Tenants of 500 23rd Street, N.W. v. District of Columbia Rental Housing Commission

617 A.2d 486, 1992 D.C. App. LEXIS 19, 1992 WL 9694

Opinions

FARRELL, Associate Judge:

Section 902 of the Rental Housing Act of 1985 (the Act) provides that, except in evic tion cases, courts may “award reasonable attorney’s fees to the prevailing party in any action under [the Act].” ¹ D.C.Code § 45-2592 (1990). This motion requires us to determine the proper standard under the Act for awarding attorney’s fees to a prevailing housing provider.²

I.

In September 1987, intervenor Columbia Plaza Limited Partnership, a “housing provider” under the Act,³ filed several capital improvement petitions before the Rent Administrator pursuant to § 210(i), D.C.Code § 45-2520(i).⁴ A small group of tenants of the property contested these petitions. Initially, the Rent Administrator dismissed the petitions on procedural grounds. On appeal to the Commission, that decision was reversed and the petitions were remanded for consideration on the merits. After a full hearing, the Rent Administrator again dismissed the petitions. The housing provider appealed and the Commission reversed the dismissal, ordering rent ceiling adjustments. The tenants sought judicial review by this court of the Commission’s decision. See § 219, D.C.Code § 45-2529. Although the tenants raised eight claims of error before this co.urt, we “affirm[ed] the Commission’s order in all respects” and addressed only a few points raised by the tenants that “merit[ed] discussion.” Tenants of 500 23rd St., N.W. v. District of Columbia Rental Hous. Comm’n, 585 A.2d 1330, 1331 (D.C.1991). The housing provider, the “prevailing party” in this action,⁵ now moves under § 902, D.C.Code § 45-2592, for an award of attorney’s fees for services rendered by counsel during the course of judicial review.⁶

II.

On its face § 902, D.C.Code § 45-2592, is silent about the standards that should serve to guide the award of attorney’s fees to prevailing parties in cases brought under the Act. To assist in interpreting this provision, we have turned to the underlying legislative purpose of the section. See Ungar v. District of Columbia Rental Hous. Comm’n, 535 A.2d 887, 892 (D.C.1987). On the one hand, § 902 was designed to deter “frivolous cases” litigated under the Act. The author of the provision, Couneilmem- ber Clarke, “put [the counsel fee provision] in because ... sometimes frivolous cases are brought and sometimes attorneys’ fees are justified on both sides of the issue.”⁷ Remarks of Councilmember Clarke, Transcript of District of Columbia Council Proceedings at 104 (Nov. 14, 1980). On the other hand, we have recognized that § 902 was intended to encourage compliance with the Act by facilitating remedial litigation by tenants. In Ungar, supra, “we inferred] from the statutory scheme that ... the purposes of the attorney’s fee provision are to encourage tenants to enforce their own rights, in effect acting as private attorneys general, and to encourage attorneys to accept cases brought under the [Act].” 585 A.2d at 892. See also Hampton Courts Tenants’ Ass’n, 573 A.2d at 12, 13 (noting Ungar's “adoption of] the ‘private attorney general’ analysis stated by the Supreme Court in explication of the [Civil Rights Act of 1964]”).

Consistent with the goal of encouraging litigation by tenants acting as “private attorneys general,” we interpret § 902 as entitling prevailing tenants to a presumptive award of attorney’s fees. See Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402, 88 S.Ct. 964, 966, 19 L.Ed.2d 1263 (1968) (construing 1964 Civil Rights Act). Indeed, we have already held that under § 902 prevailing tenants, regardless of their position in the litigation, should generally be awarded attorney’s fees though these “may be withheld, in the court’s discretion, if the equities indicate otherwise.” Ungar, 535 A.2d at 892; see also Tenants of 2301 E St., N.W. v. District of Columbia Rental Hous. Comm’n, 580 A.2d 622, 626 (D.C.1990); Hampton Courts Tenants’ Ass’n, supra; Alexander, 542 A.2d at 360-61.⁸

