The opinion of the court was delivered by: ROSENBERG
This matter is before me now on remand from the Court of Appeals on the claims of four attorneys for the Intervenor, but none by the Intervenor, himself. It is here now for the determination of a factual issue as that determination is either supported or not by a preponderance of the evidence in the case. That issue is whether such evidence supports an award of counsel fees to an intervenor's attorneys on an equitable basis on the "common benefit" theory. Brennan v. United Steelworkers of America, 554 F.2d 586, C.A.3, 1977.
Rather, the issue is broadened to the extent that this court must, should or can determine from the evidence adduced by these attorneys whether their aggregate contribution of service brought about a common benefit to the defendant's total membership of what, if any, service was rendered by the three attorney-claimants and one legal assistant, and the proportion of contribution each may have made for entitlement to each one's claim (since each made separate claims) in achieving a successful outcome for the plaintiff-as such commonly benefitted the total membership of the defendant. If indeed each did make a material contribution in his or her way as attorneys for the successful outcome of this action, it is obvious from the evidence produced that the four did not act in unison or act commonly for an aggregate fee, but that each would be entitled to an amount for services so rendered and that each would require individual evidence to support the individual entitlement.
This action was brought originally by Peter J. Brennan, Secretary of Labor (Secretary), against the United Steelworkers of America, AFL-CIO-CLC, Districts 31 and 15 (International).
Anthony Tomko, the defeated candidate in District 15 and Edward Sadlowski, the defeated candidate in District 31 were eventually permitted to intervene. However, after the plaintiff and defendant requested me to sign an order of court settling the case by ordering a new election in District 31, the intervenor objected to the settlement for pointless reasons and I ordered the settlement. Application for counsel fees for the four intervenor's attorneys followed. I denied this for lack of statutory authority. On appeal, Judge Van Dusen in an opinion for the court determined that the intervenor's attorneys would not be precluded from recovering counsel fees under Title IV of the Labor-Management Reporting and Disclosure Act under the broader application of the "common benefit" rationale; and if so allowed, the amount of such an award would be a required determination. These two questions, only, were returned for my consideration. Being bound by the law of the Court of Appeals, I proceed to inquire into and adjudicate those two questions by a preponderance of all the evidence in the case.
Of course, I do not disregard two principles expounded first by Judge Aldisert in his dissenting opinion in Brennan v. United Steelworkers of America, supra, at page 613. And second in Mr. Justice White's dissent in Brennan v. United Steelworkers, 435 U.S. 977, 979, 98 S. Ct. 1627, 1628, 56 L. Ed. 2d 71 (1978). The principle expounded by Judge Aldisert in his dissenting opinion is disagreement with the proposition "that the consensual agreement to a new election for District Director in Illinois and Indiana conferred a common benefit upon the entire membership of the United Steelworkers of America". The dissenting opinion of Mr. Justice White is to the effect that it would have been improper for an intervenor to interfere (if he did) with the Secretary of Labor's discretionary and exclusive enforcement authority in this area, since "the rationale permitting intervention was not to duplicate the efforts of the Secretary", and further that the exception to the traditional American rule against awarding attorneys' fees on the common benefit theory premised on a court's equity power should not be expanded.
I assigned the original inquiry to United States Magistrate Robert C. Mitchell who broadened the parties' prerogatives to present all the evidence they desired. Thereupon all the parties did provide the magistrate with a large volume of depositions and affidavits, and he personally presided over a large part of the case. From all these the magistrate made findings of fact, conclusions of law and a report and recommendation disallowing the attorneys' fees to the claimants because of a lack of foundation in the evidence to support the wide variety of assertions made by them.
After a lengthy and carefully scrutinized examination of this report and the record made by the parties, I confirm the findings of fact of the magistrate and adopt his recommendation as my findings of fact. But I do not act on this alone. I here set forth additional findings of fact as I supplement the magistrate's report and findings and as I, the presiding judge, have found them to be factual from the evidence and the proceedings in this case before me personally.
