Southerland v. International Longshoremen's and Warehousemen's Union, Local 8

• Decision Date: 15 December 1987
• Docket Number: No. 85-4428,85-4428
• Citation: 834 F.2d 790
• Parties: 127 L.R.R.M. (BNA) 2259, 108 Lab.Cas. P 10,263 Gene SOUTHERLAND, Plaintiff-Appellee, v. INTERNATIONAL LONGSHOREMEN'S AND WAREHOUSEMEN'S UNION, LOCAL 8, Defendant- Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 790

834 F.2d 790

127 L.R.R.M. (BNA) 2259, 108 Lab.Cas. P 10,263

Gene SOUTHERLAND, Plaintiff-Appellee, v. INTERNATIONAL LONGSHOREMEN'S AND WAREHOUSEMEN'S UNION, LOCAL 8, Defendant- Appellant.

No. 85-4428.

United States Court of Appeals Ninth Circuit.

Argued and Submitted March 2, 1987.

Decided Dec. 15, 1987.

Frank Pozzi and Robert K. Udziela, Pozzi, Wilson, Atchison, O'Leary & Conboy, Portland, Or., for defendant-appellant.

Michael L. Rosenbaum, Rosenbaum & Simmons, Portland, Or., for plaintiff-appellee.

Appeal from the United States District Court for the District of Oregon.

Before SNEED and HALL, Circuit Judges, and LEGGE, ^* District Judge.

LEGGE, District Judge:

FACTS

Plaintiff and appellee Gene Southerland sued the defendant and appellant union under the Labor Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. Secs. 411 and 412. Plaintiff sought compensatory and punitive damages for lost wages, alleging that the union had violated his due process rights in suspending him for a disciplinary violation.

The district court found that the union had violated plaintiff's due process rights, but held that plaintiff had failed to establish any compensable injury. The district court therefore granted a directed verdict and entered judgment for defendant. Plaintiff appealed. In an unpublished opinion, this court affirmed the determination that plaintiff was not entitled to damages, but remanded for the district court to determine whether plaintiff was nevertheless entitled to recover the attorneys' fees he incurred by bringing this action under section 412, 762 F.2d 1019.

On remand, plaintiff requested $22,311 in attorneys' fees. The district court held that plaintiff was entitled to an award of fees, and set the award at $11,155.50. The union now appeals that award.

ISSUES

The union raises two principal issues on appeal:

1. Whether the district court erred in finding that plaintiff had conferred a benefit on the union's members, so as to justify an award of attorneys' fees.

2. Whether the district court abused its discretion in deciding that $11,155.50 was the reasonable amount of fees.

DISCUSSION

I.

29 U.S.C. Sec. 412 does not expressly provide for an award of attorneys' fees. However, the "substantial benefit" principle permits the recovery of attorneys' fees under that section. The "substantial benefit" principle is based on the premise that a successful plaintiff should be able to spread the costs of his litigation among those who benefited from the successful outcome. Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 1946, 36 L.Ed.2d 702 (1973); Mills v. Electric Auto-Lite Co., 396 U.S. 375, 391-92, 90 S.Ct. 616, 625, 24 L.Ed.2d 593 (1970). Reimbursement of a plaintiff's costs and attorneys' fees "shifts the costs of litigation to 'the class that has benefited from them and that would have had to pay them had it brought the suit.' " Hall, 412 U.S. at 9, 93 S.Ct. at 1948, quoting Mills, 396 U.S. at 397, 90 S.Ct. at 628.

Mills and Hall used a two-factor test, allowing a plaintiff to recover his attorneys' fees (1) if the litigation conferred a substantial benefit on the members of an ascertainable class, and (2) if the court's jurisdiction over the subject matter makes possible an award that will operate to spread the costs proportionately among the class. Hall, 412 U.S. at 5, 93 S.Ct. at 1946; Mills, 396 U.S. at 393-94, 90 S.Ct. at 626.

In Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 264-65, n. 39, 95 S.Ct. 1612, 1625-26 n. 39, 44 L.Ed.2d 141 (1975), the Supreme Court reaffirmed the "substantial benefit" principle of Hall and Mills, but used a three-factor test to determine when an award of fees is appropriate. The court explained that the substantial benefit principle contained three characteristics: (1) the class of beneficiaries is "small in number and easily identifiable;" (2) "[t]he benefits could be traced with some accuracy;" and (3) the costs could be shifted "with some exactitude" to those who actually benefited from the litigation. Id.

