Baker Botts v. ASARCO

On June 15, 2015, the Supreme Court issued a 6-3 decision in favor of Bancroft’s client ASARCO in Baker Botts LLP v. ASARCO LLC, 135 S. Ct. 2158 (2015). The question presented was whether bankruptcy attorneys and other professionals can bill the bankruptcy estate for fees incurred in defending their fee requests. The United States and nearly the entire bankruptcy bar supported petitioner Baker Botts and argued that such fees should be allowed. But the Supreme Court agreed with ASARCO that this case was governed by the longstanding “American Rule,” which provides that parties should generally bear their own fees and costs absent a clear fee-shifting provision. The Court found no such clear statement in the Bankruptcy Code, which authorizes fees only for actual, necessary services rendered to the bankruptcy estate. The Court concluded that fees incurred while litigating against the bankruptcy estate cannot possibly be deemed a “service rendered” to the estate. Paul D. Clement and Jeffrey M. Harris helped prepare ASARCO’s merits brief and assisted with argument preparation.