Goodyear Tire & Rubber Co. v. Haeger

(Slip Opinion) OCTOBER TERM, 2016 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
GOODYEAR TIRE & RUBBER CO. v. HAEGER ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 15–1406. Argued January 10, 2017—Decided April 18, 2017
Respondents Leroy, Donna, Barry, and Suzanne Haeger sued petitioner
Goodyear Tire & Rubber Company, alleging that the failure of a
Goodyear G159 tire caused the family’s motorhome to swerve off the
road and flip over. After several years of contentious discovery,
marked by Goodyear’s slow response to repeated requests for internal
G159 test results, the parties settled the case. Some months later,
the Haegers’ lawyer learned that, in another lawsuit involving the
G159, Goodyear had disclosed test results indicating that the tire got
unusually hot at highway speeds. In subsequent correspondence,
Goodyear conceded withholding the information from the Haegers,
even though they had requested all testing data. The Haegers then
sought sanctions for discovery fraud, urging that Goodyear’s miscon-
duct entitled them to attorney’s fees and costs expended in the litiga-
tion.
The District Court found that Goodyear had engaged in an extend-
ed course of misconduct. Exercising its inherent power to sanction
bad-faith behavior, the court awarded the Haegers $2.7 million—the
entire sum they had spent in legal fees and costs since the moment,
early in the litigation, when Goodyear made its first dishonest dis-
covery response. The court said that in the usual case, sanctions or-
dered pursuant to a court’s inherent power to sanction litigation mis-
conduct must be limited to the amount of legal fees caused by that
misconduct. But it determined that in cases of particularly egregious
behavior, a court can award a party all of the attorney’s fees incurred
in a case, without any need to find a “causal link between [the ex-
penses and] the sanctionable conduct.” 906 F. Supp. 2d 938, 975. As
further support for its award, the District Court concluded that full
and timely disclosure of the test results would likely have led Good-
2 GOODYEAR TIRE & RUBBER CO. v. HAEGER
Syllabus
year to settle the case much earlier. Acknowledging that the Ninth
Circuit might require a link between the misconduct and the harm
caused, however, the court also made a contingent award of $2 mil-
lion. That smaller amount, designed to take effect if the Ninth Cir-
cuit reversed the larger award, deducted $700,000 in fees the Hae-
gers incurred in developing claims against other defendants and
proving their own medical damages. The Ninth Circuit affirmed the
full $2.7 million award, concluding that the District Court had
properly awarded the Haegers all the fees they incurred during the
time when Goodyear was acting in bad faith.
Held: When a federal court exercises its inherent authority to sanction
bad-faith conduct by ordering a litigant to pay the other side’s legal
fees, the award is limited to the fees the innocent party incurred sole-
ly because of the misconduct—or put another way, to the fees that
party would not have incurred but for the bad faith. Pp. 5–13.
(a) Federal courts possess certain inherent powers, including “the
ability to fashion an appropriate sanction for conduct which abuses
the judicial process.” Chambers v. NASCO, Inc., 501 U.S. 32, 44–45.
One permissible sanction is an assessment of attorney’s fees against
a party that acts in bad faith. Such a sanction must be compensato-
ry, rather than punitive, when imposed pursuant to civil procedures.
See Mine Workers v. Bagwell, 512 U.S. 821, 826–830. A sanction
counts as compensatory only if it is “calibrate[d] to [the] damages
caused by” the bad-faith acts on which it is based. Id., at 834. Hence
the need for a court to establish a causal link between the litigant’s
misbehavior and legal fees paid by the opposing party. That kind of
causal connection is appropriately framed as a but-for test, meaning
a court may award only those fees that the innocent party would not
have incurred in the absence of litigation misconduct. That standard
generally demands that a district court assess and allocate specific
litigation expenses—yet still allows it to exercise discretion and
judgment. Fox v. Vice, 563 U.S. 826, 836. And in exceptional cases,
that standard allows a court to avoid segregating individual expense
items by shifting all of a party’s fees, from either the start or some
midpoint of a suit. Pp. 5–9.
(b) Here, the parties largely agree about the pertinent law but dis-
pute what it means for this case. Goodyear contends that it requires
throwing out the fee award and instructing the trial court to consider
the matter anew. The Haegers maintain, to the contrary, that the
award can stand because both courts below articulated and applied
the appropriate but-for causation standard, or, even if they did not,
the fee award in fact passes a but-for test.
