993 F.

2d 1480
143 L.R.R.M. (BNA) 2412, 125 Lab.Cas. P 10,700

Stephen T. AGUINAGA; Wayne Pappan; Janet Brown,

individually and in behalf of all Union Members
similarly situated, Plaintiffs-Appellees,
v.
UNITED FOOD AND COMMERCIAL WORKERS
INTERNATIONAL UNION,
Defendant-Appellant,
and
United Food and Commercial Workers, Defendant.
No. 92-3211.

United States Court of Appeals,

Tenth Circuit.
May 19, 1993.

Robert C. Brown, of Smith, Shay, Farmer & Wetta, Wichita, KS (Ken M.

Peterson, Robert W. Coykendall of Morris, Laing, Evans, Brock &
Kennedy, Chartered, Patricia M. Dengler of Smith, Shay, Farmer &
Wetta, Wichita, KS, with him on the brief), for plaintiffs-appellees.
Laurence Gold, AFL-CIO Legal Dept., Washington, DC (Harry Huge of
Shea & Gould, Steven K. Hoffman, Annette M. Capretta of Donovan
Leisure, Rogovin, & Schiller, Richard Roesel, United Food &
Commercial Workers International Union, Washington, DC, with him on
the brief), for defendant-appellant.
Before TACHA, McWILLIAMS, and BALDOCK, Circuit Judges.
BALDOCK, Circuit Judge.

This appeal arises from a hybrid breach of contract/unfair representation class

action brought by 641 union members ("Plaintiffs") against their employer,
John Morrell & Company ("Morrell"), the United Food and Commercial

Workers International Union ("the Union"), and the Local Union 340, United
Food and Commercial Workers ("the Local"), under 301 of the Labor
Management Relations Act ("LMRA"), 29 U.S.C. 185. Plaintiffs alleged that
Morrell breached several provisions of the 1979 collective bargaining
agreement and that the Union and the Local breached their duty of fair
representation in their handling of Morrell's breaches. Morrell settled with
Plaintiffs prior to trial and the Local was dismissed during the course of trial.
After the jury returned a verdict in favor of Plaintiffs and against the Union on
Plaintiffs' claim for breach of duty of fair representation, the court awarded
Plaintiffs over four million dollars in damages.1 The court also awarded
Plaintiffs attorney fees in the amount of $2,221,480.92. The Union appeals the
award of attorney fees, and Plaintiffs move to dismiss the appeal for lack of
jurisdiction.
2

Plaintiffs claim that we lack jurisdiction over this appeal because the Union's
notice of appeal was untimely. Plaintiffs assert that an April 24, 1992 district
court order which awarded attorney fees and expenses, but did not determine
the amount of the award, was a final appealable order. Therefore, according to
Plaintiffs, the Union's appeal, which was not filed within thirty days of that
order, was untimely.

In Phelps v. Washburn University, 807 F.2d 153 (10th Cir.1986), we adopted a

bright line rule that an award of attorney fees is final for purposes of appeal
only after it is reduced to a sum certain. Id. at 154. Here, the amount of the
attorney fees award was undetermined until the court's entry of judgment on
May 7, 1992. Consequently, the award of attorney fees was not final until May
7, 1992, and the Union's notice of appeal, filed on June 5, 1992, was timely.
See Fed.R.App.P. 4(a)(1) (notice of appeal to be filed within thirty days of
entry of judgment). Accordingly, we have jurisdiction pursuant to 28 U.S.C.
1291.

We review the district court's award of attorney fees for an abuse of discretion.
Homeward Bound, Inc. v. Hissom Memorial Center, 963 F.2d 1352, 1355 (10th
Cir.1992). However, the court's "legal analysis which provides the basis for the
fee award is reviewable de novo." Id.

