Panola Land Buying Ass'n v. Clark

CLARK, Circuit Judge,

dissenting:

Through the Equal Access to Justice Act, 28 U.S.C. § 2412 (“EAJA”), Congress created a mechanism which enables private citizens to challenge federal government conduct which has no reasonable basis in law or fact. 1 Today, the panel majority has created a mechanism which permits the United States to settle a case and avoid payment of EAJA attorney’s fees in a way which will severely hamper, if not nullify, the effective operation of the Act. This case raises a number of important questions which were left open by the Supreme Court in Evans v. Jeff D., 475 U.S. 717 , 106 S.Ct. 1531 , 89 L.Ed.2d 747 (1986). If the EAJA is to operate as Congress intended, and the federal courts are to foster settlements as the Supreme Court has instructed, these questions need to be answered. By incorrectly deciding that Ebbinghouse has no “interest” in this litigation, for the purposes of Fed.R.Civ.P. Rule 24(a), the majority has made it impossible for Ebbing-house, and others who will follow in this circuit, to raise these questions. Because I have concluded that Ebbinghouse’s Rule 24 interest was sufficient to bring these matters to the attention of the district court, I would reverse and order a remand to the district court to determine whether the United States' settlement posture was inconsistent with federal law.

I. THE JUDGE’S ROLE IN SETTLEMENT

At the outset, I wish to distance myself from the majority’s remarks regarding a federal district court judge’s role in the settlement of litigation. As the majority notes, Ebbinghouse’s first attempt to apprise the court of the United States’ bargaining position came when he asked the court to “mediate.” He then sought to bring the matter to the court’s attention through a pretrial conference pursuant to Fed.R.Civ.P. 16. In expressing approval of the district court’s refusal to participate in the settlement process, the majority notes that when “parties to a case can agree to terms, they are free to settle ... and the *1519 court need not and should not get involved.” Majority Opinion at 1507. The majority is paraphrasing this court’s opinion in United States v. City of Miami, 614 F.2d 1322 , (5th Cir.1980), modified on reh’g, 664 F.2d 435 (1981), which reads as follows:

If the parties can agree to terms, they are free to settle the litigation at any time and the court should not get involved. As Judge Wyzanski has described the situation: “the traditional view is that the judge merely resolves issues submitted to him by the parties ... and stands indifferently when the parties, for whatever reason commends itself to them, choose to settle a litigation.” Heddendorf v. Goldfine, 167 F.Supp. 915, 926 (D.Mass.1958).

614 F.2d at 1331 (emphasis added). Judge Wyzanski’s views, whatever force they may have as a general matter, are not relevant to a ease in which the parties could not, and did not, freely “agree to terms.” Once settlement negotiations stall because of a party’s intransigence on a given issue, a district judge does not remain indifferent to the settlement process. When such a situation arises, it is no longer true that the judge “should not get involved.”

The suggestion that the district judge must ignore the dynamics of problematic settlement negotiations is difficult to square with the active role which judges take today in the settlement of federal litigation. 2 It is also difficult to reconcile with the 1983 amendment to Fed.R.Civ.P. 16. The amended rule refers explicitly to settlement in two places: Rule 16(a)(5) makes “facilitating ... settlement” an “objective” of pretrial conferences; and Rule 16(c)(7) makes “the possibility of settlement or the use of extrajudicial procedures to resolve the dispute” a “Subject to be Discussed at Pretrial Conferences.” As the advisory committee notes indicate, the 1983 amendment was necessary to “meet the challenge of modern litigation.” Fed.R. Civ.P. 16 advisory committee’s note. Empirical studies reveal, as the committee explained, that “efficient disposition of cases by ‘settlement or trial’ is more likely when a trial judge intervenes personally.” Id. 3 Although Rule 16 does not require settlement negotiations, it does express a clear preference for encouragement and facilitation of settlements. Id.

Ebbinghouse understood that it was proper to invoke the court’s Rule 16 powers when settlement negotiations stalled because the government had demanded that Panola waive its right to attorney’s fees. As one commentator has recognized, a pretrial conference sought pursuant to Rule 16 is perhaps the best vehicle through which a party can call the court’s attention to the fact that an opposing litigant has assumed an unreasonable settlement posture.

If plaintiffs’ counsel believes he or she is unreasonably being asked to sacrifice a fee, counsel should feel no hesitation about bringing the matter to the attention of the court. Rule 16 of the Federal Rules of Civil Procedure, the pretrial conference rule, gives the court the authority to address the issue.

