Polonski v. Trump Taj Mahal Associates , 137 F.3d 139 ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
2-18-1998
Arcuri v. Trump Taj Mahal
Precedential or Non-Precedential:
Docket 96-5655
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Recommended Citation
"Arcuri v. Trump Taj Mahal" (1998). 1998 Decisions. Paper 30.
http://digitalcommons.law.villanova.edu/thirdcircuit_1998/30
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Filed February 18, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 96-5655
JACQUELINE POLONSKI; OSCAR BERRIOS; MICHELE
BOYLE; NEIL BROWEN, SR.; JUDY LOWE-BROWN;
MARIA BUCHEL; DORI BYRNES; DONNA
CAMPO-POLKALSKI; JOANN CARMAN; STEPHANIE
POSTLEWAIT-CASTALDI; MICHELE COCOZZA; DORIS
SPIEGEL-CONTI; JEANNANNE DELUCA; NOELLE
DISOMMA; ELIZABETH J. ELLIS; SHARON FATATO;
JAMIE FELDMAN; TYLER FITZGERALD; CINDI FRANCO;
TRACEY GIERY; KATURAH GODARO; GUILLERMO
RIVERA; MICHAEL HAINSWORTH; SCOTT C. JOHNSON;
SANDRA LANCIERI; CATHERINE LIOSI; DEBRA LUPU;
RICHARD MARIN; IRENE MARTINEZ; KIM MEERSAND;
BEVERLY L. MIRANDA; LINA MONTECALVO; DIANE
MOOSHER; MURIEL NALE; VIVIAN NUTLIE; PATRICE
PINCHOCK; VINCE POMPILI; KATHLEEN QUINN;
DARLENE ROBINSON; THERESA SCHWEIGHARDT;
DENISE STAUFFENBERG; JULIE A. STRZMIECHNA;
SHARON TABASCO; SHARON TOCCO; KIM VINCI; SALLY
WEISDOCK; SHARON WOLF; ROBIN YOUSHAW
(hereinafter Cocktail Servers); MICHAEL RACO; VERONICA
WILSON; JOSEPH ANTONELLI; RICHARD FANTE; DANIEL
MORANIS; LOUIS NASTASI; RICHARD ROSEN; MAURICE
SHERROD; WILLIAM TRACY; JOHN WITHERS,
(hereinafter Bartenders)
v.
TRUMP TAJ MAHAL ASSOCIATES; LOCAL 54, OF THE
HOTEL EMPLOYEES RESTAURANT EMPLOYEES
INTERNATIONAL UNION (H.E.R.E.I.U.); ABC, INC., (a
fictitious name); JOHN DOE, (a fictitious name)
(D.C. Civil 9l-cv-03014)
DOROTHEA A. ARCURI; PATRICIA BROOKS, VICTORIA
BRYANT; KAREN CARLINI; ROBERT DONOVAN; PHILIP K.
FERGUSON; NANCY GUERRERA; ROBERT HINGOS; LEE
A. KINSELL; CHARLES MCBRIDE; JUNE MCBRIDE;
ROSALIE MCCARTHY; MICHELE MCCARTNEY; JANET M.
MEDIO; LINDA MERANUS; GREGORY NATALE;
MARIANNE K. ORTZMAN; RONALD PAGANO; ANNA
MARIE PLATANIA; GERI SHANNON; DONALD SILANO;
JEANETTE SOPUCH; KENNETH W. STRAIN; TRASENA
TAUSO; ELIZABETH WALKER; VICTORIA WEGER;
RICHARD ZAK; JOANNE CAPETOLA; JOHN LASCOWSKI;
ADRIENNE M. PALERMO; MARY ANN PETERSON; SUSAN
PETRONE; BARRY L. WRIGHT
v.
TRUMP TAJ MAHAL ASSOCIATES; LOCAL 54, OF THE
HOTEL EMPLOYEES RESTAURANT EMPLOYEES
INTERNATIONAL UNION, (H.E.R.E.I.U.)
