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01/24/92 TENANTS 500 23RD STREET v. DISTRICT

DISTRICT OF COLUMBIA COURT OF APPEALS


January 24, 1992

TENANTS OF 500 23RD STREET, N.W., ET AL., PETITIONERS
v.
DISTRICT OF COLUMBIA RENTAL HOUSING COMMISSION, RESPONDENT; COLUMBIA PLAZA LIMITED PARTNERSHIP, INTERVENOR

Before Terry and Farrell, Associate Judges, and Belson, Senior Judge.

The opinion of the court was delivered by: Farrell

On Intervenor's Motion For An Award of Attorney's Fees

FARRELL, Associate Judge: Section 902 of the Rental Housing Act of 1985 (the Act) provides that, except in eviction cases, courts may "award reasonable attorney's fees to the prevailing party in any action under [the Act]." *fn1 D.C. Code § 45-2592 (1990). This motion requires us to determine the proper standard under the Act for awarding attorney's fees to a prevailing housing provider. *fn2

I.

In September 1987, intervenor Columbia Plaza Limited J Partnership, a "housing provider" under the Act, *fn3 filed several capital improvement petitions before the Rent Administrator pursuant to § 210 (i), D.C. Code § 45-2520 (i). *fn4 A small group of tenants of the property contested these petitions. Initially, the Rent Administrator dismissed the petitions on procedural grounds. On appeal to the Commission, that decision was reversed and the petitions were remanded for consideration on the merits. After a full hearing, the Rent Administrator again dismissed the petitions. The housing provider appealed and the Commission reversed the dismissal, ordering rent ceiling adjustments. The tenants sought judicial review by this court of the Commission's decision. See § 219, D.C. Code § 45-2529. Although the tenants raised eight claims of error before this court, we "affirm the Commission's order in all respects" and addressed only a few points raised by the tenants that "merit Discussion." Tenants of 500 23rd St., N.W. v. District of Columbia Rental Hous. Comm'n, 585 A.2d 1330, 1331 (D.C. 1991). The housing provider, the "prevailing party" in this action, *fn5 now moves under § 902, D.C. Code § 45-2592, for an award of attorney's fees for services rendered by counsel during the course of judicial review. *fn6

II.

On its face § 902, D.C. Code § 45-2592, is silent about the standards that should serve to guide the award of attorney's fees to prevailing parties in cases brought under the Act. To assist in interpreting this provision, we have turned to the underlying legislative purpose of the section. See Ungar v. District of Columbia Rental Hous. Comm'n, 535 A.2d 887, 892 (D.C. 1987). On the one hand, § 902 was designed to deter "frivolous cases" litigated under the Act. The author of the provision, Councilmember Clarke, "put [the counsel fee provision] in because . . . sometimes frivolous cases are brought and sometimes attorneys' fees are justified on both sides of the issue." *fn7 Remarks of Councilmember Clarke, Transcript of District of Columbia Council Proceedings at 104 (Nov. 14, 1980). On the other hand, we have recognized that § 902 was intended to encourage compliance with the Act by facilitating remedial litigation by tenants. In Ungar, supra, "we infer from the statutory scheme that . . . the purposes of the attorney's fee provision are to encourage tenants to enforce their own rights, in effect acting as private attorneys general, and to encourage attorneys to accept cases brought under the ." 535 A.2d at 892. See also Hampton Courts Tenants' Ass'n, 573 A.2d at 12, 13 (noting Ungar's "adopt[ion of] the 'private attorney general' analysis stated by the Supreme Court in explication of the [Civil Rights Act of 1964]").

Consistent with the goal of encouraging litigation by tenants acting as "private attorneys general," we interpret § 902 as entitling prevailing tenants to a presumptive award of attorney's fees. See Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 (1968) (construing 1964 Civil Rights Act). Indeed, we have already held that under § 902 prevailing tenants, regardless of their position in the litigation, should generally be awarded attorney's fees though these "may be withheld, in the court's discretion, if the equities indicate otherwise." Ungar, 535 A.2d at 892; see also Tenants of 2301 E St., N.W. v. District of Columbia Rental Hous. Comm'n, 580 A.2d 622, 626 (D.C. 1990); Hampton Courts Tenants' Ass'n, supra; Alexander, 542 A.2d at 360-61. *fn8

