Ninth Circuit So Held in Pony.
A recent memorandum decision in a Ninth Circuit case reminds all of you civil rights practitioner of an important caveat: clients own the rights to fees under federal civil rights cases such that they cannot be assigned to their attorneys. However, attorney’s lien rights might lead to a different result.
In Benas v. Baca, Case No. 09-56561 (9th Cir. May 11, 2011) (unpublished memorandum decision), Yagman & Yagman & Reichmann, who represented a plaintiff in a 42 U.S.C. § 1983 federal civil rights action, had a retainer agreement providing that plaintiff irrevocably assigned her right to any fee award to the attorneys. Later, after plaintiff filed for bankruptcy protection, the bankruptcy trustee and defendants settled for $35,000 in return for a full release/with prejudice dismissal of the lawsuit. Trustee moved to dismiss the action, while YYR moved for an award of § 1988 fees based on the retainer agreement assignment provision.
The district judge denied YRR’s motion for fees based on Pony v. County of Los Angeles, 433 F.3d 1138, 1140 (9th Cir.), cert. den. sub nom., 547 U.S. 1193 (2006), which held that a plaintiff may not assign her right to seek attorney’s fees.
YYR’s appeal argued that Pony was wrongly decided, but this challenge did not get much traction because only an en banc panel can overturn an existing Ninth Circuit decision. YYR also argued that its situation was distinguishable because plaintiff joined the attorneys’ fee request. However, this argument was rejected because the trustee was the owner of the claim such that plaintiff had no interest in the outcome. Afffirmed.
BLOG UNDERVIEW--We wonder why attorneys did not insist on an attorney’s lien in the retainer agreement, which might have been binding on the trustee if validly created.
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