Intervenor argues that a housing provider is entitled to the same presumptive award of attorney’s fees as are prevailing tenants. It reasons that when a housing provider files a meritorious capital improvements petition seeking a rent adjustment under § 210(i), D.C.Code § 45-2520(i), it furthers the purposes of the Act in general and specifically of § 210, and so is properly cast in the role of “private attorney general.” This argument, however, while emphasizing the goals of other sections of the Act, does not focus adequately on the specific goals of the attorney’s fee provision, which we conclude must be our guide. See, e.g., Newman v. Piggie Park Enterprises, Inc., 390 U.S. at 402, 88 S.Ct. at 966 (analyzing Congress’ purpose in enacting counsel fee provision of Title II of Civil Rights Act of 1964 to determine criteria for awards to prevailing plaintiffs); Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 417-22, 98 S.Ct. 694, 698-701, 54 L.Ed.2d 648 (1978) (analyzing legislative history of counsel fee provision of Title VII of Civil Rights Act of 1964 to determine criteria for awards to prevailing defendants). While the Act does grant rights for housing providers and authorizes capital improvement petitions, nothing in the text of § 902 or its legislative history indicates that the legislature sought to encourage or facilitate housing provider enforcement actions by attorney’s fee awards in favor of housing providers, or to create an incentive for attorneys to accept housing provider cases by means of fee awards against unsuccessful tenants. See Ungar, 535 A.2d at 892; Hampton Courts Tenants’ Ass’n, 573 A.2d at 12. Since housing provider litigation fails to serve these goals of the attorney’s fee provision of the Act, we hold that prevailing housing providers do not enjoy a presumptive entitlement to attorney’s fee awards.

That, however, does not end the analysis. Presumptions aside, our reading of § 902 makes clear to us, as it was to the Supreme Court in interpreting identical statutory language enacted under similar circumstances, that the legislature intended something else besides facilitating remedial litigation by tenants under the Act. As the remarks of Councilmember Clarke, supra, indicate, the legislature also wanted to protect housing providers “from burdensome litigation having no legal or factual basis.” Christiansburg Garment Co., 434 U.S. at 420, 98 S.Ct. at 700. To accommodate these sometimes competing goals, we conclude that attorney’s fees may be assessed in favor of a prevailing housing provider when the litigation of tenants is “frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith.” Christiansburg, 434 U.S. at 421, 98 S.Ct. at 700; see Hamer v. County of Lake, 819 F.2d 1362, 1366-67 (7th Cir.1987), cert. denied, 493 U.S. 849, 110 S.Ct. 146, 107 L.Ed.2d 104 (1989). This interpretation of the statute has been adopted by the Rental Housing Commission for attorney’s fee awards to prevailing housing providers in several categories of litigation at the administrative level. See Hagner Management Corp. v. Rutherford, TP 12,117 (RHC Sept. 8, 1986) (prevailing housing provider in tenant petition case); Columbia Plaza Ltd. Partnership v. Tenants of 500 23rd St., N.W., CI 20,266-20,268 (RHC May 30, 1991) (prevailing housing provider in capital improvement case); Tenants of 1255 New Hampshire Ave., N.W. v. Hamilton House Ltd. Partnership, HP 20,388 (RHC May 30, 1991) (prevailing housing provider in hardship petition case). That reading of the statute by the agency charged with its enforcement confirms our judgment of the appropriateness of this standard.

The housing provider argues for a looser reading of § 902 which would allow an award of fees to a prevailing housing provider in the “sound discretion” of the court, “taking into account the relevant facts of the particular case.” A purely discretionary standard, it urges, would better permit a prevailing housing provider to recover attorney’s fees expended in resisting irrelevant and erroneous arguments pressed by tenants over years of litigation.⁹ Though this proposed standard appears on the surface to be a “straightforward” and “evenhanded” interpretation of § 902, we do not think it is consistent with the statutory purpose of facilitating tenant litigation under the Act but at the same time deterring “frivolous cases” on “both sides of the issue.” Remarks of Councilmember Clarke, supra; see Christiansburg Garment Co., 434 U.S. at 418-19, 98 S.Ct. at 698-99. As did the Supreme Court, we think the Christiansburg standard best accommodates the “inherent tension” between these goals. Hamer, 819 F.2d at 1366.

