Case Information
*2
BYBEE, Circuit Judge:
The issue before us is whether a plaintiff bringing suit under 42 U.S.C. § 1983 can assign her right to seek attorney’s fees to her attorney. We answer that she may not, and we affirm the judgment of the district court.
I. FACTS AND PROCEDURAL HISTORY On March 19, 2002, Wilma Pony, the legal guardian of Paulette Pony, a minor, filed suit against the County of Los Angeles (the “County”) and various employees of the Los Angeles Juvenile Alternative Work Program (“JAWS”) in the United States District Court for the Central District of Califor- nia. The complaint alleged that Pony was a victim of various traditional torts and constitutional violations arising out of medical procedures she was subjected to by JAWS employees on April 24, 2001.
On March 4, 2002, Pony entered into a retainer agreement with attorneys Michael Mitchell and David Margulies. The agreement contained the following provision:
Client agrees to and hereby does irrevocably assign and transfer to Attorneys all of Client’s rights and powers, whether contingent or vested or both, (a) to waive “prevailing party” status, (b) to waive, apply for, obtain judgment upon, collect, and/or receive any statutory attorney’s fee award, and (c) to make and/or accept a “lump sum, including all attor- ney’s fees” settlement offer. Client acknowledges and agrees that the foregoing assignment and trans- fer may make it more difficult for Client to settle the case, because Client will not possess the powers or rights to waive “prevailing party” status or the pow- ers or rights to waive, apply for, obtain judgment upon, collect, and/or receive any attorney’s fee award. Client hereby authorizes and directs the court to make any such attorney fee award and judgment thereon in Attorneys’ names only and not in Client’s name. In the event that a right to apply for statutory attorney’s fees survives settlement or judgment respecting Client’s claims, Attorneys will negotiate and seek agreement from Defendants upon the amount of statutory attorney’s fees to be paid by Defendants; otherwise Attorneys will apply for statu- tory attorneys fees.
(emphasis in original). The agreement also provided that the attorneys would receive the greater of one-third of the gross amount of the award (forty percent if settlement was reached within sixty days of trial), or statutory attorney’s fees.
Mitchell began representing Pony and continued to do so
through discovery and pre-trial motions. Problems arose dur-
ing the course of settlement negotiations, however. The
County offered to settle Pony’s claim for a “lump sum,
including all attorney’s fees” figure. Mitchell wrote a letter to
the County’s attorneys stating that if the County made a
“lump sum, including all attorney’s fees” offer which was
acceptable to Pony, “it will perforce be in abrogation of my
rights under the retainer agreement and I will be legally and
ethically powerless to resist it.” Citing California Business
and Professions Code Section 6128(b), which makes it a mis-
demeanor for an attorney to “willfully delay[ ] his client’s suit
with a view to his own gain,” Mitchell said that such a settle-
ment offer “will force me to resign as plaintiff’s counsel
because of the conflict it creates.” Mitchell also advised the
County that if such a settlement were reached, he intended to
seek statutory attorney’s fees pursuant to his rights under his
retainer agreement with Pony. He also declared his intent to
pursue other claims, such as a claim for intentional interfer-
ence with contractual relations.
[1]
[1]
Mitchell has waged a long war in his attempts to secure attorney’s fees
in civil rights cases. His insistence on an assignment, via the retainer
agreement, of plaintiff’s statutory rights to pursue attorney’s fees, while
maintaining co-counsel throughout the case, is only his most recent
attempt to do so.
See, e.g.
,
Mitchell v. City of Los Angeles
, 753 F.2d 86
(9th Cir. 1985) (declining to decide whether an attorney or former attorney
has standing to seek attorney’s fees because Mitchell did not appeal the
district court’s order dismissing the underlying suit);
Willard v. City of Los
Angeles
,
The tentative settlement was disrupted by Mitchell, who reiterated his intentions to pursue statutory attorney’s fees from the County despite the settlement. Following Mr. Mitch- ell’s formal request to the court for fees and a June 9, 2003, hearing on the issue of attorney’s fees, the district court con- cluded that the case had not yet been settled and scheduled the case for trial.
