Opposition Brief — Venegas v. Mitchell

Supreme Court, U.S,

FILED

JUN 73 «8

JOSEPH F. SPANIOL, JR.

ERK

—

oc

No. 88-1725

IN THE

Supreme Court of the United States

OcTOBER TERM. 1988

JUAN FRANCISCO VENEGAS,

Petitioner,

VS.

MICHAEL R. MITCHELL,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

MICHAEL R. MITCHELL

Suite 910

4929 Wilshire Boulevard

Los Angeles, California 90010

(213) 937-0344

in propria persona

Lawyers Brief Service / Legal Printers / (213) 383-4457 / (714) 720-1510

BEST AVAILABLE COPY

No. 88-1725

IN THE

Supreme Court of the United States

OcTOBER TERM. 1988

JUAN FRANCISCO VENEGAS,

Petitioner,

VS.

MICHAEL R. MITCHELL,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

MICHAEL R. MITCHELL

Suite 910

4929 Wilshire Boulevard

Los Angeles, California 90010

(213) 937-0344

in propria persona

DTT CG, see

2 ere

eis

QUESTIONS PRESENTED

Should an attorney in a successful civil rights case be

allowed to collect a contingent fee, where the amount of

the fee and the terms of the fee contract have been found

by the trier of fact to be both reasonable and permissible

by governing ethical standards?

Did Congress, in enacting the Civil Rights Attorney’s

Fees Awards Act of 1976, 42 U.S.C. Section 1988, (‘the

Act”) intend to add recovery of statutory fees to the

already existing system of contingent fee agreements

without preempting state law and without abrogating

enforceable written contracts?

QUESTIONS PRESENTED

TABLE OF AUTHORITIES

STATEMENT OF THE CASE

x -

TABLE OF CONTENTS

REASONS WHY THE PETITION

SHOULD BE DENIED

II

Iif

IV

THE CASE IS NOT RIPE FOR REVIEW

BECAUSE THE JUDGMENT BELOW WAS

INTERLOCUTORY ........-- eee eeeeees

THERE IS NO TRUE CONFLICT AMONG

THE CIRCUIT COURTS OF APPEAL ON

:). 2.) ee

ENFORCEMENT OF RESPONDENT’S FEE

AGREEMENT IS CONSISTENT WITH

SUPREME COURT DECISIONS .......-.

THE LEGISLATIVE HISTORY OF THE

ACT SHOULD NOT BE CONSIDERED,

BUT EVEN IF IT IS CONSIDERED, IT

DOES NOT SUPPORT PETITIONER’S

CONSTRUCTION OF THE LAW ........

_wawee @86 682 8666930 0 979 7 SS

eo @& 62 8 826626668060 9680979 7.9 9 4

VI

Vil

CONCLUSION

- lil -

CONGRESS NEVER INTENDED TO

PREEMPT EXTENSIVE STATE LAW

ESTABLISHING THE VALIDITY AND

GOVERNING THE REASONABLENESS

OF CONTINGENT FEE CONTRACTS

RESOLUTION OF THE FEE CONTRACT

ISSUES RAISED BY PETITIONER RE-

QUIRES FACT SPECIFIC ANALYSIS

THAT WILL FREQUENTLY INVOLVE

CASES WITH BOTH STATE LAW AND

FEDERAL CIVIL RIGHTS CLAIMS

CONGRESS DID NOT PREEMPT STATE

AND LOCAL AUTHORITY

APPENDIX A

CONTINGENT RETAINER AGREE-

~~ ene eS eC. € Ce hs ee 2s at ee es 6S Se Se eS 6 =

*. Se eS Se he fhe

Ve P.42e Fe 82 88 8 88 66 4 8. & ee &€ 8 8 2 © @ SS

Page

es

TABLE OF AUTHORITIES

Page

Cases

Agarwal v. Johnson

cape he Te, 14

Alcorn v. Anbro Engineering, Inc.

pe 14

Alyeska Pipeline Service Co. v. Wilderness Society

ke Se 11

American Construction Co. v. Jacksonville,

T. & K. W. Ry.

148 U.S. 372, 13 S.Ct. 758 (1893)............ 4

American Tobacco Co. v. Patterson

PO Os ok naw ence eecnninn 10

Blanchard v. Bergeron

__ U.S. __, 109 S.Ct. 939 (1989). ....... 5-8, 12

Caminetti v. U.S.

pr ne Se 10

City of Riverside y. Rivera

477 U.S. 561(1986) ........ 000.0... ccc eee 14

Cooper v. Singer

719 F.2d 1496 (10th Cir. 1983).......... 4,5,9

Crawford Fitting Co. v. J.T. Gibbons, Inc.

482 U.S. 437, 96 L.Ed.2d 385,

IG? SAL 2604 (19ST)... wc cee 6, 7, 10

Page

Evans v. Jeff D.

475 U.S. 717, 89 L.Ed.2d 747,

EGS SAX. 1551 CISBS) 2c ccccs 4, 6, 8,9, 11, 17

Johnson v. Georgia Highway Express, Inc.

Ge Fae FOO Gee Ge COPD so bv ce cee ecanes 7

Mitchell v. Los Angeles

Tae ©. OO Oe UM. TFGS) iio ie oe eee nanan 17

Pacific Gas & Electric Company v. State

Energy Resources Comm’n (1983)

461 U.S. 190, 103 S.Ct. 1713,

pe ee ee 16

Pennsylvania v. Delaware Valley Citizens’

Council, 483 U.S. 711,

og ee 6,7

Pharr v. Housing Authority

7064 F.26 1216 (1 ith Cie. 1963)... wc eee es 5

Sears v. Atchison, Topeka & Santa Fe

Railway Ca.

