Panola Land Buying Ass'n v. Clark

EATON, Senior District Judge: This appeal was filed by Richard J. Eb-binghouse, former attorney for the Panola Land Buying Association, a mutual self-help non-profit housing corporation, (Pano-la),1 from the district court’s denial of Eb-binghouse’s Rule 24(a)(2), Fed.R.Civ.P. motion to intervene as a party in the case. Accompanying the motion to intervene was Ebbinghouse’s “Petition For Attorney’s Fees,” which we construe to be the pleading (complaint) required by Rule 24(c), Fed. R.Civ.P. In it Ebbinghouse alleges that he is entitled to recover fees under the Equal Access to Justice Act, 28 U.S.C. § 2412, (EAJA),2 and under the State of Alabama’s attorney’s lien statute. On May 27, 1982, Ebbinghouse, while employed as a staff attorney with the Legal Services Corporation of Alabama, Inc. (Legal Services) instituted the underlying action for Panola, and represented Panola in the case until June 5, 1986. In the interim, Ebbinghouse, in June of 1984, opened his own office for the practice of law.3 After opening his office, he successfully represented Panola on an appeal from an adverse summary judgment. Trial of the underlying case was set for June 9, 1986. Settlement negotiations ensued. According to Ebbinghouse, on May 23, 1986, “all issues of the settlement that was signed by the parties and filed by the parties were successfully negotiated, except the attorney’s fee issue.” (Brief for Appellant at 11.) Ebbinghouse participated in those negotiations. The document to which Ebbinghouse refers is entitled “Settlement Agreement.” It contains a provision entitled, “Attorney’s Fees and Costs,” which reads: “Each side agrees to bear its own costs and attorney fees with the exception that plaintiff shall retain the costs of appeal paid by the defendants in the amount of $462.20.” Ebbinghouse refused to sign the “settlement agreement” on his client’s behalf since, according to Ebbinghouse, “to do so would constitute a waiver of attorney’s fees.” (Brief for Appellant at 12.) He “refused to sign any agreement wherein he would waive his attorney’s fees.” (Brief for Appellant at 3.) In the meantime, Ebbing-house, feeling that “the district court must supervise fee waivers,” (Brief for Appellant at 19.) sought “mediation of the Court,” (Brief for Appellant at 3.) in refer — 1508 — ence to the settlement negotiations. Eb-binghouse wished to establish before the district court that the defendants had no reasonable defense on the merits of the case and that the defendants were engaged in the common and continuous practice of coercing fee waivers as a condition to settlement “as a part of a vindictive effort to teach counsel he had better not bring such cases.” The district judge did not mediate,4 recognizing that if parties to a case can agree to terms, they are free to settle the litigation and the court need not and should not get involved, Gardiner v. A.H. Robins Co., 747 F.2d 1180, 1189, (8th Cir.1984), United States v. City of Miami, 614 F.2d 1322, 1330 (5th Cir.1980) modified on rehearing, 664 F.2d 435 (1981). On May 27, 1986, the parties notified the district judge that they had reached a settlement. On June 5, 1986, Panola sent Ebbinghouse a letter5 by which Panola painfully “dismissed” Ebbinghouse as Pa-nola's counsel. On June 26, 1986, a staff attorney for Legal Services, referred to by Ebbinghouse as his “co-counsel in the case,” signed the “settlement agreement” on behalf of Panola. A copy of that document was received by the district judge’s office and filed with the Clerk of the court on July 7, 1986. On July 28, 1986, Ebbing-house filed his motion to intervene which was denied on September 11, 1986. “SETTLEMENT AGREEMENT” Before discussing the rejected complaint, it must be pointed out that the document consistently referred to by the parties and Ebbinghouse as a “settlement agreement,” and treated by them on this appeal as a settlement agreement, is not a settlement agreement at all. The underlying case is still pending. The document is quite obviously a conditional agreement6 imposing conditions to settlement upon Panola and the defendants. Nevertheless, it contains a waiver of attorney’s fees — and a complete release of liability in favor of the defendants in an ongoing case. In effect, Panola and the defendants effectively continued the scheduled trial indefinitely, Panola hoping that all of the conditions in the “settlement agreement” would be fulfilled and that the case would settle satisfactorily in the future. Ebbinghouse’s proposed complaint asserted that “whatever bearing paragraph 13 of the ‘settlement agreement’ may have upon the parties, it is not binding upon petitioner and does not constitute a waiver of petitioner’s fees;” (¶ # 16 of the complaint), and that Ebbinghouse is entitled to claim fees in his own behalf under both 28 U.S.C. §§ 2412(d)(1)(A) and 2412(b). Further, the proposed complaint alleged that the defendants were engaged in a common and continuous practice of requiring fee waivers as a condition of settlement as part of a vindictive effort “to teach counsel he had better not bring such cases.”7 “PETITION FOR ATTORNEY’S FEES” UNDER EAJA The district judge denied Ebbinghouse intervention to seek attorney’s fees under — 1509 — the EAJA on the “party-specific standing issue rather than on the “issue-specific” ripeness issue, related “subheadings” of the justiciability