Petition for Writ of Certiorari — Weissbrodt v. White Mountain Apache Tribe of Arizona, 115 S. Ct. 319 (1994) (No. 94-240)

| Supreme Court, U.S,

Be Tessa 2D

ie 94 240 auc 1 0 1994

———CDQeEE Tice OFTHE CLERK

IN THE

Supreme Cort of the Wuited States

OCTOBER TERM, 1994

ISRAEL S. WEISSBRODT,

a Petitioner,

THE WHITE MOUNTAIN APACHE TRIBE OF ARIZONA

and THE UNITED STATES,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

PETITION FOR A WRIT OF CERTIORARI

DENNIS G. LYONS

Counsel of Record

1200 New Hampshire Ave., N.W.

Of Counsel: Washington, D.C. 20036

(202) 872-6700

ARNOLD & PORTER

Washington, D.C. and KENT A. YALOWITZ

New York, New York 399 Park Avenue

New York, New York 10022

a D. a (212) 715-1000

ington, D.C. Attorneys for Petitioner

August 1994 Israel S. Weissbrodt

WILSON - Epes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

QUESTION PRESENTED

Where the “results obtained” by an attorney are to be

considered in determining the amount of the attorney’s

court-awarded fee governed by federal law, is it the case

that no value is to be placed on obtaining a settlement

offer that the client rejected before hiring substitute coun-

sel? The lower courts held that the value of such a settle-

ment offer is “essentially nil” per se and is not to be con-

sidered in ruling on a fee application. App. at 13a.

(i)

TABLE OF CONTENTS

Page

QUESTION PRESENTED 00oioo.o.oeoccccccccccccccceecesoeo---- i

TABLE OF AUTHORITIES .......................--.--.----- iv

OPINIONS OF OTHER COURTS ..................... 1

ET 2

STATUTORY PROVISION INVOLVED ........_. 2

ESN SS ea 3

REASONS FOR GRANTING THE . - oe aaa 12

I. THE CASE PRESENTS AN OPPORTUNITY

TO FASHION A RULE THAT PROMOTES

SETTLEMENT IN A WIDE VARIETY OF

CASES, MANY OF THEM COMPLEX .____. 12

Il. THE PER SE RULE APPLIED BELOW IS

CONTRARY TO THE AUTHORITIES ......_. 17

Ill. THIS CASE IS AN IDEAL VEHICLE FOR

ANNOUNCING AND APPLYING THE RULE . 18

ERIE Sigal nee eee 20

SENS ER la

(iii)

iv

TABLE OF AUTHORITIES

Cases:

In re Air Crash at Detroit Metropolitan Airport

(McDonnell Douglas), 791 F. Supp. 1204 (E.D.

, Re: AR RSE as raainons son tecitiie caret eee e heer

Al-Jundi v. Rockefeller, 885 F.2d 1060 (2d Cir.

ee os Se sp ennai ectocis

Allen v. United States, 606 F.2d 432 (4th Cir.

RAR Ri ge POO Pe Nt eM ne

Blunt v. Northern Oneida County Landfill, 536

N.Y.S.24 295 (N.Y. Ct. App. 1988) .....................

City of Long Beach v. Standard Oil Co., 872 F.2d

1401 (9th Cir. 1989), cert. denied, 493 U.S. 1076

SRA ater e wee Ebi hea ae SON

Commissioner V. Jean, 496 U.S. 154 (1990) -.........

In re Complaint of Cap’n Rick Corp. (Viventi V.

Cap’n Rick Corp.), 525 F. Supp. 31 (S.D.N.Y.

1981), aff'd, 685 F.2d 423, 426 & 428 (2d Cir.

I aia hace ogee Na et ag sad an leiccneeklpe vie

Cooper V. Singer, 719 F.2d 1496 (10th Cir. 1983)...

Dolph v. Speckart, 186 P. 32 (Or. 1920) —..............

Doucet v. Standard Supply & Hardware Co., 250

So. 34: S40 (La. Ct. App. 1973) .........-...................

Dunn V. H.K. Porter Co., 602 F.2d 1105 (3d Cir.

is a

Evans V. Jeff, 475 U.S. T17 (1986)............................

In re First Colonial Corp. of Am., 544 F.2d 1291

(5th Cir.), cert. denied, 431 U.S. 904 (1977) ....

Gilson V. Chock Full O’Nuts Corp., 331 F.2d 107

oe Se, ee ee NE See

Hensley v. Eckerhart, 461 U.S. 424 (1983) ............

Hoffert v. General Motors Corp., 656 F.2d 161 (5th

Cir. 1981), cert. denied, 456 U.S. 961 (1982)...

Johnson V. Long, 305 N.E.2d 30 (Ill. Ct. App.

pg RRA Re eA Eo NERD IRAP wal aah I

In re Joint Eastern & Southern Districts of New

York Asbestos Litig., 827 F. Supp. 1014 (E. &

A cr

Keene Corp. v. United States, 118 S. Ct. 2035

(1993)

Maher v. Gagne, 448 U.S. 122 (1980)

Page

2 en

Vv

TABLE OF AUTHORITIES—Continued

Mareck v. Chesny, 473 U.S. 1 (1985) ...............--------

McGowan V. Parish, 237 U.S. 285 (1915) ................

Ojeda Vv. Hackney, 452 F.2d 947 (5th Cir. 1972)....

Osius Vv. Hastings, 97 So. 2d 623 (Fla. Ct. App.

1957), vacated, 104 So. 2d 21 (1958) -...00.0000000..

Rawlings Vv. Prudential-Bache Properties, Inc., 9

Fae Oho Cire Gare Re ee...

In re San Juan Dupont Plaza Hotel Fire, No. MDL

721 (D.P.R. Dec. 2, 1989) (available on West-

howe, GU We ee SED eich ee.

Spahn Vv. United States, 92 F. Supp. 992 (E.D. Va.

PONIES Srieciakdeaaneapaaeae eh Das ne ee

Venegas V. Skaggs, 867 F.2d 527 (9th Cir. 1989),

ORG, Te Ws Be A sis ie...

Werlein v. United States, 746 F. Supp. 887 (D.