Goldstein, Settlement Offers Contingent Upon Waiver of Attorney’s Fees: A Continuing Dilemma After Evans v. Jeff D., 20 Clearinghouse Rev. 693 , 698 (Oct. 1986). See also Moore v. National Ass’n of Securities Dealers, 762 F.2d 1093 , 1104 n. 15 (D.C.Cir.1985) (unreasonable conduct during settlement negotiations “will be kept in *1520 check through the district court’s exercise of its Rule 16 ... powers if promptly brought to the court’s attention”).

Even if the judicial “hands off” approach to settlement which is advocated by the majority represented accurately the roles which federal judges do take in the settlement process, it would have no application to this case. The principal allegation made by Ebbinghouse, first as Panola’s representative and now on his own behalf, is that the waiver of attorney’s fees was the product of a coercive negotiation posture. The record reflects that Panola did not intend to waive its right to attorney fees. Instead, it felt compelled to accept the government’s terms because the government conditioned Panola’s immediate access to FmHA funds upon such a waiver. See Appendix II to Majority Opinion.

II. EBBINGHOUSE’S RIGHT TO INTERVENE

The majority holds that Ebbinghouse had no “interest” in this litigation for the purposes of Rule 24(a)(2) because any entitlement to attorney’s fees under the EAJA is that of the “prevailing party.” As a general matter, the majority’s definition of a Rule 24 “interest” is much too narrow. The majority’s conclusion that Ebbing-house had no right to intervene rests upon a mistaken assumption that a prospective intervenor’s Rule 24 “interest” must be of a nature and magnitude identical to the interests of the parties to a litigation. A number of decisions by our court and others, along with the procedures normally associated with attorney’s fee litigation, indicate that Ebbinghouse’s interest in this litigation rose to the level of a Rule 24 “interest.”

The best indication that Ebbinghouse’s interest in payment for his legal services is in the nature of a Rule 24 “interest” is our decision in James v. Home Construction Co. of Mobile, Inc., 689 F.2d 1357 (11th Cir.1982). In James , we held that an attorney had an independent right to petition a court for a statutory fee pursuant to the Truth in Lending Act (“TILA”), 15 U.S.C. § 1640 (a)(3). Although one circuit has disagreed with our decision in James, see Freeman v. B & B Associates, 790 F.2d 145 (D.C.Cir.1986), there is no principled ground upon which the court can say that the principles set forth in James do not apply here. To demonstrate, it is useful to note what Judge Johnson actually wrote for the court in James :

Contrary to dicta in Smith v. South Side Loan Co., 567 F.2d 306, 307 (5th Cir.1978), suggesting that attorney’s fees are the right of the party suing, we find that it is the attorney who is entitled to fee awards in a TILA case, not the client. This finding is supported by cases holding that a court may directly pay the attorney, Carr v. Blazer Financial Services, Inc., 598 F.2d 1368, 1370 (5th Cir.1979), and that the award is not subject to setoff. Plant v. Blazer Financial Services, Inc., 598 F.2d 1357, 1365 (5th Cir.1979). Denial of this right to attorney’s fees would constitute injury in fact, see Warth v. Seldin, [ 422 U.S. 490, 500 , 95 S.Ct. 2197, 2205 , 45 L.Ed.2d 343 (1975) ], so an attorney’s claim is cognizable under Article III.

... If settlement of a TILA case precluded the plaintiff’s attorney from seeking a fee award, nothing would prevent indigent clients, who have no financial interest in statutory fee awards, from freely bargaining them away without personal detriment.

689 F.2d at 1358-59 . As one commentator has remarked, in James , the court “clearly held that the right to fees is the lawyer’s, not the client’s.” Comment, Settlement Offers Conditioned Upon Waiver of Attorneys’ Fees: Policy, Legal, and Ethical Considerations, 131 U.Pa.L.Rev. 793, 813 (1983). 4

*1521 It is true that the federal courts “routinely characterize the entitlement of statutory fees as belonging to the prevailing party.” Id.; see also Jonas v. Stack, 758 F.2d 567 , 570 n. 7 (11th Cir.1985) (construing 42 U.S.C. § 1988 ). But the courts also routinely recognize that applications for fee awards pursuant to certain statutes are really made by and on behalf of the attorney. As we recognized implicitly in James , it is important to remain mindful of the real dynamics of attorney’s fee litigation in cases involving indigent clients because, “where the plaintiff is under no obligation to pay counsel or where the recovery yields no funds to pay counsel, the real party in interest in a motion for fees is the attorney.” Comment, 181 U.Pa.L.Rev. at 814.