779 F.2d 1450 (10th Cir. 1985).............. 5

Stanford Daily v. Zurcher ;

64 F.R.D. 680 (N. D. CA 1974), aff d.

550 F.2d 464 (9th Cir. 1977), rev'd on

other grounds, 436 U.S. 547 (1978). .......... 7

Sullivan v. Crown Paper Board Co., Inc.

ro, | gk Ll es | 6

Venegas v. Skaggs

Bee Cee COG GU GAELUUOED occ ese eeseteees 3

ET Tm

- Vi -

Page

Wheatly v. Ford

679 F.2d 1037 (2d Cir. 1982) ............. 6,9

Willard/Mitchell v. Los Angeles

803 F.2d 526 (9th Cir. 1986)............... 17

Federal Statutes

15 U.S.C. Section 15g(1)(A) and (B)............. 10

Be U.K. Bomtiom WEE oc ww kk cc cccccc cn, 7, 10

28 U.S.C. Section 1920 ................0000.,, 7

42 U.S.C. Section 1983 ... 0... ccc, 2

42 U.S.C. Section 1968 ........... 2,7, 8, 10, 16, 17

State Statutes

California Civil Code:

hg ol ele A does ts 14

California Government Code:

ge re rae 14

Rules

California Rules of Professional Conduct

Ja eh ye ee ee 18

Central District Court Local Rule 2.5.1 ........... 18

Legislative Reports

House Report No. 94-1558 (1976) ............... 11

Senate Report No. 94-1011 (1976)............... 1]

No. 88-1725

In The

SUPREME COURT OF THE UNITED STATES

October Term, 1988

JUAN FRANCISCO VENEGAS,

Petitioner,

vs.

MICHAEL R. MITCHELL,

Respondent.

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

STATEMENT OF THE CASE

The respondent, Michael R. Mitchell (“Mitchell”),

respectfully requests that this Court deny the petition for

writ of certiorari, seeking review of the decision of the

Ninth Circuit in this case. The decision is reported at

867 F.2d 527 (9th Cir. 1989).

This case involves little more than the complaints of a

disgruntled client who voluntarily entered into a stand-

ard contingency fee contract. There is no true conflict

among the circuits on this question. Contingency fee

contracts are extensively regulated by state and local bar

associations and state contract law, and enforcement of a

private fee agreement is consistent with prior Supreme

Court decisions.

a

* o

Attorney Mitchell successfully represented Venegas

in his Section 1983 action against Long Beach, Califor-

nia police officers who used perjured evidence to convict

Venegas of murder. Venegas spent two and one half

years in prison for the conviction.

Three months prior to a ‘cheduled trial date, Mr.

Venegas’ previous attorney (his third attorne:’ in the

case) advised Mr. Venegas that he would no longer

represent him and to find another lawyer.

Against this backa:op, Mr. Venegas signed a written

fee agreement, under which attorney Mitchell would be

paid, if successful, 40% of any amount recovered, less a

$10,000 retainer. The agreement is reproduced at Appen-

dix A hereto. The agreement required Mitchell to apply

for statutory fees and to offset any such recovery against

his 40% contingent share. The agreement also expressly

covered only legal services rendered by Mitchell through

trial, leaving it to the parties’ mutual agreement whether

to continue the attorney-client relationship in the event

of a mistrial or an appeal. In the event the case was lost,

Mitchell was to receive no further fee at all.

Thereafter, Venegas consented to Mitchell’s associa-

tion of co-counsel, with attorney fees to be divided on a

50-50 basis.

After a jury trial, Mitchell obtained a $2.12 million

verdict for Venegas. Pursuant to the fee agreement,

Mitchell then made a Section 1988 motion for attorney’s

fees, and his client was awarded $117,000, of which

$75,000 was for Mr. Mitchell’s services. However,

under the privately-negotiated fee contract, Mitchell was

entitled to the contingent fee, minus the $10,000 retainer

fee. An appeal was taken by defendants, but Venegas

declined Mr. Mitchell’s offer to represent him for an

additional 10 percent of the recovery and substituted in

~» other counsel. The Ninth Circuit affirmed the jury

a =

verdict and court awarded attorney’s fees. Venegas v.

Skaggs, 831 F.2d 1514 (9th Cir.1987).

This Petition arises from Mitchell’s motion to inter-

vene for the purpose of confirming a lien for fees owed

under the contingent fee agreement. Venegas opposed

the motion, claiming Mitchell was entitled only to the

statutory fee. In deciding the motion, the district court

reviewed the fee contract. Although the court denied

Mitchell’s motion to intervene, it declined to invalidate

the contingent fee agreement and left any remaining

dispute to be resolved in a contract action in state court.

In its decision, however, the district court specifically

found that the contract was reasonable, did not result in

a “windfall” to which Mitchell was not entitled, and was

permissible under governing ethical standards, which in

this case included the Rules of Professional Conduct of

the State Bar of California. The district court also noted

Mitchell’s “exceptionally competent performance” in the

trial.

Both Mitchell and Venegas appealed the district

court’s order regarding the status of the contingent fee

agreement. On January 31, 1989,-the Ninth Circuit

reversed the district court’s denial of Mitchell’s motion

to intervene and affirmed the district court’s ruling that

Mitchell’s entitlement to attorney’s fees was not limited

to the Section 1988 award and that the 40% contingent

fee was reasonabl«. The case was remanded to the

district court with the strong suggestion that it exercise

its ancillary jurisdiction to determine fees.

