USA Law and Practice Contributed by: Robert Houck, William Lavery, Joseph Ostoyich and Leigh Oliver, Clifford Chance US
12. Appeals 12.1 Basis of Appeal
the antitrust laws. However, opponents of litigation funding have challenged these arrangements as being illegal “champerty” – the practice of acquiring an interest in pursuing a third party’s cause of action in exchange for a portion of the proceeds if litigation succeeds. See, for example, Boling v Prospect Fund- ing Holdings , 771 Fed Appx 562 (6th Cir 2019). In 2024, the litigation finance industry experienced a continued contraction in new capital commitments, with a 16% year-over-year decline. New commitments are now nearly 30% below 2022 levels. The contrac - tion is largely supply-driven, as funders face greater difficulty raising capital amidst broader challenging financial conditions. 11.2 Costs Section 4 of the Clayton Act provides that plaintiffs “shall recover” the costs associated with successfully litigating their claim, including “a reasonable attorney’s fee” (15 USC Section 15[a]). Typically, plaintiff lawyers acting for a purported class work on contingency and seek to recover a percentage of any court-approved settlement or trial award. By contrast, defendants have no general statutory right to recover their costs of successfully defending a federal antitrust litigation. The lone means of recovering defence costs is for the court to impose monetary sanctions on plaintiffs under the federal rules – for example, based on a finding that plaintiffs (or their attorneys) have asserted frivolous claims or arguments (Fed R Civ P 11). Sanctions – particularly significant monetary penal - ties – are exceedingly rare and an unreliable source of recovery of defence costs. The unavailability of defence costs to serve as a headwind on speculative antitrust claims is one reason the courts take seri - ously their gatekeeper role in assessing defendants’ threshold challenges to the sufficiency of an antitrust complaint. Typically, courts will not order a litigant to post security for its opponent’s litigation costs. The exception is that parties seeking preliminary injunctive relief must provide a security in an amount sufficient to pay the costs and damages sustained if the party is found to have been wrongfully enjoined or restrained (Fed R Civ P 65).
A litigant adversely affected by a decision of a fed - eral district court may seek to appeal that decision to an intermediate federal court of appeals. Parties may generally appeal a lower court’s conclusions of law according to a de novo standard, under which the appeals court will analyse the legal question with - out deferring to the district court’s analysis. While an appellant may also challenge a lower court’s factual findings, the appeals court will apply a far more def - erential standard of review, generally leaving fact con - clusions undisturbed unless clearly erroneous. Whether, and when, a party may challenge a district court decision can take on great significance, par - ticularly in complex litigation such as an antitrust class action. A party generally has the right to appeal “final decisions of the district courts” (28 USC Sec - tion 1291). A decision is “final” if it “ends the litiga - tion on the merits” ( Catlin v United States , 324 US 229 [1945]). The policy of the “final judgment rule” is intended to promote efficiency and limit delay, by seeking to ensure that, where possible, all challeng - es to lower-court decisions are resolved in a single appeal. By contrast, only in limited circumstances will courts permit appeals of interlocutory orders that do not finally resolve the dispute. In general, interlocutory appeals are reserved for “controlling questions of law” about which there is “substantial ground for difference of opinion” and resolution of which would “materially advance the ultimate termination of the litigation” (28 USC Section 1292[b]). The federal rules authorise – but do not require – interlocutory appeal of a decision on class certification (Fed R Civ P 23[f]). Parties who lose on appeal may petition the US Supreme Court for final review of the appellate decision. Supreme Court review is discretionary, and as a practical matter is rarely granted.
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