Smith v. Government of Virgin Islands
| Decision Date | 05 April 1966 |
| Docket Number | No. 15288,15289,15302.,15301,15288 |
| Citation | 361 F.2d 469 |
| Parties | Normand SMITH, III, as Special Administrator of the Estates of Normand Smith and Nancy L. Smith, Appellant in No. 15288, v. GOVERNMENT OF the VIRGIN ISLANDS, and Harvey Aluminum (Incorporated), and Harvey Alumina Virgin Islands, Inc., Intervenors and Cross-Appellants in No. 15301. Harry NEUMANN, Appellant in No. 15289, v. GOVERNMENT OF the VIRGIN ISLANDS and Harvey Alumina Virgin Islands, Inc., and Harvey Aluminum (Incorporated), Respondents and Cross-Appellants in No. 15302. |
| Court | U.S. Court of Appeals — Third Circuit |
John D. Marsh, Christiansted, V. I. (Young, Isherwood & Marsh, Christiansted, V. I., on the brief), for appellants Normand Smith and others.
John L. Hawkins, New York City, (Dewey, Ballantine, Bushby, Palmer & Wood, by James E. Nickerson, New York City, Russell B. Johnson, Christiansted, V. I., on the brief), for appellees and cross-appellants.
Before MARIS, HASTIE and ALDRICH,* Circuit Judges.
The matter in dispute here is an award of $20,000 to intervening defendants for attorneys' fees, and $1,326.40 for other costs, against the plaintiffs in two suits. The suits were consolidated in the district court and the contested award was made against the plaintiffs jointly.
In the district court the defendant and the intervening defendants filed motions to dismiss the complaints and for summary judgment. The court entered judgment dismissing the suits on the ground that the plaintiffs lacked standing to sue. On appeal, this court vacated the order of dismissal and remanded the causes with directions to enter summary judgments denying the plaintiffs relief. 3d Cir., 1964, 329 F.2d 135, 4 V.I. 496, cert. denied 377 U.S. 979, 84 S.Ct. 1886, 12 L. Ed.2d 747.
The original orders of the district court dismissed the complaints "with costs and reasonable attorneys' fees". The order of this court on appeal awarded costs in this court and "costs, including attorneys' fees, as allowed in the District Court". It will be observed that on its face this court's order concerning attorneys' fees was no more than an approval of the district court's order that judgment be against the plaintiffs, "with costs and reasonable attorneys' fees" in that court. No question was raised or considered with reference to the propriety of awarding attorneys' fees.
On remand it appeared that the intervenors had paid counsel fees in the amount of $76,050.04 for the services of attorneys who represented them in the district court, as well as $1,326.40 for other costs. The court then awarded $20,000 to the intervenors for attorneys' fees and the full amount of their other costs.
Authority to award attorneys' fees to the prevailing party in a suit contested in the District Court of the Virgin Islands is statutory. Section 541 of title 5, Virgin Islands Code, provides that "costs which may be allowed in a civil action include * * * (6) attorney's fees as provided in subsection (b) of this section". Subsection (b) begins by recognizing that the compensation of attorneys is a matter of contract between attorney and client. "But", the subsection continues, "there shall be allowed to the prevailing party in the judgment such sums as the court in its discretion may fix by way of indemnity for his attorneys' fees in maintaining the action or defenses thereto". Thus, the statute makes it a matter of judicial discretion whether and to what extent the losing party shall indemnify the winner for attorney's fees. On occasion, the district court, exercising that discretion, has refused to make any award for attorney's fees. Daly v. Kier, 1952, 2 V.I. 227, 228; Stoner v. Bellows, 1951, 2 V.I. 172, 187. Cf. Chase v. A. M. E. Church, 3d Cir., 1940, 108 F.2d 977, 2 V.I. 411 (). Thus, it has been properly recognized that the amount of the attorney's fee agreed upon between attorney and client, or actually paid, is only one factor to be considered in making an award under section 541. Indeed, the relatively small allowances customarily made for attorney's fees in the Virgin Islands indicate that the normal award under section 541 is often only a minor fraction of what an attorney may reasonably have charged a client for the services involved in the litigation.
This brings us to the specific problem of the present litigation. Both sides have appealed, the plaintiffs contending that the award for attorneys' fees was unwarranted and the Harvey corporations that an award much larger than $20,000 should have been made. We consider the nature and course of the litigation in order to determine what considerations, if any, appear which should guide or control the decision of the court upon this matter of attorneys' fees.
These actions are taxpayers' suits authorized by section 80 of title 5 of the Virgin Islands Code, seeking to invalidate proposed expenditures of public funds and alienation of public property to facilitate the establishment of an alumina manufacturing plant by the Harvey corporations in St. Croix, Virgin Islands. Although this court concluded that on the record the plaintiffs had failed to establish illegality in the transactions in question we recently indicated in another case our view of the value and importance of taxpayers' suits as a protection against misuse of power by public officers. We said:
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