PUBLISH
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
BOYD ROSENE AND ASSOCIATES,
INC.,
Plaintiff-Appellant,
v. No. 97-5216
KANSAS MUNICIPAL GAS
AGENCY, an interlocal municipal
agency; CITY OF WINFIELD,
KANSAS, a municipality,
Defendants-Appellees.
ORDER
Filed June 2, 1999
Before BRORBY and MURPHY, Circuit Judges and MARTEN, * District Judge.
MURPHY, Circuit Judge.
Appellee Kansas Municipal Gas Agency (KMGA), joined by its co-appellee
City of Winfield, Kansas, has petitioned for rehearing. Its petition seeks
*
Honorable J. Thomas Marten, United States District Judge, United States
District Court for the District of Kansas, sitting by designation.
withdrawal of the panel’s decision and certification of the sole issue to the
Oklahoma Supreme Court.
This dispute’s long and tortuous path is pertinent to the pending petition.
In Boyd Rosene & Assoc. v. Kansas Municipal Gas Agency , 113 F.3d 1245 (10th
Cir. 1997) (unpublished disposition) ( Rosene I ), this court affirmed the district
court’s decisions granting summary judgment to then-defendant KMGA and
denying KMGA’s cross-appeal for attorney’s fees. KMGA successfully
petitioned this court for rehearing en banc , and this court held that rather than
automatically applying the law of the state providing the substantive contract law,
a court must engage in a choice of law analysis in determining attorney’s fees
issues. See Boyd Rosene & Assoc. v. Kansas Municipal Gas Agency , 123 F.3d
1351, 1353 (10th Cir. 1997) ( Rosene II ). On remand, the district court held that
the Oklahoma attorney’s fee statute (Okla. St. Ann. tit. 12, §936) was procedural
under Oklahoma choice of law and awarded just over $134,000 in fees to the
prevailing defendants. On appeal, this court in its third opinion in the case
reversed the award of fees, holding that the Oklahoma attorney’s fee statute is
substantive and thus inapplicable in this case. See Boyd Rosene & Assoc., Inc. v.
Kansas Municipal Gas Agency , No. 97-5216, 1999 WL 212078 (10th Cir. Apr. 13,
1999)( Rosene III ). In so ruling, the court did not have the benefit or assistance of
any controlling Oklahoma precedent.
2
The issue which KMGA now seeks to be certified to the Oklahoma
Supreme Court has been the subject of three opinions in this court and addressed
twice by the district court. Until now, however, no party has even hinted at the
prospect of certification nor suggested that they were anything but content to have
the federal courts decide the question of whether Oklahoma’s attorney’s fee
statute is applicable. Now, however, faced with what otherwise would likely be a
final, adverse decision, KMGA proposes to eradicate Rosene III and all the
accompanying time, energy, and resources to seek a second opinion in a different
forum.
Never before has a party first requested certification after this court has
issued an opinion. With the exception of instances in the Fifth Circuit, 1
this
1
The Fifth Circuit has, on a number of occasions, certified an issue to a
state supreme court after it had already issued a decision. See, e.g., Grubbs v.
Gulf Int’l Marine, Inc., 985 F.2d 762, 762 (5th Cir. 1993); Frey v. Amoco Prod.
Co., 951 F.2d 67, 67 (5th Cir. 1992); Meloy v. Conoco, Inc., 794 F.2d 992, 992
(5th Cir. 1986); Halphen v. Johns-Manville Sales Corp., 752 F.2d 124, 124 (5th
Cir. 1985) (certification was denied by the Supreme Court of Louisiana); Cowan
v. Ford Motor Co., 713 F.2d 100, 100 (1983). The Fifth Circuit, however,
appears to be alone in its willingness to certify questions after it has issued a
decision. Perkins v. Clark Equip. Co., 823 F.2d 207, 209-210 (8 th Cir. 1987)
(“Once a question is submitted for decision in the district court, the parties should
be bound by the outcome unless other grounds for reversal are present. Only in
limited circumstances should certification be granted after a case has been
decided.”); In the matter of McLinn, 744 F.2d 677, 681 (9 th Cir. 1984) (“We
believe that particularly compelling reasons must be shown when certification is
requested for the first time on appeal by a movant who lost on the issue below.”);
Charles Alan Wright et al., Federal Practice & Procedure, § 4248 (1999) (“[T]he
failure of a party to suggest certification until a late stage in the proceeding
(continued...)
3
phenomenon has correspondingly not occurred in other circuits. Late requests
for certification are rarely granted by this court and are generally disapproved,
particularly when the district court has already ruled. See, e.g. , Harvey E. Yates
Co. v. Powell , 98 F.3d 1222, 1229 (10 th
Cir. 1996) (declining to certify in part
because the requesting party “did not seek to certify the question [below], and
only now (after receiving an adverse [district court] ruling) has asked us to do
so”); Messengale v. Oklahoma Bd. of Examiners in Optometry , 30 F.3d 1325,
1331 (10 th
Cir. 1994) (“We generally will not certify questions to a state supreme
court when the requesting party seeks certification only after having received an
adverse decision from the district court.”); Armijo v. Ex Cam, Inc ., 843 F.2d 406,
407 (10 th Cir. 1988) (denying certification in part because plaintiff “did not
request certification until after the district court made a decision unfavorable to
her”). This case presents the ultimate in delay.
When used properly, certification “saves time, energy, and resources, and
helps build a cooperative judicial federalism.” Lehman Bros. v. Schein , 416 U.S.
386, 390-91 (1974). A court must consider whether certification will conserve
the time, energy, and resources of the parties as well as of the court itself.
1
(...continued)
considerably weakens his insistence on certification.”). Even the Supreme Court
has commented on the Fifth Circuit’s willingness to certify issues. See Lehman
Bros. v. Schein, 416 U.S. 386, 390 n.6 (1974) (“The Fifth Circuit’s willingness to
certify is in part a product of frequent state court repudiation of its interpretations
of state law.”).
4
Whether these values are served by certifying an issue to a state supreme court is
within the “sound discretion of the federal court.” Id. Certification is never
compelled, even when there is no state law governing an issue. See Lehman
Bros ., 416 U.S. at 390-91.
Certification may well have been an appropriate option at some time earlier
in this litigation. Now, however, neither this court nor the parties would reap any
conservation of time, energy, or resources were this court to grant certification.
Indeed, certifying this issue to the Oklahoma Supreme Court at this late hour
would be inefficient and wasteful of the parties’ and the federal courts’
previously expended time, energy, and resources.
