Evans v. Jeff D. Brief for Respondents

    No. 84-1288

In  T he

(Umtrt at %  Irnfrii States
October T erm , 1985

John V. Evans, et a l,
Petitioners,v.

Jeff D„, et a l,
Respondents.

On Writ of Certiorari to the 
United States Court of Appeals 

for the Ninth Circuit

BRIEF FOR RESPONDENTS

Charles Johnson, III <202) 457-5325
Legal Aid Project 
Johnson, Olson, Robinson, 

Chartered 
P.O. Box 1725 
Pocatello, Idaho 83204 
(208) 232-7926

Howard A. Belgdoff 
Counsel of Record 
Idaho Legal A id

W illiam T. Coleman, Jr. 
Aaron S. Bater 
James P. Nehf

Services, Inc. 
P.O. Box 913 
Boise, Idaho 83702 
(208) 345-0106

O’Melveny & Myers 
1800 M Street, N.W. 
Suite 500 South 
Washington, D.C. 20036

W I L S O N  -  E P E S  P R I N T I N G  C O .  . INC. -  7 8 9 - 0 0 9 6  -  W A S H I N G T O N ,  D . C .  2 0 0 0 1



QUESTION PRESENTED

May a court, consistent with the Civil Rights Attor­
ney’s Fees Awards Act of 1976, 42 U.S.C. § 1988, and the 
federal Constitution, enforce a complete waiver of plain­
tiffs’ right to costs and attorney’s fees under § 1988, 
where the waiver is exacted by state defendants on the 
eve of trial as a condition to a settlement providing sub­
stantial injunctive relief on the merits,

(i)



QUESTION PRESENTED .......................-.....................  i

TABLE OF CONTENTS .............. ...................................  iii

TABLE OF AUTHORITIES -........................................ v

STATEMENT OF THE CASE....... ............ ...................-  1

SUMMARY OF ARGUMENT ---------------- ------ ---------- 7

ARGUMENT.............................................„ ______________  12

I. THIS CASE CONCERNS COERCIVE RE­
QUESTS FOR FEE WAIVERS IN CIVIL 
RIGHTS CASES, NOT A PER SE RULE 
BARRING SIMULTANEOUS NEGOTIA­
TION OF THE MERITS AND ATTORNEY’S 
F E E S __ ____ _________ ___- ............ ............ .......... 12

II. IN ENACTING SECTION 1988, CONGRESS
DETERMINED THAT AWARDS OF ATTOR­
NEY’S FEES WERE ESSENTIAL TO PRI­
VATE ENFORCEMENT OF CIVIL RIGHTS 
LAW S........................................ ......................... ....... 15

III. PETITIONERS WERE ABLE TO EXACT A
FEE WAIVER BY IMPROPERLY CREAT­
ING AND EXPLOITING A CONFLICT OF 
INTEREST BETWEEN RESPONDENTS 
AND THEIR COUNSEL ___________________  18

IV. THE COURT OF APPEALS PROPERLY IN­
VALIDATED THE FEE WAIVER AS CON­
TRARY TO SECTION 1988 AND THE PUB­
LIC POLICIES IT EMBODIES ...........................  24
A. The Fee Waiver In This Case Contravened 

Section 1988 And Its Underlying Purposes,
And The Court Of Appeals Correctly Invali­
dated It ________ ___________________________  24

TABLE OF CONTENTS
Page

(iii)



IV

TABLE OF CONTENTS—Continued
Page

B. Petitioners’ Alternatives To The Approach 
Of The Court Of Appeals Would Not Re­
solve The Problems Posed By The Coerced
Fee Waiver ...... ............. ............................ ........ 30

C. The Court Of Appeals Correctly Declined
To Invalidate The Entire Settlement Agree­
ment ----------------— ..........- ............ ...............—  33

V. BARRING COERCED FEE WAIVERS 
WOULD NOT INTERFERE WITH THE 
LEGITIMATE INTERESTS OF DEFEND­
ANTS IN SETTLING CIVIL RIGHTS SUITS.. 35

CONCLUSION ....... ............ .................. ..............................  39



V

TABLE OF AUTHORITIES
CASES Page

Alyeska Pipeline Service Co. v. Wilderness Soci­
ety, 421 U.S. 240 (1975) ________ _____________  15

Blum v. Stenson, 104 S. Ct. 1541 (1984) — --- ------ 37
Bounds v. Smith, 430 U.S. 817 (1977 )..... ........... 24
Boyd v. Bechtel Corp., 485 F. Supp. 610 (N.D. Cal.

1979) .............. ................................ - ....................... .. 30
Chicano Police Officer’s Association v. Stover, 624

F.2d 127 (10th Cir. 1980)_____________________  38
Clanton v. Allied Chemical Corp., 409 F. Supp.

282 (E.D. Va. 1976).-_____  26
Cleveland Board of Education v. Loudermill, 105

S. Ct. 1487 (1985) ..... ................ ..................... .. 35
Cooper v. Singer, 719 F.2d 1496 (10th Cir. 1983).. 17,

28-29, 30
Delta Air Lines, Inc. v. August, 450 U.S. 346

(1981)_ _________________________ ____ _____20
Edwards v. Arizona, 451 U.S. 477 (1981)............ 20
El Club Del Barrio, Inc. v. United Community

Corps., 735 F.2d 98 (3d Cir. 1984).....................  28, 34
Foster v. Boise-Cascade, Inc., 420 F. Supp. 674 

(S.D. Tex. 1976), aff’d, 577 F.2d 335 (5th Cir.
1978) (per curiam )_________ _____ ___________  30

Freeman v. B&B Associates, 595 F. Supp. 1338 
(D.D.C. 1984), appeal docketed, No. 85-5239
(D.C. Cir. Mar. 11, 1985) ............................... .. 19, 20

Gates v. Collier, 616 F.2d 1268 (5th Cir. 1980).... 29
Gillespie v. Brewer, 602 F. Supp. 218 (N.D. W. Va.

1985) ..........................................................10, 21, 28, 30, 33
Gram v. Bank of Louisiana, 691 F.2d 728 (5th Cir.

1982) ______________ __________________ ___ _ 38
Hensley v. Eckerhart, 461 U.S. 424 (1983) ....9, 32, 34-35,

37
Hutto v. Finny, 437 U.S. 678 (1978)_____________ 32
James v. Home Construction Co. of Mobile, 689

F.2d 1357 (11th Cir. 1982) ___________________  21, 28
Jeff D. v. Evans, 743 F.2d 648 (9th Cir. 1984)— passim 
Johnson v. Avery, 393 U.S. 483 (1969)................... 24



VI

TABLE OF AUTHORITIES— Continued
Page

Jones v. Amalgamated Warbasse Houses, Inc.,
721 F.2d 881 (2d Cir. 1983), cert, denied, 104
S. Ct. 1929 (1984) ______________ ___ ,....10,11, 30, 33

Lazar v. Pierce, 757 F.2d 435 (1st Cir. 1985)____ 20-21,
25, 29

Leeds v. Watson, 630 F.2d 674 (9th Cir. 1980).- 17
Lefkowitz v. Turley, 414 U.S. 70 (1973)_________  20
Leisner v. New York Telephone Co., 398 F. Supp.

1140 (S.D.N.Y. 1974) _________________________ 26
Lisa F. v. Snider, 561 F. Supp. 724 (N.D. Ind.

1983) ....... ......................................... ........................- 28
Maher v. Gagne, 448 U.S. 122 (1980) .................... . 9, 84
McBrearty v. United States Taxpayers Union,

668 F.2d 450 (8th Cir. 1982) (per curiam).... 10,26 
Mid-Hudson Legal Services, Inc. v. G&U, Inc.,

578 F.2d 34 (2d Cir. 1978) ___________________ 29
Mitchell v. Johnston, 701 F.2d 337 (5th Cir.

1983)......... ..................................................... ............  28
Moore v. National Association of Securities Deal­

ers, Inc., 762 F.2d 1093 (D.C. Cir. 1985) (peti­
tion for rehearing pending)------- ---------------------  20, 29

Nadeau v. Helgemoe, 581 F.2d 275 (1st Cir.
1978) .................. ........................... ............ .............. . 34-35

New York Gaslight Club, Inc. v. Carey, 447 U.S.
54 (1980) .................................................... .............. 17

Newman v. Piggie Park Enterprises, Inc., 390
U.S. 400 (1968) (per curiam )________ .______  17,34

Obin v. District No. 9 International Association
of Machinists, 651 F.2d 574 (8th Cir. 1981).... 21

Prandini v. National Tea Co., 557 F.2d 1015 (3d
Cir. 1977)_______ ____ ,________ __________ _____ 7

Regalado v. Johnson, 79 F.R.D. 447 (D. 111. 1978).. 21
Sanchez v. Schtvartz, 688 F.2d 503 (7th Cir.

1982)........ ............................................. ..................... 29
Shadis v. Beal, 685 F.2d 824 (3d Cir.), cert, de­

nied, 459 U.S. 970 (1982) .....................10, 11, 27-28, 33
White v. New Hampshire Department of Employ­

ment Security, 455 U.S. 445 (1982)___________  21, 36
Williams v. Illinois, 399 U.S. 235 (1970).... ........... 24



TABLE OF AUTHORITIES— Continued
STATUTES AND RULES Page

Civil Rights Attorney’s Fees Awards Act of 1976,
42 U.S.C. § 1988 (1982)................................. .........passim

Civil Rights of Institutionalized Persons Act, 42
U.S.C. §§ 1997-1997j (1982) ______ _____ ____ _ 17

Equal Access to Justice Act, 28 U.S.C. § 2412
(1982).. .................................. ............ .........................  36

28 U.S.C. § 2412(d) (1) ( B ) _________________  36
Legal Services Corporation Act, 42 U.S.C. § 2996-

2996? (1982) ...................... ............... ........................ 3
42 U.S.C. § 2996(6) _____________   19
42 U.S.C. § 2996f (b) (1) ............. ............. ........ 3

28 U.S.C. § 1927 (1982) ................................... .........-  38
45 C.F.R. § 1609 (1984)_____ ________ ____________  3
Fed. R. Civ. P. 1 1 ___ ___ _________________ ______ 38
Fed. R. Civ. P.12 (b ) (6 )  ________ ________________  38
Fed. R. Civ. P. 16  ............................... ...................... . 31
Fed. R. Civ. P. 23  ......... ......... ............. ........... ........ 7,19
Fed. R. Civ. P. 23 ( e ) ........... ................ ............... ........6, 31, 34
Fed. R. Civ. P. 56 ...... ............. .................... ..................  38
Fed.R. Civ. P. 59 (e )_____________________________  21
Fed. R. Civ. P. 68 __________________i......................  20

LEGISLATIVE MATERIALS
S. Rep. No. 416, 96th Cong., 1st Sess. (1979), re­

printed in 1980 U.S. Code Cong. & Ad. News 787.. 17
S. Rep. No. 1011, 94th Cong., 2d Sess., reprinted 

in 1976 U.S. Code Cong. & Ad. News 5908 ...9-10,15, 16
32, 34, 38

H.R. Rep. No. 1558, 94th Cong., 2d Sess. (1976).. 9, 15,
16-17, 34

MODEL CODE AND RULES
Model Code of Professional Responsibility

EC 5 -1_____ _________ ____ ________ _________ ___  18
EC 7-7 .........- .............. ............................. .......- ............  18, 31
EC 7 -9___ ______ _______________ _____ ___________  18
EC 7-12______ ____ _________________ _____________  19
EC 7-14______________ ____ ______________________  22
DR-1-102 (A ) (5) .................. .......... ................ .............. 22



via

Model Rules of Professional Conduct
Model Rule 1.2 ( a ) ......................................... ................  18, 31
Model Rule 1.7(b) ............. .................. ........ ................  18
Model Rule 1.14.............................................................. 19

