. Blatt: Yes, it is.

You're saying that if it addresses costs, that it trumps it.

And it is a -- you would never think -- this -- Rule 54 doesn't say don't award costs if a statute can be plausibly read to address it.

It says unless it provides otherwise, which means Congress actually intended to displace.

And unless you actually think that this provision intends to take away a cost authority--

Justice Elena Kagan: Maybe I'm--

Lisa S. Blatt: --you don't get there.

Justice Elena Kagan: --not in the business of trying to figure out what Congress's intent is.

All I'm trying to figure out is whether this Federal statute provides otherwise, and this Federal statute does provide otherwise.

Lisa S. Blatt: Okay, here's why it doesn't.

It doesn't displace it.

It doesn't in terms of the plain text; it just doesn't.

It doesn't say any -- there's no disabling aspect about it.

It's an affirmative grant to protect a defendant, and when you say to a court it has sanctioning power to award attorney's fees and costs, that doesn't say anything about what happens in the ordinary case where the defendant has prevailed at trial and been found to be completely innocent.

This--

Justice Antonin Scalia: In -- in that respect, it is different from RadLAX, in which the two provisions -- where we held the specific covers the general, but we held that because the two provisions contradicted each other.

Lisa S. Blatt: --Not only do they not contradict, this is not a specific -- when you said -- the other thing I disagreed with, when you said this comprehensively addresses costs, no, this comprehensively is about attorney's fees.

Justice Elena Kagan: It's both.

You know?

Lisa S. Blatt: It is--

Justice Elena Kagan: And if I might say, I mean, you object to this statute; it's perfectly reasonable to say Congress should have written a separate provision about costs and attorney's fees, but for whatever bad, good or indifferent reason, Congress didn't; and so this statute basically says, here's what prevailing plaintiffs get as to both costs and fees; here is what prevailing defendants get--

Lisa S. Blatt: --That's not correct, it doesn't mention prevailing--

Justice Elena Kagan: --under what circumstances, as to both costs and fees, and those are the rules.

Lisa S. Blatt: --Yes.

Unlike -- unlike the whole statute that talks about prevailing plaintiffs, this doesn't.

What is fascinating about this case is in all 50 titles of the U.S. Code, there are specific provisions that say, plaintiffs shall not be liable for costs, or a plaintiff shall not be liable for costs unless a certain condition occurs.

There's only one statute -- we looked at all 50 titles -- there is one statute that says, a court may award costs if a certain condition occurs.

That's the--

Chief Justice John G. Roberts: By all 50 titles, you don't mean each title, do you?

Lisa S. Blatt: --We've -- we've looked for all, we've looked at all the cost provisions.

Chief Justice John G. Roberts: Like in Title IX--

Lisa S. Blatt: Yes.

Chief Justice John G. Roberts: --And Title XI?

Lisa S. Blatt: Yes.

That's what's so funny about this; nothing in this -- this case -- I don't mean to trivialize it, but there's only one other statute, that Electronic Fund Transfers Act that talks about the court shall award attorney's fees and costs if there is bad faith.

And there is one other statute that says for a prevailing defendant, the court may award costs if the lawsuit is frivolous.

And in those three significant ways, I think it shows why we win, and that's a statute they relied on to say it's just like our statute, on page 18 of their brief, page 29 of our brief.

First, it only refers to costs.

The statute is about costs.

Our statute is about attorney's fees being the main event upon a finding of bad faith.

Second, it mentions prevailing defendants; ours doesn't.

And third, which I think is missing from the entire 30 minutes that you heard, their argument is plaintiff -- is Congress sat down and wanted to incentivize frivolous suits, and nonfrivolous -- nonfrivolous suits alike.

At least in the Pipeline Safety Act, Congress said if it's frivolous, the defendant gets its costs.

Here--

Justice Elena Kagan: This statute is very -- is very normal if it were just about fees, right?

It would be just like the civil rights fees statutes, where it said prevailing plaintiffs get fees, but prevailing defendants only get fees upon some higher standard, here bad faith.

