Document: 444 U.S. 472 100 S.Ct. 745 62 L.Ed.2d 676 The BOEING COMPANY, Petitioner,v.William R. VAN GEMERT et al. No. 78-1327. Argued Dec. 3, 1979. Decided Feb. 19, 1980. Syllabus Petitioner company called for the redemption of certain convertible debentures, fixing a date by which debenture holders could convert their debentures into shares petitioner's stock and after only redeem slightly more than face value. After deadline expired, some nonconverting brought class action against petitioner, claiming that it had violated federal state laws failing to give reasonably adequate notice redemption. District Court ultimately entered judgment establishing amount its liability as whole, each member recover on principal $100 in with individual recovery carry proportionate share total allowed attorney's fees, expenses, disbursements. appealed judgment's provision contending such fees should be awarded from portion fund actually claimed members, not unclaimed fund. Appeals affirmed, holding since present vested interest collect his upon request, absentee members received benefit within meaning common-fund doctrine, allows assessment common created lawyers' efforts. Held : 1. fee award this case is proper application rests perception persons who obtain lawsuit without contributing costs are unjustly enriched at successful litigants' expense. criteria doctrine satisfied when, here, certified has an undisputed mathematically ascertainable claim part lump-sum recovered behalf. In case, need prove membership injured logically Their right harvest suit proof identity, whether or they exercise it, efforts representatives counsel, unless absentees contribute payment incurred behalves, will pay nothing creation may bear additional costs. This inequity rectified Court's requiring every same extent he can recovery. Pp. 478-481. 2. applied entirely consistent American rule taxing losing party victor's fees. assert rights, least equitable owners respective recovery, whereas limited stake resisting third-party claims view colorable return any money. Although petitioner itself cannot obliged lawyers, latent money defeat member's obligation expenses litigation. 481-482. 2 Cir., 590 F.2d 433, affirmed. S. Hazard Gillespie, New York City, petitioner. Norman Winer, respondents. Mr. Justice POWELL delivered opinion Court. 1 question presented lawyers represented assessed judgment. * March 1966, Boeing Co. debentures. announced call through newspaper notices mailings investors registered notices, given accordance indenture agreement, recited redeemed $103.25 converted two company's stock. They set 29 conversion rights. Two were worth $316.25. When value $1,544,300 answered call. These left 3 Van Gemert several other United States Southern York. securities statutes well law them As damages, sought difference between have been converted. dismissed ground required agreement. Second Circuit reversed remanded. It held that, under contracts, agreement contained implied reasonable court concluded was inadequate. 520 1373, cert. denied, 423 947, 96 364, 46 282 (1975). 4 On remand, damages price outstanding Boeing's traded last day exercising court, however, refused assess prejudgment Boeing. There followed second appeal. valued later liable interest. Class filed also contended entitled receive pro rata damages. At least, argued, enough legal expenses. 5 found award, but approved valuation date. proved Allowing these money, held, would create sort "fluid class" rejected Eisen v. Carlisle & Jacquelin, 479 1005 (CA2 1973), vacated remanded grounds, 417 156, 94 2140, 40 732 (1974). Such expropriate funds belonging asserted windfall those claimed. Finally, decided use defray Since never claimed, thought awarding remaining might shift violation reaffirmed Alyeska Pipeline Service Wilderness Society, 421 240, 95 1612, 44 141 553 812 (1977). 6 now issue. first established whole. provided respondents, "in behalf all plaintiff class, . shall sum $3,289,359 together [prejudgment] ." App. 40a.1 then fixed Each disbursements.2 That share, declared, "shall ratio disbursements recovery" class. Id., 40a-41a. ordered deposit escrow commercial bank,3 appointed Special Master administer pass validity claims.4 retained jurisdiction pending implementation 7 one reasons. First, inapposite because failed it. Second, violate shifting party. Therefore, contended, members. A panel agreed Boeing, 573 733 (1978), en banc affirmed judgment, 433 (1978). 8 "present request. Thus, doctrine. 439. rule. noted "from already liable. no 'surcharge' defeated litigant." 