For these reasons, we decline the request for rehearing and certification to
the Oklahoma Supreme Court. The petition for rehearing is DENIED .
Judge Marten would grant the petition for rehearing and certify to the
Oklahoma Supreme Court.
5
F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
APR 13 1999
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
BOYD ROSENE AND ASSOCIATES,
INC.,
Plaintiff-Appellant,
v. No. 97-5216
KANSAS MUNICIPAL GAS
AGENCY, an interlocal municipal
agency; CITY OF WINFIELD,
KANSAS, a municipality,
Defendants-Appellees.
Appeal from the United States District Court
for the N. District of Oklahoma
(D.C. No. 95-CV-674-B)
Mark Banner, of Hall, Estill, Hardwick, Gable, Golden & Nelson, Tulsa,
Oklahoma (Steven M. Harris and Michael D. Davis, of Doyle & Harris, Tulsa,
Oklahoma, with him on the briefs) for Appellant, Boyd Rosene and Associates,
Inc.
Richard B. Noulles, of Gable, Gotwals, Mock, Schwabe, Kihle, Gaberino, (M.
Benjamin Singletary, of Gable, Gotwals, Mock, Schwabe, Kihle, Gaberino, Tulsa,
Oklahoma, with him on the brief, for Appellee, Kansas Municipal Gas Agency; J.
David Jorgenson, of Inhofe, Jorgenson, Balman & Waller, P.C., Tulsa, Oklahoma,
for Appellee, City of Winfield, Kansas).
Before BRORBY and MURPHY, Circuit Judges and MARTEN, * District Judge.
MURPHY, Circuit Judge.
Boyd Rosene and Associates, Inc., appeals an award of attorney’s fees
granted to Kansas Municipal Gas Agency and the City of Winfield, Kansas.
Rosene argues on appeal that under Oklahoma choice-of-law principles, Kansas
law applies and the grant of attorney’s fees to the defendants pursuant to
Oklahoma Statute § 936 was inappropriate. Exercising jurisdiction pursuant to 28
U.S.C. § 1291, this court concludes that Oklahoma choice-of-law principles
would compel the application of Kansas law on attorney’s fees. Because Kansas
disallows recovery of attorney’s fees in the absence of a contractual or statutory
provision to the contrary, the district court’s award of attorney’s fees is
Reversed.
I. Background
Boyd Rosene and Associates, Inc. (“Rosene”), sued Kansas Municipal Gas
Agency (“KMGA”) and the City of Winfield, Kansas (“Winfield”) in a breach of
contract and tort action. Rosene filed its diversity action in federal court in the
*
Honorable J. Thomas Marten, United States District Judge, United States
District Court for the District of Kansas, sitting by designation.
2
Northern District of Oklahoma. In a paragraph entitled “Choice of Law,” the
underlying contract provided that it was to be governed and construed in
accordance with Kansas law but was silent on the issue of attorney’s fees. The
district court entered summary judgment in favor of the defendants, KMGA and
Winfield, and ordered all parties to pay their own attorney’s fees. The district
court’s decision was initially affirmed on appeal. See Boyd Rosene & Assocs. v.
Kansas Mun. Gas Agency , Nos. 96-5199, 96-5209, 96-5211, 1997 WL 297677
(10 th Cir. June 5, 1997) ( Rosene I ). KMGA and Winfield, however, successfully
petitioned for rehearing en banc on the issue of their entitlement to attorney’s
fees.
Upon rehearing en banc, this court clarified Bill’s Coal Co. v. Board of
Public Utilities, 887 F.2d 242 (10th Cir. 1989), and held that in a contract suit,
“rather than automatically applying the law of the state providing the substantive
contract law, a district court must first apply the forum state’s choice-of-law rules
in resolving attorney’s fees issues.” Boyd Rosene & Assocs. v. Kansas Mun. Gas
Agency, 123 F.3d 1351, 1353 (10th Cir. 1997) (Rosene II). The en banc court
remanded the case to the district court for the application of Oklahoma’s choice-
of-law rules in resolving defendant’s claims for attorney’s fees. See id.
In applying Oklahoma’s choice-of-law rules, the district court noted that
matters of procedure, in contrast to matters of substantive law, are governed by
3
the law of the forum. The district court then held that Oklahoma’s attorney’s fee
statutes are procedural, not substantive, and proceeded to apply Oklahoma statute
§ 936, which provides for the imposition of attorney’s fees in a breach-of-contract
claim. 1 The court concluded that KMGA and Winfield were entitled to reasonable
attorney’s fees on Rosene’s breach-of-contract claim and ordered that Rosene pay
$100,365.88 to KMGA and $33,727.26 to Winfield.
II. Discussion
Review of a district court’s determinations of state law in a diversity case is
de novo. See Salve Regina College v. Russell, 499 U.S. 225, 231 (1991); Mitchell
v. State Farm Fire & Cas. Co., 902 F.2d 790, 792-93 (10 th Cir. 1990) (reviewing
choice-of-law determination in diversity case de novo). Underlying factual
determinations are reviewed for clear error. See Mid-America Pipeline Co. v.
Lario Enters., 942 F.2d 1519, 1524 (10th Cir. 1991).
1
Section 936 provides:
In any civil action to recover on an open account, a statement of
account, account stated, note, bill, negotiable instrument, or contract
relating to the purchase or sale of goods, wares, or merchandise, or for
labor or services, unless otherwise provided by law or the contract which is
the subject [of] the action, the prevailing party shall be allowed a
reasonable attorney fee to be set by the court, to be taxed and collected as
costs.
Okla. St. Ann. tit. 12, § 936 (West 1988).
4
A. Choice of law: General Principles
A federal court sitting in diversity must engage in a two-step inquiry. See
Servicios Comerciales Andinos, S.A. v. General Electric Del Caribe, Inc., 145
F.3d 463, 479 (1st Cir. 1998). First, the court must determine whether a
particular matter is procedural or substantive for Erie Railroad Co. v. Tompkins
purposes. 304 U.S. 64 (1938). If the matter is procedural, then federal law
applies; if the matter is substantive, then the court follows the law of the forum
state. See Erie, 304 U.S. at 78 (holding that federal court sitting in diversity must
apply state substantive law). Second, if the court has determined that the matter
is substantive, then it looks to the substantive law of the forum state, including its
choice of law principles, to determine the applicable substantive law. See Klaxon
Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941); Barrett v. Tallon, 30
F.3d 1296, 1300 (10th Cir. 1994). These two steps are distinct inquiries; thus,
what is substantive or procedural for Erie purposes is not necessarily substantive
or procedural for choice-of-law purposes. See Sun Oil Co. v. Wortman, 486 U.S.
