cludes fee awards against the states on a sovereign immunity theory." Since the circuits are split on the effect of sovereign immunity of the states on feeshifting, this approach can only have a limited impact on the development of private enforcement, particularly in view of the demise of the private attorney general rationale.

The cases are legion which the courts would have awarded attorneys' fees to public interest plaintiffs but for the sovereign immunity bar." Constraints imposed by § 2412 are particularly acute where the suit is brought under the provisions of NEPA, in which the federal government is invariably the defendant. 100 The sovereign immunity bar, taken together with the absence of feeshifting authorizations in major environmental statutes and judicial preclusion of awards based on the private attorney general theory, has severely limited the range in which the courts may operate to effectuate the established Congressional policy of encouraging private enforcement. Therefore Congress should evaluate and resolve the conflicting policies behind the sovereign immunity bar and citizen suit provisions in environmental legislation.

IV. JUDICIAL TREATMENT OF FEE-SHIFTING AND THE GROWTH OF THE
PRIVATE ATTORNEY GENERAL RATIONALE

A. The Early Development of Fee-Shifting

101

in

Fee-shifting, in its infancy, was employed by the courts as a mechanism to spread the costs of successful suit among the plaintiff and the beneficiaries of the litigation. The early cases making awards for this purpose were grounded in the original authority of the chancellor to do equity in particular cases. So reasoned the Supreme Court in the leading case, Trustee v. Greenough, which a plaintiff who succeeded in rescuing a trust fund from a delinquent trustee was allowed an award of attorneys' fees to be drawn from the reclaimed fund. The suit, filed on behalf of other participants in the fund, created a common fund from which equity demanded a ratable contribution for legal fees incurred. The Court in Trustees found nothing in the 1853 fee bill,10 which had severely limited awards of counsel fees, to deprive equity courts of their "long established control" over the costs and charges of litigation involving the rights to a general or common fund.108

In Sprague v. Ticonic National Bank, the Court further developed the "common fund" exception to the rule prohibiting fee-shifting. There, a successful suit against an insolvent bank, which resulted in a lien on funds earmarked for repayment of money deposited by the plaintiff, established, by collateral

27 The Eleventh Amendment provides as follows: "The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State or by Citizens or Subjects of any Foreign State." U.S. Const., amend. XI. The leading case construing the Amendment with regard to judgments and awards against the State is Edelman v. Jordan, 415 U.S. 651 (1974). Compare La Raza Unida v. Volpe, 57 F.R.D. 94, 101-02 n. 11 (N.D. Cal. 1972) with Named Individual Members of the San Antonio Conservation Society v. Texas Highway Dep't, 496 F. 2d 1017, 1026 (5th Cir. 1974), cert. denied, 420 U.S. 926 (1975). For more extensive consideration of the problem see Note, The Eleventh Amendment Does Not Bar An Award of Attorneys' Fees Based on the Private Attorney General Theory, 32 Wash. & Lee L. Rev. 133 (1975); Comment, Liability for Attorney's Fees in the Federal Courts-The Private Attorney General Exception, 16 B.C. Ind. & Com. L. Rev. 201, 230 (1975): Comment, Attorneys' Fees and the Eleventh Amendment, 88 Harv. L. Rev. 1875, 1902 (1975); Note, Awarding Attorney's Fees Against a State Official Sued in His Official Capacity After Edelman v. Jordan, 55 B.U.L. Rev. 228, 241 (1975). All of the above named commentators concluded that fee awards are a permissible imposition on state treasuries.

98 While recognizing the disparity among the lower courts on the issue, the Supreme Court. in Alyeska, 421 U.S. at 269-70 n. 44 (1975) declined to address the question. Since Alyeska, the Court has elected not to hear cases which present Eleventh Amendment issues with regard to fee-shifting. See, e.g., Taylor v. Perini, 503 F. 2d 899 (6th Cir. 1974), vacated and remanded for further consideration in light of Alyeska, 421 U.S. 982 (1975); Named Individual Members of the San Antonio Conservation Society v. Texas Highway Dep't, 496 F.2d 1017 (5th Cir. 1974), cert. denied, 420 U.S. 926 (1975).

