No. 72-630
Argued: March 21, 1973Decided: May 21, 1973
- 1. Respondent’s suit under 102 of the LMRDA vindicated not only his own rights of free speech guaranteed by the statute but furthered the interests of the union and its members as well. As a result, the award to respondent of attorneys’ fees under these circumstances comported with the trial court’s inherent equitable power of making such an award whenever “overriding considerations indicate the need for such a recovery.” Mills v. Electric Auto-Lite Co., 396 U.S. 375, 391 -392, Pp. 4-9.
- 2. The allowance of counsel fees to the successful plaintiff in a suit brought under 102 is not precluded by that statutory provision and, indeed, is supported by the legislative history of the LMRDA. Pp. 9-14.
-
- 3. Under all the facts of the case, the District Court did not
- abuse its discretion in awarding counsel fees to respondent. Pp. 14-15.
462 F.2d 777, affirmed.
BRENNAN, J., delivered the opinion of the Court, in which BURGER, C. J., and DOUGLAS, STEWART, BLACKMUN, and POWELL, JJ., joined. WHITE, J., filed a dissenting opinion, in which REHNQUIST, J., joined, post, p. 16. MARSHALL, J., took no part in the consideration or decision of the case.
Howard Schulman argued the cause and filed a brief for petitioners.
Burton H. Hall argued the cause and filed a brief for respondent. *
This case requires us to consider the propriety of an award of counsel fees to a successful plaintiff in a suit brought under 102 of the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 523, 29 U.S.C. 412. 1 On August 6, 1962, at a regular meeting of the membership of petitioner Seafarers International Union of North America – Atlantic, Gulf, Lakes and Inland Waters District, respondent introduced a set of resolutions alleging various instances of undemocratic actions and shortsighted policies on the part of union officers. [412 U.S. 1, 3] The resolutions were defeated and, on November 26, 1962, respondent was expelled from the union on the ground that his presentation of the resolutions violated a union rule proscribing ‘deliberate or malicious vilification with regard to the execution or the duties of any office or job.” After exhausting his intra-union remedies, respondent filed this suit under 102 of the LMRDA, claiming that his expulsion under these circumstances violated his right of free speech as secured by 101 (a) (2) of the Act, 29 U.S.C. 411 (a) (2). 2
On May 27, 1964, the United States District Court for the Eastern district of New York issued a temporary injunction restoring respondent’s membership in the union, and the United States Court of Appeals for the Second Circuit affirmed. 339 F.2d 881 (1965). Some five years later, the case came on for trial and the District Court, finding a violation of respondent’s rights under 101 (a) (2), ordered him permanently reinstated to membership in the union and, although denying respondent’s damages claims. 3 granted him counsel fees in the sum of $5,500 against the union. The Court of [412 U.S. 1, 4] Appeals affirmed in all respects, 462 F.2d 777 (1972). We granted certiorari limited to the questions whether (1) an award of attorneys’ fees is permissible under 102 of the LMRDA, and (2) if so, whether such an award under the facts of this case constituted an abuse of the District Court’s discretion. 409 U.S. 1074 . We affirm.
I
Although the traditional American 4 rule ordinarily disfavors the allowance of attorneys’ fees in the absence of statutory 5 or contractual authorization, 6 federal courts, [412 U.S. 1, 5] in the exercise of their equitable powers, may award attorneys’ fees when the interests of justice so require. Indeed, the power to award such fees “is part of the original authority of the chancellor to do equity in a particular situation,” Sprague v. Ticonic National Bank, 307 U.S. 161, 166 (1939), and federal courts do not hesitate to exercise this inherent equitable power whenever “overriding considerations indicate the need for such a recovery.” Mills v. Electric Auto-Lite Co., 396 U.S. 375, 391 -392 (1970); see Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718 (1967).
