Opinion ID: 773386
Heading Depth: 2
Heading Rank: 2

Heading: Spielman's Chapter 93A Attorney's Fees Claim

Text: 26 Spielman argues that his attorney's fees should be included as part of his anticipated damages. Normally, attorney's fees are excluded from the amount-in-controversy determination because the successful party does not collect his attorney's fees in addition to or as part of the judgment. Velez v. Crown Life Ins. Co., 599 F.2d 471, 474 (1st Cir. 1979) (citing 1 Moore's Federal Practice 0.99(2)). There are two exceptions to this rule: when the fees are provided for by contract, and when a statute mandates or allows payment of the fees. Id. The second exception applies here. Chapter 93A of the Massachusetts Consumer Protection Act allows plaintiffs to collect attorney's fees as part of their damages. See Mass. Gen. Laws ch. 93A, § 9(4). We thus must decide whether Spielman met the amount-in-controversy minimum by amending his complaint to include a Chapter 93A claim. 27 Spielman does not allege, however, that his individual attorney's fees are high enough to boost his damages claim over the amount-in-controversy minimum. Rather he seeks, for jurisdictional purposes, to aggregate the attorney's fees that he anticipates will be needed to press the claim of the entire class for which he is named plaintiff. Because of Supreme Court precedent, this is a difficult argument to make. 28 As we have noted, the statute that provides for federal court diversity jurisdiction, 28 U.S.C. § 1332(a), requires that the matter in controversy exceed the jurisdictional minimum. Based on this language, [t]he traditional judicial interpretation . . . has been from the beginning that the separate and distinct claims of two or more plaintiffs cannot be aggregated in order to satisfy the jurisdictional amount requirement. Snyder v. Harris, 394 U.S. 332, 335 (1969) (citing earlier cases). In Snyder, the Court rejected the argument that this rule should not apply to class action plaintiffs, whose claims, the argument goes, should instead be aggregated for jurisdictional purposes. The Court said: 29 To overrule the aggregation doctrine at this late date would run counter to the congressional purpose in steadily increasing through the years the jurisdictional amount requirement. That purpose was to check, to some degree, the rising caseload of the federal courts, especially with regard to the federal courts' diversity of citizenship jurisdiction. 30 Id. at 339-40. The Court reaffirmed this holding in Zahn v. International Paper Co., 414 U.S. 291 (1973), adding, Neither are we inclined to overrule Snyder v. Harris nor to change the Court's long-standing construction of the 'matter in controversy' requirement of § 1332. 5 Id. at 301. 31 The Supreme Court has not discussed whether the named plaintiff in a class action may aggregate the attorney's fees of the class to satisfy the jurisdictional amount requirement when a state statute like Massachusetts's Chapter 93A authorizes the awarding of fees to a successful litigant. Two circuits have addressed this question. Reviewing a claim made under a California statute that authorizes attorney's fees, the Ninth Circuit held that aggregating anticipated fees to the named plaintiff to allow her to meet the amount-in-controversy requirement would conflict with the policy of Zahn . . . in which the Supreme Court reaffirmed that the 'matter in controversy' requirement must be satisfied by each member of the plaintiff class. Goldberg v. CPC Int'l, Inc., 678 F.2d 1365, 1367 (9th Cir.), cert. denied, 459 U.S. 945 (1982). The court thus held that potential attorney's fees could not be used to satisfy the amount-in-controversy minimum. Id. at 1367. Several district courts have followed this approach. See, e.g., Karofsky v. Abbott Labs., 921 F. Supp. 18 (D. Me. 1996); Ratliff v. Sears, Roebuck & Co., 911 F. Supp. 177 (E.D.N.C. 1995); Quebe v. Ford Motor Co., 908 F. Supp. 446 (W.D. Tex. 1995); Visintine v. Saab Auto. A.B., 891 F. Supp. 496, 499 (E.D. Mo. 1995); Gilman v. Wheat, First Sec., Inc., 896 F. Supp. 507 (D. Md. 1995). 32 The Fifth Circuit considered the question of whether attorney's fees may be aggregated to obtain federal jurisdiction under a Louisiana statute that specifically authorizes the awarding of attorney's fees in a class action. In re Abbott Labs., 51 F.3d 524, 526 (5th Cir. 1995), determined that there was federal jurisdiction for a class action claim governed by Article 595 of the Louisiana Code of Civil Procedure. Article 595 provides: The court may allow the representative parties their reasonable expenses of litigation, including attorney's fees, when as a result of the class action a fund is made available, or a recovery or compromise is had which is beneficial, to the class. La. Code Civ. Proc. art. 595. The Fifth Circuit said that Article 595 entitled class representatives to anticipated attorney's fees, and that the phrase representative parties referred to the named plaintiff or plaintiffs in a class action. The court rejected the argument that Zahn precluded attributing the fees of the class to the named plaintiff when that is what a state statute provides. See Abbott Labs., 51 F.3d at 527. The court distinguished Goldberg on the ground that it sheds little light on the distinct policy choices behind Louisiana's decision regarding rights of recovery by class members. Id. at 526. An evenly divided Supreme Court recently affirmed the Fifth Circuit's decision under the name of Free v. Abbott Labs., Inc., 529 U.S. 333 (2000). 