What makes this statute different, and it is different, is that this statute twice says not only fees but also costs.

Lisa S. Blatt: --Right.

Justice Elena Kagan: Now you might say that's very uncommon, but in both sentences it says, we want the same rule for costs as we do for fees.

Lisa S. Blatt: Well, I mean, a couple things about that.

It's both very common -- fee shifting provisions routinely refer to both fees and costs, just like salt and pepper, peanut butter and jelly, they go together as a set.

Justice Sonia Sotomayor: And with that is that there are some statutes that don't.

Lisa S. Blatt: Yes.

Yes.

Justice Sonia Sotomayor: So it's not always peanut butter and jelly.

Lisa S. Blatt: Okay.

Justice Sonia Sotomayor: It's peanut butter and honey sometimes.

[Laughter]

Lisa S. Blatt: Yes.

And here--

Justice Antonin Scalia: Love and marriage.

[Laughter]

Lisa S. Blatt: --I don't know about that one.

But here -- here I think Congress -- first of all, it's just wrong that the reference to “ and costs ” is grammatically inexplicable and devoid of practical function; and that is the fundamental point of the blue brief, that this is just grammatically inexplicable, and that's just not true.

What “ and costs ” does is it, basically the word “ and ” is being used to mean “ in addition to ”.

“ And ” means “ in addition to ”.

And so what Congress is saying is when courts fee shift, attorney's fee shift on a finding of bad faith, courts additionally may award costs in addition to and over and above the attorney's fees that were measured in relationship to the work performed.

Justice Stephen G. Breyer: Suppose you're right.

What about their policy argument here, that you're a -- you're a potential plaintiff, you've borrowed a lot of money, you don't have a lot of money.

And the deal is this under your interpretation; if you win you're going to get 2 or $3,000; if you lose it will cost you about a thousand.

That's -- that's under your interpretation.

Lisa S. Blatt: Right.

Justice Stephen G. Breyer: And under theirs, it's if you win, you get 2 or $3,000, and if you lose, at least you don't lose anything.

Lisa S. Blatt: Yes.

I think their policy argument is -- I mean, it could not be worse.

A homeless person--

Justice Stephen G. Breyer: Oh, it could be worse.

Lisa S. Blatt: --No, it couldn't be worse, and here's why.

A homeless person filing a civil rights case has to pay costs, and at last that person has to pay -- has to prove damages?

This plaintiff gets $1,000 for free.

Second of all, the plaintiff in this case never asks for relief.

Well, 54 is discretionary.

If this woman was in pain and suffering, why didn't she say, district court, I can't afford this?

It is the law in every circuit that the district courts don't have to award costs, it's discretionary.

So Rule 54 has a built-in safety valve; it accommodates all the policy concerns on the other side, and every other informal paupers litigant, every consumer rights plaintiff, every civil rights plaintiff, every plaintiff in the country faces the risk of a cost award but doesn't get $1,000 thrown in for free.

Justice Ruth Bader Ginsburg: Ms. Blatt, we do have in this case the views of the government regulators, the FTC and the Consumer Finance Protection Bureau, and we have heard the government's position on the relationship between these two provisions.

Should we give any weight to the interpretation of the government administrators?

Lisa S. Blatt: Obviously not.

I don't even know where they would get a basis for deference.

I'm sorry--

Justice Antonin Scalia: We have a lot of cases that say that -- that the agency's views about what courts should do are not entitled to deference.

This is -- this is a matter--

Lisa S. Blatt: --But that would be Ledbetter, and I don't want to cite that to Justice Ginsburg.

[Laughter]

So I think the better answer is what's so mystifying about their policy argument is that they enforce -- they enforce 20 consumer protection statutes, and all of them, their -- their plaintiffs have to pay costs.

Justice Stephen G. Breyer: What about the -- how does this work, the canon?

I'm very interested.

Lisa S. Blatt: They're--

Justice Elena Kagan: Sorry.

I'm sorry.

