Allocation of Attorney’s Fees Under the Georgia RICO Act
In Nanoventions, LLC v. Daniels, 368 Ga. App. 811 (2023), the Georgia Court of Appeals reversed and vacated in part the trial court’s decision declining to award damages against one defendant and awarding attorney’s fees under O.C.G.A. § 16-14-6(c) against only a single party in a Georgia Racketeer Influenced and Corrupt Organizations (RICO) Act case.
Nanoventions Holdings, LLC (Nanoventions) filed suit against Steven Daniels, Bonnie Hutchinson, BIW Enterprises, LLC (BIW) and other defendants, alleging Stevens embezzled two million dollars from it while serving as its chief financial officer.1 Those funds were used to fund BIW and to purchase a home owned jointly by Daniels and Hutchinson.2 The trial court granted summary judgment in favor of Nanoventions on the majority of its claims against Daniels and entered default judgments against BIW and Hutchinson.3 The court also awarded $123,737.50 in attorney’s fees against only BIW.4 On appeal, Nanoventions raised the issue of attorney’s fees only being awarded against one defendant, arguing the trial court erred by refusing to award attorney’s fees as mandated by O.C.G.A. § 16-14-6(c).5
The Court of Appeals noted O.C.G.A. § 16-14-6(c) provides certain damages to an individual injured by RICO violations and that “[s]uch person shall also recover attorney’s fees in the trial and appellate courts . . . .”6 It confirmed the trial court granted attorney’s fees only against BIW, not Daniels or Hutchinson.7 The court also could not find any binding authority as to whether RICO attorney’s fees may, or must, be awarded jointly and severally.8 Thus, the court of appeals vacated the trial court’s attorney’s fees rulings relating to Daniels, Hutchinson and BIW, and directed the trial court to elicit briefing and conduct a hearing on the issue of attorney’s fees, keeping in mind O.C.G.A. § 16-14-6(c)’s requirement that attorney’s fees shall be recovered by a successful plaintiff.9
In reaching its decision, the court cited several non-binding decisions which address awarding attorney’s fees in Georgia RICO cases. In one such decision, the appellants attempted to rely on law interpreting other Georgia attorney’s fee statutes requiring litigants to prove they actually incurred fees.10 The court noted those statutes authorized fees for specific bad acts, creating no problems separating the causes of action.11 It contrasted those statutes with the broader attorney’s fee provision in the Georgia RICO statute where, like its federal analogue, causes of action may be so inextricably intertwined that the allocation of attorney’s fees between claims may be impossible or incomprehensible.12 Due to the similarities between the two statutes and the absence of decisions from Georgia Courts interpreting the statutes, the court of appeals analyzed federal decisions.13 The court noted when a common core of facts, derived from related legal theories, provides the basis for several claims, attorney fees on all related claims are permitted.14 Conversely, when different claims are based upon separate facts and theories, no fees should be awarded for unsuccessful claims.15 The court of appeals held these practical difficulties in RICO cases meant it would not require fee allocation unless the unsuccessful claims and those not receiving awards of attorney’s fees are distinctly different claims for relief based on different facts and legal theories.16 In an unpublished federal case, the district court found attorney’s fees paid by certain defendants could include work related to dismissed defendants if there was no meaningful distinction between the work applicable to both.17
Although binding authority is scarce on the issue of awarding attorney’s fees in Georgia RICO cases, the court of appeals’ decision to remand Nanoventions and its citation of non-binding authority, provides some guidance as to how trial courts may allocate attorney’s fees in RICO cases. In sum, a trial court should look to federal case law for guidance on the issue, given the similarities between the federal and Georgia RICO statutes.18 A trial court should also consider how intertwined the underlying causes of action are. If the claims in the RICO action stem from a common core of facts and related legal theories, then a court may not require allocation of attorney fees.19 The ultimate question on allocation of attorney’s fees in Georgia RICO cases appears to turn on the relationship between the underlying claims.
1 Nanoventions, LLC, 388 Ga. App. at 811–12.
2 Id. at 811.
3 Id.
4 Id. at 813.
5 Id. at 814.
6 Id. (emphasis in original).
7 Id.
8 Id.
9 Id. at 814–15. At this time, none of the parties have filed briefs with the trial court, nor has a hearing occurred.
10 Dee v. Sweet, 218 Ga. App. 18, 20, 460 S.E.2d 110 (1995) (physical precedent only).
11 Id.
12 Id.
13 Id.
14 Id.
15 Id.
16 Id. at 20–21.
17 Functional Products Trading, S.A. v. JITC, LLC, 2014 WL 3749213 at *22 (N.D. Ga. July 29, 2014).
18 Dee, 218 Ga. App. at 20.
19 Id. at 20–21.
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