December 22, 1992
TENANTS OF 500 23RD STREET, N.W., ET AL., PETITIONERS
DISTRICT OF COLUMBIA RENTAL HOUSING COMMISSION, RESPONDENT, COLUMBIA PLAZA LIMITED PARTNERSHIP, INTERVENOR
Original Opinion Of January 24, 1992,
Before: Rogers, Chief Judge; Ferren, Terry,* Steadman, Schwelb, Farrell, * Wagner, King, and Sullivan, Associate Judges; Belson, * Senior Judge.
The opinion of the court was delivered by: Per Curiam
On consideration of petitioners' petition for rehearing and rehearing en banc, the response and opposition thereto, intervenor's motion for leave to file reply to the response by the respondent, the lodged reply, and the opposition thereto, it is
ORDERED by the merits division* that the petition for rehearing is denied with the exception that the final paragraph of this court's opinion as previously issued on January 24, 1992, is deleted and replaced by the following two paragraphs:
Upon examining the entire record, we have concluded that Issues III, IV, and V, as set forth in petitioners' brief challenging the Commission's order, are groundless under the standard adopted. First, the Commission quite properly rejected 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.
It is FURTHER ORDERED that intervenor's motion for leave to file reply to response is granted and the Clerk is directed to file the lodged reply of intervenor to the response filed by the respondent; and it appearing that the majority of the Judges of this court has voted to deny the petition for rehearing en banc, it is
FURTHER ORDERED that the petition for rehearing en banc is denied.
Statement per Chief Judge ROGERS: I vote to grant the petition for rehearing en banc under Rule 40 (e). Judge Ferren's statement points out the significance of the issue. The District of Columbia's response to the petition for rehearing en banc also indicates the important theoretical and practical implications of adopting the divisions's analytical framework and suggests why a different analysis is preferrable.
Statement per Associate Judge FERREN: I vote to rehear this case en banc: This is a case of exceptional importance. D.C. App. R. 40 (e). A division of this court has awarded statutory attorney's fees to a landlord, not because the tenant's unsuccessful appeal as a whole is frivolous, but because three of eight contentions on appeal are frivolous. Under the circumstances, that is radical stuff! Rehearing en banc is required because the division, in so ruling, has misapplied the Supreme Court authority on which it relies and undermined the purposes of the attorney's fee provision in the District of Columbia Rental Housing Act of 1985. D.C. Code § 45-2592 (1990) (D.C. Law 6-10, § 902).
In this case, the housing provider filed with the Rental Housing Commission "capital improvement petitions for rent ceiling increases in three buildings that form part of a complex known as Columbia Plaza in Northwest Washington, D.C." Tenants of 500 23rd St., N.W. v. District of Columbia Rental Hous. Comm'n, 585 A.2d 1330, 1331 (D.C. 1991) (Tenants I) . A group of tenants -- the petitioners here -- contested these petitions. The tenants prevailed before the Rent Administrator. The Commission reversed and remanded. The tenants prevailed again. The Commission reversed again, ruling "as a matter of law that the housing provider had satisfied the immediate necessity requirement of [D.C. Code] § 45-2520 (g)." Id. The housing provider, as the ultimately prevailing party, asked the Commission to award attorney's fees under D.C. Code § 45-2592. The Commission declined to do so. Tenants of 500 23rd St., N.W. v. District of Columbia Rental Hous. Comm'n, No. 89-AA-1429 (D.C. Jan. 24, 1992) (Tenants II), slip op. at 3 n.6. The tenants then filed a petition for review by this court, presenting eight of the eleven contentions it had argued before the Commission. This court addressed four of them in a substantial published opinion and affirmed. See Tenants I. The housing provider sought attorney's fees in this court under § 45-2592 for successfully defending the appeal. In Tenants II, this court found the four contentions it had not addressed in Tenants I "groundless" and allowed the housing provider to submit a revised request for attorney's fees attributable to defending those four contentions. Id., slip op. at 11. On petition for rehearing, the court revised its thinking, found only three of the tenant's original eight contentions groundless, and ordered the tenants to pay the housing provider $1,100 for attorney's fees.
