Court Opinion

ID: 9643956
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:44:53.014688+00
Date Added: 2024-06-11T18:11:06.223162
License: Public Domain

SEILER, Judge,
concurring in part and dissenting in part.
I concur in the principal opinion except as to that part which denies appellant attorney’s fees. The clear language of the Truth in Lending Act directs that “any creditor who fails to comply with any requirement is liable . . . in an amount equal to the sum of [actual damages and in individual actions twice the finance charges and] ... (3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court.” 15 U.S.C. § 1640(a)(3) (1976) (emphasis added). Just last year, in a case dealing with attorney’s fees in civil rights *506actions, the United States Supreme Court stated that this section of the Truth in Lending Act made fee awards “mandatory for prevailing plaintiffs.”1 Christianburg Garment Co. v. Equal Employment Opportunity Commission, 434 U.S. 412, 415, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978).
The majority opinion cites Hannon v. Security National Bank, 537 F.2d 327 (9th Cir. 1976) as authority for denying attorney’s fees to successful litigants who are represented by legal aid societies. In Hannon, however, the litigant (a credit card holder) was a law school graduate who was not licensed to practice law, but who successfully represented himself. No attorney had been retained and it was for that reason no attorney’s fee was allowed. This is much different from the present case. The Ninth Circuit stated the issue in Hannon as follows:
“We agree that the statute should be liberally construed to encourage private enforcement. [Citations omitted.] However, the question before us is whether that liberal interpretation should be extended to allow recovery of attorney’s fees when no attorney has been retained.”
537 F.2d at 328. In fact, Hannon distinguishes the very different case presented by plaintiffs who are represented by legal aid societies and discussed the cases which have awarded fees directly to legal aid societies. The Hannon court noted that
“The reasoning behind these cases is that where the assistance of an attorney is a practical necessity, Congress did not intend that vindication of the rights guaranteed by statute depend upon plaintiff’s having economic resources to retain an attorney or else being compelled to seek out charitable assistance. The payment is made not to the litigants, but directly to the attorney as reimbursement for services actually rendered.”
537 F.2d 328-29, n. 1 (emphasis added). Clearly, the Hannon decision is distinguishable on the facts and has no application to the type of case before us.
The majority opinion dismisses as “unpersuasive” the dozens of cases directing that attorney’s fees be paid to legal aid societies representing successful plaintiffs in Truth in Lending cases. “[P]laintiffs should not be denied attorney’s fees because their attorney was employed by a legal aid society. Section 1640(a)(2) directs their award, and such an award is not contingent upon an obligation to pay an attorney, or the fact that no fee was charged.” Sellers v. Wollman, 510 F.2d 119, 123 (5th Cir. 1975) (emphasis added). A creditor who fails to provide the information required under the act “is liable ‘for a reasonable attorney’s fee,’ ” and the “fee may be awarded to a legal services office.” Manning v. Princeton Consumer Discount Co., 533 F.2d 102, 106 (3rd Cir.), cert. denied, 429 U.S. 865, 97 S.Ct. 173, 50 L.Ed.2d 144 (1976). “The fact that plaintiff’s counsel is employed by a Legal Aid Society does not affect the award of attorney’s fees.” Campbell v. Liberty Financial Planning, Inc., 422 F.Supp. 1386 (D.Neb.1976). Twenty-eight of twenty-nine federal courts dealing with a prevailing plaintiff represented by a legal aid society, including three federal circuit court of appeals, have awarded attorney’s fees to the legal aid society.2 The twenty-ninth feder*507al case, Engle v. Shapert Const. Co., 443 F.Supp. 1383 (M.D.Pa.1978), while denying an award of attorney’s fees because of extenuating circumstances in the case, is a district court decision and must be considered of dubious weight because it is in the Third Circuit, which rendered the Manning decision, supra, one of the strongest decisions upholding the awarding of attorney’s fees to legal aid societies. Evidently, for whatever reason, the district court decision was not appealed. One state appellate court has considered this question and it is in accord with the federal cases awarding attorney’s fees to legal aid societies. Robert Levitan & Sons Inc. v. Francis, 88 Misc.2d 125, 387 N.Y.S.2d 35 (App.Term 1976).
The majority opinion finds that an award of attorney’s fees would impose a penalty on respondent and unjustly enrich appellant. If § 1640(a)(3), by making a violator of the Act liable for “the costs of the action, together with a reasonable attorney’s fee”, imposes a penalty on respondent, it is at the direction of Congress in the clear language of the Act. Statutory awards of attorney’s fees to successful plaintiffs are meant to “deter the defendant and others like him from the wrongful action and to induce settlement in future cases without the necessity of resorting to the courts.” Note, Awards of Attorney’s Fees to Legal Aid Offices, 87 Harv.L.Rev. 411, 417 (1973). The majority opinion frustrates the purpose of the statutory remedy afforded successful plaintiffs. As to the charge of unjust enrichment, the cases discussed above require that attorney’s fees be paid directly to the legal aid society and, therefore, appellant will not be unjustly enriched. Moreover, federal regulations require that when a legal fee is awarded in a case represented by a legal aid society receiving federal funding, the legal fee “shall be remitted promptly” to the legal aid society. 45 C.F.R. § 1609.5(b) (1978). Legal Aid of Western Missouri receives substantial federal funding and therefore this federal regulation requires appellant in any event to remit awarded legal fees to Legal Aid. If the majority believes, as it states above, that because the attorneys are not parties to the suit that an award of attorney’s fees cannot be made to Legal Aid of Western Missouri directly, then the Court may order that appellant pay the fees to Legal Aid. The majority opinion already orders appellant to pay funds into the registry of the trial court. An order can be written to require appellant to pay the attorney’s fees into the registry of the trial court and that the clerk of the court disburse to Legal Aid the sum so deposited for its benefit.
Finally, what the majority opinion overlooks is that a refusal to award attorney’s fees to appellant unjustly enriches respondent. The respondent, having violated the statute is required by § 1640(a)(3) to pay the costs of the action and reasonable attorney’s fees. The majority opinion indicates that violators of the statute will be relieved of part of this statutory liability if they are fortuitous enough to be sued by an indigent plaintiff who must turn to a legal aid society for representation. The majority opinion tends to frustrate the very important framework of private enforcement of the Act. The attorney’s fee provision in the Act represents a congressional plan of private enforcement and an acknowledgement of the benefit to the public derived by successful litigants. Ratner v. Chemical Bank New York Trust Co., 329 F.Supp. 270, 280-81 (S.D.N.Y.1971). The majority opinion does not afford a successful litigant represented by a legal aid society the full scope of remedies provided by the Act. In relieving respondent of the statutory liability for attorney’s fees, the majority opinion penalizes the legal aid society and its indigent clients by requiring them to absorb the cost of enforcing the statute. The legal services were not “free” from the point of view of Legal Aid of Western Missouri; they were obtained at the cost of decreasing the services otherwise available for other indigent clients. See generally, Awards of Attorney’s Fees to Legal Aid Offices, supra, 87 Harv.L.Rev. 419 — 421. An award of attor*508ney’s fees in this case would reimburse those actually burdened by this suit by restoring displaced legal services to indigent clients who otherwise would have received them. Moreover, legal aid societies in Missouri will be less inclined to take suits under the Truth in Lending Act if they are denied the statutory award of attorney’s fees otherwise available to counsel for a prevailing plaintiff. The congressional design for private enforcement of the Act, at the expense of the violators and without regard to the economic resources of the plaintiff, is not followed by the majority opinion. I respectfully dissent in this regard.

