The only case known to the plaintiff in which § 175 was urged as a basis for the award of attorneys' fees is United States v. Gila River Pima-Maricopa Indian Community, 391 F.2d 53 (9th Cir. 1968). This case was brought by the United States to condemn certain interests in Indian lands for military purposes. The District Court had awarded attorneys' fees to the defendant tribe relying on § 175. The Court of Appeals reversed, holding, "with regret," that 175 did not constitute a sufficient authorization for the award of attorneys' fees given the facts if that case. The Gila kiver case is distinguishable on at least four grounds.

First, it was decided before the significant changes in the law regarding the imposition of attorneys' fees sparked by Newman v. Piggie Park Enterprises, Inc., supra," and Mills v. Electric Auto-Lite Co., supra. Without exception, every case dealing with attorneys' fees cited in part I of this Memorandum was decided during the past three years. There can be no question but that the entire climate of opinion regarding the power and right of a court of equity to award attorneys' fees has shifted so that such awards are now looked upon as the rule rather than the exception in public interest litigation. When Gila River was decided, the usual rule was that plaintiffs were to be awarded attorneys' fees "only to the extent that. defenses had been advanced 'for purposes of delay and not in good faith.'" Newman v. Piggie Park Enterprises, supra at 401.32

Second, in Gila River the government was fulfilling a proper governmental function in bringing the suit. It is true that the government was involved in a conflict of interest situation but the conflict was inevitable and there was nothing improper about it. In this case, by contrast, the government acted improperly, in violation of both its fiduciary obligations to the plaintiff and its duty to prevent waste of water, and it was this misconduct that precipitated this litigation. If the government had acted properly. this suit would not have been necesary and the plaintiff would not have had to expend its meagre resources for this purpose.

Third, in Gila River the government actually bestowed some benefits by compensating the tribe for the use of its land. It is not inequitable for the tribe to pay for its attorney out of the proceeds of the condemnation award. Indeed. contingency fee arrangements of this kind in condemnation cases are frequent. The tribe had the option of accepting the government's offer and not litigating. Here, there is no award of damages. The plaintiff is required to finance this litigation from sources of income unrelated to this case. And the tribe had no choice but to litigate in order to protect its water and fishery rights from continued destruction and infringement by the government.

Fourth, and perhaps most importantly, the Gila River case does not satisfy any of the criteria that have developed over the years for awarding attorneys' fees. There was no bad faith or obdurate behavior on the part of the government nor was there a common fund situation. And the "private attorney general" model did not fit since the case did not involve the effectuation of strong (indeed any) Congressional policies, nor did it benefit a large class of people. This case then poses the § 175 argument in the strangest possible context for the award of attorneys' fees to an Indian tribe. Where the government has not only failed to represent an Indian tribe, but through its misconduct (breach of fiduciary obligations) has made it necessary for the tribe to litigate, at great expense, against the government to protect its rights and property, 175 should be held to authorize the award of attorneys' fees and other litigation expenses.

B. Plaintiff has an independent cause of action for the expenses of this litigation

This case, and this motion for attorneys' fees and other litigation expenses, is unique because plaintiff has an independent cause of action for damages ccasioned by the government's breach of its fiduciary obligations. That is, whereas in the normal case attorneys' fees are awarded as ancillary relief inseparable from the main cause of action, here the award of attorneys' fees are predicated upon an independent theory of recovery. By failing to fulfill his fiduciary obligations, the Secretary damaged the Tribe not only by illegally

31 The Gila River case was decided by the Ninth Circuit on March 6, 1968. twelve days before the Supreme Court per curiam decision in Newman came down.

32 Actually, the change in the law that is most relevant to this case (and to Gila River) did not come until the Mills decision in 1970 because Newman turns on a statute specifically authorizing attorneys' fees. Mills did not.

24-626 - 74 - 4

diverting water away from Pyramid Lake, but also by placing the burden of this litigation on the Tribe's treasury. There is no question but that the government is liable to the Tribe for the damages occasioned by its breach, which in this case includes the expenses of this litigation. Vaughan v. Atkinson, supra. See the Supreme Court's comment on the Vaughan case in Fleischmann v. Maier Brewing Co., 386 U.S. 714, 718 (1967) which draws the distinction between awarding counsel fees as an item of compensatory damages and as a separate cost to be taxed. Given this independent theory of recovery, it would be an absurd result if the Tribe were required to bring an independent action in another court to recover attorneys' fees and other litigation expenses when this Court is obviously best suited to determine what that award should be.

