The U.S. Supreme Court will hear a case this month about whether federal courts have discretion to deny or reduce appellate costs. This case could have a significant impact on appellate law strategy, says Partner Patrick Hammon in his article on Law360. In City of San Antonio v. Hotels.com, 173 Texas municipalities obtained an 8-figure award against a number of online travel companies that later was reversed, resulting in an award of over $2.3 million in appellate costs against the municipalities. The Fifth Circuit ruled that district courts had no discretion to reduce appellate costs, a decision at odds with nearly every over other Federal Circuit.
Patrick explains: “While it is a particularly technical and narrow issue, City of San Antonio could dramatically change parties' calculus in determining whether, and how, to respond to an appeal.” He explores how parties could use a “no discretion on appellate costs” standard to drive up their costs on appeal, and put pressure on the other side to settle or dismiss an appeal. Patrick says, “If the Fifth Circuit's position is affirmed, the cost of being a losing appellee may become staggering.”
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