717, 726 (1988) (rejecting notion that “there is an equivalence between what is
substantive under the Erie doctrine and what is substantive for purposes of
conflict of laws” (citing Guaranty Trust Co. of N.Y. v. York, 326 U.S. 99, 108
(1945)). Consequently, even though attorney’s fees are substantive for diversity
5
purposes, see King Resources Co. v. Phoenix Resources Co., 651 F.2d 1349, 1353
(10th Cir. 1981), they are not thereby necessarily substantive under Oklahoma
choice-of-law rules.
B. Oklahoma Choice of Law
Oklahoma choice-of-law principles require a court to apply Oklahoma rules
to procedural matters even when those principles require the application of the
substantive law of another jurisdiction. See Veiser v. Armstrong, 688 P.2d 796,
799 n.6 (Okla. 1984) (“In a conflict-of-law analysis matters of procedure are
governed by the law of the forum.”) (citing Northern Pac. Ry. Co. v. Babcock,
154 U.S. 190, 194 (1894)); cf. Restatement (Second) of Conflict of Laws § 122
(1971) (“A court usually applies its own local law rules prescribing how litigation
shall be conducted even when it applies the local law rules of another state to
resolve other issues in the case.”). Unfortunately, Oklahoma law is silent 2 on the
2
In its reply brief, Rosene argues that UCC § 1-105’s choice-of-law
provision supersedes Oklahoma common-law choice-of-law rules and requires the
application of Kansas law to the remedies. See Okla. Stat. tit. 12A, §1-105.
Rosene’s argument misses the mark because it presupposes that attorney’s fees
are substantive. Were this court to decide that attorney’s fees are procedural, the
law of the forum would apply regardless of a substantive-law provision such as
UCC § 1-105.
Although this court concludes that attorney’s fees are substantive, we
nonetheless decline to address Rosene’s argument because it comes too late in the
day. Rosene never raised this argument in the district court and only made the
argument on appeal in its reply brief, constituting waiver on two grounds. See
Sac & Fox Nation v. Hanson, 47 F.3d 1061, 1063 (10 th Cir. 1995) (issue raised for
first time on appeal will not be reviewed except for most manifest error); State
(continued...)
6
classification of attorney’s fees as substantive or procedural for choice-of-law
purposes. 3 Nonetheless, it is this court’s responsibility to ascertain how the
Oklahoma Supreme Court would decide the choice-of-law issue. 4 See Klaxon,
313 U.S. at 496-97; First Nat. Bank of Durant v. Trans Terra Corp. Int’l, 142
F.3d 802, 806 (5th Cir. 1998).
Oklahoma courts have classified attorney’s fees as procedural, but did so in
2
(...continued)
Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 984 n.7 (10 th Cir. 1994) (failure to
raise issue in opening brief constitutes waiver).
3
KMGA proffers Gable & Gotwals Pension Plan & Trust v. Southwest
Med. Ctr.-Moore, Inc. to support its claim that Oklahoma considers attorney’s
fees to be procedural for choice-of-law purposes. In Gable, the Oklahoma court
of appeals held that attorney’s fees are procedural for purposes of choice of law.
See No. 84,241, slip op. at 4 (Okla. Ct. App. Apr. 26, 1996). Unfortunately,
Gable is unpublished and Oklahoma does not permit unpublished opinions to be
considered as precedential. See Okla. Stat. tit. 12, § 15, app. 1, Rule 1.200(b)(5)
(West 1998) (“Because unpublished opinions are deemed to be without value as
precedent and are not uniformly available to all parties, opinions so marked shall
not be considered as precedent by any court or cited in any brief or other material
presented to any court, except to support a claim of res judicata, collateral
estoppel, or law of the case.”). Furthermore, in making its decision, the Gable
court relied upon the retroactivity cases discussed infra and made no effort to
explain their applicability to choice-of-law considerations. See id.
4
KMGA argues that because the attorney’s fee statute is located in the civil
procedure portion of the Oklahoma statutes and not among the substantive
provisions of the statutes, the Oklahoma legislature viewed § 936 as procedural
and not substantive. This argument fails because Title 12 of the Oklahoma
Statutes, which contains the fee statute in issue, also contains substantive-law
provisions, such as Oklahoma’s law on libel and slander, and its law pertaining to
change of name. See Okla. Stat. tit.12, §§ 1441-1447, 1631-1637 (West 1998).
7
the context of determining a statute’s retroactive application. 5 See, e.g.,
McCormack v. Town of Granite, 913 P.2d 282, 285 (Okla. 1996) (“[S]tatutes
relating to the award of attorney fees to a prevailing party are procedural, and
subject to retrospective operation.”); Qualls v. Farmer’s Ins. Co., 629 P.2d 1258,
1259 (Okla. 1981) (“‘Taxing of attorneys’ fees as costs relates to a mode of
procedure.’” (quoting Phoenix Fed. Sav. & Loan v. Great S.W. Fire Ins. Co., 603
P.2d 356, 358 (Okla. Ct. App. 1979) (internal quotation omitted))); Cox v.
American Fidelity Assur. Co., 581 P.2d 1325, 1327 (Okla. Ct. App. 1977) (same);
Jeffcoat v. Highway Contractors, Inc., 508 P.2d 1083, 1087 (Okla. Ct. App. 1972)
(holding that § 936 related only to the remedy or mode of procedure). KMGA
argues that these cases resolve the issue here.
The characterization of an issue as procedural for retroactivity purposes
cannot be so easily transplanted into a choice-of-law context. Recalling the
admonition that the substantive/procedural dichotomy for Erie purposes is not the
5
Although two cases concluded that attorney’s fees are substantive for
retroactivity purposes, the rulings were limited to the context of permanent-total-
disability cases in which the award of attorney’s fees was statutorily “dependent
upon the award of compensation benefits itself, which is substantive.” Burr v.
Snitker, 865 P.2d 1258, 1259-60 (Okla. Ct. App. 1993), overruled on other
grounds in Special Indem. Fund v. Weber, 895 P.2d 292, 297-98 (Okla. 1995); see
also Ailey v. D & B Constr. Co., 855 P.2d 147, 149 (Okla. Ct. App. 1993),
similarly overruled by Weber, 895 P.2d at 297-98. In these cases, the trial court’s
retroactive application of a new statute dictating periodic rather than lump-sum
payment of attorney’s fees resulted in a substantive change in the parties’ vested
rights to such fees. The issue here, in contrast, is entirely independent of an
award of damages, rendering these cases inapplicable.
