Petition — Satoskar v. Indiana Real Estate Commission

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Supreme Court, U.S.

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, SeP/2 1975

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MICHAEL RODAK, JR., CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1975

——T5=330 |

NO.

VIJAY V. SATOSKAR, AND ALL OTHERS SIMILARILY SITU-

ATED,

Petitioners,

Vv.

INDIANA REAL ESTATE COMMISSION, THOMAS DICKSON,

EXECUTIVE SECRETARY: WARD DUNCAN, WILLIAM SCHMIDT,

CURTIS HUBER, HARLEY SNYDER, WILLIAM LONG, JAMES

BIBILYA, DAVID FAIR, CARL MILLER, REX BREEDEN, DON

McCULLOUGH, EUGENE McCLAIN, FRED KELLY, WAYNE

SMELTZER, MEMBERS OF THE BOARD OF DIRECTORS OF THE

INDIANA REAL ESTATE COMMISSION, STATE OF INDIANA,

Respondents.

PETITION FOR WRIT OF CERTIORARI

M. Daniel Friedland

Attorney for Petitioners

445 N. Pennsylvania St

Indianapolis, Indiana 46204

Telephone: (317) 633-6229

ee ae

el Maa, ie iN tt

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1975

NO.

VIJAY V. SATOSKAR, AND ALL OTHERS SIMILARILY SITU-

ATED,

Petitioners,

Vv.

INDIANA REAL ESTATE COMMISSION, THOMAS DICKSON,

EXECUTIVE SECRETARY: WARD DUNCAN, WILLIAM SCHMIDT,

CURTIS HUBER, HARLEY SNYDER, WILLIAM LONG, JAMES

BIBILYA, DAVID FAIR, CARL MILLER, REX BREEDEN, DON

McCULLOUGH, EUGENE McCLAIN, FRED KELLY, WAYNE

SMELTZER, MEMBERS OF THE BOARD OF DIRECTORS OF THE

INDIANA REAL ESTATE COMMISSION, STATE OF INDIANA,

Respondents.

PETITION FOR WRIT OF CERTIORARI

M. Daniel Friedland

Attorney for Petitioners

445 N. Pennsylvania St

Indianapolis, Indiana 46204

Telephone: (317) 633-6229

TABLE OF AUTHORITIES

CASES Page

Alyeska Pipeline Service Co. v. Wilderness

Society, U.S. , 95 S.Ct. 1612, 43 L.Ed.

ey See ee ee ee ee ee ee a

Brandenburger v. Thompson, 494 F.2d 885

EGelicis EPVED © oc ; es « * 6 6 8 8 cee ©

Bright v. Philadelphia- Baltimore-Washington

Stock Exchange, ° 327 F. no) 495, -” D. ree

ea ua coe eek eee ae

Donahue v. Stauton, 471 F.2d 475, (C.A. 7,

2 2.0 gs kh « 2 oe 6 & 6 ew OR Oe — 8

Espinoza v. Farah Manufacturing to. 94 S.Ct.

ae. Gee 6 ee et ke 68 ree se

Fowler _Schwartmalder, 498 F.2d 143 (C.A.

8, sya . oak @ ort a ar i ee ee

Hall v. Cole, 412 U.S. 1, 93 S.Ct. 1943 (1973). 5

Hoitt v. Vitek, 495 F.2d 219 (C.A. 1, 1974) .. 8

In re Griffiths, 413 U.S. 717 (1973). ..... 13

La Raza Unida v. Volpe, S57 F.R.D. 94 (N.D.

Cal., 1972) a nei cere CG % se SK

Lee v. Southern Home Sites, 444 F.2d 143

ee eee gt ee eg tee | CO

Merola v. Atlantic Richfield, 515 F.2d 165

a en « ~i <a: és és eee ee 6S

Mills v. Electric Auto-Lite Co., 396 FF =. *

2° Se Bs. Brera a oe ee ee 5

National Resource Defense Council v. Environ-

mental rreocesen 5 Agency, 484 F.2d 1331

(C.A. 1, 1973) a % aa

re

CASES

Newman v. Piggie Park Enterprises Inc.,

390 U.S. 400, 88 S.Ct. 964 (1968) .

Samuel v. University of Pittsburgh, -

Supp. ee We GOEE os < & ee 6 we

Satoskar v. Indiana Real Estate Commission,

F.2d » Wells Vp BOVE

Sprague v. Ticonic National Bank, 307 U.S. 16l,

59 S.Ct. 777 (1939)

Taylor v. Perini, 503 F.2d 899 (C.A. 6 1974).