requirement. In view of the conditional nature of the “settlement agreement” the district judge might have approached the justiciability question the motion to intervene presented by considering whether Ebbinghouse’s complaint was more than “an ingenious academic exercise in the conceivable.” United States v. SCRAP, 412 U.S. 669, 688, 93 S.Ct. 2405, 2416, 37 L.Ed.2d 254, 270 (1973). However, the district judge disposed of the motion to intervene to claim attorney’s fees under the EAJA by utilizing the prudential8 doctrine that a complainant must assert his own legal rights and interest and cannot rest his claim to relief on the legal rights or interests of third parties. Because of the nature of Ebbinghouse’s claim under the EAJA, we, too, need not venture too far into the labyrinth of “standing.” Rule 24(a)(2), Fed.R.Civ.P., permits intervention “when the applicant claims an interest relating to the property or to the transaction which is the subject of the action and he is so situated that the disposition of the action may, as a practical matter, impair or impede his ability to protect that interest.” (Emphasis supplied.) The interest relating to the transaction required for intervention is “a direct, substantial, legally protectable interest in the proceedings.”9 (Emphasis supplied.) Diaz v. Southern Drilling Corp., 427 F.2d 1118, 1124 (5th Cir.1970), Hobson v. Hansen, 44 F.R.D. 18, 24 (D.D.C.1968); 7C Wright, Miller & Kane, Federal Practice and Procedure, § 1908, at 271 (1986). Although standing in no way depends on the merits of the contention of the applicant for intervention, it often turns on the nature and source of the claim asserted. Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Other than Ebbinghouse’s claim under Alabama’s attorney’s lien statute, the source of his claim is the EAJA.10 Examination of the language and purpose of that source and of the history of Federal fee-shifting statutes makes it clear that the EAJA does not afford Ebbinghouse party status to assert a legally protectable right. It is readily apparent that the party eligible to recover attorney’s fees under the EAJA as part of its litigation expenses is the prevailing party. The inquiry here, however, is whether under the EAJA Appellant as former counsel for Panola also — 1510 — has standing to claim attorney’s fees from the government. The primary purpose of the EAJA is to deter the government from bringing unfounded suits or engaging in unreasonable administrative behavior. That goal is in part achieved by rectifying “the disparity between the resources and expenditure of ... individuals and their government.” 5 U.S. Code Cong. & Admin. News 1980, pp. 4953, 4984. As the House Report states: Providing an award of fees to a prevailing party represents one way to improve citizen access to courts and administrative proceedings. When there is an opportunity to recover costs, a party does not have to choose between acquiescing to an unreasonable Government order or prevailing to his financial detriment. Thus, by allowing an award of reasonable fees and expenses against the Government when its action is not substantially justified, S. 265 provides individuals an effective legal or administrative remedy where none now exists. By allowing a decision to contest Government action to be based on the merits of the case rather than the cost of litigating, S. 265 helps assure that administrative decisions reflect informed deliberation. In so doing, fee-shifting becomes an instrument for curbing excessive regulation and the unreasonable exercise of Government authority. Id. at 4991. The statutory framework chosen by Congress to accomplish these goals consists of two parts. The first, (Section 2412(b)), which is not limited to small businesses or relatively impecunious private parties, authorizes the courts to award attorney fees and expenses of attorneys against the United States, “to the same extent that any other party would be liable under the common law or any statute.” This section waives sovereign immunity. It provides that the United States will be subject to the common law and statutory exception to the American rule regarding attorneys’ fees. The second, (Section 2412(d)(1)(A)), which applies only to relatively impecunious parties,11 is a cost provision which under the prescribed circumstances12 imposes cost obligations13 upon the government which are in addition to the costs provided for in (a). In employing the “prevailing party” language, Congress recognized that throughout our history litigation costs generally have been awarded to the prevailing party.14 Over the years attorneys for prevailing parties have not paid the costs of their clients’ litigation and they have not petitioned in their own rights for the costs of litigation. Since Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975), in the absence of a contractual agreement between the parties, applicable state law in appropriate cases, or one of the common law exceptions to the American rule, federal courts have not been empowered to award attorneys’ fees unless authority has been specifically conferred upon them by a federal statute. To date over 130 statutory grants of authority having to do with particular types of litigation have been enacted by Congress. Practically all of them confer the right to recover attorneys’ fees upon the parties themselves, rather than upon the