Record and brief — United Steelworkers v. Sadlowski

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81-1906 |

In THE

- 4 Supreme Gourt, U.S.

i FILED

APR 15 1992

No.

ALEXANDER TL STEVAS

CLERK

Supreme Court of the United States

OCTOBER TERM, 1981

UNITED STEELWORKERS OF AMERICA,

AFL-CIO-CLC,

Petitioner,

EDWARD SADLOWSKI, JOSEPH F. RAUH, JR.,

LEON DESPRES, KENNETH YABLONSKI,

JUDITH SCHNEIDER,

and

RAYMOND DONOVAN, Secretary of Labor,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

LAURENCE GOLD RoBERT M. WEINBERG

AFL-CIO (Counsel of Record)

815 16th Street, N.W. MicHarcL H. GoTTESMAN

Washington, D.C. 20036 Davin M. SILBERMAN

(202) 687-5390 BREDHOFF & KAISER

1000 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 833-9340

Attorneys for Petitioner

WILSON - Eres Printine Co. Inc. - 789-0096 - WasHINGTON, D.C. 20001

2 —

QUESTIONS PRESENTED

1, Whether in an action to set aside a union election

brought by the Secretary of Labor under Titie IV of

the Labor-Management Reporting and Disclosure Act of

1959 a “common benefit” attorneys’ fee award to a pri-

vate intervenor is inconsistent with, and therefore pre-

cluded by, the remedial scheme of Title IV.

2. If not:

(A) Whether the “common benefit” doctrine requires a

claimant seeking an attorneys’ fee award to prove as an

element of his fee claim that but for his legal services the

asserted benefit would not have been realized.

(B) Whether the “common benefit” doctrine, which

allows an attorneys’ fee award, only where the award

operate [s] to spread the cost of litigation proportion-

ately among the beneficiaries,” permits a fee award where

the client for whom the legal services were performed has

realized a unique benefit from the litigation (in this case,

a high union office with a substantial salary), a small

portion of those who would be required to pay the fee

realized at best a less substantial benefit (here, the oppor-

tunity to vote in a rerun election in their district of the

union), and any benefit received by the overwhelming

majority of those who would be required to pay the fee

(i.e., those union members outside the district in which

the rerun election was conducted) was still less sub-

stantial.

(i)

TABLE OF CONTENTS

QUESTIONS PRESENTED

TABLE OF AUTHORITIES .

OPINIONS BELOW

MRISDICTIIN&ðd

STATUTORY PROVISIONS INVOLVED ........

STATEMENT OF THE CASE

Introduction

—— —

Statement of Facts

REASONS FOR GRANTING THE WRIT ........

I. The Statutory Preclusion Issue

—— — ———

II. The Common Benefit“ Issues

CONCLUSION

(iii)

—

es te e de de =

2 5

TABLE OF AUTHORITIES

CASES Page

Alyeska Pipeline Co. v. Wilderness Society, 421

U.S. 240 9, 18-23

American Association of Marriage and Family

Counselors v. Brown, 598 F.2d 1865 (D.C. Cir.

88 ——ðtv⸗. ͤͤ4r—)tñ—— 23

Bender v. Crown, 551 F.2d 169 (7th Cir. 1977) ... 19

Boeing Co. v. Van Germert, 444 U.S. 472 18

Brennan v. UAW Community Action Program, 86

L.R.R.M, 3188 (D. Conn. 1974) 8

Calhoon v. Harvey, 379 US. 134 10, 16

Cantwell v. County of San Mateo, 631 F.2d 631

COGRa Cle, DOG) nnn ancninaccsseancccenemevenrcernerrcsntnco sens 23

Donovan v. Machinists Local Lodge 79, 109 LRRM

2584 (W.D. Wash. 198177. —— 8

Donovan v. Teamsters Local 70, 661 F.2d 1199

CI Ba I ———— 8

Donovan v. Teamsters Local 326, No. 79-514 (D.

Del., Feb. 1, 1982) 8

Dunlop v. Bachowski, 421 ‘US. . 10

Fleischmann Corp. v. Maier Brewing, 386 U.S.

1 —A—A—A en EES Ae ee 9, 10, 12, 13

Grace v. Ludwig, 484 F.2d 1262 (2d Cir. 1973),

cert. denied, 416 U.S. 9044 19

Innen nen passim

Hodgson v. Steehoorkers, 408 U.S. 333 ...............- 13, 17

Marshall v. Teamsters Local 20, 509 F.Supp. 926

COE TD, CORA RE) ina .. 8

McDonald v. Oliver, 525 F.2d 1217 (5th Cir. 1978) 23

Mills v. Electric Auto-Lite Co., 396 U.S. 375..11, 12, 18, 20

Southeast Legal Defense Group v. Adams, 657 F.2d

0 23

Trbovich v. Mine Workers, 404 U.S. 528 passim

Usery v. Teamsters Local 639, 548 F.2d 369 (D.C.

Cir. 1976), cert. denied, 429 U.S. 1123 —.............. 8

Wirtz v. Bottle Blowers Assn., 889 U.S. 468 10, 16

Wirtz v. Laborers Union, 389 U.S. 477 ..............-.-.... 18, 17

TABLE OF AUTHORITIES—Continued

STATUTES Page

Labor-Management Reporting and Disclosure Act

of 1959

29 U.S.C. § 412 11

29 U.S.C. § 431 (e) 11

29 US.C. § 464 (a) 11

29 U.S.C. § 482 2, 9, 10

29 U.S.C. § 483 2, 9, 10

29 U.S.C. 8 501 (b) 11

MISCELLANEOUS

Mallin, Title IV of the LMRDA—Should Interven-

ing Plaintiffs Be Permitted to Recover Attorney's

Fees? 48 U. Cinn. L. Rev. 345 (1979) 16

IN THE

Supreme Court of the United States

OCTOBER TERM, 1981

No.

UNITED STEELWORKERS OF AMERICA,

AFL-CIO-CLC,

EDWARD SADLOWSKI, JOSEPH F. RAUH, IR.,

LEON DESPRES, KENNETH YABLONSKI,

JUDITH SCHNEIDER,

and

RAYMOND DONOVAN, Secretary of Labor,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Petitioner,

Petitioner United Steelworkers of America, AFL-CIO-

CLC, respectfully prays that a writ of certiorari issue to

cember 16, 1981, and amended on January 7, 1982.

OPINIONS BELOW

dix A. The judgment and amended judgment of the

court of appeals are unreported and are reprinted as

Appendices I and J.

JURISDICTION

The court of appeals entered its judgment on Decem-

ber 16, 1981, and an amended judgment on January 8,7

1982. On March 5, 1982, Justice Brennan entered an

Order (App. K), extending the time for filing the peti-

tion to April 15, 1982. The jurisdiction of this Court is

invoked pursuant to 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

Sections 402 and 403 of the LMRDA, 29 U.S.C. §§ 482,

483, are reprinted as an appendix at the back of this

petiticn.

STATEMENT OF THE CASE

Introduction

This case began in November, 1973, as an action

the Secretary of Labor under Title IV of the

Management Reporting and Disclosure Act of 1959, 29

U.S.C. § 401 et sc. (“LMRDA”), to set aside the 1973

election for district director of District 31 of the Uni

Steelworkers of America (“USWA”). Edward Sadlow-

ski, the defeated candidate in the election, was granted

leave to intervene. Approximately eight months after

suit was filed, the Department of Labor (“DOL”) and

USWA agreed to resolve the case by holding a DOL-

supervised rerun of the disputed election.

Since that time, the case has continued as an effort

by the four attorneys for intervenor Sadlowski to obtain

an award of fees from the membership of the USWA

under the “common benefit” exception to the American

rule against the shifting of fees. The case has been be-

fore the United States Court of Appeals for the Third

Circuit on two occasions, and has resulted in a judgment

from that court directing the district court to award

fees. USWA seeks review of that judgment here.

Statement of Facts

In February, 1978, USWA conducted elections for dis-

trict directors of the 25 districts (i.e., geographic re-

gions) into which the Union is divided. After the elec-

tions, Sadlowski—the defeated candidate for director of

District 31—protested the District 31 election in accord-

ance with USWA’s internal procedures for resolving

election contests. Sadlowski’s protest was denied by

USWA.

Sadlowski then submitted a complaint to the Secretary

of Labor under Title IV of the LMRDA. The Secretary

investigated the challenged election, assigning 19 investi-

gators to the case full-time who interviewed hundreds

of witnesses in over 2,600 hours of investigation (App.

26a). Based on the results of the investigation, the Sec-

retary instituted a suit tooverturn the election.

Sadlowski was granted leave to intervene to protect

his personal interest qua candidate in accordance with

this Court’s decision in Trbovich v. Mine Workers, 404

U.S. 528. Sadlowski’s compiaint-in-intervention added no

substantive allegations to the Secretary’s complaint, but

requested eight items of additional relief.

_ Approximately eight months after suit was filed, the

DOL and USWA agreed to resolve

the

admission of violation, by holding a DOL-supervised rerun

neys participated in negotiating the settlement and they

declined to join it, terming it, in a document filed with the

district court, “totally inadequate” and “an unconscion-

able denial” of Sadlowski’s rights, and proposing eight

modifications in the agreement (paralleling the items of

relief sought in Sadlowski's complaint)“ With one minor

change, the district court approved the settlement agree-

ment as submitted. As approved, the agreement contained

none of the relief requested either in Sadlowski’s complaint

or in his objections to the settlement. In November, 1974, a

new election was held under DOL supervision which Sad-

lowski won. Sadlowski was thereafter installed as Dis-

trict Director.

In January, 1975, respondents filed a “Verified Appli-

cation” requesting that they be awarded approximately

$500,000 in attorneys’ fees from the USWA treasury.

That treasury contains the dues of USWA’s 1,400,000

members throughout the United States and Canada, in-

cluding the 130,000 members within District 31.2 Re-

spondents premised their fee claim on the “common bene-

fit” exception to the American rule against fee shifting,

contending that the rerun of the District 31 election had

benefited the USWA membership as a whole and that

respondents were responsible for conferring that benefit.

USWA moved to dismiss the fee application on two

grounds. First, USWA argued that an award of fees to

a private intervenor in a Title IV action is inconsistent

1 The document referred to in text is reprinted in volume one

of the Joint Appendix filed in the court of appeals at 233-39. (That

Appendix is hereinafter cited as JA 9

2 Districts in the USWA are administrative subdivisions of the

International Union and do not have treasuries of their own.

with, and thus is precluded by, the remedial scheme of

Title IV. Second, USWA urged that, in any event, re-

spondents’ fee application did not state a basis for a com-

mon benefit fee award from USWA’s treasury as the

application revealed that the “benefit” that allegedly was

conferred by respondents was not “common” to all of

USWA’s members but was conferred principally upon

Sadlowski, who won an important union office (with a

$35,000 salary), and secondarily on those USWA mem-

bers within District 31 who had received the “bencut”

of a new election to choose their District Director;

USWA contended that the application alleged no benefit

to the over 90% USWA members who are outside of

District 31 and who would bear the major share of any

fee award against USWA’s treasury.

The district court sustained both of USWA’s conten-

tions and dismissed the fee application (App. 154a-73a).

Respondents appealed.

On the first appeal, a divided panel of the court of

appeals reversed. That court overturned the district

court’s statutory preclusion ruling, holding that a common

benefit fee award “is wholly consistent with Title IV of the

LMRDA” (App. 117a; see pp. 11-12, infra). And the ap-

pelate court further found respondents’ fee application

sufficient to state a common benefit fee claim (App. 117a-

35a; see p. 22, infra). Accordingly, the court remanded

the case for a determination of “[w]hether an award is

warranted and, if so, the amount of such award” (App.

136a).

USWA petitioned this Court for a writ of certiorari,

raising both the statutory preclusion and no-common-

benefit issues. Respondents opposed the petition (Br. at 4)

on the ground, inter alia, that since “no attorneys’ fees

have yet been awarded” and since the appellate court had

“simply ruled that fees are permissible here, . . [r]eview

by this Court in such circumstances would be wholly pre-

mature and unwarranted.” This Court denied the peti-

tion for certiorari. Justice White filed a dissenting opin-

ion in which Justices Stewart and Rehnquist joined sug-

gesting that both questions merited review (App. 89a-

98a ; see p. 7, infra).

On remand, the case was referred to a magistrate and

was submitted for decision on the basis of the voluminous

record developed on remand (including transcripts of 11

depositions, 13 affidavits, and over 260 exhibits) as well

as on the presettlement record.

The Magistrate issued a report recommending that

the fee claim be denied. The Magistrate concluded,

as a matter of law, that entitlement to a common

benefit award requires “ ‘a proven causal relationship be-

tween the efforts of counsel and the benefits allegedly de-

rived therefrom’ ”—that is, a showing that but for coun-

sels’ efforts the benefit would not have been realized (App.

88a). And the Magistrate found, as a matter of fact,

that respondents had failed to meet that requirement.

Respondents filed exceptions to the Magistrate’s report

with the district court. That court overruled these ex-

ceptions, endorsing the Magistrate’s legal premise and

adopt ing] his recommendations as my findings of fact”

(App. 22a).

Respondents again appealed to the Third Circuit,

which reversed the district court’s judgment in part.

The court of appeals accepted as “law of the case” the

legal rulings on the first appeal, albeit acknowledging

the “closeness of the issue[s]” that had been decided on

that appeal (App. 2a, n.1). With respect to the ques-

tions addressed on remand, the court below concluded

that the Magistrate and district court had committed

legal error by requiring respondents to establish—as an

element of their fee claim—that but for counsels’ efforts

the benefit that was allegedly conferred on the USWA

membership would not have been realized. The court held

that counsel were entitled to a fee award from USWA’s

members, under the common benefit doctrine, if their ac-

tivities were of “material assistance to the Department of

Labor” in the prosecution of the case (App. 13a; see id.

10a), regardless of whether the benefit conferred upon

USWA’s members would have been realized even in the

absence of counsels’ activities.

Applying the “material assistance to DOL” standard,

the court of appeals overturned the denial of fees with

respect to work done by counsel for Sadlowski during the

period that Sadlowski exhausted his internal union reme-

dies and submitted a complaint to the Secretary, but up-

held the denial of fees with respect to work done by coun-

sel for Sadlowski thereafter. The Court remanded the case

to the district court “for a determination of the amount

of attorney’s fees to be awarded” (App. 17a)

REASONS FOR GRANTING THE WRIT

USWA sought certiorari from the first decision of the

court of appeals in this case, which reversed the district

court’s dismissal of the fee application for failure to state

a claim. At that interlocutory stage of the case, this

Court declined to grant certiorari. In a dissenting opin-

ion, Justice White, joined by Justices Stewart and Rehn-

quist, stated that It he issues presented in this case are

of serious importance to the proper enforcement of the

LMRDA, and also to the prosecution generally of private

claims that benefit a broad class of persons” (App. 89a) ,*

and that Ibloth holdings of the lower court appear to

conflict with this Court’s decisions” (App. 92a).

On the second appeal, the court below, in directing an

award of a‘torneys’ fee, adhered to its earlier rulings as

“law of the case,” albeit recognizing the “closeness of the

On remand, the parties recently have submitted memoranda to

the district court concerning the amount of feés to be awarded

under the appellate court’s decision; the matter is now pending

before the district court for decision.

* The court of appeals likewise recognized that the case “presents

important problems in the administration of Title IV” (App. 94a).

issues” (App. 2a n.1). As the case now stands, therefore,

the two issues raised by the first decision of the court of

appeals are still present: (1) whether a “common benefit”

attorneys’ fee award to the lawyers representing a private

intervenor in an action brought by the Secretary of Labor

under Title IV of the LMRDA is inconsistent with, nd

therefore precluded by, the remedial scheme of Title IV;

and (2) whether a “common benefit” award is appropriate

when the intervenor receives a significant tangible benefit

from the suit that no one else receives and when 90% of

those to be charged with the fee are unaffected by the relief

granted in the suit. The second decision of the court of

appeals raises an additional issue as well: whether a

“eommon-benefit” fee claimant must establish that “but

for” his efforts those from whom he is seeking a fee would

not have received the benefits for which he is claiming

credit.

All three of these issues warrant plenary review by

this Court. The first—the statutory preclusion issue—

has arisen frequently in recent years, and generated con-

flicting ver court decisions.* Moreover, the result

reached by the Third Circuit on this issue is contrary to the

remedial scheme of Title IV, to the congressional policies

underlying that scheme, and to this Court’s decision in

Trbovich v. Mine Workers, 404 U.S. 528, which care-

fully limits the role of intervenors in Title IV cases in

order not to jeopardize those congressional policies. See

pp. 9-16, infra.

With respect to both the second and third issues—the

“common benefit“ issues—the decision of the court below

is inconsistent with principles established by this Court

5 See Donovan v. Teamsters Local 70, 661 F.2d 1199, 1203 (9th

Cir. 1981) ; Usery v. Teamsters Local 639, 5643 F.2d 369 (D.C. Cir.