Under the American Rule, absent a statute or enforceable contract, a prevailing

litigant is ordinarily not entitled to collect reasonable attorney fees from the
loser. Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95
S.Ct. 1612, 1616, 44 L.Ed.2d 141 (1975). However, federal courts, "in the
exercise of their equitable powers, may award attorneys' fees when the interests
of justice so require." Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 1946, 36

L.Ed.2d 702 (1973). Accordingly, courts have recognized a small number of

equitable exceptions to the American Rule--i.e., the bad faith exception, the
common fund exception, the willful disobedience of a court order exception,
and the common benefit exception. Alyeska, 421 U.S. at 257-59, 95 S.Ct. at
1621-22. At the same time, the Court has rejected the private attorney general
rationale of fee shifting. Id. at 245-46, 95 S.Ct. at 1615 (private attorney
general rationale would award attorney fees to prevailing citizen who has
vindicated important statutory rights of all citizens). Here, the district court
awarded attorney fees under the common benefit exception to the American
Rule.
6

The common benefit exception applies in cases 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, 93 S.Ct. at 1946 (quoting Mills v. Electric AutoLite Co., 396 U.S. 375, 393-94, 90 S.Ct. 616, 626, 24 L.Ed.2d 593 (1970)).
Under the common benefit exception, the court may assess attorney fees
against the group that ultimately benefits from the plaintiff's litigation by virtue
of its jurisdiction over the parties. See Mills, 396 U.S. at 394-95, 90 S.Ct. at
626-27 (court's jurisdiction over corporation made it possible for court to assess
fees against all shareholders).

We have learned that the common benefit exception originates from the
common fund exception to the American Rule. Hall, 412 U.S. at 5 n. 7, 93 S.Ct.
at 1946 n. 7. Under the common fund exception, the successful plaintiff is
awarded attorney fees because his suit creates "a common fund, the economic
benefit of which is shared by all members of the class." Id. Fee shifting is
justified under the common fund and common benefit exceptions because "[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." Mills, 396 U.S. at 392, 90 S.Ct. at 625.

Thus, in Mills, the Supreme Court approved an award of attorney fees to

successful shareholder plaintiffs in a suit brought to set aside a corporate
merger accomplished through the use of a misleading proxy statement. The
Court reasoned that by bringing suit to set aside the merger and thereby enforce
the statutory policy against dissemination of misleading proxy statements, the
plaintiffs "rendered a substantial service to the corporation and its
shareholders." Id. at 396, 90 S.Ct. at 627. Under these circumstances, assessing
fees against the corporation simply shifted the costs of litigation to all of the
shareholders of the corporation--i.e., "the class that has benefited from them

and that would have had to pay them had it brought the suit." Id. at 397, 90
S.Ct. at 628.
9

Likewise, in Hall, the Supreme Court awarded attorney fees to the prevailing
plaintiff under the common benefit exception. 412 U.S. at 8-9, 93 S.Ct. at 194748. In Hall, the plaintiff brought suit against his union under 102 of the
Labor-Management Reporting and Disclosure Act ("LMRDA"). The plaintiff
had been expelled from his union for violating a union rule by introducing
resolutions that criticized various actions of union officials. Id. at 2-4, 93 S.Ct.
at 1944-45. After concluding that the union rule could not be used to discipline
the plaintiff because he had spoken with reference to a proposal submitted at a
union meeting, the Second Circuit eventually upheld the district court's
permanent injunction restoring plaintiff's union membership and the court's
award of attorney fees. Id. The Supreme Court affirmed the award of attorney
fees, finding that Congress had not circumscribed fee shifting under the
LMRDA, and that the common benefit exception justified the shifting of fees to
the entire union membership under the facts of the case. The Court held that the
common benefit exception applied because, "by vindicating his own right of
free speech guaranteed by 101(a)(2) of Title 1 of the LMRDA, [the plaintiff]
necessarily rendered a substantial service to his union as an institution and to all
of its members." Id. at 8, 93 S.Ct. at 1948.

10

In the instant case, the district court assessed attorney fees against the Union
under the common benefit exception, thereby spreading Plaintiffs' litigation
costs to the entire Union membership. The court did so finding that the jury's
verdict vindicated the right of all Union members to be fairly represented by
the Union. According to the court, as a result of Plaintiffs' suit:

11 members of the Union should be able to expect that in the future, the Union
[t]he
will treat all members more fairly.... In the future, all Union members can expect
that the Union will investigate and pursue remedies against employers who attempt
to circumvent the terms of the collective bargaining agreement or who attempt to
illegally and fraudulently displace union members' jobs with nonunion workers.
12

Appellant App. at 6. The district court therefore awarded attorney fees and
costs to Plaintiffs under the common benefit exception to the American Rule.

