"In the United States, the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys' fee from the loser." Alyeska Pipeline Service Co. v. Wilderness Society , 421 U.S. 240, 247 (1975). This is known as the "American rule" (as opposed to the English rule, which routinely permits fee-shifting) and derives from court-made law. It has, however, numerous statutory exceptions (listed at the back of this report), some if not most of which Congress enacted in order to encourage private litigation to implement public policy. Id . at 263. Under these exceptions, a federal court (and sometimes a federal agency) may order the losing party to a lawsuit to pay the winning party's attorneys' fees. Although "attorney's fees generally are not a recoverable cost of litigation 'absent explicit congressional authorization,' ... [t]he absence of specific reference to attorney's fees is not dispositive if the statute otherwise evinces an intent to provide for such fees." Fee-shifting has been proposed, not only to encourage lawsuits, but to discourage them, especially tort suits. The English "loser pays" rule was included in tort reform legislation proposed by the Bush Administration in 1992, and in "The Common Sense Legal Reforms Act," which is part of the "Contract With America" proposed by the Republican House Members in 1994. The American rule has two major common law exceptions (instances when federal courts may award attorneys' fees without statutory authorization): the common benefit doctrine and the bad faith doctrine. These derive from the historic authority of the courts "to do equity in a particular situation." This authority has been called the "supervisory" or "inherent" power of the federal courts. Federal courts may use this inherent power even in diversity cases, which are cases arising under state law that are brought in federal court pursuant to 28 U.S.C. § 1332 when the parties are citizens of different states and the amount in controversy exceeds $50,000. Chambers v. NASCO, Inc. , 501 U.S. 32 (1991). In Alyeska , the Court had written that, "in the ordinary diversity case where the state law does not run counter to a valid federal statute or rule of court, and usually it will not, state law denying the right to attorney's fees or giving right thereto, which reflects a substantial policy of the state, should be followed." 421 U.S. at 259 n.31. In Chambers , the Court explained that this limitation "applies only to fee-shifting rules that embody a substantive policy, such as a statute which permits a prevailing party in certain classes of litigation to recover fees." 501 U.S. at 52. A substantive policy of the state is not "implicated by the assessment of attorney's fees as a sanction for bad-faith conduct before the court which involved disobedience of the court's orders and the attempt to defraud the court itself." Id . at 52-53. Common law exceptions to the American rule are "unquestionably assertions of inherent power in the courts to allow attorneys' fees in particular situations, unless forbidden by Congress." Alyeska , 421 U.S. at 259. The two major exceptions are cases in which a party at its own expense creates a fund or achieves a substantial benefit in which others share, and cases in which a party acts in bad faith. A former third exception, cases in which a plaintiff acts as a "private attorney general" in effectuating important public policy, was eliminated by the Supreme Court in Alyeska . "In the absence of a statutory prohibition, the federal courts have authority to award attorneys' fees from a fund to a party who, having a common interest with other persons, maintains a suit for the common benefit and at his own expense, resulting in the creation or preservation of a fund, in which all those having the common interest share." Annotation, 8 L.Ed.2d 894, 905 (1963). This exception to the American rule does not shift the cost of attorneys' fees to the losing party, but rather to those who benefit from the suit. The doctrine was originally conceived in Trustees v. Greenough , 105 U.S. 527 (1881), a case against trustees of 10 million or 11 million acres of land who had collusively sold hundreds of thousands of those acres at nominal prices. One beneficiary, after 11 years of litigation at his own expense, recaptured the assets and presented a claim for reimbursement of attorneys' fees. The Supreme Court approved the award, writing that "if the complainant is not a trustee, he has at least acted the part of a trustee in relation to the common interest." Id. at 532. In Mills v. Electric Auto-Lite Co. , 396 U.S. 375, 392 (1970), the Supreme Court held that under the