Intervenor argues that a housing provider is entitled to the same presumptive award of attorney's fees as are prevailing tenants. It reasons that when a housing provider files a meritorious capital improvements petition seeking a rent adjustment under § 210 (i), D.C. Code § 45-2520 (i), it furthers the purposes of the Act in general and specifically of § 210, and so is properly cast in the role of "private attorney general." This argument, however, while emphasizing the goals of other sections of the Act, does not focus adequately on the specific goals of the attorney's fee provision, which we conclude must be our guide. See, e.g., Newman v. Piggie Park Enterprises, Inc., 390 U.S. at 402 (analyzing Congress' purpose in enacting counsel fee provision of Title II of Civil Rights Act of 1964 to determine criteria for awards to prevailing plaintiffs); Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 417-22 (1978) (analyzing legislative history of counsel fee provision of Title VII of Civil Rights Act of 1964 to determine criteria for awards to prevailing defendants). while the Act does grant rights for housing providers and authorizes capital improvement petitions, nothing in the text of § 902 or its legislative history indicates that the legislature sought to encourage or facilitate housing provider enforcement actions by attorney's fee awards in favor of housing providers, or to create an incentive for attorneys to accept housing provider cases by means of fee awards against unsuccessful tenants. See Ungar, 535 A.2d at 892; Hampton Courts Tenants' Ass'n, 573 A.2d at 12. Since housing provider litigation fails to serve these goals of the attorney's fee provision of the Act, we hold that prevailing housing providers do not enjoy a presumptive entitlement to attorney's fee awards.

That, however, does not end the analysis. Presumptions aside, our reading of § 902 makes clear to us, as it was to the Supreme Court in interpreting identical statutory language enacted under similar circumstances, that the legislature intended something else besides facilitating remedial litigation by tenants under the Act. As the remarks of Councilmember Clarke, (supra) , indicate, the legislature also wanted to protect housing providers "from burdensome litigation having no legal or factual basis." Christiansburg Garment Co., 434 U.S. at 420. To accommodate these sometimes competing goals, we conclude that attorney's fees may be assessed in favor of a prevailing housing provider when the litigation of tenants is "frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith." Christiansburg, 434 U.S. at 421; see Hamer v. County of Lake, 819 F.2d 1362, 1366-67 (7th Cir. 1987), cert. denied, 110 S. Ct. 146 (1989). This interpretation of the statute has been adopted by the Rental Housing Commission for attorney's fee awards to prevailing housing providers in several categories of litigation at the administrative level. See Hagner Management Corp. v. Rutherford, TP 12,117 (RHC Sept. 8, 1986) (prevailing housing provider in tenant petition case); Columbia Plaza Ltd. Partnership v. Tenants of 500 23rd St., N.W., CI 20,266 - 20,268 (RHC May 30, 1991) (prevailing housing provider in capital improvement case); Tenants of 1255 New Hampshire Ave., N.W. v. Hamilton House Ltd. Partnership, HP 20,388 (RHC May 30, 1991) (prevailing housing provider in hardship petition case). That reading of the statute by the agency charged with its enforcement confirms our judgment of the appropriateness of this standard.

The housing provider argues for a looser reading of § 902 which would allow an award of fees to a prevailing housing provider in the "sound discretion" of the court, "taking into account the relevant facts of the particular case." A purely discretionary standard, it urges, would better permit a prevailing housing provider to recover attorney's fees expended in resisting irrelevant and erroneous arguments pressed by tenants over years of litigation. *fn9 Though this proposed standard appears on the surface to be a "straightforward" and "even-handed" interpretation of § 902, we do not think it is consistent with the statutory purpose of facilitating tenant litigation under the Act but at the same time deterring "frivolous cases" on "both sides of the issue." Remarks of Councilmember Clarke, (supra) ; see Christiansburg Garment Co., 434 U.S. at 418-19. As did the Supreme Court, we think the Christiansburg standard best accommodates the "inherent tension" between these goals. Hamer, 819 F.2d at 1366.

The housing provider further argues that the Christiansburg standard, developed under the federal civil rights laws, is inapposite to the fee award provision of the Rental Housing Act because the underlying policies of the former -- combatting discrimination -- are not those of the Rental Housing Act, which carefully balances the rights of landlords and tenants. See Tenants of 2301 E St., N.W., 580 A.2d at 628 n.11. To accept this argument, however, would be to ignore the remarkable similarities of language and intent between the attorney's fee provisions of the two laws, and the fact that this court has heretofore looked to the former in interpreting our fee award provision. Hampton Courts Tenants' Ass'n, 573 A.2d at 12. Furthermore, many courts have applied the Christiansburg standard to other federal and state fee-shifting statutes. *fn10