BAR OPINIONS
Committee on Professional and Judicial Ethics of 

the New York City Bar Association, Op. No.
80-94, reprinted in 36 Record of New York City
Bar Assoc. 507 (1981) .................... ,...................... 22

Committee on Professional and Judicial Ethics of 
the New York City Bar Association, Op. No.
82-80 (1984)___________ __________________ ___  37

District of Columbia Bar Legal Ethics Committee,
Op. No. 147, reprinted in 113 Daily Wash. Law
Rep. 389 (1985) ...... ............. ........................... . 22

Grievance Commission of Board of Overseers of
the Bar of Maine, Op. No. 17 (1981) _________  22

State Bar of Georgia, Op. No. 39, reprinted in 10 
Georgia State Bar News 5 (1984) ______ _____  22

MISCELLANEOUS
Calhoun, Attorney-Client Conflicts of Interest and 

the Concept of Non-Negotiable Fee Awards Un­
der Y2 U.S.C. § 1988, 55 Colo. L. Rev. 341
(1984) ..................................... .................................... 14,31

Comment, Settlement Offers Conditioned Upon 
Waiver of Attorneys’ Fees: Policy, Legal and 
Ethical Considerations, 131 U. Pa. L. Rev. 793
(1983)  ..................... ............... ....................... 14

6A A. Corbin, Contracts (1962 & Supp. 1984)____  26-27
Fee Waiver Requests Unethical: Bar Opinion, 68

A.B.A.J. 23 (1982) ............ ............ ........................ 25
Final Subcommittee Report of the Committee on 

Attorney’s Fees of the Judicial Conference of 
the United States Court of Appeals for the Dis­
trict of Columbia Circuit, reprinted in 13 Bar 
Rep. 4 (1984) ..................................................... . 23-24

TABLE OF AUTHORITIES— Continued
Page



IX

Kraus, Ethical and Legal Concerns in Compelling 
the Waiver of Attorney’s Fees by Civil Rights 
Litigants in Exchange for Favorable Settle­
ment of Cases Under the Civil Rights Attorney’s 
Fees Awards Act of 1976, 29 Vill. L. Rev. 597
(1984)  ______ ____ __ ________ ________14, 25-26

Restatement (Second) of Contracts (1981) .........10,27,33
Wolfram, The Second Set of Players: Lawyers,

Fee Shifting, and the Limits of Professional 
Discipline, 47 Law & Contemp. Probs. 293
(1984)............................................................... 14, 28, 33, 34

7A C. Wright & A. Miller, Federal Practice and 
Procedure (1972)........................... ......................... . 31

TABLE OF AUTHORITIES—-Continued
Page



In T he

Bnpmm (Emtrf of %
October T erm , 1985

No. 84-1288

John V. Evans, et a l,
Petitioners,

Jeff D., et ah,
Respondents.

On Writ of Certiorari to the 
United States Court of Appeals 

for the Ninth Circuit

BRIEF FOR RESPONDENTS

STATEMENT OF THE CASE

Respondents, a class of over 2,000 indigent children 
from the State of Idaho, suffer from emotional and men­
tal handicaps and are institutionalized or otherwise 
placed in petitioners’ custody.1 Due to petitioners’ fail­
ure to provide appropriate mental health services, many 
of these children were confined in adult psychiatric 
wards of state hospitals, including the facilities at State 
Hospital South ( “ SHS” ), or in out-of-state treatment 
institutions located thousands of miles from their homes 
and families. Joint Appendix ( “J.A.” ) 5, 6. Most of the 
children suffer from conditions that could be success­
fully treated by appropriate mental health care in the

1 Petitioners are the Governor of the State of Idaho, the Director 
of the Idaho Department of Health and Welfare, and two officials 
of the Adult State Mental Hospital, State Hospital South.



2

community rather than by placement in adult psychia­
tric institutions or out-of-state facilities. J.A. 65.

When this suit was filed the class members were not 
receiving the minimal educational or mental health serv­
ices required by law. SHS did not have a child psy­
chiatrist or a licensed specialist in child psychology on 
its staff. J.A. 72. In fact, SHS had no employees with 
the experience or qualifications to provide specialized 
treatment or services to emotionally and mentally dis­
turbed children. J.A. 72. The clinical evidence showed 
that the condition of many of the children had not sig­
nificantly improved or had actually regressed due to their 
inappropriate placement and the lack of adequate services, 
J.A. 68, 74.

SHS is primarily an adult psychiatric hospital with 
no special programs designed for juveniles. J.A. 72. The 
children confined at SHS were housed in facilities where 
physical contact with adult psychiatric patients was un­
avoidable. Many of these adult patients were committed 
by state courts for having illegal sexual conduct with 
children or were deemed mentally unfit to stand trial on 
charges of other criminal offenses. J.A. 63. As a result 
of these living and sleeping arrangements, some of the 
adult patients had inflicted bodily injuries on the chil­
dren. J.A. 63-64.

On August 4, 1980, respondents filed a complaint 
against petitioners and the Superintendent of the Idaho 
State Department of Education ( “ Department of Edu­
cation” ) seeking an injunction ordering the defendants 
to provide class members with appropriate educational 
and mental health services, to establish procedures for 
the development of community-based residential treat­
ment programs and to prevent the future admission of 
children to the adult patient facilities at SHS. Respond­
ents’ claims were based upon the due process and equal 
protection guarantees of the Fifth and Fourteenth 
Amendments to the United States Constitution, and var­



3

ious federal and state statutory provisions protecting the 
rights of the handicapped. The complaint did not re­
quest damages for injuries suffered by members of the 
class, but it sought injunctive relief to ensure that the 
children would be provided the minimally adequate serv­
ices required by law. J.A. 31.

The class of indigent children was represented by 
Idaho Legal Aid Services, Inc. ( “ Idaho Legal Aid” ), a 
private, non-profit organization that provides free legal 
services to qualified low-income persons. As an entity 
receiving grants under the Legal Services Corporation 
Act, 42 U.S.C. §§ 2996-29961 (1982), Idaho Legal Aid is 
prohibited from representing individuals who are capable 
of paying their own legal fees. See id. § 2996f(b) (1) ; 45 
C.F.R. § 1609 (1984). Thus, no fee agreement requiring 
respondents to pay for legal services could have been ob­
tained. However, the complaint sought costs and attor­
ney’s fees pursuant to the Civil Rights Attorney’s Fees 
Awards Act of 1976, 42 U.S.C. § 1988 (1982).2 See 
J.A. 31.

Settlement discussions began within three months after 
the action commenced, before substantial work had been 
done on the case. During the initial stages of negotia­
tions respondents attempted to settle both the education 
and mental health services claims. By March 26, 1981, 
respondents had reached a basic agreement with the De­
partment of Education on the need for appropriate educa­
tional services for the children, see Appendix to Brief of 
Petitioners ( “ Pet, App.” ) 2-3, and on October 19, 1981 
the parties entered into a stipulation resolving all of the

2 42 U.S.C. § 1988 provides in pertinent part:
In any action or proceeding to enforce a provision of sections 
1981, 1982, 1983, 1985, and 1986 of this title, title IX of 
Public Law 92-318, or title VI of the Civil Rights Act of 1964, 
the court, in its discretion, may allow the prevailing party, 
other than the United States, a reasonable attorney’s fee as 
part of the costs.



4

education-related claims. As part of its settlement pro­
posal, the Department of Education required that re­
spondents waive their statutory right to attorney’s fees, 
and respondents agreed. J.A. 54.

Settlement discussions with petitioners on the mental 
health services claims did not proceed as smoothly. On 
March 26, 1981, respondents’ counsel informed peti­
tioners of significant problems with their proposed stip­
ulation, which failed to include adequate commitments 
on issues of critical importance, including the establish­
ment of individualized treatment plans prepared by a 
qualified mental health professional, the determination 
of an appropriate minimum age for admission of pa­
tients to SHS, and the segregation of patients under age 
twenty-one from the adult patients at SHS. Petitioners 
also insisted on a waiver of fees by respondents. Pet. 
App. 2-5. After eight months of further negotiations, 
counsel for both sides reached complete agreement on 
the medical services issues, as well as the fee waiver, 
but petitioners nonetheless rejected the settlement on De­
cember 18, 1981.

Respondents therefore had no alternative but to press 
for a judicial resolution of their claims. From Decem­
ber 1981 to March 1983 the litigation intensified, as re­
spondents’ counsel engaged in extensive discovery, pre­
trial proceedings, motions for summary judgment, and 
preparation for trial.3 On July 26, 1982, the district 
court granted petitioners’ motion for summary judg­
ment as to some of respondents’ statutory claims, but

3 Respondents served several sets of interrogatories, requests for 
production of documents, requests for admissions and written in­
terrogatories, and took extensive depositions. Respondents also 
continued to press their motions for class certification and for 
preliminary injunctive relief. In addition, they responded to peti­
tioners’ discovery requests and motion for summary judgment, and 
undertook extensive trial preparations, including subpoenaing wit­
nesses, preparing experts, outlining testimony, preparing exhibits 
and drafting a pretrial statement.



5

denied summary judgment on all other grounds, includ­
ing respondents’ federal constitutional claims. Contrary 
to petitioners’ assertions, see Brief for Petitioners ( “ Pet. 
Br.” ) 9, 44, the court’s order of partial summary judg­
ment did not preclude recovery of any of the relief 
sought, and ultimately obtained, by respondents. See J.A. 
31, 56. Two months after the court ruled on summary 
judgment, it certified the plaintiff class. J.A. 58.

In March 1983, one week before the trial was sched­
uled to begin, petitioners presented a new settlement 
proposal. This stipulation offered virtually all of the 
injunctive relief respondents had sought in their com­
plaint, Jeff D. v. Evans, 743 F.2d 648, 649-50 (9th Cir. 
1984), but demanded a complete waiver of all claims 
for costs and attorney’s fees. J.A. 104. Respondents’ 
counsel informed petitioners that his clients would ac­
cept the stipulation on the merits with minor additions, 
but strenuously objected to the paragraph demanding a 
waiver of attorney’s fees because it unethically placed 
him in conflict with the interests of his clients. 743 F.2d 
at 650; J.A. 89.

Taking advantage of the ethical dilemma in which 
they had placed respondents’ counsel by offering sub­
stantial relief on the merits while insisting that coun­
sel receive no compensation, even after two and a half 
years of litigation, petitioners refused to withdraw the 
demand for a fee waiver. They did agree, however, to 
respondents’ suggestion that the validity of the waiver 
be determined by the district court. The parties there­
fore modified the stipulation by adding the phrase “ if 
so approved by the Court” after the fee waiver.4

4 As modified, the relevant paragraph of the stipulation read:
25. Plaintiffs and defendants shall each bear their own costs 

and attorney’s fees thus far incurred, if so approved by the 
Court.

J.A. 104 (emphasis added).