Thus, it is unquestioned that a federal court may award counsel fees to a successful party when his opponent has acted “in bad faith, vexatiously, wantonly, or for oppressive reasons.” 6 J. Moore, Federal Practice § 54.77 2., p. 1709 (2d ed. 1972); see, e. g., Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 n. 4 (1968); Vaughan v. Atkinson, 369 U.S. 527 (1962); Bell v. School Bd. of Powhatan County, 321 F.2d 494 (CA4 1963); Rolax v. Atlantic Coast Line R. Co., 186 F.2d 473 (CA4 1951). In this class of cases, the underlying rationale of “fee shifting” is, of course, punitive, and the essential element in triggering the award of fees is therefore the existence of “bad faith” on the part of the unsuccessful litigant.
Another established exception involves cases in which the plaintiff’s successful litigation confers “a substantial benefit on the members of an ascertainable class, and where the court’s jurisdiction over the subject matter of the suit makes possible an award that will operate to spread the costs proportionately among them.” Mills v. Electric Auto-Lite, supra, at 393-394. 7 “Fee shifting” [412 U.S. 1, 6] is justified in these cases, not because of any “bad faith” of the defendant but, rather, because “[t]o allow the others to obtain full benefit from the plaintiff’s efforts without contributing equally to the litigation expenses would be to enrich the others unjustly at the plaintiff’s expense.” Id., at 392; see also Fleischmann Distilling Corp. v. Maier Brewing Co., supra, at 719; Trustees v. Greenough, 105 U.S. 527, 532 (1882). Thus, in Mills v. Electric Auto-Lite Co., supra, we approved an award of attorneys’ fees to successful shareholder plaintiffs in [412 U.S. 1, 7] a suit brought to set aside a corporate merger accomplished through the use of a misleading proxy statement in violation of 14 (a) of the Securities Exchange Act of 1934. 48 Stat. 895. 15 U.S.C. 78n (a). In reaching this result, we reasoned that, since the dissemination of misleading proxy solicitations jeopardized important interests of both the corporation and “`the stockholders as a group.'” 8 the successful enforcement of the statutory policy necessarily “rendered a substantial service to the corporation and its shareholders.” Mills v. Electric Auto-Lite Co., supra, at 396. Under these circumstances, reimbursement of the plaintiffs’ attorneys’ fees out of the corporate treasury simply shifted 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.” Id., at 397.
The instant case is clearly governed by this aspect of Mills. The Labor-Management Reporting and Disclosure Act of 1959 was based, in part, on a congressional finding “from recent investigations in the labor and management fields, that there have been a number of instances of breach of trust, corruption, disregard of the rights of individual employees, and other failures to observe high standards of responsibility and ethical conduct . . . .” 29 U.S.C. 401 (b). In an effort to eliminate these abuses, Congress recognized that it was imperative that all union members be guaranteed at least “minimum standards of democratic process. . . .” 9 Thus, Title I 10 of the LMRDA – the “Bill of Rights of Members of Labor Organizations” – was specifically designed to promote the “full and active participation [412 U.S. 1, 8] by the rank and file in the affairs of the union,” 11 and, as the Court of Appeals noted, the rights enumerated in Title I 12 were deemed “vital to the independence of the membership and the effective and fair operation of the union as the representative of its membership.” 462 F.2d, at 780. See also International Assn. of Machinists v. Nix, 415 F.2d 212 (CA5 1969); Salzhandler v. Caputo, 316 F.2d 445 (CA2 1963).
Viewed in this context, there can be no doubt that, by vindicating his own right of free speech guaranteed by 101 (a) (2) of Title I of the LMRDA, respondent necessarily rendered a substantial service to his union as an institution and to all of its members. When a union member is disciplined for the exercise of any of the rights protected by Title I, the rights of all members of the union are threatened. And, by vindicating his own right, the successful litigant dispels the “chill” cast upon the rights of others. Indeed, to the extent that such lawsuits contribute to the preservation of union democracy, they frequently prove beneficial “not only in the immediate impact of the results achieved but in their implications for the future conduct of the union’s affairs.” Yablonski v. United Mine Workers of America, 150 U.S. App. D.C. 253, 260, 466 F.2d 424, 431 (1972). Thus, as in Mills, reimbursement of respondent’s attorneys’ fees [412 U.S. 1, 9] out of the union treasury 13 simply 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.” Mills v. Electric Auto-Lite Co., supra, at 397. See also Yablonski v. United Mine Workers of America, supra; Robins v. Schonfeld, 326 F. Supp. 525 (SDNY 1971); Cefalo v. International Union of District 50 United Mine Workers, 311 F. Supp. 946 (DC 1970); Sands v. Abelli, 290 F. Supp. 677 (SDNY 1968). We must therefore conclude that an award of counsel fees to a successful plaintiff in an action under 102 of the LMRDA falls squarely within the traditional equitable power of federal courts to award such fees whenever “overriding considerations indicate the need for such a recovery.” Mills v. Electric Auto-Lite Co., supra, at 391-392.
