Petitioner company called for the redemption of certain
convertible debentures, fixing a date by which debenture holders
could convert their debentures into shares of petitioner's stock
and after which debenture holders could only redeem their
debentures for slightly more than face value. After the deadline
expired, some of the nonconverting debenture holders brought a
class action against petitioner, claiming that it had violated
federal and state laws by failing to give reasonably adequate
notice of the redemption. The District Court ultimately entered
judgment against petitioner, establishing the amount of its
liability to the class as a whole, and fixing the amount that each
class member could recover on a principal amount of $100 in
debentures, with each individual recovery to carry its
proportionate share of the total amount allowed for attorney's
fees, expenses, and disbursements. Petitioner appealed only the
judgment's provision as to attorney's fees, contending that such
fees should be awarded only from the portion of the fund actually
claimed by class members, not from the unclaimed portion of the
judgment fund. The Court of Appeals affirmed, holding that, since
each class member had a present vested interest in the class
recovery and could collect his share of the judgment upon request,
absentee class members had received a benefit within the meaning of
the common fund doctrine, which allows the assessment of attorney's
fees against a common fund created by the lawyers' efforts.
1. The attorney's fee award in this case is a proper application
of the common fund doctrine, which rests on the perception that
persons who obtain the benefit of a lawsuit without contributing to
its costs are unjustly enriched at the successful litigants'
expense. The criteria for application of the doctrine are satisfied
when, as here, each member of a certified class has an undisputed
and mathematically ascertainable claim to part of a lump sum
judgment recovered on his behalf. In this case, absentee class
members need prove only their membership in the injured class to
claim their logically ascertainable shares of the judgment fund.
Their right to share the harvest of the suit upon proof of their
identity, whether or not they exercise it, is a benefit in the fund
created by the efforts of the class representatives and their
Page 444 U. S. 473
unless absentees contribute to the payment of attorney's fees
incurred on their behalves, they will pay nothing for the creation
of the fund, and their representatives may bear additional costs.
This inequity is rectified by the District Court's judgment
requiring every class member to share attorney's fees to the same
extent that he can share the recovery. Pp. 444 U. S.
2. The common fund doctrine, as applied in this case, is
entirely consistent with the American rule against taxing the
losing party with the victor's attorney's fees. The class members,
whether or not they assert their rights, are at least the equitable
owners of their respective shares in the recovery, whereas
petitioner's present interest is limited to its stake in resisting
third-party claims against the fund in view of petitioner's
colorable claim for the return of any unclaimed money. Although
petitioner itself cannot be obliged to pay fees a.warded to the
class lawyers, its latent claim against unclaimed money may not
defeat each class member's equitable obligation to share the
expenses of litigation. Pp. 444 U. S.
590 F.2d 433, affirmed.
POWELL, J., delivered the opinion of the Court, in which BURGER,
C.J., and BRENNAN, STEWART, WHITE, MARSHALL, BLACKMUN, and STEVENS,
JJ., joined. REHNQUIST, J., filed a dissenting opinion,
p. 444 U. S.
MR JUSTICE POWELL delivered the opinion of the Court.
The question presented in this class action is whether a
proportionate share of the fees awarded to lawyers who represented
the successful class may be assessed against the unclaimed portion
of the fund created by a judgment.
Page 444 U. S. 474
In March, 1966, The Boeing Co. called for the redemption of
certain convertible debentures. Boeing announced the call through
newspaper notices and mailings to investors who had registered
their debentures. The notices, given in accordance with the
indenture agreement, recited that each $100 amount of principal
could be redeemed for $103.25 or converted into two shares of the
company's common stock. They set March 29 as the deadline for the
exercise of conversion rights. Two shares of the company's common
stock on that date were worth $316.25. When the deadline expired,
the holders of debentures with a face value of $1,544,300 had not
answered the call. These investors were left with the right to
redeem their debentures for slightly more than face value.
Van Gemert and several other nonconverting debenture holders
brought a class action against Boeing in the United States District
Court for the Southern District of New York. They claimed that
Boeing had violated federal securities statutes as well as the law
of New York by failing to give them reasonably adequate notice of
the redemption. As damages, they sought the difference between the
amount for which their debentures could be redeemed and the value
of the shares into which the debentures could have been converted.