Minn. 1990), vacated, 793 F. Supp. 898 (D.

ps eT: ED Oe MILT oh ERAS Re OER

In re Western Real Estate Fund, Inc., 922 F.2d 592

(10th Cir. 1990), modified, 9382 F.2d 898

Cre UN a

Western Shoshone Identifiable Group v. United

States, 652 F.2d 41 (Ct. Cl. 1981) 00.00...

White Mountain Apache Tribe of Az. v. United

States:

ee es ee a

No. 93-5018 (Fed. Cir. Aug. 17, 1993) (unpub-

lished, but noted at 5 F.3d 1506; text avail-

able on Westlaw, 1993 WL 309619)

No. 91-5060 (Fed. Cir. June 3, 1991) (unpub-

lished, but noted at 940 F.2d 676; text avail-

able on Westlaw, 1991 WL 138480)

No. 88-1251 (Fed. Cir. May 10, 1988) (unpub-

PER aga be

Nos. 85-895 & 85-1348 (Fed. Cir. Aug. 7,

1985) (unpublished, but noted at 776 F.2d

1063; text reproduced at App. 32a-3Ga)

No. 84-1434 (Fed. Cir. Aug. 1, 1984) (unpub-

lished)

17

10

7,9

" |

TABLE OF AUTHORITIES—Continued |

Page

ai ae as So Eo 7

PP NE SR a RRR A Be 7

RIE RES aI TS 7

6 Cl. Ct. 575 (1984), vacated, 776 F.2d 1073

ee 5,7

Se 7

mE 2 hlleeeeaeamapeeeeasmnmree aaa 7,8

EES EE TR 7,8

(aaa. 7,8

ee 7.8

11 Cl. Ct. 446 (1987), aff'd, 5 F.3d 1506 (Fed.

Cir. 1993), cert. denied, 114 S. Ct. 538

A ee 3, 4, 7,8

20 Cl. Ct. 371 (1990) 7.8

saan... ;

26 Cl. Ct. 446 (1992), aff'd, 5 F.3d 1506 (Fed.

Cir. 1993), errt. denied, 114 S. Ct. 538

rian wae Ne ae 3, 7,8, 19

Statutes and Rules:

Act of Oct. 8, 1976, Pub. L. No. 94-465, § 2, 90

Stat. 1990, 1991 (1976) (formerly codified at

ee ey SS Se 1 2-3

Court of Federal Claims Technical and Procedural

Improvements Act of 1992, Pub. L. No. 102-572,

§ 902(a), 106 Stat. 4506, 4516 (1992)... 3

Equal Access to Justice Act, Pub. L. No. 96-481,

Title II, 94 Stat. 2327 (1980) (codified at 5

U.S.C. §504 (1988 & Supp. V 1993) and 28

U.S.C. § 2412 (1988 & Supp. IV 1992)) 14

Federal Courts Improvement Act of 1982, Pub. L.

No. 97-164, § 129, 96 Stat. 25, 39 (codified prior

to amendment at 28 U.S.C. § 1346(a) (1988)).. 3

Indian Claims Commission Act, Pub. L. No. 79-

726, § 15, 60 Stat. 1049, 1053 (1946) (formerly

codified at 25 U.S.C. § 70n (1976)) 200. 2,10

Judicial Code, 28 U.S.C. § 1254(1) (1988)

ke 8 8 ea Sc ie A 1

vii

TABLE OF AUTHORITIES—Continued

Other Judicial, Administrative and

Legislative Materials ° Page

Bureau of Labor S.atistics, CPI Detailed Report,

i bahavies 9

Bureau of Labor Statistics, CPI Detailed Report,

pF ST TE SE ce ee. Aer 9

Hearing on H.R. 11909 Before the Subcommittee

on Indian Affairs of the House Committee on

Interior and Insular Affairs, 94th Cong., 2d

I, I Satictticieninnnctidsesaiand siaiaiaainitteie et dincttedeuee 18-19

United States’ Brief as Amicus Curiae in U.S.

Bancorp Mortgage Co. Vv. Bonner Mal! Partner-

ship No. 93-714 (0O.T. 1993, filed May 12,

sein 12-13

Hubert L. Will, et al., “The Role of the Judge in

the Settlement Process,” Seminar for Newly Ap-

pointed District Judges, 75 F.R.D. 89, 203

SR 18

1992 Report of the Director of the Administrative

Office of the United States Courts ....000000 0. 12

IN THE

Supreme Court of the United States

OCTOBER TERM, 1994

No.

ISRAEL §S. WEISSBRODT,

i: Petitioner,

THE WHITE MOUNTAIN APACHE TRIBE OF ARIZONA

and THE UNITED STATES,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

PETITION FOR A WRIT OF CERTIORARI

Israel S. Weissbrodt, by his undersigned counsel, re-

spectfully petitions for a writ of certiorari to review the

judgment of the United States Court of Appeals for the

Federal Circuit in this case.’

OPINIONS OF OTHER COURTS

The Court of Appeals entered judgment without an

opinion affirming the judgment of the Court of Federal

Claims (App. Ja). The opinion of the Court of Federal

Claims (App. 2a-3la) is reported at 30 Fed. Cl. 8

(1993).

‘This petition is not filed on behalf of any corporation. See

S. Ct. R. 29.1.

2

JURISDICTION

The judgment of the court of appeals was entered on

July 12, 1994 (App. la). The jurisdiction of this Court

is invoked under 28 U.S.C. § 1254(1) (1988).

STATUTORY PROVISION INVOLVED

This case does not turn on the provisions of any par-

ticular statute: it requires the articulation of a principle

of law governing awards of attorney’s fees in all cases

in which the power to make such awards is vested in

the federal courts and governed by federal law. In this

case, that power was vested in the Court of Federal

Claims, as successor to the Indian Claims Commission

(“Commission”), under section 15 of the Indian Claims

Commission Act, which provides, in relevant part,

The fees of such attorney or attorneys [retained by

a tribe, band, or other identifiable group of Indians]

for all services rendered in prosecuting the claim in

question, whether before the Commission or other-

wise, shall, unless the amount of such fees is stipu-

lated in the approved contract between the attorney

or attorneys anc the claimant, be fixed by the Com-

mission at such amount as the Commission, in ac-

cordance with standards obtaining for prosecuting

similar contingent claims in courts of law, finds to

be adequate compensation for services rendered and

results obtained, considering the contingent nature

of the case, plus all reasonable expenses incurred in

the prosecution of the claim; but the amount so fixed

by the Commission, exclusive of reimbursements for

actual expenses, shall not exceed 10 per centum of

the amount recovered in any case.