As the Court of Appeals said:
"We emphasize that we are not passing on the truth of the statements in the record or on the character of the intervening plaintiffs, as opposed to that of the high-ranking officers of the union, but we are required, under the posture of the case as it existed at the time of the district court order from which the appeal was taken, to take all well-pleaded allegations in the record as true for purposes of this appeal and to construe them in the light most favorable to the plaintiffs." (554 F.2d at pages 589-590)
The pleading raising the issue of fee entitlement was identified as "Verified Application for Attorneys' Fees", and was filed not by the intervenor himself but by three lawyers and one law assistant who assert that they acted in behalf of the intervenor. The inquiry before me, therefore, is towards payment or non-payment of fees to the claimants who, assertedly, had been the intervenor's lawyers in the case before me.
The Court of Appeals, on return to me, provided me with the following:
"Whether an award is warranted and, if so, the amount of such award, is a matter for initial determination by the district court in the light of the broader application of the "common benefit' rationale ..." (554 F.2d at page 608).
Based upon the directive of the Court of Appeals, the claimants were given additional opportunities to present evidence to support their respective contentions and to present sufficient evidence of persuasiveness and the defendant also was given similar opportunities to present evidence if it could contrariwise so that from receipt of the evidence of both parties this court might have sufficient evidence, pro and con, for a determination legally by the preponderance of all of the evidence in the case of whether an award was or was not warranted as now based upon the common benefit rationale in accordance with the guidelines of the Court of Appeals. This, it will be noted, differs from that of the case originally when the question before me was on the theory of whether attorneys' fees were awardable generally as a matter of law in Title IV of the Labor-Management Reporting and Disclosure Act of 1959. And so at the time neither the claimants nor parties plaintiff and defendant believed it necessary to present such evidence, pro and con, as is now before me for a judicious determination.
An overall election was held on November 13, 1973 by the defendant, United Steelworkers of America, for the election of directors in its 35 geographically divided, nationwide Districts, encompassing a total membership of 1,400,000 members. After the election, 6 complaints out of 35 Districts came to the Secretary of election irregularities. Then after these six complaints were investigated, the Secretary concluded that only two merited action which was filed in this court. These were, from his findings, District 15 where the defeated candidate, Anthony Tomko, and District 31 where the defeated candidate, Edward Sadlowski, filed complaints. The Department of Labor brought this action on its own accumulated evidence for the procurement of a satisfactory resolution in these two Districts.
As I stated before, in order to give the claims the fullest consideration, I first referred the matter to a United States Magistrate for a detailed inquiry. His report is elaborate, searching and pointed. Objections were filed to his report by the claimants and by the defendant in its "Response to Objections of Intervenor". I have examined and re-examined the record carefully and I am now in a position to arrive at the following factual findings from the total record in the case, the magistrate's report, and from my own knowledge judicially acquired while presiding in the case.
The members of District 31 who might have benefitted, if any benefit arose from the action of the claimants, comprise 1/10th of the membership of the United Steelworkers upon whose 1,400,000 members nationally would fall the obligation to pay the claimants' bill under the common benefit theory. Accordingly, as the presiding judge, I must be judicially satisfied that the claimants' claims are justified, reasonably earned, fair and of benefit to the total union's membership, as a matter of equity, before I can in good conscience place this liability upon the defendant's more than one million men and women upon whose wages such liability would likely attach, before they are entitled to receive them. District 31 which covers a geographic area including parts of northwestern Illinois and northwestern Indiana comprises a membership of approximately 126,000.
While it is incumbent upon me to hear evidence and award any fairly earned attorneys' fees, it was not at the beginning when the fee application was first filed, incumbent upon me to seek out the claimants and demand that they produce evidence-whether they wanted to or not-or whether they could not; however, no pleading or indication came from them demonstrating or even indicating any readiness to proceed to satisfy me of their entitlement to any sums of money, since they argued only their legal rights to fees. Accordingly, based upon only the contents of the filed petition, I was not prepared to make any firm determination of entitlement or to adjudicate quantitative entitlement upon any conclusionary summaries of activities and amounts as averred in the petition. Particularly, I was not so inclined when many of the averments in the petition were contrary to the facts in the case as I knew them to be as the presiding judge. Some of these I shall presently point out.