The division purports to honor our previous decisions which make clear 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 Rental Housing Act of 1985." Ungar v. District of Columbia Rental Housing Comm'n, 535 A.2d 887, 892 (D.C. 1987). Tenants II, slip op. at 4. The division also purports to adopt and apply Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978), as announcing the standard best suited for discerning when a prevailing housing provider (landlord) is entitled to defensive attorney's fees from a losing tenant, i.e., when the tenant's litigation under the Act has been "frivolous, unreasonable, or groundless" or the tenant "continued to litigate after it clearly became so." Christiansburg, 434 U.S. at 422, 98 S.Ct. 694, 54 L.Ed.2d 648. In my judgment, however, the result here, by distorting and misapplying Christiansburg, will undermine Ungar-encouraged exercise of tenants' rights.
The division concedes "it is not possible for us to say that [the tenants'] appeal taken as a whole was frivolous, unreasonable, or groundless." Tenants II, slip op. at 9-10. Moreover, the division notes that the Rental Housing Commission itself, having authority to award attorney's fees to a housing provider when warranted, declined to do so in this case, apparently finding none of the tenants' contentions frivolous. (Recall that the Rent Administrator had twice ruled in the tenants' favor.) Id., slip op. at 3 n.6. The division also acknowledges the "general rule" that, in considering statutory fee-shifting, reviewing courts should be "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." Id., slip op. at 10 (quoting Hamer v. County of Lake, 819 F.2d 1362, 1369 (7th Cir. 1987), cert. denied, 493 U.S. 849, (1989)). See Hill v. Norfolk and Western Ry. Co., 814 F.2d 1192, 1200 (7th Cir. 1987); Quiros v. Hernandez Colon, 800 F.2d 1, 2 (1st Cir. 1986); Miller Brewing Co. v. Brewery Workers Local Union No. 9, AFL-CIO 739 F.2d 1159, 1168 (7th Cir. 1984), cert. denied, 469 U.S. 1160. *fn1 Finally, the division cited the standard exception to the general rule against evaluating frivolousness claim by claim: "a litigant will not 'ward off' fees 'by the happenstance of including one colorable (though losing) claim amidst an ocean of frivolous ones.'" Tenants II, slip op. at 10 (quoting Hamer, 819 F.2d at 1369 (quoting Hill, 814 F.2d at 1200)). *fn2
In the end, however, concluding that three of the tenants' eight contentions were groundless, the division awarded the housing provider $1,100 in attorneys' fees -- without adequately explaining why it abandoned the general rule and its limited exception, and without explaining at all how that figure was derived (appellate court fact finding?) or even documenting whether the tenants had a realistic opportunity to contest that particular calculation.
The division, therefore, has rejected the general rule against parsing litigation piece-by-piece for purposes of deciding whether to award a prevailing landlord defensive attorneys' fees on appeal. Instead, the division has established a new standard: a tenant should pay the landlord's attorney's fees if the tenant continues "to litigate a claim after its lack of merit should have been apparent" once the Commission had ruled. Tenants II, slip op. at 11. This new standard apparently is derived from Christiansburg's warning that defensive fees may be awarded if the losing party has "continued to litigate" after the action "clearly became" groundless. 434 U.S. at 422. But in light of Hamer and other cases, the "continue to litigate" criterion, as I see it, generally applies to each claim taken as a whole, not to each contention raised in support of each claim. The division, in translating Christiansburg for use in evaluating frivolousness on appeal, ignores Hamer's caution against the latter approach.
In order to understand Christiansburg, it is important, first, to underscore why, under a statute encouraging tenants to litigate their rights as private attorneys general, a court ordinarily should not award attorney's fees against a tenant, in favor of a prevailing landlord, unless the tenant's cause is altogether frivolous.
In Hamer, the court cautioned against using Christiansburg to chill zealous advocacy of civil rights:
The Christiansburg test is intended to strike a balance between the need to eliminate the possible "chilling effect" on civil rights plaintiffs, who may decide not to pursue a meritorious suit for fear of suffering a fee award, and the goal of deterring plaintiffs from filing frivolous claims . . . . Under the circumstances, the Supreme Court's instructions with respect to this issue bear repeating:
It is important that a district court resist the understandable temptation to engage in post hoc reasoning by concluding that, because a plaintiff did not ultimately prevail, his action must have been unreasonable or without foundation. This kind of hindsight logic could discourage all but the most airtight claims, for seldom can a prospective plaintiff be sure of ultimate success.