The District Court dismissed the action on the ground that Boeing
had given its debenture holders the notice required by the
indenture agreement. The Court of Appeals for the Second Circuit
reversed and remanded. It held that, under the New York law of
contracts, the indenture agreement contained an implied obligation
to give debenture holders reasonable notice of a redemption. The
court concluded that the notice actually given was inadequate. 520
F.2d 1373, cert. denied,
423 U.S. 947 (1975).
On remand, the District Court awarded as damages the difference
between the redemption price of the outstanding debentures and the
price at which two shares of Boeing's
Page 444 U. S. 475
common stock traded on the last day for exercising conversion
rights. The court, however, refused to assess prejudgment interest
against Boeing. There followed a second appeal. The class claimed
that the stock should have been valued as of a later date, and that
Boeing was liable for prejudgment interest. Class members who had
filed individual claims also contended that they were entitled to
receive pro rata
shares of any unclaimed damages. At the
least, they argued, they should receive enough of the unclaimed
money to pay their legal expenses.
The Court of Appeals found the class entitled to prejudgment
interest on the award, but it approved the valuation date. The
court also concluded that class members who proved their individual
claims should not share in the unclaimed portion of the judgment.
Allowing these class members to receive a proportionate part of the
unclaimed money, the court held, would create the sort of "fluid
class" recovery rejected in Eisen v. Carlisle &
479 F.2d 1005 (CA2 1973), vacated and remanded
on other grounds, 417 U. S. 156
(1974). Such a recovery would expropriate funds belonging to class
members who had not asserted their claims and give a windfall to
those who had claimed. Finally, the court decided that claiming
class members could not use the unclaimed portion of the judgment
to defray their legal expenses. Since Boeing could have a right to
money that never was claimed, the court thought that awarding
attorney's fees from the remaining funds might shift fees to the
losing party in violation of the American rule reaffirmed in
Alyeska Pipeline Service Co. v. Wilderness Society,
421 U. S. 240
(1975). 553 F.2d 812 (1977).
On the second remand, the District Court entered the judgment
now at issue. The court first established the amount of Boeing's
liability to the class as a whole. It provided that
"in behalf of all members of the plaintiff class, . . . shall
recover as their damages . . . the principal sum
Page 444 U. S. 476
of $3,289,359, together with [prejudgment] interest. . . ."
App. 40a. [Footnote 1
court then fixed the amount that each member of the class could
recover on a principal amount of $100 in debentures. Each
individual recovery was to carry its proportionate share of the
total amount allowed for attorney's fees, expenses, and
disbursements. [Footnote 2
That share, the court declared, "shall bear the same ratio to all
such fees, expenses and disbursements as such class member's
recovery shall bear to the total recovery" awarded the class.
at 40a-41a. Finally, the court ordered Boeing to
deposit the amount of the judgment into escrow at a commercial
bank, [Footnote 3
] and it
appointed a Special Master to administer the judgment and pass on
the validity of individual claims. [Footnote 4
] The court retained jurisdiction pending
implementation of its judgment.
Page 444 U. S. 477
Boeing appealed only one provision of the judgment. It claimed
that attorney's fees could not be awarded from the unclaimed
portion of the judgment fund for at least two reasons. First, the
equitable doctrine that allows the assessment of attorney's fees
against a common fund created by the lawyers' efforts was
inapposite, because the money in the judgment fund would not
benefit those class members who failed to claim it. Second, because
Boeing had a colorable claim for the return of the unclaimed money,
awarding attorney's fees from those funds might violate the
American rule against shifting fees to the losing party. Therefore,
Boeing contended, the District Court should award attorney's fees
from only the portion of the fund actually claimed by class
members. A panel of the Court of Appeals agreed with Boeing, 573
F.2d 733 (1978), but the court en banc affirmed the District
Court's judgment, 590 F.2d 433 (1978).
The Court of Appeals en banc found that each class member had a
"present vested interest in the class recovery," and that each
could collect his share of the judgment upon request.
