Tobeluk v. Lind

• Citation: 589 P.2d 873
• Decision Date: 26 January 1979
• Docket Number: No. 3477,3477
• Parties: Anna TOBELUK and Henry A. Tobeluk, minors, by their father and next friend John Tobeluk, et al., Appellants, v. Marshall L. LIND, as Commissioner of Education, et al., Appellees.
• Court: Supreme Court of Alaska (US)

Page 873

589 P.2d 873

Anna TOBELUK and Henry A. Tobeluk, minors, by their father and next friend John Tobeluk, et al., Appellants, v. Marshall L. LIND, as Commissioner of Education, et al., Appellees.

No. 3477.

Supreme Court of Alaska.

Jan. 26, 1979.

Bruce C. Twomley, Alaska Legal Services Corp., Anchorage, Stephen E. Cotton, Center for Law & Education, Cambridge, Mass., and John S. Hedland, Rice, Hoppner & Hedland, Anchorage, for appellants.

Richard M. Burnham, Asst. Atty. Gen., and Avrum M. Gross, Atty. Gen., Juneau, for appellees.

Before BOOCHEVER, C. J., and RABINOWITZ, CONNOR, BURKE and MATTHEWS, JJ.

OPINION

CONNOR, Justice.

After extensive litigation the parties to this case entered into a settlement, pursuant to which a consent decree was entered. The question now presented on appeal is whether the superior court erred in denying appellants an award of attorneys' fee as prevailing parties.

In 1972, a civil action was initiated by Alaska Native children of secondary school age to compel the provision of secondary schools in their communities of residence. Their claims alleged violation of the Alaska Constitution, Art. VII, § 1 for failure to provide the schools, as well as equal protection and racial discrimination claims under the U.S. Constitution, Fourteenth Amendment, 42 U.S.C. §§ 1981, 1983, 2000d, and Art. I, § 1 of the Alaska Constitution.

Appellants' claims under Art. VII, § 1 of the Alaska Constitution were dismissed by the trial court and that dismissal was upheld by us on appeal. ¹ The equal protection and racial discrimination claims were remanded for trial. Soon afterwards the appellees initiated settlement negotiations. A year of protracted negotiations followed, during which this case was the focus of a good deal of political attention.

A tentative agreement was reached in December 1975, but it was upset when the governor presented to the legislature a bond proposal for one-half the amount called for in the draft consent decree. Negotiations resumed and, in May 1976, the State Board of Education adopted a set of regulations implementing local secondary school programs, which had been drafted by the appellants, negotiated by the parties, and incorporated in the December draft settlement agreement. On several occasions during the negotiations, the appellees submitted proposals to the effect that a provision be added requiring each party to bear its own costs. These were rejected by the appellants. In September 1976, the parties concluded a settlement, consisting of a statement of agreed facts and a consent decree. A final order approving the settlement was entered in October 1976. Both are silent on the issue of costs and attorney's fees. The consent decree requires the state to engage in a $20 million construction program for local secondary schools and to initiate steps to secure funding through bond initiatives ² for secondary school construction in the 126 villages where the members of the appellants' class reside. Additionally, the superior court retained jurisdiction over the case and required the Department of Education to submit progress reports on the implementation of the decree every four months.

The appellants then filed a notice of taxation of costs with the clerk of trial courts, requesting fees and costs that were incurred between October 1974, when the appellants began discovery related to the prosecution of their equal protection claim, through October 1976, when the settlement was finally approved. The total amount sought is $219,379.32, covering 3,085.75 hours of work by the attorneys and the costs of taking depositions, interviewing witnesses, and conducting the settlement negotiations. ³

Sustaining the appellees' objection, the clerk deferred to the superior court for a determination of costs, if any, to be awarded. Ten memoranda were submitted by the parties encompassing over 300 pages, and oral argument was held on two occasions, lasting a total of over four hours.

After the second argument, the court ruled from the bench in favor of the appellees. The court concluded that, in the circumstances of the case, the plaintiffs could not appropriately be deemed the prevailing party "without some further indication that had the case gone to trial their legal position, as opposed to the relief they requested, would have been vindicated." In its order of April 22, 1977, the court stated that the plaintiffs' status as "prevailing party" could not be inferred from the settlement because of the political nature of the case. Plaintiffs appeal from the superior court's denial of costs and fees.

