Therefore, the Court finds the consents, for whatever binding value they may have, to be null and void as against public policy. Considering the background and facts of this case, as well as the actual effort needed to win, the amount awarded to class counsel not only provides adequate compensation on an hourly basis but also includes a sufficient incentive for the work done. V. THE INTERVENOR'S ATTORNEY'S FEES AGREEMENTS ARE VOID AS AGAINST PUBLIC POLICY UNDER THE SPIKLER RULE, AND THE FEES MUST BE DETERMINED ON A QUANTUM MERUIT BASIS The Court finds that under the Spikler rule discussed above, the intervenors must be treated on the same basis as the members of the entire class. The Court finds each of the intervenors' contracts like those of the Kiser class, to be unconscionable and void as against public policy. The Court based its findings on the following facts: (1) that most of counsel's efforts were merely duplication of class counsel's efforts, and even at that were quite brief with little evidence of legal research and (2) that the contracts with all intervenors, except Mr. Moore and Mr. Adkin's, were signed long after the commencement of the attorney-client relationship; and 8 (3) the fees were excessive for the productive efforts actually expended; and (4) as in the case of the Kiser class, it can not be said that the parties, namely the intervenors, and their counsel were on an equal basis; and (5) it is undisputed that a fiduciary relationship exists between counsel and their clients; see, Spikler, supra; Udall, supra; and (6) the benefits created for the intervenors and the class were of a special nature. In other words, retroactive pension benefits obtained as a result of 20 years work in the coal mines and the reaching of 55 years is meager to say the least. For counsel to benefit from the illegal actions of the defendant trustees and their predecessors would be inconsistent with the high duties of the legal profession to assist the disadvantaged and the downtrodden when in need of legal help. In saying this, the Court is not unaware of the expenses involved in maintaining a law office and the facilities necessary to provide the kinds of services rendered by all counsel in this case. However, it must again be said that an attorney's public duty represents a higher calling than that of his private or personal interests. Therefore. the Court finds in light of the above considerations the award of fees herein should be determined on a quantum meruit basis. Considering that the Moore counsel expended only 130 hours in the case it is impossible to say that $21,791 in attorney's contingency fees is reasonable, and it would be unconscionable to tax meager lifetime pension benefits to this extent on a quantum meruit basis. It is apparent from counsel's diaries that the Moore attorney is judicious in the use of his time. However, since the diaries also indicate a good percentage of the time spent was for telephone calls, conferences with other counsel and the attorneys fees question, the Court has discounted the time actually spent by 30%, and multiplied the balance (91) by $40, resulting in an award of a reasonable fee of $3,640 to counsel for Moore, et al. The Court will award the Adkins group attorneys with the same amount as it did the Moore group. After studying the papers filed and diaries submitted, the attorneys for this group should have spent no more time than the Moore group attorney. Although the Court recognizes that different attorneys work at different speeds, the Court finds the number of hours the Moore counsel spent a better reflection of the actual result produced, and. therefore, applied the same time factor and hourly rate as used to determine the award for the Moore group's attorney, $3,640. Mr. Hensley's agreement was signed March 12, 1973; Mr. Madden's, March 3, 1972; Mr. Walker and Mr. Smith were notified in a letter from counsel of a contingent fee of 25% of their recovery on April 21, 1972; there is no showing that the men agreed to this amount in writing or otherwise. VI. THE COURT HAS THE EQUITY POWER TO TAX ATTORNEY'S FEES AGAINST THE DEFENDANT FUND FOR THE DOMINATING REASONS OF JUSTICE This Court has equity jurisdiction to impose attorney's fees upon the defendant "in exceptional cases and for dominating reasons of justice." Sprague v. Ticonic National Bank, 307 U.S. 161 (1939). Whereas, the Court is mindful of the long standing practice of deducting attorney's fees from the class recovery, so that the burden of the litigation is spread over the entire class benefiting from the suit, an exception exists in this case. Justice requires that the Defendants pay the costs and attorney's fees incurred in this suit to compel the Defendents to discontinue their protracted discriminatory conduct and breach of fiduciary duty. Vaughan v. Atkinson, 369 U.S. 527, 530-31 (1962); Rolax v. Atlantic Coast Line R. Co. 186 F.2d 473, 481 (4th Cir. 1951). At a hearing on August 1, 1973 on the matter of attorneys' fees, counsel for the Defendant Trustees also acknowledged the Court's discretionary power to impose upon them the award of the attorneys' fees for both the class and intervenors. The Defendants raised the question, however, whether the Court should do so, when the effect might be to further limit the fund from instituting the new Trust benefits. The Court realizes that in taxing the Fund, the Fund beneficiaries are the ones who will actually bear the burden. In this instance the Court finds the imposition would neither be burdensome nor unjustified. The Court based its findings on the facts that the award is a reasonable and modest one, and that the entire Fund benefited from this suit with the prevention of general fiduciary abuse and improvement of the institutional functioning of the Fund as an entity. Mills v. Electric Auto Lite Co., 396 U.S. 375, 391-92 (1970). Furthermore, the Court will require the Defendant to pay all legitimate expenses incurred by the parties, as provided by Rule 54 (d) of the Federal Rules of Civil Procedure. The total amounts that the Defendant is ordered to pay are as follows: (a) Kiser class attorneys: Attorneys fees. Expenses Total... (b) Moore intervenors: Attorneys fees. Expenses Total (c) Adkins intervenors: Attorneys fees. Total__ An Order will be entered in accordance with this Opinion. Dated: August 29, 1973 $62, 048. 