Unpublished Disposition, 914 F.2d 263 (9th Cir. 1988)

MEMORANDUM^** 

Paul Dempster and the Sailors' Union of the Pacific ("the Union") appeal the district court's award of attorneys' fees to plaintiff-appellee, Peter Turner, for work done to enforce the Union's compliance with a prior court judgment. The Union argues that the award was improper because (1) the motion for attorneys' fees was filed too late (2) the hourly rate charged was higher than that previously sought by the plaintiff and (3) there was no basis for granting attorneys' fees for work done after the appeals stage.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1291 over this timely appeal of a final order. We review for abuse of discretion the district court's decision to award attorneys' fees as well as the amount of fees awarded. Southerland v. Intern. Longshoremen's, Local 8, 845 F.2d 796, 800 (9th Cir. 1987); Perry v. O'Donnell, 759 F.2d 702, 704 (9th Cir. 1985); Mitchell v. Keith, 752 F.2d 385, 392 (9th Cir. 1985).

BACKGROUND

Peter Turner sued the Union under the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 401, et seq. ("LMRDA"), contesting union voting restrictions that allowed only those union members with six years' experience to vote in constitutional referenda. Turner also contested a dues increase approved by a referendum from which one-third of the membership had been disenfranchised. Turner won. In October 1983, the court invalidated the voting limitation as unreasonable and set aside the dues increase, ordering the union to return the dues collected in excess of the lawful rate. Turner v. Dempster, 569 F. Supp. 683 (N.D.Ca.1983). The Union appealed, and in August 1984 this court affirmed. Turner v. Dempster, 743 F.2d 1301 (9th Cir. 1984).¹  Subsequently, the Union filed a petition for certiorari and sought a stay from the Ninth Circuit. The Supreme Court denied certiorari in February 1985.² 

In the meantime, Turner's counsel, the Public Citizen Litigation Group ("PCLG") learned that the Union had not complied with the district court's orders. Specifically, PCLG believed that not only had the Union not reimbursed its members, it had continued to collect the increased dues. Over the next three years Turner's attorneys sought compliance with the judgment. After this court affirmed the district court judgment, PCLG returned to the district court to seek enforcement of the original orders. It sought to force reimbursement of the back dues as well as to obtain an order finding the Union in contempt for continuing to collect the unlawful dues increase. The district court declined to hold the Union in contempt, but ordered it to bring itself into compliance with the court's orders by December 1984, on pain of contempt sanctions of $100 per day.

Although the union subsequently reported to the district court that it had complied with the court's orders, PCLG's review of the Union papers led it to believe that the Union still was not in compliance. In response to plaintiff's request, the district court found the Union in contempt and ordered it (1) to pay for a court appointed accountant to review the books and records to determine which members were entitled to dues refunds and (2) to pay the refund. (There was some additional haggling over the accountant's report as well as the Union's obligation to pay the accountant.) On February 28, 1986, the district court accepted the accountant's report, ordered the Union to make the further dues refunds, and ordered the Union to file a compliance report one year hence, to be accompanied by a hearing.

In February 1987, the Union filed its compliance report, and on March 20, 1987 the court held a "status conference." Apparently some questions remained regarding the completeness of the Union's compliance. The district court granted the Union's request to file one last compliance report on November 5, 1987. At this March status conference, Turner's local counsel informed the court and opposing counsel that they intended to file a request for attorneys' fees. The parties disagree about the court's response to this announcement. According to Turner's lawyer, he proposed waiting until after the November 5 compliance report was filed in order to be certain that there would be no need for him to perform additional work to determine compliance, and the district court asked counsel to try to reach agreement on both the compliance issue and the attorneys' fees due plaintiff before coming back before the court. According to the Union, the district court issued no such instruction. Instead, as recounted in an affidavit filed by the attorney for the Union, "the Court made no significant reply."

The November 5 report was never filed because, as a result of conversations in the interim, the parties reached agreement that the Union had finally and fully complied with the court's orders. It was at that point that Turner's attorneys sought agreement on attorneys' fees. They first wrote to the Union in October 1987 and again in January 1988 seeking to settle the attorneys' fee issue; the Union did not reply. On June 1, 1988, Turner's attorneys filed a motion with the district court for attorneys' fees and costs in the amount of $27,123. The district court awarded the full amount of fees sought. The Union appeals from that award.