Christiansburg, 434 U.S. at 421-22, 98 S.Ct. at 700. For the benefit of the district courts, we would only add that their effort to control the amount of frivolous litigation must not lose sight of the dictates of Congress which call for an aggressive and creative attack by civil rights plaintiffs, the "private attorney generals," to vigorously pursue enforcement of our civil rights laws. Id. at 416, 98 S.Ct. at 697. It is often through vigorous advocacy that changes and developments in the law occur and new precedent is created. Innovative, even persistent advocacy in the face of great adversity must not be unreasonably penalized with hindsight.
819 F.2d at 1366-67 (emphasis added). *fn3 We have recognized that the Council of the District of Columbia intended that tenants have the same incentive to assert their rights under the Rental Housing Acts, through potential attorney's fee awards, as claimants have under federal civil rights statutes. See Hampton Courts Tenants' Ass'n v. District of Columbia Rental Hous. Comm'n, 573 A.2d 10, 12, 13 (D.C. 1990); Ungar, 535 A.2d at 892. *fn4
The question, then, is how to apply the "more stringent standards," Hamer, 819 F.2d at 1366, under Christiansburg to determine whether a prevailing defendant landlord is entitled to attorney's fees from the plaintiff tenant because the "claim was frivolous, unreasonable, or groundless, or . . . the plaintiff continued to litigate after it clearly became so." Christiansburg 434 U.S. at 422.
It is important to note that, in Christiansburg, the Supreme Court referred to a frivolous "claim." That term has a defined meaning in attorney's fee litigation. In announcing how a prevailing plaintiff's statutory attorney's fee award should be computed under federal civil rights statutes, the Court has distinguished between "claims" (or defenses), on the one hand, and "contentions" or "grounds" or "issues", on the other. See Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S.Ct 1933 (1983). This is a distinction of determinative importance which the division in Tenants II has completely overlooked.
If, for example, a plaintiff, in one lawsuit, alleges three claims or counts and prevails on one, then the plaintiff is entitled to statutory attorney's fees for only one claim or count because, presumably, the time spent in developing and arguing the other two was unrelated to -- and thus altogether separate from -- the first, prevailing claim. In contrast, if a plaintiff brings a single claim, supported by seven contentions, and prevails on the claim because of one of the contentions and none of the others, the plaintiff shall be entitled to a reasonable fee for the lawsuit (claim) taken as a whole, rather than to only one-seventh of that amount. The result as such -- prevailing on the entire claim -- dictates the fee rather than the fortuity of how many (or few) contentions the court accepts (or reaches). See Hensley, 461 U.S. at 434-435. As the Court explained:
In some cases a plaintiff may present in one lawsuit distinctly different claims for relief that are based on different facts and legal theories. In such a suit, even where the claims are brought against the same defendants -- often an institution and its officers, as in this case -- counsel's work on one claim will be unrelated to his [or her] work on another claim. . . . The congressional intent to limit awards to prevailing parties requires that these unrelated claims be treated as if they had been raised in separate lawsuits, and therefore no fee may be awarded for services on the unsuccessful claim.
Id. (citations and footnotes omitted) (emphasis added). The Court added in a footnote: "We agree with the District Court's rejection of 'a mathematical approach comparing the total number of issues in the case with those actually prevailed upon.' Such a ratio provides little aid in determining what is a reasonable fee in light of all the relevant factors." Id. at 435 n.11 (citation omitted) (emphasis added). In short, attorney's fees are generally awardable to a prevailing plaintiff on a per "claim" basis, unless several claims are so interrelated that they are better evaluated for purposes of attorney time as one large claim. The litigation is not sorted more finely into "issues" or "contentions" or "grounds" for fee-award purposes.
The Court also recognized in Hensley, in discussing a plaintiff's failure to prevail on one among several "unrelated claims," that the defendant may be entitled to attorney's fees: "If the unsuccessful claim is frivolous, the defendant may receive attorney's fees incurred in responding to it." Id. at 435 n.10. Note again that the Court was referring to a frivolous "claim" taken as a whole. The court did not also say that an attorney's fee for a prevailing defense against a frivolous claim should be discounted if the court found (1) frivolous, some of the contentions in support of the defense or (2) non-frivolous, some of the contentions in support of the frivolous claim. What is important for evaluating whether to award a fee is the claim -- frivolous or nonfrivolous? -- not the number of frivolous or non-frivolous contentions offered to support it.
