Petition for Writ of Certiorari — Weeks v. Oklahoma Bar Ass'n
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Supreme Court,
PILED =
OFFICE OF THE CLERK
No.
In The
Supreme Court of the United States
October Term, 1998
JOSEPH WEEKS,
Petitioner,
OKLAHOMA BAR ASSOCIATION,
Respondent.
Petition For Writ Of Certiorari
To The Supreme Court Of the State Of Oklahoma
PETITION FOR WRIT OF CERTIORARI
Joseph Righton Weeks
Oklahoma City University
School of Law
2501 N. Blackwelder
Oklahoma City, OK 73106
(405) 521-5186
Counsel of record
| ;
0 98 631 OCT 15199
Question Presented
Whether federal law permits a prospective federal civil
rights plaintiff to pay, and her attorney to accept, a
contingent fee for the attorney’s representation that
consists of both the statutory attorney fee as well as a
portion of the judgment or settlement when it is not
disputed that, without the ability to offer such a fee, civil
rights plaintiffs may find it difficult to obtain competent
counsel.
Parties Below
This petition arises from a disciplinary proceeding
brought by the Respondent Oklahoma Bar Association against
the Petitioner that was consolidated for hearing and decision
with a separate proceeding brought against Mr. Mark Nation.
Mr. Nation is not a party before this Court.
Table of Contents
Question Presented .......... 0 eee eee ee ee eeeee i
EN ST EES EP Pee SUL PEE Cae eL eO il
TED ccc er cnccceccccceeeewevecsn iil
Tele of Authorities . 0 wc cc ccc cw cee ceees iv
Reports of opinions below .........---++++++505: l
Jurisdictional statement ..........22 0c eee ccceees l
Statutory provisions involved ...........--++++++5 l
Seatoment of thecas® . 0... ccc teens 2
3 Factual Summary 2... 2. ccc cece cee eeees 2
Il. How the federal question was raised .........- 4
Reasons for granting the writ ..........-6-55+++5: 5
5. The impact of the Oklahoma Supreme Court's
ie cw enna bi eeb arele WE a SS 6s 6
Il. The Oklahoma Supreme Court’s error ......... 8
A. 0 Oe er ee 8
B. Venegas v. Mitchell .............--.- 13
c. Assertedly contrary caselaw ......... 16
Ill. What the case does notinvolve .............. 8
iv
Table of Authorities
Cases:
Black Grievance Committee v. Philadelphia Elec. Co.,
690 F. Supp. 1393, 1398-1401 (E.D. Pa. 1988) ....... 17
Blum v. Stenson,
Cpe PEED cc kc cacecakeee onan 11
City of Burlington v. Dague,
Sie A EOOED no oc cscs sete NM 14-15, 17-18
City of Riverside v. Rivera,
re i ii i Wate Si0- ov as xs 13, 19
Davis v. City & County of San Francisco,
Tee aes Ree CR BOD oo 5s 6 SR TAA 18
Evans v. Jeff D.,
vc CRS Sree eres 14
Fadhl v. City and County of San Francisco,
SP F.20 OE CE TOD kn eV TSE 80 17
Fite v. First Tennessee Production Credit Ass’n,
ge fe eee 17
Fiight Attendants v. Zipes,
os ee es noe hak oe wane 18
Hensley v. Eckerhart,
SO) UD. Gee tee. ionic, OM. tage... 18
Hidle v. Geneva County Bd. of Education,
681 F. Supp. 752 (M.D. Ala. 1988) .......... 16, 20-21
Homeward Bound, Inc. v. Hissom Memorial Center,
DGS Pee Ce RE, TMD oe vvicvcceusc ns » RR 15
Vv
Huntington Branch NAACP v. Town of Huntington,
749 F. Supp. 62 (E.D.N.Y. 1990),
vacated in part and remanded for additional findings,
961 F.2d 1048 (2d Cir. 1992) .....-. eee eee ee eees 17
International Travel, Inc. v. Western Airlines, Inc.,
623 F.2d 1255 (8th Cir. 1980) ........----++-- 27-28
James v. Frank,
772 F. Supp. 984 (S.D. Ohio 1991)... .--. ee errr 17
Kay v. Ebrier,
gid We ie) ea ee ee ee a 11
Lattimore v. Oman Constr.,
868 F.2d 437 (llth Cir. 1989) .........- ee eee eeee 17
Northcross v. Board of Ed. of Memphis City Schools,
Pee Git Bove ls, os. ee a wee ie eo ee sor 18
Pennsylvania \ Delaware Valley
Citizens’ Council for Clean Air,
Po Stk Ree Soo: rer en a re ee ao 11
Raley v. Ohio,
SG US. 423 CIDSD) aks ee ee ee ce ines 8
Riverside v. Rivera,
Pos hg OSE | Pee eer ee re eee 11, 13
Robinson v. Alabama State Dept. of Education,
727 F. Supp. 1422 (M.D. Ala. 1989), aff'd,
ee i eee 17
Ruckelshaus v. Sierra Club,
ee ee es SEEPS BSS 18
Venegas v. Mitchell,
Ee ng nc ici neek ous 22-24, 26, 28
vi
Weseley v. Spear, Leeds & Kellogg,
713 F. Supe. 713 GDN... TOG) feck ci cteiv ee 17
Statutes:
Be Utes 6 TR 6 ORCAS. 6 et ee 2
PP ED. ov ccicsceccececesaChedureun 2
4B UBL. SUA 000. ccsicedS Ut) eee ASN 2
4S UB FU hc ccc ccccccccceen beeen 2
GS Wan OD cc ccccctecscncetaseuwe ce 2
SORES ccc ccc cece sdubecudscutupeurowst 16
Other Authority:
Rule 1.5(a), Okla. R. Prof. Conduct. ........... passim
Susan Koniak, Through the Looking Glass of
Ethics and the Wrongs with Rights We Find There,
ic Per Fl _.) Sere 10
John Leubsdorf, The Contingency Factor
in Attorney Fee Awards, 90 Yale L.J. 473 (1981). ..... 15
No.
In The
Supreme Court of the United States
October Term, 1998
JOSEPH WEEKS,
Petitioner,
OKLAHOMA BAR ASSOCIATION,
Respondent.
Petition For Writ Of Certiorari
To The Supreme Court Of The State Of Oklahoma
PETITION FOR WRIT OF CERTIORARI
Joseph Weeks respectfully petitions for a writ of
certiorari to review the judgment of the Oklahoma Supreme
Court in this case.
OPINIONS BELOW
The opinion of the Oklahoma Supreme Court is reported
at 69 Okla. Bar J. No. 29 at 2647 (July 18, 1998) as well as
___ P.2d ____ (Okla. 1998). The opinion is reproduced in
the Appendix to this Petition at A—1 et seq. The opinion of the
Trial Panel is not reported and is reproduced in the Appendix to
this Petition at B—1 et seq.
2
JURISDICTION
The decision of the Oklahoma Supreme Court was filed
on July 14, 1998. Petitioner’s timely Motion for Rehearing to
that court was denied on September 8, 1998. Pursuant to
Supreme Court Kule 13.1, this petition has been filed within
ninety days of the denial of rehearing. This Court has
jurisdiction pursuant to 28 U.S.C. § 1257(a).
STATUTORY PROVISIONS INVOLVED
42 U.S.C. § 1988(b) provides as follows:
In any action or proceeding to enforce a
provision of sections 1981, 198la, 1982, 1983, 1985,
and 1986 of this title, Title IX of Public Law 92-318 [20
U.S.C.A. § 1681 et seq.], the Religious Freedom
Restoration Act of 1993 [42 U.S.C.A. § 2000bb et
seq.], Title VI of the Civil Rights Act of 1964 [42
U.S.C.A § 2000d et seq.], or section 13981 of this title,
the court, in its discretion, may allow the prevailing
party, other than the United States, a reasonable
attorney’s fee as part of the costs, except that in any
action brought against a judicial officer for an act or
omission taken in such officer’s judicial capacity such
officer shall not be held liable for any costs, including
attorney’s fees, unless such action was clearly in excess
of such officer’s jurisdiction.
42 U.S.C. § 2000e-5(k) provides as follows:
In any action or proceeding under this
subchapter the court, in its discretion, may allow the
prevailing party, other than the Commission or the
United States, a reasonable attorney’s fee (including
expert fees) as part of the costs, and the Commission
and the United States shall be liable for costs the same
as a private person.
3
42 U.S.C. § 12205 provides as follows:
In any action or administrative proceeding
commenced pursuant to this chapter, the court or
agency, in its discretion, may allow the prevailing party,
other than the United States, a reasonabie attorney’s fee,
including litigation expenses, and costs, and the United
States shall be liable for the foregoing the same as a
private individual.
29 U.S.C. § 1451(e) provides as follows:
In any action under this section, the court may
award all or a portion of the costs and expenses incurred
in connection with such action, including reasonable
attorney’s fees, to the prevailing party.
STATEMENT
Be Factual summary
The Petitioner is a law professor.! Prior to beginning
his academic career, he had practiced in the areas of labor and
employment law in both private practice and as the Deputy
Associate Solicitor for Special Litigation with the U.S.
Department of Labor. As a consequence of this, he is
occasionally asked by attorneys representing federal civil rights
plaintiffs to assist in the representation.
The Petitioner was asked by Mark Nation, an attorney
recently admitted to practice, to assist him in the representation
1 See Appendix at A—3, ] 3.
4
of one Nathaniel Dodoo.2 As it developed, the representation
consisted of initiating litigation in federal court asserting that
Mr. Dodoo had been discharged from his employment in
violation of Title VII of the Civil Rights Act of 1964, the
Americans With Disabilities Act, and the Employee Retirement
Income Security Act, and that the discharge was actionable
under various state causes of action.3 The Petitioner and Mr.
Nation agreed to undertake the representation in exchange for a
fee that would be payable only in the event the contemplated
litigation eventually produced a judgment or settlement in Mr.
Dodoo’s favor. In this event, the fee would consist of: (1) any
Statutory attorney fee awarded as well as (2) 50% of any
judgment or settlement on the Mr. Dodoo’s claim.4 This fee
was knowingly and voluntarily agreed to by Mr. Dodoo.5
2 See id.
3 See id.
4 See Appendix at A—3-4,] 4. The representation
agreement contained other compensation provisions to provide for
various contingencies. The text refers to the provisions of the
agreement that were applicable in light of the events that subsequently
occurred and that formed the basis for the disciplinary proceeding that
is the subject of this petition.
5 Specifically, the Trial Panel found that “there appears to
be no question but that the contract was voluntarily entered into” and
“the contract was entered into with a full understanding between the
parties.” See Appendix at B—2. These findings were unchallenged
by the Respondent and not questioned by the Oklahoma Supreme
5
Suit was filed on Mr. Dodoo’s behalf and an offer was
ultimately obtained from the defendants to settle the litigation for
$50,000, which Mr. Dodoo accepted. Thereafter, the claim for
statutory attorney fees was settled for $23,417.68.7 Under the
circumstances, the Petitioner and Mr. Nation agreed to accept
only 40% of the settlement amount rather than the 50% that their
agreement with Mr. Dodoo contemplated. They thus took as
their complete fee: (1) 40% of the settlement about, or $20,000,
as well as (2) the $23,417.68 statutory attorney fee.? Mr.
