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Attorney's Fees (2 of 3)
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118567602
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Attorney's Fees (2 of 3)
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John Roberts' Subject Files
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Roberts, John G.: Files
Folder Title: Attorney's Fees (2 of 3)
Box: 5
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
D
$
,
Limit Legal Fee Awards
Funding
($ in millions)
1981
1982
1983
1984
1985
1986
1987
BUDGET AUTHORITY
-
112
129
149
20
20
20
OUTLAYS
20
89
135
146
40
20
20
General Description
Many laws authorize or require the Federal Government to pay attorney's fees to prevailing parties in
court or agency proceedings. Most of these fee-shifting statutes provide for an award of a "reasonable
attorney's fee" based on a "prevailing market rate"; the latter is now largely pegged to private.
commercial bar rates and often exceeds $100 per hour even where the applicant attorneys receive low
salaries from law firms and attorneys representing parties not obligated to pay for their representation.
A literal industry has arisen for attorneys dependent on federal fee awards.
Proposed Change
While maintaining "core" recoveries to individuals and small business under the Equal
Access to Justice Act ["the Act"]. a maximum hourly rate for fee awards under other Federal
fee-shifting statutes would be established. The fee cap would be primarily calculated on the
basis of the mean hourly rate paid to Government attorneys, plus a constant factor to pay for
overhead costs.
"Core" recoveries under the Act would be exempt from the fee cap provision. The Act
permits fees of $75 per hour to individuals and small businesses, and requires a showing that
the Government was not substantially justified in the position it took in litigation.
In all cases, the client would be required to certify that the fee is owed to the attorney, was
determined on an arm's length basis, and will be paid to the extent not covered by the fee
award.
In all cases, the fee awarded must bear a reasonable relation to the result achieved in the
proceeding.
Rationale
Several Federal statutes authorize or require the Federal Government to bear attorneys fees
for private parties. This reverses the standard "American rule." under which parties bear
their legal costs, win or lose.
Federal fee awards often exceed $100 per hour, invariably at multiples of the cost of the
Federal attorneys involved in the same cases.
In many instances, fee awards are based upon time spent by attorneys on the case and may
exceed the amount recovered by the client in the case.
Where damages are recoverable from the government, clients should pay their attorneys from
the sums recovered.
Oversubsidization of attorneys unduly encourages recourse to the courts; the cost to the
Federal Government of defending suits without merit is substantial.
135
Effects of the Proposed Change
Restricting attorney's fees will decrease Federal outlays and will reduce the Federal civil case
load, which has grown over 100% since 1975.
The proposal will restrict contingency fee litigation against the Federal Government, brought
by and on behalf of attorneys whose "notational" clients bear no litigation risks or costs. and
who are merely the means by which attorneys satisy nominal standing requirements.
The proposal maintains protections for individuals and small businesses who have been
subjected to overreaching Federal actions.
136
E
9
REF.
LAW &
KF
Volume 4
BUSINESS, INC.
Number 4
Harcourt Brace
310
June
Jovanovich,
TTORNEY
C6
1981
Publishers
Bimonthly
A8
EBE
S. DEPT. OF JUSTICE
JUL 8 1981
MAIN LIBRARY
NEW AND
CONTENTS
NOTEWORTHY
According to the New York Times (May 31, 1981), the
Federal Statutes Authorizing
court of claims has awarded $10,600,000 to attorneys who
the Award of Attorneys' Fees
2
won $106,000,000 for the Sioux Indian Nation in a 2-year
lawsuit against the government for its seizure, in 1877, of
the Black Hills of South Dakota. Full details in upcoming
issue.
Commentary: Timeliness of Fee Applications:
Supreme Court to Resolve Issue
3
The District of Columbia Court of Appeals has an-
nounced the standards to be applied in determining
eligibility for a fee award under the Clean Air Act. Metro-
Case Digests
4
politan Wash. Coal., Etc. D. Dist. of Col. (D.C. Cir. 1981),
p. 12.
Noted Briefly
17
The Fifth Circuit has spelled out the proper standards
and procedures for awarding fees in bankruptcy proceed-
Update
20
ings. Matter of U.S. Golf Corp. (5th Cir. Unit B, 1981), p.
15.
The use of a "ceiling" on a fee award, or any formula
Index
21
representing the equivalent of such a limitation, has again
been rejected by the First Circuit. Furtado D. Bishop (1st
Cir., 1980), p. 9.
Subject Matter
21
Inflation is not a factor to be considered in calculating a
Judges
24
fee award, it has been held, where the hourly rates applied
are the current rates rather than the rates in effect when the
services were rendered. Mader c. Crowell (M.D. Tenn.,
Plaintiff-Defendant
24
19S1), p. 11.
Defendant-Plaintiff
25
A civil rights suit rendered moot by the action of the
legislature in amending the statute, which the suit at-
Courts
25
tacked, has been held an appropriate case for a fee award,
provided that the plaintiffs can demonstrate a causal con-
nection between their suit and the amendment of the
Statutes
26
statute. COYOTE D. Roberts (D. R.I., 19S0), p. 5.
Federal Statutes Authorizing the Award of Attorneys' Fees
Age Discrimination Act of 1975 (as amended by Pub. L. 95-478,
Federal Water Pollution Control Act Amendment of 1972, 33
§-401). U.S.C. §6104(e)
U.S.C. $1365(d)
Age Discrimination in Employment Act of 1967, 29 U.S.C.
Fees and Costs, 28 U.S.C. $1912
$626(b)
Foreign Intelligence Surveillance Act of 1978 (Pub. L. 95-511,
Agricultural Unfair Trade Practices, 7 U.S.C. $2305(a), (c)
§110), 50 U.S.C. $1810
Alaska Native Claims Settlement Act, 43 U.S.C. $1619
Freedom of Information Act, 5 U.S.C. $552(a)(4)(E)
Alien Owners of Land, 48 U.S.C. $1506
Government in the Sunshine Act, 5 U.S.C. $552b(i)
Atomic Energy Act of 1954, 42 U.S.C. $2184
Guam Organic Act (Pub. L. 95-134, $204), 48 U.S.C. §1424c(f)
Bank Holding Company Act, 12 U.S.C. §§1975, 2607(d)(2)
Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15
Bankruptcy Act, 11 U.S.C. §§109, 205(c)(12), 632, 641, 642, 643,
U.S.C. §§15c(a)(2). (d)(2). 26
644, 1975
Hobby Protection Act, 15 U.S.C. $2102
Bankruptcy Reform Act (Pub. L. 95-598), 11 U.S.C. $$303(i),
Home Owners Loan Act of 1933, 12 U.S.C. $1464(d)(8)
330(a), 363(n), 503(b)
Housing and Community Development Amendments of 1979
Civil Rights Act of 1964, Title II, 42 U.S.C. $2000a-3(b)
(Pub. L. 96-153, $405) 15 U.S.C. $1709
Civil Rights Act of 1964, Title VII, 42 U.S.C. $2000e-5(k)
Indian Claims Commission Act, 25 U.S.C. $§70n. 70V-3(a),
Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C.
(added by Pub. L. 95-69)
$1988
Indian Contract Act, 25 U.S.C. $881, 82, 82(a), 85
Civil Service Reform Act of 1978 (Pub. L. 95-454, $$205, 702), 5
Indian Reorganization Act, 25 U.S.C. $476
U.S.C. §§5596(b)(1), 7701(g)
International Claims Settlement Act, 22 U.S.C. §§1623(f),
Clayton Act, 15 U.S.C. §15
1631(j), 1641(p), 1642(m). 1643(k), 16441
Clean Air Act (as amended by Pub. L. 95-95), 42 U.S.C.
Interstate Commerce Act, 49 U.S.C. §§8, 15(9), 16(2), 20(12),
$$7413(b). 7604(d), 7607(f), 7622(b)(2)(B). (e)(2)
94, 322(b)(2). 908, 1017(b)(2)
Clean Air Act Amendments of 1970, 42 U.S.C. $1857h-2(d)
Japanese-American Evacuation Claims Act of 1948, 50 U.S.C.
Coal Mine Safety Act, 30 U.S.C. 938(c)
App. $1985
Coast Guard Act, 14 U.S.C. 431(c)
Jewelers Hall-Mark Act, 15 U.S.C. $298(b), (c). (d)
Commodity Futures Trading Commission Act of 1974, 7 U.S.C.
Jury System Improvements Act of 1978 (Pub. L. 95-572, §6). 28
$18(f), (g)
U.S.C. $1875(d)(2)
Communications Act of 1934, 47 U.S.C. §§206, 407
Labor-Management Reporting and Disclosure Act of 1959. 29
Consumer Leasing Act, 15 U.S.C. $1667b(a)
U.S.C. §§431(c), 501(b)
Consumer Product Safety Act, 15 U.S.C. §§2059(e)(4), 2060(c),
Legal Services Corporation Act, 42 U.S.C. $2996e(f)
2072(a), 2073
Longshoremen's and Harbor Workers' Compensation Act, 33
Copyright Act, 17 U.S.C. $505
U.S.C. §§399(e)(1), 928
Criminal Code, 18 U.S.C. $$3006A(d), 3495
Magnuson-Moss Warranty Act, 15 U.S.C. $2310(d)(2)
Deepwater Ports Act, 33 U.S.C. $1515(d)
Marine Protection, Research, and Sanctuaries Act, 33 U.S.C.
Economic Opportunity Act of 1964, 42 U.S.C. $2701 et seq.
$1415(g)(4)
Electronic Fund Transfer Act (Pub. L. 95-630, Title XX), 15
Merchant Marine Act of 1936, 46 U.S.C. $1227
U.S.C. §1693m(a), (f)
Mexican-American Chamizal Convention Act of 1946, 22
Emergency School Aid Act of 1972, 20 U.S.C. $1617
U.S.C. $277d-21
Employee Retirement Income Security Act, 29 U.S.C. §1132(g)
Military Personnel and Civilian Employees Claims Act of 1964,
Endangered Species Act, 16 U.S.C. $1540(g)(4)
31 U.S.C. §243
Energy Policy and Conservation Act, 42 U.S.C. $6305(d)
Mobile Home Construction and Safety Standards Act, 42
Energy Reorganization Act of 1974 (as amended by Pub. L.
U.S.C. $$5412(b)
95-601), 42 U.S.C. $5851(b)(2)(B), (e)(2)
Motor Vehicle Information and Cost Savings Act, 15 U.S.C.
Equal Credit Opportunity Act, 15 U.S.C. §1691e(d)
§§1918(a), 19S9(a)
Ethics in Government Act of 1978 (Pub. L. 95-521, §710(d)), 2
National Guard Act, 32 U.S.C. $334
U.S.C. $288i(d)
National Housing Act, 12 U.S.C. §1730(in)(3)
Fair Credit Reporting Act, 15 U.S.C. $§16SIn,o
National Traffic and Motor Vehicle Safety Act of 1966, 15 U.S.C.
Fair Debt Collection Practices Act (Pub. L. 95-109, $813-(a)). 15
$1400(b)
U.S.C. §1692k
Natural Gas Pipeline Safety Act, 49 U.S.C. §1686(e)
Fair Housing Act of 1968, 42 U.S.C $3612(c)
Noise Control Act of 1972, 42 U.S.C. $4911(d)
Fair Labor Standards Act, 29 U.S.C. $216(b)
Federal Contested Election Act, 2 U.S.C. $396
Federal Credit Union Act, 12 U.S.C. $1786(o)
Editor-in-Chief: Stephen W. Seemer
Federal Deposit Insurance Act, 12 U.S.C. §1818(n)
Editor: Earl L. Kellett
Federal Employment Compensation for Work Injuries, 5
U.S.C. $8127
Editorial Assistant: Lynn M. Rizzi
Federal Mine Safety and Health Act, 30 U.S.C. $815(c)(3)
(added by Pub. L. 95-164), 30 U.S.C. §938(c)
Copyright © 1951 by Law & Business, Inc.
Federal Power Act (as amended by Pub. L. 95-617, $212). 16
All rights reserved. No part of this publication may be reproduced or
U.S.C. §825ql-(b)(2)
transmitted in any form or by any means, electronic or mechanical. including
photocopy. recording or any information storage and retrieval system. without
Federal Rules of Appellate Procedure, App. Rule 38 (28 U.S.C.)
permission in writing from the publisher. FEDERAL ATTORNEY FEE
Federal Rules of Civil Procedure, App. Rules 37, 56(g) (28
AWARDS REPORTER (ISSN 0193-3353). June, 19S1. Vol. 4. No. 4. is published
bimonthly by LAW & BUSINESS. INC., 757 Third Avenue, New York, N.Y.
U.S.C.)
10017. (212) 85S-2632. One year charter subscription (6 bimonthly issues) costs $95.
Federal Trade Commission Improvement Act, 15 U.S.C.
Second class postage paid at New York, N.Y. and at additional mailing offices.
$$57a(h) (1)
Postmaster: Send address changes to LAW & BUSINESS. INC., 757 Third
Avenue, New York, N.Y. 10017.
Norris-LaGuardia Act, 29 U.S.C. $107(e)
Ocean Dumping Act, 33 U.S.C. $1415(g)(4)
Omnibus Crime Control and Safe Streets Act of 196S, 42
COMMENTARY
U.S.C. $3766(c)(4)(B)
Organized Crime Control Act of 1970, 18 U.S.C. §1964(c)
Outer Continental Shelf Lands Act (as amended by Pub. L.
95-372), 43 U.S.C. $1349(a)(5), (b)(2)
TIMELINESSOFFEEAPPLICATIONS:
Packers and Stockyards Act, 7 U.S.C. §210(f)
Patent Infringement, 35 U.S.C. $285
Supreme Court to Resolve Issue
Perishable Agricultural Commodities Act, 7 U.S.C. $499g(b).
(c)
Petroleum Marketing Practices Act (Pub. L. 95-297, $105(d)),
15 U.S.C. $2805(d)(1), (3)
by E. Richard Larson*
Plant Variety Act, 7 U.S.C. $2565
Privacy Act, 5 U.S.C. §552a(g)(2)(B), (3)(B). (4)
One of the major unresolved issues in attorney's fees
Public Utility Holding Company Act of 1935, 15 U.S.C.
litigation involves the timing of post-judgment fee applica-
§79g(d)(4), 79j(b)(2)
Public Utility Regulatory Policies Act of 1978 (Pub. L. 95-617,
tions. Must a fee application be filed within a prescribed
§122). 16 U.S.C. $2632(a)
number of days, such as within the 10 days allowed by Rule
Railroad Revitalization and Reform Act, 45 U.S.C. $854(g)
59(e) of the Fed. R. Civ. P.? Last summer, this question was
Railroad Unemployment Insurance Act, 45 U.S.C. $355(i)
answered affirmatively by the U.S. Court of Appeals for the
Railway Labor Act, 45 U.S.C. §153(p)
First Circuit. The U.S. Supreme Court granted certiorari
Real Estate Settlement Procedures Act of 1974, 12 U.S.C.
in this case in May. Employment Security, 629 F.2d 697 (Ist
$2607(d)
Rehabilitation Act of 1973 (as amended by Pub. L. 95-602,
Cir. 1980), cert. granted, 49 USLW 3863 (U.S., May 18,
$120), 29 U.S.C. $794a(b)
1981) (No. 80-5887).
Right to Financial Privacy Act of 1978 (Pub. L. 95-630,
Overall, the courts have characterized fee applications in
$$1117(a), 1118), 12 U.S.C. $$3417(a). 3418
four different ways, and each has an impact on the timing of
Safe Drinking Water Act, 42 U.S.C. §§300j-8(d), 9(i)(2)(B)(ii)
Securities Act of 1933, 15 U.S.C. §77k(e)
a fee application. Fee applications have been characterized:
Securities Exchange Act of 1934, 15 U.S.C. 78i(e), 78r(a)
(1) as a collateral and independent claim subject to no time
Securities Investor Protection Act, 15 U.S.C. $7Seee(b) (Pub.
limits; (2) as part of a request for costs subject to no time
L. 95-283, $7(b)(5))
limits under Rules 54(d) and 58 of the Fed. R. Civ. P.; (3) as
Servicemens Group Life Insurance Act. 3S U.S.C. §784(g)
a claim integral to the merits without time limits, since the
Sex Discrimination Prohibition (Title IX of Pub. L. 92-318),
20 U.S.C. $1681 et seq. See 42 U.S.C. $1988
underlying judgment is not final or applicable until fees are
Social Security Act Amendments of 1965, 42 U.S.C. §406
decided; and (4) as a claim integral to the merits, which is
Solid Waste Disposal Act, 42 U.S.C. $$6971(c). 6972(e)
subject to the 10-day time limit under Rule 59(e) for
State and Local Fiscal Assistance Amendment of 1976, 31
motions to alter or amend a judgment.
U.S.C. $1244(e)
Surface Mining Control and Reclamation Act (Pub. L. 95-87),
The characterization of a fee application as a collateral
30 U.S.C. §§1270(d), (f), 1275(e), 1293(c)
and independent claim dates from Cohen D. Beneficial
Tax Reform Act of 1976, 26 U.S.C. $6110(i)(2)
Industrial Loan Corp., 337 U.S. 541 (1947), and Sprague C.
Toxic Substances Control Act, 15 U.S.C. §§2605(c)(4)(A),
Ticonic National Bank, 307 U.S. 161 (1939). In Sprague, the
2618(d), 2619(c)(2). 2620(b)(4)(C), 2622(b)(2)(B)
court addressed a timeliness issue similar to that being
Trademark Act, 15 U.S.C. $1117
Trading With the Enemy Act, 50 U.S.C. App. $20
raised today. In the Court's view, the common fund fee
Trust Indenture Act, 15 U.S.C. $77000(e). www(a)
application at issue was not untimely under the then-
Truth in Lending Act, 15 U.S.C. $1640(a)
existing rules of equity, since the application involved "an
Trucker Act, 28 U.S.C. §§1346(a), 1491
independent proceeding supplemental to the original pro-
Unfair Competition Act, 15 U.S.C. §72
ceeding and not a request for a modification of the original
Uniform Relocation Assistance and Real Property Acquisition
Policies Act, 42 U.S.C. $4654
decree." 307 U.S. at 170. Sprague thus means, at a mini-
United States as a Party, 28 U.S.C. $2412
mum, that there should be no specific time limits govern-
Veterans' Benefits Act, 38 U.S.C. §3404(c)
ing a fee application at least in common fund cases.
Voting Rights Amendment of 1975, 42 U.S.C. §1973/(e)
Many statutory fee-shifting provisions-such as in 42
War Hazards Compensation Act, 42 U.S.C. $1714
U.S.C. $1988-direct that fees should be awarded "as part
Water Pollution Prevention and Control Act. 33 U.S.C.
of the costs." In view of Congress' chosen definition, see
$$1365(d). 1367(c)
Wire Interception Act, 18 U.S.C. $2520
Hutto U. Finney, 437 U.S. 679 (1978), three courts of
appeals have now held that fee applications are subject only
to Rules 54(d) and 5S-which have no timing require-
TO OUR READERS
ments-and are not subject to the 10-day limitation in Rule
We welcome news of any recent decisions or developments
59(e). The Fifth Circuit initially reached this conclusion in
in the field of federal attorney fee awards. Please send your
Knighton U. Watkins, 616 F.2d 795 (5th Cir. 1980); see also,
suggestions and comments to: FEDERAL ATTORNEY
FEE AWARDS REPORTER, Law & Business, Inc.,
*Mr. Larson, an attorney with the American Civil Liberties
Harcourt Brace Jovanovich, Publishers, Dept. PR. 757
Union, is author of the forthcoming Federal Court Awards of
Third Avenue, New York, N.Y. 10017.
Attorney's Fces. which will be published in August, 1951 by Law
& Business, Inc. This article is adapted from that book.
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4. June 1981
3
Jones v. Dealer Tractor and Equipment Co., 634 F.2d 180
There, the Seventh Circuit responded to the piecemeal
(5th. Cir, 1981); Van Ooteghem v. Gray, 628 F.2d 488 (5th
appeal worry by holding that "district courts in this circuit
Cir. 1980). The Sixth and Seventh Circuits have agreed.
should proceed with attorneys' fees motions [where the fees
Johnson v. Snyder, 639 F.2d 316 (6th Cir. 1981); Bond C.
are not settled], even after an appeal is filed, as expedi-
Stanton, 639 F.2d 1231 (7th Cir. 1980).
tiously as possible. Any party dissatisfied with the court's
Where fees are requested in the pleadings, several
ruling may then file an appeal and apply to this court for
courts have now held that a claim for fees is so integrally
consolidation with the pending appeal of the merits." 623
related to the merits that the underlying judgment is not
F.2d at 34 (footnote omitted). In fact, under Rule 3(b) of the
final and appealable until fees are determined. Gurule C.
Fed. R. App. P., "[a]ppeals may be consolidated by order of
Wilson, 635 F.2d 782 (10th Cir. 1980); Johnson D. University
the court of appeals upon its motion."
of Bridgeport, 629 F.2d 828 (2d Cir. 1980); Obin v. District
Despite the analytically sound underpinnings of Terket,
No. 9 of the International Association of Machinists, 623
the timeliness issues arising from the deep division among
F.2d 521 (8th Cir. 1980); Richerson v. Jones, 551 F.2d 918
the courts of appeals will no doubt be resolved by the
(3d Cir. 1977). Cf. Liberty Mutual Ins. Co. v. Wetzel, 424
Supreme Court in White. Until such a resolution, counsel
U.S. 737 (1976) (an underlying judgment on liability is not
should closely follow the decisions in their circuits. Better,
final and appealable because injunctive relief, back pay and
counsel and the courts should try to avoid this timeliness
fees had not been addressed). Under this line of cases,
issue altogether by adding a paragraph to every judgment,
there necessarily is no time limit within which a fee
consent decree and settlement reserving the fee issues for
application must be filed for the simple reason that there is
subsequent resolution by the courts.
no final judgment until fees are determined.
