# Amicus Curiae Brief — Venegas v. Mitchell

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0499%3A8

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1990
- **Citation:** 495 U.S. 82

## Text

Suprema covert US.
~~ ae

IN THE DEC 16 as

Supreme Court of the United States OLR, |

ee errs me

No. 88-1725

OcTOBER TERM, | 989

JUAN FRANCISCO VENEGAS,
Petitioner,
VS.

MICHAEL R. MITCHELL,
Respondent.

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF OF AMICI CURIAE SAPERSTEIN & SELIGMAN,
CALIFORNIA TRIAL LAWYERS ASSOCIATION, CALI-
FORNIA EMPLOYMENT LAWYERS ASSOCIATION,
PLAINTIFFS EMPLOYMENT LAWYERS ASSOCIA-
TION, MEXICAN AMERICAN LEGAL DEFENSE AND
EDUCATIONAL FUND, AMERICAN CIVIL LL “RTIES
UNION FOUNDATION, EQUAL RIGHTS ADVC ATES,
CENTER FOR LAW IN THE PUBLIC INTERE T AND
PUBLIC ADVOCATES, INC.

Guy T. SAPERSTEIN ATONIO HERNANDEZ
Mari MAYEDA E. RICHARD LARSON
Da _e L. BRopsky MEXICAN AMERICAN LEGAL

SAPERSTEIN & SELIGMAN DEFENSE & EDUCATIONAL FUND
505 Fourteenth Street, 634 South Spring St., 11th Fir.

Suite 1150 Los Angeles, CA 90014
Oakland, CA 94612 213/629-2512
415/763-9800

THEORDORE EISENBERG
JOHN A. POWELL Cornell Law School

PauL L. HOFFMAN
Myron Taylor Hall
AMERICAN CIVIL LIBERTIES jihaca NY 14853

UNION FOUNDATION ,
132 West 43rd St. 607/255-6477

New York, NY 10036

212/944-9800 Attorneys for Amici

i
QUESTION PRESENTED

Did Congress, in enacting the Civil Rights Attorney’s
Fees Awards Act of 1976, 42 U.S.C. § 1988, intend to add
recovery of statutory fees to the already existing system
of fee agreements without abrogating enforceable written
contracts?

TABLE OF CONTENTS

INTEREST OF AMICI CURIAE ...............csccccsesceeeess
SUMMARY OF ARGUMENT .............ccccccssseeeeseeeeees
PO | NN

I. FEE AGREEMENTS ARE ESSENTIAL IN-
DUCEMENTS TO THE PROSECUTION OF
CT VEL REGIES TS CARE. .cennsssesiesennnmsmneuiaiaaaaaain

A. The Fee Agreement Is and Has Always Been
a Critical Inducement to Accepting Represen-

tation of Clients With Meritorious Claims

Who Cannot Afford to Hire Lawyers.............

B. Issues Regarding Regulation of the Terms
of Fee Agreements Should Be Left to the
Extensive Fee Regulatory System ..................

C. The Invalidation of All Fee Contracts Would
be an Unwarranted Affront to the Right to
Fn

Il. ENFORCEMENT OF OTHERWISE PERMIS-
SIBLE FEE CONTRACTS IS CONSISTENT
OeTanT CONGRESS’ LANGUAGE AND

A. The Plain Language of the Statute as Well as
the Legislative History Clearly Demonstrate
that Congress Did Not Intend to Void the
a le

B. Enforcement of Respondent’s Fee Agreement

Is Consistent with Prior Supreme Court Rul-

SINGS «<.cccececseesasescesenenneeseiesennnnnnsnnnnnnnnnnnnnnn

III. EXPERIENCE UNDER SECTION 1988

COUNSELS AGAINST INVALIDATING FEE
COIN TRA. TS ..ccccscrescesssssenntacnsieenniniininnnnnnn

COINC LUSIOIN 022200.00.:c0s0ccsesssenessensnnneniisilaiiinr Sinn

Page

11

14

TABLE OF AUTHORITIES
CASES Page
Agarwal v. Johnson, 25 Cal.3d 932 (1979) .............. 10
Alcorn y. Anbro Engineering, Inc., 2 Cal.3d 493
ee 10
Alyeska Pipeline Service Co. v. Wilderness Society,
re 16
American Tobacco Co. v. Patterson, 456 U.S. 63
a sstutensusnunnente 14
Blanchard v. Bergeron, ___. U.S. —__, 109 S.Ct.
a csnsmenonnane 18,19
Blum vy. Stenson, 465 U.S. 886 (1984)................006+. 7,17
Caminetti v. U.S., 242 U.S. 470 (1917)................... 14
Christianburg Garment Co. v. EEOC, 434 U.S. 412
as cssemmmnonnnenesaners 12
City of Riverside v. Rivera, 477 U.S. 561 (1986)..... 10
Crawford Fitting Co. v. J. T. Gibbons, 482 U.S. 437
ao eeesnnnmnnnnnonnnes 15, 18
Evans v. Jeff D., 475 U.S. 717 (1986)............:ccc00000 8, 16,19
re Dowel Products Co. v. Foster Mfg. Co.,
a 7, 11
Hensley v. Eckerhart, 461 U.S. 424 (1983).............. 7
INS vy. Cardoza-Fonseca, 480 U.S. 421 (1986)........ 14
Johnson y. Georgia Highway Express, Inc., 488 F.2d
Te 16
Kelly v. Robinson, 479 U.S. 36 (1986)..............000000- 14

Lindy Bros. Builders, Inc. v. American Radiator &
— Sanitary Corp., 540 F.2d 102 (3d Cir. ;
PTI cettninstennstienenecseccesssconscscscccsccccccooccocosvocesceccoees

Lockheed Minority Solidarity Coalition v. Lockheed
Missiles & Space Co., 406 F. Supp. 828 (N.D.
a 22

Manhart vy. City of Los Angeles, 652 F.2d 904 (9th
Cir.), vacated and remanded on other grounds,
Tn 7

Oki America, Inc. v. Microtech International, Inc.,
TET 13

iV
Page
Pennsylvania v. Delaware Valley Citizens Council

for Clean Air, 478 U.S. 556 (1986) 2.0.0... eeeeeeee 11
Pennsylvania v. Delaware Valley Citizens Council

for Clean Air, 483 U.S. 711 (1987) oe 18
Stanford Daily v. Zurcher, 64 F.R.D. 680 (N.D. Cal.