(D.C. Civil No. 91-cv-03529)
Local 54, Hotel Employees and Restaurant Employees
International Union,
Appellant
ON APPEAL FROM THE
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
(D.C. No. 9l-cv-03014 and No. 91-cv-03529)
Argued December 11, 1997
Before: GREENBERG, ROTH and SEITZ, Circuit Judges.
(Opinion Filed: February 18, 1998)
2
Richard G. Phillips, Esquire
Patrick C. Campbell, Jr., Esquire
(ARGUED)
Richard G. Phillips Associates, P.C.
Mellon Bank Center
1735 Market Street, Suite 3420
Philadelphia, Pennsylvania 19103
Attorneys for Appellees
Theodore M. Lieverman, Esquire
Robert F. O'Brien, Esquire
James Katz, Esquire (ARGUED)
Tomar, Simonoff, Adourian, O'Brien
Kaplan, Jacoby & Graziano
20 Brace Road
Cherry Hill, New Jersey 08034
Attorneys for Appellant
Local 54 HERE
OPINION OF THE COURT
SEITZ, Circuit Judge.
Local 54 Hotel Employees and Restaurant Employees
International Union ("the Union") appeals the district
court's award of attorney's fees against it under the
common benefit exception to the American rule limiting
recovery.1 We will review, under a plenary standard, the
legal interpretation of the common benefit doctrine and
whether the district court possessed the authority to apply
it in a given factual setting. Marshall v. United Steelworkers,
666 F.2d 845, 849-50 (3d Cir. 1981).
_________________________________________________________________
1. The district court exercised jurisdiction under section 301 of the
Labor-Management Relations Act, 29 U.S.C. S 185, and federal question
jurisdiction, 28 U.S.C. S 1331. We have jurisdiction under 28 U.S.C.
S 1291 to consider the district court's final order awarding attorney's
fees.
3
I. Facts and Procedural History
The facts of this case are undisputed. Between 1989 and
1990, the Union represented the food and beverage
employees of the Trump Castle, the Trump Plaza, and the
Trump Regency. In April of 1990, management of the newly
constructed Trump Taj Mahal failed to recognize the
seniority status of certain Union employees transferred
from the Trump Regency who were to be granted the
highest seniority status pursuant to a collective bargaining
agreement between the Union and Trump representatives.
As a result, the Union filed a grievance on behalf of the
former Trump Regency employees against the Taj Mahal.
This matter was submitted to binding arbitration and
resulted in an award sustaining the grievance and directing
the Trump Taj Mahal to establish seniority status for the
former Trump Regency employees. A group of Trump Taj
Mahal employees who were adversely affected by the
arbitration award ("the Polonski group") requested Trump
Taj Mahal to appeal, but no such action was taken.
By December of 1990, the U.S. Department of Justice
filed a civil RICO action against the Union and other
individuals in an unrelated matter. See United States v.
Hanley, Civil No. 90-5017 (D.N.J.). The court approved a
consent decree which provided for the resignation of the
Union's leadership and the appointment of a special
Monitor to oversee Union affairs. Shortly afterwards, the
Polonski group confronted the Monitor and alleged that the
previous arbitration award had been procured unfairly. The
Polonski group also filed suit against the Union in the
Superior Court of New Jersey, alleging a breach of the duty
of fair representation. This action was later removed to the
district court.
In view of these events, the Monitor sought to reopen the
arbitration award and submit the entire matter to the
arbitrator for redisposition. By August of 1991, the group of
employees who benefitted from the arbitration award ("the
Arcuri group") filed suit in the district court against the
Union and the Trump Taj Mahal.2 These plaintiffs sought
_________________________________________________________________
2. This action was consolidated in the district court with the Polonski
lawsuit. However, on June 10, 1994, the district court dismissed the
Polonski action for failure to provide discovery. That order is not being
appealed.