13

The Union argues that the district court's legal analysis of the common benefit
exception was erroneous.2 Specifically, the Union claims that the court erred by
failing to recognize that the common benefit exception requires that: (1) the
group to which the cost is shifted receive a benefit in common with the
prevailing plaintiff, and (2) the assessment of fees is in proportion to benefits

received.3
14

The common benefit exception, by definition, requires that the benefit received
by the prevailing plaintiff and the benefit received by the group to which fees
are shifted be "common" to both. In Mills, the Supreme Court, in first defining
the common benefit exception, stated that fee shifting was appropriate, "where
a plaintiff has successfully maintained a suit, usually on behalf of a class, that
benefits a group of others in the same manner as himself." 396 U.S. at 392, 90
S.Ct. at 625 (emphasis added). We interpret this language to require that the
prevailing plaintiff and the group share a mutual benefit, or, at least, have some
benefit in common as a result of the plaintiff's suit. See Shimman v.
International Union of Eng'rs, Local 18, 744 F.2d 1226, 1234-35 (6th Cir.1984)
(en banc), cert. denied, 469 U.S. 1215, 105 S.Ct. 1191, 84 L.Ed.2d 337 (1985).
We are further persuaded that benefit commonality is required under the
common benefit exception because it is required under the common fund
exception, see 6 James W. Moore et al., Moore's Federal Practice p 54.78 n. 4
(2d ed.1993), and the common benefit exception originates from, and is based
on, the same rationale as the common fund exception.

15

The benefits received by Plaintiffs and the entire Union membership are not
common; rather they are separate and distinct. Plaintiffs, by virtue of their
action against the Union, received money damages including back pay, lost
benefits, and prejudgment interest. The Union membership received, according
to the district court, reassurance that in the future, the Union would treat
members more fairly, and investigate and pursue remedies against employers
who breach collective bargaining agreements. The Union membership cannot
share in Plaintiffs' money judgment. Further, because Plaintiffs are not, by
operation of the judgment, automatically entitled to Union membership, they
may not benefit from any effect their suit may have on the Union's future
behavior.4

16

This is unlike the situation in Hall, where the entire union membership and the
plaintiff shared a common benefit from the plaintiff's suit against the union.
412 U.S. 1, 93 S.Ct. 1943. In Hall, the plaintiff sought and won reinstatement
in the union. Id. at 3, 93 S.Ct. at 1945. The judgment for the plaintiff resulted in
a mutual benefit because both the plaintiff and the rest of the union membership
benefitted from whatever positive effect the suit had on the union's future
behavior towards members. By contrast, in the present case the Union
membership did not benefit from the money judgment and Plaintiffs have not
shown that they necessarily benefited from whatever positive effect the
judgment may have on the Union's future treatment of its members.

17

Moreover, in the case before us, shifting fees to the Union does not result in the
costs of litigation being borne by the group that "would have had to pay them
had it brought suit." Mills, 396 U.S. at 397, 90 S.Ct. at 628. Under the facts of
this case, no Union member, outside Plaintiff class, could have brought suit to
redress Plaintiffs' injuries. For these reasons, we hold that the record before us
fails to establish that the benefits received by Plaintiffs and the rest of the
Union membership meet the commonality requirement of the common benefit
exception.

18

The Union also asserts that the common benefit exception requires the
assessment of attorney fees in proportion to the benefits received. We agree.

19

In Mills, the Supreme Court held the common benefit exception was
appropriate "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 [those benefiting]." 396 U.S. at 393-94, 90 S.Ct. at 626 (emphasis
added). The Sixth Circuit has interpreted this language to mean that fees must
be distributed in proportion to the benefits received. Shimman, 744 F.2d at
1235; accord Guidry v. International Union of Operating Eng'rs, Local 406, 882
F.2d 929, 944 (5th Cir.1989) (vacating award of attorney fees because award
"would not spread the costs of litigation proportionate to the common benefit"),
vacated on other grounds, 494 U.S. 1022, 110 S.Ct. 1465, 108 L.Ed.2d 603
(1990); Erkins v. Bryan, 785 F.2d 1538, 1548 (11th Cir.) ("fees must spread the
cost proportionally among those who benefit"), cert. denied, 479 U.S. 960, 107
S.Ct. 455, 93 L.Ed.2d 402 (1986). Although we have not previously addressed
the issue of proportionality between fees and benefits, in Jordan v. Heckler, 744
F.2d 1397 (10th Cir.1984), we explained that Mills requires the spreading of
costs among class members "in a reasonable and fair manner." Id. at 1400.
Requiring the assessment of fees in proportion to the benefit received satisfies
this "reasonable and fair" standard.