Townsend v. Edelman, F.2d Suits Be

1975

Page

13

13

TABLE OF CONTENTS

Gpénion Below . . «seu 6 © 8 6%

PUBEGGROCAGR. 6 tt tt tes he

Question Presented ....

Statement of the Case ......

Reason for Granting the Writ

Conclusion

Appendix ., «ee cees

Page

2 4

. IN THE

‘ ! SUPREME COURT OF THE UNITED STATES

2 OCTOBER TERM 1975

4

ai NO.

VIJAY V. SATOSKAR, AND ALL OTHERS SIMILARILY SITU-

15 | ATED,

Petitioners,

Vv.

INDIANA REAL ESTATE COMMISSION, THOMAS DICKSON,

EXECUTIVE SECRETARY: WARD DUNCAN, WILLIAM SCHMIDT,

CURTIS HUBER, HARLEY SNYDER, WILLIAM LONG, JAMES

BIBILYA, DAVID FAIR, CARL MILLER, REX BREEDEN, DON

McCULLOUGH, EUGENE McCLAIN, FRED KELLY, WAYNE

SMELTZER, MEMBERS OF THE BOARD OF DIRECTORS OF THE

INDIANA REAL ESTATE COMMISSION, STATE OF INDIANA,

Respondents.

PETITION FOR WRIT OF CERTIORARI

Petitioners respectfully pray that a writ of

certiorari issue to review a decision of the Unit-

ed States Court of Appeals for the Seventh Circuit.

x

OPINION BELOW

The Decision of the United States Court of

Appeals for the Seventh Circuit is presently un-

reported, but the decision is set out in Appendix

A hereto.

JURISDICTION OF THE COURT

The decision of the United States Court of

Appeals for the Seventh Circuit was entered on

June 2, 1975; and a Motion for Reconsideration

and Suggestion of En Banc was denied on July 14,

1975. This Petition for Writ of Certiorari is

being filed within ninety days of the decision

of June 2, 1975. This Court's jurisdiction is

invoked under 28 U.S.A. §1254 (1).

QUESTION PRESENTED

Whether the United States Court of Appeals

for the Seventh Circuit erred in failing to award

attorneys’ fees based upon the common benefit

doctrine.

STATEMENT OF THE CASE

This case was initiated on the authority of a

complaint filed on February 22, 1972, for injunct-

ive and declaratory relief challenging the Indiana

Statute which preciudes aliens from even applying

for a real estate license. The suit was brought

pursuant to the Civil Rights Statute 42 U.S.C.

§1983 and sought the convening of a three-judge

court to strike down the unconstitutional state

statute barring aliens from obtaining real estate

licenses. On April 19, 1972, the District Court

filed an entry dismissing plaintiff's class ac-

tion, money damages count and attorneys' fees.