This analysis of fees awardable for a prevailing claim or defense suggests what the result should be in Tenants II. The distinction between a "claim" or "defense," on the one hand, and a "contention" or "ground" or "issue," on the other, is crucial here. In this case, the housing provider filed capital improvement petitions (each comprising a claim); the tenants intervened before the Commission and filed an opposition to each (the defense), with eleven contentions against each claim. Ultimately, the housing provider prevailed, although the Commission awarded no attorney's fees against the tenants. On appeal to this court, the tenants renewed their "defense" in the form of a "petition for review" (or appellate claim). This did not prevail, but, on balance -- as the division concedes -- the appellate claim, taken as a whole, was not frivolous. Just as awardable attorney's fees for a prevailing defense against a friviolous appellate claim (taken as a whole) should not be discounted for frivolous defense contentions or for non-frivolous appellant's contentions, I do not believe attorney's fees should be awarded for a prevailing defense against a non-frivolous appellate claim (taken as a whole) simply because of a few frivolous contentions in support of that overall non-frivolous claim. The test for awarding fees, as indicated earlier, is whether an appellate claim itself is frivolous in its entirety or, at best, includes a "'colorable (though losing) claim amidst an ocean of frivolous ones.'" Hamer, 819 F.2d at 1369 (quoting Hill, 814 F.2d at 1200 (attorney's fees awarded to appellee under Fed. R. App. P. 38 because appeal "was a complete loser, and most of the grounds for appeal were patently groundless")); see Granado v. Commissioner of Internal Revenue, 792 F.2d 91, 94 (7th Cir. 1986) (attorney's fees awarded to government under Fed. R. App. P. 38 when there was only one non-frivolous argument and 22 of 24 pages of opening brief were devoted to frivolous arguments on appeal of assessment of civil fraud penalties).
It is interesting to note that, in the cases stating the general rule that bases an award of attorney's fees on whether the claim or appeal is frivolous overall, not piece-by-piece, the courts have not paid attention to the Hensley distinction between a "claim" and a "contention." In Hamer, Hill, Quiros, and Miller Brewery for example, the courts warned against distinguishing "between frivolous and non-frivolous claim in every case." Hamer, 819 F.2d at 1369 (emphasis added). Clearly, however, footnote 10 in Hensley authorizes attorney's fee awards for prevailing defendants on a per frivolous "claim" basis (unless the claims are interrelated and should be evaluated as one). 461 U.S. at 435 n.10. Christiansburg's language is similar. 434 U.S. at 422. In any event, Hensley and Christiansburg imply that the fee award for a prevailing defense generally should be based on no less than a frivolous claim as a whole. An award should not be ordered merely for frivolous "contentions" or "issues" or "grounds" argued under a losing, though not overall frivolous, claim. *fn5
There may be instances, nonetheless, in which a frivolous appellate contention is so discrete and, though frivolous, consumes so much court and attorney time, that attorney's fees should be awarded for the appellate defense of that contention as such, among the many. See District No. 8, International Ass'n of Machinists and Aerospace Workers, AFL-CIO v. Clearing, A Div. of U.S. Indus., 807 F.2d 618, 622-623 (7th Cir. 1986) (appeal of contract formation issue frivolous because it would require appellate reversal of district court's credibility findings). Such a situation would be similar to one in which a plaintiff files in the same complaint a frivolous claim among several that are not. See Hensley, 461 U.S. at 434-435.
There is no indication in Tenants II that we have a case here, such as District No. 8, that would permit contention-specific, rather than claim specific, attorney's fees under certain circumstances. *fn6 But even if this were such a case, the en banc court should provide an analysis that carefully makes clear why a contention-specific fee award is appropriate, rather than simply accepting the rule implied without analysis by the division: that each frivolous contention on appeal, -- even though the appellate claim overall is not frivolous -- presents a case for some awardable attorney's fees to a prevailing housing provider under the Rental Housing Act of 1985, contrary to virtually all judicial authority.