1976), cert. denied, 429 U.S. 1123; Donovan v. Teamsters Local

$26, No. 79-514 (D. Del., Feb. 1, 1982); Marshall v. Teamsters

Local 20, 509 F.Supp. 926 (N. D. Ohio 1981) ; Donovan v. Machinists

Local Lodge 79, 108 RRM 25684 (W.D. Wash. 1981); Brennan v.

UAW Community Action Program, 86 L.R.R.M. 3188 (D. Conn.

1974).

“{

and is in square conflict with decisions of other circuits.

Indeed, by loosing the common benefit exception to the

rule against fee shifting from its rationale,

lower court resurrects under the rubric of that ex-

this

ciety, 421 U.S. 240. See pp. 16-24, infra.

I. The Statutory Preclusion Issue

(a) Alyeska reaffirms the American rule “that attor-

ney’s fees are not ordinarily recoverable. . . from the

opposing party, 421 U.S. at 257, quoting Fleishchmann

ception, but has held that these exceptions do not apply

in statutory causes of action where an award of attor-

neys’ fees would not be consistent with the remedial

scheme established by Congress. Fleischmann Corp. v.

Maier Brewing, supra; Hall v. Cole, 412 U.S. 1, 9-19. Title

IV of the LMRDA establishes a remedial scheme that

leaves no room for a private claim for attorneys’ fees.

Title IV provides a “comprehensive procedure for en-

forcing [its substantive] rules.” Trbovich, supra, 404 U.S.

at 531. Pursuant to that scheme only the Secretary has the

power to bring a post-election suit challenging a union

election. 29 U.S.C. §§ 482, 483. By design, Congress pro-

hibited private litigants from initiating lawsuits to chal-

lenge completed union elections, “reject[ing],” as the

court below acknowledged, “a bill, H.R. 8342, 86th Cong.,

ist Sess. §402(a) (1959), which provided for union

members suits under Title IV, and authorized the award

of appropriate relief, including attorneys’ fees” (App.

100a). The prohibition on suits by private litigants re-

sulted from a congressional concern that, otherwise,

courts could be used, particularly by defeated candidates,

to disrupt union self-government, and unions would be

vulnerable to the harassment and expense incident to

defending against such private litigation.*

Further, Congress specified in “meticulous detail I]!“

(Fleischmann, supra, 386 U.S. at 719) the relief that

may be obtained in a Title IV post-election suit brought

by the Secretary (29 U.S.C. § 482(c).):

“The court shall declare the election, if any, to be

void and direct the conduct of a new election under

supervision of the Secretary and, so far as lawful

and practicable, in conformity with the constitution

and bylaws of the labor organization. The Secretary

shall promptly certify to the court the names of the

persons elected, and the court shall thereupon enter a

decree declaring such persons to be the officers of the

labor organization.”

The remedy is public in nature; no private or individual

relief is provided. And, in 29 U.S.C. § 483, Con-

gress declared that “(t]he remedy provided by [Title

IV] for challenging an election already conducted shall

be exclusive.”

The remedial provisions of Title IV just described

stand in marked contrast to those of the other titles of

the LMRDA. All other titles authorize private suits by

individual union members, and either expressly authorize

an award of attorneys’ fees in such suits or, by authoriz-

ing “such relief (including injunctions) as may be ap-

propriate,” give courts a “broad mandate” permitting

awards of attorneys’ fees pursuant to equitable excep-

tions such as the common-benefit doctrine. See Hall v.

Cole, supra, 412 U.S. at 11.”

* Trbovich v. Mine Workers, supra, 404 U.S. at 530-537; Dunlop

v. Bachowski, 421 U.S. 560, 568-570; Wirtz v. Bottle Blowers Ass'n,

389 U.S. 463, 470-472; Calhoon v. Harvey, 379 U.S. 134, 140.

In Title I (bill of rights of union members), Congress relied

for enforcement upon civil suits brought by individual union mem-

bers “for such relief (including injunctions) as may be appropri-

ate.” 29 U.S.C. § 412. In Title II (reporting), Congress also relied

upon union members for enforcement, and expressly provided that:

(b) In the face of this statutory scheme, which mani-

fests a clear congressional intent to preclude private suits

and private remedies in the post-election enforcement

processes of Title IV, the court below, on the first appeal

—and on the second appeal as “law of the case“ —never-

theless found that permitting a private intervenor to as-

sert a fee claim and to obtain an award of attorneys’

fees in a Title IV action is consistent with congressional

intent. The court found that Hall v. Cole, supra, and

Mills v. Electric Auto-Lite Co., 396 U.S. 375, “enunci-

ated a presumption against preclusion” of the judicial

authority to make fee awards (App. 10la). And in de-

termining whether this “presumption” was overcome here,

the court below looked not to the language or legislative

history of Title IV, which provide it no comfort, but to

what it called supplement [s]“ to and “expansion” (App.

104a) of the structure of Title IV resulting from this

Court’s decision in Trbovich, which the court below saw as

working a fundamental change in the statutory scheme of

Title IV. In the view of the court below:

Before the Trbovich-intervenor existed, the statutory

scheme involved only one party truly comporting it-

self in an adversarial posture: the union. But since

Trbovich the “union interest” is defined by two par-

ties with adverse viewpoints-—even if their interest

in the union remains a ommon denominator. The

Secretary, in this circumstance, occupies a more tena-

ble position since he has not only his own expertise

“The court in such action may, in its discretion, in addition to any

judgment awarded to the plaintiff or plaintiffs, allow a reasonable

attorneys fee to be paid by the defendant, and costs of the action.”

29 U.S.C. §481(c). In Title III (union trusteeships), Congress

created for individual union members a civil cause of action “for

such relief (including injunctions) as may be appropriate.” 29

U.S.C. §464(a). In Title V (fiduciary responsibility of union

officers), Congress not only gave union members a right to bring

suit, after exhaustion of internal union remedies, for “damages

an accounting or other appropriate relief,” but in addition

specified that attorneys fees and expenses may be allowed as part

of that relief, 29 U.S.C. § 501 (b).

8 8

ii!

eae

145

“7

8 —

"hi +

Far

—

[App. 116a]

Thus the court found fee awards to be consistent with—

indeed compelled by Trbovion.

We doubt that Hall and Mills create “a presumption

against preclusion.”* But even if they do, the language

The Fleischmann Court stated, “[w]hen a cause of action has

been created by a statute which expressly provides the remedies

for vindication of the cause, other remedies should not readily be

implied.” 886 U.S. at 720. While the court below thought that

Fleischmann had been “substantially undercut” (App. 100a) by

Hall and Mills, neither of those cases qualified the quoted proposi-

tion from Fleischmann. Rather, Hall and Mills each undertook an

inquiry as to whether importation of the remedy of attorneys’ fees

was consistent with the applicable statutory scheme—the inquiry

which Fleischmann mandates.

The majority below predicated its analysis on bits and pieces

of language taken out of context from Hall. A more pertinent

reference to Hall is at the point where this Court stated the holding

on this issue:

We therefore hod that the allowance of counsel fees to the

successful plaincdff in a suit brought under § 102 of the

LMRDA is consistent with .. the Act... . [412 U.S. at 14

(emphasis added) ]

[Footnote continued on page 13]

and history of Title IV, properly understood, overcome

that presumption. For, as we have seen, the language,

history, and purpose of the statute leave no room for a

private claim for attorneys’ fees in a Title IV action.

The court below apparently saw these statutory mate-

rials as beside the point, given its view that Trbovich had

worked a basic change in the enforcement scheme of Title

IV” But Trbovich created no such change; to the con-

trary, it marked out an unusually limited role for a pri-

vate intervenor in order not to jeopardize Congress’ ob-

8 [Continued]

The Hall Court was able to find a fee award consistent with

Title I of the LMRDA for two reasons, neither of which applies

here. First, the Court found that “[uJnlike § 35 of the Lanham

Act”—the section involved in Fleiechmann—the remedial provision

of Title I “broadly authorizes the courts to grant ‘such relief

(including injunctions) as may be appropriate’” and thus “does not

‘meticulously detail the remedies available to a plaintiff.’” 412

U.S. at 10-11. As we have seen, there is no such “broad[] author-

iz[ation]” in the post-election remedial provisions of Title IV;

rather the remedies are “meticulously detail[ed].”

Second, the Hall Court found that the enforcement of Titie I is

dependent upon the ability of “an aggrieved union member. . to

finance litigstion.” 412 U.S. at 14. The enforcement of Title

IV is not so dependent; indeed, Congress has vested exclusive

authority to bring suit in the Secretary of Labor. The aggrieved

member’s only obligation is to protest the election within his union

and to the Secretary. And as this Court has made clear, this

protest was intended to be a layman's complaint,” Wirtz v. Laborers

Union, 389 U.S. 477, 482 which may be “inartful” or “use broad

or imprecise language,” Hodgson v. Steelworkers, 403 U.S. 333,

340-41. ö

The court stated:

The question is not whether a union member is entitled to

recover attorney’s fees under the statute alone, where the role

- prescribed for him is complaint to the Secretary after ex-

haustion of internal union procedures. The question is what

relief a union member is entitled to after having intervened

in and partiicpated in the prosecution of an action brought

by the Secretary under Title IV in the manner anticipated

by the Supreme Court in Trbovich. [App. 104a; emphasis in

the original]

jectives in shaping Title IV. The flaw in the lower

court’s reading of Trbovich was explained in the dis-

senting opinion from the earlier denial of certiorari in

this case:

Trbovich held that the union member who initiated

the challenge might still intervene in the federal suit,

“so long as that intervention is limited to the claims

of illegality presented by the Secretary’s complaint.”

Trbovich, supra, at 537. This conclusion represented

a very careful balance between Title IV’s commitment

of enforcement authority to the Secretary’s sole dis-

cretion, and a recognition that the union member who

originally raised the complaint might wish to see his

claims pressed in some manner different from that of

the Secretary.

The opinion below threatens to upset that delicate

compromise. Intervention by union members in sup-

port of the Secretary’s grounds of complaint was up-

held in Trbovich only because it would make the

union liable “to relatively little additional burden,”

and would “not subject the union to burdensome

multiple litigation, nor will it compel the union to

respond to a new and potentially groundless suit.”

Trbovich, supra, at 536. Once attorney’s fees are

assessable against a union on behalf of intervenors,

however, the union has indeed become liable to an

“additional burden” that could be quite costly. And

the adjudication of whether an intervenor has con-

tributed significantly to the common benefit of all

union members could well involve the “burdensome

multiple litigation” that the restrictions on interven-

tion imposed by Trbovich were intended to avoid.

[App. 90a]

The validity of these observations is confirmed by the

experience in this very case. Respondents’ Fee Applica-

tion added to this case an entirely new claim, predi-

cated upon thirty-nine pages of factual allegations set

forth in the Application. Some of those allegations—

such as the allegation that the original election had been

tainted by illegalities (the allegation on which respond-

ents rested their contention that the rerun election had

constituted a benefit to USWA members within District

31)—had been made by the Secretary in his complaint

but had been left expressly unresolved by the settlement

agreement. Other allegations—such as the allegation that

misdeeds had been committed by officers of the USWA

outside District 31 (the allegation on which respondents

rested their contention that the settlement benefited

USWA members outside of District 31 by deterring

USWA officers from repeating their methods in other dis-

tricts)—had been made by Sadlowski in his complaint

to the Secretary, but had not been included in the Sec-

retary’s complaint in district court. And still other al- -

legations—those concerning the asserted failures of the

Secretary properly to perform his duties during the in-

vestigation and prosecution of this case—were wholly

new allegations, requiring USWA to defend the adequacy

of the Secretary’s performance. The resulting litigation

over these allegations has been massive, time-consuming,

and costly.

Subjecting a union that settles a Title IV case to

this type of litigation—the type inherent in the ad-

judication of common benefit fee claims in the context

of Title IV actions—is not only inconsistent with Trbo-

vich (and with the congressional pulicies underlying that

decision), but is, in addition, inconsistent with “the ef-

fective administration of Title IV,” as the Secretary of

Labor advised the court below (Br. at 13). The Secre-

tary explained:

[Aln award of attorneys’ fees may preclude expedi-

tious settlement of Title IV cases. The principal

motivation for a settlement is the avoidance of liti-

gation. Unions will be less inclined to enter into a

‘voluntary settlement agreement if there is a potential

for an award of attorneys’ fees. Any disincentive to

settlement is serious because of the remedial value of

having a new election as soon as possible. The policies

of the LMRDA, which include the encouragement of

settlements, would be disserved by permitting inter-

venors to discourage unions from entering into settle-

ments by insisting upon the right to attorneys’ fees.

IId. j 0

Because the decision below resolves this important and

recurring issue respecting the administration of Title IV

in a manner that is inconsistent with the precedents of

this Court and that thwarts the “effective administration

of Title IV,” the Court should grant a writ of certiorari

to decide the statutory preclusion issue.

II. The “Common Benefit” Issues

A. On remand, after the court of appeals held that

an award of fees was not statutorily precluded, the

Magistrate and district court ruled that to prevail

under the common benefit exception claimants must prove

that “but for” their efforts for which they are seeking

attorneys’ fees the asserted benefit would not have been

realized by those who would be compelled to pay the fees.

On that basis, the Magistrate and district court declined

to award fees here as they found, as a matter of fact,

that the USWA membership would have realized the

same asserted benefit had Sadlowski’s attorneys done

nothing.

The court of appeals rejected the Magistrate’s and

district court’s legal premise, holding that it is sufficient

10 This Court has emphasized the importance of settlements to the

enforcement of Title IV, stating that one reason Congress gave ex-

to the courts.” Calhoon v. Harvey, supra, 879 U.S. at 140; see also

Wirtz v. Bottle Blowers Ass'n, supra, 389 U.S. at 472 (“the objec-

tive [of Title IVI is not a lawsuit” but settlement). Indeed, over

60% of all Title IV cases are resolved by settlement (Mem. on

pth gga Av ap eee

U.S. 977). In contrast to the prompt relief achievable through

settlements, in fully litigated Title IV proceedings rerun elections

do not occurr, on average, until over 2.5 years have passed. Mallin,

Title IV of the LMRDA—Should Intervening Plaintiffs Be Per-

mitted to Recover Attorney's Fees? 48 U. Cinn. L. Rev. 345, 355

(1979).

for fee claimants to prove that their activities were of

“material assistance” to the Secretary of Labor (App.

9a-10a). In reaching this conclusion, the court of appeals

concern that a “but for” standard is too “rigid”

(App. 10a), and “ ‘would impose a burden in the context

of Title IV challenges which would be practically im-

possible to meet and would result in no fee recover[y]

by intervenors, thereby emasculating any theoretical right

to intervene’” (App. 9a; quoting from respondents’

brief) u Accordingly, the court below directed a fee

award here to respondent Despres for assisting in pre-

paring what Congress intended to be a “layman’s com-

plaint” to the union and to the Secretary, Wirtz v. La-

borers Union, supra, 389 U.S. at 482," notwithstanding

the finding of the Magistrate and the district court, which

the court of appeals did not disturb (App. 12a), “that

the assistance of counsel was not in any way necessary

to preserve matters for presentation to the

(App. 76a)—#.e., that the Secretary’s ability to institute

the suit that eventuated in the rerun election would have

been the same had Despres never entered the case.“

11 This was the identical concern that the court expressed in re-

solving the statutory preclusion issue (see pp. 11-12 supra), and,

again, in resolving the other common benefit issue in the case

(see pp. 22-23 infra).

12 See also Hodgson v. Steelworkers, supra, 403 U.S. at 340-41.

18 The Magistrate explained:

We first have the statements of personnel fron, e Depart-

ment of Labor supported by decisions of the Supreme Court

that the internal union protest procedures are designed to

insure that an individual can readily protect his rights. Sec-

ondly, there is the testimony of Sadlowski himself that the ele-

ments raised in his protest were basically secured without

the aid of counsel, and that while it is highly speculative, it

would appear that the assistance of counsel would not have been

necessary to gather the various elements of the protest. And

finally, there are the records of counsel which indicate that

little if any time was devoted to assisting his client in preyar-

The court of appeals’ reasoning obliterates the distinc-

tion between the “common benefit” exception and the

“private attorney general” theory repudiated by this

Court in Alyeska. The common benefit exception, as

this Court has explained, permits fee shifting “not be-

cause of any ‘bad faith’ of the defendant, but, rather,

because Ito 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.“ Hall v. Cole, supra, 412

US. at 5-6, quoting Mills v. Electric Auto-Lite, supra, 396

U.S. at 392; see Boeing Co. v. Van Germert, 444 US.

472, 478. By its terms, this rationale requires proof that

the claimants’ efforts were a but for cause of the enrich-

ment of those from whom fees are sought. If the as-

serted beneficiaries would have received the same benefit

without the claimants’ efforts, then the beneficiaries have

not been “enrich[ed] unjustly at the plaintiff’s expense.”