The existence of this independent basis for recovery of attorneys' fees should take this case out from under the rule that attorneys' fees cannot be awarded against the government unless a statute so provides. In fact, the Tribe has a separate and independent cause of action for attorneys' fees, obviating the necessity for an Act of Congress.

That the Tribe does have a right of action against the government for damages for breach of fiduciary obligation is amply supported. 28 U.S.C. § 1505 (see Act of May 24, 1949. 63 Stat. 102, amending § 24 of the Act of August 13, 1946, 60 Stat. 1049 at 1055); Seminole Nation v. United States, 316 U.S. 286 (1942); Navajo Tribe of Indians v. United States, 364 F.2d 320 (Ct. Cl 1966); 33 Menominee Tribe of Indians v. United States, 101 Ct.Cl. 10 (1944); Hebah v. United States, 428 F.2d 1334 (Ct.Cl. 1970) Mason v. United States, 461 F.2d 1364 (Ct.Cl. 1972). certiorari granted 41 U.S.L.W. 3391-3392 (January 15, 1973).

The Mason case is particularly instructive. The United States was held liable to the estate of a restricted Osage Indian for breach of fiduciary dry because it paid inheritance taxes to the State of Oklahoma from funds of the estate, as required by the Supreme Court's decision in West v Oklahoma Tax Commission, 334 U.S. 717 (1948). The Court of Claims held that proper conduct for the fiduciary would have been to attempt to overrule West because intervening decisions of the Supreme Court, lower federal courts and executive agencies made West's continuing validity suspect.

35

34

The government has argued in its Supreme Court brief that the fiduciary standard imposed by the Court of Claims was too severe, "something akin to an insurer's absolute liability rather than to the standard of good faith competence applicable to trustees in general." But the government admits in its brief that the government is liable to the Indian beneficiary in a suit in the Court of Claims for damages arising from its administration of Indian affairs when its conduct is "unreasonable," when the government fails to exercise such care and skill as a man of ordinary prudence would exercise in dealing with his own property.

30

The conduct of the government disclosed in the record before this Court fails to meet even the most minimal fiduciary standards. This Court so held. describing the challenged Secretarial action as "unlawful," " "arbitrary," "capricious," "an abuse of discretion," " and "defective and irrational because it fails to demonstrate an adequate recognition of his fiduciary duty to the Tribe."" In short, the government's conduct here does not come close even to meeting the standards it admits are applicable in its Mason brief, to say nothing

33 Both Seminole and Navajo Tribe were cited and relied upon in the Court's November 8, 1972 Memorandum Opinion, 354 F.Supp. at 256.

34 Appended to this Memorandum as Exhibit A.

35 Government's Brief, pp. 12-13.

38 Government's Brief, p. 7. It is certainly arguable, and we are sure that the respondents in Mason will argue, that the government should be held to a higher standard of care and skill than "the man of ordinary prudence." See, e.g., II Scott, The Law of Trusts (3d Ed.), § 174, p. 1410:

"It may be, however, that a particular trustee has greater skill or more facilities than those of the ordinary prudent man. In such a case he is under a duty to exercise the skill that he has and to employ the facilities which are available to him. If he is in a position to do better than the ordinary man, it is not enough to do what the ordinary man would do."

At any rate, this is the issue that the Supreme Court will soon resolve. For the purposes of this case, however, the difference in standards is only of academic interest since the government's conduct violated even the minimal standards applicable to trustees. See the accompanying text.

7354 F.Supp. at 260, paragraph 1; 354 F.Supp. at 257 and 258.

28 354 F. Supp. at 256 and 258.

