Venegas v. Mitchell
| Decision Date | 18 April 1990 |
| Docket Number | No. 88-1725,88-1725 |
| Parties | Juan Francisco VENEGAS, Petitioner v. Michael R. MITCHELL |
| Court | U.S. Supreme Court |
In connection with petitioner Venegas' civil rights suit under 42 U.S.C. § 1983, he and respondent Mitchell, an attorney, entered into a contingent-fee contract providing that, inter alia, Mitchell would receive a percentage of any gross recovery, which would be offset by any court-awarded attorney's fees, and would be allowed to intervene in the action to protect the fee award. Venegas obtained a judgment and was awarded attorney's fees, $75,000 of which was attributable to work done by Mitchell. The fees were awarded under § 1988, which enables civil rights plaintiffs to employ reasonably competent lawyers without cost to themselves by authorizing the payment of a "reasonable attorney's fee" by a losing party to a prevailing party. After Venegas obtained different counsel to handle his appeal, Mitchell filed a motion for leave to intervene, requesting that the District Court confirm a lien on the judgment for $406,000 in fees that were purportedly due him under the contract. Among other things, the court held that he was not entitled to intervene, but it refused to disallow or reduce the contingent fee, holding that it was reasonable and not a windfall to Mitchell. The Court of Appeals reversed the District Court's holding denying intervention, but agreed that § 1988 does not prevent a lawyer from collecting a reasonable contingent fee even if it exceeds the statutory fee award and that Mitchell's fee was reasonable and not a windfall.
Held:
1. Section 1988 does not invalidate contingent-fee contracts that would require a prevailing plaintiff to pay his attorney more than the statutory award against the defendant. Neither the section's language nor its legislative history supports the view that it prevents an attorney and client from entering into a contingent-fee agreement. Moreover, this Court, in holding that it is the prevailing party, rather than the lawyer, who is eligible for fees, has recognized that it is the party's right to waive, settle, or negotiate that eligibility, Evans v. Jeff D., 475 U.S. 717, 730, 106 S.Ct. 1531, 1538, 89 L.Ed.2d 747 and has implicitly accepted that statutory fee awards can coexist with private fee arrangements, cf., Blanchard v. Bergeron, 489 U.S. 87, 94-95, 109 S.Ct. 939, 944-945, 103 L.Ed.2d 67; Blum v. Stenson, 465 U.S. 886, 894-895, 104 S.Ct. 1541, 1546-1547, 79 L.Ed.2d 891. Since a § 1983 cause of action also belongs to, and can be waived by, the injured party, a contrary finding would place these plaintiffs in the peculiar position of having more freedom to negotiate a waiver of their causes of action with their adversaries than a fee with their own attorneys. The fact that Blanchard v. Bergeron, supra, does not permit a contingent-fee agreement to impose a ceiling on the amount of the statutory fee award does not mean that such an agreement should also be ignored for the benefit of the client so that he need pay only the statutory award. Blanchard dealt with what the losing party must pay the plaintiff, not with the contractual obligations of plaintiffs and their attorneys, and entitlement to a § 1988 award does not belong to the attorney. Also unpersuasive is Venegas' argument that requiring him to pay more than the reasonable fee authorized by Congress would greatly reduce his recovery and would impose a cost on him that the defendant should pay, since the amount payable under a fee agreement is not necessarily measured by the "reasonable attorney's fee" that a defendant must pay under § 1988, and since depriving prevailing plaintiffs of the option of promising to pay more to secure their counsel of choice would not further § 1988's general purpose of enabling them to secure competent counsel. Pp. 86-90.
2. Venegas offers no reason to accept his contention, rejected by the lower courts, that, even if contingent fees exceeding statutory awards are not prohibited per se by § 1988, the fee in this case is unreasonable under both federal and state law. P. 90.
867 F.2d 527 (CA9 1989), affirmed.
Richard M. Mosk, Los Angeles, Cal., for petitioner.
Charles A. Miller, for respondent.