That proving such a causal relationship may be difficult

for an intervenor in a. public prosecution provides no

warrant for relaxing this standard, as the court of ap-

peals believed. For it is not the office of the common

benefit exception to encourage exercise of such rights;

its only office is to preve it “unjust enrichment.” Alyeska

holds that it is for Congress—and not for the federal

judiciary—to determine when fee awards are necessary

to facilitate the exercise of statutory rights:

has not extended any roving authority to

the Judiciary to allow counsel fees as costs or other-

wise whenever the courts might deem them war-

ranted. What Congress has done... is to make

specific and explicit provisions for the allowance of

attorneys’ fees under selected statutes granting or

protecting various federal rights. [421 U.S. at 260]

ing the protest. From all these elements, it would appear that

the assistance of counsel was unnecessary, and that counsel

performed little if any service to furthering the Intervenor’s

protest. [App. 76a-77a]

f ;

to the allowance of attorneys’ fees to the prevailing

party in federal litigation or to pick and choose

among plaintiffs and the statutes under whi

sue and to award fees in some cases but not in

importance of the public policies uvolved in particu-

lar cases. (421 U.S. at 269]

On the issue of the need for proof of causation, the

decision below squarely conflicts with the decisions of

the Second and Seventh Circuits in Grace v. Ludwig, 484

F.2d 1262 (2d Cir. 1973), cert. denied, 416 U.S. 904

and Bender v. Crown, 551 F.2d 169, 171 (7th Cir.

1977). Grace and Bender involved common benefit

fee claims by private intervenors in an SEC proceeding

in which Commission counsel acted as public prosecutor.

The courts there held that to recover fees claimants were

required to show, as the Second Circuit put it, that but

for’ the intervention” the benefit would not have been

realized. 484 F.2d at 1269. Where that is not shown

Intervenor must then be characterized as a mere

volunteer who aids a public body or trust in the per-

formance of their officia] duties on behalf of 2 certain

class, but who is not entitled to compensation. [484

F. ad at 1268-69]

The rule adopted in Grace and Bender is thus precisely

the rule rejected by the court below.

B. The decision below finding a “common benefit“ con-

flicts with decisions of this Court and of other courts of

appeals in a second respect as well: it authorizes a fee

recovery from all of USWA’s members throughout the

United States and Canada even though, in the court’s

own view (App. 130a, 132a), Sadlowski himself received

a uniquely valuable benefit from this litigation, the 10%

of USWA members in District 31 received a less substan-

tial benefit, and the 90% of USWA members outside

District 31 received a substantially lesser benefit still.

Because the purpose of the common benefit exception is

to prevent unjust enrichment (p. 18, supra), a common-

benefit award is permissible, as this Ccurt stated in

Alyeska, only where the “benefits [can] be traced with

some accuracy, and there [is] reason for confidence that

the costs could indeed be shifted with some exactitude to

those benefiting.” 421 U.S. at 265, n.39. Proper applica-

tion of the exception requires that it will . . operate

to spread the costs of litigation proportionately among

[the] beneficiaries . . .” (ibid). See also Hall v. Cole,

supra, 412 U.S. at 5; Mills v. Electric Auto Lite,

supra, 396 U.S. at 394. The award sought here lacks

the indispensible ingredient of a common-benefit award:

it would not spread the costs proportionately among those

who receive the benefit.

At the threshold, respondent Sadlowski realized a

unique benefit from this lawsuit: the office of Director

of District 31 (with its $35,000 salary). Indeed, the very

reason he was permitted to intervene was because he had

a special, personal interest distinct from the interest of

the rest of USWA’s membership, Trbovich, supra, 404

supra, 412 U.S. at 5; Mills v. Electric Auto-Lite,

U.S. at 538-539.“ As a result of the litigation, he re-

ceived a special benefit that no other union member re-

ceived.

14 See App. 9la-92a (White, J., joined by Stewart and Rehnquist,

JJ., dissenting from denial of certiorari:

Intervention was held permissible in Trbovich in order to pro-

tect a union member’s interest, or his choice of how to repre-

sent that interest, precisely to the extent that the individual’s

interest diverged from the Secretary’s. The Secretary is the

champion of the “ ‘vital public interest in assuring free and

democratic union elections that transcends the narrower inter-

est of the complaining union member.’” Hence, the rationale

that provides for the right to intervene in the first place su

stantially undercuts the intervenor’s claim to be creating

significant common benefit not already provided by the Secre-

tary. [citations omitted; emphasis in original]

» T

The secondary “beneficiaries” of the settlement of the

District 31 litigation were the USWA members within

District 31. While the “benefit” they received from the

settlement was of an entirely different order than that

received by Sadlowski, they at least obtained a new elec-

tion for director of their district.”

Shifting fees only to the District 31 members would

be troublesome enough in light of the much greater

benefit Sadlowski personally realized. But here a fee

award would do far more than that: because USWA

districts do not have treasuries of their own, the fee

mandated by the court below would be paid from the

USWA treasury into which all USWA members in all

districts pay dues. As over 90% of the USWA members

are in districts outside District 31, over 90% of any fee

award would be borne by non-District 31 members. Any

benefit to these members from the District 31 settiement

is entirely speculative. The Secretary’s suit had alleged

no misconduct by USWA members outside of District

31. And the settlement merely directed a rerun of

the District 31 election; it provided no relief whatsoever

outside District 31. Thus any ephemeral benefit the more

than 1,000,000 USWA members outside of District 31

may have received from this litigation is, at the very

least, of an entirely different order from the political and

pecuniary benefit Sadlowski realized from this litigation

or even from the less substantial benefit that USWA

members within District 31 may have received.“ This is

1 Whether that new election was, in fact, a benefit depends upon

whether the original election had been tainted by illegality; if the

original election was not so tainted, the overturning of that election

would not constitute a benefit to District 31 members. The Secretary

had, of course, alleged such taint in his complaint; USWA had

denied the allegations in its answer; and no adjudication was ever

made on the issue. Thus, it is not even clear that the members of

USWA within District 81 received a benefit from the settlement.

1 The court of appeals seemed to believe that the settlement

would have educational value outside District 31, teaching would-

be-miscreants within the USWA that defective elections will have

not, then, a case in which a fee award would “operate

to spread the costs of litigation proporticnately among

the beneficiaries,” as Alyeska requires.

The court below acknowledged that the “greatest bene-

fit was conferred upon Union members in [District 31]”

(App. 182a; emphasis in original). That court concluded,

however, that this fact could not be allowed to defeat the

fee claim, as to do so “would thwart the process of com-

plaint and productive intervention by union members, and

deny effect to the policies enunciated by the LMRDA and

Trbovich” (App. 138a) .”

to be rerun (App. 129a-130a). But in reaching this conclusion,

the court apparently overlooked that (1) no misdeeds had ever been

proven in this case on the part of any person; (2) the Secret y had

not even alleged any misdeeds by any person outside of District 31;

and (3) there is ne apparent reason to believe that the settlement

of this case, provicing for a rerun election in one district, had

any incremental deterrent value beyond the deterrent that arises

from the very «xistence of Title IV and its more than two decades

of enforcement by the Secretary. Furthermore, whatever education

was provided by the District 31 settlement presumably was not

confined to persons within USWA and thus this theory equally

would justify—indeed require—that fees be awarded from the

treasuries of all unions.

As an alternative theory, the court of appeals suggested that

USWA members at large benefited from the rerun of the District

31 election because the director of the district serves on USWA’s

Executive Board (App. 130a). But as members in other districts

have no voice in selecting the director of District 31, a new election

can “benefit” them only if it produces a new director who happens

to take voting positions on the Board more to their liking. As this

is a matter of personal predilection, and not all would likely favor a

change, it cannot be the basis for assessing a fee against all.

17 The court below went on to reason that it was more appro-

priate for the wrongdoing union to pay the fees than “to penalize

the intervenor who performed his function correctly and well”

(App. 182a). Never mind that the members of the union might not

appreciate a fee being charged to them for an attentuated “benefit”

they could not 7 ossibly perceive: “If the rank and file is dissatisfied,

their recourse lies with the Union leaders who were responsible”

)

not “operate to scar the costs of litigation proportion-

ately among the beneficiaries,” nonetheless fees must be

awarded in order not to “thwart” intervention. But

Alyeska teaches that absent statutory authorization, this

is not an appropriate basis for a federal court to direct

the shifting of fees. As stated in the dissent from the

earlier denial of certiorari:

{t]he lower court’s reasoning that a new election in

a single district benefited the entire membership of

the United Steelworkers of America in such an iden-

tifiable and proportionate way as to justify burden-

ing the entire membership with the intervenor’s at-

torney’s fees represents logic squarely at issue with

2 3 of the common- benefit theory.

pp. 92a

In the wake of Alyeska, several courts of appeals have

rejected common benefit fee claims in situations in which

it was not possible to spread the costs of the litigation

proportionately among the acknowledged beneficiaries of

the litigation. E. g., American Association of Marriage

and Family Counselors v. Brown, 593 F.2d 1865 (D.C.

Cir. 1979); Southeast Legal Defense Group v. Adams,

657 F.2d 1118 (9th Cir. 1981); Cantwell v. County of

San Mateo, 631 F.2d 631, 639 (9th Cir. 1980); ef.,

McDonald v. Oliver, 525 F.2d 1217 (5th Cir. 1978). In

Brown, for example, the court affirmed the denial of a

fee award because the fee claimant had obtain led! a

direct and pecuniary benefit” from the litigation whereas

the benefit to the class “is incremental and relatively in-

(ibid). Apart from the fact that there was not even an allegation

in the Secretary’s complaint—let alone a finding—that “Union

leaders” had engaged in any wrong, this reasoning is the an-

tithesis of “common-benefit”—it sounds more of “common detri-

ment”: all members should share equally in paying for the union’s

sins.

inconceivable that the cost could

be distributed in proportion to the benefits received.” 657

F.2d at 1123. The decision below squarely conflicts with

these decisions.

In sum, the “common-benefit exception has in this case

been stretched beyond the bounds of its creative rationale”

in ways “affecting the . . . conduct of all common-benefit

litigation” (App. 93a) (White, J., dissenting from de-

nial of certiorari). For this reason—as well as to de-

cide the statutory preclusion issue which is “of serious

importance to the proper enforcement of the LMRDA”

(App. 89a) (White, J.)—the Court should grant a writ

of certiorari.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

LAURENCE GOLD ROBERT M. WE'™NBERG

AFL-CIO (Counsel of Record)

815 16th Street, N. W. MICHAEL H. GoTTEsMAN

Washington, D.C. 20086 Davin M. SILBERMAN

(202) 687-5890 BREDHOFF & KAISER

1000 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 883-9840

Attorneys for Petitioner

APPENDIX

STATUTORY PROVISIONS INVOLVED

Section 402 of the LMRDA, 29 U.S.C. § 482, provides:

(a) A member of a labor organization—

(1) who has exhausted the remedies available

under the constitution and bylaws of such or-

ganization and of any parent body, or

(2) who has invoked such available remedies

without obtaining a final decision within three

calendar months after their invocation, may file

a complaint with the Secretary within one cal-

endar month thereafter alleging the violation of

any provision of section 401 of this title (includ-

ing violation of the constitution and bylaws of

the labor organization pertaining to the election

and removal of officers). The challenged election

shall be presumed valid pending a final decision

thereon (as hereinafter provided) and in the

interim the affairs of the organization shall be

conducted by the officers elected or in such other

manner as its constitution and bylaws may

provide.

(b) The Secretary shall investigate such com-

plaint and, if he finds probable cause to believe that

the Secretary may prescribe. The court shall have

power to take such action as it deems proper to

preserve the assets of the labor organization.

after a trial upon the merits, the court finds—

(1) that an election has not been held within

the time prescribed by section 401 of this title,

(2) that the violation of section 401 of this

title may have affected the outcome of an

election,

the court shall declare the election, if any, to be

void and direct the conduct of a new election under

supervision of the Secretary and, so far as lawful

and practicable, in conformity with the constitution

and bylaws of the labor organization. The Secre-

tary shall promptly certify to the court the names

of the persons elected, and the court shall thereupon

enter a decree declaring such persons to be the of-

ficers of the labor organization. If the proceeding

is for the removal of officers pursuant to subsection

(h) of section 401 of this title, the Secretary shall

certify the results of the vote and the court shall

enter a decree declaring whether such persons have

been removed as officers of the labor organization.

(d) An order directing an election, dismissing a

complaint, or designating elected officers of a labor

organization shall be appealable in the same manner

as the final judgment in a civil action, but an order

directing an election shall not be stayed pending

appeal.

Section 403 of the LMRDA, 29 U.S.C. § 483, provides in

pertinent part:

* * * * The remedy provided by this subchapter for

challenging an election already conducted shall be

exclusive.

8 >

5 Supreme Court, U.S.

81-1906 |p Fite

No. 81 et APR 15 1997

RE —

OCTOBER TERM, 1981

UNITED STEELWORKERS OF AMERICA, AFL-CIO, CLC,

4 Petiti

EDWARD SADLOWSKI, JOSEPH F. RAUH, JR.,

LEON DEsPRES, KENNETH YABLONSKI,

JUDITH SCHNEIDER,

and

RAYMOND DONOVAN, SECRETARY OF LABOR,

Respondents

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

WILSON - Eres Printine Co.. Inc. . 769-0096 - WASHINGTON. D. C. 20001

o> ~

TABLE OF CONTENTS

A. Opinion of the Court of Appeals on the Second

Appeal, December 16, 1981

B. Opinion and Order of the District Court, October 31,

1980

C. Magistrate’s Report and Recommendation, June 7,

1979

D. Order of the Supreme PSR DIEM

and dissenting opinion of Justices White, Stew-

art and Rehnquist, April 17, 19798

E. Opinion of the Court of Appeals on the First Appeal,

r ð¶ EE Se a

F. Supplementary Opinion of the Court of Appeals

on Motion by Appellee for Leave to File a Petition

For Rehearing In Excess of 15 Pages, May 26,

G. Opinion and Order of the Distriet Court, December

H. Magistrate’s Report and Recommendation

I. Judgment of the Court of Appeals, December 16,

J. Amended Judgment of the Court of Appeals, Janu-

Og RRR ae EERE SRR a Ra Se

K. Order of Associate Justice William J. Brennan, Jr.

Extending Time to File Petition for Writ of Cer-

tiorari, March 6, 10 ——

19a

APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 81-1032

RAY MARSHALL, Secretary of Labor

United States Department of Labor

EDWARD SADLOWSKI,

Intervenor Plaintiff

ANTHONY TOMKO,

Intervenor Plaintiff

UNITED STEELWORKERS OF AMERICA, AFL-CIO-CLC

(District 15) (District 31)

Edward Sadlowski, Intervenor above named, and the

following counsel for Sadlowski: Joseph F. Rauh,

Jr., Leon Despres, Kenneth J. Yablonski and Judith

Schneider, Appellants

On Appeal from the United States District Court

for the Western District of Pennsylvania

(D.C. Civil No. 73-0957—-PITTSBURGH)

Argued: September 22, 1981

Before: ALDISERT, HIGGINBOTHAM

and SLOVITER, Circuit Judges

(Opinion filed December 16, 1981)

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, JR., Circuit Judge.

This case, which stems from a union member’s suc-

cessful challenge to a union election conducted in Dis-

trict 31, in 1973, comes to us on appeal for the second

time over the issue of attorney’s fees. In Brennan v.

United Steelworkers of America, 554 F.2d 586 (3d Cir.

1977), cert. denied, 485 U.S. 977 (1978) [Appendix

E, 94a], we held that an award of attorney’s fees

was not precluded by Title IV of the Labor-

Management Reporting and Disclosure Act of 1959

(LMRDA), 29 U.S.C. § 481 et seg. and that the com-

mon benefit” theory was available as a basis for

awarding attormey’s fees. On remand, the district

court was instructed to exercise its discretion on the

issue of [whether an award is warranted and, if so, the

amount of such award. . . in light of the broader ap-

plication of the common benefit’ rationale. Bren-

nan, {136a]. As a guiding principle our court wrote

that, “although union members should not be re-

1 We recognize that in Brennan Judge Aldisert wrote a thought-

ful and vigorous dissent. The closeness of the issue there is re-

flected by the fact that three United States Supreme Court Justices

dissented from the denial of the Petition for Writ of Certiorari.

Surprisingly, in its brief in support of the Petition for Certiorari,

the Department of Labor failed to cite or make reference to Judge

Aldisert’s dissent. This opinion is not intended to be an intimation

that Judge Aldisert has withdrawn from his view that an award of

attorney : fees under Title IV of the LMRDA is not statutorily

authorized. In his dissent, Judge Aldisert stated:

In reviewing the accomplishments of appellant’s able counsel. I

have nothing but the highest praise for the excellence of their

services. I quarrel only as to who should pay for those services.

