Is it unethical for defense counsel to condition a civil rights settlement on the plaintiff waiving statutory attorneys' fees?

Plain-English summary

The committee withdrew its Opinions 80-94 and 82-80 in light of the Supreme Court's decision in Evans v. Jeff D., 106 S. Ct. 1531 (1986). Opinion 80-94 had held that it was unethical for defense counsel to propose settlements conditioned on plaintiffs waiving statutory attorneys' fees in civil rights and civil liberties cases, to negotiate the fee award simultaneously with the merits, or to use the merits as a "lever" to extract a fee waiver; Opinion 82-80 had declined to reconsider that view. Those opinions rested largely on the committee's reading of the legislative policy behind the fee-shifting statutes and on DR 1-102(A)(5) (conduct prejudicial to the administration of justice), EC 2-25 (the duty to make legal services available), and, against the government, EC 7-14, together with the concern that fee-waiver demands place plaintiffs' lawyers' personal interests in conflict with their clients'.

In Jeff D., the Court held (6 to 3) that the Civil Rights Attorney's Fees Awards Act of 1976 gave the district court discretion to approve a settlement that waived attorneys' fees, and that approving such a waiver was not an abuse of discretion where the settlement secured broad injunctive relief and there was no showing of a uniform policy of demanding waivers or a vindictive effort to deter civil rights counsel. The committee recognized that the principal underpinning of its prior opinions, the view that fee-shifting fees were effectively nonwaivable, had been removed by the Court's reasoning that Congress made fees part of the arsenal of remedies but did not render them nonwaivable. For that reason alone, the committee determined that Opinions 80-94 and 82-80 had to be withdrawn, while emphasizing that no inference should be drawn that previously condemned conduct was now sanctioned.

The committee declined to issue general guidance, deciding that it could better address the many fact-specific permutations (whether counsel serves without charge or through a legal services organization, whether a retainer addresses fee waiver, whether the fee is contingent, whether monetary or injunctive relief is sought, whether court approval is required, whether the request is for a total waiver or simultaneous negotiation, and which side initiates it) in concrete inquiries. It noted two open questions for the future: whether defense counsel may ethically ask for a fee waiver as part of a settlement, and whether plaintiffs' counsel may ethically decline; it observed there is no longer binding ethical authority in New York forbidding such a request or requiring plaintiffs' counsel always to agree, while leaving open whether a coercive request could pose an ethical problem.

Currency note

This opinion was issued in 1987, before New York replaced the Code of Professional Responsibility (the Disciplinary Rules cited here) with the New York Rules of Professional Conduct, effective April 1, 2009. Conduct prejudicial to the administration of justice is now addressed by Rule 8.4, and conflicts between a lawyer's interest and a client's by Rule 1.7. This opinion itself withdrew two earlier committee opinions, and later authorities have continued to develop the law on statutory fee waivers. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Common questions

Q: Can defense counsel condition a civil rights settlement on the plaintiff waiving statutory attorneys' fees?

A: The committee concluded that, after Jeff D., doing so is not unethical per se, and it withdrew its prior opinions to the contrary, leaving the question to be decided on the facts of each case.

Q: Does withdrawing the prior opinions mean the conduct is now approved?

A: The committee concluded no; it emphasized that no inference should be drawn that conduct previously deemed unethical is now necessarily sanctioned.

Q: Did the committee issue new general guidance on fee waivers?

A: The committee concluded it should not; it decided to address the fact-specific questions in concrete inquiries rather than a general rule, listing many factors that could affect the analysis.

Background and rules framework

The opinion concerned the ethics of fee-waiver demands in civil rights settlements, an area the withdrawn opinions had grounded in DR 1-102(A)(5) (conduct prejudicial to the administration of justice), EC 2-25, and EC 7-14, with an underlying concern about conflicts between plaintiffs' counsel's fee interest and their clients' interests. These map to ABA Model Rule 8.4 (misconduct) and Model Rule 1.7 (conflicts of interest). The opinion's holding turned on the Supreme Court's interpretation of the Civil Rights Attorney's Fees Awards Act of 1976 in Evans v. Jeff D.

Citations and references

Rules of Professional Conduct:

• New York Code DR 1-102(A)(5); EC 2-25, EC 7-14 (invoked by the withdrawn opinions and discussed here)
• MR 8.4 (misconduct); MR 1.7 (conflicts of interest)

Statutes:

• Civil Rights Attorney's Fees Awards Act of 1976 (the "Fees Act")

Cases:

• Evans v. Jeff D., 106 S. Ct. 1531 (1986), district court discretion to approve a settlement waiving statutory attorneys' fees

Other opinions cited:

• N.Y. City 80-94 and N.Y. City 82-80: prior committee opinions, withdrawn by this opinion

See also

• NYC Bar Formal Op. 1991-3: Nonrefundable Retainers and Advance Fees
• NYC Bar Formal Op. 1988-7: Mortgage on a Client's Property to Secure a Fee

Source

• Landing page: https://www.nycbar.org/reports/formal-opinion-1987-4/