Page 444 U. S. 478
Thus, the court held, absentee class members had received a
benefit within the meaning of the common fund doctrine.
at 439. The court also found its holding consistent
with the American rule. It noted that lawyers for the class would
receive their fees "from the amount for which Boeing has already
been held liable. There is no surcharge' on the defeated
litigant." Id. at 441-442. We granted certiorari, 441 U.S.
942 (1979), and we now affirm.
Since the decisions in Trustees v. Greenough,
105 U. S. 527
(1882), and Central Railroad & Banking Co. v. Pettus,
113 U. S. 116
(1885), this Court has recognized consistently that a litigant or a
lawyer who recovers a common fund for the benefit of persons other
than himself or his client is entitled to a reasonable attorney's
fee from the fund as a whole. See Mills v. Electric Auto-Lite
Co., 396 U. S. 375
(1970); Sprague v. Ticonic National Bank, 307 U.
(1939); cf. Hall v. Cole, 412 U. S.
(1973). The common fund doctrine reflects the
traditional practice in courts of equity, Trustees v.
at 105 U. S.
-537, and it stands as a well recognized exception to
the general principle that requires every litigant to bear his own
attorney's fees, Alyeska Pipeline Service Co. v. Wilderness
421 U.S. at 421 U. S.
-258. The doctrine rests on the perception that
persons who obtain the benefit of a lawsuit without contributing to
its cost are unjustly enriched at the successful litigant's
expense. See, e.g., Mills v. Electric Auto-Lite Co.,
U.S. at 396 U. S. 392
Jurisdiction over the fund involved in the litigation allows a
court to prevent this inequity by assessing attorney's fees against
the entire fund, thus spreading fees proportionately among those
benefited by the suit. See id.
at 396 U. S.
In Alyeska Pipeline Service Co. v. Wilderness Society,
we noted the features that distinguished our common
fund cases from cases where the shifting of fees was inappropriate.
First, the classes of persons benefited by the lawsuits "were
Page 444 U. S. 479
small in number and easily identifiable." 421 U.S. at
421 U. S. 265
n. 39. Second, "[t]he benefits could be traced with some accuracy.
. . ." Ibid.
Finally, "there was reason for confidence
that the costs [of litigation] could indeed be shifted with some
exactitude to those benefiting." Ibid.
characteristics are not present where litigants simply vindicate a
general social grievance. Id.
at 421 U. S.
-267, and n. 39. On the other hand, the criteria are
satisfied when each member of a certified class has an undisputed
and mathematically ascertainable claim to part of a lump sum
judgment recovered on his behalf. Once the class representatives
have established the defendant's liability and the total amount of
damages, members of the class can obtain their share of the
recovery simply by proving their individual claims against the
judgment fund. This benefit devolves with certainty upon the
identifiable persons whom the court has certified as members of the
class. Although the full value of the benefit to each absentee
member cannot be determined until he presents his claim, a fee
awarded against the entire judgment fund will shift the costs of
litigation to each absentee in the exact proportion that the value
of his claim bears to the total recovery. See generally
Dawson, Lawyers and Involuntary Clients in Public Interest
Litigation, 88 Harv.L.Rev. 849, 916-922 (1975) .
In this case, the named respondents have recovered a determinate
fund for the benefit of every member of the class whom they
represent. Boeing did not appeal the judgment awarding the class a
sum certain. [Footnote 5
does Boeing contend
Page 444 U. S. 480
that any class member was uninjured by the company's failure
adequately to inform him of his conversion rights. Thus, the damage
to each class member is simply the difference between the
redemption price of his debentures and the value of the common
stock into which they could have been converted. To claim their
logically ascertainable shares of the judgment fund, absentee class
members need prove only their membership in the injured class.
Their right to share the harvest of the lawsuit upon proof of their
identity, whether or not they exercise it, is a benefit in the fund
created by the efforts of the class representatives and their
counsel. Unless absentees contribute to the payment of attorney's
fees incurred on their behalves, they will pay nothing for the
creation of the fund and their representatives may bear additional
costs. The judgment entered by the District Court and affirmed by
the Court of Appeals rectifies this inequity by requiring every
member of the class to share attorney's fees to the same extent
that he can share the recovery. [Footnote 6
] Since the benefits of the class
Page 444 U. S. 481
recovery have been "traced with some accuracy" and the costs of
recovery have been "shifted with some exactitude to those
benefiting," Alyeska Pipeline Service Co. v. Wilderness
at 421 U. S. 265
n. 39, we conclude that the attorney's fee award in this case is a
proper application of the common fund doctrine.
