Evans v. Jeff D. Brief of the Committee on Legal Assiatance
Public Court Documents
January 1, 1985

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Brief Collection, LDF Court Filings. Evans v. Jeff D. Brief of the Committee on Legal Assiatance, 1985. 8593183c-b19a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/8a993815-e94f-47ef-98e4-107c61bfe51f/evans-v-jeff-d-brief-of-the-committee-on-legal-assiatance. Accessed April 29, 2025.
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No. 84-1288 I n t h e Bnpnmz (tort of tljr Imirfc Ifetrs October T erm, 1985 John Y. E vans, R ose B owman, George Bachik and W illiam Gruzinski, Petitioners, v. Jeee D., P aula E., John M., and Dusty R., Minors, By and Through Their Next Friend, Charles Johnson, III, Individually and on Behalf of the Class They Represent and Mark Clary, Intervenor, Respondents. ON WRIT OE CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF OF THE COMMITTEE ON LEGAL ASSISTANCE OF THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK AS AMICUS CURIAE ON BEHALF OF RESPONDENT A llan L. Gropper 1155 Avenue of the Americas New York, New York 10036 (212) 819-8403 Counsel for Amicus Curiae Table of Contents Page Table of Authorities ..................................... iv Interest of Amicus ........................................ 1 Statement of the Case: Hie Questions Actually Presented ................................ 3 Summary of Argument...................................... 6 Argument............. 10 I. Hie Problem of Coerced Waiver of Statutory Attorneys' Pees is One Peculiar to Civil Rights Practice, Arising From the Nature of the Attor- ney/Client Relationship Typical of those Cases................... 10 A. Hie Nature of Civil Rights Cases ..................................... 11 B. These Dynamics of Civil Rights Practice Result in Significantly Different Ethical Consequences ......................... 13 II. Given These Circumstances, A Defendant's Lawyer Who Makes an Offer of Settlement Condi tioned on the Waiver of the Required Statutory Pee Violates Accepted Norms of Professional Ethics 22 24 A. The Use of the Waiver Tactic is Prejudicial to the Administration of Justice . . . . . . . . . . . B. The Use of the Waiver Tactic Undermines the Integrity of the Legal Profession . . . . . . . . . . . . . . . . . . 28 C. The Use of the Waiver Tactic is Inconsistent with the Lawyer's Duty to Act within the Bounds of the Law . . . . . . . . . . . 31 D. Hie Use of the Waiver Tactic by Government Counsel is Particularly Inappropriate ........................ 40 III . A Bifurcated Approach to Negotiations of the Merits and Fees in Civil Rights Cases is the Most Appropriate and Effective Remedial Device for Preventing the Ethical Abuse of the Coercive Waiver and its Variants .............. 43 A. Coercive Fee Waiver Agreements Should be Unenforceable ........................ 44 B. A Bifurcated Approach to Settlement Is the Most Effective Remedy . . . . . . . 46 C. The Ordinary Judicial Tools Have So Far Proven Insufficient . . . . . . . . . 54 - i i - D. The Criticisms of the Bifurcated Approach Are Inaccurate........................... 58 CONCLUSION..................................................... 64 - i i i - Table of Authorities Cases: Pages Adickes v. Kress & Co., 398 U.S. 144 (1970) .................. 41 Blum v. Stenson, U.S. , 79 L.Ed. 2d 891 (1984) .............. 36, 58 Cotton v. Hinton, 559 F.2d 1326 (5th Cir. 1977) ..................... 45 Hensley v. Eckerhart, 461 U.S. 424 (1 9 8 3 ) . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Lazar v. Pierce, 757 F.2d 435 (1st Cir. 1985) ...................... ..18, 19, 22, 30 Lipscomb v. Wise, 643 F.2d 319 (5th Cir. 1981) ......................... 10 Moore v. National Assoc, of Securi ties Dealers, 765 F.2d 1093 (D.C. Cir. 1985) . . . . . . . . . . . 17, 23, 30, 48, 54 Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400 (1968) ......... 33, 34 New York Gaslight Club, Inc. v. Carey, 447 U.S. 54 (1980) ........ 33 Owen v. City of Independence, 445 U.S. 622 (1980) .......... . 41 Prandini v. National Tea Co., 557 F.2d 1015 (3rd Cir. 1977) . . . . . . 54, 55, 63 Regalado v. Johnson, 79 F.R.D. 447 (N.D. 111. 1978) .......................... .. 10 United States v. ITT Continental Baking Co., 420 U.S. 223 (1975). 44 iv Weil v. Neary, 278 U.S. 160 (1929) .. 44 Woodstock Iron, Co. v. Richmond and Danville Extension Co., 129 U.S. 644 (1889) .................. 44 Statutes: Civil Rights Attorneys' Fees Awards 5, 6, 10, 31, Act of 1976, 42 U.S.C. § 1988 .. 37, 40, 42 H.R. Rep. No. 94-1558, 94th Cong., 11, 25, 33, 36 2d Sess. (Sept. 15, 1976) . . . . . 40, 42 S. Rep. No. 94-1011, 94th Cong., 11, 25, 33, 2d Sess. (June 29, 1976) .......... 34, 36 122 Cong. Rec. § 17052 (daily ed. Sept. 29, 1976) ......................... 12 Equal Access to Justice Act, 28 U.S.C. § 2412(d) ................... 14 H.R. Rep. No. 1418, 96th Cong., 2d Sess. (1980), reprinted in 1980 U.S. CODE CONG. & AD. NEWS 5908 ............................. 14 Federal Rules of Civil Procedure 23(e) 5 Materials on Legal Ethics: ABA Code of Professional Responsi b ility ........................................ 7 Preamble and Preliminary Statement 32 Canon 1 ..................................... 23, 28 Canon 2 ..................................... 23, 24, 25 Canon 5 ...................................... 19 v Canon 7 23, 31 Canon 9 24, 29 Ethical Considerations 1-1 24 i-t; 28, 32 24 ?-?4 12 ?-25<f-< 12, 24 C_1 17, 19 q«1 Q —' • o e e « ® # » « 0 ® e e e » « « « ® ® 9 ® s o 41 7-4 32 7-7 18 7—Q 17 7-1 n» I W » » s * . ; j © © © i 9 « 8 0 ® 3 i « j » ® ® a © # e w 42 7-1 2 19 42 7-18 25 7-23 60 24, 25 9-1 21, 29 9 -6 . . . . . . . ........................... 1, 21, 29 VI District o f Columbia Bar, Legal Ethics Committee, Opinion Ho, 147, reprinted in 113 Daily Washington Law Reporter 389 (1985) . . . . . . . . . . State Bar o f Georgia, Advisory 20, 23, 26, 39 Opinion No. 38, reprinted in 10 Georgia State Bar News 5 (1384) 22 Opinion No. 17 of Overseers o f the Bar (Maine) (1981) . . . . . . . . . . . . . . . . . . . . . . . 16, 20, 22 Formal Opinion C-235 (May 1985), reprinted in Michigan Bar Journal 508 (June 1985} . . . . . . Ccsnnitt.ee on Legal Ethics, Ihe Association of the Bar of the City o f New York . . . . . . . . . . . . . 20, 22 Opinion No. 80-94 . . . . . . . . . . . . 2, 26, 39 Opinion No. 82-80 . . . . . . . . . . 2, 37, 47, 58, 63 Vermont Bar Association, Opinion No. 85-3 (1985) . . . . . . . . . . . . . . 20, 22, 30, 46 Other Authorities: Calhoun, Attorney-Client Conflicts o f Interest and the Concept of Non-Negotiable Fee Awards Under 42 U.S.C. § 1988, 55 Colo. L. Rev. 341 (1984) . . . . . . . . . . . . . . . . . . . . . Coffwent, Settlement Offers Conditioned upon Waiver o f Attorney's Fees: Policy, Legal, and Ethical Considerations, 131 U.Pa. L.Rev. 793 (1983) .......... . - v i i i - 10, 18, 42 5656 Disciplinary Rules 1— 102(A) (5) .................................. 25 2— 106(B) (4) . ................................ 12 2-108(B) ............................ 27, 59 2-109(A) (2) .................................... 32 5-101 (A) ......................................... 16 7-102.............................................. 35 7—102(A) (1) & (2) .............. 32, 62 ABA Model Rules of Professional Conduct (1983) 7 Preamble ............................. 25, 32, 42 Model Rules 1.2(a) ......................................... 18 1.4(a) ......................................... 18 1.5(a)(4) .................................... 12 1.7(b) ......................................... 16 1.14............................................. 19 3.3(a)(3) .................................... 60 5.6(b) ............................ 27, 59 6.1 .............................................. 24 8.4(a) .......................... 29 8.4(d) ..................................... 25 ARA Informal Opinion 1039 (1968) ................................ 27, 28 - v i i - M. F. Derfner & A. D. Wolf, 2 COURT AWARDED ATTORNEYS FEES 1| 21.03 n.36 (1984) ................................ 15 Fee Waiver Requests Unethical: Bar Opinion, 68 A.B.A.J. 23 (Jan. 1982) ........................................... 17, 44 R. Fisher & W. Ury, GETTING TO YES (1981) ............................ 50, 52 Kraus, Ethical and Legal Concerns in Compelling the Waiver of Attor ney's Fees by Civil Rights Litigation in Exchange for Favorable Settlement of Cases Under the Civil Rights Attorneys' Fees Awards Act of 1976, 29, V ill. L.Rev. 597 (1984) ............ 41, 46, 57 Levin, Practical, Ethical and Legal Considerations Involved in the Settlement of Cases in which Statutory Attorney's Fees Are Authorized, 14 Clearinghouse Rev. 515, (Oct. 1980) ....................... 55 A. Miller, Attorney's Fees in Class Actions 224 (1980)...................... 63 Restatement of Contracts 2d § 178 . . . 44, 45 Restatement of Contracts 2d § 184 . . . 45 IX INTEREST OF AMICUS1 The A ss o c i a t i o n of the Bar o f the City of New York was incorporated by act of the New York Le g i s l a t u r e in 1871. It was formed, in part, " for the purposes o f . . . f a c i l i t a t i n g and improving the admi n istrat ion of ju s t i c e , elevating the stan dard o f i n t e g r i t y , honor and courtesy in the l e g a l p r o f e s s i o n . . . . " Co ns t i tu t ion , Ar t i c le I I . I t is composed o f over 14,000 lawyers and judges practicing or r e s id in g in the C i ty o f New York. This b r i e f is f i l e d on behal f of the A s s oc i a t i on ' s Com mittee on Legal Assistance. The interest of the Committee in this case i s three fo ld . F i r s t , i t seeks to en courage access to lega l representation for a l l persons . I t pursues th i s o b j e c t i v e both by encouraging attorneys to undertake rep re sen ta t i on of indigents pro bono pub- Letters of consent to the filing of this brief have been lodged with the Clerk of the Court. 2 1ico and by supporting the a v a i l a b i l i t y o f s t a t u t o r y a t t o r n ey s ’ f ees in c i v i l r i ghts cases. In the op in io n o f the Committee, negot i a t ion t a c t i c s such as those ap parent ly used in t h i s case th r ea t en sub s t a n t i a l l y to undermine the a v a i l a b i l i t y o f s t a t u t o r y f e e s in c i v i l r i g h t s cases and, the re f o re , the a v a i l a b i l i t y o f coun se l to indigent c i v i l r i gh ts claimants. Second, a long with the Committee on P r o f e s s i o n a l and J u d i c i a l E th i c s , the Committee is in teres ted in maintaining the high e th i ca l standards o f the p r o f e s s i o n . I t s Opinion No. 80-34 (1981) concluded that o f f e r s o f sett lement in c i v i l r i g h t s cases condit ioned on a waiver o f s ta tutory a t t o rneys ’ fees are p ro f e s s i ona l l y unethi c a l . ( A copy i s a t tached as an appendix to this b r i e f ) . As a c o r o l l a r y , the Asso c i a t i o n a l s o opined t h a t , in these cases , a defendant ' s lawyer should not i n i t i a t e simultaneous negot iat ions o f the merits o f 3 the l i t i g a t i o n and the issue of attorneys' fees. Subsequently, i t issued Opinion No. 82-80, ind ica t ing that, during the course of negotiations for settlement on the me r i t s , i t i s p e rm is s i b l e to exchange rea sonable information regarding a p o t e n t i a l fee request so that the defendant can as certain the extent of ultimate l i a b i l i t y . Th i rd , along with the Committee on Federal Courts, the Committee i s i n t e r e s ted a l l developments that a f fect the ad ministration of the federal cou rt s . This case presents major i ssues of concern in that area. STATEMENT OF THE CASE! THE QUESTIONS ACTUALLY PRESENTED The many b r i e f s f i l e d by va r ious amici on behalf o f the p e t i t i o n e r s t r e a t the case as posing the quest ion o f the propriety of simultaneous nego t i a t i ons of the meri ts together with the f ees as a 4 s i n g l e , u n i v e r s a l q u e s t i o n . Whi le we endorse f u l l y the reason ing o f the cour t below in banning simultaneous negot iat ions in c i v i l r i gh ts cases, that i s not , in our view, the primary quest ion presented nor a q u e s t i o n necessary to d e c i s i o n in t h i s case. Rather, th is case is about the im p r o p r i e t y o f a t a c t i c that e f f e e t i v e l y coerces a waiver o f the s ta tutory f e e . This is we l l i l l u s t r a t e d by the d i f f e r e n t ways in which the d i s t r i c t court and the co ur t o f appea ls conce i v ed the case . In approv ing the f e e w a i v e r , the d i s t r i c t court considered only the ques t i on o f the e t h i c a l conduct o f p l a i n t i f f s * counsel in negot ia t ing f ees in tandem with the meri ts. [T]he e t h i c a l c o n s i d e r a t i o n i s " I s the a ttorney in the proc ess o f b a r g a in in g out to d e p r e c i a t e h is c l i e n t ' s claim or to proceed in a