The housing provider further argues that the Christiansburg standard, developed under the federal civil rights laws, is inap-posite to the fee award provision of the Rental Housing Act because the underlying policies of the former — combatting discrimination — are not those of the Rental Housing Act, which carefully balances the rights of landlords and tenants. See Tenants of 2301 E St., N.W., 580 A.2d at 628 n. 11. To accept this argument, however, would be to ignore the remarkable similarities of language and intent between the attorney’s fee provisions of the two laws, and the fact that this court has heretofore looked to the former in interpreting our fee award provision. Hampton Courts Tenants’ Ass’n, 573 A.2d at 12. Furthermore, many courts have applied the Christiansburg standard to other federal and state fee-shifting statutes.¹⁰

We emphasize that this standard is not a reformulation of the traditional “bad faith” exception to the American Rule. See, e.g., Dalo v. Kivitz, 596 A.2d 35, 39-40 (D.C.1991); Goffe v. Pickard, 588 A.2d 265, 271 (D.C.1991) (defendant liable for attorney’s fees under “bad faith” exception to American Rule when “conduct ‘was vexatious and designed to avoid responsibility to the plaintiffs in bad faith’ ”). Under § 902, a finding of “subjective bad faith” is unnecessary to an award of attorney’s fees in favor of a housing provider, provided the tenants’ litigation was “frivolous, unreasonable, or without foundation.” Christiansburg, 434 U.S. at 421, 98 S.Ct. at 700. The statutory standard, therefore, is less stringent than our common-law “bad faith” exception to the American Rule.

III.

Applying these principles, we must consider whether an award in favor of the prevailing housing provider is justified in this case. Under the Christiansburg test, a prevailing housing provider may be awarded attorney’s fees when the tenants’ position was “frivolous, unreasonable, or groundless” or the tenants “continued to litigate after it clearly became so.” 434 U.S. at 422, 98 S.Ct. at 701. It follows from the latter branch that, while a claim may have had merit before the Commission, it is not necessarily meritorious before this court because the tenant “continued to litigate after it clearly.became” unreasonable or groundless. See Harris v. Group Health Ass'n, 213 U.S.App.D.C. 313, 317-18, 662 F.2d 869, 873-74 (1981).

As explained at the outset, petitioners raised eight claims of error before this court, and we found it necessary to address approximately half of them, though we treated one other briefly in a final footnote. Thus it is not possible for us to say that petitioners’ appeal taken as a whole was frivolous, unreasonable, or groundless. On the other hand, there is no denying that petitioners’ insistence on renewing virtually every claim raised before (and rejected by) the Commission put the housing provider to the necessity of briefing, and preparing to argue orally, at least several issues we think prudent counsel ought not to have pursued in this court. Thus we face an issue that has troubled other courts in related fee award contexts, namely, whether to divide a litigant’s claims into reasonable (though unsuccessful) and unreasonable ones. As a general rule, it appears “that reviewing courts are hesitant to impose a requirement on the lower courts and liti gants which would lead to the need to distinguish between frivolous and nonfrivo-lous claims in every case.” Hamer, 819 F.2d at 1369.¹¹ An exception easy to apply, perhaps because affecting so few cases, is that a litigant will not “ward off” fees “by the happenstance of including one colorable (though losing) claim amidst an ocean of frivolous ones.” Id. (quoting Hill v. Norfolk & Western Ry., 814 F.2d 1192, 1200 (7th Cir.1987)). Adopting the Christians-burg standard, however, does not compel us to reject a housing provider’s request for fees only if the vast preponderance of the tenants’ arguments were unreasonable (an “ocean of frivolous” ones compared to one or two colorable ones). That standard may be appropriate in awarding fees at the agency level (an issue we do not decide), but as Christiansburg makes clear, continuing to litigate a claim after its lack of merit should have been apparent may provide the basis for a fee award. This court routinely expects litigants to engage in some winnowing of issues at the appellate level. Cf. Jones v. Barnes, 463 U.S. 745, 103 S.Ct. 3308, 77 L.Ed.2d 987 (1983). Therefore, we hold that a prevailing housing provider’s request for attorney’s fees may be premised on individual claims or issues raised by tenants that were frivolous, unreasonable, or groundless. This holding, we caution, rests on an interpretation of § 902 of the Act which expressly provides for a shift in attorney’s fees; we do not decide whether a similar differentiation among issues would be appropriate in applying, for example, D.C.App.R. 38 (1990) (costs and damages for frivolous appeal); see Tupling v. Britton, 411 A.2d 349 (D.C.1980).

