Olms interpretative Manual

COUNSELFEESANDEXPENSES

518.001LMRDA,SECTION501(b)

The trial judge may allot a reasonable part of the recovery in any action under thissubsection to pay the fees of counsel prosecuting the suit at the instance of the member of thelabor organization and to compensate such member for any expenses necessarily paid or incurredbyhimin connection withthe litigation.

518.005DEFINITIONOF“RECOVERY”

In this case plaintiffs filed a motion for counsel fees and expenses pursuant to section501(b) of the LMRDA.In construing the language authorizing the payment of counsel fees, e.g.,“The trial judge may allot a reasonable part of the recovery,” Judge Body held that “recovery”was not intended to be limited to actual money recovery effectuated, but must include the totalbenefit conferred upon the union through the efforts of counsel.Therefore, the court determinedthat a reasonable counsel fee was $38,000 in that the union had benefited because (1) the plaintiffshadobtainedaninjunction againsttheuseof unionfundstodefend certainofficersagainstcharges

and (2) plaintiffs had obtained a verdict against these officers for the $24,921.41 already expendedin their defense.See Highway Truck Drivers & Helpers Local 107, International Brotherhood ofTeamstersv. Cohen,220 F.Supp. 735(E.D. Pa. 1963),aff’d, 334F.2d 378 (3dCir. 1964), cert.
denied, 379 U.S. 921 (1964).See alsoKerrv. Shanks, 466 F.2d 1271 (9th Cir. 1972) (monetaryrecovery not necessary for trial judge, in “exercise of sound discretion” and when suit benefitedtheunion,toaward counsel fees and other litigationexpensesto the plaintiff).

However,thosecourtsthat allowunionsthemselves tobring§501 claims(see§515.301,above) do not allow unions to recover counsel fees.See, e.g., Local 815, InternationalLongshoreman'sAssociation, v. Brazil, 12 F.Supp. 2d 918 (E.D. Wis. 1998).

(Revised:Dec. 2016)

518.100COMPUTING COUNSEL FEE

Ratner, retained as counsel to a dissident faction of union members—the Local UnionReunification Committee (LURC)—successfully pursued several court actions on their behalf.These actions ultimately led to a court-ordered convention, reorganization of the union, ouster oftop International officers (the president, the secretary, and three vice presidents–allof whom werelater convicted and sentenced on embezzlement and/or conspiracy charges), and the subsequentelection of LURC backers to top offices in the union.At that convention it was decided that theLURC should be dissolved, that the International should become plaintiff in what had been a classaction,and that Ratner beretained ascounsel. However,theunion declared thatitwould not

accepttheresponsibilityforLURCcounsel fees“unlessanduntilordered byacourttodoso.”

Ratner and his associates, who received no payments for their services from April 1961through January 1962, brought suit to obtain these fees and related expenses.The district courtawarded them $54,834.91 from the contracting parities who entered into the fee agreement, theclassrepresented by theparties, i.e.,LURCbackers, and thefunds oftheunion, because theactionwas initiated, undertaken, and prosecuted “in the interest of the Union membership as awholesuch fruits as flowed from the lengthy proceedings flowed to the benefit of the Union andfor the benefit of all its members.”The award against the International was limited to the terms oftheretainer between Ratner and theLURC.

On appeal, the Circuit Court reversed and remanded, holding that the value of Ratner’slegal services, when computed on the basis of benefit to the union, may even exceed thecomputations based upon the scale provided for in the retainer agreement, and accordingly ruledthat the court could not base its award upon the contract between Ratner and the LURC.It ruledthat section 501(b) did not limit the court to the amount of “recovery” effected against the oustedunion officials, but directed the court to hold the International union liable for reasonable fees,properlyearned, based upon the “benefit” whichinured tothe International.

BakeryandConfectioneryWorkersInternationalUnionv. Ratner,335F.2d691,56LRRM 2432(D.C. Cir.1964).

(TechnicalRevisions:Dec. 2016)