manner that w i l l be u n fa i r to his c l i e n t ? " And I th ink the e t h i c a l c o n s i d e r a t i o n s run on ly to the issue and not to what is f a i r to the a t t o r n e y , and there fore I am o f the opinion that i t doesn ' t v i o l a t e any e th i c a l consider at ions fo r an attorney to g i v e up his 5 attorney fees in the interest o f ge t ting a better bargain for his c l i ent . R epo r te r ' s T r an sc r ip t o f Proceedings of Apri l 28, 1983, ( "R .T . " ) at 7. The Ninth C i r c u i t took a very d i f ferent v iew. I t noted that p l a i n t i f f s bargained f o r the d i s t r i c t court ' s appro va l as "a cond i t i on on the waiver of f e e s . . . . " Cert . App. 19a. Thus, i t viewed the relevant ques t ion as one o f the p ro p r i e t y under the s t a tu t e , 42 U .S .C . § 1988, and F.R.C.P. 23(e ) o f the d i s t r i c t court ' s approval o f such a waiver when: The attorney was asked to choose be tween forgoing any compensation while obtaining a f a v o ra b l e sett lement on behal f of the c la ss , or decl ining the b e n e f i t f o r the c l a s s in hope of ev e n tu a l l y r ece i v in g a fee award. P l a i n t i f f s ' a t torney here accepted the b e n e f i t for the c lass and turned to the court for his own protection. Cer t . App. 23a. I t concluded that a co erced waiver should not be accepted and that the p l a i n t i f f s are ent i t led to a rea sonable fee. Id. at 25a. 6 SUMMARY OF ARGUMENT The p r i n c i p a l quest ion in this case concerns the p r o p r i e t y o f a n ego t i a t i o n tact ic designed to coerce a waiver o f s t a tutory fees by p i t t ing p l a i n t i f f counsel ' s duty to the c l i e n t a ga in s t h is or her interest in a fee . I t is a problem pecu l i a r to c i v i l r i g h t s p r a c t i c e , a r i s i n g from the s p e c i a l c ircumstances that typ ica l ly govern the attorney/cl ient r e l a t i o n sh ip in such case s . Acco rd ing ly , a n a l y s i s premised on other models of r e presentation — such as contingent fees in to r t cases or a t t o r n e y / c l i e n t r e l a t i o n ships under other fee s h i f t i n g s t a tu te s such as the a n t i t r u s t laws or the Equal Access to Justice Act — are not only un he lp fu l , but a lso misleading. In this narrow context , the ac t i ons of defense counsel in conditioning s e t t l e ment on waiver o f fees tend to make a dead l e t t e r o f §1988 and v i o l a t e a p p l i c a b l e 7 norms o f p r o f e s s i o n a l e th ic s . F i r s t , i t is p r e j u d i c i a l to the a dm in i s t r a t i on of just ice because, contrary to both the con gress ional intent and the requirements of the canons, i t se rves to de te r counsel from undertaking r ep re se n t a t i o n in these cases . Second, because the purpose and e f fe c t of the tac t ic i s to p lace opposing counsel in a c o n f l i c t o f i n t e r e s t , i t vio lates the lawyer ' s "solemn duty to up hold the i n t e g r i t y and honor o f h is pro f e s s i o n . . . . " Code o f Pro fess iona l Respon s i b i l i t y EC 9 -6.2 The tact ic is unethical because i t is not the product of a good f a i th i n t e r p r e t a t i o n o f the law in the c l i e n t ' s favor, but rather the exp lo i tat ion of a d isequi l i b r ium in l i t i g a t i n g posture not related 2 Citations to the Code of Professional Responsibility ("the Code"), which are the governing ethical standards for the New York bar, are directly to the relevant disciplinary rule ( "DR"), ethical consider ation ("EC"), or canon. Citations to the Model Rules are to ABA Model Rules of Professional Conduct(1983). 8 to the r e l a t i v e merits of the case. I t is not a bona f ide compromise because i t i g nores ent i re ly the statutory obl igat ion to pay f ees that a r i s e s from the o f f e r o f r e l i e f on the merits that i t accompanies. Thus, the use o f t h i s t a c t i c by de fense counsel runs afoul of the duty to confine zealous representation within the bounds o f the law. I t a l s o v i o l a t e s the special duty of government counsel to seek a just and f a i r re su l t . A court should not en fo rce a fee waiver that is the resul t of th i s form of e t h i c a l abuse. O r d i n a r i l y , i t should merely exc i s e the fee waiver p rov i s i on because the defendant i s not ent it led to the b e n e f i t o f the ba rga in i t has thus manipulated. But a f t e r - th e - f a c t remedies are not s u f f i c i e n t in th i s context . Be cause the very existence of the unethical conduct may be masked by the appearance of vo lunta ry waiver. a court may not always 9 be ab le to po l ice such v io l at ions through ret rospect ive remedies alone. Two a l t e r n a t i v e s e x i s t . The Court may d i r e c t a c t i v e s u p e rv i s i o n by the f e d e r a l d i s t r i c t courts o f set t lement negotiations in these case s . Or, i t may ban simultaneous negotiations o f fees and the merits in these cases. Of these two, we respect fu l l y submit that the prohib it ion of simultaneous nego t i a t i o n s i s the b e t t e r , more e f f i c i e n t remedy. F i r s t , i t preserves scant jud ic ia l resources ; because i t i s s e l f - en fo rc ing , i t requires less active involvement of the d i s t r i c t c o u r t . Second, i t w i l l in fact f a c i l i t a t e se t t l ements , both because i t encourages more e f f i c i e n t negotiation - - encouraging the part ies to negot ia te on a p r in c i p l e d b a s i s and in good fa ith f i r s t on the merits and then, separately, on the p l a i n t i f f s ' ent i t lement to fees - - and because i t better maintains the balance of 10 i ncen t i ve s that o r d i n a r i l y produces set tlement. Third, i t better c on t ro l s other e t h i c a l problems that ar i se during simul taneous negotiations. ARGUMENT I . THE PROBLEM OF COERCED WAIVER OF STATUTORY ATTORNEYS8 FEES IS ONE PECULIAR TO CIVIL RIGHTS PRACTICE, ARISING FROM THE NATURE OF THE ATTOR- NEY/CLIENT RELATIONSHIP TYPICAL OF THOSE CASES In our v iew, this case does not turn on the question of the propriety of simul taneous negotiation on the merits and fees in the gene ra l run o f cases nor on the quest ion whether f ees under 42 U .S .C . § 1988 ( "the Act" ) are subject to s e t t l e ment on r easonab le terms. Rather, the question i s whether defendants in a c i v i l r i g h t s case may coerce a waiver of statu tory fees by knowingly creating a conf l ic t of interest for p l a i n t i f f s ' •counsel , p i t t ing the c l i e n t s ' i n t e r e s t in r e l i e f on the merits against counsel ' s interest in a fee. The a v a i l a b i l i t y of this tact ic is a function o f a narrow set of circumstances typical of c i v i l r ights cases but not not- mally present in most other areas of prac t i c e . We f i r s t explain how c i v i l r ights d i f f e r s from most other areas of practice. We then show why the eth ical issue i s one that uniquely plagues the c i v i l r ights area . A. The Nature o f C iv i l Rights Cases The bas ic fact , recognized by the Congress that passed the Act, is that c i v i l r ights claimants are typ ica l ly indi gent and cannot af ford to pay lega l f e e s.3 Unl ike ordinary tort or commercial l i t i g a t i on , c i v i l r ights cases rare ly produce a fund s u f f i c i e n t l y large also to cover the l a w y e r ' s f e e.4 Because of this , the S. - 11 - S. Rep. No. 94-1011, 94th Cong , 2d Sess., 2 (June 29, 1976); accord H. R. Rep. No. 94-1558, 94th Cong., 2d Sess., 1, 3 (Sept. 15, 1976); Lipscomb v. Wise, 643 F.2d 319, 320 (5th Cir. 1981); Regalado v. John son, 79 F.R.D. 447, 451 (N.D. 111. 1978). H.R. Rep. Mo. 94-1558, supra n.3, at 9; S. Rep. No. 94-1011, supra n.3, atilt 12 t yp i ca l r e t a iner agreement between a c i v i l r i gh ts claimant and p r i v a t e counsel does not o b l i g a t e the c l i e n t to pay the f e e , or even a s u b s t a n t i a l p o r t i o n o f i t . I t could no t , e i the r as a matter o f p ra c t i ca - 5l i t y or e t h i c s . ' Thus, w h i l e r e t a i n e r agreements o f ten require the c l i e n t to pay a p o r t i o n o f the co s t s or to advance a modest r e ta in e r , they usual ly r e c i t e that the l a w y e r ' s f e e w i l l be covered by a court award o f a t to rney ' s f e e s . Congress was aware o f th is important d i f f e r e n ce in p r a c t i c e between c i v i l r i g h t s cases and other forms o f contingent f e es . 122 Cong. Rec, § 17052 ( d a i l y e d . Sept . 29, 1976) (Remarks o f Senator Kennedy as sponsor) . In addi t ion, there is an e n t i r e (and l a r g e ) c l a s s o f c i v i l r i gh ts counsel p re cluded by law from con trac t ing fo r a f ee See 2-106(B)(4) (prohibiting excessive fee; rea sonableness o f fee linked to "amount involved and re sult obtained"); accord Model Rule 1.5(a)(4); see also EC 2-24, EC2~2*5~T9uty to represent indigents). 13 from the c l i e n t . This includes the fede ral Legal Services Corporation, which pro vided counsel in th i s case and is barred by f e d e r a l s t a tu te from charging a f e e , and many p r i v a t e c i v i l r i g h t s o r g an i z a t ions. In New York, for example, p r i v a t e o r g an i z a t i o n s that prov ide l e g a l a s s i s tance are chartered by the courts as legal aid s o c i e t i e s . Although they may accept court awarded f e e s , they are p roh ib i t ed from co l lect ing a fee from the c l i ent . In add i t ion , s ince many o f these o r g a n i z a t ions hold tax exempt status under § 501 ( c ) { 3 ) , they cannot and do not charge f e e s . B . These Dynamics o f C i v i l R igh t s Practice Result Tn~sTgmTFicantly D if^ ferenF"EtlvI^aT~Cbnsequences An o f f e r o f settlement on the merits condit ioned on the waiver o f s t a tu to ry fees i s a pract ice unique to c i v i l r ights cases because the circumstances that make i t e f f e c t i v e r a r e l y e x i s t in other fee s h i f t i n g contexts such as under the Equal 6Access to J u s t i c e Act or the a n t i t r u s t laws. For example, in an a n t i t r u s t case brought by a c o r p o r a t i o n , the a t t o r n e y 6 - 14 - 6 'file Solicitor General’ s arguments concerning the quandry imposed by the ruling below on the government when it litiga tes cases covered by the Equal Access to Justice Act, 28 U.S.C. § 2412(d), ( " EAJA") are completely inapposite. See B rief for the United States as Amicus Curiae at"T3~14. For a variety of reasons, offers by the government to s e tt le the merits of such litiga tion in exchange for a release o f l ia b ility for fees under that Act rarely present similar ethical concerns. Under the EAJA, the government is only liable for fees i f "the position of the United States was not substantially ju stified ." 28 U.S.C. § 2412(d) (1) (B). Thus, unlike cases governed by § 1988, the private citizen litiga ting against the federal government is not entitled to fees under the EAJA simply because he or she prevails; it depends, instead, on the degree to which the government's position was unreasonable, file EAJA was passed not to encourage counsel to ac cept cases against the government, but merely to com pensate citizens unreasonably forced to court by the government's unjustifed conduct. See H.R.Rep. No. 1418, 96th Cong., 2d Sess. (1980), reprinted in 1980 U.S. CODE CONG. & AD. NEWS 5908-14.'T5£E5nTEKese l i tigants are economic enterprises that can afford counsel. Accordingly, the retention of counsel in nost cases within the coverage of the EAJA is exceed ingly unlikely to be premised upon an agreement that a ll fees wi l l be provided by a court award under the EAJA. Thus, the disassociation between the lawyer's and the c lien t's interests in recovering a fee that makes the tactic coercive is entirely absent from the government's litiga tion in EAJA cases. 15 w i l l have a reta iner agreement that spe l l s out the f e e . I f the de fendant o f f e r s a f l a t percentage o f the damage request in settlement, impl ic i t in that o f f e r w i l l be a request to waive statutory fees . But no ethical dilemma is presented. The attorney exp l a in s to the c l i e n t that the o f f e r means the c l i ent w i l l receive the s e t t l e ment f i g u r e less the amount of the agreed f e e . Even when there i s a t rad i t iona l con tingent fee, expressed as a percentage of the r ecovery , the interests of the lawyer and the c l i ent do not diverge. They are in f ac t p a r a l l e l : the l a r g e r the c l i e n t ' s recovery, the la rger the fee. I f the c l i ent and lawyer disagree on the adequacy of the amount o f f e r e d , i t i s the c l i e n t ' s d e c i s i o n whether the o f f e r i s su f f i c ien t in l i g h t o f i t s bottom l i n e v a lu e . See M.F. Derfner & A.D. Wolf, 2 COURT AWARDED ATTORNEYS PEES K 21.03 n. 36 (1984). 