In the meantime, the underlying case has been settled

with the City of Long Beach paying in excess of $2

million, and with Venegas refusing to pay Mitchell any

fee whatsoever, statutory or otherwise. .

Mitchell seeks only that to which he is entitled by

legal contract as reviewed by the courts: attorney’s fees

lie

for successfully representing a client who now refuses to

honor his financial obligations.

REASONS WHY THE PETITION

SHOULD BE DENIED

I

THE CASE IS NOT RIPE FOR RE-

VIEW BECAUSE THE JUDGMENT

BELOW WAS INTERLOCUTORY

This case is not ripe for review because the judgment

below is interlocutory. The Ninth Circuit remanded the

matter to the district court. No inconvenience or em-

barrassment to any party would result from the denial of

certiorari at this pe.nt, so this Court should not issue its

writ. American Construction Co. v. Jacksonville, T. &

K. W. Ry., 148 U.S. 372, 384, 13 S.Ct. 758, 763 (1893).

Each party will have an opportunity to seek appropriate

review after final judgment.

ll

THERE IS NO TRUE CONFLICT

AMONG THE CIRCUIT COURTS OF

APPEAL ON THIS ISSUE

The purported intercircuit conflict on the issue of

contingent fee agreements is illusory.

Petitioner relies heavily on the Tenth Circuit’s opin-

ion in Cooper v. Singer, 719 F.2d 1496 (10th Cir. 1983).

However, the Cooper decision was founded on the

assumption that statutory fees belonged to and would be

awarded to the attorney. As shown infra, p. 17, Evans v.

Jeff D., 475 U.S. 717, 89 L.Ed.2d 747, 106 S.Ct.

ats

1531 (1986) has shown that assumption to have been

erroneous.

First, the Tenth Circuit itself has subsequently limited

the Cooper decision. See Sears v. Atchison, Topeka &

Santa Fe Railway Co., 779 F.2d 1450 (10th Cir. 1985).

In Sears, plaintiffs’ counsel had a retainer agreement

that provided counsel would recover 40% of all

monetary recovery. After two appeals and two denials of

certiorari, judgment of $4.1 million for plaintiffs was

affirmed. Plaintiffs then petitioned for relief from their

fee contract obligations, relying on Cooper. The Tenth

Circuit refused to apply Cooper retroactively to govern a

contract made before the Cooper decision, noted that

Cooper has been criticized by other courts, and stated

that the Sears fee agreement was enforceable because the

contract language differed from the contract at issue in

Cooper. The Tenth Circuit in Sears rejected the argu-

ment that the 40% retainer resulted in a wirdfall to

plaintiffs’ counsel, noting that the fee agreements were

“freely, willingly and knowingly entered into prior to the

litigation.”

Second, petitioner’s attempt to create a conflict where

none exists is nowhere more clear than in his citation to

Pharr v. Housing Authority, 704 F.2d 1216 (11th Cir.

1983). Petitioner implies that Pharr is still good author-

ity and that this decision adds “to the confusion in the

Circuits.” Cert. Petition at p. 8. However, Pharr has

been overruled by Blanchard v. Bergeron, ___ U.S. __,

109 S.Ct. 939 (1989). In Pharr, the Eleventh Circuit

found that if a contingent fee agreement was reasonable,

then the defendant was liable for the greater of the

statutory fee or the contingent fee amount. This holding

is contrary to this Court’s recent decision in Blanchard,

where the Court plainly stated that “[t]he defendant is

not, however, required to pay the amount called for in a

contingent fee contract if it is more than a reasonable fee

+. =

calculated in the usual way.” 109 S.Ct. at 944. Both

courts below found Mitchell’s fee was reasonable.

Third, neither Sullivan v. Crown Paper Board Co.,

Inc., 719 F.2d 667 (3rd Cir. 1983) nor Wheatly v. Ford,

679 F.2d 1037 (2d Cir. 1982) establish a true Circuit

Court conflict. Both cases merely state that plaintiff

should pay his or her attorney either the statutory fee or

the contingent fee, whichever is greater. Sullivan, 719

F.2d 670. Petitioner mischaracterizes the language in

Wheatley, which only provides — consistent with all

other Circuits — that statutory fee should be applied as a

credit to the contingent fee, if the contingent fee is

greater. See Wheatley, 679 F.2d a: 1041 (“Counsel is

entitled by the terms of [the fee] contract to 40% of the

final recovery.... [WJe hold that, to the extent counsel

receives payment of the section 1988 statutory award,

his claim for services rendered under his fee agreement

with his client shall be deemed paid and satisfied.”)

(emphasis added). Wheatley simply holds, in using the

word “to the extent” rather than the word “if,” that no

double recovery of fees is allowed.

All of the cases cited by petitioner — with the sole

exception of the Ninth Circuit’s decision herein — were

decided before this Court’s opinions in Blanchard v.

Bergeron, _U.S._, 109 S.Ct. 939 (1989), Pen..sylvania

v. Delaware Valley Citizens’ Council, 483 U.S. 711, 107

S.Ct. 3078 (1987) (“Delaware Valley II’), Crawford

Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 107 S.Ct.

2494 (1987), and Evans v. Jeff D. 475 U.S. 717, 89

L.Ed.2d 747, 106 S.Ct. 1531 (1986). As discussed

below, each of these decisions supports the enforce-

ability of the private contractual agreement between

attorney and client in the context of statutory fee cases.

