Panola Land Buying Ass'n v. Clark

• Citation: 844 F.2d 1506
• Decision Date: 17 May 1988
• Docket Number: No. 86-7704,86-7704
• Parties: PANOLA LAND BUYING ASSOCIATION, Plaintiff, Richard J. Ebbinghouse, Movant-Appellant, v. Vance CLARK, Administrator, Farmer's Home Administration, United States Department of Agriculture in his official capacity, et al., Defendants- Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 1506

844 F.2d 1506

PANOLA LAND BUYING ASSOCIATION, Plaintiff Richard J. Ebbinghouse, Movant-Appellant, v. Vance CLARK, Administrator, Farmer's Home Administration United States Department of Agriculture in his official capacity, et al., Defendants- Appellees.

No. 86-7704.

United States Court of Appeals Eleventh Circuit.

May 17, 1988.

Richard J. Ebbinghouse, Birmingham, Ala., pro se.

Abigail Turner, Legal Services Corp. of Alabama, Mobile, Ala., for movant-appellant.

John Zippert, pro se.

Kevin J. Hasson, Office of Legal Counsel, U.S. Dept. of Justice, William Kanter, Appellate Staff, Civ. Div., U.S. Dept. of Justice, Washington, D.C., Frank W. Donaldson, U.S. Atty., Birmingham, Ala., for defendants-appellees.

Appeal from the United States District Court for the Middle District of Alabama.

Before JOHNSON and CLARK, Circuit Judges, and EATON ^*, Senior District Judge.

EATON, Senior District Judge:

This appeal was filed by Richard J. Ebbinghouse, former attorney for the Panola Land Buying Association, a mutual self-help non-profit housing corporation, (Panola), ¹ from the district court's denial of Ebbinghouse's Rule 24(a)(2), Fed.R.Civ.P. motion to intervene as a party in the case. Accompanying the motion to intervene was Ebbinghouse's "Petition For Attorney's Fees," which we construe to be the pleading (complaint) required by Rule 24(c), Fed.R.Civ.P. In it Ebbinghouse alleges that he is entitled to recover fees under the Equal Access to Justice Act, 28 U.S.C. Sec. 2412, (EAJA), ² and under the State of Alabama's attorney's lien statute.

On May 27, 1982, Ebbinghouse, while employed as a staff attorney with the Legal Services Corporation of Alabama, Inc. (Legal Services) instituted the underlying action for Panola, and represented Panola in the case until June 5, 1986. In the interim, Ebbinghouse, in June of 1984, opened his own office for the practice of law. ³ After opening his office, he successfully represented Panola on an appeal from an adverse summary judgment. Trial of the underlying case was set for June 9, 1986. Settlement negotiations ensued. According to Ebbinghouse, on May 23, 1986, "all issues of the settlement that was signed by the parties and filed by the parties were successfully negotiated, except the attorney's fee issue." (Brief for Appellant at 11.) Ebbinghouse participated in those negotiations. The document to which Ebbinghouse refers is entitled "Settlement Agreement." It contains a provision entitled, "Attorney's Fees and Costs," which reads: "Each side agrees to bear its own costs and attorney fees with the exception that plaintiff shall retain the costs of appeal paid by the defendants in the amount of $462.20." Ebbinghouse refused to sign the "settlement agreement" on his client's behalf since, according to Ebbinghouse, "to do so would constitute a waiver of attorney's fees." (Brief for Appellant at 12.) He "refused to sign any agreement wherein he would waive his attorney's fees." (Brief for Appellant at 3.) In the meantime, Ebbinghouse, feeling that "the district court must supervise fee waivers," (Brief for Appellant at 19.) sought "mediation of the Court," (Brief for Appellant at 3.) in reference On May 27, 1986, the parties notified the district judge that they had reached a settlement. On June 5, 1986, Panola sent Ebbinghouse a letter ⁵ by which Panola painfully "dismissed" Ebbinghouse as Panola's counsel. On June 26, 1986, a staff attorney for Legal Services, referred to by Ebbinghouse as his "co-counsel in the case," signed the "settlement agreement" on behalf of Panola. A copy of that document was received by the district judge's office and filed with the Clerk of the court on July 7, 1986. On July 28, 1986, Ebbinghouse filed his motion to intervene which was denied on September 11, 1986.

                to the settlement negotiations.  Ebbinghouse wished to establish before the district court that the defendants had no reasonable defense on the merits of the case and that the defendants were engaged in the common and continuous practice of coercing fee waivers as a condition to settlement "as a part of a vindictive effort to teach counsel he had better not bring such cases."    The district judge did not mediate, 4 recognizing that if parties to a case can agree to terms, they are free to settle the litigation and the court need not and should not get involved, Gardiner v. A.H. Robins Co., 747 F.2d 1180, 1189, (8th Cir.1984), United States v. City of Miami, 614 F.2d 1322, 1330 (5th Cir.1980) modified on rehearing, 664 F.2d 435 (1981)
                