6
The parties submitted the settlement agreement, in­

cluding the fee waiver, to the district court for approval 
pursuant to Rule 23(e). At a hearing on March 22, 
1983, the district court vacated the trial date and took 
the matter under submission. Two weeks later, re­
spondents filed a Motion for Consideration of Costs and 
Attorney Fees on Settlement. J.A. 87. At a second hear­
ing convened on April 28, 1983, the district court ap­
proved the stipulation, J.A. 94, and on May 6, 1983 the 
court denied respondents’ motion for costs and attorney’s 
fees, J.A. 106.

In considering whether to allow costs and attorney’s 
fees, the district court did not question the strength of 
respondents’ case, nor did it suggest that respondents 
had not prevailed in the action by virtue of the substan­
tial equitable relief they received in the settlement. 743 
F.2d at 650. In fact, as the court of appeals observed, 
petitioners themselves did “ not maintain that there [was] 
any basis, apart from the stipulation, for the denial of 
attorney’s fees. . . . [Their] only contention [was] that 
the [respondents] should be bound by the stipulation 
waiving fees.”  Id.

The district court denied costs and fees solely on the 
basis of the stipulated waiver, but in approving the 
waiver it focused on the wrong legal and ethical issues 
presented by petitioners’ demand. In its view, the validity 
of the waiver turned entirely on whether the decision of 
respondents’ counsel would harm his clients:

[T]he ethical consideration is “ Is the attorney in the 
process of bargaining out to depreciate his client’s 
claim or to proceed in a manner that will he unfair 
to his client?” And I think the ethical considera­
tions run only to [that] issue . . . .

J.A. 93. The court thus failed to recognize that by offer­
ing nearly all of the injunctive relief sought in the com­
plaint but insisting on a fee waiver, petitioners had placed 
respondents’ counsel in a conflict of interest with his



7
clients that could be resolved only by acceding to the 
waiver. It also failed to recognize that this tactic would 
enable petitioners to circumvent their statutory liability 
for fees and frustrate the policies Congress sought to 
implement by making fees available to prevailing parties 
under Section 1988.

Respondents appealed from the May 6 order denying 
costs and fees, and the Ninth Circuit reversed.5 Although 
the court of appeals discussed in dictum a decision of the 
Third Circuit disapproving all simultaneous negotiations 
of merits and attorney’s fees, see Prandini v. National 
Tea Co., 557 F.2d 1015 (3d Cir. 1977), it reaffirmed the 
view held by the Ninth Circuit that the results of such 
fee negotiations are not “per se unacceptable.”  743 F.2d 
at 652. However, after considering the undisputed facts 
of this case, the requirements of Rule 23 and Section 
1988, the public policies served by attorney’s fee awards 
in civil rights cases, and the ethical conflict created by 
petitioners’ demand between the class lawyer’s interest 
in compensation and the class members’ interest in re­
lief, the court concluded that the “ stipulated waiver of 
all attorneys’ fees obtained solely as a condition for ob­
taining relief for the class should not be accepted by the 
court,” id. (emphasis added), and remanded the case 
for a determination of reasonable attorney’s fees.

SUMMARY OF ARGUMENT
This case presents a narrow question for decision, but 

one that is crucial to the enforcement of the civil rights 
laws: whether a court in a civil rights action, in which 
only injunctive relief is sought, may enforce a complete 
waiver of plaintiffs’ right to costs and attorney’s fees un­
der the Civil Rights Attorney’s Fees Awards Act of 1976, 
42 U.S.C. § 1988, where the defendant on the eve of trial

5 While the appeal was pending, the Ninth Circuit also ordered 
petitioners to abide by the terms of the stipulation and to imple­
ment the relief provided therein while appellate review was being 
completed. J.A. 117, 119.



has conditioned a settlement offer providing substantial 
relief on the merits on that waiver. Rather than address­
ing this fundamental issue, petitioners argue that the 
court of appeals should not have imposed a per se rule 
against “ simultaneous negotiation of both merits and 
attorney’s fees in class action settlements.”  Pet. Br. 7. 
Much of the briefing by petitioners and their amici re­
volves around this misconception of the case. The court 
of appeals, however, did not rely on a per se rule against 
simultaneous negotiations to support its decision. Rather, 
it found the fee waiver in this case contrary to the im­
portant public policies behind Section 1988, and held only 
that a “ stipulated waiver of all attorney’s fees obtained 
solely as a condition for obtaining relief for the class 
should not be accepted by the court.” Jeff D. v. Evans, 
743 F.2d at 652.

The facts of this case show that petitioners secured a 
fee waiver by exploiting a conflict of interest between re­
spondents and their counsel. Respondents are a class of 
indigent, mentally and emotionally handicapped children 
who sought to obtain lawful conditions of institutionaliza­
tion by petitioners. In such cases, where indigent plain­
tiffs seek only injunctive relief, counsel’s only opportunity 
for compensation lies in an award of statutory attorney’s 
fees. Despite his interest in recovering fees, the para­
mount obligation of respondents’ counsel was, as peti­
tioners surely were aware, to protect the interests and 
special needs of his clients. On the eve of trial, after two 
and a half years of litigation and a previous refusal to 
settle, petitioners offered a settlement that provided 
nearly all of the merits relief sought by respondents but 
demanded a complete waiver of costs and attorney’s fees 
under Section 1988. Federal courts and a number of bar 
ethics committees have recognized that such an offer un­
fairly and improperly pits the lawyer’s interest in fees 
against his client’s interest in relief on the merits. Con­
fronted with that offer, respondents’ counsel could not 
ethically place his own interest in compensation above his



9

clients’ need for relief. Even to delay obtaining that re­
lief, which included the termination of such practices as 
housing emotionally disturbed children with adult psy­
chiatric patients charged with crimes, was obviously un­
acceptable.

But for the stipulated fee waiver, respondents would 
have been entitled to reasonable fees and costs under Sec­
tion 1988. “ [A] prevailing plaintiff ‘should ordinarily 
recover an attorney’s fee unless special circumstances 
would render such an award unjust,’ ” Hensley v. 
Eckerhart, 461 U.S. 424, 429 (1983) (quoting S. Rep. 
No. 1011, 94th Cong., 2d Sess. 4 (1976)), and a plain­
tiff who obtains a favorable settlement can recover fees. 
See Maher v. Gagne, 448 U.S. 122 (1980). There is no 
question that respondents prevailed in this case. Their 
class was certified, their constitutional claims withstood 
summary judgment, and, on the eve of trial, they ob­
tained a settlement granting them nearly all of the relief 
they sought. Only by - “ driv[ing] a wedge”  between 
respondents and their counsel, Pet. Br. 37, and by play­
ing upon counsel’s professional concern for his clients’ 
interests, were petitioners able to circumvent their lia­
bility for attorney’s fees under Section 1988. By coercing 
a waiver of respondents’ federally created rights under 
Section 1988, petitioners’ actions contravene that statute 
and raise significant constitutional questions.

The impact of petitioners’ tactic, if upheld, would ex­
tend far beyond the denial of fees in this case. Indeed, 
its effect would be to undermine the policies Congress 
sought to implement through Section 1988. Recognizing 
that most “victims of civil rights violations cannot afford 
legal counsel,” Congress authorized fee awards to “ at­
tract competent counsel” to civil rights cases and thus 
enable indigent plaintiffs to “present their cases to the 
courts.” H.R. Rep. No. 1558, 94th Cong., 2d Sess. 1, 9 
(1976). Finding that “ fee awards are essential”  if the 
civil rights laws are to be “ fully enforced,”  S. Rep. No.



10

1011, 94th Cong., 2d Sess., 5 (1976), Congress enacted 
Section 1988 to encourage private enforcement of those 
laws. These congressional purposes plainly would be 
frustrated by judicial enforcement of coerced fee waivers. 
If upheld, defendants will routinely demand, and obtain, 
fee waivers as a condition to settlement in civil rights 
cases. Deprived of the economic incentives intended by 
Congress, indigent civil rights plaintiffs seeking injunc­
tive relief will be unable to attract competent counsel to 
present their claims.

The district court addressed none of the problems posed 
by the fee waiver in this case. It completely misappre­
hended the coercive nature of petitioners’ demand, dis­
regarded the impact of such a fee waiver on the purposes 
of Section 1988, and rubber-stamped the stipulated waiver 
without independently assessing, as it was required to do 
under Section 1988, the reasonableness of awarding no 
fees at all in this case. See, e.g., Jones v. Amalgamated 
Warbasse Houses, Inc., 721 F.2d 881, 884 (2d Cir. 1983), 
cert, denied, 104 S. Ct. 1929 (1984).

The court of appeals correctly reversed the district 
court and held that the fee waiver should not be enforced. 
The court plainly had authority to invalidate a provision 
of an agreement that is contrary to public policy, see, 
e.g., McBrearty v. United States Taxpayers Union, 668 
F.2d 450 (8th Cir. 1982) (per curiam) ; Restatement 
(Second) of Contracts § 178 (1981), and its decision was 
consistent with the rulings of other courts that have set 
aside fee waivers as contrary to the public policy em­
bodied in Section 1988. E.g., Shadis v. Beal, 685 F.2d 
824 (3rd Cir.), cert, denied, 459 U.S. 970 (1982); 
Gillespie v. Brewer, 602 F. Supp. 218, 226-28 (N.D. 
W. Va. 1985).

Contrary to petitioners’ contention, the court of ap­
peals also correctly declined to invalidate the entire set­
tlement agreement. Courts have modified fee provisions



11

and invalidated fee waivers without disturbing the rest 
of the settlement agreements of which they were a part. 
See, e.g., Jones v. Amalgamated Warbasse-, Shadis v. 
Beal. Moreover, the parties here recognized the question­
able validity of the fee waiver and explicitly reserved the 
issue for the court to decide. Finally, if it was improper 
for petitioners to insist upon a fee waiver as a settlement 
condition, it would make little sense to allow them to 
avoid all of their obligations under the agreement on the 
ground that they relied on the impermissible waiver.

Petitioners and their amici suggest various alternatives 
to address the problems posed by coerced fee waivers, but 
none would be as fair and effective as the approach taken 
by the court of appeals. For example, they suggest that 
the problems posed by the type of fee waiver demanded 
here could be avoided by a carefully crafted retainer 
agreement. But even if a retainer agreement explicitly 
authorized respondents’ counsel to decline a settlement 
offer that was clearly in the best interests of the handi­
capped children he represented, it would hardly resolve 
the dilemma he faced as a conscientious attorney, and it 
would probably be invalid.

Finally, affirming the court of appeals decision would 
not interfere with the legitimate interests of defendants 
in settling civil rights cases. Defendants could still ob­
tain information about fees from plaintiffs, and thus as­
sess their total potential liability. Nor would such a rul­
ing preclude negotiation and settlement of attorney’s fees. 
Rather, it would merely eliminate a tactic that enables 
defendants, contrary to Congress’ intent, to avoid any 
liability for fees in settling meritorious civil rights suits. 
I f  the coerced fee waiver in this case is upheld, the harm 
will be not only to respondents here, but also to future 
indigent victims of civil rights violations, whose claims 
will go unredressed because they will be unable to secure 
counsel to represent them.



12

ARGUMENT

I. THIS CASE CONCERNS COERCIVE REQUESTS 
FOR FEE WAIVERS IN CIVIL RIGHTS CASES, 
NOT A PER SE RULE BARRING SIMULTANE­
OUS NEGOTIATION OF THE MERITS AND AT­
TORNEY’S FEES.