Dodoo received 60% of the settlement, or $30,000.10
Court.
6 See Appendix at A—4, { 5.
7 See Appendix at A—5, { 6.
8 See Appendix at A—4,{5.
9 See Appendix at A—5,46. This is not literally accurate.
Primarily so that there would be no question concerning the
applicability of attorney-client privilege, the representation agreement
provided that Mr. Dodoo was to pay, and he did pay, the sum of $10
as a nonrefundable retainer at the point that the Petitioner and Mr.
Nation agreed to represent him. To avoid burdening the readability of
this petition with purposeless qualification, Mr. Dodoo’s payment of
this $10 is hereafter ignored.
10 See id.
6
Acting on a grievance subsequently filed by Mr. Dodoo,
the Respondent asserted by means of a Disciplinary Complaint
that this fee violated Rule 1.5(a) of the Oklahoma Rules of
Professional Conduct, which provides in relevant part that “[a]
lawyer’s fee shall be reasonable.”!! The Trial Panel hearing
this complaint recommended that, in light of the unsettled nature
of the law in this area, no discipline should be imposed on
Petitioner and Mr. Nation.!2_ The Oklahoma Supreme Court, to
which the matter was then referred, refused to accept this
recommendation.
The Oklahoma Supreme Court viewed the fee agreement
as a “self-enhancement” of, or “self-help” with respect to, the
statutory attorney fee available in civil rights cases.!3 This, it
held, “is not a viable concept in the area of attorney fees.” 14
After reviewing a number of federal court decisions in this
context, the court held as follows:
In keeping with the above authorities, we are
_ compelled to the conclusion that by retaining the entirety
of the contingent fee deducted from Mr. Dodoo’s
recovery in addition to the statutory fee, respondents’
fee arrangement exceeded existing federal case law. We
11 See Appendix at A—5-6, { 8.
12 See Appendix at B—5-6.
13 See Appendix at A—13, J 21.
14 See id.
7
find that the Bar Association has therefore met its
burden of showing by clear and convincing evidence
that respondents’ fee arrangement violated Rule
1.5(a).15
The court accordingly imposed discipline consisting of a public
reprimand upon the Petitioner.!6
For purposes of the appropriateness of this case for the
granting of certiorari, it is significant that there is nothing in the
Oklahoma Supreme Court’s decision to suggest that there was
anything fact specific that caused that court to reach the decision
that it did. Indeed, the court made very clear that the amount of
the fee was not a factor in its decision.!7 Without regard to the
amount, the court accepted the proposition that federal law
simply does not permit an attorney representing a federal civil
rights plaintiff to receive a fee that is to consist of both the
statutory attorney fee and a portion of the plaintiff's substantive
recovery and that such a fee is therefore a per se violation of
15 See Appendix at A—21, { 42 (emphasis added); see also
Appendix at A—3, { 2 (“[RJespondents’ dual fee arrangement at
issue violated Rule 1.5(a). We find this recovery of the contingent
attorney fee was not warranted under existing federal law . . . .”);
Appendix at A—9, ¥ 13 (“The Bar Association submits that
respondents’ dual recovery was an unwarranted windfall not
authorized by federal law which constitutes an unreasonable fee in
violation of 1.5(a). We agree.”).
16 See Appendix at A—24, { 48.
17 See Appendix at A—22, f 43-44.
Rule 1.5.8
II. How the federal question was raised
The federal question in this case arose in a somewhat
unusual manner. The complaint filed by the Respondent simply
alleged that the fee violated Rule 1.5 without any specific
reliance upon federal law as the basis for this contention.
Petitioner asserted in his answer that, because the imposition of
discipline would frustrate the federal scheme under which civil
rights claimants obtain counsel, such discipline was barred
under the Supremacy Clause of the United States
Constitution.!9
Neither the Trial Panel nor the Oklahoma Supreme
Court at any point addressed this defense. And in the case of
the Oklahoma Supreme Court, this was appropriate. As noted
previously, that court determined that the fee was in violation of
federal law and that a fee that is unauthorized by federal law is
per se “unreasonable” and therefore a violation of Rule 1.5. As
the court’s decision was based on federal law, Petitioner’s
Supremacy Clause defense was moot. But by the same token,
of course, there is therefore no question but that the federal
18 See Appendix at A—22, | 44.
19 See Appendix at A—10-11, ] 17.
9
issue is properly presented to this court.20 This Court clearly
has jurisdiction to grant the writ.
REASONS FOR GRANTING THE WRIT
Review by this Court is sought pursuant to Supreme
Court Rule 10.1(c). As set out below, the Oklahoma Supreme
Court’s decision decided an important question of federal law in
a way that conflicts with applicable decisions of this Court. To
the extent that the decision does not conflict with applicable
decisions of this Court, the question involved should be settled
by this Court.
I. The impact of the lower court’s decision
The necessary (and, presumably, the intended)
consequence of the Oklahoma Supreme Court’s published
ruling in this case will be that attorneys asked to undertake the
representation of civil rights plaintiffs will not do so for a fee
that is to consist of both the statutory fee award and a portion of
the plaintiff's substantive recovery. But the Trial Panel
determined — in findings uncontested by the Respondent and
unquestioned by the Oklahoma Supreme Court — that there
was “no evidence to rebut the fact that without this type of a
contract it would be difficult to obtain competent counsel for
complainants.”2! As this suggests, the result in this case does
20 See, e.g., Raley v. Ohio, 360 U.S. 423, 436-37
(1959)(“There can be no question as to the proper presentation of a
federal claim when the highest state court passes on it.”).
21 See Appendix at B—3.
10
not mean that attorneys will charge another fee in civil rights
cases, but that in many cases they simply will not agree to
undertake the representation at all. Of itself, a limitation on the
ability of those having federal civil rights claims to obtain
competent counsel to bring their claims to court would be
deserving of certiorari review even if its effect were limited to
just one state.
But the effect of the decision will not, of course, be
limited to Oklahoma. There is nothing unique about the market
in Oklahoma for civil rights counsel. Nor is there anything
unique about the disciplinary rule that the Petitioner has been
found to have violated; Rule 1.5 or its Model Code analogue,
DR 2-106, has been adopted as a part of the disciplinary rules in
virtually every state.22 If the fee utilized by the Petitioner is in
conflict with federal law and thus a per se violation of Rule 1.5,
as the Oklahorna Supreme Court has now held, it is not simply
prospective fedéral civil rights plaintiffs in Oklahoma who can
be expected to experience difficulty in obtaining competent
counsel. Tose having such claims in any state can be expected
to experience similar difficulty.
The prospect of this being the result of the Oklahoma
Supreme Court’s imposition of discipline upon Petitioner is all
the more real because of the absence of opposing caselaw. To
Petitioner’s knowledge, no court has previously considered the
question of the legitimacy under federal law of a fee agreement
22 See generally Susan Koniak, Through the Looking Glass
of Ethics and the Wrongs with Rights We Find There, 9 Geo. J.
LecaL Etuics 1, 4 n.14 (1995)(“Some version of either Model Rule
1.5 or Model Code DR 2-106 is in force in virtually every state.”).
11
under which a federal civil rights claimant obtains representation
by means of a fee arrangement under which, if the litigation is
successful, the attorney will receive both any statutory fee
award and a portion of the plaintiff's substantive recovery.
Lacking such opposing caselaw, and in light of the federal court
decisions that were relied upon by the Oklahoma Supreme
Court, attorneys in every state can be expected to conclude that
discretion is the better part of valor. They will accordingly
decline the representation of civil rights claimants when such
representation might have been accepted if the attorney and his
prospective client were permitted to agree to a fee of the kind
utilized by the Petitioner in the present case.
There is, of course, no way in which Petitioner can
quantify the impact of the Oklahoma Supreme Court’s decision.
But in some unknown and unknowable number of cases, there
is simply no question that prospective federal civil rights
plaintiffs across Oklahoma, and in other states as well, will now
find it difficult to obtain competent counsel. Given this Court’s
consistent recognition that attorney fees received by those who
represent federal civil rights plaintiff must be sufficient to permit
the plaintiff to obtain competent counsel,?3 there is a very
23 See, e.g., Kay v. Ehrler, 499 U.S. 432, 435-36
(1991)(specific purpose of award of attorney fees is to “enable
potential plaintiffs to obtain the assistance of competent counsel in
vindicating their rights”); Pennsylvania v. Delaware Valley Citizens’
Council for Clean Air, 483 U.S. 711, 733 (1987)(reasonable
statutory fee award should be one that would attract “competent
counsel”); Riverside v. Rivera, 477 U.S. 561, 578 (1986)(purpose
of awarding attorney's fees is “to encourage the bringing of
meritorious civil rights claims which might otherwise be abandoned
because of the financial imperatives surrounding the hiring of
12
compelling basis for this Court to review the decision of the
court below and determine whether, in fact, federal law does
mandate this result.
What has to this point been said describes a compelling
reason why certiorari review, and reversal, will avoid
diminishing the present ability of prospective civil rights
plaintiffs to obtain counsel. But such review may well do much
more than this.
As outlined above, the Oklahoma Supreme Court’s
decision will cause those attorneys now willing to represent
civil rights plaintiffs for a fee of the kind agreed to by Mr.
Dodoo to now refuse to do so. But even prior to that court’s
decision, those seeking representation to pursue civil rights
claims have had great difficulty obtaining counsel because many
attorneys have been unwilling to accept such cases in the
absence of an ability to receive a fee of the kind Mr. Dodoo
agreed to pay and have been unwilling, due to the uncertainly in
the law, to accept such a fee. Absent clear authority to assure
such attorneys that they may undertake the representation in
exchange for such a fee, they have been simply unwilling to
assume the risk that, by doing so, they will be subject to a
disciplinary proceeding of the kind brought against the
Petitioner.
The point here is that the Oklahoma Supreme Court’s
decision, although wrong, is not bizarre. The same reasoning
competent counsel”); Blum v. Stenson, 465 U.S. 886, 897
(1984)(statutory attorney fee awarded should be “adequate to attract
competent counsel”).
13
that caused that court to reach the conclusion that it did has
almost certainly caused many attorneys to question whether they
may validly accept the representation of a civil rights plaintiff in -
exchange for the kind of fee that Mr. Dodoo agreed to pay.
Certiorari review by this Court, and reversal, will thus have the
positive consequence of assuring such attorneys that they need
not fear a per se rule that would condemn such a fee.
II. The Oklahoma Supreme Court’s error
The Oklahoma Supreme Court was wrong in concluding
that federal law will not permit the fee that Mr. Dodoo agreed to
pay to the Petitioner and Mr. Nation. As set out below, federal
law does not prohibit such a fee.
A. Policy
Two decisions of this Court have had a significant
impact on the ability of prospective civil rights plaintiffs to
obtain counsel. The first of these significantly increased the
risk that the plaintiff's counsel will be paid nothing for her
work. The second sharply diminished the attorney’s
prospective compensation in the event the litigation brought on
the plaintiffs behalf is successful.