Justice Stephen G. Breyer: I'm very interested in canons, and I want to know on the canon, the traditional thing, which you've probably looked up, what about the specific governs the general?

Is it -- how is that, that's an old canon that's been around a long time, and people are aware of it, and--

Lisa S. Blatt: --Well, I'm happy to go canon to canon.

Justice Stephen G. Breyer: --This is -- seems to be the one they feel is very important.

Lisa S. Blatt: That's the government.

The--

Justice Stephen G. Breyer: Yes.

Well, that's what I'm interested in.

Lisa S. Blatt: --Okay.

Well, I don't think -- canons, you know, don't trump common sense, context, history--

Justice Stephen G. Breyer: That -- that's a different matter.

Lisa S. Blatt: --But let's go to canons.

Let's go to canons, specific versus the general.

It's all word games.

It turns on what you think “ specific ” means.

This is not specific to the question presented about prevailing parties and costs.

This is about attorney's fees.

That -- and costs are on top of attorney's fees, is essentially how--

Justice Elena Kagan: Well, you say that, but it says to both.

It says the costs together with the reasonable attorney's fees, and then the next sentence it says fees and costs.

So you might wish that they were a different statute, and it might be good policy to have a different statute--

Lisa S. Blatt: --I don't wish for a different statute.

I think what you're saying is that Congress passed a firewall; Congress said, we need to encourage frivolous suits and nonfrivolous, but let's put a firewall in and give them fees and costs, that God forbid there is bad faith and harassment.

Justice Elena Kagan: --I'm not in the business -- I'm not in the business of trying to figure out exactly what Congress is doing.

I'm in the business of just reading what Congress did; and what Congress did is it created a set of rules that applies to attorney's fees and costs at the same time.

Lisa S. Blatt: It -- it affirmatively gives district courts emboldening power to sanction.

So--

Justice Elena Kagan: That sounds very terrible.

Lisa S. Blatt: --But not if you file a lawsuit in bad faith and for purposes of harassment.

So I mean -- I think even -- I think the history is obvious; this was trying to make defendants better off than the defendant's suit under the Truth in Lending Act which is part of the same umbrella Consumer Credit Protection Act, and they're -- inexplicably, somehow, by trying to make them better off made them worse than every other creditor that they serve, and immunized these plaintiffs from the universal risk of cost shifting that every other litigant has to face, and so -- and you don't get there from -- all they have is a negative inference.

Justice Elena Kagan: Well, Ms. Blatt, you say it -- it's supposed to make defendants better off by focusing on just part of the provision, but the provision is -- as a whole, it does a set of things.

It treats plaintiffs and prevailing plaintiffs in a certain set of ways, and it treats prevailing defendants in a certain set of ways.

Lisa S. Blatt: It doesn't speak to prevailing defendants.

Justice Elena Kagan: Prevailing defendants, but when -- prevailing defendants are treated worse than prevailing plaintiffs, because they have to show that there is a bad faith lawsuit.

Lisa S. Blatt: Yeah, I'm going -- I'm going to keep repeating it because it's my position.

This doesn't -- does the fact that this doesn't refer to prevailing defendants speaks volumes that what was not on Congress's mind was Rule 54.

What was on Congress's mind is victimized debt collectors who were sued in bad faith.

Now, I understand this is a pro-plaintiff statute, but this would be extraordinary to think that they gave them attorney's fees when they -- but it's basically saying -- this is a -- this is a defendant who went to trial and won, was law abiding, didn't do anything wrong, and Congress in that situation said not only might -- might not the suit be -- be -- have merit or good faith, it might have even been frivolous.

When under Rule 54 -- again, this is what I find so mystifying about this case.

If the petitioner thought, oh, I had a really hard case in the law or oh, I'm really poor, she could have asked for discretionary relief.

Instead, the lawyer went into court and said, I have a recent Ninth Circuit decision and I don't have to pay costs at all.

Justice Elena Kagan: Ms. Blatt, let me try it a different way.