99 E.g., Committee to Stop Route 7 v. Volpe, 4 ERC 1681 (D. Conn. 1972).

100 E.g., Alyeska, 421 U.S. 240 (1975); Sierra Club v. Lynn, 502 F. 2d 43 (5th Cir. 1974), cert. denied, 421 U.S. 994 (1975).

101 105 U.S. 527 (1881) [hereinafter cited as Trustees].

102 Act of February 26, 1853, 10 Stat. 161, ch. 80 § 1. For a discussion of the statute and its present day vitality, see text at notes 39-44, supra.

103 Trustees, 105 U.S. at 536. This exception to the American Rule was extended by Central R.R. & Banking Co. v. Pettus, 113 U.S. 146 (1885), to give directly to plaintiff's attorney a right to recover reasonable fees from the beneficiaries of a fund created or retained by his efforts.

104 307 U.S. 161 (1939) [hereinafter cited as Sprague].

estoppel, the rights of fourteen other depositors who were not represented in the suit. The absence of a class action or the actual creation of a fund was held not to preclude the reimbursement of counsel fees on the theory that plaintiff's success would have a stare decisis effect entitling others similarly situated to enforce their own liens against the banks.10 Justice Frankfurter, speaking for the Court in Sprague, noted that the creation, in essence, of a constructive fund, was a judicial act that "hardly touch (ed)" the general equity power of the federal courts "to do justice between a party and the beneficiaries of his litigation." 108 This broad reading of the equitable exception to the American Rule for common fund cases proved to be an important antecedent to the development of the private attorney general theory discussed below.107

110

In contrast to the cost spreading rationale in common fund cases, the federal courts, in the exercise of their equity powers, have taxed counsel fees against parties acting in bad faith prior to or during the litigation as a punishment for such conduct. The courts have found an award of reasonable attorneys' fees appropriate where the unsuccessful litigant has enagaged in vexatious, harassing, dilatory, or otherwise unreasonable conduct.10 For example, defendants found to have wilfully disobeyed or failed to make good faith efforts to comply with constitutional imperatives in desegregation 109 and reapportionment cases have been taxed under the punitive rationale of the bad faith exception. Furthermore, a court may assess attorneys' fees for disobedience of a judicial order. Although the bad faith rationale has not experienced the same expansion as the other equitable exceptions the demise of the private attorney general doctrine may prompt the courts to look more carefully at the behavior of the ligitants in search of a non-statutory basis for an award of counsel fees." B. Fee-Shifting in the Public Interest: Toward a Private Attorney General Rationale

114

112

111

The need to encourage citizens to litigate important social issues and to vindicate personal rights has resulted in an effort by the judiciary to expand access to the courts. Predicated, in part, on the recognition of practical difficulties inherent in citizen participation in modern government and influence in bureaucratic decisionmaking." these judicial efforts have chipped away at the barriers which had previously relegated individual grievances to the cumbersome legislative process. The creation of private rights of action under federal statutes which were merely declarative of certain rights or provided only for government enforcement 15 has contributed to increased access to the federal courts. In the environmental area, relaxation of standing requirements to permit challenges to agency action by public interest groups reflects judicial cognizance of the role of the courts in protecting our natural resources. Set in the context of these developments, fee-shifting in public interest litigation can be understood as a logical extension of these attempts to open the courts to legitimate citizen grievances.

105 Id. at 167.

116

100 Id. This expansive construction of the power of equity is echoed in other decisions by the Court. See, e.g., Union P. Ry. Co. v. Chicago R.I. & P. Ry. Co., 163 U.S. 564, 601 (1896); Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946).

107 See text at notes 129-40 infra. For a detailed, but more critical analysis of the "common fund" cases, see Dawson, Lawyers and Involuntary Clients in Public Interest Litigation, 88 Harv. L. Rev. 849, 850-81 (1975).

106 See, e.g., Vaughan v. Atkinson, 369 U.S. 527, 530-31 (1962); Kinnear-Weed Corp. v. Humble Oil & Refining Co.. 441 F. 2d 631, 637 (5th Cir. 1971); see also 6 J. Moore, Federal Practice § 54.77(2), p. 1709 (2d ed. 1974).