8
same for choice-of-law purposes, the Restatement (Second) of Conflict of Laws
cautions generally that “[substantive/procedural] characterizations, while
harmless in themselves, have led some courts into unthinking adherence to
precedents that have classified a given issue as ‘procedural’ or ‘substantive,’
regardless of what purposes were involved in the earlier classifications.” § 122
cmt. b. The Restatement then provides the example of a decision classifying an
issue as procedural for retroactivity purposes which “might mistakenly be held
controlling on the question whether [the issue] is ‘procedural’ for choice-of-law
purposes.” Id. The Supreme Court has iterated this principle: “The line between
‘substance’ and ‘procedure’ shifts as the legal context changes. ‘Each implies
different variables depending upon the particular problem for which it is used.’”
Hanna v. Plumer, 380 U.S. 460, 471 (1965) (quoting Guaranty Trust Co. of N.Y.
v. York, 326 U.S. 99, 108 (1945)).
The purposes underlying the substantive/procedural dichotomies employed
in retroactivity and choice-of-law cases are completely different. In the choice-
of-law context, most matters are treated as substantive. Only in particular
instances should a court consider a matter to be procedural. If a case “has foreign
contacts and . . . many issues in the case will be decided by reference to the local
law of another state,” a state should label an issue “procedural” and thus apply its
own law only when to do so would serve the purpose of efficient judicial
9
administration. Restatement § 122 cmt. a. The range of issues relating to
efficient judicial administration is narrow and includes such items as “the proper
form of action, service of process, pleading, rules of discovery, mode of trial and
execution and costs.” Id; see generally id. ch. 6. These are matters in which it
would be especially disruptive or difficult for the forum to apply the local rules of
another state, and in which failure to employ another state’s law will not
undermine interstate comity. 6 See id. § 122 cmt. a.
The general presumption in retroactivity determinations is that a statute will
not apply retroactively unless the legislature has clearly expressed its intent that it
apply retroactively. See Landgraf v. USI Film Prods., 511 U.S. 244, 275 (1994).
If the legislature has made its intent clear, a court need not even consider whether
the statute should be classified as substantive or procedural. See id. at 280. Only
if the legislature’s intent is not clear should a court consider whether the statute is
substantive or procedural. See id. at 275-80. The question then becomes whether
the retroactive operation of the statute would alter the parties’ vested rights. If
the parties’ vested rights would be affected, then the statute is substantive and
will not be applied retroactively. Otherwise, the statute is deemed to be
6
The Restatement notes that “[p]robably the most important function of
choice-of-law rules is to make the interstate . . . system[] work well. Choice-of-
law rules, among other things, should seek to further harmonious relations
between states and to facilitate commercial intercourse between them.” See id. §
6 cmt. d.
10
procedural and may apply retroactively because parties generally have a
diminished reliance interest in procedural matters. See id.; see also id. at 275
n.29 (noting some instances in which procedural rules will not be applied
retroactively).
Thus, the considerations entertained by a court in classifying a particular
matter as procedural or substantive are quite different depending upon whether
the context is choice of law or retroactive application of a statute. Choice of law
analysis concerns judicial efficiency, while retroactivity analysis primarily
concerns legislative intent and only secondarily considers fairness with regard to
party expectations.
While the divergent purposes of retroactivity and choice-of-law analyses
render the Oklahoma retroactivity precedents inapposite in this case, this court
acknowledges that both inquiries share a concern about disrupting the parties’
expectations. 7
Nonetheless, the roles of party expectations in each inquiry are
meaningfully different.
Because conflicts of law are inevitable in a federal system, parties to a
contract are empowered to and frequently do choose a particular state’s law to
7
The Restatement offers four factors to consider in classifying an issue for
choice-of-law purposes, one of which is whether the parties shaped their actions
with reference to the local law of a certain state. See Restatement (Second) of
Conflict of Laws § 122 cmt. a. The parties’ expectations, the Restatement notes,
are “a weighty reason for applying [the law relied upon].” Id.
11
apply to the execution and interpretation of the contract. Absent special
circumstances, courts usually honor the parties’ choice of law because two “prime
objectives” of contract law are “to protect the justified expectations of the parties
and to make it possible for them to foretell with accuracy what will be their rights
and liabilities under the contract.” Restatement § 187 cmt. e; 8
see also Williams v.
Shearson Lehman Bros. , 917 P.2d 998, 1002 (Okla. Ct. App. 1995) (concluding
that parties’ contractual choice of law should be given effect because it does not
violate Oklahoma’s constitution or public policy); Barnes Group, Inc. v. C & C
Prods., Inc ., 716 F.2d 1023, 1029 n.10 (4 th
Cir. 1983) (“[P]arties enjoy full
autonomy to choose controlling law with regard to matters within their
contractual capacity.”).
Consistent with the primacy of party expectations in determining
contractual obligations, party choice of law is a significant consideration in
determining whether an attorney’s fees statute is substantive or procedural for
state choice-of-law purposes. See, e.g. , El Paso Natural Gas Co. v. Amoco Prod.
Co. , Civ. A. No. 12083, 1994 WL 728816, at *4-*5 (Del. Ch. Dec. 16, 1994)
(holding that attorney’s fees are procedural for choice-of-law purposes, that issue
8
Party expectation plays such a significant role in contract choice of law
cases that even when the parties to a contract fail to make a choice of law, the test
provided by the Restatement to assist the court in discerning which state’s law
ought to govern includes consideration of the parties’ expectations. See
Restatement § 188 cmt. b (“[T]he protection of the justified expectations of the
parties is of considerable importance in contracts.”).
12
of applicability of Texas attorney’s fee statute was substantive because contract
contained a Texas choice-of-law provision); Atchison Casting Corp. v.
DOFASCO, Inc ., No. 93-2447, 1995 WL 655183, at *8-9 (D. Kan. 1995)
(concluding that issue of entitlement to attorney’s fees was substantive for
choice-of-law purposes in part because parties’ choice-of-law provision indicated
that they relied upon law of another jurisdiction).