An attorney agreeing to accept any kind of case on a
contingency basis understands that there is a risk of being paid
nothing for her work if the case cannot be won. But there are
other risks confronted by an attorney asked to represent a civil
rights plaintiff. Quite often in such cases, the amount of work
that must be performed by the plaintiff's counsel is such that,
eventually, the defendant’s potential exposure for the statutory
14
attorney fee will exceed his potential exposure upon the
plaintiff's substantive claim.24 This fact has led to a tactic not
uncommon with defendants in such cases by which the plaintiff
is offered a settlement that equals or exceeds what he could
expect to obtain by winning the suit at trial but with the proviso
tbat his claim for attorney fees must be waived as a condition of
the settlement. Other than an altruistic concern for the welfare
of his attorney, such a plaintiff would have no reason to refuse
a settlement of this kind, particularly when refusal may result in
losing at trial and obtaining nothing at all.
In Evans v. Jeff D.,25 the Court considered this tactic
and ultimately held that the federal courts have no authority to
interfere with a plaintiff's waiver of attorney fees to obtain a
favorable settlement.26 As a result of Evans, the attorney asked
to represent a civil rights plaintiff now faces not only the risk of
being paid nothing if the plaintiff does not prevail, but in many
cases also the risk of being unable to obtain compensation
financed by the statutory attorney fee even if the case is “won.”
Before she can decide whether to accept a particular civil
rights case, an attorney must first decide whether, and upon
what terms of compensation, to accept civil rights cases as a
24 See, e.g., City of Riverside v. Rivera, 477 U.S. 561,
564-65 (1986)(noting plaintiff's receipt of $33,350 in compensatory
damages and just under $250,000 in statutory attorney fees).
25 475 U.S. 717 (1986).
26 See id. at 730-38.
15
class. Because of the risk of loss and the Evans risk of having
the plaintiff agree to waive an award of statutory attorney fees
as the price of a settlement, contingent compensation for civil
rights cases must be significantly higher than cases in which the
attorney's fee is noncontingent. Put simply, the “winners”
must provide sufficient compensation so that the attorney is
adequately compensated for work performed in the entire class
of civil rights cases that she accepts, winners and losers, or else
she simply will not accept such cases as a class. As the Court
has recognized, “[a]n attorney operating on a contingency-fee
basis pools the risks presented by his various cases: cases that
turn out to be successful pay for the time he gambled on those
that did not.”27 This means that contingent compensation in
civil rights cases has to be significantly greater than the
noncontingent compensation that is sufficient to attract
competent counsel in other kinds of cases.28
27 City of Burlington v. Dague, 503 U.S. 557, 565 (1992).
28 As Justice Blackmon noted in his dissenting opinion in
City of Burlington, “it is a fact of the market that an attorney who is
paid only when his client prevails will tend to charge a higher fee than
one who is paid regardless of outcome, and relevant professional
standards long have recognized that this practice is reasonable.” City
of Burlington, 503 U.S. at 567 (Blackmon, J., dissenting)(footmotes
omitted). See also Homeward Bound, Inc. v. Hissom Memorial
Center, 963 F.2d 1352, 1358-59 (10th Cir. 1992)(“We have no
doubt that contingent fee cases ‘typically generates fees (if at all)
substantially in excess of their more conservative counterparts,” such
as hourly retainer cases, in order to compensate the attorney for the
risk of losing and not being paid.”). See generally John Leubsdorf,
The Contingency Factor in Attorney Fee Awards, 90 Yale LJ. 473,
16
How is such compensation to be paid by the prospective
civil rights plaintiff? If the applicable fee statute permits an
award of statutory fees to the prevailing plaintiff that takes the
contingent nature of the attorney’s compensation into account,
then competent counsel might well accept such cases based on
the statutory fee alone since in this event the attorney’s fee in
cases that are won weuld compensate for the cases in which the
case is lost or in which the client has agreed to an Evans
settlement that includes a waiver of the statutory fee. And for
just this reason, at one point a “contingency enhancement” of
Statutory attorney fee awards was both permissible and not
uncommon.29
480 (1981)(“A lawyer who both bears the risk of not being paid and
provides legal services is not receiving the fair market value of his
work if he is paid only for the second of these functions. If he is paid
no more, competent counsel will be reluctant to accept fee award
cases.”).
29 As an example, the federal district court in Hidle v.
Geneva County Board of Education, 681 F. Supp. 752 (M.D. Ala.
1988), increased the lodestar computation by 100% to take the
contingent nature of the attorney’s compensation into account and
noted in doing so the effect of the failure of some courts to grant a
contingency enhancement in employment discrimination cases.
_ Most wahcaehanmas mye lawyers agree to
contingency arrangements involve personal inimry
and debt collection. Very few lawyers in Alabama
are, however, willing to undertake such
arrangements in employment discrimination cases.
This difference is for the most part due to the
availability of substantial fee enhancement with the
former cases, and the lack of such with the latter
cases. The evidence before the court convincingly
17
In City of Burlington v. Dague 39 however, a sharply
divided Court held that the attorney fee available under the fee
shifting statutes cannot permissibly be enhanced to take into
reflects that attorneys in the state are unwilling to
undertake employment discrimination cases on a
contingency basis because, in large part, they believe
the cases are uneconomical; the fees they receive
when successful are not high enough to justify taking
the risk of losing such cases, especially since there is
plenty of other, more profitable work available.
Id. at 757; see also Lattimore v. Oman Constr., 868 F.2d 437, 439-
40 (1ith Cir. 1989)(upholding 100% contingency enhancement
upheld); Fadhl v. City and County of San Francisco, 859 F.2d 649,
650-51 (9th Cir. 1988)(same); Fite v. First Tennessee Production
Credit Ass'n, 861 F.2d 884, 894-95 (6th Cir. 1988)(upholding 75%
contingency enhancement); James v. Frank, 772 F. Supp. 984,
1003-04 (S.D. Ohio 1991)(awarding 200% contingency
enhancement); Huntington Branch NAACP v. Town of Huntington,
749 F. Supp. 62, 65-66 (E.D.N.Y. 1990)(awarding 75%
contingency enhancement and noting that “the general rule recognized
by the most recent cases is that a multiplier of .5 to 1 [or an
enhancement of 50% to 100%] is appropriate to compensate for
contingency”), vacated in part and remanded for additional findings,
961 F.2d 1048 (2d Cir. 1992); Robinson v. Alabama State Dept. of
Education, 727 F. Supp. 1422, 1432-33 (M.D. Ala. 1989)(noting
that 100% contingency enhancement in recent Alabama cases “has
been viewed as minimally necessary to attract competent counsel for
civil rights cases”), aff'd, 918 F.2d 183 (11th Cir. 1990); Weseley v.
Spear, Leeds & Kellogg, 711 F. Supp. 713, 716-17 (E.D.N.Y.
1989)(awarding 100% contingency enhancement): Black Grievance
Committee v. Philadelphia Elec. Co., 690 F. Supp. 1393, 1398-1401
(E.D. Pa. 1988)(awarding 200% contingency enhancement).
30 505 U.S. 557 (1992).
18
account the contingent nature of the attorney’s compensation. 3!
After City of Burlington, the prospect of receiving the statutory
attorney fee could not of itself be sufficient to induce competent
counsel to take civil rights cases on a contingency basis.
31 See id. at 560-67. City of Burlington was a case
involving the fee shifting provisions incorporated in the Resource
Conservation and Recovery Act and the Clean Water Act. See id. at
559. In City of Burlington and in other cases, however, the Court
has consistently viewed its decisions under any of the various fee
shifting statutes to be applicable to other such statutes. See, e.g., id.
at 562 (“case law construing what is a ‘reasonable’ fee applies
uniformly to all” fee-shifting statutes using the term); Ruckelshaus v.
Sierra Club, 463 U.S. 680, 691 (1983)(“similar attorney’s fee
provisions should be interpreted pari passu”); Hensley v. Eckerhart,
461 U.S. 424, 433 n. 7 (1983)(the standards “set forth in this
opinion are generally applicable in all cases in which Congress has
authorized an award of fees to a ‘prevailing party’”); see also Flight
Attendants v. Zipes, 491 U.S. 754, 758 n. 2 (1989)(“fee-shifting
statutes’ similar language is ‘a strong indication’ that they are to be
interpreted alike”); Northcross v. Board of Ed. of Memphis City
Schools, 412 U.S. 427, 428 (1973)(“{S]imilarity of language ... is,
of course, a strong indication that ... two [attorney's fee] statutes
should be interpreted pari passu”). Every court to have considered
the issue has accordingly held that, in light of City of Burlington, the
fees available under the various civil rights fee shifting statutes cannot
be enhanced to take the contingent nature of the attorney's
compensation into account. See, e.g., Davis v. City & County of
San Francisco, 976 F.2d 1536, 1549 (9th Cir. 1992)(noting,
pursuant to City of Burlington, that fact that attorney’s compensation
is contingent on success of suit cannot be considered in setting hourly
rate for attorney’s work in calculating reasonable attorney fee for
successful plaintiff).
19
In some cases, the prospective civil rights plaintiff may
nevertheless be able to obtain counsel by means of offering a
contingent fee that consists of a portion of his substantive
recovery if the litigation is successful. This is how virtually all
personal injury plaintiffs obtain counsel. But as the Court has
recognized, in many cases the prospective damages available in
civil rights litigation will be insufficient to attract competent
counse].32
If, then, neither the statutory attorney fee nor a portion
of the substantive recovery will in many cases be sufficient in
themselves to attract competent counsel, it follows that some
combination of these sources of funds must be used. If
representation is to be obtained at all in many cases, a civil
rights plaintiff must be in a position to offer prospective
counsel, if the litigation is successful, both the statutory
attorney fee and a portion of his substantive recovery as a risk
premium to compensate the attorney for the risk of being paid
nothing for her work.
32 See, e.g., City of Riverside v. Rivera, 477 U.S. 561,
577 (1986)(“[T]he contingent fee arrangements that make legal
services available to many victims of personal injuries would often
not ericourage a lawyer to accept civil rights cases, which frequently
involve substantial expenditures of time and effort but produce only
small monetary recoveries.”); id. at 579 (“In light of the difficult
nature of the issues presented by this lawsuit and the low pecuniary
value of the many of the rights respondents sought to vindicate, it is
highly unlikely that the prospect of a fee equal to a fraction of the
damages respondents might recover would have been sufficient to
attract competent counsel.”’).
20
The fee that Mr. Dodoo agreed to pay to the Petitioner
and Mr. Nation to represent him does no more than this. If, as
the Oklahoma Supreme Court has ruled, any such fee
arrangement is in conflict with federal law and is therefore a per
se violation of the applicable disciplinary rule, the inevitable
result will be that prospective civil rights plaintiffs having
claims with a modest potential recovery will be unable to attract
competent counsel even though such claims may involve
egregious violations of our civil rights laws. - cannot be
what federal law requires. ,
What is actually at issue in this case was described very
well by the court in Hidle v. Geneva County Board of
Education.33 And although the court was addressing in that
case the situation in Alabama, it might well have been speaking
of Oklahoma or of any other state.