SUPP sascha lapis diiaiasiiaiaie 17
Swann vy. Charlotte-Mecklenburg Bd. of Education,

66 F.R.D. 483 (W.D.N.C. 1975)........cccceeeeeeeeeeeeee 17
United States v. Hohri, 482 U.S. 64 (1987)............. 14
Wards Cove Packing Co. v. Atonio, ___ U.S. —__.,

i Be trcrnianctcntincmnniiiimasnnenenen 20
STATUTES AND REGULATIONS
Re ee ee diediciieieticitinaiesinittiienniinnnincnesnins 15
Se ies Se aiiaieaiiiceiliiniscineininitasaciinnititeniimpionniinatis 15
y fe! oe & | | REE een eS EEE 15, 17
ABA Code of Professional Responsibility

— «£ = —__————— EETE NE IRR Ee Er nnEI 9
ABA Informal Opinion 86-1521.................eeeeeeeeeees 11
ABA Model Rules of Professional Conduct

ee Be iiiitncnnnniiitessininiiinnapinimennnal 9
American-Mexican Chamizal Convention Act of

BS a | ee 15, 16

Antitrust Civil Process Act Amendments Pub. L.
94-435, 90 Stat. 1394 (1976) 15 U.S.C. §§ 15b-h. 15

Ce, Se Oe ccctitesncicncicinnnensssetiinniiminniinsimnin 10
Re I, FI Ti cisiisssesnthinneinennipemnimatninaicoianene 13
TET TOR 10
California Business & Professions Code § 6200, er ,
SU .. sininiaeijcandaiensdinigncnemmniemdabadainteatininenmitiamnneniatin
California Business and Professions Code § 6000,
0 I, e:isisccicesceieniubicnsieaiitincinaiceciniidnameimammaiidispiadaleimaamaaiitieii 9
California State Bar Rules of Professional Responsi-
IIE ccncsunennintienintanmtaniidadersptniiiainnininiatitimedieiiinien 9
Civil Rights Attorney’s Fees Awards Act Pub. L.
94-559, 90 Stat. 2641, 42 U.S.C. § 1988.0... passim

Coast Guard Act 14, U.S.C. § 431(C)........ eee 15

Page
OT aici alia ie 13
Federal Tort Claims Act, 28 U.S.C. § 2678............. 15,17

International Claims Settlement Act of 1949, 22
U.S.C. §§ 1623(f), 1631(j), 1641(p), 1642(m),

Pe cocsscrasisihanibiienianindiniaiiiatabiaeheincaaainecematuaiediiimiiitideaaes 15
Japanese-American Evacuation Claims Act of 1948,

4 So 8 dd 16
Military Personnel and Civilian re rees Claims

Act of 1964 as amended, 31 U.S.C. § 3721(i)...... 16
Organic Act of Guam, 48 U.S.C. § 1424.00.00... 16
Servicemen’s Group Life Insurance Act, 38 U.S.C.

AREER ae IRE eee 16
Social Security Act, 42 U.S.C. § 406(a) .................. 15,17
OTHER AUTHORITIES
3 C. D. Sands Sutherland Statutory Construction

I i 14
Administrative Office of the United States Courts

1984 Annual Report of the Director.................... 20

Eisenberg & Schwab, The Reality of Constitutional
Tort Litigation, 72 Cornell L. Rev. 641 (1987)... 20, 21

Mandatory Arbitration of Attorney-Client Fee Dis-
putes: A Concept Whose Time Has Come, 14
Toledo L. Rev. 1205 (1983) ..............cccsessscscceceeees 9,10

Schwab & Eisenberg, Explaining Constitutional
Tort Litigation: The Influence of The Attorneys
Fee Statute and the Government as Defendant,
73 Cornell L. Rev. 719 (1988) ............................. 8, 21

IN THE

Supreme Court of the United States

OcTOBER TERM, 1989

JUAN FRANCISCO VENEGAS,
Petitioner,
VS.

MICHAEL R. MITCHELL,
Respondent.

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF OF AMICI CURIAE SAPERSTEIN & SELIGMAN,
CALIFORNIA TRIAL LAWYERS ASSOCIATION, CALI-
FORNIA EMPLOYMENT LAWYERS ASSOCIATION,
PLAINTIFFS EMPLOYMENT LAWYERS ASSOCIA-
TION, MEXICAN AMERICAN LEGAL DEFENSE AND
EDUCATIONAL FUND, AMERICAN CIVIL LIBERTIES
UNION FOUNDATION, EQUAL RIGHTS ADVOCATES,
CENTER FOR LAW IN THE PUBLIC INTEREST AND
PUBLIC ADVOCATES, INC.

INTEREST OF AMICI CURIAE

Amici curiae represent an array of private civil rights
attorneys and trial lawyers’ organizations who depend on fee
agreements in their representation of civil rights, environ-
mental, and public interest plaintiffs. Amici also represent
numerous non-profit civil rights and public interest organiza-
tions which are actively involved in civil rights cases.
The amici are:

2

SAPERSTEIN & SELIGMAN, P.C., Oakland, California

This seventeen-year-old, 32-lawyer firm specializes in
plaintiffs’ employment discrimination litigation, both indi-
vidual and class actions. Contingent fee agreements are
commonly chosen by clients because civil rights victims
typically cannot afford any other type of fee arrangement.
Frequently, the client is not obligated to pay for either costs
or legal services during the course of the litigation.