common benefit doctrine there is no requirement "that the suit actually bring money into the court as a prerequisite to the court's power to order reimbursement of expenses." Mills was a stockholders' derivative suit, a type of case which, the Court noted, may bring substantial non-pecuniary benefits. Boeing Co. v. Van Gemert , 444 U.S. 472 (1980), was a successful class action in which over $3 million in damages were awarded. Some class members collected their shares of the damages, but others did not. The district court, invoking the common benefit doctrine, ordered that the plaintiffs' attorneys be awarded their fees from the total amount of the judgment, concluding that it was equitable for all class members—claiming and non-claiming alike—to bear a pro rata share of the costs of producing the judgment in their favor. The defendant objected to use of the unclaimed money for this purpose, arguing that the ultimate disposition of the unclaimed money had not been decided. But the Supreme Court affirmed the award of attorneys' fees, holding: The common-fund doctrine, as applied in this case, is entirely consistent with the American rule against taxing the losing party with the victor's attorney's fees.... Boeing presently has no interest in any part of the fund. Any right that Boeing may establish to the return of the money eventually claimed is contingent on the failure of the absentee class members to exercise their present rights of possession. Although Boeing itself cannot be obliged to pay fees awarded to the class lawyers, its latent claim against unclaimed money in the judgment fund may not defeat each class member's equitable obligation to share the expenses of litigation. Id. at 481-482. In Hall v. Cole , 412 U.S. 1, 5 (1973), the Supreme Court wrote: [I]t is unquestioned that a federal court may award counsel fees to a successful party when his opponent has acted 'in bad faith, vexatiously, wantonly, or for oppressive reasons.... ' In this class of cases, the underlying rationale of 'fee shifting' is, of course, punitive, and the essential element in triggering the award of fees is therefore the existence of 'bad faith' on the part of the unsuccessful litigant. A fee award under the bad faith exception requires subjective bad faith—"some proof of malice entirely apart from inferences arising from the possible frivolous character of a particular claim." Copeland v. Martinez , 603 F.2d 981, 991 (D.C. Cir. 1979), cert. denied , 444 U.S. 1044 (1980). In Hall v. Cole , the Supreme Court wrote: "It is clear ... that 'bad faith' may be found, not only in the actions that led to the lawsuit, but in the conduct of the litigation." 412 U.S. at 15. Subsequently, as another court wrote: "Federal courts have applied [the bad faith] exception both when bad faith occurred in connection with the litigation and when it was an aspect of the conduct that gave rise to the lawsuit." However, some courts have refused to apply the bad faith exception to a party's underlying claim, noting that the Supreme Court's statement in Hall v. Cole had concerned the common benefit exception, not the bad faith exception. An attorney, as well as a party, who acts in bad faith may be ordered to pay the attorneys' fees of the opposing party. In Roadway Express, Inc. v. Piper , 447 U.S. 752, 765-767 (1980), the Supreme Court held: [I]n narrowly defined circumstances federal courts have inherent power to assess attorney's fees against counsel. . . . The power of a court over members of its bar is at least as great as its authority over litigants. If a court may tax counsel fees against a party who litigated in bad faith, it certainly may assess those expenses against counsel who willfully abuse judicial processes.... Like other sanctions, attorney's fees certainly should not be assessed lightly or without fair notice and an opportunity for a hearing on the record. But in a proper case, such sanctions are within a court's powers. In Durrett v. Jenkins Brickyard, Inc. , 678 F.2d 911, 919 (11 th Cir. 1982), the court held "that the Court in Roadway Express intended to authorize the assessment of attorney's fees against counsel who either willfully disobeyed a court order or acted in bad faith, vexatiously, wantonly, or for oppressive reasons." In Roadway Express , the Supreme Court also noted that, under Federal Rule of Civil Procedure 37(b), "[b]oth parties and counsel may be held personally liable for expenses, 'including attorney's fees,' caused by the failure to comply with discovery orders." 447 U.S. at 763. The Court also found that only excess costs, not attorneys' fees, could be assessed under 28 U.S.C.