attorneys.15 Berger, Court Awarded At — 1511 — torney’s Fees, 126 U.Pa.L.Rev. 304. It has not been unusual for those of us in the legal profession subjectively to consider that such fee provisions were enacted for the benefit of the Bar, but that is not the case. They were enacted for the benefit of the persons the statutes are designed to reach. They proceed from the assumption that the wealth of the party shall not determine the party’s capability to enforce the rights conferred by the statute. In addition to the straightforward “prevailing party” language in the EAJA, there are provisions within the statute which affirmatively rule out the attorney as a recognized applicant for fees and expenses. We shall discuss two of these provisions. (1). In the “fees and other expenses” definition, attorneys are treated in the same manner as expert witnesses, engineers, scientists, analysts, or other persons found by the court to be necessary for the preparation of the party’s case. Congress did not intend that all persons performing services to the prevailing party in the litigation be allowed to become parties in the case to assert their claims for compensation. Those persons look to the party that obtained their services — just as does the attorney for the party. The prevailing party may look to the opposing party for its costs. (2). Section (d)(1)(B) requires a prevailing party seeking an award of fees and other expenses under (d)(1)(A) to submit “an application for fees and other expenses which shows ... and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses are computed.” That provision clearly manifests Congress’ intent that the prevailing party’s lawyer is not considered to be an applicant under the EAJA. Had Congress provided attorneys a right to claim fees independent of the right of the prevailing party, the courts would have been obligated to entertain successive claims for fees when one lawyer for the prevailing party succeeds another in the litigation. Not only might more than one award have been required, but contests between successive lawyers for the same party could have developed over questions regarding which lawyer performed particular services for the prevailing party. Further, if clients and their lawyers had independent entitlements in the same action, conflicts of interest between attorney and client would develop. Historically, the client and the lawyer make their fee arrangement, and the lawyer looks to the client for payment of the legal fee.16 The lawyer represents and advises, but the client controls the litigation. In enacting the EAJA, Congress recognized and maintained the attorney-client relationship as it has existed throughout our history. The James Case In attempting to simplify the approaches taken by Ebbinghouse in his search for an attorney’s fee, we said at the outset that Ebbinghouse alleges that he is entitled to recover attorney’s fees under the EAJA and under Alabama’s attorney’s lien statute. However, in his discussion of this Court’s opinion in James v. Home Const. Co. of Mobile, 689 F.2d 1357 (11th Cir.1982), he attempts to combine those two approaches. Recognizing that in the settlement agreement in James attorney’s fee questions were expressly left open for the court to determine, Ebbinghouse argues that James is nevertheless determinative of this case. His reasoning is as follows: In James, leaving open the fees issue was in effect an assignment of the right to pursue fees. This court held that the attorney had standing to pursue the fees .... By statute, an attorney’s lien is an — 1512 — assignment to pursue the case.... The statute [Alabama Attorney’s Lien Statute] provides that the attorney stands in the shoes of the client and thus, standing by operation of law is conferred on the attorney. It is the attorney’s lien statute that ‘bestows’ standing on the attorney in the fee statute [EAJA] itself. Since EAJA is silent on who the question of standing, state law should govern resolutions of this issue.... Alabama law provides who may assert a client’s cause of action. Brief for Appellant at 45, 46. The district judge classified that approach as “an attempt to bootstrap standing under the EAJA.” We mention it only to demonstrate that the principle distinction between this case and the James case, upon which Appellant says he relied when he agreed to continue to represent Panola upon his entering private practice, is clear. For our discussion of James, we borrow Chief Judge Wald’s analysis of James in her excellent opinion in Freeman v. B & B Associates, 790 F.2d 145 (D.C.Cir.1986). In James, the Eleventh Circuit found that a successful attorney in a TILA case had standing to seek fees after the settlement of the borrower’s underlying claim. The settlement agreement, however, expressly left open the existence of the lawyer’s fees. The Eleventh Circuit found that under these circumstances section 1640(a)(3) created a ‘right of action’ for attorneys to seek fee awards, James involved an attorney’s standing to pursue his client’s claim for attorneys’ fees under TILA. James is silent on the question of an attorney’s right of action where the client has expressly waived any claim to attorneys' fees.... In fact, however, we read the rationale in James as applicable solely to the issue of the attorney’s standing to seek attorneys’ fees. See Moore v. National Association of Securities Dealers, Inc., 