The Civil Rights Attorney's Fees Awards Act of 1976 (Fees Act)
provides that "the court, in its discretion, may allow the
prevailing party . . . a reasonable attorney's fee" in enumerated
civil rights actions. Respondents brought a class action against
petitioners (the Governor and other public officials of Idaho
responsible for the education and treatment of mentally handicapped
children) in Federal District Court on behalf of children who have
been or will be placed in petitioners' care. It was alleged that
deficiencies in both the educational programs and health care
services provided respondents violated the Federal and State
Constitutions and various federal and state statutes. Injunctive
relief and an award of costs and attorney's fees were sought.
Ultimately, the District Court approved a settlement granting the
injunctive relief sought conditional on respondents' waiver of any
claim for attorney's fees. The Court of Appeals invalidated the fee
waiver, left standing the remainder of the settlement, and remanded
to the District Court to determine what attorney's fees were
reasonable, holding that the historical background of Federal Rule
of Civil Procedure 23(e), which gives a district court power to
approve settlements of class actions, and of the Fees Act,
compelled the conclusion that a stipulated waiver of attorney's
fees obtained solely as a condition for obtaining relief for the
class should not be accepted by the court.
Held:
1. The District Court had the power, in its discretion, to
approve the waiver of attorney's fees. Pp.
475 U. S.
730-738.
(a) The language of the Fees Act, as well as its legislative
history, indicates that Congress bestowed on the "prevailing party"
a statutory eligibility for a discretionary award of attorney's
fees in specified civil rights actions. Neither the statute nor the
legislative history suggests that Congress intended to forbid all
waivers of attorney's fees. Congress neither bestowed fee awards
upon attorneys nor rendered them nonwaivable or nonnegotiable;
instead, it added them to the remedies available to combat civil
rights violations, a goal not invariably inconsistent
Page 475 U. S. 718
with conditioning settlement on the merits on a waiver of
statutory attorney's fees. Pp.
475 U. S.
730-732.
(b) A general proscription against waiver of attorney's fees in
exchange for a settlement on the merits would itself impede
vindication of civil rights, at least in some cases, by reducing
the attractiveness of settlement. It is not implausible to
anticipate that parties to a significant number of civil rights
cases would refuse to settle if liability for attorney's fees
remained open, thereby forcing more cases to trial, unnecessarily
burdening the judicial system, and disserving civil rights
litigants. Pp.
475 U. S.
732-738.
2. The District Court did not abuse its discretion in approving
a waiver of attorney's fees that secured broad injunctive relief
greater than that which respondents could reasonably have expected
to achieve at trial. There is nothing in the record to indicate
that Idaho has adopted a statute, policy, or practice insisting on
a fee waiver as a condition of settlement in civil rights
litigation in conflict with the Fees Act. Nor does the record
indicate that petitioners' request to waive fees was a vindictive
effort to deter attorneys from representing plaintiffs in civil
rights suits against Idaho. Pp.
475 U. S.
738-743.
743 F.2d 648, reversed.
STEVENS, J., delivered the opinion of the Court, in which
BURGER, C.J., and WHITE, POWELL, REHNQUIST, and O'CONNOR, JJ.,
joined. BRENNAN, J., filed a dissenting opinion, in which MARSHALL
and BLACKMUN, JJ., joined,
post, p.
475 U. S.
743.
Page 475 U. S. 719
JUSTICE STEVENS delivered the opinion of the Court.
The Civil Rights Attorney's Fees Awards Act of 1976 (Fees Act)
provides that "the court, in its discretion, may allow the
prevailing party . . . a reasonable attorney's fee" in
Page 475 U. S. 720
enumerated civil rights actions. 90 Stat. 2641, 42 U.S.C. §
1988. In
Maher v. Gagne, 448 U. S. 122
(1980), we held that fees
may be assessed against state
officials after a case has been settled by the entry of a consent
decree. In this case, we consider the question whether attorney's
fees
must be assessed when the case has been settled by a
consent decree granting prospective relief to the plaintiff class,
but providing that the defendants shall not pay any part of the
prevailing party's fees or costs. We hold that the District Court
has the power, in its sound discretion, to refuse to award
fees.
I
The petitioners are the Governor and other public officials of
the State of Idaho responsible for the education and treatment of
children who suffer from emotional and mental handicaps.
Respondents are a class of such children who have been or will be
placed in petitioners' care. [
Footnote 1]
On August 4, 1980, respondents commenced this action by filing a
complaint against petitioners in the United States District Court
for the District of Idaho. The factual allegations in the complaint
described deficiencies in both the educational programs and the
health care services provided respondents. These deficiencies
allegedly violated the United States Constitution, the Idaho
Constitution, four
Page 475 U. S. 721
federal statutes, and certain provisions of the Idaho Code. The
complaint prayed for injunctive relief and for an award of costs
and attorney's fees, but it did not seek damages.
On the day the complaint was filed, the District Court entered
two orders, one granting the respondents leave to proceed
in
forma pauperis and a second appointing Charles Johnson as
their next friend for the sole purpose of instituting and
prosecuting the action. At that time, Johnson was employed by the
Idaho Legal Aid Society, Inc., a private, nonprofit corporation
that provides free legal services to qualified low-income persons.
[
Footnote 2] Because the Idaho
Legal Aid Society is prohibited from representing clients who are
capable of paying their own fees, [
Footnote 3] it made no agreement requiring any of the
respondents to pay for the costs of litigation or the legal
services it provided through Johnson. Moreover, the special
character of both the class and its attorney-client relationship
with Johnson explains why it did not enter into any agreement
covering the various contingencies that might arise during the
course of settlement negotiations of a class action of this
kind.
Shortly after petitioners filed their answer, and before
substantial work had been done on the case, the parties entered
into settlement negotiations. They were able to reach agreement
concerning that part of the complaint relating to educational
services with relative ease, and, on October 14, 1981, entered into
a stipulation disposing of that part of the case. The stipulation
provided that each party would bear its "own attorney's fees and
costs thus far incurred." App.
Page 475 U. S. 722
54. The District Court promptly entered an order approving the
partial settlement.
Negotiations concerning the treatment claims broke down,
however, and the parties filed cross-motions for summary judgment.
Although the District Court dismissed several of respondents'
claims, it held that the federal constitutional claims raised
genuine issues of fact to be resolved at trial. Thereafter, the
parties stipulated to the entry of a class certification order,
engaged in discovery, and otherwise prepared to try the case in the
spring of 1983.
In March, 1983, one week before trial, petitioners presented
respondents with a new settlement proposal. As respondents
themselves characterize it, the proposal "offered virtually all of
the injunctive relief [they] had sought in their complaint." Brief
for Respondents 5.
See App. 89. The Court of Appeals
agreed with this characterization, and further noted that the
proposed relief was "more than the district court in earlier
hearings had indicated it was willing to grant." 743 F.2d 648, 650
(CA9 1984). As was true of the earlier partial settlement, however,
petitioners' offer included a provision for a waiver by respondents
of any claim to fees or costs. [
Footnote 4] Originally, this waiver was unacceptable to
the Idaho Legal Aid Society, which had instructed Johnson to reject
any settlement offer conditioned upon a waiver of fees, but Johnson
ultimately determined that his ethical obligation to his clients
mandated acceptance of the proposal. The parties conditioned the
waiver on approval by the District Court. [
Footnote 5]
Page 475 U. S. 723
After the stipulation was signed, Johnson filed a written motion
requesting the District Court to approve the settlement "except for
the provision on costs and attorney's fees," and to allow
respondents to present a bill of costs and fees for consideration
by the court. App. 87. At the oral argument on that motion, Johnson
contended that petitioners' offer had exploited his ethical duty to
his clients -- that he was "forced," by an offer giving his clients
"the best result [they] could have gotten in this court or any
other court," to waive his attorney's fees. [
Footnote 6] The District Court, however, evaluated
the waiver in the context of the entire settlement and rejected the
ethical underpinnings of Johnson's argument. Explaining that,
although petitioners were
"not willing to concede that they were obligated to [make the
changes in their practices required by the stipulation], . . . they
were willing to do them as long as their costs were outlined and
they didn't face additional costs,"
it concluded that
"it doesn't violate any ethical considerations for an attorney
to give up his attorney fees in the interest of getting a better
bargain for his client[s]."
Id. at 93. Accordingly, the District Court approved
Page 475 U. S. 724
the settlement and denied the motion to submit a costs bill.
When respondents appealed from the order denying attorney's fees
and costs, petitioners filed a motion requesting the District Court
to suspend or stay their obligation to comply with the substantive
terms of the settlement. Because the District Court regarded the
fee waiver as a material term of the complete settlement, it
granted the motion. [
Footnote
7] The Court of Appeals, however, granted two emergency motions
for stays requiring enforcement of the substantive terms of the
consent decree pending the appeal. More dramatically, after
ordering preliminary relief, it invalidated the fee waiver and left
standing the remainder of the settlement; it then instructed the
District Court to "make its own determination of the fees that are
reasonable," and remanded for that limited purpose. 743 F.2d at
652.
In explaining its holding, the Court of Appeals emphasized that
Rule 23(e) of the Federal Rules of Civil Procedure gives the court
the power to approve the terms of all settlements of class actions,
[
Footnote 8] and that the
strong federal policy embodied in
Page 475 U. S. 725
the Fees Act normally requires an award of fees to prevailing
plaintiffs in civil rights actions, including those who have
prevailed through settlement. [
Footnote 9] The court added that
"[w]hen attorney's fees are negotiated as part of a class action
settlement, a conflict frequently exists between the class lawyers'
interest in compensation and the class members' interest in
relief."
743 F.2d at 651-652. "To avoid this conflict," the Court of
Appeals relied on Circuit precedent which had "disapproved
simultaneous negotiation of settlements and attorney's fees" absent
a showing of "unusual circumstances."
Id. at 652.
[
Footnote 10] In this case,
the Court of Appeals found no such "unusual circumstances," and
therefore held that an agreement on fees "should not have been a
part of the settlement of the claims of the class."
Ibid.
It concluded:
"The historical background of both Rule 23 and section 1988, as
well as our experience since their enactment, compel the conclusion
that a stipulated waiver of all attorney's fees obtained solely as
a condition for obtaining relief for the class should not be
accepted by the court."
Ibid.
Page 475 U. S. 726
The importance of the question decided by the Court of Appeals,
together with the conflict between its decision and the decisions
of other Courts of Appeals, [
Footnote 11] led us to grant certiorari. 471 U.S. 1098
(1985). We now reverse.
II
The disagreement between the parties and
amici as to
what exactly is at issue in this case makes it appropriate to put
certain aspects of the case to one side in order to state precisely
the question that the case does present.
To begin with, the Court of Appeals' decision rested on an
erroneous view of the District Court's power to approve settlements
in class actions. Rule 23(e) wisely requires court approval of the
terms of any settlement of a class action, but the power to approve
or reject a settlement negotiated by the parties before trial does
not authorize the court to require the parties to accept a
settlement to which they have not agreed. Although changed
circumstances may justify a court-ordered modification of a consent
decree over the objections of a party after the decree has been
entered, [
Footnote 12] and
the District Court
Page 475 U. S. 727
might have advised petitioners and respondents that it would not
approve their proposal unless one or more of its provisions was
deleted or modified, Rule 23(e) does not give the court the power,
in advance of trial, to modify a proposed consent decree and order
its acceptance over either party's objection. [
Footnote 13] The options available to the
District Court were essentially the same as those available to
respondents: it could have accepted the proposed settlement; it
could have rejected the proposal and postponed the trial to see if
a different settlement could be achieved; or it could have decided
to try the case. The District Court could not enforce the
settlement on the merits and award attorney's fees anymore than it
could, in a situation in which the attorney had negotiated a large
fee at the expense of the plaintiff class, preserve the fee award
and order greater relief on the merits. The question we must
decide, therefore, is whether the District Court had a duty to
reject the proposed settlement because it included a waiver of
statutorily authorized attorney's fees.
That duty, whether it takes the form of a general prophylactic
rule or arises out of the special circumstances of this case,
derives ultimately from the Fees Act, rather than from the
strictures of professional ethics. Although respondents contend
that Johnson, as counsel for the class, was faced with an "ethical
dilemma" when petitioners offered him relief greater than that
which he could reasonably have expected to obtain for his clients
at trial (if only he would stipulate to a waiver of the statutory
fee award), and although we recognize Johnson's conflicting
interests between pursuing relief for the class and a fee for the
Idaho Legal Aid Society, we do
Page 475 U. S. 728
not believe that the "dilemma" was an "ethical" one in the sense
that Johnson had to choose between conflicting duties under the
prevailing norms of professional conduct. Plainly, Johnson had no
ethical obligation to seek a statutory fee award. His
ethical duty was to serve his clients loyally and competently.
[
Footnote 14] Since the
proposal to settle the merits was more favorable than the probable
outcome of the trial, Johnson's decision to recommend acceptance
was consistent with the highest standards of our profession. The
District Court, therefore, correctly concluded that approval of the
settlement involved no breach of ethics in this case.