Prior to trial, Pony and the County reached a firm settle-
ment, with Pony releasing all of her claims against the County
in exchange for $29,999.99. The settlement was inclusive of
all attorney’s fees, “notwithstanding any statutory or contrac-
tual rights which plaintiff’s present or former counsel may
have or have had and notwithstanding any language in the
retainer agreement between plaintiff and her present or former
counsel.” As part of the settlement, however, Pony and Mar-
attorney’s fees resides in the client, so that an attorney or former attorney
does not have standing to sue for fees);
Venegas v. Skaggs
,
gulies had to agree to indemnify the County against any fees or costs sought by Mitchell. The court dismissed Pony’s suit on account of settlement on July 16, 2003.
In response to the dismissal, Mitchell filed two motions: a Motion for Relief from Order, alleging that the court’s dis- missal of the suit was by mistake or inadvertence, and a motion for attorney’s fees. The district court ruled that Mitch- ell lacked standing, and denied both motions. He now appeals.
II. ANALYSIS
A. Mitchell’s Standing to Seek Attorney’s Fees [2]
[1] Successful plaintiffs in civil rights suits may seek attor- ney’s fees from the losing defendant. Under 42 U.S.C. § 1988(b), “[i]n any action or proceeding to enforce a provi- sion of [42 U.S.C. § 1983] . . . , the court, in its discretion, may allow the prevailing party . . . a reasonable attorney’s fee as part of the costs . . . .” The Supreme Court has held that Section 1988 vests the
right to seek attorney’s fees in the prevailing party, not her
attorney, and that attorneys therefore lack standing to pursue
them.
Evans v. Jeff D.
,
[3] In this case, Pony, the prevailing party, did not exercise her rights to pursue attorney’s fees. To the contrary, she waived them as a condition of settlement with the County. Accordingly, under the Court’s ruling in Evans and our ruling in Virani , Mitchell has no standing to pursue attorney’s fees merely as a result of his position as Pony’s former attorney. Mitchell argues that he need not rely on his status as Pony’s former attorney. He contends that he has standing under his retainer agreement with Pony, whereby she assigned her rights to apply for attorney’s fees to him. If the assign- ment is valid, Mitchell argues, he stands in her shoes and may assert her rights to statutory attorney’s fees as if she had asserted them herself. However, Pony’s putative assignment to Mitchell is invalid because the right to seek attorney’s fees under 42 U.S.C. § 1988 is a substantive cause of action which cannot be transferred contractually.
Section 1988 establishes a prevailing plaintiff’s right to
seek attorney’s fees, but it provides no direct guidance on
whether plaintiffs have the ability to transfer this right. Sec-
tion 1988 also provides that courts should resolve ambiguities
in the federal civil rights laws by looking to the common law,
as modified by the laws of the state in which they sit. 42
U.S.C. § 1988(a) (2000) (“[I]n all cases where [federal laws]
are not adapted to [protecting and vindicating civil rights], or
are deficient in the[ir] provisions [to do so], the common law,
as modified and changed by the constitution and statutes of
the State wherein the court [sits shall govern] . . . , so far as
[it] is not inconsistent with the Constitution and laws of the
United States . . . .”);
Chardon v. Fumero Soto
,
[5]
The Supreme Court has construed claims brought under
Section 1983 as tort claims for personal injury.
City of Monte-
rey v. Del Monte Dunes at Monterey, Ltd.
,
assignable under California law.
Pac. Gas & Elec. Co. v.
Nakano
, 87 P.2d 700, 701 (Cal. 1939) (“It is well settled in
this jurisdiction that a purely tort claim is not assignable.”);
Curtis v. Kellogg & Andelson
,
This application of California tort law is consistent with the
purpose of the federal civil rights statutes.
See Felder v.