Pub. L. No. 79-726, § 15, 60 Stat. 1049. 1053 (1946)

(formerly codified at 25 U.S.C. § 70n (1976) ).?

2 When the life of the Commission expired on September 30,

1978, the remaining cases on its docket were transferred to the

United States Court of Claims. See Act of Oct. 8, 1976, Pub. L.

a

STATEMENT

Petitioner, Israel S. Weissbrodt (“Weissbrodt”), is a

lawyer. Starting in 1949, he and other attorneys * repre-

sented Respondent The White Mountain Apache Tribe

of Arizona (the “Tribe” or the “White Mountain Tribe”)

under a contingent-fee arrangement to pursue claims that

the United States, as trustee for the Tribe, had misman-

aged and misused the Tribe’s funds end resources.* The

case, in the nature of an accounting by a fiduciary, re-

quired an item-by-item evaluation of the government’s

management of tribal funds and resources, in large part

as evidenced by a voluminous accounting first rendered

by the Government to the Commission in. this case in

1970 and extensively revised in 1975.5 The evidence also

included thousands of pages of documents, reaching back

into the Nineteenth Century and spanning a period ex-

ceeding 75 years. See App. 34a.

In 1980, thirty years into the case, Weissbrodt nego-

tiated a settlement on behalf of the Tribe with the De-

No. 94-465, § 2, 90 Stat. 1990, 1991 (1976) (formerly codified at

25 U.S.C. § 70v (1976)). The United States Claims Court in turn

obtained jurisdiction of such cases pursuant to the Federal Courts

Improvement Act of 1982, Pub. L. No. 97-164, § 129, 96 Stat. 25, 39

(codified prior to amendment at 28 U.S.C. §$1346(a) (1988)).

Pursuant to the Court of Federal Claims Technical and Procedural

Improvements Act of 1992, Pub. L. No. 102-572, § 902(a), 106 Stat.

4506, 4516, that court is now called the United States Court of

Federa! Claims. See Keene Corp. Vv. United States, 118 S. Ct. 2035,

2037 n.1 (1993).

% Petitioner has applied for fees on his own behalf and as a fiduci-

ary for his colleagues at the time of the representation.

4 App. 3a, 30 Fed. Cl. at 10; see White Mountain Apache Tribe

of Az. V. United States, 11 Cl. Ct. 614 (1987), aff'd, 5 F.8d 1506

(Fed. Cir. 1993), cert. denied, 114 8. Ct. 588 (1994); White Moun-

tain Apache Tribe of Az. v. United States, 26 Cl. Ct. 446 (1992),

aff'd, 5 F.3d 1506 (Fed. Cir. 1993), cert. denied, 114 S. Ct. 538

(1994).

5 White Mountain Apache Tribe of Az. V. United States, supra,

26 Cl. Ct. at 454-55.

4

partment of Justice. The settlement was the product not

only of years of litigation but also of presentations to the

Department of Justice as to the value of the claims of

the Tribe and of a second tribe, the San Carlos Apache,

whose lands border those of the White Mountain Tribe,

and whose claims had been litigated along with the White

Mountain Tribe’s.” The settlement called for the entry

of a $13 million judgment in favor of the White Moun-

tain Tribe and a $10 million judgment in favor of the

San Carlos Tribe. App. 5a, 30 Fed. Cl. at 11. In rec-

ommending the .ettlement in 1980, the Weissbrodt firm

predicted that “if the Government was required to fur-

nish additional accounting reports, and additional trials

were held, and the litigation was continued to final judg-

ments, it might take up to about ten more years before

the claims could be brought to final conclusions.” Report

on Proposed Settlement (1980), Ex. A to Third Affidavit

of I.S. Weissbrodt, executed October 5, 1992 (excerpted

in Court of Appeals Appendix at 187-88).

Although the San Carlos Tribe accepted the settlement

for its claims, the White Mountain Tribe followed advice

given by another lawyer—one William Veeder—to reject

the settlement offer. According to the trial court, three

concerns drove the rejection of the settlement. The first

appears insubstantial: members of the Tribe worried that

the proposed language of the judgment would preclude

water rights and land recovery claims—the claims that

Veeder was prosecuting in a separate matter (App. 6a-

7a, 30 Fed. Cl. at 11-12). Although the United States’

trial counsel assured the Tribe that he would recommend

the inclusion of language clarifying that the judgment

would be without prejudice to those claims, Veeder was

apparently unconvinced. See App. 6a, 30 Fed. Cl. at

® White Mountain Apache Tribe of Az. Vv. United Siates, supra,

11 Cl. Ct. at 618, 621.

5

11.7. The issue was never resolved, because Veeder suc-

ceeded in blocking all efforts to move forward to settle-

ment. Second, Tribe members were dissatisfied with the

amount of the proposed settlement (App. 7a, 30 Fed.

Cl. at 12); here, too, Veeder left his mark, for he had

offered the Tribe visions of a huge judgment, amounting

to more than ten times the amount of the proposed

settlement—and exceeding by a similar factor the actual

$14.4 million judgment finally obtained after another

decade of litigation.’ Finally, “a principal reason” for

7 Letter from Richard L. Beal to Robert C. Brauchli (March 30,

1982), Ex. O-12 to Affidavit of Robert C. Brauchli executed Sep-

tember 14, 1992 (excerpted in Court of Appeals Appendix at 184) ;

Letter from I.S. Weissbrodt to Robert Brauchli (Feb. 18, 1982),

Ex. C-7 to Third Weissbrodt Affidavit, executed October 5, 1992

(excerpted in Court of Appeals Appendix at 194). Even apart

from the assurance of the Government’s trial counsel that the

settlement agreement would be revised to make this matter plain,

the concern was without foundation. The release clauses in the

settlement agreement only covered claims which the tribes “have

asserted or could have asserted” in the docket “under the Indian

Claims Commission Act” (Court of Appeals Appendix at 79, 81).

Neither the Commission nor its successors, the Court of Claims

and the Claims Court (now the Court of Federal Claims), had any

jurisdiction to entertain a claim for ownership of water rights or

of land. Their jurisdiction was restricted to pecuniary claims.

Thus, neither under the terms of the settlement nor under res

judicata principles could these other claims have been foreclosed.

