Murphy v. Smith, 583 U.S. 220

Charles Murphy, a prisoner, won a §1983 trial against two prison officials and received a monetary judgment of $307,733.82 and $108,446.54 in attorney’s fees.
42 U.S.C. §1997e(d)(2) provides: “a portion of the [prisoner’s] judgment (not to exceed 25 percent) shall be applied to satisfy the amount of attorney’s fees awarded against the defendant. If the award of attorney’s fees is not greater than 150 percent of the judgment, the excess shall be paid by the defendant.”
The district court ordered Murphy to pay 10% of his judgment toward the fee award and taxed the remainder to defendants without explaining the 10% choice.
The Seventh Circuit reversed, holding that §1997e(d)(2) requires a district court to apply as much of the judgment as necessary, up to 25%, to fully satisfy the fee award before requiring defendants to pay anything.
The Supreme Court granted certiorari to resolve whether district courts have discretion to apply less than the amount necessary (up to 25%) to fully satisfy an attorney-fee award.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §1997e(d)(2) allows district courts discretion to apply any portion (up to 25%) of a prisoner’s judgment toward attorney’s fees, or requires applying as much of the judgment as necessary (up to 25%) to fully satisfy the fee award before taxing defendants	Murphy: “portion (not to exceed 25%) shall be applied” permits judicial discretion to pick any portion ≤25% (e.g., 10%)	Respondents: statutory “shall be applied … to satisfy” requires using judgment funds as necessary, up to 25%, to fully discharge fee award before shifting costs to defendants	Court: Affirmed Seventh Circuit — district courts must apply as much of the judgment as necessary, up to 25%, to satisfy the fee award (no unfettered discretion to choose a smaller amount)

Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998) (interpreting the mandatory force of “shall”).
Russello v. United States, 464 U.S. 16 (1983) (different statutory language likely signals different meaning).
Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546 (1986) (lodestar and fee-shifting precedent).
Blum v. Stenson, 465 U.S. 886 (1984) (lodestar formulation for reasonable fees).
Hensley v. Eckerhart, 461 U.S. 424 (1983) (district court discretion in awarding and adjusting attorney’s fees).
Burlington v. Dague, 505 U.S. 557 (1992) (limits on fee calculations and methods).
United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (1906) (syllabus disclaimer on headnotes not part of opinion).
INS v. Cardoza-Fonseca, 480 U.S. 421 (1987) (inferences from deleted legislative language).