The court believes that a few additional
comments are appropriate here. At issue here is
much more than the simple question of how
much Hidle’s attorneys should receive as
attorney fees. At issue is Alabama’s continued
full and vigorous commitment to this Nation’s
lofty, but as yet unfulfilled, agenda to make the
promises of this land available to all citizens,
without regard to race or sex or other
impermissible characteristic. There are at least
two ways to undermine this commitment. The
first is open and direct: a repeal of this Nation’s
anti-discrimination laws. The second is more
indirect and, for this reason, somewhat
insidious: to deny victims of discrimination a
means for redress by creating an economic
33 681 F. Supp. 752 (MLD. Ala. 1988).
21
market in which attorneys cannot afford to
represent them and take their cases to court. It
appears from the undisputed evidence that
Alabama squarely falls within the latter scenario;
the state’s already too small pool of attorneys
willing to take civil rights cases is growing even
smaller. The court therefore hopes that with the
relief it affords today this trend will not only be
halted, it will be dramatically reversed; the court
sees its relief as not an isolated measure, but
rather as a broad recommitment of Alabama’s
legal resources to the full and vigorous pursuit
of civil rights.34
As the court in Hilde recognized, the effective
enforcement of our civil rights laws to a large extent depends
upon the ability of prospective civil rights plaintiffs to offer
sufficent compensation to attract competent counsel to take their
cases to court. The Oklahoma Supreme Court’s decision in the
present case seriously undermines that objective by making
effectively unlawful the only fee arrangement that many such
plaintiffs are in a position to offer. As a matter of policy,
federal law should not be deemed to prohibit fee arrangements
of the kind condemned by the Oklahoma Supreme Court in this
case.
B. Venegas v. Mitchell
Not only policy but precedent requires this conclusion.
Mr. Dodoo is by no means the first civil rights claimant who
has retained counsel by means of a fee in excess of the statutory
attorney fee, prevailed through the efforts of the attorney he has
thereby retained, and then later insisted that his attorney must
34 Id. at 758-59.
22
accept as his sole compensation the statutory atiorney fee. This
identical claim was made by the plaintiff in Venegas v.
Mitchell.35 Venegas, the plaintiff in that case, had retained
Mitchell as his counsel by means of a contract that provided
that, if the suit to be brought were successful, the attorney
would receive 40% of the recovery with any statutory attorney
fee being set off against the amount otherwise payable.36
Ultimately a judgment of $2.08 million was obtained and a
statutory fee award of $117,000.37 Because there was co-
counsel also sharing in the fee, Mitchell asserted a claim to
$406,000 of this under his agreement with Venegas.38 As with
Mr. Dodoo in the present case, Venegas asserted that — despite
their contract — Mitchell was entitled to receive only $75,000,
the portion of the statutory fee award attributable to his work.39
This Court’s opinion in Venegas was unanimous. There
were neither dissenting nor concurring opinions. All nine
justices subscribed to the opinion of Justice White for the Court
rejecting the claim of Venegas that his attorney must accept as
35 495 U.S. 82 (1990).
36 See id. at 84.
37 See id. at 85.
38 See id.
39 See id. at 86.
23
his fee only the statutory fee award.
[Our cases have not] indicated that [the civil
rights attorney fee statute], by its own force,
protects plaintiffs from having to pay what they
have contracted to pay, even though their
contractual liabilit’ :s greater than the statutory
award that they may collect from losing
opponents. Indeed, depriving plaintiffs of the
option of promising to pay more than the
Statutory fee if that is necessary to secure
counsel of their choice would not further [the
statute’s] general purpose of enabling such
plaintiffs in civil rights cases to secure competent
counsel.
In sum, [the statute] controls what the
losing defendant must pay, not what the
prevailing plaintiff must pay his lawyer. What a
plaintiff may be bound to pay and what an
attorney is free to collect under a fee agreement
are not necessarily measured by the “reasonable
attorney fee” that a defendant must pay pursuant
to a court order. [The statute] itself does not
interfere with the enforceability of a contingent-
fee contract.40
This Court unanimously held in Venegas that federal
law does not prohibit a fee agreement by which Mitchell, the
attorney, receive’ a fee consisting of $75,000 financed by the
statutory fee 2 ard and, in addition, $331,000 financed from
the judgmen: on Venegas’ substantive civil rights claim.
Venegas is thus directly in conflict with the determination by the
Oklahoma Supreme Court that federal law prohibits a fee that is
to consist of both the statutory attorney fee and a portion of the
40 Id. at 89-90. ‘i
24
plaintiff's substantive recovery.
The Oklahoma Supreme Court found Venegas to be
distinguishable on the basis that, in that case, the fee agreement
provided for the attorney to receive a percentage of the
plaintiff’s substantive recovery with any statutory fee award
being applied to reduce, dollar for dollar, the sum that would
otherwise be payable to the attorney out of the plaintiff's
recovery on his substantive claim.4! But nothing in the Court’s
opinion in Venegas even remotely suggest that this distinction is
one that would be accepted by the Court. Again, the Court held
in Venegas that “[the statute] itself does not interfere with the
enforceability of a contingent-fee contract.”42
And beyond this, any distinction drawn between the fee
agreement in the present case and that used in Venegas is
wholly a distinction of description. To appreciate this, the
Court should consider a simple example.
Suppose that a Title VII claim is brought and ultimately
results in a substantive judgment for $50,000 and a statutory fee
award of $10,000. If the contract between the plaintiff and his
lawyer was of the type used in Venegas and provided that the
lawyer would be entitled to 50% of the recovery with the
statutory attorney fee being offset against this, the attorney’s
resulting compensation would be $25,000 and the plaintiff
would retain $35,000. The Respondent would have to
41 See Appendix at A—17, { 31.
42 Venegas, 495 U.S. at 90.
25
concede, given Venegas, that such a fee would be proper under
federal law. Suppose instead that the contract provided that the
attorney would receive both the statutory fee award and 30% of
the recovery. The attorney’s resulting compensation would still
be $25,000 and the plaintiff would still retain $35,000. But
now, according to the Respondent, the fee is in conflict with
federal law and the attorney must be satisfied with only the
agreed 30% of the substantive recovery, or $15,000.
The claim that federal law will not permit a prospective
civil rights plaintiff to offer both the statutory fee award and a
portion of his recovery is also in conflict with the practical
requirements of how they obtain counsel. As noted previously,
when very large damages can be expected if the case is
successful, as in Venegas, it may well be possible to attract
competent counsel with simply the prospect of a portion of the
plaintiff's substantive recovery if the suit is successful because
in such cases success in the suit will produce a fee for the
attorney that is commensurate with the work and risk that she
assumes by taking the case. In such a case, the fee acceptable
to competent counsel may well be one in which any statutory
fee award is applied to reduce the amount that the attorney will
receive from the plaintiff's substantive recovery.
This says nothing about the abili?y of a potential plaintiff
such as Mr. Dodoo, with a very much smaller potential
recovery if the case is successful,43 to obtain counsel if he is
43 Assuming that his case woul’ *»ke about two years to
reach judgment, Mr. Dodoo had a claim for back pay of about
$10,000. And although he had the potential to recover damages for
emotional distress and punitive damages, recovery of any such
damages would have been extremely speculative.
26
restricted in his ability to do so by a requirement that the fee
agreement must provide that any court awarded attorney fee will
be applied, dollar for dollar, against the agreed portion of the
client’s recovery that is to be retained by the attorney. In such
cases, a portion of the client’s recovery, even if it is the
maximum fifty percent permitted by Oklahoma law,*4 can in
many cases be seen by prospective counsel at the outset as
insufficient to justify the work and risk of nonpayment if the
suit is not successful. When this is true, it is only by means of
being permitted to offer a fee arrangement by which his attorney
will receive, if the suit is successful, both the statutory fee
award and an agreed portion of judgment or settlement of the
client’s substantive claim that he can reasonably expect to obtain
competent counsel. If putative civil rights plaintiffs are
precluded from offering such compensation because their
prospective attorneys are not permitted to accept it, the result
will in many cases not be that the plaintiff pays less to his
attorney, but that he does not become an actual plaintiff in the
first instance because the law will not allow him to pay what is
necessary to obtain representation.
This is exactly the concern that caused this Court to
unanimously reject the claim of the plaintiff in Venegas.
“(D]epriving plaintiffs of the option of promising to pay more
than the statutory fee if that is necessary to secure counsel of -
their choice would not further [the statute’s] general purpose of
enabling such plaintiffs in civil rights cases to secure competent
44 See 5 Okla. Stat § 7.
27
counsel.”45 This policy that civil rights plaintiffs must be
permitted to offer what is necessary to attract competent counsel
is no less frustrated when potential plaintiffs are forbidden to
offer a fee of the kind by which the Petitioner and Mr. Nation
were retained than it would be by forbidding the kind of fee
arrangement used in Venegas.
C. Assertedly contrary caselaw
The Oklahoma Supreme Court relied upon several
federal appellate cases in reaching its conclusion that federal law
will not permit the fee that the plaintiff agreed to pay the
defendants.46 That reliance was misplaced. None of the cases
involved a fee agreement in which a prospective civil rights
plaintiff expressly agreed to pay a fee that would include both
the statutory attorney fee and a portion of the plaintiff's
recovery.47 Moreover, each of the cases relied upon by the
45 Venegas, 495 U.S. at 89-90.
46 See Appendix at A—19-21, 49 37-41.
47 The only case cited by the Oklahoma Supreme
Court — and the only case known to the Petitioner — in which there
was an actual agreement by the client that his attorney would receive
both the statutory attorney fee and a percentage of his recovery is
International Travel, Inc. v. Western Airlines, Inc., 623 F.2d 1255
(8th Cir. 1980). The fee arrangement in that case provided that one
of the plaintiff's two attorneys would receive 45% of the total sums
paid by the defendant and the other would receive the statutory
attorney fee attributable to his services. See id. at 1277. And it is
28
Oklahoma Supreme Court was decided prior to Venegas.
Again, to the Petitioner's knowledge, the validity under federal!
law of a fee of the kind that Mr. Dodoo agreed to pay has never
previously been considered by any court. Subsequent to
Venegas, the Petitioner is aware of no decision that has held any
fee arrangement knowingly and voluntarily agreed to by a
true that the Eighth Circuit found the fee arrangement unreasonable
under the particular facts of that case. This case is not, however, one
that could have formed a proper basis for the lower court’s decision.
It is, at the outset, unclear whether the conclusion of the
Eighth Circuit could survive Venegas. Bu even if it could, this was
an antitrust case in which the attomney receiving 45% of the total sums
paid by the defendant took his percentage from a recovery by the
plaintiff that had been tripled by statute such that the total payment by
the defendant was in excess of a half million dollars. See id.
Moreover, the statutory attorney fee, under an attorney fee statute
different from the statute governing statutory attorney fees in civil
rights cases, had been increased to take into account the contingent
nature of the attorney’s compensation — something that is no longer
permitted in civil rights cases. See id. at 1273-74. These facts were
considered by the court as well as the fact that, under the antitrust
attorney fee statute, “the major purpose for the statutory award for
attorney's fees was to prevent substantial diminution of the plaintiff's
trebled damage recovery.” /d. at 1278. This is very different from
the policy underlying the civil rights attorney fee statute, which is that
the fee received by the attorney must be sufficient to ensure that those
having civil rights claims of modest amount will be able to attract
competent counsel. See Venegas v. Mitchell, 495 U.S. 82
(1990)"‘[D]epriving plaintiffs of the option of promising to pay more
than the statutory fee if that is necessa’ / to secure counsel of their
choice would not further [the statute’s] general purpose of enabling
such plaintiffs in civil rights cases to secure competent counsel.”).