The majority states the obvious: fee-shifting statutes are not typically enacted for the benefit of the bar. Majority Opinion at 1510. Typically, such statutes are designed to make possible litigation which Congress deems desirable. The EAJA allows private parties to challenge unreasonable government conduct when they may otherwise lack the resources to do so. It Would do no violence to Congress’ purpose in enacting the EAJA or its choice of the term “prevailing party” to hold that, under certain circumstances, a party’s attorney may pursue a fee award in his own name. As we suggested in James , by awarding attorney’s fees directly to counsel, courts frequently acknowledge that the attorney is the real party in interest in a dispute over attorney’s fees. See, e.g., Maher v. Gagne, 448 U.S. 122, 126 , 100 S.Ct. 2570, 2573 , 65 L.Ed.2d 653 (1980), (affirming 42 U.S.C. § 1988 fee award made directly to counsel); Wedra v. Thomas, 623 F.Supp. 272, 278 (S.D.N.Y.1985) (making EAJA award directly to attorney); Grand Boulevard Improvement Ass’n v. Chicago, 553 F.Supp. 1154, 1169 (N.D.Ill.1982) (making EAJA award directly to attorney).

The rule which permits direct payment of attorney’s fees to those who have earned them, besides being attributable to common sense, is apparently grounded in the concept that a direct award to the party constitutes a form of unjust enrichment of that party. This idea can be traced to a decision of this court, where we construed the fee-shifting provision of the Civil Rights Act of 1964, 42 U.S.C. § 2000a-3(b), which contains the “prevailing party” language found in the EAJA as well as 42 U.S.C. § 1988 (“section 1988”). In Miller v. Amusement Enterprises, Inc., 426 F.2d 534, 539 (5th Cir.1970), we explained that the court had a duty to ensure that a fee award would actually compensate legal services and “not go to litigants” themselves. The Ninth Circuit has characterized our approach in Miller as a rule which protects “against a windfall to the litigant.” Brandenburger v. Thompson, 494 F.2d 885, 889 (9th Cir.1974), superseded by statute on other grounds, see Stanford Daily v. Zurcher, 550 F.2d 464, 465 (9th Cir.1977). See also Hairston v. B. & R. Apartments, 510 F.2d 1090, 1093 (7th Cir.1975) (even though fee award pursuant to 42 U.S.C. § 3612 (c) “accrue[s] to the benefit of the [prevailing] plaintiff,” award should go directly to provider of legal services “[t]o avoid any windfall”); accord Rodriguez v. Taylor, 569 F.2d 1231, 1245 (3d Cir.1977) (construing 29 U.S.C. § 216 (b)), cert. denied, 436 U.S. 913 , 98 S.Ct. 2254 , 56 L.Ed.2d 414 (1978). Although the source of the application of unjust enrichment principles to fee-shifting statutes is unclear, it is most probably derived from the theoretical underpinnings of the “common fund” and “common benefit” exceptions to the American Rule regarding attorney’s fees and costs. See, e.g., Boeing Co. v. Van Gemert, 444 U.S. 472, 479 , 100 S.Ct. 745, 749 , 62 L.Ed.2d 676 (1980) (common fund doctrine “rests on the perception that persons who obtain the benefit of a lawsuit without contributing to its costs are unjustly enriched at the successful litigants expense”).

A further indication that the attorney is the real party in interest in litigation involving attorney’s fees is the rule that counsel has standing to appeal a denial of attorney’s fees. In Lipscomb v. Wise, 643 F.2d 319 (5th Cir. Apr. 1981) (per curiam), we held that an attorney could appeal in his own name the denial of an application for fees pursuant to the Votings Right Act of *1522 1965, 42 U.S.C. § 1973Í (e). It is important to note that section 1973Z (e) is, in pertinent part, identical to 42 U.S.C. § 1988 (“section 1988”) and contains, as does the EAJA, the “prevailing party” language which the EAJA borrowed from existing fee-shifting statutes. 5 Our remarks concerning the attorney’s standing are instructive:

Ordinarily, an appeal from .a judgment may be taken only by a party-litigant adversely affected by it. In theory, attorneys for a litigant are not personally affected by a judgment. Even in the limited class of cases in which attorney’s fees may be awarded, the award is made to the prevailing party, not to counsel. However, as a practical matter, the lawyer is frequently the only person adversely affected when attorney’s fees are denied. An indigent client has no real financial interest in whether his attorney is awarded fees. If the client is not indigent, the attorney may still be the party aggrieved in fact, if the client’s net recovery is not affected by the amount allowed for fees. When they are the real parties in interest, attorneys are entitled to a day in court.