The common fund doctrine, as applied in this case, is entirely
consistent with the American rule against taxing the losing party
with the victor's attorney's fees. See Alyeska Pipeline Service
Co. v. Wilderness Society, supra
at 421 U. S. 247
The District Court's judgment assesses attorney's fees against a
fund awarded to the prevailing class. Since there was no appeal
from the judgment that quantified Boeing's liability, Boeing
presently has no interest in any part of the fund. [Footnote 7
] The members of the class, whether
or not they assert their
Page 444 U. S. 482
rights, are at least the equitable owners of their respective
shares in the recovery. Any right that Boeing may establish to the
return of money eventually unclaimed is contingent on the failure
of absentee class members to exercise their present rights of
possession. [Footnote 8
Although Boeing itself cannot be obliged to pay fees awarded to the
class lawyers, its latent claim against unclaimed money in the
judgment fund may not defeat each class member's equitable
obligation to share the expenses of litigation.
The judgment of the Court of Appeals is
The relevant paragraph of the District Court's judgment declares
"ORDERED, ADJUDGED AND DECREED that plaintiffs, in behalf of all
members of the plaintiff class, which consists of all holders on
March 29, 1966 of 4 1/2% Convertible Subordinated Debentures of the
Boeing Company who failed to exercise their conversion right before
it terminated on March 29, 1966, shall recover as their damages
herein from the defendants the principal sum of $3,289,359 together
with interest thereon at the legal rates fixed by the State of New
York, N.Y. C.P.L.R. § 5001(a) from March 9, 1966 to the date of
this judgment, with costs to be taxed. . . ."
The class lawyers have requested fees totaling about $2 million.
573 F.2d 733, 735, n. 3 (1978) (panel opinion).
Interest on the principal sum of $3,289,359 from the conversion
deadline to the date of judgment amounted to $2,459,647, bringing
the judgment to $5,749,006. With income earned on investments and
other additions, the fund now totals over $7 million. Brief for
Special Master as Amicus Curiae
The District Court gave the Special Master a broad mandate
"direct the parties in the necessary ministerial steps to
effectuate the Judgment, receive all proofs of claim to participate
in the Fund established by the Judgment, pass on the validity of
same, direct the giving of notices to interested persons of
hearings on disputed claims, conduct the necessary hearings, submit
reports thereon, and, in general, supervise the administration of
the Judgment and decide all disputed questions of law and fact
connected therewith subject to confirmation by the Court. . .
In the year following his appointment, the Special Master mailed
notices to debenture holders who could be identified and published
notices in two national newspapers. By July 15, 1978, the Special
Master had received claims accounting for $290,000 worth of the
$1,544,300 in unconverted debentures. Brief for Special Master as
11. The District Court then extended the
time for filing proofs of claims, and the Master renewed his
efforts to locate holders of the remaining debentures. Further
research in files kept by the trustee under the indenture agreement
revealed the identity of additional debenture holders. A
professional search firm endeavored to trace holders who had
relocated. Banks and brokerage houses also were furnished with
information that might help them to locate clients who had invested
in the debentures. As of July 18, 1979, shortly before he filed his
brief with this Court, the Master had received claims accounting
for $706,600 worth of debentures, or about 47% of the unconverted
Boeing contends that the judgment in this case was simply a
procedural device ordering Boeing to pay into escrow its maximum
potential liability to the class. The judgment will not be final,
Boeing argues, until absentee class members have presented their
individual claims. Thus, Boeing concludes, the judgment fund
confers no benefit on class members who fail to claim against it.
Brief for Petitioner 226, and n. *.
We think that Boeing misreads the judgment. The District Court
explicitly ordered that
"plaintiffs in behalf of all members of the plaintiff class . .
. shall recover as their damages herein from the defendants the
principal sum of $3,289,359 together with interest. . . ."