Upon examining the entire record, we' have concluded that Issues III, IY, and V, as set forth in petitioners’ brief challenging the Commission’s order, are groundless under the standard adopted. First, the Commission quite properly rejected petitioners’ argument concerning improper allocation of the cost of improvements as “offered [with] no explanation as to what this means and no argumentation” (Issue III). Second, the Commission’s refusal to dismiss the petitions for failure of the engineer (an independent contractor) to produce a file pursuant to subpoena to the housing provider was entirely warranted in view of petitioners’ failure to object on this ground at the hearing (Issue IV). Third, the Commission was not required to deny the petitions because of asserted defects in notice to a few tenants not shown to be contesting the petitions (Issue V). As to each of these issues, petitioners could not reasonably expect to obtain reversal of the Commission’s order.

In light of the supplemental motion for attorney’s fees and supporting documentation filed by the housing provider, it shall be awarded attorney’s fees in the amount of $1100.

So ordered.

Before ROGERS, Chief Judge; FERREN, *TERRY, STEADMAN, SCHWELB, *FARRELL, WAGNER, KING, and SULLIVAN, Associate Judges; *BELSON, Senior Judge.

Footnotes

1

. Section 902 also authorizes the Rent Administrator and the Commission to award attorney’s fees to a prevailing party. D.C.Code § 45-2592. Subject perhaps to the point made at page 491, infra, the standards we adopt for attorney’s fee awards for litigation in the courts apply equally to awards made by the administrative bodies, "since the identical statutory language operates at all levels.” Alexander v. District of Columbia Rental Hous. Comm’n, 542 A.2d 359, 360 (D.C.1988).

2

. The court reserved this issue in Hampton Courts Tenants’ Ass’n v. District of Columbia Rental Hous. Comm'n, 573 A.2d 10 (D.C.1990).

3

. Under the Act, "housing provider” means "a landlord, an owner, lessor, sublessor, assignee, or their agent, or any other person receiving or entitled to receive rents or benefits for the use or occupancy of any rental unit within a housing accommodation within the District.” Section 103(15), D.C.Code § 45-2503(15).

4

. Section 210(i), D.C.Code § 45-2520(i), provides:

The housing provider may petition the Rent Administrator for approval of the rent adjustment for any capital improvements made under subsection (g) of this section, if the petition is filed with the Rent Administrator within 10 calendar days from the installation of the capital improvements.

In turn, § 210(g), D.C.Code § 45-2520(g), provides:

The housing provider may make capital improvements to the property before the approval of the rent adjustment by the Rent Administrator for the capital improvements where the capital improvements are immediately necessary to maintain the health or safety of the tenants.

5

. None of the parties disputes the housing provider’s status as the "prevailing party.” Thus, we need not make the threshold determination of whether the movant "prevailed” for the purposes of awarding attorney’s fees under the Act. See Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983).

6

. The housing provider also filed a motion for an award of attorney's fees before the Commission for legal services rendered in this case at the administrative level. Section 902, D.C.Code § 45-2592. The Commission denied the housing provider's motion. Columbia Plaza Ltd. Partnership v. Tenants of 500 23rd St., N.W., CI 20,266-20,268 (RHC May 30, 1991). That decision by the Commission is not the subject of this appeal.

7

. The attorney’s fee provision of the Act originated in the Rental Housing Act of 1980, D.C.Code § 45-1592 (1981). The 1980 Act was replaced by the Rental Housing Act of 1985. The attorney’s fee provision, however, remained "virtually unchanged" in the 1985 Act. Alexander, 542 A.2d at 359 n. 2.