In summary, the cases on which petitioner relies have

lost their authority by reason of intervening decisions of

the Supreme Court.

III

ENFORCEMENT OF RESPONDENT’S

FEE AGREEMENT IS CONSISTENT

WITH SUPREME COURT DECISIONS

In each of three recent decisions addressing issues

arising under fee-shifting statutes, this Court has ac-

knowledged the viability of fee agreements privately

negotiated by plaintiffs and their attorneys. In Crawford

Fitting, the right to privately contract for fees was

preserved. In that case, the Court limited reimbursement

to a prevailing party for expert witnesses to $30.00 per

day. Accordingly, a federal court is bound by the limits

of 28 U.S.C. §§ 1821 and 1920 “absent explicit statutory

or contractual authority to the contrary.” /d. at 390, 393.

Likewise, in Pennsylvania v. Delaware Valley

Citizens’ Council, 483 U.S. 711, 107 S.Ct. 3078 (1987),

the Court stated that “the fee contract between the client

and his attorney should be taken into account when

determining the reasonableness of the award... .”

Delaware Valley, supra at 3085. See, also, Johnson v.

Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.

1974); Stanford Daily v. Zurcher, 64 F.R.D. 680 (N. D.

CA 1974), aff'd. 550 F.2d 464 (9th Cir. 1977), rev’d on

other grounas, 436 U.S. 547 (1978). In its discussion of

the nature of Section 1988, the Court in Delaware Valley

also noted that because a losing plaintiff is entitled to no

fees, his or her attorney will be paid nothing unless “the

attorney has an agreement with the client that the attor-

ney will be paid, win or lose.” /d. at 3081.

In Blanchard v. Bergeron, U.S. , 109 S.Ct. 939

(1989) this Court again reaffirmed the viability of

private contingent fee agreements by holding that a

district court cannot limit the court-awarded attorney’s

fees to an amount provided in a contingency fee

sft.

agreement between a prevailing party and his or her

attorney. Thus, “a contingent fee agreement is not a

ceiling upon the fees recoverable under Section 1988,”

Id. at 946, and a private agreement may be a factor in

determining the reasonableness of court-awarded fees.

Id. at 944. However, Blanchard also makes it clear that

a prevailing party and his or her attorney can contrac-

tually agree to a higher fee than the statutory award, and

that will not alter the losing party’s obligation to pay

court-awarded fees. Jd. at 945. Thus, petitioner’s

appeal at page 13 of his brief to “balance the scales” by

invalidating all contingency fee agreements is empty

rhetoric. Blanchard has, in fact, already equalized the

equation. Defendants in civil rights cases are only liable

for the amount of the statutory fee award, no more no

less, regardless of the private contract between client

and attorney.

Moreover, petitioner has taken out of context and

misconstrued one sentence of this Court’s dictum in an

effort to transform Blanchard into a case upholding the

right of a disgruntled client to breach a private contrac-

tual agreement with his or her attorney. Petition, p. 11.

Despite petitioner’s attempt, Blanchard remains a-case

concerned primarily with the fee obligations imposed by

a court on a losing party by virtue of Section 1988.

Finally, although this Court did not directly address

the issue of contingent fee agreements in Evans v. Jeff

D., 475 U.S. 717, 89 L.Ed.2¢ 747, 106 S.Ct. 1531

(1986), implicit in its determination was an acknowl-

edgment of the validity of private fee agreements. In

Jeff D., this Court held that Section 1988 does not

require a district court to disapprove a stipulation seek-

ing to settle a case which is expressly conditioned on the

prevailing party's waiver of attorney’s fees. Reviewing

Congressional intent, the Court observed, “[Congress]

did not prevent the party from waiving this eligibility

_ -

{for attorney’s fees] anymore than it legislated against

assignment of this right to an attorney....” /d. at

730-31. The Court added that while “Congress expected

fee-shifting to attract competent counsel to represent

citizens deprived of their civil rights, it neither bestowed

fee awards upon attorneys nor rendered them nonwaiv-

able or non-negotiable.” (emphasis added) 475 U.S. at

731-32. As such, if the right to apply for or collect

Statutory fees can be used by the client as “a bargaining

chip” to be waived to negotiate an advantageous settle-

ment, then it would be an anomalous result to prevent a

prevailing attorney from seeking to enforce a private fee

agreement — whether hourly, contingent or otherwise.

Surely, if a fee contract is viable after a Jeff D. waiver of

fees, it must be equally enforceable after a successful

trial on the merits which occurred here. See, Venegas v.

Mitchell, petitioner’s Appendix, p. A-15.

IV

THE LEGISLATIVE HISTORY OF

THE ACT SHOULD NOT BE CON-

SIDERED, BUT EVEN IF IT IS CON-

SIDERED, IT DOES NOT SUPPORT

PETITIONER’S CONSTRUCTION OF

THE LAW

Petitioner has postulated that the legislative history of

the Act supports petitioner’s interpretation of the hold-

ings in Cooper and Wheatley. To the contrary, the clear

language of the statute, as well as its legislative history,

belie this view.

It is a fundamental rule of statutory construction that

“the meaning of the statute must, in the first instance, be

sought in the language in which the act is framed, and if

that is plain, ... the sole function of the courts is to

-10-

enforce it according to its terms.” Caminetti v. U.S., 242

U.S. 470 (1917). If the language is unambiguous, it is

inappropriate to resort to legislative history to interpret

the statute. American Tobacco Co. v. Patterson, 456

U.S. 63, 68 (1982).

