Opinion ID: 1530733
Heading Depth: 1
Heading Rank: 5

Heading: Attorney's Fees Bad Faith Exception

Text: Alternatively, Brice argues that even if the enabling statute does not authorize the Board to award attorney's fees in all cases where the employee grievant prevails, the statute does vest the Board with equitable power to award attorney's fees in those instances where the State employer acted in bad faith. One of the well-recognized common law exceptions to the American Rule is the power of a court or an administrative tribunal, otherwise vested with equitable authority, to award attorney's fees when the losing party has `acted in bad faith, vexatiously, wantonly, or for oppressive reasons.' Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 258-59, 95 S.Ct. 1612, 1622, 44 L.Ed.2d 141 (1975) (citation omitted). The purpose of this exception is not to award attorney's fees to the prevailing party as a matter of right, but rather to `deter abusive litigation in the future, thereby avoiding harassment and protecting the integrity of the judicial process.' See Schlank v. Williams, D.C.App., 572 A.2d 101, 108 (1990) (citation omitted). This equitable exception, which only applies in extraordinary cases, has been recognized in Delaware. Loretto Literary & Benevolent Inst. v. Blue Diamond Coal Co., Del.Ch., 444 A.2d 256, 260-61 (1982). The Superior Court concluded that the record in this case would have justified an award of attorney's fees pursuant to the American Rule's equitable exception for abusive litigation. Brice v. State, Dept. of Correction, Del.Super., C.A. No. 96A-09-004, Terry, J., 1997 WL 524053 (June 23, 1991) (ORDER). The Superior Court determined, however, that the Board did not have the authority to invoke that exception. Id. We have concluded that the Board does have that equitable ancillary jurisdiction. The record reflects that the enabling statute vests the Board with the authority to grant equitable remedial relief to a prevailing employee, e.g.,  restore any position and place employees in a position they were wrongfully denied. 29 Del.C. § 5931(a) (emphasis added). It is well-established in the jurisprudence of Delaware that `the authority granted to an administrative agency should be construed so as to permit the fullest accomplishment of the legislative intent or policy.' State, Dept. of Correction v. Worsham, Del.Supr., 638 A.2d 1104, 1107 (1994) (quoting Atlantis I Condominium Ass'n v. Bryson, Del.Supr., 403 A.2d 711, 713 (1979)). An express grant of broad equitable jurisdiction to an administrative tribunal by the General Assembly also vests that tribunal with the ancillary authority to do all that is reasonably necessary to execute that power. Id. This Court has recognized that in limited circumstances, equity may require an assessment of attorney's fees for the prevailing party to be made whole. Burge v. Fidelity Bond and Mortgage Co., Del.Supr., 648 A.2d 414, 421 (1994). We conclude that the phrase make employees whole is not a specific statutory authorization to award attorney's fees to a successful litigant on a routine basis. Nevertheless, we hold that that phrase, when read in the context of the broad equitable remedial authority that the enabling statute vests in the Board, does confer ancillary equitable jurisdiction upon the Board to award attorney's fees to a successful litigant in extraordinary cases, pursuant to the common law bad faith exception to the American Rule. The record reflects that Brice presented such a case to the Board.