The lawyers’ claims are cognizable under Article III. If the district court’s order is affirmed, they will suffer an economic injury in fact. See Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91 , 99 S.Ct. 1601 , 60 L.Ed.2d 66 (1979); Linda R.S. v. Richard D., 410 U.S. 614 , 93 S.Ct. 1146 , 35 L.Ed.2d 536 (1973). They have “alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues.” Baker v. Carr, 369 U.S. 186, 204 , 82 S.Ct. 691, 703 , 7 L.Ed.2d 663, 678 (1962). Turning to congressional intent, we believe that allowing attorneys to appeal from a denial of fees under 42 U.S.C. § 1973Í (e) “serves the clearly expressed legislative purpose of encouraging private enforcement of the civil rights laws.” Palmigiano v. Garrahy, 616 F.2d 598, 602 (1st Cir.1980); Torres v. Sachs, 538 F.2d 10 (2d Cir.1976). See Gates v. Collier, 616 F.2d 1268 (5th Cir.1980) (discussing the civil rights laws generally). Attorneys who bring civil rights suits on behalf of their clients may be secure in the knowledge that they can pursue any legitimate right they may have to attorneys fees in federal court. Finally, we note that “the interest of the courts and the public in complete, consistent, and efficient settlement of controversies,” Provident Tradesmen Bank & Trust Co. v. Patterson, 390 U.S. 102, 111 , 88 S.Ct. 733, 739 , 19 L.Ed.2d 936, 946 (1968), underlying such devices as joinder of necessary parties and pendent jurisdiction, supports allowing an attorney to appeal when he is truly the interested party.

Accordingly, we join three other circuits in holding that attorneys may appeal from a denial of attorney’s fees to their client. See Dietrich Corp. v. King Resources Co., 596 F.2d 422 (10th Cir.1979); Preston v. United States, 284 F.2d 514 (9th Cir.1960); Angoff v. Goldfine, 270 F.2d 185 (1st Cir.1959); 9 Moore’s Federal Practice ¶ 203.06 at 3-23 (2d ed. 1980).

643 F.2d at 320-21 (emphasis added).

Given our court’s prior willingness to look at the economic realities behind fee-shifting statutes, the court should extend the rule in James to fee-shifting statutes which contain the prevailing party language. It simply makes no sense to say that a lawyer can prosecute the appeal of an order denying fees in his own name, but to conclude that an attorney cannot apply for fees in his own name if the statute refers to prevailing parties.

The question here, however, is much simpler. The threshold question is merely whether Ebbinghouse has a sufficient “interest” within the meaning of Rule 24(a)(2) to be able to intervene in the underlying action to protect his fee. The majority’s wooden application of the term “prevailing party” causes the question to answer itself. *1523 Its definition of what constitutes an interest is that of Judge Skelly Wright, cited by this court with approval in Diaz v. Southern Drilling Corp., 427 F.2d 1118, 1124 (5th Cir.) (citing Hobson v. Hansen, 44 F.R.D. 18, 24 (D.D.C.1968)), cert. denied, 400 U.S. 878 , 91 S.Ct. 118 , 27 L.Ed.2d 115 (1970). The majority emphasizes that a Rule 24 interest must be “legally protecta-ble” and concludes that it is “clear that the EAJA does not afford Ebbinghouse party status to assert a legally protectable right.” Majority Opinion at 2817 (emphasis added). As Judge Johnson’s reasoning in James indicates, an attorney’s interest in statutory fees, even if derived from his representation of a prevailing party, is a legally protectable interest. Were this not so, contrary to our holding in Lipscomb , an attorney could not appeal a denial of an application for attorney’s fees in his own name.

Although it is clear that Ebbinghouse’s interest meets Judge Wright’s definition of that term, I hasten to emphasize that this definition is by no means exclusive, nor definitive. In fact, it is widely recognized that, since the 1966 amendments to Rule 24 appeared, no authoritative definition of this term has emerged. The Supreme Court’s two major decisions in this area, Cascade National Gas Corp. v. El Paso Natural Gas Co., 386 U.S. 129 , 87 S.Ct. 932 , 17 L.Ed.2d 814 (1967), and Donaldson v. United States, 400 U.S. 517 , 91 S.Ct. 534 , 27 L.Ed.2d 580 (1971), offer little guidance. See generally 7C C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 1908 (1986). Donaldson does say, as does the majority, that an interest must be “significantly protectable” before it can rise to the level of a Rule 24 interest. 400 U.S. at 528 , 91 S.Ct. at 541 . “But ‘significantly protectable interest’ has not been a term of art in the law and there is sufficient room for disagreement about what it means_” 7C Federal Practice and Procedure § 1980 at 270.