A contingent fee agreement which entitles the firm to a
percentage of the recovery is an important incentive for
undertaking the risk of representing civil rights plaintiffs.
Prohibiting the firm from entering into contingent fee agree-
ments would seriously deter them from representing civil
rights plaintiffs.

CALIFORNIA TRIAL LAWYERS ASSOCIATION

The California Trial Lawyers Association (CTLA) is a
statewide organization of plaintiffs’ trial attorneys. CTLA’s
approximately 6,500 members derive legal fees from contin-
gent fee work and have represented hundreds of civil rights
plaintiffs on contingent fee contracts. If CTLA’s members
were prohibited from entering into contingency fee agree-
ments, many would simply not handle civil rights cases.

CALIFORNIA EMPLOYMENT
LAWYERS ASSOCIATION

The California Employment Lawyers Association is a
Statewide organization of plaintiffs’ attorneys who practice
employment and discrimination law. Members of this organi-
zation are involved in employment and civil rights cases and
commonly accept representation of plaintiffs on a contingent
fee basis. Currently, there are a small number of attorneys left
in California willing and capable of prosecuting employment

3

discrimination cases on behalf of plaintiffs. This figure would
dwindle to almost nothing if employment attorneys were
prohibited from contracting with their clients on a contin-
gency basis for a percentage of the recovery.

PLAINTIFFS EMPLOY" 1ENT
LAWYERS ASSOCIATION

The Plaintiffs Employment Lawyers Association (PELA)
is a nationwide organization of plainiiffs employment attor-
neys. Members of PELA are involved in employment, civil
rights and public interest litigation and rely on contingent fee
agreements to pursue these cases. If statutory fees were the
only fee recovery in civil rights cases, many of PELA’s
members would be out of the business of prosecuting civil
rights claims.

MEXICAN AMERICAN LEGAL DEFENSE
AND EDUCATIONAL FUND

The Mexican American Legal Defense and Educational
Fund (MALDEF) is a national civil rights organization estab-
lished in 1967. Its principal objective is to secure, through
litigation and education, the civil rights of Hispanics living
in the United States. This objective is pursued in part by
MALDEF’s provision of free legal representation to civil
rights plaintiffs in nonmonetary cases. MALDEF recognizes,
however, that the rights of Hispanics are also vindicated in
cases involving potentially sizeable monetary recovery by
private counsel retained on a contractual basis. Both types
of representation are essential to securing the civil rights of
Hispanics.

4

AMERICAN CIVIL LIBERTIES UNION FOUNDATION,
New York, New York
AMERICAN CIVIL LIBERTIES UNION FOUNDATION
OF SOUTHERN CALIFORNIA
Los Angeles, California

The American Civil Liberties Union (“ACLU”) is a non-
profit public interest organization with more than 275,000
members and more thar. 50 affiliates in nearly every state,
including the ACLU of Southern California (“ACLU/SC”).
Both the ACLU and its affiliates are dedicated to protecting
the civil rights and civil liberties of all persons in the United
States. The ACLU, through its legal staff and hundreds of
volunteer attorneys, has been involved in hundreds of cases
brought under the federal civil rights laws to vindicate these
rights.

Though the ACLU does not sponsor cases on a contingent
fee basis it has a strong interest in maintaining the availability
of attorneys fee awards to private counsel involved in bringing
civil rights actions. To the extent that the Civil Rights
Attorney’s Fees Awards Act of 1976, 42 U.S.C. Section 1988,
is interpreted in a way that creates disincentives for the
private bar to handle civil rights cases, the ACLU believes
that the purposes of the civil rights laws will be undermined
and many deserving civil rights plaintiffs will remain
unrepresented.

EQUAL RIGHTS ADVOCATES, INC.,
San Francisco, California

Equal Rights Advocates, Inc. (ERA) is a non-profit public
interest law firm dedicated to achieving equality of rights
under the law for women. ERA regularly handles intake and
referral of sex discrimination matters, and has great difficulty
finding attorneys wiiling to represent clients who cannot
afford legal counsel.

5

CENTER FOR LAW I™ THE PUBLIC INTEREST,
Los Angeles, California

The Center for Law in the Public Interest (CLIPI) is a
non-profit public interest law firm. CLIPI’s public interest
litigation includes employment discrimination and environ-
mental cases. The Center regularly handles intake and referral
of civil rights, environmental and public interest litigation.
Such cases are virtually impossible to refer to private counsel
where the client cannot afford the cost of legal services.

PUBLIC ADVOCATES, INC., San Francisco, California.

Public Advocates, Inc. is a non-profit public interest law
organization which has been representing poor and minority
individuals and organizations since 1971. The bulk of Public
Advocates’ litigation is in the fields of education, health
care, homelessness, economic development and employment.
Many, if not most of Public Advocates’ cases are co-counseled
with private attorneys and legal services organizations. The
availability of co-counseling arrangements with private attor-
neys would be impaired by a prohibition against private fee
contracts.

6
SUMMARY OF ARGUMENT

The amici submitting this brief are private practitioners
and non-profit public interest and civil rights organizations
that are litigating hundreds of cases under fee shifting statutes.
Unless privately negotiated fee agreements are available,
the congressional goal of enabling clients to find competent
lawyers needed to enforce civil rights and environmental
legislation will be frustrated. The already severely diminis-
hing number of attorneys willing to handle such cases would
decrease even further if the Court were to take away one of
the traditional means for attorneys to undertake representa-
tion for clients who cannot afford legal services—the contin-
gent fee contract.

Fee contracts are subject to regulation under state and
federal statutes and are even further regulated by state, local
and American Bar Association ethical rules and regulations
which in this case includes the Rules of Professional Conduct
of the State Bar of California. Usurpation of this extensive
fee regulation system was not contemplated by Congress
when it enacted the civil nghts fee shifting provisions.

As there is no indication that Congress intended to
eliminate the contract rights of attorney and client, the deci-
sion of the Ninth Circuit should be affirmed.