In contrast, the parties’ expectations are not given the same elevated status
in retroactivity cases. Only if legislative intent is unclear are the parties’
expectations considered by the court. Because parties’ expectations are not
critical in retroactivity cases, they were not even considered in the Oklahoma
cases holding that Oklahoma’s attorney’s fees statute may be applied
retroactively. In contrast, when determining choice-of-law issues, Oklahoma
courts prioritize party expectations. See, e.g. , Shearson Lehman , 917 P.2d at
1002; cf. Bakhsh v. JACRRC Enters. , 895 P.2d 746, 747 (Okla. Ct. App. 1995)
(holding, in choice-of-forum case, that “[p]arties to a contract may choose the
jurisdiction in which all actions arising from their transaction shall be heard”).
Finally, this court is not convinced that what counts as procedural for
choice-of-law purposes is the same as what counts as procedural for retroactivity
purposes. For support we look to the Restatement , to which Oklahoma courts
routinely refer on issues relating to choice of law. See, e.g. , Beard v. Viene , 826
13
P.2d 990, 994-98 (Okla. 1992); Bohannan v. Allstate Ins. Co. , 820 P.2d 787, 795-
96 (Okla. 1991); Shearson Lehman , 917 P.2d at 1002 . Chapter six of the
Restatement is dedicated to the general rule that a forum should apply its own
local rules “prescribing how litigation shall be conducted even when it applies the
local law rules of another state to resolve other issues in the case.” § 122.
Oklahoma follows this general rule. See Veiser , 688 P.2d at 799 n.6. Though not
purporting to be exhaustive, chapter six of the Restatement surveys the matters
normally considered procedural for choice-of-law purposes. 9
The section “Rules
for Management of Litigation” appears to be where a loser-pays attorney’s fees
provision would be listed, if at all. See id . §§ 123-36. The procedural issues
listed, however, clearly relate to vehicles by which litigation proceeds, such as
service of process and notice, pleading and conduct of proceedings, burden of
proof, pleading requirements for set-off or counterclaim, and enforcement of
judgment, to name a few. See id. §§ 126, 127, 128, 131, 133. Although
Oklahoma has not comprehensively addressed which matters it considers
procedural for choice-of-law purposes, a few Oklahoma courts have concluded
that certain issues, similar to those listed by the Restatement , are procedural for
choice-of-law purposes. See, e.g. , Flanders v. Crane Co. , 693 P.2d 602, 605
(Okla. 1984) (summary judgment standards); Veiser , 688 P.2d at 799 & n.6
9
The Restatement does not similarly survey substantive matters.
14
(procedure to collaterally attack judgment); Stephens v. Household Fin. Corp .,
566 P.2d 1163, 1165 (Okla. 1977) (set off, counterclaim, and recoupment).
This court is unable to discern any relationship between a loser-pays
attorney’s fees provision and the Restatement ’s classification of procedural issues
for choice-of-law purposes. 10
Moreover, KMGA fails to explain why Oklahoma’s
retroactivity cases compel this court to conclude that attorney’s fees are also
procedural in a choice-of-law context. Consequently, the retroactivity cases are
not controlling in the determination of the status of attorney’s fees for choice-of-
law purposes. See also DOFASCO , 1995 WL 655183, at *7 (noting Restatement ’s
caution and rejecting contention that cases holding attorney’s fees procedural in
retroactivity context control in choice-of-law context (citing Restatement (Second)
of Conflict of Laws § 122 cmt. b)).
Taking a different approach, KMGA cites to two cases to support its
argument that “under Oklahoma law, the law of the forum governs the mode of
procedure and remedy in breach of contract cases, regardless of the law applicable
to the substantive contract issues.” In Clark v. First National Bank of Marseilles,
Illinois , the Oklahoma Supreme Court stated:
10
Restatement § 130, “Methods of securing obedience to court,” might
include attorney’s fees awarded to sanction bad-faith conduct, but not loser-pays
attorney’s fees. The difference between these two types of attorney’s fees is
discussed infra .
15
The law of the state where the contract is entered into determines
matters bearing upon its execution, interpretation, and validity, but
the law of the state where the contract is sought to be enforced
determines the remedy and mode of procedure in enforcing the same.
157 P. 96, 96 para. 3 (Okla. 1916) (syllabus by the court); see also Aetna Cas. &
Sur. Co. of Hartford, Conn. v. Gentry , 132 P.2d 326, 326 para. 2 (Okla. 1942)
(similar).
Clark and Aetna , however, do not address the issue here. In Clark , the
issue before the Oklahoma Supreme Court was whether a lender who had seized
the debtor’s chattel in Kansas had been entitled to avail itself of Kansas-law
procedures for seizing and selling mortgaged chattels. See id. at 97-98. After the
seizure and sale in Kansas, the lender had sued the debtor on the promissory note
in Oklahoma court. See id. at 97. That court had refused the debtor’s request to
assess against the lender a penalty prescribed by Illinois law for a mortgagee who
fails to strictly follow the Illinois statute’s procedural requirements for chattel-
mortgage foreclosures. See id. Rejecting the debtor’s argument that Illinois law,
not Kansas law, governed the remedy available to a lender because the mortgage
had been created and largely performed in Illinois, the court on appeal stated that:
[T]he laws of Illinois . . . could have no applicability in the state of
Kansas where [lender] sought to enforce his chattel mortgage, and
that the [lender] having followed the remedy prescribed by the laws
of Kansas . . . the [debtor] cannot be heard to complain.
157 P. at 99 (emphasis added). Clark did not purport to apply Oklahoma choice-
16
of-law rules and the language quoted by KMGA provides no insight as to how the
Oklahoma Supreme Court would decide the issue here.
Although Aetna did involve a choice of law issue, it is of no assistance to
KMGA’s position. The issue in Aetna was whether Kansas or Oklahoma law
applied, the former creating a direct cause of action by victims against a
tortfeasor’s insurer and the latter rejecting direct insurer liability. 132 P.2d 326,
330-31 (Okla. 1942). The contract at issue was made in Kansas, pursuant to
Kansas law. See id. at 331. Despite the defendant’s argument that the cause of
action brought in Oklahoma “constitute[d] merely a procedural or remedial right
under the law of [Kansas], and as such is not recognizable or enforceable under
the law of Oklahoma, . . . where such a right does not exist,” the court concluded
that “[t]he nature of the liability on the contract . . . is governed by the law of the
state where it was made.” Id. Plainly the court concluded that the issue was
substantive and thus is consistent with Oklahoma choice of law principles
providing that the law of the state with the most significant relationship to the
transaction and the parties governs the contract. See, e.g., Shearson Lehman , 917
P.2d at 1002 (citing to Restatement § 188, law governing in absence of effective
choice by parties). Moreover, KMGA does not argue and we cannot find anything
in Aetna to suggest that attorney’s fees would also be considered procedural by
the Oklahoma Supreme Court.