29
prospective federal civil rights plaintiff to be in violation of
federal law.
III. What the case does not involve
The Petitioner does not challenge the authority of the
Oklahoma Supreme Court to impose disciplinary sanctions in
any case in which an attorney’s fee is found to be
“unreasonable” and thus in violation of Rule 1.5 of the
Oklahoma Rules of Professional Conduct. But that court’s
authority in this respect is not an issue presented to this Court.
What is instead at issue is the Oklahoma Supreme Court’s per
se determination that, without regard to whether the fee would
be reasonable under the facts of the case, prospective federal
civil rights plaintiffs may not offer, because the attorneys whose
representation they solicit are forbidden by federal law to
accept, a fee contingent upon the success of the litigation that is
to consist of both the statutory attorney fee and a portion of the
plaintiff's substantive recovery. This is a question that can and
should be resolved by this Court as a matter of law.
30
CONCLUSION
The Petitioner would respectfully ask that a Writ of
Certiorari issue to review the decision of the Oklahoma
Supreme Court.
Respectfully submitted,
Joseph Righton Weeks
Oklahoma City University School of Law
2501 N. Blackwelder
Oklahoma City, OK 73106
(405) 521-5186
A-]
1998 OK 83
FOR OFFICIAL PUBLICATION
[Filed July 14, 1998}
IN THE SUPREME COURT OF THE STATE OF
OKLAHOMA
STATE OF OKLAHOMA, ex rel., _)
Oklahoma Bar Association, )
)
Complainant, )
)
Vv. )
) SCBD # 4123
JOSEPH WEEKS, )
)
Respondent. )
STATE OF OKLAHOMA, ex rel., _)
Oklahoma Bar Association, )
)
Complainant, )
) SCBD # 4125
Vv. )
)
MARK NATION, )
)
Respondent. )
qo Bar disciplinary proceedings in which
respondents allegedly violated Rule 1/5(a) of the Rules of
Professional Conduct, providing a lawyer’s fee shall be
reasonable. Respondents were employed to represent a client in
a civil rights action. Respondents retained the entirety of the
contingent fee in addition to the statutory fee. The Professional
Responsibility Tribunal recommended neither respondent be
disciplined. The Oklahoma Bar Association seeks our
A-2
imposition of public censure upon respondents. After our de
novo review, we find cause for public censure of respondent
Joseph Weeks and we agree with the recommendation of the
trial panel as to respondent Mark Nation.
PUBLIC CENSURE AND PAYMENT OF COSTS
TO RESPONDENT JOSEPH WEEKS ONLY.
Allen J. Welch,
Assistant General Counsel,
Oklahoma Bar Association,
Oklahoma City, Oklahoma For Complainant
Joseph R. Weeks,
Oklahoma City,
Oklahoma Respondent
Calvin W. Henrickson,
Oklahoma City, Oklahoma For Respondent Nation
PER CURIAM:
{1 In this appeal from a bar disciplinary proceeding we
are asked to decide whether respondents, attorneys for a
prevailing plaintiff in a civil rights action, received an
unreasonable fee in violation of Rule 1.5(a) of the Oklahoma
Rules of Professional Conduct, when they collected both the
full amount of the attorney fees received in settlement with the
defendants pursuant to 42 U.S.C. § 1988, and the full amount
of the agreed upon contingent fee from the client’s recovery.
Rehearing of our previous decision in SCBD 4123 is granted.
Our previous opinion is withdrawn and this opinion is
substituted therefor.
A-3
q2 We agree with appellant, Oklahoma Bar
Association, that respondents’ dual fee arrangement at issue
violated Rule 1.5(a). We find their recovery of the contingent
attorney’s fee was not warranted under existing federal law, and
therefore they obtained money from their client’s recovery
which they were not entitled to receive. As discussed below,
we conclude that respondent Nation should not be disciplined
but that respondent Weeks should be publicly censured.
i.
{3 The facts of this matter are substantially undisputed. -
In November of 1993, the client, Nathaniel Dodoo, contacted
respondent Mark Nation in an effort to obtain counsel to
represent him in a civil rights action based on allegations of
racial discrimination. Nation had graduated from law school
only one year before and because of his limited experience in
this complex area, he asked respondent Joseph Weeks to help
him with the case. Nation was familiar with Weeks and his
good reputation in this area of the law as Weeks is a member of
the faculty at the law school from which Nation had just
graduated.
44 Weeks reviewed the relevant information and agreed
to serve as co-counsel. Once involved in the case, Weeks
prepared the complaint and the representation agreement the
parties signed, which is at issue in this proceeding. That
agreement is a five page single-spaced document which
provides that respondents would retain any court awarded or
negotiated fee and 50% of any judgment or settlement paid by
defendants. The contract provides in relevant part:
A4
“. . . One half (1/2) of any amounts received by
Mr. Dodoo, through a court judgment or a
settlement agreement between the parties to the
dispute (hereafter referred to as ‘the contingent
amount’), shall be paid jointly to Mr. Weeks and
Mr. Nation.
Mr. Weeks and Mr. Nation will
undertake reasonable and necessary steps to
pursue obtaining a negotiated or court ordered
attorney fee if such an award of attorney fees is
available under the claims on which the litigation
is successful. Mr. Dodoo hereby assigns to Mr.
Weeks and Mr. Nation his right to seek or obtain
such an attorney fee as a prevailing party in
litigation of his claims and further assigns to
them his right to waive any such attorney fee.
Because of the risk involved in obtaining
no judgment or settlement and the possibility of
Mr. Dodoo’s receipt of a nonmonetary form of
relief such as reinstatement, it is understood that
any negotiated or court ordered attorney fee
obtained by Mr. Weeks and Mr. Nation will be
retained by them in addition to the contingent
amount...and...
. In the event that a settlement or
judgement is obtained that does not contain
nonmonetary relief . . .. Mr. Weeks and Mr.
Nation will receive . . . in addition to the
retainer, (1) the contingent amount . . . and (2)
any negotiated or court awarded attorney fee.”
45 After a relatively short time, respondents negotiated a
settlement with defendants on plaintiffs claim in the amount
$50,000. At plaintiff's request, respondents agreed to reduce
their contingent fee amount to 40% of the recovery.
Respondents thereby retained $20,000 as their 40% contingent
A-5
fee and they gave Mr. Dodoo $30,000, which was 60% of the
recovery.
{6 Respondents subsequently negotiated a settlement
with the defendants for attorney’s fees and costs pursuant to 42
U.S.C. § 1988, in the amount of $23,417.68. Respondents
did not advise or consult Mr. Dodoo while they were
negotiating for the attorney’s fee or upon their acceptance of it.
Respondents retained for themselves $43,417.68 as their fee;
$23,417.68 as the statutory attorney’s fee obtained in the
settlement and $20,000, the 40% contingent fee amount, while
Dodoo’s recovery was but $30,000.
q7 According to his grievance filed with the Bar
Association, Mr, Dodoo had been unable to find out from
respondents the total amount of money they had collected from
his case, even after the action was over. Mr. Dodoo stated he
was able to find out the total amount for which the case settled
only by going to the federal courthouse and checking the file.
There he learned that on August 26, 1994, respondents Weeks
and Nation had filed a release and satisfaction acknowledging
receipt of $73,417.68 from the defendants.
Il.
48 The Oklahoma Bar Association filed complaints
against respondents Weeks and Nation, licensed attorneys,
alleging they violated Rules 1.2(a), 1.4, 1.5, 1.7(b), 1.15(b)
and (c), and 8.4(c) of the Rules of Professional Conduct as well
as Rules 1.4(b) and (d) of the Rules Governing Disciplinary
Proceedings. Subsequently, the Bar Association charged
respondents by amended complaint with violating Rule 1.5(a)
of the Rules of Professional Conduct which provides: “A
A
lawyer’s fee shall be reasonable.”! The Bar sought imposition
of professional discipline. The actions were made companion
cases and the proceeding before the trial panel concerned both
respondents. Unless otherwise indicated, references in this
opinion include both respondents.
{9 The character of the fee arrangement which allowed
respondents to retain dual fees was the focus of the disciplinary
proceeding. Respondents contend that the other charges in the
original complaint were abandoned by the Bar Association, but
the record does not support that position. The Bar Association
presented no evidence beyond the stipulations of the parties in
support of the charges of the original complaint and the
amended complaint. Only respondents testified at the hearing
1 In its entirety, the Rule provides:
“(a) A lawyer’s fee shall be reasonable. The factors to be considered
in determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of
the questions involved, and the skill requisite to perform the
legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance
of the particular employment will preclude other employment
by the lawyer;
(3) the fee customarily charged in the locality for similar legal
services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the
circumstances;
(6) the nature and length of the professional relationship with
the client;
(7) the experience, reputation, and ability of the lawyer or
lawyers performing the services; and
(8) whether the fee is fixed or contingent.”
A-7
before the trial panel. The Bar Association and the respondents
entered into a stipulation of fact for submission to the
Professional Responsibility Tribunal which included the
following:
“On August 26, 1994, the defendants filed with
the Court a Release and Satisfaction, which
acknowledged receipt of $73, 417.68 from the
defendants. Neither Weeks or Nation consulted
Dodoo while negotiating, or upon acceptance of,
the $23,417.68 received for attorney fees and
costs.”
{10 The matter was tried as a question of law on agreed
and stipulated facts. The trial panel of the Professional
Responsibility Tribunal recommended that no discipline be
imposed and set forth the following suggestion in its findings
that this Court should:
“... Interpret Rule 1.4 of the Rules Governing
Disciplinary Proceeding, Rule 1.5 of the Rules
of Professional Conduct, and 5 O.S.A Section
7, with respect to a fact situation such as this.
Attorneys in the future could then appropriately
deal with clients knowing what is required.”
{11 The facts reveal that Nation played a very minimal
role in representing Mr. Dodoo; he relied on Weeks, the far
more experienced attoniey, to guide him through the process.
To Weeks’ credit, he has been quite forthright in
acknowledging and accepting the disproportionately larger share
of responsibility for these actions.
A-8
Ii.
412 This Court possesses exclusive original jurisdiction
in Bar disciplinary proceedings. Rule 1.1, Rules Governing
Disciplinary Proceedings, 5 O.S. 1991, Ch. 1 App. 1-A; State
ex rel. Okl.BarAss'n v. Eakin, 1995 OK 106, 914 P.2d 644
(Ok1.1995); State ex rel. Okl.BarAss’n v. Raskin, 1982 OK 39,
642 P.2d 262 (Okl.1982). The Supreme Court’s review is by
de novo consideration on the entire record. Neither the parties’
stipulation of fact nor the Tribunal’s findings, conclusions of
law nor recommendations of discipline are binding on this
Court. Rule 6.15, Rules Governing Disciplinary Proceedings;
State ex rel. Okl.Bar Ass'n. v. Fagin, 1992 OK 188, 848 P.2d
11 (Okl.1992); State ex rel. Okl.Bar Ass'n. v. Eakin, supra.