Given our holdings in James and Lipscomb , and the realities of fee-shifting statutes, one is compelled to conclude that Eb-binghouse’s derivative interest in statutory fees is a legally protectable interest. One’s interest in a law suit need not be identical to that of a “party,” as the majority suggests, before he can intervene. To illustrate, return to our remarks in Diaz , which follow our approval of Judge Wright’s definition of a Rule 24 interest:

The interest [does not have] to be of a legal nature identical to that of the claims asserted in the main action.... All that is required is an interest in the property or other rights at issue, provided the other elements of intervention are present.

427 F.2d at 1124 (emphasis added). It is clear that Panola’s right to fees under the EAJA was a right in which Ebbinghouse had a sufficient interest to intervene in the underlying litigation once Panola had dismissed him as counsel^.

III. JEFF D. AND COERCIVE WAIVERS OF ATTORNEY’S FEES

This appeal concerns a public interest lawyer who, after providing years of excellent legal services, 6 tried to do everything possible to secure for himself a statutorily authorized attorney’s fee. 7 As counsel for Panola, Ebbinghouse opposed the most formidable of civil litigants: the United States government. From all indications, the government’s position in this case, from start to finish, was unreasonable. Yet today, the majority ignores this court’s duty to ensure that the government does not take unfair advantage of indigent plaintiffs and the lawyers who choose to represent them. The court has missed an opportunity to instruct the government that its settlement posture in this case was inconsistent with the purposes of the EAJA. In order to escape liability for EAJA fees, the government told Panola, in effect, “if you don’t get Ebbinghouse to give up his fee, *1524 or fire him, then we just can’t do business.” When the Supreme Court said in Jeff D. that the courts have no business interfering with “negotiated waivers of attorney’s fees,” 106 S.Ct. at 1540 (emphasis added), it did not express approval of the position taken by the government during the settlement negotiations in this case.

The narrow holding in Jeff D. is that a district court, in approving a 42 U.S.C. § 1983 class action settlement pursuant to Fed.R.Civ.P. 23(e), has the power to sustain that portion of a settlement agreement which waives a prevailing party’s right to attorney’s fees and costs which might otherwise be sought pursuant to section 1988. There are a number of important distinctions between this case and Jeff D. The EAJA serves a very different purpose from section 1988, construed by the Supreme Court in Jeff D. In addition, the EAJA, unlike section 1988, provides for mandatory awards of attorney’s fees. Equally important are the factual distinctions between the two cases. In Jeff D., the plaintiffs bargained away their right to attorney’s fees in exchange for greater relief on the merits. Here, there was no such exchange. Plaintiffs’ counsel in Jeff D. tried to have the district court void that portion of a settlement agreement which voluntarily waived attorney’s fees. Here, plaintiff’s counsel thought the government’s demand for a fee waiver unreasonable and would not agree to it. He then tried unsuccessfully to seek the district court’s assistance. In Jeff D., the Supreme Court found no indication that the settling defendant had acted improperly in bargaining for a waiver of attorney’s fees. In this case, the district court, and now the majority, have created a procedural trap for lawyers which denies them the right to test the propriety of the government’s bargaining position.

In Jeff D., the Court explained why it is important to permit the negotiation of section 1988 fees. The force of the Court’s exposition in this regard derives from the purposes for which Congress passed section 1988, namely, “the promotion of respect for civil rights.” Id. at 1539 . Section 1988 is not the only mechanism provided by Congress to promote this objective; instead, it is but one component of the “arsenal of remedies available to combat violations of civil rights.” Id. at 1540 . The Court found that a general proscription against negotiated waivers of attorney’s fees “in exchange for a settlement on the merits” might “impede vindication of civil rights.” Id.

In contrast with section 1988, the EAJA is the only mechanism which reduces the effect of the tremendous resource imbalance between private citizens and the federal government so as to enable them to challenge unlawful or unreasonable government behavior. As is clear from the EAJA’s legislative history, the statute

rests on the premise that certain individuals ... may be deterred from seeking review of, or defending against unreasonable governmental action because of the expense involved in securing the vindication of their rights. The economic deterrence to contesting governmental action are magnified in these cases by the disparity between the resources and expertise of these individuals and their government. The purpose of the [EAJA] is to reduce the deterrence and disparity by entitling certain prevailing parties to recover an award of attorney fees, expert witness fees and other expenses against the United States, unless the Government’s action was substantially justified.

H.R.Rep. No. 1418, 96th Cong., 2d Sess. 5-6, reprinted in 1980 U.S.Code Cong. & Admin.News 4984. When faced with an indigent opponent such as Panola, which has been seeking assistance from the Farmer’s Home Administration since 1970, see Panola Land Buyers Ass’n v. Shuman, 762 F.2d 1550 , 1553 (11th Cir.1985), the government can virtually nullify the effect and purpose of the EAJA by absolutely conditioning any form of immediate relief upon a waiver of attorney’s fees.

