Venegas v. Mitchell

Syllabus In connection with petitioner Venegas' civil rights suit under 42 U.S.C. § 1983, he and respondent Mitchell, an attorney, entered into a contingent-fee contract providing that, inter alia, Mitchell would receive a percentage of any gross recovery, which would be offset by any court-awarded attorney's fees, and would be allowed to intervene in the action to protect the fee award. Venegas obtained a judgment and was awarded attorney's fees, $75,000 of which was attributable to work done by Mitchell. The fees were awarded under § 1988, which enables civil rights plaintiffs to employ reasonably competent lawyers without cost to themselves by authorizing the payment of a "reasonable attorney's fee" by a losing party to a prevailing party. After Venegas obtained different counsel to handle his appeal, Mitchell filed a motion for leave to intervene, requesting that the District Court confirm a lien on the judgment for $406,000 in fees that were purportedly due him under the contract. Among other things, the court held that he was not entitled to intervene, but it refused to disallow or reduce the contingent fee, holding that it was reasonable and not a windfall to Mitchell. The Court of Appeals reversed the District Court's holding denying intervention, but agreed that § 1988 does not prevent a lawyer from collecting a reasonable contingent fee even if it exceeds the statutory fee award and that Mitchell's fee was reasonable and not a windfall.

Held: 1. Section 1988 does not invalidate contingent-fee contracts that would require a prevailing plaintiff to pay his attorney more than the statutory award against the defendant. Neither the section's language nor its legislative history supports the view that it prevents an attorney and client from entering into a contingent-fee agreement. Moreover, this Court, in holding that it is the prevailing party, rather than the lawyer, who is eligible for fees, has recognized that it is the party's right to waive, settle, or negotiate that eligibility, Evans v. Jeff D., 475 U.S. 717, 730, 106 S.Ct. 1531, 1538, 89 L.Ed.2d 747 and has implicitly accepted that statutory fee awards can coexist with private fee arrangements, cf., Blanchard v. Bergeron, 489 U.S. 87, 94-95, 109 S.Ct. 939, 944-945, 103 L.Ed.2d 67; Blum v. Stenson, 465 U.S. 886, 894-895, 104 S.Ct. 1541, 1546-1547, 79 L.Ed.2d 891. Since a § 1983 cause of action also belongs to, and can be waived by, the injured party, a contrary finding would place these plaintiffs in the peculiar position of having more freedom to negotiate a waiver of their causes of action with their adversaries than a fee with their own attorneys. The fact that Blanchard v. Bergeron, supra, does not permit a contingent-fee agreement to impose a ceiling on the amount of the statutory fee award does not mean that such an agreement should also be ignored for the benefit of the client so that he need pay only the statutory award. Blanchard dealt with what the losing party must pay the plaintiff, not with the contractual obligations of plaintiffs and their attorneys, and entitlement to a § 1988 award does not belong to the attorney. Also unpersuasive is Venegas' argument that requiring him to pay more than the reasonable fee authorized by Congress would greatly reduce his recovery and would impose a cost on him that the defendant should pay, since the amount payable under a fee agreement is not necessarily measured by the "reasonable attorney's fee" that a defendant must pay under § 1988, and since depriving prevailing plaintiffs of the option of promising to pay more to secure their counsel of choice would not further § 1988's general purpose of enabling them to secure competent counsel. Pp. 86-90. 2. Venegas offers no reason to accept his contention, rejected by the lower courts, that, even if contingent fees exceeding statutory awards are not prohibited per se by § 1988, the fee in this case is unreasonable under both federal and state law. P. 90. 867 F.2d 527 (CA9 1989), affirmed. WHITE, J., delivered the opinion for a unanimous Court. Richard M. Mosk, Los Angeles, Cal., for petitioner. Charles A. Miller, for respondent. Justice WHITE delivered the opinion of the Court.