LOCAL NO. 149 IU, UA, A. & AIW v. American Brake Shoe Co.
Decision Date | 05 January 1962 |
Docket Number | No. 8411.,8411. |
Citation | 298 F.2d 212 |
Parties | LOCAL NO. 149 INTERNATIONAL UNION, UNITED AUTOMOBILE, AIRCRAFT AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA (UAW-AFL-CIO), Winchester, Virginia, Appellant, v. AMERICAN BRAKE SHOE COMPANY, Winchester, Virginia, PLANT OF AMERICAN BRAKEBLOK DIVISION, Winchester, Virginia, Appellee. |
Court | U.S. Court of Appeals — Fourth Circuit |
Lowell Goerlich, Washington, D. C. (J. Lynn Lucas, Luray, Va., and Harold A. Cranefield, Detroit, Mich., on brief), for appellant.
Flourney L. Largent, Jr., Winchester, Va. (Largent, Anderson & Larrick, Winchester, Va., on brief), for appellee.
Before BOREMAN and BELL, Circuit Judges, and MARTIN, District Judge.
Appellant, Union, appeals from an order of the District Court refusing to award attorneys' fees to the Union. The Union was the prevailing party in this Court on the merits of a prior appeal. Upon remand to the District Court to effectuate the decision here reached, that court held "it should not be within the power of the courts to penalize litigants because their defenses cannot be upheld," and refused to award attorneys' fees as costs.
The original dispute in this case arose as the aftermath of an arbitrator's award in favor of the Union. The arbitrator required reclassification of four individual employees who, the Union contended, were misclassified. Appellee, Employer, refused to reclassify these employees, contending that the award exceeded the arbitrator's authority under the contract and the submission. The District Court required specific enforcement of the award. This Court affirmed the findings of the District Court including its finding that it had jurisdiction (reported 285 F.2d 869).
Here the Union seeks to recover reasonable attorneys' fees as costs on the grounds that the employer's refusal to abide by the arbitrator's award was arbitrary and without any meritorious basis.
The propriety of awarding attorneys' fees against a party who, without justification, refuses to abide by an arbitrator's award and thereby necessitates enforcement proceedings in the District Court by virtue of § 301(a) of the Labor Management Relations Act (29 U.S.C.A. § 185(a)) is the sole issue in this case. This issue turns on the historical equity powers of federal courts since no statute authorizes attorneys' fees in these circumstances.
(1939), the question of "the power of federal courts in equity suits to allow counsel fees" was fully explored. Citing English and American precedent, the Court stated at pages 164, 165 of 307 U.S., at page 779 of 59 S.Ct.:
(Footnotes omitted.)
Refusing to recognize any formula for the exercise of this power, the Court at page 167 of 307 U.S., at page 779 of 59 S.Ct. stated:
The rationale of this decision has found application in a variety of situations in subsequent cases. The principle that the federal courts have inherent power to award attorneys' fees as costs in the absence of statutory authority has been recognized where such fees were denied,1 relied on where they were granted.2 The variety of factual circumstances in which this principle has been applied indicates that "dominating reasons of justice" has been the guide to its application.
Guardian Trust Co. v. Kansas City Southern Ry. Co., 28 F.2d 233 (8 Cir. 1928), is a treatise on the history of this subject in equity courts.
"The power of courts of equity over costs does not rest upon the statutes, but upon usage long continued. * * * costs as between solicitor and client (are allowed) where the litigation is false, unjust, vexatious, wanton, or oppressive." Buchhalter v. Rude, 54 F.2d 834 (10 Cir.1931), reversed for misapplication of the principle 286 U.S. 451, 52 S.Ct. 605, 76 L.Ed. 1221 (1932).
Unnecessary, groundless, vexatious and oppressive petitions and motions have been held to constitute appropriate reason for the exercise of the equitable power to award attorneys' fees against the offending party, In re Swartz, 130 F.2d 229 (7 Cir.1942), rehearing denied.
This Court stated the general rule in equity in Specialty Equipment & Machinery Corp. v. Zell Motor Car Co., 193 F.2d 515 (4 Cir.1952) at pages 520, 521:
"* * * which is that costs beyond those allowed by statute will be taxed only in exceptional circumstances, `such as exist in the case of fraud, oppression, or bad faith cases of fiduciary relationship or those in which the prevailing party has helped to create the fund upon which the costs are charged.\' Swan Carburetor Co. v. Chrysler Corporation, 6 Cir., 149 F.2d 476, 478; Sprague v. Ticonic Nat. Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184."
In actions for unfair competition attorneys' fees are assessed as an element of damages where the wrongdoers' action is unconscionable, fraudulent, willful, in bad faith, vexatious or exceptional.3
The power of a court of equity to allow the taxation of attorneys' fees as costs has been before this Court. In Rolax v. Atlantic Coast Line R. Co., 186 F.2d 473 (4 Cir.1951), this Court dealt with such a situation. There Chief Judge Parker held that, under the Railway Labor Act, Negro firemen were entitled to relief against the railroad and the Brotherhood of Locomotive Firemen and Enginemen from a discriminatory contract entered into between the union and the railroad.
In sanctioning the award of attorneys' fees to the Negro firemen the Court said at page 481:
* * *"
In Local 205, United Electrical Radio and Machine Workers v. General Electric Co., 172 F.Supp. 960 (D.Mass.1959), the identical point here in issue was raised. The Court commented at page 961:
Aside from the inherent power of courts of equity to award counsel fees in appropriate cases a directive policy has been declared by the Courts in interpretation of the Labor Management Relations Act.
Textile Workers Union of America v. Lincoln Mills of Alabama, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), bears both on the question of the power of federal courts and its proper exercise under the Act. This case is a mandate to the lower courts to fashion a body of federal law to effectuate the policy of the National Labor Laws and an explanation of that policy. At page 457 of 353 U.S., at page 918 of 77 S.Ct.:
See United Steelworkers of America v. Warrier & Gulf Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960) as to the policy of the Act.
From the authority herein cited it is clear that the District Court had the power to award attorneys' fees to Appellant, Union. This appears both from the Labor Relations Management Act, the constructions of that Act and the...
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