I believe that Title IV precludes an award of attorney’s fees in

this case, and even if it does not, I believe that this is not an

appropriate case for an equitable award under the common

benefit theory.

Brennan, [150a]. However, the Brennan opinion is now the law of

this case, and we must ascertain whether the district court's

judgment after the remand is consistent with Brennan.

quired to pay for unnecessary duplication of legal serv-

ices, it should not be presumed that mere duplication of

effort by either counsel for Sadlowski or counsel for the

Department of Labor was unnecessary or non-benefi-

cial.’’* (footnote in original renumbered) .

The case was remanded to the district court which

assigned the matter to a United States Magistrate for a

review of the record and for the taking of additional evi-

dence. The Magistrate’s Report and Recommendation,

recoramended the denial of the fee claim, and was filed

on June 7, 1979. The district court adopted the magis-

trate’s findings of fact and recommendation and sup-

plemented the report with additional findings of fact.

On October 31, 1980, an Order was entered denying the

application for attorneys’ fees.

After reviewing the very existence record in this case

and after hearing able counsel in oral argument, we have

concluded that the district court’s denial of fees for work

performed by Sadlowski’s counsel over the five month

period between February, 1973, the date of the first

District 31 election and June, 1978, the date of Sadlow-

ski’s filing of a compiaint with the Secretary of Labor,

was error. We will therefore reverse the district court

2 The text of the court’s footnote 18 is as follows:

See page 598 above. -eferring to the court’s detailed recita-

tion of the efforts Sadlowski’s counsel] It is clear that some

duplication of effort will always occur, since the Secretary must

verify information relating to improper union conduct secured

and supplied by an intervenor’s counsel. Also, time limitations

and exhaustion requirements of 29 U.S.C. § 482 and other pro-

visions, may necessitate legal services on behalf of the Secre-

tary as well as such services on behalf of the intervenor. In this

case, the decision of the Secretary to terminate the investiga-

tion may have justified the continued efforts of counsel for the

intervenor to ducument and preserve evidence of union mis-

conduct. See Verified Application for Attorneys’ Fees at 108a-

104a.

Brennan, [136a]) n.18.

The United Steelworkers of America held an election

on February 13, 1973 in District 31 for the position of

District Director. District 31 is the largest in the Steel-

workers union, consisting of approximately 300 locals

and 130,000 members in Illinois and Indiana. The elec-

tion campaign, between the union’s hand-picked successor

to the then retiring District Director of thirty years and

Sadlowski, was fiercely fought. During the three-day

period it took to count the votes, Sadlowski was advised

of widespread ballot fraud, illegal electioneering, depriva-

tion of secret balloting and interference with observers.

When the tabulations were complete and Sadlowski’s ad-

versary declared the winner by a 1,785 vote margin,

Sadlowski hired counsel to investigate the allegations of

voting fraud and to aid him in exhausting the internal

administrative remedies required by the constitution of

the Steelworkers.

Sadlowski filed a protest with the appropriate union

authorities who, after reviewing his case, sustained the

election result. An appeal was taken to the International

Executive Board which likewise denied Sadlowski’s chal-

lenge. Having exhausted his union remedies, Sadlowski

filed a timely complaint under the LMRDA with the

Secretary of Labor.

The Secretary investigated the complaint and on No-

vember 8, 1973 filed a civil suit in the Western District

CLAIMANTS’ VERIFIED APPLICATION FOR

ATTORNEYS’ FEES AND FIRST APPEAL

Sadlowski’s counsel submitted a Verified Application

for Attorneys’ Fees with a supporting memorandum to

the district court on January 31, 1975. The application

detailed the work of four attorneys, Leon Despres, Joseph

Rauh, Jr., Kenneth J. Yablonski and Judith Schneider on

behalf of Sadlowski. It sought attorneys’ fees for work

performed prior to the Secretary’s filing of a complaint

and for “post-complaint efforts to expedite, conduct dis-

covery and bring about a fair rerun settlement, [and]

. . « to facilitate a fair election itself.” Brief for Appel-

lants at 6.

In Brennan, we detailed in three full pages the work

allegedly performed by Sadlowski’s counsel both pre- and

post- complaint. We emphasized the critical nature of

private participation in the enforcement scheme of Title

IV and at numerous points indicated, either explicitly

or implicitly that Salowski’s “need for counsel cannot

be doubted.” Brennan, (108a].

The test for an award of attorney’s fees is whether

counsel’s work was a material assistance to the Secre-

tary and ultimately contributed to a result which can be

said to be for the common benefit of all union members.

The “common benefit” theory, in turn, entails satisfying

three elements: whether the benefits may be traced with

some accuracy; whether the class of beneficiaries are

readily identifiable; and, whether there is a

basis for confidence that the costs may be shifted

some precision to those benefitting. Id. at [128a].

attorneys for Sadlowski contend that the work they

formed on behalf of their client was a material

of the “common benefit” theory. Specifically, they

before the district court and here on appeal that

vindication of union democracy [in securing a rerun

tion! . . is a substantial common benefit conferred

the union and its members. Brief for Appellant

at 8. Sadlows’ci’s successful challenge served notice on

the union and its members that election improprieties

would not go unchallenged.

III.

THE MAGISTRATE’S AND THE DISTRICT COURT’S

FINDINGS OF FACT AND CONCLUSIONS OF

LAW ON RU MAND

Hail

dell

recommended that the application be denied. It is clear

from reading the magistrate’s report that the standard

applied was whether the assistance of counsel was strictly

necessary to perfect a protest through the union’s inter-

nal procedures and then to the Secretary of Labor.

When considering the work performed by counsel in

marshalling the facts and phrasing the issues for pres-

entation to the Secretary, for example, the magistrate

wrote, “it was the opinion of Stephen Ernst, who was

the lead litigation and trial counsel for the Department

of Labor in this suit, that Sadlowski’s counsel aided

Sadlowski in perserving his rights. Nevertheless,

because “no showing has been made that the assistance

of counsel was necessary to preserve these interests,” the

work was adjudged by the magistrate to be uncompensa-

able.

Similarly, the district court by adopting the magis-

trate’s report seemed to require that the assistance of

counsel be necessary. The district court went even fur-

ther when it considered the overall benefit of Sadlowski’s

successful protest, writing that:

Who desired the benefits from the settlement?

election in which he won the victory which he had

sought originally. The circumstances do not matter

as to whether they were hotly contested or not at

time. He, Sadlowski, was victorious. Undoubt-

since he was campaigning

whole, it was Sadlowski’s counsel’s campaign activi-

ties which eventually became victorious.

As for any benefits which might be considered

to be “common” to the other Districts, there are only

fanciful assertions that all the 1,400,000 Interna-

tional members of the Union will be put on notice

that election improprieties will not be tolerated—

as if all 1,400,000 such members really were in need

of such notice; and further, that the election of Sad-

lowski would “willy-nilly” have been to the com-

mon benefit of the 1,400,000 members—if that bene-

fit was in fact needed, or even that the intervenor‘s

election might not actually have been detrimental

to any of all these International members.

What is uncontravertedly obvious to me as a fact-

finder is that there is no evidence whatsoever that

there had been any common benefit to the Interna-

tional or any other District, that evidence should

have been presented in the case to make it manifest

argument was a fact and not just a conclusion that

the 1,400,000 International membership was com-

monly benefitted, and more so that the assumed com-

mon benefit was a reasonable basis for shifting the

costs of the intervenor’s campaign to the 1,400,000

International membership with “some precision to

those benefitting.” But there is no such factual per-

suasion of precision benefitting. Neither was there

any factual persuasion of precision benefitting

126,000 members in District 31, because the claim-

ants’ activities were directed in the irrelevant finan-

cial path for procuring inadmissible evidence politi-

cally beneficial only to Sadlowski’s potential, even-

tual election. Even here if such character of irregu-

larities required notice to the membership, there is

no evidence of that.

I find it impossible to extract from the evidence

in this case as a whole any “substantial benefit on

the members of an ascertainable class” bestowed by

the claimants. Even with the election of Sadlowski

as Director, there is no evidence of whether the Dis-

trict 31 membership were better or worse off with

Sadlowski as Director.

District Court Opinion, App. Vol. V at 01587-89 and

01590. Consequently, the district court awarded no attor-

neys fees.

IV.

THE PRESENT APPEAL

In Brennan, we instructed the district court to exer-

cise its discretion in deciding whether the work per-

formed by Sadlowski’s counsel was for the common bene-

fit of the rank and file members of District 31 and the

Steelworkers in general. It exercised that discretion, and

we are now asked to review the order of the district

court denying attorneys’ fees. We note that our standard

af review is twofold. When reviewing the magistrate’s

and the district court’s use of a strictly necessary stand-

ard to gauge whether counsel should be awarded fees,

we will treat this holding as a conclusion of law and

exercise plenary review. When considering the findings

of fact as found below, we will use the clearly erroneous

standard.

The appellants contend that the use of the strictly

necessary standard is tantamount to applying a “but for”

standard. They argue that

[t]o require, as the District Court would require,

intervenor to prove that without his participation

the Secretary would not have secured a rerun elec-

tion is inconsistent with this Court’s Sadlowski I

[Brennan] decision; such a standard would impose

a burden in the context of Title IV challenges which

would be practically impossible to meet and would

result in no fee recovering by intervenors, thereby

emasculating any theoretical right to intervene.”

Brief for Appellants at 19. We agree with the appellants

that a strictly necessary or “but for” standard is incon-

siste t with Brennan.

In Brennan we quoted with approval the following

language from Usery v. Local Union 689, International

Brotherhood of Teamsters, 543 F.2d 369, 384 (D.C.Cir.

1976), cert. denied sub nom., Local Union No. 639 v.

Marshall, 429 U.S. 1123 (1977) :

10a

“Tt is not dificult to conceive of examples of mate-

rial assistance to the Secretary and the court in

vindication of the interest—of the public and the

union rank and file—in union democracy ...

[Clounsel representing the intervenor may unearth

material and even elusive evidence, or develop tell-

ing arguments in support of the Secretary’s claims

of illegality. . . . [T]he Trbovich court envisioned

that intervenors would perform a role independent

of the Secretary in helping the court fashion a suit-

able remedial order, and perhaps even assist the

Secretary in supervising the conduct of the rerun.

. . » [SJound principle advises that error is more

likely to be exposed when intervenors are able to

secure competent counsel because of the prospect of

recovering attorney’s fees.” [Footnotes omitted.]

Brennan, [107a]. We have concluded that the district

court erred by applying a more rigid standard than

that indicated by our decision in Brennan. Further,

the magistrate’s constant concern over whether the pres-

ence of counsel added anything to what Sadlowski could

have done alone is in stark contrast to our admonition

in Brennan that:

The agency and the intervenor perform truly dif-

ferent roles, with, in our view, considerably less

overlap and waste than the district court found. The

Department of Labor per’orms a q - judicial,

rather than a purely adversarial role in Title IV

cases. Its duty is to the public, its own policies, the

union interest, and the individual. In deciding

whether to institute suit, what to complain of, and

what to settle for, the Secretary must constantly

weigh competing interests and duties. Consid-

ering the complexities of internal union remedies,

complaint to the Secretary, and recourse to the

courts, and the penalties for lack of legal or techni-

cal sophistication, we cannot believe that intervenors

were intended to proceed pro se.

ila

[115a-116a]. With the above principles of Brennan in

mind, we will now proceed to review the appellants ef-

forts under the “common benefit” theory and the district

court’s holdings.

A. EXHAUSTION OF UNION REMEDIES

As already noted the District 31 election took place

on February 13, 1973. The returns were not complete

until February 16. On the sixteenth, Sadlowski called

Despres seeking his assistance in filing a protest with

the union. Despres agreed to represent Sadlowski on

February 17 and began working to gather information

and evidence concerning election irregularities. The

union’s constitution required a protest to be filed with

the International Tellers not later than 10 days after the

election. Thus, Despres had only seven days from the

time the election results were announced to file a protest

in an election involving 300 locals and 130,000 members.

During the seven-day period, Despres alleges that he

conducted the following activities:

Despres examined the union constitution and

procedures, examined the applicable legal authori-

ties, advised Sadlowski on the legal necessity to ex-

haust union procedures, interviewed Sadlowski, in-

terviewed witnesses, advised Sadlowski associates

who were interviewing witnesses, prepared state-

ments and affidavits, gathered documents, put data

in presentable form, prepared a draft of a protest

of the election, conferred with Sadlowski and asso-

ciates and revised the draft and conferred with

Sadlowski about the protest generally and his con-

duct in relation to it.

Verified Application for Attorneys’ Fees at 4. Despres

continued to assist Sadlowski with his case as it pro-

ceeded through the Steelworkers’ internal review and

appeal procedures. This process was not completed until

12a

May 31, 1978, when the International Executive Board,

chaired by Steelworkers’ President Abel, denied Sadlow-

ski’s appeal and ended his recourse through the union’s

internal procedures.

The magistrate’s and the district court’s opinion of

Despres’ work during this time period can be seen in the

district court’s summarization and adoption of the mag-

istrate’s findings. The trial court found that:

1. In order to preserve issues for presentation to

the Secretary, only minimal requirements are im-

posed; that these obligations could readily be ful-

filled without the assistance of counsel; and that the

assistance of counsel was not necessary to preserve

matters for presentation to the Secretary.

[Appendix B, 12a]. We have already concluded that

the district court applied the wrong standard for judging

whether counsel should be granted fees. The LMRDA

requires that the union member exhaust internal reme-

dies before the Secretary can file suit, 29 U.S.C § 482(a),

and the Supreme Court has limited the Secretary’s power

to issues raised by the claimant. Hodgson v. Local Union

6799, USWA, 403 U.S. 333 (1971). We now conclude

that Despres’ efforts from February 16 until the date of

the final International Executive Board decision on

May 13 are compensable if they were ultimately for the

Steelworkers’ “common benefit.”

The “common benefit” to the Steelworkers of Despres’

efforts on behalf of Sadlowski are clear. Without process-

ing the protest through the Steelworkers internal reme-

dies, Sadlowski would have been foreclosed from going

to the Department of Labor. While it may be true that

an attorney’s assistance was not absolutely necessary, as

we wrote in Brennan:

quick action and skillful advocacy are probably most

important at the initial stages of the enforcement

scheme, when infractions must be identified, a bill

[106a]. Absent Sadlowski’s quick challenge to the

election and Despres’ legal assistance the Steelworkers

would have been deprived of the candidate

choice. We have no difficulty in concluding t

Steelworkers, but especially those in District 31, benefit-

ted from the ultimate vindication of union democracy.

B. THE COMPLAINT FILED WITH THE SECRE-

TARY OF LABOR

On June 25, 1978 Sadlowski filed a complaint with

the Department of Labor totalling nearly 100 pages.

Aided by the assistance of counsel, the complaint was

specific, detailed and accompanied by supporting docu-

mentation. The chief trial attorney for the Department

of Labor stated in an affidavit that Sadlowski’s counsel

had performed a valuable service both to his client and

to the Department. Further, the compliance officer in

charge of the investigation candidly conceded in a dep-

osition that of the 64 locals investigated by his team

59 were selected on the basis of Sadlowski’s complaint.

Again, as with the exhaustion of remedies work, the

district court dismissed the efforts of Sadlowski’s coun-

sel “as not necessary to invest the Department with juris-

diction to inevstigate and ultimately to sue.” We think

that it was error not to consider the material assistance

provided by counsel for Sadlowski. We have also con-

cluded that Despres’ efforts were a common benefit to

the Steelworkers and a material assistance to the De-

partment of Labor. Sadlowski’s and Despres’ efforts nar-

rowed the issues for Labor and helped to isolate the spe-

cific problems with the election.

14⁴

C. LABOR’S DECISION TO BRING SUIT

After Sadlowski’s complaint to Labor was filed on

June 25, 1973, and after Labor completed its investiga-

tion in August, the district court granted Labor three ex-

tensions of its statutory deadline for deciding whether or

not to initiate suit.“ Sadlowski and Despres became con-

cerned that union lobbying with the Department would

result in no law suit being brought even though the in-

vestigation by Labor confirmed Sadlowski’s allegations

of election improprieties. Thus, they engaged Joseph L.

Rauh, Jr., a prominent Washington, D.C. attorney expe-

rienced in LMRDA election proceedings, to carry their

case forward within the Department.

Sadlowski’s counsel, Despres and Rauh, argue that

the Department of Labor performs a quasi-judicial role

in Title IV cases and that Rauh’s efforts ia Washington

were a necessary counter-balance to the adversarial pos-

ture taken by the union’s lawyers. William J. Kilberg,

then Solicitor for the Department of Labor, stated in an

affidavit that after Labor’s investigation the decision to

sue was a foregone conclusion absent an agreeable set-

tlement. The district court found that Kilberg’s state-

ment was representative of Labor’s position and that the

extensions granted to Labor “were for the purpose of al-

lowing USW to investigate the election.” [Appendix B,

50a].