Under 42 U.S.C. § 1988 (1982 ed.), a court may award a reasonable attorney's fee to the prevailing party in civil rights cases. We granted certiorari to resolve a conflict among the Courts of Appeals as to whether § 1988 invalidates contingent-fee contracts that would require a prevailing civil rights plaintiff to pay his attorney more than the statutory award against the defendant.1
This dispute arises out of an action brought by petitioner Venegas under 42 U.S.C. § 1983 (1982 ed.) in the United States District Court for the Central District of California, alleging that police officers of the city of Long Beach, California, falsely arrested Venegas and conspired to deny him a fair trial through the knowing presentation of perjured testimony. After an order of the District Court dismissing Venegas' complaint as barred by the statute of limitations was reversed by the Court of Appeals,2 Venegas retained respondent Mitchell as his attorney. Venegas and Mitchell signed a contingent-fee contract providing that Mitchell would represent Venegas at trial for a fee of 40% of the gross amount of any recovery. The contract gave Mitchell "the right to apply for and collect any attorney fee award made by a court," App. to Brief in Opposition 3a, prohibited Venegas from waiving Mitchell's right to court-awarded attorney's fees, and allowed Mitchell's intervention to protect his interest in the fee award. The contract also provided that any fee awarded by the court would be applied, dollar for dollar, to offset the contingent fee. The contract obligated Mitchell to provide his services for one trial only and stated that "[i]n the event there is a mistrial or an appeal, the parties may mutually agree upon terms and conditions of [Mitchell's] employment, but are not obligated to do so." Id., at 1a. Venegas subsequently consented to the association of co-counsel with the understanding that co-counsel would share any contingent fee equally with Mitchell.
Venegas obtained a judgment in his favor of $2.08 million. Mitchell then moved for attorney's fees under § 1988, and on August 15, 1986, the District Court entered an order awarding Venegas $117,000 in attorney's fees, of which $75,000 was attributable to work done by Mitchell.3 The District Court calculated the award for Mitchell's work by multiplying a reasonable hourly rate by the number of hours Mitchell expended on the case, and then doubling this lodestar figure to reflect Mitchell's competent performance. App. to Pet. for Cert. 28a. Negotiations between attorney and client about the possibility of Mitchell's representing Venegas on appeal broke down, and on September 14, 1986, Mitchell signed a stipulation withdrawing as counsel of record. Venegas obtained different counsel for the appeal.4
Mitchell then filed a motion for leave to intervene, which requested that the District Court confirm a lien on the judgment for the fees purportedly due him under the contingent-fee contract in the amount of $406,000. The District Court held that Mitchell had not established his entitlement either to intervention as of right under Federal Rule of Civil Procedure 24(a)(2) or to permissive intervention under Rule 24(b)(2), primarily because the court could discern no connection between Mitchell's asserted rights under the fee contract and the substance of Venegas' civil rights action. App. to Pet. for Cert. 23a. The court went on to state its view, however, that the contract did not expressly provide for a lien and declined to decide whether the contract gave rise to an implied equitable lien on Venegas' recovery because the judgment had been stayed pending appeal. The court remarked that Mitchell could bring an action in state court to establish his lien, if and when the judgment for Venegas became final. Id., at 26a. The District Court refused to disallow or reduce the contingent fee claimed by Mitchell, holding that in this case the fee contracted for was reasonable and not a windfall for the attorney. Id., at 27a-29a.
On appeal, the Ninth Circuit ruled that the District Court had erred in denying Mitchell permissive intervention, 867 F.2d 527, 531 (1989), but agreed, contrary to Venegas' submission, that § 1988 does not prevent the lawyer from collecting a reasonable fee provided for in a contingent-fee contract even if it exceeds the statutory award, id., at 533. The Court of Appeals also agreed with the District Court that the fee provided for by the contract in this case was reasonable and not a mere windfall to Mitchell. Because the judgment in Venegas' favor had by that time been affirmed, the court remanded to the District Court to act on the merits of Mitchell's motion to confirm a lien on the recovery. We granted certiorari, 493 U.S. 806, 110 S.Ct. 46, 107 L.Ed.2d 15 (1989).
Section 1988 states in pertinent part that "[i]n any action or proceeding to enforce a provision of sections 1981, 1982, 1983, 1985, and 1986 of this title, . . . the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs." The section by its terms authorized the trial court in this case to order the defendants to pay to Venegas, the prevailing party, a reasonable attorney's fee. The aim of the section, as our cases have explained, is to enable civil rights plaintiffs to employ reasonably competent lawyers without cost to themselves if they prevail. It is likely that in many, if not most, cases a lawyer will undertake a civil rights case on the express or implied promise of the plaintiff to pay the lawyer the...
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