The defect, if any, in the negotiated fee waiver must be traced
not to the rules of ethics but to the Fees Act. [
Footnote 15] Following
Page 475 U. S. 729
this tack, respondents argue that the statute must be construed
to forbid a fee waiver that is the product of "coercion." They
submit that a "coercive waiver" results when the defendant in a
civil rights action (1) offers a settlement on the merits of equal
or greater value than that which plaintiffs could reasonably expect
to achieve at trial but (2) conditions the offer on a waiver of
plaintiffs' statutory eligibility for attorney's fees. Such an
offer, they claim, exploits the ethical obligation of plaintiffs'
counsel to recommend settlement in order to avoid defendant's
statutory liability for its opponents' fees and costs. [
Footnote 16]
The question this case presents, then, is whether the Fees Act
requires a district court to disapprove a stipulation seeking to
settle a civil rights class action under Rule 23 when the offered
relief equals or exceeds the probable outcome at trial, but is
expressly conditioned on waiver of statutory eligibility for
attorney's fees. For reasons set out below, we are not persuaded
that Congress has commanded that all such settlements must be
rejected by the District Court. Moreover, on the facts of record in
this case, we are satisfied that the District
Page 475 U. S. 730
Court did not abuse its discretion by approving the fee
waiver.
III
The text of the Fees Act provides no support for the proposition
that Congress intended to ban all fee waivers offered in connection
with substantial relief on the merits. [
Footnote 17] On the contrary, the language of the Act,
as well as its legislative history, indicates that Congress
bestowed on the "prevailing party" (generally plaintiffs [
Footnote 18]) a statutory
eligibility for a discretionary award of attorney's fees in
specified civil rights actions. [
Footnote 19] It did not prevent the party from waiving
this eligibility
Page 475 U. S. 731
anymore than it legislated against assignment of this right to
an attorney, such as effectively occurred here. Instead, Congress
enacted the fee-shifting provision as "an integral part of the
remedies necessary to obtain" compliance with civil rights laws,
S.Rep. No. 94-1011, p. 5 (1976), to further the same general
purpose -- promotion of respect for civil rights -- that led it to
provide damages and injunctive relief. The statute and its
legislative history nowhere suggest that Congress intended to
forbid
all waivers of attorney's fees -- even those
insisted upon by a civil rights plaintiff in exchange for some
other relief to which he is indisputably not entitled [
Footnote 20] -- anymore than it
intended to bar a concession on damages to secure broader
injunctive relief. Thus, while it is undoubtedly true that Congress
expected fee-shifting to attract competent counsel to represent
citizens deprived of their civil rights, [
Footnote 21] it neither bestowed fee awards upon
attorneys
Page 475 U. S. 732
nor rendered them nonwaivable or nonnegotiable; instead, it
added them to the arsenal of remedies available to combat
violations of civil rights, a goal not invariably inconsistent with
conditioning settlement on the merits on a waiver of statutory
attorney's fees. [
Footnote
22]
In fact, we believe that a general proscription against
negotiated waiver of attorney's fees in exchange for a settlement
on the merits would itself impede vindication of civil rights, at
least in some cases, by reducing the attractiveness of settlement.
Of particular relevance in this regard is our recent decision in
Marek v. Chesny, 473 U. S. 1 (1986).
In that case, which admittedly was not a class action and therefore
did not implicate the court's approval power under Rule 23(e), we
specifically considered and rejected the contention that civil
rights actions should be treated differently from other civil
actions for purposes of settlement. As THE CHIEF JUSTICE explained
in his opinion for the Court, the settlement of litigation provides
benefits for civil rights plaintiffs
Page 475 U. S. 733
as well as defendants and is consistent with the purposes of the
Fees Act:
"There is no evidence, however, that Congress, in considering §
1988, had any thought that civil rights claims were to be on any
different footing from other civil claims insofar as settlement is
concerned. Indeed, Congress made clear its concern that civil
rights plaintiffs not be penalized for 'helping to lessen docket
congestion' by settling their cases out of court.
See
H.R.Rep. No. 94-1558,
supra, at 7."
". . . Some plaintiffs will receive compensation in settlement
where, on trial, they might not have recovered, or would have
recovered less than what was offered. And even for those who would
prevail at trial, settlement will provide them with compensation at
an earlier date without the burdens, stress, and time of
litigation. In short, settlements, rather than litigation, will
serve the interests of plaintiffs as well as defendants."
473 U.S. at
473 U. S. 10. To
promote both settlement and civil rights, we implicitly
acknowledged in
Marek v. Chesny the possibility of a
tradeoff between merits relief and attorney's fees when we upheld
the defendant's lump-sum offer to settle the entire civil rights
action, including any liability for fees and costs.
In approving the package offer in
Marek v. Chesny, we
recognized that a rule prohibiting the comprehensive negotiation of
all outstanding issues in a pending case might well preclude the
settlement of a substantial number of cases:
"If defendants are not allowed to make lump-sum offers that
would, if accepted, represent their total liability, they would
understandably be reluctant to make settlement offers. As the Court
of Appeals observed,"
"many a defendant would be unwilling to make a binding
settlement offer on terms that left it exposed to liability for
attorney's fees in whatever amount the court might
Page 475 U. S. 734
fix on motion of the plaintiff."
"720 F.2d at 477."
Id. at
473 U. S. 6-7.
See White v. New Hampshire Dept. of Employment Security,
455 U. S. 445,
455 U. S. 454,
n. 15 (1982) ("In considering whether to enter a negotiated
settlement, a defendant may have good reason to demand to know his
total liability from both damages and fees").
Most defendants are unlikely to settle unless the cost of the
predicted judgment, discounted by its probability, plus the
transaction costs of further litigation, are greater than the cost
of the settlement package. If fee waivers cannot be negotiated, the
settlement package must either contain an attorney's fee component
of potentially large and typically uncertain magnitude or else the
parties must agree to have the fee fixed by the court. Although
either of these alternatives may well be acceptable in many cases,
there surely is a significant number in which neither alternative
will be as satisfactory as a decision to try the entire case.
[
Footnote 23]
The adverse impact of removing attorney's fees and costs from
bargaining might be tolerable if the uncertainty introduced into
settlement negotiations were small. But it is not. The defendants'
potential liability for fees in this kind of litigation can be as
significant as, and sometimes even more significant than, their
potential liability on the merits. This proposition is most
dramatically illustrated by the fee awards
Page 475 U. S. 735
of district courts in actions seeking only monetary relief.
[
Footnote 24] Although it is
more difficult to compare fee awards with the cost of injunctive
relief, in part because the cost of such relief is seldom reported
in written opinions, here too attorney's fees awarded by district
courts have "frequently outrun the economic benefits ultimately
obtained by successful litigants." 122 Cong.Rec. 31472 (1976)
(remarks of Sen. Kennedy). [
Footnote 25] Indeed, in this very case, "[c]ounsel for
defendants view[ed] the risk of an attorney's fees award as the
most significant liability in the case." Brief for Defendants in
Support of Approval of Compromise in
Jeff D. v. Evans, No.
80-4091 (D. Idaho), p. 5. Undoubtedly there are many other civil
rights actions in which potential liability for attorney's fees may
overshadow the potential cost of relief on the merits and darken
prospects for settlement if fees cannot be negotiated.
The unpredictability of attorney's fees may be just as important
as their magnitude when a defendant is striving to fix its
liability. Unlike a determination of costs, which ordinarily
involve smaller outlays and are more susceptible of calculation,
see Marek v. Chesny, 473 U.S. at
473 U. S. 7,
"[t]here is no precise rule or formula" for determining attorney's
fees,
Page 475 U. S. 736
Hensley v. Eckerhart, 461 U. S. 424,
461 U. S. 436
(1983). [
Footnote 26] Among
other considerations, the district court must determine what hours
were reasonably expended on what claims, whether that expenditure
was reasonable in light of the success obtained,
see id.
at
461 U. S. 436,
461 U. S. 440,
and what is an appropriate hourly rate for the services rendered.
Some District Courts have also considered whether a "multiplier" or
other adjustment is appropriate. The consequence of this succession
of necessarily judgmental decisions for the ultimate fee award is
inescapable: a defendant's liability for his opponent's attorney's
fees in a civil rights action cannot be fixed with a sufficient
degree of confidence to make defendants indifferent to their
exclusion from negotiation. [
Footnote 27] It is therefore not implausible to
anticipate that parties to a significant number of civil rights
cases will refuse to settle if liability for attorney's fees
remains open, [
Footnote 28]
thereby forcing more cases to trial, unnecessarily
Page 475 U. S. 737
burdening the judicial system, and disserving civil rights
litigants. Respondents' own waiver of attorney's fees and costs to
obtain settlement of their educational claims is eloquent testimony
to the utility of fee waivers in vindicating civil rights claims.
[
Footnote 29] We conclude,
therefore, that it is not
Page 475 U. S. 738
necessary to construe the Fees Act as embodying a general rule
prohibiting settlements conditioned on the waiver of fees in order
to be faithful to the purposes of that Act. [
Footnote 30]
IV
The question remains whether the District Court abused its
discretion in this case by approving a settlement which included a
complete fee waiver. As noted earlier, Rule 23(e) wisely requires
court approval of the terms of any settlement
Page 475 U. S. 739
of a class action. The potential conflict among members of the
class -- in this case, for example, the possible conflict between
children primarily interested in better educational programs and
those primarily interested in improved health care -- fully
justifies the requirement of court approval.
The Court of Appeals, respondents, and various
amici
supporting their position, however, suggest that the court's
authority to pass on settlements, typically invoked to ensure fair
treatment of class members, must be exercised in accordance with
the Fees Act to promote the availability of attorneys in civil
rights cases. Specifically, respondents assert that the State of
Idaho could not pass a valid statute precluding the payment of
attorney's fees in settlements of civil rights cases to which the
Fees Act applies.
See Brief for Respondents 24, n. 22.
From this they reason that the Fees Act must equally preclude the
adoption of a uniform statewide policy that serves the same end,
and accordingly contend that a consistent practice of insisting on
a fee waiver as a condition of settlement in civil rights
litigation is in conflict with the federal statute authorizing fees
for prevailing parties, including those who prevail by way of
settlement. [
Footnote 31]
Remarkably, there seems little disagreement on these points.
Petitioners and the
amici who support them never suggest
that the district court is obligated to place its stamp of approval
on every settlement in which the plaintiffs' attorneys have agreed
to a fee waiver. The Solicitor General, for example,
Page 475 U. S. 740
has suggested that a fee waiver need not be approved when the
defendant had "no realistic defense on the merits," Brief for
United States as
Amicus Curiae Supporting Reversal 23, n.
9;
see id. at 26-27, [
Footnote 32] or if the waiver was part of a "vindictive
effort . . . to teach counsel that they had better not bring such
cases," Tr. of Oral Arg. 22.
We find it unnecessary to evaluate this argument, however,
because the record in this case does not indicate that Idaho has
adopted such a statute, policy, or practice. Nor does the record
support the narrower proposition that petitioners' request to waive
fees was a vindictive effort to deter attorneys from representing
plaintiffs in civil rights suits against Idaho. It is true that a
fee waiver was requested and obtained as a part of the early
settlement of the education claims, but we do not understand
respondents to be challenging that waiver,
see Tr. of Oral
Arg. 31-32, and they have not offered to prove that petitioners'
tactics in this case merely implemented a routine state policy
designed to frustrate the objectives of the Fees Act. Our own
examination of the record reveals no such policy.
Page 475 U. S. 741
In light of the record, respondents must -- to sustain the
judgment in their favor -- confront the District Court's finding
that the extensive structural relief they obtained constituted an
adequate
quid pro quo for their waiver of attorney's fees.
[
Footnote 33] The Court of
Appeals did not overturn this finding. Indeed, even that court did
not suggest that the option of rejecting the entire settlement and
requiring the parties either to try the case or to attempt to
negotiate a different settlement would have served the interests of
justice. Only by making the unsupported assumption that the
respondent class was entitled to retain the favorable portions of
the settlement while rejecting the fee waiver could the Court of
Appeals conclude that the District Court had acted unwisely.
What the outcome of this settlement illustrates is that the Fees
Act has given the victims of civil rights violations a powerful
weapon that improves their ability to employ counsel, to obtain
access to the courts, and thereafter to vindicate their rights by
means of settlement or trial. For aught that appears, it was the
"coercive" effect of respondents' statutory right to seek a fee
award that motivated petitioners' exceptionally generous offer.
Whether this weapon might be even more powerful if fee waivers were
prohibited in cases like this is another question, [
Footnote 34] but it is, in any event, a
question
Page 475 U. S. 742
that Congress is best equipped to answer. Thus far, the
Legislature has not commanded that fees be paid whenever a case is
settled. Unless it issues such a command, we shall rely primarily
on the sound discretion of the district courts to appraise the
reasonableness of particular class action settlements on a
case-by-case basis, in the light of all the relevant circumstances.
