Unida v. Volpe

57 F.R.D. 94, 2 Envtl. L. Rep. (Envtl. Law Inst.) 20691, 4 ERC (BNA) 1797, 1972 U.S. Dist. LEXIS 11502
CourtDistrict Court, N.D. California
DecidedOctober 19, 1972
DocketNo. 071-1166
StatusPublished
Cited by96 cases

This text of 57 F.R.D. 94 (Unida v. Volpe) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Unida v. Volpe, 57 F.R.D. 94, 2 Envtl. L. Rep. (Envtl. Law Inst.) 20691, 4 ERC (BNA) 1797, 1972 U.S. Dist. LEXIS 11502 (N.D. Cal. 1972).

Opinion

MEMORANDUM OF DECISION

PECKHAM, District Judge.

Plaintiffs in this environmental protection and housing assistance case originally brought suit to enjoin the construction of California Highway Project 238.1 2**The injunction was granted on the grounds that the defendants failed to comply with § 4(f) of the Department of Transportation Act of 1966 and various sections of 23 U.S.C. dealing with housing displacement and relocation. Plaintiffs now move for the awarding of attorneys’ fees, against defendants, the California Highway Department, California Department of Public Works, and J. A. Legarra, Chief Highway Engineer, State of California, in his individual and representative capacity.

While the general American rule is that attorneys’ fees are not ordinarily recoverable as costs absent an express statutory authorization, the courts have developed exceptions to this rule for situations in which “overriding considerations” indicate the need for such a recovery. Mills v. Electric Auto-Lite, 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970).2The statutes which were the [96]*96basis of the relief on the merits in La Raza do not specifically provide for the awarding of fees; hence, we must consider whether this case falls within a judge-created exception to the American rule.

The power to grant attorneys’ fees springs from the equitable powers of the court. Sprague v. Ticonic Nat. Bank, 307 U.S. 161, 166, 59 S.Ct. 777, 83 L.Ed. 1184 (1939). The basic issue in the present motion is whether plaintiffs have demonstrated that equity compels the awarding of fees in this case. Through the use of their equitable powers courts have carved out several exceptions to the American rule of not granting attorneys’ fees absent statutory authorization.

1) The “obdurate behaviour” situation. Here the courts use their equitable powers to impose costs on defendants who behaved in bad faith. See, e. g., Kahan v. Rosenstiel, 424 F.2d 161, 167 (3rd Cir. 1970), cert. denied, Glen Alden Corp. v. Kahan, 398 U.S. 950, 90 S.Ct. 1870, 26 L.Ed.2d 290 (1970) ; Knight v. Auciello, 453 F.2d 852 (1st Cir. 1972).

2) The “common fund” situation. Here the courts use their equitable powers to insure that the beneficiaries of litigation are the ones who share the expense. This is a defensive use of the equitable power of the courts to prevent the unjust enrichment of “free riders”. See, e. g., Sprague v. Ti-conic Nat. Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939).

3) The “private attorney general” situation. Here the courts use their power offensively when necessary and appropriate to insure the effectuation of a strong Congressional policy. See e.g., Sims v. Amos, 340 F.Supp. 691 (M.D. Ala. decided March 17, 1972); cf. Newman v. Piggie Park Enterprises, 390 U.S. 400, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968).

Doubtless some cases defy categorization into one of the three categories, perhaps the present ease is one, but the categories provide useful tools for analysis.

1. The obdurate behavior situation.

The first exception, the “obdurate behavior” or “bad faith” situation, does not apply to this case. In its memorandum and order the court specifically found that the State Highway Department did not behave in bad faith:

“From the evidence thus far presented it also appears that, despite sincere efforts, the State has an inadequate relocation assistance program, as defined by § 205 of the Uniform Relocation Assistance Act of 1970 and IM 80-1-71. The State, albeit in good faith, has failed to comply with the federal relocation statutes and regulations.” • (emphasis added).

337 F.Supp. at 233.

The same findings apply to the environmental aspect of the case. La Raza involved complicated legal questions; by no means were the duties of the state clear, and the court affirms its earlier findings that the State did not behave in bad faith. Our concern here is with those situations when the defendants’ errors and conduct falls short of obdurate behavior.