Casey
, 487 U.S. 131, 139 (1988) (“Any assessment of the
applicability of a state law to federal civil rights litigation,
therefore, must be made in light of the purpose and nature of
the federal right.”). Preventing civil rights plaintiffs from con-
tractually transferring their rights to attorney’s fees furthers
both the federal policy of protecting civil rights and the fed-
eral policy of encouraging settlement.
See Evans
,
Mitchell’s strongest argument in favor of upholding the transfer under the retainer agreement comes from dicta in Venegas v. Mitchell , 495 U.S. 82 (1990). In that case, the Court addressed the issue of whether statutory attorney’s fees operated as an upper bound on the compensation attorneys could receive from civil rights plaintiffs. The Court concluded that the statute did not impose a ceiling on compensation, and that parties could contract for contingency fees or hourly rates in excess of the statutory level. Id. at 90. Mitchell relies on the Court’s statement that:
[I]t is the party’s entitlement to receive the fees in the appropriate case . . . [and] it is the party’s right to waive, settle, or negotiate that eligibility. . . . . . . If § 1983 plaintiffs may waive their causes of action entirely, there is little reason to believe that they may not assign part of their recovery to an attor- ney if they believe that the contingency arrangement will increase their likelihood of recovery. A contrary decision would place § 1983 plaintiffs in the peculiar position of being freer to negotiate with their adver- saries than with their own attorneys.
Id. at 88.
While at first glance, this may seem like a solid foundation
for Mitchell to rely on, it does not withstand careful scrutiny.
In
Venegas
, the Court was writing in the context of contin-
gency fees and was referring to a plaintiff’s ability to assign
a portion of her
recovery
, not her
substantive causes of action
.
Generally, a party may freely assign the proceeds of his judg-
ment or the value of his recovery. This is true under federal,
California, and common law.
See, e.g.
,
id.
at 87 (“We have
never held that § 1988 constrains the freedom of the civil
rights plaintiff to become contractually and personally bound
to pay an attorney a percentage of the recovery
, if any . . . .”)
(emphasis added); C AL . B US . & P ROF . C ODE § 6147 (West
2000). This is also consistent with current Section 1988 juris-
prudence, which holds that an attorney is free to collect statu-
tory attorney’s fees once a client has exercised his rights by
demanding them, but not before.
Evans
,
scope of the Supreme Court’s holding in Venegas , and repre- sents an extension that is unsupported by the Court’s logic and analysis. Accordingly, the assignments to Mitchell under the retainer agreement are invalid as a matter of law. Without his contractual rights, Mitchell lacks standing to bring a claim for attorney’s fees. See Evans , 475 U.S. at 730-32. [3] B. Supremacy Clause Challenge to the County’s Settlement Policy
Mitchell also asserts that the County has a “custom, policy, or practice of settling civil rights cases only on a ‘lump sum, including all attorney’s fees basis.’ ” He further asserts that this practice contradicts federal policy and congressional intent to provide attorney’s fees for civil rights victims, as manifested in 42 U.S.C. § 1988, and that the County’s con- duct therefore violates the Supremacy Clause of the United States Constitution. See U.S. C ONST . art. VI, cl. 2. The County denies having such a policy, and maintains that its actions are consistent with the Constitution. The County further argues that Mitchell lacks standing to challenge the settlement on this basis; Mitchell counters by alleging that he has both direct and third-party standing. We do not reach the substantive merits of Mitchell’s claim, as we find that Mitchell lacks [3] In light of our disposition on standing, we do not reach the County’s alternative argument that the retainer agreement’s transfer provisions are void because acquiring Pony’s right to seek attorney’s fees would violate Mitchell’s duty of loyalty to his client.
standing to challenge the County’s policy under the Suprem- acy Clause. [4] Mitchell does not have standing to challenge the legal-
ity of the County’s action merely by virtue of being a voter or a taxpayer. To satisfy this Court’s jurisdictional standing requirement, a plaintiff “must allege a distinct and palpable injury to himself, even if it is an injury shared by a large class of other possible litigants.” Warth v. Seldin , 422 U.S. 490, 501 (1975); see also Allen v. Wright , 468 U.S. 737, 754 (1984) (“This Court has repeatedly held that an asserted right to have the Government act in accordance with law is not suf- ficient, standing alone, to confer jurisdiction on a federal court.”). In order to have direct standing under Article III, a plaintiff must demonstrate that:
(1) [he] has suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or immi- nent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defen- dant; and (3) it is likely, as opposed to merely specu- lative, that the injury will be redressed by a favorable decision.