While we are inclined to disagree with the district

court on the role of Rauh in moving the Department of

Labor to action, we cannot say that the findings of fact

on this issue are clearly erroneous. We will therefore af-

firm the district court’s denial of attorneys’ fees for work

performed in an effort to urge Labor to file suit in district

* Section 482 (b) gives the Secretary 60 days from the filing of

a complaint to institute a civil suit in district court if he or she

finds probable cause to believe that an unremedied violation exists.

29 U.S.C. § 482(b).

15a

D. SADLOWSKIS INTERVENTION FROM FILING

OF SUIT BY LABOR THROUGH THE SETTLE-

MENT PROCESS AND RERUN ELECTION

The Secretary of Labor instituted suit in the United

States District Court for the Western District of Pennsyl-

vania on November 8, 1973. On January 17, 1974,

Sadlowski was granted leave to intervene. Local counsel

was engaged in the person of Kenneth J. Yablonski and

a fourth attorney, Judith Schneider, was hired to com-

plete Sadlowski’s legal team.

The gist of counsels’ argument is that they took dep-

ositions, participated actively in settlement conferences

by critiqueing proposed settlements and by making in-

dependent suggestions, and assisted in ensuring that

the agreed upon rerun election was fair. We have no

doubt that counsel worked very diligently throughout

this entire period. However, we cannot say the district

court’s findings that counsels’ work was either dupli-

eative of the Secretary’s or was rejected by the court

are clearly erroneous. Furthermore, the work performed

by counsel, although substantial, was at this stage

of the process more for the benefit of a specific can-

didate, Sadlowski, than for the common benefit.“ Thus,

we will affirm the district court’s denial of attorneys’

fees for work performed during this period.

THE COMMON BENEFIT

The common benefit from Sadlowski’s drive to over-

turn a union election characterized by fraud is without

doubt. The district court’s finding that a new election,

* Sadlowski later became a candidate for another union office

seeking the post of International President in February, 1977. He

lost this election to the union’s officially endorsed candidate by a

margin of 79,580 votes. See Sadlowski v. Marshall, 464 F.Supp. 858

(D. D.C.) (rejecting Sadlowski’s challenge to the Department of

Labor’s refusal to bring suit to challenge the election), aff'd mem.,

No. 79-1461 (D.C. Cir. 1979), cert. denied, 447 U.S. 905 (1980).

[129a]. That the individual who brought suit also

receives a direct personal benefit from it is of no matter

when considering the “ ‘implications for the future con-

duct of the union’s affairs.“ Hall, 412 U.S. at 8 quoting

Yablonski v. United Mine Workers of America, 466 F.2d

424, 48. (D.C.Cir. 1972), cert. denied, 412 US. 918

(1973). The common benefit from dispelling a chill on

free speech is exactly parallel to the common benefit

Sadlowski conferred on the Steelworkers by insisting on

a fair election.

More recently in Usery v. Local Union No. 639, 543

F.2d 369 (D.C.Cir. 1976), cert. denied, 429 U.S. 1128

(1977), the District of Columbia Circuit considered the

same attorney’s fees issues in a Title IV challenge to a

Teamsters’ local election as our court did in Brennan.

The Court noted that the LMRDA was passed by Con-

gress in 1959 “[i]n response to findings of extensive cor-

ruption and improper fiscal and electoral practices by,

labor unions ... .” Local Union No. 639 at 373. The

Court examined the many common benefit cases under

various titles of the LMRDA and concluded that, “the

governing rationale was that union members by bring-

ing suits against their union help vindicate the statutory

policy in favor of union democracy which necessarily re-

reprinted in App. C DOO, bis Brief at A. 10.

We have thus concluded that Sadlowski’s counse! played

sented to the Secretary. The ultimate result of this work

was a rerun election that Sadlowski won. This was more

than a “fanciful assertion” of benefit and redounded to

the common good of all steelworkers. Thus, it should be

compensated accordingly. See Lindy Bros. Builders Inc.

v. American Radiator & Standard Sanitary Corp., 487

F.2d 161 (3d Cir. 1973); and, Lindy Bros. Builders Inc.

v. American Radiator & Standard Sanitary Corp., 540

F.2d 102 (3d Cir. 1976) (en banc).

VI.

CONCLUSION

The order of the district court denying counsel at-

torney’s fees for work performed in exhausting the

union’s internal procedures for challenging the election

and in filing a complaint with the Secretary of Labor will

be reversed. The district court’s order will be affirmed

insofar as it denied attorneys’ fees for the period after the

Secretary received the complaint and decided to insti-

tute the lawsuit which led to a settlement. We will there-

fore remand this case to the district court for a determi-

nation of the amount of attorney’s fees to be awarded in

18a

accordance with this opinion and the opinions of our cir-

cuit pertaining to the fixing of fees.“

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

not with excessive frugality. Counsel should not be penalized for

winning an appeal with legal and factual arguments contrary to the

district court’s position or because someone might perceive coun-

sel’s style as abrasive. Counsel should always be compensated for

the quality of their work and not on the trial judge’s evaluation of

counsel’s affability. We are confident that on remand the district

court will act expeditiously to award a proper fee based on the rec-

ord before it that already adequately demonstrates the energies of

counsel during th. appropriate period.

19a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT FOR

THE WESTERN DISTRICT OF PENNSYLVANIA

C.A. 78-957

PETER J. BRENNAN, Secretary of Labor,

United States Department of Labor,

* Plaintiff

UNITED STATES YT AMERICA,

AFL-CIO-CLC (District 31),

Defendant

EDWARD SADLOWSkI,

Intervenor

PETER J. BRENNAN, Secretary of Labor,

United States Department of Labor

EDWARD SaDLOWSKI,

Intervenor plf

ANTHONY TOMKO

a Intervenor plf

UNITED STEELWORKERS OF AMERICA

AFL-CIO-CLC (District 15) (District 31)

Edward Sadlowski, intervenor above named and the fol-

lowing counsel for Sadlowski: Joseph L. Rauh, Jr.;

Leon Despres; Kenneth J. Yablonski; and Judith

Schneider

OPINION

ROSENBERG, DISTRICT JUDGE

This matter is before me now and on remand from

the Court of Appeals on the claims of four attorneys

for the Intervenor, but none by the Intervenor, himself.

is here now for the determination of a factual issue

a» that determination is either supported or not by a

preponderance of the evidence in the case. That issue is

whether such evidence supports an award of counsel fees

to an intervenor’s attorneys on an equitable basis on the

“common benefit” theory. Brennan v. United Steel-

workers of America, [94a].

Rather, the issue is broadened to the extent that this

court must, should or can determine from the evidence

adduced by these attorneys whether their aggregate con-

tribution of service brought about a common benefit to

the defendant’s total membership of what, if any, service

was rendered by the three attorney-claimants and one

legal assistant, and the proportion of contribution each

may have made for entitlement to each one’s claim (since

each made separate claims) in achieving a successful

outcome for the plaintiff—as such commonly benefitted

the total membership of the defendant. If indeed each

did make a material contribution in his or her way as

attorneys for the successful outcome of this action, it is

obvious from the evidence »roduced that the four did not

act in unison or act commonly for an aggregate fee, but

that each would be entitled to an amount for services so

rendered and that each would require individual evidence

to support the individual entitlement.

This action was brought originally by Peter J. Bren-

nan, Secretary of Labor (Secretary), against the United

Steelworkers of America, AFL-CIO-CLC, Districts 31

and 15 (International)“ Anthony Tomko, the defeated

candidate in District 15 and Edward Sadlowski, the de-

feated candidate in District 31 were eventially permitted

to intervene. However, after the plaintiff and defendant

requested me to sign an order of court settling the case

by ordering a new election in District 31, the intervenor

objected to the settlement for pointless reasons and I or-

dered the settlement. Application for counsel fees for the

four intervenor’s attorneys followed. I denied this for

1 The caption of the case was amended to name the successor

plaintiff, Ray Marshall, Secretary of Labor.

lack of statutory authority. On appeal, Judge Van Dusen

in an opinion for the court determined that the inter-

venor’s attorneys would not be precluded from recovering

counsel fees under Title IV of the Labor Management-

returned for my consideration. Being bound by the law

of the Court of Appeals, I proceed to inquire into and

adjudicate those two questions by a preponderance of all

the evidence in the case.

Of course, I disregard two principles expounded first

by Judge Aldisert in his dissenting opinion in Brennan

v. Steelworkers of America, [146a], and second in Mr.

Justice White’s dissent in Brennan v. United Steelwork-

ers, 435 U.S. 977, 979 (1978), [Appendix D, 89a, 91a].

The principle expounded by Judge Aldisert in his dissent-

ing opinion is disagreement with the proposition “that the

consensual agreement to a new election for District Di-

rector in Illinois and Indiana conferred a common benefit

upon the entire membership of the United Steelworkers

of America”. The dissenting opinion of Mr. Justice

White is to the effect that it would have been improper

for an intervenor to interfere (if he did) with the Sec-

retary of Labor’s discretionary and exclusive enforce-

ment authority in this area, since “the rationale per-

mitting intervention was not to duplicate the efforts

of the Secretary”, and further that the exception to the

traditional American rule against awarding attorneys’

fees on the common benefit theory premised on a court’s

equity power should not be expanded.

I assigned the original inquiry to United States Magis-

trate Robert C. Mitchell who broadened the parties’ pre-

rogatives to present all the evidence they desired. There-

upon all the parties did provide the magistrate with a

large volume of depositions and affidavits, and he per-

of fact as I supplement the magistrate’s report and find-

ings and as I, the presiding judge, have found them

to be factual from the evidence and the proceedings in

this case before me personally.

As I have already stated, this issue was originally

presented to me by an application for attorneys’ fees

immediately after I signed the order for a settlement.

Other than the pleadings, originally, there was no proof

presented nor was any request made for a formal hear-

ing or for the privilege of presenting any proof to me of

entitlement to attorneys’ fees. The total amount de-

manded seemed exaggerated in view of the knowledge

which I had of the case. No evidence or law was pre-

sented to me to convince me of any legal entitlement.

This last statement explains that the Court of Appeals as

well did not have any evidence before it to support any

legal entitlement to fees by the claimants, but was re-

quired to base its determination of law upon what the

claimants only asserted to be facts without the neces-

sary proof which should have been given to me.

As the Court of Appeals said:

“We emphasize that we are not passing on the truth

of the statements in the record or on the character

of the intervening plaintiffs, as opposed to that of

the high-ranking officers of the union, but we are re-

The pleading raising the issue of fee entitlement was

identified as “Verified Application For Attorneys’ Fees”,

and was filed not by the intervenor himself but by three

lawyers and one law assistant who assert that they acted

in behalf of the intervenor. The inquiry before me,

therefore, is towards payment or non-payment of fees

to the claimants who, assertedly, had been the inter-

venor’s lawyers in the case before me.

The Court of Appeals, on return to me, provided me

with the following:

“Whether on award is warranted and, if so, the

amount of such award, is a matter for initial de-

termination by the district court in the light of the

broader application of the ‘common benefit’ rationale

.--” [186a].

Based upon the directive of the Court of Appeals, the

claimants were given additional opportunities to present

evidence to support their respective contentions and to

present sufficient evidence of persuasiveness and the de-

fendant also was given similar opportunities to present

evidence if it could contrary-wise so that from receipt of

the evidence of both parties this court might have suf-

ficient evidence, pro and con, for a determination legally

by the preponderance of all of the evidence in the case

of whether an award was or was not warranted as now

based upon the common benefit rationale in accordance

with the guidelines of the Court of Appeals. This, it will

be noted, differs from that in the case originally when

the question before me was on the theory of whether

attorneys’ fees were awardable generally as a matter of

24a

law in Title IV of the Labor Management-Reporting and

Disclosure Act of 1959. And so at the time neither the

claimants nor parties plaintiff and defendant believed

it necessary to present such evidence, pro and con, as is

now before me for a judicious determination.

HISTORY AND FINDINGS

the election of directors in its 35 geographically divided,

nationwide Districts, encompassing a total membership

of 1,400,000 members. After the election, 6 complaints

out of 35 Districts came to the Secretary of election

irregularities. Then after these six complaints were in-

vestigated, the Secretary concluded that only two merited

action which was filed in this court. These were, from

his findings, District 15 where the defeated candidated,

Anthony Tomko, and District 31 where the defeated

candidate, Edward Sadlowski, filed complaints. The De-

partment of Labor brought this action on its own ac-

cumulated evidence for the procurement of a satisfactory

resolution in these two Districts.”

Both Sadlowski in District 31 and Tomko in District

15 asked to intervene. The complaint was separated by

this court into “A” and “B” parts for Districts 15 and

31. From that point my concern and attention in this

determination is to the procedures and the circumstances

in District 31 as they bear any significance to the merit

or the lack of merit to the intervenor’s claimants’ claim

for attorneys’ fees, except in those instances where ex-

planatorily related factual references wil! be pointedly

made to District 15.

As I stated before, in order to give the claims the full-

est consideration, I first referred the matter to a United

2 The settlement in each District was different. In District 15, it

was the adoption of a new set of nomination procedures. In Dis-

trict 31, both parties agreed to a supervised re-run election.

States Magistrate for a detailed inquiry. His report is

elaborate, searching and pointed. Objections were filed

to his report by the claimants and by the defendant in its

“Response to Objections of Intervenor”. I have examined

and re-examined the record carefully and I am now in a

position to arrive at the following factual findings from

the total record in the case, the magistrate’s report, and

from my own knowledge judicially acquired while presid-

ing in the case.

The members of District 31 who might have benefitted,

if any benefit arose from the action of the claimants, com-

prise 1/10th of the membership of the United Steelwork-

ers upon whose 1,400,000 members nationally would fall

the obligation to pay the claimants’ bill under the com-

mon benefit theory. Accordingly, as the presiding judge,

I must be judicially satisfied that the claimants’ claims

are justified, reasonably earned, fair and of benefit to the

total union’s membership, as a matter of equity, before

I can in good conscience place this liability upon the de-

fendant’s more than one million men and women upon

whose wages such liability would likely attach, before they

are entitled to receive them. District 31 which covers 2

geographic area including parts of northwestern Illinois

and northwestern Indiana comprises a membership of

approximately 126,000.

While it is incumbent upon me to hear evidence and

award any fairly earned attorneys’ fees, it was not at the

beginning when the fee application was first filed, in-

cumbent upon me to seek out the claimants and demand

cating any readiness to proceed to satisfy me of their en-

titlement to any sums of money, since they argued only

their legal rights to fees. Accordingly, based upon only

the contents of the filed petition, I was not prepared to

make any firm determination of entitlement or to adjudi-

cate quantitative entitlement upon any conclusionary

summaries of activities and amounts as averred in the

petition. Particularly, I was not so inclined when many

of the averments in the petition were contrary to the

facts in the case as I knew them to be as the presiding

judge. Some of these I shall presently point out.

Immediately, or soon after the complaints of election

irregularities were received, the Secretary assigned a

large number of experienced Department of Labor

(DOL) Compliance Officers, all under the direction of

supervisors to investigate the 6 election complaints. The

investigators had frequent consultations with the defeated

candidates and hundreds of others. I accept the affidavit

of Stephen Ernst, Chief Trial Counsel for the Secretary

of Labor, who made factual averments and to which no

counter-affidavit was filed; and now incorporate these as

some of the findings of fact in this case, particularly as

these relate to District 31. However, insofar as the ac-

tivity of the Secretary is concerned, I shall indicate only

that much as may have been inter-related in the continu-

ing inquiry into the complaints, their processing and ter-

minations in all six Districts from which reports of ir-

regularities came to the Secretary, sufficient to induce the

Secretary to procure overall evidence.

As far as District 31 is concerned,

(1) The Secretary had assigned 19 DOL Compliance

Officers to the investigation of this District, and over

8,600 person hours were expended by them in the process;

(2) Chief Trial Counsel, Stephen Ernst, accumulated

“several file drawers of materials” in his office and addi-

tional boxes of materials in the Chicago office of the Sec-

retary of Labor (Ernst Affidavit II, paragraph 5) ; and

(3) The evidence so adduced by these DOL investiga-

tors and the Secretary’s counsel was more than sufficient

for the Secretary to pursue the action in District 31

(again without regard to the other five districts) where

the evidence was so abundant as to make it feasible to

27a

proceed to trial without formal discovery, except for such

as the defendant may have desired.

Counsel for the Secretary had accumulated by these

investigations more than enough evidence to enter this

action and to carry it to completion without aid from

the intervenor or any of the claimants. The reason for

this was that counsel for the Secretary had on the work-

ing staff highly motivated and skilled professional fed-

eral investigators upon whom complete knowledgeable re-

liance could be placed. However, that would not have pre-

vented the Secretary from participating in any discovery

which would be initiated by the defendant International.

In fact the defendant had indicated to me, as I presently

explain, the desire to depose a large number of members

in the Chicago area. This was defense evidence, not

plaintiff’s evidence.