On May 1, 1972, plaintiff filed an interlocutory

sie

appeal to the U.S. Court of Appeals for the Sev-

enth Circuit for a reversal of the District

Court's April 19, 1972 entry. On May 19, 1972,

the District Court filed an entry abstaining from

determining jurisdiction until plaintiff repaired

to the Indiana State Courts. After emasculating

plaintiff's complaint by eliminating the count

for damages, class action and attorneys' fees,

the Court ultimately abstained from the case and

mandated plaintiff to repair to State Courts. On

May 23, 1972, plaintiff filed a Notice of Appeal

from both the Judge's April 19, 1972 and May 19,

1972 entries. On’June 18, 1973, the Seventh

Circuit reversed the District Court's April 19,

1972 order denying class action, damages and

attorneys' fees. The Seventh Circuit also re-

viewed the May 19, 1972 order of abstention and

set up a three judge court to decide the case on

the merits. The State then appealed the Seventh

Circuit decision by Writ of Certiorari to the

United States Supreme Court and certiorari was

denied. On August 8, 1973, the three judge panel

granted partial summary judgment on the constit-

utional question, issued a declaration that the

Indiana statute was unconstitutional and enjoined

the enforcement thereof. The three judge Court

then remanded to the District Court the issues of

damages and attorneys' fees. Since the Indiana

statute precluded aliens from even submitting an

application to take the real estate exam, there

were no records of other aliens who were denied

the opportunity to take the test, and therefore,

the class action was dismissed and the litigation

proceeded as a test case. On January 25, 1974,

the Attorney General filed a Notice of Appeal to

the Supreme Court from the three judge decision

of December 28, 1973. On the 28th of April, 1974,

plaintiff filed a Motion to Dismiss or Affirm in

the Supreme Court. On June 10, 1974, the Supreme

Court entered an Order affirming the decision of

ai

three judge Court, citing In re Griffiths.

On July 29, 1974, the trial before the Dis-

trict Court was held and the Court denied damages

and attorneys' fees. From that holding, plaintiff

asked for a review before the United States Court

of Appeals for the Seventh Circuit on December 31,

1974. On June 2, 1975, following an intervening,

peripheral decision by the United States Supreme

Court in Alyeska Papel Service Co. v. Wilder-

ness Society, the Seventh Circuit denied relief

for the plaintiff. From that denial, the plain-

tiff requested reconsideration and suggested an

en banc rehearing. The motion for reconsidera-

tion was denied on July 14, 1975.

REASONS FOR GRANTING CERTIORARI, III

This Court should grant Certiorari in Satos-

kar v. Indiana Real Estate Commission, F.2d .

(C.A.7, 1975), #74-1946, in order to (1) clarify

its decision in Alyeska Pipeline Service Co. v.

Wilderness Society, U.S. , 95 S.Ct. 1612,

43 L.Ed.2d (1975) insofar as it fails to pro-

vide clear guidelines in the application of the

common benefit exception following the demise of

the private attorney general exception, (2) end

the threatened dissonance and confusion between

the holding of Alyeska and the actions of lower

courts, (3) reevaluate the deleterious implica-

cions of Alyeska for public interest litigation,

and (4) reverse the Seventh Circuit's unjust and

unjustifiable decision in Satoskar.

Prior to this Court's decision last term in

Alyeska, there existed five generally accepted

exceptions to the American Rule prohibiting the

award of attorneys' fees: willful non-compliance

with a court order, obdurate bad faith pleading,

common fund, common benefit, and private attorney

general, La Raza Unida v. Volpe, 57 F.R.D. 94

fin

(N.D. Cal., 1972). The last three exceptions rep-

resent a continuum of concept initiated in the

decision of Sprague v. Ticonic National Bank, 307

U.S. 161, 59 ee 777 (1939).

Whether one professes to sue represent-

atively or formally makes a fund avail-

able for others may, of course, be a

relevant circumstance in making the

fund liable for his costs in producing

it. But when such a fund is for all

practical purposes created for the

benefit of others, the formalities

of the litigation--the absence of an

avowed class suit or the creation of

a fund, as it were, through stare de-

cisis rather than through a decree--

hardly .touch the power of equity in

doing justice as between a party and

the beneficiaries of his litigation.

The broad terms of the language in that opinion

were given fuller meaning in this Court's deci-

sion in Newman v. Piggie Park Enterprises Inc.,

390 U.S. 400, 88 S.Ct. 964 (1968), Mills v.

Electric Auto-Lite Company, 396 U.S. 375, 90 S.

Ct. 616 (1970), Hall v. Cole, 412 U.S. 1, 93 S.

Ct. 1943 (1973). Last tern, Alyeska expressly

struck down the private attorney general rule,

except where Congress explicitly authorized it.

In that same opinion, this Court expressly re-

affirmed the continued vitality of the common

benefit exception, Alyeska, fn. 39, at 1625.