Nothing in the court's order made Boeing's
liability for this amount contingent upon the presentation of
individual claims. Thus, we need not decide whether a class action
judgment that simply requires the defendant to give security
against all potential claims would support a recovery of attorney's
fees under the common fund doctrine.
We also think that Boeing's arguments come too late. Although
the District Court did not fix the amount of attorney's fees to be
assessed against absentee class members, its judgment terminated
the litigation between Boeing and the class concerning the extent
of Boeing's liability. See Swanson v. American Consumer
517 F.2d 555, 559-561 (CA7 1975). This is
not a case, like Liberty Mutual Ins. Co. v. Wetzel,
424 U. S. 737
(1976), where a prayer for attorney's fees against an opposing
party remains unanswered. See Richerson v. Jones,
918, 921-922 (CA3 1977). Thus, the judgment awarding the class a
fixed recovery was final and appealable. Since Boeing did not
appeal it, we cannot now consider whether the judgment was in
Since an award of attorney's fees under the common fund doctrine
simply relieves claiming class members of costs incurred for the
benefit of others, we see no merit in Boeing's contention that the
award amounts to a "fluid class" recovery. See
Tr. of Oral
Arg. 20. Here, as in Eisen v. Carlisle & Jacquelin,
417 U. S. 156
417 U. S. 172
n. 10 (1974), we express no opinion on the validity of judgments
permitting such recoveries.
Although we recognize that this 14-year-old case has had a
fractured career in the courts, we do not agree with MR. JUSTICE
REHNQUIST's dissenting view that the judgment before us lacks
444 U. S. 482
. The District Court's judgment first
ordered Boeing to pay a specified sum to the entire class and then
assessed undetermined attorney's fees against the entire fund
created by the judgment. The judgment on the merits stripped Boeing
of any present interest in the fund. Thus, Boeing had no cognizable
interest in further litigation between the class and its lawyers
over the amount of the fees ultimately awarded from money belonging
to the class. But Boeing did have an interest, arising from its
colorable claim for the return of excess money, in whether
attorney's fees could be assessed against the entire fund, rather
than against the portion actually claimed. Since the District
Court's order assessed attorney's fees against the entire fund, it
was a final judgment on the only issue in which Boeing still had an
interest. In the peculiar circumstances of this case, Boeing could
secure review of the allocation of fees only by appealing from this
The Court of Appeals did not consider the ultimate disposition
of whatever money may remain in the fund after the District Court
enforces a deadline for the presentation of individual claims. 590
F.2d 433, 440, n. 17 (1978). We likewise express no opinion on that
MR. JUSTICE REHNQUIST, dissenting.
In disposing of this case on the merits, the Court gives short
shrift to the question of appealability, a threshold issue by no
means free from doubt even under the most generous view of our
decided cases. I have concluded from these cases, viewed in light
of the longstanding policy of the federal judicial system against
piecemeal appeals, that the judgment now before us lacks the
finality required by 28 U.S.C. § 1291, and I would therefore remand
this case to the Court of Appeals with instructions to dismiss
Boeing's appeal. Exhibit "A" of the shortsightedness of the Court's
sloughing off the issue of appealability as it does is the fact
that the parties are obliged to refer to the present case not
merely as "Van Gemert,
" but as "Van Gemert III.
This case, which began in March, 1966, has been appealed to the
Court of Appeals for the Second Circuit three times, and now, after
14 years of litigation, this Court affirms the third decision of
the Court of Appeals.
There is no doubt as to the appealability of the first of the
three decisions of the District Court, since it dismissed
Page 444 U. S. 483
respondents' complaint with prejudice. The second appeal was
also by respondents from a determination by the District Court that
respondents were not entitled to any prejudgment interest; this
decision was also reversed by the Court of Appeals. Following this
second remand, the District Court entered a "Judgment and Order"
stating that Boeing was liable to respondent class in the amount of
$3,289,359 plus interest, ordering Boeing to pay this amount into
escrow, and indicating that respondents' attorneys could recover
their fees "out of said total amount of this judgment." At this
point, Boeing appealed for the first time, asserting that
respondents' attorneys should collect their fees only out of that
portion of the fund actually claimed. As noted by the Court, the
Court of Appeals en banc affirmed this aspect of the District
The novelty of the question posed by Boeing is attributable in
large part to the historic prevalence of the "American rule," which
generally prevents a court from requiring the losing party to pay
the prevailing party's attorney's fees. In recent years, however,
the proliferation of class actions and the enactment of various
statutes modifying the American rule [Footnote 2/1
] have multiplied the opportunities for
recovering attorney's fees, and have simultaneously spawned a great
deal of litigation over assessment of those fees. These
developments lend added significance to the procedural implications
of our decisions in this area.