16 Contras t a c i v i l r i g h t s case f o r i n j u n c t i v e r e l i e f brought by a c l a s s o f i n d i g e n t s . De fendants ' counsel o f f e r to s e t t l e the merits condit ioned on a wa iv er o f f e e s . I f p l a i n t i f f s accept the o f f e r , counsel , who may have invested s i g n i f i c a n t t ime , w i l l r e c e i v e no f ee whatsoever. The c l i e n t s , who w i l l bene f i t from the r e l i e f on the mer i ts , are nevertheless unburdened by any l i a b i l i t y f o r the l a w y e r s ' f e e s : e i t h e r because they have no con t ra c tua l f e e o b l i g a t i o n , as i s usual , o r in any case because they are judgment p r o o f . The o f f e r thus creates a c o n f l i c t o f i n t e r e s t between lawyer and c l i e n t , which would p rec lude the r e p r e s e n t a t i o n as an i n i t i a l m a t t e r . ̂ See DR 5-101 ( A ) ; Model This conflict o f interest "cannot be resolved by the attorney resigning from the case. P la in t i f f s in [these cases] must, o f necessity, be represented by counsel and any attorney representing p la in t i f f s under these circumstances fa lls victim to the same statutorily created con flic t." Opinion No. 17 of Overseers o f the Bar (Maine) at 2 (1981) ("Maine Bar Op. No. 17"). 17 Rule 1 .7 (b ) . When the terms of the s e t t l e ment agreement are favorable, his duty "always to act in a manner consistent with the best in te re s t s of his c l i e n t . . . , " EC 7-9, comes in con f l i c t with his legitimate interest in a fee. The lawyer is required This conflict cannot be resolved by "preparing] for the dilemma with a retainer agreement" as suggested by the Fqual Fhplqyment Opportunity Advisory Council, Brief as Micus Curiae at 6, and by Moore v. National Assoc, of Securities Dealers, 765 F.2d 1093, 1105 n. 17 (D.C.Cir. 1985). A retainer agreement which pro vides that the client will defer to counsel's pecuni ary interest and refuse settlement would be unethical and unenforceable. EC 5-1. Nor could the retainer agreement require the client, though indigent, to bear the fee — that would be unethical too. See dis cussion supra. If the retainer provides that counsel would give up the fee, it just achieves the same re sult as the coercive waiver tactic. The suggestion that the retainer agreement could vest the statutory fee recovery in the client presents the same problems and more. Such a retainer would have to provide that counsel would be paid a reasonable fee contingent on success. Presumedly, it would specify hourly rates. But this is a nonsolution. First, it would not work for organizational counsel who cannot charge a fee. Second, it would not solve the coercive waiver problem. If the judgment proof client accepts the settlement, does counsel sue the indigent client for the fee he or she cannot pay? "Retainer agreements are useful devices for disclos ing to clients the conflict of interest inherent in a case in which an attorney expects to be paid under a fee statute but,as a practical and legal matter, they are unsatisfactory devices for eliminating the con- 18 to communicate the sett lement o f f e r to the 9c l i e n t , who has the f i n a l say whether to accept i t . 10 The p r e d i c t a b l e r e s u l t is that the c l i e n t w i l l be induced t o accept the s e t t l e m e n t o f f e r to the lawyers ' de triment ; whenever a wa i ver o f f e r i s made in these cases, "counsel can fo resee them s e l v e s su b j e c t to be ing euchred out o f the i r f e e / Lazar v. P i e r c e , 757 F.2d 435, 438 (1st C i r . 1985). The dilemma is in t e n s i f i e d in a case l i k e J e f f D. when the c l i e n t c l a s s con s i s t s o f incompetent minors. Any mental or physical condi t ion o f a c l i e n t that renders him incapable o f making a cons ide red judgment on h is f l i c t of interest." Calhoun, Attorney-Client Con- fl ic ts o f Interest and the Qarx^pb^Fl^n-Ne^^IiSYe Fee’ ’AwairSs- "Urrier "4i U.S.C. ~ § 1 §88",""’5«> Colo.L.Rev". T-Tfr5?3--TS"T1"§S-4T:------- — ~ 9 Model Rule 1.4(a); Comment to Rule 1.4 ("A lawyer who receives from opposing counsel an o ffer o f settlement in a c i v i l controversy should promptly inform the client of its substance...."); see also EC 7-7. EC 7-7 ( " i t is for the client to decide whether he w ill accept a settlement o f f e r . . . . " ) ; Model Rule 1.2(a) ("A lawyer shall abide by a c lien t’ s decision whether to accept an o ffer o f settlement....") 19 own behal f casts addit ional responsi b i l i t i e s on his lawyer. EC 7-12; see Model Rule 1.14; Comment to Rule 1.4. In that circumstance, the lawyer i s "compel led . . . to make decisions on beha l f o f the c l i e n t . . . , " and must "act with care to safeguard and advance the interests of the c l i e n t . " EC 7-12. Faced with a f avo rab l e o f f e r of prompt r e l i e f , the lawyer must "exercise independent pro f e s s i o n a l judgment on behal f of the c l i e n t , " Canon 5, " f r ee of compromising in f luence and l o ya l t i e s ---- ," EC 5-1; forgo his pecuniary s e l f - i n t e r e s t ; and accept the o f f e r . The suggestion from some quarters that i t i s "not an ethical no-no" for counsel " to ins is t on a reasonable fee" even i f that is "detrimental to the c l i e n t ' s success fu l settlement," Lazar , 757 F.2d at 438, has no support in either the standards of an ethical pro fess ion11 or 11 Every bar association that has considered the issue 20 common sense. Consider the case o f an unemployed c l i e n t who was denied a job becau.se o f race. The defendant o f f e r s him a job and back pay, condit ioned on coun s e l wa i v ing the f e e . Counsel could not in good conscience block the sett lement and, at the l e a s t , postpone r e l i e f because the i r pecuniary in t e r e s t i s more important than that o f the indigent c l i e n t . In this case, the sa fe ty o f mental ly i l l c h i l d r e n confined by the s ta te was in j e opa rdy because they were housed with an adul t popu la t ion that included chi ld mo l e s t e r s . The sett lement o f f e r contained has concluded that it would be unethical for counsel to turn down an offer o f settlement in these circum stances. See Formal Opinion C-235 (May 1985), reprinted in Michigan Bar Journal 508, 553 (June 1985); Maine Bar Op. No. 17 at 4; Vermont Bar Association Opinion No. 85-3 at 2-3 (1985); District of Oolumbia Bar, Legal Ethics Committee, Opinion No. 147 at 5-6, reprinted in 113 Daily Washington Law Reporter 389, 394 (1985); Op. No. 80-94 at 6a-7a ( 198Y)'. No bar association has ruled otherwise to our knowledge. The D.C. Bar (pinion does conclude that a ll future settlement offers that violate the opinion need not be conveyed to the client, although they should be. 21 deta i led provisions designed to eliminate that problem. Cert. App. 3a-4a. Counsel might have re jected the settlement o f f e r because o f the fee waiver condition, f o r cing the case to t r i a l . But suppose that, in the inter im before r e l i e f was granted, even one ch i l d was assaulted, molested or raped. Would the lawyer have acted in a manner consistent with his eth ical respon s i b i l i t y to that cl ient? To proceed to t r i a l under these circumstances because of the l awyer ' s interest in a fee would c lea r ly f a i l to "promote publ ic confidence in our system and in the lega l pro fes s ion. " EC 9-1; see also EC 9-6. In these s i tuat ions , the ethical con f l i c t s that face p l a i n t i f f s ' counsel are ex t r ao rd ina ry . Because of that, the temp t a t i on to employ the coercive fee waiver i s s t rong . Indeed, various amici suggest that i f fee waivers are approved they may be requi red to use them. See, e . g . , Br ie f 22 fo r the States as Amici Curiae at 52-53. A f a i r , ra t iona l l e g a l system d e se r v in g o f the p u b l i c ' s respect and conf idence would not a l low that to occur. I I . GIVEN THESE CIRCUMSTANCES, A DEFEN DANT'S LAWYER WHO MAKES AN OFFER OF SETTLEMENT CONDITIONED ON THE WAIVER OF THE REQUIRED STATUTORY FEE VIOLATES ACCEPTED NORMS OF PROFESSIONAL ETHICS This Assoc ia t ion was the f i r s t to ad dress sq u a r e l y the i ssue o f c o e r c i v e waiver . I f has s in ce been j o in e d by the D. C. Bar. Both have concluded tha t the 1 o t a c t i c i s u n e t h i c a l . See n.11 supra . Even those cour t s that have approved waivers in p a r t i c u l a r cases have noted the q u e s t i o n a b l e nature o f d e f e n d a n t s 1 1 3conduct or o the rw i s e in t imated that in addition to the bar opinions cited in n. 11 supra, the Georgia Bar has approved lump sum offers in T itle VII cases. State Bar o f Georgia, Advisory Opinion No. 38, reprinted in 10 Georgia State Bar News 5 (1984). LiKe-Bie~^Tnions'-oFtEe W3TIgan7 Maine, and Vermont bars, i t does not discuss the waiver issue. in Lazar v. Pierce, the First Circuit observed of the waiver o ffer in that case: "We are . . . c r itica l of the Housing Authority. I t seems apparent that i t was playing on counsel's di f f icul t dilemma in exactly the 23 important e t h i c a l c o n s id e ra t i o n s are 1 4raised by such conduct. This should not s u r p r i s e . Whatever the c o ns ide ra t io ns that govern other as pects of settlement negotiations in these cases , the use by de fense counsel of the coercive waiver t a c t i c v i o l a t e s accepted norms of p r o f e s s i o n a l r e spons ib i l i t y . It runs a f o u l of the duty " t o maintain . . . the integr i ty of the lega l p r o f e s s i o n . . . , " Canon 1; the "duty to make l e g a l counsel a v a i l a b l e Canon 2; the duty to con f ine zea lous r ep re s e n t a t i o n o f a c l i e n t "w i th in the bounds of the law . . . ," Canon 7; and the duty to "avoid even the appear- * 14 manner plaintiff asserts. This was not a bona fide compromise." 755 F.2d at 437. It continued: "While there may have been no consciously unethical conduct, to object to going to court, and to object to paying any fee, does not . . . oonsnend itself." Id. at n. 1. 14 In Moore v. National Association of Securities Dealers,-'"the court approve3~~an express waiver"irat least where a demand for such has not been made by a defendant." 762 F.2d at 1099. It further acknowled ged "that such offers present sane difficulty for plaintiffs' counsel." Id. at 1105 n. 17 (citing D.C. Bar. Op. No. 147). 24 ance of p r o f e s s i o n a l i m p r o p r i e t y . . . . " Canon 9. A. The Use of the Waiver Tact ic Is PreJuBnTcTa.I~~Fo tKe MiirnI¥tga±ion 6T Justice "A ba s i c tenet o f the p r o f e s s i o n a l r e s p o n s i b i l i t y o f l awyers i s that every person in our s o c i e t y should have ready access to the independent s e r v i c e s o f a l a w y e r . . . . " EC 1-1. There is a special r espons ib i l i t y to provide or support lega l assistance to the poor. EC 2-25; EC 8-3. The provision of f ree l e g a l s e r v i c e s to those unable to pay r easonab le fees continues to be an ob l iga t ion of each lawyer as wel l as the profession g e n e r a l l y . . . . Every lawyer should support a l l proper e f f o r t s to meet this need for lega l services. Model Rule 6 .1 , Comment to Rule 6.1; accord Canon 2; EC 2-1 . These ob i igat ions ar i se not merely as a matter o f noblesse o b l i g e , but from the requi rements o f the l e g a l system i t s e l f . "The f a i r adm in i s t r a t i on o f j u s t i c e r eq u i r e s the a v a i l a b i l i t y o f competent 25 l a w y e r s . . . . , " EC 8-3, because " [ t ] he lega l system in i t s broadest sense funct ions best when persons in need o f l e g a l . . . ass i s t ance are represented by t h e i r own c o u n s e l . " EC 7 - 1 8 . ^ Thus, the lawyer ’ s ob l iga t ion under Canon 2 to as s i s t in mak ing l e g a l counsel a v a i l a b l e merges with the injunction of DR 1 — 102(A) (5 ) : "A l aw yer sha l l not . . . [ e ] ngage in conduct that is p r e j u d i c i a l to the adm in i s t r a t i on o f j u s t i c e . " Accord Model Rule 8 .4 (d ) . But th i s i s p r e c i s e l y the e f fec t of the wai ver tact ic . The purpose of the Act was to provide l e g a l r ep re s e n t a t i o n to ind igent c i v i l r i g h t s c la imants by the award o f fees "adequate to a t t r a c t competent counse l . " S. Rep. No. 94-1011 at 6? H.R. Rep. No. ^ The Preamble to the Model Rules explains that: "A lawyer's responsibilities as a representative o f clients, an o ffice r o f the legal system and a public citizen are usually harmonious. Thus, when an opposing party is well represented, a lawyer can be a zealous advocate on behalf of a client and at the same time assume that justice is being done." 26 - 94-1 558 at 9. Congress knew tha t : Because a vast ma jo r i ty o f the v i c tims of c i v i l r ights v io l at ions can not a f f o r d l e g a l counse l , they are unable