17
Despite the parties’ arguments to the contrary, Oklahoma law provides no
guidance for the classification of attorney’s fees for choice-of-law purposes.
1. Tenth Circuit Cases
Rosene cites to two Tenth Circuit cases to support its assertion that
attorney’s fees are substantive. In Hess Oil Virgin Islands Corp. v. UOP , Inc .,
this court stated:
We are convinced that the district court correctly looked to the
Oklahoma conflict of laws rule to determine whether Oklahoma would
apply its own statute on attorney’s fees or that of the Virgin Islands where
the substantive claim arose. . . . We also agree with the trial court’s view
that Oklahoma would apply the law of the Virgin Islands since the right of
recovery of the attorney’s fee is intertwined with that of the substantive
right.
861 F.2d 1197, 1210 (10th Cir. 1988) (citations omitted). Although a federal
court and not an Oklahoma state court applied Oklahoma choice-of-law
principles, Hess is the only case that discusses the issue here. As precedent,
however, Hess is so problematic it does not aid this court’s decision. First, Hess
was decided before Salve Regina College v. Russell , in which the Supreme Court
rejected the prevailing clear-error standard of review of district courts’
determinations of state law and required instead that courts of appeals review
such determinations de novo . 499 U.S. 225, 231 (1991). More significantly,
however, it is doubtful that Hess remains viable after Rosene II . See Rosene II ,
18
123 F.3d at 1353.
Other Tenth Circuit cases also hold that attorney’s fees are substantive, but
they do not purport to engage in a choice-of-law analysis for Oklahoma. In
Prudential Insurance Co. of America v. Carlson , this court stated that “[s]tatutes
providing for attorneys’ fees impose a liability which one may enforce as a matter
of right. Such fees are put in controversy in the suit and are a part of the
substantive right.” 126 F.2d 607, 611 (10th Cir. 1942). Prudential , however,
employed the reasoning rejected by Rosene II : “Since the substantive rights of the
parties are governed by the lex loci , it follows that the law of [the state where the
contract was made] . . . governs the right to recover attorneys’ fees.” Id. ; see also
R.L. Clark Drilling Contractors v. Schramm, Inc. , 835 F.2d 1306, 1309 (10 th
Cir.
1987) (citing Prudential ).
KMGA points to A.T. Clayton & Co. v. Missouri-Kansas-Texas Railroad
Co. to support its claim that the Tenth Circuit has “effectively recognized the
procedural nature of Oklahoma’s attorney fee statutes.” 901 F.2d 833 (10 th
Cir.
1990). In Clayton the issue was whether an Oklahoma attorney’s fee statute was
preempted by a federal statute, the Carmack Amendment, previously determined
to preempt state common law remedies. See id. at 834-35. The Clayton court
relied upon a Supreme Court decision concluding that a Texas attorney’s fee
statute was not preempted by the Carmack Amendment because the Texas statute
19
did not contradict or burden the Carmack Amendment. See id. (quoting Missouri,
Kansas & Texas Ry. Co. v. Harris , 234 U.S. 412, 419-21 (1914)). The Clayton
court concluded that, similar to the Texas statute, the Oklahoma statute “simply
provides an incidental compensatory allowance for the expense of employing an
attorney” and does not “substantively enlarge the responsibility of the carrier.”
See id. at 835 (construing Okla. Stat. tit. 12, § 940A (1981)). KMGA argues that
the Clayton court’s willingness to apply the Oklahoma attorney’s fee statute even
when the case was substantively governed by the law of another jurisdiction
indicated the court’s view that the statute was procedural.
Clayton , however, is completely devoid of state choice-of-law analysis, and
the court’s conclusion that an Oklahoma attorney fee statute had a de minimis
effect on a defendant’s liability under the Carmack Amendment contributes
nothing to the discussion here. Unlike choice-of-law principles which are a zero-
sum game (either state A or state B’s law will be applied), preemption law
permits the concurrent application of state and federal law if the state law is not
inconsistent with the federal law. See Gade v. National Solid Wastes
Management Ass’n ., 505 U.S. 88, 98-99 (1992) (discussing conflict preemption).
Moreover, because federal procedural law is applicable in federal courts, the
procedural or substantive nature of Oklahoma’s attorney’s fee statute was
irrelevant. See Hanna v. Plumer , 380 U.S. 460, 465 (1965).
20
2. Other Jurisdictions
KMGA cites the Wyoming Supreme Court decision Smithco Engineering,
Inc. v. International Fabricators, Inc. for the proposition that § 936, the
Oklahoma attorney’s fee statute at issue here, is procedural. 775 P.2d 1011,
1017-1019 (Wyo. 1989). The issue in Smithco was whether, by virtue of contract
situs, the party who sued in Wyoming could nonetheless “[utilize] the Oklahoma
attorneys’ fees . . . statute” in Wyoming. Id. at 1017. The Wyoming Supreme
Court reiterated the proposition that matters of procedure are governed by the law
of the forum, even if the applicable substantive law is from another jurisdiction.
See id. at 1018; see also 16 Am. Jur. 2d Conflict of Laws § 151 nn.35&37 (1998)
(citing Smithco , among other cases, for this proposition); accord Veiser , 688 P.2d
at 800 n.6 (“In a conflict-of-law analysis matters of procedure are governed by the
law of the forum.”). The court proceeded to hold that attorney’s fees are
procedural in Wyoming. See id . at 1018. KMGA relies upon dicta in which the
court stated that “[w]e are buttressed in our view [that attorney’s fees are
procedural] by the fact that Oklahoma recognizes that the assessment of attorney’s
fees as costs under . . . § 936 . . . is procedural.” Id.
Smithco is not helpful because the Wyoming Supreme Court expressly
engaged in an analysis of Wyoming, not Oklahoma, choice of law. See id. at
21
1017-18. Additionally, although a state is free to consult the choice-of-law
determinations of another state in deciding whether its own statute is substantive
or procedural, state courts are not compelled to do so. Cf. Nesladek v. Ford
Motor Co. , 46 F.3d 734, 737 (8 th
Cir. 1995). Rather, the forum’s law controls the
substantive/procedural determination, and KMGA provides no support for the
proposition that Oklahoma has found Wyoming choice-of-law analysis compelling
enough to adopt it. See Klaxon , 313 U.S. at 496 (requiring federal court sitting in
diversity to apply conflict-of-law rules of state in which court sits). For these
reasons, Smithco is no more compelling than DOFASCO , which held that under
Kansas choice-of-law principles, attorney’s fees are substantive. See DOFASCO ,
1995 WL 655183, at *9. Moreover, the Oklahoma cases upon which Smithco
relies are the retroactivity cases already discussed and rejected as insufficiently
analogous for choice-of-law purposes. See discussion supra , at __.
