Webster v. Sowders, s. 86-6309

• Citation: 846 F.2d 1032
• Decision Date: 18 May 1988
• Docket Number: 87-5198,Nos. 86-6309,s. 86-6309
• Parties: 25 Fed. R. Evid. Serv. 915 Ross WEBSTER, Jr., et al., Plaintiffs-Appellees, v. Dewey SOWDERS, et al., Defendants-Appellants, Versar, Inc., Intervenor.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 1032

846 F.2d 1032

25 Fed. R. Evid. Serv. 915

Ross WEBSTER, Jr., et al., Plaintiffs-Appellees, v. Dewey SOWDERS, et al., Defendants-Appellants, Versar, Inc., Intervenor.

Nos. 86-6309, 87-5198.

United States Court of Appeals, Sixth Circuit.

Argued Jan. 4, 1988.

Decided May 18, 1988.

Barbara W. Jones, argued, Corrections Cabinet, Office of Gen. Counsel, Frankfort, Ky., for defendants-appellants.

Robert E. Reeves, Daniel R. Dolan, Lexington, Ky., Andrew S. Lipton, Cincinnati, Ohio, Gary E. Powell, argued, for plaintiffs-appellees.

Before MERRITT, KENNEDY and KRUPANSKY, Circuit Judges.

MERRITT, Circuit Judge.

The principal questions at issue on this appeal concern the limits on a district court's authority (1) to award interim attorney fees under 42 U.S.C. Sec. 1988 without findings and conclusions respecting liability, (2) to impose the cost of a court-appointed monitor upon a defendant under Fed.R.Evid. 706(b); and (3) to impose Rule 11 sanctions on a litigant for undertaking an appeal considered frivolous by the District Court.

I.

In late 1985 officials at the Northpoint Training Center, a Kentucky correctional institution, began a program to use inmate labor to remove from prison structures old insulation material that apparently contained asbestos. Shortly thereafter, a group of inmates brought this class action in the District Court against the state of Kentucky and state prison officials for injunctive relief and damages, claiming that the State visited cruel and unusual punishment upon them when prison officials exposed them to potentially dangerous levels of asbestos. The plaintiffs also included an unspecified state pendent claim.

The complaint was filed March 11, 1986, along with a motion for a temporary restraining order prohibiting the defendants from "affecting or disturbing in any way" the Northpoint asbestos insulation except in emergency situations. The District Court held an abbreviated hearing on March 12 and issued the TRO the next day. On March 21, the TRO was amended to include the plaintiffs and extended. On March 27, a hearing was held on plaintiffs' motion for a preliminary injunction; the District Court found that much of the asbestos removal was "required to be performed by the inmates and none of it was performed according to the applicable federal regulations." The Court further found that there was a "health hazard that might possibly ultimately be life-threatening" to inmates and employees at Northpoint, that "unless immediate action is taken this hazard may be aggravated," and that "an emergency situation exists requiring immediate intervention by the Court." Findings of Fact and Conclusions of Law on Preliminary Injunction, App. 287-88.

The preliminary injunction was granted; it basically continued the terms of the TRO. In the next few days, the District Court determined that to deal expeditiously with the emergency it was necessary to postpone trial on issues of liability, to postpone discovery, to postpone ruling on the individual defendants' motions to dismiss on the grounds of qualified immunity, to appoint a firm of asbestos-removal experts nominated by the plaintiffs in order to oversee compliance, and to award plaintiffs' counsel interim attorney fees.

The District Court granted the attorney fees by a single order in November 1986 containing two conceptually distinct rulings: for services already performed, it awarded a lump sum of approximately $50,000 in attorney fees ¹ and $1,290 in expenses; and it established a formula for the future according to which plaintiffs' counsel would indefinitely receive reasonable fees for approximately 75 percent of their hours expended each month to assure state compliance with the preliminary injunction. The 75 percent figure was intended to compensate plaintiffs' counsel for performing their monitoring function under the injunctive order but not to compensate them for continuing efforts on the damages claims, on which the District Court had stayed discovery and reserved its rulings, as it had on questions of liability and immunity generally.

The order also continued the Court's employment of Versar, Inc., the asbestos-removal expert, pursuant to Fed.R.Evid. 706(b). The Court based both prospective decisions on findings that:

(1) it is not yet clear that the potentially life-threatening asbestos danger at the Northpoint facility has been totally abated; (2) there is a continuous need to monitor this situation; [and] (3) the most efficient way to monitor this situation is to rely on the Plaintiffs' lawyers with the assistance of the Court appointed expert, Versar.