The Union's principal challenge is that the motion for attorneys' fees was not timely under the Northern District of California's Local Rule 270-1, which provides that applications for attorneys' fees must be filed "within sixty days of entry of judgment terminating the action with respect to which the services were rendered."³  Plaintiff's counsel asserts that the application was timely, that it was only after they had established that the defendants had fully complied with Court's orders that it became appropriate to attempt to resolve the issue of the remaining attorneys' fees due, and that in any event, they simply were following the court's instruction.

According to Turner's account of the March 20, 1987 status conference, the judge expressly instructed the attorneys to wait until full compliance had been ascertained and then to try to work out an agreement on attorneys' fees. This direction is within the discretion of the trial court, and if true, would dispose of the Union's challenge. The Union, however, contends that at the March conference, the district court announced that enforcement proceedings were concluded and that the parties should attempt to settle the attorneys' fee issue. This, according to the Union, started the Rule 270-1 clock running. Unfortunately, the March status conference was not reported. However, we need not resolve this factual dispute; even assuming that the hearing went exactly according to the Union's version, the attorneys' fees award was not improper under Rule 270-1.

As Turner points out, under Rule 270-1 the deadline for filing applications dates from the entry of a final judgment. Yet there was no final judgment entered to conclude the enforcement proceedings. The final court event was the March 20, 1987 status conference, at which time the court expressly left the case open until the following November, when a final compliance report was due. Therefore, we find that under the terms of 270-1, the fee application was not untimely.

In addition to the work done to secure compliance with the district court's order, Turner's attorney also sought attorneys' fees for their opposition to the Union's attempt to obtain a stay from the Ninth Circuit and a grant of certiorari from the Supreme Court; there were final judgments entered in these two actions. Therefore, the time limitation of 270-1 may operate to bar an award for that work. Furthermore, it could be argued that Turner erred in not filing the attorneys' fees application with the Ninth Circuit for the work done in opposing the Union's request for a stay.⁴  However, in reviewing attorneys' fees awarded in a Clayton Act suit, the Supreme Court held that fee applications for appellate work performed in both the Court of Appeals and the Supreme Court may be filed in District Court. Perkins v. Standard Oil Company of California, 399 U.S. 222 (1970). The Seventh Circuit specifically extended this principle to LMRDA suits. Local 17, Intern. Ass'n of Heat v. Young, 775 F.2d 870, 872 (7th Cir. 1985) (concluding that "the flexibility demonstrated by the Supreme Court in Perkins in allowing the district court to award attorneys' fees for Supreme Court work is applicable to prevailing plaintiffs in LMRDA cases ...").⁵  In light of the fact that at the time when the petition for certiorari and for a stay were denied, counsel was engaged in efforts to exact compliance and knew it would seek attorneys' fees for that work, plaintiff's decision to wait for the final resolution of the case and to consolidate all its request for all post-appellate attorneys' fees is reasonable, especially where a primary consideration in setting rules governing the timing of applications for attorneys' fees is the need to prevent fragmented and piecemeal determinations. Mitchell v. Keith, 752 F.2d 385, 392 (9th Cir. 1985) (upholding allegedly untimely attorneys' fee award; interests of judicial economy were served and the delay did not surprise or prejudice defendants), citing White v. New Hampshire Department of Employment Security, 455 U.S. 445, 452 (1981).

Finally, even assuming that the terms of Local Rule 270-1 apply to bar plaintiff's application for attorneys' fees, Rule 270-1 provides for an extension of time should the district court determine that good cause exists. The district court invoked this provision in its Order awarding attorneys' fees and costs.⁶  The history of this case reveals that the district court had ample cause to grant plaintiff an extension of time to file for attorneys' fees. Cf. Perry v. O'Donnell, 759 F.2d 702 (9th Cir. 1985) (in the absence of a specific time restriction, a fee request is timely if filed within a reasonable period so long as it does not unfairly surprise or prejudice the affected party). It is obvious that the Union cannot claim it was surprised by Turner's fee application, given the undisputed evidence of counsel's announcement at the status conference that they would seek attorneys' fees, and their efforts to negotiate an attorneys' fee agreement directly with the Union. The Union claims that it was prejudiced by the delay. We subscribe here to the court's concluding remark in Robinson v. Ariyoshi, 703 F. Supp. 1412, 1421 (D.Hawaii 1989) in rejecting defendant's claim of prejudice because of opponents' delay in filing for attorneys' fees: "Tommyrot!" The claimed prejudice in the form of increased interest obligation and fee rates is attributable to the Union's refusal to resolve the issue.