The activity of the Secretary and his staff of 19 DOL

Compliance Officers was of such magnitude that one of

the claimants’ attorneys for the intervenor, Leon Des-

pres, wrote to another claimant attorney, Joseph Rauh,

on August 30, 1973 and admitted that the Secretary had

accomplished comprehensive and conclusive results from

the DOL investigation.“

While the Compliance Officers interrogated the two

unsuccessful candidates, there is no evidence that the

Secretary consulted with Sadlowski or his counsel on

whether or not to commence any action in the United

States District Court for the Western District of Penn-

sylvania, or in any other court. So thorough had been

the work and so voluminous the results of the Secretary’s

staff that the Secretary was able to proceed with the

This letter of Despres and another letter addressed to Rauh was

evidently for the purpose of obtaining “encouragement or informa-

tion that might help Sadlowski in the Campaign” and praised the

Secretary and his staff for the intensive investigation which the

Secretary had carried on and stated that “[a] new election seems

likely” to occur for Sadlowski’s benefit.

28a

entry of this action and pursue it. As I just stated, this

did not include the depositions which the defendant de-

sired from a large number of voters in Election District

31. In fact, counsel for the plaintiff and defendant indi-

cated their desire for this court to sit in Chicago for a

a ee eee ee

ons.

The fact that on three or four occasions either Sadlow-

ski or his attorney, Mr. Rauh, called the Secretary ob-

viously had no effect upon the Secretary’s determination

to file suit, is corroborated by the affidavit of William J.

Kilberg, Solicitor for the Department of Labor, who had

final avthority on the decision to sue. This was presented

before the magistrate and was not contradicted by any

counter-affidavit. He testified that:

“It is clear that at no point in time, once the field

investigation had been completed in early August,

was there ever any doubt that short of a satisfactory

settlement, the Department would sue in District

31.“ (Kilberg’s Affidavit, paragraph 9).

“I know, from my own knowledge, that nothing done

by Mr. Rauh or any other attorney for Mr. Sadlow-

ski contributed to the Department’s decision to in-

stitute suit in District 31. That suit would have

been instituted on the date it was instituted, whether

or not Mr. Sadlowski had been represented by at-

torneys.” (Kilberg’s Affidavit, paragraph 29).

Since neither the Secretary nor any member of his

staff who functioned for the Secretary in his procedure

had reason to have personal interest in this matter, nor

in the constant flow of such labor cases coming for their

attention and processing, I give high credibility and

great weight to their testimony. This is more so true

because of the many conflicting assertions made by Sad-

lowski’s supporters, particularly as I know the facts in

the case which came before me in open court.

All in all, I endeavored to detailedly scrutinize the vol-

uminous summary recitals presented in affidavit form to

the magistrate by the claimants as these were presented

with a changed attitude in derrogation of practically all

which the Secretary of Labor, his counsel and the large

number of DOL investigators had done. Previously, coun-

sel lauded the Secretary’s DOL officers’ activities. Had

the claimants’ Narrative given some fair evaluation to

the Secretary and his staff, as counsel had done in their

previous letters, and been less self-laudatory, they might

have been more credible as to such matters which they

averred as being out of court.

As to their recital of boasts of their in-court activities

and their specific influence on this court in securing an

ultimate settlement and decree for a new election, I not

only reject these in-court statements, but as well I find

many of their out-of-court statements contradicted or un-

supported by the evidence. Thus, the claimants’ proof is

insubstantial and insufficient and lacking persuasiveness

enough for me to hold their contentions (and claims)

proven by a preponderance of the evidence in the case as

a whole. I make this conclusion as the presiding judge

who had a more impartial knowledge of the in-court facts

involved than any other person in the case.

The Secretary of Labor through its official counsel filed

this action on November 8, 1973.

Soon after that Edward Sadlowski, the defeated candi-

date in District 31, filed for leave to intervene. On Janu-

ary 21, 1974, the plaintiff and defendant stipulated to

separate the trial relating to Districts 15 and 31 and des-

ignated them as District 15, Part “A” and District 31,

Part “B.” The plaintiff accordingly filed a complaint in

During my in-court hearings and arguments, some time was

shared in discussing settlement with the plaintiff’s and defendant’s

counsel, and they informed me that the Secretary’s aim from the

beginning was to arrive at a settlement by having the defendant

agree to a new election. Evidence in the case supports the plaintiff

and defendant counsel’s statements of settlement aims. This settle-

ment the Secretary’s and defendant’s counsel eventually achieved.

each of these separately in order to identify the facts

which he alleged to be pertinent to each of these Dis-

tricts. These amended complaints were filed January

28th.

On February 12th, the defendant filed answers to the

amended complaints as related to these two Districts.

The matter came before me in open court for the first

time on the motion of the plaintiff to expedite the trial

of both Parts A and B.

The second open-court matter before me came when

the plaintiff requested a preliminary injunction and clari-

fication of the pretrial order. The intervenor’s counsel

was also present, but was more an observer than a par-

ticipant. On this occasion in court, counsel for both the

plaintiff and defendant attempted to have me make a

determination on the admissibility of evidence which had

been presented in a previous labor case and explained that

it would simplify this case. I denied the motion as being

premature and informed counsel I would require facts in

evidence before I could make a determination on the

admissibility of any evidence, especially such as was not

yet before me.

The next activity occurred when both plaintiff’s and

defendant’s counsel desired someone to preside over the

taking of depositions (presumably desired by the defend-

ant) of a large number of witnesses in District 31 in

Chicago, asserting that the taking of such depositions

would be helped by the court’s supervision. This would

have required at least one week’s time. I held the matter

in abeyance and informed counsel that consideration

would be given to this at a future, appropriate time. The

intervenor’s counsel was of no significant help here to the

plaintiff.

In the meantime, I urged counsel for the plaintiff and

defendant to continue their attempt (as I had previously

stated) to reach a settlement in the case, since this would

the trial. Counsel for the plaintiff and defendant agreed

with me and informed me that they were interested in a

settlement and agreed with me that a lengthy trial was

unwarranted and would serve no good purpose.

Counsel for > plaintiff and defendant assured me that

settlement discussions had taken place and offered to exert

every effo t to bring about such à result. They agreed to

bring the matter earnestly to the attention of their re-

spective principals. That evidently helped their hitherto

settlement efforts, because on August 2, 1974, counsel for

the plaintiff and defendant did file a motion for the ap-

proval of a settlement agreement between the plaintiff

and defendant.

On March 29th, 1974 the first uctive record particina-

tion which the intervenor’s counsel exerted was in giving

notice of two depositions, one to the successful candidate

and the other to Joseph Jeneske. Request was also made

for the production of documents.

The next record activity in which the intervenor’s

counsel participated was on May 28, 1974, when the de-

fendant gave notice to take the deposition of the inter-

venor, Edward Sadlowski and requested the production

of documents.

On June 25th, 1974, notice was given of ‘the taking of

depositions by Joseph Rauh, the intervenor’s counsel, to

Stanley Lachen and Panny Cifalia. A second notice was

dated July 16th. Counsel then gave notice of a deposition

to Fermine Salinas on July 29th.

Here I comment on the notices given by intervenor’s

counsel to the various witnesses for depositions and find

„7. 8

depositions of those named were irrelevant to the plain-

tiff’s case and superfivous. Rather than detail the depo-

sitions taken by the intervenor, I shall, in order to save

and , summarize what was attempted by them.

these the interven-r’s counsel concentrated on procur-

ing information from the witnesses on the financing of

the campaign prior to the election in which Sadlowski

was the defeated candidate.

When a party’s attorneys admit certain facts, it is in-

cumbent upon the trial judge to give as much credibility

as possible to such admissions of counsel. For instance,

Leon Despres, one of the attorneys for the intervenor in

a letter dated May 24, 1974 to Joseph Rauh, co-counsel

for the intervenor, indicated that these depositions had

political and not legal significance. Despres stated

“The reason we felt it necessary to take these deposi-

tions was to compel these men to refuse to divulge

payments out of USW funds for Evett campaign con-

tributions or expenditures. Since USW said it would

take Sadlowski’s deposition, I felt it was psychologi-

cally very important to have these refusals precede

Ed’s testimony. Thus his frankness of disclosure will

stand in sharp contrast.” (Despres Deposition, Ex-

hibit 11).

I repeat, that any financial circumstance would not pos-

sibly be a usable element in the plaintiff’s case against

the defendant, as I presently point out.

Thus, since the majority of the questions asked of the

deponents were focused on financial issues, it is cor-

roboratingly evident that counsel claimants were politi-

cally motivated to procuring another election to promote

Sadlowski and give him another change for victory at a

second-chance election, rather than gaining relevant evi-

dence to aid the plaintiff and the court in making find-

ings of fact for the resolution of procedural issues be-

fore it.

Discovery concerning the financial issue was irrelevant

and nothing gained by these would have been admissible

in evidence in this case, because as the Department

Labor’s investigation disclosed, and as not averred in its

complaint, there

tried. In fact, it was the Secretary’s final Report of

Investigation which concluded that Sadlowski’s allegation

that “union funds and materials were used to support

Evett’s candidacy” was “not substantiated by investi-

gation.” (pages 71, 78).

INTERVENOR LIMITED BY PLAINTIFF’S

Under the law the intervenor is bound by the pleadings

of the case and neither Sadlowski nor his counsel could

possibly add an additional claim not included in the

Secretary’s complaint, or contrary to its averments. In

Trbovich v. United Mine Workers, et al., 404 U.S. 528,

587 (1972), the Court denied the petitioner’s request to

add additional grounds for setting aside a union election.

Mr. Justice Marshall stated:

. . . These are claims that the Secretary has pre-

sumably determined to be without merit. Hence to

require the union to respond to these claims would be

to circumvent the screening function assigned by

statute to the Secretary .. . Accordingly, we hold

that in a post election enforcement suit, Title IV

imposes no bar to intervention by a union members,

so long as that intervention is limited to the claims

of illegality presented by the Secretary’s complaint.”

Neither does this court have jurisdiction to inquire into

financial matters which the Secretary did not address

in his complaint, and am as restricted here as is the

intervenor.

While in the briefs there are plenty of self-serving

arguments of the extraordinary work done by the claim-

ants outside the courtroom, it is noticeable that not one

34a

single averment is made in any of their pleadings which

relates to discovery being conducted in order to support

the claim of irregularities in the past election other than

financial.

It should be observed perhaps in this connection that

the intervenor was frank in revealing the fact that he

had a personal interest in the action commenced by the

Secretary. This he did, when he filed the motion for

leave to intervene under Federal Rule of

24 on December 20, 1973. There it is stated,

7. Petitioner Sadlowski has a direct and substan-

tial interest in the subject matter of this action and

is so situated that the disposition of this action and

the terms of any order entered will as

his

8. Petitioner Sadlowski’s interest is not adequately

represented by the parties in this action

Furthermore, in the intervenor’s complaint filed De-

cember 10, 1973, he adopted and incorporated “by refer-

ence the allegations set forth in paragraphs I, II, III,

IV, V, VI, XI, XII, XIII and XIV” of the complaint

appear to involve financial matters, but that is the only

place where financing of election campaigns is raised.

Thus, it would seem that the intervenor might have

raised, but even this not legally, financial matters relat-

ing to the dinner, and to the dinner only; but his dis-

covery ranged far and wide to legislative and educetional

funds, to voluntary political education committee funds;

to a strike relief fund; and, fourteen other similar finan-

cial subject matters. None of these were raised as irregu-

larities by the Secretary. Furthermore, the Secreiary

ruled, as verified by Ronald Lehman, Counsel for the

Department of Labor, that no questionable financial ac-

tivities were involved. (Lehman deposition, page 35).

The intervenor through his able counsel knew that none

of these financial issues had any relevancy in the case

and knew that he was limited to the issues set forth in

the Secretary’s complaint. Trbovich, supra, at page 537.

Accordingly, what the claimants raised in their deposi-

tions is so far and wide of the issues presented by the

Secretary as to be frivolous. This is also aside from the

principle laid down in Trbovich, supra, at page 531, that

Congress has constituted suit by the Secretary of Labor to

be the exclusive post-election remedy for a violation of

Title IV.

Thus, I find that the intervenor’s depositions were not

taken in good faith for the purpose of aiding the court in

a fair and judicial determination of the issues in this

case. One indication of this is a letter from the inter-

venor’s counsel Rauh to co-counsel Leon Despres dated

February 7, 1974. This letter commended the trial at-

torney for the Secretary as being “able, energetic and

quite determined to win” as well as commending the

amount of evidence already gathered by the government.

The claimants undoubtedly accepted the inevitability of

the new election as fact from the report of the investiga-

tion of the Department of Labor’s Compliance Officers,

and so counsel knew that the depositions filed subsequently

by notices on June 25th, July 16th and 29th, 1974 were

worthless—except for their ulterior, political purposes.

I hold that such discovery activities by Sadlowski and his

counsel were of no help to the plaintiff and were injected

only for self-serving purposes. As such these activities

of Sadlowski’s counsel cannot be deserving of any equi-

table compensation by the entire membership of the

defendant—or any of the 35 Districts.

B6a

CLAIMANTS’ OBJECTION TO SETTLEMENT

The next activity by the claimants (personally) on the

record file was a request for an oral argument of their

objections to the motion for approval of the settlement

agreement by the plaintiff and defendant. That was not

necessary because I had already scheduled a hearing on

the matter in order to ascertain the appropriateness of

such a settlement.

At the hearing both counsel for the plaintiff and for the

defendant extoll ed the virtues of a settlement, and stressed

the savings of months of trial time and energy. But

counsel for the intervenor objected primarily on two

grounds: (1) that, since I was requiring that the new

election must be held within 90 days of an order of settle-

ment, the forcoming election would be within two or

three days of Thanksgiving and inconvenient for voters;

and (2) that an election by mailed ballots could not be

worked out within 90 days.

I disagreed with the intervenor’s counsel and overruled

his objections. First, I did not see why an election could

not be held before Thanksgiving—and counsel for the

plaintiff and defendant agreed that it could and assured

me that it would be so held. Second, there was no evi-

dence before me that a new election would be conducted

by mail as the intervenor’s counsel argued that it would

be. I informed all counsel that the method of conducting

the election, if specifically voted by the International for

future elections, would not bind the Secretary in con-

ducting a second election, and the conduct of an election

by this agreed upon order of court would be completely

within the discretionary functioning of the Secretary who

was required by law to appropriately and adequately

conduct the election. I stated emphatically that I would

not interfere with the discretion of the Secretary.

87a

ALLEGED BENEFITS CONTRIBUTED BY

INTERVENOR-CLAIMANTS

The claimants in their briefs make much of the unusual

activity expended by them in bringing about the settle-

ment between the plaintiff and the defendant. I observe

here that Rauh, counsel for the intervenor, was a mod-

estly acting attorney in the courtroom, as also were coun-

sel for the plaintiff and the defendant. There was no

unusual activity on the part of Rauh which indicated to

me that the settlement agreement submitted to me was

wrong. All that Rauh attempted to do was argue that

there should be no settlement. Secretary counsel, Wil-

liam Kilberg and Stephen Ernst, representing the plain-

tiff, and Michael Gottesman representing the defendant

disagreed with Rauh and together in the courtroom

pressed the motion for settlement and the finalization of

the case.

Up to that time elections were being held under the

International’s Constitution at the many fixed places

throughout the International area. Counsel for the de-

fendant asserted that the forthcoming convention was to

consider the matter of elections by mail. This was dis-

cussed only and nothing more. I reiterated that the Sec-

retary was to hold the election in accordance with the

Constitution of the International Union, and I emphasized,

throughout, that the election must be held within 90 days.

It was totally on that basis that I approved the settlement

in spite of the fact that Rauh did not withdraw his objec-

tions. In fact, he seemed to believe that he was unsuccess-

ful before me because, in related fashion, he stated,

. . all my arguments have been overruled”. (Tr. page

48). Thus, it is obvious that counsel for the intervenor

performed nothing to bring about the settlement, and in

this respect could not possibly have benefitted the mem-

bership of 1,400,000 members.

Accordingly, Rauh’s objections gained nothing for the

membership and even nothing that would give the inter-

venor more convenience for his forthcoming campaign as

a candidate for election. As of that time I had not had

all the evidence which I now have before me, but had I

then had the full evidence which * now have, I would have

realized that Rauh’s attempted obstruction of the settle-

ment agreement, which the plaintiff and defendant desired,

was not because of any aid to the court for a judicial

determination of the case, or for the benefit of 1,400,000

union members, but because Rauh’s interjecting not-so-

very soluable objections, actually, was to acquire more and

extended time for his client’s campaigning in a new elec-

tion. Thus, the objections being an empty gesture, merits

no compensatory credits in “bringing out” a settlement.