762 F.2d 1093, 1099 n. 10 (D.C.Cir.1985) (opinion of MacKinnon, J.) (attorney’s right to fees under Title VII is one of subrogation to his client’s.... This more limited reading of James accords with cases in which an attorney has been found in some circumstances to have standing to pursue his client’s claim for attorneys’ fees in civil rights cases. See, e.g., Lipscomb v. Wise, 643 F.2d 319 (5th Cir.1981) 17 790 at 148, 149. In Evans v. Jeff D., 475 U.S. 717, 106 S.Ct. 1531, 89 L.Ed.2d 747 (1986), the Supreme Court pointed out (not necessarily with approval), when comparing James with cases which hold that Congress bestowed on the prevailing party statutory eligibility for a discretionary award of attorney’s fees in specified civil rights actions, that this court in James was construing the Truth In Lending Act, 15 U.S.C.A. §§ 1601 et seq., (TILA), mandatory award of attorneys’ fees. 106 S.Ct. at 1539, n. 19, 89 L.Ed.2d at 760, n. 19. THE INDIGENT CLIENT AND THE EAJA To say the least, this is not your usual case. Before us is an appellant who asserts that his former client’s signing of a document containing a waiver of attorney’s fees does not affect his independent right to claim fees under the EAJA, yet who earnestly seeks to challenge the fee waiver provision. Had Ebbinghouse an independent right under the EAJA to claim attorney’s fees, a challenge to the waiver provision in the document signed by his former client and not by him would not be necessary. Further, Appellant stresses that the defendants required the fee waiver provision as a condition of settlement, yet he seeks to challenge that provision considering that a — 1513 — successful challenge could not cause the entire “settlement agreement” to be annulled. The attorney for Panola, the “ami-cus”, supports the Appellant’s position and writes that, “his clients [Panola], against his [Ebbinghouse’s] advice agreed to the defendants ultimatum of a waiver of fees.” (Brief of Amicus at 9.) Yet, Legal Services’ client, Panola, “has no interest in challenging the coerced waiver.” (Brief for Appellant at 25.) In addition to Appellant’s understandable interest in being fully paid for his services to Panola, this case appears to be a concerted effort by Legal Services and the Appellant (with the acquiescence of Panola, see letter, Appendix II), to establish that when the government negotiates settlements with indigent or poor parties it consistently insists upon a waiver of fees when it has no realistic defense on the merits, and to have this court rule that a waiver by indigent or poor clients of attorneys’ fees does not prevent attorneys from seeking fees under the EAJA. Legal Services and the Appellant foresee continuing recurrence of the fee waiver problem when Legal Services refers to private counsel cases which involve federal fee-shifting statutes. They are concerned that indigent plaintiffs will exploit the attorney fee provision of the EAJA to their own best advantage in settlement negotiations. Legal Services tells us: “Prior to Evans, 18 competent federal litigators in Alabama were refusing to accept civil rights cases because of the great professional and personal costs. Post Evans, the likelihood of recovering fees is further diminished; thus, black groups like plaintiff will often be unable to obtain counsel for important civil rights litigation.” (Brief of Amicus at 9.) The Appellant warns that “the ability of indigent persons to obtain counsel” is “at stake” in this case. The Supreme Court in Evans considered the problem raised by the Legal Services attorney and the Appellant. The Court, in discussing 42 U.S.C.A. § 1988, wrote: We are cognizant of the possibility that decisions by individual clients to bargain away fee awards may, in the aggregate and in the long run, diminish lawyers’ expectations of statutory fees in civil rights cases. If this occurred, the pool of lawyers willing to represent plaintiffs in such cases might shrink, constricting the ‘effective access to the judicial process’ for persons with civil rights grievances which the Fees Act was intended to provide. H.R.Rep. No. 94-1558, P. 1 (1976). That the ‘tyranny of small decisions’ may operate in this fashion is not to say that there is any reason or documentation to support such a concern at the present time. Comment on this issue is therefore premature at this juncture. We believe, however, that as a practical matter the likelihood of this circumstance arising is remote. See Moore v. National Assn. of Securities Dealers, Inc., 246 U.S.App.D.C., [114] at 133, n. 1, 762 F.2d, [1093] at 1112, n. 1 (Wald, J., concurring in judgment). Evans, 106 S.Ct. at 1545 n. 34, 89 L.Ed.2d at 766 n. 34. However, Mr. Justice Brennan in his dissenting opinion responded, “it does not require a sociological study to see that permitting fee waivers will make it more difficult for civil rights plaintiffs to obtain legal assistance. It requires only common sense.” Evans, 106 S.Ct. at 1552, 89 L.Ed.2d at 775. In context, it must be recognized that the EAJA is designed to make it expedient for individuals, small businesses and certain organizations to challenge unreasonable — 1514 — government action. The “$2,000,000 net worth” eligibility limitation upon individuals and the “$7,000,000 net worth and no more than 500 employees” eligibility limitations upon businesses are not stringent limitations, and attorney fee