30 Id. at 256.

40 Id. at 257 and 258.

41 Id. at 257.

of the more stringent standards to which it was held by the Court of Claims. Given the government's breach of its fiduciary obligations to the Tribe, its liability for the Tribe's expenses, including attorneys fees, incurred in restoring and preserving the corpus of the turst, necessarily follows. Indeed, the leading Supreme Court case on the award of attorneys' fees in the common fund situation involved exactly this situation, Sprague v. Ticonic National Bank, 307 U.S. 161 (1939), same case on remand, 28 F.Supp. 229 (D. Maine 1939), 110 F.2d 174 (1st Cir. 1940). Another leading case discussed and approved in Sprague, 307 U.S. at 169, also on point is Internal Improvement Fund v. Greenough, 105 U.S. 527 (1882). United States v. Equitable Trust Co., 283 U.S. 738 (1931) awarded attorneys' fees in a suit brought by an Indian's next friend to recover the Indian's trust property which the Secretary of the Interior had illegally permitted to be taken away from him. The fees came out of funds held by the United States.

It is basic black letter law that:

"Where litigation respecting an express trust was necessitated or occasioned by some fault or misconception of duty on the part of the trustee, the courts tend to impose any allowance made for costs or attorneys' fees upon the trustee individually."

Annotation, "Allowance of attorneys' fees in, or other costs of, litigation by beneficiary respecting trust," 9 A.L.R. 2d 1132 at 1243. See cases cited at 9 A.L.R. 2d 1243 et seq. and 1249 et seq. The following federal court cases confirm and follow this rule: Crutcher v. Joyce, 146 F.2d 518 (10th Cir. 1945); Wolff v. Calla, 228 F.Supp. 891 (E.D. Pa. 1968); Cleveland v. Second National Bank & Trust Co., 149 F.2d 466 (6th Cir. 1945); Tevander v. Ruysdael, 299 F. 746 (7th Cir. 1924). See also Re Bausch's Estate, 115 N.Y.S.2d 278, 280 App.Div. 482 (1952).

42

Attorneys' fees have been awarded as an independent measure of damages in analogous circumstances. In Kerr v. City of Chicago, 424 F.2d 1134 (7th Cir. 1970), cert. denied 400 U.S. 833, and United States v. McLeod, 385 F.2d 734 (5th Cir. 1967), attorneys' fees were awarded as an integral part of plaintiff's damages, just as medical expenses are included as an element of damages in personal injury actions. Both of these cases involved infringement on the plaintiffs' civil rights by local government officials. They hold that such plaintiffs are entitled to recover attorneys' fees incurred as a foreseeable result of the wrongful and illegal acts of the defendant. Kerr v. City of Chicago, supra. 424 F.2d at 1141. Judge Wisdom's statement in United States v. McLeod, supra, is equally applicable here.

"In order to grant full relief in this case, we must see that as far as possible the persons who were arrested and prosecuted in violation of [law] are placed in the position in which they would have stood had the county not acted unlawfully. Only in this manner may we be sure that the possibility of unlawful arrest and prosecution will not deter Negroes from participating in tho voting process. ... The Court can and must. however, do all within its power to eradicate the effect of the unlawful prosecutions in this case. We therefore bold that the district court should enter an order requiring the appropriate officials of Dallas County to return all fines, and to expunge from the record all arrests and convictions resulting from the prosecutions which form the basis for these suits. The individuals so prosecuted would not have had to bear the costs of their defense had these prosecutions been enjoined as they should have been. The district court's order should therefore include a requirement that the county reimburse the individuals involved for the costs, including reasonable attorneys' fees. incurred in the defense of the state criminal prosecutions." 385 F.2d at 749-750.

Similarly, the award of attorneys' fees is necessary to make the plaintiff whole, so that it is placed in the position in which it would have stood had the government not acted unlawfully. The Tribe would not have had to bear the expenses of this litigation if the government had fulfilled its fiduciary obligations. Kerr and McLeod certainly stand for the proposition that the plaintiff is entitled to recover as damages attorneys' fees and other litigation expenses incurred as a foreseeable result of the defendants' wrongful and illegal conduct. See also Vaughan v. Atkinson, supra. The case is obviously far more compelling when the defendant stands in a fiduciary relationship with the plaintiff.

The phrase "independent measure of damages" in this context is used by way of contrast to the award of attorneys' fees as relief ancillary to another cause of action.