Lisa S. Blatt: Okay.

Justice Elena Kagan: Let's just suppose that 54(k) didn't exist at all.

Lisa S. Blatt: 54(d)?

Justice Elena Kagan: 54(d) didn't exist.

Lisa S. Blatt: Okay.

Justice Elena Kagan: And all you had was this provision, okay?

Lisa S. Blatt: Uh-huh.

Justice Elena Kagan: So this provision says on a finding by the court that it's brought in bad faith, the court may award to the defendant attorney's fees and costs.

So suppose a defendant wins, but there's not a finding that it was made in bad faith, would then the person be entitled to either attorney's fees or costs?

Lisa S. Blatt: Well, we wouldn't -- certainly, we sought costs here under Rule 54.

Justice Elena Kagan: I'm saying that--

Lisa S. Blatt: I know.

Okay.

And you've took it up.

So that takes out my route seeking for costs under Rule 54, it doesn't exist in your world.

Justice Elena Kagan: --In my world, you would not get fees or costs.

Lisa S. Blatt: I'm imagining then the world in 1936, and we rely on 1920 or 1919 or the long-standing practice of courts awarding costs.

Now, a court might--

Justice Elena Kagan: I'm just asking you a simple question.

Lisa S. Blatt: --We would not get costs under this provision, you're correct.

Justice Elena Kagan: You would not get costs under that provision.

Lisa S. Blatt: Because this -- in that sense, I think this was a question that another justice asked.

If you just look at this provision, the only basis for costs and fees in this provision is the bad faith finding of harassment.

Justice Elena Kagan: Okay.

So if you would not get costs under that provision--

Lisa S. Blatt: Under 1692.

Justice Elena Kagan: --under 1692, a provision that talks about fees and costs generally as to both plaintiffs and defendants, then how does a rule that says what -- where you would get costs unless a Federal statute provides otherwise change matters?

Lisa S. Blatt: Because -- because, again, Rule 54 is not preemption, a field preemption.

It's saying if Congress intended to displace, the proviso, unless otherwise provided, it was recognition that other statutes might displace Rule 54.

And if you look at all the statutes that we cite on pages 19 and 20, they actually do prohibit costs.

And then if you look at the statutes on pages 24 and 25, where time and time again Congress has said a prevailing party may recover attorney's fees and costs, well, the “ and costs ” in their view, I guess those statutes are inexplicable.

I mean, it's clearly they're redundant and they overlap with Rule 54.

They don't displace it.

And even the practice guides that we cite on page 22, which is basically Wright and Miller and Moore, say something that merely overlaps with Rule 54 doesn't displace the court's discretion.

And again, I think you have to ask yourself, what was Congress doing?

To me, this is -- this is a -- the attorney's fees are the main show, it goes with bad faith, Congress was not thinking about Rule 54, and I think you can be quite confident Congress was not thinking, we want plaintiff lawyers to go around saying not only Congress, but the government wanted us to file frivolous suits.

Justice Elena Kagan: You might be right, but suppose Congress wasn't thinking about Rule 54.

Suppose it didn't occur to the drafters what Rule 54 said or what the default provision was.

They just wrote a statute about fees and costs.

And then -- it doesn't really matter whether they were thinking about Rule 54 or not.

Lisa S. Blatt: Yes, if you -- right.

And so there's like that Oncale case with same sex harassment, Congress can write a very -- can write a plain language provision and regardless of what Congress intended, if the language covers it, that's tough, we're going to construe it.

That's your law.

This is not that.

This -- this doesn't say anything about prevailing parties.

This is talking about bad faith and attorney's fees.

It doesn't say a court can't act in the absence of bad faith, it doesn't say anything about prevailing parties, it doesn't reveal any intent to displace it, especially when you compare it with all the other statutes, you look at the history.

Sorry.

Justice Sonia Sotomayor: Counsel, it was thinking about prevailing parties because the predecessor sentence--

Lisa S. Blatt: Prevailing defendants -- I agree, sorry.