[
Footnote 35] In this case,
the District Court did not
Page 475 U. S. 743
abuse its discretion in upholding a fee waiver which secured
broad injunctive relief, relief greater than that which plaintiffs
could reasonably have expected to achieve at trial. [
Footnote 36]
The judgment of the Court of Appeals is reversed.
It is so ordered.
[
Footnote 1]
The number of children in petitioners' custody, as well as the
duration of that custody, fluctuates to a certain degree. Although
it appears that only 40 or 50 children are in custody at any one
moment, the membership in respondents' class is apparently well
over 2,000. App. 61.
[
Footnote 2]
Although Johnson subsequently entered private practice, and
apparently bore some of the financial burden of the litigation
himself, any award of costs or fees would inure to the benefit of
Idaho Legal Aid. Brief for Plaintiffs in Support of Motion for
Consideration of Costs and Attorney Fees in
Jeff D. v.
Evans, No. 80-4091 (D. Idaho), p. 6.
[
Footnote 3]
Idaho Legal Aid receives grants under the Legal Services
Corporation Act, 42 U.S.C. §§ 2996-2996
l, and is not
allowed to represent clients who are capable of paying their own
legal fees,
see § 2996f(b)(1); 45 CFR § 1609 (1984).
[
Footnote 4]
Petitioners append to their brief on the merits the parties'
correspondence setting forth their respective positions on
settlement. Without embarking on a letter-by-letter discussion of
the status of the fee waiver in the bargaining, it is clear that
petitioners' proposals uniformly included fee waivers, while
respondents' almost always did not.
[
Footnote 5]
Paragraph 25 of the settlement agreement provides:
"Plaintiffs and defendants shall each bear their own costs and
attorney's fees thus far incurred, if so approved by the
Court."
App. 104. In addition, the entire settlement agreement was
conditioned on the District Court's approval of the waiver
provision under Federal Rule of Civil Procedure 23(e).
See
nn.
7 and |
7 and S. 717fn8|>8,
infra.
[
Footnote 6]
Johnson's oral presentation to the District Court reads in full
as follows:
"In other words, an attorney like myself can be put in the
position of either negotiating for his client or negotiating for
his attorney's fees, and I think that that is pretty much the
situation that occurred in this instance."
"I was forced, because of what I perceived to be a result
favorable to the plaintiff class, a result that I didn't want to
see jeopardized by a trial or by any other possible problems that
might have occurred. And the result is the best result I could have
gotten in this court or any other court, and it is really a fair
and just result in any instance, and what should have occurred
years earlier, and which, in fact, should have been the case all
along. That result I didn't want to see disturbed on the basis that
my attorney's fees would cause a problem and cause that result to
be jeopardized."
App. 90-91.
[
Footnote 7]
The District Court wrote a letter to respondents' counsel
explaining the conditional nature of petitioners' settlement
offer:
"[T]he defendants' signing of the stipulation was dependent upon
the Court's approval of the finding that it was appropriate to
accept a stipulation where plaintiffs waived attorneys fees. . . .
The defendants entered into the stipulation only as a compromise
matter, with the understanding that they would not pay any
attorneys fees, and advised the Court that, if there were going to
be attorneys fees, that they wanted to proceed with trial, because
they did not think they were required to conform to the stipulation
legally. Under those circumstances, it would be entirely
inappropriate to leave the stipulation in effect. If you
effectively challenge the stipulation, the whole stipulation falls,
and the matter must be tried by the Court. On the other hand, if
you do not successfully challenge the stipulation, then the
stipulation and stay is in effect. But until the validity of the
stipulation is determined, the Court feels it is entirely unfair to
enforce it."
Id. at 115-116.
See id. at 112.
[
Footnote 8]
"Dismissal or Compromise. A class action shall not be dismissed
or compromised without the approval of the court, and notice of the
proposed dismissal or compromise shall be given to all members of
the class in such manner as the court directs."
Fed.Rule Civ.Proc. 23(e).
[
Footnote 9]
As we held in
Maher v. Gagne, 448 U.
S. 122,
448 U. S. 129
(1980): "The fact that respondent prevailed through a settlement,
rather than through litigation, does not weaken her claim to fees."
See ibid. (quoting S.Rep. No. 94-1011, p. 5 (1976)). Nor
does the fact that the fee award would benefit a legal services
corporation justify a refusal to make an award.
See New York
Gaslight Club, Inc. v. Carey, 447 U. S.
54,
447 U. S. 70-71,
n. 9 (1980); H.R.Rep. No. 94-1558, pp. 5 and 8, n. 16 (1976).
[
Footnote 10]
That precedent,
Mendoza v. United States, 623 F.2d 1338
(CA9 1980), like the Third Circuit decision in
Prandini v.
National Tea Co., 557 F.2d 1015 (1977), which both the
Mendoza court and the panel below cited approvingly,
instituted a ban on simultaneous negotiations of merits and
attorney's fees issues to prevent attorneys from trading relief
benefiting the class for a more generous fee for themselves.
See Mendoza v. United States, supra, at 1352-1353;
Prandini v. National Tea Co., 557 F.2d at 1020-1021. In
neither of those cases had the court rejected a part of the
settlement and enforced the remainder.
[
Footnote 11]
On the question whether it is ever proper to put plaintiff's
counsel to the choice of recommending acceptance of a favorable
settlement or pursuing a statutory fee award, the decision of the
Ninth Circuit below is in accord with the rule prevailing in the
Third Circuit,
see Prandini v. National Tea Co., 557 F.2d
at 1021 (not recognizing an exception for "unusual circumstances");
cf. El Club Del Barrio, Inc. v. United Community Corps.,
735 F.2d 98, 101, n. 3 (CA3 1984) (dictum noting applicability of
Prandini to fee waivers in holding that such waivers must
be explicit), and conflicts with decisions in four other Circuits
holding that civil rights plaintiffs are free to waive fee awards
as part of an overall settlement, at least in some circumstances,
see Moore v. National Assn. of Security Dealers, Inc., 246
U.S.App.D.C. 114, 125, 762 F.2d 1093, 1104 (1985) (opinion of
MacKinnon, J.);
id. at 134-135, 762 F.2d at 1113-1114
(Wald, J., concurring in judgment);
Lazar v. Pierce, 757
F.2d 435, 438-439 (CA1 1985);
Gram v. Bank of Louisiana,
691 F.2d 728, 730 (CA5 1982) (dictum);
Chicano Police Officer's
Assn. v. Stover, 624 F.2d 127, 132 (CA10 1980).
[
Footnote 12]
See Pasadena City Board of Education v. Spangler,
427 U. S. 424,
427 U. S. 437
(1976);
United States v. United Shoe Machinery Corp.,
391 U. S. 244,
391 U. S. 251
(1968);
Railway Employees v. Wright, 364 U.
S. 642,
364 U. S. 651
(1961);
United States v. Swift & Co., 286 U.
S. 106,
286 U. S. 114
(1932).
[
Footnote 13]
Cf. Firefighters v. Stotts, 467 U.
S. 561,
467 U. S. 592
(1984) (STEVENS, J. concurring in judgment); Restatement (Second)
of Contracts § 184, Comment a, p. 30 (1981) ("If the performance as
to which the agreement is unenforceable [as against public policy]
is an essential part of the agreed exchange, . . . the entire
agreement [is] unenforceable"); E. Farnsworth, Contracts § 5.8, p.
361 (1982).
[
Footnote 14]
Generally speaking, a lawyer is under an ethical obligation to
exercise independent professional judgment on behalf of his client;
he must not allow his own interests, financial or otherwise, to
influence his professional advice. ABA, Model Code of Professional
Responsibility EC 5-1, 5-2 (as amended 1980); ABA, Model Rules of
Professional Conduct 1.7(b), 2.1 (as amended 1984). Accordingly, it
is argued that an attorney is required to evaluate a settlement
offer on the basis of his client's interest, without considering
his own interest in obtaining a fee; upon recommending settlement,
he must abide by the client's decision whether or not to accept the
offer,
see Model Code of Professional Responsibility EC
7-7 to EC 7-9; Model Rules of Professional Conduct 1.2(a).
[
Footnote 15]
Even state bar opinions holding it unethical for defendants to
request fee waivers in exchange for relief on the merits of
plaintiffs' claims are bottomed ultimately on § 1988.
See
District of Columbia Bar Legal Ethics Committee, Op. No. 147,
reprinted in 113 Daily Wash.L.Rep. 389, 394-395 (1985); Committee
on Professional and Judicial Ethics of the New York City Bar
Association, Op. No. 82-80, p. 1 (1985);
id. at 4-5
(dissenting opinion); Committee on Professional and Judicial Ethics
of the New York City Bar Association, Op. No. 80-94, reprinted in
36 Record of N.Y.C.B.A. 507, 508-511 (1981); Grievance Commission
of Board of Overseers of the Bar of Maine, Op. No. 17, reprinted in
Advisory Opinions of the Grievance Commission of the Board of
Overseers of the Bar 69-70 (1983). For the sake of completeness, it
should be mentioned that the bar is not of one mind on this ethical
judgment.
See Final Subcommittee Report of the Committee
on Attorney's Fees of the Judicial Conference of the United States
Court of Appeals for the District of Columbia Circuit, reprinted in
13 Bar Rep. 4, 6 (1984) (declining to adopt flat rule forbidding
waivers of statutory fees).
Cf. State Bar of Georgia, Op.
No. 39, reprinted in 10 Ga.St.Bar News No. 2, p. 5 (1984)
(rejecting the reasoning of the Committee on Professional and
Judicial Ethics of the New York City Bar Association in the context
of lump-sum settlement offers for the reason, among others, that
"[t]o force a defendant into proposing a settlement offer wherein
plaintiffs['] statutory attorney fees are not negotiated . . .
[means that] meaningful settlement proposals might never be made.
Such a situation undeniably . . . is inimical to the resolution of
disputes between parties").
[
Footnote 16]
See Committee on Professional and Judicial Ethics of
the New York City Bar Association, Op. No. 80-94, reprinted in 36
Record of N.Y.C.B.A. at 508 ("Defense counsel thus are in a
uniquely favorable position when they condition settlement on the
waiver of the statutory fee: they make a demand for a benefit which
the plaintiff's lawyer cannot resist as a matter of ethics and
which the plaintiff will not resist due to lack of interest").
Accord, District of Columbia Bar Legal Ethics Committee,
Op. No. 147, reprinted in 113 Daily Wash.L.Rep. at 394.
[
Footnote 17]
The operative language of the Fees Act provides, in its
entirety:
"In any action or proceeding to enforce a provision of sections
1977, 1978, 1979, 1980, and 1981 of the Revised Statutes, title IX
of Public Law 92318, or in any civil action or proceeding, by or on
behalf of the United States of America, to enforce, or charging a
violation of, a provision of the United States Internal Revenue
Code, or title VI of the Civil Rights Act of 1964, the court, in
its discretion, may allow the prevailing party, other than the
United States, a reasonable attorney's fee as part of the
costs."
90 Stat. 2641, 42 U.S.C. § 1988.
[
Footnote 18]
See H.R.Rep. No. 94-1558, pp. 6-7 (1976); S.Rep. No.
94-1011, pp. 4-5, and n. 4 (1976); 122 Cong.Rec. 35122-35123 (1976)
(remarks of Rep. Drinan);
id. at 35125 (remarks of Rep.
Kastenmeier).
[
Footnote 19]
This straightforward reading of § 1988 accords with the view
held by the majority of the Courts of Appeals.
See, e.g., Jonas
v. Stack, 758 F.2d 567, 570, n. 7 (CA11 1985) ("Strict
conformity to the language of [§ 1988] would require that the [fee]
application be made by the attorney in the name of his client, the
prevailing party. We consider this to be the procedure of choice,
since it ensures that awards made under the Act compensate their
intended beneficiaries");
Brown v. General Motors Corp.,
722 F.2d 1009, 1011 (CA2 1983) ("Under [42 U.S.C. § 1988], it is
the prevailing party, rather than the lawyer, who is entitled to
attorney's fees");
Cooper v. Singer, 719 F.2d 1496,
1506-1507 (CA10 1983) (distinguishing between client's and
counsel's entitlement to fees in the course of holding that "if the
client's section 1988 fee award . . . is less than the
amount owed to the attorney under the contingent fee agreement,
then the lawyer will be expected to reduce his fee to the amount
awarded by the courts" (emphasis added));
White v. New
Hampshire Dept. of Employment Security, 629 F.2d 697, 703 (CA1
1980) ("[A]ward of attorney's fees goes to
prevailing party,'
rather than attorney"), rev'd on other grounds,
455 U. S. 445
(1982). But cf. James v. Home Construction Co. of Mobil
Inc., 689 F.2d 1357, 1358-1359 (CA11 1982) (disagreeing with
Smith v. South Side Loan Co., 567 F.2d 306, 307 (CA5 1978)
("[A]n award [of attorney's fees] is the right of the party suing
not the attorney representing him"), and construing Truth in
Lending Act's mandatory award of attorney's fees as "creat[ing] a
right of action for attorneys to seek fee awards after settlement
of the plaintiff's claim." 689 F.2d at 1359).