4
damages for the Union's breach of the duty of fair
representation, and moved to temporarily enjoin the
Monitor from attempting to have the arbitration award
reopened. After the Union represented that it would not
seek to reopen the award, the Arcuri group withdrew their
motion for a preliminary injunction, and continued their
litigation against the Union for a breach of the duty of fair
representation.3
Upon cross-motions for summary judgment, the district
court held that the Monitor had in fact breached his duty
of fair representation by attempting to reopen the
arbitration in an arbitrary manner. The court, on
September 30, 1994, ordered the Union to pay attorney's
fees as damages caused by the Union's violation of the
labor laws. The matter was subsequently referred to a
magistrate judge to determine the appropriate amount of
attorney's fees and costs.
However, by order dated August 1, 1995, the district
court reversed its position and held that the plaintiffs were
not entitled to attorney's fees as damages under the labor
laws. Instead, the court allowed the plaintiffs to recover
under the common benefit doctrine all attorney's fees for
aspects of the litigation in which they prevailed. 4 The case
was once again referred to the magistrate judge, who
recommended a total award of $103,566.30 in attorney's
fees and costs. On September 27, 1996, the district court
adopted the magistrate judge's recommendation. The Union
now appeals the district court orders allowing attorney's
fees under the common benefit doctrine and adopting the
magistrate judge's ultimate recommendation as the
appropriate amount of fees and costs.
_________________________________________________________________
3. The Monitor nevertheless held an evidentiary hearing to consider the
Polonski group's grievances against the arbitration award. On April 6,
1992, the Monitor eventually issued a decision in favor of the Arcuri
group and upheld the award.
4. These two orders were appealed by the Union on May 16, 1996. This
court dismissed those appeals as untimely. See Polonski, et al. v. Trump
Taj Mahal, et al., Nos. 96-5291, 96-5347 (3d Cir. May 23, 1997)
(judgment order).
5
II. Jurisdiction of This Court
At the outset, the plaintiffs question the jurisdiction of
this court to consider the August 1, 1995 order allowing
attorney's fees under the common benefit doctrine. They
assert that the Union had previously appealed that order,
in addition to the September 30, 1994 order, and this court
had dismissed those appeals as untimely under Fed. R.
App. P. 4(a)(1). From this, we understand the plaintiffs to
make a two-fold argument. They first contend that our prior
dismissal renders all matters relating to that appeal final
and conclusive. Second, they seem to make the argument
that the Union's notice of appeal had only mentioned the
district court's final September 27, 1996, order adopting
the magistrate judge's recommendation as to attorney's fees
under the common benefit doctrine. Because the Union did
not include in its notice of appeal the August 1, 1995 order,
plaintiffs contend that we have no jurisdiction to consider
that order.
The plaintiff's first argument -- that the appeal of the
common benefit issue is precluded by our dismissal of the
Union's prior appeal -- is meritless. It is well established in
our court that an appeal from an order granting attorney's
fees is not final unless reduced to an identifiable amount.
Pennsylvania v. Flaherty, 983 F.2d 1267, 1276-77 (3d Cir.
1993). It goes without saying that a dismissal of a
premature attorney's fees appeal carries no res judicata
effect, as this court could not have exercised jurisdiction to
consider the appeal. With some exceptions not applicable
here, this court will only consider an appeal from an
attorney's fee determination when it becomes final. See id.
Thus, the dismissal of the Union's premature appeal of the
August 1, 1995 order does not bar our consideration of the
issue at this time.
Plaintiffs' second contention -- that the Union's failure to
explicitly include in its notice of appeal the August 1 order
granting attorney's fees -- is also without force. While Fed.
R. App. P. 3(c) does provide that the notice of appeal must
"designate the judgment, order, or part thereof appealed
from," an appeal from a final judgment that is identified in
the notice will draw into question all non-final orders and
rulings which produced the judgment. Elfman Motors, Inc.
6
v. Chrysler Corp., 567 F.2d 1252, 1253 (3d Cir. 1977) (per
curiam). It is almost axiomatic that decisions on the merits
are not to be avoided on grounds of technical violations of
procedural rules, see Foman v. Davis, 371 U.S. 178, 181-82
(1962), and we have read notices of appeal liberally. See
CTC Imports and Exports v. Nigerian Petroleum Corp., 951
F.2d 573, 576 (3d Cir. 1991). Such treatment is particularly
appropriate where the order appealed is discretionary and
relates back to the judgment sought to be reviewed. Elfman
Motors, 567 F.2d at 1254.