waivers by prevailing parties, of course, do not relieve those parties from their obligations to their lawyers. The problem Legal Services and the Appellant foresee is more likely to arise in injunctive actions brought by indigent parties and in the defense by indigent parties of actions brought against them by the government. Even then, as to the availability of counsel to represent the indigent in challenges to government actions, prevailing parties may recover attorneys’ fees and expenses only when the government is unable to show that its position was not substantially justified and when no special circumstances exist which would make an award unjust. Thus, awards of attorneys’ fees are not routinely made under the EAJA. Nevertheless, the expressed concern is not an illusionary one. Congress has been diligent to provide fee-shifting in its remedial statutes and it has been attentive to the people’s right to challenge unreasonable government action. The EAJA initially was an experimental statute. It has been re-enacted and amended. It is for Congress to consider any revision to the EAJA or to otherwise address what the Legal Services attorney and the Appellant see as a serious problem. This court can no more formulate a solution, which it is implored to do in this case, than it can appropriate the funds necessary to effectuate a solution. ATTORNEY’S LIEN CLAIM We turn now to Ebbinghouse’s motion to intervene to assert an attorney’s lien under Alabama law. Federal courts sitting in a state enforce that state’s statute creating attorneys’ liens.19 Central Railroad & Bkg. Co. v. Pettus, 113 U.S. 117, 5 S.Ct. 387, 28 L.Ed. 915 (1885), Hoxsey v. Hoffpauir, 180 F.2d 84 (5th Cir.1950), Webster v. Sweat, 65 F.2d 109 (5th Cir.1933), Brooks v. Mandel-Witte Co., 54 F.2d 992 (2d Cir.1932). Under the Alabama lien law,20 an attorney’s lien is enforceable only against monies acquired by the client as a result of the lawyer’s services rendered in the particular action or proceeding by which the money is produced. Johnson v. Riddle & Ellis, 204 Ala. 408, 85 So. 701 (1920). No monies upon which an attorney’s lien could be enforced are in the hands of either Pa-nola or the district court. As the issues now stand,21 there will be none. Thus, Ebbinghouse was properly denied intervention to enforce an attorney’s lien. Should monies (other than monies the use and distribution of which are controlled by federal law) come into Panola’s hands in the underlying case as a result of Ebbing-house’s services, he may then seek to intervene to enforce an attorney’s lien. Under such change of circumstances, the September 11, 1986, order denying Ebbinghouse’s motion to intervene would not, within itself, bar his future intervention to enforce an attorney’s lien. CONCLUSION Under the “anomalous rule” we have provisional jurisdiction to determine wheth — 1515 — er intervention was erroneously denied the Appellant. E.E.O.C. v. Eastern Airlines, Inc., 736 F.2d 635 (11th Cir.1984). Therefore, we have considered the entangled issues presented to the district court and to this court. Having done so, we find that the district court properly denied the Appellant’s motion to intervene. Thus, our provisional jurisdiction is exhausted. Accordingly, this appeal is dismissed for want of jurisdiction. APPENDIX I STATUTE 28 U.S.C. § 2^12. Costs and fees (a) ... (b) Unless expressly prohibited by statute, a court may award reasonable fees and expenses of attorneys, in addition to the costs which may be awarded pursuant to subsection (a), to the prevailing party in any civil action brought by or against the United States or any agency or any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. The United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award. (c)(1) Any judgment against the United States or any agency and any official of the United States acting in his or her official capacity for costs pursuant to subsection (a) ... shall be in addition to any relief provided in the judgment. (2) ... (d)(1)(A) Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. (B) A party seeking an award of fees and other expenses shall, ... submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses are computed. The party shall also allege that the position of the United States was not substantially justified. Whether or not the position of the United States was not substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based) which is made in the civil action for which fees and other expenses are sought. (C) ... (2) For the purposes of this subsection— (A) “fees and other expenses” includes the reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party’s ease, and reasonable attorney fees (B) “party” means (i) an individual whose net worth did not exceed $2,000,-000 at the time the civil action was filed, or (ii) any owner of an unincorporated business, or any partnership, corporation, association, unit of local government or organization, the net worth of which did not exceed $7,000,000 at the time the civil action was filed, and which had not more than 500 employees at the time the civil action was filed: except that an organization described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)(3)) exempt from taxation under section 501(a) of such Code, or a cooperative association as defined in section — 1516 — 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)), may be a