At the outset it is important to clarify the issues at 
stake. This case presents a narrow question for decision: 
Whether a court, in a civil rights action involving only 
injunctive relief, may enforce a complete waiver of costs 
and attorney’s fees, where the defendant after two and a 
half years of litigation has conditioned a settlement offer 
providing nearly all of the relief sought by the plaintiffs 
on that waiver. Petitioners and their amici never come to 
grips with this fundamental issue. Instead, conceding 
that in some circumstances fee waivers are improper, 
see, e.g., Pet. Br. 36, they contend that this Court should 
not impose a complete ban on “ simultaneous negotiation 
of both merits and attorney’s fees in class action settle­
ments.” See, e.g., Pet. Br. 7; Brief for the United States 
As Amicus Curiae Supporting Reversal ( “ U.S. Br.” ) 5. 
That issue is simply not presented by the record or the 
ruling below.

Petitioners contend that the court of appeals “ im- 
pos[ed] . . .  a per se bifurcated settlement rule”  and 
“ ruled that . . .  all negotiated settlements, absent unu­
sual circumstances, must be conducted in two separate 
stages.”  Pet. Br. 10. But the Ninth Circuit made no 
such sweeping pronouncement. Rather, it held that the 
fee waiver in this case contravened the public policy 
reflected in Section 1988 and that the district court should 
not have denied attorney’s fees on the basis of that 
waiver. The court of appeals clearly stated its precise 
holding:

[A] stipulated waiver of all attorney’s fees obtained 
solely as a condition for obtaining relief for the class



13

should not be accepted by the court. Rather, the 
court should make its own determination of the fees 
that are reasonable, giving due consideration to the 
appropriate factors.

Jeff D. v. Evans, 743 F.2d at 652.

That ruling is unassailable in the factual context of 
this case. On the merits, respondents presented substan­
tial constitutional claims concerning the state’s treatment 
of mentally and emotionally handicapped children. These 
claims withstood petitioners’ motion for summary judg­
ment. The case was certified as a class action, and the 
settlement offered by petitioners on the eve of trial pro­
vided nearly all of the merits relief sought by the plain­
tiff class. Thus, the concerns of several amici about not 
being able to settle “ nuisance” suits do not pertain to 
this case. See p. 37 infra.

In addition, respondents sought and received only in­
junctive relief. Such cases leave plaintiff’s counsel with 
no possibility of compensation other than an award of 
fees under Section 1988. This case thus does not present 
the validity of a “ lump sum” settlement or a “ sweet­
heart”  settlement that offers high fees to tempt plaintiff’s 
counsel to accept a lower settlement on the merits.6 * 8 Peti­
tioners’ settlement offer, accompanied by a demand for a 
complete fee waiver, squarely pitted counsel’s interest 
in compensation for his efforts against the interest 
of the plaintiff class in an extremely beneficial settle­
ment. As the court of appeals recognized, the ability of 
defendants to exploit such a conflict in order to exact fee 
waivers from plaintiffs’ counsel undermines the economic 
incentives that Congress expressly provided in Section

6 The interests of plaintiffs and their counsel are not as divergent 
where the parties negotiate a settlement providing monetary dam­
ages or a common fund. The higher the settlement amount, the 
higher the fees counsel might obtain from the fund. Similarly, in
a standard contingent fee contract, counsel’s fee is a percentage
of the monetary relief the plaintiff receives.



1988 to encourage private enforcement of the civil rights 
laws.

Finally, this case does not involve a surprise challenge 
by plaintiffs to a fee waiver they had misleadingly ac­
cepted. Respondents’ counsel made it clear that he be­
lieved the fee waiver was unlawful and unethical, and 
the parties consequently made the waiver expressly sub­
ject to court approval. See p. 5 & n.4 supra.'1

To be sure, there are other important issues concern­
ing the settlement of cases in which statutory attorney’s 
fees are recoverable. Commentators have offered a vari­
ety of possible solutions to the full range of issues that 
might arise in such cases.8 But this case presents only 
the stark issue of the validity of a fee waiver, in a case 
involving injunctive relief only, exacted from plaintiffs’ 
counsel on the eve of trial as a condition to a settlement 
offer on the merits that was extremely favorable to his 
clients. For the reasons set forth below, respondents 
maintain that the judgment of the court of appeals in­
validating that fee waiver should be affirmed.

14

(< * * * 7 Petitioners’ suggestion, see Pet. Br. 47-48, that there may be
special circumstances” for denying fees on the ground that the

challenge to the waiver by respondents’ counsel unfairly surprised
or misled them is thus unfounded.

8 See, e.g., Calhoun, Attorney-Client Conflicts of Interest and the 
Concept of Non-Negotiable Fee Awards Under J>2 U.S.C. § 1988, 
55 Colo. L. Rev. 341 (1984) (fee awards under Section 1988 should 
be non-negotiable); Kraus, Ethical and Legal Concerns in Com­
pelling the Waiver o f Attorney’s Fees by Civil Rights Litigants in 
Exchange for Favorable Settlement of Cases Under the Civil Rights 
Attorney’s Fees Awards Act of 1976, 29 Vill. L. Rev. 597 (1984) 
(endorsing ban on simultaneous negotiation of merits and attorney’s 
fees) ; Wolfram, The Second Set of Players: Lawyers, Fee Shifting, 
and the Limits of Professional Discipline, 47 Law & Contemp. 
Probs. 293, 316-19 (1984) (endorsing post-settlement invalidation 
of fee waivers as contrary to public policy) ; Comment, Settlement 
Offers Conditioned Upon Waiver of Attorneys’ F ees: Policy, Legal, 
and Ethical Considerations, 131 U. Pa. L. Rev. 793 (1983) (endors­
ing discontinuance of simultaneous negotiations only upon request 
of plaintiff’s counsel).



15

II. IN ENACTING SECTION 1988, CONGRESS DETER­
MINED THAT AWARDS OF ATTORNEY’S FEES 
WERE ESSENTIAL TO PRIVATE ENFORCEMENT 
OF CIVIL RIGHTS LAWS.

The legislative history of Section 1988 makes its pur­
pose plain: the statute was intended to facilitate pri­
vate enforcement of civil rights laws by enabling pre­
vailing plaintiffs to recover costs and attorney’s fees. 
The Act was passed in response to this Court’s decision 
in Alyeska Pipeline Service Co. v. Wilderness Society, 421 
U.S. 240 (1975), which held that federal courts could 
not award attorney’s fees to a prevailing party absent 
explicit congressional authorization. Testimony before 
Congress “ indicated that civil rights litigants were suf­
fering very severe hardships because of the Alyeska deci­
sion.”  H.R. Rep. No. 1558, 94th Cong., 2d Sess. 2 
(1976) ( “House Report” ). The House Report stated 
that civil rights “plaintiffs were the hardest hit by the 
decision,”  and specifically noted that “private lawyers 
were refusing to take certain types of civil rights cases 
because the civil rights bar, already short of resources, 
could not afford to do so.”  Id. at 3. Section 1988 was 
intended to remedy this problem.9

The legislative history emphasized Congress’ finding 
that, if civil rights plaintiffs could not recover attorney’s 
fees, they would go unrepresented and civil rights viola­
tions would go unredressed. The House Judiciary Com­

9 Emphasizing that Section 1988 was intended to achieve uni­
formity in federal civil rights laws, petitioners suggest that this 
goal was an implicit endorsement of fee waivers because such 
waivers were permissible under existing fee provisions in other 
civil rights statutes. See Pet. Br. 13-14. The cases cited by peti­
tioners do not show that fee waivers were permissible. See p. 26 
n.25 infra. In any event, the uniformity sought by Congress con­
cerned the effect of this Court’s decision in Alyeska, which “ created 
anomalous gaps in our civil rights laws whereby awards of fees 
[were] . . . suddenly unavailable” in actions under those civil rights 
statutes that lacked a fee provision. S. Rep. No. 1011, 94th Cong., 
2d Sess. 4 (1976).



16

mittee found that “ a vast majority of the victims of 
civil rights violations cannot afford legal counsel”  and 
are therefore “unable to present their cases to the 
courts.”  House Report, at 1. See S. Rep. No. 1011, 94th 
Cong., 2d Sess. 2 (1976) ( “ Senate Report” ) (many civil 
rights plaintiffs “ who must sue to enforce the law ha [ve] 
little or no money with which to hire a lawyer” ). By 
authorizing recovery of attorney’s fees, Section 1988 gave 
“ such persons effective access to the judicial process 
where their grievances can be resolved . . . .”  House Re­
port, at 1.

Congress found the need for recovery of attorney’s fees 
“pressing” and “ compelling.”  See House Report, at 3. 
The Senate Judiciary Committee stressed that the “civil 
rights laws depend heavily upon private enforcement,”  
Senate Report, at 2, and that “ fee awards are essential” 
if the civil rights laws “ are to be fully enforced.”  Id. at 
5. See id. at 2 ( “ fee awards have proved an essential 
remedy if private citizens are to have a meaningful op­
portunity to vindicate the important Congressional poli­
cies” in the civil rights laws). Congress also viewed fee 
awards as a critical deterrent to civil rights violations. 
The Senate Judiciary Committee stressed that fee awards 
are necessary “ if  those who violate the Nation’s funda­
mental laws are not to proceed with impunity . . . .” 
Senate Report, at 2. See id. at 5 ( “ fee awards are an 
integral part of the remedies necessary to obtain . . . 
compliance” with civil rights laws).10

Congress specifically focused on civil rights cases in 
which damages might be unavailable, noting that

awarding counsel fees to prevailing plaintiffs in such
litigation is particularly important and necessary if

10 Congress also recognized that the less desirable alternative to 
vigorous private enforcement of the civil rights laws was increased 
enforcement by the government. See id. at 4 ( “ fee shifting provi­
sions have been successful in enabling vigorous enforcement of 
modern civil rights legislation, while at the same time limiting the 
growth of the enforcement bureaucracy” ).



17

Federal civil and constitutional rights are to be 
adequately protected. To be sure, in a large number 
of cases brought under the provisions covered by [the 
bill], only injunctive relief is sought, and prevail­
ing plaintiffs should ordinarily recover their counsel 
fees.

House Report, at 9. See Newman v. Picjgie Park Enter­
prises, Inc., 390 U.S. 400, 402 (1968) (per curiam); 
Cooper v. Singer, 719 F.2d 1496, 1502 (10th Cir. 1983).

This case epitomizes Congress’ concerns. A class of 
emotionally and mentally handicapped children obviously 
does not have the funds to hire private lawyers and fi­
nance this type of litigation.11 Only with legal repre­
sentation provided without fee by Idaho Legal Aid were 
respondents able to prosecute successfully their injunc­
tive claims and secure conditions and services required by 
law. Respondents’ counsel had every reason to believe 
they would be able to recover costs and fees if  they pre­
vailed at trial or through settlement.12 Instead, petition­
ers compelled respondents’ lawyers to forego compensa­
tion as part of a settlement offer providing nearly all of 
the merits relief the class sought. If one of the results

11 In enacting the Civil Rights of Institutionalized Persons Act, 
42 U.S.C. §;§ 1997-1997j (1982), Congress recognized that institu­
tionalized persons are in dire need of legal representation to protect 
their basic civil rights:

Most institutionalized persons are poor; many are indigent; 
none possesses the resources necessary to finance litigation 
challenging systematic, institution-wide abuse. The cost of 
hiring experts to investigate, document, evaluate, and present 
testimony on the adequacy of institutional conditions is beyond 
the means of the most affluent institutionalized individuals.