A similar characterization of a request for fees led the
First Circuit to a quite different result in White D. New
CASE DIGESTS
Hampshire Department of Employment Security, 629 F.2d
697 (1st Cir. 1980), cert. granted, 49 USLW 3863 (U.S.,
May 18, 1981) (No. 80-5887). There, the court of appeals
Church of Scientology of California V. Gazares, 638 F.2d
held that an award is integrally related to the underlying
1272 (5th Cir. Unit B, 1981)-Kravitch, J.
judgment, but that any request for fees is separate from the
An award to a prevailing defendant, under the Civil
judgment in that the fee request must be filed within the 10
Rights Attorney's Fees Awards Act of 1976, was affirmed in
days allowed by Rule 59(e) for a motion to alter or amend a
this civil rights-defamation action. The court held that fees
judgment.
As is apparent, these differing characterizations have led
were properly awarded for the entire case rather than being
limited to the civil rights claim, that the defendant's
to a deep division among the courts. There also is a division
on a number of subsidiary issues. For example, although
insurance coverage did not preclude an award in his favor,
the First Circuit in White held that the 10-day limitation in
and that there was no error in refusing to allow the plaintiff
Rule 59(e) is jurisdictional under Rule 6(b) and that the
to depose the defendant's attorneys on their hours and
services. (Although the opinion does not so indicate, this
timeliness argument thus could be raised for the first time
case appears to have been decided by the Fifth Circuit's
on appeal, the Fourth Circuit in Fox C. Parker, 626 F.2d 351
Unit B. See the SPECIAL NOTE in the April, 1981 issue of
(4th Cir. 1980), held that the-Rule 59(e) timeliness argu-
this Reporter explaining the Administrative Units of the
ment could not for the first time on appeal. Cf. Hirschkop
Fifth Circuit Court of Appeals.)
U. Snead, No. 79-1480 (4th Cir., April 14, 19S1), off on
other grounds 475 F.Supp. 59 (E.D. Va. 1979) (the Fourth
Circuit affirmed a denial of fees because of defendants'
Basis for Award
immunity and not due to the Rule 59(e) timeliness
argument).
This action had been brought by the plaintiff church
Another subsidiary issue involves the ethical impropriety
against the defendant, the mayor of Clearwater, Florida,
of conducting simultaneous negotiations over fees and over
alleging that certain statements made by the mayor, critical
the underlying judgment. Although the First Circuit in
of the church, were in violation of the civil rights of the
White saw nothing wrong with this-indeed, encouraged
church and its members, and constituted defamation. The
it-the Third Circuit in Prandini v. National Tea Co., 557
district court had granted summary judgment in favor of
F.2d 1015 (3d Cir. 1977), directed that settlements on the
the defendant on the civil rights claim, had dismissed the
merits should be reached separate from and prior to any
defamation claim, and had awarded attorney fees to the
discussion of fees. See also Mendoza D. United States, 623
defendant. On appeal, the court of appeals agreed with the
F.2d 1338 (9th Cir. 1980).
district court and affirmed its decision on the merits, then
Running through several of these disparate decisions is
turned its attention to the fee award.
the judicial worry about piecemeal appeals. The answer to
The district court had directed the parties to submit
this concèrn, however, is not necessarily the imposition of
affidavits or other evidence on the amount of the fees to be
restrictive time limits on fee requests. Instead, the best
awarded, and had conducted an evidentiary hearing in
answer seems to be the approach adopted by the Seventh
which it had considered and made findings with regard to
Circuit in Terket c. Lund, 623 F.2d 29 (7th Cir. 1980).
each of the criteria suggested in Jolinson C. Georgia High-
4
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4, June 1981
way Express, 488 F.2d 714 (5th Cir. 1974). The district court
Insurance Coverage
had then determined that the amount of the award should
be $36,021.75.
The plaintiff also contended that attorney fees could not
On appeal, the court first noted that under the Fees
be awarded to the defendant since he was covered by
Awards Act, a prevailing defendant can recover only if the
insurance. The plaintiff relied on Johnson U. Georgia
plaintiffs claim was frivolous, unreasonable, or groundless,
Highway Express, Inc. for the proposition that a party
or if the plaintiff continued to litigate after it clearly became
cannot be awarded a higher fee than he is contractually
obligated to pay. The plaintiff reasoned that since the
so.
Here, the plaintiff argued that the action was not frivo-
defendant was covered by insurance, he was not con-
lous, unreasonable, or groundless since: (1) the district
tractually obligated to pay any fee, and thus should not be
court had sustained the complaint for over two years,
the recipient of a fee award.
(2) evidence supported the claim, and (3) the district judge
But the court disposed of this contention by saying that
himself had stated that the action presented novel legal
the plaintiffs argument ignored the statement of the defen-
issues.
dant's attorney that the defendant's insurance was one of
The court pointed out that, during the two-year period
indemnity; thus, the company was. not obligated to pay
referred to by the plaintiff, the complaint had been
unless the defendant was obligated to pay after termination
amended three times, primarily to clarify the defamation
of the case.
claims. Under these circumstances, said the court, the fact
that the district court sustained the complaint during that
Right to Depose Attorneys
period was a tribute to the trial judge's patience and
fairness, and not an indication of his view of the merits. As
The plaintiff also argued that it was error to award
to the evidentiary support for the plaintiffs assertions, the
attorney fees without allowing the plaintiff to depose the
court simply disagreed, saying there was no material,
defendant's attorneys on the time and nature of their
admissable evidence to support the plaintiffs civil rights
services.
claim. Finally, the court said that the fee award would not
But the court pointed out that the plaintiff had interro-
be precluded by the trial judge's statement that the action
gated the defendant's attorney at length (presumably, this
presented novel legal issues. It explained that the question
interrogation occurred at the evidentiary hearing), and that
of standing presented the difficult legal issues, which had
the defendant's attorney had submitted an affidavit provid-
little to do with the merits of the claim.
ing a detailed record of the time spent and the duties
The court concluded that the plaintiff's civil rights action
performed.
was indeed frivolous, unreasonable and groundless, and
Moreover, it was noted that the district court had indi-
that an award to the defendant was justified.
cated it was intimately familiar with the litigation, and was
satisfied with the correctness of its award, which it consid-
ered to be extremely low. The court of appeals saw no abuse
Pendent Claim
of discretion under these circumstances.
The court noted that there was no statute providing for
attorney fee awards in diversity defamation actions, so that
COYOTE Y. Roberts, 502 F. Supp. 1342 (D. R.I. 1980)-
Pettine, C.J.
if this suit had been brought only on the theory of
defamation, attorney fees would not have been recoverable.
But fees were recoverable on the civil rights claim, and on
In this action, brought by a prostitute and a national
that basis, the district court had made an award covering
organization seeking reform of sex laws, challenging the
both the civil rights and the defamation action.
constitutionality of a Rhode Island criminal statute, it was
Expressing its concurrence with the holding below, the
held that the plaintiffs would be entitled to a fee award
court pointed out the several circuits had permitted awards
under the Civil Rights Attorney's Fee Awards Act of 1976 if
on pendent claims arising out of the same nucleus of facts.
they could demonstrate a causal connection between their
Here, the first complaint had alleged the defamatory
suit and the actions of the state legislature in amending the
statements as part of the civil rights claim. Since a defama-
statute, as well as the actions of the Providence police
tion claim may not serve as the basis of a civil rights action
department in changing its patterns of enforcement.
under -12 U.S.C. $1983, the plaintiff was required to amend
As construed by the Rhode Island Supreme Court, the
its complaint and plead the alleged defamation as a separate
statute prohibited all extramarital sexual intercourse, and
count. But the amended complaint was not filed until two
all "unnatural" methods of copulation, regardless of
years after the original complaint. Under these circum-
whether the participants were married. The plaintiffs'
stances, the court concluded, it would be impossible to
claimed that the statute violated the constitutional right of
apportion accurately the time spent by the defendant's
privacy by punishing private consensual conduct between
attorneys on the civil rights claim and on the nonfederal
adults and private solicitation for prostitution.
defamation claim. For this reason, it was held that the
After trial, but before the court had rendered its deci-
district court had not erred in granting fees for the entire
sion, the Rhode Island legislature amended the statute,
case.
substantially curing the alleged constitutional infirmities.
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4. No. 4, June 1981
5
With the consent of all parties, the court dismissed the
prostitutes, and because law enforcement personnel would
complaint, reserving the question of attorney fees.
continue to arrest and prosecute prostitutes under the new
The defendants in the action were the Rhode Island
statutes, the plaintiffs had not, in reality, gained anything.
attorney general and the police chief of the City of Provi-
But the court pointed out that the defendants' argument
dence, both of whom were sued in their official capacity.
ignored the fact that the former statute encompassed far
The court first dealt with the propriety of a fee award
more than sex for pay, and that the removal of a clause
against the state defendant.
prohibiting the commission of "indecent acts" benefitted
any of the plaintiffs, prostitutes or not, who wished to
Termination of Action Before Judgment
engage in nonremunerative sexual activity of the type
barred by the former statute.
The court noted that the plaintiffs' fee request was not
However, the court conceded that the defendants' argu-
foreclosed by the fact that the case had been terminated
ment presented a difficult question with regard to prostitu-
without an entry of judgment in their favor. The Fees
tion itself. It was true that the plaintiffs might find it
Award Act was said to encourage the vindication of federal
difficult to engage in the now decriminalized act of prostitu-
rights by alleviating the financial burdens of litigation, and
tion with impunity, since all the preparatory activity, such
the court observed that federal courts have uniformly
as solicitation, remained felonious. But the court pointed
recognized that the intent and purpose of the Act mandated
out that the plaintiffs had consistently conceded the state's
a fee award to plaintiffs who had obtained some significant
ability to regulate public aspects of prostitution and had
part of the relief they sought without completing the full
litigated this case in the belief that decriminalization of the
course of litigation. If this were not the rule, the court
act of prostitution, regardless of the continued vitality of
remarked, a defendant could put a plaintiff to the expense
anti-solicitation laws, would further their campaign to
of engaging in discovery, pre-trial motions and memoranda,
insulate private consensual adult activity from state control.
and other preparatory efforts until the strength of the case
Although it would appear that the plaintiffs would have
became clear. Then, by reforming its ways before the court
been more satisfied with an amendment exempting from
the defendant could act on the merits and preclude the
criminal sanctions any private solicitation, the court viewed
plaintiff's recovery of fees for labor that in fact accomplished
the plaintiffs' consent to the order dismissing this case as an
the desired objective.
indication that the point was not considered to be of any
Although the court conceded that it had found no
great importance. Under these circumstances, the court
previous case in which a challenged state statute was
felt that the defendants' argument was, essentially, that
amended by the legislature after trial but before a decision
regardless of whether the plaintiffs had obtained a substan-
had been rendered, it said that the policy considerations
tial part of what they sought through litigation, and despite
were essentially the same as those involved in any other fee
their apparent satisfaction with the result, the court still
award case.
must decide if they had "really" benefited from getting
Accordingly, the court ruled that if the plaintiffs had
what they wanted. In response to this contention, the court
achieved some substantial part of the benefit they sought,
stated:
and if they otherwise met the criteria for a prevailing party,
as discussed below, they were entitled to a fee award even
In evaluating this argument, the Court has
though the statutory amendment came about without
found little guidance in cases from this, or
formal judicial involvement.
other, circuits. It is well established that even
when a plaintiff obtains in large part the ob-
Objectives of Action
ject of her suit, a court must independently
assess the substantiality of her claim to en-
In order to recover attorney fees in the absence of a clear-
sure that she has prevailed in a legal
cut judgment in their favor, the court said that the plaintiffs
sense
Whether a plaintiff who believes
must show that the basic objectives of the lawsuit had been
that she has achieved something of value
achieved or at least furthered in some significant way. The
must also satisfy an objective test of benefit in
court explained that the plaintiffs need not have accom-
a factual sense is not at all clear. To some
plished all their goals; partial success would be sufficient so
extent, the law does not attempt indepen-
long as it involved some significant issue in the litigation.
dently to appraise the degree of real advan-
Here, the core of the plaintiffs' claim was that the state
tage that accrues to a plaintiff from a lawsuit.
could not constitutionally bar consenting adults from en-
The doctrine of standing and principles of
gaging in purely private sexual activity, regardless of
justiciability that weed out hypothetical
whether the motivation of one of the participants was
questions establish a minimum quantum of
economic. As the court now read the amended statutes,
objectively-defined benefit that a suit must
such activity no longer constituted a crime, thus indicating
offer: the sincerest subjective expectation of
that the amendments afforded the plaintiffs a very substan-
advantage will not avail the plaintiff who can-
tial portion of the relief they had sought.
not meet those standards. Those criteria en-
Nevertheless, the court noted that the defendants' objec-
sure that a suit will possess a certain degree
tion appeared to be that since many of the plaintiffs were
of legally-cognizable value to the litigant.
6
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4, June 19S1
Once they have been satisfied, the Court
causation in this case cannot be discerned through the
does not know by what more rigorous scale it
media of legal memoranda and affidavits. An evidentiary
could purport to gauge the 'real' worth of a
hearing, with its opportunity for direct observation of
plaintiffs getting substantially what she
witnesses and cross-examination, is required and will be
wanted. Nor am I sure that a court's judg-
ordered."
ment of what is worth fighting for should be
substituted for that of the litigant who saw fit
Legislature as "Third Party"
to institute and prosecute the suit. There-
fore, absent a clear indication from a higher
The defendant attorney general argued that, whatever
court that a different test is required, this
the motivation for the statutory amendments, the actions of
Court concludes that the extent of actual
the legislature were independent of his control and should
benefit to plaintiffs is to be measured by the
not be imputed to him. He contended that fees could not
degree to which defendant's subsequent ac-
be assessed against a defendant on the basis of actions taken
tions afforded them the relief they sought.
by a third party, no matter how beneficial they may have
Here, as defendant agrees, the statutory
been to the plaintiff.
amendments satisfy the plaintiffs' principal
But the court pointed out that, to obtain judicial review
objection
The court therefore finds that
of the constitutionality of a state statute, the plaintiffs had
the recquisite benefit-in-fact exists in this
used the appropriate device of suing a responsible state
case.
official in his official capacity. The real target of the
plaintiffs' suit was the state, which was exercising its police
Prevailing Party
power through the challenged statute. Any award of fees in
this case would be assessed against official funds.
The court next took up the question whether the plain-
The court said that the attorney general's role in this case
tiffs had met "the two-prong test" for becoming prevailing
was to serve as a surrogate for the state of Rhode Island.
parties, as established by Nadeau D. Helgemoe, 581 F.2d
Thus, in substance, the attorney general was arguing that it
275 (1st Cir. 1978) (digested in the April, 1979 issue of this
was improper to award fees against the executive branch of
Reporter). First, the court explained, no award may be
the state on the basis of activity that was really within the
made if the plaintiffs' action was found to be completely
bailiwick of the legislative branch. But the court declined to
superfluous in bringing about the change; rather their
adopt so rigidly compartmentalized an approach to state
efforts must have been a necessary and important factor in
government actions, saying that the state in its role as law
achieving the result. Second, the court must determine
enforcer could not disavow all connection with the state in
whether the plaintiffs had prevailed in a legal sense; that is,
its role as law maker.
a fee award would not be appropriate if the claims were so
Thus, with regard to the propriety of a fee award against
frivolous, unreasonable, or groundless that the defendants'
the state defendant, it was held:
conduct would be presumed to have been gratuitous.
"This Court therefore concludes that there is no legal bar
Evaluating the substantiality of the plaintiffs' claim in
to plaintiffs' recovery of at least a portion of their attorney's
light of existing case law, the court concluded that their
fees from the State defendant in his official capacity if they
challenge to the alleged overbreadth of the statute was not
establish the necessary actual basis-i.e., causation-at a
patently frivolous or unreasonable, and thus was suffi-
subsequent hearing."
ciently substantial to meet the standard required of a
prevailing party.
Award Against City
The remaining question (the role played by the lawsuit in
achieving the objective) was said to be one of causation. The
The nature of the plaintiffs' claim against the city police
defendants argued that the amendment of the statute was a
department defendant was that its enforcement of the
response to angry community outcry against a high inci-
statute in question was geared toward the predominantly
dence of prostitution in a particular area of the city of
female sellers of sexual services, while the predominantly
Providence. According to the defendant, the amendments
male purchasers were ignored, even though equally culpa-
were designed to streamline the prosecution process, in the
ble under the statute. Plaintiffs' evidence tended to show
hope that quicker convictions would stem the increase in
that more females than males were arrested and charged
solicitation and pandering which outraged neighborhood
under the statute, and that the police department used
residents. The court pointed out that this explanation might
more male undercover officers than female undercove
account for the statutory amendments insofar as they made
officers, thus indicating that its efforts were primaril;
loitering and solicitation petty misdemeanors tried to the
against women.
court and subject to a truncated appeals procedure, but it
Again, the court emphasized that it need not determin
did not shed any light on why the amendments also deleted
whether the plaintiffs were likely to have succeeded in thi
from the former statute phrases which had outlawed the
portion of their case, since the plaintiffs need only establis
commission of acts of prostituion and other indecent acts.
that their claim was not frivolous, unreasonable, or ground
The court concluded;
less in light of the plaintiffs' efforts, and the police depar
"It is obvious to the Court that the subtle workings of
ment's failure to offer an explanation for its enforceme
strategy, the court concluded that the requisite legal sub-
the court found two relatively minor instances UI unpina-
stantiality was present in the plaintiffs' claim.
tion of effort, and reduced the claimed hours accordingly.
The defendant police chief also argued that a fee award
The court then turned its attention to the hours spent
would be inappropriate since the public had no interest in
preparing the fee petitions, referring to its obligation to
protecting and legitimizing prostitution. But the court said
ensure that the total was reasonable and did not represent a
this argument ignored the fact that the plaintiffs' complaint
windfall.
was basically one of sex discrimination, and remarked: "The
By the court's "most conservative estimate," it was said
Court assumes that defendant is not suggesting that a
that the total hours claimed for preparation of time records
charge of gender-based discrimination is less meritorious
and the plaintiffs' brief on the fee application was 76.1
when made by avowed prostitutes than other women."
hours, characterized by the court as "an obviously inflated
The court concluded that there was no legal bar to the
figure which comprises more than twenty percent of hours
plaintiffs' recovery of fees from the defendant police chief in
spent on the entire case," which the court said "represents
his official capacity, if evidence adduced at the subsequent
a clear case of overreaching."
hearing revealed a causal connection between this lawsuit
In discussing this point, the court apparently drew an
and a change in the police department's pattern of enforcing
analogy to common fund cases saying:
the statute.
The court ordered that the case be added to the trial
(S)everal courts flatly reject the concept of
calendar.
billing hours for time spent preparing fee ap-
plications at all, soundly reasoning that reso-
lution of fees issues enures only to the
Farris v. Cox, 508 F. Supp. 222 (N.D. Cal. 1981)-Williams
benefit of counsel, as distinguished from the
(Spencer), J.
plaintiff class." As such, services rendered
solely for the purpose of securing fees are not
All hours claimed for compiling time records, and in
compensable. While an award for time spent
preparing and presenting the fee application, were dis-
on fees issues is singularly inappropriate in
allowed in this civil rights class action contesting prison
common fund cases since such efforts do not
regulations, as the court awarded nearly $10,000 less than
benefit the class, this rationale is less persua-
plaintiffs' attorneys had requested under the Civil Rights
sive where fees are provided for. by a settle-
Attorney's Fees Awards Act of 1976.
ment agreement. When defendants pay
By the terms of a settlement agreement approved by the
plaintiffs' attorneys' fees directly, such as
court, the plaintiffs had won a partial victory, gaining for
done in the present case, section 1988 per-
prisoners the rights to written notice and preliminary
mits a nominal award for charges reasonably
hearings in connection with certain disciplinary matters.
incurred in preparing time sheets. However,
However, the plaintiffs did not prevail on claims for money
these compensable hours must be strictly
damages and for a preliminary injunction.
limited so as to discourage attorneys from
In the case in chief, the plaintiffs had been represented
spending an excessive amount of time on the
primarily by one legal assistance group, although certain
fee petition itself when, in fact, these hours
local appearances had been made by another legal assist-
are spent solely for their own benefit. More-
ance group. The settlement agreement provided for an
over, billing hours typically are treated as an
attorney fee award, and the plaintiffs' attorneys retained a
item of the attorney's overhead and absorbed
private firm to prepare their fee petition. The petition
as an operating cost by the petitioning firm.
requested total fees of $31,995.
(Footnotes and paragraphing omitted.)