This court will exercise appellate jurisdiction over orders
that are not specified in the notice of appeal where: (1)
there is a connection between the specified and unspecified
orders; (2) the intention to appeal the unspecified order is
apparent; and (3) the opposing party is not prejudiced and
has a full opportunity to brief the issues. See MCI
Telecommunications Corp. v. Teleconcepts, Inc., 71 F.3d
1086, 1092 (3d Cir. 1995) (citations and internal quotations
omitted), cert. denied, 117 S. Ct. 64 (1996); Lusardi v. Xerox
Corp., 975 F.2d 964, 972 (3d Cir. 1992); Williams v.
Guzzardi, 875 F.2d 46, 49 (3d Cir. 1989). In the attorney's
fee context, this court has found that "an adequate
connection exists between a specified order that designates
the prevailing party for purposes of attorney's fees and an
unspecified order that quantifies the attorney's fee award."
MCI Telecommunications, 71 F.3d at 1093. Similarly, where
"subsequent appellate proceedings manifest the appellant's
intent to appeal the attorney's fees issue," and where "the
opposing party had and exercised a full opportunity to brief
the issue and did not raise any claim of prejudice," this
Court has found a notice of appeal specifying one attorney's
fee order sufficient to confer jurisdiction over an appeal
from another unspecified attorney's fee order in the same
case. Bernardsville Bd. of Educ. v. J.H., 42 F.3d 149, 156
n.10 (3d cir. 1994). In this case, the earlier attorney's fee
order was connected to the order specified in the notice of
appeal in that the earlier order established the legal basis
for the award of fees that was reduced to a final amount in
the specified order. The appellate proceedings clearly
manifest an intent to appeal the common benefit issue
decided in the first order, and there is no prejudice since
both parties have fully briefed the issues. Accordingly, we
7
find the notice of appeal from the September 27, 1996 final
order adopting the magistrate judge's fee recommendation
sufficient to confer jurisdiction over the appeal from the
earlier order granting attorney's fees under the common
benefit exception.
III. The Common Benefit Doctrine
A. Requirements for Applicability
We now turn to the merits of this appeal. By way of
background, it is well established that the traditional
American rule disfavors the award of attorney's fees in the
absence of statutory or contractual authorization. Summit
Valley Indus., Inc. v. Local 112, United Bhd. of Carpenters
and Joiners, 456 U.S. 717, 721 (1982). Under the exercise
of its equitable powers, however, a federal court may
fashion an attorney's fees award to successful litigants who
confer a common benefit upon a class of individuals not
participating in the litigation. Mills v. Electric Auto-Lite Co.,
396 U.S. 375, 391-92 (1970). At the heart of this exception
is a concern for fairness and unjust enrichment; the law
will not reward those who reap the substantial benefits of
litigation without participating in its costs. As explained by
the Supreme Court, "[t]o allow the others to obtain full
benefit from the plaintiff's efforts without contributing
equally to the litigation expenses would be to enrich the
others unjustly at the plaintiff's expense." Id. at 392. The
origins of this doctrine can be traced to the common fund
rule whereby those who share in a fund must participate in
paying attorney's fees when a prevailing plaintiff 's litigation
redounds to the benefit of the common fund. See Hall v.
Cole, 412 U.S. 1, 5 n.7 (1972); 1 Dan B. Dobbs, Law of
Remedies S 3.10(2) (2d ed. 1993).
Under the common benefit doctrine, an award of
attorney's fees is appropriate where "the plaintiff's
successful litigation confers ``a substantial benefit on the
members of an ascertainable class, and where the court's
jurisdiction over the subject matter of the suit makes
possible an award that will operate to spread the costs
proportionately among them.' " Hall, 412 U.S. at 5 (quoting
8
Mills, 396 U.S. at 393-94). This test entails satisfying three
distinct elements: (1) the plaintiff must confer a substantial
benefit; (2) to members of an ascertainable class; and (3)
the court must ensure that the costs are proportionally
spread among that class. Because this test may be read
literally to include every lawsuit against any institutional
defendant, we have refined this language further. In
Marshall v. United Steelworkers, 666 F.2d 845, 848 (3d Cir.