Justice Sonia Sotomayor: --But it was talking -- no, prevailing parties.

The provision is geared towards prevailing parties in some form.

The first sentence says a prevailing plaintiff, not whether it's on a substantial basis or any exception.

Lisa S. Blatt: Yeah.

Justice Sonia Sotomayor: It says you get fees or you can get fees and costs.

Lisa S. Blatt: Right.

Justice Sonia Sotomayor: So it then decides to limit what a prevailing defendant can do.

Isn't that a natural reading?

Lisa S. Blatt: No, because it says expressly in a case of successful action, it talks about prevailing plaintiffs, and then it says if there's -- to me, it's just -- it's natural when you just read it in light of sort of common sense in context in what Congress was doing.

If a plaintiff files in bad faith, the court is empowered and emboldened -- it's like a neon light -- courts, you have authority to award attorney's fees and costs.

Justice Elena Kagan: Well, that's -- that's just a different way of saying the following: The first sentence says, when you're a prevailing plaintiff, you get costs and fees.

How about defendants?

Well, prevailing is not enough for defendants.

Defendants have to show--

Lisa S. Blatt: Yeah.

Justice Elena Kagan: --that the suit was filed in bad faith--

Lisa S. Blatt: Yeah, and I think--

Justice Elena Kagan: --and then they get costs and fees.

Lisa S. Blatt: --Right.

And I think you have to keep this in mind that there are completely diametrically opposed background presumptions in our legal system.

It's an extraordinary event to get attorney's fees, and it's an extraordinary event not to get costs.

And so the court -- the Congress has to use explicit language to over -- overturn the American rule.

And so what Congress did here, that is the most natural, even if I drew you to a tie--

Justice Elena Kagan: I completely agree with that.

But that's what it comes down to, that if you think that Congress has to use super extraordinary language to over -- to -- to get out of 54(d), then you're right.

But 54(d) doesn't say that.

It just says--

Lisa S. Blatt: --Right, and--

Justice Elena Kagan: --unless the Federal statute provides otherwise.

Lisa S. Blatt: --And I think you can look -- the Petitioner did -- did a valiant job of trying to drudge up as many statutes as they can.

All the statutes on point are explicit.

Now, there's one statute that might not be, the pipeline safety one.

And so the question is: Do we think that Congress actually tried to displace a court's authority under that statute, and that's a statute that just says a court may award costs if a lawsuit is frivolous.

This one just doesn't say that.

You at least -- even if you don't think of it as magic language or an explicit statement, the fact that Congress repeatedly has used explicit language casts considerable doubt that this was done by mere implication, and then you look at the fact that it doesn't mention prevailing parties, it's talking about bad faith, it has attorney's fees, what was Congress doing, you look at the legislative history, it shows that it was -- it was trying to make them better off than a class of defendants, but their view inexplicably makes them worse off.

And then you look at the result that they're actually advocating that the government thinks it's a good idea that plaintiffs can file lawsuits cost free that are frivolous.

I mean--

Justice Antonin Scalia: --I guess in the first sentence of 3, the phrase “ the costs of the action ” is really superfluous in light of 54(d)(1).

You really don't know that.

I mean, that would have been the case anyway.

So there's no reason to think that it isn't frivolous in the second sentence -- or superfluous in the second sentence, right?

Why did they have to say the costs of the action in the case of a successful action?

Lisa S. Blatt: --Successful action to enforce it.

Justice Antonin Scalia: The costs of the action, together with a reasonable -- as determined by the court.

Lisa S. Blatt: Why isn't--

Justice Antonin Scalia: They -- they have the costs anyway, if Congress didn't write anything, right?

Lisa S. Blatt: --I mean, I think that -- again -- I mean--

Justice Antonin Scalia: I'm trying to help you.

[Laughter]

Lisa S. Blatt: --Yeah, I know.

And I was going to say there's so much is superfluity in here, I don't know where to begin.

It's all over the place.

The whole thing obviously overlaps with the court's inherent authority.

