BRANDENBURGER v. THOMPSON

OPINION

EUGENE A. WRIGHT, Circuit Judge:

Brandenburger appeals from a denial of his motion for reasonable attorneys' fees following the entry of a consent judgment. We reverse and remand.

In Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969), the Supreme Court ruled unconstitutional state statutes denying welfare benefits to residents who had not resided within the state for at least one year immediately preceding their application for assitance. Two years later, in 1971, Hawaii established as a condition of eligibility for state welfare benefits a one-year durational residency requirement substantially identical to those struck down in Shapiro. Relying on Shapiro, Brandenburger brought this suit under 42 U.S.C. § 1983, for himself and all others similarly situated, challenging the constitutionality of the Hawaii statute and seeking injunctive relief against the defendant, the Director of Hawaii's Department of Social Services. Prior to the entry of judgment, he also moved for an award of reasonable attorneys' fees relying on the dual bases of Hawaii's alleged bad faith and the "private attorney general" doctrine.

Prior to trial, the defendant abandoned his position and stipulated to judgment in favor of plaintiff. Plaintiff thereafter moved for attorneys' fees, the question was reserved for decision and, after a hearing, the motion was denied. The district judge filed no written opinion, but his oral comments reveal two bases for his decision. First, he believed that he should not award attorneys' fees to the plaintiff since the defendant had not acted in bad faith. Second, he believed that an award of attorneys' fees to Brandenburger would be improper since he was represented, without charge, by the American Civil Liberties Union.1 Brandenburger's appeal is from that portion of the judgment denying his motion for reasonable attorneys' fees.2

I.

Although American courts historically have not awarded attorneys' fees to successful litigants without explicit statutory or contractual authority, see Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717-718, 87 S.Ct. 1404, 18 L.Ed.2d 475 (1967); Ehrenzweig, Reimbursement of Counsel Fees in the Great Society, 54 Calif.L.Rev. 792, 793 (1966),3 federal courts have equitable power, in the absence of legislation, to award attorneys' fees in the interest of justice. Hall v. Cole, 412 U.S. 1, 4-5, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973); Mills v. Electric Auto-Lite Co., 396 U.S. 375, 391-392, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970). Thus, even though § 1983 does not explicitly authorize an award of attorneys' fees, the court's equitable power may be invoked to make such an award in appropriate cases. See e. g., Sims v. Amos, D.C., 340 F.Supp. 691 (Three-Judge Court, per curiam), aff'd mem. Amos v. Sims, 409 U.S. 942, 93 S.Ct. 290, 34 L. Ed.2d 215 (1972) (§ 1983); cf. Knight v. Auciello, 453 F.2d 852 (1st Cir. 1972) (§ 1982); Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir. 1971) (§ 1982).4 And an award of attorneys' fees assessed against a state official acting in his or her official capacity is not proscribed by the Eleventh Amendment. Sims v. Amos, supra, 340 F.Supp., at 694 n. 8.

We next consider whether the instant case is an appropriate one to exercise the court's power to award attorneys' fees. Plaintiff argues that it is, relying on two bases. First, he argues that Hawaii acted in bad faith. Second, he contends that attorneys' fees should be awarded since he acted as a "private attorney general." Since we agree with plaintiff's latter contention, we need not reach and do not consider the issue of bad faith.

Under the "private attorney general" doctrine, an award of attorneys' fees should be made to a litigant who (1) furthers the interests of a significant class of persons by (2) effectuating a strong congressional policy. The award serves the purpose of encouraging such public-minded suits. See Sims v. Amos, supra, at 694-695; Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968); Miller v. Amusement Enterprises, Inc., 426 F.2d 534 (5th Cir. 1970); Lee v. Southern Home Sites, supra; La Raza Unida v. Volpe, 57 F.R.D. 94 (N.D.Cal.1972). Under this doctrine, the good or bad faith of the defendant is irrelevant. Sims v. Amos, supra 340 F. Supp. at 694-695.

The instant case falls squarely within the ambit of the "private attorney general" doctrine. The plaintiff benefited a significant class, persons who are both potential welfare recipients and interstate travelers, by vindicating the federally protected right of interstate travel free from the forfeiture of welfare benefits. And, since § 1983 expresses a strong policy of vindicating federal constitutional rights against infringement by state officials, id. at 694, the plaintiff furthered congressional policy by challenging the Hawaii statute.

