Court Opinion

ID: 9472683
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:07:16.53523+00
Date Added: 2024-06-11T17:43:04.268780
License: Public Domain

KEITH, Circuit Judge,
concurring.
I agree with the concurrence set forth by Judge Edwards. I write separately to express the view that the majority opinion is incorrect to place needlessly broad limits on the bad faith exception to the American Rule. The majority would constrain the bad faith exception to exclude the recovery of attorney’s fees in cases involving bad faith in the conduct that leads to the underlying substantive claim. The Supreme Court’s statement that “it is clear, however, that ‘bad faith’ may be found, not only in the actions that led to the lawsuit, but also in the conduct of the litigation” has been used in support of awarding attorneys’ fees. Hall v. Cole, 412 U.S. 1, 15, 93 S.Ct. 1943, 1951, 36 L.Ed.2d 702 (1973). The Court cited this language seven years later in support of the proposition that attorney’s fees could be awarded when litigation is conducted in bad faith rather than just filed in bad faith. Roadway Express, Inc. v. Piper, 447 U.S. 752, 766, 100 S.Ct. 2455, 2464, 65 L.Ed.2d 488 (1980).
The Hall dicta has also been quoted by the Ninth Circuit as well as this Court in determining whether bad faith in the conduct leading to the underlying claim creates an exception to the American Rule. McQuiston v. Marsh, 707 F.2d 1082, 1086 (9th Cir.1983); Dogherra v. Safeway Stores, Inc., 679 F.2d 1293, 1298 (9th Cir.), cert. denied, 459 U.S. 990, 103 S.Ct. 346, 74 L.Ed.2d 386 (1982); Huecker v. Milburn, 538 F.2d 1241, 1245 n. 9 (6th Cir.1976). As the majority notes, this Court has cited Hall in dicta “for the proposition that ‘bad faith’ which justifies the award of attorneys’ fees may be demonstrated in the conduct which necessitated the action or in conduct occurring during the course of the action.” Majority Opinion at 1233 (citing and quoting Huecker v. Milburn, 538 F.2d at 1245 n. 9. The majority concedes that, given the facts in Huecker, this Court must have been referring to bad faith in the conduct which gave rise to the underlying claim.
The Ninth Circuit has also adopted the dicta in Hall to support similar awards of attorney’s fees. In holding that a California district court committed clear error in finding bad faith on the part of a defendant employer that had dismissed an employee, the Ninth Circuit left little doubt that attorney’s fees could be awarded where there was bad faith in the conduct that led to the underlying claim. Dogherra v. Safeway Stores, Inc., 679 F.2d at 1298. The Ninth Circuit implicitly upheld this proposition a year later by remanding a case to the district court for resolution of a factual dispute “as to the bad faith, if any, of the [defendant] both before and during the course of th[e] litigation” in order to determine if attorney’s fees should be assessed. McQuiston v. Marsh, 707 F.2d at 1086. (Citing Hall v. Cole, 412 U.S. at 15, 93 S.Ct. at 1951).
Given the interpretation of Hall by the courts in Huecker and McQuiston and the refusal of the Supreme Court to grant certiorari in Dogherra to overrule this interpretation, the majority should be less aggressive in limiting the bad faith exception to the American Rule. Despite contrary rulings by the Supreme Court and by this Court, the majority opinion would have the effect of preventing the award of attorney’s fees in cases where plaintiffs are forced to bring legal action because of a defendant’s flagrant violation of their legal rights. Vaughan v. Atkinson, 369 U.S. 527, 530-31, 82 S.Ct. 997, 999-1000, 8 *1240L.Ed.2d 88 (1962) (Court held that seaman could be awarded attorney’s fees as part of damages in suit against shipowners who failed to grant plaintiff his clear legal right to maintenance and cure while recovering from an illness contracted aboard ship). Huecker v. Milburn, 538 F.2d at 1245 n. 9 (citing and quoting Monroe v. Board of Commissioners, 453 F.2d 259, 263 (6th Cir.), cert. denied, 406 U.S. 945, 92 S.Ct. 2045, 32 L.Ed.2d 333 (1972)). In this case, the clear failure to grant Shimman his right to union participation without interference supports the original award of attorney’s fees. However, in addition to this Court’s pronouncement equally allocating costs on appeal, bad faith such as the failure to recognize clear legal rights is not presented as justification for an award of attorney’s fees.
Given the precedents cited above, I am of the view that the majority should restrain its ruling on the bad faith exception only to the issue of granting attorney’s fees for the appeal in question.