100 See, e.g., Bell v. School Bd. of Powhatan Cty., 321 F. 2d 494, 500 (4th Cir. 1963); Rolfe v. County Bd. of Educ. of Lincoln Cty., 391 F. 2d 77, 81 (6th Cir. 1968).

110 Sims v. Amos, 340 F. Supp. 691 (M.D. Ala.), aff'd mem.. 409 U.S. 942 (1972). See Alyeska, 421 U.S. at 270 n. 46 (1975) (rejecting the application of the private attorney general rationale in Sims but approving of the bad faith ground).

111 E.g., Toledo Scale Co. v. Computing Scale Co., 261 U.S. 399 (1923).

112 See, e.g., Doe v. Poelker, 515 F. 2d 541, 547 (8th Cir. 1975).

118 Flast v. Cohen, 392 U.S. 83, 111 (1968) (Douglas, J., concurring); N.A.A.C.P. v. Button, 371 U.S. 415. 430 (1963).

114 Jones v. Alfred H. Mayer Co.. 392 U.S. 409, 414 n. 13 (1968); cf. Bivens v. Six Unknown Named Agents Federal Bureau of Narcoties, 403 U.S. 388 (1971).

115 J. I. Case Co. v. Borak, 377 U.S. 426 (1964); Allen v. State Bd. of Elections, 393 U.S. 544 (1969); but see Holloway v. Bristol-Myers Corp., 327 F. Supp. 17. 21-22 D.D.C. 1971). 110 See United States v. Students Challenging Regulatory Agency Procedures, 412 U.S. 660 (1973); Sierra Club v. Morton, 405 U.S. 727 (1972).

118

While the coalescence of the growth of equity power to transfer fees and the recently expanded access to the courts provided familiar ground for the courts to base awards to public interest plaintiffs, the federal judiciary primarily looked to Congressional policy as the foundation upon which the build the private attorney general doctrine. With the appearance of early fee-shifting provisions in certain enforcement statutes,117 some lower federal courts were willing to extrapolate from this Congressional inclination a basis for awarding fees to private parties suing to enforce broad statutory policies, even where the relevant statute was silent on the fee award question. The Supreme Court, however, was initially reticent to go beyond the boundaries of statutory fee-shifting. In Fleischmann Distilling Corporation v. Maier Brewing Company,1 119 the Court held an award of attorneys' fees inappropriate where the applicable trademark statute 120 "meticulously" provided the complete remedies available under the act without authorizing the transfer of litigation costs.12 Basic to the holding in Fleischmann was the Court's adoption of the canon of statutory construction, expressio unius est exclusio alterius, which states, that specific mention of one remedy implies exclusion of another. This conservative approach to fee-shifting temporarily chilled the development of awards as a method of mitigating the economic deterrent to private enforcement of federal legislation.122

124

One year later the Court had occasion to make substantial inroads into Fleischmann. The per curiam opinion in Newman v. Piggie Park Enterprises 123 stands as the foundation and most concise statement of the now defunct private attorney general rationale. In a suit brought under Title II of the Civil Rights Act of 1964 to enjoin racial discrimination in a restaurant chain, the court allowed the successful plaintiffs an award pursuant to the fee-shifting provision in the Act.125 More importantly, the Court went further in dicta by declaring that a plaintiff who obtains an injunction under the the Act, "does so not for himself alone but as a 'private attorney general,' vindicating a policy that Congress considered of the highest priority." 12 The Court relied explicitly on 'the strength of the legislative history and implicitly on the heightened national demand for the eradication of racial discrimination that marked the 1960's in concluding that the Congressional policy was in fact of the "highest priority." " Despite the strong dicta in Piggie Park, the decision had to be limited to statutory fee-shifting issues. Expansion by the Court was required in order to develop the private attorney general doctrine into an equitable exception to be operative in the absence of specific statutory authorization. Such expansion came indirectly from the Court in Mills v. Electric Auto-Lite Company. 129 The action was brought as a shareholders' derivative suit under § 14(a) of the Securities Exchange Act of 1934 to set aside a merger approved by the shareholders on the basis of a 'misleading proxy statement. The Court held that an award of attorneys' fees was appropriate notwithstanding the absence of specific statutory authorization for fee-shifting or a common financial benefit or fund created by the suit.