Just weeks before the Act was enacted, Congress

passed the Antitrust Civil Process Act amendments of

1976. During the debates on that legislation, Congress

focused considerable attention on the availability of

contingency fees for private attorneys. Both the House

and Senate ultimately agreed expressly to prohibit

private attorneys from collecting contingency fees based

on a percentage of monetary relief unless the award of

fees is determined by a court. See, 15 U.S.C. Section

15g(1)(A) and (B).

In contrast to the contingent fee prohibition in the

antitrust amendments, Congress included no limitation

on private fee contracts in Section 1988. In Crawford

Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 96

L.Ed.2d 385, 391, 107 S.Ct. 2494 (1987), the Court held

that Congress had enacted 28 U.S.C. Section 1821 as a

limitation on the amount of reimbursement a district

court may award to a prevailing party for expert witness

fees. Thus, Justice Rehnquist aptly observed, “[iJt is ...

clear that when Congress meant to set a limit on fees, it

knew how to do so.” Likewise, Congress unquestionably

knew how to place limits on the availability of fees

under a private contingency fee contract, but it did not

do so when it passed the Civil Rights Attorney’s Fees

Awards Act. Petitioner cannot now impute such limita-

tion in the absence of an expression of clear Congres-

sional intent.

Even if reference is made to the legislative history of

Section 1988, it readily demonstrates that the primary

purpose of the Fees Act was “the promotion of respect

for civil rights” rather than the imposition of limits on

PF

attorney’s fees, as petitioner suggests. See, e.g., S. Rep.

No. 94-1011, p. 5 (1976); Evans v. Jeff D., 475 U.S. 717,

731-32, 89 L.Ed.2d 747, 106 S.Ct. 1531 (1986). Ac-

cording to the chief proponents of the legislation, the

impetus for enacting the Fees Act was to restore the

Status quo after the Supreme Court decided in Alyeska

Pipeline Service Co. v. Wilderness Society, 421 U.S. 240

(1975) that attorney’s fees could not bt awarded under

the Reconstruction Civil Rights Acts in the absence of a

specific authorizing statute. See, e.g., Senate Report No.

94-1011, pp. 1, 4, 5; House Report No. 94-1558, pp. 2,

3, 9. The scant commentary cited by petitioner as

criticism of attorneys seeking fees for their work pales in

comparison to the strong emphasis Congress placed on

encouraging meritorious civil rights actions. It is surely

not enough to overcome the extensive other legislative

history and statutory language to the contrary.

V

CONGRESS NEVER INTENDED TO

PREEMPT EXTENSIVE STATE LAW

ESTABLISHING THE VALIDITY AND

GOVERNING THE REASONABLE-

NESS OF CONTINGENT FEE CON-

TRACTS

In support of petitioner’s argument regarding Con-

gressional intent, he cites the Senate Judiciary Commit-

tee Report for the proposition that “citizens must have

the opportunity to recover what it costs them to vindicate

[their civil rights] in court.” (Petition, p. 8.)

This sentence in the Report is founded on the mis-

taken assumption that most, if not all, civil rights clients

are able to and do pay their lawyers on an hourly basis

as the case proceeds. If civil rights clients were able to

- 12.

do this, they would have no difficulty finding lawyers

financially able to represent them. The true facts are that

civil rights clients are generally not able to pay an

hourly attorney fee or are not able to attract an attorney

able to represent them on a contingency basis because of

the relatively minor damages or equitable relief sought.

Petitioner also cites remarks of Senator Tunney.

(Petition, p. 9.) However, Congress knew, as Senator

Tunney must have known, that nonlawyers cannot

normally act as “private attorney’s general.” In civil

rights cases, lawyers, not nonlawyers, enforce the law.

Lawyers in the Civil Rights Division of the U.S. Depart-

ment of Justice, pursuant to guaranteed government

salaries (with no obligation to pay overhead) enforce the

civil rights laws. No one expects these government

lawyers “to pay for the privilege of enforcing the law.”

Nor should anyone expect private lawyers such as

respondent to pay for the privilege of enforcing the law.

And the burden is truly on private lawyers, not their

clients, to bear the substantial overhead of operating a

law office while they seek to vindicate the public right,

and when, unlike government lawyers, they receive no

payment if they fail to succeed.

Thus, it is clearly a questionable exercise {6 rely upon

a single sentence in one branch of Congress’ report, and

the remarks of one Senator to ascertain Congressional

intent in enacting a statute. See, e.g., Blanchard v.

Bergeron, S.Ct. _, LEd2d_, U.S. (1989)

(Concurrence of Justice Scalia).

. 2

VI

RESOLUTION OF THE FEE CON.

TRACT ISSUES RAISED BY PETI-

TIONER REQUIRES FACT SPECIFIC

ANALYSIS THAT WILL _ FRE-

QUENTLY INVOLVE CASES WITH

BOTH STATE LAW AND FEDERAL

CIVIL RIGHTS CLAIMS

The issues raised by petitioner involve fact specific

matters of contract interpretation and ethical principles

that are best left to the extensive enforcement mecha-

nisms already in place among local, state and national

bar associations, state regulatory provisions, and fee

arbitration panels which routinely regulate attorney-

client fee disputes. Petitioner claims that two of the

issues presented herein involve: (1) the attorney’s

fiduciary duty to the client regarding disclosure of fee

provisions; and (2) whether a federal court can enforce a

contingent fee contract contrary to public policy as

stated by the state court.