In the typical American rule case, the federal judicial system,
by statute and rule, has generally made a final order a
prerequisite to appellate review. A judgment is not considered
final, and therefore appealable, until the district court has
completed all but the most ministerial acts. Arguably,
Page 444 U. S. 484
litigation necessitating an award of attorney's fees should be
treated no differently. It would be quite reasonable, I believe, to
postpone appeal in such cases until the District Court had entered
judgment not only on liability and damages, but also on whether and
in what amount attorney's fees will be assessed. Cf. Liberty
Mutual Ins. Co. v. Wetzel, 424 U. S. 737
(1976) (dismissing appeal from judgment of liability in Title VII
action under Civil Rights Act of 1964 where requests for
injunction, damages, and attorney's fees remained pending in the
For better or for worse, the little precedent that exists in
this area has tended to deviate from such a sensible approach. This
deviation has been particularly noticeable when the right to
attorney's fees has been based on the existence of a "common fund"
such as that discussed in the opinion of the Court. Beginning with
Trustees v. Greenough, 105 U. S. 527
(1882), the Court has evidenced a willingness to treat the division
of the common fund as a separate piece of litigation for purposes
of appeal. In Greenough,
for example, this Court
entertained an appeal from an order allowing a successful plaintiff
bondholder to recover attorney's fees even though the original
action remained pending in the trial court for purposes of
administration. The Court stated that the award of fees, "though
incidental to the [original] cause," was sufficiently "collateral,"
"distinct," and "independent," to be appealable in its own right.
it was an analytically short, though
temporally long, step to the decision of the Court of Appeals for
the Seventh Circuit in Swanson v. American Consumer Industries,
517 F.2d 555 (1975). In that shareholders' derivative
suit, the District Court entered judgment in favor of plaintiffs
and awarded damages. Seven months later it granted attorney's fees
to prevailing counsel under an "extension" of Greenough.
517 F.2d at 560. Two notices of appeal were filed from this latter
order, one on behalf of
Page 444 U. S. 485
plaintiffs challenging the amount of damages and the other on
behalf of plaintiffs and their attorneys challenging the amount of
attorney's fees. The Court of Appeals dismissed the appeal on the
question of damages as untimely, reasoning that the District
Court's determination of damages was final, and therefore
appealable, upon entry of the first order.
represent two sides of
the same coin. If an attorney's attempt to secure fees from the
common fund is "collateral" enough to support an independent appeal
despite the continued pendency of the main litigation, [Footnote 2/2
] then the judgment
establishing the fact and amount of the defendant's liability in
the main litigation should also support a separate appeal despite
the continued pendency of a dispute over division of the fund
between the beneficiaries and their attorneys. [Footnote 2/3
Page 444 U. S. 486
Implicit in this bifurcated approach to appealability in common
fund cases is a strict bifurcation of the issues that can be
litigated in either appeal. Thus, this Court would not have
permitted the trustees in Greenough
to contest in their
appeal the merits of the dispute that generated the common fund.
Nor, I venture, would the Court of Appeals for the Seventh Circuit
have allowed a timely appeal on the issue
Page 444 U. S. 487
of damages to challenge the amount of attorney's fees assessed,
an issue that was the subject of a later, separate appeal. In each
case, appellant would be powerless to reach backward or forward
from the "collateral" proceeding to the "merits" of the
But this is exactly what the Court permits Boeing to do in this
case. Assuming, as seems likely, that the Greenough/
model of bifurcated appealability will prevail, I have
no doubt that Boeing could have appealed, at this stage of the
proceedings, from the judgment that it was liable to the plaintiff
class in the amount of $3,289,359 plus interest. But as the Court
concedes, indeed stresses, Boeing has not challenged either the
fact of liability or the amount. See ante
at 444 U. S.