The ultimate responsibility to impose discipline in a case before
this Court is ours alone. The burden is on the Bar Association
as the party seeking re-examination of the record to show why
the trial panel’s recommendations should not be accepted.
Raskin, supra. The Bar meets its burden here.
{13 The positions of the parties on this appeal can be
simply stated. The Bar Association is not concerned with he
amount of the fee collected by the respondents, but rather
challenges the character of the fee agreement created in the
employment contract which allows respondents to retain the
entirety of both fees. The Bar submits that respondents could
have recovered either the contingent contract fee or the
statutory fee, but not both. The Bar suggests that the
agreement should have provided that any statutory attorney’s
fee recovered by settlement or court award would be applied
against the contingent amount owing under the agreement with
their client, rather than in addition to it. Under that
arrangement, because the negotiated statutory fee recovered was
A-9
greater, Mr. Dodoo’s liability under the contingent contract
would have been deemed satisfied. If the contingent fee had
been greater, Mr. Dodoo would have been responsible for the
difference between the two amounts, but not the entire
contingent fee. The Bar Association submits that respondents’
dual recovery was an unwarranted windfall not authorized by
federal law which constitutes an unreasonable attorney fee in
violation of 1.5(a). We agree.
{14 Respondents’ arguments primarily focus on their
contention that the dual fee arrangement is necessary and serves
important public policy interests. In his testimony before the
trial panel and in his briefs, respondent Weeks repeatedly
stressed that larger fees make civil rights cases more attractive to
competent lawyers, thereby enabling deserving plaintiffs, who
could not otherwise afford to employ counsel, to obtain
effective representation. Respondent Weeks also testified that
fee arrangements of this type are in standard usage by attorneys
in civil rights litigation in the Western District of Oklahoma and
he believed that without the possibility of this type of dual
recovery in a successful case, he, and other experienced
lawyers who represent civil rights litigants, would cease
accepting these cases.
{15 In respondent’s view, neither the contingent fee nor
the statutory fee is sufficient in itself to compensate lawyers in
civil rights cases. Weeks explained that a contingent fee may be
quite small even in a successful civil rights case, since a
Significant monetary recovery is often not the outcome of an
action for injunctive or declaratory relief. He repeatedly
testified that the statutory fee alone also ordinarily provides
insufficient compensation because the federal district courts
routinely undervalue the hourly rate of an attorney with his
A-10
experience and undercompensate the number of hours as well,
often significantly reducing the billable hours used to calculate a
“reasonable” fee under § 1988. According to respondent
Weeks, this leads to court awarded fees that are inadequate to
compensate attorneys for the tremendous work required in civil
rights actions and their considerable risk of not succeeding after
so much time and effort is expended, making these cases much
less attractive to qualified attorneys.
{16 Respondents submit that this need to supplement
statutory attorney’s fees with the addition of the full amount of
the contingent fee which they advocate here, has taken on
increased significance and urgency because the Supreme Court
of the United States has now clearly established that the
statutory attorney fee cannot be enhanced based on the
contingent nature of the attorney’s compensation. All
uncertainty surrounding this question, respondents concede,
was put to rest in City of Burlington v. Dague, 505 U.S. 557,
112 S.Ct. 2638 (1992), where the Supreme Court held that
enhancement for contingency is not permitted under fee shifting
statutes such as § 1988. Compare Pennsylvania v. Delaware
Valley Citizens’ Council for Clean Air, 483 U.S. 711, 107
S.Ct. 2078(1987)(Delaware Valley I).
{17 Respondents take the position that, since Dague,
there is no longer any basis for the belief that an attorney will
receive a “reasonable fee” from a statutory award pursuant to
§ 1988, at least in this district. They argue that because of the
holding in Daugue, together with the likelihood that the courts
will substantially undervalue the hours and rate of an attorney’s
compensation, there is no alternative but to conclude that
statutory fee awards must be supplemented with the full amount
of the contingent fee. This is so they submit, because a plaintiff
A-11
may have to offer dual compensation to obtain counsel of his
choice. They argue that a ruling by this Court proscribing the
recovery of both fees would violate the Supremacy Clause of
the United States Constitution, as well as Art. 1, § 1 of the
Oklahoma Constitution, as it would frustrate the congressional
policy enacted in § 1988 intended to attract competent counsel to
accept civil rights litigation so that plaintiffs who do not have
the funds to hire attorneys and enforce important constitutional
and civil rights may do so.
{18 We are not persuaded by respondents’ self-serving
arguments offered in support of their views that they should be
paid twice for one job. It seems obvious to us that a bar
disciplinary proceeding before this Court is a singularly
inappropriate forum to seek relief from federal policies
regarding attorney’s fees in federal cases and complain about
decisions of the United States Supreme Court implementing
them. If respondents have concerns about the adequacy of
attorney fees awarded by federal courts in general and the effect
of those fee calculations on public policy considerations, such
as the availability of counsel, they should present them to the
attention of the federal judiciary and Congress. These matters
are not the business of this Court. Rather, it is the
responsibility of this Court in disciplinary matters to safeguard
the interests of the public, the courts and the legal profession
from lawyers who violate standards of professional conduct.
Raskin, supra.
{19 While we must address the arguments raised by the
parties, it has not escaped the Court’s attention that
respondents’ arguments are not framed by the facts of this case.
Their recurring theme centers about the factors causing the
alleged insufficiency of court awarded attorney’s fees in these
A-12
matters: the courts’ undervaluation of attorneys’ hours and
rates, and the fact that the statutory fee cannot be enhanced by
the existence of the contingency contract. Respondents’
statutory fee, however, was not obtained by award of the court,
but in voluntary settlement with the defendants. If respondents
believed this settlement amount was too small, they should not
have accepted it. In point of fact, this Court is of the opinion
that the fee respondents received was not insufficient by any
| standard: Respondent Weeks testified he worked approximately
50 hours on the case which was settled by negotiation within
six months for $50,000 and $23,000.00 in attorney’s fees.
420 In this case, of course, the federal district court had
no opportunity to determine a reasonable statutory fee or
| consider the reasonableness of the contingent fee arrangement
| since the parties reached an agreed settlement. If the court had
| awarded the statutory fee in an amount the respondents
considered insufficient, they could have appealed and presented
their policy concerns to the Tenth Circuit.2
2 We note in passing that the Court of Appeals has expressly
recognized the policy considerations raised by the respondents. In
Cooper v. Singer, 719 F.2d 1496, 1506 N.14 (10th Cir.1983), the
Court stated:
| We recognize that civil rights attorneys may decline to accept cases
| notwithstanding a guarantee of the amount that may be potentially
| awarded under section 1988. To the extent that these decisions reflect
that the respective cases lack legal merit, the intendment of section
1988 is fulfilled -- section 1988 encourages only meritorious
litigation. However, if civil rights attorneys decline meritorious cases
because they expected fee awards are less than the market value of
their services, then the courts have failed to fulfill their obligation
A-13
{21 Respondents’ concerns about the “enhancement” of
their statutory attorney fees, whether controlled by pre-Dague or
post-Dague factors, are not placed at issue by these facts. That
concept does not apply to a settlement between parties.
Enhancement is tied, by definition, to a court’s award of
attorney fees to a fee applicant seeking from the court an
upward adjustment of the lodestar figure the district court
calculated. See Dague, supra; Blum, supra. What respondents
are advocating here, on the other hand would be more properly
styled “self-enhancement” of fees, or simply “self-help.” This is
not a viable concept in the area of attorney’s fees.
IV
{22 It is necessary to provide some background of the
legal issues which frame this matter in order to explain the
question before us and our answer. The Civil Rights Attorney
Fees Award Act of 1976, 42 U.S.C. § 1988, provides that in
selected civil rights actions, “the court, in its discretion, may
allow the prevailing party, other than the United States, a
reasonable attorney’s fee as a part of the cost.”
{23 “The purpose of § 1988 is to insure effective access
to the judicial process’ for persons with civil rights grievances.
Accordingly, a prevailing plaintiff should ordinarily recover an
attorney's fee unless special circumstances would render such
an award unjust’.” Hensley v. Eckerhart, 461 U.S. 424, 430,
103 S.Ct. 933, 1937, 76 L.E2d 40 (1983). [internal quotation
marks and citation omitted]. A party is a “prevailing party” for
under section 1988 to award reasonable fees. We therefore stress
again it is essential that the fee awards reflect the fair value of actual
services rendered on successful claims.
A-14
_ purposes of entitlement to attorney’s fees under § 1988 in a case
that settles favorably to claimant prior to trial. Maher v. Gagne,
448 U.S. 122, 129, 100 S.Ct. 2570, 2575, 65 L.E2d 653,661
(1980).
{24 Congress intended that the fee awarded a prevailing
plaintiff should be adequate to attract reasonably competent
counsel, “but not produce windfalls to attorneys. (citations
omitted)” Blum v. Stenson, 465 U.S. 886,896 104 S.Ct.
1541,1548, 79 L.Ed.2d 891 (1984). Fee shifting statutes, such
as § 1988, “were not designed as a form of economic relief to
improve the financial lot of attorneys, nor where they intended
to replicate exactly the fee an attorney could earn to a private fee
arrangement with his client. Instead, the aim of such statutes
was to enable private parties to obtain legal help in seeking
redress for injuries resulting from the actual or threatened
violation of specific federal laws. Hence, if [a plaintiff finds] .
. it possible to engage a lawyer based on the statutory
assurance that he will be paid a ‘reasonable fee’ the purpose
behind the fee shifting statute has been satisfied.” Pennsylvania
v. Delaware Valley Vitizens’ Council for Clean Air, 478 U.S.
546, 565, 106 S.Ct.a3088, 3098, 92 L.Ed. 2d 439 (1986)
(Delaware Valley I).
{25 The right to collect attorney’s fees awarded under
§ 1988, belongs to the prevailing party, not his attorney. Evans
v. Jeff D. 475 U.S. 717, 106 S.Ct. 1531; Venegas, supra. The
determination of what a “reasonable fee” may be in each case
and the factors upon which that figure should be determined,
has led to its own fairly long line of litigation. See Blum v.
Stenson, supra; Delaware Valley I, supra; Delaware Valley II,
supra, Hensley, supra; Dague, supra.
A-15
426 There is a “strong presumption” that the “reasonable
fee” contemplated by § 1988 is the product of “reasonable hours
times a reasonable rate.” Daguc.supra; Delaware Valley I; 478
U.S. at 565, 106 S.Ct. 3098. This figure is known as the
“lodestar” and it has become the “guiding light of our fee
shifting jurisprudence.” Dague, 505 U.S. 557, 563, 112 S.Ct.
2638, 2641.
q27 An upward adjustment of the lodestar amount is
permissible only in “rare” and “exceptional” cases and the fee
applicant bears the additional burden of showing the adjustment
is “necessary.” Blum v. Stenson, supra, at 1548. Certain
particular factors may be considered by the court in its inquiry
of deciding whether to adjust the fee upward or downward
although many of those factors are subsumed within the initial
calculation of hours reasonably expended at a reasonable hourly
rate. Hensley, 461 U.S. 424, 434 N.9; 103 S.Ct. 1940.