These arguments were either not presented to the

Ninth Circuit, or were not clearly enough presented to

merit mention in the Ninth Circuit’s opinion, and the

facts of record will not support a determination of thes.

questions by this Court. They await evidentiary deter-

mination on remand.

Second, even if petitioner had adequately presented

these arguments on appeal, neither supports petitioner’s

request for certiorari. The issue regarding fiduciary

obligations is not briefed by petitioner and the petition is

devoid of any suggestion that there is a Circuit Court

conflict on this issue. The last question which petitioner

identifies regarding enforcement of a contingent fee

agreement that is purportedly “contrary to the public

“" e

policy as expressed by the highest court in the state in

which the court sits,” Petition at i, is a nonissue. Peti-

tioner cites no authority for this proposition, and the

only California cases cited have no application to the

facts of this case. Instead, petitioner’s California cases

address the availability of quantum merit recovery for

the attorney who is discharged prior to the contingency

— a situation not at issue here, because Mitchell repre-

sented Venegas until the contingency in the agreement

was Satisfied, to wit, he prevailed at the trial.

However, petitioner is correct in noting that state law

will frequently need to be referenced in civil rights fee

contract cases. For example, in City of Riverside v.

Rivera, 477 U.S. 561 (1986), plaintiffs prevailed on both

their federal claims and their state law negligence

claims. /d. at 564. Had plaintiffs’ counsel wished to

enforce a fee contract in that case, the Tenth Amendment

would require that the fee contract based on the state law

tort causes of action be governed and enforced in accor-

dance with state law. The same would be true with

discrimination cases in California, where the state

legislature has enacted state statutes prohibiting dis-

crimination in employment, housing and public accom-

modations and services. See Cal. Govt. Code, Section

12940, et. seq.; Cal. Civil Code, Section 51. Other

pendent state claims are often included in federal civil

rights cases in California, including intentional infliction

of emotional distress predicated on a discrimination

theory. See, e.g., Agarwal v. Johnson, 25 Cal.3d 932

(1979) (intentional infliction of emotional distress based

on racial epithets); Alcorn v. Anbro Engineering, Inc., 2

Cal.3d 493 (1970) (supervisor shouting epithets to

plaintiff). In these cases involving both federal and state

discrimination causes of action, the California courts

would have the right to determine and regulate the

attorney’s fees contract questions in accordance with

local and state bar professional rules of responsibility,

~ F

California contract law, and the fee contract provisions

of the California Business & Professions Code.

As petitioner’s reference to state law indicates, the

predominate interest of the states in regulating fee

contracts supports denial of the petition for certiorari.

Vil

CONGRESS DID NOT PREEMPT

STATE AND LOCAL AUTHORITY

“It is well established that within con-

Stitutional limits Congress may preempt

State authority by so stating in express

terms. (citation omitted) Absent explicit

preemptive language, Congress’ intent to

supersede state law altogether may be

found from a ‘scheme of federal regulation

.. . SO pervasive as to make reasonable the

inference that Congress left no room for

States to supplement it,’ because ‘the Act

of Congress may touch a field in which the

federal interest is so dominant that the

federal system will be assumed to preclude

enforcement of state laws on the same

subject,’ or because ‘the object sought to

be obtained by the federal law and the

character of obligations imposed by it may

reveal the same _ purpose.’ (citations

omitted) Even where Congress has not

entirely displaced state regulation in a

specific area, state law is preempted to the

extent that it actually conflicts with federal

law. Such a conflict arises when

‘compliance with both federal and state

regulations is a physical impossibility,’

x ©

(citation omitted), or where state law

‘stands as an obstacle to the accomplish-

ment and execution of the full purposes

and objectives of Congress.’ (citation

omitted)” Pacific Gas & Electric Company

v. State Energy Resources Comm'n (1983)

461 U.S. 190, 203-204, 103 S.Ct. 1713,

1722, 75 L.Ed.2d 752.

First, Congress never inserted any express terms in

amending Section 1988 preempting state laws validating

or regulating contingent fee agreements.

Second, the scheme of Section 1988 is not so perva-

sive as to make reasonable the inference that Congress

left no room for states to allow their inhabitants and

members of their bars the historic right to enter into and

enforce contingent fee agreements in federal civil rights

actions. The Civil Rights Attorney’s Fees Awards Act

does not touch a field in which the federal interest is so

dominant — the validity and reasonableness ef contir

gent fee agreements — that the federal system will be

assumed to preclude enforcement of state laws on that

subject. The Act validates fee-shifting for prevailing

plaintiffs in an effort to assure they obtain competent

counsel. Precluding enforcement of state laws on con-

tingent fees does nothing to assure, and in fact under-

mines, the ability of fee-indigent clients to obtain

counsel.

The object sought to be obtained by the federal law

(that victims of civil rights violations with only equit-

able or small monetary claims obtain competent counsel)

and the character of obligations imposed by it (that

fee-shifting occur when the victim prevails) reveals that

the state laws respecting contingent fee agreements have

a different purpose: to assure that all fee-indigent per-

sons who have civil rights or other claims of potentially

substantial monetary value are able to obtain an attorney.

2.

Third, the state law here does not conflict with federal

law as interpreted by Evans. State law enshrines the

right of an attorney and client, free of coercion, to

contract that the client will pay the attorney a percentage

only out of the res recovered. Federal law provides that

the client will be paid (upon prevailing) — or may waive

to achieve settlement — by the offending defendant a

reasonable amount, denoted an “attorney’s fee” to

achieve the Evans goal of settling cases, or, if the fee is

actually extracted from the defendant, to motivate the

defendant to stop violating civil rights. It is not physi-

cally impossible for the attorneys and the parties to

comply with both state law respecting contingent fees

and the federal fee statute. Nor do the state contingent

fee laws stand as any obstacle to enforcement of Section

1988. Indeed, the state laws harmoniously supplement

Section 1988 insofar as they provide at least some means

of payment for attorneys in the face of burgeoning client

fee waivers.