The common fund exception was first express-

ly enunciated in Sprague. In this decision, it

was first recognized fa in actions similar to

shareholders' derivative actions, the final re-

sult of the case accrued to the ultimate good of

the defendants as well as the plaintiffs. Con-

sequently, it would be proper to assess the fund

"=

established by the suit to provide for the payment

of the successful attorneys' fees. In 1968, the

Supreme Court in Newman painted in broad terms the

importance of facilitating the use of the courts

for the vindication of constitutional rights and

the consequent necessity to award attorneys' fees

to aid in this effort.

When a plaintiff brings an action

under that Title, he cannot recover

damages. If he obtains an injunction,

he does so not for himself alone but

also as a 'private attorney general’,

vindicating a policy that Congress

considered of the highest priority.

If successful plaintiffs were rou-

tinely forced to bear their own at-

torneys' fees, few aggrieved parties

would be in a position to advance the

public interest by invoking the in-

junctive powers of the federal courts.

A synthesis of these two concepts first oc-

cured in Mills, in which the common fund exception

to the American Rule was extended to the award of

attorneys' fees in those cases where the final

result provided an identifiable benefit which was

to the ultimate good of the defendant. One result

of this decision was that many of the circuit and

district courts of the federal judiciary went one

step further and combined the result of Mills with

the dictum of Newman and the liberal private at-

torney general doctrine appeared, e.g. National

Resource Defense Council v. Environmental Protec-

tion Agency, 484 F.2d 1331 (C.A.1, 1973). The

private attorney general exception to the American

Rule was initially utilized in cases where a

strong Congressional policy was being implemented.

In other words, the ultimate beneficiary was the

United States and its citizens, and they should

aid in covering the expenses of this effort.

7

&

Eventually, the phrase "trong Congressional

policy" became virtually synonymous with almost

any Constitutional right or privilege. In Hall,

the Supreme Court explicitly refused to either

endorse or reject this approach, choosing rather

to further refine the common benefit doctrine.

The silence of the Court concerning private at-

torney general came to an end in Alyeska. There,

this Court held that only the four other judicially

created exceptions to the American Rule were valid,

specifically eliminating the private attorney

general doctrine.

The private attorney general doctrine can be

viewed as a logical extension of the basic con-

cepts of the common benefit exception, National

Resource, at 1333-1334. Just as the common bene-

fit rule allows an award of fees when the result

of the suit is to provide a substantial benefit

to the ultimate beneficiaries, the defendants,

the private attorney general rule allowed an

award of fees when the result of the suit was to

provide a substantial benefit (i.e. the vindica-

tion of a strong Congressional policy) to the

ultimate beneficiaries generally charactevi7¢d as

the general citizenry. Moreover, the lack of

precise requirements for qualifying as a private

attorney general made it a favored instrument of

crusading counsels and activist jurists. The

glib popularity of the private attorney general

doctrine contributed to its demise. The obvious

appeal of acting as a private attorney general

substituted for judicial evaluation of the

strength of the Congressional policy and the

depth of the benefit conferred by the vindication

of that constitutional right. Concommitantly, on

the more staid end of the fee award scale, common

benefit fell into general disuse.1

1 The best evidence of the relative use of the

die

These circumstances have resulted in lack of

understanding and consequent confusion in the

lower courts as to the state of the common benefit

exception following Alyeska, even as it reaffirmed

the language of Hall, Alyeska, fn. 39 at 1625.

A result of this confusion has been the Seventh

Circuit's action in Satoskar. The primary dif-

ficulty lies in the establishing of guideposts as

to what benefits achieve the threshold quality

level to meet the necessary requirement of sub-

Stantiality.

In Hall, a union member was excluded from his

union for "villifying" a union official. The

court affirmed the liability of the union and then

went on to award attorneys' fees, based upon the

Bu

structural election. That court awarded attorneys'

fees, based upon the common benefit exception. It

did so by determining that the suit had conferred

a substantial benefit to the defendant stock ex-

change by contributing to the responsiveness of

the intraorganizational governing institutions

of the exchange, Bright, at 506.