441-442. We granted certiorari, 441 942, 99 2158, 60 1043 (1979), we affirm. II 9 decisions Trustees Greenough, 105 527, 26 L.Ed. 1157 (1882), Central Railroad Banking Pettus, 113 116, 387, 28 915 (1885), recognized consistently litigant lawyer recovers himself client See Mills Electric Auto-Lite Co., 396 375, 90 616, 24 593 (1970); Sprague Ticonic National Bank, 307 161, 59 777, 83 1184 (1939); cf. Hall Cole, 412 1, 93 1943, 36 702 (1973). reflects traditional practice courts equity, supra U.S., 532-537, stands well-recognized exception general principle requires own 257-258, S.Ct., 1621-1622. cost litigant's See, e. g., 392, 625. Jurisdiction over involved litigation prevent assessing entire fund, thus spreading proportionately among benefited suit. id., 394, 626. 10 supra, features distinguished our cases where inappropriate. classes lawsuits "were small number easily identifiable." 265, n. 39, 1625, 39. "[t]he benefits traced accuracy Ibid. "there reason confidence [of litigation] indeed shifted exactitude benefiting." Those characteristics litigants simply vindicate social grievance. 263-267, 1624-1626, hand, when Once defendant's proving devolves certainty identifiable whom full determined until presents claim, exact proportion bears generally Dawson, Lawyers Involuntary Clients Public Interest Litigation, 88 Harv.L.Rev. 849, 916-922 11 named respondents determinate represent. did appeal certain.5 Nor does contend uninjured failure adequately inform him damage To counsel. Unless rectifies recovery.6 "traced accuracy" "shifted benefiting," conclude III 12 Society,supra, 247, 1616. assesses prevailing there quantified presently fund.7 Any establish eventually contingent rights possession.8 13 Affirmed. 14 REHNQUIST, dissenting. 15 disposing merits, gives short shrift appealability, threshold issue means free doubt even most generous cases. I cases, viewed light longstanding policy judicial system piecemeal appeals, before us lacks finality U.S.C. § 1291, therefore remand instructions dismiss Exhibit "A" shortsightedness sloughing off appealability fact parties refer merely "Van Gemert," III." began three times, now, years litigation, affirms third decision Appeals. 16 Court, respondents' complaint prejudice. determination interest; Following "Judgment Order" stating respondent plus interest, ordering escrow, indicating attorneys "out said judgment." point, time, asserting out aspect order. 17 novelty posed attributable large historic prevalence "American rule," prevents party's recent years, proliferation actions enactment various modifying rule1 multiplied opportunities recovering simultaneously spawned great deal developments lend added significance procedural implications area. 18 typical American-rule system, statute rule, made final order prerequisite appellate review. considered final, appealable, district completed ministerial acts. Arguably, necessitating treated differently. quite reasonable, believe, postpone what assessed. Cf. Liberty Mutual Ins. Wetzel, 424 737, 1202, 47 435 (1976) (dismissing Title VII Civil Rights Act 1964 requests injunction, remained Court). 19 For better worse, little precedent exists area tended deviate sensible approach. deviation particularly noticeable based existence "common fund" discussed Beginning evidenced willingness treat division separate piece purposes example, entertained allowing bondholder though original trial administration. stated "though incidental [original] cause," sufficiently "collateral," "distinct," "independent," appealable right. 531. 20 From Greenough analytically short, temporally long, step Seventh Swanson Consumer Industries, Inc., 517 555 shareholders' derivative suit, favor plaintiffs Seven months counsel "extension" Greenough. F.2d, 560. latter order, challenging untimely, reasoning entry 21 represent sides coin. If attempt secure "collateral" support independent despite continued pendency main litigation,2 dispute beneficiaries attorneys.3 22 Implicit bifurcated approach strict bifurcation issues litigated either permitted trustees contest merits generated Nor, venture, timely challenge assessed, subject later, appellant powerless reach backward forward proceeding "merits" lawsuit. 23 But exactly permits do case. Assuming, seems likely, Greenough/Swanson model prevail, appealed, stage proceedings, concedes, stresses, challenged amount. ante, 497-480, 5. must appeared futile I, 1373 (1975), liability, II, (1977), precise payable Instead, relies "finality" side coin, prosecute above, crisscrossing contentions inconsistent Even if "collateral order" rubric "a particular matter arising complainant's petition allowances. 