to present their cases to the courts. In au th o r i z in g an award of r easonab le attorney ' s fees , [§ 1988] is designed to give such persons e f f e c t i v e access to the j u d i c i a l pro cess . . . . I d . at 1. But "the long term e f fe c t of p e r s i s t e n t demands for the waiver of s t a tutory fees is to prejudice a v i t a l aspect o f the a dm in i s t r a t i o n o f just ice and un dermine e f f o r t s to make counsel a v a i l a b l e to those who cannot af ford i t . . . . " Op. No. 80-94 at 13a; accord D.C. Bar Op. No. 147 at 7. The knowledge that counsel can be forced to forgo a fee by means of the wai ver tact ic spreads quickly; i t deters law yers from accepting representat ion o f i n - 1 6digent c i v i l r ights claimants. The bar has long recognized that 16 16 See Kraus, Ethical and Legal. Concerns in Compelling the Waiver 'oF^ttorrey1s~'Fies~^y~Civ1ir^igiits Liti gants in Exchange for ^a\ror^Ie ^ttlement of (iases UiSeFTHeTn^vTI"Rights'"AEtori^p^Fees Awar3s^.ct"o’F 1976, 59 V ill. L.Rev. $97, 674-93“ 27 - sett lement agreements which serve to re s t r i c t access to le ga l representation v io l a t e the r u l e s o f e t h i c s . In the l a t e s i x t i e s , there was an eve r - in c r ea s in g pract ice accompa nying the settlements in [ a n t i t r u s t ] cases o f taking from the p l a i n t i f f ' s counsel covenants not to sue or to a id in any su it against the se t t l ing defendants. ABA Informal Opinion 1039 at 1 (1968) . Although there were "not . . . Canons c l e a r l y cover ing the m at t e r , " i_d_. at 3, the Committee neve r the less condemned the practice because i t "a f f ec t s the r i g h t of the c l i e n t to ob t a in the b e n e f i t o f the services to which he i s e n t i t l ed from his own l a w y e r . " I d . at 44. This rul ing has been c o d i f i e d in both DR 2-108(B) and Model Rule 5 .6 ( b ) . The a v a i l a b i l i t y of a settlement pro v i s i o n such as that p r o h i b i t e d by DR 2- 108(B) encouraged the defendants to se t t l e . I t is nevertheless unethical because i t interferes with the a b i l i t y of those in 28 need of l ega l assistance to reta in counsel who are competent in the su b j e c t matter . Informal Opinion 1039 at 4-5. The waiver tac t ic i s more harmful . Not only does i t a f f e c t the lawyer in the pa r t i cu la r case, i t a lso deters a l l other lawyers from ac cept ing c i v i l r i g h t s cases because they can be forced to give up thei r fee. Use of the t a c t i c p r e j u d i c e s the administration of ju st ice because i t threatens to under mine the very device Congress found neces sary to prov ide l e g a l r ep re s e n t a t i o n in c i v i l r ights cases . B. The Use of the Waiver__Tactic Underm £lii¥~'T"fi'e~"ntTgFrtY"~o~FjEH e~~LegaT ProFe¥iTon " Canon 1 p rov ides tha t : "A lawyer should a ss i s t in maintaining the integr i ty . . . o f the l e g a l p ro f e s s i o n . ” This duty not only requires the lawyer to "maintain high per sona l s tandards o f p r o f e s s i o n a l conduct" h imse l f , but a l s o to "encourage f e l low lawyers to do l i k e w i s e ." EC 1 -5 . 29 This duty stems, in part, from the pr in c ip les of Canon 9, that " [ a ] lawyer should promote p u b l i c conf idence in our system and in the lega l pro fess ion . " EC 9-1; see a l so EC 9-6 ( "Every lawyer owes a solemn duty to uphold the integ r i ty and honor of his p r o f e s s i o n . . . . " ) . The Model Rules express the same concept in p la in and un mistakab le terms. " I t i s p r o f e s s i o n a l misconduct f o r a lawyer to . . . knowingly a s s i s t or induce another to [ v i o l a t e or attempt to v i o l a t e the r u l e s of p r o f e s s iona l conduct] . . . . " Model Rule 8 .4 ( a ) (emphasis added). Defendants ' counsel who make s e t t l e ment o f f e r s designed to create a conf l ic t of i n t e r e s t between opposing counsel and the c l ient p l a i n t i f f act in a manner i n cons i s ten t with thei r duty to the pro fes s ion. At the worst , they induce p l a i n t i f f s ' counsel to abandon their c l i en t s ' interest in favor of thei r personal , pecu 30 niary interest . But, the integ r i ty of the p r o f e s s i o n may be undermined even when e t h i c a l p l a i n t i f f s 5 counsel r es is t the con f l i c t . Ensnared in the con f l i c t created by the waiver tact ic , wel l meaning counsel have o f ten acceded to the coercive demand of waiver expecting subsequently to chal lenge i t be fore the d i s t r i c t court. A l though one state bar has approved such a cha l le nge as e th ica l , Vermont Bar Associ at ion Opinion No. 85-3, some courts have condemned the "secret plan to rescind" as " e x a c t l y the wrong way" to " in e f f e c t , bu i l d upon a misrepresentation ." Lazar , 75 7 F . 2d at 4 38-39; see a lso Moore v, Na t i o n a l Assoc iat ion of Securi t ies Dealers, 762 F. 2d 1093, 1 1 10 (D.C. Ci r . 1985). In add i t i o n , courts have been "even more c r i t i c a l o f " defense counsel for "playing on c o u n s e l ' s d i f f i c u l t dilemma." Lazar, 757 F.2d at 437. 31 C. The Use of the Waiver Tactic Is Inconsistent with the "Lawyer* s Duty "to Act witHTn the Bounds of t h e Law Defendants and their amici vigorously disclaim any unethical conduct and instead argue that the use of coercive waiver o f f e r s i s j u s t i f i e d by t h e i r e t h i c a l duty under Canon 7 to prov ide t h e i r c l i e n t s with zea lous r e p r e s e n t a t i o n . They e r r , however, because Canon 7 r e q u i r e s that zealous representa t ion must be contained "within the bounds of the law. " Analysis of the dynamics of the coe rc i ve waiver t a c t i c and the bounds o f the law under § 1988 demonstrates that the waiver tact ic is unacceptable and unethical . We s t a r t from the same i n i t i a l premise as the Code. The continued existence of a free and democratic s o c i e t y depends upon r e cognition of the concept that just ice i s based upon the r u l e o f l a w . . . . Without i t , individual r ights become sub jec t to unrest ra ined power, r e spect for law i s des troyed , and ra t ional self-government is impossible. 32 1 7Preamble and Prel iminary Statement at 1. "To lawyers e s p e c i a l l y , r espec t f o r law should be more than a p l a t i tude . " EC 1-5. This means, of course , that p o s i t i o n s e~ spaused on behal f of c l i ents are not e th i cal so l e ly because they are " f a v o r a b l e to the c l i e n t . " EC 7-4. Rather, they must a lso be "supported by the law or . . . sup p o r t a b l e by a good f a i t h argument for an extens ion , m o d i f i c a t i o n , or r e v e r s a l of the law." Id. Accord DR 7-102(A ) (1 )& (2 ) ; see also DR 2-109(A ) ( 2 ) . Thus, to analyze the e th i c s of an o f f e r o f set t lement condit ioned on a waiver of fees , i t is necessary to explore the basis of the d e f e n d a n t ' s nego t i a t ing 17 17 As expressed in the Preamble to the Model Rules: "A lawyer is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the qualiity of justice .... "The Rules presuppose a larger legal context shaping the lawyer's role. That context includes court rules and statutes relating to matters of licensure, laws defining specific obligations of lawyers and substan tive and procedural law in general." 33 p o s i t i o n . One could not e th i c a l l y argue to a court that fees should be denied to a prevai l ing p l a i n t i f f because the defendant disapproves o f that expense or b e l i e v e s that the po l i cy of the Fees Act is wrong. Under the Act, a p r e v a i l i n g p l a i n t i f f i s enti t led to a "reasonable attorney ' s fee , " which he or she "should o rd inar i ly recover . . . un less s p e c i a l c i rcumstances would render such an award unjust. " S. Rep. No. 94-1011 at 4; H.R. Rep. No. 94-1558 at 6 (quot ing Newman v. Piggie Park Enterpri ses, I n c . , 390 U.S. 400, 402 ( 1 9 6 8 ) ) . 18 Congress provided for fees for three reasons. The f i r s t was ret rospect ive : to compensate the individual l i t i g a n t , see S. Rep. No. 94-1011 at 2, imposing on c i v i l r igh ts de fendants the o b l i g a t i o n to pay The intimation that awards of counsel fees are wholly discretionary, see Petitioners' Brief at 13, is inaccurate. See New York Gaslight Club, Inc, v. Carey, 447 U.S. 54, 6$ (11560) ( “the courtrs discre- tion to deny a fee award to a prevailing plaintiff is narrow.") 34 the transaction costs of the ir v io la t ions . But i t a lso had two prospective purposes : "to encourage individuals injured by r a c i a l discr imination to seek j u d i c i a l r e l i e f . . . , " Newman, 390 U.S. at 402, and to p r o v id e a d i s i n c e n t i v e to future v i o l a - . 19t o r s , Defendants are not e t h i c a l l y f ree to seek to evade these o b l i g a t i o n s , a l though that would serve th e i r pecuniary i n t e r e s t . De fendan ts ' counse l may take any good f a i t h p o s i t i o n r eg a rd ing what i s a " r ea sonable a t t o r n e y ' s f e e " in a g i v e n case . But, absent spec ia l circumstances, counsel cannot argue that a p r e v a i l i n g p l a i n t i f f should be deprived o f a reasonable fee and s t i l l be "wi th in the bounds o f the law." Nor may lawyers seek in s e t t l e m e n t 19 Congress determined that "the effects of such fee awards are ancillary and incident to securing com pliance with these laws, ard that fee awards are an integral part of the remedies necessary to obtain such compliance." S. Rep. No. 94-1011 at 5 (emphasis added). 35 that which i s con t ra ry to law. DR 7-102. When defendants ' counsel seek to coerce a waiver o f f e e s , they are attempt ing to ef fectuate prec ise ly the oppos i te o f what Congress intended: to make the indigent c i v i l r ights claimant bear his or her own costs in the p a r t i c u l a r case and to make c i v i l r i g h t s l i t i g a t i o n una t t r a c t i v e gene ra l l y . True, settlement normally encompasses a compromise of the f u l l measure of r e l i e f on the basis of the l ikel ihood of success. But that does not s a lv age a sett lement o f f e r o f l e s s than a reasonable fee, l et alone an o f f e r o f no fee at a l l . Under § 1988, a settlement o f f e r of substantial r e l i e f on the meri ts and no fee i s , in terms, an o f f e r not premised on the l i k e l i h o o d o f success . For Congress e x p l i c i t l y cons idered when a s e t t l i n g p l a i n t i f f is ent i t led to fees and adopted a pu re ly func t iona l approach: P l a i n t i f f s 36 are e n t i t l e d to f ees i f " they v ind ica te r ights through a consent judgment or with out f o rma l ly obtaining r e l i e f . " S. Rep. No. 94-1011 at 5; accord H.R. Rep. No. 94-1558 at 7. Indeed, even when "a de fendant might vo luntar i ly cease the unlaw f u l p r a c t i c e . . . , [ a ] court should s t i l l award fees" i f the f i l i n g o f the la wsu i t was the cata lyst for such "voluntary" com p l i a n c e . H.R. Rep. No. 94-1 558 at 7 ; accord S. Rep. No. 94-1011 at 5. Thus, under the Act, the ob l igat ion to pay fees ar ises not from success at t r i a l - -wh ich i s est imated in settlement— but from the accomplishment by p l a i n t i f f of the desired 2 0end. Under the A c t , a defendant that o f f e r s f a v o r a b l e r e l i e f on the meri ts 20 This is, in part, a function of Congress's intention that fees be governed by "prevailing market rates," Blum v. Stenson, ___U.S. ____ 79 L.Ed.2d 891, 900 (1984); the market would not deny counsel a fee because success was achieved by agreement rather than litigation. 37 2 1ob l igates i t s e l f to pay a reasonable fee. A negotiation tact ic that evades that ob l i g a t i o n i s not wi th in the bounds of the law. Contrast a case in which § 1988 would not ob l igate the defendant to pay counsel f e e s . A defendant, for example, may have i d e n t i f i e d and moved to r e c t i f y a c i v i l r i g h t s v i o l a t i o n be fo re the p l a i n t i f f s ' su it i s begun. Because the r e l i e f mea sures antedate the su it — and, therefore, p l a i n t i f f s were not the c a t a l y s t f or r e l i e f - - a defendant could assert in good fai th that i t is not required to pay f ees under the Act . In th i s " n o n c a ta ly t i c " case, a defendant could combine r e l i e f on the meri ts with a waiver o f f e r and s t i l l 2 2be "w i th in the bound s o f the law" 2̂ As long as it does not condition fees on merits re lie f, it can bargain over what is a reasonable fee. To do so, it is entitled to disclosure of the plain t i f fs ' fee request. N.Y.C. Op. No. 82-80. 