The Haegers’ defense of the lower courts’ reasoning is a non-
starter: Neither court used the correct legal standard. The District
Cite as: 581 U. S. ____ (2017) 3
Syllabus
Court specifically disclaimed the need for a causal link on the ground
that this was a “truly egregious” case. 906 F. Supp. 2d, at 975. And
the Ninth Circuit found that the trial court could grant all attorney’s
fees incurred “during the time when [Goodyear was] acting in bad
faith,” 813 F.3d 1233, 1249—a temporal, not causal, limitation. A
sanctioning court must determine which fees were incurred because
of, and solely because of, the misconduct at issue, and no such finding
lies behind the $2.7 million award made and affirmed below. Nor is
this Court inclined to fill in the gap, as the Haegers urge. As an ini-
tial matter, the Haegers have not shown that this litigation would
have settled as soon as Goodyear divulged the heat-test results (a
showing that would justify an all-fees award from the moment Good-
year was supposed to disclose). Further, they cannot demonstrate
that Goodyear’s non-disclosure so permeated the suit as to make that
misconduct a but-for cause of every subsequent legal expense, total-
ing the full $2.7 million.
Although the District Court considered causation in arriving at its
back-up award of $2 million, it is unclear whether its understanding
of that requirement corresponds to the appropriate standard—an un-
certainty pointing toward throwing out the fee award and instructing
the trial court to consider the matter anew. However, the Haegers
contend that Goodyear has waived any ability to challenge the con-
tingent award since the $2 million sum reflects Goodyear’s own sub-
mission that only about $700,000 of the fees sought would have been
incurred regardless of the company’s behavior. The Court of Appeals
did not address that issue, and this Court declines to decide it in the
first instance. The possibility of waiver should therefore be the ini-
tial order of business on remand. Pp. 9–13.
813 F.3d 1233, reversed and remanded.
KAGAN, J., delivered the opinion of the Court, in which all other
Members joined, except GORSUCH, J., who took no part in the considera-
tion or decision of the case.
Cite as: 581 U. S. ____ (2017) 1
Opinion of the Court
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, Wash-
ington, 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
_________________
No. 15–1406
_________________
GOODYEAR TIRE & RUBBER COMPANY,
PETITIONER v. LEROY HAEGER, ET AL.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[April 18, 2017]
JUSTICE KAGAN delivered the opinion of the Court.
In this case, we consider a federal court’s inherent au-
thority to sanction a litigant for bad-faith conduct by
ordering it to pay the other side’s legal fees. We hold that
such an order is limited to the fees the innocent party
incurred solely because of the misconduct—or put another
way, to the fees that party would not have incurred but for
the bad faith. A district court has broad discretion to
calculate fee awards under that standard. But because
the court here granted legal fees beyond those resulting
from the litigation misconduct, its award cannot stand.
I
Respondents Leroy, Donna, Barry, and Suzanne Haeger
sued the Goodyear Tire & Rubber Company (among other
defendants) after the family’s motorhome swerved off the
road and flipped over.1 The Haegers alleged that the
——————
1 The additional defendants named in the Haegers’ complaint were
Gulf Stream Coach, the manufacturer of the motorhome, and Spartan
Motors, the manufacturer of the vehicle’s chassis. In the course of the
litigation, the Haegers reached a settlement with Gulf Stream, and the
District Court granted Spartan’s motion for summary judgment.
2 GOODYEAR TIRE & RUBBER CO. v. HAEGER
Opinion of the Court
failure of a Goodyear G159 tire on the vehicle caused the
accident: Their theory was that the tire was not designed
to withstand the level of heat it generated when used on a
motorhome at highway speeds. Discovery in the case
lasted several years—and itself generated considerable
heat. The Haegers repeatedly asked Goodyear to turn
over internal test results for the G159, but the company’s
responses were both slow in coming and unrevealing in
content. After making the District Court referee some of
their more contentious discovery battles, the parties finally
settled the case (for a still-undisclosed sum) on the eve of
trial.
