Courts cannot sanction a party for their bad-faith conduct by forcing the offending litigant to cover all of the opponent's legal fees without first showing but-for causation, the Supreme Court ruled this morning. The case stems from a dispute between Goodyear Tire & Rubber and a family who claimed the company's tires were responsible for their motorhome accident. During discovery, Goodyear withheld important internal reports. Finding the misconduct especially egregious, the district court sanctioned the tire company, ordering it to pay all of the family's attorney's fees and costs since the deception began -- a total of $2.7 million.
But such an award must be "limited to the fees the innocent party incurred solely because of the misconduct," a unanimous Court determined.