S. Rep. No. 416, 96th Cong., 1st Sess. 20 (1979).

1:2 Congress made it clear that legal services organizations could 
recover fees under Section 1988. See House Report, at 8 n.16; 
New York Gaslight Club, Inc. v. Carey, 447 U.S. 54, 70-71 n.9 
(1980); Leeds v. Watson, 630 F.2d 674, 677 (9th Cir. 1980).



18

of successfully settling civil rights cases is a waiver of 
costs and fees, the financial ability of Idaho Legal Aid, 
or indeed any attorney, to represent future civil rights 
claimants will be seriously undermined.

III. PETITIONERS WERE ABLE TO EXACT A FEE 
WAIVER BY IMPROPERLY CREATING AND EX­
PLOITING A CONFLICT OF INTEREST BETWEEN 
RESPONDENTS AND THEIR COUNSEL.

The serious threat to the purposes of Section 1988 de­
rives from the unique ability of defendants in petition­
ers’ position to exploit a conflict o f interest between 
plaintiffs and their counsel. Under the American Bar 
Association’s Model Code of Professional Responsibility 
(“ Model Code” ) ,13 a lawyer has a fiduciary obligation to 
protect the interests of the client. The lawyer’s undivided 
loyalty to his client cannot be diluted by his “ personal 
interests,” and his professional judgment must be ex­
ercised “ solely for the benefit of his client and free of 
compromising influences and loyalties.”  EC 5-1; see 
Model Rule 1.7(b). Accordingly, an attorney is required 
to evaluate a settlement offer purely on the basis of his 
client’s interest, without considering his own interest 
in obtaining a fee. See EC 7-7 ( “ it is for the client to 
decide whether he will accept a settlement offer” ) ; Model 
Rule 1.2(a) ( “ lawyer shall abide by a client’s decision 
whether to accept an offer of settlement of a matter” ). 
The attorney’s entitlement to seek fees under Section 
1988 does not lessen his duty “always to act in a manner 
consistent with the best interests of his client,”  EC 7-9, 
and to provide disinterested counsel to his client. A 
favorable settlement offer coupled with a fee waiver de­

13 The State of Idaho has adopted standards of professional 
ethics very similar to the Model Code, which was adopted by the 
American Bar Association in 1969. In August 1983 the American 
Bar Association adopted the Model Rules of Professional Conduct. 
The Model Rules and the Model Code equally support the reasoning 
set forth herein.



19

mand thus directly pits the attorney’s economic interests 
against the client’s interests.14

The “ cruel dilemma” faced by an attorney confronted 
with such a settlement offer conditioned on a fee waiver, 
Freeman v. B & B Associates, 595 F. Supp. 1338, 1342 
(D.D.C. 1984), appeal docketed, No. 85-5239 (D.C. Cir. 
Mar. 11, 1985), is particularly acute in the circum­
stances of this case. On the one hand, the lawyer’s inter­
est in recovering fees under the statute is at its height. 
As is often true in civil rights cases, respondents’ counsel 
had no expectation of being paid by the indigent children 
he represented. Moreover, as in any case involving equi­
table relief only, the relief obtained cannot provide any 
compensation for the attorney.

On the other hand, the attorney here has special ob­
ligations to protect his client’s interests. Counsel is ob­
ligated under Fed. R. Civ. P. 23 to represent adequately 
the interests of the absent class members as well as the 
named plaintiffs. Representing a class of mentally and 
emotionally handicapped children “ casts additional re­
sponsibilities upon [the] lawyer” to “ act with care to 
safeguard and advance the interests of his client.” EC 
7-12; see Model Rule 1.14. These ethical obligations pre­
cluded respondents’ counsel from rejecting petitioners’ 
settlement offer, which provided immediate relief for 
children in need. Respondents’ interest in promptly end­
ing such practices as placing emotionally disturbed chil­
dren with adult sex offenders properly dictated his deci­
sion. Petitioners surely knew that respondents’ counsel 
could not ethically turn down their settlement offer in

14 The Legal Services Corporation, Act specifically provides that 
legal services attorneys “must have full freedom to protect the 
best interests o f their clients in keeping with the Code of Profes­
sional Eesponsibility, the Canons of Ethics, and the high standards 
of the legal profession.”  42 U.S.C. §2996(6).



20

order to protect his fees, and they placed him in that 
position solely to avoid their liability under Section 1988.15 16

Courts have widely recognized the ethical problems in­
herent in settlement offers conditioned on fee waivers. 
Justice Powell pointed out the conflict of interest inher­
ent in an offer of judgment under Rule 68 that does not 
include costs and attorney’s fees:

An offer to allow judgment that does not cover 
accrued costs and attorney’s fees is unlikely to lead 
to settlement. Many plaintiffs simply could not af­
ford to accept such an offer. It may be, also, that 
the plaintiff’s lawyer instituted the suit with no hope 
of compensation beyond recovery of a fee from the 
defendant. Such a lawyer might have a conflict of 
interest that would inhibit encouraging his client to 
accept an otherwise fair offer.

Delta Air Lines, Inc. v. August, 450 U.S. 346, 364 
(1981) (Powell, J., concurring).1,6 Other courts have rec­
ognized the same problem in demands for waivers of 
fees under Section 1988.17

15 Petitioners contend that it would be “ anomal[ous]” to bar a 
waiver of the right to attorney’s fees under Section 1988 since 
constitutional rights of defendants in criminal cases can be waived. 
See Pet. Br. 14 n.3. This argument completely ignores the coercive 
nature of the fee waiver demanded here. Cases are legion in which 
this Court has emphasized that a waiver of constitutional rights 
must be “voluntary”  as well as “knowing and intelligent,” Edwards 
v. Arizona, 451 U.S. 477, 482 (1981) (right to counsel), and not 
“ coercefd]”  or “ compelled.” Lefkowitz v. Turley, 414 U.S. 70, 79-83 
(1973) (privilege against self-incrimination).

16 See Freeman v. B & B Assoc., 595 F. Supp. 1338, 1342 (D.D.C. 
1984) (offer of judgment conditioned on fee waiver allows de­
fendant “ to squeeze an attorney and his client into a situation 
where an attorney can only be assured of an opportunity for a 
fee by jeopardizing a settlement otherwise advantageous to his 
client” ), appeal docketed, No. 85-5239 (D.C. Cir. Mar. 11, 1985).

17 See, e.g., Moore v. National Ass’n of Sec. Dealers, Inc., 762 
F.2d 1093, 1100, 1103 (D.C. Cir. 1985) (petition for rehearing 
held in abeyance pending outcome of this case); Lazar v. Pierce,



21

Petitioners and their amici suggest that White v. New 
Hampshire Department of Employment Security, 455 
U.S. 445 (1982), supports their position. In White, the 
Court held that a post-judgment fee motion was not a 
motion under Fed. R. Civ. P. 59(e) to alter or amend a 
judgment on the merits. That the Court “decline[d] to 
rely on”  an alternative argument that negotiation of at­
torney’s fees should be deferred until after judgment on 
the merits hardly supports petitioners’ contention that 
conditioning a settlement offer on a waiver o f fees is per­
missible. Indeed, the Court acknowledged that simul­
taneous negotiation of fees and merits “ may raise diffi­
cult ethical issues for a plaintiff’s attorney.” 455 U.S. at 
454 n.15.18

A  number of bar ethics committees have also acknowl­
edged the ethical problems presented by fee waiver de­
mands. The Ethics Committee of the New York City 
Bar Association has recognized that, because of his ethi­

757 F.2d 435, 438 (1st Cir. 1985) ; Obin v. District No. 9 Int’ l 
Ass’n of Machinists, 651 F.2d 574, 582-83 (8th Cir. 1981) ; Gillespie 
v. Brewer, 602 F. Supp. 218, 226-28 (N.D. W. Va. 1985) ; Regalado 
v. Johnson, 79 F.R.D. 447, 451 (D. 111. 1978).

The State Amici make much of the fact that Section 1988 author­
izes an award of fees to a prevailing party, and not directly to 
counsel, suggesting that any conflict of interest between attorney 
and plaintiff over recovery of fees was not objectionable to Con­
gress. See Brief of Alabama, et al., Amici Curiae In Support of 
Petitioners ( “ States Br.” ) 19-22. But Congress made it clear 
that fee awards were intended “ to attract competent counsel”  to 
civil rights cases, House Report, at 9, and courts have recognized 
that “ a motion for fees and costs in such a case, although made in 
the name of the plaintiff, is really one by the attorney.” Regalado 
v. Johnson, 79 F.R.D. 447, 451 (D. 111. 1978); see James v. Home 
Constr. Co. of Mobile, 689 F.2d 1357, 1358 (11th Cir. 1982).

18 Petitioners’ reliance on a statement in White that “a defendant 
may have good reason to demand to know his total liability from 
both damages and fees,” 455 U.S. at 454 n.15, is misplaced since 
petitioners here did not seek any information on liability for fees 
but insisted upon a complete fee waiver. See p. 37 infra.



22

cal obligations to the client, plaintiff’s counsel “ must 
ignore his or his organization’s interest in a fee and 
recommend waiver of the fee, if  the substantive terms 
of the settlement are desirable for the plaintiff.” Com­
mittee on Professional and Judicial Ethics of the New 
York City Bar Association, Op. No. 80-94 at 4, re­
printed in 36 Record of New York City Bar Assoc. 507 
(1981).

Defense counsel thus are in a uniquely favorable 
position when they condition settlement on the waiver 
of the statutory fee: they make a demand for a 
benefit which the plaintiff’s lawyer cannot resist as 
a matter of ethics and which the plaintiff will not 
resist due to lack of interest.

Id. Noting that statutory fees are “ critical to the ad­
ministration of justice,” see DR-102 (A ) (5),  the Com­
mittee concluded that “ it is unethical for defense coun­
sel to exploit this situation in cases arising under sta­
tutes aimed at protecting civil rights and civil liber­
ties.”  Id.19 20 The District of Columbia Bar adopted the 
same analysis. District of Columbia Bar Legal Ethics 
Committee, Op. No. 147, reprinted in 113 Daily Wash. 
Law Rep. 389 (1985) ; see also Grievance Commission of 
Board of Overseers of the Bar of Maine, Op. No. 17 
(1981) (unethical to negotiate fees prior to settlement 
of the underlying action where statutory fees are avail­
able) .2,°

The district court here utterly failed to comprehend the 
conflict of interest created by petitioners’ settlement offer 
conditioned on a fee waiver. The court stated that “ the

19 The Committee also noted the special obligation of government 
attorneys under EC 7-14 not to use their position or the power of 
the government “ to bring about unjust settlements or results.”

20 State Bar of Georgia, Op. No. 39, reprinted in 10 Georgia State 
Bar News 5 (1984) (see Pet. Br. 18), merely authorizes lump sum 
settlement offers, without considering fee waivers in injunctive 
relief cases.



