Skehan v. Board of Trustees of Bloomsburg State College

• Decision Date: 13 May 1976
• Docket Number: No. 73-1613,73-1613
• Parties: Dr. Joseph T. SKEHAN, Appellant, v. BOARD OF TRUSTEES OF BLOOMSBURG STATE COLLEGE et al., Appellees. . Rehearing In Banc
• Court: U.S. Court of Appeals — Third Circuit

Page 53

538 F.2d 53

Dr. Joseph T. SKEHAN, Appellant, v. BOARD OF TRUSTEES OF BLOOMSBURG STATE COLLEGE et al., Appellees.

No. 73-1613.

United States Court of Appeals, Third Circuit.

Rehearing In Banc May 13, 1976.

Opinion on Remand from the Supreme Court of the United

States June 21, 1976.

Michael H. Gottesman, Dennis D. Clark, Bredhoff, Cushman, Gottesman & Cohen, Washington, D. C., Harry Lore, Cohen & Lore, Philadelphia, Pa., for appellant.

J. Justin Blewitt, Jr., Deputy Atty. Gen., Norman P. D'Apolito, Lawrence Silver, Deputy Atty. Gen., Chief, Civ. Litigation, Robert P. Kane, Atty. Gen., Dept. of Justice, Harrisburg, Pa., for appellees.

OPINION ON REMAND FROM THE SUPREME COURT OF THE UNITED STATES

Before SEITZ, Chief Judge, and BIGGS, VAN DUSEN, ALDISERT, ADAMS, GIBBONS, ROSENN, HUNTER, WEIS and GARTH, Circuit Judges.

GIBBONS, Circuit Judge.

This case is before us on remand from the Supreme Court. In August 1972 Joseph Skehan, formerly a non-tenured Associate Professor of Economics at Bloomsburg State College in Pennsylvania, sued in the district court seeking preliminary and permanent injunctive relief of reinstatement and back pay to that position, declaratory relief that his termination from the position was unconstitutional, punitive damages and attorney's fees. The defendants in the action were Bloomsburg State College; its Board of Trustees; Dr. Robert Nossen, its President; his successor to the presidency, Dr. Charles Carlson; and John Pittenger, Pennsylvania's Superintendent of Education.

The district court found that Skehan's one year employment contract was an interest in the nature of property; that its termination without an adequate hearing violated due process; and that the termination was not, as alleged, in retaliation for engaging in activity protected by the first amendment. ¹ The court did not decide whether the college's prior decision not to renew Skehan's contract, ² which had the effect of preventing him from achieving tenure, was made in reprisal for activities protected by the first amendment. Nor did it decide whether Skehan had a contractual right to a so-called "academic freedom" hearing prior to the college's decision not to renew his appointment. ³

On appeal we affirmed the district court's determinations that the termination of Skehan's one year contract violated due process and that the termination was not in retaliation for the exercise of first amendment rights. We concluded that the court should have considered his claim that the non-renewal decision was so motivated, and should have decided his claim to a contractual "academic freedom" hearing prior to termination. We held that the individual defendants, exercising discretionary governmental functions, were immune from suits for money damages. We instructed the district court to determine whether the college was an entity as to which Pennsylvania asserted sovereign immunity. If the college did not share the Commonwealth's immunity, the district court was instructed to consider making an award of back pay and an award of attorney's fees. Otherwise it was to deny an award of back pay or attorney's fees. ⁴ Skehan filed a petition for certiorari. On May 27, 1975 the Supreme Court ordered that the judgment of this court be vacated and the case be remanded to this court for further consideration in light of Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975), and Wood v. Strickland, 420 U.S. 308, 95 S.Ct. 992, 43 L.Ed.2d 214 (1975). ⁵ We decided to review the case in banc, and requested supplemental briefing. We now turn to a consideration of our prior decision in light of the Supreme Court's mandate.

I. Alyeska Pipeline Service Co. v. Wilderness Society

We previously held that Skehan, as a private attorney general vindicating a public interest in having state-related institutions act in compliance with the fourteenth amendment, was entitled to an award of attorney's fees from Bloomsburg State College provided the college did not share the sovereign immunity of the Commonwealth of Pennsylvania. ⁶ Alyeska Pipeline Service Co. v. Wilderness Society, supra, overrules the cases on which we relied and which recognized that basis for the award of attorney's fees. It holds that absent (1) a contract or statute granting a right to attorney's fees; (2) the conferring of a common benefit by the recovery of a fund or property; (3) willful disobedience of a court order; or (4) a finding that the losing party has acted in bad faith, vexatiously, wantonly or for oppressive reasons, federal courts must apply the American rule requiring each party to pay from his own pocket for the services of his attorney. Skehan points to no statute which would justify an award of attorney's fees, ⁷ but he urges that because primary emphasis was placed on the now-discredited but once-respectable private attorney general theory, we should still remand for appropriate findings by the district court on both the common benefit and bad faith exceptions to the American rule.