Immediately, or soon after the complaints of election irregularities were received, the Secretary assigned a large number of experienced Department of Labor (DOL) Compliance Officers, all under the directions of supervisors to investigate the 6 election complaints. The investigators had frequent consultations with the defeated candidates and hundreds of others. I accept the affidavit of Stephen Ernst, Chief Trial Counsel for the Secretary of Labor, who made factual averments and to which no counter-affidavit was filed; and now incorporate these as some of the findings of fact in this case, particularly as these relate to District 31. However, insofar as the activity of the Secretary is concerned, I shall indicate only that much as may have been inter-related in the continuing inquiry into the complaints, their processing and terminations in all six Districts from which reports of irregularities came to the Secretary, sufficient to induce the Secretary to procure overall evidence.
As far as District 31 is concerned,
(1) The Secretary had assigned 19 DOL Compliance Officers to the investigation of this District, and over 3,600 person hours were expended by them in the process;
(2) Chief Trial Counsel, Stephen Ernst, accumulated "several file drawers of materials" in his office and additional boxes of materials in the Chicago office of the Secretary of Labor (Ernst Affidavit II, paragraph 5); and
Counsel for the Secretary had accumulated by these investigations more than enough evidence to enter this action and to carry it to completion without aid from the intervenor or any of the claimants. The reason for this was that counsel for the Secretary had on the working staff highly motivated and skilled professional federal investigators upon whom complete knowledgeable reliance could be placed. However, that would not have prevented the Secretary from participating in any discovery which would be initiated by the defendant International. In fact the defendant had indicated to me, as I presently explain, the desire to depose a large number of members in the Chicago area. This was defense evidence, not plaintiff's evidence.
The activity of the Secretary and his staff of 19 DOL Compliance Officers was of such magnitude that one of the claimants' attorneys for the intervenor, Leon Despres, wrote to another claimant attorney, Joseph Rauh, on August 30, 1973 and admitted that the Secretary had accomplished comprehensive and conclusive results from the DOL investigation.
While the Compliance Officers interrogated the two unsuccessful candidates, there is no evidence that the Secretary consulted with Sadlowski or his counsel on whether or not to commence any action in the United States District Court for the Western District of Pennsylvania, or in any other court. So thorough had been the work and so voluminous the results of the Secretary's staff that the Secretary was able to proceed with the entry of this action and pursue it. As I just stated, this did not include the depositions which the defendant desired from a large number of voters in Election District 31. In fact, counsel for the plaintiff and defendant indicated their desire for this court to sit in Chicago for a week, more or less, to supervise the taking of such depositions.
The fact that on three or four occasions either Sadlowski or his attorney, Mr. Rauh, called the Secretary obviously had no effect upon the Secretary's determination to file suit, is corroborated by the affidavit of William J. Kilberg, Solicitor for the Department of Labor, who had final authority on the decision to sue. This was presented before the magistrate and was not contradicted by any counter-affidavit. He testified that:
"It is clear that at no point in time, once the field investigation had been completed in early August, was there ever any doubt that short of a satisfactory settlement, the Department would sue in District 31." (Kilberg's Affidavit, paragraph 9).
"I know, from my own knowledge, that nothing done by Mr. Rauh or any other attorney for Mr. Sadlowski contributed to the Department's decision to institute suit in District 31. That suit would have been instituted on the date it was instituted, whether or not Mr. Sadlowski had been represented by attorneys." (Kilberg's Affidavit, paragraph 29).
Since neither the Secretary nor any member of his staff who functioned for the Secretary in his procedure had reason to have personal interest in this matter, nor in the constant flow of such labor cases coming for their attention and processing, I give high credibility and great weight to their testimony. This is more so true because of the many conflicting assertions made by Sadlowski's supporters, particularly as I know the facts in the case which came before me in open court.