The evidence of the plaintiff, and in effect corroborated

by the admissions of the intervenor’s counsel, lent sub-

stance to the fact—and I so hold—that the intervenor was

a defeated candidate in a labor election, and like millions

of defeated American political candidates all the way from

committeemen and women to United States Senator, or

possibly national presidential elector, or fraternal, cor-

porate, church and even other labor applicants for office,

as disappointed candidates, contest unfavorable elections

in an effort to reverse them for the purpose of becoming

the ultimate victor; so Sadlowski after losing the election

count processed his dispute all the way through the inter-

nal machinery of the International. Failing there, he

made the next challenge to the Department of Labor by

the legal authority given him in the Labor Management-

Reporting and Disclosure Act, 29 U.S.C. § 482(b).

NON-EXISTENT PROOF OF COMMON BENEFIT

TO MEMBERSHIP

To support merit to their claims for fees, the claimants

contend that the running of a second election for director

of District 31 conferred a benefit not only upon District

31, but upon the entire USW membership; first, because

the director of District 31 sits on the International Execu-

tive Board, the governing body of the USW, and as such

official he would be of benefit to the entire union member-

ship; and second, because by the re-running of the election

in District 31 the entire membership of the USW was put

on notice that election improprieties will not be tolerated.

So the claimants put into question two conclusory argu-

ments as a basis for proving that the “common benefit”

doctrine is applicable to the instant case sufficiently enough

to justify an award of attorney’s fees, payable by the

total International membership.

Judge Van Dusen in Brennan v. United Steelworkers,

etc., supra, at pages 604-605, stated that the evaluation

of the “common benefit” claims must be whether the bene-

fits (1) may be traced with some accuracy; (2) the class

of beneficiaries is readily identifiable; and (3) whether

there is a reasonable basis for confidence that the costs

may be shifted with some precision to those benefitting.

Examining the claimants’ contentions in the light of

the evaluations of the common benefit rationale, we keep

in mind first the fact that Sadlowski’s complaint to the

Secretary was not the only one among the thirty-five Dis-

tricts of the International; that five other complaints

were registered; that one other complaint that of An-

thony Tomko in District 15 is incorporated in this action

with Sadlowski’s complaint and that the claimants did

not stand out as principal champions and defenders of the

1,400,000 members of the International. The record

showed that the Tomko complaint, as well as the Sad-

lowski complaint were being processed at the same time.

and that I, although separately, disposed of each at the

behest and common effort of the Secretary’s counsel and

the Union’s counsel. While this part of the record was

not introduced into evidence, it is, nevertheless a part of

this record as it was before me as Part “A”. The settle-

ment of District 15 and the stipulation came before me

as a package, as agreed upon between counsel for the

plaintiff and defendant and as such, I granted counsel’s

If, then, the two Districts 15 and 31 were those liti-

gated and settled together as a package, can it be said

with any accuracy, with what is before me in this case

that the District 31 litigation by the intervenor, helped

District 15 also? If so, there is not one bit of evidence

in the record or before me that the claimants helped to

bring it about. And so far as the claimants’ argument

that “the entire membership of the USW was put on

notice that election improprieties will not be tolerated”,

it is uncontradicted that at least twenty-nine other Dis-

We look at all these principles enunciated by Judge

Van Dusen in Brennan v. United Steelworkers, supra,

that benefits may be traced with some accuracy; that the

class of beneficiaries is readily identifiable, and that there

doubt as to whether the other 34 Districts «an measure

up to fitting into the requisites specified by Judge Van

1 —

down by Judge Van Dusen, the contentions of the claim-

ants are completely without merit.

In accordance with the guidance of the Court of Ap-

peals, the class of beneficiaries is not readily identifiable

because no benefits can be traced “with some accuracy” to

any beneficiaries, and so there can be no “reasonable basis

for confidence that the costs may be shifted with some

precision to those benefitting’—but certainly not to

1,400,000 International members as being commonly bene-

fitted.

Who desired the benefits from the settlement? Well,

certainly Sadlowski did in spite of the fact that his coun-

sel opposed it, because there was a new election in which

42a

he won the victory which he had sought originally. The

circumstances do not matter as to whether they were hotly

contested or not at this time. He, Sadlowski, was vic-

torious. Undoubtedly, he benefitted. And since he was

campaigning through his counsel all the way through the

continuance of the processing of this action, as was shown

to be the case by the evidence produced as a whole, it was

Sadlowski’s counsel’s campaign activities which eventually

became victorious.

As for any benefits which might be considered to be

“common” to the other Districts, there are only fanciful

assertions that all the 1,400,000 International members of

the Union will be put on notice that election improprieties

will not be tolerated—as if all 1,400,000 such members

really were in need of such notice; and further, that the

election of Sadlowski would “willy-nilly’ have been to the

common benefit of the 1,400,000 members—if that benefit

was in fact needed, or even that the intervenor’s election

might not actually have been detrimental] to any or all

these International members.

What is uncontravertedly obvious to me as a factfinder

is that there is no evidence whatsoever that any District

including District 31 was affected. If there had been any

common benefit to the International or any other District,

that evidence should have been presented in the case to

make it manifest in order to base a judicial determination

entitling the claimants to fees. Otherwise, the claimants

required me as a factfinding judge to assume that their

argument was a fact and not just a conclusion that the

1,400,000 International membership was commonly bene-

fitted, and more so that the assumed common benefit was

a reasonable basis for shifting the costs of the intervenor’s

campaign to the 1,400,000 International membership with

“some precision to those benefitting’. But there is no

such factual persuasion of precision benefitting. Neither

was there any factual persuasion of precision benefitting

126,000 members in District 31, because the claimants’

43a

activities were directed in the irrelevant financial path

for procuring inadmissible evidence politically beneficial

only to Sadlowski’s potential, eventual election. Even here

if such character of irregularities required nc tice to the

membership, there is no evidence of that.

Under these circumstances, it is impossible for me to

trace “with some accuracy” any benefits bestowed upon

any of the membership, and especially upon the Interna-

tional membership, as the “readily identifiable benefici-

aries”. Neither do the claimants’ unproved assumption

satisfy the dictates of the Court of Appeals as it reflects

upon the principle laid down by the Supreme Court in

Alyeska Pipeline Service Co. v. Wilderness Society, et al.,

421 U.S. 240, 265, n. 39 (1975).

ATTORNEYS’ FEES—TRADITIONAL RULE—

COMMON BENEFIT

The traditional American rule is that attorneys’ fees

are not ordinarily recoverable by 2 successful litigant in

the absence of statutory or contractual authorization.

However, federal courts “in the exercise of their equitable

powers, may award attorneys’ fees when the interests of

justice so require.” Hall v. Cole 412 U.S. 1, 4-6 (1973).

The inherent power to award such relief “is part of the

original authority of the chancellor to do equity in a par-

ticular situation.” Sprague v. Ticonic National Bank,

307 U.S. 166, 166 (1939); Hall v. Cole, supra, at page 5.

Exceptions to the American rule, created by both the

ecurts and Congress have developed in certain situations

“in which overriding considerations indicate the need for

such a recovery”, such as where the “plaintiff’s successful

litigation confers ‘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 proportionate

among them.“ Hall v. Cole, supra, at page 5; Mills v.

Electric Auto-Lite Co., 396 U.S. 375, 393-394 (1970). In

44a

gauging the principles in Hall and Mills to the instant

case, I find it impossible to extract from the evidence in

this case as a whole any “substantial benefit on the mem-

bers of an ascertainable class” bestowed by the claimants.

Even with the election of Sadlowski as Director, there is

no evidence of whether the District 31 membership were

better or worse off with Sadlowski as Director.

Initially this “common fund” or “common benefit” ex-

ception to the American rule emerged in situations where

through litigation the successful plaintiff enhanced or

preserved a fund for the benefit of a class of beneficiaries,

since it would be unjust for those who benefitted from

the plaintiff’s efforts not to contribute to the attorneys’

fees, either directly or from the fund or property itself.

See Trustees v. Greenough, 105 U.S. 527, 531-537 (1882).

The case law has developed since then so as to allow,

for example, an award of attorneys’ fees where a plaintiff

sued for her own benefit, and her success entitled others

to recover out of the same assets by operation of stare

decisis, Sprague, supra, at page 166; where also a plain-

tiff produced by litigation a non-pecuniary benefit, such

as where shareholders conferred a benefit on their corpo-

ration by proving a violation of securities’ laws, Mills v.

Electric Auto-Lite, swpra; and where a union member

conferred a benefit on the union by vindiction of his right

enrich the others unjustly at the plaintiff’s expense.”

Mills, supra, at page 392.

45a

With this rationale in mind in this case, what unjust

enrichment accrued to the 34 other Districts and their

membership? That the claimants argue that Sadlowski

sits on the International Executive Board? So what would

happen if he did not sit on the Executive Board? What

difference did his sitting make? As the factfinder, I do

not know. And the claimants’ contention that I should

conclude benefits either way could only be by surmise.

Equitably, I cannot do this.

Since 29 other Districts (not filing complaints) did not

need “to be put on notice that election improprieties will

not be tolerated”, how were these 29 Districts and their

memberships bestowed “common benefits” and thereby

derived “unjust enrichment” by anything the claimants

did? For that matter, in addition to the memberships in

the 29 Districts, what barest suspicion (let alone evi-

dence) can be levelled at the memberships in the other 5

complaining Districts that their complaints were basically

of such character with or worse than that of the inter-

venor’s, and that accordingly they needed “to be put on

notice that election improprieties will not be tolerated”,

and that the claimants’ activities would produce for such

memberships “unjust enrichment” if the claimants’ awards

were not shifted to them? And if so shifted, how do we

separate them from all the other District memberships?

All this is a matter purely for surmise and conjecture,

and no factfinder can in good conscience make findings of

fact on surmise and conjecture. No evidence whatsoever

is here supporting any contention that all this is not sur-

mise and conjecture.

On the other hand, neither would it be just to enrich the

claimants at the expense of the full membership, or a part

of the membership, if the claimants were neither the re-

sponsible processor of the litigation nor responsible for

its successful outcome, as in this case the settlement was

not brought about but rather opposed by Rauh who is

now one of those claiming bestowal of benefits. Using

46a

conjecture only what if Rauh had been successful in ob-

structing the plaintiff’s and defendant’s stipulated settle-

ment and final determination? Would the case have been

. required to go to trial and possibly not have been termi-

nated until sometime in 1975.“ Would the membership of

District 31 have benefitted? Or would Sadlowski have

been more benefitted because he had more time to cam-

paign unnecessarily? Who would have benefitted? Since

the settlement and final determination of the case was

not brought about by the claimants, then the intervenor is

no less a beneficiary than are the 1,400,000 members, if

in fact they are; but the intervenor is almost exclusively

the sole beneficiary at the expense of the Secretary of

Labor who conducted the total investigative and legal

processing and settling of the case. And even taking the

proportion down to the smallest number of possible bene-

ficiaries, there is no evidence in the case that the irregu-

larities complained of by the intervenor were of such a

level in his District 31 (or in any other District) as to

require notice to just the District 31 members that such

irregular election activities would not be tolerated.

The claimants rely heavily on Hall v. Cole, supra, where

the Supreme Court affirmed an award of $5,500 in attor-

neys’ fees to the respondent who was expelled from his

union for deliberate and malicious vilification of union

management and who subsequently regained his union

membership under §103 of the Labor Management-

Reporting and Disclosure Act. The court held that the

respondent’s suit not only vindicated his own right of free

speech guaranteed by the statute, but furthered the demo-

cratic interest of the union and its members as well. The

Court reasoned by vindicating his own rights, the suc-

cessful litigant dispelled the “chill” upon the rights of

others. The Court, at pages 8-9, stated:

“Thus, as in Mills, reimbursement of respon dent's

attorneys’ fees out of the union treasury simply shifts

Hearing of March 21, 1974, Tr. 22.

47a

the costs of litigation to ‘the class that has benefitted

from them and that would have had to pay them had

it brought the suii.’”

The claimants argue that their efforts as well dispelled

a similar chilling effect and promoted union democracy.

While there can be no doubt that the respondent in Hall

produced a common benefit for free speech for all mem-

bers in the union solely through his litigation efforts, the

claimants’ legal efforts, on the other hand, produced noth-

ing of substance or materiality, nothing that was not, in

any event, repetitive or duplicative of the Secretary’s

intense and massive investigation. Sadlowski’s counsel are

not precluded from attorneys’ fees simply because of Sad-

lowski’s status as an intervenor and the Secretary’s domi-

nant enforcement role in this area, but the claimants are

not entitled to a free ride on the Secretary’s comprehen-

sive accomplishment, without material input; and they

are not entitled to compensation for redundant (even if

intensive), and at the very best, marginal case work prod-

uct.

The magistrate also relied om Wolf v. General Motors-

United Auto Workers, Etc., 56) F.2d 1266, C.A. 3, 1978.

Here our Court of Appeals affirmed a District Court’s

denial of an application for attorneys’ fees by counsel who

represented certain auto employees in a suit to obtain

supplemental unemployment benefits. When the benefits

were disbursed by the administrative board at the proper

time, the suit was dismissed on the merits as moot; and

the attorneys’ fees were denied because counsel failed to

demonstrate a sufficient causal relationship between their

efforts and the disbursal of the fund under the common

benefit exception”. The Court said in the per curiam

opinion:

„[Wie are asked to determine that the efforts of

appellants’ counsel resulted in a ‘common benefit’ to

a discernible class. Because the facts of this case

fall far outside the narrowly circumscribed common

benefit exception to the general ‘American Rule’ that

attorney’s fees are ordinarily not recoverable by a

prevailing litigant in the absence of statutory au-

thorization. (citing Alyeska, supra), we affirm.” (at

page 1267)

“The common benefit exception anticipates, and is

necessarily preceded by, a proven causal relation-

ship between the efforts of counsel and benefits

allegedly derived therefrom.” (at page 1268)

The applicants argued that suit was filed against the

GM benefits plan and therefore the benefits were dis-

bursed. The Court responded.

“{I}t would be a logical fallacy to conclude that

the resulting payments were caused by an indepen-

dent suit in federal court.” (at page 1268)

Similarly, the claimants here appear to be reasoning

that, because Sadlowski intervened, settlement occurred.

The claimants have failed to show by any evidence, cause

and effect relationship. I have found through examining

the actual sequence of litigation and settlement events

that the resulting settlement occurred independently and

in spite of the actions of one of the claimants, Rauh.

Consequently, they have not demonstrated the required

“sufficient causal relationship” between any efforts on

satisfactory finalization of the case under the

mon benefit” exception.

edgeable individual of what in common vernacular “the

game is all about”. So, too, in this case I am observant

of the pleadings and am familiar with their contents.

ties premised the fundamental parts which each of the

parties, plaintiff, defendant, intervenor and intervenor’s

counsel played toward the eventual outcome in the de-

termination by me of the case. As I look back over the

whole proceedings and review the transcripts and the

pleadings, and with special detailed examination of the

part which the intervenor and the claimants played, I

served quite clearly the whole process and the record

contributions which made the eventual satisfactory ter-

mination possible, and must make my findings and de-

cisions in accordance with the facts, both legally and

in equity.

SUMMARY OF MAGISTRATE’S FINDINGS OF FACT

The magistrate addressed the threshold issue of whether

or not any benefit was bestowed on the membership as

a result of the actions of the intervenor and the claim-

ants. After my examination of the record, I affirm and

also adopt his findings. He found that:

1. In order to preserve issues for presentation to the

Secretary, only minimal requirements are imposed; that

these obligations could readily be fulfilled without the

assistance of counsel; and that the assistance of counsel

was not necessary to preserve matters for presentation

to the Secretary.

2. A complaint filed with the Department of Labor

need only set forth several allegations, and a formal

legal document prepared by counsel is not necessary to

invest the Department with jurisdiction to investigate

and ultimately to sue.

8. During the period between June 25, 1973 through

August 1973 and until recommendation of the Depart-

ment to file suit, an intensive investigation by the Sec-

retary occurred.

4. The intervenor did not influence the Secretary’s de-

cision to sue, as Solicitor Kilberg stated, “. . . [a]t no

50a

point in time, was there ever any doubt that, short of

a satisfactory settlement, the Departmert would sue in

District 31.” |

5. Extensions of time before th~ filing of suit were for

the purpose of allowing USW to investigate the election.

6. Although the intervenor contends that it became

necessary to retain Attorney Rauh to expedite the pro-

ceedings, the actual intent was to politically assist Sad-

lowski’s new campaign.

7. Despite Rauh’s contention that his three or four

conversations with Mr. Lagather “caused labor to file

suit“, the uncontradicted evidence from Solicitor Kil-

berg creditably demonstrates that Rauh did not provide

any factual information which was not already in the

Department’s files; that Rauh did not advance any legal

arguments which the Department had not already con-

sidered and that Rauh’s statements had no effect on the

decision to file suit in District 31.

8. Rauh’s efforts at the hearing on the plaintiff’s mo-

tion for expedited discovery on March 21, 1974 had no

effect on the final outcome of the proceedings which took

place as rapidly as possible within the limitations of

plaintiff’s counsel’s other commitments.