1981), this court inquired: (1) whether the benefits may be
traced with some accuracy; (2) whether the class of
beneficiaries are readily identifiable; and, (3) whether there
is a reasonable basis for confidence that the costs may be
shifted with some precision to those benefitting.
B. The Arguments
In examining the applicability of the common benefit
doctrine, the district court recounted the Mills test of
substantial benefit, commonality, and apportionment. The
court stated without comment that the plaintiffs satisfied
the last two elements of commonality and apportionment.
As to substantial benefit, the court reasoned that the
plaintiffs, through their lawsuit, taught the Union a
"generalized lesson" that it should respect the finality of
arbitration. Because all Union members would benefit from
the Union's respect for the law, the district court concluded
that there was indeed a common benefit which mandated
fee shifting to achieve equity.
The Union on appeal initially argues that the common
benefit doctrine cannot apply to fair representation actions
under the labor laws. The Union's argument here is that
duty of fair representation cases "are no different in
conception from a lawsuit by a person injured in a motor
vehicle accident." Br. at 18. In the Union's view, to award
attorney's fees in these types of cases would constitute a
derogation of the American rule because these actions, like
negligence claims, are not well suited to vindicate public
rights.
In the alternative, the Union posits that none of the Mills
common benefit elements are met in this case. There was
no substantial benefit, the Union contends, because the
9
plaintiffs' litigation was not a "general vindication" of Union
members' rights. Even if there were a benefit, the Union
argues that it was not a common one because the plaintiffs
benefitted by vindicating their own seniority rights, and the
other Union members did not stand to share that benefit in
common with the plaintiffs, as their seniority interests were
in fact adverse to the plaintiffs. Finally, the Union notes
that there would be no way to achieve true apportionment
in this case because attorney's fees would come out of
Union funds to which all members contribute pro rata, yet
all Union members would not benefit equally from the
litigation.
The plaintiffs, on the other hand, argue that their
litigation against the Union had established a violation of
fair representation duties owed to them under the labor
laws. From this, they assert that a substantial benefit has
been rendered to all Union members through the
vindication of this legal right. They consequently conclude
that fee-shifting under the common benefit doctrine is
appropriate in this case.
C. The Test Applied
In order to determine the availability of attorney's fees
under the common benefit doctrine, this court must apply
the three part test announced in Mills and its progeny. We
cannot accept the Union's argument that fair
representation cases cannot form the basis for attorney's
fees under this theory of fee-shifting. As we have previously
stated, the common benefit doctrine stems from an
inherent power to fashion equitable relief, and we have not
hesitated to summon this authority where "overriding
considerations indicate the need for such a recovery."
Brennan v. United Steelworkers, 554 F.2d 586, 600 (3d Cir.
1977) (quoting Mills, 396 U.S. at 391-92). Application of the
doctrine is not predicated upon the type of action
sustained, but depends instead on the equitable
circumstances of each case. Indeed, the Supreme Court
and lower federal courts have applied the doctrine in a
myriad of circumstances without announcing absolutes
regarding applicability. See 1 Mary F. Derfner & Arthur D.
Wolf, Court Awarded Attorney Fees P 3.01[5] (1997)
10
(surveying cases). We will accordingly apply each of the
Mills criteria to examine whether the district court
possessed the legal authority in the present context to
award attorney's fees under the common benefit doctrine.