In Satoskar, Indiana had a statute which pro-

hibited the entry of aliens into that state's real

estate profession. Vijay Satoskar, in an effort

to eliminate the unfair statute, took the licens-

ing entity to Court. This Court granted summary

affirmance to the decision of three judge panel

which struck down the Indiana statute, leaving the

matter of fees and damages to the lower courts.

common benefit exception. It did so by determining

that the suit had conferred a substantial benefit The ultimate beneficiary in Satoskar is both

to the defendant union by contributing to the small and easily identifiable, Alyeska, fn. 39 at

furtherance of free speech within the union, Hall, at 1625. It is the Indiana Real Estate Commission

at 1948. and the agents that it licenses. The indiana Real

Estate Commission is no longer snackled by an un-

constitutional law and, consequently, is enabled

to increase the quantity of qualified real estate

agents in Indiana. In being able to do so, the

Indiana Real Estate Commission and the agents can

more completely fulfill their functions and thus

broaden their competency, esteem, and base within

the state.

In a strikingly similar case, Bright v. Phil-

adelphia-Baltimore-Washington Stock Exchange, 327

F. Supp. 495 (E.D. Pa., 1971), a stock exchange

member was found to have been wrongfully excluded

from participation within the organization's

two exceptions (common benefit and private at-

torney general) is that in the period from the

time of the Mills decision until the time of the

decision in Alyeska, one of the circuits awarded

fees based upon common benefit, Merola v. Atlantic

Richfield, 515 F 2d 165 (C.A. 3, 1975), while

private attorney general was utilized in, at

least six: Hoitt v. Vitek, 495 F. 2d 219 (C.A. l,

Thus, in each of these cases, a basic paradigm

of law exists. A single-interest service organiza-

tion is involved in each case. A member of each or-

ganization, after being wrongfully excluded, took

their organization to court to remedy the situa-

tion. The union violated the United States Constit-

(A. Stoel Southern ome ates : = he ) ution, the stock exchange violated its by-laws, and

(C.A. My net oa a —. C.A. 7. 1972 the Indiana Real Estate Commission violated the Uni-

te agg ), Donahue v. auton, (C.A. 7, ), ) ted States Constitution. Each violation served to

Fowler v. Schwartzwalder, 498 F. 2d 143 (C.A. 8,

1974), Brandenburger v. Thompson, 494 F. 2d 885

(C.A. 9, 1974).

exclude a person from a position within the organiz-

ation.. The resolution of the two prior cases (Hall

-10-

and Bright) against the respective organizations was

found, by the courts, to be for the ultimate benefit

of the organization. A fortiori, then, as the ultim-

ate benefit in Satoskar belongs to the organization,

the Indiana Real Estate Commission; this is a case

where the common benefit doctrine, as set out in

Hall and Alyeska, ought rightfully to apply.

Contrary to these results, the Seventh Cir-

cuit in Satoskar ignored the holdings of Sprague,

Mills, Hall and Alyeska and refused to even reach

beyond the fees‘ question. In doing so, it held

that,

There is no effective way in the

instant case to levy fees against a

benefited class...Any benefit to

resident aliens of Indiana is merely

theoretical and not reducible to

monetary figures.

In that short passage the Appeals court succeeded

in truncating the Alyeska requirement of a "small

and easily ascertainable class" of beneficiaries,

Alyeska, fn. 39 p. 1625, by distorting the common

benefit doctrine by confusing the plaintiffs with

the benefited party and thus undermining the entire

retaionale of fee-shifting, which is basic to com-

mon benefit, Mills at 625. Moreover, it effect-

ively negates Mills, Hall, and Alyeska by requir-

ing a monetary benefit, while the above cases all

hold that the benefit accrued need not be monetary

in nature. Alyeska specifically upheld both com-

mon fund and common benefit exceptions to the

American Rule, fn. 39 p. 1625.

Pro bono publico has always permitted fees

at scaled down per hour figures. Where an anti-

trust or securities lawyer could expect from $50-

$100 per hour for winning, the constitutional law-

yer is faced with the bleak prospect that if he

ein

gets far-reaching reform for his client in a tough

case, he gets a slap on the back and no money, but

if he rejects the reform and goes for a money set-

tlement, he may be compensated, despite the sacri-

fice of constitutional principles. In the real

world, it is unfair to place any citizen in that

position. The language of this decision in Sat-

oskar places an excruciating chilling effect upon

the workings of a society that is accustomed to

utilizing the legal system as a means to curb un-

just laws and further the principles and ideals

of our founding fathers.