. The Supreme Court listed the following statutes as providing for a mandatory award of attorney’s fees to prevailing plaintiffs: Clayton Act, 15 U.S.C. § 15 (1976): Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 216(b) (1976); Packers and Stockyards Act, 7 U.S.C. § 210ffi (1976); Truth in Lending Act, 15 U.S.C. § 1640(a) (1976); and Merchant Marine Act of 1936, 46 U.S.C. § 1227 (1976). 434 U.S. at 415 n.5, 98 S.Ct. 694 (emphasis added).

. See, e. g. Manning v. Princeton Consumer Discount Co., 533 F.2d 102 (3rd Cir.), cert. denied, 429 U.S. 865, 97 S.Ct. 173, 50 L.Ed.2d 144 (1976); Powers v. Sims and Levins, 542 F.2d 1216 (4th Cir. 1976); Sellers v. Wollman, 510 F.2d 119 (5th Cir. 1975); Jones v. Allied Loans, Inc., 447 F.Supp. 1121 (D.S.C.1977); Ecenrode v. Household Finance Corp. of South Dover, 422 F.Supp. 1327 (D.Del.1976); Gillard v. Aetna Finance Co., 414 F.Supp. 737 (E.D.La.1976); Doggett v. Ritter Finance Co. of Louisa, 384 F.Supp. 150 (W.D.Va.1974), modified on other grounds, 528 F.2d 860 (4th Cir. 1975); and Jones v. Seldon’s Furniture Warehouse, Inc., 357 F.Supp. 886 (E.D.Va.1973). Additional cases are reported in the CCH Consumer Credit Guide, the Poverty Law Reporter and the Clearinghouse Review.