The court said it would be guided by the criteria
established in Johnson v. Georgia Highway Express, Inc.,
[Editor's Note: It is well settled that the time spent in
488 F.2d 714 (5th Cir. 1974). The Fees Awards Act, the
preparing the fee application is not compensable in com-
court noted, was intended to effectuate the strong federal
mon fund or equitable fund cases. See, for example, Seigal
policy of fully redressing civil rights violations by enabling
D. Merrick (S.D.N.Y. 1979), digested in the August, 1979
litigants to obtain competent counsel. The court added that
issue of this Reporter. Such has not been the rule, however,
while the award is not to be used to make attorneys rich, it
in cases governed by statute, where the fee award will be
must nevertheless be sufficient to make civil rights repre-
paid by the losing party, and not out of the recovery of the
sentation financially attractive to highly qualified attorneys.
prevailing party. The language of the court in the present
case, quoted in the preceding paragraph, might be re-
Hours Decoted to Case
garded as an indication that a "common fund case" philoso-
phy was permitted to play a part in a case governed by
The defendants did not challenge the accuracy of the
statute. If so, the standard applied by the court might be
time records submitted by the plaintiffs' attorneys, but
inconsistent with the frequently-expressed rationale that
contended that the attorneys had spent an unreasonable
the denial of compensation for time spent on the fee
number of hours on the case.
application would be inconsistent with the purpose of the
Scrutinizing the time sheets of the plaintiffs' attorneys,
Fees Awards Act, since it would dilute the overall award,
8
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4. June 19SI
and to that extent, defeat the purpose of the Act. See Bond
Multiple Factor
v. Stanton (7th Cir. 1980), digested in the February, 1981
issue; Weisenberger v. Huecker (6th Cir. 1979), digested in
The plaintiffs suggested that the application of a multiple
the October, 1979 issue; and Lund D. Affleck (1st Cir. 1978),
factor would be justified because of the difficulty of the
digested in the August, 1979 issue of this Reporter. Courts
legal issues presented in the case, the risk of litigation, and
have generally not regarded the Fee Awards Act as permit-
the quality of the attorneys' work.
ting merely a "nominal" award for time spent in preparation
But the court disagreed, saying that the issues in this
of the fee application, although in at least one instance, a
case were neither novel nor particularly complex, that
court refused to apply to such hours a multiple factor which
there was no long and complicated trial, that a clear prima
was applied to time spent on the case in chief. Bolden v.
facie case had been established by the defendant's own
Pennsylvania State Police (E.D. Penn. 1980), digested in
records, and that the risk involved in this litigation was not
the December, 1980 issue.]
high. The court pointed out that a settlement was negoti-
The court held that in cases involving statutory fee
ated just seven months after the complaint was filed.
requests in a class action, the parties should present only
Moreover, although the plaintiffs had achieved "an admi-
time records and a short memorandum of controlling law.
rable result," the court rules that the result was not
The court said it was convinced that the fee application in
extraordinary, and that the fee award should reflect this
such a case was not designed to be an adversarial process,
fact.
but rather an informational aid to the court in determining
reasonable fees. Adversarial briefs were condemned as
Conclusion
"both inappropriate and unnecessary."
Describing the presentation of a fee petition as a "routine
Based on the hours and rates it had adopted, the court
task," the court criticized the legal assistance group repre-
concluded that $22,001.50 should be awarded to the legal
senting the plaintiffs because they had "curiously and, in
assistance group which had served as chief counsel, that
this court's opinion unnecessarily" engaged the services of a
$525 should be awarded to the other legal assistance group,
private law firm to prepare a "boiler-plate" brief. Under
and that no award would be made to the private firm.
these circumstances, the court ruled that the private firm's
request for 49.5 hours was "patently unreasonable," and the
request of the legal assistance group for 26.6 hours on the
Furtado V. Bishop, 635 F.2d 915 (Ist Cir., 1980)-Coffin,
same task "represents a grossly inflated claim which cannot
C.J.
stand." The court concluded:
"Even in civil rights cases, fees may be denied in their
In its second review of the fee award in this civil rights
entirety when petitioning lawyers are guilty of overreach-
action brought by prisoners against prison officials for
ing in seeking outrageously unreasonable fees.
The
damages resulting from the officials' use of excessive force,
present situation is an appropriate occasion for the court to
false reporting, and suppression of communication, the
exercise its discretion and deny all fees relating to work on
First Circuit Court of Appeals again disapproved of the
the fee petition because the request here represents a
district court's use of a ceiling on the award, and made its
grossly inflated bill." (Emphasis by the court.)
own calculations, increasing the district court's award of
$13,750 to $22,905, plus certain uncontested amounts
Hourly Rates
allowed for appellate work.
As we reported in the April, 19S0 issue of this Reporter,
The plaintiffs sought compensation of $125 per hour for
the trial judge had originally awarded fees of $13,750, a
an attorney who had "impressive credentials," with over
figure representing half of the damages which the plaintiffs
seventeen years of trial experience, many of them in the
had recovered, on the basis that it would be unfair to
field of civil rights litigation. With respect to three other
require the defendants to pay more than the plaintiffs"
attorneys, the plaintiffs sought hourly rates of $75. To
counsel could have earned on a contingent fee basis.
support these rates, the affidavit of a local attorney was
However, in recognition of the fact that this decision might
submitted, indicating that the rates claimed were within
not be accepted on appeal, the trial judge had made the
normal range.
alternative finding that the plaintiffs' attorneys had "legit-
The defendant challenged these rates as excessive, point-
imately put $20,000 worth of work into the case, timewise."
ing out that the senior partner in one of the defense firms
The court of appeals had reversed, rejecting the idea that
also had seventeen years of trial experience and similar
there should be a ceiling on the award based on the
achievements, and charged only $60 for the services ren-
damages recovered, and also declining to approve the
dered in this case, and that the main defense litigator in this
figure of $20,000, since the trial judge's use of the word
action had been admitted for eight years, and billed his
"timewise" left the implication that the only factor consid-
client only $55 per hour.
ered was the time spent on the case.
The court held, based on its experience and on awards in
On remand, the trial judge again awarded the same
similar cases in the district, that the requested fee of $125
amount, $13,750. The trial judge explained that he had
would be reduced to $100, and the requested fees of S75
arrived at the figure by applying the "one third rule,"
would be reduced to $70.
allowing counsel one third of the "recovery," with "recov-
1081
ery" defined as damages plus fee award. (This ruling on
priate award for this case. It was pointed out that, or-
remand was covered in our June, 1980 issue.)
dinarily, the amount of a fee award is to be determined by
On this second appeal, the court said that the percentage
the trial court, and the role of an appellate court is to review
approach discounted one key object of the legislative intent
for errors of law or abuse of discretion. However, in the
behind the Civil Rights Attorney's Fees Awards Act of 1976:
distinctive circumstances of the present case, the court
the encouragement of private enforcement of civil rights
concluded that, in the interests of expediting the final
laws.
disposition of the fee issue, which had already been twice
The court explained that under the traditional "American
before the district court and twice before the court of
rule," requiring successful plaintiffs to bear the expenses
appeals, it was appropriate for the court of appeals to
vindicating their rights, plaintiffs typically will not act to
proceed to determine the appropriate award without an-
redress injury unless the expected recovery exceeds the
other remand to the district court.
expected costs. Thus, suits involving invasion of civil
After considering the evidence in detail, the court of
rights, but promising only modest or highly uncertain
appeals concluded that the plaintiffs were entitled to a fee
recovery, would usually not be pursued. Through the Fees
award of $22,905, in addition to an uncontested amount of
Awards Act, Congress had sought to alter this pattern of
$1,000 which the trial court had allowed for preparation and
prohibitively costly vindication. The court declared: "It
delivery of oral argument, and a further uncontested
therefore is precisely the civil rights lawsuits whose pros-
amount of $2,000, allowed for opposition to an earlier
pect of modest recovery would not justify the expense of a
petition for certiorari.
difficult or acromonious legal fight-the "marginal" suits, in
the words of the district court-that Congress intended to
make practicable."
Iranian Students Ass'n V. Sawyer, 639 F.2d 1160 (5th Cir.
The district court had proposed that its ceiling be used in
Unit A, 1981)-Ainsworth, J.
cases which are brought for money damages, but do not
serve to establish a principal or "to serve as a public
Because of conflicting pleadings and affidavits as to
warning beyond the damages themselves." The court of
whether the plaintiffs' suit was a factor in bringing about
appeals said this reading of the Act would finance cases that
the result they had sought, it was held in this civil rights
create legal rules, but not cases that apply them. The
action that the district court had erred in refusing to grant
problem with this approach, the court said, is that path-
an evidentiary hearing to determine which party had
breaking holdings which will not be enforced are of limited
prevailed under the Civil Rights Attorney's Fees Awards
public value. Moreover, the court pointed out that "the
Act of 1976.
'principle' of enforcement is served by suits that 'merely'
Following a campus disturbance, the defendant univer-
seek damages." (Emphasis by the court.)
sity president issued a ban on marches and demonstrations,
Although the court of appeals felt that the district court
and created a panel of inquiry to review the disturbance
had evinced a laudible desire to guard against meritless
and recommend appropriate action. The plaintiff student
civil rights suits and undeserved attorney fees, it noted that
association filed this action for an injunction, damages, and
these ends can be achieved by less drastic means. Par-
attorney fees, claiming that the ban was unconstitutional.
ticularly, the Act's limitation of fees to prevailing parties was
One day after this suit was filed, the ban was lifted. The
regarded as a deterrent to the bringing of cases with little
defendants asserted that the decision to lift the ban was
chance of success. And the court also pointed out that
based on the panel's findings, was made before the suit was
meritless suits can support a fee award against an unsuc-
filed, and was made at a time when they had no knowledge
cessful plaintiff suing on a frivolous, unreasonable, or
of the plaintiffs' intention to file suit. The defendants also
groundless claim.
contended that when they learned of the plaintiffs' plans,
The goal of avoiding awards of undeserved fees, the court
they notified plaintiffs' counsel of their decision to lift the
said, would be better advanced by close and systematic
ban, but the plaintiffs filed the suit nonetheless. The
scrutiny than by special formulas such as the one-half
plaintiffs denied these assertions, contending that they
recovery rule. Although broad discretion and subjective
were never given firm assurance that the ban would be
views would weigh significantly in such scrutiny, the court
lifted promptly.
remarked that it found "the most hopeful approach to date"
In a conference attended only by the district judge and
to be the approach developed by the Third Circuit in the
counsel, the district judge found the plaintiffs' position
Lindy cases. (See discussion of Lindy Bros. Builders, Inc.
"more plausible," held that the plaintiffs were prevailing
of Philadelphia, et al. u. Am. Radiator & Sanitary Corp. et
parties under the Act since the decision to lift the ban was
al., 540 F.2d 102 (3d Cir. 1976), in Vol. 1, No. 1 of this
precipitated by the plaintiffs' suit, and that the plaintiffs'
Reporter.)
suit was not frivolous. From the district court's order
The court concluded that the amount of recovery should
granting the plaintiffs' motion for attorney fees, the defen-
not present a limitation on a fee award, but should be
dants appealed.
considered as only one factor among many others.
The court of appeals acknowledged that a party may
The court next considered whether to remand to the trial
prevail and be entitled to fees under the Act when remedial
judge for a redetermination of the fee award in light of its
action by the defendant effectively moots the controversy
holding, or instead proceed itself to determine the appro-
subsequent to the filing of the action. However, it was said
10
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4. June ISSI
that although the litigation has been rendered moot by the
judge, but the court felt compelled to consider the pro-
defendants actions, the record must reflect ample evidence
priety of such procedure.
of a link between the litigation and the defendant's action
As a general proposition, it was said, once a three-judge
before the district court can award fees under the Act.
court has entered judgment, the single judge before whom
There must be evidence showing the existence of a causal
the action was initially filed may take subsequent actions
relationship between the suit and the relief received, and
necessary to enforce the judgment. The court noted that
this relationship must be more than simple knowledge that
this rule had been applied with respect to fixing time for
litigation may occur. The court cited its previous decision in
compliance with a desegregation order, and assessing
Robinson c. Kimbrough, 620 F.2d 468 (5th Cir. 1980),
damages. The court felt the rule was fully applicable in this
digested in the October, 1980 issue of this Reporter, for the
instance, and concluded there was no need to reconvene
proposition that plaintiffs may recover fees under the Act if
the three-judge court. Accordingly, the court proceeded to
they can show that their lawsuit was a significant catalytic
determine the amount of fees, pointing out that it would be
factor in achieving the primary relief sought through
guided by Northcross v. Board of Education, 611 F.2d 624
litigation, despite their failure to obtain formal judicial
(6th Cir. 1979), digested in the April, 1980 issue of this
relief.
Reporter.
In this case, it was pointed out that the district court had
found a causal connection between the plaintiffs' suit and
Precailing Party Status
the lifting of the ban by reviewing the chronology of
The plaintiffs had initially prevailed in their apportion-
relevant events and weighing the plausibility of each coun-
ment challenge, as the three-judge court had held the
sel's version of events. However, the court stated that
questioned statute unconstitutional, expressly retaining
although the chronological sequence of events is a factor to
jurisdiction over the cause pending enactment of a constitu-
be considered, it is not definitive. And although the district
tional plan of apportionment. After further proceedings,
court found the plaintiffs' argument more plausible, the
both judicial and legislative, the plaintiffs later filed a
contradicting pleadings and affidavits were insufficient evi-
motion for further relief, challenging the constitutionality
dence upon which the district court could make such a
of a new apportionment plan which had been enacted by
determination.
the legislature. This motion was denied, and the defen-
The court stated that if the decision to lift the ban was
dants contended that no award should be made for work on
made before the defendants became aware of the suit, the
that motion, since the plaintiffs, in that respect, were not
proper conclusion would be that the litigation was neither a
prevailing parties under the statute.
substantial factor nor a significant catalyst in terminating
However, it was held that when the three-judge court
the ban. Furthermore, since the record was inadequate to
retained jurisdiction pending enactment of a constitutional
permit review of the district court's decision, it was ruled to
plan of apportionment, the plaintiffs' counsel became obli-
be "clearly error" on the part of the district court to deny a
gated to determine whether the newly enacted legislation
full evidentiary hearing on the merits as to which party was
was, in fact, constitutional. It was necessary for counsel to
the prevailing party. Accordingly, the case was vacated and
conduct discovery concerning the new legislation, and
remanded.
ultimately, to challenge the statute. Under these circum-
stances, the court said it was irrelevant that this later attack
Mader V. Crowell, 506 F. Supp. 484 (M.D. Tenn. 1981)-
was based on grounds different from the original complaint.
Morton, C.J.
and that it proved unsuccessful. The motion for further
relief was neither frivolous nor brought in bad faith, the
In this reapportionment action, in which fees were
court said, and was properly regarded as part of the same
requested under the Civil Rights Attorney's Fees Awards
case on which the plaintiffs were clearly the prevailing
Act of 1976, the court held, inter alia, (1) that a single judge
parties. Under Northcross, it was concluded, the plaintiffs
could properly award fees, although the case was tried on
were entitled to fees for time reasonable spent on the
the merits to a three-judge court; (2) that the plaintiffs had
motion, as well as time devoted to the original case.
prevailed within the meaning of the Act even with respect
to a motion that was decided against them; and (3) that
Inflation Factor
where the hourly rates requested and awarded were appar-
ently current, no inflation factor would be applied for
For work done during 1978 and 1979, the plaintiffs
requested an upward adjustment to accommodate the
services rendered in previous years.
decreased purchasing power of current dollars. But the
The court had previously held that the plaintiffs were
entitled to fees, and the only issue to be determined was
court pointed out that the hourly rates being requested and
approved were characterized by the plaintiffs as the "stan-
the proper amount to be awarded.
dard" rates charged by the firm with which they were
associated. The court remarked that these rates were
Single-Judge Determination
apparently the current rates, and were being applied to all
The case had been tried on the merits to a three-judge
hours claimed, regardless of the year in which they OC-
court, as required by statute. Apparently, neither party
curred. The court said: "It can only be assumed that the
objected to the determination of the fee issue by a single
rates charged by a law firm rise from time to time to reflect
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4, June 1981
Il
inflation, and it would result in a windfall to plaintiffs'
government had been restrained and notoriously laggard in
counsel to once again adjust the figures." The court con-
exacting obedience to pollution control requirements. The
cluded that an award for all hours incurred, based on the
purpose of the citizen-suit provision was to aid enforcement
current hourly rate, achieved a just result.
of the Act while motivating governmental agencies charged
with the responsibility to bring enforcement and abate-
Multiple Factor
ment proceedings. Courts, therefore, were empowered to
award fees without regard to the outcome of the litigation,
The plaintiffs requested on the application of a multiple
whenever such an award was deemed to be in the public
factor of one-third, based on the contingent nature of
interest. On the basis of this background, the court con-
success in this case.
cluded that Congress considered a fee recovery to be
But the court replied that the law in this area was well-
consonant with the public interest whenever the underly-
settled, and the facts not particularly uncertain. Thus,
although there was some risk that the plaintiffs would not
ing suit was "a prudent and desirable effort to achieve an
unfulfilled objective of the Act." It was said that the
prevail, the court noted that some such risk is inherent in
attorney fee provision was offered as an inducement to
every case. Unless the risk of nonpayment is substantially
citizen suits, which Congress deemed necessary. Under
higher than was evident in this case, the court held, an
these circumstances, the court stated that decisions on fee
adjustment for the contingent risk is not merited.
awards should not make wholesale substitutions of
hindsight for the legitimate expectations of citizen
Amount of Award
plaintiffs.
The court allowed the plaintiffs to recover for all the time
From this perspective, the court said, the district court
claimed in their application, at the rates they requested,
accorded the public interest too narrow a scope. It was held
$75 per hour for attorney's time, and $20 per hour for the
that none of the factors the district court relied on was
time of legal assistants. It was noted that "defendants do not
pertinent with regard to the question of whether, in light of
question the reasonableness of the $75 per hour rate and
what was known when the suit was instituted, the action
obviously that rate is reasonable for this type of service."
was of the type Congress sought to encourage when it
The court also decided, "to avoid further litigation," to
authorized fee awards. Thus, the district court departed
accept the plaintiffs' counsel's estimate of $1,000 as the
from the fundamental purpose of the citizen-suit provision
amount reasonably incurred on the fee application.
by confining itself to a post hoc exploration for actual and
The total fee award was accordingly set at $34,091.
tangible effects of the litigation.
Accordingly, the order appealed from was reversed and
remanded.
Metropolitan Wash. Coal., Etc. V. Dist. of Col., 639 F.2d
802 (D.C. Cir. 1931)-Per Curiam.
Richerson V. Jones, 506 F. Supp. 1259 (E.D. Pa. 1981)-
Ditter, J.
In this suit brought under the Clean Air Act, it was held
that the standard to be applied in determining eligibility for
In this Title VII employment discrimination case, fees of
an award is whether the suit is a prudent and desirable
$12,236.84 were awarded under 42 U.S.C. §2000e-5(k) to
effort to achieve an unfulfilled objective of the Act, and not
the plaintiff, the court holding that he was a prevailing
necessarily the outcome or practical effects of the litigation.
party under the Act despite a reversal and remand from the
This action was brought under the citizen-suit provision
court of appeals.
of the Act to contest the implementation of a plan calling for
Plaintiff was a federal employee, alleging racial discrimi-
closing certain solid-waste incinerators. Following approval
nation. A trial court initially found in plaintiffs favor,
by the Environmental Protection Agency of a revised plan,
awarding retroactive promotions with backpay and interest
the suit was dismissed as moot.
but denying punitive damages. On appeal, the court 0
The district court denied the plaintiffs request for a fee
appeals affirmed the denial of punitive damages and two 0
award on the grounds that the action was relevant, but not
the retroactive promotions, but reversed that part of the
determinative, that it was not in the public interest, that it
trial court's order providing for a third promotion, estab
could not have tangibly benefited the public, and that it had
lished certain backpay provisions, awarded interest, an
questionable legitimacy since the EPA was already consid-
awarded counsel fees. Following remand, and in accord
ering proposed revisions.
ance with the opinion of the court of appeals, the distric
But on appeal, it was held that the district court had
court made certain modifications in its original judgmen
incorrectly focused its attention on the outcome and practi-
as well as reinstating the original award of attorney fee
cal effects of the litigation, to the exclusion of a more
without prejudice to the plaintiffs right to file a suppleme
relevant consideration: whether the suit was of the type
tal petition for further fees in connection with the ad
that Congress intended to encourage when it enacted the
tional proceedings.
citizen-suit provision.
The case was now before the court on plaintiffs supp
Turning to the legislative history of the Act, the court
mental petition for fees in connection with the appeal 2
that Congress had believed that the federal
the proceedings on remand.
Prevailing Party Status
the reasonable hourly rate for the services performed, the
The government argued that none of the time spent on
court observed that the plaintiffs attorney had been a
the appeal should be included in the present fee award,
member of the bar for approximately twelve years, and had
since all of the issues raised on the appeal were determined
considerable experience in the field of equal opportunity
in the government's favor, and against the plaintiff. But the
matters. The court said that he had directed this litigation
court regarded the government's view as "plainly incor-
with the skill and expertise of an experienced practitioner
rect," since a prevailing party is one who essentially
in the field, and had demonstrated "established legal
succeeds in obtaining the relief he seeks in his claims on
talent." The plaintiffs attorney had submitted a table of
the merits, and the plaintiff in this case had essentially
"historical rates" for his services, reflecting an increasing
succeeded on his employment discrimination claim on
rate during the years of this litigation. He claimed $60 per
appeal and remand, and was awarded the relief he sought.
hour for 1976; $75 for 1977; $85 for 1978; $95 for 1979; and
The court explained that, on appeal, the government had
$115 for 1980. The court found that these rates were
failed in its assertion that the retroactive promotion ordered
reasonable for an attorney in the Philadelphia legal com-
by the district court was not supported by the evidence.
munity, in view of counsel's status and experience, and
commented: "I believe that the use of historical rates best
Instead, the court of appeals had held that the district court
failed to make the findings necessary to justify its order,
reflects the value of the services performed."
and directed the district court on remand to make specific
The court also rejected the government's contention that
findings in order to support the retroactive promotion. The
the hourly rates should be reduced in relation to the
court of appeals had simply been unable to determine the
various types of work performed on the case. The court said
basis for the district court's decision from the record before
the tasks performed by counsel for the plaintiff were not
it, and had accordingly remanded for clarification. But the
merely ministerial or clerical but were necessarily devoted
government had not prevailed on its claim, on appeal, that
to the preparation of the appeal and subsequent remand,
the district court's job classification award was not predi-
and were properly the function of counsel.
cated on a sufficient evidentiary basis.
