decide which congressional policies were important enough and which were not important enough or which parts of the statute were important enough and which were not important enough to merit fee shifting. The fourth circuit, and the Supreme Court in Alyeska, felt that courts should not be in that position. That, so far as I know, is the only objection to the private attorney general theory I have ever heard. Mr. KASTENMEIER. My last question here is in terms of H.R. 4675, Mr. Crane's bill, which stems from a different philosophical basis, namely that these are individuals who are defendants against litigation precipitated by the Federal Government in which they prevail. Would you agree there is a need to award them attorneys' fees? Mr. DERFNER. I think there are certainly many cases in which a great deal of unfairness is brought about by a suit brought by the Federal Government, but before going the whole way of carving out a giant exception to the American rule, the appropriate place to start is with what the chairman suggested, by authorizing fees to be awarded against the United States when it brings a suit frivolously. I recognize what the Congressman from California said about the problem of finding "bad faith," but I think "frivolous" would be an acceptable standard that might solve some of those problems. But I do not think I would say that every time somebody is sued by the United States and wins, that he automatically gets his fees. Mr. KASTENMEIER. Thank you, Mr. Derfner and Mrs. Derfner for your contribution this morning. We are concluding this morning's testimony, but on Wednesday next in this room at 10 o'clock we will continue for our second, and for the time being our last day on hearings on the various bills before us relating to the award of attorneys' fees. Until 10 o'clock on Wednesday, this subcommittee is adjourned. [Whereupon, at 12:25 p.m., the subcommittee was adjourned, to reconvene Wednesday, October 8, 1975, at 10 a.m.] AWARDING OF ATTORNEYS' FEES WEDNESDAY, OCTOBER 8, 1975 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES, AND THE ADMINISTRATION OF JUSTICE OF THE COMMITTEE OF THE JUDICIARY, The subcommittee met, pursuant to recess, at 10:10 a.m. in room 2226, Rayburn House Office Building, the Hon. Robert W. Kastenmeier [chairman of the subcommittee] presiding. Present: Representatives Kastenmeier, Danielson, Drinan, Pattison, and Railsback.. Also present: Gail P. Higgins, counsel, and Thomas E. Mooney, associate counsel. Mr. KASTENMEIER. The committee will come to order. Today we resume the second day of hearings on the subject of awarding of attorneys' fees. The impetus for these hearings, for six of these eight attorneys' fees bills which are now pending in the subcommittee, is the Supreme Court's recent decision in the Alyeska case of May 12 of this year. In that case, the Court ruled the courts have no power to award attorneys' fees under the private attorney general theory, unless the statute specifically authorizes it. These hearings are the start of a legislative effort to focus on the problems and needs raised by the Alyeska case, and by any other situation which may justify awards. Today, we are pleased to have a distinguished panel of attorneys who will discuss the attorneys' fees problems in the context of public access to the courts, and administrative proceedings. On Monday, we received testimony from three Congressmen who separately initially sponsored a total of seven different bills. And today, we are very pleased to honor our colleague, Mark Andrews of North Dakota, who was the original sponsor of H.R. 8368. I am pleased to greet our colleague. TESTIMONY OF THE HONORABLE MARK ANDREWS, A REPRESENTATIVE AT LARGE IN CONGRESS FROM THE STATE OF NORTH DAKOTA Mr. ANDREWs. Thank you, Mr. Chairman. It is good to be here. I want to thank you for allowing me to appear before your distinguished subcommittee, and also for scheduling hearings on this legislation I have introduced. As you know, the fifth amendment to the Constitution provides, and I quote: "... nor shall private property be taken for public use with out just compensation." The intent and purpose behind this fifth amendment clause is to allow the Government to take property it deems essential for "public use," but at the same time, to put the landowner-condemnee back in the same or similar position he was before the condemnation occurred, by paying him "just compensation." Briefly, the reason I have introduced this legislation is to assure landowners that the letter, as well as the spirit, of the "just compensation" clause is fulfilled. Basically, the problem results wherein a landowner receives a just compensation award, which is then diminished up to a third, to pay court costs and attorneys' fee. As an example, I would like to insert for the record a case wherein a North Dakota farmer received for his