130

128

Confronted with similar Congressional treatment of fee awards as was presented in Fleischmann, the Court was forced to detail its attempt to distin

117 E.g., Securities & Exchange Act of 1934 § 18(a), 15 U.S.C. § 78r (a) (1970).

118 See, e.g., Rolax v. Atlantic Coast Line R.R. Co., 186 F. 2d 473 (4th Cir. 1951) (civil rights violation within a union).

119 386 U.S. 714 (1967) [hereinafter cited as Fleischmann].

120 Lanham Act, 15 U.S.Č. § 1051 et seq., (1970).

121 Fleischmann, 386 U.S. at 719.

122 See, e.g., Stevens v. Abbott, Proctor & Paine. 288 F. Supp. 836, 848 (E.D. Va. 1968) (fees denied in suit brought under the Securities Act of 1934).

123 390 U.S. 400 (1968).

124 Civil Rights Act of 1964. Title II, § 204 (1), 42 U.S.C. § 2000a-3 (a) (1970). 125 Id. § 204 (b), 42 U.S.C. § 2000a-3 (b) (1970).

126 Piggie Park, 390 U.S. at 402. The private attorney general theory was first employed to expand the class of persons who had standing to challenge administrative action. Associated Indus. v. Ickes, 134 F. 2d 694, 704 (2d Cir.), dismissed as moot, 320 U.S. 707 (1943). 127 Piggie Park, 390 U.S. at 402 n. 3, citing S. Rep. No. 872, 88th Cong., 2d Sess., pt. 1, at 11, 24 (1964); H.R. Rep. No. 914, 88th Cong., 1st Sess., pt. 1, at 18 (1963); H.R. Rep. No. 914, 88th Cong., 1st Sess., pt. 2, at 1-2 (1963).

128 The holding of Piggie Park was twice reaffirmed in school desegregation suits brought under the Emergency School Aid Act of 1972, 20 U.S.C. § 1601 et seq. (Supp. IV, 1974). Northcross v. Bd. of Educ., 412 U.S. 427 (1973); Bradley v. School Bd., 416 U.S. 698 (1974). Section 718 of the Act, id. § 1617, a discretionary fee-shifting provision similar to the clause .construed in Piggie Park, was held in both cases to require an award of fees to the successful plaintiffs. The Court in Northcross found that the plaintiffs were "'private attorneys general' vindicating national policy in the same sense as are plaintiffs in Title II actions." 412 U.S. at 428.

129396 U.S. 375 (1970) [hereinafter cited as Mills].

120 15 U.S.C. § 78n (a) (1970).

133

guish that case. Provisions for fee-shifting under two other sections of the Securities Exchange Act 13 rendered the statute susceptible to the experssio unius argument held applicable to the remedies available in Fleischmann. However, the Mills Court, relying in part on an analogous Second Circuit decision,122 held that the absence of express Congressional authorization for a fee-shifting under § 14(a) did not preclude such an award in certain cases.1 The Mills opinion drew an analogy from the recently acknowledged judicial power to create a private right of action under the Act 14 to establish the ability to award counsel fees.135 Thus, the Court concluded that the lack of Congressional mandate for fee-shifting under the statutory section in issue did not deprive a court of the power to award counsel fees in appropriate circumstances."

136

To buttress this circumvention of Congressional silence, the traditional formulation of the common fund exception was expanded to encompass benefits to a corporation and its shareholders which were incapable of expression in monetary terms. This alternative holding provided the impetus for the lower courts to apply the private attorney general rationale ot non-statutory fee-shifting. The Court held that where a successful suit conferred a "substantial benefit on an ascertainable class" and the "court's jurisdiction over the subject matter of the suit makes possible an award that will operate to spread the costs proportionately among them," fee-shifting is permissible."

137

The Court further emphasized the validity of this form of benefit in saying: "... private stockholders' actions of this sort 'involve corporate therapeutics' and furnish a benefit to all shareholders by providing an important means of enforcement of the proxy statute.”1 "138 In effect, the construction that vindication of statutory policy was a significant benefit conferred upon the corporation by private enforcement suits engendered at least an expanded construction of equity powers under the common fund exception, if not its merger with the private attorney general theory articulated in Piggie Park. Mills was therefore read by the lower courts to provide authority in a broad range of cases for fee-shifting in the absence of express Congressional authorization."