Time Spent on Fee Application
Hours of Service
The court separated the hours spent by counsel on the
The court next turned its attention to the task of deter-
fee petition, saying that the time claimed was reasonable,
mining the lodestar figure for the fee award, under the
but that much of the work did not require great legal skill.
procedure established by Lindy Bros. Builders, Inc. v.
For this reason, the court held that the hourly rate allowa-
American Radiator & Standard Sanitary Corp., 487 F.2d
ble for work on the fee petition should not be equal to the
161 (3d Cir. 1973), and 540 F.2d 102 (3d Cir. 1976), as
hourly rate permitted for the case in chief, but rather
discussed in Vol. 1, No. 1 of this Reporter.
should be compensated at a rate equal to two-thirds of the
The court pointed out that the hours of service required a
rates allowed for the case in chief.
determination of the number of hours actually devoted to
claims that ultimately proved successful. In this connec-
Lodestar Figure
tion, the court said that credit should be given only for
hours "reasonably supportive" of such claims, although it
Using the hours and rates it had determined reasonable,
proceeded to hold in this case that the hours claimed by the
the court calculated the lodestar figure for the case in chief
plaintiffs attorney satisfied this requirement.
at $8,928.75, and the lodestar figure for the fee petition at
The next task, which the court regarded as more difficult,
$2,238.43.
was to determine whether it was reasonably necessary to
spend that number of hours in support of these claims. The
Multipliers
government objected to the hours claimed in this case, on
The court noted that the lodestar figure for the case in
the basis that (1) some of the time claimed for the appeal
chief could be adjusted to account for exceptional circum-
was for work already performed, and compensated, during
stances. It said that two significant factors identified by the
trial on the merits; (2) the time claimed for simple tasks was
Third Circuit as exceptional circumstances, which migh
unnecessary and repetitive; and (3) there was not a com-
justify adjustment of the lodestar figure, were the con
plete and exact itemization of the number of hours required
tingent nature of the case and the quality of the worl
to perform the precise tasks claimed.
performed.
The court rejected the government's first two conten-
With regard to the contingent nature of the case, the
tions, but conceded that the final contention had some
court regarded this consideration as consisting of thre
merit, since certain claims for telephone calls and corre-
separate factors: (1) the complexity of the case and th
spondence were too vague to satisfy the requirements
probability of success; (2) the risks assumed in developin
imposed by the Lindy case. For this reason, the court
the case; and (3) the delay in receipt of payment. Since eac
disallowed several of the hours claimed.
of these factors was present in this case, the court grante
plaintiffs request for a 7½ percent increase.
Hourly Rate
However, the court declined to grant any increase for t]
Turning to the next ingredient in the lodestar calculation,
quality of the work, saying that although a high caliber
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4, June 1981
legal skill had been exhibited, this high quality was ade-
This suit stemmed from the action of the Housing
quately reflected in the hourly rate charged.
Authority of the City of Pittsburgh, which had allegedly
Purposes of Act
evicted tenants without sufficient notice, and in violation of
the Fourteenth Amendment. The district court granted a
The court noted that Hughes v. Repko, 578 F.2d 483 (3d
preliminary injunction, and after a hearing, enjoined the
Cir. 1978), digested in the December, 1978 issue of this
housing authority from evicting tenants until it complied
Reporter, had emphasized that the fee award should be
with federal regulations, and directed it to institute a
evaluated in light of the important substantive purposes of
system of notices in compliance with the regulations. The
the Civil Rights Act, and that this evaluation required the
plaintiff's motion for fees, under the Civil Rights Attorney's
district court to decide whether the calculated fee, includ-
Fees Awards Act of 1976, was denied by the district court.
ing the portion that reflected compensation for work per-
On appeal, the court observed that the Fees Awards Act
formed on the fee application, was reasonable in light of the
is not a waiver of the sovereign immunity of the United
legislative history of the fee statute and the substantive
States, and does not permit an award of counsel fees against
purposes of the underlying civil rights statute involved. In
the United States. Fee awards against the federal govern-
this connection, the court noted that some of the factors in
ment are generally prohibited, the court pointed out, by
gauging the reasonableness of the fee award were the
the express assertion of sovereign immunity in 28 U.S.C.
importance of the vindicated constitutional right, the con-
$2412. "Except as otherwise specifically provided by stat-
gressional policy behind the statute, the number of citizens
ute, a judgment for costs, as enumerated in section 1920 of
benefiting, the extent of the civil rights violation remedied,
this title but not including the fees and expenses of
the novelty of the theory of recovery, and the service to the
attorneys may be awarded to the prevailing party in any
public.
civil action brought by or against the United States, or any
Considering the fees now being awarded, as well as the
agency or official of the United States acting in his official
fees previously awarded in this case, the court ruled that
capacity.
while there was no doubt that the substantive purposes of
Under this statute, the court said it must determine
Title VII had been furthered through the substantial efforts
whether the housing authority was an "agency." or "official"
of counsel in this case, the fees awarded were fair and
of the United States, and thus shielded from a fee award.
reasonable, and no further increase was warranted.
The housing authority was said to be a public corporation
created under the Pennsylvania Housing Authorities Law,
Services of Paralegal
and in accordance with the United States Housing Act. The
The plaintiff claimed compensation for twenty hours
Pennsylvania legislature explicitly created the authority "to
devoted to the case by a paralegal, at a rate of $40 per hour.
cooperate with and act as agent of the Federal Govern-
The court recognized that compensation could be
ment." But the court pointed out that other parts of the
awarded for the services of a paralegal if the services
Pennsylvania Act portrayed the housing authority as a
consisted of work traditionally done by an attorney. In this
creature of state statute, with a state identity for many
case, the hours claimed were for the paralegal's services in
purposes. Thus, the Pennsylvania legislature's intentions
preparing exhibits to accompany the affidavit on plaintiff's
with regard to the housing authority's status as a federal
counsel in support of the fee petition. The court held that
agency were "at best, unclear."
this work was clearly work an attorney traditionally would
Moreover, the question of whether the housing authority
have performed, and was therefore recoverable.
was an "agency" or "official" of the United States, and thus
Because of the detail involved in the paralegal's work, the
immune under $2412, was said to be a question of federal
court found the number of hours to be reasonable, but held
law, and not a decision for the states.
the hourly rate should be reduced to $20, and accordingly
The court described the housing authority as a creature
awarded $400 for the work of the paralegal.
of state law which, by federal law, has a unique relationship
with the federal government. Although the housing au-
Conclusion
thority received substantial funding from the federal gov-
ernment, the court ruled that funding alone did not
Including the paralegal time, the court awarded a total
establish an agency relationship between the housing au-
attorney fee of $12,236.84, in addition to the $27,500 which
thority and the federal government. Rather, if the state
had previously been awarded for work in connection with
agency qualified for federal assistance, the federal govern-
the original trial.
ment became a guarantor of the housing authority's obliga-
tions. The federal funds merely guaranteed housing
Staten V. Housing Authority, 638 F.2d 599 (3d Cir. 1950)-
authority projects; they were not segregated funds exposed
Hunter, J.
to attorney fee actions.
The court explained that the decentralized public hous-
A housing authority was held not to be immune, under
ing program worked through a dual network of federal and
28 U.S.C. $2412, from a fee award in this civil rights case.
state agencies, not through the federal governments sole
The court ruled that the housing authority was not an
and direct control over the housing projects. Although
"agency" or "official" of the United States within the
funding was said to be one indication of whether a housing
meaning of the statute.
authority is an extension of the United States government,
the court insisted that funding, alone, was not determina-
time and $50 for in-court time, and that the total allowable
tive. The court said that it must also take into consideration
fee would be $8,750. On the attorney's petition for rehear-
the housing authority's exclusive control over the federal
ing, the bankruptcy judge increased the attorney's compen-
grant funds, its freedom from federal involvement or
sable time to 310 hours out of court and 16 hours in court,
control over the daily management and operation of the
but refused to change the hourly rates. On this basis, the
housing authority, plus the fact that the housing authority
attorney fee was increased to $10,100, an award upheld by
was created by, and continued to be governed in accord-
the district court.
ance with state law.
On appeal, the court of appeals held that the bankruptcy
Given both the federal and state statutory schemes for
judge had abused his discretion by applying a ceiling or
housing authorities, the court found that the defendant
maximum limitation on the hourly rate, and that the district
housing authority was not an "agency" of the United States,
court had placed undue emphasis on the principle of
immune from fee awards under $2412.
economy to the exclusion of other considerations. But the
The district court had also indicated that, even if the
court rejected the attorney's contention that the bankruptcy
housing authority were not immune, it would nevertheless
judge had abused his discretion by reducing the compensa-
decline to exercise its discretion in favor of a fee award.
ble hours without giving the attorney the opportunity to
However, the court of appeals ruled that the district
respond to the judge's reason for making the reductions.
court had failed to apply the proper standard for exercising
its discretion. The basis for the district court's opinion was
Proper Standards and Procedure
that the case was "simple" and should be "handled rou-
tinely." But on appeal, the court referred to the well-settled
Since this case had been filed before October I, 1979, the
principle that a party seeking to enforce civil rights, if
court noted that it was decided under the former Bank-
successful, should ordinarily recover fees unless special
ruptcy Act, and was not affected by the Bankruptcy Reform
circumstances would render such an award unjust. The
Act of 1978.
simplicity of a case, the court ruled, is not a "special
Explaining the standards to be applied in setting at-
circumstance" justifying a denial of fees in a civil rights
torney fees under the former Bankruptcy Act, the court
action. Rather, it is merely one of the factors to be
said that bankruptcy judges have wide discretion in deter-
considered in determining the amount of fees to be
mining fees, and that they should be reversed only for an
awarded. The case was remanded for redetermination of
abuse of discretion, which can occur only when the bank-
the fee issue based on the proper standard.
ruptcy judge fails to apply the proper legal standard or to
follow proper procedures in making the determination, or
bases an award on findings of fact which are clearly
erroneous. Referring to its earlier ruling, In re First
Colonial Corp., 544 F.2d 1291 (5th Cir.), cert. den., 431
Matter of U.S. Golf Corp., 639 F.2d 1197 (5th Cir. Unit B,
U.S. 904, 52 L. .Ed.2d 3288, 97 S. Ct. 1696 (1977), the court
1981)-Randall, J.
observed that there was a specific set of factors to be
considered by bankruptcy judges in determining fee
awards. These factors consisted of the criteria spelled out in
The standards and procedures for awarding fees in
the leading civil rights case of Johnson v. Georgia Highway
bankruptcy proceedings were discussed in detail in this
Express, Inc., 488 F.2d 714 (5th Cir. 1974), plus two
appeal from a fee determination, the court holding there
additional considerations: (1) bankruptcy estates are to be
had been an abuse of discretion by the bankruptcy judge in
administered as economically as possible, and (2) a policy
this case, and the fee he had awarded should be substan-
against duplicative fees and compensation for nonlegal
tially increased. (Although the opinion does not so indicate,
services.
this case appears to have been decided by the Fifth
The court also noted that the First Colonial decision had
Circuit's Unit B. See the SPECIAL NOTE in the April,
spelled out the proper procedure to be followed by bank-
1981 issue of this Reporter, explaining the Administrative
ruptcy judges in determining fees. First, the judge should
Units of the Fifth Circuit Court of Appeals.)
determine the nature and extent of the services supplied by
The attorney had first been appointed as receiver for a
the attorney, aided by the attorney's written statement and
bankrupt corporation, had then been appointed as trustee
description of the hours worked, and (if there are any
for the corporation, and finally as attorney for the trustee.
disputed factual issues) an evidentiary hearing. Second, the
He served both as trustee and as attorney for the trustee
judge must assess the value of the services rendered, and in
throughout the procedings.
this connection the court noted that because judges are
Following administration of the bankruptcy estate, the
familiar with legal fees, expert testimony may be taken, but
attorney filed an application for fees of over $36,000,
is not required. Third, the judge must explain the basis of
claiming he had devoted some 580 hours to the case in his
his award by briefly describing his findings of fact and
capacity as attorney for the trustee.
explaining how an analysis of the appropriate factors led to
The bankruptcy judge initially determined that only
his decision. The court stressed that the judge must
about 270 hours could be compensated as "attorney time,"
indicate how each of the twelve Johnson factors affected the
that reasonable hourly rates would be $30 for out-of-court
decision.
Ceiling on Award
factors. Thus, while it was true that an attorney's fee should
be set at the lower end of the spectrum of reasonableness
In this case, the bankruptcy judge had examined each of
when all else is equal, this case presented a situation where
the Johnson factors. All of the factors he found to be
all the other factors weighed in favor of a higher fee. In
relevant weighed in favor of a higher fee. He found that
other words, "all else is not equal." (Emphasis by the court.)
some of the questions involved in litigation which had been
The court explained that economy is an additional consider-
brought by the attorney in connection with his duties to the
ation, but it should not serve to displace the Johnson
estate were difficult; that some of these suits required a
factors.
lawyer of exceptional skill; that a customary fee in compara-
ble work in the community was $40 per hour; that the
Sufficiency of Hearing
results obtained were significant (over $135,000 in assets
recovered and over $92,000 in claims defeated); that the
The bankruptcy judge had reduced or eliminated a large
attorney was "accomplished"; that this suit was undesirable,
portion of the hours claimed by the attorney on the basis
that much of the work should have been done in less time
requiring the attorney to challenge the largest bank in the
town where he practiced, despite the personal interest of
or by nonlegal employees. On this appeal, the attorney
certain officers and directors of the bank; and that an award
argued that the judge abused his discretion by disallowing
in a closely analogous previously decided case was $40 per
particular hours on this basis without giving him an oppor-
hour.
tunity to respond. None of the creditors had challenged the
The court remarked that none of the individual factors,
hours disallowed by the judge, and the judge had not stated
at any time before his decision that he believed much of the
taken alone would have led to the conclusion that the
claimed time was excessive or nonlegal. For these reasons,
bankruptcy judge abused his discretion, since each of the
factors, no matter how favorable or persuasive, must be
the attorney took the position that he had not been given an
evaluated in light of the other factors and considerations,
opportunity to explain to the judge why the specific items
and a genuine balance should be struck. But in this case, all
reduced or eliminated were reasonable uses of attorney
time.
of the relevant factors were in the attorney's favor. The
bankruptcy judge had systematically discussed each of
The court first noted that the attorney was, of course,
entitled to an evidentiary hearing on disputed factual issues
these factors, finding most of them favorable to the attorney
and none of them unfavorable, and then awarded an hourly
pertaining to the nature and extent of his services.
fee substantially below the amount he found to be reason-
However, the bankruptcy judge held a hearing, at which
the attorney testified about the reasonableness of the hours
able for comparable work.
The basis for the reduction in the hourly rate made by
claimed. Nevertheless, the judge did not ask the altorney
the bankruptcy judge was a "policy of the District Court for
to explain why any of his hours were necessary or why a
the Middle District of Alabama in bankruptcy" which
nonlegal employee could not have done the work. Accord-
limited attorney fees to $30 per hour for out-of-court time
ingly, the attorney contended that if he had known the
and $50 per hour for in-court time. Regardless of the
judge would reduce or disallow particular hours on this
basis, he could have adequately justified those hours to the
balance struck through a genuine examination of the John-
son factors, this policy set an absolute limit to attorney fees
judge. The attorney argued that he was entitled to know
the specific basis of the judge's objections so that he might
in bankruptcy cases. Thus, the court said, the policy served
specifically respond during the evidentiary hearing.
to override the Johnson analysis and was accordingly incon-
sistent with the procedure spelled out in the First Colonial
On this point, the court said that the better practice
would have been for the judge to confront the attorney at
case.
The court concluded: "It is simply not possible to
least with his general objections to the claimed hours, and
seriously weigh the Johnson factors in the face of an
perhaps with particular items the judge thought unneces-
absolute maximum fee. Therefore the bankruptcy judge
sary or nonlegal. Had this been done, the court remarked,
abused his discretion insofar as he relied on the district
the judge could have focused the evidentiary hearing on the
court's maximum fee policy."
specific deficiencies in the attorney's application, which
might have facilitated a more informed determination on
the fee.
Policy of Economy
However, the court refused to regard the bankruptcy
judge's failure to follow its recommended procedure as an
In upholding the bankruptcy judge's award, the district
abuse of discretion. The court explained that the burden
court had not relied on the maximum fee. Instead, the
was on the attorney claiming a fee in a bankruptcy proceed.
district court had relied on the policy of economy expressed
ing to establish the basis of his services. Since an attorney
in the First Colonial case, under which the fee awarded
may be awarded fees in a bankruptcy proceeding only to
should be set "at the lower end of the spectrum of
the extent that the hours claimed are indeed compensable
reasonableness."
as valid attorney time, it is incumbent upon the attorney to
The court of appeals conceded that the policy of economy
demonstrate that his hours represent work that was reason
was to be considered in determining a proper fee, but said
ably necessary and could not have been done by nonleg:
that the relevance of this consideration did not authorize
employees. Since the burden was on the attorney 1
the bankruptcy judge to ignore the impact of the other
demonstrate that the hours claimed were compensable
FEDERAL ATTORNEY FEE AWARDS REPORTER. Vol. 4. No. 4. June 19
and since the attorney was afforded an evidentiary hearing
black police officers seeking to defend the affirmative action
in this case, the court concluded that the judge committed
program by showing past discrimination. Under these
no abuse of discretion by failing to inform the attorney
circumstances, the court said that the procedural posture of
during the evidentiary hearing of the specific grounds on
the case was not dispositive, that the Christiansburg rule
which he objected to the allowance of certain hours.
was inapplicable, and that the intervenors, who had vindi-
cated their rights, were entitled to collect attorney fees
Redetermination of Fees
from the plaintiffs, despite the fact that the plaintiff's action
was not frivolous, unreasonable, or without foundation.
The court of appeals pointed out that appellate courts,
Baker U. City of Detroit, 504 F. Supp. 841 (E.D. Mich.
like trial courts, are themselves experts as to the reason-
1980)-Keith, J. (Circuit Judge, sitting by designation.)
ableness of an attorney fee, and that appellate courts may
set such fees themselves. Here, since all the Johnson
factors were adequately spelled out in the bankruptcy
judge's opinions, the court felt sufficiently informed to
make its own determination of a reasonable fee in this case.
Hourly rates ranging from $250 for partners' time to $55
Weighing all the factors, the court concluded that the
for the time of junior associates were adopted in a securities
attorney should be compensated at a rate of $45 per hour
class action in which a fund of $6,100,000 had been created
for his out-of-court time; it left undisturbed the judge's
through settlement, and the court also applied a multiple
decision to compensate in-court time at a rate of $50 per
factor of 1.5. The court found the hourly rates reasonable
hour. Using these figures, the court recalculated the proper
because of the specialized problems involved in the case,
award for time spent before the bankruptcy court at
the experience and reputation of plaintiff's counsel, and the
$14,750, added a fee of $1,000 for appellate work, and
fact that counsel had avoided excess use of partners' time
arrived at a total fee of $15,750. The case was remanded to
and needless expenditure of time, generally. The court
the district court for entry of an order consistent with the
applied the multiple factor because counsel had developed
court of appeals' opinion.
a theory of liability based on difficult and subtle accounting
principles which would have been presented to a jury at
plaintiff's peril if these principles were not adequately
NOTED BRIEFLY
distilled and clarified, but counsel were nevertheless able
to develop a large settlement fund. The total fee award was
$1,384,798.50. Charal C. Andes, 88 FRD 265 (E.D. Pa.
1980)-Bechtle, Jr.
In an action brought by seven individuals and a 930
member union local, contesting certain aspects of a pension
plan, a court held that the defendant employers, upon
dismissal of the plaintiff's action, were entitled to a fee
Where the Ku Klux Klan, denied use of a school athletic
award under the fee provisions of the Employment Retire-
field for a rally, filed this civil rights suit against the school
ment Income Security Act (ERISA). But because of the
board, and after trial but before judgment the Klan, at the
plaintiff's inability to pay, the court ruled that the award
suggestion of the district court, made a new application
would be made only against the union, not against the
including assurances that it would post a bond for costs and
individuals. It reduced the total claim of $25,647.12 for fees
damages, and would not burn crosses, carry firearms, or
and costs to $6,000. American Communications Assoc. C.
wear hooded robes, thus prompting the school board to
Retirement Plan, 507 F. Supp. 922 (S.D. N.Y. 1981)-
grant the application with no judgment by the court on the
Weinfeld, J.
merits, it was held that the Klan was not a prevailing party
under the Civil Rights Attorney's Fees Awards Act of 1976.