party regardless of the net worth of such organization or cooperative association; ... APPENDIX II PANOLA LAND BUYING ASSOCIATION, INC. P.O. BOX 95 EPES, ALABAMA 35460 ASSOCIATED ORGANIZATIONS: PLBA DEVELOPMENT CORPORATION PLBA HOUSING COOPERATIVE, INC. PLBA COOPERATIVE STORE June 5, 1986 Attorney Richard J. Ebbinghouse 504 Brown Marx Tower 2000 First Avenue North Birmingham, Alabama 35203 Dear Rick: This letter is written in response to information we received from Abigail Turner. She explained to us that the FmHA attorney had given us three (3) alternatives before they would sign the settlement agreement with PLBA-HDC on the additional housing for Wendy Hills: that you would withdraw as counsel; that you would voluntarily sign the agreement; or that we would dismiss you as counsel. Based on your statements to the court in the request for pre-trial conference and your statements to Abigail, we understand that you have declined to choose either of the first two options. Regrettably, we feel we must choose the third option of dismissing you as our attorney on this case. This is a painful option for us, and we hope you will understand the reasons we believe we are forced to choose this course of action due to the ultimatum we have received from the government. It is our judgment that we must accept the government’s settlement offer because there are monies to fund housing at this time, and those monies are unlikely to be available beyond this fiscal year. As you know we have weighed settlement carefully and feel that obtaining housing for poor and black people in west Alabama is our most important goal. We understand the conflict of interest you have written about to us. We are most grateful for your high ethical values and professionalism in being honest about the dilemma and conflict you face. We seriously doubt that we and groups like us will be able to obtain competent and experienced counsel as these fee waiver demands become the government’s standard operating procedure. You have been our lawyer through this whole ordeal, beginning with the administrative hearings, the first district court ruling, the successful appeal and trial preparations. We thank you for your fine representation and we resent the government telling us who can represent us. We appreciate the fine result that has come from your legal efforts on our behalf. When Abigail met with our board last week and explained the terms of the settlement, they expressed unhappiness with this choice they had to make. Again thanks for your persistence and high quality work on our behalf. We count you as one of our greatest friends. Cooperatively yours, /s/ Frank C. Cook Frank L. Cook President /s/ John Zippert John Zippert Secretary FLC/JZ:fr APPENDIX III In the United States District Court for the Northern District of Alabama Panola Land Buying Association Housing Development Corp., Plaintiffs, v. Vance Clark, Administrator, Farmers Home Administration, et al., Defendants. Civil Action No. CV-83-G-1216W SETTLEMENT AGREEMENT WHEREAS, the parties to this lawsuit desire to resolve this matter ... without — 1517 — the time and expense of further litigation, ... therefore, prior to the taking of testimony and the trial of this action, and without this agreement or any action taken pursuant hereto constituting evidence or admission by either party as to any issue of law or fact raised by this lawsuit, it is hereby AGREED as follows: I. PARTIES II. SECTION 515 RURAL COOPERATIVE HOUSING OR RURAL RENTAL HOUSING 3. Defendants agree that the sites identified in Exhibit A attached hereto are acceptable locations for Section 515 Rural Cooperative Housing (“RCH”) or Rural Rental Housing (“RRH”) projects as far as proximity to essential community services is concerned. If because of the results of the market surveys or other problems, these sites are not approved, plaintiff may substitute other sites if FmHA determines that they meet applicable FmHA site regulations. 4. If plaintiff satisfies applicable requirements for the Section 515 program, defendants agree to fund Section 515 projects at one or more of those sites not to exceed a total of sixty units; provided, however, that such loans must be obligated on or before September 15, 1986. In addition, defendants agree to provide FmHA rental assistance for thirty of such units for a term of five years, provided that the relevant loan or loans are obligated on or before September 15, 1986. Defendants agree that procedures followed in renewing rental assistance units for other borrowers similarly situated will be followed with respect to plaintiff. 5. The parties agree that the preapplication(s) or application(s) may be submitted for Section 515 RRH and/or Section 515 RCH loans, provided, however, that plaintiff must elect to proceed under one program or the other not later than August 15, 1986. 6. Both parties agree to utilize their best efforts to process any applications by plaintiff for the funding discussed above in an expeditious manner. Plaintiff agrees to submit any preapplication(s) for such loans not later than June 9, 1986. Defendants agree to notify plaintiff not later than fifteen calendar days following receipt of such a preapplication(s) of any deficiencies. Plaintiff agrees to submit any application^) for the funding at issue not later than August 1, 1986. Defendants agree to notify plaintiff of any deficiencies in such application(s) not later than fifteen calendar days following receipt of plaintiff’s written specification of the type of loan it seeks — rural rental housing or rural cooperative housing — as described in paragraph five (5) of this agreement. 