It would have been preferable for Turner's attorneys to file a motion for attorneys' fees as soon as it realized that the Union was not going to respond, favorably or otherwise, to their request to settle the fees issue. But, given the history of this case, there is no merit to the Union's argument that the district court abused its discretion in awarding fees.

The Union also challenges the amount of the attorneys' fee awarded. On appeal the Union challenged generally the total fee awarded. The Union did not challenge the use of a multiplier to enhance the lodestar figure. Therefore, we find that the Union failed to preserve this issue on appeal. Perry v. O'Donnell, 759 F.2d at 706.

The Union argues that the claimed value of legal services more than doubled the amount sought in Turner's attorney's letter of October 6, 1987, in which they sought $13,234. There is no merit to this challenge. First, plaintiff's counsel performed additional work to file a motion with the court for fees. Second, as Turner argues, the October 6 letter was a settlement offer, and therefore is inadmissible under Rule 408, Federal Rules of Evidence. The Union cannot defeat a fee award by complaining that the fees sought when the matter had to be litigated are higher than the amount counsel would have accepted to expedite the receipt of funds and to avoid further litigation.

Almost as an afterthought, the Union challenges, apart from the question of the timeliness of application, where any attorneys' fees award was proper. Without elaboration or explanation, it argues that counsels' efforts conferred no common benefit, and that defendants' actions were not taken in bad faith.

The equitable "common benefit doctrine" is the basis of awarding fees to prevailing plaintiffs in LMRDA actions. Hall v. Cole, 412 U.S. 1 (1973), Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970). It is the law of this case that the initial litigation as well as the successful appeal, from which plaintiffs recovered attorneys' fees, conferred a common benefit. Certainly then the time spent defending and enforcing those judgments also confers a common benefit. As the Seventh Circuit reasoned in evaluating a request for appellate fees, if this were not the case, the purpose of LMRDA would be frustrated:

If disgruntled union members, as prevailing plaintiffs, were forced to incur costs for unsuccessful, fruitless Union appeals, this would have a chilling effect on union members' ability to afford challenging the union leadership. Situations would develop where union officials could wilfully violate the law, yet recognize an inability on the part of their membership to challenge the Local hierarchy in court due to a lack of funds. Union members would decide to bring suit based on financial considerations rather than merit. Hence, due to the uneven bargaining positions of the parties, the purpose of the LMRDA would be frustrated. This predicament clearly could not have been intended by Congress.

Local 17, 775 F.2d at 873. This applies equally to efforts to secure compliance. See also, Perry v. O'Donnell, 759 F.2d 702 (9th Cir. 1985) (awarding attorneys' fees in bankruptcy case for appellant's continuing efforts to enforce the district court's orders).

We are puzzled by the Union's reference to bad faith. Even if the attorneys' fee award were based on plaintiff's pursuit of a civil contempt action, it would not be necessary to show willfullness or bad faith. Perry v. O'Donnell, 759 F.2d 702 (9th Cir. 1985). The Union may have been referring to another exception to the "American Rule" for awarding attorneys' fees cited by the Court in Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240 (1975)--when a losing party acts in bad faith. However, that was not the basis for seeking or awarding attorneys' fees in this case.

Turner asks this court to impose a higher rate of interest on the award as a "modest compensatory sanction" for the Union's delay in prosecuting this appeal. Turner relies on 28 U.S.C. § 1927, which provides that an attorney "who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." Under 28 U.S.C. § 1961, interest on money judgments in a civil case is calculated from the date of the entry of the judgment at a rate equal to the average auction price of one-year Treasury bills settled immediately prior to the date of judgment. Turner asks instead that interest be paid at the highest rate obtained during the pendency of the appeal. Turner's attorneys allege that interest rates have increased since fees were awarded and that they unreasonably have been denied the ability to earn that interest because of what they characterize as the Union's dilatory tactics.⁷ 

Turner has failed to satisfy its burden of establishing it is entitled to a departure from the usual rule governing post-judgment interest. Turner cites no authority to guide this court in exercising its discretion. Although sorely tempted, we decline to impose further sanction upon the Union.

CONCLUSION

The district court's decision to award attorneys' fees is affirmed.