We emphasize that this standard is not a reformulation of the traditional "bad faith" exception to the American Rule. See, e.g., Dalo v. Kivitz, 596 A.2d 35, 39-40 (D.C. 1991); Goffe v. Pickard, 588 A.2d 265, 271 (D.C. 1991) (defendant liable for attorney's fees under "bad faith" exception to American Rule when "conduct 'was vexatious and designed to avoid responsibility to the plaintiffs in bad faith'"). Under § 902, a finding of "subjective bad faith" is unnecessary to an award of attorney's fees in favor of a housing provider, provided the tenants' litigation was "frivolous, unreasonable, or without foundation." Christiansburg, 434 U.S. at 421. The statutory standard, therefore, is less stringent than our common-law "bad faith" exception to the American Rule.

III.

Applying these principles, we must consider whether an award in favor of the prevailing housing provider is justified in this case. Under the Christiansburg test, a prevailing housing provider may be awarded attorney's fees when the tenants' position was "frivolous, unreasonable, or groundless" or the tenants "continued to litigate after it clearly became so." 434 U.S. at 422. It follows from the latter branch that, while a claim may have had merit before the Commission, it is not necessarily meritorious before this court because the tenant "continued to litigate after it clearly became" unreasonable or groundless. See Harris v. Group Health Ass'n, 213 U.S. App. D.C. 313, 317-18, 662 F.2d 869, 873-74 (1981).

As explained at the outset, petitioners raised eight claims of error before this court, and we found it necessary to address approximately half of them, though we treated one other briefly in a final footnote. Thus it is not possible for us to say that petitioners' appeal taken as a whole was frivolous, unreasonable, or groundless. On the other hand, there is no denying that petitioners' insistence on renewing virtually every claim raised before (and rejected by) the Commission put the housing provider to the necessity of briefing, and preparing to argue orally, at least several issues we think prudent counsel ought not to have pursued in this court. Thus we face an issue that has troubled other courts in related fee award contexts, namely, whether to divide a litigant's claims into reasonable (though unsuccessful) and unreasonable ones. As a general rule, it appears "that reviewing courts are hesitant to impose a requirement on the lower courts and litigants which would lead to the need to distinguish between frivolous and non-frivolous claims in every case." Hamer, 819 F.2d at 1369. *fn11 An exception easy to apply, perhaps because affecting so few cases, is that a litigant will not "ward off" fees "by the happenstance of including one colorable (though losing) claim amidst an ocean of frivolous ones." Id. (quoting Hill v. Norfolk & Western Ry., 814 F.2d 1192, 1200 (7th Cir. 1987)). Adopting the Christiansburg standard, however, does not compel us to reject a housing provider's request for fees only if the vast preponderance of the tenants' arguments were unreasonable (an "ocean of frivolous" ones compared to one or two colorable ones). That standard may be appropriate in awarding fees at the agency level (an issue we do not decide), but as Christiansburg makes clear, continuing to litigate a claim after its lack of merit should have been apparent may provide the basis for a fee award. This court routinely expects litigants to engage in some winnowing of issues at the appellate level. Cf. Jones v. Barnes, 463 U.S. 745 (1983). Therefore, we hold that a prevailing housing provider's request for attorney's fees may be premised on individual claims or issues raised by tenants that were frivolous, unreasonable, or groundless. This holding, we caution, rests on an interpretation of § 902 of the Act which expressly provides for a shift in attorney's fees; we do not decide whether a similar differentiation among issues would be appropriate in applying, for example, D.C. App. R. 38 (1990) (costs and damages for frivolous appeal); see Tupling v. Britton, 411 A.2d 349 (D.C. 1980).

Upon examining the entire record, we have concluded that Issues III, IV, and V, as set forth in petitioners's brief challenging the Commission's order, are groundless under the standard adopted. First, the Commission quite properly rejecrted petitioners' argument concerning improper allocation of the cost of improvements as "offered no explanation as to what this means and no argumentation" (Issue III). Second, the Commission's refusal to dismiss the petitions for failure of the engineer (an independent contractor) to produce a file pursuant to subpoena to the housing provider was entirely warranted in view of petitioners' failure to object on this ground at the hearing (Issue IV). Third, the Commission was not required to deny the petitions because of asserted defects in notice to a few tenants not shown to be contesting the petitions (Issue V). As to each of these issues, petitioners could not reasonably expect to obtain reversal of the Commission's order.

In light of the supplemental motion for attorney's fees and supporting documentation filed by the housing provider, it shall be awarded attorney's fees in the amount of $1100.

So ordered.


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