8 See Affidavit of Michael D. Lieder, executed Aug. 4, 1992, 7 13

(excerpted in Court of Appeals Appendix at 72) (“Veeder appeared

at our meeting with the Tribal Council . . . and contended that,

apart from the possible adverse impact of the proposed settlement

on the matters that he was handling for the Tribe, it was grossly

inadequate in amount.”’) ; see also Response to Aug. 27, 1984, Order

to Show Cause, filed Sept. 19, 1984 (excerpted in Court of Appeals

Appendix at 233) (“Present counsel [Veeder] recommended rejec-

tion of the offer [renewed in 1984], stressing that the damage done

to Plaintiff Tribe’s Reservation, through intentional mismanage-

ment, is far closer to $130,000,000 than to $13,000,000.”); White

Mountain Apache Tribe of Az. v. United States, 6 Cl. Ct. 575, 577

(1984) (quoting same), vacated, 776 F.2d 1073 (Fed. Cir. 1985).

6

rejecting the offer was the Tribe’s desire to “know[] what

its claims were worth” by litigating to the bitter end.

App. 20a, 30 Fed. Cl. at 17-18.

After Veeder had suggested that the settlement be

rejected, the Tribe sought to dismiss Weissbrodt as coun-

sel for cause. This effort was rejected by the Department

of Interior, which held that no such cause existed. Fol-

lowing this display of no-confidence, Weissbrodt agreed

to a withdrawal by mutual consent, because he recog-

nized “that it would be difficult for him and those asso-

ciated with him on the contract to continue to represent

the tribe under existing circumstances.” °

Having succeeded in blocking a settlement, Veeder

later took the helm on an hourly retainer, to be paid

currently and not out of the award, and set about the

task of litigating the case. His effort seemed to involve

more than the usual consumption of judicial resources.

By the end of 1984, he had disobeyed orders requiring

the pretrial exchange of written experts’ reports on the

theory that the court lacked jurisdiction to make such

orders; he had sought mandamus and moved for dis-

cretionary interlocutory review of those orders (unsuc-

cessfully); he had moved for recusal of the trial judge

(unsuccessfully); and he had been sanctioned with a

daily monetary penalty of $100 for continued disobedi-

ence of the court’s pretrial orders. Three published opin-

ions plus other orders of the trial court, and two appeals

to the court of appeals, were involved in this by-play.

Finally, faced with continued disobedience of its orders,

the trial court sanctioned the Tribe by dismissing its com-

plaint, citing (in a fourth published opinion) “a lack of

diligence in pursuing [the] suit and willful refusal to com-

® Letter from Kenneth L. Payton, Acting Deputy Assistant Sec-

retary, Department of the Interior, to Ronnie Lupe, Chairman,

White Mountain Apache Tribe (Aug. 24, 1981), Ex. A to First

Lieder Affidavit, executed Aug. 4, 1992 (excerpted in Court of

Appeals Appendix at 88) ; see App. 7a, 80 Fed. Cl. at 12.

7

ply with orders of the court.” 6 Cl. Ct. at 578. In the

interests of justice, however, the court also directed the

entry of judgment in favor of the Tribe in the amount of

$10 million, on the ground that this was the amount of

the rejected settlement offer, less a $3 million pecuniary

sanction. 6 Cl. Ct. at 585. By a two-to-one vote, the

court of appeals vacated the dismissal of the complaint

“to give the Tribe one final opportunity to comply with

[the] court’s pretrial orders.” App. 33a; the dissenter

took the view that the trial court had acted within its

discretion in light of Veeder’s misbehavior. App. 35a.

With the case reinstated, another decade of litigation

followed. By the end, Veeder had amassed an impressive

record, at least of litigation, if not of achievement: a

grand total of two trials lasting several weeks each,” 13

published opinions by the trial court consuming a total of

223 pages in the official reporter,’ and five trips to the

court of appeals.” Through it all, Veeder litigated the

10 The resource mismanagement claims were tried in September

and October 1986, following an inspection of the reservation by

the trial judge involving travel around the reservation by automo-

bile and helicopter as well as “a fixed-wing flight crisscrossing the

entire reservation.” 11 Ci. Ct. at 618, 621. A second trial began in

December 1991 and after a respite concluded in March 1992, involv-

ing both accounting claims and “mixed resource mismanagement/

secounting claims.” 26 Cl. Ct. at 447-48.

114 Cl. Ct. 575 (1984) ; 4 Cl. Ct. 586 (1984); 5 Cl. Ct. 288 (1984) ;

6 Cl. Ct. 575 (1984); 8 Cl. Ct. 677 (1985); 9 Cl. Ct. 1 (1985); 9

Cl. Ct. 32 (1985); 9 Cl. Ct. 158 (1935); 10 Cl. Ct. 115 (1986); 11

Cl. Ct. 614 (1987) ; 20 Cl. Ct. 371 (1990) ; 25 Cl. Ct. 3383 (1992) ; 26

Cl. Ct. 446 (1992).

12 No. 94-5018 (Fed. Cir. Aug. 17, 1993) (unpublished, but noted

at 5 F.3d 1506; text available on Westlaw, 1993 WL 309619);

No. 91-5060 (Fed. Cir. June 3, 1991) (unpublished, but noted at

940 F.2d 676; text available on Westlaw, 1991 WL 138480); No. 88-

1251 (Fed. Cir. May 10, 1988) (unpublished); Nos. 85-895 &

85-1348 (Fed. Cir. Aug. 7, 1985) (unpublished, but noted at 776

F.2d 1063; text reproduced at App. 32a-36a); No. 84-1434 (Fed.

Cir. Aug. 1, 1984) (unpublished).

8

case to the hilt and rebuffed the trial judge’s efforts to

encourage the parties to settle the case—or even to settle

tiny portions of it, such as one claim of less than $100.

Examples of this behavior were detailed repeatedly by the

trial court in its many published opinions in the case.