-480, n. 5. Such an appeal must have appeared futile
in light of Van Gemert I,
520 F.2d 1373 (1975), which
established liability, and Van Gemert II,
553 F.2d 812
(1977), which established the precise amount of damages payable to
each member of the class. Instead, Boeing relies on the "finality"
of the District Court's judgment on the merits the Swanson
side of the coin, to prosecute an appeal on the division of the
common fund, the Greenough
side of the coin. As noted
above, such criss-crossing of contentions is inconsistent with a
bifurcated approach to appellate litigation in common fund
Even if Boeing is to be allowed to appeal under the "collateral
order" rubric in this case, the order from which it appealed was
not final even under that doctrine. Greenough
that the trustees brought their appeal from "a final
determination of the particular matter arising upon the
complainant's petition for allowances. . . ." 105 U.S. at
105 U. S. 531
(emphasis added). Similarly, Cohen v. Beneficial Industrial
Loan Corp., 337 U. S. 541
(1949), which formalized the "collateral order" doctrine presaged
requires that the order appealed from be the
disposition of a claimed right which is not an
ingredient of the cause of action, and does not require
consideration with it." 337 U.S. at 337 U. S.
-547 (emphasis added).
Page 444 U. S. 488
In this case, however, that portion of the litigation involving
the attorney's fees is still in its most nascent phase. We do not
know, for example, when these fees are going to be assessed, how
they will be calculated, or what will become of that portion of the
fund that is neither claimed nor paid out in fees.
Nowhere does this lack of finality manifest itself more than in
the Court's holding that Boeing has standing to litigate over the
division of the spoils even though it may not have any continuing
interest whatsoever in the money held in escrow. [Footnote 2/4
] In allowing Boeing to base its appeal
on a "colorable claim for the return of [any] excess,"
at 444 U. S. 481
n. 7, the Court comes dangerously close to assuming in a single
phrase that Boeing has standing. At best, this analysis is
unnecessary, since final settlement of the conflicting claims to
the fund would establish Boeing's standing once and for all. At
worst, it represents a dangerous dilution of the standing
requirement. In any event, the anticipatory nature of the analysis
necessary to reach the merits of Boeing's appeal buttresses the
notion that the Court is using a dubious technique to gloss over a
lack of finality.
The procedural implications of our decision today will, I fear,
have a more far-reaching effect than the decision on the
Page 444 U. S. 489
propriety of the application of the common fund rule for
allowing fees. Were I an attorney representing a party in common
fund litigation at a juncture similar to that encountered by Boeing
prior to its appeal, I would be quite confused about the propriety
of an immediate appeal, either on the merits of the main cause of
action or on the details of an impending assessment of fees.
Fearful that, by waiting for a "final order" in the strict sense, I
might forfeit my right to appeal certain aspects of the litigation,
cf. Swanson v. American Consumer Industries, Inc.,
probably would err in favor of filing an immediate appeal on
whatever aspects of the case were bothersome at that time.
] From the standpoint
of the federal appellate courts, such uncertainty can only result
in numerous interlocutory, precautionary appeals.
In sum, I believe that the District Court's order on the
division of the "common fund" lacks the finality necessary to
support Boeing's appeal, and would remand this matter to the Court
of Appeals with instructions to dismiss the appeal. I therefore
5 U.S.C. § 552(a)(4)(E) (permitting award of
attorney's fees in actions brought under Freedom of Information
Act); 15 U.S.C. § 1691e(d) (suits under Equal Credit Opportunity
Act); 42 U.S.C. § 2000e-5(k) (Title VII suits under Civil Rights
Act of 1964); 42 U.S.C. § 1988 (civil rights suits).
See also Sprague v. Ticonic National Bank, 307 U.
, 307 U. S. 169
(1939) (claim for fees out of common fund "sufficiently different"
from parent claim to support separate appeal); Preston v.