[
Footnote 20]
Judge Wald has described the use of attorney's fees as a
"bargaining chip" useful to plaintiffs as well as defendants. In
her opinion concurring in the judgment in
Moore v. National
Assn. of Security Dealers, Inc., she wrote:
"On the other hand, the
Jeff D. approach probably means
that a defendant who is willing to grant immediate prospective
relief to a plaintiff case, but would rather gamble on the outcome
at trial than pay attorneys' fees and costs up front, will never
settle. In short, removing attorneys' fees as a 'bargaining chip'
cuts both ways. It prevents defendants, who in Title VII cases are
likely to have greater economic power than plaintiffs, from
exploiting that power in a particularly objectionable way; but it
also deprives plaintiffs of the use of that chip, even when,
without it, settlement may be impossible and the prospect of
winning at trial may be very doubtful."
246 U.S.App.D.C. at 133, 762 F.2d at 1112.
[
Footnote 21]
See H.R.Rep. No. 94-1568,
supra, at 1, 9;
S.Rep. No. 94-1011,
supra, at 2, 6; 122 Cong.Rec.
33313-33314 (1976) (remarks of Sen. Tunney);
id. at
33314-33315 (remarks of Sen. Kennedy);
id. at 36128
(remarks of Rep. Seiberling).
[
Footnote 22]
Indeed, Congress specifically rejected a mandatory fee-shifting
provision,
see H.R.Rep. No. 94-1668,
supra, at 3,
5, 8; 122 Cong.Rec. 36123 (1976) (remarks of Rep. Drinan), a
proposal which the dissent would virtually reinstate under the
guise of carrying out the legislative will. Even proponents of
nonwaivable fee awards under § 1988 concede that
"one would have to strain principles of statutory interpretation
to conclude that Congress intended to utilize fee non-negotiability
to achieve the purposes of section 1988."
Calhoun, Attorney-Client Conflicts of Interest and the Concept
of Non-Negotiable Fee Awards under 42 U.S.C. § 1988, 66
U.Colo.L.Rev. 341, 386 (1984). This conclusion is buttressed by
Congress' decision to emulate the "over fifty" fee-shifting
provisions that had been successful in enlisting the aid of
"private attorneys general" in the prosecution of other federal
statutes that had been on the books for decades. H.R.Rep. No.
94-1568,
supra at 3, 5.
Accord, S.Rep. No.
94-1011,
supra, at 3.
See also 122 Cong.Rec.,
supra at 36123 (appendix to remarks of Rep. Drinan)
(listing more than 50 fee-shifting statutes). No one has suggested
that the purpose of any of those fee-shifting provisions has been
frustrated by the absence of a prohibition against fee waivers.
[
Footnote 23]
It is unrealistic to assume that the defendant's offer on the
merits would be unchanged by redaction of the provision waiving
fees. If it were, the defendant's incentive to settle would be
diminished because of the risk that attorney's fees, when added to
the original merits offer, will exceed the discounted value of the
expected judgment plus litigation costs. If, as is more likely, the
defendant lowered the value of its offer on the merits to provide a
cushion against the possibility of a large fee award, the
defendant's offer on the merits will in many cases be less than the
amount to which the plaintiff feels himself entitled, thereby
inclining him to reject the settlement. Of course, to the extent
that the merits offer is somewhere between these two extremes, the
incentive of both sides to settle is dampened, albeit to a lesser
degree with respect to each party.
[
Footnote 24]
See, e.g., Rivera v. Riverside, 763 F.2d 1580,
1581-1583 (CA9 1985) (city ordered to pay victorious civil rights
plaintiffs $245,456.25 following a trial in which they recovered a
total of $33,350 in damages),
cert. granted, 474 U.S. 917
(1985);
Cunningham v. City of McKeesport, 753 F.2d 262,
269 (CA3 1985) (city ordered to pay some $35,000 in attorney's fees
in a case in which judgment for the plaintiff was entered in the
amount of $17,000);
Copeland v. Marshall, 205 U.S.App.D.C.
390, 401, 641 F.2d 880, 891 (1980) (en banc) ($160,000 attorney's
fees awarded for obtaining $33,000 judgment);
Skoda v.
Fontani, 646 F.2d 1193, 1194 (CA7),
on
remand, 519 F.
Supp. 309, 310 (ND Ill.1981) ($6,086.12 attorney's fees awarded
to obtain $1 recovery).
Cf. Marek v. Chesny, 473 U.S. at
473 U. S. 7
($171,692.47 in claimed attorney's fees and costs to obtain $60,000
damages judgment).
[
Footnote 25]
See, e.g., Grendel's Den, Inc. v. Larkin, 749 F.2d 945,
960 (CA1 1984) (awarding $113,640.85 in fees and expenses for
successful challenge to law zoning liquor establishments in
Larkin v. Grendel's Den, 459 U. S. 116
(1982)).
[
Footnote 26]
While this Court has identified "the number of hours reasonably
expended on the litigation multiplied by a reasonable hourly rate"
as "[t]he most useful starting point for determining the amount of
a reasonable fee,"
Hensley v. Eckerhart, 461 U.S. at
461 U. S. 433,
the "product of reasonable hours times a reasonable rate does not
end the inquiry,"
id. at
461 U. S. 434,
for
"there may be circumstances in which the basic standard of
reasonable rates multiplied by reasonably expended hours results in
a fee that is either unreasonably low or unreasonably high."
Blum v. Stenson, 465 U. S. 886,
465 U. S. 897
(1984).
"A district court is expressly empowered to exercise discretion
in determining whether an award is to be made and, if so, its
reasonableness."
Id. at
465 U. S. 902,
n.19.
See Hensley v. Eckerhart, 461 U.S. at
461 U. S. 437.
The district court's calculation is thus anything but an
arithmetical exercise.
[
Footnote 27]
The variability in fee awards is discussed in, for example,
Berger, Court Awarded Attorneys' Fees: What is "Reasonable"?, 126
U.Pa.L.Rev. 281, 283-284 (1977); Diamond, The Firestorm over
Attorney Fee Awards, 69 A.B.A.J. 1420, 1420 (1983); and National
Association of Attorneys General, Report to Congress: Civil Rights
Attorney's Fees Awards Act of 1976 (Feb. 3, 1984), reprinted in
Hearing on The Legal Fee Equity Act (S. 2802) before the
Subcommittee on the Constitution of the Senate Committee on the
Judiciary, 98th Cong., 2d Sess., 280-293 (1984).
[
Footnote 28]
This is the experience of every judge and a majority of the
members of a Third Circuit Task Force which concluded that that
Circuit's ban on fee negotiations "tends to discourage settlement
in some cases and, on occasion, makes it impossible." Report of the
Third Circuit Task Force: Court Awarded Fees 38 (1985) (footnotes
omitted). The Task Force reasoned:
"[P]reventing agreement on fees at the time settlement of the
merits is discussed . . . makes it difficult for the defendant to
ascertain precisely what its liability will be, thereby eliminating
the very certainty that makes settlement attractive to the
defendant. The net effect . . . may be more trials, thus raising
the question whether that cost is justifiable, inasmuch as the
conflict between settling the merits and discussing fees may be
more hypothetical than real."
Ibid. (footnotes omitted).
[
Footnote 29]
Respondents implicitly acknowledge a defendant's need to fix his
total liability when they suggest that the parties to a civil
rights action should "exchange information" regarding plaintiff's
attorney's fees.
See, e.g., Committee on Professional and
Judicial Ethics of the New York City Bar Association, Op. No.
82-80, p. 2 (1985); Grievance Commission of Board of Overseers of
the Bar of Maine, Op. No. 17, Advisory Opinions of the Grievance
Commission of the Board of Overseers of the Bar 70 (1983). If this
exchange is confined to time records and customary billing rates,
the information provides an insufficient basis for forecasting the
fee award for the reasons stated above. If the "exchange" is more
in the nature of an "assurance" that attorney's fees will not
exceed a specified amount, the rule against waiving fees to obtain
a favorable settlement on the merits is, to that extent, breached.
Apparently, some parties have circumvented the rule against
simultaneous negotiation in one Circuit by means of tacit
agreements of this kind.
See El Club Del Barrio, Inc. v. United
Community Corps., 735 F.2d at 101, n. 3 (defendants' counsel
suggest that the Third Circuit's ban on simultaneous negotiations
is "
more honored in the breach'"); A. Miller, Attorneys' Fees
in Class Actions 222 (1980) ("Hence, even if agreements on fees are
not included in settlements, the net result might be to increase
informal agreements among counsel or to encourage withholding
agreements on fees from the judge until after the settlement is
approved"); Comment, Settlement Offers Conditioned Upon Waiver of
Attorneys' Fees: Policy, Legal, and Ethical Considerations, 131
U.Pa.L.Rev. 793, 805, n. 90 (1983) (survey of several District
Judges serving in the Third Circuit, finding exchanges of
information being used by plaintiffs' lawyers to "voluntarily
reduce the number of compensable hours claimed as an incentive for
defendant to settle"). Finally, if counsel for the plaintiffs are
allowed to renege on their informal agreements, the rule against
fee waivers will have been vindicated at the expense of future
settlements, inasmuch as defendants will be unable to trust
assurances made by plaintiffs' counsel.
[
Footnote 30]
The Court is unanimous in concluding that the Fees Act should
not be interpreted to prohibit all simultaneous negotiations of a
defendant's liability on the merits and his liability for his
opponent's attorney's fees.
See opinion of BRENNAN, J.,
dissenting,
post at
475 U. S.
762-763,
475 U. S.
764-765. We agree that, when the parties find such
negotiations conducive to settlement, the public interest, as well
as that of the parties, is served by simultaneous negotiations.
Cf. supra, at
475 U. S.
732-734. This reasoning applies not only to individual
civil rights actions, but to civil rights class actions as
well.
Although the dissent would allow simultaneous negotiations, it
would require that "whatever fee the parties agree to" be "found by
the court to be a
reasonable' one under the Fees Act."
Post at 475 U. S. 754.
See post at 475 U. S. 753,
n. 6. The dissent's proposal is imaginative, but not very
practical. Of the 10,757 "other civil rights" cases filed in
federal court last year -- most of which were 42 U.S.C. § 1983
actions for which § 1988 authorizes an award of fees -- only 111
sought class relief. See Annual Report of the Director of
the Administrative Office of the United States Courts, An Analysis
of the Workload of the Federal Courts for the Twelve Month Period
Ended June 30, 1985, pp. 281, 555 (1985). Assuming that of the
approximately 99% of these civil rights actions that are not class
actions, a further 90% would settle rather than go to trial, the
dissent's proposal would require district courts to evaluate the
reasonableness of fee agreements in several thousand civil rights
cases annually, while they make that determination in slightly over
100 civil rights class actions now. Moreover, if this novel
procedure really is necessary to carry out the purposes of the Fees
Act, presumably it should be applied to all cases arising under
federal statutes that provide for fee-shifting. But see n.
22 supra.
[
Footnote 31]
See Committee on Professional and Judicial Ethics of
the New York City Bar Association, Op. No. 80-94, reprinted in 36
Record of N.Y.C.B.A. 607, 610 (1981) ("[T]he long-term effect of
persistent demands for the waiver of statutory fees is to . . .
undermine efforts to make counsel available to those who cannot
afford it").
Accord, District of Columbia Bar Legal Ethics
Committee, Op. No. 147, reprinted in 113 Daily Wash.L.Rep. 389, 394
(1986). National staff counsel for the American Civil Liberties
Union estimates that requests for fee waivers are made in more than
half of all civil rights cases litigated.
See Winter, Fee
Waiver Requests Unethical: Bar Opinion, 68 A.B.A.J. 23 (1982).
[
Footnote 32]
In this regard, consider the following comment in the Final
Subcommittee Report of the Committee on Attorney's Fees of the
Judicial Conference of the United States Court of Appeals for the
District of Columbia Circuit:
"Against this background, it was agreed that there were certain
situations in which the refusal of defense counsel to proceed
except on a package basis was improper. For instance, in a Freedom
of Information Act case, where a journalist was the plaintiff and
either had a reasonably good case, or had won in the district court
and the government was considering appeal, it would be improper for
government counsel to offer to release the documents only if
plaintiff's counsel agreed to waive all attorneys fees. That
situation presents a grossly unfair choice to the plaintiff and
his/her counsel, and permitting such offers to be made would
seriously undermine the purpose of fee-shifting provisions.
Moreover, it would serve no end other than saving the government
money which it would otherwise have to pay, yet any such saving is
plainly at odds with the purpose for which the fee-shifting statute
was enacted."