According to one commentator, there are four justifications for requiring one party in a dispute to pay the legal expenses of another: "to make a prevailing party whole, to encourage certain types of litigation, to punish certain types of parties, and to provide financial assistance to the prevailing party or his [or her] attorneys." Marshall J. Breger, Compensation Formulas for Court Awarded Attorney Fees, 47 LAW & CONTEMP. PROBS. 249, 250 (1984). The division has acknowledged the "encouragement" justification under the Rental Housing Act of 1985 but has announced a rule, in reality, that favors the "punitive" approach, punishing tenants who have contested the landlord's capital improvement petitions with an appellate claim the division concedes is not, taken as a whole, frivolous.
In summary, there are several reasons why this case of first impression should receive en banc review:
1. This is the first court, as far as I can tell, to apply Christiansburg automatically, contention-by-contention, rather than claim-by-claim, despite substantial, compelling authority -- including Supreme Court authority in Hensley -- to the contrary. If we are going to take a new path, ill-advised as I believe it would be, the full court should take responsibility for doing so.
2. The decision is likely to have a devastating impact on tenant-landlord litigation -- an impact the Council of the District of Columbia did not intend. Many tenants are poor. The threat of having to pay some of the landlords' attorneys' fees -- if the tenants' counsel guess wrong about how many contentions to raise -- will deter their bringing actions against their landlords, contrary to the "private attorney general" policy of D.C. Code § 45-2592. Indeed, in this very case, the tenant-petitioners dropped on appeal three of the contentions they had raised before the Commission; their counsel did the "winnowing of issues at the appellate level," Tenants II slip op. at 11, the division has asked for. But tenants and their counsel are now subject to a radical revision of general fee-shifting principles constructed by only three (out of nine active and seven senior) Judges who have ruled, with the benefit of hindsight, that the appeal was not finely enough tuned. *fn7
3. The Commission could be influenced by the division's opinion to adopt as its own policy the contention-by-contention approach under the rule announced by the division. Then the Commission could order a tenant to pay the landlord's attorney's fees -- at the Commission level -- simply because the tenant made too many arguments in the first instance. In this way, the possibility for aggressive, creative lawyering on behalf of tenants' rights under a complex statute could be seriously threatened.
4. The division premises its warning that tenants and counsel should not continue to litigate frivolous contentions on an assumption that airing an argument before the Commission itself will necessarily reveal when the argument is frivolous. This is dangerous thinking. The number of times this court reverses an administrative agency ruling -- even when according proper deference to agency expertise -- should remind us all that this court, not the agency, has the last word. For this reason alone, this court should be very reluctant to say a tenant should not have approached the court with a contention concerning statutory rights that only the Commission, not this court, has addressed.
5. The decision will have an obvious, major impact on the interpretation of other attorneys' fees statutes in the District of Columbia.
6. If contentions are frivolous, this court can -- and does -- deal with them summarily. Little time is wasted. If the court is conscientious, probably more time for appellate review will be spent evaluating "groundlessness" for attorney's fee purposes than on the substantive contention itself. Furthermore, because the same contentions presumably will have been raised before the Commission, the housing provider's counsel will have to spend little extra effort and expense punching a word processor button to print out a previously-written argument for use in the appellate brief. On balance, therefore, it appears to me that the division's opinion necessitating that future parties litigate the issue of "groundlessness," contention-by-contention, will be more costly to everyone concerned than our existing practice of dealing summarily with the merits of each allegedly groundless argument itself.
fter almost fifteen years on this court, I can recount instance after instance where one of my colleagues or I have been intrigued and concerned about issues other colleagues have deemed frivolous. That is why at least three (and sometimes nine or more) Judges sit on appeals; we often see cases differently. I have also experienced conscientious counsel suggesting a priority for issues at oral argument, only to find the court wishes to proceed first with what counsel believes to be a lesser issue. Sometimes counsel have it right. Especially as to complex statutes, counsel may have more experience than Judges and, having studied the area of law recently and carefully, are in a position to suggest important issues and implications that the courts should take more seriously. We should not be too quick to disparage a particular contention.
This is not to say litigation is never frivolous. sometimes it is. But if an appeal overall is not frivolous -- as the division says this one is not -- I believe it is presumptuous to nitpick that appeal in the way the division favors. The costs in time and energy will far outweigh the benefits to anyone. And the costs to tenants generally from the threat this case hangs over their heads will, I predict, be serious.
It is a shame that the full court has blinked at these realities and let the decision stand unexamined. This is the kind of case, with an enormous potential impact, that all nine active Judges are supposed to address under Rule 40(e).