23

ethical considerations run only to the issue” of whether 
“ the attorney in the process of bargaining [is] out to 
depreciate his client’s claim or to proceed in a manner 
that will be unfair to his client.” J.A. 93. Presumably, 
the district court would have recognized the conflict if 
respondents’ counsel had refused the settlement offer by 
placing his own interest in obtaining a fee above the 
interests of his clients. The conflict created by peti­
tioners did not disappear simply because counsel recog­
nized his ethical duty and accepted the offer.

Petitioners ultimately do not dispute that their con­
duct created a serious conflict of interest for respon­
dents’ counsel. They merely contend that, “ in light of 
these alleged conflict of interest problems,” “ a per se 
bifurcated settlement rule is not appropriate.” Pet. Br. 
11, 20; see also U.S. Br. 22 (conditional settlement offers 
are “ not ipso facto indicative of bad faith or unethical 
conduct” ). Whether or not a per se rule is appropriate, 
on the facts of this case it was improper for petitioners 
to use their conditional settlement offer to “ drived] a 
wedge between [the] plaintiffs and plaintiff’s counsel,” 
Pet. Br. 37, and exploit that conflict of interest to evade 
their statutory liability for fees.21

21 Petitioners rely on the Final Subcommittee Report of the 
Committee on Attorney’s Fees of the Judicial Conference of the 
United States Court of Appeals for the District of Columbia Cir­
cuit, reprinted in 13 Bar Rep. 4 (1984), but that report simply 
declined to adopt a flat rule prohibiting- simultaneous settlement of 
the merits and attorney’s fees. Moreover, the Report offered two 
examples suggesting that the fee waiver in this case would be 
considered improper. First, the Committee indicated that a lump 
sum settlement offer would be proper in a Title VII case “ in which 
the only issue is money, and the defendant believes that the plain­
tiff’s case is very weak.’’ Id. at 6. By contrast, in a Freedom of 
Information Act case, it would be improper for government counsel 
to condition release of the requested documents upon a waiver of 
attorney’s fees. “ That situation presents a grossly unfair choice 
to the plaintiff and his/her counsel, and permitting such offers to be 
made would seriously undermine the purpose of fee shifting provi-



24

IV. THE COURT OF APPEALS PROPERLY INVALI­
DATED THE FEE WAIVER AS CONTRARY TO 
SECTION 1988 AND THE PUBLIC POLICIES IT 
EMBODIES.

A. The Fee Waiver In This Case Contravened Section 
1988 And Its Underlying Purposes, And The Court 
Of Appeals Correctly Invalidated It.

By offering to provide nearly all of the relief sought 
by respondents, but conditioning the offer on a complete 
waiver of attorney’s fees, petitioners placed respondents’ 
counsel in a conflict of interest that could only be re­
solved by acceptance of the settlement and the fee waiver. 
On the facts of record there is no doubt that, but for 
that waiver, respondents would have been entitled to an 
award of some fees under the statute. See pp. 34-35 in fra . 
Thus, petitioners’ conditional settlement offer enabled 
them to circumvent entirely their potential liability for 
fees and effectively negated the operation of Section 
1988 in this case.22

The effect of the tactic used by petitioners, however, 
extends far beyond the confines of this case. In any 
civil rights case in which indigent plaintiffs seek injunc­
tive relief only, a defendant can evade liability for at­

sions.” Id. In light of these examples, it seems highly unlikely 
that the D.C. Circuit Committee would approve of government 
counsel’s conditioning a settlement providing the equitable relief 
requested by respondents here on a waiver of fees.

22 Where Congress has guaranteed citizens a federal right, states 
may not interfere with the individual exercise of that right. See 
Johnson v. Avery, 393 U.S. 483 (1969) ; see also Bounds v. Smith, 
430 U.S. 817, 834 (1977) (Burger, C.J., dissenting). Plainly, the 
state could not pass a statute precluding payment o f attorney’s fees 
in certain types of civil rights cases to which Section 1988 applies. 
Yet, petitioners and their amici suggest that they may be obliged 
routinely to demand fee waivers in an effort to reduce their total 
liability. See Pet. Br. 31-32; States Br. 53. Petitioners should not 
be permitted to “accomplish indirectly . . . that which cannot be 
done directly.” Williams v. Illinois, 399 U.S. 235, 243 (1970).



25
torney’s fees under Section 1988, even after years of liti­
gation and no matter how strong the plaintiffs case, by 
offering subtantial relief on the merits coupled with a 
fee waiver demand. Because this tactic plays on coun­
sel’s concerns for the interests of his clients, it is espe­
cially effective where, as in this case, plaintiffs are insti­
tutionalized children who are in serious need of the 
relief they seek. Such coerced fee waivers plainly con­
travene Congress’ purposes in enacting Section 1988. As 
the First Circuit has aptly stated:

[F ]or a defendant to require [plaintiff’s counsel] to 
forgo his fee (the instant case being a classic ex­
ample, since the so-called settlement provided no 
available funds, and, by hypothesis, the client was 
indigent) or to attempt to negotiate an unreason­
able fee, by playing upon counsel’s concern for his 
client, is contrary to the very intendment of the Act.

. . .  I f counsel can forsee themselves subject to 
being euchred out of their fee, even though success­
ful, the Congressional purpose will, pro tanto, be 
frustrated.

Lazar v. Pierce, 757 F.2d 435, 438 (1st Cir. 1985).23
Demands for fee waivers in civil rights cases are al­

ready commonplace.34 Petitioners and their amici go so 
far as to suggest that defense counsel may be ethically 
obliged to demand such a waiver. See Pet, Br. 32; States 
Br. 51-53. If this Court endorses the practice, fee waivers 
will always be demanded by defendants as a settlement 
condition in civil rights cases. “ No matter how sophisti- * 24

2,3 The court in Lazar declined to allow plaintiff’s counsel to 
recover fees, not because it approved of the fee waiver, but because 
plaintiff’s counsel, unlike respondents’ counsel here, entered the 
consent decree without informing the opposing parties of his 
intention to challenge the fee waiver provision. 757 F.2d at 437, 
439. See p. 29 n.29 infra.

24 The national staff counsel for the ACLU has estimated that 
requests for fee waivers are made in more than half of all civil 
rights cases litigated. Fee Waiver Requests Unethical: Bar Opinion, 
68 A.B.A.J. 23 (1982).



26

cated the analysis of attorney responses becomes, the 
conclusion remains that the more we decrease the rea­
sonable expectation of Fees Act awards, the less likely 
it is that Fees Act cases will be initiated.” Kraus, supra, 
29 Vill. L. Rev. at 637. Congress’ goal of encouraging 
private enforcement of the civil rights laws by provid­
ing for recovery of fees and costs under Section 1988 
clearly would be undermined by sanctioning the fee 
waiver at issue here.2:i

In these circumstances, there can be no doubt that the 
court of appeals was correct in concluding that the 
“ waiver of all attorney’s fees obtained solely as a con­
dition for obtaining relief for the class should not be 
accepted . . . .”  Jeff D. v. Evans, 743 F.2d at 652. Nor 
is there any question that the court had authority to set 
aside the coerced fee waiver as contrary to the public 
policy embodied in Section 1988. It is well-established 
that federal courts may void contractual provisions that 
contravene public policy. E.g., McBrearty v. United 
States Taxpayers Union, 668 F.2d 450 (8th Cir. 1982) 
(per curiam ); see generally 6A A. Corbin, Contracts *

2j Searching for some indication that such fee waivers are per­
missible, petitioners argue that when Congress passed Section 
1988, it “must be presumed to have known”  about two district 
court cases supposedly “ interpreting] Titles II and VII to allow 
plaintiffs to waive attorney’s fees,” Pet. Br. 13, and that Congress 
implicitly endorsed those decisions by its silence on this issue. 
Apart from the strained logic of this proposition, the decisions cited 
by petitioners did not authorize a fee waiver. In one case, a settle­
ment agreement specifically reserved the question of attorney’s fees 
for resolution by the court. Unable to determine from the settle­
ment agreement whether plaintiffs were in fact “prevailing parties,” 
the court asked the parties to address this issue. See Clanton v. 
Allied, Chem. Corp., 409 F. Supp. 282, 284-85 (E.D. Va. 1976). 
In the other case, the court affirmed one award of attorney’s fees 
under a settlement agreement and declined to award fees to another 
attorney because it determined that he was not entitled to them 
under the statute. Leisner v. New York Tel. Co., 398 F. Supp 1140 
(S.D.N.Y. 1974).



27

§ 1375 (1962 & Supp. 1984). The Restatement (Sec­
ond) of Contracts § 178 (1981) specifically provides that:

(1) A promise or other term of an agreement is 
unenforceable on grounds of public policy if legisla­
tion provides that it is unenforceable or the interest 
in its enforcement is clearly outweighed in the cir­
cumstances by a public policy against the enforce­
ment of such terms.

In determining whether a provision of an agreement 
contravenes public policy, Section 178 looks to “ the 
strength of that policy as manifested by legislation or 
judicial decisions” and “ the likelihood that refusal to 
enforce the term will further that policy.”  Id. § 178(3) 
(a ), (b ).2*

Relying on the Restatement, the Third Circuit in 
Shadis v. Beal, 685 F.2d 824 (3rd Cir.), cert, denied,, 
459 U.S. 970 (1982), invalidated as contrary to public 
policy a contract provision in which a legal services 
organization waived any right to request or receive legal 
fees in actions against the Commonwealth of Pennsyl­
vania. The court stated that “ Congress expressed un­
ambiguously the significance it attached to the attor­
neys’ fees provisions, and we conclude that the public 
policy embodied in § 1988 is a vital one.”  Id. at 831.26 27 
The court held the offending provision void, finding that 
“  [ i]f  the Commonwealth could insert and enforce the 
no fees restraints in its contracts, the policy of economic

26 Section 178 also requires consideration of “ the seriousness of 
any misconduct involved and the extent to which it was deliberate” 
and “the directness of the connection between that misconduct and 
the term.” Id. § 178(3) (c ), (d).

27 The Restatement does not require an express prohibition of
the contract term; rather, “ it is sufficient if the legislature makes 
an adequate declaration of public policy which is inconsistent with 
the contract’s terms.” Shadis, 685 F.2d at 833-34 (citing Restate­
ment (Second) of Contracts §179, Comment (b) ( “ [a] court
. . . will look to the purpose and history o f the statute” ) ) .



inducement sought by Congress would be severely im­
paired.” Id.

Courts in a variety of circumstances have refused to 
give effect to a waiver of a plaintiff’s right to recover 
fees. They have specifically held fee waivers demanded 
as a settlement condition unenforceable as contrary to 
the principles of Section 1988, just as the Ninth Circuit 
held in this case. Gillespie v. Brewer, 602 F. Supp. 218, 
226-28 (N.D. W. Va. 1985) ; see Lisa F. v. Snider, 561 
F. Supp. 724 (N.D. Ind. 1983) (court ordered parties 
to conduct settlement negotiations on the merits and 
fees separately where defendant had demanded fee 
waiver as a settlement condition) ; cf. Mitchell v. John- 
ston, 701 F.2d 337, 351 (5th Cir. 1983) (court may not 
condition pro hac vice admission of plaintiff attorneys 
on waiver of their right to seek fees under Section 
1988). See Wolfram, supra, 47 Law & Contemp. Probs. 
at 317-18 (1984).28

In other contexts, courts have refused to find that plain­
tiffs’ attorneys had waived their right to seek attorney’s 
fees under the statute. For example, a settlement agree­
ment that is silent on attorney’s fees has not been viewed 
as an implicit waiver barring recovery of fees. See, 
e.g., El Club Del Barrio, Inc. v. United Community 
Corps., 735 F.2d 98 (3d Cir. 1984). Similarly, the ex­
istence of a contingent fee agreement between counsel 
and plaintiffs has not been considered a waiver of the 
right to recover fees under Section 1988 in excess of the 
contingency amount. See, e.g., Cooper v. Singer, 719

28 Courts have also protected the purposes of fee-shifting provi­
sions in other statutes. See, e.g., James v. Home Constr. Co. of 
Mobile, 689 F.2d 1857, 1359 (11th Cir. 1982) ( “ Congress could not 
have intended to allow settling defendants to demand fee waivers 
under Truth in Lending Act since “ [s]uch a result would enable 
[defendants] . . .  to escape liability for attorney’s fees . . . [and] 
would thwart both the statute’s private enforcement scheme and 
its remedial objectives” ) .



