Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 1 of 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 FENNEMORE CRAIG, P.C. Timothy Berg (No. 004170) Emily Ward (No. 029963) 2394 E. Camelback Road, Suite 600 Phoenix, AZ 85016-3429 Telephone: (602) 916-5000 Email: tberg@fclaw.com Email: eward@fclaw.com GIBSON, DUNN & CRUTCHER LLP Theodore B. Olson (admitted pro hac vice) Matthew D. McGill (admitted pro hac vice) 1050 Connecticut Avenue, N.W. Washington, DC 20036-5306 Telephone: (202) 887-3680 Email: tolson@gibsondunn.com Email: mmcgill@gibsondunn.com OFFICE OF THE GOVERNOR Anni Foster (No. 023643) 1700 W. Washington Street Phoenix, AZ 85007 Telephone: (602) 542-4331 Email: afoster@az.gov Attorneys for Defendant Governor Douglas A. Ducey 15 UNITED STATES DISTRICT COURT 16 DISTRICT OF ARIZONA 17 Michael Pierce, 18 19 20 21 22 No. CV-16-01538-PHX-NVW Plaintiff, v. Douglas A. Ducey, in his capacity as Governor of the State of Arizona, Defendant. DEFENDANT GOVERNOR DOUGLAS A. DUCEY’S RESPONSE TO PLAINTIFF’S APPLICATION FOR AWARD OF TAXABLE AND NON-TAXABLE COSTS AND REASONABLE ATTORNEY’S FEES 23 24 Governor Douglas A. Ducey (the “Governor”) opposes Plaintiff Michael Pierce’s 25 Application for Award of Taxable and Non-Taxable Costs and Reasonable Attorney’s Fees 26 (“Application”) (Doc. #140). The Governor does not challenge the amount of Pierce’s FENNEMORE CRAIG, P.C. PHOE NI X Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 2 of 9 1 requested fees. Instead, the Governor challenges Pierce’s ability to seek attorneys’ fees 2 given that (1) federal courts cannot award fees under the private attorney general doctrine, 3 (2) the “common benefit” doctrine cannot apply because there is not a “common fund,” and 4 (3) since any fee or cost award against Governor Ducey would be paid from the State of 5 Arizona, it is barred by the State’s sovereign immunity. As a result, the Governor 6 respectfully requests that the Court deny Pierce’s Application. 7 I. LAW AND ARGUMENT 8 The “basic point of reference when considering the award of attorneys’ fees is the 9 bedrock principle known as the American Rule: Each litigant pays his own attorneys’ fees, 10 win or lose, unless a statute or contract provides otherwise.” Baker Botts L.L.P. v. ASARCO 11 LLC, 135 S. Ct. 2158, 2164 (2015) (quoting Hardt v. Reliance Standard Life Ins. Co., 560 12 U.S. 242, 252–53 (2010)). Courts depart from the American Rule only in “specific and 13 explicit provisions for the allowance of attorneys’ fees under selected statutes.” Id. (quoting 14 Alyeska Pipeline Serv. Co. v. Wilderness Soc., 421 U.S. 240, 260 (1975)). 15 The statute Pierce filed suit under, the Enabling Act, does not provide for an 16 attorneys’ fee award. This should end the inquiry as “the law of the United States . . . has 17 always been that absent explicit congressional authorization, attorneys’ fees are not a 18 recoverable cost of litigation.” Stanton Rd. Assocs. v. Lohrey Enters., 984 F.2d 1015, 1018 19 (9th Cir. 1993) (quoting Runyon v. McCrary, 427 U.S. 160, 185 (1976)). 20 Nevertheless, Pierce relies on the “private attorney general” doctrine, the “common 21 fund” doctrine, and a few selected cases to seek attorneys’ fees—none of which apply here. 22 In any event, any attorneys’ fees and costs award would be paid for by the State of Arizona, 23 which is entitled to sovereign immunity from any monetary judgment. To the extent 24 Arizona law (specifically, A.R.S. § 12-348) could provide for an attorneys’ fees and costs 25 award, that state statute cannot award fees and costs here because this Court’s subject matter 26 jurisdiction arises under federal question (not diversity) and none of the seven instances in FENNEMORE CRAIG, P.C. PHOE NI X -2- Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 3 of 9 1 § 12-348 apply to this case. 2 A. 3 The Supreme Court Has Squarely Prohibited Federal Courts From Awarding Fees Under The “Private Attorney General” Doctrine. 4 In Alyeska, the United States Supreme Court held that the awarding of attorneys’ 5 fees on a “private attorney general” theory, in the absence of express statutory authorization, 6 was not within the equitable jurisdiction of the federal courts. 