,

ARGUMENT
I,

FEE AGREEMENTS ARE ESSENTIAL
INDUCEMENTS TO THE PROSECUTION
OF CIVIL RIGHTS CASES

A. The Fee Agreement Is and Has Always Been a Critical
Inducement to Accepting Representation of Clients With
Meritcrious Claims Who Cannot Afford to Hire Lawyers

Enforcement of privately negotiated fee agreements
which permit the attorney to recover a percentage of the
damages is consistent with the aim of the fee shifting statutes,
which seek to provide an incentive for aitorneys to represent
clients with meritorious civil rights and environmental
claims. This fundamental congressional purpose has been
repeatedly recognized by this Court.'

The importance of the fee agreement as an inducement
is demonstrated by its consistent use in the legal market place
in civil rights and comparable complex federal litigation.’
Unlike civil rights defendants, civil rights plaintiffs often lack
the resources to pay for representation during the course of
litigation. Indeed, clients represented by amici frequently

' See Hensley v. Eckerhari, 461 U.S. 424, 429 (1983) (“The
purpose of § 1988 is to ensure ‘effective access to the judicial
process’ for persons with civil rights grievances. H.R. Rep. No. 94-
1558, p. 1 (1976).”); Blum v. Stenson, 465 U.S. 886, 897 (1984)
(“The legislative history [of § 1988] explains that ‘a reasonable
attorney's fee’ is one that is ‘adequate to attract competent counsel,
but .. . [that does] not produce windfalls to attorneys.’ S. Rep. No.
94-1011, p. 6 (1976).”).

2 See, e.g., Manhart v. City of Los Angeles, 652 F.2d 904 (9th
Cir.), vacated and remanded on other grounds, 461 U.S. 951 (1983);
Lindy Bros. Builders, Inc. vy. American Radiator & Standard Sanitary
Corp., 540 F.2d 1021 (3d Cir. 1976) (antitrust case); Farmington
Dowel Products Co. v. Foster Mfg. Co., 421 F.2d 61 (ist Cir. 1969)
(“Farmington I”).

8

~e

cannot even afford to pay for the non-fee costs of litigation.
Therefore, private civil rights plaintiffs’ counsel may have no
realistic alternative but to enter into fee arrangements in
order to meet the costs of running their practices.

Evans v. Jeff D., 475 U.S. 717 (1986) has made the
practical need for fee agreements in cases involving fee
shifting statutes even greater. In Evans, this Court held that
plaintiffs in a civil rights action could waive the right to
Statutory attorneys’ fees. Given the possibility that the client
may waive statutory attorney’s fees altogether, separate fee
contracts between plaintiffs and their counsel have become
essential. In an Evans situation, the only protection available
for private attorneys is to have in effect a fee agreement. If
such agreements are not available in fee shifting cases, the
threat of forced fee waivers under Evans would make civil
rights cases financially devastating for plaintiffs’ attorneys.
Not only would such cases not be financially competitive with
other cases, they would lead to financial ruin for even the
most successful of plaintiffs’ firms.

Failure to enforce ethically permissible fee agreements
will undermine the economic viability of the sole practitioners
and small firms that make up the bulk of the experienced
private civil rights bar, and will inevitably lead to the with-
drawal of many of the most experienced and talented attor-
neys from this practice.’ Thus, invalidation of privately
negotiated fee contracts would be a serious, and perhaps
devastating, setback to the enforcement of the civil rights and
environmental laws. The only beneficiaries of such a financial
disincentive would be the violators of those laws.

> Contrary to Petitioner's assertion at page 28 of his brief, most
civil mghts litigation is brought by small private firms and solo
practitioners. See Schwab & Eisenberg, Explaining Constitutional
Tort Litigation, 73 Cornell L. Rev. 719,768 (1988).

9

B. Issues Regarding Regulation of the Terms of Fee Agree-
ments Should Be Left to the Extensive Fee Regulatory
System

Many of the issues raised by Petitioner involve fact
specific matters of contract interpretation and ethical princi-
ples 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.
In this case, this includes the ABA Model Rules of Profes-
sional Conduct, Rule |!.5 (“Fees”) (1983), the ABA Code
of Professional Responsibility DR 1-106 (“Fees for Legal
Services”) (1981), as well as various provisions of the Califor-
nia Business and Professions Code, § 6000, ef. seg., and the
California State Bar Rules of Professional Responsibility. In
addition, numerous local agencies such as state and county
bar associations have fee arbitration panels which routinely
consider questions regarding the enforcement of fee
agreements.‘

* See Mandatory Arbitration of Attorney-Client Fee Disputes:
A Concept Whose Time Has Come, 14 Toledo L. Rev. 1205 (1983).
These fee arbitration agencies include: Alaska Bar R. 35-42; Rules
of Comm. of the State Bar of Ariz. on Arbitration of Fee Disputes;
By-Laws of the Legal Fee Arbitration Comm. of the Bar Ass'n of
Greater Cleveland and the Rules and Regulations of its Legal Fee
Arbitration Bd.; Rules for Arbitration for Legal Disputes, Conn.
Bar Ass’‘n; Rules of the Fee Dispute Comm. of the Dallas Bar Ass'n;
Modcl Fee Arbitration Bylaws, as adopted by the Fla. Bar Ass’n;
State Bar of Ga.’s Fee Arbitration R.; Rules of the Idaho State Bar
on Arbitration of Fee Disputes; Rules for the Arbitration Comm.,
as approved by the lowa State Bar, Mich. Gen. CT.R.979; Legal
Fee Arbitration Plan, as adopted by the Ky. Bar Ass'n; Resolution
of Fee Disputes, N.H. Bar Ass'n; N.J.Ct.R. 1:20A; Section 739, By-
Laws of the Philadelphia Bar Ass'n Rules to the Fee Dispute
Comm. of the Philadelphia Bar Ass'n; Procedures of the Legal Fee
Arbitration Bd. of the Minn. State Bar, Rules of the Comm. on
Resolution of Fee Disputes, the Bar Ass'n of Metropolitan St. Louis;
Fee Arbitration Rules, as adopted by the State Bar of Wis.; Cal.
Bus. & Prof. Code § 6200, et seg.; Rules of Procedures for the

10

Reference to state and local fee regulation is not only
prudent, but will frequently be necessary in civil rights and
other fee shifting cases due to the common existence of
pendent state claims. Thus, fee agreements in fee shifting
cases frequently apply to both federal and state law claims.
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. Jd. 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 accordance with state law.