II
This does not end our inquiry, however, for even where “fee-shifting” would be appropriate as a matter of equity, Congress has the power to circumscribe such relief. In Fleischmann Distilling Corp. v. Maier Brewing Co., supra, for example, we held that 35 of the Lanham Act, 60 Stat. 439, 15 U.S.C. 1117, precluded an award of attorneys’ fees as a separate element of recovery in a suit for deliberate infringement of a trademark. In reaching that result, we reasoned that, since 35 “meticulously detailed the remedies available to a plaintiff [412 U.S. 1, 10] who proves that his valid trademark has been infringed,” Congress must have intended the express remedial provisions of 35 “to mark the boundaries of the power to award monetary relief in cases arising under the Act.” Id., at 719, 721. Petitioners contend that this reasoning dictates a similar conclusion with respect to 102 of the LMRDA. We do not agree. Unlike 35 of the Lanham Act, which specifically “provided not only for injunctive relief, but also for compensatory recovery measured by the profits that accrued to the defendant by virtue of his infringement, the costs of the action, and damages which may be trebled.” 14 102 of the LMRDA broadly authorizes the courts to grant “such relief (including injunctions) as may be appropriate.” 29 U.S.C. 412. Thus, 102 does not “meticulously detail the remedies available to a plaintiff,” and we cannot fairly infer from the language of that provision an intent to deny to the courts the traditional equitable power to grant counsel fees in “appropriate” situations.
Petitioners argue further, however, that because Congress expressly authorized the recovery of counsel fees in 201 (c) and 501 (b) of the LMRDA, 29 U.S.C. 431 (c), 501 (b), the absence of a similar express provision in 102 indicates an intent to preclude “fee-shifting” in suits brought under that section. Sections 201 (c) and 501 (b), which are not a part of Title I, deal with narrowly defined problems under the Act, and specifically authorize such limited remedies as an examination of the union’s books and records and an accounting. 15 By contrast, 102 was premised upon the fact [412 U.S. 1, 11] that Title I litigation necessarily demands that remedies “be tailored to fit facts and circumstances admitting of almost infinite variety,” 16 and 102 was therefore cast as a broad mandate to the courts to fashion “appropriate” relief. Indeed, any attempt on the part of Congress to spell out all of the remedies available under 102 would create the “danger that those [remedies] not listed might be proscribed with the result that the courts would be fettered in their efforts to `grant relief according to the necessities of the case.'” Gartner v. Soloner, 384 F.2d 348, 353 (CA3 1967). See Fleischmann Distilling Corp. v. Maier Brewing Co., supra. Confronted with a virtually identical situation in Mills, we explained that the inclusion in certain sections of the Securities Exchange Act of 1934 of express provisions for recovery of attorneys’ fees “should not be read as denying to the courts the power to award counsel fees in suits under other sections of the Act when circumstances make such an award appropriate . . . .” 396 U.S., at 390 -391. That reasoning is equally persuasive today. 17
Finally, petitioners call our attention to two isolated comments in the legislative history of Title I – one by Senator Goldwater in his testimony before a House Committee 18 [412 U.S. 1, 12] and the other contained in a dissenting statement to a House Committee Report 19 – expressing the fear that, in the absence of a specific provision for the award of counsel fees, such relief would be unavailable in suits brought under 102. Although these statements plainly indicate “a feeling by some members of the Congress that it would have been desirable and prudent to spell out unmistakably a right to attorney’s fees,” they “hardly amount to a definitive and absolute setting of the Congressional face against the giving of such incidental relief by the courts where compatible with sound and established equitable principles.” Yablonski v. United Mine Workers of America, 150 U.S. App. D.C., at 258, 466 F.2d, at 429. See Gartner v. Soloner, supra, at 352. Indeed, both of these comments expressly favored the allowance of counsel fees in Title I litigation, and there is no suggestion anywhere in the [412 U.S. 1, 13] legislative history that even a single member of Congress was opposed to such relief or desired the words “such relief . . . as may be appropriate” to restrict the historic equity powers of the federal courts. On the contrary, there are numerous expressions by sponsors and other supporters of the Act indicating that 102 was intended to afford the courts “a wide latitude to grant relief according to the necessities of the case,” 20 and “to give such relief as [the court] deems equitable under all the circumstances.” 21