00 2,725.00 $64, 773.00 $3, 640. 00 891. 32 $4, 531. 32 $3,640. 00 276. 75 $3, 916. 75 CHARLES R. RICHEY, United States Court of Appeals No. 72-1219 For the First Circuit NATURAL RESOURCES DEFENSE COUNCIL, INC., RHODE ISLAND TUBERCULOSIS AND v. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT. No. 72-1224 NATURAL RESOURCES DEFENSE COUNCIL, INC., PROJECT ON CLEAN AIR, ET AL., PETITIONERS, V. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT. ON PETITIONERS' MOTION FOR COSTS AND ATTORNEYS' FEES Before COFFIN, Chief Judge, ALDRICH and CAMPBELL, Circuit Judges. Richard E. Ayres and Thomas B. Arnold for petitioners. Thomas C. Lee, Attorney, Department of Justice, with whom Kent Frizzell, Assistant Attorney General, Edmund B. Clark, and Martin Green, Attorneys, Department of Justice, were on brief, for respondent in case 72-1219. John P. Hills, Attorney, Department of Justice, with whom Kent Frizzell, Assistant Attorney General, Edmund B. Clark, and Martin Green, Attorneys, Department of Justice, were on brief, for respondent in case 72-1224. 2 NATURAL RESOURCES DEFENSE COUNCIL V. E.P.A. October 1, 1973 CAMPBELL, Circuit Judge. Petitioners in Natural Resources Defense Council, Inc. v. Environmental Protection Agency, 478 F.2d 875 (1st Cir. 1973), now request this court to award them attorneys' fees as well as costs against the Environmental Protection Agency [EPA] for their efforts in obtaining orders requiring EPA to comply with certain of its obligations under the Clean Air Amendments of 1970, 42 U.S.C. §§ 1857c-5 et seq. We hold that petitioners are entitled to recover reasonable attorneys' fees and costs. Traditionally, a prevailing party usually receives costs. but not attorneys' fees. Compare Ehrenzweig, Reimbursement of Counsel Fees and the Great Society, 54 Calif. L. Rev. 792 (1966), McCormick, Counsel Fees and Other Expenses of Litigation as an Element of Damages, 15 Minn. L. Rev. 619 (1931), and Posner, An Economic Approach to Legal Procedure and Judicial Administration, 2 J. Legal Studies 399, 428, 437 (1973) with Goodhart, Costs, 38 Yale L.J. 849 (1929) and Note, Distribution of Legal Expenses Among Litigants, 49 Yale L.J. 699 (1940). Moreover, sovereign immunity would prevent a court, without congressional consent, from awarding even costs against the federal government or one of its agencies. Only in 1966 did Congress, by statute of general application, waive immunity from conventional costs; but the broad waiver still does not extend to attorneys' fees. 28 U.S.C. § 2412, infra; United States v. Chemical Foundation, Inc., 272 U.S. 1 (1926); Cassata v. Federal Savings & Loan Insurance Corp., 445 F.2d 122 (7th Cir. 1971). An early judicially-created exception to the no-fees rule was that attorneys' fees might be taxed to a private party who had sued or defended in bad faith. The award was to punish frivolous or ill-motivated litigation. See, e.g., Knight v. Auciello, 453 F.2d 852 (1st Cir. 1972); Comment, OPINION OF THE COURT. 3 The Allocation of Attorney's Fees After Mills v. Electric Auto-Lite Co., 38 U. Chi. L. Rev. 316, 317-23 (1971). Another exception was made in equity proceedings where a plaintiff recovered, through the litigation, a fund in which others were entitled to share. Costs "as between solicitor and client" were allowed to be paid from the fund not to punish the loser, but to prevent unfair advantage to non-litigant beneficiaries. See, e.g., Trustees v. Greenough, 108 U.S. 527, 532 (1882). Cf. Philadelphia v. Chas. Pfizer & Co., 345 F. Supp. 454, 482-83 (S.D.N.Y. 1972). Building upon the "fund" rationale, courts allowed attorneys' fees in other situations where to do so resulted in a more equitable allocation of the costs of suit among all who benefitted. See, e.g., Sprague v. Ticonic National Bank, 307 U.S. 161 (1939) (plaintiff's victory, in consequence of stare decisis, established the claims of fourteen other trusts pertaining to the same bonds; fees were assessed against the bonds.) Cf. Hornstein, Legal Therapeutics: The "Salvage" Factor in Counsel Fee Awards, 69 Harv. L. Rev. 658 (1956). Recently the notion of spreading the litigation costs equitably among all the beneficiaries has been coupled with that of encouraging suits which promote the public interest.1 Newman v. Piggie Park 1 Some courts have drawn a sharp distinction between "benefit" cases in which the suit serves the interests of a limited group, and "private attorney general" cases in which the whole public is the beneficiary either because it receives a boon directly or because some "strong public policy" is vindicated. See, e.g., La Raza Unida v. Volpe, 57 F.R.D. 94 (N.D. Cal. 1972) and cases cited therein. Cf. Hall v. Cole, 412 U.S. n.7, 41 U.S.L.W. 4658, 4660 n.7 (1973). However, after Hall and Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970), the concept of "benefit" includes any improvement, financial or otherwise, provided to the beneficiary group. Whether that group is limited or includes the whole public should therefore ordinarily not affect the form of analysis. The number of beneficiaries would be important only when the court needed to determine whether the benefit was sufficiently large to justify an award of fees, or when the fees would be calculated to relate to the quantum of benefit. |