22 There is no suggestion whatsoever that this case in volved such circumstances. Rather, the acceptance by the defendants of detailed injuctive re lie f only on 38 a l though, as we show in Pt. I l l , i t would a lso be unnecessary as a prac t ica l matter. A comparative a n a l y s i s o f the dyna mics o f the waiver o f f e r in these very d i f f e ren t c ircumstances is instructive . In a " noncatalytic" su i t , the waiver o f f e r is premised on a good fa i th interpretation of the law and the f a c t s in the c l i e n t ' s f a v o r . I t i s e f f e c t i v e because o f the st rength o f d e f e n d a n t ' s l e g a l p o s i t i o n a lone . And, one might add, i t achieves a f a i r and expe d i t i o u s r e s o l u t i o n of the dispute, providing p l a i n t i f f s with no less than they are ent i t led to. In the o rd ina ry case , however, the waiver demand i s not premised on a good f a i t h reading of the law. It i s e f fe c t ive r ega rd l e s s o f the meri ts o f the case or the l i k e l i h o o d o f success . And while it provides p l a i n t i f f s with a compromise mea- the eve of tria l rebuts any possibi l i ty that the state had planned the changes prior to the lawsuit, begun two years earlier. 39 sure o f r e l i e f with respect to one aspect of the case (the m e r i t s ) , i t p rov ides no r e l i e f whatsover with regard to the second aspect of the case (the statutory e n t i t l e ment to attorneys' f e es ) . In the ordinary case, the waiver tac t i c i s e f f e c t i v e not because p l a i n t i f f s ca l c u l a t e the l i k e l i h o o d o f success and determine to accept r e l i e f without fees; i t i s e f f e c t ive s o l e l y because the de fendants can explo it the eth ical quandary that i t creates . I t i s "a demand . . . that the p l a i n t i f f ' s lawyer cannot r e s i s t as a matter of ethics and in which the p l a i n t i f f has no i n t e r e s t and the r e fo r e w i l l not r e s i s t . " D.C. Bar Op. No. 147 at 5-6; N.Y.C. Bar Op. No. 80-94 at 7a. I t r e s u l t s not in a f a i r and exped i t ious se tt l ement , but r a the r in an undeserved windfal l to the c i v i l r ights v i o l a t o r who avoids the s t a tu to ry o b l i g a t i o n to pay f e e s . 40 D. The Use o f the Waiver Tactic by Government Counsel Is P a r t i c u l a r l y Inapproprfate In the hands of government, the wai ver t act ic w i l l be p a r t i c u l a r l y e f f e c t i v e in d e f e a t i n g the goa l o f providing legal representation contemplated by Canon 2 and the Act. And given thei r special respon s i b i l i t i e s in our system, i t i s p a r t i c u l a r l y inappropriate for the government and i t s counsel to coerce a se tt lement that evades the law and is unjust. Because "governmental o f f i c i a l s are f requently the defendants in cases brought under the s t a t u t e s covered by" § 1988, H.R. Rep. No. 94-1558 at 7, they are best situated to discourage p l a in t i f f s® counsel by repeated invoca t ions of the coercive waiver tact ic . Permitt ing c on d i t i on a l fee s e t t l e ments favors p u b l i c e n t i t i e s and o - ther h a b i t u a l abusers who are custo mar i ly de fendants in c i v i l r i g h t s cases. They can better fend o f f sub sequent claims and continue unlawful p r a c t i c e s by the use o f intentional and concerted insistence on fee w a i v e r s . The reputation of spec i f i c de- 41 fendants who u t i l i z e fee waiver tac t ic s quickly sp reads , and the c i v i l r i g h t s bar i s forced to switch r e sources to other " t a rge t s . " Thus, the most f l a g r a n t o f f e n d e r s are rewarded. Kraus, supra n . 16, 29 V i l l . L.Rev. at 644- 45 ( f oo tnotes omi t ted) . Yet , as the Court has noted in a re la ted context : How "un ique ly amiss" i t would be therefore, i f the government i t s e l f - - " the s o c i a l organ to which a l l in our society look fo r the promotion of l i b e r t y , j u s t i c e , f a i r and equal treatment, and the sett ing o f worthy norms and go a l s f or s o c i a l conduct" — were permitted to disavow l i a b i l i t y for the injury i t has begotten. Owen v . C i t y o f Independence , 445 U.S. 622, 651 (1980) (quoting Adickes v. Kress & Co . , 398 U.S. 144, 190 ( 1970) (Brennan, J . , concurring) ) . Government counsel ' s duty of loya lty runs not to p a r t i c u l a r o f f i c i a l s but to ? 3the enti ty . Therefore, they cannot ignore the impact of the i r actions on p l a i n t i f f s , 23 See EC 5-18: "A lawyer employed or retained by a corporation or similar entity owes his allegiance to the en tity .. . . " And beca-who are the e n t i t y ' s c i t izens . 24 use they r ep re sen t the government, they have a heightened duty to see that the law i s complied with. Thus, the Code cautions tha t : A government lawyer in a c i v i l action . . . has the r e s p o n s i b i l i t y to seek j u s t i c e and to deve lop a f u l l and f a i r r eco rd , and he should not use his pos it ion or the economic power of the government to harass p a r t i e s or to br ing about unjust settlements or r e s u l t s . 25EC 7-14. The coercive waiver t act ic runs afoul of this e t h i c a l command because i t 24 This irony was not lost upon the Congress that passed § 1988. It noted that: "Such governmental entities and offic ia ls have substantial resources available to them through funds in the common treasury, including taxes paid by the plaintiffs themselves." H.R. Rep. No. 94-1558 at 7. 25 The nongovernmental lawyer also has a duty of fair dealing. BC 7-10 provides that: "The duty of a lawyer to represent his client with zeal does not militate against his concurrent obligation to treat with consideration a ll persons involved with the legal process and to avoid the infliction of needless harm." Similarly, the Preamble to the Model Rules (observes that: "As negotiator, a lawyer seeks a result advantageous to the client but consistent with requirements of honest dealing with others." The point is only that the responsibility of government counsel is greater. 43 e x p l o i t s the government's better economic p o s i t i o n to dep r i ve opposing counsel o f thei r statutory f e e . I I I . A BIFURCATED APPROACH TO NEGOTIATIONS OF THE MERITS AND FEES IN CIVIL RIGHTS CASES IS THE MOST APPROPRIATE AND EFFECTIVE REMEDIAL DEVICE FOR PREVENTING THE ETHICAL ABUSE OF THE COERCIVE WAIVER AND ITS VARIANTS The eth ica l abuse occas ioned by the coe rc ive waiver t a c t i c i s not a r a re or iso lated occurrence. I t has been es t ima ted " that there are requests for fee wai vers in more than ha l f of the c i v i l r ights cases l i t i g a t e d . " Fee Waiver Requests Uneth ica l : Bar Op in io n , 68 A . B .A . J . 23 (Jan. 1982). As noted above, the p e t i t ioners and the i r amici suggest they may be compel led to use the tact ic by their ethica l r espons ib i l i t y to the ir c l i ents . A p ra c t i c e thus entrenched r e q u i r e s more than rhetor ica l censure; the courts must develop and en force appropriate measures to prevent such eth ical abuses. 44 A, Coerc ive Fee Waiver Agreements ShouT3^~Be~~Dnenforce5ETe~~~~ A " c o n t r a c t . . . in v i o l a t i o n o f publ ic po l i c y and pro fess iona l e t h i c s . . . c a l l s for j u d i c i a l condemnation. '1 Weil v. Neary, 278 U.S. 160, 174 (1929 ) . Faced wi th a f e e waiver that is the r esu l t o f t h i s form o f e thica l , abuse, a cour t should app ly the t r a d i t i o n a l ru l e that c o n t r a c t s a ga in s t 2 6p u b l i c p o l i c y are u n en fo r c e a b l e . See, e . g . , Woodstock I ron, Co. v. Richmond and D a n v i l l e Extens ion C o . , 129 U.S. 644 (1889); Restatement o f Contracts 2d § 178. This i s p a r t i c u l a r l y so when " the strength o f that po l i c y [ i ] s manifested by l e g i s l a t i o n . " I d . , subsection ( 3 ) ( a ) . The u n e n f o r c e a b i l i t y o f the coerc ive f ee waiver, however, should not in a case l i k e t h i s r e s u l t in the i n v a l i d i t y o f the balance o f the s e t t l e m e n t agreement . In 26 " [a ] consent decree or order is to be construed for enforcement purposes basically as a contract . . . . " United States v. ITT Continental Baking Co., 420 U.S. m r s 3§ T i r 57s y :— ~— 45 refusing to enforce contractual terms that are void as against publ ic p o l i c y , courts genera l ly preserve the balance of the con t rac t , and even of the term. Restatement o f Contracts 2d §§ 1 78, 184. This i s par t i c u l a r l y t rue when, as here , the party seeking enforcement o f the balance acted " in good fa ith and in accordance with rea sonable standards of f a i r dea l ing . " I d . , § 184(2 ) . When the substance of the se t tlement on the meri ts i s , on i t s own, a reasonab l e compromise, c f . Cotton v. Hin t o n , 559 F . 2d 1326, 1330 (5th Ci r . 1977), i t should be enforced because the fee wai ver cannot be said to have been "an essen t i a l part o f the agreed exchange . " Re statement § 184 (1 ) . That the defendant does not r ece i v e the f u l l benef it of i t s bargain is of l i t t l e consequence when that ba rga in was obta ined unethica l ly : "This [ i ] s not a bona f i d e compromise." Lazar , 757 F .2d at 437. 46 Bat unless the Court i s c lear on both the unen fo rceab i l i ty and the s eve rab i l i ty of fee wa ive rs , this form of ju d i c i a l r e view w i l l be ine f f e c t i ve . The defendants, as here, often counter such e f f o r t s with a request to undo the negotiated settlement on the ground that the fee waiver was the cons ide ra t io n for the grant of r e l i e f on the m e r i t s . This can be as e f fe c t iv e in prevent ing p l a i n t i f f s ' counsel from chal leng ing the waiver as that tact ic was co e r c i v e in the f i r s t place: "each step forward reintroduces prec ise ly the same ethical dilemma that o r i g in a l l y forced the acceptance o f the fee waiver . " Kraus, 29 V i l l . L .Rev . at 620-22; see Vermont Bar Op. No. 85-3 (a t torney may chal lenge coerced fee waiver as long as it does not jeopar dize c l i e n t ' s recovery) . B . A Bifurcated Approach to Settle ment's the '~Mos t Erf ect 1 ve~~l3em'idy~~"~ We respect fu l ly submit that, for four reasons , a f l a t ban on simultaneous or 47 conditional negotiations of the merits and fees in this narrow c lass of cases i s the 27best remedy. 1. A f l a t ban on simultaneous nego t i a t i o n de a l s d i r e c t l y with the waiver problem by removing the context that makes the t a c t i c e f f e c t i v e . I t g i v e s c l e a r guidance to busy d i s t r i c t courts, e l imi nating the uncertainties of a case-by-case approach. 2. A b i f u r c a t e d approach to s e t t l e ment better preserves scant j u d i c i a l r e sources . Re l i ance on d i s t r i c t court supe rv i s i on would only be su c ce s s fu l in d i r e c t p rop o r t i on to the amount o f time and e f f o r t expended by the d i s t r i c t court. Actua l s u pe r v i s i o n o f negotiations could be very time consuming. A f t e r - t h e - f a c t review might r eq u i r e r econs t ruc t io n of 2 27 ibis would neither preclude defendants from obtain ing reasonable information regarding prospective fee requests, N.Y.C. Bar Op. No. 82-80, nor from negotia ting separate fee settlements after agreement has been reached on the merits. 48 the course o f negot ia t ions in an e f f o r t to asce r ta in whether the defendants* negot ia t i o n t a c t i c s were in f a c t c o e r c i v e . See Moore , 762 F . 2d at 1114-15 (Wright, C . J . , 2 8d i s s e n t i n g ) . The b i furcated negot ia t ion approach, on the o the r hand, i s s e l f - e n f o r c i n g . I t i s su c c e s s fu l because, by removing the context that makes the c o e r c ive waiver t a c t i c and i t s var iants e f f e c t i v e , i t ends t h e i r use. I f the ban on simultaneous or condi t iona l nego t ia t ion is breached , a s imple a p p l i c a t i o n to the court can bring prompt sanct ions. The argument tha t b i f u r c a t i o n would requi re two sett lement hearings i s mispla- 28 judge Wright's dissenting opinion catalogues the progress o f the settlement negotiations in Moore and shows that the "waiver" o ffer came from tfieT]pIain- t i f f s because, by a pattern of responses and nonre sponses to prior settlement offers, "NASD's counsel had made absolutely clear that the merits proposal was perfectly acceptable, but that NASD would not agree to that merits proposal unless the question of fees and costs were resolved[ a]nd . . . that only a waiver .. . would satisfy NASD and permit the merits settlement to go forward." Id. at 1115 (emphasis in o rig in a l). 