Nothing indicates that Congress intended to make EAJA fees “nonnegotiable,” as the Supreme Court found to be true of section 1988 fees. It is important to remember, however, that an award of EAJA fees, unlike a fee award under section 1988, is not *1525 within the discretion of a district court. This is a fact which the Supreme Court emphasized in JeffD. See 106 S.Ct. at 1538, 1545 . EAJA awards pursuant to 28 U.S.C. § 2412 (d)(1)(A) are mandatory. If the United States fails to carry its burden of demonstrating that its position was substantially justified, a district court is obliged to award fees and costs. 8 Cf Jeff D., 106 S.Ct. at 1540 n. 22 (noting that Congress rejected proposal to make section 1988 fees mandatory). In this regard, it should be noted that the EAJA is more like the attorney’s fee provision in the TILA, which we construed in James , than it is like section 1988. Compare 28 U.S.C. § 2412 (d)(1)(A) with 15 U.S.C. § 1640 and 42 U.S.C. § 1988 .

As I discussed in Part I, the district court should have responded to Ebbinghouse’s request for some form of judicial participation in the settlement process to determine the reasons for the government’s desire to settle and whether its demand that settlement exclude payment of attorney’s fees was coercive. Both of these factors would have informed the district court’s judgment as to whether the government’s position was substantially justified and, consequently, liable for EAJA fees. The majority denies the opportunity to lay bare the truth of the reason and justness of the government’s position and frustrates the intent of Congress in passing the EAJA.

In addition to its discussion of the policies behind the civil rights statutes, the Supreme Court in Jeff D. also emphasized the economics of settlement in holding that section 1988 fees could be waived by a prevailing party:

To promote both settlement and civil rights, we implicitly acknowledged in Marek v. Chesney, [ 473 U.S. 1 , 105 S.Ct. 3012 , 87 L.Ed.2d 1 (1985),] the possibility of a tradeoff between merits relief and attorney’s fees when we upheld the defendant’s lump-sum offer to settle the entire civil rights action, including any liabilities for fees and costs.

106 S.Ct. at 1540 . In accordance with this policy, the Court explained that fee issues may be so essential to settlement negotiations that it would do violence to the deal struck between the parties to permit a party that prevailed through settlement to challenge a portion of that settlement to which it has already agreed. 9 The Court said that it would be unfair to disturb the result bargained for by the state of Idaho because, in calculating what it was willing to give up in settlement, Idaho’s agents necessarily incorporated the possibility of attorney’s fees into its settlement calculus. This reasoning, so fundamental to the decision in Jeff D. has no application to cases concerning the EAJA because payment of EAJA awards is made possible through a separate fund appropriated by Congress. Thus, Jeff D. ’s emphasis upon a section 1983 defendant’s need to know its total exposure (the cost of relief to the plaintiffs, plus costs and fees) when negotiating a settlement is not relevant to the questions presented here.

The government was not evaluating its settlement position in this case with regard to some ball-park figure beyond which it would have considered settlement impossible. This is not to say that government attorneys are not duty bound to protect the EAJA fund from unwarranted dissipation. *1526 The government’s interest in saving money is simply not an interest which informs the judicial interpretation of a fee-shifting statute. As a subcommittee of the D.C. Circuit’s Judicial Conference has explained, “any such saving is plainly at odds with the purpose for which the fee-shifting statute was enacted.” Final Subcommittee Report on Attorney’s Fees of the U.S. Court of Appeals for the District of Columbia Circuit, quoted in JeffD., 106 S.Ct. at 1544 n. 32. In cases where the United States’ liability under the EAJA would otherwise be clear, the courts should prevent the government from escaping such liability by absolutely conditioning relief upon a waiver of fees. This is particularly true where there is evidence that the government coerced an indigent party to relinquish its right to attorney’s fees or did not, as the Court discussed in Jeff D., offer greater relief in exchange for a fee waiver. Absolute demands for fee waivers are entirely inconsistent with the policy behind the EAJA, which is concerned primarily with unreasonable government conduct, as well as unreasonable government litigation positions. See generally H.R.Rep. No. 120, 99th Cong., 1st Sess. reprinted in 1985 U.S.Code Cong. & Admin.News 132.