13 Bar Rep. at 6.
[
Footnote 33]
From the declarations of respondents' counsel in the lower
courts, as well as those of the District Court and the Court of
Appeals, all of which are quoted in
475 U. S.
supra, we understand the District Court's approval of the
stipulation settling the health services claims to have rested on
the determination that the provision waiving attorney's fees and
costs was fair to the class --
i.e., the fee waiver was
exchanged for injunctive relief of equivalent value.
[
Footnote 34]
We are cognizant of the possibility that decisions by individual
clients to bargain away fee awards may, in the aggregate and in the
long run, diminish lawyers' expectations of statutory fees in civil
rights cases. If this occurred, the pool of lawyers willing to
represent plaintiffs in such cases might shrink, constricting the
"effective access to the judicial process" for persons with civil
rights grievances which the Fees Act was intended to provide.
H.R.Rep. No. 94-1558, p. 1 (1976). That the "tyranny of small
decisions" may operate in this fashion is not to say that there is
any reason or documentation to support such a concern at the
present time. Comment on this issue is therefore premature at this
juncture. We believe, however, that, as a practical matter, the
likelihood of this circumstance arising is remote.
See Moore v.
National Assn. of Securities Dealers, Inc., 246 U.S.App.D.C.
at 133, n. 1, 762 F.2d at 1112, n. 1 (Wald, J., concurring in
judgment).
[
Footnote 35]
"Each negotiation, like each litigant, is unique; reasonableness
can only be determined by looking at the strength of the
plaintiff's case, the stage at which the settlement is effective,
the substantiality of the relief obtained on the merits, and the
explanations of the parties as to why they did what they did."
Id. at 134, 762 F.2d at 1113 (Wald, J., concurring in
judgment).
See also the following comment in the opinion of the Final
Subcommittee Report of the Committee on Attorney's Fees of the
Judicial Conference of the United States Court of Appeals for the
District of Columbia Circuit:
"[T]he purpose of such settlement offers is not, in most cases,
to create an attorney-client conflict, nor to punish or deter
plaintiffs' attorneys from taking on fee-shifting cases. Generally
speaking, the reason that defendants make such offers is to limit
their total exposure."
"
* * * *"
"The key in these situations is whether the defendant's offer is
reasonable in light of all the circumstances, including the chances
of success on the merits and the risk of possible exposure in
damages and attorneys fees. And in making such determinations, the
legitimate interest of the fee-shifting provisions must be balanced
against the legitimate interest of the defendant, whether a
governmental agency or private party, in making an offer which will
fix liability with considerable certainty. This balancing approach
applies regardless of whether the issue is phrased in terms of the
right of the defendant to make a lump sum settlement offer or the
right to refuse to pay fees to the plaintiff's attorney while
providing some measure of relief to the client. In both situations,
the inquiry is the same, and can be decided only on a case-by-case
basis, assessing the reasonableness of the defendant's
conduct."
13 Bar Report at 6.
[
Footnote 36]
Although the record in this case does not provide us with any
information concerning the amount of money that had been expended
on costs, it is appropriate to note that costs other than fees may
also be a significant item in class action litigation. For example,
in
Moore v. National Assn. of Securities Dealers, Inc.,
supra, the class representative's liability for costs amounted
to over $30,000 at the time she decided that her best interests
would be served by a settlement. 246 U.S.App.D.C. at 116-117, 762
F.2d at 1095, 1096, and n. 2 (opinion of MacKinnon, J.). The
interest in recovering costs already expended by a class
representative may justify a refusal to accept a settlement
including only prospective relief and, conversely, the interest in
avoiding the additional expenditures associated with continuing the
litigation may also justify accepting an otherwise doubtful
settlement.
JUSTICE BRENNAN, with whom JUSTICE MARSHALL and JUSTICE BLACKMUN
join, dissenting.
Ultimately, enforcement of the laws is what really counts. It
was with this in mind that Congress enacted the Civil Rights
Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988 (Act or Fees
Act). Congress authorized fee-shifting to improve enforcement of
civil rights legislation by making it easier for victims of civil
rights violations to find lawyers willing to take their cases.
Because today's decision will make it more difficult for civil
rights plaintiffs to obtain legal assistance, a result plainly
contrary to Congress' purpose, I dissent.
I
The Court begins its analysis by emphasizing that neither the
language nor the legislative history of the Fees Act supports "the
proposition that Congress intended to ban all fee waivers offered
in connection with substantial relief on the merits."
Ante
at
475 U. S. 730.
I agree. There is no evidence that
Page 475 U. S. 744
Congress gave the question of fee waivers any thought at all.
However, the Court mistakenly assumes that this omission somehow
supports the conclusion that fee waivers are permissible. On the
contrary, that Congress did not specifically consider the issue of
fee waivers tells us absolutely nothing about whether such waivers
ought to be permitted. It is black letter law that,
"[i]n the absence of specific evidence of Congressional intent,
it becomes necessary to resort to a broader consideration of the
legislative policy behind th[e] provision. . . ."
Brooklyn Savings Bank v. O'Neil, 324 U.
S. 697,
324 U. S. 706
(1945);
see also 2A C. Sands, Sutherland on Statutory
Construction §§ 54.01-54.03 (4th ed.1984). We must interpret the
statute in the way that is most consistent with Congress' broader
purpose; a result which is "plainly at variance with the policy of
the legislation as a whole,"
Ozawa v. United States,
260 U. S. 178,
260 U. S. 194
(1922), cannot be correct.
Watt v. Western Nuclear, Inc.,
462 U. S. 36,
462 U. S. 56
(1983) (statute should not be interpreted "to produce a result at
odds with the purposes underlying the statute" but rather "in a way
that will further Congress' overriding objective"); 2A Sands,
supra, § 46.07;
See also
United States v.
Freeman, 3 How. 556,
44 U. S. 565
(1845);
Sorrells v. United States, 287 U.
S. 435,
287 U. S. 446
(1932);
United States v. Brown, 333 U. S.
18,
333 U. S. 25-26
(1948);
Lynch v. Overholser, 369 U.
S. 705,
369 U. S. 710
(1962);
Perry v. Commerce Loan Co., 383 U.
S. 392,
383 U. S.
399-400 (1966) (quoting
United States v. American
Trucking Assns., 310 U. S. 534,
310 U. S. 543
(1940));
United States v. Campos-Serrano, 404 U.
S. 293,
404 U. S. 298
(1971). Accordingly, the first and most important question to be
asked is what Congress' purpose was in enacting the Fees Act. We
must then determine whether conditional fee waivers are consistent
with this purpose.
II
The Court asserts that Congress authorized fee awards "to
further the same general purpose -- promotion of respect for civil
rights -- that led it to provide damages and injunctive
Page 475 U. S. 745
relief."
Ante at
475 U. S. 731.
The attorney's fee made available by the Act, we are told, is
simply an addition to "the arsenal of remedies available to combat
violations of civil rights."
Ante at
475 U. S.
732.
Obviously, the Fees Act is intended to "promote respect for
civil rights." Congress would hardly have authorized fee awards in
civil rights cases to promote respect for the securities laws. But
discourse at such a level of generality is deceptive. The question
is
how did Congress envision that awarding attorney's fees
would promote respect for civil rights? Without a clear
understanding of the way in which Congress intended for the Fees
Act to operate, we cannot even begin responsibly to go about the
task of interpreting it. In theory, Congress might have awarded
attorney's fees as simply an additional form of make-whole relief,
the threat of which would "promote respect for civil rights" by
deterring potential civil rights violators. If this were the case,
the Court's equation of attorney's fees with damages would not be
wholly inaccurate. However, the legislative history of the Fees Act
discloses that this is not the case. Rather, Congress provided fee
awards to ensure that there would be lawyers available to
plaintiffs who could not otherwise afford counsel, so that these
plaintiffs could fulfill their role in the federal enforcement
scheme as "private attorneys general," vindicating the public
interest. [
Footnote 2/1]
Page 475 U. S. 746
Before the late 1960's, the concept of fee-shifting in public
interest litigation was virtually nonexistent. In
Newman v.
Piggie Park Enterprises, Inc., 390 U.
S. 400 (1968) (per curiam), this Court was called upon
to interpret the attorney's fee provision of Title II of the then
recently enacted Civil Rights Act of 1964, 42 U.S.C. § 2000a-3(b).
We held that a prevailing plaintiff should ordinarily recover fees
unless special circumstances rendered such an award unjust. Noting
that
"[w]hen the Civil Rights Act of 1964 was passed, it was evident
that enforcement would prove difficult and that the Nation would
have to rely in part upon private litigation as a means of securing
broad compliance with the law,"
we recognized that "[a] Title II suit is thus private in form
only."
Newman, 390 U.S. at
390 U. S. 401.
If a plaintiff obtains relief, he "does so not for himself alone,
but also as a
private attorney general,' vindicating a policy
that Congress considered of the highest priority. " Id. at
390 U. S. 402
(footnote omitted). We recognized further that the right to recover
attorney fees was conferred by Congress to ensure that this private
public-enforcement mechanism would operate effectively:
"If successful plaintiffs were routinely forced to bear their
own attorneys' fees, few aggrieved parties would be in a position
to advance the public interest by invoking the injunctive powers of
the federal courts. Congress therefore enacted the provision for
counsel fees -- not simply to penalize litigants who deliberately
advance arguments they know to be untenable but, more broadly, to
encourage individuals injured by racial discrimination
Page 475 U. S. 747
to seek judicial relief under Title II."
Ibid. (footnote omitted).
Newman interpreted the fee provision of Title II as
intended to bridge the gap between the desire of an individual who
has been deprived of a federal right to see that right vindicated
and the financial ability of that individual to do so. More
importantly,
Newman recognized that Congress did not erect
this bridge solely, or even primarily, to confer a benefit on such
aggrieved individuals. Rather, Congress sought to capitalize on the
happy coincidence that encouraging private actions would, in the
long run, provide effective public enforcement of Title II. By
ensuring that lawyers would be willing to take Title II cases,
Congress made the threat of a lawsuit for violating Title II real,
thereby deterring potential violators.
After
Newman, lower courts -- invoking their equitable
powers to award attorney's fees -- adopted a similar rationale to
award fees in cases brought under civil rights statutes that did
not contain express provisions for attorney's fees.
See, e.g.,
Stolberg v. Members of Board of Trustees for State Colleges of
Conn., 474 F.2d 485 (CA2 1973) (42 U.S.C. § 1983);
Donahue
v. Staunton, 471 F.2d 475 (CA7 1972),
cert. denied,
410 U.S. 955 (1973) (same);
Lee v. Southern Home Sites
Corp., 444 F.2d 143 (CA5 1971) (42 U.S.C. § 1982).
See
generally Derfner, One Giant Step: The Civil Rights Attorney's
Fees Awards Act of 1976, 21 St.Louis U.L.J. 441, 443, and nn. 9-22
(1977) (citing cases). In May, 1975, this Court in
Alyeska
Pipeline Service Co. v. Wilderness Society, 421 U.
S. 240, ruled that the equitable powers of the federal
courts did not authorize fee awards on the ground that a case
served the public interest. Although recognizing that
"Congress has opted to rely heavily on private enforcement to
implement public policy and to allow counsel fees so as to
encourage private litigation,"
the Court held that
"congressional utilization of the private-attorney-general
concept can in no sense be construed as a grant of authority to
the
Page 475 U. S. 748
Judiciary . . . to award attorneys' fees whenever the courts
deem the public policy furthered by a particular statute important
enough to warrant the award."
Id. at
421 U. S. 263.
Instead, the Court ruled, only Congress could authorize awarding
fees as a means of encouraging private actions in the name of
public policy.
Id. at
421 U. S.
269-271.
In the wake of
Alyeska, Congress acted to correct
"anomalous gaps" in the availability of attorney's fees to enforce
civil rights laws, S.Rep. No. 94-1011, p. 1 (1976) (hereafter
S.Rep.). [
Footnote 2/2]
See H.R.Rep. No. 94-1558, p. 2 (1976) (hereafter
H.R.Rep.); 122 Cong.Rec. 31472 (1976) (remarks of Sen. Kennedy).
Testimony at hearings on the proposed legislation disclosed that
civil rights plaintiffs, "a vast majority of [whom] cannot afford
legal counsel," H.R.Rep. 1, were suffering "very severe hardships
because of the Alyeska decision,"
id. at 2. The
unavailability of fee-shifting made it impossible for legal aid
services, "already short of resources," to bring many lawsuits,
and, without much possibility of compensation, private attorneys
were refusing to take civil rights cases.
Id. at 3.
See generally Hearings on the Effect of Legal Fees on the
Adequacy of Representation before the Subcommittee on
Representation of Citizen Interests of the Senate Committee on the
Judiciary, 93d Cong., 1st Sess., pts. 1-4 (1973). Congress found
that
Alyeska had a "devastating" impact on civil rights
litigation, and it concluded that the need for corrective
legislation was "compelling." H.R.Rep. 3;
see also 122
Cong.Rec.,
supra, at 31471 (remarks of Sen. Scott), 31472
(remarks of Sen. Kennedy).