Respondent Mitchell has suffered these fee waivers

on numerous occasions. See, e.g. Mitchell v. Los

Angeles, 753 F.2d 86 (9th Cir. 1985); Willard/Mitcheli v.

Los Angeles, 803 F.2d 526 (9th Cir. 1986). (“[In Evans]

the Supreme Court held that Section 1988 vests the right

to ‘attorney’s fees’ in the ‘prevailing party’ rather than

his attorney. /d. 106 S.Ct. at 1558-40, n. 19. It follows

that an attorney has no standing under Section 1988 to

seek attorney’s fees on his own behalf.” 803 F.2d at

527.)

It is inconceivable that Congress would have intended

to make the district court’s orders respecting Section

1988 fees preemptive of state, local, and federal bar

regulation of contingent fee agreements. This would

place intolerable burdens on attorneys.

8.

For example, the U.S. District Court for the Central

District of California has adopted the Rules of Profes-

sional Conduct of the State Bar of California as the

standard of professional conduct for the district court.

Local Rule 2.5.1. Cal. Rule of Professional Conduct

4-200 prohibits attorneys from entering into “an agree-

ment for ... an ... unconscionable fee,” and recites

eleven factors to be considered in determining the

cor.scionability of a fee, including whether “the fee is

fixed or contingent.” Thus, an attorney might properly

contract for a reasonable contingent fee under state law,

adopted by the local federal court, only to have the fee

declared unconscionable or unreasonable by a different

federal standard, subjecting the attorney to state bar and

local federal bar discipline.

In sum, there is no evidence that Congress intended

Section 1988 to be the exclusive vehicle for payment of

civil rights attorneys. If that had been intended, the

Statute would say so and it does not.

,

———

CONCLUSION

This case involves a private contract made and per-

formed in California. The client received precisely what

he bargained for at arms length: the professional serv-

ices of a skilled, experienced trial lawyer. In fact,

Mitchell performed a superior job — resulting in a

substantial verdict for the client. Since there is no true

conflict in the circuits on any of the issues raised by

petitioner, this case simply involves a disgruntled client

seeking to avoid the terms of a properly enforceable

contract to which he voluntarily agreed. Nowhere does

it appear that Congress intended to preempt the ability of

parties to contract. This is a simple breach of contract

case, and the district court has not rendered any

- 19 -

judgment for either party on the contested issues. None

of petitioner’s arguments warrants issuance of a writ of

certiorari.

DATED: June 23, 1989.

Respectfully submitted,

MICHAEL R. MITCHELL

in propria persona

APPENDIX A

+e

oe

-A l-

CONTINGENT RETAINER AGREEMENT

This Agreement is made at the County of Los An-

geles, State of California, effective on September 18,

1985 by and between Juan Francisco Venegas, [home

address and phone number omitted] Work: Menes Law

Corporation, 1901 Avenue of the Stars, Suite 1240,

Century City, CA 90067, Phone (213) 277-4895

(“Client”) and MICHAEL R. MITCHELL, 5850 Canoga

Avenue, 4th floor, Woodland Hills, CA 91367, Phone

(818) 992-1203 (“Attorney”) hereinafter sometimes

referred to jointly as “the parties.”

In consideration for the mutual promises hereinafter

set forth the parties agree as follows:

1. Client agrees to retain Attorney to represent Client

as Client’s Attorney in that certain pending federal civil

rights action by Client as plaintiff and Long Beach,

California police officers as defendants (“Defendants”)

in connection with the Client’s December 25, 1971 false

arrest, trial, conviction and imprisonment for 2 1/2 years

in state prison.

2. Attorney agrees to prosecute the lawsuit, now

scheduled for trial November 5, 1985, on Client’s behalf

against Defendants. Client agrees that Attorney is

empowered to perform legal services for Client on

Client’s behalf in said lawsuit and to do all things

necessary, appropriate or advisable in connection with

Attorney’s representation. Client agrees that Attorney is

empowered to effect a compromise or settlement in the

above-mentioned matter subject to Client’s prior

authorization. This agreement covers one trial only. In

the cvent there is a mistrial or an appeal, the parties may

mutually agree upon terms and conditions of Attorney’s

employment, but are not obligated to do so.

3. Client hereby expressly authorizes Attorney to

allow any accountant employed by Attorney and any

-A 2-

accountant or other person representing the California

State Bar and any federal or state taxing authority to

inspect and copy records of accounts of Client’s funds

held in trust by Attorney.

4. Client agrees to pay Attorney a non-refundable

retainer fee in the amount of Ten Thousand Dollars

($10,000), payable $5,000 upon execution of this agree-

ment and $5,000 prior to November 5, 1985. Client also

agrees to pay Attorney for legal services rendered in

connection with the lawsuit, Forty Percent (40%) of the

gross amount recovered (prior to any deductions for

costs) less the non-refundable retainer fee actually paid.

Client understands that Attorney’s fee is not set by law

but is negotiable between Client and Attorney. Client

warrants and represents that Client will hold Attorney

harmless from all liens or other claims by any person to

all proceeds recovered.

Client initials /s/ J.V.