[4]
We note that we have never held that a policy of only settling Section
1983 actions on a lump sum basis, including all attorney’s fees, would vio-
late the Supremacy Clause, although we have previously alluded to this
possibility.
See Bernhardt v. Los Angeles County
,
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC),
Inc.
,
[9]
As we have discussed above, the right to seek attorney’s
fees under 42 U.S.C. § 1988 belongs to clients, not to attor-
neys.
Evans
,
cal.” In the absence of its policy, the County might have refused to settle Pony’s civil rights case at all. This seems par- ticularly likely given that the ultimate settlement amount, $29,999.99, is less than the attorney’s fees Mitchell seeks (over $50,000); moreover, Mitchell was not Pony’s only attor- ney and he terminated his representation of her before the set- tlement was reached. It is therefore entirely possible that the case would have gone to trial. Had the County prevailed at trial, Mitchell, under his contingency fee arrangement with Pony, would not have received any compensation at all. But even if the County were willing to settle Pony’s case without forcing her to waive her right to seek attorney’s fees, Pony, as a prevailing party, would still be free to use waiver as a bargaining chip in order to increase the amount that the County would pay her in the settlement. Evans , 475 U.S. at 731 n.20. In such a scenario, one would expect Mitchell’s compensation to mirror that which he has received under the County’s policy. Mitchell’s monetary injuries are therefore speculative, at best, and he is unable to satisfy Article III’s “injury in fact” requirement.
[11] This same line of logic demonstrates that Mitchell has also failed to satisfy the second requirement for Article III standing. For much the same reasons that it is uncertain whether Mitchell was injured by the County’s policy, it is also unclear whether his injury, if any, is fairly traceable to the County’s actions. Without its policy, the County might have insisted on taking the case to trial; if the County had won at trial, Mitchell would have received nothing. Even if the County had been willing to settle with Pony while permitting her to retain her right to seek attorney’s fees, she still would have had the right to bargain away that right in exchange for a larger settlement, and there is every reason to believe that she would have done so. Therefore, even if Mitchell has suf- fered an injury, he would have suffered the same injury in the absence of the County’s policy; his injury, if any, thus cannot fairly be traced to the County’s actions. Generally, a plaintiff may only bring a claim on his
own behalf, and may not raise claims based on the rights of
another party.
See Allen
,
A litigant is granted third-party standing because the
tribunal recognizes that her interests are aligned with those of
the party whose rights are at issue and that the litigant has a
sufficiently close connection to that party to assert claims on
that party’s behalf.
See Coal. of Clergy, Lawyers, & Profes-
sors v. Bush
, 310 F.3d 1153, 1166 n.1 (9th Cir. 2002) (Ber-
zon, J., concurring) (“[T]hird-party standing recognizes a
wide range of relationships in which the third-parties’ inter-
ests are sufficiently aligned with the interests of the rights-
holder that standing is appropriate.”);
Gulf Island-IV, Inc. v.
Blue Streak-Gulf Is Ops
, 24 F.3d 743, 747 (5th Cir. 1994);
Harris v. Evans
,
III. CONCLUSION
We hold that the provisions of the retainer agreement con- veying Pony’s right to seek or waive attorney’s fees to Mitch- ell are void under California law. We reach this conclusion because Section 1983 sounds in tort and California law pro- hibits a plaintiff from transferring her substantive tort claims. We also find that Mitchell lacks standing to raise a constitu- tional challenge to the County’s settlement policy. We there- fore dismiss Mitchell’s claims and affirm the judgment of the district court.
AFFIRMED.