Accepting this Court's invitation,
see Alyeska, supra,
at
421 U. S.
269-271, Congress passed the Fees Act in order to
reestablish the
Newman regime under which attorney's fees
were awarded as a means of securing enforcement of civil rights
laws by ensuring that lawyers would be willing to
Page 475 U. S. 749
take civil rights cases. The legislative history manifests this
purpose with monotonous clarity. For instance, the Report of the
House Judiciary Committee notes
"The effective enforcement of Federal civil rights statutes
depends largely on the efforts of private citizens. Although some
agencies of the United States have civil rights responsibilities,
their authority and resources are limited."
H.R.Rep. 1. The Report explains, quoting from
Newman,
that a plaintiff who obtains relief in a private lawsuit
""does so not for himself alone, but also as a
private
attorney general,' vindicating a policy that Congress considered of
the highest" importance."
Id. at 2 (quoting 390 U.S. at
390 U. S.
402). The Report then describes the intended scope and
operation of the Fees Act, before concluding:
"The application of these standards will insure that reasonable
fees are awarded to attract competent counsel in cases involving
civil and constitutional rights, while avoiding windfalls to
attorneys. The effect of [the Fees Act] will be to promote the
enforcement of the Federal civil rights acts, as Congress intended,
and to achieve uniformity in those statutes and justice for all
citizens."
H.R.Rep. 9.
These same themes are prominent in the Senate Report:
"The purpose and effect of [the Fees Act] are simple -- it is
designed to allow courts to provide the familiar remedy of
reasonable counsel fees to prevailing parties in suits to enforce
the civil rights acts which Congress has passed since 1866. . . .
All of these civil rights laws depend heavily upon private
enforcement, and fee awards have proved an essential remedy if
private citizens are to have a meaningful opportunity to vindicate
the important Congressional policies which these laws contain."
S.Rep. 2. The Senate Report quotes the same language from
Newman as the House Report, explaining that "fees are an
integral
Page 475 U. S. 750
part of the remedy necessary to achieve compliance with our
statutory policies."
Id. at 3. After citing existing
fee-shifting provisions, the Report sets out the Committee's
finding that
"[t]hese fee-shifting provisions have been successful in
enabling vigorous enforcement of modern civil rights legislation,
while at the same time limiting the growth of the enforcement
bureaucracy."
Id. at 4. The Report then concludes:
"If our civil rights laws are not to become mere hollow
pronouncements which the average citizen cannot enforce, we must
maintain the traditionally effective remedy of fee-shifting in
these cases."
Id. at 6.
The floor debates, which were extensive, also are replete with
similar expressions; I set out but a few examples. Senator Tunney,
who sponsored the original version of the Fees Act, stated to the
Senate:
"The problem of unequal access to the courts in order to
vindicate congressional policies and enforce the law is not simply
a problem for lawyers and courts. Encouraging adequate
representation is essential if the laws of this Nation are to be
enforced. Congress passes a great deal of lofty legislation
promising equal rights to all."
"Although some of these laws can be enforced by the Justice
Department or other Federal agencies, most of the responsibility
for enforcement has to rest upon private citizens, who must go to
court to prove a violation of the law. . . . But without the
availability of counsel fees, these rights exist only on paper.
Private citizens must be given not only the rights to go to court,
but also the legal resources. If the citizen does not have the
resources, his day in court is denied him; the congressional policy
which he seeks to vindicate goes unvindicated; and the entire
Nation, not just the individual citizen, suffers."
122 Cong.Rec. 33313 (1976). Senator Kennedy, who sponsored the
amended version of the Fees Act that was actually passed, made the
same point somewhat more succinctly:
Page 475 U. S. 751
"Long experience has demonstrated . . . that Government
enforcement alone cannot accomplish [compliance with the civil
rights laws]. Private enforcement of these laws by those most
directly affected must continue to receive full congressional
support. Fee shifting provides a mechanism which can give full
effect to our civil rights laws, at no added cost to the
Government."
Id. at 31472. But perhaps it was Representative
Anderson, responding to a question from an opponent of the Fees
Act, who summed up the reason for the legislation most effectively.
He said:
"We are talking here about major civil rights laws. We have an
obligation, it seems to me, as the representatives of the people,
to make sure that those laws are enforced, and we discharge that
obligation when we make available a reasonable award of attorneys'
fees at the discretion of the court. Those of us who are interested
in making sure that those laws are enforced . . . are simply
abetting and aiding that process of law enforcement when we agree
to the provisions of this bill."
Id. at 35116.
See also, e.g., id. at 31471
(remarks of Sen. Scott) ("Congress should encourage citizens to go
to court in private suits to vindicate its policies and protect
their rights"), 35128 (remarks of Rep. Seiberling).
III
As this review of the legislative history makes clear, then, by
awarding attorney's fees, Congress sought to attract competent
counsel to represent victims of civil rights violations. [
Footnote 2/3] Congress' primary purpose was
to enable "private attorneys
Page 475 U. S. 752
general" to protect the public interest by creating economic
incentives for lawyers to represent them. The Court's assertion
that the Fees Act was intended to do nothing more than give
individual victims of civil rights violations another remedy is
thus at odds with the whole thrust of the legislation. Congress
determined that the public as a whole has an interest in the
vindication of the rights conferred by the civil rights statutes
over and above the value of a civil rights remedy to a particular
plaintiff. [
Footnote 2/4]
I have gone to great lengths to show how the Court
mischaracterizes the purpose of the Fees Act because the Court's
error leads it to ask the wrong question. Having concluded that the
Fees Act merely creates another remedy to vindicate the rights of
individual plaintiffs, the Court asks whether negotiated waivers of
statutory attorney's fees are "invariably inconsistent" with the
availability of such fees as a remedy for individual plaintiffs.
Ante at
475 U. S. 732.
Not surprisingly, the Court has little difficulty knocking down
this frail straw man. [
Footnote
2/5] But the
proper question is whether permitting
negotiated
Page 475 U. S. 753
fee waivers is consistent with Congress' goal of attracting
competent counsel. It is therefore necessary to consider the effect
on
that goal of allowing individual plaintiffs to
negotiate fee waivers.
A
Permitting plaintiffs to negotiate fee waivers in exchange for
relief on the merits actually raises two related but distinct
questions. First, is it permissible under the Fees Act to negotiate
a settlement of attorney's fees simultaneously with the merits?
Second, can the "reasonable attorney's fee" guaranteed in the Act
be waived? As a matter of logic, either of these practices may be
permitted without also permitting the other. For instance, one
could require bifurcated settlement negotiations of merits and
fees, but allow plaintiffs to waive their fee claims during that
phase of the negotiations. Alternatively, one could permit
simultaneous negotiation of fees and merits, but prohibit the
plaintiff from waiving statutory fees. This latter possibility
exists because there is a
range of "reasonable attorney's
fees" consistent with the Fees Act in any given case.
Cf. Blum
v. Stenson, 465 U. S. 886
(1984);
Hensley v. Eckerhart, 461 U.
S. 424,
461 U. S.
433-437 (1983); H.R.Rep. 8-9; S.Rep. 6;
see
generally Johnson v. Georgia Highway Express, Inc., 488 F.2d
714, 716-720 (CA5 1974) (listing relevant factors). [
Footnote 2/6]
More importantly, since simultaneous negotiation and waiver may
have different effects on the congressional policy of encouraging
counsel to accept civil rights cases, each practice must be
analyzed independently to determine whether or
Page 475 U. S. 754
not it is consistent with the Fees Act. Unfortunately, the Court
overlooks the logical independence of simultaneous negotiation and
waiver, and assumes that there cannot be one without the other.
See ante at
475 U. S.
734-738, and n. 28. As a result, the Court's discussion
conflates the different effects of these practices, and its opinion
is of little use in coming to a fair resolution of this case. An
independent examination leads me to conclude: (1) that plaintiffs
should not be permitted to waive the "reasonable fee" provided by
the Fees Act; but (2) that parties may undertake to negotiate their
fee claims simultaneously with the merits, so long as whatever fee
the parties agree to is found by the court to be a "reasonable" one
under the Fees Act.
B
1
It seems obvious that allowing defendants in civil rights cases
to condition settlement of the merits on a waiver of statutory
attorney's fees will diminish lawyers' expectations of receiving
fees and decrease the willingness of lawyers to accept civil rights
cases. Even the Court acknowledges
"the possibility that decisions by individual clients to bargain
away fee awards may, in the aggregate and in the long run, diminish
lawyers' expectations of statutory fees in civil rights cases."
Ante at
475 U. S.
741-742, n. 34. The Court tells us, however, that
"[c]omment on this issue" is "premature at this juncture" because
there is not yet supporting "documentation."
Ibid. The
Court then goes on anyway to observe that, "as a practical matter,
the likelihood of this circumstance arising is remote."
Ibid.
I must say that I find the Court's assertions somewhat difficult
to understand. To be sure, the impact of conditional fee waivers on
the availability of attorneys will be less severe than was the
restriction on fee awards created in
Alyeska. However,
that experience surely provides an indication of the immediate
hardship suffered by civil rights claimants
Page 475 U. S. 755
whenever there is a reduction in the availability of attorney's
fee awards. [
Footnote 2/7]
Moreover, numerous courts and commentators have recognized that
permitting fee waivers creates disincentives for lawyers to take
civil rights cases, and thus makes it more difficult for civil
rights plaintiffs to obtain legal assistance.
See, e.g., Moore
v. National Assn. of Securities Dealers, Inc., 246
U.S.App.D.C. 114, 133-134, 762 F.2d 1093, 1112-1113 (Wald, J.,
concurring in judgment)
id. at 138, 762 F.2d at 1117
(Wright, J., dissenting) (1985);
Shadis v. Beal, 685 F.2d
824, 830-831 (CA3),
cert. denied sub nom. O'Bannon v.
Shadis, 459 U.S. 970 (1982); Kraus, 29 Vill.L.Rev. at 626,
633-638; Comment, Settlement Offers Conditioned Upon Waiver of
Attorneys' Fees: Policy, Legal, and Ethical Considerations, 131
U.Pa.L.Rev. 793, 814-816 (1983); Committee on Professional and
Judicial Ethics of the New York City Bar Association, Op. No.
80-94, reprinted in 36 Record of N.Y. C. B. A. 507, 508-509
(1981).
But it does not require a sociological study to see that
permitting fee waivers will make it more difficult for civil rights
plaintiffs to obtain legal assistance. It requires only common
sense. Assume that a civil rights defendant makes a settlement
offer that includes a demand for waiver of statutory attorney's
fees. The decision whether to accept or reject the
Page 475 U. S. 756
offer is the plaintiff's alone, and the lawyer must abide by the
plaintiff's decision.
See, e.g., ABA, Model Rules of
Professional Conduct 1.2(a) (1984); ABA, Model Code of Professional
Responsibility EC 7-7 to EC 7-9 (1982). [
Footnote 2/8] As a formal matter, of course, the
statutory fee belongs to the plaintiff,
ante at
475 U. S. 730,
and n. 19, and thus technically the decision to waive entails a
sacrifice only by the plaintiff. As a practical matter, however,
waiver affects only the lawyer. Because "a vast majority of the
victims of civil rights violations" have no resources to pay
attorney's fees, H.R.Rep. 1, [
Footnote
2/9] lawyers cannot hope to recover fees from the plaintiff,
and must depend entirely on the Fees Act for compensation.
[
Footnote 2/10] The plaintiff
Page 475 U. S. 757
thus has no real stake in the statutory fee, and is unaffected
by its waiver.
See Lipscomb v. Wise, 643 F.2d 319, 320
(CA5 1981) (per curiam). Consequently, plaintiffs will readily
agree to waive fees if this will help them to obtain other relief
they desire. [
Footnote 2/11] As
summed up by the Legal Ethics Committee of the District of Columbia
Bar:
"Defense counsel . . . are in a uniquely favorable position when
they condition settlement on the waiver of the statutory fee: they
make a demand for a benefit that the plaintiff's lawyer cannot
resist as a matter of ethics, and one in which the plaintiff has no
interest, and therefore will not resist."
Op. No. 147, reprinted in 113 Daily Washington Reporter,
supra, n. 8, at 394.
Of course, from the lawyer's standpoint, things could scarcely
have turned out worse. He or she invested considerable
Page 475 U. S. 758
time and effort in the case, won, and has exactly nothing to
show for it. Is the Court really serious in suggesting that it
takes a study to prove that this lawyer will be reluctant when, the
following week, another civil rights plaintiff enters his office
and asks for representation? Does it truly require that somebody
conduct a test to see that legal aid services, having invested
scarce resources on a case, will feel the pinch when they do not
recover a statutory fee?
And, of course, once fee waivers are permitted, defendants will
seek them as a matter of course, since this is a logical way to
minimize liability. Indeed, defense counsel would be remiss not to
demand that the plaintiff waive statutory attorney's fees. A lawyer
who proposes to have his client pay more than is necessary to end
litigation has failed to fulfill his fundamental duty zealously to
represent the best interests of his client. Because waiver of fees
does not affect the plaintiff, a settlement offer is not made less
attractive to the plaintiff if it includes a demand that statutory
fees be waived. Thus, in the future, we must expect settlement
offers routinely to contain demands for waivers of statutory fees.