2. The common fund situation.

The second exception is the common fund “situation”. In Sprague v. Ticonic Nat. Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939), the U.S. Supreme Court held that attorneys’ fees can be awarded when the judgment results in a “common fund” for the plaintiffs or for the class. That is to say, when the [97]*97plaintiffs’ efforts result in substantial benefits to others, these “free riders”— those who receive significant benefits without paying for them — should compensate the plaintiffs for the benefits the latter has conferred upon them. The Supreme Court has more recently elaborated on the inequity of “free riders” in a litigation context:

“To allow the others to obtain full benefit from the plaintiffs’ efforts without contributing equally to the litigation expenses would be to enrich the others unjustly at the plaintiff’s expense.” Mills v. Electric Auto-Lite, 396 U.S. 375, 392, 90 S.Ct. 616, 625, 24 L.Ed.2d 593 (1970).

In other words the “free-riders” situation is an appropriate one for the Court to exercise its equitable powers to award attorneys’ fees.

The plaintiffs in Mills were certain shareholders in Electric Auto-Lite Company who alleged that a merger had been accomplished through the use of a misleading proxy statement. A group of shareholders brought a derivative action to have the merger set aside and eventually prevailed on the merits. The Supreme Court approved the awarding of attorneys’ fees despite the absence of any statutory authorization by utilizing the common-fund approach.

The Court stated that attorneys’ fees can be awarded “where the litigation has conferred a substantial benefit on the members of an ascertainable class, and where 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.” 396 U.S. at 393, 90 S.Ct. at 626.

Mills extended the scope of the common-fund justification for the awarding of fees by holding that no pecuniary benefit need be demonstrated. 396 U.S. at 393, 90 S.Ct. 616. In so doing it has become exceedingly difficult to trace the benefits of litigation to their ultimate beneficiaries, so as to apportion the attorneys’ fees amongst them.3 Because of the attendant difficulties in determining the ultimate beneficiaries, the “common fund” mold simply does not fit the present situation. As Judge Merhige stated in Bradley v.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Alaska Building, Inc. v. Legislative Affairs Agency
403 P.3d 1132 (Alaska Supreme Court, 2017)
Alaska Conservation Foundation v. Pebble Limited Partnership
350 P.3d 273 (Alaska Supreme Court, 2015)
Olson v. Automobile Club of Southern California
179 P.3d 882 (California Supreme Court, 2008)
Town of St. John v. State Board of Tax Commissioners
730 N.E.2d 240 (Indiana Tax Court, 2000)
Beasley v. Wells Fargo Bank
235 Cal. App. 3d 1407 (California Court of Appeal, 1991)
Village of Los Ranchos De AlBuquerque v. Barnhart
906 F.2d 1477 (Tenth Circuit, 1990)
City of Sacramento v. Drew
207 Cal. App. 3d 1287 (California Court of Appeal, 1989)
U.S. Industries, Inc. v. Touche Ross & Co.
854 F.2d 1223 (Tenth Circuit, 1988)
Downing v. City of Columbus
505 N.E.2d 841 (Indiana Court of Appeals, 1987)
Neighborhood Preservation Coalition v. Claytor
553 F. Supp. 919 (E.D. Pennsylvania, 1982)
Brentwood Assn. for No Drilling, Inc. v. City of Los Angeles
134 Cal. App. 3d 491 (California Court of Appeal, 1982)
Mandel v. Myers
629 P.2d 935 (California Supreme Court, 1981)
Roberts v. Lemos
651 F.2d 201 (Third Circuit, 1981)
William Walker v. Robbins Hose Company No. 1, Inc.
622 F.2d 692 (Third Circuit, 1980)
Walker v. Robbins Hose Co. No. 1, Inc.
622 F.2d 692 (Third Circuit, 1980)
Rich v. City of Benicia
98 Cal. App. 3d 428 (California Court of Appeal, 1979)
Woodland Hills Residents Ass'n v. City Council of Los Angeles
593 P.2d 200 (California Supreme Court, 1979)

Cite This Page — Counsel Stack

Bluebook (online)
57 F.R.D. 94, 2 Envtl. L. Rep. (Envtl. Law Inst.) 20691, 4 ERC (BNA) 1797, 1972 U.S. Dist. LEXIS 11502, Counsel Stack Legal Research, https://law.counselstack.com/opinion/unida-v-volpe-cand-1972.