The JeffD. opinion itself suggests that in circumstances such as this, the courts should take a hard look at the government’s settlement posture in cases against indigent opponents. The civil rights plaintiffs in Jeff D. and various amici curiae, argued that settlements with fee waivers should be scrutinized carefully when, for example, a government defendant had adopted a uniform practice of “insisting on a fee waiver as a condition of settlement in civil rights litigation.” 106 S.Ct. at 1543 . In addition, the United States Solicitor General argued that fee waivers might be invalidated where “the defendant had ‘no realistic defense on the merits,’ or if the waiver has part of a ‘vindictive effort ... to teach counsel that they had better not bring such cases.’ ” Id. at 1544 (citations omitted). Although the Court acknowledged that such practices might nullify the intended effect of a fee-shifting statute designed to benefit those who cannot afford counsel, it declined to reach these arguments for the simple reason that the record did not indicate that Idaho had adopted a consistent policy of requiring fee waivers. Specifically, the Court explained that the plaintiffs “ha[d] not offered to prove that the petitioners’ tactics ... merely implemented a routine state policy designed to frustrate the objectives of the Fees Act,” or deter civil rights representation generally. 106 S.Ct. at 1544 . The Court was skeptical that such practices could work, in the aggregate, to cause the pool of civil rights counsel to contract substantially. 10 And because there was “no reason or documentation to support such a concern,” it concluded that comment on the issue would be premature.

Ebbinghouse did raise these concerns before the district court but it is impossible to evaluate their validity because the district court and the majority have made it impossible for Ebbinghouse to develop the record by holding that he has no right to intervene. Nevertheless, we do know that in attempting to settle this case, the government “insisted” that it not be liable for any attorney’s fees. See Record, Yol. I, Tab 120 at 2 (district court opinion). To see that such a policy should not be condoned, one should consider Judge MacKinnon’s opinion in Moore v. National Association, 762 F.2d 1093 (D.C.Cir.1985). 11 An important issue in Moore , as in Jeff D., was whether the courts ought to bar the simultaneous negotiation of merits relief and fees in cases where a fee-shifting statute is involved. In concluding that there should be no such bar, the court said,

What we have here, ... is a plaintiff who, after extensive discovery, on her own initiative and through counsel, sought to settle her case through offers of settlement.

*1527 Id. at 1104 (emphasis in original). Crucial to Judge MacKinnon’s reasoning was the “ ‘distinction between plaintiff-suggested waiver[s] and defendant-coerced waiver[s].’ ” Id. at 1104 n. 15 (quoting id. at 1114 (Wright, J., dissenting)). Ultimately, the question in Moore , as well as Jeff D., was whether a civil rights plaintiff could “voluntarily” waive its right to fees. Id. at 1094 . 12 In JeffD., the majority highlighted the voluntary nature of the plaintiffs’ fee waiver and stressed the fact that Idaho’s settlement offer “was more favorable than the probable outcome of a trial.” 106 S.Ct. at 1538 . See also id. at 1535 (plaintiffs’ counsel conceded that Idaho’s settlement offer provided more relief than a court could provide). Here, there is simply no indication that the relief offered by the government in settling this case “constituted an adequate quid pro quo for [Panola’s] waiver of attorney’s fees.” Id. at 1544. Panola’s right to attorney’s fees were not “exchanged for injunctive relief of equivalent value,” id. at 1544 n. 33, but abandoned in the face of the real possibility that FmHA funding would soon become unavailable. See Appendix II to Majority Opinion.

IV. CONCLUSION

In light of Jeff D., attorneys know that when statutory fees are an issue, any challenge to the settlement position assumed by government entities must take place. before a settlement is executed. A party cannot agree to a waiver of attorney’s fees and then attack that waiver as invalid. By instructing the district courts that they are free to disregard the dynamics of settlement negotiations, the majority has eliminated an entire class of such challenges which could otherwise take place before settlement negotiations break down. In holding that a lawyer cannot challenge the government’s settlement posture, once he has been fired, the majority has foreclosed the possibility that such challenges will ever take place. The decision in this case will undoubtedly encourage the government to require EAJA fee waivers in the future. Equally disturbing is that it creates an incentive for the government to interfere with the usual alignment of interests between attorneys and clients. See generally Note, Fee Waivers and Civil Rights Settlement Offers: State Ethics Prohibitions After Evans v. Jeff D., 87 Colum.L.Rev. 1214 (1987); Wolfram, The Second Set of Players: Lawyers, Fee Shifting, and the Limits of Professional Discipline, 47 Law & Contemp. Probs. 293 (1984); Goldstein, supra, 20 Clearinghouse Rev. at 694-95.