Another category of cases also supports the plaintiffs' right to recovery. They involve Title V of the Labor-Management Reporting and Disclosure Act (the "Landrum-Griffin Act"), 29 U.S.C. § 501. The relevant cases are Bakery and Confectionery Workers International Union v. Ratner. 118 U.S.App.D.C. 269, 335 F.2d 691 1964); Retail Clerks Union, Local 648 v. Retail Clerks Int. Ass'n, 299 F.Supp. 1012 (D. D.C. 1969) and Cefalo v. International Union of Dist. 50 United Mine Workers, 311 F.Supp. 946 (D. D.C. 1970). See also Hall v. Cole, supra.

Title 29 U.S.C. § 501 (a) establishes a trust relationship between the officers of a labor organization and its members. Pursuant to 29 U.S.C. § 501 (b), any member of a labor organization may bring suit in federal district court against union officials alleged to have violated their trust responsibilities. Section 501 (b) further provides that "the trial judge may allot a reasonable part of the recovery in any [such] action . . . to pay the fees of counsel prosecuting the lawsuit at the instance of the member of the labor organization and to compensate such member for any expenses necessarily paid or incurred by him in connection with the litigation."

Defendants in Title V action have argued that attorneys' fees awarded pursuant to § 501 (b) are limited to a reasonable part of a monetary "recovery." In rejecting that contention, this Court and the Court of Appeals for this Circuit have relied on the breach of trust aspects of the plaintiffs' cases.

"Congress in section 501 (a) has defined the fiduciary status of union officers. They are to execute their trust for the benefit of the organization and its members. Should such officers violate their trust, a member of the union is authorized under section 501(b) to initiate steps looking toward remedial action....

[T]he accomplishment of benefits to the membership as "appropriate relief" might well be achieved under court authority without monetary "recovery" as such. The payment of fees and reimbursement of expenses incurred became the obligation of the International under traditional equitable principles which were simply called into play pursuant to the authorization for action under section 501. The claimed limitation relied upon by the appellant does not exclude the International's liability for reasonable fees, properly earned. Rather the language is permissive. It means no more than this: where a monetary recovery has in fact been achieved, that fund may constitute a source from which the trial judge "may allot a reasonable part" for the payment of counsel fees and disbursements.

Bakery and Confectionery Workers International Union v. Ratner, supra, 335 F.2d at 696–697.

The cases awarding attorneys' fees in Title V actions hold, in essence. that violations of § 501 (a) trust obligations give rise to a "traditional, equitable" entitlement to attorneys' fees and to reimbursement of expenses even where damages are not sought. The permissive language of § 501 (b) is construed so as not to interfere with or otherwise limit this traditional equitable relief. The same traditional and equitable principles give rise to the Tribe's cause of action against the Secretary for recovery of its attorneys' fees and litigation expenses incurred in remedying the Secretary's breach of trust.

The existence of this independent cause of action for damages occasioned by the Secretary's breach of trust takes this case out from under the rule requiring specific statutory authorization for awarding attorneys' fees against the government. At least part of the justification for requiring statutory authorization is the rule that public monies cannot be paid out unless there is an appropriation by Congress. Here there is already Congressional consent to awarding the plaintiff damages occasioned by the government's breach of its fiduciary obligations. 28 U.S.C. §§ 1491 and 1505, Mason v. United States, supra, Menominee Tribe v. United States, 101 Ct.Cl. 10 (1944), Navajo Tribe v. United States, supra. There is no need for any more express authorization. Hence,

43 An alternate jurisdictional basis is the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2674 and 2680, pursuant to which the federal district courts have jurisdiction to award money damages against the United States caused by the "negligent or wrongful act or omission" of any government employees (§ 1346(b)) "in the same manner and to the same extent as a private individual [would be able] under like circumstances" (§ 2674). See, e.g., Rayonier Inc v. United States, 352 U.S. 315 (1957). holding the United States liable for the negligence of Forest Service employees in falling to control a fire, and Swanner v. United States, 309 F.Supp. 1183 (M.D. Ala. 1970), 406 F.2d 716 (5th Cir. 1969), holding the United States liable for breach of its special duty to use reasonable care to protect an employee whom it has reasonable cause to believe is endangered as a result of the performance of his governmental duties. These cases suggest that the government would be liable for its negligent mismanagement of its special fiduciary duties to the Tribe in the same manner and to come extent as a private trustee under like circumstances.

the usual rationale for denying the award of attorneys' fees against the government has no application here.

