Opinion ID: 602388
Heading Depth: 3
Heading Rank: 3

Heading: The Effect of the July 26, 1982 Fence Agreement.

Text: 34 Had the Plaintiffs been assigned the proper seniority dates and placed in active service as the Morris Award determined they should have been, they would have been in active service from July 1981 until the PATCO furlough in December 1981, and would have been recalled to active service no later than June 1982. 8 If that had happened, then Plaintiffs would not have been furloughed on October 23, 1982, due to the terms of the Fence Agreement: 35 The parties further agree that neither Company may, during the term of this Letter of Agreement, recall or place into active pilot status any pilot not in active line pilot service as of July 12, 1982.... 36 If they had not been furloughed in October 1982, Plaintiffs would have brought jobs to the merger, and would have accumulated more active service but for ALPA's improper handling of their initial seniority assignment and their placement, via the Greenbaum Award, on the integrated seniority list. 37 D. ATTORNEY'S FEES. 38 Under the American rule successful litigants are generally not entitled to recover attorney's fees from the losing party, Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975), except where (1) the losing party is found to have pursued the litigation in bad faith, (2) the fee award would spread the cost of the lawsuit among members of a class who benefited from the litigation, or (3) the fees are a proper element of damages. 9 39 We review the attorney's fees award for abuse of discretion. Atlantic Richfield Co. v. Manges, 702 F.2d 85, 87 (5th Cir.1983). Finding that the district court's award of attorney's fees fails to fit within any of the recognized exceptions, we hold that the district court abused its discretion in awarding Rogers and Baker their attorney's fees, and therefore vacate that portion of the district court's judgment. 40 1. The Bad Faith Exception. 41 Attorney's fees may be awarded to a successful litigant when his opponent has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. F.D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U.S. 116, 129, 94 S.Ct. 2157, 2165, 40 L.Ed.2d 703 (1974). While other circuits have held that underlying conduct may be considered in determining whether the losing party has acted in bad faith, 10 this circuit has consistently held that the bad faith action(s) must occur in the course of the litigation. See Guidry v. International Union of Operating Eng'rs, Local 406, 882 F.2d 929, 944 (5th Cir.1989) ([T]he focus of the bad faith inquiry is not the actions that precipitated the law suit, but rather the manner in which the litigation itself is carried out.), vacated on other grounds, 494 U.S. 1022, 110 S.Ct. 1465, 108 L.Ed.2d 603 (1990); Huddleston v. Herman & MacLean, 640 F.2d 534, 559 (5th Cir.1981) ([T]he bad faith or vexatious conduct inherent in the fraudulent acts that constituted the cause of action itself cannot be the basis for an attorney's fees award under the bad faith exception. The bad faith conduct must occur during the litigation process itself.) (citations omitted), aff'd in part and rev'd in part on other grounds, 459 U.S. 375, 103 S.Ct. 683, 74 L.Ed.2d 548 (1983). 42 Here the district court found that ALPA had breached its duty of fair representation by acting arbitrarily, discriminatorily, and/or in bad faith toward Plaintiffs both during and subsequent to seniority integration proceedings, but made no particularized finding of bad faith during the litigation process. Therefore, we hold that the bad faith exception does not authorize awarding attorney's fees to Plaintiffs in this action. 43 2. The Common Benefit Exception. 44 Attorney's fees may also be awarded to a successful litigant whose success confers a substantial benefit on the members of an ascertainable class, and where the court's jurisdiction over the subject matter of the suit makes possible an award that will operate to spread the costs proportionately among them. Mills v. Electric Auto-Lite Co., 396 U.S. 375, 393-94, 90 S.Ct. 616, 626, 24 L.Ed.2d 593 (1970). 45 Plaintiffs claim that their suit would have been to the benefit of the entire dirty dozen and anyone else so situated, but by the time the Morris Award was handed down only four such persons existed, including Plaintiffs, and by the time this suit was filed, apparently only Rogers and Baker remained. A class of two, where both are named parties and both immediately benefit as a result of the verdict and shared the cost of obtaining it, is not a class for common benefit purposes. Furthermore, the award to Plaintiffs does not inure to the benefit of all union members. Guidry, 882 F.2d at 944. In fact, Plaintiffs' success, based upon the rhetoric in the briefs, is probably considered a defeat by much of the union membership. 46 3. Attorney's Fees as an Element of Damages. 47 In Seymour v. Olin Corp., 666 F.2d 202 (5th Cir.1982), this court upheld an award of attorney's fees and costs against the plaintiff's union as a fair measure of the 'difficulty and expense'  of regaining his proper position with his employer and collecting all of the back pay and benefits owed him resulting from the union's failure to process his grievance. Id. at 213-14. However, in Del Casal v. Eastern Airlines, Inc., 634 F.2d 295 (5th Cir.), cert. denied, 454 U.S. 892, 102 S.Ct. 386, 70 L.Ed.2d 206 (1981), this court limited the plaintiff's recovery from the union to fees and costs associated with his grievance against his employer, thereby excluding fees and costs associated with his suit against the union for breach of the duty of fair representation. See id. at 301. 48 This case is distinguishable from Seymour in that Plaintiffs did not incur the attorney's fees they seek to recover in the course of handling a dispute with their employer which was properly ALPA's duty to pursue; rather, like that portion of the fees which were denied in Del Casal, the fees which Plaintiffs seek herein were incurred exclusively in the pursuit of their action against ALPA for breaching its duty of fair representation.III. CONCLUSION 49 Clayton, Augspurger, Mumford, and Smith offer this court sufficient guidance to find that the district court did have jurisdiction to hear Plaintiffs' duty-of-fair-representation claim while a contemporaneous action was pending before the CAB. We find no error in the district court's conclusions that the Greenbaum Award failed to properly incorporate the Morris Award and Plaintiffs suffered additional injury due to their improper assignment to the integrated seniority list. Therefore, we AFFIRM the district court's judgment in all respects except for the award of attorney's fees ($184,412.50 plus interest) which we VACATE. 50 AFFIRMED IN PART, VACATED IN PART.