Justice Sonia Sotomayor: You don't think that there's a serious argument that the first sentence does away with the discretionary nature?

Lisa S. Blatt: No, it's clear “ shall ”.

It's clear “ shall ” obviously.

The first sentence does--

Justice Sonia Sotomayor: So it's a command.

54(d) is permissive according to your earlier argument.

Lisa S. Blatt: --Oh, yes, that's right.

Yes.

Justice Sonia Sotomayor: And so this does -- it's not superfluous because it went to mandatory.

Justice Antonin Scalia: Gotcha.

Lisa S. Blatt: That's true.

Justice Antonin Scalia: Well taken.

Lisa S. Blatt: Yeah.

The question, though, was in the case of any successful action when, obviously, they prevailed to begin with, so the question is whether that's superfluous.

But the whole provision overlaps with the court's inherent authority.

And I know it hasn't come up, but I just think it's strange that it says for the purposes of bad faith and harassment, Congress was obviously using belt and suspenders there, so it's not surprising that Congress added “ and costs ” here.

If you look at Rule 54 -- let me just say one other thing, Justice Kagan -- if you look at Rule 54, it also says

"unless the statute provides otherwise, costs other than attorney's fees. "

So why -- they didn't have to say that, because in the next provision it talks about attorney's fees.

They just -- they wanted to make clear for whatever reason or maybe they just wrote some really excess, redundant, silly language, but they said costs, meaning anything that's not costs.

It's just that Congress sometimes uses these, and I guess this was the honey and peanut butter thing, that a lot of fee-shifting statutes talk about both attorney's fees and costs, and so they went together and -- they also mentioned it.

Obviously, it's different.

I agree that there's a verb in the first sentence that's mandatory, so it trumps Rule 54.

But with respect to the two objects, Congress was already thinking about attorney's fees and costs anyway and so there's nothing wrong with them saying, in addition to the attorney's fees that you can get in bad faith, once you calculate the attorney's fees reasonable in relation to the work performed, you also get costs.

And the only thing I would say, when we define “ and ” as in addition to, they seem to think that that was an extraordinary reading of the word “ and ”, citing something from something called [dictionaryDOTcom,] and if you just went to [dictionaryDOTcom,] which I had not done before, and you type in “ and ”, the first definition is “ in addition to ”.

If there are no further questions--

Chief Justice John G. Roberts: Thank you, counsel.

Ms. Zieve, you have six minutes remaining.

REBUTTAL ARGUMENT OF ALLISON M. ZIEVE ON BEHALF OF THE PETITIONER

Allison M. Zieve: Thank you.

First, the FDCPA doesn't just encourage frivolous suits.

Ms. Blatt repeatedly referred to plaintiffs getting a free $1,000.

If the -- if the plaintiffs win their suits, that means both that they're not frivolous and they're not in bad faith.

In cases that are frivolous but a court makes a finding that it's not in bad faith, defendants have other means of recovering fees and costs using Rule 11 or Section 1927; and there are cases in which courts have denied fees and costs under the FDCPA and granted them under Rule 11 or 1927.

Ms. Blatt suggested that--

Justice Ruth Bader Ginsburg: Would you explain why we would look to other rules?

You wouldn't look at the Rule 54(d), and we might look at Rule 11 and we might look at something else?

I thought your -- your position was that this statute governs all requests for fees and costs under this particular Act.

Allison M. Zieve: --Our position is that this provision, k(a)(3), discusses the allocation of fees and costs that come at the end of the case based on who won and who lost.

And if you read it as a whole, as I think Justice Kagan suggested, that's what Congress was doing.

It was carefully calibrating the allocation of fees and costs at the end of the case.

And, in fact, in instances in which -- which defendants have asked for fees and costs in FDCPA cases based on bad faith, they do always come at the end of the case.

Which also shows this is not a misconduct provision.

If it were a misconduct provision, it wouldn't just be about bad faith in bringing the action.