As a realistic matter, the court said, the Klan had not gained
anything from this suit that it could not have obtained
In an action by a police union challenging a city's
without litigation. Coen c. Harrison County School Board,
affirmative action program to achieve racial balance on the
638 F.2d 24 (5th Cir. Unit A, 1981)-Per Curiam.
police force, a court held that parties who intervened as
defendants in the case were entitled to a fee award under
the standard by which plaintiffs are ordinarily judged,
pursuant to the Civil Rights Attorney's Fees Awards Act of
In an action against a city for sex discrimination in the
1976. The court acknowledged the rule of Christiansburg
hiring of police officers, where the plaintiffs contended that
Garment Co. U. EEOC, 434 U.S. 412, 54 L. Ed.2d 64S, 98
the fee awarded them under the State and Local Fiscal
S. Ct. 694 (1978), digested in Vol. 1, No. 2 of this Reporter,
Assistance Act was inadequate, the fee determination was
which held that a prevailing plaintiff should ordinarily be
reversed and remanded. The district court's consideration
awarded fees in all but special circumstances, whereas a
of the city's ability to pay the award may have been
prevailing defendant could collect fees only if the suit
improper, said the court of appeals. It pointed out that the
brought against him was frivolous, unreasonable, or with-
district court had been unclear as to whether it considered
out foundation. But here, the intervenor-defendants were
the city's wealth as compared with that of the plaintiffs
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4, June 1951
17
(which would have been permissible), or the city's general
In a case of first impression, it was held that a prayer for
assertions of impecuniosity. Ordinarily, it said, a court
attorney fees under the Fair Labor Standards Act should be
should not focus exclusively on the financial conditions of
included in determining the amount in controversy for
one party unless that party appeared to be in extremis.
purposes of jurisdiction under the Tucker Act, 28 U.S.C.
Cohen v. West Haven Bd. of Police Com'rs., 638 F.2d 496
$§1346(a)(2), 1491, so that where the fee request brought.
(2d Cir. 1980)-Kearse, J.
the claim to over $10,000, exclusive jurisdiction rested in
the court of claims. The court said that settled law de-
veloped in the context of analogous jurisdictional statutes
strongly supported its decision, and concluded that this
On remand from the Supreme Court of the United States
action by federally-employed firefighters for overtime com-
of an action by a consumer's association, complaining that a
pensation, liquidated damages, and attorney fees, should
state bar disciplinary rule hindered its publication of a
be transferred to the court of claims. Graham D. Henegar,
lawyer directory, a three-judge district court has held,
640 F.2d 732 (5th Cir. Unit A, 1981)-Williams (Jerre S.), J.
under the Civil Rights Attorney's Fees Awards Act of 1976,
that special circumstances existed which would render
unjust any fee award against the defendant bar association.
But no such circumstances existed with respect to the
Noting that the fee provisions of the Longshoreman's and
defendant Supreme Court of Virginia, which was ordered
Harbor Workers' Compensation Act do not address the
to pay fees to the plaintiff in an amount to be determined.
question, the Fifth Circuit has held that a claimant who is
The Supreme Court's opinion had dealt primarily with
unsuccessful before the Benefits Review Board, but then
issues of judicial and legislative immunity. On remand, all
succeeds in persuading the court of appeals to reverse the
three judges wrote opinions, one judge concurring, and
board's order, is entitled to an award for legal services
one judge concurring in part and dissenting in part.
rendered both before the board and the court of appeals.
Consumers Union of U. S. D. American Bar Ass'n, 505 F.
The court discerned a congressional intention that when an
Supp. 822 (E.D. Va. 1981)-Bryan, Sr. Cir. J. (For previous
employer contests its liability for compensation in whole or
opinions in this litigation, see the digests in our issues of
in part and the claimant is ultimately successful, the
December, 1979, and August, 1980.)
employer and not the claimant must pay the claimant's
attorney fees for services necessary to that success, regard-
less of how close a case might be which is litigated but
finally lost by the employer. Hole D. Miami Shipyards
Corp., 640 F.2d 769 (5th Cir. Unit B, 1981)-Godbold, C.J.
Under the fee provisions of the Motor Vehicle Informa-
tion and Cost Savings Act, a court held that a plaintiff who
prevailed at the trial level and successfully defended its
judgment (including a fee award) on appeal, was entitled to
an additional fee award for services rendered on appeal and
In a securities fraud case, it was held that the bad faith or
on the present fee application. The court also held that
vexatious conduct inherent in the fraudulent acts con-
under 28 U.S.C. $1961, providing that interest "shall" be
stituting the basis of an action under Rule 10b-5 cannot be
allowed on money judgments, the plaintiff was entitled to
the basis for an award of attorney fees under the "bad faith'
interest on the original judgment, including the attorney
exception to the American Rule. Rather, the bad faith
fees and costs awarded in that judgment. Fleet Investment
necessary to justify a fee award must occur during the
Co. v. Rogers, 505 F. Supp. 522 (W.D. Okla. 1980)-
litigation process. Since the district court in the presen
Daugherty, C.J. (The ruling on appeal in this case was
case found bad faith only in the conduct of the defendant
digested in the October, 1980 issue.)
giving rise to the action itself, and not in the litigation
proceedings, it was held that fees should not be awarded
Huddleston v. Herman & MacLean, 640 F.2d 534 (5th Ci:
Unit A, 1981)-Rubin, J. [Editor's Note: For a differer
Under the Employee Retirement Income Security Act of
view, see Wright U. Heizer Corp., infra, p. 19]
1974 (ERISA), it has been held that a fee award to prevail-
ing plaintiffs is not precluded by the fact that the plaintiffs'
action did not benefit any general class of beneficiaries of
the retirement fund involved. The court said that the
The Sixth Circuit has aligned itself with the Fifth Circ
common benefit rule is an exception to the general rule
(saying that the Fifth Circuit's opinion was "better TC
against fee shifting, but that it has no bearing in cases
soned" than that of the First Circuit) and has held tha
governed by statutes which expressly authorize fee awards.
motion for fees under the Civil Rights Attorney's Fo
Ford v. New York Central Teamsters Pension Fund, 506 F.
Awards Act of 1976 is not subject to the time limitations
Supp. 180 (W.D. N.Y. 1980)-Elfvin, J.
Rule 59(e) of the Federal Rules of Civil Procedure. ]
court agreed that fees under the Act are awarded as CO
and are therefore unaffected by the civil rule imposin
ten-day limit on motions to alter or amend judgments.
The fee provisions or the
Johnson v. Snyder, (6th Cir. 1981)-Per Curiam.
the Outer Continental Shelf Land Act, both of which
provide for fee awards whenever "appropriate," have been
construed to require a determination of (1) whether Con-
gress intended to encourage the particular type of litigation
Finding "overgenerosity" in the district court's award of
involved, and (2) if so, whether an award of attorney fees
$2,721,650.40 fees in a securities fraud class action, the
would be in the public interest. While observing that no
Eighth Circuit Court of Appeals has reduced the award to
courts had yet delineated the parameters of "appropriate-
$1,019,634. The district court had used hourly rates of $125
ness" under the two acts, the court relied on the con-
for senior attorneys and $60 for associates, finding these
struction of identical language in the Clean Air Act by the
rates consistent with those charged in securities litigation
District of Columbia Court of Appeals in Metropolitan
around the country. The court of appeals held that the
Wash. Coal., Etc. C. Dist. of Col., digested in this issue,
application of this "national standard" was an abuse of
supra p. II. Finding both requirements satisfied in this
discretion. It applied hourly rates of $S0 and $40, respec-
environmental suit, the court entered a fee award in favor of
tively, saying these rates were much more in line with the
the plaintiffs, although the defendants ultimately prevailed
hourly rates normally charged by the attorneys involved.
on the merits. North Slope Borough U. Andrus, 507 F.
Jorstad C. IDS Realty Trust [1981] Fed. Sec. L. Rep. (CCH)
Supp. 106 (D. D.C. 1981)-Robinson, J.
197,902 (8th Cir.)-Ross, J. (The district court's decision in
this case is briefed in the June, 1950 issue of this Reporter)
In a reapportionment case brought against a city council,
it was held that the plaintiffs were prevailing parties under
The standards for awarding appellate fees under the Age
the Civil Rights Attorney's Fees Awards Act of 1976, despite
Discrimination in Employment Act (ADEA) were spelled
the fact that the city council was already attempting to
out in this action for job discharge in violation of that Act.
devise a new apportionment plan at the time the suit was
The court said it was clear that appellate fees could be
filed, and the fact that the district court eventually adopted
awarded under the ADEA, which incorporates the re-
the city council's new plan, rather than the plaintiffs. The
medial rights and procedures of the Fair Labor Standards
court of appeals said that the good faith of the city council
Act. While statutory authorization thus exists for fees at the
was of no consequence, nor was the issue settled by the acts
trial level, said the court, a fee award on appeal is in the
of the council in admitting the unconstitutionality of the
discretion of the appellate court. In exercising this discre-
former plan, and consenting to the entry of an injunction
tion, an appellate court should grant fees "when the
against its use. The court held that a party need not prevail
complexity of the issues and the time necessary to master
on all issues to prevail under the Act; it is only necessary
those issues warrants reimbursement to the prevailing
that it prevail on the main issue. Here, the principal relief
party." Finding merit in the prevailing plaintiffs request for
prayed for was an injunction against future elections under
fees in the present case, the court remanded to the district
the former apportionment plan, "precisely the relief or-
court to determine the amount of the award, saying that the
dered by the district court". Ramos D. Koebig, 63S F.2d 838
factors which the district court should consider are the
(5th Cir., Unit A, 1981)-Johnson, J.
number of hours spent in preparation, the experience of
the attorneys, the number and complexity of the issues, the
degree of wasted or duplicated effort, and the customary
fees charged for equivalent litigation services in the com-
Despite deliberate infringement, a jury award of puni-
munity. Kelly U. American Standard, Inc., 640 F.2d 974
tive damages, time consuming and allegedly dilatory tactics
(9th Cir. 1981)-Boochever, J.
by the defendant, and considerable expense of litigation fo:
the plaintiff, a fee award has been denied under the
Copyright Act and Rule 37 of the Federal Rules of Civi
Procedure. The court said the substance of the defendant
Agreeing with the Third and Fifth Circuits, the Ninth
contentions in the case demonstrated its conduct was not i
Circuit has held that a legal services organization repre-
bad faith, the behavior of the defense counsel was no
senting a plaintiff in a Truth-in-Lending Act case is entitled
deliberately or unnecessarily dilatory, and although th
to a fee award under the Act, despite the fact that it does
plaintiff had taken substantial risk and had incurred appro
not charge the plaintiff a fee. The court reasoned that such
imately $250,000 in expenses in prosecuting the suit, i
an award would presumably facilitate enforcement of the
rewards from the litigation, including $410,000 in punitiv
Act, and noted that a similar rule applies to civil rights
damages, were proportionate. Roy Export Co. U. Columb
cases. Kessler D. Associates Financial Services, Co., 639
Broadcasting System, 503 F. Supp. 1137 (S.D. N.Y. 19S0).
F.2d -19S (9th Cir. 19S1)-Pregerson, J.
Lasker, J.
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4. June 1981
An arbitration ruling, made pursuant to a grievance
hard-pressed to pay an award substantially greater than the
under a collective bargaining agreement, has been held not
amount of fees awarded herein." Thomas u. Board of
to be an "action or proceeding under" Title VII of the Civil
Education, 505 F. Supp. 102 (N.D. N.Y. 19S1)-Foley. J.
Rights Act, and hence not an event that could qualify the
prevailing party for a fee award under the Act. Although the
arbitrator's award, in favor of an employee claiming sex
discrimination, furthered the general objectives of Title
In a case of first impression, it has been held that
VII, the court stressed that the course pursued by the
administrative agencies are authorized to award attorney
employee was separate from a Title VII remedy. The
fees to prevailing parties under the fee provisions of the
Supreme Court's ruling in New York Gaslight Club Inc., C.
Rehabilitation Act. The court relied on similar holdings
Carey,-U.S.,-64 L.Ed.2d 723, 100 S.Ct. 2024 (1980),
under Title VII of the Civil Rights Act of 1964, noting
digested in the August, 1980 issue of this Reporter, was
"virtually identical language" in the two statutes. Watson c.
distinguished, since it dealt with administrative proceed-
United States Veterans Administration, 88 FRD 267 (C.D.
ings which were a prerequisite to court action. Sullivan c.
Cal. 1980)-Tashima, J.
Bureau of Vocational Rehab., 504 F. Supp 582 (E.D. Pa.
1980)-Pollak, J.
The fact that the prevailing plaintiffs' attorneys were from
a large law firm which had provided and would continue to
In awarding appellate fees under the Civil Rights At-
provide pro bono publico services regardless of a fee award,
torney's Fees Awards Act of 1976, it has been held that the
while the defendant was a department of the state govern-
following factors, in addition to those listed in Johnson C.
ment suffering budgetary limitations, was held not to
Georgia Highway Express, 48S F.2d 714 (5th Cir. 1974),
constitute "special circumstances" which would justify the
should be considered: (1) the quality of briefs and oral
denial of fees to the plaintiff under the Civil Rights
arguments; (2) the amount of time necessary to prepare
Attorney's Fees Awards Act of 1976. The court concluded
briefs and oral arguments; (3) the difficulty of the issues on
that there was "simply no basis in the statute, legislative
appeal; and (4) the complexity and importance of the case
history or case law for the defendants' argument here."
from the view of the appellate court. Suzuki v. Yuen, 507 F.
Witherspoon C. Sielaff, 507 F. Supp. 667 (N.D. III. 1981)-
Supp. 819 (D. Hawaii, 1981)-King, C.J.
Crowley, J.
Where fees had been requested and denied prior to the
In a shareholder derivative suit, it was held, under the
effective date of the Civil Rights Attorney's Fees Awards
"bad faith" exception to the American Rule, that a court in
Act of 1976, with only supplemental enforcement proceed-
awarding fees should not foreclose the possibility that a
ings remaining unresolved at that time, it was held that fees
plaintiff, under Rule 10b-5, could prove that a defendant's
could be allowed only for the pending supplemental pro-
bad faith behavior in the conduct giving rise to the cause of
ceedings, not for the entire case. If the question of fees for
action was so outrageous as to justify a fee award. The court
the initial case had not yet been decided, the court said,
recognized this view as being consonant with Seventh
such an unresolved issue would "apparently" suffice to
Circuit precedent, and at odds with holdings in the Third
render the entire case "pending" on the effective date of the
Circuit. However, in the context of this case, the court
Act, and an award for the entire case would have been
found that the conduct inherent in the 10b-5 claim did not
proper. But if all issues, including fees, have been resolved
support a fee award, and made its award on other grounds.
before the Act's effective date, the fact that supplemental
Wright v. Heizer Corp., 503 F. Supp. 802 (N.D. III. 19S0)-
proceedings continue beyond that date was held not to
Marshall, J. [Editor's Note: For a different view, see
make the entire case "pending" so as to justify a more
Huddleston D. Herman & MacLean, supra, p. 17 this issue.]
comprehensive award. Taylor v. Sterrett, 640 F.2d 663 (5th
Cir. Unit A, 1981)-Coleman, J.
UPDATE
In awarding hourly rates of $50 and $40 respectively, for
the plaintiffs' two attorneys, rather than the requested rates
of $105 and $75, the court in this civil rights action held that
Fleet Incestment Co. c. Rogers, digested in the October,
the ability of the defendants to pay an award should be
19S0 issue. Additional fee award for postjudgment services:
considered "in all cases." Awarding a total of $9,867.50 fees
see p. 18, supra.
under the Civil Rights Attorney's Fees Awards Act of 1976,
the court remarked that "this rural school district and its
Furtado v. Bishop, briefed in the June, 19S0. issue. Fee
supporting taxpayers with very modest incomes would be
recalculated on appeal: see p. 9, supra.
20
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4. June 198
Gates D. Collier, digested in the August, 1980 issue.
Benefits (See Relief Obtained)
Petition for rehearing by panel granted: 636 F.2d 942.
Bonus (See Multiple Factor)
Ceiling on Award
Jones v. United States, digested in the June, 1980 issue.
Furtado V. Bishop
9
Fee award on remand: 505 F. Supp. 781.
U.S. Golf Corp., Matter of
15
Class Actions
Jorstad D. IDS Realty Trust, briefed in the June, 1980
Charal V. Andes
17
issue. Award reduced on appeal: see p. 19 supra.
Farris V. Cox
8
Jorstad V. IDS Realty Trust
19
Saunders v. Claytor, digested in the February, 1981
Common Benefit Doctrine
issue. cert. den., sub nom Saunders C. Lehman, 49 USLW
Ford V. New York Central Teamsters Pension
Fund
18
3663.
Common Fund Doctrine
Supreme Court of Va. C. Consumers Union, digested in
Charal V. Andes
17
the August, 1980 issue. Fee award on remand: see Consum-
Farris V. Cox
8
ers Union of U.S. C. American Bar Ass'n, P. 18, supra.
Complexity of Issues
Farris V. Cox
8
Kelly V. American Standard, Inc.
19
Staten V. Housing Authority
14
U.S. Golf Corp., Matter of
15
Contingent Risk
Farris V. Cox
8
INDEX
Mader V. Crowell
11
Richerson V. Jones
12
Copyright Cases
Subject Matter
Roy Export Co. V. Columbia Broadcasting
System
19
Current Rates (See Time When Services Rendered as
Ability to Pay Fees
Affecting Award)
American Communications Assoc. V.
Customary Fee in Community
Retirement Plan
17
U.S. Golf Corp., Matter of
15
Cohen V. West Haven Bd. of Police Com'rs
17-18
Damages Awarded as Affecting Fee Award
Thomas V. Board of Education
20
Furtado V. Bishop
9
Witherspoon V. Sielaff
20
Roy Export Co. V. Columbia Broadcasting
"Action or Proceeding"
System
19
Sullivan V. Bureau of Vocational Rehab.
20
Denial of Fees
Administrative Proceedings; Award for
Coen V. Harrison County School Board
17
Hole V. Miami Shipyards Corp.
18
Farris V. Cox
8
Watson V. United States Veterans Administration
20
Huddleston V. Herman & MacLean
18
Amount in Controversy as Including Fees
Roy Export Co. V. Columbia Broadcasting
Graham V. Henegar
18
System
19
Appellate Fees
Sullivan V. Bureau of Vocational Rehab.
20
Fleet Investment Co. V. Rogers
18
Dilatory Tactics
Hole V. Miami Shipyards Corp.
18
Roy Export Co. V. Columbia Broadcasting
Kelly V. American Standards, Inc.
19
System
19
Richerson V. Jones
12
Discovery as to Fee Award Matters
Suzuki V. Yeun
20
Church of Scientology of California V. Cazares
4
"Appropriate" Circumstances for Award
Dismissal of Action
North Slope Borough V. Andrus
19
Church of Scientology of California V. Cazares
4
Arbitration Awards
COYOTE V. Roberts
5
Sullivan V. Bureau of Vocational Rehab.
20
Metropolitan Wash. Coal., Etc. V. Dist. of Col.
12
Bad Faith
Diversity Cases
Church of Scientology of California V. Cazares
4
Church of Scientology of California V. Cazares
4
Huddleston V. Herman & MacLean
18
Documentation of Fee Request
Roy Export Co. V. Columbia Broadcasting
Church of Scientology of California v. Cazares
&
System
19
U.S. Golf Corp., Matter of
I
Wright V. Heizer Corp.
20
Duplication of Effort
Bankruptcy Proceedings
Farris V. Cox
{
U.S. Golf Corp., Matter of
14
Kelly V. American Standard, Inc.
I
Equitable Theory for Award (See Inherent Power of
Hourly Rates: $100/Hour to $150/Hour
Court to Award Fees)
Farris V. Cox
8
Eivdentiary Hearing (See Hearing on Fee Request)
Richerson V. Jones
12
Excessive Time
Hourly Rates: Over $150/Hour
Farris V. Cox
8
Charal V. Andes
17
Findings of Fact and Conclusion of Law (See Judgment of
Inflation
Trial Court; Requirements for)
Mader V. Crowell
11
Fourteenth Amendment
Inherent Power to Court to Award Fees
Staten V. Bureau of Vocational Rehab.
14
Huddleston V. Herman & MacLean
18
Fraud
Wright V. Heizer Corp.
20
Huddleston V. Herman & MacLean
18
Injunction
Jorstad V. IDS Realty Trust
19
Ramos V. Koebig
19
Frivolous Claims
Staten V. Housing Authority
14
Church of Scientology of California V. Cazares
4
Inmates (See Prisoners)
Funding of Organization as Factor
Insurance Coverage
Staten V. Housing Authority
14
Church of Scientology of California V. Cazares
4
Geographical Considerations
Interest on Fee Award
Jorstad V. IDS Realty Trust
19
Fleet Investment Co. V. Rogers
18
Good Faith as Defense
Intervenor's Right to Fees
Ramos V. Koebig
19
Baker V. City of Detroit
17
Government Units and Officials
Judgment of Trial Court; Requirements for
Baker V. City of Detroit
17
U.S. Golf Corp., Matter of
15
Coen V. Harrison County School Board
17
Judicial Immunity
Cohen V. West Haven Bd. of Police Com'rs
17-18
Consumers Union of U.S. V. American Bar Assin
18
Consumers Union of U.S. V. American Bar Ass'n
18
Jurisdiction to Award Fees
COYOTE V. Roberts
5
Furtado V. Bishop
9
Farris V. Cox
8
Graham V. Henegar
IS
Furtado V. Bishop
11
Labor Cases
Mader V. Crowell
American Communications Assoc. V.
Metropolitan Wash. Coal., Etc. V. Dist. of Col.