Some months later, the Haegers’ lawyer learned from a
newspaper article that, in another lawsuit involving the
G159, Goodyear had disclosed a set of test results he had
never seen. That data indicated that the G159 got unusu-
ally hot at speeds of between 55 and 65 miles per hour. In
ensuing correspondence, Goodyear conceded withholding
the information from the Haegers even though they had
requested (both early and often) “all testing data” related
to the G159. Record in No. 2:05–cv–2046 (D Ariz.), Doc.
938, p. 8; see id., Doc. 938–1, at 24, 36; id., Doc. 1044–2,
at 25 (filed under seal). The Haegers accordingly sought
sanctions for discovery fraud, claiming that “Goodyear
knowingly concealed crucial ‘internal heat test’ records
related to the [G159’s] defective design.” Id., Doc. 938,
at 1. That conduct, the Haegers urged, entitled them to
attorney’s fees and costs expended in the litigation. See
id., at 14.
The District Court agreed to make such an award in the
exercise of its inherent power to sanction litigation mis-
conduct.2 The court’s assessment of Goodyear’s actions
——————
2 The court reasoned that no statute or rule enabled it to reach all the
offending behavior. Sanctions under Federal Rule of Civil Procedure
11, the court thought, should not be imposed after final judgment in a
Cite as: 581 U. S. ____ (2017) 3
Opinion of the Court
was harsh (and is not contested here). Goodyear, the court
found, had engaged in a “years-long course” of bad-faith
behavior. 906 F. Supp. 2d 938, 972 (D Ariz. 2012). By
withholding the G159’s test results at every turn, the
company and its lawyers had made “repeated and deliber-
ate attempts to frustrate the resolution of this case on the
merits.” Id., at 971. But because the case had already
settled, the court had limited options. It could not take
the measure it most wished: an “entry of default judg-
ment” against Goodyear. Id., at 972. All it could do for
the Haegers was to order Goodyear to reimburse them for
attorney’s fees and costs paid during the suit.
But that award, in the District Court’s view, could be
comprehensive, covering both expenses that could be
causally tied to Goodyear’s misconduct and those that
could not. The court calculated that the Haegers had
spent $2.7 million in legal fees and costs since the mo-
ment, early in the litigation, when Goodyear made its first
dishonest discovery response. And the court awarded the
Haegers that entire sum. In the “usual[ ]” case, the court
reasoned, “sanctions under a [c]ourt’s inherent power
must be limited to the amount [of legal fees] caused by the
misconduct.” Id., at 974–975 (emphasis deleted). But this
case was not the usual one: Here, “the sanctionable con-
duct r[ose] to a truly egregious level.” Id., at 975. And
when a litigant behaves that badly, the court opined, “all
of the attorneys’ fees incurred in the case [can] be awarded,”
without any need to find a “causal link between [those
expenses and] the sanctionable conduct.” Ibid. As further
support for its decision, the court considered the chances
that full and timely disclosure of the test results would
——————
case. See 906 F. Supp. 2d 938, 973, n. 24 (D Ariz. 2012). And sanctions
under 28 U.S. C. §1927, it noted, could address the wrongdoing of only
Goodyear’s attorneys, rather than of Goodyear itself. See 906 F. Supp.
2d, at 973.
4 GOODYEAR TIRE & RUBBER CO. v. HAEGER
Opinion of the Court
have affected Goodyear’s settlement calculus. “While
there is some uncertainty,” the court stated, “the case
more likely than not would have settled much earlier.”
Id., at 972.
Perhaps sensing thin ice, the District Court also made a
“contingent award” in the event that the Court of Appeals
reversed its preferred one. App. to Pet. for Cert. 180a.
Here, the District Court recognized the possibility that a
“linkage between [Goodyear’s] misconduct and [the Hae-
gers’] harm is required.” Ibid. If so, the court stated, its
fee award should be reduced to $2 million. The deduction
of $700,000, which was based on estimates Goodyear
offered, represented fees that the Haegers incurred in
developing claims against other defendants and proving
their own medical damages. See App. 69.
