Hooker v. Hoover

882 F. Supp. 574, 1995 U.S. Dist. LEXIS 4888, 1995 WL 227584
CourtDistrict Court, N.D. Texas
DecidedApril 7, 1995
DocketCiv. Nos. 3:94-CV-0190-H, 3:94-CV-0520-H, 3:94-CV-0521-H, 3:94-CV-0577-H
StatusPublished

This text of 882 F. Supp. 574 (Hooker v. Hoover) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hooker v. Hoover, 882 F. Supp. 574, 1995 U.S. Dist. LEXIS 4888, 1995 WL 227584 (N.D. Tex. 1995).

Opinion

MEMORANDUM OPINION AND ORDER

SANDERS, District Judge.

Before the Court are Defendants’ Motion to Dismiss Presenting Rule 12 Defenses and Objections and Brief in Support (“Motion to Dismiss”), filed April 8, 1994; Plaintiffs’ Memorandum of Law in Opposition to Defendants’ Motion to Dismiss (“Response”), filed April 22, 1994; and Defendants’ Reply (“Reply”), filed June 29, 1994. Also before the Court is Defendants’ Brief on Plaintiffs’ Claim of an Implied Private Right of Action Under 28 U.S.C. § 2678 Filed Pursuant to Court Order (“Defendants’ Brief’), filed March 15, 1995; Plaintiffs’ Response with Supporting Brief to Defendants’ Motion to Dismiss (“Plaintiffs’ Brief’), filed March 15, 1995; and Defendants’ Reply Brief, .filed March 20, 1995.

I. Background

This case involves a fee dispute between Plaintiffs and their former lawyer, Dean Hoover, who represented Plaintiffs in litigation (“the underlying litigation”) resulting from a fire that killed several of their relatives. Plaintiffs now assert that Hoover misrepresented the size of the settlement he negotiated for Plaintiffs; they additionally assert that Hoover’s contingent fee was illegal because it exceeded the fee cap of the Federal Tort Claims Act (“FTCA”).

Plaintiffs filed their federal Complaint January 31, 1994, alleging jurisdiction under the Federal Tort Claims Act (“FTCA”), 28 U.S.C. §§ 2671, et seq. Specifically, Plaintiffs contend that Hoover’s fee violated 28 U.S.C. § 2678, the FTCAs fee cap provision. See Complaint at 6-7; 28 U.S.C. § 2678. In addition, Plaintiffs seek a declaratory judgment that the legal services contract between Plaintiffs and Hoover is void for illegality because its fee provisions violate the FTCA fee cap. Complaint at 8-10. Plaintiffs contend that these two claims provide the Court with subject matter jurisdiction pursuant to 28 U.S.C. § 1331. In addition to their claims under the FTCA’s fee cap provision, Plaintiffs set forth the following state claims: (1) breach of the fee agreement; (2) breach of fiduciary duty; (3) conversion; and (4) fraud and constructive fraud. Plaintiffs seek both punitive damages and an accounting of expenses.

Defendants’ Answer and Counterclaim alleges nine affirmative defenses and incorporates the claims Defendant brought against Plaintiffs in the state court suits that were consolidated with the federal lawsuit. Against each Plaintiff, Defendants claim breach of the legal services agreement for failure to pay fees, breach of another agreement that obligated Plaintiffs to pay certain expenses that had been advanced by Defendants, and fraud based on the allegation that Plaintiffs feigned agreement with the settlement in the underlying litigation while at the same time planning this lawsuit. Against Donald Hooker, LeQuita Hooker Holmes, and Anita Hooker McCrorey, Defendants additionally assert a claim for tortious interference with Defendants’ business relations with Defendants’ other clients and a defamation claim. Against LeQuita Hooker Holmes and Anita Hooker McCrorey, Defendants also claim breach of agreements ratifying the settlement and fee agreement in the underlying litigation.

II. Analysis

Defendants’ Motion to Dismiss attacks each claim in Plaintiffs’ Complaint. The Court addresses only the jurisdictional point, which is dispositive.

Plaintiffs’ Complaint describes their suit as “an action arising under the Federal Tort Claims Act” and thus within this Court’s [576]*576federal question jurisdiction. Complaint ¶ 1. Because their cause of action is premised on the FTCA’s fee cap provision, 28 U.S.C. § 2678, Plaintiffs assert that “[a] private right of action is available for plaintiffs in that plaintiffs are one of a class for whose special benefit the statute was enacted. The private right of action is consistent with the legislative intent of the statute and consistent with the underlying purposes.” Complaint ¶30. Defendant contends that 28 U.S.C. § 2678 is purely a criminal statute and does not create a private right of action for a client who wishes to sue his attorney. Motion to Dismiss at 11.

As an initial matter, the Court notes that § 2678 provides no direct right of action for a civil plaintiff. Federal courts have, however, frequently interpreted § 2678 in the civil context, typically by adjudicating claims of excessive contingent fees in cases over which they already had jurisdiction. See, e.g., Wyatt v. United States, 783 F.2d 45, 46 (6th Cir.1986); Pollard v. United States, 69 F.R.D. 646, 648 (M.D.Ala.1976). Neither the Court nor the parties has located any case in which § 2678 was the jurisdictional basis for a client’s suit against his attorney. See Defendants’ Brief at 3; Plaintiffs’ Brief at 1.

Accordingly, the Court turns to Plaintiffs’ contention that § 2678 creates an implied private right of action. As the Supreme Court has pointed out, “the fact that a federal statute has been violated and some person harmed does not automatically give right to a private cause of action in favor of that person.” Touche Ross & Co. v. Redington, 442 U.S. 560, 568, 99 S.Ct. 2479, 2485, 61 L.Ed.2d 82 (1979) (quoting Cannon v. University of Chicago, 441 U.S. 677, 688, 99 S.Ct. 1946, 1953, 60 L.Ed.2d 560 (1979)). The starting point for this Court’s inquiry, then, must be the Supreme Court’s decision in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). In Cort, the Supreme Court indicated that four factors should be considered in determining whether a private right of action should be implied: (1) whether the plaintiff is “one of the class for whose especial benefit the statute was enacted”; (2) whether there is any indication of legislative intent, explicit or implicit, either to create or deny a remedy; (3) whether it is consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff; and (4) whether the cause of action is traditionally relegated to state law in an area basically the concern of the states, so that it would be inappropriate to infer a cause of action based solely on federal law. Cort, 422 U.S. at 78, 95 S.Ct. at 2087-88. More recent Supreme Court cases have clarified the analysis, indicating that the central issue is whether Congress intended to create a private right of action. See Redington, 442 U.S. at 568, 99 S.Ct. at 2485 (“[Ojur task is limited solely to determining whether Congress intended to create the private right of action asserted....”).

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Related

Wyandotte Transportation Co. v. United States
389 U.S. 191 (Supreme Court, 1967)
Cort v. Ash
422 U.S. 66 (Supreme Court, 1975)
Cannon v. University of Chicago
441 U.S. 677 (Supreme Court, 1979)
Touche Ross & Co. v. Redington
442 U.S. 560 (Supreme Court, 1979)
Thompson v. Thompson
484 U.S. 174 (Supreme Court, 1988)
Floyd G. Wyatt Carol Wyatt v. United States
783 F.2d 45 (Sixth Circuit, 1986)
Pollard v. United States
69 F.R.D. 646 (M.D. Alabama, 1976)

Cite This Page — Counsel Stack

Bluebook (online)
882 F. Supp. 574, 1995 U.S. Dist. LEXIS 4888, 1995 WL 227584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hooker-v-hoover-txnd-1995.