The issue presented is whether appellants are entitled to costs and fees under Rule 82 of the Alaska Rules of Civil Procedure ⁴ or the federal Civil Rights Attorney's Fees Awards Act of 1976. ⁵

The Alaska rules and the federal statute are similar in that both provide the court with the discretionary authority to award attorneys' fees to a prevailing party, and both intend fee awards to be compensatory rather than punitive.

Despite the above similarities, the two fee award provisions are based on dissimilar underlying policies. The purpose of Rule 82 is to partially compensate a prevailing party for the expenses incurred in winning his case. It is not intended as a vehicle for accomplishing anything other than providing compensation where it is justified. Malvo v. J. C. Penney Co., Inc., 512 P.2d 575, 587 (Alaska 1973), De Witt v. Liberty Leasing Company of Alaska, 499 P.2d 599, 602 (Alaska 1972), Quoting Preferred General Agency of Alaska, Inc. v. Raffetto, 391 P.2d 951, 954 (Alaska 1964); Hughes, Award of Attorney's Fees in Alaska: An Analysis of Rule 82, 4 UCLA-Alaska L.Rev. 129, 148 (1974). In comparison, the explicit purpose of the fee shifting provision in the federal statute, 42 U.S.C. § 1988, is to encourage meritorious claims which might not otherwise be brought. ⁶ We find it convenient, therefore, to discuss the state and federal questions separately.

ALASKA CIVIL RULE 82

Civil Rule 82 provides for the awarding of attorney's fees to the prevailing party. We defined the term "prevailing party" in Buza v. Columbia Lumber Co., 395 P.2d 511, 514 (Alaska 1964):

. . . (I)t has been established by case law that the prevailing party to a suit is the one who successfully prosecutes the action or successfully defends against it, prevailing on the main issue, even though not to the extent of the original contention. He is the one in whose favor the decision or verdict is rendered and the judgment entered. (footnotes omitted)

Failure to recover the full measure of relief sought or to prevail on all the issues raised does not necessarily preclude that party from "prevailing party" status, provided that he is successful with regard to the "main issue in the action." Cooper v. Carlson 511 P.2d 1305, 1308 (Alaska 1973); Buza v. Columbia Lumber Co., supra. However, there is no "immutable rule that the party who obtains an affirmative recovery must be considered the prevailing party." Owen Jones & Sons, Inc. v. C. R. Lewis Co., 497 P.2d 312, 313-14 (Alaska 1972) (footnote omitted). See Continental Insurance Co. v. U. S. Fidelity and Guarantee Co., 552 P.2d 1122, 1125 (Alaska 1976).

Appellees suggest that where the issues have not been fully litigated, ⁷ the prevailing party should be determined by considering the likelihood of success on the merits. On several occasions the trial court, expressing its opinion, commented that appellants' equal protection argument was not "as insubstantial as the state would contend" and that appellants had "made a compelling case." However, ruling from the bench in favor of the appellees after the second argument, the court concluded:

"it would not be appropriate to term the plaintiffs in this case, in light of the settlement and all surrounding circumstances, a prevailing party without some further indication that had the case gone to trial their legal position, as opposed to the relief they requested, would have been vindicated."

In its final order the court stated: "The existing record would not support a finding that the plaintiffs were likely to prevail on their State or Federal constitutional arguments."

Appellants submit that the substantial relief they obtained qualifies them as the "prevailing party." A number of facts lend support for their position. The consent decree provides a comprehensive plan for the provision of local secondary schools including $20 million in construction funds for these schools. The regulations drafted by the plaintiffs and voluntarily enacted by the state are incorporated in the decree. The court retains jurisdiction over the case until the program is substantially completed, requiring progress reports every four months. Because the funding to implement the agreement is contingent upon the passage of a bond issue, the consent decree states that if the bond issue should fail, and the decree become void, that the plaintiffs retain their legal remedies. Additionally, the parties stipulated that "the facts set forth in the Statement of Agreed Facts be considered established and the parties shall not relitigate such facts."

To refute appellants' claim of "prevailing party" status, the appellees contend that they have planned to provide local secondary school programs since 1970, and that the settlement of the case is the result of political, rather than legal, considerations and efforts. They maintain that the consent decree was merely a recognition of the termination of the suit.

Although the prevailing party is the party who prevails on the suit as a whole, Fairbanks Builders, Inc. v. Sandstrom Plumbing & Heating, Inc., 555 P.2d 964, 967 (Alaska 1976), where each party has prevailed on a main issue the court retains discretion to refrain from characterizing either as the prevailing party, and a denial of attorney costs and fees in such instances is appropriate. City of Valdez v. Valdez Development Co.,...