A divided Ninth Circuit panel affirmed the full $2.7
million award. According to the majority, the District
Court acted properly in “award[ing] the amount [it] rea-
sonably believed” the Haegers expended in attorney’s fees
and costs “during the time when [Goodyear was] acting in
bad faith.” 813 F.3d 1233, 1250 (2016). Or repeated in
just slightly different words: The District Court “did not
abuse its discretion” in “award[ing] the Haegers all their
attorneys’ fees and costs in prosecuting the action once
[Goodyear] began flouting [its] discovery obligations.” Id.,
at 1249. Judge Watford disagreed. He would have de-
manded a “causal link between Goodyear’s misconduct
and the fees awarded.” Id., at 1255 (dissenting opinion).
The only part of the District Court’s opinion that might
support such a connection, Judge Watford noted, was its
hypothesis that disclosure of the test results would have
produced an earlier settlement, and thus obviated the
need for further legal expenses. But Judge Watford
thought that theory unpersuasive: Because Goodyear
would still have had plausible defenses to the Haegers’
suit, “[i]t’s anyone’s guess how the litigation would have
Cite as: 581 U. S. ____ (2017) 5
Opinion of the Court
proceeded” had timely disclosure occurred. Ibid. Accord-
ingly, Judge Watford would have reversed the District
Court for awarding fees beyond those “sustained as a
result of Goodyear’s misconduct.” Id., at 1256.
The Court of Appeals’ decision created a split of authority:
Other Circuits have insisted on limiting sanctions like this
one to fees or costs that are causally related to a litigant’s
misconduct.3 We therefore granted certiorari. 579 U. S.
___ (2016).
II
Federal courts possess certain “inherent powers,” not
conferred by rule or statute, “to manage their own affairs
so as to achieve the orderly and expeditious disposition of
cases.” Link v. Wabash R. Co., 370 U.S. 626, 630–631
(1962). That authority includes “the ability to fashion an
appropriate sanction for conduct which abuses the judicial
process.” Chambers v. NASCO, Inc., 501 U.S. 32, 44–45
(1991). And one permissible sanction is an “assessment of
attorney’s fees”—an order, like the one issued here, in-
structing a party that has acted in bad faith to reimburse
legal fees and costs incurred by the other side. Id., at 45.
This Court has made clear that such a sanction, when
imposed pursuant to civil procedures, must be compensa-
tory rather than punitive in nature. See Mine Workers v.
Bagwell, 512 U.S. 821, 826–830 (1994) (distinguishing
compensatory from punitive sanctions and specifying the
procedures needed to impose each kind).4 In other words,
the fee award may go no further than to redress the
——————
3 See, e.g., Plaintiffs’ Baycol Steering Comm. v. Bayer Corp., 419 F.3d
794, 808 (CA8 2005); Bradley v. American Household, Inc., 378 F.3d
373, 378 (CA4 2004); United States v. Dowell, 257 F.3d 694, 699 (CA7
2001).
4 Bagwell also addressed “coercive” sanctions, designed to make a
party comply with a court order. 512 U.S., at 829. That kind of
sanction is not at issue here.
6 GOODYEAR TIRE & RUBBER CO. v. HAEGER
Opinion of the Court
wronged party “for losses sustained”; it may not impose an
additional amount as punishment for the sanctioned
party’s misbehavior. Id., at 829 (quoting United States v.
Mine Workers, 330 U.S. 258, 304 (1947)). To level that
kind of separate penalty, a court would need to provide
procedural guarantees applicable in criminal cases, such
as a “beyond a reasonable doubt” standard of proof. See
id., at 826, 832–834, 838–839. When (as in this case)
those criminal-type protections are missing, a court’s
shifting of fees is limited to reimbursing the victim.
That means, pretty much by definition, that the court
can shift only those attorney’s fees incurred because of the
misconduct at issue. Compensation for a wrong, after all,
tracks the loss resulting from that wrong. So as we have
previously noted, a sanction counts as compensatory only
if it is “calibrate[d] to [the] damages caused by” the bad-
faith acts on which it is based. Id., at 834. A fee award is
so calibrated if it covers the legal bills that the litigation
abuse occasioned. But if an award extends further than
that—to fees that would have been incurred without the
misconduct—then it crosses the boundary from compensa-
tion to punishment. Hence the need for a court, when
using its inherent sanctioning authority (and civil proce-
dures), to establish a causal link—between the litigant’s
misbehavior and legal fees paid by the opposing party.5
——————
5 Rule-based and statutory sanction regimes similarly require courts
to find such a causal connection before shifting fees. For example, the
Federal Rules of Civil Procedure provide that a district court may order
a party to pay attorney’s fees “caused by” discovery misconduct,
Rule 37(b)(2)(C), or “directly resulting from” misrepresentations in
pleadings, motions, and other papers, Rule 11(c)(4). And under 28
U.S. C. §1927, a court may require an attorney who unreasonably
multiplies proceedings to pay attorney’s fees incurred “because of ” that
misconduct. Those provisions confirm the need to establish a causal
link between misconduct and fees when acting under inherent authority,
given that such undelegated powers should be exercised with especial
“restraint and discretion.” Roadway Express, Inc. v. Piper, 447 U. S.