29

F.2d 1496 (10th Cir. 1983); Sanchez v. Schwartz, 688 
F.2d 503, 505 (7th Cir. 1982).

In short, most courts confronting fee waivers have 
been true to the purposes of Section 1988. “ Recognizing 
Congress’ clear signals to apply the Act ‘broadly to 
achieve its remedial purpose,’ ”  Gates v. Collier, 616 F.2d 
1268, 1275 (5th Cir. 1980) (quoting Mid-Hudson Legal 
Services, Inc. v. G&U, Inc., 578 F.2d 34, 37 (2d Cir. 
1978)), they have not permitted fee waivers to under­
mine Congress’ intent to provide the necessary economic 
incentives for lawyers to represent indigent civil rights 
plaintiffs.29

Disregarding this precedent and the especially coercive 
nature of the fee waiver at issue here, the district court 
simply enforced the waiver without even considering 
whether it would contravene the purposes of Section 
1988.30 The district court also erred by failing to make

29 Petitioners’ reliance on Moore v. National Ass’n of Sec. Dealers, 
Inc., 762 F.2d 1093 (D.C. Cir. 1985) (petition for rehearing 
held in abeyance pending outcome of this case), is misplaced. 
The court in Moore, which specifically found this case distinguish­
able, 762 F.2d at 1102, held only that “plaintiffs may, volun­
tarily and on their own initiative, offer a waiver or concession of 
possible claims for fees and costs in an effort to encourage settle­
ment.” Id. at 1105. The court stressed this limitation on its 
ruling, see id. at 1105 n.17, 1110, as did Judge Wald’s concur­
ring opinion. Id. at 1112-13. It is clear in this case that re­
spondents’ counsel did not voluntarily and on his own initiative 
offer a fee waiver. The court in Moore also noted that the plain­
tiff “ understood she had a weak case on the merits.” Id. at 1107. 
Moreover, as in Lazar v. Pierce, 757 F.2d 435, 439 (1st Cir. 1985), 
a critical aspect of the decision in Moore was the failure of 
plaintiff’s counsel to inform the defendants or the court of his 
objections to the fee waiver. See 762 F.2d at 1111 (Wald, J., con­
curring) (stressing that plaintiff’s counsel “ unequivocally” in­
formed the district court “ that the waiver was fully voluntary” ) .

30 Petitioners’ contention that the district court did not deny 
fees solely on the basis of the waiver provision in the settlement 
agreement is defied not only by the district court’s decision, J.A. 
93-94, but by petitioners’ failure even to argue in the district court



30

any independent determination under Section 1988 of the 
reasonableness of denying all fees in this case.31 In view 
of these legal errors and the plain threat to the statute, 
the court of appeals correctly reversed the district court’s 
decision to enforce the fee waiver.32

B. Petitioners’ Alternatives To The Approach Of The 
Court Of Appeals Would Not Resolve The Problems 
Posed By The Coerced Fee Waiver.

Petitioners and their amici argue that there are a 
number of alternative solutions short of invalidating 
coerced fee waivers that would deal with the problems 
presented here. They suggest, for example, that the prob­
lems posed by a fee waiver demanded as a settlement con­
dition should simply be worked out between plaintiffs and 
their counsel through a carefully crafted retainer agree­

that respondents’ motion for fees could be denied on any other 
basis. See p. 6 supra.

31 See, e.g., Jones v. Amalgamated Warbasse Houses, Inc., 721 
F.2d 881, 884 (2d Cir. 1983) ( “ [t]he presence of an arms’ length 
negotiated agreement among the parties weighs strongly in favor 
of approval, but such an agreement is not binding on the court” ), 
cert, denied, 104 S. Ct. 1929 (1984) ; Gillespie v. Brewer, 602 F. 
Supp. 218, 226 (N.D.W.Va. 1985) (despite fee waiver clause in 
settlement agreement, court made its own determination that fees 
should be awarded and held that the “ clause violates public policy 
and is unenforceable” ) ; Boyd v. Bechtel Corp., 485 F. Supp. 610, 
628 (N.D. Cal. 1979) ( “ [t]his Court has made it abundantly clear 
that it alone has the authority to determine whether and how much 
attorneys’ fees will be awarded in this case, and that it will not 
be bound by any agreements between the parties regarding fees” ) ; 
Foster v. Boise-Cascade, Inc., 420 F. Supp. 674, 687 (S.D. Tex. 
1976), aff’d, 577 F.2d 335 (5th Cir. 1978) (per curiam ); cf. Cooper 
v. Singer, 719 F.2d 1496 (10th Cir. 1983) (in determining reason­
able fees under Section 1988, courts are not bound by contingent 
fee agreement).

®2 Since the district court’s decision on the validity of the fee 
waiver was based on legal errors, petitioners’ contention that the 
court of appeals erred by reversing without finding that the dis­
trict court abused its discretion is mistaken.



31

ment. See, e.g., Pet. Br. 33-34; U.S. Br. 7, 25. The di­
lemma faced by a conscientious plaintiff’s attorney con­
fronted with a very favorable settlement offer conditioned 
on a fee waiver would not be resolved by the existence of 
a retainer agreement authorizing the attorney to act 
against the interests of his client. Moreover, such a re­
tainer agreement would be of questionable validity at 
best,33 particularly when the clients are mentally and 
emotionally handicapped minors.

Petitioners also suggest that a district court can use 
its authority under Rule 23(e) and Rule 16 to intercede 
in settlement negotiations in which there are allegations 
of unethical conduct by defendants.34 But requiring 
plaintiff’s counsel to go to the judge during the negotia­
tions is almost certain to be ineffective. If plaintiff’s 
counsel cannot risk losing a favorable settlement by re­
fusing to acceed to a demanded fee waiver, he will also 
be unable to risk withdrawal of the settlement offer by 
seeking the court’s intervention. It is not clear what 
relief a district court could provide that would assist 
plaintiff’s counsel without harming the interests of his 
clients that he seeks to protect.35

33 As one commentator has noted: “Any retainer provision
which may be construed as a limitation on the ability of the client 
to settle is likely to be declared invalid. An attorney cannot insist, 
for example, on a right to participate equally with the client in 
determining the propriety o f settlement.”  Calhoun, supra-, 55 Colo. 
L. Rev. at 354. See EC 7-7; Model Rule 1.2 (a ) . Further, “a con­
tingent fee agreement cannot bind members of a class represented 
by an individual plaintiff and, therefore, is not an effective solu­
tion for class action.” 55 Colo. L. Rev. at 356.

34 Specifically, they suggest that the court use a magistrate or a 
special master or “ appoint a guardian ad litem to protect the 
interests o f plaintiffs.” Pet. Br. 37.

85 Moreover, in reviewing a settlement of a class action under 
Rule 23(e), the district court’s obligation is primarily “ to protect 
the nonparty members of the class from unjust or unfair settle­
ments affecting their rights,” 7A C. Wright & A. Miller, Federal 
Practice and Procedure §1797, at 226 (1972), not to protect the 
interests o f plaintiff’s counsel.



32

Finally, petitioners urge this Court to create a pre­
sumption that defense counsel has acted in good faith, 
which plaintiffs would have to overcome in order for 
the district court to invalidate a fee waiver. Pet. Br. 36. 
Similarly, the Acting Solicitor General suggests that 
plaintiffs must meet a threshold burden of demonstrat­
ing the “ bad faith”  of defense counsel. U.S. Br. 27. But 
the defendant’s good or bad faith is not the concern. 
Petitioner’s demand for a fee waiver as a condition of a 
favorable settlement offer here is improper because it 
undermines Section 1988. This holds true even if a de­
fendant’s motivation is simply to save money by avoid­
ing paying fees.36 Moreover, Congress did not intend 
fee awards against state defendants to depend on a 
showing of bad faith, see Senate Report, at 5 n.7; 
Hutto v. Finney, 437 U.S. 678, 693 (1978), and it would 
be inconsistent with that intent and highly inefficient to 
require the court to hold a hearing on petitioners’ state 
of mind in determining whether fees are available. See 
Hensley v. Eckerhart, 461 U.S. 424, 437 (1983) ( “ [a] 
request for attorney’s fees should not result in a second 
major litigation” ) .37

86 The technique of exploiting a conflict of interest to exact a fee 
waiver in the circumstances of this case does, in any event, indicate 
bad faith, although neither petitioners nor the Solicitor General 
clearly define the standard. Petitioners concede that a plaintiff’s 
burden of showing bad faith “would ordinarily be met when an offer, 
on its face, makes a ‘totally inadequate provision for class counsel.’ ” 
Pet. Br. 36. Clearly the absolute waiver demanded here after two 
and a half years of litigation meets this test.

37 Other “ solutions” suggested by amici, such as providing notice 
to absent class members and allowing the settlement process itself 
to work out any problems, see States Br. at 57-58, would provide 
no help to plaintiff’s counsel and no protection for the long-term 
interests of civil rights plaintiffs. The suggestion that the problem 
lies exclusively in the domain o f state bar ethics committees, see 
Brief of the Council of State Governments, Amicus Curiae, et al., 
20, overlooks the power and the obligation of federal courts to deter­
mine when an award o f fees is appropriate under Section 1988 and 
to preserve the purposes of that statute. See pp. 24-30 supra.



33

The court of appeals decision on the facts of this case 
provides a far more workable standard: where plaintiffs 
have a substantial claim on the merits for injunctive re­
lief only, a fee waiver exacted by a defendant as a condi­
tion to a favorable settlement offer contravenes public 
policy and is therefore invalid.

C. The Court Of Appeals Correctly Declined To In­
validate The Entire Settlement Agreement.

Petitioners and their amici argue that, having found 
the fee waiver invalid, the court of appeals was obli­
gated to invalidate the entire settlement agreement and 
remand the case to the district court for further pro­
ceedings. But federal courts have frequently modified 
fee provisions in settlement agreements without even 
questioning the validity of the rest o f the agreement. 
See, e.g., Jones v. Amalgamated Warbasse Houses, Inc., 
721 F.2d 881 (2d Cir. 1983), cert, denied, 104 S. Ct. 
1929 (1984). Specifically, courts have held fee waiver 
provisions void as contrary to public policy while leaving 
the rest of the contract or settlement agreement intact. 
E.g., Shadis v. Beal, 685 F.2d 824 (3d Cir.), cert, de­
nied, 459 U.S. 970 (1982); Gillespie v. Brewer, 602 F. 
Supp. 218 (N.D. W. Va. 1985). See Wolfram, supra, 47 
Law & Contemp. Probs. at 318 ( “ [t]he courts’ general 
approach is to invalidate the entire contract only when 
the offending clause is an integral part of the contract 
and its excision makes the remainder of the contract im­
possible or seriously difficult to perform” ) ; Restatement 
(Second) of Contracts § 184 (1981).

