In the case of Murphy v. Smith, the U.S. Supreme Court had to determine how much a prisoner who wins a civil rights suit must pay towards his attorney's fees from his judgment award under federal law (42 U.S.C § 1997e(d)). Charles Murphy, an inmate in Illinois, won $307,733.82 in damages after he was assaulted by prison guards and then denied medical attention for his injuries. His lawyers sought 25% of this amount ($76,933) as their fee but were awarded only 10%. The Seventh Circuit reversed this decision arguing that when a judgment is sufficient to cover it, prisoners should contribute the full statutory cap of 25% toward their attorneys' fees. The Supreme Court agreed with the Seventh Circuit’s interpretation in an opinion authored by Justice Gorsuch. It held that district courts are required to apply up to 25 percent of the judgement towards attorney's fees before satisfying any remaining balance using other sources such as defendant payments.

In the dissenting opinion for Murphy v. Smith, Justice Sotomayor argued that the majority misinterpreted 42 U.S.C §1997e(d), a law outlining how attorney's fees should be paid in prison litigation cases. She contended that this statute does not mandate courts to apply up to 25% of a prisoner’s judgment towards attorney’s fees before considering other sources of payment. Instead, she believed it gives discretion to district courts on whether and how much of the award should go toward such costs. The majority's interpretation, according to her view, would unfairly burden prisoners by reducing their compensation for often severe injuries suffered while incarcerated due to state negligence or misconduct.