The same is true of discrimination cases in California,
where the state legislature has enacted state statutes prohibit-
ing discrimination in employment, housing and public ac-
commodations and services. See Cal. Govt. Code § 12940,
et. seq.; Cal. Civil Code § 51. Other pendent state claims are
often included in federal civil rights cases in California,
including intentional infliction of emotional distress predi-
cated on a discrimination theory.’ In these cases involving
both federal and state discrimination causes of action, the
California courts would have the right to determine and
regulate the attorneys’ fees contract questions in accordance

with local and state bar professional rules of responsibility,
(footnote 4 continued from page 9)

Hearing of Fee Arbitration Proceedings by the Alameda County
Bar Ass'n; Rules for Arbitration Proceedings for Attorney Fee
Disputes, Peverly Hills Bar Ass'n; Rules for Conduct of Fee Dis-
putes and Other Related Matters, Los Angeles County Bar Ass’n;
Rules of Conduct of Fee Arbitrations by the Fee Arbitration Comm.
of the Santa Clara County Bar Ass’n; San Diego County Bar Ass’n
Rules of the Arbitration Comm. /d. at 1226 n.104.

> See, e.g., Agarwal v. Johnson, 25 Cal.3d 932 (1979) (inten-
tional infliction of emotional! distress based on racial epithets);
Alcorn v. Anbro Engineering, Inc., 2 Cal. 3d 493 (1970) (supervisor
shouting epithets to plaintiff).

1]

California contract law, and the fee contract provisions of
the California Business & Professions Code.

C. The Invalidation of All Fee Contracts Would be an Unwar-
ranted Affront to the Right to Contract

The result sought by Petitioner would invalidate fee
agreements under a number of statutes and would not be
limited to interfering with the right to contract only in civil
rights cases. This Court and Congress have stated that fee
shifting statutes are to be interpreted “in pari materia”.®
Thus, contracts regarding environmental, civil rights, and
other fee shifting statutes are subject to invalidation regard-
less of whether or not the client is willing to abide by the
terms of the contract, as was the case in Farmington Dowel
Products Co. yv. Foster Mfg. Co., 421 F.2d 61 (1st Cir. 1969).’

Since the statutory fee is only awarded if the client wins,
and no statutory fee is awarded if the client loses, the radical
result sought by Petitioner—an order prohibiting the attorney
in this and consequently any fee shifting case from collecting
a fee except the statutory fee—imposes on the attorney and
client a forced contingent arrangement. The result of this
forced bargain would be that the right to contract for even a
standard hourly agreement is abrogated.* Attorney and client

© See, e.g., Pennsylvania v. Delaware Valley Citizens’ Council

for Clean Air, 478 U.S. 556, 559 (1986) (“Delaware Valley I), S.

Rep. No. 94-1011, 94th Cong., 2d Sess., 6 (1976).

” Farmington is considered the leading case on the relationship
between the statutory and ethical tests which govern fee amounts.
In Farmington, an antitrust case, the Court held that the statutory
and ethical tests for a reasonable fee were different. 421 F.2d at
90. It instructed the district court to determine the “maximum
ethically allowable fee,” to assess the reasonable statutory fee from
defendant, and to require plaintiff to pay only such further amount
as would constitute a fee that was not excessive under the ethical
standards. /d. at 87.

*This result raises serious ethical concerns. In 1986 the
American Bar Association Standing Committee on Ethics and
Professional Responsibility issued Informal Opinion 86-1521, stat-
ing that it is unethical for a lawyer not to offer clients alternative
fee arrangements before accepting a case on a contingent-fee basis.

12

should be encouraged—not prohibited from—negotiating fee
contracts which best suit the needs and financial circum-
stances of each case.

Invalidation of fee contracts also unnecessarily interferes
with economic regulation which occurs in the legal market-
place. If statutory fees alone were sufficient to attract an
adequate supply of attorneys, then these types of agreements
would dominate the marketplace. If, however, statutory fees
were insufficient consideration, civil rights plaintiffs will have
to have some “bargaining chip” to induce attorneys to accept
their cases. Traditional bargaining tools which clients can
utilize to obtain counsel include contemporaneous hourly
agreements, lump sum “retainer” agreements, and contingent
fee agreements.

The ruling sought by Petitioner would also interfere with
all fee contracts negotiated between civil rights defendants
and their counsel. This Court has recognized that the civil
rights statutes, like “many of the statutes”, have “flexible”
fee provisions which authorize “the award of attorney’s fees
to either plaintiffs or defendants”. Christianburg Garment
Co. v. EEOC, 434 U.S. 412, 416 (1978).° Since either plaintiff
or defendant may be a “prevailing party” within the meaning
of the civil rights fee statutes, limiting fees to those available
under a statutory award would invalidate a broad array of
plaintiffs’ and defendants’ free market contracts. Surely,
Congress never intended such interference with the rights of
Parties to negotiate free market contracts regarding payment
for legal representation.

Thus, to interpret the Civil Rights Attorney’s Fees
Awards Act as precluding private fee agreements between
clients and their attorneys would be a substantial burden on
those parties’ right to enter contracts. In interpreting such

* The Christianburg standard, although decided under Title
VII's fee provision, applies to numerous fee statutes. See Chris-
tianburg, 434 U.S. at 416 n.7.