See, e.g.,9 Cl. Ct. 1 (1985) (criticizing plaintiff for filing

“wholly noncompliant” papers); 9 Cl. Ct. 32, 35 (1985)

(denying motion for rehearing, noting that plaintiff offered

“no excuse for having failed” to bring supposedly impor-

tant facts to the court’s attention the first time around);

9 Cl. Ct. 158, 163 (1985) (questioning “wisdom of using

judicial resources” by plaintiff to litigate an item worth

less-than $100); 10 Cl. Ct. 115, 117 (1986) (“This

marks the third time in the recent past in which plaintiff

has simply ignored evidentiary burdens with respect to

damages.”); 11 Cl. Ct. 614, 645 (1987) (criticizing

plaintiff for coming to trial with two untenable measures

of damages on water rights mismanagement claim, despite

having been “forewarned”); 20 Cl. Ct. 371, 375-76

(1990) (rebuffing plaintiff for trying to relitigate previ-

ously rejected claims and for asserting new claim that

came to counsel in an “epiphany” nearly thirty-five years

after the statute of limitations had run); id. at 373 (urg-

ing negotiated settlement, but observing that “plaintiff's

misapprehension of the type of claim that remains for res-

olution is entirely inconsistent with a realistic prospect of

achieving some success by way of negotiation”); 26 Cl.

Ct. at 483-84 (1992) (critizing “serious omission on

plaintiff's part” in proving damages and finding that the

disbursement process complained of by plaintiff was “in-

herently honest and reliable,” but awarding damages “de-

spite plaintiff's failure of proof,” because critical evidence

from the 19th and early-20th centuries had been lost).

13 Unpublished decisions appear to have been to the same effect.

See, e.g., Order entered by the trial court on Feb. 8, 1991 (“No

useful purpose was served by plaintiff’s filing its most recent

motion. The motion was denied previously for reasons fully ex-

plained in the orders of the court. Plaintiff is on notice that

9

In 1992, after the decade of litigation predicted by

Weissbrodt, the Tribe obtained a judgment for $14.4

million—which by November 1993 had accrued approxi-

mately $412 million in interest (App. 3a, 30 Fed. Cl. at

10). This total amount was worth less than 90% of the

value in constant dollars of the settlement the Tribe re-

jected." Weissbrodt applied for his fees, seeking 10% of

the judgment, as contemplated by his contract with the

Tribe. The amount of the fee, which was contingent upon

recovery, was to be fixed by the court and was limited

contractually and by the terms of the Indian Claims Com-

mission Act to 10% of the recovery.”* The trial court

stayed Weissbrodt’s fee application while Veeder unsuc-

cessfully appealed the $14.4 million judgment, contending

that the Tribe’s claims were worth not just the $130

million he had presented to the Tribe at the time of re-

future motions of this nature will not be tolerated. Should plaintiff

file another frivolous, repetitive motion, plaintiff will be required

to pay for defendant’s attorney time in responding thereto. Al-

though the court’s consideration of such filings is gratis, plaintiff’s

opponent should not be required to respond without reimbursement

of attorney’s fees.”) (quoted in an unpublished opinion of the

court of appeals dismissing an appeal of the plaintiff (noted at

940 F.2d 676 (Fed. Cir. 1991), and available on Westlaw, 1991 WL

138480) ).

14 Using the 1967 = 100 base period, the unadjusted CPI-U for

November 1993 was 436.9, and for January 1981 it was 260.5. See

Bureau of Labor Statistics, CPI Detailed Report, November 1993,

p. 8; Bureau of Labor Statistics, CPI Detailed Report, January

1981, p. 9. Multiplying the $13 million by the November 1993

CPI-U, and dividing by the January 1981 CPI-U, results in a

current value for the rejected settlement, without interest, as of

November 1993, of more than $21.8 million.

15 The almost invariable practice of the Commission and its suc-

cessors in making awards, and of the Department of the Interior

in taking a position on them, was to award 10% in contingent-fee

cases under the Act. App. 15a, 30 Fed. Cl. at 15. The Court of

Claims made it clear in Western Shoshone Identifiable Group V.

United States, 652 F.2d 41 (Ct. Cl. 1981), that the three principal

factors to be considered in these cases were the “results obtained,”

10

jection of the settlement, but $1.5 billion. These

amounts were, respectively, approximately ten times and

approximately 100 times the damages determined at trial.

(Veeder also sought certiorari, which was denied. 114

S. Ct. 538 (1994).)

Following affirmance of the judgment, the trial court

took up Weissbrodt’s fee application.’ In determining

the amount of attorney’s fees to award to Weissbrodt, the

Court of Federal Claims—like the trial courts in in-

numerable other fee-application cases (see infra pp. 13-

14, 17 & nn.22-24, 28-29)—-was required by the govern-

ing statute to consider, among other things, the “results

obtained.” See App. 1la-14a, 30 Fed. Cl. at 14-15; In-

dian Claims Commission Act § 15 (quoted supra at p. 2).

Weissbrodt sought a 10% fee, arguing that the “result” he

had “obtained” was the $13 million settlement offer. This

had been the product of a thirty-year litigation, and had

been predicted by Weissbrodt to save the Tribe and the

courts 10 years of additional litigation. That the settle-

ment offer was better than the ultimate judgment—and

that the case voraciously consumed judicial resources for

another decade—served only to highlight its value.

However, the trial court concluded that it could not

consider the settlement offer as a “result obtained,” be-

cause its value once it was rejected was, per se, “essen-

tially nil.” App. 13a, 30 Fed. Cl. at 14. Accordingly,

the fees awarded in other claims cases, and the risks involved for

the plaintiff’s counsel. On appeal, Weissbrodt sought only 10% of

the $13 million.

16 Affidavit of Michael D. Lieder, executed Jan. 6, 1994 (Court

of Appeals Appendix at 247-48).

17QOn behalf of the Tribe, Veeder vigorously opposed the appli-

cation; the Justice Department took no position, and the Depart-

ment of Interior took no position on the amount of fees to be

awarded, but stated that it had no objection to the allowance of

expenses. Defendant’s Response to Motion of I.S. Weissbrodt for

Attorney Fees and Expenses (Oct. 5, 1993) (excerpted in Court

of Appeals Appendix at 234-35).

11

the court evaluated the fee application as though the set-

tlement offer had never been obtained by Weissbrodt.

App. 13a-14a, 30 Fed. Cl. at 14-15. It concluded that

Weissbrodt and his colleagues were entitled only to

$200,000, as compensation for their thirty-two year rep-

resentation of the Tribe, on the ground that “no sum

exists that actually inured to the benefit of the Tribe” as

a result of Weissbrodt’s work. App. 23a, 30 Fed. Cl. at

19. A different evaluation necessarily will ensue on re-

mand if the trial court is required to consider the settle-

ment offer a “result obtained” by Weissbrodt.”