428 While the interaction of contingent contract fees
with § 1988 was not addressed by Congress, it has been the
subject of decisions of the United States Supreme Court and
lower federal courts. The Supreme Court has not passed
directly on the narrow issue before us, although it has
addressed closely related questions and those decisions are
pertinent here. As the Bar Association points out, there are
lower federal court decisions directly on point, and those will be
discussed below. No decision has approved, directly or
indirectly, the fee arrangement respondents defend here.
429 The Supreme Court has accepted that statutory
awards can coexist with private fee arrangements. Venegas v.
Mitchell, 495 U.S. 82, 110 S.Ct. 1679 (1990). A contingent
fee arrangement does not impose an automatic ceiling on the
aa i
A-16
award of attorney’s fees under § 1988. Blanchard v. Bergeron,
489 U.S. 87, 92, 109 S.Ct. 939, 944 (1989). In Blanchard,
the Court found that the presence of a contingent fee may aid a
court in assessing the reasonableness of the fee award, but that
it would be inconsistent with the policy and purpose of § 1988
if the contingent contract were dispositive. The Court rejected
the idea that an approach other than the lodestar calculation, the
“centerpiece of attorney’s fee awards”, should be followed
where a contingent fee agreement exists. The Court stated:
“As we understand § 1988’s provision for
allowing a ‘reasonable attorney’s fee,’ it
contemplates reasonable compensation, in light
of all of the circumstances, for the time and
effort expended by the attorney for the prevailing
plaintiff, no more and no less. Should a fee
| agreement provide less than a reasonable fee
| calculated in this manner, the defendant should
| nevertheless be required to pay the higher
| amount. The 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.”
q39 A prevailing party may be required to pay his
attorney a Contingent fee which exceeds the statutory award. In
Venegas, supra, the United States Supreme Court addressed the
issue of whether a prevailing party may have his liability under
a contingent fee agreement disallowed or reduced when the
contingent amount is greater than the statutory award under
§ 1988. The client argued that because of the Court’s holding
in Blanchard that a contingent fee amount does not impose a cap
on court awarded fees, his contingent fee should also be
ignored for his benefit so he would not have to pay his lawyer
more than the “reasonable” fee awarded by the court against the
A-17
defendant. The Supreme Court held that nothing in § 1988
invalidated a contingent fee contract’s provision for a plaintiff to
pay his attorney more than the statutory fee if he chose, nor did
the section interfere with the enforceability of such a provision.
{31 Respondent’s reliance on Venegas in support of
their position is misplaced, however, as the facts and the
contractual agreement differ significantly from this case. First,
the client’s contingency contract obligation in Venegas was
greater than the statutory award, not less. Here, Mr. Dodoo’s
contingent fee liability is less ($20,000), not more, than the
Statutory fee negotiated with defendant by settlement
($23,000.00). Most importantly, in Venegas the client had to
pay his attorney only the difference between his greater
contingency fee award and the Statutory award. The
employment contract at issue there expressly provided that “any
fee awarded by the court would be applied dollar for dollar to
offset the contingent fee.” Accordingly, the prevailing plaintiff
was held responsible for paying 40% of the recovery
($406,000.00) offset by the amount of the § 1988 attorney’s
fee award ($75,000.00).
{32 The representation agreement prepared by
respondent Weeks and entered into by the parties, has no
provision for the contingent fee to be offset or credited by the
Statutory fee. To the contrary, Weeks’ testimony revealed that
he intentionally designed the agreement to prevent any offset by
expressly providing that the statutory fee would be retained “in
addition” to the contingent fees.
133 Respondent Weeks dismisses the Bar Association’s
suggestion that a dollar for dollar offset of the contingency fee
such as that in Venegas should have been included in their fee
A-18
agreement. He contends that such a provision is only workable
in a case such as Venegas which has the expectation of a very
large damage recovery if the case is successful. In keeping with
his consistent position, he argues that in an action such as Mr.
Dodoo’s, which has a very small potential recovery, only a fee
arrangemeut which includes the full amount of the contingent
fee in addition to the statutory fee will interest competent
counsel to become involved in the case.
V.
{34 While respondents have presented self-serving
arguments Claiming that important public policy interests would
be served by allowing them to receive dual fees, they have cited
no legal authority, case law or statutory, which permits this fee
arrangement. We do not find this surprising since no statute
allows it and case law has consistently disapproved this dual
recovery.
¥35 Even though the trial panel recommended no
disciplinary measures for respondents, it recognized that the
character of their fee arrangement was extraordinary and
presented cause for concern. The panel noted, “If this contract
had included some phrase to the effect that attorneys would
receive either the ‘contingency’ or the ‘court awarded attorney
fees’ with the phrase ‘not to exceed 50% of the total amounts
awarded or collected” this question would not be before us.”
q36 As the Bar Association correctly notes, this
suggested arrangement would be in keeping with the general
rule as set forth in annot., Effect of Contingent Fee Contract of
Fee Award Authorized by Federal Statute, 76 A.L.R.Fed347,
352 (1983), which states:
Te
A-19
“In general, the cases explicitly or implicitly hold
that the statutory award of attorney fees should
not be treated as an amount in addition to that
received or to be received by the attorney under a
contingent fee contract, with many courts
explicitly holding that the award is to be credited
against the amount owed to the attorney under
the contract, and if the award equals or exceeds
the contractual fee, that amount is deemed paid
and satisfied.”
437 Those federal courts which have considered the
issue of an attorney’s recovery of both the court awarded
statutory fee and the entirety of the contingent fee amount, have
disallowed the arrangement as inappropriate and a windfall to
the attorney. In Wilmington v. J.I. Case Co., 793 F.2d 909,
923, (8th Cir.1986), the Court of Appeals affirmed the district
court’s award of statutory fees but ordered that award applied
on the amount due under the contingency agreement, not
received in addition to that agreement. That contingent fee
was silent on the question of whether it would be reduced by
the statutory fees awarded. The court noted the broad
supervisory powers of courts over contingency fee agreements
as well as the duty of courts under § 1988 to award reasonable
fees, and determined that the attorneys would receive a windfall
if they were to receive both the statutory fee award and the full
amount due under the contingent fee agreement.
938 In Sullivan v. Crown Paper Bd.Co., Inc., 719
F.2d 667 (3rd Cir.1983) the Third Circuit remanded an action
for consideration of the contingent agreement terms, stating that
counsel should recover the contingent amount or the statutory
amount, whichever is greater. The court determined that where
the contingent fee is greater, plaintiff would be directed to pay
counsel the difference between the two fees. Where (as here)
A-20
the statutory fee is greater, plaintiff's contingent obligation to
counsel should be deemed settled. Similarly, in Sargeant v.
Sharp, 579 F.2d 645, 648 (1st Cir.1978), the Court of Appeals
suggested that where the attorney has been paid a contingent fee
in an amount equal to or above the amount of a statutory fee
award, plaintiff should be reimbursed that amount when the
court sets the fee, Plaintiff should be paid “any excess over that
amount of the fee arrangement” going to counsel.
q39 Likewise, in Wheatley v. Ford, 619 F.2d 1037,
1041 (2nd Cir.1982), plaintiff's fee obligation to his attorney
was deemed paid and satisfied” to the extent of the § 1988
Statutory award ordered. In International Travel, Inc. v.
Western Airlines, Inc., 623 F.2d 1255 (8th Cir. 1980), the
client was represented by co-counsel and the contract provided
that one attorney would receive the entire contingency fee award
(45% of the total recovery) and the other counsel would receive
the statutory fee award. The net effect of the contract was, as
the Bar Association notes, similar to that of the representation
agreement employed by respondents here. After review, the
court objected to the fee arrangement, finding that it breached
the “outer limits of reasonableness”.
440 In Hamner v. Rios, 769 F.2d 1404 (9th Cir.1985),
the Court of Appeals remanded an action for determination of a
reasonable statutory fee. Emphasizing the power of the courts
to supervise fee awards under contingency contracts to avoid
unreasonable results, the Court instructed the lower court to
determine a reasonable statutory fee award, and then, if the
statutory award was less than the contingent fee, to consider
whether plaintiff should be compelled to pay the difference
between the statutory amount and the contingency fee.
A-21
141 In Venegas v. Skaggs, 867 F.2d 527 (9th
Cir.1989), the Ninth Circuit affirmed the district court’s ruling
that contingent fee arrangemenis which exceed the statutory
award are permissible under § 1988, as that statute does not set
a ceiling on plaintiff's emtitlement to fees under a contingent fee
contract. This ruling was later affirmed by the Supreme Court
in Venegas v. Mitchell, supra. Addressing the issue of whether
plaintiff should be required to pay the difference between the
Statutory fee and the greater contingency contract amount, the
Court answer in the affirmative in a manner that leaves no doubt
that under our facts (where the statutory award is greater than
the contingent amount) the Court would consider the dual
recovery improper. The Court stated, “The plaintiff's attorneys
are not entitled to both the statutory award and the full amount
of the contingent fee.” At 534 n.7.
VI.
442 In keeping with the above authorities, we are
compelled to the conclusion that by retaining the entirety of the
contingent fee deducted from Mr. Dodoo’s recovery in addition
to the statutory fee, respondents’ fee arrangement exceeded
existing federal case law. We find that the Bar Association has
therefore met its burden of Showing by clear and convincing
evidence that respondents’ fee arrangement violated Rule
1.5(a). Attorneys who take a greater share of the amount of
money recovered for a client as an attorney’s fee than they are
entitled to receive under existing law are subject to discipline.
State ex rel. Okl. Bar Ass’n. v. Fagin, 1992 Ok 118, 848 P.2d
11(Ok1.1992); State ex rel. Okl Bar Ass’n. y. Mason, 1063 OK
89, 380 P.2d 961 (OkI.1963); State ex rel. Okl. Bar Ass'n v.
Moss, 1978 OK 61, 577 P.2d 1317(Okl. 1978).
A-22 id
443 We are not persuaded by respondents contentions
that charges against them are inappropriately brought by the Bar
Association under Rule 1.5(a). They contend that the reach of
that provision is limited to challenges to the amount of fees
taken from a client’s recovery, and because their contingent
percentage of Mr. Dodoo’s recovery was only 40% (less than
the statutory minimum of 50% set by 5 O.S. 1991, § 7), the
rule is not properly implicated. Respondents additionally argue
that Rule 1.4(d) of the Rule Governing Disciplinary
Proceedings precludes the imposition of discipline under Rule
1.5 here as there was no showing or finding of extortion or
fraud by the trial panel. That rule provides that controversies
“as to the amount of fees shall not be considered a basis for
charges unless it is made to appear that the amount demanded is
extortionate or fraudulent.”
444 This controversy, or course, does not concern the
amount of a contingent fee and it was not necessary to make a
showing or finding of extortion here. We find that the
reasonableness standard of Rule 1.5(a) encompasses, by
definition, the minimum requirement that a fee received by an
attorney licensed by this Court must be warranted by existing
law.3 An unwarranted fee is per se unreasonable fee.
3 Rule 1.5 now covers the provisions formerly set forth in
DR-2-107, 5 O.S.Supp.1983, ch.1, App.3, as follows:
“A lawyer shall not enter into an agreement for, charge, or
collect an illegal or clearly excessive fee. ....A fee is clearly
excessive when, after a review of the facts, a lawyer of ordinary
prudence would be left with a definite and firm conviction that the fee
is in excess of a reasonable fee . . .”