421 U.S. at 269 (federal 7 courts “are not free to fashion drastic new rules with respect to the allowance of attorneys’ 8 fees to the prevailing party in federal litigation”). The reason for this prohibition is simple: 9 Congress has the “power and judgment to pick and choose among its statutes and to allow 10 attorneys’ fees under some, but not others.” Id. at 263. Given that Congress has the ability 11 to provide for fees (and indeed has done so on many occasions1), a court’s decision that 12 some statutes are sufficiently important (and award fees) and others are unimportant (and 13 deny fees) would defy this congressional authority. Id. Because the Supreme Court 14 foreclosed awarding attorney’s fees under the private attorney general theory without 15 statutory authorization in Alyeska, Pierce cannot rely on the private attorney general 16 doctrine as the basis for his attorneys’ fees and costs. See Californians for Renewable 17 Energy v. California Pub. Utilities Comm’n, 922 F.3d 929, 942 (9th Cir. 2019) (“the 18 Supreme Court long ago foreclosed awarding attorney fees under the private attorney 19 general theory without statutory authorization”). 20 B. 21 Pierce also cites Hall v. Cole, 412 U.S. 1 (1973) for the proposition that attorneys’ 22 fees can be awarded in cases where a plaintiff’s successful litigation confers “a substantial 23 benefit on the members of an ascertainable class, and where the court’s jurisdiction over the The “Common Benefit” Doctrine Does Not Apply Here. 24 25 26 1 Following Alyeska, Congress explicitly provided for attorneys’ fees for claims brought pursuant to the Civil Rights Attorney’s Fees Awards Act of 1976 (42 U.S.C. § 1988(b)), the Fair Labor Standards Act (29 U.S.C. § 216(b)), and others. FENNEMORE CRAIG, P.C. PHOE NI X -3- Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 4 of 9 1 subject matter of the suit makes possible an award that will operate to spread the costs 2 proportionately among them.” Application at 4. Hall has no application here. It involved 3 a former union member that had been expelled from the union for his protests of union 4 management and then filed suit under the Labor-Management Reporting and Disclosure 5 Act to reinstate his union membership. 412 U.S. at 2–4. The court awarded fees to the 6 union member from the union’s treasury because the union’s membership benefited from 7 the lawsuit’s vindication of its members’ free speech rights. Id. at 6. The “common benefit” 8 theory in Hall “requires a “common fund” from which to compensate a plaintiff to spread 9 “the cost of litigation among the beneficiaries of the litigation.” Californians for Renewable 10 Energy, 922 F.3d at 942. 11 To be clear, the common fund doctrine “does not shift the fees from the plaintiff to 12 the defendant” as Pierce seeks to do here. Id. Instead, it requires a “common fund” that 13 will “shift the costs of litigation” from the plaintiff to the common fund. Oldfield v. Athletic 14 Cong., 779 F.2d 505, 509 (9th Cir. 1985). There is no “common fund” from which to pay 15 Pierce’s attorney’s fees and costs. The only “fund” even applicable here is the School Trust 16 Fund, which Pierce does not request payment from. He likely could not make such a request 17 anyway given that “[d]istributions from the trust funds shall be made as provided in Article 18 10, Section 7 of the Constitution of the State of Arizona.” Arizona Statehood and Enabling 19 Act Amendments of 1999, Public Law No. 106-133, 113 Stat. 1682 (1999) (emphasis 20 added). 21 Moreover, a proposal to pay Pierce’s attorney’s fees and costs from the School Trust 22 Fund “raises serious jurisdictional questions” because none of the affected beneficiaries of 23 the School Trust Fund “are parties to this case or have filed similar cases in federal court.” 24 Cantwell v. San Mateo Cty., 631 F.2d 631, 639 (9th Cir. 1980). Further, the beneficiaries 25 of the School Trust Fund are so broad that applying the “common fund” exception to the 26 American Rule would “merge the exception into the private-attorney-general concept FENNEMORE CRAIG, P.C. PHOE NI X -4- Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 5 of 9 1 rejected in Alyeska.” Stevens v. Mun. Court for San Jose-Milpitas Judicial Dist., Santa 2 Clara County, State of Cal., 603 F.2d 111, 113 (9th Cir. 1979). 3 4 C. The State Of Arizona’s Sovereign Immunity Bars Any Award Of Fees And Costs Against Governor Ducey. 5 The Eleventh Amendment bars citizens from suing their own states in federal court. 6 Edelman v. Jordan, 415 U.S. 651, 663 (1974). As a result, this Court has already dismissed 7 the State from this litigation based on the State’s sovereign immunity, leaving only 8 Governor Ducey as the remaining defendant. See Doc. #100 (“MINUTE ENTRY for 9 proceedings held before Senior Judge Neil V. Wake: Motion Hearing held on 3/30/2017. 10 The State of Arizona’s Motion to Dismiss [Docs. 54 and 62] is granted in part, for lack of 11 jurisdiction under the 11th Amendment. Defendant State of Arizona is dismissed from this 12 action for lack of jurisdiction under the 11th Amendment.”). 