Richlin Security Service Co. v. Chertoff
The Supreme Court ruled that a company that wins a fee award against the federal government can recover its paralegal costs at the market rate paralegals normally charge, not just at the lower cost the law firm paid to employ them.
The decision resolves a split among lower courts over how a federal fee-shifting law treats paralegal work, and it extends a similar rule the Court had already applied to civil rights lawsuits to this government-fee-recovery law as well.
“Paralegals are surely more analogous to attorneys, experts, and agents than to studies, analyses, reports, tests, and projects.”
The Court explains why paralegal costs should count as recoverable 'fees' rather than flat 'expenses.'
How it got here: Richlin won before a federal contract appeals board, which capped its paralegal fee recovery at cost; the Federal Circuit affirmed, and Richlin appealed to the Supreme Court.
The Case in Depth
What happened
Richlin Security Service, a small California guard company, had a billing dispute with the former Immigration and Naturalization Service over misclassified employees. Richlin won its underlying claim before a federal contract appeals board, then sought reimbursement of its attorney's fees and paralegal costs under a federal law letting winning parties recover fees from the government when the government's position wasn't justified.
The question before the Court
When a company wins money from the government, can it get reimbursed for its paralegals' work at the market billing rate, or only at what the law firm actually paid them?
The Court's answer
Yes — a company that wins a fee award against the federal government can recover its paralegal costs at the market rate paralegals normally charge, not just at what the law firm paid to employ them. The Court read the statute's text as treating paralegal charges as 'fees,' recoverable at 'prevailing market rates' just like attorney fees, rather than as flat 'expenses' capped at cost.
The Court also leaned on its own earlier ruling interpreting a similar civil-rights fee-shifting law, which held it obvious that 'attorney's fees' have long included the work of paralegals. Since that same historical understanding applies to the law at issue here, paralegal fees must likewise be paid at market rates, and the government's competing policy and legislative-history arguments did not change that conclusion.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Businesses and individuals who successfully challenge unjustified government positions can now recover more money for the paralegal work that went into their case, rather than being limited to below-market reimbursement. This makes it more financially realistic for smaller parties to fight the government and recoup their full litigation costs, including support staff.
What changes now
The case returns to the Federal Circuit and then to the contract appeals board for further proceedings applying the market-rate standard the Court adopted. Richlin's paralegal fee award will need to be recalculated using prevailing market rates rather than the lower cost figure the board had used. The ruling is a final decision on the legal question, though the exact dollar recalculation is left for the lower proceedings.
Concurrences and dissents
Concurrence in part — Justice Scalia
Justice Scalia joined the Court's opinion in full except for Part III-A, which discussed legislative history. He apparently did not want to endorse relying on a Senate Report as evidence of what Congress intended.
Concurrence in part — Justice Thomas
Justice Thomas joined the Court's opinion except for Parts II-B and III, meaning he did not join the sections relying on the Missouri v. Jenkins precedent or on legislative history and policy arguments, likely preferring to rest the decision on the statutory text alone.
How the Court got there
The legal reasoning, step by step
- The Court read the fee-shifting law's text directly: it lets a winning party recover 'fees' it incurred, calculated at 'prevailing market rates,' and paralegal charges are naturally 'fees' rather than the kind of flat 'expenses' (like study or report costs) the statute treats differently.
- The Court rejected the government's argument that paralegal costs should be grouped with expenses like engineering reports, reasoning that paralegals are far more comparable to attorneys and other professionals than to inanimate cost items like studies or tests.
- The Court also rejected measuring any 'cost' limitation from the law firm's perspective rather than the client's, noting the statute repeatedly says fees are recoverable as 'incurred by that party' — meaning the client, not the firm.
- The Court then leaned on its own precedent interpreting a similar civil-rights fee-shifting statute, which had held it 'self-evident' that the term 'attorney's fee' historically included paralegal work, since attorneys traditionally billed clients for that work as part of their own fee.
- Applying that same self-evident historical understanding here, the Court concluded that this law's use of 'attorney...fees' likewise includes paralegal fees, meaning they too must be paid at prevailing market rates rather than at attorney cost.
- The Court found the government's competing legislative-history and policy arguments unpersuasive, concluding that market-rate recovery for paralegals is consistent with how the statute already treats other professionals, and that no ambiguity remained to require a narrow reading favoring the government.
Doctrinal impact
Cases affected by this decision
Reaffirms Missouri v. Jenkins (491 U. S. 274)
The Court relies on this case's rule that 'attorney's fees' historically include paralegal fees to interpret the similar statute here.
Distinguishes West Virginia Univ. Hospitals, Inc. v. Casey (499 U. S. 83)
The Court uses this case to clarify that Jenkins rested on the traditional meaning of 'attorney's fees,' not on broad policy goals.