It is axiomatic to the lay public that the

operation of justice in the United States mandates

courts that are equally available for all. In an

ideal sense, this remains true. Any person may

file in the courts of the country. Yet, especially

in suits which concern complex questions of law,

such as this one, it is necessary to have a lawyer.

Attorneys cost money. If the ability of constitu-

tional litigants to obtain fees from the other ,

side is further abrogated, even in victory, then

the court system will have made a conscious de-

cision in favor of stare decisis over the rights

and interests of all the citizens of the nation.

What has occurred in the latest decisions has

been a blurring of. the fact that while three of

these exceptions to the American Rule share a com-

mon heritage and thus have some similarities, that

each exists as an independent entity and that the

subsequent reduction of one of the exceptions does

not reduce any of the other exceptions' essential

qualities, except insofar as it partakes of the

forbidden entity. The crucial decision then be-

comes one of determining the degree, if any, of

overlap between the allowed and the unallowed,

common benefit and private attorney general.

If the effective emasculation of the common

o$2.

benefit exception to the American Rule by the Sev-

enth Circuit is allowed to stand, that decision

can have but one result on the pursuit of justice

in this society. If people could exist in society

without having to "pay" their way, the issue of

attorneys' fees would be of no import. However,

it is necessary for people to have money to survive

in our society. Consequently, attorneys are being

presented with a Hobson's choice by the Satoskar

decision, even more so than that provided by the

language of Alyeska. If the attorney chooses re-

form he loses bi chance for compensation. If he

settles for money out of court, he loses the op-

portunity to achieve real reform.

The devastating impact of this decision lies,

not as much with the attorneys, for if an attorney

is deprived of his pro bono work he will find pay-

ing clients elsewhere, but with the people who now

will be unable to obtain competent counsel in their

efforts to vindicate constitutional rights. As

result of this opinion, constitutional litigants

will lack competent counsel for the fact that a

lawyer cannot live on righteousness alone. Con-

sequently, the ultimate loser from the end of the

common benefit exception will be the citizen who

is unable to afford the costs inherent in obtaining

competent counsel in a complex constitutional case

and the lengthy ensuing court battle. Thus, the

equal access to the courts of justice, which every

American schooichild knows to be true, will only

be true in school. For in the federal courtrooms,

unless the onerous effects of the Satoskar deci-

sion are rectified, only the wealthy will have the

fair and just access to the courts to which all

Americans are entitled.

Another basis for granting Certiorari was the

erroneous application of the bad faith pleadings

exception to the American Rule. The tendency of

deep-pocket defendants, such as the Indiana Real

x's

Estate Commission, to prolong the appeals process

beyond the point of reasonableness in an effort to

outlast the less endowed party to the litigation

is a practice which is patently unjust. Especially

in a situation such as this, where an on-point

authority, In re Griffiths, 413 U.S. 717, clearly

controlled. The Indiana Real Estate Commission

took a direct appeal to this court from the find-

ings of the three-judge panel, arguing that there

was a substantial federal question of equal pro-

tection in that Espinoza v. Farah Manufacturin

Co., 94 S.Ct. 334 (1974) tempered the holding of

In re Griffiths. In an earlier writ, the Commis-

Sion unsuccessfully argued that abstention was

proper in that despite In re Griffiths, there was

no constitutional issue involved in alien licens-

ing.

If an alien can practice law, an alien can

surely obtain a real estate license. The Indiana

Real Estate Commission cannot provide a legitimate

basis for pressing that appeal to this Court.

This Court in a summary affirmance agreed with the

lower panel and cited In re Griffiths as its whole

opinion. The repeated and dilatory appeals accom-

plished only one objective, it delayed plaintiff's

right to obtain a license. While the courts are

always open to legitimate legal challenges, ju-

dicial economy would dictate that frivolous appeals

brought by parties with unequal financial resources

be deterred. Therefore an award of counsel fees

would further the policy of judicial econometrics

by discouraging bad faith appeals in such situa-

tions.