7. ... III. LIMITATION ON CHALLENGES TO FmHA ACTIONS 8. Plaintiff agrees, for a period of three years following execution of this agreement, not to submit any preapplication or application to FmHA for any Section 515 multi-family housing at the existing Panola site, and further agrees during the same three-year period not to initiate any new legal action before this or any other court or tribunal concerning the availability of FmHA loans for such Section 515 multifamily housing at the existing Panola Site. IV. RELEASE OF LIABILITY 9. This agreement constitutes a complete release from and bar to causes of action, claims or rights, against Charles Shuman, Vance Clark and Dale Richey, the FmHA, Department of Agriculture, and any of its present, past or future employees in their official or individual capacities, arising from the actions complained of in this lawsuit. — 1518 — Y. DISMISSAL OF THIS ACTION 10. On or before the day the applicable loans are closed or on or before the day of the final inspection after construction, whichever is later, plaintiff agrees to dismiss this action with prejudice. 11. Should plaintiff fail to fulfill its obligations under this agreement, defendants will advise plaintiff by written notice of the specific nature of the failure to fulfill its obligations. If plaintiff fails to comply with its obligations within seven (7) calendar days of receipt of the written notice, plaintiff agrees to dismiss this action with prejudice within fifteen (15) calendar days thereafter. 12. The parties agree that this settlement agreement will be filed in this Court, signed as received by Judge Guin, and will be a part of the pleadings in this case. However, the filing of this document with the Court and the acknowledgment of its receipt by Judge Guin is not intended to imply any approval or ratification by the Court, or to change its status as a settlement agreement between the parties in any fashion. The sole remedy for any failure by defendants to comply with the terms of this agreement shall be the refusal by plaintiff to dismiss this action. VI. ATTORNEY’S FEES AND COSTS 13. Each side agrees to bear its own costs and attorney fees with the exception that plaintiff shall retain the costs of appeal paid by the defendants in the amount of $462.20. [Signed by representatives of the parties.] (Emphasis supplied.) Footnotes [1] The underlying case was filed through Legal Services Corporation of Alabama, Inc. Panola was allowed to proceed in forma pauperis. [2] See APPENDIX I. EAJA. [3] Ebbinghouse executed a written contract with Legal Services which provided that Legal Services would pay him a "retainer to cover only a portion of his time expended at less than one-half his hourly rate and his out of pocket expenses;” that he was to reimburse Legal Services from "any fee awarded" in the underlying case. (Brief for Appellant at 8, 9.) He has no fee agreement with Panola. [4] None of the special circumstances which require the Court to approve a settlement were present in this case. [5] See APPENDIX II. Letter. [6] See APPENDIX III. “Settlement Agreement”. [7] Appellant presents as his first issue on appeal the following question: “When an attorney is fired by his indigent client because he refuses to sign a settlement agreement that contains waiver of fees that is insisted upon by agencies of the United States, the Defendants, as a condition to any settlement, i.c., it is a coerced waiver of fees, and the client through another attorney executes the agreement, docs the attorney have standing to raise the Evans exceptions to waiver of attorneys fees?" Along with his motion to intervene, the Appellant filed a paper styled "motion for Evans hearing.” “Evans" refers to Evans v. Jeff D., 475 U.S. 717, 106 S.Ct. 1531, 89 L.Ed.2d 747 (1986), a class action. "Evans hearing” refers to the hearing conducted in that case by the trial judge under Fed.R.Civ.P. Rule 23(e). “Evans exceptions” is the Appellant's term for an argument advanced in the Supreme Court by the class representative (respondent) that 42 U.S.C.A. § 1988 precluded petitioners (the governor and other public officials of the State of Idaho) from adopting a consistent policy of insisting upon an attorney fee waiver as a condition of settlement in civil rights litigation and for a suggestion made by the Solicitor General, one of the amici in the case, that a fee waiver included in a class action settlement need not be approved by the district judge when the defendants had "no real — 1509 — istic defense on the merits,” or if the waiver was part of a "vindictive effort.... to teach counsel that they had better not bring such cases." In view of the evidentiary record, the Supreme Court found it unnecessary to evaluate either the argument or the suggestion. [8] The standing doctrine embraces several judicially self-imposed limits on the exercise of federal jurisdiction, such as the general prohibition against a litigant’s raising another person’s legal rights. Allen v. Wright, 468 U.S. 737, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). [9] Admittedly, there is no precise definition for the interest a would be intervenor must