Butt v. United Bhd. of Carpenters & Joiners of Am.

• Decision Date: 08 June 2021
• Docket Number: No. 18-2273,No. 18-2272,18-2272
• Citation: 999 F.3d 882
• Parties: Shenecqua BUTT; Allegra King; Tanya Mitchell; Theresa Howard; Ellen Bronson v. UNITED BROTHERHOOD OF CARPENTERS & JOINERS OF AMERICA; Carpenters Health & Welfare Fund of Philadelphia & Vicinity; Edward Coryell; Mark Durkalec; Philadelphia Housing Authority; Metropolitan Regional Council of Carpenters and Joiners of America, Sandra Thompson, Appellant Theresa Howard v. Philadelphia Housing Authority; Metropolitan Regional Council of Carpenters and Joiners of America; Edward Coryell, Sr. (Officially and Personally); Mark Durkalec (Officially and Personally), Sandra Thompson, Appellant
• Court: U.S. Court of Appeals — Third Circuit

999 F.3d 882

Shenecqua BUTT; Allegra King; Tanya Mitchell; Theresa Howard; Ellen Bronson

v.UNITED BROTHERHOOD OF CARPENTERS & JOINERS OF AMERICA; Carpenters Health & Welfare Fund of Philadelphia & Vicinity; Edward Coryell; Mark Durkalec; Philadelphia Housing Authority; Metropolitan Regional Council of Carpenters and Joiners of America, Sandra Thompson, Appellant

Theresa Howard

v.Philadelphia Housing Authority; Metropolitan Regional Council of Carpenters and Joiners of America; Edward Coryell, Sr. (Officially and Personally); Mark Durkalec (Officially and Personally), Sandra Thompson, Appellant

No. 18-2272

No. 18-2273

United States Court of Appeals, Third Circuit.

Submitted on November 12, 2020

Filed: June 8, 2021

Sandra Thompson, Law Office of Sandra Thompson, LLC, 351 E. Princess Street, P.O. Box 1901, York, PA 17405, Counsel for Thompson, Appellant

Ryan M. Paddick, 1442 Pottstown Pike, #312, West Chester, PA 19380, Counsel for Paddick, Appellee

Before: HARDIMAN, SCIRICA, and RENDELL, Circuit Judges

OPINION OF THE COURT

HARDIMAN, Circuit Judge.

This appeal involves a dispute over legal fees. The District Court ordered attorney Sandra Thompson to pay predecessor counsel, Ryan Paddick, $54,562.73 from Thompson's portion of a settlement fund. Thompson appealed, raising four arguments. We will affirm.

I

This controversy between attorneys Thompson and Paddick began over a decade ago. In 2009 and 2010, Shenecqua Butt, Theresa Howard, and Ellen Brown (collectively, the Clients), filed separate discrimination cases in the United States District Court for the Eastern District of Pennsylvania against, among others, the United Brotherhood of Carpenters & Joiners of America. After their cases were consolidated for discovery, the Clients suffered an adverse summary judgment in January 2012. Acting pro se, the Clients filed a notice of appeal in this Court.

The Clients then hired Paddick to handle their Third Circuit appeal. The night before the case was scheduled for oral argument, Paddick entered into contingency fee agreements with each of the Clients. Those agreements provided that Paddick would serve as counsel on remand (if any) and promised Paddick a 40 percent fee of any trial or settlement proceeds.

Paddick prevailed in the appeal. Consistent with his agreement with the Clients, Paddick pursued discovery and prepared for trial. Paddick took twenty-four depositions, presented two oral arguments, attended two settlement conferences, and filed nine substantive motions or responses. When it came time to retain an expert witness in March 2015, however, Paddick was unable to advance the necessary funds. Paddick told the Clients: "if this puts you in a position where you feel the need to change counsel, I will cooperate with any new counsel." Paddick v. Butt , 2018 WL 1991737, at *10 (E.D. Pa. Apr. 27, 2018).

In April 2015, the Clients terminated their relationship with Paddick and retained Thompson to pursue their claims for a 35 percent contingent fee. Paddick informed Thompson of his labors on behalf of the Clients and told her that "fees remain due on the work [he] did on the cases prior to [her] stepping in." Id. at *10. Thompson did not respond. In September 2017, the Clients settled their cases for a total of $380,000, so under her fee agreement, Thompson's share was $133,000.

In October 2017, the District Court acknowledged the settlements and dismissed the Clients’ cases with prejudice. About a month later, Paddick moved to intervene in the Clients’ cases to enforce an attorney's charging lien against the settlement proceeds. The District Court granted Paddick's motion to intervene, set a hearing date, and ordered Thompson to hold the contested portion of the settlement proceeds in an escrow account "pending resolution of the motion." Dist. Ct. Dkt. No. 321, at 2. In April 2018, the District Court found Paddick entitled to $54,562.73 for his work and ordered Thompson to pay Paddick that amount in her capacity as custodian of the escrow account. Dist. Ct. Dkt. No. 357, at 1. The District Court's order did not, however, explicitly state whether Paddick's fees were to be paid from the fees paid to Thompson or from the Clients’ portion of the settlement fund. Confusion ensued between Thompson and the Clients, so the District Court held a second hearing in May 2018 to resolve the matter. Thompson argued Paddick's fee should not come from her fees but instead should come from the Clients’ portion of the recovery.¹ The District Court disagreed and ordered Thompson to pay Paddick's fee from her $133,000 portion.