13 Any award of attorneys’ fees to Pierce, and thus against Governor Ducey, would be 14 paid from the State. See Will v. Michigan Dept. of State Police, 491 U.S. 58, 71 (1989) 15 (“[A]a suit against a state official in his or her official capacity is not a suit against the 16 official but rather is a suit against the official’s office. As such, it is no different from a suit 17 against the State itself.”). Given that any attorneys’ fees award would be paid by the State, 18 it is barred by the State’s sovereign immunity under the Eleventh Amendment. See 19 Edelman, 415 U.S. at 663 (“[L]iability which must be paid from public funds in the state 20 treasury is barred by the Eleventh Amendment.”); Estate of Lagano v. Bergen Cnty. 21 Prosecutor’s Office, 769 F.3d 850, 857 (3d Cir. 2014) (holding that sovereign immunity 22 also extends to state agents and state instrumentalities “as long as the state is the real party 23 in interest”); Regents of the Univ. of Cal. v. Doe, 519 U.S. 425, 429 (1997) (“[When the 24 action is in essence one for the recovery of money from the state, the state is the real, 25 substantial party in interest and is entitled to invoke its sovereign immunity from suit.”). 26 Stated simply, because any award of attorneys’ fees and costs against Governor Ducey FENNEMORE CRAIG, P.C. PHOE NI X -5- Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 6 of 9 1 would be paid by the State of Arizona, the State’s sovereign immunity bars any monetary 2 award. 3 Pierce cites Hutto v. Finney, 437 U.S. 678 (1978) to argue that “the Eleventh 4 Amendment does not prevent an award of attorney’s fees against [State] officers in their 5 official capacities.” Application at 5. Hutto is inapplicable here because the district court 6 in Hutto first found bad faith before imposing attorneys’ fees, making such fees analogous 7 to civil contempt. 437 U.S. at 691 (“[T]he award of attorney’s fees for bad faith served the 8 same purpose as a remedial fine imposed for civil contempt.”); see also id. at 692 9 (analogizing the fee award as a “penalty imposed to enforce a prospective injunction”). In 10 fact, Hutto emphasized that “compensation was not the sole motive for the award.” Id. 11 Rather, the Supreme Court quoted the district court, which had explicitly made clear that it 12 would “make no effort to adequately compensate counsel for the work that they have done 13 or for the time that they have spent on the case.” Id. (quoting Finney v. Hutto, 410 F. Supp. 14 251, 285 (E.D. Ark. 1976)). 15 Here, in contrast, Pierce has never alleged that the Governor engaged in bad faith, so 16 any award on that basis is improper. See Californians for Renewable Energy, 922 F.3d at 17 941; see also Assoc. of Flight Attendants, AFL-CIO v. Horizon Air Indus., Inc., 976 F.2d 18 541, 550 (9th Cir. 1992) (construing bad faith exception narrowly and directing that an 19 award of attorneys’ fees for bad faith “can be imposed only in exceptional cases and for 20 dominating reasons of justice” otherwise the exception “risks conflict with the rationale of 21 the American rule”); F.T.C. v. Kuykendall, 466 F.3d 1149, 1152 (10th Cir. 2006) (holding 22 that for “the exceedingly narrow bad faith exception” to the American Rule to apply, “there 23 must be clear evidence that the challenged claim is entirely without color and has been 24 asserted wantonly, for purposes of harassment or delay, or for other improper reasons”). 25 Moreover, Pierce expressly seeks to “compensate counsel for the work that [Jacob has] 26 done” and “for the time that [Jacob has] spent on the case.” Hutto, 437 U.S. at 691. This FENNEMORE CRAIG, P.C. PHOE NI X -6- Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 7 of 9 1 is exactly the type of compensation Hutto expressly did not permit. 2 D. 3 Though Pierce did not make such a request under A.R.S. § 12-348, this Court made 4 mention of potentially awarding Pierce his attorney’s fees for Mr. Jacob’s pro bono 5 representation pursuant to A.R.S. § 12-348 should Pierce eventually prevail on the merits. 6 (Doc. #53 (Feb. 7, 2017 Scheduling Hearing on Pierce’s Motion for Preliminary Injunction) 7 at 20:7–21:9). This Court cannot award Pierce any attorney’s fees under A.R.S. § 12-348. 