[
Footnote 2/12]
The cumulative effect this practice will have on the civil
rights bar is evident. It does not denigrate the high ideals that
motivate many civil rights practitioners to recognize that lawyers
are in the business of practicing law, and that, like other
business people, they are and must be concerned with earning a
living. [
Footnote 2/13] The
conclusion that permitting fee
Page 475 U. S. 759
waivers will seriously impair the ability of civil rights
plaintiffs to obtain legal assistance is embarrassingly
obvious.
Because making it more difficult for civil rights plaintiffs to
obtain legal assistance is precisely the opposite of what Congress
sought to achieve by enacting the Fees Act, fee waivers should be
prohibited. We have on numerous prior occasions held that
"a statutory right conferred on a private party, but affecting
the public interest, may not be waived or released if such waiver
or release contravenes the statutory policy."
Brooklyn Savings Bank v. O'Neil, 324 U.S. at
324 U. S. 704
(holding right to liquidated damages under Fair Labor Standards Act
nonwaivable).
See also e.g., Boyd v. Grand Trunk Western R.
Co., 338 U. S. 263,
338 U. S. 266
(1949) (holding venue provision of Federal Employers' Liability Act
nonwaivable);
Wilko v. Swan, 346 U.
S. 427,
346 U. S.
434-438 (1953) (holding void an agreement to arbitrate
in lieu of judicial remedy provided by Securities Exchange Act);
cf. James v. Home Construction Co. of Mobile, Inc., 689
F.2d 1357, 1359 (CA11 1982) (implying a right of action for
attorneys to seek fees under Truth-in-Lending Act to further
congressional policies). This is simply straightforward application
of the well-established principle that an agreement which is
contrary to public policy is void and unenforceable.
See
Restatement (Second) of Contracts § 178 (1981);
see also,
Brooklyn Savings Bank v. O'Neil, supra, at
324 U. S. 710;
Crites, Inc. v. Prudential Insurance Co., 322 U.
S. 408,
322 U. S. 418
(1944);
Weil v. Neary, 278 U. S. 160,
278 U. S.
171-174 (1929);
Woodstock Iron Co. v. Richmond &
Danville Extension Co., 129 U. S. 643,
129 U. S.
662-663 (1889). [
Footnote
2/14]
Page 475 U. S. 760
2
This all seems so obvious that it is puzzling that the Court
reaches a different result. The Court's rationale is that, unless
fee waivers are permitted, "parties to a significant number of
civil rights cases will refuse to settle. . . ."
Ante at
475 U. S. 736.
This is a wholly inadequate justification for the Court's
result.
First, the effect of prohibiting fee waivers on
settlement offers is just not an important concern in the context
of the Fees Act. I agree with the Court that encouraging
settlements is desirable policy. But it is
judicially
created policy, applicable to litigation of any kind and having no
special force in the context of civil rights cases. [
Footnote 2/15] The
congressional
policy underlying the Fees Act is, as I have argued throughout, to
create incentives for lawyers to devote time to civil rights cases
by making it economically feasible for them to do so.
Supra at
475 U. S.
745-753. [
Footnote
2/16] As explained above, permitting fee
Page 475 U. S. 761
waivers significantly undercuts this policy. Thus, even if
prohibiting fee waivers does discourage some settlements, a
judicial policy favoring settlement cannot possibly take
precedence over this express
congressional policy. We must
implement Congress' agenda, not our own.
In an attempt to justify its decision to elevate settlement
concerns, the Court argues that settlement "provides benefits for
civil rights plaintiffs as well as defendants, and is consistent
with the purposes of the Fees Act," because
"'[s]ome plaintiffs will receive compensation in settlement
where, on trial, they might not have recovered, or would have
recovered less than what was offered.'"
Ante at
475 U. S.
732-733 (quoting
Marek v. Chesny, 473 U. S.
1,
473 U. S. 10
(1985));
see also ante at
475 U. S. 731
(legislative history does not show that Congress intended to bar
"even [waivers] insisted upon by a civil rights plaintiff in
exchange for some other relief to which he is indisputably not
entitled . . . ") (footnote omitted).
As previously noted, by framing the purpose of the Fees Act in
very general terms, the Court merely obscures the proper focus of
discussion. The Fees Act was designed to help civil rights
plaintiffs in a particular way -- by ensuring that there will be
lawyers willing to represent them. The fact that fee waivers may
produce some settlement offers that are beneficial to a few
individual plaintiffs is hardly "consistent with the purposes of
the Fees Act,"
ante at
475 U. S. 733,
if permitting fee waivers fundamentally undermines what Congress
sought to achieve. Each individual plaintiff who waives his right
to statutory fees in order to obtain additional relief for himself
makes it that much more difficult for the next victim of a civil
rights violation to find a lawyer willing or able to bring his
case. As obtaining legal assistance becomes more difficult, the
"benefit" the Court so magnanimously
Page 475 U. S. 762
preserves for civil rights plaintiffs becomes available to fewer
and fewer individuals, exactly the opposite result from that
intended by Congress.
Moreover, I find particularly unpersuasive the Court's apparent
belief that Congress enacted the Fees Act to help plaintiffs coerce
relief to which they are "indisputably not entitled."
See
ante at
475 U. S. 731,
475 U. S. 732.
It may be that, in particular cases, some defendants' fears of
incurring liability for plaintiff's attorney's fees will give
plaintiffs leverage to coerce relief they do not deserve. If so,
this is an unfortunate cost of a statute intended to ensure that
plaintiffs can obtain the relief to which they are entitled. And it
certainly is not a result we must preserve at the expense of the
central purpose of the Fees Act.
Second, even assuming that settlement practices are relevant,
the Court greatly exaggerates the effect that prohibiting fee
waivers will have on defendants' willingness to make settlement
offers. This is largely due to the Court's failure to distinguish
the fee waiver issue from the issue of simultaneous negotiation of
fees and merits claims.
Supra at
475 U. S. 754.
The Court's discussion mixes concerns over a defendant's reluctance
to settle because total liability remains uncertain with reluctance
to settle because the cost of settling is too high.
See
ante at
475 U. S.
734-737. However, it is a prohibition on simultaneous
negotiation, not a prohibition on fee waivers, that makes it
difficult for the defendant to ascertain his total liability at the
time he agrees to settle the merits. Thus, while prohibiting fee
waivers may deter settlement offers simply because requiring the
defendant to pay a "reasonable attorney's fee" increases the total
cost of settlement, this is a separate issue altogether, and the
Court's numerous arguments about why defendants will not settle
unless they can determine their total liability at the time of
settlement,
ante at
475 U. S. 734,
475 U. S. 735,
475 U. S. 736,
are simply beside the point. [
Footnote 2/17] With respect
Page 475 U. S. 763
to a prohibition on fee waivers (and again merely assuming that
effects on settlement are relevant), the sole question to be asked
is whether the increased cost of settlement packages will prevent
enough settlement offers to be a dispositive factor in this
case.
The Court asserts, without factual support, [
Footnote 2/18] that requiring defendants to pay
statutory fee awards will prevent a "significant number" of
settlements.
Ante at
475 U. S.
734-735. It is, of course, ironic that the same absence
of "documentation" which makes comment on the effects of
permitting fee waivers "premature at this juncture,"
ante at
475 U. S. 742,
n. 34, does not similarly affect the Court's willingness to
speculate about what to expect if fee waivers are
prohibited. Be that as it may, I believe that the Court
overstates the extent to which prohibiting fee waivers will deter
defendants from making settlement offers. Because the parties can
negotiate a fee (or a range of fees) that is not unduly high and
condition their settlement on the court's approval of this fee, the
magnitude
Page 475 U. S. 764
of a defendant's liability for fees in the settlement context
need be neither uncertain nor particularly great. [
Footnote 2/19] Against this, the defendant must
weigh the risk of a nonnegotiated fee to be fixed by the court
after a trial; as the Court reminds us, fee awards in
this
context may be very uncertain and, potentially, of very great
magnitude.
See ante at
475 U. S.
734-735, nn. 23, 24. Thus, powerful incentives remain
for defendants to seek settlement. Moreover, the Court's decision
last Term in
Marek v. Chesny, 473 U. S.
1 (1985), provides an additional incentive for
defendants to make settlement offers, namely, the opportunity to
limit liability for attorney's fees if the plaintiff refuses the
offer and proceeds to trial.
All of which is not to deny that prohibiting fee waivers will
deter some settlements; any increase in the costs of settling will
have this effect. However, by exaggerating the size and the
importance of fee awards, and by ignoring the options available to
the parties in settlement negotiations, the Court makes predictions
that are inflated. An actual disincentive to settling exists only
where three things are true: (1) the defendant feels he is likely
to win if he goes to trial, in which case the plaintiff will
recover no fees; (2) the plaintiff will agree to relief on the
merits that is less costly to the defendant than litigating the
case; and (3) adding the cost of a negotiated attorney's fee makes
it less costly for the defendant to litigate. I believe that this
describes a very small class of cases -- although, like the Court,
I cannot "document" the assertion.
C
I would, on the other hand, permit simultaneous negotiation of
fees and merits claims, since this would not contravene
Page 475 U. S. 765
the purposes of the Fees Act. Congress determined that awarding
prevailing parties a "reasonable" fee would create necessary -- and
sufficient -- incentives for attorneys to work on civil rights
cases. Prohibiting plaintiffs from waiving statutory fees ensures
that lawyers will receive this "reasonable" statutory fee. Thus, if
fee waivers are prohibited, permitting simultaneous fees and merits
negotiations will not interfere with the Act; the lawyer will still
be entitled to, and will still receive, a reasonable attorney's
fee. Indeed, permitting simultaneous negotiations in such
circumstances may even enhance the effectiveness of the Fees Act by
making it easier for a lawyer to dispose of his cases more quickly.
This frees up the lawyer's time to take other cases, and may
enhance his reputation as an effective advocate who quickly obtains
relief for clients.
IV
Although today's decision will undoubtedly impair the
effectiveness of the private enforcement scheme Congress
established for civil rights legislation, I do not believe that it
will bring about the total disappearance of "private attorneys
general." It is to be hoped that Congress will repair this Court's
mistake. In the meantime, other avenues of relief are available.
The Court's decision in no way limits the power of state and local
bar associations to regulate the ethical conduct of lawyers.
Indeed, several Bar Associations have already declared it unethical
for defense counsel to seek fee waivers.
See Committee on
Professional Ethics of the Association of the Bar of the City of
New York, Op. No. 8280 (1985); District of Columbia Legal Ethics
Committee, Op. No. 147,
supra, n. 8, 113 Daily Washington
Law Reporter, at 389. Such efforts are to be commended, and, it is
to be hoped, will be followed by other state and local
organizations concerned with respecting the intent of Congress and
with protecting civil rights.
Page 475 U. S. 766
In addition, it may be that civil rights attorneys can obtain
agreements from their clients not to waive attorney's fees.
[
Footnote 2/20] Such agreements
simply replicate the private market for legal services (in which
attorneys are not ordinarily required to contribute to their
client's recovery [
Footnote
2/21]), and thus will enable civil rights practitioners to make
it economically feasible -- as Congress hoped -- to expend time and
effort litigating civil rights claims.
During the floor debates over passage of the Fees Act, Senator
Hugh Scott reminded the Congress in terms that might well have been
addressed to the Court today that
"we must bear in mind at all times that rights that cannot be
enforced through the legal process are valueless; such a situation
breeds cynicism about the basic fairness of our judicial system.
[We] must be vigilant to insure that our legal rights are not
hollow ones."
122 Cong.Rec. 31471 (1976).
[
Footnote 2/1]
This is not to deny that the threat of liability for attorney's
fees contributes to compliance with civil rights laws, and that
this is a desirable effect.
See Hensley v. Eckerhart,
461 U. S. 424,
461 U. S. 443,
n. 2 (1983) (BRENNAN, J., concurring in part and dissenting in
part);
see also Cooper v. Singer, 719 F.2d 1496, 1501
(CA10 1983);
Shadu v. Beal, 685 F.2d 824, 829 (CA3 1982);
Oldham v. Ehrlich, 617 F.2d 163, 168 (CA8 1980);
Dennis v. Chang, 611 F.2d 1302, 1306 (CA9 1980); Calhoun,
Attorney-Client Conflicts of Interest and the Concept of
Non-Negotiable Fee Awards Under 42 U.S.C. § 1988, 55 U.Colo.L.Rev.