12
Retirement Plan
17
Ramos V. Koebig
19
Baker V. City of Detroit
17
Richerson V. Jones
12
Ford V. New York Central Teamsters Pension
Staten V. Housing Authority
20
Fund
IS
Thomas V. Board of Education
20
Graham V. Henegar
18
Witherspoon V. Sielaff
20
Sullivan V. Bureau of Vocational Rehab.
20
Hearing of Fee Request
Law Clerks (See Paralegals)
Church of Scientology of California V. Cazares
4
Legal Aid (See Public Interest Attorneys)
COYOTE V. Roberts
5
Legislative Immunity
Iranian Students Ass'n V. Sawyer
10
Consumers Union of U.S. V. American Bar Assn
1
U.S. Golf Corp., Matter of
15
Locality (See Geographical Considerations)
Historical Rates (See Time When Services Rendered as
Meritless Claims
Affecting Award)
Church of Scientology of California V. Cazares
Moot Claims
Hourly Rates: Less than $25/Hour
Coen V. Harrison County School Board
Mader V. Crowell
11
COYOTE V. Roberts
Hourly Rates: $25/Hour to $45/Hour
Iranian Students Ass'n V. Sawyer
Jorstad V. IDS Realty Trust
19
Metropolitan Wash. Coal., Etc. V. Dist. of Col.
Thomas V. Board of Education
20
Motion for Fees (See Documentation of Fee Request)
U.S. Golf Corp., Matter of
15
Multiple Factor
Hourly Rates: $50/Hour to $70/Hour
Charal V. Andes
Charal V. Andes
17
Farris V. Cox
Farris V. Cox
8
Mader V. Crowell
Richerson V. Jones
12
Richerson V. Jones
Thomas V. Board of Education
20
Nocel Issues
U.S. Golf Corp., Matter of
15
Church of Scientology of California V. Cazares
Hourly Rates: $75/Hour to $95/Hour
Opposing Counsel's Hours or Fees
Jorstad V. IDS Realty Trust
19
Farris V. Cox
Mader V. Crowell
Il
Paralegals
Richerson V. Jones
12
Mader V. Crowell
FEDERAL ATTORNEY FEE AWARDS REPORTER, VoL 4. No. 4, June
Richerson V. Jones
12
U.S. Golf Corp., Matter of
15
Partial Success as Limitation on Award
Retroactive Application of Fee Statute
Mader V. Crowell
11
Taylor V. Sterrett
20
Pendent Claims
Reversal on Appeal as Justifying Fees
Church of Scientology of California V. Cazares
4
Hole V. Miami Shipyards Corp.
18
"Pending" Cases (See Retroactive Application
Risk of Litigation (See Contingent Risk)
of Fee Statute)
Securities Cases
Percentage of Recovery as Factor
Charal V. Andes
17
Furtado V. Bishop
9
Huddleston V. Herman & MacLean
18
Petition for Fees (See Documentation of Fee Request)
Jorstad V. IDS Realty Trust
19
Postjudgment Services
Wright V. Heizer Corp.
20
Fleet Investment Co. V. Rogers
18
Simplicity of Case as "Special Circumstance"
Richerson V. Jones
12
Staten V. Housing Authority
14
Taylor V. Sterrett
20
Sovereign Immunity (See United States Liability
Precailing Party
for Fees)
Coen V. Harrison County School Board
17
"Special Circumstances"
COYOTE V. Roberts
5
Consumers Union of U.S. V. American Bar Assn
18
Iranian Students Ass'n V. Sawyer
10
Staten V. Housing Authority
14
Ramos V. Koebig
19
Witherspoon V. Sielaff
20
Richerson V. Jones
12
Standard of Review
Prevailing Party (Defendant)
Furtado V. Bishop
9
Church of Scientology of California V. Cazares
4
Metropolitan Wash. Coal., Etc. V. Dist. of Col.
12
Prevailing Party (Some Issues Won)
U.S. Golf Corp., Matter of
15
Mader V. Crowell
11
State Law; Applicability of
Prisoners
Staten V. Housing Authority
14
Farris V. Cox
8
Students (See Paralegals)
Furtado V. Bishop
9
Pro Bono Publico Services
Substantiality of Claim
Witherspoon V. Sielaff
COYOTE V. Roberts
20
5
Public Benefit
Summary Judgment
Metropolitan Wash. Coal., Etc. V. Dist. of Col.
12
Church of Scientology of California V. Cazares
4
Public Interest Attorneys
Supplemental Proceedings; Award for
Kessler V. Associates Financial Services Co.
19
Taylor V. Sterrett
20
Punitice Damages
Three-Judge Courts
Roy Export Co. V. Columbia Broadcasting
Mader V. Crowell
1
System
19
Time Records
Purpose of Fee Award Acts
Farris V. Cox
COYOTE V. Roberts
5
Farris V. Cox
8
Time Spent on Fee Application
Furtado V. Bishop
9
Farris V. Cox
Hole V. Miami Shipyards Corp.
18
Fleet Investment Co. V. Rogers
Metroploitan Wash. Coal., Etc. V. Dist. of Col.
12
Mader V. Crowell
North Slope Borough V. Andrus
19
Richerson V. Jones
Richerson V. Jones
12
Time When Services Rendered as Affecting Award
Quality of Legal Services
Mader V. Crowell
Charal V. Andes
17
Richerson V. Jones
Farris V. Cox
8
Timeliness of Motion
Richerson V. Jones
12
Johnson V. Snyder
18
U.S. Golf Corp., Matter of
15
United States' Liability for Fees
Reasons for Award (See Judgment of Trial Court;
Richerson v. Jones
Requirements for)
Staten V. Housing Authority
Relief Obtained
Unreasonable Claims
Charal V. Andes
17
COYOTE V. Roberts
5
Church of Scientology of California V. Cazares
Farris V. Cox
8
Unsuccessful Claims
Ford V. New York Central Teamsters Pension
Mader V. Crowell
Fund
IS
Metropolitan Wash. Coal., Etc. V. Dist. of Col.
Furtado v. Bishop
9
Vexations Conduct
Metropolitan Wash. Coal., Etc. v. Dist. of Col.
12
Huddleston V. Herman & MacLean
FEE AWARDS REPORTER, Vol. 4, No. 4, June 1981
Ross, J.
Judges
Jorstad V. IDS Realty Trust
19
Rubin, J.
Huddleston V. Herman & MacLean
18
Ainsworth, J.
Tashima, J.
Iranian Students Ass'n V. Sawyer
10
Watson V. United States Veterans Administration
20
Bechtle, J.
Charal V. Andes
17
Weinfeld, J.
American Communications Assoc. V.
Boochever, Jr.
Retirement Plan
17
Kelly V. American Standard, Inc.
19
Bryan, Sr. Cir. J.
Williams (Jerre S.), J.
Consumers Union of U.S. V. American Bar Ass'n
18
Graham V. Henegar
18
Coffin, C.J.
Williams (Spencer), J.
Furtado V. Bishop
9
Farris V. Cox
8
Coleman, J.
Taylor V. Sterrett
20
Crowley, J.
Witherspoon V. Sielaff
20
Daugherty, C.J.
Plaintiff-Defendant
Fleet Investment Co. V. Rogers
18
Ditter, J.
Richerson V. Jones
12
American Communications Assoc. V.
Elfcin, J.
Retirement Plan
17
Ford V. New York Central Teamsters Pension
Baker V. City of Detroit
17
Fund
18
Charal V. Andes
17
Foley, J.
Church of Scientology of California v. Cazares
4
Thomas V. Board of Education
20
Coen V. Harrison County School Board
17
Godbold, C.J.
Cohen V. West Haven Bd. of Police Com'rs
17-18
Hole V. Miami Shipyards Corp.
18
Consumers Union of U.S. V. American Bar Ass'n
18
Hunter, Jr.
COYOTE V. Roberts
5
Staten V. Housing Authority
14
Farris V. Cox
8
Johnson, J.
Fleet Investment Co. V. Rogers
IS
Ramos V. Koebig
19
Ford V. New York Central Teamsters Pension
Kearse, Jr.
Fund
18
Cohen V. West Haven Bd. of Police Com'rs
17-18
Furtado V. Bishop
9
Keith, J.
Graham V. Henegar
18
Baker V. City of Detroit
17
Hole V. Miami Shipyards Corp.
18
King, C.J.
Huddleston V. Herman & MacLean
18
Suzuki V. Yuen
20
Iranian Students Ass'n V. Sawyer
10
Kravitch, J.
Johnson V. Snyder
18-19
Church of Scientology of California V. Cazares
4
Jorstad V. IDS Realty Trust
19
Lasker, J.
Kelly V. American Standard, Inc.
19
Roy Export Co. V. Columbia Broadcasting
Kessler V. Associates Financial Services Co.
19
System
19
Mader V. Crowell
Il
Marshall, J.
Metropolitan Wash. Coal, Etc. V. Dist. of Col.
12
Wright V. Heizer Corp.
20
North Slope Borough V. Andrus
19
Ramos V. Koebig
19
Morton, C.J.
Mader V. Crowell
11
Richerson V. Jones
12
Roy Export Co. V. Columbia Broadcasting
Pettine, C.J.
COYOTE V. Roberts
5
System
19
Staten V. Housing Authority
14
Pollak, J.
Sullivan V. Bureau of Vocational Rehab.
20
Sullivan V. Bureau of Vocational Rehab.
20
Suzuki V. Yuen
20
Pregerson, J.
Tavlor V. Sterrett
2(
Kessler V. Associates Financial Services Co.
19
Thomas V. Board of Education
2
Randall, J.
U.S. Golf Corp., Matter of
1
U.S. Golf Corp., Matter of
15
Watson v. United States Veterans Administration
2
Robinson, J.
Witherspoon V. Sielaff
2
North Slope Borough V. Andrus
19
Wright V. Heizer Corp.
2
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4, June 19
5th Circuit, Unit A
Defendant-Plaintiff
Coen V. Harrison County School Board
17
Graham V. Henegar
18
Huddleston V. Herman & MacLean
18
Iranian Students Ass'n V. Sawyer
10
American Bar Ass'n, Consumers Union of U.S.
18
Ramos V. Koebig
19
19
Taylor V. Sterrett
20
V.
American Standard, Inc., Kelly V.
17
5th Circuit, Unit B
Andes, Charal V.
19
Church of Scientology of California V. Cazares
4
Andrus, North Slope Borough V.
19
Hole V. Miami Shipyards Corp.
I8
Associates Financial Services Co., Kessler V.
9
U.S. Golf Corp., Matter of
15
Bishop, Furtado V.
20
6th Circuit
Board of Education, Thomas V.
20
Johnson V. Snyder
I8-19
Bureau of Vocational Rehab., Sullivan V.
4
8th Circuit
Cazares, Church of Scientology of California V.
17
Jorstad V. IDS Realty Trust.
19
City of Detroit, Baker V.
9th Circuit
Columbia Broadcasting System, Roy Export Co.
19
Kelly V. American Standard, Inc.
19
8
Kessler V. Associates Financial Services Co.
19
V.
Cox, Farris V.
11
D.C. Circuit
Crowell, Mader V.
17
Metropolitan Wash. Coal., Etc. V. Dist. of Col.
12
Detroit, City of, Baker V.
12
Dist. of Col., Metropolitan Wash Coal, Etc. V.
17
Harrison County School Board, Coen V.
20
DISTRICT COURT
Heizer Corp., Wright V.
18
Henegar, Graham V.
18
Cal., C.D.
Herman & MacLean, Huddleston V.
14
Watson V. United States Veterans Administration
20
Housing Authority, Staten V.
19
Cal., N.D.
IDS Realty Trust, Jorstad V.
12
Farris V. Cox
8
Jones, Richerson V.
19
D.C.
Koebig. Ramos V.
18
North Slope Borough V. Andrus
19
Miami Shipyards Corp., Hole V.
Hawaii
New York Central Teamsters Pension Fund,
18
Suzuki V. Yuen
20
Ford V.
Ill., N.D.
Reitrement Plan, American Communications
17
Witherspoon V. Sielaff
20
Assoc. V.
5
Wright V. Heizer Corp.
20
Roberts, COYOTE V.
18
Mich., E.D.
Rogers, Fleet Investment Co. V.
10
Baker V. City of Detroit
17
Sawyer, Iranian Students Ass'n V.
20
N.Y., N.D.
Sielaff, Witherspoon V.
18-19
Thomas V. Board of Education
20
Snyder, Johnson V.
20
N.Y., S.D.
Sterrett, Taylor V.
American Communications Assoc. V.
United States Veterans Administration, Watson
20
Retirement Plan
17
15
V.
Roy Export Co. V. Columbia Broadcasting
U.S. Golf Corp., Matter of
17-18
System
19
West Haven Bd. of Police Com'rs, Cohen V.
20
N.Y., W.D.
Yuen, Suzuki V.
Ford V. New York Central Teamsters Pension
Fund
I8
Okal., W.D.
Courts
Fleet Investment Co. V. Rogers
18
Pa., E.D.
Charal V. Andes
17
COURT OF APPEALS
Richerson V. Jones
12
Sullivan V. Bureau of Vocational Rehab.
20
1st Circuit
R.I.
Furtado V. Bishop
9
COYOTE V. Roberts
5
2d Circuit
Tenn., M.D.
Cohen V. West Haven Bd. of Police Com'rs
17-18
Mader V. Crowell
II
3rd Circuit
Va., E.D.
Staten V. Housing Authority
14
Consumers Union of U.S. V. American Bar Assn
IS
FEDERAL ATTORNEY FEE AWARDS REPORTER, Vol. 4, No. 4, June 1981
25
F
à
TRILLING & KENNEDY
ATTORNEYS AT LAW
BINGHAM KENNEDY
SUITE 1100
(202) 223-1577
BARRY J. TRILLING
1100 SEVENTEENTH STREET, N.W.
WASHINGTON, DC 20036
June 29, 1982
Executive Director
Capital Legal Foundation
1101 17th St., N.W., Suite 810
Washington, D.C. 20036
Dear Sir or Madam:
Awards of attorneys' fees have received increasing attention in recent
months, especially in the context of public interest litigation under Federal
statutes. As a result, your organization may have considered the possibility
of seeking attorneys' fees in its litigation. I am writing to offer the
services of this firm in evaluating the question whether to seek attorneys'
fees, in establishing the procedures necessary to document a claim, and in
actually litigating claims.
This firm has considerable experience in attorneys' fees litigation.
Before my partner and I left the Department of Justice, each of us had
defended attorneys' fee claims against the government. More recently, we
successfully litigated two fee applications on behalf of the Environmental
Defense Fund in the D.C Circuit Court of Appeals. In that litigation, the
Court characterized the work of this firm as "first-rate", described our
documentation as "clear and thorough" and our experience in civil litigation
as "extensive". Without discussing the decisions in detail, it is sufficient
to note that in EDF V. EPA, 672 F.2d 42 (D.C. Cir. 1982), we were able to
obtain a total award for EDF of $90,000 for 825.4 hours of attorney time, thus
yielding an average hourly rate of roughly $109. As a result, we thought that
other public interest organizations might benefit from our experience in
handling those cases, and we envision three ways in which we might be of
service.
First, in deciding whether to seek attorneys' fees in a matter which has
been litigated by in-house counsel, we can offer a "second opinion" concerning
the merits of a potential claim. Equally important is the fact that this
evaluation can usually be accomplished at a single initial conference, for
which we charge $50 per hour.
Second, if a decision is made to seek attorneys' fees, we are available
to handle the application for fees and the related briefing of the issues.
Our experience in handling the EDF cases indicates that use of retained
counsel offers several advantages to the client. First, it is easier for
outside counsel to advocate the excellent performance of in-house staff
June 29, 1982
Page Two
attorneys in handling the merits of the case than it is for the staff attor-
neys to do SO themselves. Second, it eliminates the need for in-house
counsel to litigate issues which are not generally of interest to public
interest attorneys and which would divert them from other cases. Third, the
arrangement offers the possibility of substantial financial rewards for your
organization.
The third area in which we may be useful is in counselling organizations
in establishing the record-keeping practices necessary to litigate a claim for
attorneys' fees successfully. It has been our experience that many public
interest organizations lose the opportunity to apply for fees for much of
their attorneys' time simply by failing to provide the minimal documentation
required. On the other hand, any change in record-keeping practices poses the
risk of increased administrative expense and disruption of established office
procedures. Accordingly, it is necessary to tailor any recommendations to the
particular needs and structure of the law office involved, taking into con-
sideration the number of attorneys, the nature and volume of the litigation
handled by it, etc. Our goal is to suggest a time record system which meets
the requirements for an award of attorneys' fees, while minimizing overhead
expense and diversion of attorneys and secretarial staff to ministerial
functions. In addition to suggesting record-keeping practices, #e may also be
able to offer suggestions on how to minimize duplication of attorney time so
as to maximize potential fee awards.
He would be happy to discuss these services further with you at your
convenience. In addition, I have enclosed a copy of our firm brochure, which
you may find to be of interest. If you have any questions, please give me
a call.
Sincerely yours,
Eingles Bingham Kennedy Kf
BK:gms
Enclosure
The purpose of this brochure is to introduce
The Clean Air Act
the law firm of Trilling & Kennedy and to acquaint
The Clean Water Act
you with the legal and consultant services which
The Federal Toxic Substance
the firm offers. as well as the background and
Control Aci
experience of its attorneys. Trilling & Kennedy
Federal Pesticide laws
was recently opened in downtown Washington,
Federal Noise Pollution laws.
D.C., by two former Justice Department attor-
neys, Bingham Kennedy and Barry J. Trilling.
Mr. Trilling and Mr. Kennedy have each been in-
The firm offers a diversified mix of consultation
volved in legal actions concerning a wide variety
and litigation services, concentrating in environ-
of Federal environmental laws. They have pre-
mental law and federal employee rights, based
pared federal enforcement cases and have de-
upon extensive experience of its attorneys in
fended Federal regulatory actions carried out
both areas. In addition, the location of the firm,
under these laws. Since the firm was opened, it
in downtown Washington, D.C., provides ready
has been retained by the United States Environ-
access to federal agencies, federal courts, and
mental Protection Agency to provide advice con-
the headquarters of national trade associations
cerning implementation of the federal hazardous
and organizations.
waste program.
Federal Employee Rights
PROFESSIONAL EXPERIENCE
Both Mr. Kennedy and Mr. Trilling have provided
Environmental Law
counselling services with respect to the rights of
federal government employees under federal
Barry Trilling and Bingham Kennedy have wide
law, including issues concerning Reductions in
experience in the field of environmental regula-
Force, Merit System Principles, Performance
tion. Each has spent much of his professional
Appraisals, and Merit Pay under the Civil Service
career working in the area. As a trial lawyer with
Reform Act of 1978. Since the firm opened, it
the Department of Justice and as an Assistant
has worked with the Bipartisan Congressional
United States Attorney, Mr. Trilling has super-
Task Force on Federal Employees and has repre-
vised litigation concerning:
sented several individuals and groups of federal
employees. Moreover. while he was an Assistant
The Clean Air Act
United States Attorney in Los Angeles, Mr. Trilling
The Clean Water Act
conducted extensive litigation involving federal
Federal hazardous waste laws.
employees' rights on behalf of the United States
government, taught courses on Equal Employ-
While with the Justice Department, Mr. Trilling
ment Law. and served as an Equal Employment
was the federal government's lead counsel in the
Opportunity representative for federal employ-
litigation concerning the "Love Canal" hazardous
ees.
waste disaster.
Individual Background and Education
Mr. Kennedy, during his experience in EPA's
Office of General Counsel and the Department
Bingham ("Toby") Kennedy has been practicing
of Justice, has conducted litigation in federal
law for 12 years. He graduated from Yale Univer-
trial courts and courts of appeals involving:
sity and the University of Virginia Law School,
where he was a member of the Board of Editors
of the Virginia Law Review. His experience in-
cludes a judicial clerkship. private practice in his
TRILLING & KENNEDY
home. state of New Jersey, service with the
Environmental Protection Agency and, more
Attorneys at Law
recently, the Department of Justice. He is a
Washington, D.C.
member of the Bars of New Jersey, Pennsyl-
vania, and the District of Columbia, as well as
various federal courts.
After graduating from UCLA and the Law School
of the University of California at Berkeley (Boalt
Hall), Barry Trilling served as an attorney for the
Federal Government for almost ten years, in-
cluding terms as an Assistant United States
Attorney in Los Angeles and as a Trial Attorney
in the Department of Justice. Mr. Trilling has
written articles, delivered speeches, and parti-
cipated in several symposia on the subjects of
environmental law and federal employment liti-
gation. He is admitted to practice in California,
the District of Columbia and various federal
courts.
Federal laws and regulations in the areas of
environmental protection and government em-
ployees' rights have become increasingly com-
plex. If you have a question in any of these
areas, an attorney from Trilling & Kennedy would
be pleased to discuss it with you.
There is no charge for an initial consultation. The
firm may be reached by telephone at (202) 223-
1577.
TRILLING & KENNEDY
Suite 1100
1100 Seventeenth Street, N.W.
Washington, D.C. 20036
*
G
TRIAL LAWYERS FOR PUBLIC JUSTICE, P.C.
ANNOUNCES THE OPENING
OF ITS OFFICES
FOR THE PRACTICE OF
PUBLIC INTEREST LAW
SUITE 611
2000 ? STREET. NORTHWEST
WASHINGTON D.C.
20035
ANTHONY 2. ROISMAN
(202) 453-9500
EXECUTIVE DIRECTOR
FOUNDERS
Steving Corrective
I D. Lee. Chairman
Jay Goald
Charles Reilly
RASC mostigle, Finance
Browns Greene
Emest C. Only
Fre! Baron'
Edwin Hardin. Jr.