284 F.2d 514 (CA9 1960) (attorney's appeal from
District Court's refusal to award fees on common fund theory);
Angoff v. Goldfine,
270 F.2d 185 (CA1 1959) (attorney's
appeal from District Court's refusal to grant him fees out of
Outside the common fund context, the consensus in the lower
courts over the permissibility of bifurcated appeals dissolves. Two
Courts of Appeals, including the Seventh Circuit, appear to have
carried the Greenough/Swanson
approach over into cases
where one party recovers attorney's fees directly from an opposing
party. In Hidell v. International Diversified Investments,
520 F.2d 529 (CA7 1975), for example, appellee had brought suit
under the securities laws. The District Court entered a judgment
granting appellee an injunction, damages, and "reasonable"
attorney's fees. The Court of Appeals, citing Swanson,
allowed the defendant to appeal the merits of the dispute prior to
the actual determination of those fees.
In Lowe v. Pate Stevedoring Co.,
595 F.2d 256, 257 (CA5
1979), the plaintiff had prevailed on the merits of an unfair
representation suit against his union. The District Court granted
plaintiff's attorney fees as the result of the union's "bad faith,"
but denied plaintiff's attorney a lien against the union to secure
his fee. The Court of Appeals, relying on Swanson, Preston v.
United States, supra,
and Cohen v. Beneficial Industrial
Loan Corp., 337 U. S. 541
(1949), allowed the attorney to prosecute his appeal even though
his client's prayer for reinstatement remained pending in the
District Court. To the extent that the Fifth Circuit treats such an
appeal as severable from the main cause of action, it might also
treat an appeal from the main litigation as severable from the
attorney's fees proceeding.
Two other Courts of Appeals have rejected the bifurcated model
of appealability in non-common fund cases. In Richerson v.
551 F.2d 918, 922 (1977), the Third Circuit confronted
an appeal by the United States from a judgment of liability in a
discrimination suit. The District Court's order had awarded
plaintiff promotion, backpay, and interest, but had not yet ruled
on plaintiff's request for attorney's fees. In holding that the
United States had not appealed from a final order, the Court of
Appeals relied upon Liberty Mutual Ins. Co. v. Wetzel,
424 U. S. 737
(1976), and distinguished Swanson
as a case where
plaintiff was not seeking to collect fees from his adversary.
Employing similar analysis, the Second Circuit twice has held
that, where the obligation to pay an opposing party's attorney's
fees arises out of an agreement that is also the subject of the
original litigation, the attorney's fees issue is not sufficiently
collateral to allow appeal from a judgment on the merits prior to a
determination of the attorney's fees. See Aetna Casualty &
Surety Co. v. Giesow,
412 F.2d 468 (1969) (suit for breach of
subordination agreement); Union Tank Car Co. v.
416 F.2d 96 (1969) (suit to enforce settlement
agreement). Judge Friendly has attempted to reconcile
with the common fund cases. See Cinerama, Inc.
v. Sweet Music, S.A.,
482 F.2d 66, 70, n. 2 (CA2 1973).
See also Union Tank Car Co. v. Isbrandtsen, supra
This overview is offered only to illustrate the complexity of
this issue. Perhaps all these cases can be reconciled in some
principled manner; if not, it is only a matter of time before this
Court will have to try its hand at an issue that obviously has been
perplexing other federal courts. In the meantime, I believe that we
should tread quite carefully in this area.
Boeing's only interest in the funds now held in escrow is its
assertion that the unclaimed portion of the judgment eventually
will revert to it. But respondents have argued with some force that
the unclaimed funds will eventually escheat to the State of New
N.Y.Aband.Prop.Law § 1200 (McKinney 1944). In
fact, the Attorney General of New York already has presented such a
claim to the District Court. See
Brief for Respondents
filed by Stuart D. Wechsler 23. If the Attorney General and
respondents are correct, then Boeing has no more standing to press
its appeal than would a losing defendant have standing to contest
the division of an award between plaintiff and his attorney
pursuant to a contingent fee arrangement.
Although respondents have not challenged Boeing's standing, we
are obligated to consider the issue sua sponte,
necessary. See, e g., Juidice v. Vail, 430 U.
, 430 U. S. 331
The potential for confusion is even greater outside the context
of common fund litigation. See
n. 3, supra.