Cite as: 581 U. S. ____ (2017) 7
Opinion of the Court
That kind of causal connection, as this Court explained
in another attorney’s fees case, is appropriately framed as
a but-for test: The complaining party (here, the Haegers)
may recover “only the portion of his fees that he would not
have paid but for” the misconduct. Fox v. Vice, 563 U.S.
826, 836 (2011); see Paroline v. United States, 572 U. S.
___, ___ (2014) (slip op., at 12) (“The traditional way to
prove that one event was a factual cause of another is to
show that the latter would not have occurred ‘but for’ the
former”). In Fox, a prevailing defendant sought reim-
bursement under a fee-shifting statute for legal expenses
incurred in defending against several frivolous claims.
See 563 U.S., at 830; 42 U.S. C. §1988. The trial court
granted fees for all legal work relating to those claims—
regardless of whether the same work would have been
done (for example, the same depositions taken) to contest
the non-frivolous claims in the suit. We made clear that
was wrong. When a “defendant would have incurred [an]
expense in any event[,] he has suffered no incremental
harm from the frivolous claim,” and so the court lacks a
basis for shifting the expense. Fox, 563 U.S., at 836.
Substitute “discovery abuse” for “frivolous claim” in that
sentence, and the same thing goes in this case. Or other-
wise said (and again borrowing from Fox), when “the cost[ ]
would have been incurred in the absence of ” the discovery
violation, then the court (possessing only the power to
compensate for harm the misconduct has caused) must
leave it alone. Id., at 838.
This but-for causation standard generally demands that
a district court assess and allocate specific litigation ex-
penses—yet still allows it to exercise discretion and judg-
ment. The court’s fundamental job is to determine whether
a given legal fee—say, for taking a deposition or drafting a
motion—would or would not have been incurred in the
——————
752, 764 (1980).
8 GOODYEAR TIRE & RUBBER CO. v. HAEGER
Opinion of the Court
absence of the sanctioned conduct. The award is then the
sum total of the fees that, except for the misbehavior,
would not have accrued. See id., at 837–838 (providing
illustrative examples). But as we stressed in Fox, trial
courts undertaking that task “need not, and indeed should
not, become green-eyeshade accountants” (or whatever the
contemporary equivalent is). Id., at 838. “The essential
goal” in shifting fees is “to do rough justice, not to achieve
auditing perfection.” Ibid. Accordingly, a district court
“may take into account [its] overall sense of a suit, and
may use estimates in calculating and allocating an attor-
ney’s time.” Ibid. The court may decide, for example,
that all (or a set percentage) of a particular category of
expenses—say, for expert discovery—were incurred solely
because of a litigant’s bad-faith conduct. And such judg-
ments, in light of the trial court’s “superior understanding
of the litigation,” are entitled to substantial deference on
appeal. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).
In exceptional cases, the but-for standard even permits
a trial court to shift all of a party’s fees, from either the
start or some midpoint of a suit, in one fell swoop. Cham-
bers v. NASCO offers one illustration. There, we approved
such an award because literally everything the defendant
did—“his entire course of conduct” throughout, and indeed
preceding, the litigation—was “part of a sordid scheme” to
defeat a valid claim. 501 U.S., at 51, 57 (brackets omit-
ted). Thus, the district court could reasonably conclude
that all legal expenses in the suit “were caused . . . solely
by [his] fraudulent and brazenly unethical efforts.” Id., at
58. Or to flip the example: If a plaintiff initiates a case in
complete bad faith, so that every cost of defense is at-
tributable only to sanctioned behavior, the court may
again make a blanket award. And similarly, if a court
finds that a lawsuit, absent litigation misconduct, would
have settled at a specific time—for example, when a party
was legally required to disclose evidence fatal to its posi-
Cite as: 581 U. S. ____ (2017) 9
Opinion of the Court
tion—then the court may grant all fees incurred from that
moment on. In each of those scenarios, a court escapes the
grind of segregating individual expense items (a deposi-
tion here, a motion there)—or even categories of such
items (again, like expert discovery)—but only because all
fees in the litigation, or a phase of it, meet the applicable
test: They would not have been incurred except for the
misconduct.