20

Moreover, Alyeska teaches us that the common benefit and common fund
exceptions are justified because fees are required to be shifted "with some
exactitude to those benefiting." 421 U.S. at 265 n. 39, 95 S.Ct. at 1626 n. 39.
The Alyeska Court refused to extend the rationale of the common fund and
common benefit exceptions to private attorney general cases, because to do so
would require "sophisticated economic analysis" in order to proportionately
assess fees according to benefits received. Id. This concern on the part of the
Alyeska Court demonstrates that indeed proportionality between fees and
benefits received is required under the common fund and common benefit
exceptions. Further, in Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745,

62 L.Ed.2d 676 (1980), the Supreme Court explained that the common fund
exception met Alyeska's exactitude requirement because, "a fee awarded
against the entire judgment fund will shift the costs of litigation to each
absentee in the exact proportion that the value of this claim bears to the total
recovery." Id. at 479, 100 S.Ct. at 750 (emphasis added). Likewise here, we
hold that in order for the common benefit exception to meet Alyeska 's
requirement of fee shifting with exactitude, the plaintiff and the benefiting
group members must bear fees in proportion to benefits received.
21

The assessment of attorney fees against the entire Union membership here does
not spread the costs of litigation in proportion to the benefits received. Like the
plaintiffs in Shimman and Guidry, Plaintiffs received significant money
damages, while the Union members received only the incidental benefit of
potentially improved future treatment by the Union. Under the district court's
shifting of fees to the Union, Plaintiffs would not be required to pay any greater
portion of the attorney fees even though Plaintiffs received a substantially
greater benefit. See Guidry, 882 F.2d at 944; Shimman, 744 F.2d at 1235. Such
a result would allow Plaintiffs to be unjustly enriched at the expense of the
Union membership; therefore, the court's award of attorney fees under the
common benefit exception cannot stand.

22

Finally, we believe our interpretation of the common benefit exception is in

keeping with the general policy of Alyeska that, in the absence of a statute or
enforceable contract, attorney fees should be awarded sparingly. 421 U.S. at
264, 95 S.Ct. at 1625. As in Shimman, there was no injunctive relief obtained
in this case to effect any changes in the Union's practices or procedures.
Instead, the benefit that the district court found inured to the union members
was not "by direct operation of the judgment, but rather w[as] the result of a
realization that the union would have to reform itself or risk exposure to further
liability." Shimman, 744 F.2d at 1235 n. 13. We agree with the Shimman court
that, although "[s]ociety as a whole always benefits through general deterrence
when the law is enforced," id., allowing fee shifting based on such incidental
benefits resembles the private attorney general rationale which was rejected by
Alyeska.

23

REVERSED and REMANDED.

The issue of the Union's liability, and issues relating to the damages award
were the subject of a separate appeal. See Aguinaga v. United Food and
Commercial Workers Int'l Union, 993 F.2d 1463 (10th Cir.1993)

Although attorney fees are available, if sought, as compensatory damages in

301 cases under the LMRA, no statute authorizes fee shifting in 301 cases.
Ames v. Westinghouse Elec. Corp., 864 F.2d 289, 293 (3d Cir.1988).
Nevertheless, the circuit courts that have addressed the issue have held that the
common benefit exception is available, in the appropriate case, to a successful
plaintiff who brings an action under 301. See e.g., Kinney v. International
Bhd. of Elec. Workers, 939 F.2d 690 (9th Cir.1991); Emmanuel v. Omaha
Carpenters Dist. Council, 560 F.2d 382 (8th Cir.1977). Although neither party
has addressed whether the common benefit exception is available in actions
brought under 301 of the LMRA, we assume, for the purposes of this appeal,
that it is

The Union also argues that the court erred by not applying the common fund
exception. We decline to entertain this argument because, as the district court
correctly pointed out, Plaintiffs based their attorney fee application solely on
the common benefit exception

Plaintiffs, in settling with their employer, waived their rights to job

reinstatement. The record is unclear, however, as to whether or not all members
of Plaintiff class are currently members of the Union. As a result, it could be
argued that commonality of benefits is satisfied if all members of Plaintiff class
remain Union members. Nevertheless, we need not engage in speculation to
address this argument because we hold that the award of attorney fees also fails
due to lack of proportionality of benefits received. See infra