Because the plaintiff met the requirements of a "private attorney general," the district court should have granted his motion for attorneys' fees.5 While an award of attorneys' fees is generally discretionary, see e. g., Hall v. Cole, supra 412 U.S. at 15, 93 S.Ct. 1943, when a litigant qualifies as a "private attorney general," "the award loses much of its discretionary character and becomes a part of the effective remedy a court should fashion to encourage public-minded suits . . . and to carry out congressional policy." Sims v. Amos, supra 340 F.Supp. at 694, citing Mills v. Electric Auto-Lite Co., supra; Lee v. Southern Home Sites, supra. Cf. also, Anderson v. Pass Christian Isles Golf Club, Inc., 488 F.2d 855, 858 (5th Cir. 1974). Therefore, a remand on the issue whether an award should be given in this case is unnecessary.

II.

The district court's second basis for denying plaintiff's motion for attorneys' fees was that they should not be awarded to a litigant who was represented without charge by a public interest group, here the American Civil Liberties Union. But the fact that the plaintiff was not obligated to pay the ACLU for its services is not a bar to an award of attorneys' fees. All that is required is the existence of an attorney-client relationship. See Miller v. Amusement Enterprises, Inc., supra.6

The policy underlying the "private attorney general" doctrine supports this conclusion. It is true that the prospect of attorneys' fees does not discourage the litigant from bringing suit when legal representation is provided without charge. But the entity providing the free legal services will be so discouraged, and an award of attorneys' fees encourages it to bring public-minded suits when so requested by litigants who are unable to pay. Thus, an award of attorneys' fees to the organization providing free legal services indirectly serves the same purpose as an award directly to a fee paying litigant. See Note, Awards of Attorneys' Fees to Legal Aid Offices, 87 Harv.L.Rev. 411 (1973). Of course, the award should be made directly to the organization providing the services to ensure against a windfall to the litigant. Miller v. Amusement Enterprises, Inc., supra 426 F.2d at 539.

In so far as the judgment of the district court did not award attorneys' fees to the plaintiff, it is reversed. The case is remanded to the district court for a determination of the amount of a reasonable fee to be paid to the ACLU.7

Reversed and remanded.

KOELSCH, Circuit Judge (specially concurring):

The majority rests decision upon the easy pronouncement that "under the `private attorney general' doctrine, an award of attorneys' fees should be made to a litigant who (1) furthers the interests of a significant class of persons by (2) effectuating a strong congressional policy". The many cases and commentators indicate no such general test, and I decline to uncritically join in giving it currency. Instead, in reaching my conclusion, I choose to follow a well established rule having clear guideposts.

The material facts are undisputed. The Legislature of Hawaii, at its regular session in 1971, enacted a bill which imposed a one-year durational residency requirement as a condition of eligibility for public assistance benefits provided by the State.

Shortly afterward Brandenburger, personally and as representative of a purported class, commenced this suit under 42 U.S.C. § 1983, against the State Director of the Department of Social Services, whose duty it was to administer the statute. Relying upon Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969), he charged that the one-year requirement violated the equal protection provision of the Fourteenth Amendment; he requested injunctive relief and, in addition, a monetary allowance for the services of his attorneys in the litigation.

At the request of the district judge, a three-judge court was duly created to hear and determine the cause; but before the matter went to trial, he issued an order to the defendant to show cause why, in the light of the rule in Shapiro, defense of the action would not be frivolous. Defendant immediately capitulated and stipulated to entry of a judgment striking down the residency requirement; however, the matter of attorneys' fees was reserved for decision.

The judge denied the fees. His reasons are not entirely clear. He filed no written opinion, but his oral observations tend to indicate that decision was rested variously upon a supposed lack of power, a view that although power existed, no award should be made because no bad faith was shown, or a belief that an allowance of attorneys' fees was largely impermissible where, as here, the litigation was prosecuted without charge to Brandenburger by the A.C.L.U. This appeal followed.

(1) Section 1983, upon which plaintiffs' action was predicated, contains no provision for attorneys' fees. However, this does not end the inquiry. The Supreme Court, only recently, in Hall v. Cole, 412 U.S. 1, 4-5, 93 S.Ct. 1943, 1945, 36 L.Ed.2d 702 (1973), has carefully pointed out that:

And a number of federal courts have, and I think correctly, held that this "inherent equitable power" to award attorneys' fees extends to suits under Section 1983 and related statutes. See Knight v. Auciello, 453 F.2d 852 (1st Cir. 1972); Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir. 1971); Cooper v. Allen, 467 F.2d 836 (5th Cir. 1972); Callahan v. Wallace, 466 F.2d 59 (5th Cir. 1972); Donahue v. Staunton, 471 F.2d 475 (7th Cir. 1972). See also, Kelly v. Guinn, 456 F.2d 100 (9th Cir. 1972). Thus I conclude that, to the extent judgment was predicated upon a lack of power, the court was in error.