claim in order to qualify under Rule 24(a). However, Judge Skelly Wright’s definition in Hobson, adopted by the Fifth Circuit in Diaz, is sufficient for the purpose of this case. The intervention sought here involves a fundamental prudential consideration of the standing doctrine. It does not involve the more complex "standing” considerations required- in cases such as Allen v. Wright, 468 U.S. 737, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984) and cases cited there, which bring into play the constitutional scheme of Separation of Powers. [10] Ebbinghouse also sought to intervene in order to raise the "common fund,” the "common benefit," and the "bad faith” exceptions to the American rule regarding payment of attorneys' fees. The district judge did not address those claims. Consequently, they are not before this court. However, we do recognize the reasonableness of the district judge’s not having considered them. Suffice it to say, the circumstances underlying this matter do not resemble the circumstances which bring into play the "common fund” equitable doctrine or its extension, the "common benefit” equitable doctrine. As to the "bad faith” doctrine, Ebbinghouse asserts that the defendants' conduct gave him "an independent claim for attorney’s fees under the EAJA,” in that the defendants’ conduct constituted "intentional interference” with the long standing attorney-client relationship that had existed between him and Panola. It appears that Appellant misconceives the substance and purpose of Section 2412(b) of the EAJA. That section does not alter in any way the doctrines that make up the traditional exceptions to the American rule. [11] The limitations placed upon eligibility are set out in the definitions of "Party." § 2412(d)(2)(B). [12] § 2412(d)(1)(A) provides for an award of fees and other expenses to a private party who prevails in any civil action (other than cases sounding in tort) against the government unless the "position of the U.S. was substantially justified or special circumstances make an award unjust.” [13] "'Fees and other expenses’ includes the reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party’s case, and reasonable attorney fees ...” § 2412(d)(2)(A). [14] One hundred thirty four years ago the "fee bill" of 1853, 10 Stat. 161 (now 28 U.S.C. § 1923) made attorneys’ fees recoverable as taxable costs in certain situations. [15] There are few exceptions. See, e.g., Longshoremen’s and Harbor Workers' Compensation Act Amendments of 1972 § 13, 33 U.S.C.A. § 928(a), (in an administrative proceeding ne — 1511 — cessitated by employer’s controversion of employee’s workmen’s compensation claim, reasonable attorneys’ fees taxed against unsuccessful employer and paid directly to the attorney). [16] By 1796 there had evolved a general rule known as the American rule denying the routine recovery of attorneys’ fees from the opposing party. Arcambel v. Wiseman, 1796, U.S., 3 U.S. (Dall.) 306, 1 L.Ed. 613. The American rule was a deliberate departure from the English practice. Conte v. Flota Mercante Del Estado, 277 F.2d 664 (2d Cir.1960). [17] Having observed that James involves an attorney's standing to pursue his client’s claim for attorney’s fees under TILA and that James is silent on the question of an attorney’s right of action where the client has expressly waived any claim of attorney’s fees, the D.C. Circuit in Freeman disagreed with James "to the extent that language in James suggests a more general right of action under TILA by attorneys for their fees.” James is not in point in this case, and we do not repudiate James, implicitly or otherwise. [18] In Evans, the Supreme Court slated in dictum that by enacting 42 U.S.C.A. § 1988, the Civil Rights Attorneys’ Fees Award Act, "Congress neither bestowed fee awards upon attorneys nor rendered them non-waivable or nonnegotiable.” 106 S.Ct. at 1533, 89 L.Iid.2d at 760. Upon the facts in the case, Evans, a class action, holds that in consideration of the extent ol equitable relief provided in a settlement in the case and the absence of countervailing factors, the district court did not abuse its discretion in upholding a fee waiver and refusing to award fees following a consent decree signed by the parties. [19] Of course, state attorney’s lien statutes may be applied in the federal courts so long as the state's procedure for enforcement of the attorney's lien and the state’s statute establishing the priority of any such lien do not do violence to federal procedural statutes and rules and to the priorities of encumbrances as established by federal statutes. [20] 18 Code of Alabama § 34-3-61 (1975) (a) Attorneys-at-law shall have a lien on _ (b) "Upon actions and judgments for money, they shall have a lien superior to all liens but tax liens, and no person shall be at liberty to satisfy said action or judgment, until the lien or claim of the attorney for his fees is fully satisfied; and attorneys-at-law shall have the same right and power over action or judgment to enforce their liens as their clients had or may have for the amount due thereon to them.” [21] Because the underlying case has not settled and in view of the relationship between the attorney fee waiver and the release of liability provisions of the "settlement agreement,” it is not inconceivable that Panola yet will be in position to seek attorney fees and other expenses under the EAJA.