Ortega and Sand
bill Colon
Hare. Wyea, Newell & Newton
Mary A Parker*
Pist Cirbuy
David Hanney
Robert L Parks
for Cotchett"
Dennis Harringto 5°
Pater Pedmum Law Office
Learned Decof
Ress M. Herein
Richard
Pab 11
Roser 11. Hegan*
Reberts Ritter
Tol Keskulf
Thomas Hallers
Bruce 0.
Stratev Preiver
C.T.Hivass
Mark P. Bubiness
Part Rhengold
Susan
Philip] Regas
have Birgh
Robert I
Fdr. Road
Duen RASS*
E. Stewart Junes
Past Rozen
Fred Sayre
Timethy E. Kelley
& Baumberger
Bill Shormoft
William F. Hearty
Herry B. Rechblasi
Willard F. Kits
Ronald 11. Rouds
Joel Kleinberg
Said Buman
Brenson Adams
J. Marray Kleig
Memy Sams
Goods Alferis
Lee Kreindler
Charles Sinvere
Anderson
Kennerh Kripke*
Richard # F Schaden
Chacks Andrews
Krepaick and Campbell
Sheldon J. S.Mesings:
Join V. Andrews
Norman Landre
J=n Richard Schlichuner
Haba Armold
Morton Leisen
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Scott B-Ndwin
Aaron M Levine"
George Shadon*
Charles Ren
Harry Lesine
Ining Staff
Lanes licenly
Addeph] Levy
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July X by
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Marvin E. Leais
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Sudger Purger
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Clarks S: VM
Daniel M. Resper*
John Lind
Crig ungending
Mahrs Black
Lopatin. Miller & Freedom
1 R Speare
Daniel Belone*
Thomas F. Lyde
Browles A Spivey
Barry
Thomas W. McAliky
Charles E. Such
Brue Proilles
Jobyan McCamic*
Lary 5. Stewart
James Breckner*
McDougell
Released
James si. Burler
Frask) McKona
Pad
R:. Care
John McLaughks
Daniell Selliven*
DARK Crey
George Maliasky
} lucal Sweet
Lawrence S. Charles
Thomas Malene
Claim "I don
Stanley M. Charley
Benjamin Main
Mary 3, 11. "
1-44 Code
Mark Marks
Assos The
Robert Consun
Maryland Tell Lawyers Assis
Ritual Times
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B.J. Masterson
Wilson Trise*
Tony Cenningbam
J.C. Metcalf
Regar Vanghan
Peter r. Deblasio
Michigan Trial Lawyers
110.00 Vesses
Robert Dishor
Kennech Mickel
WAS Wagner,
Jureld Drake
Robert]. Military
William W Wagner"
Charles Dyer
Jerume Miss
Brace Walter'
Grorge Elsener
Richard Methoff
Theodore Warshifity
Joseph Epstein
Charles Morris
James With
George A Fairbanks
Perenich & Carell
Benand Wherstone
Furliberg
Riches!
William P. Winderly
Abal. Fuctoberg
Insted Name
Wid sj subsidinen
1 is and Gallegher*
New Mexico Tell Lawyers
Weeke Honswell, Kex
Elvon Galive
And
an! Martinez
blood Garlend*
John N stem
haph I. Young*
Gay Gerling
M. Nurseberg
M. Younger
Subject Gifreath
John Quien
Nicholas Zemas
Name Capatal
T rial Lawyers for Public Justice is a public in-
terest law firm which utilizes trial litigation is an
instrument of social change and for vindication of
individual rights. The Firm works with the Trial
Lawyers Founders to identify individuals and situa-
tions which merit legal action in the public interest.
The Firm's network of trial lawyer members serves
as the backbone of all out-of-state litigation, and trial
lawyers may contribute their service through sab-
baticals taken in Washington.
The Firm will work closely with other public inter-
cst groups to stay abreast of current issues, maintain
an open flow of information exchange, and heighten
awareness of instances in which citizens have suf-
fered injuries or losses due to the conduct of govern-
ment or private companies and for which trial litiga-
tion would be appropriate.
Trial Lawyers for Public Justice owes its existence
to the time, efforts, and contributions of many. It is
especially indebred to Joan Claybrook for her help in
raising funds and organizing the firm, and to Ralph
Nader for inspiration and guidance; their involve-
ment has been vital to the founding of the firm.
H
&
JUSTICE REPORT
Paying Lawyers to Sue the Government
An Expense That OMB Could Do Without
The Office of Management and Budget complains that generous attorneys' fee
awards by the courts enable "public interest" lawyers to push their ideology.
BY DAWN P. JACKSON
lawyers for those who take it to court.
try" of public interest law firms has de-
OMB estimates that the total is about
veloped as a result of the legal fee awards.
T
he Environmental Defense Fund
$20 million a year, but Horowitz says the
Public interest groups have come to
Inc. won a split decision in federal
recent court practice of awarding fees to
regard the awarding of attorneys' fees as
court in February when it sought stricter
attorneys of non-prevailing clients could
"3 permanent financing mechanism for
regulation by the Environmental Protec-
drive up that figure.
them." Horowitz said in an interview.
tion Agency (EPA) of a class of toxic
Now the Administration is preparing
The Administration, he added. does not
chemicals known as polychlorinated
to ask Congress to restrict such fees. In its
accept these groups' argument that as the
biphenyls (PCBs). A three-judge panel of
fiscal 1983 budget, it outlined a proposal
level of litigation rises, so does the level of
the U.S. Court of Appeals for the District
to limit the hourly rate that can be used in
justice.
of Columbia Circuit upheld the environ-
computing fee awards to the rate that
The General Accounting Office. which
mental group on two counts and ruled
government lawyers are eligible to be
audits legal fee outlays for Congress. says
against it on a third.
paid. To stop frivolous suits based solely
that in fiscal 1977. the most recent year
But when it came to getting EPA to
on the hope that the government would
for which it has data, three laws resulted
pay its legal fees, the environmental
have to foot the bill, the Administration
in more attorneys' fee awards than any
group won hands down. For the time
would require plaintiffs to certify in ad-
others. They are Title VII of the 1964
spent on the case-825 hours spent by its
vance that they would pay their lawyers
Civil Rights Act (which forbids discrimi-
own attorneys and 82 hours by a private
themselves, with the possibility of being
nation in employment). the 1966 Free-
law firm-the Environmental Defense
reimbursed by the government later. Fi-
dom of Information Act and the 1974
Fund was awarded $99,534.50. That's a
nally. the proposal would make fee
Privacy Act.
rate of nearly $110 an hour, far more
awards somehow proportional to the
Looming is the 1980 Equal Access to
than any government lawyer is paid.
judgments won by the plaintiffs against
Justice Act, which OMB feels has the
The three-judge panel acted on the
the government. OMB and the Justice
potential to be by far the costliest of all.
authority of the 1976 Toxic Substances
Department are still working out the de-
The act authorizes the federal govern-
Control Act, which allows such fee
tails of the proposal they will submit to
ment to pay attorneys' fees for individ-
awards whether the party challenging the
Congress.
uals and small businesses that defend
government wins, loses or draws. "The
Already, the proposed changes have
themselves against "overreaching" gov-
decision of the court
may
include
an
met with strong opposition not only from
ernment actions.
award of cósts of suit and reasonable
public interest lawyers and the American
A bookkeeping wrangle over which
attorneys' fees
if the court determines
Civil Liberties Union but from the
federal budget account should be used to
such an award appropriate," the law says.
American Bar Association (ABA) as
make payments under the act has so far
The Toxic Substances Control Act is
well. In testimony to the House Judiciary
prevented any payments. But OMB esti-
only one of more than 100 laws that in
Subcommittee on Courts, Civil Liberties
mates that when payments begin. the
effect require the government to pay the
and the Administration of Justice, the
annual costs of attorneys' fees will mush-
legal fees of the parties that take it to
ABA denounced the proposal as an at-
room from $20 million last year to S135
court. To the Reagan Administration,
tempt to "undermine the intent" of laws
million in 1983 and S146 million in 1984,
these awards represent a subsidy that
that make provision for attorneys' fee
the last year for which the Equal Access
enables "public interest" lawyers to push
awards. And Alan Houseman, director of
to Justice Act is now authorized.
their ideology at public expense.
the Center for Law and Social Policy,
Horowitz said that for fiscal 1983, the
"The notion that government should
said in an interview that the proposal
Administration intends to establish a
subsidize discrete segments of the bar for
would reduce "our ability to represent
tracking system that will provide 3 break-
ideological purposes is unjustified and
those groups who otherwise would not be
down of which laws are the costliest. For
dangerous," said Michael J. Horowitz,
represented because of a lack of funds."
now. he can only point to specific cases
special counsel of the Office of Manage-
A 'LITERAL INDUSTRY'
that illustrate his displeasure with the fee
ment and Budget (OMB).
system.
The government does not keep track of
The Administration's 1983 budget
One case that helped to generate the
how much it spends each year to pay the
message complains that a "literal indus-
Administration's proposal to curb attor-
680 NATIONAL JOURNAL 4/17/82
Alan Houseman (left) of a public interest law firm takes issue with the Reagan Administration's proposal to curb attorneys'
fees for parties that take the government 10 court. Michael J. Horowitz of OMB says. "For those who have their noses at the
troughs screaming about our proposal being some vendetta or a lack of justice, I think it is a lot of bunk."
neys' fees is Copeland V. Marshall, a
District of Columbia Circuit, is Sierra
to Justice Act, which OMB says will cost
discrimination suit brought against Labor
Club V. Gorsuch. In February, the court
more than $100 million a year. would be
Secretary Ray Marshall. Using Title VII
ruled against the Sierra Club, which had
trimmed by 15 to 25 per cent.
of the 1964 Civil Rights Act. a group of
sought to force EPA administrator Anne
women employees of the Labor Depart-
M. Gorsuch to review EPA's standards
THE PUBLIC INTEREST BAR
ment charged that the department denied
for sulfur dioxide and particulates from
Indeed, Horowitz seems interested in
them promotions and excluded them
coal-fired generators under the Clean Air
the Administration's proposal not SO
from training programs on the basis of
Act.
much for its promise to save the govern-
sex.
But at the same time, the court decided
ment money 2S for its potential to reduce
Less than 3 week before the U.S. Court
to grant legal fees to the Sierra Club,
a form of litigation that he says does more
of Appeals for the District of Columbia
which is still negotiating with EPA over
harm than good to all involved.
Circuit was scheduled to hand down its
what the amount should be. The court
"Take a look at the record of the past
verdict in 1980. the Labor Department
held that under the Clean Air Act, such
10 years," Horowitz said. "These pro-
conceded the plaintiffs' charge and
fees are not limited to "substantially pre-
grams have hurt, not helped, the poor."
agreed to pay the women back pay total-
vailing or prevailing parties" provided
The lawyers who benefit the most from
ing more than $31,000. The court then
that the case makes a "substantial contri-
attorneys' fee awards, Horowitz said, are
awarded attorneys' fees to the prestigious
bution to the interpretation and develop-
"public-sector vendors" whose main con-
Washington law firm of Wilmer & Pick-
ment of the act."
cern is not for their clients but for their
ering. which represented the women. The
The Administration argues that losing
own points of view. "One can think of
law firm received $160,000 in fees plus
plaintiffs should not be able to win
hundreds of instances in which. in the
$11.000 in overhead costs-more than
awards of legal fees, although the Justice
service of some kind of ideology, a bunch
five times what the plaintiffs got from the
Department says that the Clean Air Act
of middle-class lawyers have left the poor
Labor Department.
is only one of 14 environmental laws that
holding the bag," he said. "So for those
To reduce the chances of this kind of
permit losers to collect. Under the Ad-
who have their noses at the troughs
outcome. the Administration proposed 2
ministration's proposal. "the fee awarded
screaming about our proposal being some
maximum rate of 525 an hour for plain-
must bear a reasonable relation to the
vendetta or a lack of justice, I think it is a
tiffs' lawyers, approximately the top sal-
result achieved in the proceeding."
lot of bunk."
ary of civil service lawyers. Attorneys'
To ensure that plaintiffs' lawyers
Horowitz said public interest lawyers
fees could additionally include payments
would be paid by their clients if the court
should have to compete in the market-
to cover expenses.
did not grant them legal fees. the Admin-
place for clients and fees. "I have no
The budget says that as now granted
istration would require plaintiffs to state
doubt that once [public interest lawyers]
by the courts. attorneys' fees depend on a
in writing that they would pay their own
get off the dependence on government
"prevailing market rate" that is "pegged
attorneys' fees and then, if the court so
money, they are going to find that they
to private. commercial bar rates and of-
ruled. collect reimbursement from the
can, if they are worth supporting. get
Icn exceeds $100 per hour even where the
government. That would convert fee
support from a public which agrees with
applicant attorneys receive low salaries
awards from a subsidy for lawyers to a
their advocacy," he said.
from law firms." Most laws that autho-
benefit for their clients, Horowitz said.
Public interest lawyers take issue.
rize attorneys' fees place no limit on those
Even OMB is far from certain of the
Frederick S. Middleton III of the Sierra
fees, although the Equal Access to Jus-
budgetary impact of the Administration's
Club Legal Defense Fund said that legal
tice Act has a $75-an-hour limit that
proposals. Horowitz said the $20 million
fee awards enable his group and others
would not be changed by the Administra-
a year that is being spent now would be
like it to initiate important legal action
tion's proposal.
shaved substantially. although he de-
that otherwise would be left undone.
Another case cited by Horowitz, again
clined to estimate by how much. In addi-
"The point isn't that we are the good or
from the U.S. Court of Appeals for the
tion. he said, the cost of the Equal Access
bad guys, the point is representing issues
NATIONAL JOURNAL 4/17/82 681
that the market system does not provide
for," he said. "No one has an economic
Meanwhile, Back in the States
interest in stopping pollution. but it is in
the interest of the public to protect the
Not only the federal government finds itself saddled with millions of dollars in
environment regardless of the cost."
bills from the attorneys who do battle with it in the courts. Thanks in large part
At the Center for Law and Social
to a 1976 federal law, states are finding themselves increasingly burdened by
Policy. Houseman called the Administra-
fees they must pay to opposing lawyers in civil rights cases.
tion's proposal an effort to keep unwel-
Consider the case of Skehan V. Board of Trustees of Bloomsburg State
come cases out of the courts. "Essen-"
College. in which Joseph T. Skehan, a non-tenured professor at the Pennsylvania
tially, the proposal would deny low-
college, charged that he had been fired without due process and in violation of
income people and environmentalists re-
his 1st Amendment right of free speech. The U.S. Court of Appeals for the 3rd
dress," he said. "This is attacking the
Circuit rejected the 1st Amendment charge but ordered Skehan reinstated on a
heart of the constitutional system."
"suspended with pay" basis so that he could receive a fair hearing. He was dis-
The ABA rejects the proposals to re-
missed again after the hearing and received less than $25,000 for the suspension
quire plaintiffs to certify that they would
period. The court, meanwhile, awarded his lawyers $50,000, to be paid by the
pay their lawyers if attorneys' fees are not
state of Pennsylvania.
awarded. The effect, it says, would be to
In response to such cases, Sen. Orrin G. Hatch, R-Utah, chairman of the Judi-
prevent those who can't otherwise afford
ciary Subcommittee on the Constitution, has introduced amendments to whittle
to go to court from turning to public
down the impact of the 1976 Civil Rights Attorneys' Fees Awards Act. That law
interest lawyers who hope to get their
provides that lawyers for persons who successfully go to federal court to defend
compensation from the government.
their civil rights may be awarded their fees from the defendants, which are
Liberal public interest law firms would
frequently state or local governments.
be more deeply affected by the Adminis-
When the law was enacted, many recent federal civil rights laws already
tration's proposal than would the newer
included such provisions, but those enacted before 1964 generally did not.
generation of conservative firms. most of
Congress held that without such a law, many persons whose civil rights had been
whose revenue comes from private foun-
violated could not afford to seek redress in court. States have been complaining
dations, association grants and busi-
ever since that the law has dealt a blow to their treasuries. A March 1981 survey
nesses. Bob Best of the Pacific Legal
by the National Association of Attorneys General found that Florida had paid
Foundation, established in Los Angeles in
$778,090 under the act since its enactment in 1976. Of 22 states responding to
1973, said that less than 5 per cent of his
the association's survey, Washington had paid more than $400,000 and ranked
group's income comes from fee awards.
highest with $4.5 million in pending fee requests.
Best said he favors requiring all liti-
"Many local officials I have spoken to have expressed concern about the
gants to pay their attorneys' fees, regard-
substantial fee awards they have already paid, the increasing amounts of money
less of the outcome in court. The award-
that are being diverted from public services to legal defense and their view that a
ing of fees. he said. should be approached
number of these suits are simply brought to collect attorneys' fees," Hatch said
"very carefully because it has tremen-
at the outset of March 1 hearings before his subcommittee.
dous and significant room for abuse."
His bill (S 585) would authorize payment of legal fees by losing plaintiffs to
At OMB, Horowitz says that conserva-
winning defendants if the courts determined that they brought "frivolous suits
tive public interest groups would ulti-
at the taxpayer's expense." Hatch said such a provision would eliminate the
mately be affected by the proposed
"dual standard" that now makes only plaintiffs eligible for fee awards.
changes just as surely as liberal groups
Hatch would deny attorneys' fee awards to plaintiffs who rejected settlement
would. "Conservative groups will have
offers comparable to the awards ultimately granted in court. This provision,
their noses at the troughs just the same as
Hatch said, would encourage settlements and "result in a
reduction of the
any other sort of group," he said. "As
terrible congestion that now exists in our courts."
they begin to achieve the same kind of
A third provision of Hatch's bill would limit the hourly rate received by
critical mass as the traditional public
lawyers in fee awards to the market rate prevailing in the local area.
interest groups, that's where they'll get
Finally, Hatch would try to stop the practice of attaching claims not covered
their money from."
under the attorneys' fee act to those that are covered so that lawyers receive fees
How public interest law firms would be
for the entire claims. His proposal would instruct judges to determine whether
affected by the proposal will have to
the claims would have been eligible individually under the act.
await submission of a bill. The Cabinet
Although Hatch emphasized that he supports the 1976 act's goal of providing
council on legal policy may have an op-
incentives for lawyers to represent clients who otherwise could not afford them.
portunity to review whatever proposal
he has run into opposition from the civil rights lobby, which says his bill would
emerges from the current discussions be-
weaken a law that has helped the poor defend their civil rights.
tween OMB and the Justice Department.
Former Rep. Robert F. Drinan, D-Mass., now a professor at the Georgetown
For his part. Horowitz is determined
University Law Center, testified before Hatch's subcommittee on behalf of the
that something be done. "One of the
Alliance for Justice and the Leadership Conference on Civil Rights. "Many of
things this Administration has got to do."
the proposed amendments," Drinan said, "would undermine the fundamental
he said, "is move beyond the rhetoric by
purpose of the act: to allow civil rights plaintiffs to vindicate their rights and
which people intimidate a political pro-
thereby to enforce the laws."
cess into subsidizing them and look at the
The Administration has taken no formal position on Hatch's bill. Michael J.
reality of what the political system can do
Horowitz, special counsel of the Office of Management and Budget, said the
and afford."
Administration might incorporate some of Hatch's provisions into its own bill to
Public interest firms are watching
limit attorneys' fee awards by federal agencies.
carefully. "The proposal was buried deep
Hatch's subcommittee is expected to vote on his bill later this month. Peter
in the budget," Middleton said, "and it is
Ormsby of the subcommittee staff said the bill has a good chance of clearing the
not going to slip by without the light of
panel but it is "too tough to call" in the full Judiciary Committee.
day shining on it."
682 NATIONAL JOURNAL 4/17/82
Regulation $3.50 copy
May/June 1982
AEI Journal on Government and Society
RG
WASHINGTON WASHI NGTON
ATTN- MICHAEL HOROWITZ
UFC OF THE PRESIDENT
OFC EXEC BUDGET
OF NGMT &
OMB-472 - DEOB
Economists
20775
and Public Policy
GeorgeStimer
DC 20500
Airline.Deregulation
603
S.Working
DavidR Grahamand
Daniel P.Kaplan
Predicting the Future
ofAdmini ative Law
Martin'Shapiro
TheMutho Runaway Bureaucract-
theCaseoftheFTC
Barry R Weingast and Mark J. Moran
Competitio ramongtheStates
The Ethics of.Regulatory Competition
Steven Kelman
A.Response
Walter Olson
Perspectives
on current developments
The Private Attorney General
isn't out of pocket even when he loses, presum-
ably on the theory that it benefits the public to
Industry: Doing Well by Doing Good
have these things sued out even when he turns
out to be on the wrong side. So why not the
A good idea tends to get run into the ground.
same for the private attorney general? Enter
Take the idea that certain sorts of litigation
provisions for the award of attorneys' fees to
against the government ought to be made easi-
some litigants who sue the agencies and lose!
er. In the bad old days, when a federal agency
The inexorable logic marches on: Come to
went beyond its assigned powers, even persons
think of it, the public attorney general is not
directly affected by its actions frequently could
merely compensated for his out-of-pocket ex-
not challenge them. If, for example, the Tennes-
penses; he's paid a salary for all the benefits his
see Valley Authority began selling electricity
litigiousness brings to the Republic. So why not
beyond its legally prescribed area, the private
the same for the private attorney general as
utilities that were undersold at public expense
well? Thus, the ne plus ultra of attorneys' fees:
did not necessarily have standing to sue. Since
awards to the loser based not upon what the
they had no "right" to be free from competi-
nominal private attorney general (the plaintiff)
tion, governmental or otherwise, the harm done
is charged by his lawyers, but rather upon what
to them was no different as a legal matter from
the real private attorney general (the lawyers
that done to the public at large. And the pub-
themselves) could have charged for their serv-
lic's "right" to have agencies behave in accord-
ices on the open market.
ance with law was to be vindicated through
That this is not all a bad dream is demon-
Congress and the Executive rather than through
strated by several cases recently decided by the
the courts.