The misapplication of the common benefit

doctrine in Satoskar is merely symptomatic of the

confusion which currently reigns in the lower

courts following Alyeska, see Townsend v. Edelman,

F.2d, (C.A.7, 1975), #73-1960 & #73-1961

and Samuel v. University of Pittsburgh, F.Supp.

-14-

__, (D.C., W.Pa., 1975). This confusion will

heighten further in the days ahead as attorneys

across the country scramble to obtain recompense

for their efforts in the broad range of cases af-

fected, from shareholders' derivative suits to 42

U.S.C. 1983, civil rights actions.

The Supreme Court has a responsibility to es-

tablish viable criteria for the assessment of the

award of attorneys' fees in litigation of common

concern. A balancing test should be forged that

awards fees based upon a substantial common bene-

fit conferred and denying fees where the rights

vindicated are more personal in nature. Affirma-

tive action by this Court is necessary to create

order where confusion currently reigns in de-

termining whether an award of counsel fees is

justified in public interest litigation.

CONCLUSION

For the foregoing reasons, it is respectfully

prayed that a writ of certiorari be granted to

review the decision of the Seventh Circuit of Ap-

peals for the Seventh Circuit.

Respectfully submitted,

Mr. Daniel Friedland

Attorney for Petitioners

eM.

APPENDIX A

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

ARGUED APRIL 9, 1975

DECIDED JUNE 2, 1975

Before Pell, Stevens, and Tone, Circuit Judges

Tone, Circuit Judge: The issue in this ap-

peal is whether the District Court properly denied

a request for the awarding of attorneys' fees

against the State and Indiana and state officials

who were defendants in their official capacities.

In the underlying suit, plaintiff was successful

in challenging the constitutionality of the In-

diana statute precluding aliens from applying for

or obtaining real estate licenses, but did not

prevail on the class and damages aspects of the

case.

The history of the case was this: A single

judge abstained from deciding the constitutional

question, but his decision was reversed and re-

manded for the convening of a three-judge court,

478 F.2d 1405 (7th Cir., 1973), cert. denied

414 U.S. 1004 (1973). On remand, the statute was

declared unconstitutional, and the Supreme Court

summarily affirmed, citing In re Griffiths, 413

U.S. 717 (1973), 417 U.S. 938 (1974). The case

then proceeded to trial before a single judge on

the issues of damages and attorneys' fees. On

September 11, 1974, in the order now before us,

the District Court denied both damages and fees.

The District Court denied the request for

fees on the ground that the Eleventh Amendment

ofthe

bars any monetary recovery against the state, and,

since the officials are defendants in their of-

ficial capacities only, any award against them

would be, in effect, an award against the state.

We affirm the judgment but do so without reaching

the Eleventh Amendment question.

Plaintiff recognizes the American Rule that

the prevailing party is not ordinarily entitled

to recover his attorneys' fees from the losing

party but argues that his case comes within sev-

eral judicially created exceptions to that general

rule: (1) that by securing injunctive and declar-

atory relief he has conferred a common benefit on

a group of people whose constitutional rights had

been violated: (2) that he has acted as a private

attorney general in effectuating a strong Congres-

sional policy: (3) that he should receive attor-

neys' fees based on "this Court's inherent equit-

able power to shift the attorneys fees to defeated

defendants in 1983 actions": and (4) that defend-

ants have acted obstinately and in bad faith in

"pursuing frivolous appeals". Plaintiff further

argues that the Eleventh Amendment, contrary to

the conclusion of the District Court, does not bur

recovery of attorneys' fees from the state or

state officials being sued in their official cap-

acities.

Since oral argument in this case, the Supreme

Court has held in Alyeska Pipeline Service Co. v.

The Wilderness Society, U.S. , 43 U.5.L.W.