8

. The housing provider contends that our previous generous interpretation of the statute in favor of tenants unfairly exposes housing providers to liability for attorney’s fees for even "the slightest procedural mis-step by a housing provider, even one who appears pro se." A division of the court, however, is not free to reexamine the soundness of those decisions. Moreover, while our decisions presumptively entitle prevailing tenants to an award, they nevertheless require consideration of the surrounding circumstances in each case and authorize the denial of attorney’s fees to prevailing tenants when the equities of the situation dictate that result.

9

. The housing provider is not alone in pointing to economic factors to support its interpretation of the statute. The Commission and the tenants assert that housing providers are in a better financial position than tenants to litigate under the Act because they, unlike individual tenants, cán recover attorney's fees as business costs. We do not pursue this inquiry but note only that, as in the context analyzed by the Supreme Court in Christiansburg, there may be "equitable considerations on both sides of this question.” 434 U.S. at 422-23 n. 20, 98 S.Ct. at 701 n. 20.

10

. See, e.g., Nemeroff v. Abelson, 620 F.2d 339, 349-50 (2d Cir.1980) (when prevailing defendant applied for attorney’s fees, court held that "minimum standard for an award under § 9(e) of the Exchange Act [of 1934, 15 U.S.C. § 78i(e)] is that set forth in Christiansburg’); National Wildlife Fed'n v. Consumers Power Co., 729 F.Supp. 62, 64 (W.D.Mich.1989) (under § 505(d) of the Clean Water Act, 33 U.S.C. § 1365(d) (1988), prevailing defendant is entitled to award of attorney’s fees "only where the plaintiffs claim is frivolous, meritless or vexatious”); National Union of Hosp. & Health Care Employees v. Southeast Volusia Hosp. Dist., 436 So.2d 294, 296-97 (Fla.Dist.Ct.App.1983) (court affirms award by commission under Christians-burg standard to prevailing defendant under Florida’s Public Employees Relations Act); Dobie v. Liberty Homes, Inc., 53 Or.App. 366, 373, 632 P.2d 449, 453 (1981) (“the reasoning of the Supreme Court [in Christiansburg ] regarding guidelines for awarding attorney fees is applicable in construing the attorney fee provision of our [labor] statute”); Community Cause v. Boatwright, 195 Cal.App.3d 562, 573-76, 240 Cal. Rptr. 794, 801-03 (1987) (Christiansburg standards apply to awards to prevailing defendants under California’s Political Reform Act); People v. Roger Hedgecock for Mayor Comm., 183 Cal.App.3d 810, 815-17, 228 Cal.Rptr. 424, 427-28 (1986) (same); Whaley v. Alaska Workers’ Compensation Bd., 648 P.2d 955, 959-60 (Alaska 1982) (appellate rule construed according to Christiansburg standards when granting attorney's fees to employer-defendant in worker’s compensation case); Village of Palm Springs v. Retirement Builders, Inc., 396 So.2d 196, 198-99 (Fla.Dist.Ct.App.), pet. for rev., denied, 402 So.2d 614 (Fla.1981) (fee-shifting provision of Florida’s utility consumers’ protection law interpreted according to Christiansburg). But see State v. Black, 100 Wash.2d 793, 803-07, 676 P.2d 963, 970-71 (1984) (rejecting Christiansburg standard for awarding attorney’s fees to prevailing defendants, court applied a balancing test because "the policy considerations [supporting Washington’s state antitrust law] are significantly different [than Title VII of the Civil Rights Act of 1964]”).

11

. In Miller Brewing Co. v. Brewery Workers Local 9, 739 F.2d 1159 (7th Cir.1984), cert. denied, 469 U.S. 1160, 105 S.Ct. 912, 83 L.Ed.2d 926 (1985), for example, the court reasoned:

The company’s resistance to the arbitrator’s finding that it violated the preference clause may have been frivolous; but we doubt whether it would be worthwhile, at least as a general rule, to divide a suitor’s claims (or defenses) into frivolous and nonfrivolous, and award attorney's fees in respect to frivolous claims but not the others. The added burden to the court of making this determination would often outweigh the benefit to the party of obtaining a partial award of attorney’s fees. Although it is costly to defend against a frivolous suit, the marginal costs of knocking out the frivolous claims in a suit that has a meritorious core usually are not great.

Id. at 1168.