U.S. Court of Appeals for the District of Colum-
This view of the world changed radically
bia Circuit. On February 5, that court awarded
during the 1940s and 1950s as Congress (and
attorneys' fees to the losers in three cases un-
ultimately the courts, without benefit of explic-
der the Clean Air Act-which, like other envi-
it legislative mandate) set about conferring
ronmental statutes, specifies that the court may
standing on new classes of litigants. Any per-
award attorneys' fees "where appropriate." In
son "adversely affected or aggrieved" was given
Sierra Club V. Gorsuch, the court noted that the
a right to be free of unlawful agency action. The
Sierra Club and the Environmental Defense
theory advanced to support the new approach
Fund had "extended great efforts to perform
was that these plaintiffs were being enlisted as
their advocacy tasks well" and had assisted the
"private attorneys general" to benefit the so-
court in construing the statute-even though
ciety at large by keeping the agencies in line.
they had lost on all counts. In Environmental
After a couple of decades the thought OC-
Defense Fund V. Environmental Protection
curs: Gee, the public attorney general doesn't
Agency, the court awarded fees to the Environ-
have to dig into his own pocket to do the pub-
mental Defense Fund, which had lost on eleven
lic's work. Why should the private attorney gen-
of the thirteen issues in the case. And in Ala-
eral? Thus there arise federal statutes in vari-
bama Power Co. V. Gorsuch, the court awarded
ous fields compensating private litigants for
fees to the Sierra Club and the Environmental
their attorneys' fees when they are successful
Defense Fund, which had lost on about half the
in correcting agency malfeasance.
issues, and to the government of the District of
Time goes by and another inconsistency be-
Columbia, which had lost on the other half
comes apparent: The public attorney general
(since it had taken the opposite position).
REGULATION, MAY/JUNE 1982 5
PERSPECTIVES ON CURRENT DEVELOPMENTS
In the second of these cases, the court
provisions of such statutes as the Clean Air Act;
awarded fees adding up to more than the En-
it may even categorically disqualify him! In
vironmental Defense Fund's lawyers had ac-
Alabama Power Co. V. Gorsuch, the D.C. circuit
tually been paid. This was in accord with a
court suggested that it might not be "appropri-
standard of "adjusted market value" that the
ate" (the statutory standard, if it can be called
court had adopted in Copeland V. Marshall, a
a standard) to award fees to those with eco-
1980 employment discrimination suit brought
nomic motives, since the fee provisions were
under Title VII of the Civil Rights Act, which
meant to encourage litigation by persons who
permits "the court, in its discretion, [to] allow
would not sue otherwise. Never mind that this
the prevailing party, other than the
United
conclusion rests on the questionable assump-
States, a reasonable attorney's fee." (The courts
tion that groups like the Sierra Club will be less
have managed to interpret this, by the way, to
likely to litigate than profit-seeking corpora-
apply only to a prevailing plaintiff, and not to a
tions and loss-averse individuals for whom
prevailing defendant.) The plaintiff, Copeland,
compliance may be cheaper than litigation. And
had been represented by the prestigious Wash-
never mind even the inverted equity of a rule
ington law firm of Wilmer, Cutler and Picker-
that covers your costs only if you are not suing
ing. The court ordered the Labor Department,
to obtain something of value that has been
Copeland's employer, to promote her, and
wrongfully withheld. The important point is
awarded her and several other plaintiffs a total
that the effect of the rule is to establish a policy
of $33,000 in back pay. It then awarded her
directing the flow of litigation subsidies pri-
lawyers $160,000 in attorneys' fees, basing the
marily to ideologically motivated law-reform
amount not on what Copeland had agreed to
or anti-law-reform organizations.
pay the law firm, nor even on what the law
The D.C. circuit's view on this last point
firm actually paid its partners and associates
may well be in accord with the statutory intent.
who worked on the case, but on the "market
Whether it is or not, any change in the current
value" of their work. This was calculated by
situation will have to be sought in Congress;
multiplying the number of hours the attorneys
and the Reagan administration proposes just
had worked by the hourly rate Wilmer, Cutler
that. It has submitted legislation that will limit
and Pickering usually charged its corporate
attorneys' fees under all statutes to the level
clients-plus some adjustment upward for the
provided for in the Equal Access to Justice Act.
high quality of the service it had provided.
In addition, the award would have to bear a
There is of course another rationale for the
reasonable relation to the result achieved in the
awarding of attorneys' fees against the govern-
case. Only winners would qualify, and the client
ment, quite different from the "private attorney
would have to certify that the fee was owed,
general" concept: It might simply be thought
was determined on an arm's-length basis, and
fair to compensate the citizen for what it actu-
will be paid to the extent not covered by the
ally costs him to extract justice from his gov-
fee award. The proposal is sure to encounter
ernment. This notion is to some extent embod-
vigorous opposition from the private attorney
ied in the 1980 Equal Access to Justice Act,
general industry, from the smallest San Fran-
which provides for the award of fees in admin-
cisco legal-aid storefront to the deep-pile con-
istrative and court litigation against agencies
ference rooms of Washington law firms.
by (1) individuals with less than $1,000,000 net
What is ultimately involved here, however,
worth and (2) companies and associations with
may go far beyond the "private attorney gen-
less than 500 employees and (except for tax-
eral" issue. The law governing the award of
exempt entities such as most public-interest
attorneys' fees in federal litigation-not only
law firms) less than $5,000,000 net worth. (It is
against the government but against private par-
a relatively stingy fee provision, containing a
ties as well-is an expanding wasteland of con-
limitation of $75 per hour, a requirement that
fusion. Such chaos often accompanies the ini-
the person seeking the fee be the "prevailing
tial attempt to abandon important and long-
party," and even an exception where the agen-
standing legal traditions. The accelerating pace
cy's position was "substantially justified.")
of statutory change, one suspects, has more to
But not only will a direct personal injury
do with the "individual justice" rationale than
not help a litigant under the more liberal fee
the "private attorney general" rationale. In an
6 AEI JOURNAL ON GOVERNMENT AND SOCIETY
PERSPECTIVES ON CURRENT DEVELOPMENTS
age when corporations are tempted to describe
(which is responsible for enforcing the act),
their annual profits in multiples of annual at-
the Department of Energy, and a Reagan ad-
torney's fees instead of percentages of annual
ministration interagency working group study-
sales, the cost of obtaining justice, whether
ing the financial health of the electric utility
from the government or from a private party,
industry. Moreover, while parts of the industry
is more often than not prohibitive. While we
are seeking only to reform the act, the admin-
are not yet prepared to abandon in wholesale
istration is reportedly leaning toward total re-
fashion the American rule that each party to
peal. Committee hearings on several repeal and
litigation pays his own attorneys, and to adopt
reform bills are under way on Capitol Hill.
the English rule that loser pays all, we are
Utility holding companies date back to the
gradually moving in that direction for federal
1890s, but their real heyday was the 1920s, when
claims through a disorganized and often incon-
demand for electrical power was growing rap-
sistent spate of preferential statutes. As one
idly in a largely unregulated environment. By
would expect, the earliest of these favor liti-
1932, according to a Federal Trade Commission
gants whose causes society regards as particu-
report, 78 percent of electric power and 80 per-
larly "just," or (to put it more cynically) whose
cent of interstate natural gas were controlled
numbers, cohesiveness, and political influence
by holding company systems. Most criticism
make the justice of their cause more readily ap-
of the holding companies focused on a few big
parent to elected officials. Civil rights claims
systems - examples of the so-called Power
were among the first; small business suits
Trust. The system operated by Samuel Insull
against agencies 'the most recent; and many
is the classic example. Insull's empire spread
more can be expected to follow, until the ex-
across thirty-two states and included not only
ception gobbles up the rule.
electric companies but ice houses, textile mills,
a paper mill, and a hotel. Through "pyramid-
ing," the layering of one holding company on
A New Deal for Utilities?
top of another, Insull controlled large amounts
of capital with a relatively small investment.
A holding company, said Will Rogers, is a "thing
Before it collapsed in 1929, his system was
where you hand an accomplice the goods while
more than ten layers deep. Pyramiding was al-
the policeman searches you." For most large
leged to abet various financial abuses, among
businesses now, it is something a lot more
which were "self-dealing," in which a holding
innocuous: a single corporate roof under which
company charged exorbitant management and
they may conveniently house all the various
engineering fees to its operating companies,
businesses they own or control, often in unre-
and "write-ups," in which it misrepresented the
lated industries, without mingling their actual
value of newly issued securities.
operations. Almost all businesses can diversify
Public discontent with both the size and
as much as they like, with or without a holding
structure of such operations led to the Public
company structure. The biggest exceptions are
Utility Holding Company Act of 1935. The act
utilities and banks, which face restrictions on
required all utility holding companies, defined
both participation in holding company struc-
as companies that control or own at least 10
tures and diversification generally.
percent of the voting securities of a gas or elec-
With the rise of such "near-banks" as Sears
tric utility, to register with the SEC, to simplify
Roebuck and American Express, the banking
their corporate structure by removing such
exception may not last long. Now the utility
complexities as subholding companies, and to
industry too has decided that it wants to play
divest themselves of all facilities outside a con-
on the same terms as everyone else. It is call-
tiguous geographic area or region. The act also
ing for the reform, if not the full repeal, of the
empowered the commission to regulate many of
Public Utility Holding Company Act of 1935,
the firms' financial practices and placed restric-
the old New Deal statute that limits the use of
tions on utility diversification (see below).
holding companies and confines utility diver-
The more jerry-built of the utility holding
sification within very narrow bounds. And it
companies did not withstand the Depression
has mustered some impressive support, includ-
anyway, since their pyramid structure made
ing the Securities and Exchange Commission
even a small loss at the operating level devastat-
REGULATION, MAY/JUNE 1982 7
Reagan Stalks Public Interest Lawyers' Fees
By STUART TAYLOR Jr.
Special to The New York Three
/ASHINGTON, Feb. 16 - When
3 city's mostly liberal "public inter-
lawyers were riding high a few
ars ago, they asked Congress to put
ttle old-fashioned American finan
1 incentive into their mission of rep-
enting the poor, the downtrodden
1 the environment.
Congress responded in the way char-
eristic of it then. It authorized
ges to order the Federal and state
rements to pay legal feas to pri-
Morey's
NOTEWORTHY
e lawyers who sued them and WOD
der almost 100 laws dealing with
il rights, poverty, environmental
itection and consumer rights.
n the process, according to Presio
it Reagan's budget cutters, Con-
:33 created a $20 million-s-year litl-
us monster at the taxpayers' ex.
ise, a monster the Reagan aides
rpcse to tame by striking at its pock-
ook
'A literal industry has arissa for 8th
neys dependent on Federal fee
ards," the Administration's Budget
ssage said, going on to proposs
Client's Ability 2 Factor
ging the courts with unnecessary litl.
arp cutbacks on the authority of the
gation. The lawyers respond that they
The Reagan proposal would also
irts to award fees to lawyers victori-
rarely get fees of this size, even when
keep courts from awarding fees to law.
over the Federal Government, as
they win, that they do not always win
yers whose clients cannot certify that
11 as a cap on some of the fees.
and that, unlike lawyers who get
they will pay the fees "10 the extent not
Lawyers See Political Diversion
retainers or clients' fees, they have to
covered by the fee award. This would
awyers who sue the Government
make the victories pay for the losses.
apparently prevent fee awardsto law.
yers who win suits against the Govern-
a cause or for profit depict the Ad-
Joseph L Rauh Jr., a prominent
ment on behalf of poor clients who do
nistration proposal as a political de
Washington civil rights lawyer, said of
not expect to win large monetary dam.
aimed at stripping poor peo-
the Government: "They don't want to
ages, such a3 those seeking court OT-
minority groups and environmen-
enforce the civil rights laws, they don't
ders to stop pollution or to obtain docu-
ists of their legal protections and
want anybody else enforcing them,
ments under the Freedom of Informa-
nying them access to the courts.
and they try to get the courts not to co-
tion Act.
The Budget Message said the Laws,
force them."
If the proposal was broadened to
ich lawyers refer to as "fee-shift-
Peter Coppelman, a lawyer with the
apply to lawsuits not only against the
had resulted in "oversubsidize-
Wilderness Society here, said, "This
Federal Government but also against
of lawyers with fees often ex.
clearly is an effort to choke off peo-
state and local governments, which
eding $100 a hour. Budget officials
ple's redress through the courts, con-
the budget official said might be CODe
reported that there was SO much
sistent with the attempt to destroy the
sidered, it would apparently prevent
gation over claims for fees that
Legal Services Corporation." He was
civil rights lawyers from winning fee
any lawyers paid $20 an issue for a
referring to the Reagan proposal to
awards in school desegregation law-
veekly publication called "Federal
abolish, as of March 31, the $241 mil-
suits.
torney Fee Awards Reporter."
lion Federal program that under-
is an example of what the Govern-
The budget proposal would exempt
writes legal aid for the poor.
apparently thinks is wrong, a
most claims for legal fees under the
A Budget Office spokesman, who re-
ee-judge panel of the Federal ap-
Equal Access to Justice Act of 1980,
quested anonymity, countered,
court here recently ordered the
which was enacted with conservative
"These guys equate the national com-
vironmental Protection Agency to
support primarily for the purpose of
$99,534.50 in attorneys' fees to the
mitment to justice with the extent to
allowing small businesses that are
which the taxpayers subsidize them
vironmental Defense Fund, which
subjected to unjustfied Federal regu-
personally. When we look at the kinds
obtained a court order foreing the
latory actions to recover up to $75 an
of budget problems we're having. the
ency to go back to the drawing
hour for legal fees in contesting them.
ard with some new regulations on
notion of subsidizing a bunch of free-
standing ideologues of the right and of
The budget message estimated the
of polychlorinated biphenyls, the
total cost to the Federal Government
micals known as PCB's.
the left is just outrageous."
he payment was based on hourly
The Reagan proposal to modify fee
of court-awarded legal fees at $20 mile
llon in 1981. But a budget official ac-
of $110 for the most experienced
shifting laws would have Congress es-
knowledged that this was based on
tablish a cap based on "the mean
vironmental Defense Fund lawyer
guesswork, and Alan B. Morrison, di-
hourly rate paid to Government attor-
included $9,534.50 "for time spent
rector of the Ralph Nader-affiliated
neys, plus a constant factor to pay for
preparing the application for fees,"
Public Citizen Litigation Group here,
overhead costs." That would appar-
dge Harry T. Edwards's opinion
said it sounded much too high.
ently come to $25 an hour or so, about
"If it's $20 million, I don't know
one-third the amount that the Govern-
Budget officials say that such decl-
who's getting it," esaid.
encourage lawyers bent on clog-
ment now pays in settlement of fee
award claims here, and less than one-
fifth what experienced lawyers in big
Washington firms charge corporate
clients.
Wall Street Journal
February 26, 1981
Ambulance Chasers:
Public interest" groups Fand
ment of legal fees from the federal
consumer advocates are finding
government. The Equal Access to Jus-
themselves in tough financial straits
tice Act, ostensibly passed by Con-
Foundation grants which provided
gress last year to assist small- busi-
seed money for many of these groups,
nessmen defending themselves
are in short supply,and the Reagan
against the likes of OSHA inspectors
administration is unlikely to provide
allows parties who prevail in lawsuits
the kind of "public interest" largess
or in adversary hearings generally to
which became commonplace under
recover attorney fees against the gov-
President Carter. Since small private
emment. The Carter Justice Depart-
donations are incapable of taking up
ment enacted 2 ceiling on settlement
the slack, these advocacy groups are
fees to public interest lawyers of $60
turning to new potential-sources of
per hour. In addition, the Equal Em-
funding
ployment Opportunity Commission
Their answer is called the Alliance
proposes federal payment of attorneys
for Justice. It will be a coalition of
fees in complaints about federal hiring
public interest and civil rights groups.
discrimination.
of which 17 have already joined, in-
Federal programs to pay attorneys
cluding N.O.W. Legal Defense Fund,
fees for public interest groups-along
Native American Rights Fund, Natu-
with the established practice of "in-
ral Resources Defense Council, Con-
tervener funding" for participation in
sumers Union and Center for Law in
federal hearings - could make the
the Public Interest. The new alliance
American taxpayer the largest single
will replace the existing Council for
contributor to the "public interest
Public Interest Law.
movement. The vision of some advo-
A recent council letter to its mem-
cacy lawyers chasing after suits, not
bers says that the decision to establish
4
just on principle but to earn a living,
the alliance is based "on the ever
creeps into our minds.
growing need to pool our ideas and re-
Consumer advocates, OMB direc-
sources to develop some common
tor David Stockman said this week
strategies around issues essential to
have created this whole facade of
our survival.' Executive Director Nan
consumer protection in order to seize
"Aron explains that these groups are in
power in our society. I think part of
financial trouble and fear that their
the mission of this administration is to
major issues may go down the
unmask and discredit that false ideol
drain" as a result of November's elec-
ogy
tions. Therefore, she says; public in-
Maybe a good place to start would
terest groups hope to supplement their
be in having a look at this novel ap
revenues from legal fees paid by the
proach to funding, forcing this group
government
to return to more traditional means of
Although non-profit public inter-
financing a political movement, by
est" law firms are barred by the tax
finding people who believe enough in
code from accepting fees from
what it espouses to contribute volun-
"clients," these firms car accept pay-
tarily.
RUKEYSER
government of the lawyers, by the lawyers and for lawyers?
NEW YORK - Have we
on this casc."
tion and Environmental Protection Agency
A visitor from another planet might find
become a government
Lawyers Plainly Victorious
have provided fees to corporate law firms
It ironic - or at least suspicious - that a
the lawyers, by the
awyers and for the
- Perhaps even more of a bonanza for the
over the past decade totaling hundreds of
U.S. Congress itself dominated by lawyers
attorneys was the 7½ -year tussle with
millions of dollars - all paid for by
seems incapable of writing legislation that
awyers?
whose crimes Include giving
stockholders, of course, and representing
does not lead to endless, costly litigation.
You might think 30 if
Americans the best telephone service in the
one more disincentive to the ownership of
you look at the results
corporate shares.
Yet the long drawn-out lawsuits that have
a number of recent,
world. Precisely who came out ahead in
every aspect of this settlement is still being
Still continuing, for example, is what may
become characteristic of our excessively
protracted cases in
vhich the real big
argued, with one exception: the lawyers
well be the longest-running litigation suit in
litigious society have not left everybody
vinner appears to
were plainly victorious.
history: the FCC determination to deny
unhappy. Stockholders (and, ultimately,
renewal of RKO General licenses to operate
consumers) may be penalized, but top
ave been not the "public" Interest or not
As the case meandered through the
television stations in New York, Boston and
lawyers now charge their corporate clients
he "corporate" Interest - but the "legal"
courts, the communications ginnt's costs
Los Angeles and 12 other broadcasting
as much as $100 an hour - and beginning
atcrest.
mounted to an estimated $360 million, and
stations. A recent court decision narrowed
attorneys In prestigious Manhattan law
-It Is not clear what we taxpayers
the government's to $15 million. No wonder
the 13 year battle to the question of whether
firms can pull down $43,000 a year.
gained from the Justice Department's
AT&T President William Ellinghaus
RKO should be permitted to retain its
Even the government has grown uneasy.
13-year harassment of IBM, one of the
thought it was worthwhile to settle with the
Boston Station, WNAC-TV.
President Reagan's budget message this
nost successful and productive companies
government and climinate the uncertainty
year, complained about "oversubsidization
U.S. history, but it is manifestly clear
that had been "hanging over our heads and
Alleged Past Misdeeds
of lawyers who make a Living from suing's
what the lawyers gained.
those of our stockholders." Only the
The case against RKO now appears to
the federal government. When the
Before the government finally admitted
lawyers had reason to be sad - over what
center on the lawyer's-delight question of
administration's proposals for, cutbacks In
case was groundless and bowed out, the
whether the company lacked candor in
what 18 sald had become a $20
was getting to be quite a comfortable
Justice Department's legal costs reached
annuity.
failing to report to the FCC some alleged
itillion-a-year. bill for taxpayers produced
estimated $13.4 million - and IBM's are
past misdeeds by its corporate parent, the
predictable cries of outrage from "public
believed to have run into hundreds of
- Though no official figures are
General Tire & Rubber Company. Such a
Interest" Inwyers, a Budget Office official
millions. Thomas Barr, A senior partner of
available, industry observers estimate that
standard, it is held, would represent a
commented wryly: "These guys equate th
the New York law firm of Cravath,
contested rulings of such federal
radical change from any past rulings
national committment to justice with the
Swaine & Moore, who managed IBM's
regulatory bodies as the Securities and
concerning corporate parents and
extent to which the taxpayers subsidize
defense (and trained a whole generation
Exchange Commission, Federal Communi-
broadcast children - and could open up
them personally."
of young antitrust lawyers in the process)
cations Commission, Federal Trade
opportunities for a whole generation of new
Couldn't we settle this out of court?
acknowledges: "We made a lot of money
Commission, Food and Drug Administra-
lawsuits.
McNaught Syndicate, Inc.