Petitioners’ contention that the entire settlement agree­
ment must fall is hardly surprising. Whenever a de­
fendant has demanded a fee waiver as part of a settle­
ment offer, gambling on the validity of the waiver, the 
defendant will contend that the agreement should fall in 
its entirety if the waiver is struck down. If it was wrong, 
however, for petitioners to demand a fee waiver as a



34

settlement condition in the circumstances of this case, it 
certainly would not be a proper remedy to allow petition­
ers to avoid their obligations under the rest of the agree­
ment on the ground that they relied on the impermissible 
waiver. See Wolfram, supra, 47 Law & Contemp. Probs. 
at 318. Here, it was particularly appropriate for the 
court to hold the fee waiver invalid without disturbing 
the rest of the settlement agreement, since the agreement 
explicitly reserved the question of the waiver’s validity for 
the court. See J.A. 104; p. 5 & n.4 supra. Since the entire 
settlement agreement had to be approved by the court un­
der Rule 23(e),  the inclusion of this language only in the 
fee waiver clause indicates that the court was to deal with 
the fee waiver provision separately.

Petitioners also contend that, even if the fee waiver 
was properly held invalid, the court of appeals should not 
have remanded for a “ determination” of attorney’s fees, 
since the district court could still deny any fees to re­
spondents. In seeking such a remand, petitioners ask this 
Court to shut its eyes to the facts of this case. It is well 
established that “ a prevailing plaintiff ‘should ordinarily 
recover an attorney’s fee unless special circumstances 
would render such an award unjust.’ ” Hensley v. 
Eckerhart, 461 U.S. 424, 429 (1983) (quoting S. Rep. 
No. 1011, 94th Cong., 2d Sess. 4 (1976) (quoting in turn 
Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 
402 (1968)) ) .  See El Club Del Barrio, Inc. v. United 
Community Corps., 735 F.2d 98, 100 (3d Cir. 1984) 
(recognizing the “ presumption established in Hensley and 
Piggie Park'” that prevailing plaintiffs should be awarded 
fees). It is equally plain that a plaintiff who enters a 
favorable settlement can recover fees, see, e.g., Maher v. 
Gagne, 448 U.S. 122 (1980); House Report, at 7, and that 
“ ‘plaintiffs may be considered “ prevailing parties”  for 
attorney’s fees purposes if they succeed on any significant 
issue in litigation which achieves some of the benefit the 
parties sought in bringing suit.’ ”  Hensley, 461 U.S. at



35

433 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 
(1st Cir. 1978)).  Simply put, “ [t]he result is what mat­
ters.”  461 U.S. at 435.38

There is simply no basis in the record for suggesting 
that respondents are entitled to no fees at all under the 
appropriate standards. See p. 6 supra. Neither in 
the district court, in response to the motion for costs and 
attorneys’ fees, nor in the court of appeals, did petitioners 
contend that respondents were not “ prevailing parties”  or 
“ maintain that there [wTas] any basis, apart from the 
stipulation, for the denial of attorneys’ fees. . . . The 
[petitioners’ ] only contention [was] that the [respond­
ents] should be bound by the stipulation waiving fees.” 
Jeff D. v. Evans, 743 F.2d at 650.®9

V. BARRING COERCED FEE WAIVERS WOULD NOT 
INTERFERE WITH THE LEGITIMATE INTER­
ESTS OF DEFENDANTS IN SETTLING CIVIL 
RIGHTS SUITS.

Contrary to the assertions of petitioners and their 
amici, an affirmance in this case would not interfere wTith 
the public policy in favor of settling civil rights suits. 
I f  this Court makes it clear that coerced fee waivers will 
not be enforced, there will be a strong incentive to settle

38 Hensley stressed that “ the fee award should not be reduced 
simply because the plaintiff failed to prevail on every contention 
in the lawsuit. . . . [T ]he court’s rejection o f or failure to reach 
certain grounds is not a sufficient reason for reducing a fee.” 
461 U.S. at 435. The district court’s granting summary judg­
ment against respondents on certain claims thus provides no 
basis for denying fees, particularly since it left the core constitu­
tional claims intact.

89 Having never raised the argument below that respondents are 
otherwise not entitled to attorneys’ fees under Section 1988, peti­
tioners should not be permitted to raise this argument for the first 
time in this Court. See, e.g., Cleveland Bd. of Educ. v. LoudermiU, 
105 S. Ct. 1487, 1492 n.5 (1985).



36

at an early stage rather than run the risks of neglecting 
settlement, going to trial, and incurring much larger fees 
after the case has been fully litigated. By contrast, if 
defendants know that a fee waiver will be upheld, the 
lack of any potential liability for fees will provide an in­
centive to delaying settlement. More importantly, to the 
extent coercive fee waiver demands promote settlement, 
it is only because defendants are allowed to “ drive [] a 
wedge between . . . plaintiffs and plaintiff’s counsel,” Pet. 
Br. 37, to eliminate their liability under Section 1988. A 
tactic that “ promotes” settlement, but fosters conflicts of 
interest, denies reasonable compensation to attorneys and 
undermines the purposes of a federal statute is contrary 
to public policy and should not be tolerated.40

Relying on White v. New Hampshire Department of 
Employment Security, 455 U.S. 445, 454 n.15 (1982), 
petitioners and their amici argue that a defendant has a 
“ right to know” its total liability, including potential lia­
bility for attorney’s fees. The ruling sought by respond­
ents would not preclude a defendant from seeking fee in­
formation from plaintiffs or from negotiating an agree-

40 The Acting Solicitor General’s contention that invalidating the 
fee waiver in this case would somehow discourage settlements in 
cases under the Equal Access to Justice Act, 28 U.S.C. § 2412 (1982) 
( “ EAJA” ), is unpersuasive. See U.S. Br. at 18-14. The EAJA 
obligates the Government to pay counsel fees only when “ the posi­
tion o f the United States was not substantially justified,” 28 U.S.C. 
§ 2412(d) (1) (B ), whereas Section 1988 authorizes a fee award to 
a prevailing plaintiff even if  the defendant took a substantially 
justified position. The higher threshold for obtaining fees under 
the EAJA makes it less likely that an attorney’s decision to repre­
sent a party will be premised upon an expectation that his compen­
sation will come from a fee award. In any event, the Government 
should not be permitted to circumvent its liability under the EAJA 
by demanding a fee waiver after litigating against its citizens 
without “substantial[] justifi[cation].”



37

ment on fees subject to court approval.41 Petitioners 
never inquired into the amount of time respondents’ at­
torneys spent on the case or made any effort to determine 
their potential liability for fees. They were only inter­
ested in obtaining an absolute fee waiver as a condition 
to a stipulation on the merits.

It is also unrealistic to assume that a defendant has no 
way of calculating the amount of attorney’s fees a 
plaintiff will ultimately be awarded. Recent decisions of 
this Court on fee calculations make a reasonable estimate 
possible. See, e.g., Hensley v. Eckerhart, 461 U.S. 424, 
433 (1983) ( “ the number of hours reasonably expended 
. . . multiplied by a reasonable hourly rate . . . provides 
an objective basis on which to make an initial estimate” 
of fees) ,42

Petitioners and several of their amici contend that fee 
waivers are necessary to settle “ nuisance suits,”  which 
defendants may be willing to settle only if they can avoid 
liability for attorney’s fees. Once again, this concern is 
not at issue here. Respondents pressed substantial con­
stitutional and statutory claims concerning the treatment 
of emotionally and mentally disturbed children, and any 
suggestion that their suit was frivolous is belied by peti­
tioners’ decision to provide almost all of the injunctive 
relief sought. In any event, a fee waiver in the settlement 
of a true nuisance suit may be upheld under Section 1988,

41 See Committee on Professional and Judicial Ethics of the New 
York City Bar Ass’n, Op. No. 82-80 (1984) (defendants’ counsel in 
civil rights cases ethically may request that plaintiffs’ counsel sup­
ply fee information for estimating defendants’ total liability).

42 The Court also focused on the results obtained by plaintiffs, see 
461 U.S. at 435, a factor which should be as apparent to defendants 
as to plaintiffs. Moreover, this and other factors affecting fee cal­
culations often will be reflected in the hourly rates and the hours 
expended. See Blum v. Stenson, 104 S. Ct. 1541, 1548-50 (1984); 
Hensley, 461 U.S. at 434 n.9.



38

since a plaintiff who brings a non-meritorious suit would 
not qualify as a “ prevailing party”  entitled to fees. See, 
e.g., Gram v. Bank of Louisiana, 691 F.2d 728, 730 (5th 
Cir. 1982) ; Chieano Police Officer’s Association v. Stover, 
624 F.2d 127, 131 (10th Cir. 1980). Moreover, defend­
ants have an array of weapons to combat frivolous litiga­
tion.43 Petitioners’ concern is not the frivolous, but the 
meritorious case, such as this one.

*  *  *  *

In sum, petitioners and amici seek to divert the Court 
from the facts of this case and the only issue decided 
below— whether the fee waiver demanded by petitioners 
as a condition of a favorable settlement was properly 
invalidated as contrary to Section 1988 and the public 
policy it reflects. Petitioners’ take-it-or-leave-it settle­
ment proposal, offering substantial merits relief only if 
respondents waived all claims to fees, sought to create 
and exploit a conflict of interest between respondents 
and their counsel in order to avoid liability under Sec­
tion 1988. The real harm from this tactic is not only to 
the lawyers or to the plaintiffs in a particular suit, but 
to future victims of civil rights violations who will go 
unrepresented. This is precisely the problem Congress 
sought to address in enacting Section 1988. Judicial en­
forcement of such fee waivers would undermine the pur­
poses of Section 1988, leaving “ our civil rights laws . . . 
mere hollow pronouncements which the average citizen 
cannot enforce.”  Senate Report, at 6.

43 Defendants can dispose of frivolous suits by filing a motion to 
dismiss under Rule 12(b) (6) or a motion for summary judgment 
under Rule 56. In addition, they may seek costs and attorney’s fees 
under Section 1988 itself, and they may recover costs and fees from 
counsel under Rule 11 and 28 U.S.C. § 1927 (1982) if the litigation 
was frivolous or vexatious.



39

CONCLUSION

For the reasons stated above, respondents respectfully
submit that the decision of 
be affirmed.

Howard A. Belodoff 
Counsel of Record 
Idaho Legal A id 

Services, Inc.
P.O. Box 913 
Boise, Idaho 83702 
(208) 345-0106

Charles Johnson, III 
Legal Aid Project 
Johnson, Olson, Robinson, 

Chartered 
P.O. Box 1725 
Pocatello, Idaho 83204 
(208) 232-7926

the court of appeals should 

Respectfully submitted,

W illiam T. Coleman, Jr. 
Aaron S. Bayer 
James P. Nehf 

O’Melveny & Myers 
1800 M Street, N.W. 
Suite 500 South 
Washington, D.C. 20036 
(202) 457-5325

Dated: September 6,1985