Unpublished Disposition, 902 F.2d 39 (9th Cir. 1990)

MEMORANDUM^* 

Robert "Red" Kinney, former business manager and financial secretary of Local 396 of the International Brotherhood of Electrical Workers (IBEW), appeals from the denial of his post-trial motion for attorneys' fees. Kinney filed suit in district court against the union. After a jury trial, Kinney prevailed on two of his five original claims. The jury determined IBEW had imposed a trusteeship over Local 396 in violation of 29 U.S.C. § 464(c), but awarded no damages. The jury further determined IBEW had improperly removed Kinney from his elected position in the Local in violation of 29 U.S.C. § 185, and awarded Kinney $5000. The district court denied Kinney's motion for attorneys' fees. IBEW did not appeal. This appeal by Kinney is limited to the denial of attorneys' fees. We reverse.

The traditional American Rule disfavors an award of attorneys' fees in the absence of statutory or contractual authority, but "federal courts, in the exercise of their equitable powers, may award attorneys' fees when the interests of justice so require." Hall v. Cole, 412 U.S. 1, 4-5 (1973). Attorneys' fees may be awarded to successful parties in actions brought pursuant to Title I of the Labor-Management Reporting and Disclosure Act (LMRDA or the Act), 29 U.S.C. § 412, when the losing party acted in bad faith, or when "the plaintiff's successful litigation confers a substantial benefit on an ascertainable class, and ... 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." Hall, 412 U.S. at 5 (internal quotation omitted).¹  In Higgins v. Harden, 644 F.2d 1348, 1352 (9th Cir. 1981), this court applied the Hall criteria to a case brought, like the present action, under Title IV of the Act, 29 U.S.C. § 464.

In denying Kinney's application for attorneys' fees, the district court determined neither of the Hall criteria had been met. We reverse a finding of substantial benefit only for clear error. Southerland v. International Longshoremen's Local 8, 845 F.2d 796, 799 (9th Cir. 1987). In reviewing this finding, however, we, like the district court, are bound by the jury's verdict that IBEW had imposed an unlawful trusteeship on the local²  and had improperly removed Kinney from his union position.

An individual who vindicates his own rights as a union member through litigation can confer a substantial benefit on other members of the union:

[B]y 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."

Hall, 412 U.S. at 8. (quoting Yablonski v. United Mine Workers, 466 F.2d 424, 431 (D.C. Cir. 1972)). A successful challenge to an unlawfully imposed trusteeship benefits the union by rendering invalid all consequences of the trusteeship, and returning autonomy to the local. Higgins, 644 F.2d at 1352. Accord McDonald v. Oliver, 525 F.2d 1217, 1227 (5th Cir. 1976) (successful suit to dissolve trusteeship returned democratic processes and autonomy to the local to the common benefit of its members).

It is clear to us Kinney's litigation will have "implications for the future conduct of the union's affairs." Hall, 412 U.S. at 8. His successful suit will deter the union from similar unlawful conduct in the future, even absent an award of damages, because the union now knows its action was illegal. Failure to award attorneys' fees in these circumstances would discourage individual members from challenging unlawfully imposed trusteeships, and an important check on the power of the international union would be lost. See Hall, 412 U.S. at 13; McDonald, 525 F.2d at 1227-28.

That the trusteeship was dissolved before Kinney's suit was tried does not weigh against awarding Kinney attorneys' fees. " [T]he court should take into account the fact that it was only after this action was brought that the defendant decided to stop the conduct complained of. In that sense, the action was effective in procuring relief, even though no injunction was issued." Kerr v. Screen Extras Guild, Inc., 466 F.2d 1267, 1271 (9th Cir. 1972).

Because Kinney's action "unquestionably" benefits the union, it was error to deny the motion for attorneys' fees. See Kerr v. Shanks, 466 F.2d 1271, 1278 (9th Cir. 1972).

For the same reasons Kinney is entitled to attorneys' fees on his claim under section 185, challenging his removal from union office. By vindicating his right against discharge without due process, Kinney has conferred a substantial benefit on his fellow union members.³ 

Accordingly, we reverse and remand to the district court with instructions to award Kinney reasonable attorneys' fees for both claims. Because of our resolution of the substantial benefit issue, we need not reach Kinney's contention that the union acted in bad faith and that he is entitled to fees on that ground.

REVERSED and REMANDED.