See State ex rel. Okl.Bar Ass’n. v. Watson, supra, Oklahoma
A-23
445 Additionally, it is undisputed that respondents failed
to communicate with Mr. Dodoo about the negotiations and
settlement of the statutory attorney’s fee in violation of Rule
1.4, as charged in the original complaint. Respondents do not
deny that they failed to inform their client. In fact, they made it
clear in their pleadings; they also stipulated to it, testified about
it and discussed it in their briefs. Respondent Weeks’
consistent explanation for the omission was that the fee was
theirs, not Mr. Dodoo’s, and since he had no claim to it, he had
no reason to know about it. Weeks reasoned that if Mr. Dodoo
had been a pro se litigant, he would not have received attorney’s
fees and, therefore, the statutory fee was exclusively theirs.
This is particularly so, Weeks adds, in light of the assignment
of that fee in the representation agreement.
{46 Respondent is mistaken, however. The fee
belonged to Mr. Dodoo. Under applicable federal law, Mr.
Dodoo was eligible to collect the statutory fee; it was his tight to
waive, settle or negotiate that eligibility. Evans v. Jeff D., 475
U.S. 717, 106 S.Ct. 1531 (1986); Venegas v. Mitchell, supra.
The Bar does not challenge the claimed assignment of the
Statutory fee, and its validity and effectiveness are not before us
for decision today.
{47 For purposes of addressing the question before us,
we find that even if we were to assume, for the sake of
argument, that the assignment was valid, respondents were not
thereby relieved of their duty imposed by Rule 1.4 to keep their
Turnpike Authority v. New Life Church, 870 P.2d 762 (1994).
A-24
client informed of the settlement of attorney’s fees in his case.4
This they failed to do.
448 For the reasons stated above, we find that clear and
convincing evidence shows that the fee arrangement did violate
Rule 1.5(a) and respondent Joseph Weeks is hereby publicly
censured and is ordered to pay the costs of this proceeding in
the amount of $1,134.75, within 90 days of the effective date of
this opinion.
KAUGER, C.J., SUMMERS, V.C.J.. AND LAVANDER,
HARGRAVE, JJ., CONCUR.
SIMMS, J., CONCURS SPECIALLY.
HODGES, J., CONCURS IN RESULT.
OPALA, WILSON, JJ., CONCUR IN PART, DISSENT IN
PART.
WATT, J., DISSENTS.
SIMMS, J., CONCURRING SPECIALLY:
{1 I concur with the majority, however, I would find
respondent Nation is also subject to discipline and publicly
censure him for his participation in this fee arrangement.
Additionally, I would orde: both respondents to make
restitution to Mr. Dodoo of the $20,000 contingent attorney’s
fee. Even though restitution may undoubtedly be obtained in
the district court, I would resolve the issue in this discipline
4 Rule 1.4 provides:
“(a) lawyer shall keep a client reasonably informed about the status of
a matter and promptly comply with reasonable requests for
(b) A lawyer shall explain a matter to the extent reasonably necessary
to permit the client to make informed decisions regarding the
representation.
A-25
matter. Respondents obtained a windfall recovery which they
were not entitled to receive and I would order them to return it
to their client as restitution.
WATT. J., DISSENTING: I would suspend each respondent
for some period of time.
OPALA, J., DISSENTING IN PART:
I would (a) administer public reprimand to respondents
Weeks and Nation; (b) order that they pay the costs of this
proceeding not later than 90 days after this court’s opinion
becomes final; (c) direct that they not be restored to good
Standing as licensed Oklahoma practitioners until they have
made restitution to Mr. Dodoo, their former client, of $20,000
— the amount of their excessive contingent-fee recovery; and
(d) provide that they refund the excess fee recovered not later
than 30 days after this opinion becomes final. In sum, I join the
separate statement authored by Simms, J.
B-1
IN THE SUPREME COURT OF THE STATE OF OKLAHOMA
BEFORE THE PROFESSIONAL RESPONSIBILITY TRIBUNAL
[Filed March 26, 1996]
STATE OF OKLAHOMA, ex rel.,
Oklahoma Bar Association,
Complainant,
OBAD # 1228
SCBD # 4123
v.
JOSEPH WEEKS,
Respondent.
STATE OF OKLAHOMA, ex rel.,
Oklahoma Bar Association,
OBAD # 1229
SCBD # 4125
Complainant,
)
)
)
)
)
Vv. )
)
MARK NATION, )
)
)
Respondent.
STATEMENT OF FACTS
Weeks and Nation were retained by Dodoo to represent
him in a Title 7 Civil Rights Action. A five page, single spaced,
written agreement was entered into after consultation with
outside private counsel, which provided in part that Weeks and
Nation were entitled to receive one-half (1/2) of any judgment
or settlement (the contingent fee) and all negotiated or court
ordered attorney’s fees. Dodoo originally agreed with the fee
arrangement, but had misgivings and subsequently negotiated a
B-2
reduction of the contingent fee portion of the contract to pay
forty percent (40%). A settlement of $50,000 was reached on
Dodoo’s claim and he received $36,000.00 with Weeks and
Nation retaining $20,000.00. Weeks and Nation then received
a $23,417.68 attorney fees which they retained. The net result
was that of the $73,417.68, Dodoo received $30,000, and
Weeks and Nation retained $43,417.68.
There appears to be no question but that the contract was
voluntarily entered into. Weeks testified that this type of
contract is standard within the Western District and is the only
way to get attorneys for these types of cases. Weeks further
testified that because of the nature of the cases, even the best
attorneys may hopefully expect a 50% success rate, and when
calculating his average fee, he has received an hourly rate of
$51.00. (This, of course, is an average of both the winning
and losing cases).
Weeks felt that this fee was fair, because: (1) The client
agreed to and understood the fee in advance of executing the
contract: (2) It was a minimum fee necessary to obtain
competent counsel; (3) If this type of contract is negated, it
would result in less than a reasonable fee in these types of
cases: and, (4) It is not unusual for attorney’s fees in these
types of cases to be in excess of the damage.
B-3
If this contract had included some phrase to the effect
that attorneys would receive either the “contingency” or the
“court awarded fees” with a phrase “not to exceed 50% of the
total amounts awarded or collected”, this question would not be
before us.
However, the trial panel can come to no other
conclusion but that the evidence showed that the contract was
entered into with a full understanding between the parties.
There was no evidence offered to rebut the statement of Weeks
that these types of contracts are the kind normally entered into in
this type of case within the Western District. There is likewise
no evidence to rebut the fact that without this type of contract it
would be difficult to obtain competent counsel for
complainants. We must, therefore, determine if based upon this
evidence we can find that such a contract is in and of itself
inherently unreasonable.
Weeks contends that this is a matter governed by Rule
1.4 of the Rules Governing Disciplinary Proceedings, in that
Section D provided that controversies as to the amount of
attorney’s fees shall not be the basis for charges in a
disciplinary proceeding unless it is made to appear that the
amount demanded is extortionate or fraudulent. Weeks
suggests that there is no evidence of extortion or fraud and
therefore, the case must be dismissed. While we agree that
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extortion and fraud are not present, we do find that Rule 1.5 of
the Rules of Professional Conduct provide that a lawyer’s fee
shall be reasonable, and that we must determine under the facts
| in this case if the fee arrangement was reasonable. If so, the
case should be dismissed. If not, then we must look to
discipline.
Under Rule 1.5, Weeks discussed with the tribunal the
eight factors to be considered in determining the reasonableness
of the fee. We must also determine whether the contract
violates title 5, O.S.A., Section 7, which provides:
“Tt shall be unlawful for an attorney to contract
for a percentage or portion of the client’s cause
of action or claim not to exceed 50% of the net
amount of such judgment as may be recovered
The Bar Association suggests that an award of
attorney’s fee is an award to a client and that, in this case,
Dodoo received an award on his claim of $50,000.00 and an
award of attorney’s fees of some $23,000.00. On the other
hand, the trial panel recognized that in some civil rights actions
an award of little or no monetary value may be given yet
substantial attorney‘s fees awarded. If the attorney receives this
award as his fee pursuant to a contingent fee contract, would the
statute be violated? We do not think so. Is it then incorrect to
suggest that where a client gets an award plus atiorney’s fees
that the attorney cannot receive a sum in excess of 50% of the
entire award? We think that the answer to that question must be
founded in the rationalization that where an attorney is entitled
to the attorney’s fee award, a client cannot complain that an
| attomey received a sum greater than the client did himself on his
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ee a
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cause of action (but that an attorney cannot accept such a fee
award and then demand a percentage of his contingent fee
contract to permit recovery in excess of 50%. Common sense
and public policy dictate that a contingent fee contract which
allows the attorney 50% of the award plus the court awarded
attorney’s fee cannot stand if the attorney receives a sum greater
than 50% of the total award. It would appear that some
restriction should be placed on fees allowed in representation
contracts so that the court-awarded attorney fee plus such
percentage of the contingent fee award does not permit the
attorney to recover an amount greater than the percentage of the
contingent fee award contracted for. The total of the award
should not exceed 50% of all monies awarded. This, however,
should not affect any award of substantial attorney fees in cases
of nominal damages where that is or has been the agreement.
Respondent make a very effective argument that
restricting the amounts of attorney fees allowed will cause
attorneys doing this type of work to seek other types of
employment. This benefits defendants only, who as a general
rule have counsel on retainer or house counsel to handle their
litigation, whereas, the claimants have only the incentive of the
contingency contract or fees to be awarded, to get their day in
court. This is a right and concern that is not taken lightly by
this tribunal.
RECOMMENDATION FOR DISCIPLINE
Because we can find no previous cases in line with the
facts of this case, and since we unanimously agree that each of
the Respondents acted in what they felt was an appropriate
manner, we cannot in good conscience recommend any
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discipline. We can, however, suggest that our court interpret
Rule 1.4 of the Rules Governing Disciplinary Proceeding, Rule
1.5 of the Rules of Professional Conduct, and 5 O.S.A. Section
7, with respect to a fact situation such as this. Attorneys in the
future could then appropriately deal with clients knowing what
is required. We would therefore recommend that no discipline
be given.
isi) = Tom R. Stevenson
TOM R. STEVENSON, Presiding Master
/s/ John Shipp
JOHN SHIPP, PRT LAWYER MEMBER
/s/_ Alice Musser
ALICE MUSSER, PRT LAY MEMBER
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C-1
IN THE SUPREME COURT OF THE STATE OF
OKLAHOMA
[Filed September 8, 1998]
STATE OF OKLAHOMA, ex rel..
Oklahoma Bar Association,
Complainant,
Vv.
SCBD NO. 4123
)
)
)
)
)
JOSEPH WEEKS, )
)
)
Respondent.
RDER
Respondent’s Petition for Rehearing is denied.
D‘INE BY ORDER OF THE SUPREME COURT IN
CONFERENCE THIS 8th DAY OF SEPTEMBER, 1998.
/s/ Yovonne Kauger
CHIEF JUSTICE
CONCUR: KAUGER, C.J., SUMMERS, V.C.J.,
LAVENDER, SIMMS, HARGRAVE, OPALA,
WATT, JJ.
DISSENT: HODGES, WILSON, JJ.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.