139

C. Expansion of the Private Attorney General Theory in the Lower Federal Courts

The Inferior federal courts were particularly receptive to the Supreme Court's apparent expansion of equity power to award fees in the absence of statutory authorization. The broad language of Mills and Piggie Park was interpreted to permit awards to plaintiffs who effectuated "important" Congressional policies by securing rights and benefits due a certain class or group. For example, the Fifth Circuit gave Mills a typically generous reading, noting that the decision was "better understood as resting heavily on ‘overriding considerations' that private suits are necessary to effectuate congressional policy and that awards of attorneys' fees are necessary to encourage private litigants to initiate such suits." 140

The lower courts treated the size and relevant common interests of the class of beneficiaries more liberally than the immediately ascertainable class of share

151 Securities Exchange Act of 1934 §§ 9(e), 18(a), 15 U.S.C. §§ 781(e). 78r(a) (1970). 132 Smolowe v. Delendo Corp., 136 F. 2d 231 (2d Cir. 1943). The court in Smolowe awarded attorneys' fees, in a suit by stockholders to recover short swing profits for the corporation under § 16(b) of the Securities Act of 1934, "on the theory that the corporation which had received the benefit of attorney's services should pay the reasonable value thereof." Id. at 241.

139 396 U.S. at 390-91.

134 J. I. Case Co. v. Borak, 377 U.S. 426, 430-31 (1964).

135 Mills. 396 U.S. at 391.

136 Id. at 390-91.

137 Id. at 393-94.

138 Id. at 396. citing Hornstein, Legal Therapeutics: The "Salvage" Factor in Counsel Fee Awards, 69 Harv. L. Rev. 658, 659, 662-63 (1956).

139 The common fund exception was again given broad reach in Hall v. Cole, 412 U.S. 1 (1973). In that case, a former union member expelled for decrying certain union actions and policies, sued for reinstatement under § 102 of the Labor-Management Reporting and Disclosure Act. 29 U.S.C. § 412 (1970). The Supreme Court affirmed the award of attorneys' fees. despite the absence of a fee-shifting provision in § 102. Fleischmann was distinguished by reading authorization in that section to grant "such relief... as may be appropriate" to include fee awards. Under the expanded common benefit doctrine developed in Mills, the Court held the suit, by vindicating plaintiff's right of free speech guaranteed by the Act, had rendered a substantial benefit to the union and its membership. 412 U.S. at 8. The Court concluded that an award in this case fell "squarely within the traditional equitable power of federal courts to award such fees whenever 'overriding considerations indicate the need for such a recovery." Id. at 9, quoting Mills, 396 U.S. at 391-92.

140 Lee v. Southern Home Sites Corp., 444 F. 2d 143, 145 (5th Cir. 1971).

145

holders in the Mills case." The most significant development of the private attorney general doctrine came in suits vindicating federal rights and challenging racially discriminatory practices.14 Awards in these cases were often premised on the recognition that a "private attorney general" who advances the public interest should not be forced to bear the costs of litigation." Alternatively, the courts reasoned that the vindication of important rights ought not be made dependent upon the financial resources of the plaintiff; therefore, elimination of an impediment such as counsel fees would go far to encourage these suits.1 While the Supreme Court envisioned equity based awards as being discretionary," some of the lower courts held such an "award loses much of its discretionary character and becomes a part of the effective remedy a court should fashion to encourage public minded suits... and to carry out Congressional policy." 147 Environmental plaintiffs also benefited from the private attorney general doctrine, albeit to a lesser extent than civil rights plaintiffs. As noted above,i“ fee awards in environmental suits, particularly those brought under NEPA, were precluded by the sovereign immunity bar. Additionally, certain litigated environmental issues lacked clearly defined statutory and public policy imperatives that characterize racial discrimination and civil rights cases. The courts, lacking an unassailable public policy preference, were less willing to encourage conservationist suits through fee awards.140