531 (emphasis added). Similarly, Cohen Beneficial Industrial Loan Corp., 337 541, 69 1221, 1528 (1949), formalized presaged "final disposition ingredient cause require consideration it." 546-547, 1225-1226 involving still nascent phase. know, going how calculated, become neither nor paid 25 Nowhere lack manifest standing litigate spoils continuing whatsoever escrow.4 base "colorable [any] excess," 481, 7, comes dangerously close assuming single phrase standing. best analysis unnecessary, settlement conflicting once all. worst represents dangerous dilution requirement. event, anticipatory nature necessary buttresses notion using dubious technique gloss finality. today will, fear, far-reaching effect propriety Were attorney representing juncture similar encountered prior appeal, confused about immediate details impending Fearful waiting sense, forfeit my aspects probably err filing whatever bothersome time.5 standpoint courts, uncertainty result numerous interlocutory, precautionary appeals. 27 sum, believe dissent. relevant paragraph declares full: "ORDERED, ADJUDGED AND DECREED consists 29, 1966 41/2% Convertible Subordinated Debentures Company terminated herein defendants thereon rates State York, N.Y.C.P.L.R. 5001(a) 9, taxed. 40a. requested totaling $2 million. 733, 735, (1978) (panel opinion). amounted $2,459,647, bringing $5,749,006. With income earned investments additions, totals $7 Brief Amicus Curiae 4-6. gave broad mandate "direct steps effectuate Judgment, proofs participate Fund same, direct giving interested hearings disputed claims, conduct hearings, submit reports supervise administration Judgment decide questions connected therewith confirmation 42a. year following appointment, mailed identified published national newspapers. By July 15, 1978, accounting $290,000 unconverted 11. extended time renewed locate Further research files kept trustee revealed identity holders. professional search firm endeavored trace relocated. Banks brokerage houses furnished information help clients invested 18, 1979, shortly brief $706,600 47% securities. 14. contends device maximum potential argues, claims. concludes, confers fail 25-26, *. think misreads explicitly "plaintiffs supra. Nothing court's presentation class-action defendant security arguments come too late. fix concerning liability. 555, 559-561 (CA7 1975). like (1976), prayer opposing remains unanswered. Richerson Jones, 551 918, 921-922 (CA3 1977). appealable. consider error. relieves others, see merit contention amounts Tr. Oral Arg. 20. Here, 172, 10, 2150, (1974), express judgments permitting recoveries. recognize 14-year-old fractured career agree REHNQUIST's dissenting Post, 482. specified undetermined stripped cognizable further excess rather peculiar circumstances review allocation appealing adverse ultimate remain enforces 440, likewise question. 552(a)(4)(E) (permitting Freedom Information Act); 1691e(d) (suits Equal Credit Opportunity 42 2000e-5(k) (Title suits 1964); 1988 (civil-rights suits). 169, 781, (1939) (claim "sufficiently different" parent appeal); Preston States, 284 514 (CA9 1960) (attorney's refusal theory); Angoff Goldfine, 270 185 (CA1 1959) grant fund). Outside context, consensus lower permissibility appeals dissolves. Courts Appeals, including Circuit, appear carried directly Hidell International Diversified Investments, 529 1975), appellee laws. granting "reasonable" citing Swanson, actual Lowe Pate Stevedoring 595 256, 257 (CA5 1979), prevailed unfair-representation union. plaintiff's union's "bad faith," denied lien union fee. relying client's reinstatement Fifth treats severable action, attorney's-fees proceeding. noncommon-fund 922 Third confronted discrimination promotion, backpay, yet ruled request relied seeking adversary. Employing analysis, twice arises collateral allow Aetna Casualty Surety Giesow, 468 (1969) (suit breach subordination agreement); Union Tank Car Isbrandtsen, 416 enforce agreement). Judge Friendly attempted reconcile Giesow Cinerama, Inc. Sweet Music, A., 482 66, 70, 1973). 97. overview offered illustrate complexity Perhaps reconciled principled manner; not, try hand obviously perplexing courts. meantime, tread carefully assertion revert argued force escheat N.Y. Aband. Prop. Law 1200 (McKinney 1944). fact, Attorney General Respondents Stuart D. Wechsler 23. correct, press pursuant contingent-fee arrangement. standing, obligated sua sponte, necessary. Juidice Vail, 430 327, 331, 97 1211, 1215, 51 376 confusion greater outside context

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