The common benefit theory will not avail Skehan in this case. While it is true that the public at large benefits from making public institutions act in accordance with the demands of due process, Skehan is not attempting to assess against those benefited members a fair share of the reasonable value of the attorney's services which created the benefit. Compare Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corp., 487 F.2d 163 (3d Cir. 1973); Merola v. Atlantic Richfield Co., 493 F.2d 292 (3d Cir. 1974); City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974); Grunin v. International House of Pancakes, 513 F.2d 114 (8th Cir. 1975). Instead, he is attempting to charge the losing party for the reasonable value of attorney's fees which conferred that intangible benefit on an unascertainable class not within the court's jurisdiction. In Hall v. Cole, 412 U.S. 1, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973), the Court applied the common benefit theory to justify a fee award for conferring a common but intangible benefit the protection of first amendment rights. But there the Court could assess the fee against a union treasury, and thus shift the cost of litigation to an ascertainable class of union members who had been benefited. Skehan would have us analogize a union treasury to the treasury of the college. But the analogy between union dues in a union treasury and public funds in the college treasury is remote at best. Moreover, in Hall v. Cole it was quite clear who were the beneficiaries of increased union democracy and fairer operation of the union. In this case there would be no way of telling whether, if attorney's fees were assessed against the college, the cost would ultimately be borne by those parts of the college's several constituencies students, faculty, and the tax-paying public which actually benefited. We share Judge Wright's view that to apply the common benefit theory to assess attorney's fees against a losing party "would . . . stretch it totally outside its basic rationale . . . ." Wilderness Society v. Morton, 161 U.S.App.D.C. 446, 495 F.2d 1026, 1029 (1974) (en banc), rev'd on other grounds sub nom., Alyeska Pipeline Service Co. v. Wilderness Society, supra. To hold that we could charge the college for a common benefit to an undefined public would be to apply in other words the private attorney general theory which the Alyeska Court proscribed. And the inapplicability of the common benefit theory to an assessment of attorney's fees against the individual defendants is even more obvious. Thus we conclude that a remand for findings with respect to this theory is not appropriate.

Skehan also urges that on remand he would be able to show that all of the defendants, but in particular President Nossen, acted in bad faith, vexatiously, wantonly, or for oppressive reasons, states of mind which Skehan contends permit an award of attorney's fees under the American rule. The particular reference to Nossen, a prime mover in his termination but hardly a prime mover in carrying on this litigation, suggests the need for distinguishing between the bad faith which may have led to the termination of employment and bad faith, vexatiousness or oppression in litigating. It is the latter which comprises the predicate for the well-recognized fourth exception to the American rule on fee awards. The fee is awarded in the nature of costs for vexatiously bringing or maintaining an unfounded action or defense. ⁸ 6 J. Moore, Federal Practice P 54.77(2), at 1079 (2d ed. 1974). It can hardly be said that on those issues on which the defendants have thus far prevailed the defense has been maintained in bad faith, vexatiously, wantonly or for oppressive reasons. Nor can we find evidence of oppressiveness in the defendants' response on appeal to those issues on which Skehan has been successful. On the other hand, since we are remanding and we cannot predict the future course of this litigation, we cannot foreclose consideration of the award of attorney's fees as costs based upon any lack of good faith in maintaining the litigation in the future.

Skehan, relying on Vaughan v. Atkinson, 369 U.S. 527, 530-31, 82 S.Ct. 997, 8 L.Ed.2d 888 (1962), urges that there is a fifth exception to the American rule, which allows the recovery of fees as an element of damages for pre-litigation vexation or oppression in resisting a just claim. In Vaughan v. Atkinson, a suit in admiralty for maintenance and cure and for injury from the withholding of maintenance and cure when it was due, the seaman could show no injury caused by the withholding of the payments other than the cost of attorney's fees in the suit. The Fourth Circuit, applying the American rule, refused to award fees as an item of compensatory damages. ⁹ The Supreme Court, with seven Justices participating and two dissenting, held that attorney's fees could be recovered as...