Thompson filed this timely appeal.

II²

Thompson's first (and most substantial) argument is that the District Court lacked jurisdiction to hear Paddick's motions. She claims the Court's jurisdiction "terminated" when the cases were dismissed with prejudice after settlement. Butt Br. 30. Thompson acknowledges that the District Court had the "inherent power to enforce its judgments." Butt Br. 31 (quoting Peacock v. Thomas , 516 U.S. 349, 359, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996) ). But she contends that Paddick must seek to enforce his attorney's lien by suing the Clients in state court because the District Court did not retain jurisdiction over the case after it was dismissed and Paddick did not seek to intervene before the dismissal.

We disagree. The District Court had jurisdiction to resolve Paddick's lien motion, but not for the reason it cited (i.e. , the supplemental jurisdiction statute, 28 U.S.C. § 1367 ). As we shall explain, the District Court had ancillary enforcement jurisdiction based on its inherent powers rooted in the common law and unrelated to the statutory grant of authority.

Courts, including this one, have sometimes been imprecise when discussing ancillary enforcement jurisdiction. See, e.g. , IFC Interconsult v. Safeguard Int'l Partners, LLC , 438 F.3d 298, 309 (3d Cir. 2006) (treating the inquiries for ancillary and supplemental jurisdiction as the same); 13 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 3523 (3d ed. 2002) ("Today, the terms ‘ancillary,’ ‘pendent,’ and ‘supplemental’ are all used, essentially interchangeably."). This appeal provides us an opportunity to clear up "needless confusion," WRIGHT & MILLER § 3523, in this area of law.

Unlike the sources of jurisdiction conferred by 28 U.S.C. § 1367,³ ancillary enforcement jurisdiction focuses on "the power [of federal courts] to enforce their judgments and ensur[es] that they are not dependent on state courts to enforce their decrees." Nat'l City Mortg. Co. v. Stephen , 647 F.3d 78, 85 (3d Cir. 2011). It stems from the proposition that "[a] district court acquires jurisdiction over a case or controversy in its entirety and, as an incident to the disposition of a dispute properly before it, may exercise jurisdiction to decide other matters raised by the case over which it would not have jurisdiction were they independently presented." Id. (quoting Sandlin v. Corp. Interiors, Inc. , 972 F.2d 1212, 1216 (10th Cir. 1992) ). Put differently, ancillary enforcement jurisdiction exists "to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees." Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 380, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). This proposition has been applied consistently for over 200 years. See, e.g. , United States v. Hudson , 11 U.S. (7 Cranch) 32, 34, 3 L.Ed. 259 (1812) (recognizing the contempt power as an "implied power" necessary to a court's proper functioning); Bank of the United States v. Halstead , 23 U.S. (10 Wheat.) 51, 53, 6 L.Ed. 264 (1825) ("The authority to carry into complete effect the judgments of the Courts, necessarily results, by implication, from the power to ordain and establish such Courts."); Cooter & Gell v. Hartmarx Corp. , 496 U.S. 384, 395, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990) (listing proceedings for costs and attorneys’ fees as collateral issues "that a federal court may consider after an action is no longer pending").

Nor does ancillary enforcement jurisdiction end when a court renders a judgment on the merits or dismisses a case. As Chief Justice Marshall recognized: "[t]he jurisdiction of a [c]ourt is not exhausted by the rendition of its judgment, but continues until that judgment shall be satisfied." Wayman v. Southard , 23 U.S. (10 Wheat.) 1, 23, 6 L.Ed. 253 (1825) ; see also Riggs v. Johnson Cnty. , 73 U.S. (6 Wall.) 166, 187, 18 L.Ed. 768 (1867) ("Process subsequent to judgment is as essential to jurisdiction as process antecedent to judgment, else the judicial power would be incomplete and entirely inadequate to the purposes for which it was conferred by the Constitution."). "It is well established that a federal court may consider collateral issues after an action is no longer pending," including "motions for costs or attorney's fees." Cooter & Gell , 496 U.S. at 395, 110 S.Ct. 2447 ; see also White v. N.H. Dep't of Emp. Sec. , 455 U.S. 445, 451 n.13, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982) (explaining that, even "years after the entry of a judgment on the merits," a federal court may award counsel fees); Nat'l City Mortg. Co. , 647 F.3d at 85 (holding the District Court had ancillary jurisdiction after judgment was entered in order to give effect to the remedy it granted).

These precedents lead us to conclude that the District Court had ancillary enforcement jurisdiction over the dispute between Thompson and Paddick. The Supreme Court has indicated that ancillary enforcement jurisdiction extends to attorney fee disputes. White , 455 U.S. at 447–48, 452, 454, 102 S.Ct. 1162 (resolving a post-judgment motion for attorney's fees under 42 U.S.C. § 1988 more than four months after the parties settled the case and the district court approved a consent decree); Sprague v. Ticonic Nat'l Bank , 307 U.S. 161, 170, 59 S.Ct. 777, 83 L.Ed. 1184 (1939) (holding that because a petition for fees is "an...