(2) Whether attorneys' fees should be awarded in a proper case, of course, involves a determination of the equities and, generally, an exercise of discretion.

Here, the district court concluded that defendant had not acted in bad faith. Such a finding would perhaps be correct with respect to defendant's conduct in the lawsuit itself. But the real inquiry, as Brandenburger argues, should be upon the defendant's conduct which precipitated this litigation, with particular attention to the question whether Shapiro was dispositive and, if so, whether defendant's failure to follow that decision constituted bad faith. I conclude that the answer is "yes."

In Shapiro, the Supreme Court struck down statutes of several jurisdictions1 which contained requirements identical to those appearing in the Hawaii statute. The Court's rationale, in substance, was that the durational residency requirement violated the Equal Protection Clause of the Fourteenth Amendment, because it created an impermissible classification between short- and longer-duration residents which was not justified by a compelling state interest. In answer to the defendant's argument that discouraging the influx of potential welfare recipients protected the fiscal integrity of their welfare programs, and that this purpose constituted such a compelling interest, the Court responded:

The Court further emphasized:

I cannot accept the defendant's argument that the justification for the Hawaii residency requirement differs in any material respect from that unsuccessfully asserted by the defendants in Shapiro. True, the Hawaii legislative committee stated that it "has . . . carefully considered [its] legislative findings in light of . . . Shapiro v. Thompson * * *. If the sole purpose of the waiting-period requirement is designed to serve no greater purpose than to deter in-migration to Hawaii, it would seem, then, to be clearly unconstitutional." However, the Committee, having paid lip-service to Shapiro, went on to say that:

In substance, this latter statement offered the same reasons in support of the Hawaii statute as those emphatically rejected by the Court in Shapiro. As in Shapiro, the Hawaii statute created what "in effect was [a] nonrebuttable presumption that every applicant for assistance in his first year of residence came to the jurisdiction . . ." for the purpose of collecting welfare benefits to which he should not be entitled. Shapiro, supra, 394 U.S. at 631, 89 S.Ct. at 1330. If the State's goal is deterring fraud, "it is unreasonable to accomplish this objective by the blunderbuss method of denying assistance to all indigent newcomers for an entire year." 394 U. S. at 637, 89 S.Ct. at 1333. Neither can the State's other stated objective, to-wit, to encourage new residents to seek work, justify the residency requirement. 394 U.S. at 637-638, 89 S.Ct. at 1333.2

Moreover, the fact should again be noted that the Hawaii statute was not a pioneer; nor could the defendant justify his refusal to honor claims in the reasonable belief that the statute was valid. In sum, the conclusion is manifest that defendant's enforcement of the statute, in the face of Shapiro, constituted bad faith as a matter of law.3

(3) That Brandenburger was under no legal obligation to pay his attorneys a fee for services is no bar to an award.

As the Fifth Circuit pointed out in Miller v. Amusement Enterprises, Inc., 426 F.2d 534 (5th Cir. 1970):

See also, Sanders v. Russell, 401 F.2d 241 (5th Cir. 1968); Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir. 1971); Lea v. Cone Mills Corp., 438 F.2d 86 (4th Cir. 1971). Since it is the policy of the courts in such cases to grant fee awards, at least in part, to encourage the bringing of such lawsuits, I agree with the Fifth Circuit that it should be the attorney-client relationship, rather than any formal fee arrangements, which affords the basis for fees in an otherwise proper case. To prevent any unjust enrichment of a party, the court can always exercise its equity powers to "assure that the fees allowed are to reimburse and compensate for legal services rendered and will not go to the litigants . . ." Miller, supra, 426 F.2d at 539.

In sum I conclude that the district court possessed the power to award counsel fees in this case; that the relationship between plaintiff and his attorneys was such as to permit the award of such fees; that the refusal to make an allowance constituted an abuse of discretion;5 that the judgment, so far as it disallows attorneys' fees, should be accordingly reversed; and the cause remanded to the district court with directions to determine a reasonable fee and to enter judgment for plaintiff.