land a judgment in the amount of $13,660.26. which was then reduced to $7,610.57 after he paid $2,244.40 in court costs and $3.805.29 in attorneys' fees. Is this "just compensation"? Has the landowner in this case been made whole? I think not. I would like, Mr. Chairman, to include this document at this point in the record. Mr. KASTENMEIER. Without objection, the case will be received and made part of the record. [The material referred to follows:] Mr. and Mrs. ALBERT E. KLAIN, ATTORNEYS AT LAW, BAIR, BROWN AND KAUTZMANN, DEAR FOLKS: We have received payment from the government on your condemnation case. Enclosed is a statement showing the distribution we will be making of the funds. If you would like to stop at our office at 1:30 on Tuesday, April 8, 1975, we will go over the entire matter with you and make disbursement of your share. If for any reason this isn't convenient, call Mrs. Shaw and she will make arrangements for another time for you. Very truly yours, Enclosure. BAIR, BROWN & KAUTZMANN. P.S. Both of you must come to the office to sign the check. Gross Recovery-. Less costs: Saugstad Knudson Bair, Brown & Kautzmann. Lindell Total Net recovery Less 1⁄2 attorneys' fees--‒‒. Net to client__. Total $13, 660. 26 978.00 1,234.00 12. 40 20.00 2, 244. 40 11, 415. 86 3,805. 20 7, 610. 57 6, 049. 69 Mr. ANDREWS. Some may argue that the case I have referred to is just an example of excessive attorneys' fees. However, I have been informed by many members of the bar in my State that a contingency fee of one-third is very common in condemnation actions. As I am not an attorney, I do not think it would be proper or fair for me to state what are or are not reasonable or unreasonable attorneys' fees. This is not the issue addressed in my legislation anyway. However, I do feel my proposed legislation would assure that landowners receive fair compensation for their property. It does this by allowing the court to award fees and expenses of attorneys to the condemnee. By doing this, the situation is eliminated wherein a landowner's award is diminished substantially by court costs and attorneys' fees. I would also like to point out that this legislation prevents a windfall to the landowner-condemnee by limiting costs to those actually incurred in litigation. Mr. Chairman, I suppose one could maintain that juries already take attorneys' fees into consideration when deciding on the amount of the award. However, it is just as easily arguable that juries do not and cannot take attorneys' fees into consideration, because of instructions from the bench. I am sure that opponents of this bill will also assert that its adoption will provide an incentive for landowners to litigate. Even so, the landowner under this legislation would only get what he is entitled to fair compensation for the value of his land. In closing, Mr. Chairman, I want to point out that I believe there are many landowners in my state who are not receiving "just compensation". As Members of Congress, I am sure that it is a firm desire of all of us to make sure that protections written into our Bill of Rights are indeed realized for the benefit of all. We cannot afford these abuses to continue. Again, I thank you for allowing me to testify before your committee. It is my hope that action will be taken on this legislation, as I know it has been the concern of other members in previous Congresses as well. Before answering questions, I would like to make some additional comments. First, I would briefly like to point out just why we have this problem in our State. We have built two interstate highways, one east and west across the State, one north and south across the State, and the question of compensation to the landowners has always been a matter of concern. Many of these landowners, because the government could not come in and give them substitute acreage were forced off the farm. Something that should be considered by this subcommittee in the area of condemnation reform is the following situation: if you are going to take a hundred acres from farmer A, maybe the Government could come in and offer him 100 acres of similar land in close proximity to the land he is now farming-and you eliminate the problem of how much it is worth, and a host of other things. The primary need of the man who owns the land is to get back into a condition he was in before the Government project came through. We are finding the same problem on canal rights of way, and other project area pickups for the Garrison Diversion project. And because of this, we have a great deal of interest in my state in condemnation reform. I would like to include in the record, if I might, Mr. Chairman, a statement from Stanley Moore, the president of the North Dakota Farmers Union, the largest farm organization in my State, that illustrates the problem they feel their farmers have; and letters from |