9. Although the intervenor alleges that he strongly

influenced the theory of prosecution by the Department,

the evidence from the record, specifically from the plain-

tiff’s trial counsel Ernst, indicates that the theory or

prosecution, actual prosecution and settlement of the law-

suit was not affected by anything said or done by the

intervenor.

10. The discovery undertaken by the intervenor pro-

duced no useful evidence which the Department did not

already have as result of the DOL’s massive investigation.

11. Although the intervenor claims credit for block-

ing “unsatisfactory undemocratic settlement proposals”,

the contention that the intervenor blocked the splitting

of the District is refuted by the evidence from three

DOL affidavits which show that this proposal had been

rejected by the Secretary prior to its ever having been

communicated to the intervenor; and the contention that

the intervenor prevented multiple nominations in the re-

run election is also refuted by the evidence that this

became a moot point when Evett agreed to be a candidate

in the rerun election.

12. The intervenor took no helpful or compelling part

in the settlement negotiations.

13. The intervenor refused to be a party to the set-

tlement agreement, which had to be redrafted excluding

the intervenor as a party.

14. None of the intervenor’s objections to the settle-

ment agreement was sustained at the hearing on August

23, 1974.

15. There was no intention of rerunning the Disrtict

31 election at the outside limitation date of November

29, 1974, and thus, the intervenor’s claim that his efforts

preserved union democracy by preventing the election

being conducted on Thanksgiving weekend is without

merit.

16. The court broadly approved conducting the elec-

tion in conformity with Union regulations and Title IV,

and no specific recommendations by the intervenor were

adopted by the court.’

TI have already discussed the settlement procedure before me and

cite the Magistrate’s findings to show only the accuracy of the

Magistrate’s observations and holdings. Also, as I refer only to

the intervenor in the Magistrate’s findings, I infer and include also

such claimants as are related to the specific findings or additional

findings to include them as any or all claimants in the case be-

fore me.

52a

IDENTITY AND DEMANDS OF CLAIMANTS

In examining every facet of the claims which the claim-

ants are making for payment of fees, in fact and in law,

I have not overlooked a circumstance that it was Sadlowski

(not the claimants) who filed the complaint originally

with the plaintiff. I also observe that Sadlowski would

have been deprived of the ultimate victory as a Director

in District 31 if he had not filed the complaint with the

plaintiff, and if the plaintiff after investigation had not

brought this action, and if the plaintiff had not worked

with the defendant for the ultimate settlement and Sad-

lowski’s eventual victory. To a rational extent, Sadlowski

did render some services to the Secretary as he did for

himself. This, then, might be considered as a service

rendered by Sadlowski personally in aid of the Secretary.

I must consider also that Sadlowski did not do this be-

cause of his beneficent attitude towards the membership

of the International Union, but only because Sadlowski

was hoping to benefit personally from the Secretary’s con-

duct. If I could seperate personal services rendered by

Sadlowski to the Union, either for the District or the In-

ternational, I might have been able to fairly and justly

determine upon a basis for compensation—if this had

been done through attorneys, or even the claimants (even

though Sadlowski claims nothing personally for legal

costs) but I have nothing before me to give me the slight-

est foundation for such a finding and determination. On

the other hand, I have before me an abundance of highly

credible evidence which indicates that what Sadlowski did

before filing the complaint with the Secretary was as a

defeated candidate. In this respect a holding that any

funds are due Sadlowski for such under the present claims

of counsel for compensation would be improper.

While another matter which I have considered is not di-

rectly apt in making this holding, I deem it informative

to discuss here certain evidence of the claimants which af-

fects the credibility of the assertions and allegations made

in support of their claims.

In the narrative statement filed by the claimants and

in certain affidavits and depositions as filed by them before

the magistrate, a total claim was made for approximately

$96,000.00 (Narrative Statement, page 2). A breakdown

in these pleadings is as follows:

1. Joseph Rauh, claimant, asserts an expenditure of

235 hours (Intervenor’s Narrative Statement, page 7).

These hours are taken from entries on a calendar and are

summary hours without details.

2. Leon Despres, claimant, asserts an expenditure of

approximately 256 hours with some reasonable detail for

167.5 hours, but admits that 88.5 * hours have no records

at all (Intervenor’s Narrative Statement, page 8), and

are without details.

8. Judith Schneider, claimant, a law student at the

time, asserts expenditures of 1,279 hours, but admits that

at no time did she make any time record, and the hours

set forth are mostly her estimate (Intervenor’s Narrative

Statement, page 9), and are without details.

4. Kenneth Yablonski, claimant, asserts an expendi-

ture of 15 hours, which he admits is from memory and un-

substantiated from any diary or record (Intervenor’s

Narrative Statement, page 9), without details.

In each of these individual claims, the hourly estimate

of time was set forth by the individuals on the theory that

this was the standard amount claimed under such circum-

stances, except in the case of Miss Schneider which was

based upon what salary she had been receiving.

Miss Schneider is requesting $20.00 per hour in addition

to the salary that she received in 1974 from the Associa-

tion for Union Democracy. She now claims that her hourly

rate of pay of $5.00 per hour was a “ridiculously low

base figure”, and that she should be awarded an additional

Of course, I question how he could account for 88.5 hours by

memory alone.

54a

$25,580.00 out of the Steelworkers’ Union dues, wichout

having presented convincing evidence that her work merits

any increase whatsoever. (See Narrative Statement at

page 11) I find that her work, which was predominately

non-legal and political in nature, has already been ade-

quately compensated.

I have cited these only to indicate that I have most care-

fully examined the record in an effort to give credibility,

where credibility was due, and not to deprive the claim-

ants of any just compensation or fees where so entitled.

Since I have already discussed these matters before, I

merely repeat this now for the purpose of showing one of

the elements upon which I have arrived at my conclusion

based upon the preponderance of all of the evidence in the

case as a whole.

I am also aware of the fact that since our law now is

rather liberal in granting attorneys’ fees in any number of

ways, that oftentimes a claim for counsel] fees is abused.

I am reminded here of what was held in Brown v. Stack-

ler, 612 F.2d 1057, 1059, C.A. 7, 1980. There an attorney

made an exorbitant demand which was not supported by

the evidence and the district court denied the attorneys’

fees as claimed. The Court of Appeals affirmed the Dis-

trict Court decision and in an opinion by Judge Edward

Dumbauld stated that such a denial of such an outra-

geously excessive fee demand will be a “. . . hopefully effec-

tive means of encouraging counsel to maintain adequate

records and submit reasonable carefully calculated, and

conscientiously measured claims when seeking. . . counsel

fees.” Judge Dumbauld further stated in this opinion:

“If, as appellant argues, the Court were required

to award a reasonable fee when an outrageously un-

reasonable one has been asked for, claimanis would

be encouraged to make unreasonable dem nds, know-

ing that the only unfavorable consequence of auch

misconduct would be reduction of their fee to what

they should have asked for in the first place. Tc ~ -

55a

courage such greed a severer reaction is needful, and

the District Court reponded appropriately in the case

at bar.” (612 F.2d, at page 1059).

While I am in agreement with the philosophy laid down

in Brown v. Strickler, supra, of containing counsel’s fees

demands ethically within the realm of certainty, I consider

the proof of the claimants in this case in the aspect of

another element by which I determine credibility. The de-

tails of services rendered by them do not add any weight

to their claims for entitlement of fees, when viewed in the

evidence as a whole as it contains contradictory assertions

and arguments made by the claimants.

SUMMARY

The defendant, United Steelworks of America, AFL-

CIO-CLC, held an election on February 13, 1973, for the

selection of directors in its 35 Districts throughout the

United States. Six complained to the plaintiff, the Secre-

tary of Labor, that irregularities had been practiced in

their elections. The Secretary immediately put to work

his team of expert Compliance Officers to investigate these

six complaints. Of these they found two where there was

a likelihood of irregularities. These were from Anthony

Tomko, the defeated candidate in District 15 in the Pitts-

burgh area, and from Edward Sadlowski, the defeated

candidate in District 31 in the Chicago area.

An overly abundant amount of evidence was amassed

both in the Pittsburgh and Chicago Districts under the

skilled supervision of the Secretary’s counsel; and on the

recommendation of counsel this action was commenced by

the Secretary. Complainants Tomko and Sadlowski inter-

vened, but Sadlowski gathered around him a crew of at-

torneys whose prime function was to inaugurate deposi-

tions to discover financial matters. The Secretary, however,

had held that no financial irregularities were practiced

so he did not include such an averment in his com-

plaint as filed in this court. Nevertheless counsel for Sad-

Compliance Officers and counsel had amassed a large

amount of evidence as to make it unnecessary for the Sec-

retary to initiate any discovery after the action was filed.

The defendant indicated need for discovery in District 31

in Chicago, and at which this court was asked to preside

for a week, but that never materialized.

This court in an effort to procure a settlement had

learned that the plaintiff and defendant had been negoti-

ating for settlement in both Districts. This court en-

couraged counsel to continue to do so. Couneel for the

Secretary and the International Union eventually pre-

sented 2 motion to approve such a package settlement

agreement for both parts “A” and B“, Districts 15 and

81. One of Sadlowski’s counsel, who had appeared in the

previous two open-court matters before me but had done

nothing to further the final determination of the case or

aid the plaintiff, also appeared at the settlement hearing

on Part “B”, District 31 and objected. He presented two

reasons for disallowing the settlment; one, that the re-

election would be held around Thanksgiving Day as an in-

terferring inconvenience to the membership; and two, that

an election by means of mail balloting could not be effec-

tive. I overruled both objections. The first, because my

order would have included an election under the exclusive

supervision of the Secretary of Labor within a maximum

period of 90 days to which counsel for the plaintiff and

defendant gave me assurance that the re-election would

be held before Thanksgiving time; and second, because no

57a

evidence had been presented before me of any mail ballat-

ing, and so I concluded that it was injected by counsel for

the intervenor superficially for the purpose of preventing

the settlment. In discussing this second objection in open

court by counsel without contradiction, the question of a

mail balloting method was to be presented at the forth-

coming convention of the International, but that this

could not be retroactive. I ruled that a second election

must be held and completely supervised by the Secretary

closely and in line with what was the processing of the

first election. I held that the objections made in behalf of

the intervenor were without merit and dismissed them. I

ordered a Secretary controlled re-election in District 31.

The new election was eventually held satisfactorily and

legally under the efficient supervision of the Secretary and

Sadlowski was elected as Director District 31.

Thereafter, a “Verified Application for Attorneys’ Fees”

was presented to me for payment of various sums of

money for four individuals, three attorneys and one law

clerk, who had been in permanent employment elsewhere,

on declarations of service for the intervenor. No request

was made by the claimants for a hearing to support their

claims. No records of accounts, no verification of custom-

ary and usual entitlement of earnings was presented, and

I was presumably required to charge the claims to the

members of the International. I was given no factual or

legal supports to do so and I denied the claims on the sole

question presented before me (a legal one) that the statu-

tory law did not authorize this court to allow counsel fees.

On appeal our Court of Appeals held that while there

was no statutory authorization for entitlement for such

payments, there was nevertheless an equitable philosophy

known as the “common benefit doctrine” which could en-

title the claimants to compensation on their presumed

averments if proved and if proved pointedly by defined

legal and factual] guides that such common benefits were

traceable with some accuracy to all the members of the

Internationa! Union as a readily identifiable class of bene-

ficaries, The matter was referred back to me for such de-

termination, and if so proved, in what compensatory

amount.

When it came back to me I referred the matter a sec-

ond time to the United States Magistrate who inquired

widely and in depth, and who received a vast amount of

affidavits, exhibits and other evidence as would give him a

clear and comprehensible knowledge and insight of all the

circumstances of the demanded claims. The magistrate

made detailed and explanatory findings of fact and set

forth many consistencies, inconsistencies and contradic-

tions in the evidence, and as well a recital of legal princi-

ples. He recommended denying the claims. The claimants

objected and the defendant filed an answer to these

objections.

The matter then came to me for further consideration.

I re-inquired into all of the evidence in the case as sub-

mitted and add findings of fact on the evidence, and of

that which came before me as the presiding judge. I ob-

served the details and set forth the inconsistencies and

deficencies of the claimants’ case as I determine these in

findings of fact from the substantial preponderance of the

evidence in the case as a whole.

As for the guidelines which Judge Van Dusen in the

Court of Appeals had set forth as the method by which

the “common benefit” rationale was to be applied and

findings made thereon, I find the claimants’ case to be

totally wanting in fact and in equity in accordance with

the prescribed law.

Judge Van Dusen had indicated that, while counsel

fees generally might not be available to claimants as I

had originally ruled, there was the possibility that the

claimants might be entitled to counsel fees for the com-

mon benefit” bestowed to the total membership of the

defendant International.

I find from all the evidence that the total membership

of the Union was approximately more than 1,400,000;

Districts; that 29 of the Districts had no complaints and

so we have the right to conclude that these were devoid

of any irregularities; that in District 31 the defeated

candidate Sadlowski hired a crew of attorneys whose

efforts and activities from the beginning were aimed

for his eventual election; that his counsel proceeded with

depositions relating to financial matters which had no

relationship to the issues in the Secretary’s case and

which would not have been admissible in any evidence

in this court proceeding; that all of these claimants’ ef-

forts were directed in these channels and none of them

for the benefit of the plaintiff or the final determination

of the case; that one of the claimants, as counsel for

Sadlowski, actually attempted to defeat a finalization

of the case by the settlement between the Secretary and

the Union, assumedly in an effort to extend the time for

campaigning for Sadlowski’s eventual election; that if

the attempt to prevent the settlement by Sadlowski’s

counsel had succeeded, the case would have continued on

for a year or two, or longer, with no possible benefit

to the District 31 members and obviously not to the

Union as a whole; that the objections as niade for the

final settlement in open court before me were without

fact and merit, since I had ruled that the election must

be held within 90 days and within the law under the

exclusive supervision of the Secretary of Labor; that

counsel for the plaintiff and defendant cooperated with

the court in arriving at the settlement and termination

the

District 31, Part B“, be counsel for the plain-

As for the accrual of benefits and to whom, I hold:

that Sadlowski’s counsel claimants did nothing to aid in

the disposition of this case; that the claimants’ argu-

ment for entitlement based on the statements by the

elaimants (1) that Sadlowski would be a member of the

Executive Board of the International was presented only

as an argument with conclusion and without any evidence

or showing of how, why or when; and (2) that the

claimants’ statement, that members of the International

would be put on notice that election improprieties would

not be tolerated, was not only a baseless but a contra-

dicted speculation because we know that 29 out of 35

International Districts held regular, orderly and com-

pliant elections and the elections in 4 other Districts

were held to be in good order by the Secretary, and even

in Districts 15 and 31 no proof was presented of any

need of warnings. Furthermore, no evidence whatsoever

was presented to sustain the requirements enunciated

under the common benefit doctrine that (1) the benefits

may be traced with some accuracy; (2) the class of bene-

ficiaries is readily identifiable; and (3) whether there

is a reasonable basis for confidence that the costs may

be shifted with some precision to those benefitting.

Thus, in fulfillment of the guides placed upon me by

the Court of Appeals, I hold that the claimants have not

proved by the preponderance of the evidence in this case

that the claimants’ alleged services resulted in any trace-

able “common benefit” to the defendant International

membership either totally or in identifiable part or parts,

or even to the members of Districts 15 and 31; or that

there is any reasonable basis for confidence that such

a cost or costs can be shifted with some precision to

1,400,000 benefitting members of the defendant or any

identifiable part or parts or District».

of the facts as I did, which were attempted to be con-

tradicted in the claimants’ narrative statement, argu-

pecially about what I did and said in court and their

misstatements and exaggerations in that regard, and I

arrive at the full capability of making findings of fact

from the vast preponderance of the evidence as a whole.

In law and in equity, contribution to the individual claim-

ants of the sums claimed by them from innocent and

unbenefitted persons belonging to any or all of the un-

identifiable membership of the International Union would

be unjust and unconscionable.

As for the sums of money claimed here for possible

benefits, no evidence exists in the record, let alone a

preponderance of all the evidence of the case as a whole,

of what services were spent or for whom of the 1,400,000

members of the defendant, or segment of them—all this

in accordance with the requirements laid down by the

Court of Appeals.

MAGISTRATE’S REPORT AND RECOMMENDATION

Accordingly, after my fullest inquiries into the record,

the examination of all the affidavits which were presented

and of the further examination of the pleadings as all

this was aided by my own recollection in the case, when

all these were compared and examined with the findings

of the magistrate, I corroborate the very detailed state-

ments and findings of the magistrate. As to this, I find

upon his report and recommendation, since I have in-

dependently -aade my own findings cf fact

sions of law and determinations. Also, while I adopt the

findings of the magistrate, I basically make my own

findings and conclusions additionally with those made b

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