As to their recital of boasts of their in-court activities and their specific influence on this court in securing an ultimate settlement
and decree for a new election, I not only reject these in-court statements, but as well I find many of their out-of-court statements contradicted or unsupported by the evidence. Thus, the claimants' proof is insubstantial and insufficient and lacking persuasiveness enough for me to hold their contentions (and claims) proven by a preponderance of the evidence in the case as a whole. I make this conclusion as the presiding judge who had a more impartial knowledge of the in-court facts involved than any other person in the case.
The Secretary of Labor through his official counsel filed this action on November 8, 1973.
Soon after that Edward Sadlowski, the defeated candidate in District 31, filed for leave to intervene. On January 21, 1974, the plaintiff and defendant stipulated to separate the trial relating to Districts 15 and 31 and designated them as District 15, Part "A" and District 31, Part "B". The plaintiff accordingly filed a complaint in each of these separately in order to identify the facts which he alleged to be pertinent to each of these Districts. These amended complaints were filed January 28th.
On February 12th, the defendant filed answers to the amended complaints as related to these two Districts.
The matter came before me in open court for the first time on the motion of the plaintiff to expedite the trial of both Parts A and B.
The second open-court matter before me came when the plaintiff requested a preliminary injunction and clarification of the pretrial order. The intervenor's counsel was also present, but was more an observer than a participant. On this occasion in court, counsel for both the plaintiff and defendant attempted to have me make a determination on the admissibility of evidence which had been presented in a previous labor case and explained that it would simplify this case. I denied the motion as being premature and informed counsel I would require facts in evidence before I could make a determination on the admissibility of any evidence, especially such as was not yet before me.
The next activity occurred when both plaintiff's and defendant's counsel desired someone to preside over the taking of depositions (presumably desired by the defendant) of a large number of witnesses in District 31 in Chicago, asserting that the taking of such depositions would be helped by the court's supervision. This would have required at least one week's time. I held the matter in abeyance and informed counsel that consideration would be given to this at a future, appropriate time. The intervenor's counsel was of no significant help here to the plaintiff.
Counsel for the plaintiff and defendant assured me that settlement discussions had taken place and offered to exert every effort to bring about such a result. They agreed to bring the matter earnestly to the attention of their respective principals. That evidently helped their hitherto settlement efforts, because on August 2, 1974, counsel for the plaintiff and defendant did file a motion for the approval of a settlement agreement between the plaintiff and defendant.
On March 29th, 1974 the first active record participation which the intervenor's counsel exerted was in giving notice of two depositions, one to the successful candidate and the other to Joseph Jeneske. Request was also made for the production of documents.
The next record activity in which the intervenor's counsel participated was on May 28, 1974, when the defendant gave notice to take the deposition of the intervenor, Edward Sadlowski and requested the production of documents.
On June 25th, 1974, notice was given of the taking of depositions by Joseph Rauh, the intervenor's counsel, to Stanley Lachen and Danny Cifalia. A second notice was dated July 16th. Counsel then gave notice of a deposition to Fermine Salinas on July 29th.
Here I comment on the notices given by intervenor's counsel to the various witnesses for depositions and find as a fact that all of these notices and the taking of depositions of those named were irrelevant to the plaintiff's case and superfluous. Rather than detail the depositions taken by the intervenor, I shall, in order to save time and space, summarize what was attempted by them. In these the intervenor's counsel concentrated on procuring information from the witnesses on the financing of the campaign prior to the election in which Sadlowski was the defeated candidate.
When a party's attorneys admit certain facts, it is incumbent upon the trial judge to give as much credibility as possible to such admissions of counsel. For instance, Leon Despres, one of the attorneys for the intervenor in a letter dated May 24, 1974 to Joseph Rauh, co-counsel for the intervenor, indicated that these depositions had political and not legal significance. Despres stated:
"The reason we felt it necessary to take these depositions was to compel these men to refuse to divulge payments out of USW funds for Evett campaign contributions or expenditures. Since USW said it would take Sadlowski's deposition, I felt it was psychologically very important to have these refusals precede Ed's testimony. Thus his frankness of disclosure will stand in sharp contrast." (Despres Deposition, Exhibit 11).
I repeat, that any financial circumstance would not possibly be a usable element in the plaintiff's case against the ...