The Fair Credit Reporting Act, for example, has a provision that provides for fees but not costs that speaks to conduct throughout the case, but with respect to bad faith filings of pleadings, motions, or other papers.

That's a misconduct provision; this one isn't.

The main--

Justice Antonin Scalia: Isn't it -- isn't it the case that, in order to appeal to the proposition that the specific governs the general, you -- you have to read the second sentence of 3 as containing a negative -- a negative implication?

As saying--

Allison M. Zieve: --Yeah.

We do read the “ court may award ” to mean

"and, in other circumstances, it may not. "

Justice Antonin Scalia: --It may not.

So you are reading in a negative--

Allison M. Zieve: Just as this Court -- just as this Court read “ may ” in Cooper Industries or Crawford Fittings and said,

"If you don't read “ may ” to define the scope of what Congress is authorizing the court to do, then that provision has no meaning. "

Justice Elena Kagan: I understood Ms. Blatt to actually agree with that, that if you put Rule 54 aside, this does say,

"You may, under a certain set of conditions. "

which implies you may not, under -- if those conditions are not met.

Allison M. Zieve: Right, she did agree that without Rule 54 this provision -- that -- that no costs could be awarded to a defendant unless they had acted in bad faith.

I mean, I think at some points GRC and Ms. Blatt here today asked you to just ignore that “ and costs ” exists in the sentence at all.

Although the fact that this sentence is not replicated numerous times throughout the U.S. Code doesn't seem to me reason for ignoring it, but, rather, for giving effect to it.

Congress obviously thought it was doing something when it enacted this sentence and when it added these words to the statute.

It does not say,

"The court may award fees in addition to costs. "

or “ as part of costs ” or “ together with costs ”.

Again, grammatically, it treats the two terms, “ fees and costs ”, on a par--

Justice Antonin Scalia: --Suppose -- suppose the words “ and costs ” were left out in the second sentence.

Would not the argument be made that you cannot award costs even in an action brought in bad faith?

Wouldn't -- that this sum argument you're making--

Allison M. Zieve: --No, I don't think so.

There are -- no.

There are statutes that provide for fee awards and don't -- don't say anything about costs, and these cases are--

Justice Antonin Scalia: --But you're saying “ negative implication ”.

If it -- if it says only

"attorneys fees in reasonable relation to the work expended. "

the implication would be you--

Allison M. Zieve: --Justice Scalia, other--

Justice Antonin Scalia: --you cannot -- you cannot, even in the case of a frivolous action, award costs.

Wouldn't that be the reading of it?

Allison M. Zieve: --In other cases under other statutes, that argument has been made occasionally and rejected.

It's also rejected in the treatises that we cite that if you don't mention costs--

Justice Antonin Scalia: Yes.

But I'm suggesting if that argument is rejected, so should yours be.

Allison M. Zieve: --No.

Because--

Justice Antonin Scalia: Because it seems the two are parallel.

Allison M. Zieve: --If the -- if the statute does not mention costs, then it doesn't provide otherwise with respect to costs.

Justice Stephen G. Breyer: So she says if I -- if I tease -- if you tease your sister, I'm going to give you -- give her your allowance and her allowance, that that doesn't mean that the sister loses her allowance if you don't tease her.

I mean, there are a lot of instances--

Allison M. Zieve: Well--

Justice Stephen G. Breyer: --where you put the “ and ” in and it doesn't mean that that's the exclusive place for giving it.

Sometimes, it does; sometimes, it doesn't.

That's her point.

Allison M. Zieve: --Well, putting aside that I hope that Congress drafts a little more carefully than a mother may threaten her child--

[Laughter]

Justice Stephen G. Breyer: I doubt that it does.

I mean, they're human beings over there; they're not necessarily all--

Allison M. Zieve: But they're -- the presumption behind that hypothetical is that the one child is going to get their allowance no matter what.

The presumption here is that Rule 54(d) will apply unless a statute provides otherwise.

This statute doesn't.

Thank you, Your Honor.

Chief Justice John G. Roberts: Thank you, counsel.

The case is submitted.