Conflict and Solidarity: The Legacy of Evans v. Jeff D.

Georgetown Journal of Legal Ethics, The, Spring 2004 by Nazer, Daniel

Suppose that you are a lawyer for a small public interest organization. You have just defeated a summary judgment motion in your biggest case and you think that your opponent will finally be interested in negotiating a good settlement. Soon your opponent makes an offer that includes all the injunctive relief your clients sought. There is a problem, however. The offer is conditioned on your client waiving any claim to statutory attorney's fees. You have been working on this case for two years and a fee award could provide much needed financial relief for your cash-strapped employer. Do you advise your clients to accept the offer?

Suppose instead that the case involved monetary damages. Rather than conditioning settlement on a complete fee waiver, the defendant offers to pay $400,000 dollars to settle the case. The defendant tells you that he doesn't care how you divide the money between fees and relief for your clients. How should you respond to this offer?

After the Supreme Court's decision in Evans v. JeJfD., public interest lawyers must be prepared to face situations such as these.1 In Jeff'D., the Supreme Court held that defendants may ask a plaintiff to waive his or her right to statutory attorney's fees as a condition of a settlement offer.2 The Court also concluded that it is acceptable to conduct simultaneous negotiation of attorney's fees and liability on the merits.3 This leaves plaintiffs' lawyers vulnerable to fee-related conflicts of interest. The attorney's duty to her client suggests that she should counsel him to accept any offer that includes sufficient relief on the merits. If the offer is conditioned on a fee waiver then the attorney will miss out on a fee award if the client follows her advice. Moreover, even without a fee waiver request, if the defendant is solely concerned with minimizing overall liability, then any increase in a fee agreement may come at the cost of decreasing the damages for the client.4

Many commentators have argued that Jeff D. would frustrate the policy of the Civil Rights Attorney's Fees Awards Act of 1976 ("Fees Act").5 In particular, commentators have claimed that Jeff D. will discourage attorneys from accepting civil rights cases and will cause plaintiffs' attorneys to regularly miss out on collecting statutory attorney's fees.6 Empirical research, however, suggests that Jeff D. did not have as dire an effect as was anticipated.7

This Note considers the practical and ethical consequences of Jeff D. I focus on the challenges faced by public interest attorneys in the non-profit sector. As they are usually unable to charge fees, these attorneys are most vulnerable to fee waiver requests.8 The Note is divided into three parts. Part I reviews Jeff D. in detail. Part II considers the options that Jeff D. left open for public interest lawyers. I argue that some of these options are in tension with ethical rules protecting the client's control of litigation. Thus, lawyers pursuing these strategies must exercise considerable care to avoid breaching ethical duties to their clients. I consider ways in which bar associations and courts can regulate attorney behavior to ensure ethical conduct while protecting lawyers' ability to pursue statutory fees.

Part III reviews the results of structured interviews conducted with ten public interest lawyers in the non-profit sector. These lawyers are from diverse regions and practice areas.9 The interviews examined how public interest lawyers actually respond to fee-related conflicts and whether such conflicts cause public interest lawyers significant ethical and financial difficulties. I found that public interest lawyers have developed some common techniques for responding to fee related conflicts. The main strategies are careful client selection and "client education." First, the attorney selects clients who are sympathetic to the overall goals of the attorney's organization. second, the attorney explains how important fee awards are to the continuing success (or even existence) of the lawyer's organization. Clients will then be sympathetic to the pursuit of fee awards. This approach has mitigated the worst effects of Jeff D.

I. EVANS v. JEFF D.

A. BACKGROUND

In the United States, the default rule is that the prevailing party in not entitled to collect attorney's fees from the loser.10 Exceptions to this default rule were virtually non-existent until the late 1960s." Since then, Congress has included fee-shifting provisions in a variety of statutes. Such provisions are found in civil rights laws, employment laws and environmental laws, among others.12 Fee awards are intended to promote the practice of law in the public interest. '3

When a case goes to judgment, the court will calculate the attorney fee award.14 This means that a lawyer is unlikely to face any difficult ethical questions after judgment is entered. After judgment, the attorney can advocate vigorously for a large fee award without endangering the relief that has already been awarded to his or her client. Fee-related conflicts might arise in settlement negotiations, however. Prior to judgment, the parties usually try to settle both the issue of relief for the plaintiff as well as the fee award.l5 Defendants pursue this strategy because they are concerned with their total liability and fees can be a significant component of liability.16 Plaintiffs' lawyers can ask the defendant to leave the fee award to the court, but in practice defendants are very reluctant to do this.17 Thus, settlement usually requires that parties simultaneously negotiate both fees and relief. This generates potential conflicts of interest between plaintiffs and their counsel. If defendants are concerned with total liability then any increase in fees may come at the expense of reduced relief on the merits. Similarly, improvements in relief on the merits may come at the expense of a lower fee offer. This leads to a conflict of interest as clients do not necessarily share their attorneys' interest in maximizing the fee award.