"SETTLEMENT AGREEMENT"

Before discussing the rejected complaint, it must be pointed out that the document consistently referred to by the parties and Ebbinghouse as a "settlement agreement," and treated by them on this appeal as a settlement agreement, is not a settlement agreement at all. The underlying case is still pending. The document is quite obviously a conditional agreement ⁶ imposing conditions to settlement upon Panola and the defendants. Nevertheless, it contains a waiver of attorney's fees--and a complete release of liability in favor of the defendants in an ongoing case. In effect, Panola and the defendants effectively continued the scheduled trial indefinitely, Panola hoping that all of the conditions in the "settlement agreement" would be fulfilled and that the case would settle satisfactorily in the future.

Ebbinghouse's proposed complaint asserted that "whatever bearing paragraph 13 of the 'settlement agreement' may have upon the parties, it is not binding upon petitioner and does not constitute a waiver of petitioner's fees;" (p # 16 of the complaint), and that Ebbinghouse is entitled to claim fees in his own behalf under both 28 U.S.C. Secs. 2412(d)(1)(A) and 2412(b).

Further, the proposed complaint alleged that the defendants were engaged in a common and continuous practice of requiring fee waivers as a condition of settlement as part of a vindictive effort "to teach counsel he had better not bring such cases." ⁷

"PETITION FOR ATTORNEY'S FEES" UNDER EAJA

The district judge denied Ebbinghouse intervention to seek attorney's fees under Because of the nature of Ebbinghouse's claim under the EAJA, we, too, need not venture too far into the labyrinth of "standing." Rule 24(a)(2), Fed.R.Civ.P., permits intervention "when the applicant claims an interest relating to the property or to the transaction which is the subject of the action and he is so situated that the disposition of the action may, as a practical matter, impair or impede his ability to protect that interest." (Emphasis supplied.) The interest relating to the transaction required for intervention is "a direct, substantial, legally protectable interest in the proceedings." ⁹ (Emphasis supplied.) Diaz v. Southern Drilling Corp., 427 F.2d 1118, 1124 (5th Cir.1970), Hobson v. Hansen, 44 F.R.D. 18, 24 (D.D.C. 1968); 7C Wright, Miller & Kane, Federal Practice and Procedure, Sec. 1908, at 271 (1986).

                the EAJA on the "party-specific" standing issue rather than on the "issue-specific" ripeness issue, related "subheadings" of the justiciability requirement.  In view of the conditional nature of the "settlement agreement" the district judge might have approached the justiciability question the motion to intervene presented by considering whether Ebbinghouse's complaint was more than "an ingenious academic exercise in the conceivable."   United States v. SCRAP, 412 U.S. 669, 688, 93 S.Ct. 2405, 2416, 37 L.Ed.2d 254, 270 (1973).  However, the district judge disposed of the motion to intervene to claim attorney's fees under the EAJA by utilizing the prudential 8 doctrine that a complainant must assert his own legal rights and interest and cannot rest his claim to relief on the legal rights or interests of third parties
                

Although standing in no way depends on the merits of the contention of the applicant for intervention, it often turns on the nature and source of the claim asserted. Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975).

Other than Ebbinghouse's claim under Alabama's attorney's lien statute, the source of his claim is the EAJA. ¹⁰ Examination of the language and purpose of that source and of the history of Federal fee-shifting statutes makes it clear that the EAJA does not afford Ebbinghouse party status to assert a legally protectable right.

It is readily apparent that the party eligible to recover attorney's fees under the EAJA as part of its litigation expenses is the prevailing party. The inquiry here, however, is whether under the EAJA Appellant as former counsel for Panola also The primary purpose of the EAJA is to deter the government from bringing unfounded suits or engaging in unreasonable administrative behavior. That goal is in part achieved by rectifying "the disparity between the resources and expenditure of ... individuals and their government." 5 U.S. Code Cong. & Admin. News 1980, pp. 4953, 4984. As the House Report states:

has standing to claim attorney's fees from the government.

Providing an award of fees to a prevailing party represents one way to improve citizen access to courts and administrative proceedings. When there is an opportunity to recover costs, a party does not have to choose between acquiescing to an unreasonable Government order or prevailing to his financial detriment. Thus, by allowing an award of reasonable fees and expenses against the Government when its action is not substantially justified, S. 265 provides individuals an effective legal or administrative remedy where none now exists. By allowing a decision to contest Government action to be based on the merits of the case rather than the cost of litigating, S. 265 helps assure that administrative decisions reflect informed deliberation. In so doing, fee-shifting becomes an instrument for curbing excessive regulation and the unreasonable exercise of Government authority.

Id. at 4991.

The statutory framework chosen by Congress to...