The first element to be analyzed is the existence of a
"substantial benefit" common to all class members that
may be traced with some accuracy. We have previously held
that attorney's fees may be proper even though the benefit
conferred is nonpecuniary in nature. Merola v. Atlantic
Richfield Co., 515 F.2d 165, 169-70 (3d Cir. 1975). As Mills
makes clear, "[t]he fact that this suit has not yet produced,
and may never produce, a monetary recovery from which
the fees could be paid does not preclude an award based on
this rationale." 396 U.S. at 392. What is of utmost
importance here is the nature and quality of the common
benefits attained from litigation rather than any particular
quantification into dollar amounts. As a result, the fact that
the plaintiffs did not procure damages in their action
against the Union is inapposite to our analysis and would
not, on its own, preclude fee-shifting under the common
benefit doctrine.
However, federal courts must scrutinize the benefits
conferred from litigation carefully, lest the doctrine
overwhelm the American rule that each party is to bear its
own litigation costs. The general policy is that attorney's
fees should be awarded "in limited circumstances" absent a
fee-shifting statute or contract. Alyeska Pipeline, 421 U.S.
at 257-58; see also Aguinaga v. United Food and
Commercial Workers Int'l Union, 993 F.2d 1480, 1485 (10th
Cir. 1993). In this regard, the mere vindication of a legal
right by one class member is not necessarily a substantial
benefit that would trigger the application of the doctrine.
See, e.g., Crane Co. v. American Standard, Inc., 603 F.2d
244, 255 (2d Cir. 1979); Bailey v. Meister Brau, Inc., 535
F.2d 982, 995-96 (7th Cir. 1976). The Supreme Court
illustrated this principle in exploring the substantial
benefits gained from a shareholders derivative suit brought
to challenge a violation of the securities laws:
[A] substantial benefit must be something more than
technical in its consequence and be one that
accomplishes a result which corrects or prevents an
11
abuse which would be prejudicial to the rights and
interests of the corporation or affect the enjoyment or
protection of an essential right to the stockholder's
interest.
Mills, 396 U.S. at 396 (quoting Bosch v. Meeker Cooperative
Light and Power Ass'n, 257 Minn. 362, 366, 101 N.W.2d
423, 427 (1960)). More specifically, a common benefit is
substantial where, by vindicating the important statutory
policy at issue, the plaintiff has rendered a "substantial
service" to all members of the class. Id. This substantial
service is typically one that not only corrects an abuse
prejudicial to an essential right, but also impacts the future
conduct of the defendant's affairs. Hall, 412 U.S. at 8
(quoting Yablonski v. United Mine Workers, 466 F.2d 424,
431 (D.C. App. 1972)). Were the rule otherwise, any legal
victory over an institutional defendant by one of its
members would lead to fee shifting through the common
benefit doctrine. See 1 Dobbs, supra, S 3.10(2). Indeed, the
narrowly tailored common benefit exception might provide
an impermissible back door to the "private attorney
general" framework that was rejected in Alyeska Pipeline.
See Alyeska Pipeline, 421 U.S. at 264 n.39; Shimman v.
International Union of Operating Eng'r, Local 18, 744 F.2d
1226, 1235 n.13 (6th Cir. 1984); Bailey, 535 F.2d at 995-
96;
We take particular guidance from the Supreme Court's
decision in Hall itself, which considered the common
benefit doctrine in the context of a dispute between Union
members and Union leadership. The plaintiff in Hall
received reinstatement to the Union after he was discharged
pursuant to a Union rule proscribing "deliberate or
malicious vilification with regard to the execution or the
duties of any office or job." Hall, 412 U.S. at 3. In
considering the same Mills factors pertinent to our
discussion here, the Court identified the main purpose of
the statute at issue and whether the plaintiff 's litigation, by
vindicating the relevant statutory policies, rendered a
substantial service to an ascertainable class. Hall, 412 U.S.
at 8. The Court reasoned that the lawsuit had vindicated an
important free speech right, which "necessarily rendered a
substantial service to [the] Union as an institution and to
12
all of its members." Id. In particular, the successful plaintiff
had dispelled a "chill" cast upon the free speech rights of all
Union members by invalidating a Union rule that was
found repugnant to the Labor-Management Reporting and
Disclosure Act of 1959 ("LMRDA"). Thus, fee shifting in that
case was appropriate under the common benefit doctrine.