In reaching its decision, the trial court did not acknowl-

edge the cases from state and federal courts addressing

the same issue without applying any per se rule that a

'SIn that context, the statute vests authority in the trial court

to determine the proper fee, once it has been apprised of the

proper legal standard. See Hensley v. Eckerhart, 461 U.S. 424,

438 (1983) (remanding because trial court “did not properly con-

sider the relationship between the extent of success and the amount

of the feé award”). In this regard, we are not seeking certiorari

to review other obvious errors committed by the trial court and

uncorrected by the court of appeals, such as, after ruling a nil

value for the settlement, its choice of a “flat fee of $200,000.00”

(App. 28a, 30 Fed. Cl. at 21), which was then rationalized by

working backward. In this regard, the trial court refused to ac-

cept a 50/50 allocation between the two tribes for work that bene-

fited both (primarily during the many years when the cases were

consolidated for all purposes), even though the settlement pro-

posed for the White Mountain Tribe was higher than the one

accepted by the San Carlos Tribe; instead, the court “discounted”

the allocation, so that nearly 60% of the work was said to have been

done for the San Carlos Tribe’s benefit, and only 40% for that of

the White Mountain Tribe (App. 27a, 30 Fed. Cl. at 21), Similarly,

the court imposed a 15% penalty for failure to keep time records

during the 1970s (in a contingency-fee litigation) that comported

with recordkeeping standards developed in the 1980s (App. 27a,

30 Fed. Cl. at 21). And, in another ruling favoring rejection,

rather than acceptance, of settlements, the court held that the

hourly fee to be paid in the 1990s would be based on the prevail-

ing hourly rates of two or three decades ago (App. 29a, 30 Fed.

Cl. at 22).

12

rejected settlement must be ignored (see infra p. 17

& nn.28-29); nor did it cite any case embracing the per

se rule. Instead, the court erroneously considered the case

to be one of “first impression” (App. 10a, 30 Fed. Cl.

at 13), overlooking or ignoring the many decisions of the

federal and state courts in which attorneys’ accomplish-

ments in negotiating settlements for their clients that the

client elected to reject were considered as valuable “re-

sults obtained” in the judicial determination of attorneys’

fees. The Court of Appeals for the Federal Circuit af-

firmed without opinion. App. la.

REASONS FOR GRANTING THE WRIT

I. THE CASE PRESENTS AN OPPORTUNITY TO

FASHION A RULE THAT PROMOTES SETTLE-

MENT IN A WIDE VARIETY OF CASES, MANY

OF THEM COMPLEX

This Court has repeatedly extolled the virtues of rules

favoring the settlement of litigation.” We suggest that

promulgating rules that encourage the settlement of civil

actions, especially actions that tend toward complexity,

serves important purposes in the fair and efficient ad-

ministration of justice by the federal courts. The need

for such rules continues to increase as the number of

federal cases filed and the caseload per judge continues

to rise.” In a case set for argument this Term, the Solici-

tor General for the United States as amicus curiae re-

cently reiterated his agreement that fair rules that en-

courage the settlement of civil litigation promote “im-

portant public interests” and “economic efficiency.” Brief

19 F.g., Evans v. Jeff D., 475 U.S. 717, 732-34 (1986); Mareck

v. Chesny, 473 U.S. 1, 7-10 (1985); Maher v. Gagne, 448 U.S. 122,

129 (1980).

201992 Report of the Director of the Administrative Office of

the United States Courts 60-65 (district courts seeing renewed

increases in civil workload after decline in late 1980s and steady

increase in criminal workload); id. at 56-57 (steady rises for

courts of appeals).

13

for the United States as Amicus Curiae in U.S. Bancorp

Mortgage Co. v. Bonner Mall Partnership, No. 93-714,

at 18 (O.T. 1993, filed May 12, 1994).

This case provides an important opportunity to affirm

such a rule. By concluding that a settlement offer is of

“no value” if it has been rejected by the client, the lower

courts applied a per se rule that shifted a major element

of the economic cost of rejecting a reasonable settlement

away from the litigant rejecting it and onto the counsel

who recommended the seitlement. This per se rule ac-

tually provides an economic disincentive toward settlement.

By rejecting the settlement and hiring new counsel, the

litigant effectively received thirty years’ worth of legal

services fer close to no fee. Such a windfall would appear

unfair in any event. But the lower courts’ rule has the

added disadvantage of relieving the client from one of

the economic consequences of rejecting the settlement—

having to pay a percentage of the rejected settlement, to

the extent that the final award is equal to or greater than

it. It also discourages settlement by strengthening the

hands of lawyers who might “volunteer” to obtain a better

result, by wiping the slate clean of any obligation by the

client to pay a contracted-for percentage fee, or a fee

measured by, or even reflecting the value of, the rejected

settlement, to the first lawyer.

Whether a settlement offer is a valuable “result ob-

tained” is an issue of broad importance. Of course, it is

an issue present even in contingency-fee cases not involv-

ing a federal statute and in those involving only a single

plaintiff. In this context, a number of federal courts have

held that contingency-fee agreements are always subject

to court supervision.’ But the issue is much broader. In

“1 Venegas V. Skaggs, 867 F.2d 527, 532 n.6 (9th Cir. 1989),

aff'd, 495 U.S. 82 (1990); Cooper v. Singer, 719 F.2d 1496, 1505

(10th Cir. 1983) ; Hoffert v. General Motors Corp., 656 F.2d 161,

165 (5th Cir. 1981), cert. denied, 456 U.S. 961 (1982): Allen v.

United States, 606 F.2d 432, 435-36 (4th Cir. 1979): Dunn v.

H.K. Porter Co., 602 F.2d 1105, 1108 (3d Cir. 1979).

14

a wide variety of cases, the federal courts are called upon

to evaluate such “results” in passing on applications

for attorneys’ fees, whether there is a contingent-fee

arrangement or not. These cases are apt to be com-

plex, involving multiple plaintiffs or classes or groups

such as the Tribe. Litigation of that sort consumes mas-

sive amounts of judicial resources. These cases include,

among others, class actions in federal court,” cases under

the fee-shifting provisions of the civil rights laws and the

Equal Access to Justice Act,” and a myriad of other

kinds of cases in federal court in which attorneys’ fees are

subject to the courts’ supervision.”