Plaintiff contends that this Court has jurisdiction to award attorneys' fees against the government as part of its inherent equitable powers once it is determined that 28 U.S.C. § 2412 does not bar such a result. That is, no specific statutory grant of jurisdiction is necessary to support an award of attorneys' fees. See State of Utah v. United States, 304 F.2d 23 (10th Cir. 1962); Fairmont Creamery Co. v. Minnesota, 275 U.S. 70 (1927); Sims v. Amos, supra; La Raza Unida v. Volpe. supra, 57 F.R.D. at 101-102, n. 11. However, should the Court determine that an affirmative grant of jurisdiction is essential to award attorneys' fees and other litigation expenses in the peculiar circumstances presented here, it would still be appropriate for this Court to determine the amount of that award. With such a declaration from this Court, the plaintiff would then be able to invoke the jurisdiction of the Court of Claims pursuant to 28 U.S.C. §§ 1491 and 1505" or of a federal district court pursuant to 28 U.S.C. § 1346 (b) to enforce the judgment. This Court is obviously best suited to determine what constitutes a proper award for attorneys' fees and other litigation expenses in this case. It would be senseless to litigate this issue anew in the Court of Claims or any other court.

III

THE ADMINISTRATIVE PROCEDURE ACT CONSTITUTES A WAIVER OF THE GOVERNMENT'S IMMUNITY TO AWARDS OF ATTORNEYS' FEES AND OTHER LITIGATION EXPENSES The rationale for not awarding attorneys' fees and other litigation expenses, or, for that matter, even taxable costs against the government, in the absence of statutory authorization, ultimately traces to its sovereignty. See Fairmont Creamery Co. v. Minnesota, supra; United States v. Chemical Foundation, 272 U.S. 1, 20 (1926). It follows that a statute waiving the government's sovereign immunity from suit also waives its immunity from liability for costs and attorneys' fees. Reconstruction Finance Corp. v. J. G. Menihan Corp., 312 U.S. 81 (1941).

The Court of Appeals for this Circuit has held that the Administrative Procedure Act constitutes an unequivocal waiver of sovereign immunity. Scanwell Laboratories, Inc. v. Shaffer, 137 U.S.AApp.D.C. 371, 424 F.2d 859, 873-874 (1970). Applying the reasoning of Keconstruction Finance Corp v. J. G. Menihan Corp., supra, to the waiver effectuated by the A.P.A. requires a holding that the Act also waives the government's immunity from liability for costs and attorneys' fees, thus placing “[the government] upon an equal footing with private parties as to the usual incidents of suits in relation to the payment of costs and allowances." 312 U.S. at 85-86.

Because Reconstruction Finance Corp. v. J. G. Menihan Corp. is so central to this argument, and so controlling, it merits further discussion. The Reconstruction Finance Corporation (R.F.C.) purchased certain property of a corporation, including its trademarks, and then sued the Menihan Corporation to enjoin its use of the trademarks. R.F.C. lost the suit, but the district court denied Menihan's application for costs and other allowances. The Court of Appeals for the Second Circuit reversed the denial of the application and the Supreme Court unanimously affirmed.

"Congress has expressly provided that the Reconstruction Finance Corporation shall have power "to sue and be sued, to complain and to defend, in any court of competent jurisdiction, State or Federal." There is nothing in the statutes governing its transactions which suggests any intention of Congress that in suing and being sued the Corporation should not be subject to the ordinary incident of unsuccessful litigation in being liable for the costs which might properly be awarded against a private party in a similar case." 312 U.S. at 83.

Similarly, there is nothing in the Administrative Procedure Act to suggest any intention of Congress that "in being sued" governmental agencies should not be liable for the ordinary incidents of successful litigation. And these incidents, the Supreme Court held, include both taxable costs and attorneys' fees. 312 U.S. at 85.

44 This Court has concurrent jurisdiction with the Court of Claims over claims not exceeding $10,000 against the United States. 28 U.S.C. § 1346(a)(2).