Sneaking Suspicions
 
Archives-- March 25-April 7, 2007


This page includes posts from March 25-April 7, 2007 in the usual reverse order.

Each posting on the home page is perma-linked to these archive pages.

April 4, 2007
Fee at last

Last year I wrote a post discussing two cases in Delaware about attorney’s fees in government lawsuits.

In one case, some folks in New Castle County sued their local government because the then-current administration built up huge surpluses that well exceeded the county law’s limits on government hoarding. They argued the money had to be used, which would have reduced their current tax burden. The fact that the surpluses have come in handy now that the revenue streams have dried up was not so important, as they viewed it.

After hard fought legal proceedings, the county government took some strong hints from Chancellor William Chandler and changed their ways. Some of the ordinances simply legitimated the surpluses, thus preserving the county’s options to decide when to spend it down. However, on one surplus issue involving the Light Tax (a special street lighting expense fund), the County applied the extra money toward the next fiscal year’s allotment.

Flush with victory, if not much else, the plaintiffs sought $500,000 in attorney’s fees for vindicating taxpayer’s rights. The Chancellor followed the normal practice of American Courts, however, and denied the claim:

Plaintiffs argue, and I agree, that there is a definite, although intangible, benefit to the citizenry when its elected officials are forced to conform their actions to the dictates of law. In some situations where the actions of private whistleblower/litigants are found to confer a benefit upon the State and its citizens, the General Assembly has recognized this benefit by legislation providing that the plaintiffs’ fees and costs must be paid by the defendant [note omitted]. In other words, the Legislature has demonstrated that it is cognizant of the fact that our general American rule on legal fees does not sufficiently encourage litigation in areas where that litigation is found to be especially meritorious or in the public interest. Presumably, if litigation of the instant kind, involving budgetary authority and taxing authority, were considered to be in similar need of encouragement, the General Assembly would provide for a shifting of fees. It has not done so here. Without minimizing the importance of the result the plaintiffs have obtained on behalf of the interest of all citizens of New Castle County in governmental compliance with the law, the “good government” result achieved here is not the type of benefit that supports a common-law exception to the American rule that each litigant must bear his own costs.

The plaintiffs then appealed to the state Supreme Court.

Last week the Court issued a short opinion in which, somewhat surprisingly, it found a limited way to reverse and remand Chandler’s decision.

The en banc appellate court had no real difficulty affirming the Chancery Court’s view about the ephemeral nature of one aspect of the plaintiffs’ victory, involving the blockage of an $80 million bond issue. As both courts saw that claim, it was difficult at best to quantify any tangible benefit to the county taxpayers for the plaintiffs’ efforts  on that issue.

When the County applied over a half-million dollars to one year’s light tax expenses, however, that was a litigation result the Supreme Court could point to in supporting the decision to award attorney’s fees:

The common benefit exception [to the usual rule that each side pays their own attorneys] allows a successful litigant to recover attorneys’ fees if the litigation creates a monetary benefit that is shared by others. Historically, this exception has been applied to business enterprise litigation where, for example, a stockholder may recover funds for the benefit of the entire corporation. The exception is premised on the equitable principle that those who benefit from litigation would be unjustly enriched if the entire cost of the action were borne by the successful plaintiff. We hold that the rationale of the common benefit exception applies to taxpayer suits that result in a quantifiable monetary benefit for all taxpayers.

***

The Light Tax Fund surplus … was used to reduce all taxpayers’ light tax rate. Korn’s amended complaint raised a meritorious claim that the Light Tax Fund surplus was unlawful. The claim was mooted when the County took corrective action, namely, applying the surplus to the calculation of the next year’s light tax rate. The County, thus, “returned” approximately $540,000 to the taxpayers – a tangible benefit that is both substantial and quantifiable. The taxpayers who received that benefit should, as a matter of equity, share the attorneys’ fees incurred to obtain it.

The Court then remanded the case back to Chancellor Chandler to determine what those fees should be, given the fact that the plaintiffs had sought $500,000 for their entire case, and not just this one element.

Last year I suggested that some part of the attorney’s fees should be awarded, but for different reasons, and not necessarily in the full amount claimed:

When governments are sued under these circumstances, … the Courts should be more amenable to relaxing the standards against awarding attorney’s fees….

An award of a few thousand dollars in fees would have sent a message about the potential costs of defending the indefensible, as the County did in the Korn case…. 

That kind of message might not deter some folks, but it could be a useful deterrent against the ill-advised enthusiasms of some others.

Now that the Supreme Court has expanded the common benefit exception to these taxpayer lawsuits, that possibility is a real one.

March 28, 2007
Annals of Crime

An Associated Press crime story today featured this remarkable headline:

Charges Dropped for Spray-Painting Goats

This makes sense on several levels, from an animal-friendly criminal justice perspective.

I'm sure the plea bargain included a statement from the goats that they were really, really sorry and that they'd never ever spray-paint again.

It also eliminates the problem facing the New York correctional system about which jail space the goats would have required--although the Empire State has at least one prison farm in operation, so there was that option.

The actual facts were far more mundane, of course, but I really appreciated how the headline forced me to read it.

March 27, 2007
They're not smiling now

One of the great things about living around here is that so many things are accessible by boat.

One of our favorite trips is a ride up the Lewes & Rehoboth Canal, hoping that one of the public dock spaces in front of the old Irish Eyes Pub & Restaurant will be open.

Whenever there's a spot, we pull in, tie up, and climb the short ladder to the wooden walkway leading to the outdoor dining area.

It's a great mid-ride break, but based on last night's big fire it'll be a while before we can do it again:

Popular Lewes eatery and nightspot Irish Eyes Restaurant and Pub - known to longtime beach-goers as Anglers Restaurant - burned to the ground Monday morning, erasing decades of history.

The cause of the 3 a.m. blaze that leveled the one-story structure remains under investigation, but many were mourning its loss.

Co-owner Thomas Jones says he plans to re-build the place as quickly as possible, maybe by late summer.

Gosh I hope so.

March 25, 2007
Silly string

This week's golf column is about golf and the war on Islamofascism--sort of.

The connection is that a local golf guy is collecting a special kind of donation for the war effort:

Silly string and golf
March 23, 2007

Joe Romano has a new thing for string—Silly String, that is.

The long-time starter at The Rookery Golf Course in Milton, who also works at Clubhouse Golf outside Rehoboth Beach, is starting up a charitable drive to accept donations of the brightly colored gooey stuff at both locations. More..

Good luck to him.


   

Contact Information:

Fritz Schranck
P.O. Box 88
Nassau, DE  19969
USA

fschranck-at-sneakingsuspicions.com


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© Frederick H. Schranck 2002-2007