Finally, KMGA cites City of Carter Lake v. Aetna Casualty & Surety Co .
604 F.2d 1052 (8 th
Cir. 1979). In Carter , the court considered whether the
attorney’s fee statute in the forum state, Nebraska, was substantive or procedural.
See id. at 1062. The Eighth Circuit had only to look to the Nebraska Supreme
Court, which had addressed the issue and held that the attorney’s fee statute in
question was procedural. See id. (citing Hawkeye Cas. Co. v. Stoker , 48 N.W.2d
623, 634 (Neb. 1951)). Had Oklahoma decided the issue before us, this decision
22
would be as easy as that in Carter . Carter is also unpersuasive because, like
Smithco , it does not purport to apply Oklahoma choice-of-law principles.
Moreover, to the extent that KMGA cites to Carter for the appearance of
uniformity among courts who have considered the issue here, this court notes that
other courts have decided that their attorney’s fee statutes are substantive, not
procedural, indicating that this is by no means an obvious or settled issue. For
example, an Oregon state court held that because attorney’s fees must be pleaded
and proved, “awarding them is a matter of substantive, rather than procedural,
right.” Seattle-First Nat’l Bank v. Schriber , 625 P.2d 1370, 1373 (Or. Ct. App.
1981); see also Aries v. Palmer Johnson, Inc ., 735 P.2d 1373, 1380 & n.3 (Ariz.
Ct. App. 1987) (holding that Arizona law providing for award of attorney’s fees
was substantive, and citing cases from several other states); Corrosion Rectifying
Co. v. Freeport Sulfur Co. , 197 F. Supp. 291, 292 (S.D. Tex. 1961) (“Texas
authorities and other cases clearly hold the issue of attorneys’ fees to be one of
substantive rights . . . .”).
C. § 936 Attorney’s Fees Are Substantive
The particular factual circumstances of this case lead this court to conclude
that the Oklahoma Supreme Court would classify § 936 attorney’s fees as
substantive. This conclusion is compelled by the nature of the attorney’s fees
23
statute at issue and the nature of the underlying contractual dispute.
1. The distinction between loser-pays and bad-faith attorney’s fees
This court recognizes a distinction, as do other courts and commentators,
between loser-pays attorney’s fees, that is, attorney’s fees awarded to a party
simply because it prevailed, and attorney’s fees assessed for a willful violation of
a court order or against a losing party who acted in bad faith, vexatiously,
wantonly, or for oppressive reasons [hereinafter “bad-faith attorneys fees”]. See,
e.g. , Servicios Comerciales , 145 F.3d at 480 n.9 (noting that a rule awarding
loser-pays attorney’s fees “has a much better claim to being ‘substantive’ than a
rule awarding attorney’s fees only as a sanction for frivolous litigation.”).
Loser-pays attorney’s fees are normally not within a court’s inherent power.
Instead, they reflect a conscious policy choice by a legislature to depart from the
American rule and codify the English rule. See 20 Am. Jur. 2d Costs § 57 (1995)
(“Fees paid to attorneys are ordinarily not recoverable from the opposing party as
costs, in the absence of express statutory or contractual authority.”). The
authority to award bad-faith attorney’s fees, though frequently codified, is usually
within a court’s inherent powers, which it has discretion to exercise in the interest
of justice and efficient judicial administration. For example, the Oklahoma
Supreme Court noted that a court’s inherent power to make “an award of
24
attorney’s fees against an opponent under the ‘bad faith’ exception to the
American Rule” was based upon its need “to manage its own affairs so as to
achieve the orderly and timely disposition of cases.” Winters v. City of Oklahoma
City , 740 P.2d 724, 725 (Okla. 1987) (discussing Roadway Express, Inc. v. Piper ,
447 U.S. 752, 764-65 (1980)); see also Pennsylvania v. Delaware Valley Citizens’
Council for Clean Air , 478 U.S. 546, 562 n.6 (1986).
The attorney’s fees provided by § 936 are not assessed for bad-faith
litigation; they are instead simply granted to the prevailing party. While courts
award bad-faith attorney’s fees for reasons related to judicial administration,
§ 936 attorney’s fees do not seem to fit the same rubric. See Servicios
Comerciales , 145 F.3d at 481 n.9.
2. Contractual Choice of Law
Because parties are empowered to make contractual choice-of-law
provisions, their expectations about the applicability of those choice-of-law
provisions are a significant factor in the determination of whether an issue is
substantive or procedural for choice-of-law purposes. In determining whether an
issue is substantive or procedural, the Restatement considers whether the parties
shaped their actions with reference to the local law of a certain jurisdiction. 11
See
11
The Restatement also considers whether: (1) the issue is one whose
(continued...)
25
Restatement § 122 cmt. a; see also DOFASCO , 1995 WL 655183, at *8-9
(applying Restatement factors and concluding that attorney’s fees are substantive
for Kansas choice-of-law purposes).
In accord with the Restatement , a few courts have concluded that party
reliance on contractual choice-of-law provisions compels a conclusion that
attorney’s fees are substantive. Even though the Supreme Court of Delaware had
held that attorney’s fees are “a procedural matter governed by the law of the
forum,” Chester v. Assiniboia Corp ., 355 A.2d 880, 882 (Del. 1976), the
Delaware Court of Chancery concluded that the parties’ contractual choice of law
created a substantive claim of right to attorney’s fees under Texas law. See El
Paso , 1994 WL 728816, at *5. The facts of El Paso are quite similar to this case.
In a breach-of-contract suit between Amoco and El Paso, the contract in question
did not address attorney’s fees but did contain a general choice-of-law provision
designating Texas law as controlling. See id . Texas permits the recovery of
11
(...continued)
resolution would be likely to affect the ultimate result of the case; (2) the
precedents have tended consistently to classify the issue as procedural or
substantive for conflict-of-laws purposes; and (3) applying another jurisdiction’s
rules of judicial administration would unduly burden the forum. See id. § 122,
cmt. a. We note that these remaining factors leave the decision in this case in
equipoise. The attorney’s fees issue will not affect the ultimate disposition of this
case, which weighs in favor of KMGA. On the other hand, applying the Kansas
law of attorney’s fees would not unduly burden the court, which weighs in favor
of Rosene. Finally, as already noted, there is no consistent classification of
attorney’s fees to be found in either Oklahoma or Tenth Circuit law.