13

legislation the importance of the individual’s right freely to
enter into contracts should not be overlooked. The impor-
tance of the right to contract is underscored by the contract
clauses of the Federal and State Constitutions. '°

While courts and legislatures alike have been more will-
ing to substitute their own judgment of what is a sound and
worthwhile business transaction for the judgments of private
individuals in the marketplace, this is not appropriate here.
As Judge Alex Kozinski stated in a recent opinion:

Perhaps most troubling, the willingness of courts to
subordinate voluntary contractual arrangments to
their own sense of public policy and proper business
decorum deprives individuals of an important mea-
sure of freedom. The right to enter into contracts—
to adjust one’s legal relationships by mutual agree-
raent with other free individuals—was unknown
through much of history and is unknown even today
in many parts of the world. Like other aspects of
personal autonomy, it is too easily smothered by
government officials eager to tell us what’s best for
us. The recent tendency of judges to insinuate
tort causes of action into relationships traditionally
governed by contract is just such overreaching. It
must be viewed with no less suspicion because the
government officials in question happen to wear
robes.

Oki America, Inc. v. Microtech
International, Inc.

872 F.2d 312, 316 (9th Cir. 1989)
(Kozinski, J., concurring)

Judge Kozinski's remarks regarding the expansion of tort
causes of action into the contract area applies with even
greater force to the proposed interpretation of the Civil Rights
Attorney’s Fees Awards Act. For, if the Court interprets that
Act as Petitioner suggests, it will obliterate the free market
rights of the parties and their attorneys to enter into private
contracts and will place the entire matter of what consider-

'© Const., Art. I § 10; see. e.g., Cal. Const., Art. I.

14

ation attorneys will be paid for representing such clients—
normally the subject of free negotiation between client and
attorney—into the hands of the judiciary. This affront to
contract rights should not be lightly embraced by this Court.

Il.

ENFORCEMENT OF OTHERWISE
PERMISSIBLE FEE CONTRACTS IS CONSISTENT
WITH CONGRESS’ LANGUAGE AND INTENT

A. The Plain Language of the Statute as Well as the Legisla-
tive History Clearly Demonstrate that Congress Did Not
Intend to Void the Right to Contract

Petitioner has postulated that the legislative history of
the Civil Rights Attorney’s Fees Awards Act of 1976'' sup-
ports the abrogation of the right of attorney and client to
agree to the terms of an ethically permissible fee contract.
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 enforce it
according to its terms.” Caminetti v. U.S., 242 U.S. 470, 485
(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). See also
INS v. Cardoza-Fonseca, 480 U.S. 421, 431-32 (1986); Kelly
v. Robinson, 479 U.S. 36, 43 (1986); United States v. Hohri,
482 U.S. 64 (1987); 3 C.D. Sands, Sutherland Statutory
Construction, § 46.01 (4th Ed. 1986).

''The Civil Rights Attorney's Fees Awards Act, Pub. L.
94-559, 90 Stat. 2641, as set forth in 42 U.S.C. § 1988.

15

Just weeks before Section 1988 was enacted, Congress
passed the Antitrust Civil Process Act amendments of 1976."
During the course of the lengthy debates on the antitrust
amendments, the legislators focused considerable attention
on the availability of contingent fees for private attorneys.
As a consequence, both the House and Senate ultimately
agreed to explicitly 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. § 1 5g(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, 482 U.S. 437 (1987), this Court held that
Congress had enacted 28 U.S.C. § 1821 as a limitation on the
amount of reimbursement a district court may award to a
prevailing party for expert witness fees. Thus, Justice Rehn-
quist aptly observed, “[ijt is ... clear that when Congress
meant to set a limit on fees, it knew how to do so.” Jd. at
442. Likewise, Congress unquestionably knew how to place
limits on the availability of fees under a private fee contract,
but it did not do so when it passed the Civil Rights Attorney’s
Fees Awards Act. Petitioners cannot now impute such limita-
tion in the absence of an expression of clear congressional
intent.'?

'2 The Antitrust Civil Process Act Amendments, Pub. L. 94-
435, 90 Stat. 1394, 1395, 1396 (1976), as set forth in 15 U.S.C.
§§ 1 Sb-h.

'3 Moreover, had Congress intended to limit attorneys’ fees
under § 1988, it could have imposed a cap on fees as it has in
numerous other statutes. See, ¢.g., Equal Access to Justice Act, 28
U.S.C. § 2412(d\ 1A) ($75/hour in absence of special circum-
stances); Federal Tort Claims Act, 28 U.S.C. § 2678 (fee limited to
20% of administrative settlement; 25% of judgment); Social Security
Act, 42 U.S.C. § 406(a) (fee limited to 25% of award); Coast Guard
Act, 14 U.S.C. § 431(c) ($10 maximum); International Claims
Settlement Act of 1949, e.g., 22 U.S.C. §§ 1623(f), 16314), 1641(p),
1642(m), 1643(k) (10 percent maximum); American-Mexican

16

Even if reference is made to the legislative history of
Section 1988, it readily demonstrates that the primary pur-
pose of the Fees Act was “the promotion of respect for civil
rights” rather than the imposition of limits on contract rights,
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, 106S.Ct. 1531 (1976). According 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 attorneys’ fees could not be awarded 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 en-
couraging meritorious civil rights actions.

Indeed, both the Senate and House Reports cited the
seminal Title VII case, Johnson v. Georgia Highway Express,
Inc., 488 F.2d 714 (Sth Cir. 1974), for the proposition that
the reasonableness of fee awards under § 1988 should be
determined in accordance with the 12 standards articulated
by the Johnson court. S. Rep. No. 94-1011, p.6 (1976); H.R.
Rep. No. 94-1558, p.8 (1976). It is noteworthy that among
the 12 factors for determining fee awards is “whether the fee
is fixed or contingent.” Johnson, supra, at 718 (emphasis
added). Thus, Congress was not only aware that attorneys
separately contract with their clients for fees on a contingency

basis but also affirmed its support for the practice.
(footnote 13 continued from page 15)

Chamizal Convention Act of 1964, 22 U.S.C. §277d-21 (10 percent
maximum); Japanese-American Evacuation Claims Act of 1948,
50 U.S.C. App. § 1985 (10 percent maximum); Organic Act of
Guam, 48 U.S.C. § 1424c(f) (5 percent maximum); Military Person-
nel and Civilian Employees Claims Act of 1964, as amended, 31
U.S.C. § 3721(i) (10 percent maximum); Servicemen’s Group Life
Insurance Act, 38 U.S.C. § 784(g) (10 percent maximum).

