Page:Baker Botts L.L.P. v. ASARCO LLC.pdf/5

Rh successful reorganization in which all of ASARCO’s creditors were paid in full. After over four years in bankruptcy, ASARCO emerged in 2009 with $1.4 billion in cash, little debt, and resolution of its environmental liabilities.

The law firms sought compensation under §330(a)(1), which provides that a bankruptcy court “may award … reasonable compensation for actual, necessary services rendered by” professionals hired under §327(a). As required by the bankruptcy rules, the two firms filed fee applications. Fed. Rule Bkrtcy. Proc. 2016(a). ASARCO, controlled once again by its parent company, challenged the compensation requested in the applications. After extensive discovery and a 6-day trial on fees, the Bankruptcy Court rejected ASARCO’s objections and awarded the firms approximately $120 million for their work in the bankruptcy proceeding plus a $4.1 million enhancement for exceptional performance. The court also awarded the firms over $5 million for time spent litigating in defense of their fee applications.

ASARCO appealed various aspects of the award to the District Court. As relevant here, the court held that the firms could recover fees for defending their fee application.

The Court of Appeals for the Fifth Circuit reversed. It reasoned that the American Rulethe rule that each side must pay its own attorney’s fees“applies absent explicit statutory … authority” to the contrary and that “the Code contains no statutory provision for the recovery of attorney fees for defending a fee application.” In re ASARCO, L. L. C., 751 F. 3d 291, 301 (2014) (internal quotation marks omitted). It observed that §330(a)(1) provides “that professional services are compensable only if they are likely to benefit a debtor’s estate or are necessary to case administration.” Id., at 299. Because “[t]he primary beneficiary of a professional fee application, of course, is the professional,” compensation for litigation defending that application does not fall within §330(a)(1). Ibid.

We granted certiorari, 573 U. S. 991 (2014), and now affirm.