26
attorney’s fees and Delaware does not. See id. at *4. Amoco, the prevailing
party, argued that because of the contractual choice-of-law provision, Texas law
should govern and hence it should recover attorney’s fees; El Paso argued that
because Delaware considers attorney’s fees to be procedural, the law of the forum
should apply. See id .
The court stated that the core analysis should be “whether the issue is one
that constitutes or is vitally bound up with the adjudication of the asserted
substantive right.” Id. The court noted, however, that certain attorney’s fees
statutes, for example, those which award attorney’s fees as a result of bad-faith
litigation, do not involve a substantive right. See id . Thus, the court reasoned,
the application of the law of the forum in those instances would not be perceived
as failing to afford full faith and credit to sister states, or as disappointing the
reasonable expectations of either party. See id . Not confronted with this type of
attorney’s fee, the court found compelling the contractual provision that Texas
law governed. See id. at *5. Even though the contract did not specifically
address attorney’s fees, the parties had nevertheless made the victor’s entitlement
to fees a “substantive contractual right by reason of designating as governing the
law of . . . Texas.” Id.
The El Paso court is not alone. In DOFASCO the Kansas federal district
court concluded that attorney’s fees were substantive in part because the contract,
27
although silent as to attorney’s fees, provided for Canadian law to control,
tending to show that the parties had shaped their conduct in light of Canadian
law. See DOFASCO , 1995 WL 655183, at *8-9. Cf. Bensen v. American
Ultramar Ltd. , No. 92 CIV. 4220, 1997 WL 317343, at *15 (S.D.N.Y. June 12,
1997) (despite conclusion that attorney’s fees were procedural under New York
choice of law, stating that even if law of foreign jurisdiction applied, “it would be
unjust to compel plaintiff to absorb defendants’ sizable legal bill when he was not
aware of the possibility and did not have the opportunity to conduct the litigation
accordingly”). 12
In this case, the parties expressed in their choice-of-law provision that
Kansas law would govern their agreement. They said nothing, however, about the
allocation of attorney’s fees. While Kansas law does not statutorily permit
recovery of attorney’s fees, it does not prohibit the parties from contracting to
shift or allocate attorney’s fees. See Kan. Stat. Ann. § 84-2-710, cmt.1 (1997)
(“Seller’s incidental damages: Attorney’s fees incurred in bringing the breach of
contract action, however, are not recoverable as incidental damages under this
section.”); see also T.S.I. Holdings, Inc. v. Jenkins , 924 P.2d 1239, 1254 (Kan.
Without suggesting that the conclusion would have been different, this
12
court notes that in Du-Wel Products, Inc. v. United States Fire Insurance Co.,
perhaps the most cogent state court decision concluding that attorney’s fees are
procedural for choice-of-law purposes, the contract at issue did not contain a
choice-of-law provision. See 565 A.2d 1113, 1120 (N.J. Super. Ct. App. Div.
1989).
28
1996). The parties’ failure to provide for attorney’s fees, in the face of their
adoption of Kansas law, indicates their expectation that each party would bear its
own costs. Moreover, the contract was created in 1994 when Bill’s Coal , decided
in 1989, was the law. Thus, if the parties contracted with an eye toward the
applicable law, their expectation would have been that Kansas law would govern
the recovery of attorney’s fees. This court therefore concludes that, consistent
with the parties’ expectations, Oklahoma choice-of-law principles would apply
Kansas law which does not allow recovery of attorney’s fees absent a contractual
provision to the contrary.
This decision is fully in accord with Rosene II . Rosene II states that “rather
than automatically applying the law of the state providing the substantive contract
law, a district court must first apply the forum state’s choice-of-law rules.” 123
F.3d at 1353 (emphasis added). Rosene II thus prescribes a process by which a
court must abide in determining a choice-of-law issue; it does not prescribe a
result. A court is not permitted to slavishly adhere to the law of the state
providing the substantive law. Neither, however, is a court prohibited from
weighing heavily the expectations of the contracting parties when, as here, such
parties’ reliance is a consideration in the forum state’s choice-of-law principles.
D. Attorney’s fees as costs
29
Because it seems incontrovertible that costs are procedural, 13
the question
remains whether it matters that § 936 provides attorney’s fees “be taxed and
collected as costs.” Okla. Stat. tit. 12, § 936.
Under Oklahoma law, attorney’s fees are not synonymous with costs. See
Sisk v. Sanditen Inv., Ltd. , 662 P.2d 317, 320 (Okla. Ct. App. 1983) (“The usage
of the word ‘costs’ in a statute providing for the award thereof is not ordinarily
understood to include attorney fees.”). Instead, attorney’s fees awards are only
permitted under statutes specifically providing for recovery of attorney’s fees .
See Harlow Corp. v. Bryant Exploration & Prod. Co. , 816 P.2d 1154, 1155 (Okla.
Ct. App. 1991) (holding that statute authorizing award of “costs” did not
authorize trial court to award attorney’s fees to prevailing party). Although costs
must also be allowed by statute, Oklahoma provides for their universal award to
successful plaintiffs and defendants as a matter of course. See Okla. Stat. tit. 12,
§ 928 (“Where it is not otherwise provided by this and other statutes, costs shall
be allowed of course to the plaintiff, upon a judgment in his favor, in actions for
the recovery of money only, or for the recovery of specific, real or personal
property.”); id. § 929 (similar, defendants). That attorney’s fees are taxed as
13
Restatement § 122 states that “[a] court usually applies its own local
rules prescribing how litigation shall be conducted even when it applies the local
law rules of another state to resolve other issues in the case.” Comment a explains
that issues of judicial administration include “the proper form of action, service
of process, pleading, rules of discovery, mode of trial and execution and costs.”
(emphasis added). Id. cmt. a.
30
costs is a matter of form, not substance, and does not render attorney’s fees
procedural for choice-of-law purposes.
V. Conclusion
This court concludes that § 936 attorney’s fees are a substantive issue in
the litigation arising from the contract between Rosene and KMGA. Accordingly,
Oklahoma choice-of-law principles would compel the application of Kansas law
to this issue. The judgment of the federal court in the Northern District of
Oklahoma awarding attorney’s fees to KMGA and Winfield is REVERSED and
this case is REMANDED to the district court for entry of judgment consistent
with this opinion.
31
Boyd Rosene & Assoc. v. Kansas Municipal Gas
Combined Opinion