Moreover, the award of attorneys’ fees under 102 is clearly consonant with Congress’ express desire to adopt “legislation that will afford necessary protection of the rights and interests of employees and the public generally . . . .” 29 U.S.C. 401 (b). As the Court of Appeals recognized:
- “Not to award counsel fees in cases such as this would be tantamount to repealing the Act itself by frustrating its basic purpose. It is difficult for individual members of labor unions to stand up and fight those who are in charge. The latter have the treasury of the union at their command and the paid union counsel at their beck and call while the member is on his own. . . . An individual union member could not carry such a heavy financial burden. Without counsel fees the grant of federal jurisdiction is but a gesture for few union members could avail themselves of it.” 462 F.2d, at 780-781.
Thus, it is simply “untenable to assert that in establishing the bill of rights under the Act Congress intended to have those rights diminished by the unescapable fact that [412 U.S. 1, 14] an aggrieved union member would be unable to finance litigation . . . .” Gartner v. Soloner, supra, at 355. See Yablonski v. United Mine Workers of America, supra, at 259, 466 F.2d, at 430; Robins v. Schonfeld, 326 F. Supp., at 531; Sands v. Abelli, 290 F. Supp., at 686; cf. Newman v. Piggie Park Enterprises, Inc., 390 U.S., at 402 . We therefore hold that the allowance of counsel fees to the successful plaintiff in a suit brought under 102 of the LMRDA is consistent with both the Act and the historic equitable power of federal courts to grant such relief in the interests of justice.
III
Finally, petitioners maintain that the award of counsel fees to respondent under the facts of this case constituted an abuse of the District Court’s discretion. Specifically, petitioners argue that the District Court’s finding that some of respondent’s actions “were, in part, motivated by [his] political ambitions for union office” represents a finding of “bad faith” on the part of respondent. The District Court clearly rejected the “logic” of this contention, and we agree. Title I of the LMRDA was specifically designed to protect the union member’s right to seek higher office within the union, 22 and we can hardly accept the proposition that the exercise of that right is tantamount to “bad faith.” See Yablonski v. United Mine Workers of America, supra, at 259-260, 466 F.2d, at 430-431. [412 U.S. 1, 15]
Petitioners also contend that the award of attorneys’ fees in this case was improper because the District Court, in denying respondent’s claim for punitive damages, found that “the defendants, in good faith, believed that they had a right to charge and discipline [respondent] for his actions.” It is clear, however, that “bad faith” may be found, not only in the actions that led to the lawsuit, but also in the conduct of the litigation. And, as the Court of Appeals noted, the conduct of this particular litigation was marked by “the dilatory action of the union and its officers. . . .” 462 F.2d, at 780. Moreover, although the presence of “bad faith” is essential to “fee-shifting” under a “punishment” rationale, neither the presence nor absence of “bad faith” is in any sense dispositive where attorneys’ fees are awarded to the successful plaintiff under the “common benefit” rationale recognized in Mills and operative today. Under that theory, counsel fees are granted, not because of the “bad faith” of the defendant but, rather, because the litigation confers substantial benefits on an ascertainable class of beneficiaries. In that situation, the element of “bad faith” of the defendant is simply one of many considerations best addressed to the sound discretion of the District Court. 23 Under the facts of this case, we cannot say that the District Court abused that discretion.