4561, 4568 (1975), that in the absence of express

Statutory authority the federal courts do not have

inherent judicial power to award fees based on the

“private attorney general" approach or on their

views as to the social importance of the policy

underlying the statute under which the plaintiff

sues. Thus, plaintiff's second and third argu-

ments have been conclusively rejected by the Su-

preme Court. The Court also noted the limits of

of Fe

the "common fund and common benefit" justification

for awarding fees; that in all the cases upholding

awards on that basis, "the class of beneficiaries

was small in number and easily identifiable. The

benefits could be traced with some accuracy, and

there was reason for confidence that the costs

could indeed be shifted with some exactitude to

those benefitting."...U.S. at n.39, 43 U.S.L.W.

at 4569, n. 39. There is no effective way in the

instant case to Jevy fees against a benefited

class for the reasons that presumably led the

District Court to reject the class and damages

allegations of the complaint: Any benefit to resi-

dent aliens of Indiana is merely theoretical and

not reducible to monetary figures: the class suf-

fers problems of indefiniteness: and thus the

means of identifying either benefit or class with

requisite accuracy are lacking. To assess attor-

neys' fees against the state is inappropriate be-

cause that would impose a share of the cost on all

citizen taxpayers and not just on the aliens di-

rectly benefited. If it is to be asserted that

all citizens have in fact benefited from the vin-

dication of constitutional principles, the "common

benefit" theory would merge into the "private at-

torney general" approach, which as we have said

has been rejected by the Court in Alyeska Pipeline.

There remains the question of whether there

was "bad faith" on the part of the state or its

officials that would justify a fee award. The

standards for bad faith are necessarily stringent.

Compare Sims v. Amos, 340 F.Supp. 691, 693-694

(M.D. Ala. 1972), aff'd. 409 U.S. 942 (1972), with

Donahue v. Staunton, 471 F.2d 475, 482-483 (7th

Cir. 1972), cert, denied 410 U.S. 955 (1973), and

see discussion of the two in Alyeska Pipeline,

U.S. at ___n. 46, 43 U.S.L.W. at 4571, n. 46. The

prosecution of timely appeals on the merits of a

case does not show bad faith, especially where, as

here, the defendants were acting on the advice of

off»

the state Attorney General, who represented them

throughout the course of this litigation and where

the issue involved had been the subject of an in-

tervening Supreme Court decision (In re Griffiths,

supra, 413 U.S. 717) which was not on all fours

with the instant case. We have been referred to

no evidence that would support a finding that the

appeals were taken in bad faith.

As a result of our conclusion that no proper

basis existed on which the District Court could

have justified an award of fees, we affirm the

order denying fees without reaching the question

whether the Eleventh Amendment precludes an award

of fees against the state or its officials.* This

° The disagreement among the circuits on this

question is described but not resolved in footnote

46 of the Alyeska Pipeline opinion, U.S. at

n. 46, 43 U.S.L.W. at 4571 n. 46. It should also

be noted that there is an intra-circuit split in

both the Fifth and Sixth Circuits: compare Jordan

v. Gilligan, 500 F.2d 701 (6th Cir. 1974), petition

t

for cert. filed 43 U.S.L.W. 3240 (U.S. Oct. 9,

1974) (No. 74-403), with Milburn v. Hueker, 500 F.

2d 1279, 1282 (6th Cir. 1974), and see Taylor v.

Perini, 503 F.2d 899, 911-912 (6th Cir. 1974),

petition for cert. filed, 43 U.S.L.W. 3281 (U.S.

Oct. 30, 1974) (No. 74-506): and compare Gates v.

Collier, 489 F.2d 298 (Sth Cir. 1973), rehearing

en banc granted, 500 F.2d 1382 (1974) and Norman

v. Alabama, 503 F.2d 1320, 1321 n.1 (Sth Cir. 1974)

(hearing en banc on the issue of attorneys' fees)

with Named Individual Members of San Antonio Con-

servation Society v. Texas Highway Department, 496

F.2d 1017, 1025-1026 (Sth Cir. 1974), rehearing en

banc granted, 496 F.2d 1026 (1974). Petitions for

certiorari are pending in three cases, Jordon v.

Gilligan and Taylor v. Perini, as noted above, and

Skehan v. Board of Trustees of Bloomsburg State

College, 501 F.2d 31 (3rd Cir. 1974), petition for

cert. filed, 43 U.S.L.W. 3296 (U.S. Nov. 8, 1974)

(No. 74-558).

ten ee thle th. a lal

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-19- ‘

result is in accord with that reached in Townsend

v. Edelman (Nos. 73-1960, 73-1961, June 2, 1975),

decided this day by another panel of this court.

AFF IRMED