ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 73-0957 -- PITTSBURGH)
Before Aldisert, Higginbotham and Sloviter, Circuit Judges.
This case, which stems from a union member's successful challenge to a union election conducted in District 31, in 1973, comes to us on appeal for the second time over the issue of attorney's fees. In Brennan v. United Steelworkers of America, 554 F.2d 586 (3d Cir. 1977), cert. denied, 435 U.S. 977, 98 S. Ct. 1627, 56 L. Ed. 2d 71 (1978),*fn1 we held that an award of attorney's fees was not precluded by Title IV of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), 29 U.S.C. § 481 et seq. and that the "common benefit" theory was available as a basis for awarding attorney's fees. On remand, the district court was instructed to exercise its discretion on the issue of "(w)hether an award is warranted and, if so, the amount of such award ... in light of the broader application of the "common benefit' rationale...." Brennan, 554 F.2d at 608. As a guiding principle our court wrote that, "although union members should not be required to pay for unnecessary duplication of legal services, it should not be presumed that mere duplication of effort by either counsel for Sadlowski or counsel for the Department of Labor was unnecessary or non-beneficial."*fn2 (footnote in original renumbered).
The case was remanded to the district court which assigned the matter to a United States Magistrate for a review of the record and for the taking of additional evidence. The Magistrate's Report and Recommendation, recommended the denial of the fee claim, and was filed on June 7, 1979. The district court adopted the magistrate's findings of fact and recommendation and supplemented the report with additional findings of fact. On October 31, 1980, an Order was entered denying the application for attorneys' fees.
After reviewing the very extensive record in this case and after hearing able counsel in oral argument, we have concluded that the district court's denial of fees for work performed by Sadlowski's counsel over the five month period between February, 1973, the date of the first District 31 election and June, 1973, the date of Sadlowski's filing of a complaint with the Secretary of Labor, was error. We will therefore reverse the district court insofar as its order denied Sadlowski's counsel attorneys' fees for the above noted five month period and affirm the remainder of the district court's Order.
The factual history of this case has been comprehensively recorded in our earlier Brennan decision and in the district court's opinion under review. Consequently, we write here only to summarize those facts.
The United Steelworkers of America held an election on February 13, 1973 in District 31 for the position of District Director. District 31 is the largest in the Steelworkers union, consisting of approximately 300 locals and 130,000 members in Illinois and Indiana. The election campaign, between the union's hand-picked successor to the then retiring District Director of thirty years and Sadlowski, was fiercely fought. During the three-day period it took to count the votes, Sadlowski was advised of widespread ballot fraud, illegal electioneering, deprivation of secret balloting and interference with observers. When the tabulations were complete and Sadlowski's adversary declared the winner by a 1,785 vote margin, Sadlowski hired counsel to investigate the allegations of voting fraud and to aid him in exhausting the internal administrative remedies required by the constitution of the Steelworkers.
Sadlowski filed a protest with the appropriate union authorities who, after reviewing his case, sustained the election result. An appeal was taken to the International Executive Board which likewise denied Sadlowski's challenge. Having exhausted his union remedies, Sadlowski filed a timely complaint under the LMRDA with the Secretary of Labor.
The Secretary investigated the complaint and on November 8, 1973 filed a civil suit in the Western District of Pennsylvania seeking to void the District 31 election. The district court granted Sadlowski's motion to intervene as a plaintiff. Following extensive pretrial negotiations, in which Sadlowski's counsel played a role, a settlement was reached calling for a new election in District 31. The district court approved the settlement and a new election was held on November 19, 1974. Sadlowski handily defeated his opponent, who had been serving as Director since the initial election in February, 1973, by a 19,479 vote margin. This result was finalized on December 2, 1974 and Sadlowski assumed the post of District Director.
CLAIMANTS' VERIFIED APPLICATION FOR ATTORNEYS' FEES AND FIRST APPEAL
Sadlowski's counsel submitted a Verified Application for Attorneys' Fees with a supporting memorandum to the district court on January 31, 1975. The application detailed the work of four attorneys, Leon Despres, Joseph Rauh, Jr., Kenneth J. Yablonski and Judith Schneider on behalf of Sadlowski. It sought attorneys' fees for work performed prior to the Secretary's filing of a complaint and for "post-complaint efforts to expedite, conduct discovery and bring about a fair rerun settlement, (and) ... to facilitate a fair election itself." Brief for Appellants at 6.
In Brennan, we detailed in three full pages the work allegedly performed by Sadlowski's counsel both pre- and post-complaint. We emphasized the critical nature of private participation in the enforcement scheme of Title IV and at numerous points indicated, either explicitly or implicitly that Sadlowski's "need for counsel cannot be doubted." Brennan, 554 F.2d at 595.
The test for an award of attorney's fees is whether counsel's work was a material assistance to the Secretary and ultimately contributed to a result which can be said to be for the common benefit of all union members. The "common benefit" theory, in turn, entails satisfying three elements: whether the benefits may be traced with some accuracy; whether the class of beneficiaries are readily identifiable; and, whether there is a reasonable basis for confidence that the costs may be shifted with some precision to those benefitting. Id. at 604-05. The attorneys for Sadlowski contend that the work they performed on behalf of their client was a material assistance to the Secretary and qualified under each element of the "common benefit" theory. Specifically, they argued before the district court and here on appeal that "the vindication of union democracy (in securing a rerun election) ... is a substantial common benefit conferred on the union and its members ...." Brief for Appellants at 8. Sadlowski's successful challenge served notice on the union and its members that election improprieties would not go unchallenged.
THE MAGISTRATE'S AND THE DISTRICT COURT'S FINDINGS OF FACT AND CONCLUSIONS OF LAW ON REMAND
The magistrate, to whom the case was assigned after remand, reviewed the application for attorneys' fees and recommended that the application be denied. It is clear from reading the magistrate's report that the standard applied was whether the assistance of counsel was strictly necessary to perfect a ...