17

Congress’ intent to add statutory fees to the then existing
fee incentives available to clients is also evidenced by refer-
ence to the cases where the fee standards were “correctly
applied.” Blum y. Stenson, 465 U.S. 886, 893-4 (1984)
(quoting with approval from legislative history). In Stanford
Daily v. Zurcher, 64 F.R.D. 680 (N.D. Cal. 1974), plaintiffs
were able to obtain counsel through use of a lump sum
or “retainer” payment. The fee agreement provided that
plaintiffs would pay counsel “$5,000 plus whatever funds
they could raise from interested third parties.” Jd. at 686.
Pursuant to this fee contract, counsel was paid $8,500. Jd.

Similarly, in another case cited with approval by Con-
gress, Swann y. Charlotte-Mecklenburg Bd. of Education, 66
F.R.D. 483 (W.D.N.C. 1975), counsel for plaintiffs received
some payment of fees and costs from the NAACP Legal
Defense and Educational Fund, Inc. /d. at 486. The Court
specifically acknowledged the existence of the private fee
arrangement. /d.

If Congress had desired to regulate private fee agree-
ments, it would have evidenced this intent by placing a dollar
amount limit or percentage “cap” on civil rights attorneys’
fees, as it has done in numerous other fee statutes.'* The
absence of these “supervisory” fee provisions in the Civil
Rights Attorney’s Fees Awards Act further demonstrates that
the statutory fee provision was not intended to abrogate
priv2’* arrangements negotiated by the client and his or her
attorney.

B. Enforcement of Respondent's Fee Agreement Is Consistent
with Prior Supreme Court Rulings

In each of four recent decisions addressing issues arising
under fee shifting statutes, this Court has acknowledged the

'* See, ¢.g., 28 U.S.C. § 2412(d)(1 (A) (fee awards under Equal
Access to Justice Act limited to $75/hour in absence of special
circumstances); Federal- Tort Claims Act, 28 U.S.C. § 2678 (fee
limited to 20% of administrative settlement; 25% of judgment or
settlement); Social Security Act, 42 U.S.C. § 406(a) (fee limited to
25% of award).

18

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 §§ 1821 and 1920 “absent explicit statutory or
contractual authorization” Jd. at 445 (emphasis added).

Likewise, in Pennsylvania v. Delaware Valley Citizen's
Council, 483 U.S. 711 (1987) (“Delaware Valley IT’), the
Court stated that “the fee contract between the client and his
attorney should be taken into account when determining the
reasonableness of a fee award . . . .” Delaware Valley II, supra
at 723. In its discussion of the nature of § 1988, the Court
in Delaware Valley I] 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
attorney will be paid, win or lose” Jd. at 715. Indeed, in
Delaware Valley II all nine Justices noted with approval the
availability of private fee contracts. '*

In Blanchard v. Bergeron, __. U.S. ___., 109 S.Ct. 939
(1989) this Court again reaffirmed the viability of private fee
agreements by holding that a district court cannot limit the
court awarded attorneys’ fees to an amount provided in a
contingent fee agreement. Thus, “a contingent fee agreement
is not a ceiling upon the fees recoverable under § 1988”, 109
S.Ct. at 946, and a private agreement may be a factor in
determining the reasonableness of court awarded fees. 109
S.Ct. at 944. However, Blanchard also makes it clear that a
prevailing party and his or her attorney can contractually
agree to a higher fee than the statutory award, and that will
not alter the losing party's obligation to pay court-awarded

'> Justice O’Connor concurred in this portion (part II) of Justice
White's plurality decision. Jd. at 734 (O'Connor, J. concurring).
In addition, Justice Blackmun recognized with approval the avail-

ability of privately negotiated contingent fee contracts. Jd. at 737
(Blackmun, J. dissenting).

19

fees. 109 S.Ct. at 945. Thus, Petitioner’s dramatic appeal
to “balance the scales” by invalidating all fee agreements is
no more than 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.

Finally, although this Court did not directly address the
issue of fee agreements in Evans v. Jeff D., 475 U.S. 717
(1986), implicit in its determination was an acknowledgement
of the practice of entering into private fee agreements.
Reviewing congressional intent, the Court observed, “[Con-
gress] did not prevent the party from waiving this eligibility
[for attorneys’ fees] any more than it legislated against assign-
ment of this right to an attorney....” Jd. 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 non-waivable or non-negotiable”. Id. at
731-32 (emphasis added). As such, if the mght to statutory
fees can be used as “a bargaining chip” to negotiate an
advantageous settlement agreement, it would be an anoma-
lous result to limit a prevailing attorney to statutory fees.
Surely, if a contract can be negotiated which allows the
plaintiff to waive statutory fees, a contract can be negotiated
which allows use of one of the time-honored means for
representation of clients with little or no financial resources—
the contingent fee agreement.

Ill.