49 ced . Counsel may separately negotiate the merits and fees , without condi t ioning one on the o the r , and present both agreements to the court at one hea r ing . Moreover, the c o n f l i c t s of interest and the r e s u l t ing opportunities for abuse that occur in c i v i l r i g h t s cases are not l im i ted to class actions. Thus, even i f the b i f u r cated n ego t i a t i o n approach might occa s iona l ly y i e ld more settlement hearings in c l a s s a c t i on c a se s , the a l t e r n a t i v e s - - in t ens iv e a f t e r - t h e - f a c t s c ru t iny or s u pe rv i s i o n o f n ego t i a t i on - - would require greater d i s t r i c t court re sources in every case. The b i f u r c a t e d approach encourages the part i es to bargain in good f a i th on a p r in c i p l e d b a s i s to reach a reasonab le compromise on the merits of each aspect of the case: f i r s t , on the question of r e l i e f and, s e p a r a t e l y , on an app rop r ia te and reasonab le fee . That form of "pr incipled 50 n ego t i a t i on produces wise agreements amicably and e f f i c i e n t l y . " R. F ishe r and W. U ry , GETTING TO YES 86 ( 1981 ) . In the long term, i t w i l l conserve j u d i c i a l resources. 3. The b i f u r c a t e d approach w i l l in fact encourage s e t t l em ents , d e sp i t e the s u p e r f i c i a l l y appealing assertions to the cont ra ry . The cur rent a v a i l a b i l i t y of " s a c r i f i c e " tact ics disserves the s e t t l e ment process. In many of these cases, the ult imate 1 i a b i l i t y f o r the p l a i n t i f f s ' attorneys' fees may be the s i n g l e l a r g e s t incentive for compliance. This i s obvious ly true, for example, when the monetary or i n j u n c t i v e r e l i e f at stake is minor. But i t w i l l a lso be true in cases in which the i n jun c t iv e r e l i e f i s very c o s t l y . In those cases, the lower t r a n s a c t i o n costs of in-house l i t i g a t i o n are o f f s e t by the l a rger savings that accrue from de lay ing implementation. Thus, the a v a i l a b i l i t y of '■ 51 " s a c r i f i c e " tact ics as a method of avoid ing or reducing l i a b i l i t y f o r fees r e moves the l a r g e s t economic incen t ive to voluntary compliance without l i t i g a t i o n . See Kraus, 29 V i l l . L.Rev. at 643-44. Once l i t i g a t i o n has begun, the a b i l i t y to avoid or reduce fee l i a b i l i t y by l a t e r use of " s a c r i f i c e " tact ics is an incentive to delay settlement to the l a s t moment, as occurred in this case. In con t ra s t , the bi furcated negotiat ion process makes c l e a r that de fendants w i l l not be able to avoid the payment o f accrued fees . Thus, there i s a s t rong incentive either to comply vo luntar i ly or to s e t t l e at an early stage before the accrued fees become very large. The a v a i l a b i l i t y of " s a c r i f i c e " tac t ic s disserves the sett lement process in another way. P l a i n t i f f s ' counsel know that they face the p o s s i b i l i t y of being manipu l a t ed to compromise th e i r fee i f they - 52 engage in s imultaneous n e g o t i a t i o n s . Therefore, many counsel w i l l simply refuse to n e g o t i a t e i f the defendants i n s i s t on simultaneous negot ia t ions . When negot ia t ions have a l ready begun, the i n t e r j e c t i o n o f " s a c r i f i c e " t a c t i c s is l i k e l y to d e r a i l the process. As the p e t i t i oners point ou t , the community o f i n t e r e s t s shared by the p a r t i e s i s o f t e n the most e f f e c t i v e basis o f s e t t l em en t . B r i e f f o r P e t i t i o n e r s at 27-28. The invocat ion o f the coerc ive waiver t a c t i c or i t s v a r i ants destroys the p l a i n t i f f s ’ f a i t h in the other s i d e ' s bona f i d e s . I t thus not only d e s t r o y s the community o f in t e r e s t s that might l ead to s e t t l e m e n t , but a l s o de c r eases the va lue o f any sett lement that might be achieved. "A wise p l a i n t i f f knows that ult imate success 'depends to a degree on making the other side s u f f i c i e n t l y con t en t with an agreement to want to l i v e up to i t . ' " B r ie f f o r P e t i t i o n e r s at 28 (quo 53 t i n g F ishe r & Ury, supra, at 75) . Rut by the same token,, a wise p l a i n t i f f knows that the agreement he or she gets is only as valuable as the good f a i th o f the other s i d e in implementat ion; the invocat ion o f the wa iver t a c t i c destroys any hope the p l a i n t i f f might have that a sett lement is worth achieving. 4. The b i furcated approach be t te r contro ls other forms o f e th i c a l abuse. I t i s more e f f e c t i v e in deal ing with the par t i a l s a c r i f i c e and p a r t i a l sweetheart s i t uations --which develop from the t r a d e - o f f o f mer i t s r e l i e f f o r fees r e l i e f or v i c e versa— that w i l l be hard to uncover in an a f t e r - t h e - f a c t review o f the r e su l t . More o v e r , even when simultaneous negot iat ions r e s u l t in a p e r f e c t l y f a i r and e th ica l s e t t l e m e n t , i t creates an appearance o f im prop r i e t y . What the publ ic sees is a bunch o f lawyers se t t ing the i r own fees amongst themselves at the poss ible expense 54 of the c l i e n t , not the context o f the overa l l r e su l t . C. The O rd ina ry J u d i c i a l Tools Have So f5F~Proven in su fflcT en t Judicia l scrutiny of settlement agre ements may be e f f e c t i v e in the " sw ee t hear t '8 context - - when o v e r l y generous attorneys* fees are exchanged f o r a com promise o f the i n t e r e s t s o f the c l i e n t c l a s s , see Prandin i v. National Tea Co . , 557 F . 2d 1015, 1020-21 (3rd C i r . 1977) - - because the e t h i c a l abuse i s more r e a d i l y apparent from the terms o f the settlement. But " s a c r i f i c e " agreements - - l i k e coe rc ive waiver and i t s variants - - r e s i s t e f f e c t ive scrutiny. When defendants r eq u i r e p l a i n t i f f s ' counsel to accept a lower fee in exchange f o r r e l i e f on the meri t s , the r e s u l t may be ind ist inguish able in h ind s igh t from a tough but good f a i t h b a r ga in . S i m i l a r l y , c oe rc i v e fee waivers come wrapped in the r h e t o r i c of knowing and vo lunta ry waiver, s ee , e . g , , - 55 Moore, 762 F .2d at 1107, and are o f ten mistaken for a voluntary barter of the fee for r e l i e f on the merits (the " b a r ga in in g chip" t h e o r y ) . Id . at 1105. That is how the d i s t r i c t court erred in th i s case , R.T. 7, even though p l a i n t i f f s ' a t torneys negotiated a provision requiring court ap proval that should have a ler ted the court to the fact that the waiver was not volun tary. Simply to remit th i s i ssue to the lower federal courts would be to r eq u i r e busy judges to assess complex negotiations without necessary guidance . Thus, when counsel have sought d i s t r i c t court in te r vention during n ego t i a t i o n s the r e s u l t s have often been unsatisfactory. Indeed, a In one case, the parties negotiated a settlement without discussing fees. Prior to its presentation to the court for approval, however, the defendants insisted that the settlement was conditional on a fu l l waiver of fees. Relying on Prandini, plain t i f f s ' counsel raised the matter with"the district court. The court declined to rule; p la int i f f s ' counsel were forced to acquiesce to the waiver in light of the client's interest in re l i e f on the merits. Levin, Practical, Ethical and Legal Consi- 56 m ajo r i ty o f the r u l i n g s in these cases are unreported, r e f l ec t ing that these pro blems are not always considered with 3 0depth. ' The problem is compounded because the absence o f reported d e c i s i o n s , together with the disincent ives to appeal, derations Involved in the Settlement of Cases in whlcK Statutory Attorney’s Fees Are Authorized, 14 Clearinghouse Rev. 515,519 (Oct. 1980). In another case, counsel's motion to the court to prohibit the defendants from insisting on a fee waiver instead prompted the court to direct the plaintiffs counsel to continue to negotiate and to act in the client's best interest. The agreement that resulted included a fee waiver. Counsel' s effort to set aside the waiver provision was met with a motion by the defendants to set aside the entire agreement; the court approved the agreement and the fee waiver. When the plaintiffs appealed, defendants cross-appealed, again placing the re lie f on the merits at risk. Because of this, the appeals were voluntarily dismissed. Comment, Settlement Offers Conditioned upon Waiver of Attorney's Fees; PoTIcy7 Legal, "and Ethical Considerations, 131 U.Pa.L.Rev. 793, 802 (1983). 30 For example, sane courts have tended wrongly to as sume (See Pt. I supra) that fees in this context are no different than any other. No doubt courts have also been affected by the important role that settle ments play in judicial administration. Understandab ly, courts not fully familiar with the dynamics of the settlement process may be reluctant to tinker with any aspect of the "mix" that now produces set tlements. 57 have e f f e c t i v e l y sh i e lded the p r a c t i c e from adequate scrutiny; "the most b l a t a n t examples o f c o n d i t i o n a l Pees Act waivers almost never reach a p p e l l a t e c o u r t s . " Kraus, 29 V i l l . L. Rev. at 620. Thus, federa l d i s t r i c t court i n t e r vent ion i s unl ikely to serve as an e f f e c t ive remedy to t h i s p r a c t i c e . The lower courts would require an a f f i rmat ive d i rec t i v e s e n s i t i v e l y to po l ice such abuses .3 ̂ Because of the l i m i t a t i o n s o f r e t r o s p e c t i v e rev iew, a c t i v e su pe rv i s i on o f the conduct of negotiations that concern both the merits and fees would be required. The petitioners' assertion that district courts already have adequate tools to police such miscon duct, Brief for Petitioners at 34-35, misses the mark because it fails to acknowledge the conditions noted above that render these tools ineffective in fact. Indeed, the petitioners would make district court intervention even less likely and less effective by erecting additional barriers: They would create a new presumption of ethical conduct by defense counsel that the already victimized plaintiffs ' counsel would have to overcome. id. at 35-36. 58 D . The Criticisms of the Bifurcated Approach Are Inaccurate Contrary to the a s s e r t i o n s o f p e t i t ione r s and t h e i r a m ic i , the b i f u r c a t e d approach does not impinge on the eth ical r e s po n s i b i l i t i e s o f de fense counse l . De fendants have a l e g i t im a te i n t e r e s t in knowing the extent of the ir l i a b i l i t y . But that does not mean that overzealous coun se l may coerce a waiver or p a r t i a l wa iver of fees. Other avenues are open to ethical defense counsel to further th e i r c l i e n t s ' interest in l imiting l i a b i l i t y . For exam p l e , de fendants can reques t r easonab le in format ion concerning hours and r a t e s . See N.Y.C. Bar Op. No. 82-80. Then, apply ing the s tandards enunciated in Blum v. Stenson, 79 L . Ed.2d at 901-03, they can f i g u r e th e i r ou t s id e l i a b i l i t y with rea sonable accuracy. Or they can l imit their l i a b i l i t y for fees by se t t l ing meritorious su its promptly. They can aggress ive ly bar ga in over a r easonab le f e e , seeking to - 59 exclude compensation f o r unnecessary e f f o r t . Or they can argue that the su i t was in f a c t meri t less and, although nomi na l ly se tt l ed , should not resul t in a sub s t a n t i a l f e e . A l l o f these op t ions pre serve v i go rous advocacy f o r both s i d e s , unl ike the coe rc ive waiver t a c t i c which preempts the process. That de fense counsel cannot achieve the most advantageous r e s u l t f o r the i r c l i e n t s ne i ther means that " s a c r i f i c e " t a c t i c s are e t h i c a l , nor that a ban on s imultaneous n ego t i a t i ons con f l i c t s with ethical o b l i g a t i o n s . Many other e t h i c a l r u l e s r e s t r i c t zea lous r e p r e s e n t a t i o n . Obtaining from opposing counsel a covenant not to sue the defendant in another action as a condition o f set t lement both serves the de f endant ' s best interest and induces the defendant to s e t t l e . I t i s neverthe l e s s u n e th ic a l . DR 2~1G8(B) ; Model Rule 60 5 . 