8 Setting aside that the State and Governor Ducey are entitled to sovereign immunity 9 in federal court, even if they were not, this Court cannot award attorneys’ fees under state 10 law for a federal cause of action. Pierce has not alleged any state law claims to justify 11 awarding attorney’s fees under state law.2 Pierce has always maintained that this Court’s 12 subject matter jurisdiction proceeded under a “federal question.” See Doc. #134 at 1. The 13 Ninth Circuit has held multiple times over that attorneys’ fees cannot be awarded under 14 state law for a claim that is exclusively premised on federal question subject matter 15 jurisdiction. See Disability Law Ctr. of Alaska, Inc. v. Anchorage Sch. Dist., 581 F.3d 936, 16 940 (9th Cir. 2009) (“In a pure federal question case brought in federal court, federal law 17 governs attorney fees.”); Klein v. City of Laguna Beach, 810 F.3d 693, 701–02 (9th Cir. 18 2016) (“Klein was only a prevailing party on his federal claims, and since we address 19 federal, not state claims, the federal common law of attorney’s fees, and not state law, is the 20 relevant authority.”); Home Sav. Bank by Resolution Tr. Corp. v. Gillam, 952 F.2d 1152, 21 1163 (9th Cir. 1991) (“Resort to state law [for attorneys’ fees] is inappropriate in federal 22 question cases when controlling federal common law exists and directly conflicts with the 23 state rule.”). 24 A.R.S. § 12-348 Does Not Apply. Moreover, there are only seven types of cases where an award of fees against the 25 2 26 Pierce’s Third Amended Complaint only sought an “injunction” and did even identify a particular cause of action. Doc. #134. FENNEMORE CRAIG, P.C. PHOE NI X -7- Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 8 of 9 1 state under A.R.S. § 12-348(A) is permitted—none of which apply here. 2 3 4 5 6 7 8 A.R.S. § 12-348(A) Reason It Does Not Apply 1. A civil action brought by this state or Pierce brought this lawsuit—not the State, nor a city, town or county against the party. the Governor. 2. A court proceeding to review a state agency decision pursuant to chapter 7, article 6 of this title or any other statute authorizing judicial review of agency, city, town or county decisions. Pierce challenged Proposition 123 (codified as Ariz. Const. art. X, § 7), which is a state constitutional provision—not a “state agency decision.” 9 10 11 12 13 14 15 16 17 18 19 20 3. A proceeding pursuant to § 41-1034. A.R.S. § 41-1034 provides for a “judicial declaration of the validity of [an administrative] rule” that can only be brought “in the superior court in Maricopa county in accordance with title 12, chapter 10, article 2.” 4. A special action proceeding brought by the party to challenge an action by this state or a city, town or county against the party. The Court briefly suggested that this provision applies to this litigation. (Doc. #53 at 21:5–9). However, again, Proposition 123 is not an “action” by the State and was never brought “against” Pierce. It is part of the Arizona Constitution. Moreover, a “special action” is a state law form of relief that does not apply here given that this Court has federal question (not diversity) subject matter jurisdiction. Finally, a “special action” under Arizona law combines traditional writs (certiorari, mandamus, prohibition), see Ariz. Spec. Act. R. 1(a), whereas federal courts are still required to utilize the writs, see Federal Rule of Appellate Procedure 21. 21 22 23 24 25 5. An appeal by this state to a court of This litigation does not involve the personnel law from a decision of the personnel board. board under title 41, chapter 4, article 6. 6. A civil action brought by the party to This litigation does not involve the seizure or challenge the seizure and sale of sale of personal property. personal property by this state or a city, 26 FENNEMORE CRAIG, P.C. PHOE NI X -8- Case 2:16-cv-01538-NVW Document 143 Filed 10/21/19 Page 9 of 9 1 2 3 4 5 6 7 town or county. 7. A civil action brought by the party to challenge a rule, decision, guideline, enforcement policy or procedure of a state agency or commission that is statutorily exempt from the rulemaking requirements of title 41, chapter 6 on the grounds that the rule, decision, guideline, enforcement policy or procedure is not authorized by statute or violates the Constitution of the United States or this state. Again, Pierce challenged Proposition 123 (codified as Ariz. Const. art. X, § 7), which is a state constitutional provision—not a state agency decision. 8 9 10 11 12 II. CONCLUSION For the foregoing reasons, the Governor respectfully requests that the Court deny Pierce’s Application (Doc #140). DATED this 21st day of October, 2019. 13 FENNEMORE CRAIG, P.C. 14 15 By s/ Timothy Berg Timothy Berg Emily Ward 16 17 OFFICE OF GOVERNOR DOUGLAS A. DUCEY Anni Foster 18 19 GIBSON, DUNN & CRUTCHER LLP Theodore B. Olson Matthew D. McGill 20 21 Attorneys for Defendant Governor Douglas A. Ducey 22 23 24 15246675_3 25 26 FENNEMORE CRAIG, P.C. PHOE NI X -9-