III
It is an oddity of this case that both sides agree with
just about everything said in the last six paragraphs about
the pertinent law. Do legal fees awarded under a court’s
inherent sanctioning authority have to be compensatory
rather than punitive when civil litigation procedures are
used? The Haegers and Goodyear alike say yes. Does that
mean the fees awarded must be causally related to the
sanctioned party’s misconduct? A joint yes on that too.
More specifically, does the appropriate causal test limit
the fees, a la Fox, to those that would not have been in-
curred but for the bad faith? No argument there either.
And in an exceptional case, such as Chambers, could that
test produce an award extending as far as all of the
wronged party’s legal fees? Once again, agreement (if
with differing degrees of enthusiasm). See Brief for Peti-
tioner 17, 23–24, 31; Brief for Respondents 17–18, 22–23;
Tr. of Oral Arg. 34–35, 46–47.
All the parties really argue about here is what that law
means for this case. Goodyear contends that it requires
throwing out the trial court’s fee award and instructing
the court to consider the matter anew. The Haegers main-
tain, to the contrary, that the award can stand. They
initially contend—pointing to a couple of passages from
the Ninth Circuit’s opinion—that both courts below articu-
lated and applied the very but-for causation standard we
have laid out. See Brief for Respondents 17–18 (highlight-
10 GOODYEAR TIRE & RUBBER CO. v. HAEGER
Opinion of the Court
ing the Ninth Circuit’s statements that Goodyear’s “bad
faith conduct caused significant harm” and that the Dis-
trict Court “determine[d] the appropriate amount of fees to
award as sanctions to compensate the [Haegers] for the
damages they suffered as a result of [Goodyear’s] bad
faith”). And even if we reject that view, the Haegers con-
tinue, we may uphold the fee award on the ground that it
in fact passes a but-for test. That standard is satisfied (so
they say) for either of two reasons. First, because the case
would have settled as soon as Goodyear disclosed the
requested heat-test results, thus putting an end to the
Haegers’ legal bills. Or second, because (settlement pro-
spects aside) the withholding of that data so infected the
lawsuit as to account for each and every expense the Hae-
gers subsequently incurred. See id., at 14–15, 22, 26.
The Haegers’ defense of the lower courts’ reasoning is a
non-starter: Neither of them used the correct legal stand-
ard. As earlier recounted, the District Court specifically
disclaimed the “usual[ ]” need to find a “causal link” be-
tween misconduct and fees when the sanctioned party’s
behavior was bad enough—in the court’s words, when it
“r[ose] to a truly egregious level.” 906 F. Supp. 2d, at 975
(emphasis deleted); see supra, at 3. In such circumstances,
the court thought, it could award “all” fees, including those
that would have been incurred in the absence of the mis-
conduct. 906 F. Supp. 2d, at 975. And the court confirmed
that approach even while conceding that it might be
wrong: By issuing a “contingent award” of $2 million,
meant to go into effect if the Ninth Circuit demanded a
causal “linkage between the misconduct and harm,” the
District Court made clear that its primary, $2.7 million
award was not so confined. App. to Pet. for Cert. 180a; see
supra, at 4. Still, the Court of Appeals left the larger
sanction in place, because it too mistook what findings
were needed to support that award. In the Ninth Circuit’s
view, the trial court could grant all attorney’s fees in-
Cite as: 581 U. S. ____ (2017) 11
Opinion of the Court
curred “during the time when [Goodyear was] acting in
bad faith.” 813 F.3d, at 1250 (emphasis added); see id., at
1249 (permitting an award of fees incurred “once [Good-
year] began flouting [its] discovery obligations” (emphasis
added)); supra, at 4. But that is a temporal limitation, not
a causal one; and, like the District Court’s “egregiousness”
requirement, it is wide of the mark. A sanctioning court
must determine which fees were incurred because of, and
solely because of, the misconduct at issue (however seri-
ous, or concurrent with a lawyer’s work, it might have
been). No such finding lies behind the $2.7 million award
made and affirmed below.