Order Regarding Interim Attorney's Fees Award, Nov. 24, 1986, App. 659, 661. A later order on February 4, 1987, directed the State to pay for Versar's services. App. 666. The record is somewhat unclear, but Versar's fees apparently accrued to about April 1987, when the asbestos in question was walled off. The fees for plaintiffs' counsel continued on until January 1988, when this appeal was heard and this Court issued an interim order suspending further fee payments. Through June 1987, the State apparently had paid some $129,000 to plaintiffs' counsel and an unspecified sum to Versar.

II.

A threshold issue is whether the obviously interlocutory attorney fee and expert monitor fee orders are appealable. Although ordinarily orders awarding interim fees in the course of litigation are not appealable, see Hastings v. Maine-Endwell Central School Dist., 676 F.2d 893 (2d Cir.1982); Ruiz v. Estelle, 609 F.2d 118 (5th Cir.1980), in the circumstances of this case we believe appellate review is appropriate.

The Supreme Court recently has emphasized that appellate jurisdiction to review interlocutory orders in this era of "modern litigation" when some lawsuits are tried in stages over extended periods centers on the related questions of whether "such review is truly needed" and whether the orders in question have serious and perhaps irreparable consequences. See Gulfstream Aerospace Corp. v. Mayacamas Corp., --- U.S. ----, ----, 108 S.Ct. 1133, 1141-43, 99 L.Ed.2d 296 (1988); see also Palmer v. City of Chicago, 806 F.2d 1316, 1318-19 (7th Cir.1986) (irreparable harm assessed by comparing harm to litigant if no review and harm to district court's management of case if review allowed), cert. denied, --- U.S. ----, 107 S.Ct. 2180, 95 L.Ed.2d 836 (1987).

The attorney fee order of Nov. 24, 1986, imposed a prospective burden upon the State to pay large monthly fees without any definite cutoff date, without rulings on central legal issues in the case, without specific findings or conclusions concerning theories of liability and immunity and without assurances that in the event of appellate reversal on the merits the State could recover from plaintiffs' counsel the sizeable amounts already paid (a point conceded at argument by plaintiffs' counsel). We believe that this combination of features, i.e., the weight of the prospective burden and the likelihood of irreparable harm due to nonrecovery, qualify this case for review either (1) as a "collateral order" under 28 U.S.C. Sec. 1291, see, e.g., Palmer v. City of Chicago, 806 F.2d at 1317-20; Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985); Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), or (2) as the "practical" equivalent of an injunctive order under 28 U.S.C. Sec. 1292(a)(1). Although orders for payment of fees or costs ordinarily do not qualify as injunctive orders appealable under Sec. 1292(a)(1), in this case the State has no other recourse. It has been unable to appeal directly the District Court's order granting the preliminary injunction because the Court simply has never acted on defendants' routine motion to alter or amend that order, filed April 4, 1986. Under these circumstances, both the order granting interim attorney fees and the order to pay Versar are intertwined with the injunctive order and have the requisite "practical" effect. See United States v. Bedford Associates, 618 F.2d 904, 915-16 (2d Cir.1980) (Sec. 1292(a)(1) appeal proper if order related to or in aid of substantive relief sought in lawsuit).

III.

A. Attorney Fees

Interim attorney fees awarded during the pendency of litigation are permissible and thus within the authority of the district court when the court has entered a concrete order that " 'determines substantial rights of the parties,' " meaning "when a party has prevailed on the merits of at least some of his claims." Hanrahan v. Hampton, 446 U.S. 754, 757-58, 100 S.Ct. 1987, 1989, 64 L.Ed.2d 670 (1980) (per curiam) (quoting Bradley v. Richmond School Board, 416 U.S. 696, 723 n. 28, 94 S.Ct. 2006, 2022, n. 28, 40 L.Ed.2d 476 (1974)). Interim fees are "especially appropriate" when a party has prevailed on "an important matter" in a case, even if the party ultimately does not prevail on all issues. Hampton, 446 U.S. at 757, 100 S.Ct. at 1989 (quoting S.Rep. No. 1011, 94th Cong., 2d Sess. 5, reprinted in 1976 U.S. Code Cong. & Admin. News, 5908, 5912 (legislative history of Civil Rights Attorney's Fees Awards Act of 1976). The Supreme Court has declared that, particularly in complex cases of long duration, delaying a fee award until the conclusion of litigation "would work substantial hardship on plaintiffs and their counsel" and discourage the institution of actions that Congress intended to encourage by passage of attorney fee statutes. Bradley, 416 U.S. at 723, 94 S.Ct. at 2022.

It is true that a party may be considered "prevailing" under 42 U.S.C. Sec. 1988 when, as here, he has secured preliminary but not yet permanent injunctive relief. See, e.g., Taylor v. City of Fort Lauderdale, 810 F.2d 1551, 1558 (11th Cir.1987); Cha v. Levine, 701 F.2d 750 (8th Cir.1983).

However, to qualify a plaintiff as "prevailing" the preliminary relief obtained must represent an unambiguous indication of probable success on the merits,...