Attorney initials /s/ MRM

5. Client understands and agrees to pay and advance

all necessary costs and expenses incident to the perform-

ance of this agreement. It is anticipated that these costs

may include, but are not limited to the following: filing

fees, service of process fees, trial witness fees, deposi-

tion costs, expert witness fees, computerized legal

research, travel, and copying costs. Client and Attorney

agree that the contingent fee payable to Attorney shall be

calculated based on the gross amount recovered prior to

any deduction for costs or expenses incurred or

advanced.

6. Client hereby gives and grants unto Attorney the

right to endorse a check, draft or other instrument for the

payment of money in Client’s name or on Client’s behalf

and to retain the share and sums out of the amounts

finally received by settlement, judgment or otherwise, in

-A 3-

full for the attorneys fee due to Attorney under this

agreement and for any disbursements made by the

Attorney for costs and expenses, delivering the balance

to Client.

7. Client agrees to cooperate fully with Attorney in

all matters relating to Attorney’s representation and

agrees that failure to cooperate will constitute a breach

of this Agreement by Client.

8. Client agrees that Attorney may, at Attorney’s

election, and at any time, intervene as a party in the

action for the sole purpose of protecting Attorney’s

interest in and to any attorney fee award which may be

made by the trial or any appellate court. Client acknowl-

edges that the right to apply for and collect any attorney

fee award made by a court is Attorney’s and not Client’s

right. Client understands and agrees that Client has no

right to nor shall client attempt to waive or waive Attor-

ney’s right to apply for and collect attorney’s fees. In

consideration for Client’s agreements, Attorney agrees

that Attorney shall make appropriate applications for

attorneys fees in the lawsuit. Attorney and Client agree

that to the extent that attorneys fees are awarded and

recovered by Attorney, the same shall, dollar-for-dollar,

reduce Client’s obligation to pay (or shall be refunded to

Client if previously paid) attorney fees to Attorney

pursuant to Paragraph 4 above. Any attorneys fees

awarded by a court in excess of the amount which Client

is obligated to pay pursuant to paragraph 4 above is the

property of and shall be paid to Attorney.

9. This agreement is binding on the successors, heirs,

administrators, executors and trustees of the parties.

Client initials /s/ J.V.

Attorney initials /s/ MRM

-A 4-

10. Client acknowledges that Attorney has advised

Client and that Client understands that, should Client not

prevail in the lawsuit, Client would be required to pay

Defendants’ costs of suit, and might possibly be required

to pay Defendants’ attorney’s fees. This agreement is

the entire agreement between the parties, and this

agreement may not be amended or modified except by a

written document signed by both parities. [sic] Should

any dispute ba respecting rights or obligations under

this agreemeftt, the prevailing party shall be entitled to a

reasonable attorney’s fee.

11. This Agreement shall become effective and

binding only upon acceptance by Attorney. Acceptance

can only be made by Attorney’s affixing his signature

below and delivering an original signed copy to Client.

Client understands and agrees that Attorney has made no

guarantees regarding the successful termination of this

matter and that all expressions relative to the outcome

are matter of Attorney’s opinion only.

DATE: 9-18-85 /s/ Juan F. Venegas

Juan Francisco Venegas (“Client”)

DATE: 9-18-85 /s/_ Michael R. Mitchell

Michael R. Mitchell (“Attorney”)

-A 5-

January 8, 1986

i Juan Venegas, consent that the Law Offices of

Johnnie L. Cochran, Jr associate as my attorney with

Michael R. Mitchell in my federal case of Venegas v.

Wagner, and that said attorneys may share

, atto

on a 50-50 basis. ‘ : mre

/s/_ Juan F. Venegas

No. 88-1725

IN THE SUPREME COURT OF THE UNITED S.ATES

October Term, 1988

JUAN FRANCISCO VENEGAS,

Petitioner,

vs.

MICHAEL R. MITCHELL,

Respondent.

STATE OF CALIFORNIA )

) ss:

COUNTY OF LOS ANGELES )

DONALD A. JOHNSON, being first duly sworn, deposes anx tys: I am a citizen of

the United States and a resident of or employed in th -ounty aforesaid. I am over

the age of 18 years and not a party to the above action. My busines. address is 3550

Wilshire Boulevard, Suite 916, Los Angeles, California 90010. On June 23, 1989, I

served the within BRIEF IN OPPOSITION TO PETITION FOR WRIT OF

CERTIORARI on the interested parties in said action by placing three true copies

thereof with first-class postage fully prepaid, in the United States post office mailbox

at Los Angeles, California, in sealed envelopes addressed as fi. iows:

MICHAEL S. BROMBERG, ESQ.

BOX 2112, HAMPTON STREET

SAG HARBOR, NY 11963

That affiant makes this service, for MICHAEL R. MITCHELL, in propria persona,

and that to the best of my knowledge all the persons required to be served in said

action have been served.

On June 23, 1989, before me, the undersigned, a Notary Pubfic in and for said

County and State, personally appeared DONALD A. JOHNSON known to me to be

the persor whose name is subscribed to the within instrument, and acknowledged to

me that he executed the same.

Witness my hand and official seal.

ase ee sk a> ae ee eS oe ae?

ha OFFICIAL are) Md. (UL.

x 2 Theodore f iAatsuo viiden ! | Peaches <2 L_

j es on Sef Notary Public in and for

Y Spa a LOS ANGELES CONNTY t ;

' Ns sts ty comm. expires OV 30, 1990 % said county and state

2S Or aS SA SS

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