Nor are we tempted to fill in that gap, as the Haegers
have invited us to do. As an initial matter, the Haegers
have not shown that this litigation would have settled as
soon as Goodyear divulged the heat-test results (thus
justifying an all-fees award from the moment it was sup-
posed to disclose, see supra, at 8–9). Even the District
Court did not go quite that far: In attempting to buttress
its comprehensive award, it said only (and after express-
ing “some uncertainty”) that the suit probably would have
settled “much earlier.” 906 F. Supp. 2d, at 972. And that
more limited finding is itself subject to grave doubt, even
taking into account the deference owed to the trial court.
As Judge Watford reasoned, the test results, although
favorable to the Haegers’ version of events, did not deprive
Goodyear of colorable defenses. In particular, Goodyear
still could have argued, as it had from the beginning, that
“the Haegers’ own tire, which had endured more than
40,000 miles of wear and tear, failed because it struck
road debris.” 813 F.3d, at 1256 (dissenting opinion). And
indeed, that is pretty much the course Goodyear took in
another suit alleging that the G159 caused a motorhome
accident. See Schalmo v. Goodyear, No. 51–2006–CA–
2064–WS (Fla. Cir. Ct., 6th Cir., Pasco County). In that
case (as Judge Watford again observed), Goodyear pro-
12 GOODYEAR TIRE & RUBBER CO. v. HAEGER
Opinion of the Court
duced the very test results at issue here, yet still elected to
go to trial. See 813 F.3d, at 1256. So we do not think the
record allows a finding, as would support the $2.7 million
award, that disclosure of the heat-test results would have
led straightaway to a settlement.
Further, the Haegers cannot demonstrate that Good-
year’s non-disclosure so permeated the suit as to make
that misconduct a but-for cause of every subsequent legal
expense, totaling the full $2.7 million. If nothing else, the
District Court’s back-up fee award belies that theory.
After introducing a causal element into the equation, the
court found that the $700,000 of fees that the Haegers
incurred in litigating against other defendants and prov-
ing their own medical damages had nothing to do with
Goodyear’s discovery decisions. See App. to Pet. for Cert.
180a; supra, at 4. The Haegers have failed to offer
any concrete reason for questioning that judgment, and we
do not see how they could. At a minimum, then, the sanc-
tion order could not force Goodyear to reimburse those
expenses—because, again, the Haegers would have paid
them even had the company behaved immaculately in
every respect.
That leaves the question whether the contingent $2
million award should now stand—or, alternatively,
whether the District Court must reconsider from scratch
which fees to shift. In the absence of any waiver issue, we
would insist on the latter course. Although the District
Court considered causation in arriving at its back-up
award, we cannot tell from its sparse discussion whether
its understanding of that requirement corresponds to the
standard we have described. That uncertainty points
toward demanding a do-over, under the unequivocally
right legal rules. But the Haegers contend that Goodyear
has waived any ability to challenge the $2 million award.
In their view, that sum reflected Goodyear’s own submis-
sion—which it may not now amend—that only about
Cite as: 581 U. S. ____ (2017) 13
Opinion of the Court
$700,000 of the fees sought would have been incurred
“regardless of Goodyear’s behavior.” App. 69; see Brief for
Respondents 41; supra, at 4. The Court of Appeals did not
previously address that issue, and we decline to decide it
in the first instance. See Cutter v. Wilkinson, 544 U.S.
709, 718, n. 7 (2005) (“[W]e are a court of review, not of
first view”). The possibility of waiver should therefore be
the initial order of business below. If a waiver is found,
that is the end of this case. If not, the District Court must
reassess fees in line with a but-for causation requirement.
For these reasons, we reverse the judgment of the Court
of Appeals and remand the case for further proceedings
consistent with this opinion.
It is so ordered.
JUSTICE GORSUCH took no part in the consideration or
decision of this case.