6 ( b ) . The defendant 's in a b i l i t y to f i x with ce r t a in ty the amount o f t o t a l l i a b i l i t y a l l at once w i l l on ly prevent settlement in the rarest case. The same con s ide ra t ions that now prompt p a r t i e s to s e t t l e w i l l continue to f avo r sett lement over l i t i g a t i o n in most case s . in s u i t s for monetary r e l i e f , the defendant w i l l s t i l l s e t t l e because settlement costs less than the f u l l contingent l i a b i l i t y . In injunc t i v e case s , the defendant w i l l s e t t l e because a negotiated sett lement g i v e s i t the maximum control over the terms of the eventual decree. In e i t h e r case , s e t t l e ment saves the defendant both i ts further costs of l i t i g a t i o n and the 1arger l i a b i l i t y for attorneys' fees that would other- -•2 Another example is the rule requiring counsel to disclose adverse authority directly on point. EC 7-23; Model Rule 3.3(a)(3). It directly disserves the client's interest but is required by the lawyer's ooligations both to the tribunal before which he or she is practicing and to the law. 12 61 wise accrue. B i fu r ca t ed n ego t i a t i on s might deter settlement in cases in which the d e f en dant could avoid a l l l i a b i l i t y for fees i f the case proceeded to t r i a l . In that case, the prospect of conferring preva i l ing par ty s t a tus on the p l a i n t i f f by s e t t l i n g without a concurrent waiver of fees would seem to deter se tt l ement . One such c i r cumstance i s the " n o n c a t a l y t i c " s u i t desc r ib ed above. But in that case , the defendant can simply se t t l e and oppose the fee award by demonstrating that compliance predated f i l i n g . The t r u l y m e r i t l e s s s u i t i s another such circumstance. But in that case , the defendant has numerous a l t e r n a t i v e s . It can se t t l e ear ly when the fee award w i l l be small . Even when the lack of merit does not appear u n t i l l a t e , i t can seek to l im i t the fee recovery on the grounds of the meager resu l ts obtained. See Hensley 62 - v. E c k e rh a r t , 461 U .S. 424 ( 1983). And, when the case is f r i vo lous , i t can sue for i t s own attorneys' fees . True, there may be some m e r i t l e s s cases in which the defendant, unwi l l ing to run the r i s k o f fee l i a b i l i t y , w i l l not s e t t l e . But that may we l l be a b e n e f i t . I t i s o f ten assumed that some p l a i n t i f f s ' l awyers f i l e m e r i t l e s s s u i t s f or the i r "nuisance va lue , " hoping that defen dants w i l l s e t t l e j u s t to avoid the cost . . 3 3o f l i t i g a t i o n . ' To the extent that b i f u r c a t e d n ego t i a t i o n s make m e r i t l e s s s u i t s l e s s l i k e l y to s e t t l e , they reduce the incent i ve to f i l e such "nuisance s u i t s . " That furthers both the sound ad ministration of ju st ice and the long term interests of defendants. The advantages of the b i f u r c a t e d ap proach to sett lement pioneered by the 33 Such suits are plainly unethical because not premised on a good faith interpretation of the law. See DR 7-102(A) (1) & (2). ~ ~ 63 Third Ci rcu it in Prandini are substant ia l . I t i s not su rp r i s ing , therefore, that the Pra nd in i approach has broad support. In his r epor t to the Federal Judic ia l Center on fees in c lass a c t i on ca se s , P ro f e s so r Mil le r reported the resu l ts of a question naire on the subject : 51.9% of the judges responded that they agreed with the Pran d in i approach; 65.6% of the a t torneys agreed . A breakdown fo r the at torneys* response shows b ipart i san support f o r the r u l e : 65% of p l a i n t i f f s a t to rneys and 59.4% of defendants attorneys support the ru le . A. M i l l e r , Attorney's Fees in Class Act ions 224 ( 1 9 8 0 ) . ^ The A s s o c i a t i o n ' s opinions, supporting the Prandini approach in the c i v i l r i g h t s area where the con s iderat ions are stronger, were the r e s u l t of extens i ve d e l i b e r a t i o n by members of 34 Professor Miller also reported that the problems with the Prandini approach are mitigated by providing the defendant with information regarding the fee request, i d . at 223, a practice that the Association has approved of. Op. No. 82-80. 64 the bar with a v a r i e t y o f perspect i ve s . h ru le wi th such a high deg ree o f support from those in p r a c t i c e cannot be as unworkable as p e t i t i o n e r s and t h e i r amici contend. In sum, the b i f u r c a t e d approach i s the most e f f e c t i v e remedy fo r a p r a c t i c e that impugns the i n t e g r i t y o f the l e g a l system and subver t s the i n t e n t o f Cong ress. I t both removes the opportunity fo r impropriety and prevents the appearance of im p r o p r i e t y in the se t t l ement process in c i v i l r i g h t s c a s e s . I t i s w o r k a b l e ; i t w i l l encourage f a i r and expedi t ious s e t tlements more than i t w i l l de ter them. I t should be af f i rmed by this Court. CONCLUSION For the f o r e g o i n g reasons , the judgment o f the court o f appeals should be a f f i rmed. 65 Respectful ly submitted , The Committee on Legal Ass is t ance o f the Associa tion of the Bar of The City of New York Al lan L. Cropper 1155 Avenue of the Americas New York, New York 10036 (212) 819-8403 Counsel For Amicus Curiae Opinion Number 80-94 Inquiry Reference No. 80-94: Opinion on Settlement Of fers in Publ ic Interest L i t iga t i on Con d i t iona l on Waiver "of Statutory Fees Many statutes providing protection f o r c i v i l r i g h t s and c i v i l l i b e r t i e s also prov ide for an award by the court of attorneys' fees to successful p l a i n t i f f s .1 The purpose of these attorneys' fee provi s ions i s to encourage enforcement of the r ights protected by the statute by persons See, e.g., 20 U.S.C. § 1617 (Education Amendments of T§72) (action charging state or local education agency with discrimination); 42 U.S.C. § 19731(e) (Voting Rights Act); 42 U.S.C. § 2000a-3 (Civil Rights Act of 1967) (discrimination in public accom modations) ; 42 U.S.C. § 20003-5 (Civil Rights Act of 1964) (discrimination in employment); 42 U.S.C. § 3612(c) (Pair Bousing Act of 1968) (discrimination in the sale or rental of housing); 42 U.S.C. § 1988 (Civil Rights Attorneys' Fees Award Act of 1976). Recently, Congress enacted the Equal Access to Justice Act, which amends 5 U.S.C. § 504 and 28 U.S.C. § 2412 to permit counsel fee awards against the United States in certain agency and judicial pro ceedings. 2a who would otherwise be unwil l ing or unable to bear the cost of doing so. These s ta tutes a lso have been interpreted to permit an award of attorneys' fees upon a s e t t l e - 4- 2 ment. We have received a number of informal i n q u i r i e s by lawyers for publ ic interest o r g a n i z a t i o n s , who frequently represent p l a i n t i f f s in actions under these s ta tu te s , asking whether i t is e th ica l for defense lawyers in such actions ( t y p i c a l ly , but not always, government counsel) to make settlement o f f e r s in such suits con d i t i o n a l on a waiver of statutory fees. The inqu i r ing lawyers have pointed out that such demands place publ ic interest l awyers in an impossible con f l i c t between th e i r in te re s t in fees to help finance In Maher v. Gagne, 100 S. Ct. 2570 (1980), the Court teI3TRaTcDunseI fees under 42 U.S.C. § 1988 may be awarded even after settlement of a plaintiff 's claim oc following a consent judgment. In either case, the pla in t i f f may be a "prevailing party" within the meaning of the statute. 3a t h e i r program and the interests of their c l i e n t s in the merits of the settlement, which u l t imate ly forces p l a i n t i f f s ' counsel to submit to such demands for the waiver of the fee. At a publ ic forum on eth ical problems in publ ic interest l i t i g a t i o n co-sponsored by this Committee las t P a l l , pane l i s ts and members o f the audience repeatedly noted t h e i r concern with this pract ice , urging that i t was not only an unfair bargaining t a c t i c , but that i t would ult imately have a d e l e t e r i o u s e f f e c t on c i v i l r ights s ta t u t e s , the enforcement of which depend in important part on the a v a i l a b i l i t y of s ta tutory counsel fees. In this opinion we explain why we b e l i e v e that such conditional settlement o f f e r s are unethical in actions ar i s ing under c i v i l r ights and c i v i l l i b e r t i e s st a tu tes . 4a I As a ru l e , this Committee does not respond to inqui r ie s by lawyers about the conduct of other counsel. Our function is to prov ide guidance to inquiring lawyers about t h e i r own proposed conduct. We do not pass judgment on complaints about o the r s ; that i s the province of the Departmental D isc ip l inary Committee and the courts which can a f ford due process hear i ngs . Neverthe less , in this instance the Committee has decided to give i ts op in ion , not as a condemnation of past p r a c t i c e , but as a guide to future con duct . The question concerning the ethics of conditional settlement o f f e r s i s one which bears not only on the conduct of defense counsel who make such o f f e r s , but on the conduct of p l a i n t i f f s ' counsel who must decide how to respond to such o f f e r s . We decided that we could not responsibly counsel p l a i n t i f f s ' lawyers on their o b l i 5a g a t i o n when confronted with such condi t ional settlement o f f e r s without consider ing the e th i c s of the conditional s e t t l e ment o f f e r i t s e l f . We issue this opinion, however, recognizing that there is no c l e a r precedent by which defense counsel could have guided themselves in the past. I I As a lready indicated, the demand for a waiver o f statutory counsel fees as a cond i t ion to settlement presents a severe dilemma for p l a i n t i f f s ' counsel. Frequently, p l a i n t i f f s ' counsel in c i v i l r i g h t s l i t i g a t i o n are employed by a p u b l i c i n t e r e s t organizat ion which does not accept fees from the c l i ent as a matter o f po l i c y and in any event, p l a in t i f f s in such cases often have no resources to pay a fee. In such cases, waiver o f the attorneys fees w i l l a f fec t only the lawyers and thei r organizations, who depend ent i re l y on the statute for - 6a thei r fee; the c l i ent who i s not obl igated or i s unable to pay f e e s , has no stake in the s t a tu to ry fee and i s hence not con- 3cerned with i t s waiver. Yet p l a i n t i f f ' s counsel owes undivided loya lty to the c l i e n t and i s obl iged to exercise his As the Fifth Circuit noted recently in Lipscomb v. Wise? _______ F.2d ______ (April 22, 1981), a case recognizing an attorney's right to appeal from a denial of a fee in a civil rights case: "In theory, attorneys for a litigant are not personally affected by a judgment. Even in the limited class of cases in which attorney's fees may be awarded, the award is made to the prevailing party, rot to counsel. However, as a practical matter, the lawyer is frequently the only person adversely affected when attor ney's fees are denied. An indigent client has no real financial interest in whether his attorney is awarded fees. I f the client is not indigent, the attorney may s t il l be the party aggrieved in fact, i f the client's net recovery is not affected by the amount allowed for fees. When they are the real parties in interests, attorneys are entitled to a day in court. * * * "Attorneys who bring civil rights suits on behalf of their cl ients my be secure in the knowledge that they can pursue any legitimate right they may have to attorney's fees in federal courts." 7a judgment in evaluating the settlement free from the influence of his or his organiza t i o n ' s i n t e re s t in a fee. DR-5-101(A). Hence, i t would seem that p l a i n t i f f ' s counsel confronted by such a demand must i gnore h is or his organ izat ion ' s interest in a fee and recommend waiver of the fee, i f the substantive terms of the settlement are d e s i r a b l e for the p l a i n t i f f . Defense counsel thus are in a uniquely favorable posit ion when they condition settlement on the waiver of the statutory fee: they make a demand fo r a benef i t which the p l a in t i f f ' s lawyer cannot r e s i s t as a matter of e th i c s and which the p l a i n t i f f w i l l not r es is t due to lack of interest . A majority of this Committee bel ieves that i t i s unethical for defense counsel to exploi t this s i tuat ion in cases ar i sing under s t a tu te s aimed at protecting c i v i l r i g h t s and c i v i l l i b e r t i e s .4 We do not 4 This view apparently is also shared by some govern- 8a reach the question as i t may a r i se in any other context. Authorization of fee awards under such s t a t u t e s i s c r i t i c a l to the adminis t r a t i o n o f j u s t ic e ; indeed, i t appears irent lawyers vho defend government entities in suits under civil rights statutes. The Supreme Court has recently agreed to review a decision of the First Circuit interpreting F.R. Civ. P. 59(e) to require that a fee application must be filed within 10 days of the entry of a consent judgment terminating an action brought urrier 28 U.S.C. § 1983. White v. New Hampshire Department of Employment Security, U.S.L.W. 38&3 (May 18, 138Ty ('No.' 86-5M7)7"granting cert to 629 F.2d 697 (1st Cir. 1980). Counsel for New Haripshire conceded that it was their understand ing that they were ethically forbidden from holding the settlement of the merits "hostage" to negotia tion of a settlement on fees favorable to the state; they assumed that they could not discuss fees until after agreement was reached on the settlement of the merits. White v« Hampshire Department of Ehploy- ngnt Seoarity ̂ ajpra, petition for a Writ of Certio- T a r i, p. 5, n. 2. We do not find it necessary to reach the question of whether in every type of case in which fees may be awarded to a plaintiff it is ethically improper for counsel to discuss simulta neously the settlement of the merits and the counsel fee award. See Prandini v. National Tea Co.f 557 F.2d 1015, 102'"{3b "C?if7_T^Tf)~ar3~^jr^5a~:vTJnited States, 623 F.2d 1338, 1352-1353 (9th Cir. 1$80). As wHT~become apparent, this opinion turns on a con junction of principles applicable primarily to l i t i gation protecting civil rights or c iv il liberties. See Regalado v. Johnson, 79 F.R.D. 447 (N.D. 111. T578). 