This court has followed the Alyeska approach in numerous cases not arising under the LMRDA. See, e.g., B.P. North America Trading v. Vessel Panamax Nova, 784 F.2d 975, 977-78 (9th Cir.1986) (reversing an award of attorneys' fees in an admiralty case as there was no class of beneficiaries who could share the pecuniary award), cert. denied, --- U.S. ----, 107 S.Ct. 175, 93 L.Ed.2d 111 (1986); In re Hill, 775 F.2d 1037, 1041 (9th Cir.1985) (denying fees in an immigration case because requiring government to pay fees would not shift costs to benefited class); Southeast Legal Defense Group v. Adams, 657 F.2d 1118, 1122-23 (9th Cir.1981) (denying award because class of all Oregon taxpayers was too broad to qualify as an identifiable class). See also, Cantwell v. County of San Mateo, 631 F.2d 631, 639 (9th Cir.1980) (denying fees where beneficiaries could not be identified and costs could not be shifted with exactitude), cert. denied, 450 U.S. 998, 101 S.Ct. 1703, 68 L.Ed.2d 199 (1981); Stevens v. Municipal Court, 603 F.2d 111, 112-13 (9th Cir.1979) (denying fees under common benefit exception for failure to satisfy Alyeska criteria).

In cases brought under the LMRDA, however, this court continues to adhere to the two-factor test of Hall, even after the Supreme Court's Alyeska decision. Shortly after Alyeska was decided, this court explained:

The recent Supreme Court decision, Alyeska Pipeline Service Co. v. Wilderness Society, [citation omitted] does not overrule Hall. In view of the great factual similarity between the instant case and Hall, our decision is not affected by Alyeska.

Ross v. International Brotherhood of Electrical Workers, 544 F.2d 1022, 1025 (9th Cir.1976). See, Rollison v. Hotel, Motel, Restaurant, Etc., 677 F.2d 741, 747-48 (9th Cir.1982); Bise v. International Brotherhood of Electrical Workers, 618 F.2d 1299, 1306 (9th Cir.1979), cert. denied, 449 U.S. 904, 101 S.Ct. 279, 66 L.Ed.2d 136 (1980); see also, Vincent v. Hughes Air West, Inc., 557 F.2d 759, 768-69 n. 7 (9th Cir.1977). ¹

The union's argument here is based on the Alyeska "tracing" requirement, and essentially asks this court to adopt the Alyeska test in cases arising under 29 U.S.C. Sec. 412. The union then argues that the award of fees must be reversed because plaintiff has not and cannot trace the benefits to either the union or its members. ² The district court did not view Alyeska as applicable to this case and did not require plaintiff to trace the benefits conferred.

As stated, this court has continued to use the two-factor test of Hall, even after Alyeska. Appellant has not shown any reason why that test should be changed now. Indeed, Alyeska's test is not necessarily inconsistent with Hall, and in union membership cases the "tracing" requirement may exist as a matter of law. Such a reading of Alyeska has been adopted by the Third and District of Columbia Circuits. Brennan, 554 F.2d at 600-01; Usery, 543 F.2d at 382. This court concurs in the continued application of the Hall test.

Even under Hall, the union then argues that the district court erred in finding that plaintiff had conferred a substantial benefit on the union or its members. The union contends that the district court's finding was inadequate and that there was insufficient evidence to support its finding.

We must first note that this court consistently has used the term 'valuable service' as a synonym for 'substantial benefit.' See, e.g., Ross v. International Brotherhood of Electrical Workers, 544 F.2d 1022, 1025 (9th Cir.1976); Rollinson v. Hotel Employees, Local 879, 677 F.2d 741, 747-48 (9th Cir.1982); Bise v. International Brotherhood of Electrical Workers, 618 F.2d 1299, 1306 (9th Cir.1979), cert. denied, 449 U.S. 904, 101 S.Ct. 279, 66 L.Ed.2d 136 (1980). Both the district court and the previous panel used "valuable service" in this manner.

We review a finding of "valuable service" under the "clearly erroneous" standard. Rollinson, 677 F.2d at 748; Bise, 618 F.2d at 1306. ³

The district court found:

The plaintiff has conferred a valuable service on the union members in successfully asserting his procedural due process rights in the suspension process. As such, he is entitled to recover attorney fees. While there is no direct proof that this action affected any particular individual other than the plaintiff, heightened attention to procedural due process in a group setting benefits all of the members of the group who are entitled to the same safeguards.

The union contends that this court's earlier order required a finding of "substantial benefit" as a prerequisite to a fee award and that the quoted finding by the district court is inadequate. However, as we have noted, this court uses "valuable service" as a synonym for "substantial benefit." Our earlier order specifically used the term "valuable service." The district court expressly found that union members did receive a "valuable service" from Southerland's suit, referred to the order of remand, and cited and applied Hall and Mills in making the award. The court applied the proper legal standard.

The union also argues that there was insufficient evidence to support the district court's finding. However, this court has not been provided with a reporter's transcript of either the trial or the hearing after remand. And the district court's earlier order, entered after the trial, discussed the detailed evidence in the case. This court therefore cannot determine that the district court's finding of substantial benefit was "clearly erroneous."

II.

The district court's determination of the amount of the award is reviewed by this court under an abuse of discretion standard. Jordan v. Multnomah County, 815 F.2d 1258, 1261 (9th Cir.1987). ⁴

The union makes several arguments regarding the amount of the award. It argues that the findings of the district court were not sufficient to allow meaningful review by this...