In Brennan v. United Steelworkers, 554 F.2d 586 (3d Cir.
1977), this court extended that principle to voting rights
violations under the LMRDA. We initially noted that the
LMRDA "was intended to provide union members with
protection from the type of attempts to thwart the wishes of
union members and impair union democracy." Id. at 601.
Given the facts before us in Brennan, we had little doubt
that the types of voting violations evident in that case
would spread to other Union districts and ultimately render
union democracy nothing more than a hollow promise. Id.
at 605. Because the plaintiff's lawsuit in Brennan
contributed to the vindication of the entire democratic
process and necessarily redounded to the benefit of the
whole union, we held that fee-shifting was particularly
applicable.
Applying these principles, we find that the district court
erred in its legal conclusion that all Union members derived
a substantial benefit from the Union's receiving a
"generalized lesson" that an arbitrator may not reconsider
the merits of a final arbitration award. Simple "generalized
lessons" of well-established law are not substantial benefits
that form the basis of fee shifting. Otherwise, whenever a
defendant violates a right common to all its membership,
fee shifting would be appropriate without any inquiry into
the nature of the "substantial service" rendered to those
who will ultimately pay for the litigation. This has never
been the analysis and equity will not hinge on a result that
is merely "technical in nature." Mills, 396 U.S. at 396.
There is little doubt that plaintiffs' litigation conferred a
substantial benefit among some of those involved in the
internal seniority dispute between Union factions. The
Arcuri group of Union members directly benefited from the
outcome in that it prevented the Union from attempting to
reopen a favorable arbitration award and procured a
judgment that it was not being treated fairly as required
13
under the duty of fair representation. But this alone cannot
be the basis of fee shifting under the common benefit
doctrine because the plaintiffs seek to collect fees from the
Union treasury, which necessarily implies that all Union
members must have benefitted from the litigation.
Here, we cannot see what substantial benefits redounded
to the benefit of all the Union members. This is not a case
where the plaintiffs' litigation corrected a "deceit practiced
on the stockholders as a group," as was evident in Mills
itself. 396 U.S. at 392 (quoting J.I. Case Co. v. Borak, 377
U.S. 426, 432 (1964)). Nor did the successful litigants
realistically dispel any "chill" associated with a Union abuse
prejudicial to the enjoyment of essential rights by the entire
Union membership. This dispute between Union factions
can hardly be analogized to Hall and its progeny, where
violations of first amendment or voting rights necessarily
resulted in an immediate harm to the promise of Union
democracy or the freedom of expression. Similarly, the
lawsuit did not "establish[ ] significant new principles of
law" beneficial to all Union members. Marshall v. United
Steelworkers, 666 F.2d 845, 853 (3d Cir. 1981).
In the end, nothing in the present litigation indicates a
"substantial service" rendered to the entire Union
membership such as would justify an equitable award of
attorney's fees. All the facts before us indicate that the
internal seniority grievances among Union members directly
at odds with each other had no broader implications to
those completely divorced from the context of the dispute.
The record cannot fairly support a legal conclusion that the
Union's attempt to reopen arbitration was a practice that
threatened "the enjoyment or protection of an essential
right" to the entire Union's interest. Mills, 396 U.S. at 396.
Nor can we see how fee shifting in the present case would
establish a policy that would "encourage unions to more
zealously represent employees' interests." Cruz v. Local
Union No. 3 Of the Int'l Brotherhood of Elec. Workers, 34
F.3d 1148, 1159 (2d Cir. 1994). It is important to
emphasize that the logic underlying the common benefit
doctrine is restitutionary in nature, not punitive or limited
to labor policy. Hall, 412 U.S. at 6-7. Union members here
would not be unjustly enriched at the plaintiffs' expense.
14
Accordingly, we will reverse the district court's attorney's
fee award under the common benefit doctrine. Because we
hold that the district court did not possess the authority to
shift fees, we need not reach the validity of the precise
amount recommended by the magistrate judge and adopted
by the district court.
IV. Conclusion
For the foregoing reasons, we will reverse the district
court order granting attorney's fees.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
15