In many ways, this case provides a paradigm of the

type of case most likely to suffer from the per se rule

applied by the lower courts and most likely to benefit

from the rule that we suggest. This was a complex litiga-

tion in which the plaintiff was, in essence, a group of

people that were numerous enough to have a multimillion

dollar claim for the aggregate wrongs done to them and

their predecessors, but geographically compact enough,

and with enough organizational structure, to be suscept-

=2 Under Rule 23(e) of the Federal Rules of Civil Procedure,

courts consider and approve not only settlements, but also attend-

ant fee applications. See, e.g., Evans v. Jeff D., 475 U.S. 717, 724

(1986); Rawlings v. Prudential-Bache Properties, Inc., 9 F.3d

513, 515-16 (6th Cir. 1993); Ojeda v. Hackney, 452 F.2d 947, 948

(5th Cir. 1972).

23 See, e.g., Hensley v. Eckerhart, 461 U.S. 424, 433 (1983);

Commisioner V. Jean, 496 U.S. 154, 160-61 (1990).

“4 See Gilson Vv. Chock Full O’Nuts Corp., 331 F.2d 107, 109

(2d Cir. 1964) (en banc, per Friendly, J.) (value of settlement in

attorney’s fee application in securities case governed by federal

law, because “remedial incidents” of federal rights of action, in-

cluding attorney’s fees, are matters of federal law); Jn re First

Colonial Corp. of Am., 544 F.2d 1291, 1300 (5th Cir.) (same, in

bankruptcy cases), cert. denied, 431 U.S. 904 (1977); In re Com-

plaint of Cap’n Rick Corp. (Viventi v. Cap’n Rick Corp.), 525 F.

Supp. 31, 35-36 (S.D.N.Y. 1981) (same, in admiralty case), aff'd,

685 F.2d 423, 426 & 428 (2d Cir. 1982).

15

ible to internal conflict.*° The group also was compact

enough that each member had a palpable stake in the

size of the recovery, in contrast to huge nationwide class

actions in which each class member’s financial stake may

be very small. It is these cases, in which a relatively

compact—but still potentially fractious—group stands to

share in a large recovery, that are often the most con-

suming of judicial resources. A review, for example, of_

the ten longest civil trials (all the ones consuming more

than 60 trial days) during the year ended September 30,

1992 (the latest year for which such figures are avail-

able), reveals that six of the ten involved similarly com-

pact groups.”

25 The group dynamics that can determine whether a settlement

is accepted or rejected in a case like this one are the same whether

the group is viewed juridicially as a single entity (like the Tribe

or a labor organization), whether a large number of individual

plaintiffs are involved, or whether a class action involving a rela-

tively compact class is presented. In the latter two situations,

a settlement may be impossible if substantial numbers of individual!

group members refuse to settle, or, in the case of a class, exercise

rights to opt out under F.R.C.P. 23(c) (2).

261992 Annual Report of the Director of the Administrative

Office of the United States Courts, Table C-9, at 220. See In re

San Juan Dupont Plaza Hotel Fire, No. MDL 721, Amended Case

Order, n.1 (D.P.R. Dec. 2, 1989) (2300 personal injury plaintiffs)

(available on Westlaw, 1989 WL 168401); In re Air Crash at

Detroit Metropolitan Airport (McDonnell Douglas), 791 F. Supp.

1204, 1209 (E.D. Mich. 1992) (approximately 150 consolidated

cases); In re Joint Eastern & Southern Districts of New York

Asbestos Litig., 827 F. Supp. 1014, 1023 (E. & S.D.N.Y. 1993)

(sixteen personal injury plaintiffs); City of Long Beach v. Stand-

ard Oil Co., 872 F.2d 1401, 1402 (9th Cir. 1989) (city and state

for itself and its political subdivisions), cert. denied, 493 U.S.

1076 (1990); Al-Jundi v. Rockefeller, 885 F.2d 1060, 1062 (2d

Cir. 1989) (prisoners at Attica state prison during 1971 riot);

Werlein v. United States, 746 F. Supp. 887, 890 (D. Minn. 1990)

(residents of area surrounding munitions plant that discharged

toxic waste), vacated pursuant to settlement, 793 F. Supp. 898

(D. Minn. 1992).

16

The litigants in these cases are those often most sus-

ceptible to the “volunteer” “spoiler” counsel, who attack

a proposed settlement with the promise of a huge recov-

ery and hints of a sell-out by the original counsel who is

recommending settlement. A common result, as here, of

the rejection of such a settlement sponsored by initial

counsel, particularly where volunteer counsel have ad-

vised against the settlement, is the discharge or with-

drawal by mutual consent of the lawyer whose recom-

mendation has been rejected. With groups of this sort,

there are apt to be some internal differences of opinion,

or some members of the group may have access to poten-

tial “volunteer” substitute counsel, or such volunteers

have access to them, creating a likelihood of second-

guessing of a proposed settlement by dissidents. Thus, it

is these cases that would benefit most from a rule pro-

viding for the award of compensation to the original

counsel as if the initially negotiated settlement had been

accepted, for such a rule would provide a real economic

incentive for accepting reasonable settlements.”

We do not suggest. of course, that every settlement

that is negotiated by counsel ought to be accepted by the

client. The client has, and must have, the right to choose.

But just as the client must have the right to accept or

“7 It is irrelevant to sav, es did the trial court (App. 20a, 30

Fed. Cl. at 18), that if the ensuing litigation had resulted in a judg-

ment that the Tribe take nothing. Weissbrodt would have been

entitled to nothing, and accordingly the rejected settlement was of

no value. It is true that in such a ease Weissbrodt would have

gotten nothing—10°7 (or any percent) of nothing is nothing. The

result ultimately obtained is the outside limit, to be sure. But

it turned out that a “take nothing” judgment was not the result.

A judgment in approximately the same dollar amount but, of

course, in depreciated dollars, was obtained a decade later. Indeed,

it was not surprising that an amount of a similar order of magni-

tude to the settlement was eventually obtained, in a case involving

a vast panoply of individual claims based on a large part of a

century of stewardship of the United States over the Tribe’s

affairs—a case in the nature of an “accounting.”