341, 343 (1984); Kraus, Ethical and Legal Concerns in Compelling
the Waiver of Attorney's Fees by Civil Rights Litigants in Exchange
for Favorable Settlement of Cases Under the Civil Rights Attorney's
Fees Awards Act of 1976, 29 Vill.L.Rev. 597, 643-644 (1984). My
point is simply that this effect was not what led Congress to enact
the Fees Act. Significantly, the Court cites nothing from the
legislative history -- or anywhere else, for that matter -- to
support its argument that, in awarding attorney's fees to
prevailing parties, Congress thought it was merely adding one more
remedy to the plaintiff's existing "arsenal." As the discussion
which follows clearly establishes, this is because Congress viewed
attorney's fees as a special kind of remedy designed to serve a
specific purpose.
[
Footnote 2/2]
Alyeska was decided on May 12, 1975. Senator Tunney introduced
S. 2278 on July 31, 1975. The bill was signed by the President and
became effective on October 19, 1976.
[
Footnote 2/3]
Even the Court acknowledges that
"it is undoubtedly true that Congress expected fee-shifting to
attract competent counsel to represent citizens deprived of their
civil rights. . . ."
Ante at
475 U. S. 731
(footnote omitted). Ironically, the only authority the Court cites
from the legislative history is in support of this statement.
[
Footnote 2/4]
The Court seems to view the options as limited to two: either
the Fees Act confers a benefit on attorneys, a conclusion which is
contrary to both the language and the legislative history of the
Act,
ante at
475 U. S.
730-731, or the Fees Act confers a benefit on individual
plaintiffs, who may freely exploit the statutory fee award to their
own best advantage. It apparently has not occurred to the Court
that Congress might have made a remedy available to individual
plaintiffs primarily for the benefit of the public. However,
Congress often takes advantage of individual incentives to advance
public policy, relying upon "private attorneys general" to secure
enforcement of public rights without the need to establish an
independent enforcement bureaucracy. As long as the interests of
individual plaintiffs coincide with those of the public, it does
not matter whether Congress intended primarily to benefit the
individual or primarily to benefit the public. However, when
individual and public interests diverge, as they may in particular
situations, we must interpret the legislation so as not to
frustrate Congress' intentions.
See Brooklyn Savings Bank v.
O'Neil, 324 U. S. 697,
324 U. S. 704
(1945).
[
Footnote 2/5]
The assumption that fee awards are identical to other remedies
like damages or injunctive relief makes it easy for the Court to
conclude that Congress would not have intended to prohibit fee
waivers in exchange for relief on the merits "any more than it
intended to bar a concession on damages to secure broader
injunctive relief."
Ante at
475 U. S.
731.
[
Footnote 2/6]
Thus, even if statutory fees cannot be waived, the parties may
still want to agree on a fee (or a range of acceptable fees) that
they believe to be within the range of fees authorized by the Act.
The parties may then, if they choose to do so, make their
settlement on the merits contingent upon the district court's
approval of their negotiated fee as within the range of
"reasonable" fees contemplated by the Fees Act.
[
Footnote 2/7]
It is especially important to keep in mind the fragile nature of
the civil rights bar. Even when attorney's fees are awarded, they
do not approach the large sums which can be earned in ordinary
commercial litigation.
See Berger, Court Awarded
Attorneys' Fees: What is "Reasonable"?, 126 U.Pa.L.Rev. 281,
310-316 (1977). It is therefore cost-inefficient for private
practitioners to devote much time to civil rights cases.
Consequently, there are very few civil rights practitioners, and
most of these devote only a small part of their time to such cases.
Kraus, 29 Vill.L.Rev. at 633-634 (citing studies indicating that
less than 1% of lawyers engage in public interest practice).
Instead, civil rights plaintiffs must depend largely on legal aid
organizations for assistance. These organizations, however, are
short of resources and also depend heavily on statutory fees.
H.R.Rep. 3; Kraus,
supra, at 634;
see also Blum v.
Stenson, 465 U. S. 886,
465 U. S.
894-896 (1984).
[
Footnote 2/8]
The attorney is, in fact, obliged to advise the plaintiff
whether to accept or reject the settlement offer based on his
independent professional judgment, and the lawyer's duty of
undivided loyalty requires that he render such advice free from the
influence of his or his organization's interest in a fee.
See,
e.g., ABA, Model Code of Professional Responsibility EC 6-1,
EC 6-2, DR 6-101(A) (1982); ABA, Model Rules of Professional
Conduct 1.7(b), 2.1 (1984). Thus, counsel must advise a client to
accept an offer which includes waiver of the plaintiff's right to
recover attorney's fees if, on the whole, the offer is an
advantageous one.
See, e.g, Commission Op. No. 17 (1981),
Advisory Opinions of the Grievance Commission of the Board of
Overseers of the Bar of Maine 69, 70 (1983); District of Columbia
Bar, Legal Ethics Committee, Op. No. 147, reprinted in 113 Daily
Washington Law Reporter 389, 394 (1985). As the discussion in text
makes clear, the plaintiff makes no sacrifice by waiving statutory
attorney's fees, and thus a settlement offer is not made less
attractive by the inclusion of a demand for a fee waiver.
[
Footnote 2/9]
See also S.Rep. 2; 122 Cong.Rec. 31472 (1976) (remarks
of Sen. Kennedy);
id. at 31832 (remarks of Sen. Hathaway)
("[R]ight now the vindication of important congressional policies
in the vital area of civil rights is made to depend upon the
financial resources of those least able to promote them"). Indeed,
legal aid organizations receiving funds under the Legal Services
Corporation Act, 42 U.S.C. §§ 2996-2996
l, are prohibited
from representing individuals who are capable of paying their own
legal fees.
See § 2996f(b)(1); 46 CFR §1609 (1985).
[
Footnote 2/10]
Nor can attorneys protect themselves by requiring plaintiffs to
sign contingency agreements or retainers at the outset of the
representation.
Amici legal aid societies inform us that
they are prohibited by statute, court rule, or Internal Revenue
Service regulation from entering into fee agreements with their
clients. Brief for NAACP Legal Defense and Educational Fund, Inc.,
et al. as
Amici Curiae 10-11; Brief for Committee
on Legal Assistance of the Association of the Bar of the City of
New York as
Amicus Curiae 12-13. Moreover, even if such
agreements could be negotiated, the possibility of obtaining
protection through contingency fee arrangements is unavailable in
the very large proportion of civil rights cases which, like this
case, seek only injunctive relief. In addition, the Court's
misconceived doctrine of state sovereign immunity,
see
Atascadero State Hospital v. Scanlon, 473 U.
S. 234,
473 U. S. 247
(1985) (BRENNAN, J., dissenting), precludes damages suits against
governmental bodies, the most frequent civil rights defendants.
Finally, even when a suit is for damages, many civil rights actions
concern amounts that are too small to provide real compensation
through a contingency fee arrangement. Of course, none of the
parties has seriously suggested that civil rights attorneys can
protect themselves through private arrangements. After all,
Congress enacted the Fees Act because, after
Alyeska, it
found such arrangements wholly inadequate.
Supra at
475 U. S.
748-751.
[
Footnote 2/11]
This result is virtually inevitable in class actions where, even
if the class representative feels sympathy for the lawyer's plight,
the obligation to represent the interests of absent class members
precludes altruistic sacrifice. In class actions on behalf of
incompetents, like this one, it is the lawyer himself who must
agree to sacrifice his own interests for those of the class he
represents.
See, e.g., ABA, Model Code of Professional
Responsibility EC 7-12 (1982).
[
Footnote 2/12]
The Solicitor General's suggestion that we can prohibit waivers
sought as part of a "vindictive effort" to teach lawyers not to
bring civil rights cases, Tr. of Oral Arg. 22, a point that the
Court finds unnecessary to consider,
ante at
475 U. S.
739-740, is thus irrelevant. Defendants will seek such
waivers in every case simply as a matter of sound bargaining.
Indeed, the Solicitor General's brief suggests that this will be
the bargaining posture of the United States in the future. Brief
for United States as
Amicus Curiae 12-13.
[
Footnote 2/13]
See Johnson, Lawyers' Choice: A Theoretical Appraisal
of Litigation Investment Decisions, 15 Law & Soc.Rev. 567
(1980-1981) (concluding that "fee for service" lawyers will
withdraw resources from a given case when total expected costs
exceed total expected benefits); Kraus, 29 Vill.L.Rev. at 637 ("No
matter how sophisticated the analysis of attorney responses
becomes, the conclusion remains that the more we decrease the
reasonable expectation of Fees Act awards, the less likely it is
that Fees Act cases will be initiated").
[
Footnote 2/14]
To be sure, prohibiting fee waivers will require federal courts
to make a determination they would not have to make if fees could
be waived. However, this additional chore will not impose a
significant burden. In assessing the impact of making statutory
fees nonwaivable on the business of the federal courts, it is
important not to overlook the context in which the fee
determination is made. Unlike in the adversarial context, if the
parties have agreed to a fee (or a range of acceptable fees) as
part of a settlement, the court will not be required to hear
testimony or engage in judicial factfinding in order to resolve
disputes over hours reasonably spent, hourly rates, and the like.
Similarly, the court will not have to decide whether to enhance the
lodestar to reflect high-quality representation or risk of
nonsuccess, or to prepare an opinion in anticipation of appellate
review. The court's simple task will be to review the parties' raw
billing data in order to determine whether the court itself
could reasonably have made a fee award of the amount
agreed to by the parties. Such calculations will, in the vast
majority of cases, require little time or effort.
[
Footnote 2/15]
By lessening docket congestion, settlements make it possible for
the judicial system to operate more efficiently and more fairly,
while affording plaintiffs an opportunity to obtain relief at an
earlier time. These benefits accrue when settlements are reached in
non-civil rights cases no less than in civil rights cases.
[
Footnote 2/16]
Settlement is discussed only once in the legislative history of
the Fees Act. The House Committee Report explained:
"The phrase 'prevailing party' is not intended to be limited to
the victor only after entry of a final judgment following a full
trial on the merits. It would also include a litigant who succeeds
even if the case is concluded prior to a full evidentiary hearing
before a judge or jury. . . . A 'prevailing' party should not be
penalized for seeking an out-of court settlement, thus helping to
lessen docket congestion."
H.R.Rep. 7.
[
Footnote 2/17]
For the reasons stated in
475 U. S. I
would permit simultaneous negotiation of fees and merits. The
parties could agree upon a reasonable fee which would be subject to
judicial approval under the Fees Act. Any settlement on the merits
could be made contingent upon such approval. By permitting
defendants to ascertain their total liability prior to settling,
this approach fully alleviates the Court's concerns in this
regard.
[
Footnote 2/18]
The Court does cite a few cases in which courts awarded
attorney's fees greater in value than the relief obtained on the
merits.
See ante at
475 U. S.
734-735, and nn. 24, 25. From these, the Court would
have us draw the inference that, without fee waivers, there will be
significantly fewer settlements. But what a few courts have done in
the context of adversarial proceedings tells us little about what
to expect when parties negotiate a reasonable fee award. A court
may exercise its discretion and fix a fee award at the upper end of
the range of reasonable fees, while the parties may agree in
negotiation to a figure in the middle or at the lower end of this
range.
The Court also cites a brief filed by petitioners in the
District Court which states that petitioners viewed the risk of a
large attorney's fee award as "
the most significant liability
in the case.'" Ante at 475 U. S. 735
(quoting Brief for Defendants in Support of Approval of Compromise
in Jeff. D. v. Evans, No. 80-4091 (Idaho), p. 5). This
self-serving statement, filed by petitioners to persuade the
District Court to approve a fee waiver, is hardly authority for the
conclusion the Court seeks to establish.
[
Footnote 2/19]
Indeed, although such cases should be rare, in frivolous or
minor disputes, an agreement that no fees be awarded could be
approved by the court as "reasonable" under the Fees Act.
Cf. S.Rep. 5 (prevailing plaintiff should ordinarily
recover fees, but fees may be denied in "special circumstances");
Kerr v. Quinn, 692 F.2d 875 (CA2 1982);
Skehan v.
Board of Trustees of Bloomsburg State College, 436 F.
Supp. 657 (MD Pa.1977).
[
Footnote 2/20]
Since Congress has not sought to regulate ethical concerns
either in the Fees Act or elsewhere, the legality of such arguments
is purely a matter of local law.
See Nix v. Whiteside,
ante at
475 U. S. 176
(BRENNAN, J., concurring in judgment).
[
Footnote 2/21]
One of the more peculiar aspects of the Court's interpretation
of the Fees Act is that it permits defendants to require
plaintiff's counsel to contribute his compensation to satisfying
the plaintiff's claims. In ordinary civil litigation, no defendant
would make -- or sell to his adversary -- a settlement offer
conditioned upon the plaintiff's convincing his attorney to
contribute to the plaintiff's recovery. Yet today's decision
creates a situation in which plaintiff's attorneys in civil rights
cases are required to do just that. Thus, rather than treating
civil rights claims no differently than other civil litigation,
ante at
475 U. S. 733
(quoting
Marek v. Chesny, 473 U. S.
1,
473 U. S. 10
(1985)), the Court places such litigation in a quite unique -- and
unfavorable -- category.