EXPERIENCE UNDER SECTION 1988 COUNSELS
AGAINST INVALIDATING FEE CONTRACTS

The available evidence counsels against interpreting
§ 1988 to limit the recovery of fees pursuant to a private

20

contract. Despite judicial and popular perceptions to the
contrary, § 1988 has not attracted a mass of attorneys to bring
previously neglected civil rights actions. If the possibility of
fee awards attracted attorneys to constitutional tort litigation,
one would expect civil rights filings to increase after the
effective date of § 1988, October 1, 1976. Yet the most
comprehensive study of civil rights filings finds that, after
enactment of § 1988, there was a general nationwide decline
in general non-prisoner civil rights filings as a percentage of
all federal civil filings. Eisenberg & Schwab, The Reality of
Constitutional Tort Litigation, 72 Cornell L. Rev. 641, 666
(1987) (Table III) [hereinafter referred to as Reality).'®

Table III from Reality compares the annual increase in
non-prisoner civil rights filings with the annual increase in
all federal civil filings from 1975 to 1984. The civil rights
category that encompasses most § 1983 and other civil rights
claims is Administrative Office Category number “440”,
which is labeled “other civil rights”.'’ Table II] reveals that,
between 1975 and 1984, this category declined as a fraction

'© Nothing in the unrefined, gereralized statistical information
presented by Petitioner sur~ .otal abandonment of the right
to contract. Petitioner’s raw da’ 1s precisely the type of generalized
information criticized by this Court in its recent decision in Wards
Cove Packing Co. v. Atonio, _ U.S. —_, 109 S.Ct. 2115 (1989).
Unlike the data in the study relicd upon herein, there is no basis
for eliminating from Petitioner's material any of a number of
factors which could explain differences in filing statistics such as
changes in substantive law, societal attitudes about litigation in
general, or variations in workforce demographics. Any of these
factors could well explain the figures cited by Petitioner, and there
is NO reason to extrapolate from that data the conclusion that
Petitioner's figures are explained solcly by court decisions regarding
contingent fee contracts.

'’ This category excludes employment claims, most of which
are covered by their own fec statute which has been part of Title
VII since its enactment in 1964. The data for Table III come from
Administrative Office of the United States Courts, 1984 Annual
Report of the Director 145 (Table 25).

21
of the federal civil docket. Civil rights filings either remained
constant or decreased relative to all civil filings in all but two
years during the ten-year period and in only one of those two
years did the relative increase exceed five percentage points.
If § 1988 generated a spate of civil rights actions in the
decade after its enactment, they are undetectable through
observation.

Similar findings apply with respect to prisoner civil rights
litigation. Reality, 72 Cornell L. Rev. at 666-67 & Table
1V.'® Indeed, in the prisoner area there is evidence that
§ 1988 has provided insufficient incentives to attract private
counsel to meritorious prisoner claims. Schwab & Eisenberg,
Explaining Constitutional Tort Litigation: The Influence of
The Attorneys Fees Statute and The Government as Defendant,
73 Cornell L. Rev. 719, 770-74 (1988).

It is true that the absolute level of civil rights filings
increased during the reported period. But, given the increase
in population and general litigation (as measured by the
increase in other civil filings), the absolute level of civil rights
filing activity is less persuasive evidence than the relative
level. If § 1988 were inducing lawyers to file civil rights cases
in extraordinary numbers, there should have been an increase
in both the absolute and relative level of civil rights filings.

'§ Further evidence that § 1988 had modest effects on filings is
presented in Schwab & Eisenberg. Explaining Constitutional 71
Litigation, 73 Cornell L. Rev. 719 (1988).

22
CONCLUSION

There exists an abundance of well-financed and experi-
enced attorneys available to defend civil rights cases at guar-
anteed hourly rates. The principal congressional objective
in providing for reasonable attorneys’ fees in civil rights
litigation, however, was to provide an incentive to competent
attorneys to accept these difficult but socially important cases
on behalf of plaintiffs. H.R. Rept. No. 94-1558, 94th Cong.
2d Sess. 6 (1976); S. Rep. 94-1001, 94th Cong. 2d Sess. 4
(1976). The purpose was not to provide mere representation
to plaintiffs, but representation by highly skilled attorneys
experienced in this complex area of law who are sufficiently
well-capitalized to be able to persevere through protracted
litigation. Former Judge Charles B. Renfrew captured this
purpose well:

Litigation in this area often involves extraordinarily
complex legal and factual issues that many attorneys
would simply be unable to handle successfully. The
important individual and societal issues at stake in such
litigation may not be adequately protected unless attor-
neys possessing the requisite skills can be induced to take
Title VII cases. Many able attorneys, no doubt, are
willing to forego some financial rewards because of the
psychic satisfaction of advancing a cause in which they
believe. However, the enforcement of the rights guaran-
teed by Title VII cannot be entrusted to such altruistic
motives. Lockheed Minority Solidarity Coalition v. Lock-
heed Missiles & Space Co., 406 F. Supp. 828, 830 (N.D.
Cal. 1976)

23

The lofty congressional purposes of providing competent
representation for victims of civil rights abuses would be ill
served by the invalidation of the right to contract sought by
Petitioner. The interference with the economics of the legal
marketplace and the contract rights of the parties sought by
Petitioner should not be indulged by this Court.

Dated: December 15, 1989
Respectfully submitted,

Guy T. SAPERSTEIN

Mari MAYEDA

Dace L. BRopsky

SAPERSTEIN & SELIGMAN
505 Fourteenth Street,
Suite 1150
Oakland, CA 94612
415/763-9800

ATONIO HERNANDEZ

E. RicHARD LARSON

MEXICAN AMERICAN LEGAL
DEFENSE & EDUCATIONAL FUND
634 South Spring St., 1 1th Fir.
Los Angeles, CA 90014
213/629-2512

THEORDORE EISENBERG
Cornell Law School
Myron Taylor Hall
Ithaca, NY 14853
607/255-6477

JOHN A. POWELL
AMERICAN Civil LiBERTIES UNION
FOUNDATION
132 West 43rd Street
New York, NY 10036
213/944-9800

PAUL HOFFMAN
AMERICAN Civit LIBERTIES
UNION FOUNDATION OF
SOUTHERN CALIFORNIA
633 So. Shatto Place
Los Angeles, CA 90005
P 213/487-1720

Attorneys for Amici

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0499%3A8. Public record. Not legal advice.