17

reject a setilement, the exercise of that right should be

conditioned on facing certain obligations; and the nature

of those obligations must be defined by common fairness,

a due regard for the proper administration of justice, and

a concern for the proper allocation of increasingly scarce

judicial resources. Just as the client must be master of

the decision whether to settle or not, the client must be

responsible for the decision not to settle a case as recom-

mended by counsel, and for the fair consequences of that

decision.

II. THE PER SE RULE APPLIED BELOW IS CON-

TRARY TO THE AUTHORITIES

The holding below that a settlement offer once re-

jected is not a valuable “result obtained” by counsel con-

flicts with the holdings of a variety of state and federal

courts. Some courts have held that a client who rejects

a settlement and hires substitute counsel must be held to

the letter of the bargain with the first contingent-fee coun-

sel upon recovery.” Others have held that such counsel

are entitled to a quantum meruit recovery, in which the

amount of the rejected settlement is to be taken into ac-

count in assessing the value of the services provided.”

But, so far as we can tell, no court has, until now,

8 F.9g., Spahn v. United States, 92 F. Supp. 992, 994 (E.D. Va.

1950); Doucet v. Standard Supply & Hardware Co., 250 So. 2d

549, 550-51 (La. Ct. App. 1971); Osius v. Hastings, 97 So. 2d

623, 625-26 (Fla. Ct. App. 1957). vacated for lack of jurisdiction,

104 So. 2d 21 (Fla. 1958); Dolph v. Speckart, 186 P. 32, 33, 36

(Or. 1920). Cf. McGowan v. Parish, 237 U.S. 285, 299-300 (1915)

(holding contixgent-fee client to letter of agreement upon recov-

ery after discharge of counsel).

*0 F.g., In re Western Real Estate Fund, Inc., 922 F.2d 592,

596-97 (10th Cir. 1990), modified on other grounds, 932 F.2d 898

(1991) (en banc); In re Complaint of Cap’n Rick Corp., supra, at

35-36; Blunt v. Northern Oneida County Landfill, 536 N.Y.S.2d

295, 297 (N.Y. Ct. App. 1988); Johnson v. Long, 305 N.E.2d 30,

31-32 (Ill. Ct. App. 1978).

18

adopted a per se rule excluding the rejected settlement

from consideration.

A rule treating a settlement offer—even one that was

rejected—as a “result” of some value makes perfect sense

as a matter of policy. It encourages settlements by pro-

viding economic incentives toward settlement. It pro-

motes participation by counsel in cases where fees are

~ subject to court approval, for it provides counsel an ob-

jective basis for believing that they will be compensated

fairly upon negotiation of a reasonable resolution. In-

deed, without such assurances, counsel are likely to be

less inclined to take such cases, even if meritorious. And

—perhaps most important—it recognizes that clients, the

interests of justice and the administration of the judicial

system are often better served by counsel who encourage

them to resolve their differences fairly, rather than egg

them on to “push the envelope” and test every legal and

factual issue to the end. As Judge Will once said, “One

of the fundamental principles of judicial administration

is that, in most cases, the absolute result of a trial is not

as high a quality of justice as is the freely negotiated,

give a little, take a little setthkement.” Hubert L. Will,

et al., “The Role of the Judge in the Settlement Process,”

Seminar for Newly Appointed District Judges, 75 F.R.D.

89, 203 (1976).

Ill. THIS CASE IS AN IDEAL VEHICLE FOR AN-

NOUNCING AND APPLYING THE RULE

The facts of this case present a paradigm of what can

go wrong where “spoiler” counsel persuades litigants in a

complex civil case to find out what their case is “really

worth” by testing every legal and factual theory, no mat-

ter how unlikely to succeed, rather than resolve their

case reasonably. By the time Veeder took over, the case

had already gone on for thirty years, consuming sub-

stantial judicial and governmental resources.” Indeed, it

30 See Hearing on H. R. 11909 Before the Subcommittee on In-

dian Affairs of the House Committee on Interior and Insular

19

took two decades to get the Government to produce an

accounting for its stewardship, and then another five years,

until 1975, for it to revise that accounting to the point

where it could begin to serve as a basis for a determina-

tion of the obligations owed to the Tribe?! The benefits

of a settlement in 1980 would have been enormous. The

Tribe would have received a far better recovery. Ten

years of complex litigation, punctuated by frequent frivo-

lous positions by the plaintiff, would have been pre-

termitted. Enormous costs to the Tribe, the Justice De-

partment and the courts would have been avoided. It

is fair to say that the only person who actually benefited

from the rejection of the settlement and concommitant

litigation to the bitter end was the new counsel.

This case provides the Court with an opportunity to

address this subject, an important one in cases that are

by their nature going to be complex, and to reject a rule

that provides a disincentive to settlement by removing one

of the economic consequences of rejectiug a settlement.

It provides the Court an opportunity, following the mini-

mum requirement of other courts that have addressed the

issue, to enunciate a proper rule: that the rejected settle-

ment must be viewed as a “result obtained”; and that in

appropriate cases a percentage fee based on the settle-

ment must be awarded to counsel presenting a settlement,

which is then rejected, to the extent that ultimately there

is a recovery. Such a rule would avoid disincentives for

Parties to agree to settlements, appropriately encourage

settlements, be fair in its application, and accord with the

mainstream of judicial authority.

Affairs, 94th Cong., 2d Sess. 52 (1976) (testimony of Jerome

K. Kuykendall, Chairman of the Indian Claims Commission) (de-

scribing one phase of the case, in which Weissbrodt had filed

1,500 pages of exceptions to the Government’s accounting, and 73

motions for partial summary judgment).

31 White Mountain Apache Tribe of Az. v. United States, supra,

26 Cl. Ct. at 452-55. .

20

CONCLUSION

This petition for a writ of certiorari should be granted.

Of Counsel:

ARNOLD & PORTER

Washington, D.C. and

New York, New York

MICHAEL D. LIEDER

Washington, D.C.

August 1994

Respectfully submitted,

DENNIS G. LYONS

Counsel of Record

1200 New Hampshire Ave., N.W.

Washington, D.C. 20036

(202) 872-6700

KENT A. YALOWITZ

399 Park Avenue

New York, New York 10022

(212) 715-1000

Attorneys for Petitioner

Israel S. Weissbrodt