9a c r i t i c a l to the perception of ju st ice and i t s a c c e s s i b i l i t y to a l l members of s o c i e t y . The statutory fee award is a r ec o g n i t i o n that protections af forded m in o r i t i e s subjected to invidious d i s c r i mination or to persons abused by arb i t ra ry governmental action are of ten meaningless unless counsel can be secured to a s s i s t in the enforcement of those r ights , and that, t y p i c a l l y , victims of such conduct are unable to a f fo rd counsel. In Newman v. Piggie Park Enterprises, Inc. , 390 U.S. 400, 402 ( 1968), the Supreme Court sa id, in connection with an a p p l i c a t i o n for attorney 's fees under the Civ i l Rights Act of 1964: I f success fu l p l a i n t i f f s were rou t ine ly forced to bear thei r own attorneys ' fees , few aggrieved pa r t i e s would be in a pos it ion to advance the pub lic interest by invok ing the injunctive powers of the federal courts. Congress therefore enacted the provision for counsel fees - - not simply to penalize l i t i gants who de l i be ra te ly advance argu ments they know to be untenable but, 10a more broad ly , to encourage ind iv i duals injured by rac ia l discr imina t ion to seek ju d i c i a l r e l i e f under T i t l e I I . [Footnote omitted. ] Lower courts have given s imilar explana t ions in cases brought under a var iety of s t a tu t e s for monetary and injunctive r e l i e f . S ee , e . g , , Torres v. Sachs, 530 F. 2d 10, 13-14 (2d Ci r . 1976) {42 U.S.C. § 1 973 ( e ) ) ; Nadaeau v. Helgemoe, 581 F. 2d 2 7 5, 280 (1st Ci r . 1978) ( 42 U.S.C. § 1 9 8 8) ; Dennis v. Chang,, 611 F. 2d 1 302, 1306-07 (9th Ci r . 1980) (same); Rodriguez v. T a y l o r , 569 F.2d 1 231 , 1 245 ( 3rd Cir . 1977) (Age Discrimination in Employment Act ) . See a lso 1976 U.S. Code Cong. & Ad. News 5913, reprint ing S. Rep. No. 94-1022, 94th Cong., 2d Sess 5, stating the purpose of the law that became 42 U.S.C. § 1988. In s e v e ra l hear i ngs held over a per iod o f years , the Committee has found that fee awards are essential i f the Federal statutes to which S. 2278 appl ies are to be fu l ly en fo r c e d . We f ind that the e f fects of such fee awards are anc i l l a ry and 11a inc ident to securing compliance with tFe~se Taws, and that fee awards are an integra l part o f the remedies necessary to obtain such compliance. . . [ I t ] i s intended that the a t to r neys' fees , l ike other items of cost s , w i l l be col lected either d i r e c t l y from the o f f i c i a l , in his o f f i c i a l capacity, from funds of his agency or under his control , or from the State or loca l government (whether or not the agency or govern ment i s a named par ty ) . [Footnotes, omitted; emphasis added.] In the preamble to the Equal Access to Justice Act of 1980, Congress found: that c e r t a in ind ividua ls , partner sh ip s , corporations, and labor and other organizat ions may be deterred from seeking review o f , or defending a g a in s t , unreasonable governmental action because of the expense invo lved in securing the vindicat ion of the r ights in c i v i l cases and in administrative proceedings. These statutes thus provide one form of response to the need to balance the s c a l e s of j u s t i c e and provide a means for encourag ing those who could not otherwise af ford to do so a r e a l i s t i c opportunity to en force t h e i r r ights . Routine demands in 12a the context of settlement that p l a i n t i f f ' s counsel waive such statutory fees thus could s e r i o u s l y undermine the e f f e c t i v e ness of these provisions as a device for making counsel ava i l ab l e to persons having claims under these statutes. DRl -102(A) (5) provides: "A. A Lawyer sha l l not: * * * 5. Engage in conduct that is pre jud ic i a l to the adminis t rat ion of j u s t i c e . " Moreover, under the Code o f Profes s i o n a l Respons ib i l i ty every lawyer is urged to support e f f o r t s to make counsel a v a i l a b l e to those unable to af ford i t . EC 2-25 s t a t e s : "The rendit ion of free lega l services to those unable to pay reasonable fees continues to be an ob l iga t ion of each lawyer, but the e f f o r t s of ind iv idua l lawyers are often not enough to meet the need. Thus, i t has been necessary for the profession to i n s t i t u t e addit ional programs to provide lega l services . Accordingly, 13a l e g a l a id o f f i c e s , lawyer re fe r ra l s e r v i c e s , and other related programs have been developed, and others w i l l be developed, by the profess ion. Every lawyer should support a l l proper eTFo7ts~Xo~lnee't"TH i s "neec]"'~'f or I eg a 1 services' . ~ir '^("Emphasis sup pl ied . ) ’ In the view of the majority of the Committee, the long term e f f e c t of pe r s i s tent demands for the waiver of statutory fees i s to prejudice a v i t a l aspect of the admin is t r a t ion of just ice and undermine e f f o r t s to make counsel ava i l ab l e to those who cannot a f ford i t , contrary to the ob l igat ions and aspi rat ions of the Code of Professional Responsib i l i ty . We f ind this conc lus ion pa r t i cu l a r l y compelling in l i g h t o f the spec ia l ob l igat ions of government counsel, who in the usual c i v i l r i g h t s case are counsel for defen dant , to deal f a i r l y and not take undue advantage o f his posit ion to bring about unjust settlements or re su l ts . EC 7-14. Although th i s opinion is not l imited to 14a government counsel, we be l ieve the con s i d e r a t i o n s of EC 7-14 add addit ional f o rce to our conclusion where government counsel i s involved. Ill In reaching this conclusion we have considered c a re fu l l y the views of a sub s t a n t i a l minority o f the Committee which, although sympathetic to the concerns expressed in this opinion, bel ieves s t ro n g l y that in prohibi t ing a spec i f ic type o f sett lement demand aimed at l im i t ing a p a r t y ' s monetary exposure the Com mittee has invaded the ju r i sd ic t ion of the courts and the l e g i s l a tu re . The minority considers that rel iance on the purpose of these statutes is inap p r o p r i a t e because i t is for Congress or the courts to determine whether pa rt i cu l ar conduct ought to be prohibited as d e t r i mental to the statutory goa ls . The Com mittee ma jo r i ty , however, bel ieves that 15a concerns f o r statutory goals re l a t ing to the adminis t rat ion of ju st ice have been t r ad i t i on a l l y considered eth ica l concerns. Thus, in addit ion to the express concerns of DR1-102(A)( 5 ) , the Code of Professional R e s p o n s i b i l i t y concerns i t s e l f with a v a r i e t y o f conduct which undermines or obstructs the use of the jud i c i a l process. See , e . g , , DR-7-102, DR-7-105, DR-7- 106 (C) ( 7) , DR-7-107, DR-7-108, DR-7-109. C e r t a in l y , as a general proposition enforcement of statutory goals is not with in the province of ethics committees. However, where, as here, ac t i v i t y of the kind at i ssue p l a in ly inter fe res with a s p e c i f i c and c le a r ly art icu lated l e g i s l a t i v e goa l to f a c i l i t a t e use of the j ud i c i a l process to enforce fundamental r i g h t s , we be l ieve such conduct raises ethical concerns. A second concern of the minority is that the op in ion could inter f ere with the 16a sett lement process and hence intrudes on an area o f spec ia l concern to the courts. The minor i ty urges that some defendants, p a r t i c u l a r l y in an action seeking injunc t i v e r e l i e f only, might be w i l l i ng to s e t t l e the merits provided they could eliminate or at least l imit thei r monetary exposure on an award of counsel fees , but that they would be unwil l ing to s e t t l e the merits i f they faced uncertain monetary exposure f o r counsel fees . The minority a l so urges that the eth ical rule the Com mittee announces a f fec t s not only defense l awyer s , but the defendants themselves — who are deprived of an opportunity to have th e i r counsel seek a certain type of sett lement which would l imit the defen dants' exposure. But that resul t i s not unique under the Code o f Pro fess iona l Responsibi l i ty and is therefore insuf f ic ient to rebut the reasons underlying this opinion. For 17a - ins tance , the e f f e c t of DR 2-108 (B) i s to bar sett lements in which the p l a i n t i f f ' s counsel agrees not to bring on behal f of other p l a i n t i f f s actions s imilar to the one being s e t t l e d . Such agreements also would be d e s i r a b l e to defendants who seek to l imit thei r future exposure, and i t may well be that the Rule inhib i ts settlements where the defendant fears future suits on the same claim by other p l a i n t i f f s . N eve r th e le s s , such settlements are barred because they would induce a con f l i c t between p l a i n t i f f ' s counsel ' s interest in his own practice and the c l i e n t ' s interest in an adequate settlement. See a lso ABA In formal Opinion 1039 (1968), which reached this conclusion pr ior to the adop t ion of DR 2-108(B). The s i tuation here is analogous in that demands for waiver of the statutory fee generate a con f l i c t between the l a w y e r ' s interest in the fee and the 18a c l i e n t ' s i n t e re s t in the adequacy of the sett lement on the mer i ts . ̂ Moreover, the pr inc ip le we announce does not prevent the p a r t i e s from negotiating the fee a f ter agreement has been reached on the s e t t l e ment o f the merits of the p l a i n t i f f ' s c la im. The resu l t here would only pre- The analogy may not be a perfect f it i f the de jure right to the fee is the client's rather tHan the lawyer's. In that case, unlike the agreement to l imit the lawyer's representation of other plain tiffs, it could be said that the demand for waiver of the statutory fee does not pit the lawyer's interest against the cl ient 's interest. The question of whether the right to the fee is the client's or the lawyer's is one of law which we cannot decide. See Lipscomb v. Wise, F.2d (5th Cir. April "2, T m t fi5wevir7 tHe^istinctlon is at best theore tical because in the typical case only the lawyer has a practical interest in the statutory fee. Ibid. The Federal District Court noted in Regalado v/Johnson, 79 F.R.D. 447 (N.D. 111. 1978): "Everyone familiar with civil rights litiga tion knows that a plaintiff in such suits rarely pays attorney's fees or the costs of litigation. For these reasons, a motion for fees and costs in such a case, although made in the name of the plaintiff, is really one by the attorney. This interest in the fee makes it improper for the lawyer in a civil rights suits to inject the question of attor ney's fees into the balance of settlement dis cussions." 79 F.R.D. at 451. 19a elude the de fendant ' s lawyer from holding the sett lement of the merits hostage to a waiver of the statutory fee. In sum, we be l ieve that i t is unethi cal for defense counsel to propose s e t t l e ments conditioned on the waiver of fees author ized by statutes designed to encourage the enforcement of c i v i l r ights and c i v i l l i b e r t i e s . As an obvious coro l lary and for the same reasons, we consider i t unethical for defense counsel to attempt to negotiate the fee award under such s t a tu te s simultaneously with the negot i a t i on of the settlement of the merits. I t would appear to fol low that i f a de fense counsel cannot demand a waiver of an e n t i r e fee, he a lso should not be permitted to use the merits of the s e t t l e ment as a le ve r to extract e f f e c t i v e l y a waiver o f part of the fee. This opinion, however, should not be considered an express ion of our views with regard to - 20a demands f o r waiver of statutory fees , or simultaneous negotiations of fees and the merits, in any contexts other than the one involved here. 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