Notwithstanding the sporadic incidence of fee-shifting in environmental litigation, the private attorney general doctrine provided an important impetus for litigation over ecological and conservation issues. In one of the leading cases applying the doctrine, La Raza Unida v. Volpe," 151 the district court awarded counsel fees to a public interest organization which had obtained an injunction halting the construction of a highway through public parklands. The court articulated three requirements the satisfaction of which would qualify plaintiffs for a fee award: "(1) the effectuation of strong public policies; (2) the fact that numerous people received benefits from plaintiffs' litigation success; (3) the fact that only a private party could have been expected to bring the action...." 152 In this particular suit, both federal and state agencies were named as defendants, resulting in a private party mounting the challenge. The requisite strength of public policy was found in federal legislation designed to prevent wholesale destruction of our natural resources by highway construction and to protect the interests of persons displaced by such projects. The consideration of alternative routes to highway projects running through parklands, which the

154

153

141 See, e.g., Calnetics Corp. v. Volkswagen of America, Inc., 353 F. Supp. 1219, 1225 (C.D. Cal. 1973) (fee awarded in private antitrust suit since plaintiff vindicated a compelling national economic interest which benefits inured to the "marketplace"); Brandenburger v. Thompson, 494 F. 2d 885, 888-89 (9th Cir. 1974) (fee awarded in suit striking down a durational residency requirement for welfare recipients which benefited a "significant class" composed of "potential welfare recipients and interstate travelers").

142 See, e.g., Donahue v. Staunton, 471 F. 2d 475 (7th Cir. 1972), cert. denied, 410 U.S. 955 (1973) (fee awarded in suit brought under 42 U.S.C. § 1983 (1970) to vindicate free speech guarantee); Sims v. Amos, 340 F. Supp. 691 (M.D. Ala.), aff'd mem,, 409 U.S. 942 (1972) (fee award to plaintiff who successfully sued the state on reapportionment issue); Wyatt v. Stickney, 344 F. Supp. 387 (M.D. Ala. 1972), aff'd in part sub nom. Wyatt v. Aderholt, 503 F. 2d 1305 (5th Cir. 1974) (fee award in suit establishing a constitutional right to treatment for mental patients).

143 See, e.g., Knight v. Auciello, 453 F. 2d 852 (1st Cir. 1972) (fee awarded in suit brought under 42 U.S.C. § 1982 (1970) based on racial discrimination in housing); N.A.A.C.P. v. Allen, 340 F. Supp. 703 (M.D. Ala. 1972), aff'd, 493 F. 2d 614 (5th Cir. 1974) (fee awarded in successful action to enjoin discrimination in state police hiring practices); see generally cases collected in Derfner, Attorneys' Fees in Pro Bono Publico Cases, reprinted in Hearings, supra note 12, at 862.

144 See, e.g., Fowler v. Schwarzwalder, 498 F. 2d 143, 145 (8th Cir. 1974).

145 See, e.g., Wyatt v. Stickney. 344 F. Supp. 387 (M.D. Ala. 1972), aff'd in part sub nom., Wyatt v. Aderholt, 503 F. 2d 1305 (5th Cir. 1974).

148 Hall v. Cole, 412 U.S. 1, 15 (1973).

147 Simms v. Amos. 340 F. Supp. 691, 694 (M.D. Ala.), aff'd mem., 409 U.S. 942 (1972). 148 See text at notes 99-100 supra.

149 Harrisburg Coalition Against Ruining the Environment v. Volpe, 381 F. Supp. 893, 89899 (M.D. Pa. 1974); cf. Delaware Citizens for Clean Air, Inc. v. Stauffer Chemical Co., 62 F.R.D. 353. 356 (D. Del. 1974).

150 See Witt, After Alyeska: Can the Contender Survive, Juris Doctor (October 1975), at 35.

151 57 F.R.D. 94 (N.D. Cal. 1972) [hereinafter cited as La Raza Unida]. 152 Id. at 101.

153 E.g., Department of Transportation Act of 1968 § 4(f), 49 U.S.C. § 1653(f) (1970). $201. 42 U.S.C. § 4621 (1970).

154 Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 1970 §201, 42 U.S.C. § 4621 (1970).