As if to suggest that the result in this case is not a harsh one, the majority says that Ebbinghouse may again seek to intervene to enforce an attorney’s lien if Panola acquires monies which are not controlled by federal law. The majority does not say what the source of these monies might be. Yet if the government has failed to act with substantial justification, it is the EAJA which should provide the monies for payment of attorney’s fees, not Panola. Still, the majority has indicated to Ebbing-house that the only route to compensation is attacking the resources of his former indigent client which he has long fought to augment. This absurd result has not come about because of any collusive conduct on the part of the client, as is often the case when the attorney/client relationship dissolves on the eve of settlement; nor is it due to any failing on the part of Ebbing-house. Instead, it is because the government “insisted” that it not be liable for any attorney’s fees.

The EAJA seeks to offset the effects of “unreasonable governmental action” by placing resources in the hands of those who might otherwise “be deterred from seeking review” of such action. H.R.Rep. No. 1418, 96th Cong., 2d Sess. 5, reprinted in 1980 U.S.Code Cong. & Admin.News 4984. If the United States demands fee waivers as a prerequisite for settling any case which involves potential liability for EAJA fees, it can nullify the intended purpose of the Act. In this case, by eondition- *1528 ing immediate access to scarce FmHA funds by an absolute waiver of attorney’s fees, the government gained an advantage which the EAJA clearly seeks to deny it.

For the foregoing reasons, I respectfully dissent.

. See United States v. Certain Real Estate Property, 838 F.2d 1558, 1561 (11th Cir.1988); Stratton v. Bowen, 827 F.2d 1447, 1449 (11th Cir.1987) (citing H.R.Rep. No. 1418, 96th Cong. 2d Sess. 10, reprinted in 1980 U.S.Code Cong. & Admin. News 4984, 4989); Haitian Refugee Center v. Meese, 791 F.2d 1489, 1496 (11th Cir.1986).

. This active role which many judges take in encouraging settlement has been subject to criticism. See generally Resnik, Managerial Judges, 96 Harv.L.Rev. 376 (1982). But no one doubts that many judges play a pivotal role in shaping settlement negotiations. For works written by federal judges which advocate an active judicial role in the settlement process, see Lambros, The Judge’s Role in Fostering Voluntary Settlements, 29 Vill.L.Rev. 1363 (1984); R. Will, R. Merhige & A. Rubin, The Role of the Judge in the Settlement Process 4-7 (1977). The latter work was the result of a seminar conducted by the Federal Judicial Center for new district judges. See Comment, Objectivity and Accountability: Limits on Judicial Involvement in Settlement, 1987 U.Chi. Legal F. 369, 372 n. 7.

. A recent survey of trial lawyers in four jurisdictions also suggests that lawyers generally prefer to have a district judge take an active role in the settlement process. See Brazil, What lawyers Want From Judges in the Settlement Arena, 106 F.R.D. 85 (1985).

. For reasons which are unclear, the majority adopts the D.C. Circuit’s "limited reading" of our decision in James. See Majority Opinion at 2819-20, n. 17 (discussing Freeman v. B & B Associates, 790 F.2d 145, 148-49 (D.C.Cir.1986)). The majority’s suggestion that James concerns "an attorney’s standing to pursue his client's claim for attorney’s fees” is inexplicable in light of James’s holding that the attorney had a independent right to pursue a statutory fee award. Compare Majority Opinion at 2820 n. 17 with James, 689 F.2d at 1358 .

. For an indication that Congress intended to give the EAJA term "prevailing party" the same meaning it has in other fee-shifting statutes, see H.R.Rep. 1418, 96th Cong., 2d Sess. 11, reprinted in 1980 U.S.Code Cong. & Admin.News, 4984, 4990.

. Including a successful appeal to this court. See Panola Land Buyers Ass'n v. Shuman, 762 F.2d 1550 (11th Cir.1985).

. It should be noted that there is no suggestion in this case that Ebbinghouse violated his ethical duty to exercise independent judgment on Panola's behalf.

. The EAJA provides:

Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

28 U.S.C. § 2412 (d)(1)(A) (emphasis added).

. But, as one commentator has explained, although the Court "correctly stat[ed] the formula for the defendant’s settlement incentives,” it "failed to address the crucial analytic question: whether the benefits of allowing simultaneous negotiation of fees and merits (in encouraging settlements) exceed the costs of doing so (in deterring desirable litigation). Miller, Attorney Fees in the Supreme Court, 72 A.B.A.J. 40 (Nov. 1, 1986).

. The dissenters, however, found this proposition "embarrassingly obvious." 106 S.Ct. at 1554 (dissenting opinion).

. In Moore , each member of the three-judge panel filed a separate opinion.

. The Moore court held "that in a Title VII class action plaintiffs may, voluntarily and on their own initiatives, offer a waiver or concession of possible claims for fees and costs to encourage settlement.” 762 F.2d at 1105 .