Opinion
Editorial Note:
This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted May 6, 1999.
Appeal from United States District Court for the District of Oregon, Michael R. Hogan, District Judge, Presiding.
Before CANBY, T.G. NELSON, Circuit Judges, and FOGEL, District Judge.
The Honorable Jeremy Fogel, United States District Judge for the Northern district of California, sitting by designation.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as may be provided by 9th Cir. R. 36-3.
Appellants seek review of an order of the district court denying their motion for attorney's fees following settlement of a civil rights case brought pursuant to 42 U.S.C. § 1988(b). For the reasons discussed herein we will affirm the order, although we do so for somewhat different reasons from those articulated by the district court. The district court determined that Appellants waived any right to attorney's fees under 42 U.S.C. § 1988(b) by a written release in the parties' settlement agreement. Appellees contended that the release was so sweeping as to encompass attorney's fees. The district court found the release ambiguous, but held that extrinsic evidence revealed the parties' intent to include attorney's fees in the release. We conclude as a matter of law that the language of the release clearly and unambiguously relinquishes Appellants' right to attorney's fees and thus need not reach the question of whether the district court properly considered extrinsic evidence.
I. Standard for Relinquishing the Right to Attorney's Fees Under 42 U.S.C.§ 1988(b)
42 U.S.C. § 1988(b) provides in relevant part that: "[i]n any action or proceeding to enforce a provision of [§ 1983], the court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee as part of the costs." While the district court ostensibly is given "discretion," a prevailing plaintiff "should ordinarily recover an attorney's fee unless special circumstances would render such an award unjust." Hensley v. Eckerhart, 461 U .S. 424 (1983) (internal quotation marks and citations omitted).
In this Circuit, the following test is used to assess potential waivers of the right to § 1988(b) attorney's fees:
First, a waiver of attorneys' fees may be established by clear language in the release. If the decree contains an explicit reference to fees or the breadth of the release is so "sweeping" that it necessarily includes attorneys' fees, a waiver may be found. Second, if the language in the release is unclear or ambiguous, surrounding circumstances may clearly manifest the intent of the parties that attorneys' fees be waived. If, during the course of negotiations, the plaintiff rejects an explicit fee waiver provision, we are unlikely to construe ambiguous or more limited language in the settlement instrument as a waiver of fee liability. Conversely, if the defendant can provide clear evidence that demonstrates that an ambiguous clause was intended by both parties to provide for the waiver of fees, then the defendant is absolved of liability.
Muckleshoot Tribe v. Puget Sound Power & Light, 875 F.2d 695, 698 (9 th Cir.1989) (internal citations omitted).
Appellants argue that any waiver of attorney fees must be explicit, ignoring the reference in Muckleshoot to the possibility of waiver by means of a sufficiently "sweeping" release (id. at 698). In support of their position, Appellants point to the Ninth Circuit's expression of "full agreement with the Third Circuit's resolution of both the El Club Del Barrio and Ashley cases," (Wakefield v. Mathews, 852 F.2d 482, 484 (9 th Cir.1988) citing El Club Del Barrio 735 F.2d at 100 and Ashley v. Atlantic Richfield Company 794 F.2d 128 (3d Cir.1986). However, rather than importing a requirement of explicit waiver from the Third Circuit, Wakefield merely expresses agreement with the rule that "the [plaintiff's] failure to reserve the [attorney fee] issue," (El Club Del Barrio 735 F.2d at 100) does not result in waiver by silence. Wakefield, 852 F.2d at 484. The standard delineated in Muckleshoot thus is in complete harmony with Wakefield.
In fact, we held in Wakefield that the right to section 1988(b) fees had been waived because of the breadth of the release there at issue, further undercutting any contention that an explicit waiver standard was adopted. Wakefield 852 F.2d at 484. Given that a release of "costs" was included in the language before the Court in Wakefield, the decision's reliance upon the breadth rather than specificity of the release is all the more significant.
Although federal law prescribes what the release at issue must accomplish in order to be effective, Oregon contract law is properly used to interpret whether the settlement agreement in this case meets the Muckleshoot test. See 42 U.S.C. § 1988(a); Botefur v. City of Eagle Point, Oregon, 7 F 3d 152, 156 (9th Cir.1993)(holding that the interpretation of settlement agreements is a matter of state law even where federal rights are released). Under federal law, if the clear language of the release encompasses attorney's fees, then Appellants are precluded from recovering such fees, and no inquiry need be made into the circumstances surrounding the formation of the settlement agreement. Muckleshoot, 875 F.2d at 698. Oregon contract law is in accord. Cf., Eagle Inudstries v. Thompson, 321 Or. 398 (1995) (noting that the first step in contract interpretation is to derive whether the meaning is clear from the four corners of the document, giving a common sense interpretation to each phrase).
B. Analysis of the Release at Issue
The release at issue here provides, inter alia, as follows:
Plaintiffs, hereby release ... Defendants ... from all claims, demands, 4 damages, liabilities and causes of suit or action of any kind whatever, whether known or unknown, which may exist or which the undersigned may claim to exist as of the date of the release. Specifically, but without limitation, this release covers any and all claims, demands, damages, liabilities, and causes of suit or action which were or could have been alleged in [the instant case].
ER 81.
Comparison of this language with the language at issue in Wakefield is most instructive. In Wakefield, the defendants were released from "liabilities, claims, rights, obligations, demands, damages, [etc.]" with regard to their "conduct ... to date" without regard even to whether the claims waived related to the litigation then at issue. Here, as in Wakefield, generalities such as "all claims, demands, damages, liabilities, [etc.]," dictate the outside borders of the release. As the district court noted, it may be argued that words such as "liabilities" either may refer in a limited manner to obligations described by substantive legal theories or, less commonly, may also describe derivative obligations associated with the expense of pursuing substantive claims. There is no ambiguity, however, when the language of the instant release is considered as a whole. For example, the word "demands" carries no implication of being limited to the assertion of a cause of action. The same may be said of the word "claims". Further, as in Wakefield, the release at issue does not require even that the forsaken "claims, demands, [etc.]" have a nexus to the dispute which prompted the underlying litigation. They may be "of any kind whatever, whether known or unknown."
In Wakefield the court looked to the course of negotiations as well as the settlement language. However, no ambiguity was remarked upon explicitly, not was any other justification given for looking beyond the borders of the document. This implies that the court's reference to the negotiations simply was basis for its interpretation of the settlement agreement.
On appeal the parties concentrate on the terms "claims" and "liabilities," probably because the trial court found that these terms made the release ambiguous. However, Appellees' position here as below, is that the release is sufficiently sweeping so as to include attorney's fees, and it is both proper and necessary for us to consider the full context of the release in order to assess this position.
In short, no exacting Chompskian-style analysis is required to conclude that the parties intended to fashion something akin to the broadest retrospective release which the English language could enable. The clear language of the release is so sweeping that it must necessarily pertain to attorney's fees.
III. Disposition
The order of the district court is hereby AFFIRMED.