33 Spielman argues that the attorney's fees provision of Chapter 93A, like Article 595 of the Louisiana code as construed in Abbott Labs., allows him to aggregate the anticipated fees of his class toward the amount-in-controversy minimum. Chapter 93A provides in relevant part: 34 If the court finds in any action commenced hereunder that there has been a violation of section two, the petitioner shall, in addition to other relief provided for by this section and irrespective of the amount in controversy, be awarded reasonable attorney's fees and costs incurred in connection with said action. 35 Mass. Gen. Laws ch. 93A, § 9(4). Spielman urges us to read petitioner in the same way that the Fifth Circuit read representative parties in Article 595. We have reservations about the correctness of Abbott Labs. Even if that were not the case, however, we would decline to adopt the parallel reading that Spielman advocates. 36 To begin with, § 9(4) does not refer to class actions or to named class action plaintiffs. Nor do other sections of Chapter 93A specifically discuss multiple-party lawsuits. The statute simply offers a cause of action to a consumer or a group of consumers who claim that a business has defrauded them. Thus in contrast to Article 595 of the Louisiana code, which explicitly provides that attorney's fees may be awarded to the representative parties . . . when as a result of the class action a fund is made available . . . to the class (emphasis added), nothing in Chapter 93A suggests that the legislature intended petitioner to refer to the named plaintiff in a class action rather than to each of the members of the class. 37 As the Massachusetts district court pointed out recently, petitioner is a generic term in Massachusetts law. See Ciardi v. F. Hoffmann-La Roche, Ltd., No. Civ. A. 99-11936-GAO, 2000 WL 159320, at  (D. Mass. Feb. 7, 2000). In rejecting the same aggregation argument that Spielman makes here, Ciardi ably explained: The term 'petitioner' is one historically used in Massachusetts as the equivalent in equity of the term 'plaintiff' at law. While petitioners might from time to time have been representatives, they were not necessarily so, and the terms in Massachusetts are not interchangeable. Id. at . We agree. The text of § 9(4) does not support Spielman's argument that the statute uses the word petitioner as the equivalent of the term representative in the Louisiana statute. 38 We also reject Spielman's contention that the Massachusetts Supreme Judicial Court's statement in Coggins v. New England Patriots Football Club, Inc., 550 N.E.2d 141 (Mass. 1990) (Coggins II), about the award of attorney's fees from a common fund controls the jurisdictional outcome here. That case began with Coggins v. New England Patriots Football Club, Inc., 492 N.E.2d 1112 (Mass. 1986) (Coggins I), in which a group of non-voting shareholders brought a corporate derivative action to challenge a merger, and the SJC ordered the calculation of rescissory damages. Id. at 1115-16. The parties then settled. Following settlement, the plaintiffs filed a motion for attorney's fees and costs to be assessed against the defendants. The superior court rejected that argument on the ground that in Coggins I, the higher court ordered the derivative claim 'reinstated' . . . solely to permit a reconstructive calculation of rescissory damages, and not as a calculation of corporate damages. Coggins II, 550 N.E.2d at 142. Reasoning that the plaintiffs thus had not succeeded in garnering funds on the corporation's behalf, the superior court ruled that their attorney's fees should come from a common settlement fund rather than from the defendants. Id. In affirming the lower court's ruling, the Massachusetts Supreme Court said that attorney's fees may be awarded from a common settlement fund, but emphasized the discretionary nature of such an award. Where a party has at his or her own expense, been successful in creating, preserving or enlarging a fund in which other parties have a rightful share, a court may order the payment of attorneys' fees and expenses out of the fund as part of the damages award. . . . Such an allowance is discretionary and not a matter of strict right. Id. at 143 (citations omitted). 39 Even if a court were to apply the rule set forth in Coggins II in a Chapter 93A class action like this one, and exercise its discretion to award the named plaintiff attorney's fees from a common settlement fund, the award would simply be the unremarkable result of an exercise of the equitable discretion of the trial court rather than the mandated result of any language in Chapter 93A. Indeed, Chapter 93A does not, by its terms, address the aggregation/allocation issue in a class action suit. The possibility of an aggregated award through the exercise of the court's discretion does not justify disregarding the anti-aggregation principles of Snyder and Zahn. See Snyder, 394 U.S. at 339-40; Zahn, 414 U.S. at 301. 6 40 In sum, we reject Spielman's argument that Chapter 93A's authorization of attorney's fees requires that such fees be aggregated to the named plaintiff for purposes of determining federal jurisdiction. For the reasons we have stated, we find that Spielman's amended complaint fails to meet the amount-in-controversy minimum. Having found no basis for the exercise of federal diversity jurisdiction, we affirm the district court's dismissal of Spielman's case. 41 Affirmed.