This Court recently reaffirmed the common law rule that each party to a lawsuit customarily pays his or her own legal fees: "Because no person should be penalized for merely defending or prosecuting a lawsuit, an award of attorney's fees is the exception rather than the rule.'' Quirk v. Town of New Boston , 140 N.H. 124, 135 (1995). Such an exception does indeed exist in cases where a litigant's conduct is in "bad faith'', which the Court has defined as "malicious, fraudulent and intentional''. Wilko of Nashua, Inc. v. TAP Realty, Inc., 117 N.H. 843, 852 (1977). See generally, Charles A. Szypszak, Attorneys' Fees Awards and Unreasonable Litigation, 37 NHBJ, p. 9-15 (March, 1996). However, the relevant conduct for purposes of awarding attorney's fees is defined as prosecuting or defending a lawsuit without a reasonable basis for the claim in the law or the facts. Keenan v. Fearon, 130 N.H. 494, 501-2 (1988). In other words, a claim for legal fees must be based upon the litigation misconduct of a party. Moreover, a litigant's "subjective belief is irrelevant as long as the [litigant's] legal position was not entirely without merit. The test for bad faith is an objective one.'' Treisman v. Town of Bedford , 135 N.H. 573, 575 (1992).

None of the conduct of the State upon which the Plaintiffs premise their new Motion for Sanctions, however, involves claims of litigation misconduct by the State.¹ Here is what the Plaintiffs charge the State with either doing in bad faith or not doing in bad faith:

1. Missing the Court's April 1, 1999 deadline to create a new education funding system by 28 days.² (Not only does this have nothing to do with the State's judicial conduct, but it obviously also resulted in no additional legal fees to the Plaintiffs who waited until August 19, 1999 to file this current batch of motions.)

2. Failing to adopt a new educational delivery scheme which is supposedly in violation of the State's constitutional duty to do so. (Again, this has nothing to do with the State's litigation conduct. Additionally, the claim has no merit. See Memorandum of Eugene M. Van Loan, III In Opposition to Plaintiffs ' Motion for Procedural Order.)

3. Failing to devise a satisfactory formula to calculate the cost of an adequate education. (Once more, the conduct in question is completely extrajudicial. And, again, it has no merit. See, Memorandum of Eugene M. Van Loan, III In Opposition to Plaintiff's Motion for Procedural Order.)

4. Failing to appoint the two commissions set up by HB 117 in a timely manner and failing to deliver a satisfactory report from a commission established in 1997. (Of all the plaintiffs' claims of allegedly improper conduct, this one has absolutely nothing to do with the proceedings in this Court. As far as the merits of the claim are concerned, the Plaintiffs have no standing to complain about the Legislature's alleged failure to comply with requirements it has imposed upon itself.)³

In asserting a right to an award of attorneys' fee, the Plaintiffs nevertheless argue that this Court may award them their legal fees on account of the State's extrajudicial conduct.⁴ This Court has expressly and conclusively rejected that identical argument in Maguire v. Merrimack Mutual Insurance Co., 133 N.H. 51 (1990). In that case, the plaintiffs brought an action against the defendant for fire insurance benefits under a homeowner's insurance policy. By special verdict, the jury found that the plaintiffs had willfully and intentionally burned their own home and had sworn falsely in order to fraudulently collect insurance proceeds. The trial court, however, had refused to assess the plaintiffs with the defendant's legal fees. On appeal, the defendant argued that "a denial of attorney's fees is in error where there are specific findings of bad faith or fraudulent conduct.'' Id. at 53-54.

This Court, however, refused to overturn the trial judge's decision not to award attorneys' fees since:

[T]he judge concluded that the plaintiffs were justified in litigating their claim because much of the testimony was conflicting, including that of the expert witnesses, and because the evidence was circumstantial. He also noted that witness credibility "played a substantial role in the verdict.

Id. at 56. After confirming the trial court's finding that the plaintiffs were not unreasonable in litigating the matter, the Court further addressed defendant's argument that it should receive its legal fees on account of the plaintiffs' underlying fraud, by quoting the trial court as follows:

It may, at first blush, seem unjust not to award attorney's fees in an action where one who seeks to collect under his fire insurance policy, is determined to have burned his own home. However, an analysis of the Court's decision in Keenan v. Fearon, 130 N.H. 494 (1988), and the purposes behind the general rule against awarding attorney's fees, indicate that it is not, in fact, unjust. In this case, the issue of the cause of the fire deserved to be litigated from an evidentiary standpoint.

Id. at 53. Thus, one's entitlement to legal fees turns upon the reasonableness of the position taken by one's opponent in instituting or defending the litigation, not upon the nature of the opponent's acts giving rise to the cause of action.

The Keenan decision, referred to above, interpreted Harkeem v. Adams, 117 N.H. 687 (1977), as focusing on the unnecessary nature of judicial proceedings as the determinative factor in awarding attorneys' fees. A fee award could be justified when a party was "forced to litigate against an opponent whose position is patently unreasonable.'' Id. at 502. The Court defined patently unreasonable as "without any reasonable basis in the facts provable by evidence, or any reasonable claim in the law as it is, or as it might arguably be held to be.'' Id. Compare, Adams v. Bradshaw, 135 N.H. 7 (1991) (holding that even though the underlying case was ultimately decided against them, the plaintiffs were not unreasonable in litigating the case and could not be assessed attorney's fees since their position turned on a fine question of law never before answered by the court); Clipper Affiliates v. Checovich, 138 N.H. 271, 279 (1994) (trial court's award of attorneys' fees to the defendant overturned because the plaintiff's lawsuit, even though unsuccessful, was not entirely frivolous); Nash Family Investment Properties v. Town of Hudson, 139 N.H. 595 (1993).

In subsequent cases, this Court has continued to restrict the focus of this issue to a party's position taken in litigation, rather than the party's actions leading to litigation. For example, in Flanagan v. Prudhomme, 138 N.H. 561 (1994), which involved a dispute over a property line, the Court held that

Because we have found the boundary . . . difficult to determine and because we have resolved the ambiguity differently than did the trial court, we cannot agree [that the defense] was patently unreasonable. Although [the defendants'] conduct toward their neighbors may have been vexatious and egregious, we look only to their conduct in the litigation and find nothing to support the conclusion that their defense was frivolous.

Id. at 576 (emphasis added). Accordingly, although this Court sustained the trial court's award of damages based upon the defendant's "reckless disregard of [the plaintiffs'] interests,'' it reversed an award of legal fees to the plaintiffs. Id. at 575-76.

In Taber v. Town of Westmoreland, 140 N.H. 613 (1996), this Court reversed the trial court's assessment of attorneys' fees against the town for defending a zoning board of appeals (ZBA) decision granting a variance to the plaintiffs' neighbor. The trial court had based the award on its finding that "by softening the legal standard for unnecessary hardship created by [the Supreme Court], the ZBA ignored the proper legal standard and forced the [plaintiffs] `to seek judicial assistance to secure a clearly defined right which should have been freely enjoyed without such intervention.''' Id. at 615. In reversing the lower court, however, this Court once again held that because the town's position in the litigation was not unreasonable (since it was defending the actions of a quasi-judicial body, which were properly within that body's jurisdiction, even if not correct), the town could not be liable for the plaintiffs' legal fees. Id. at 617. Of particular significance to the case at bar is the Court's comment that "for purposes of awarding attorney's fees in this case, the issue is not whether the ZBA improperly granted the variance, but rather whether the town exercised bad faith in the defense of the ZBA's decision.'' Id. at 616. Again, therefore, the Court emphasized that the legal fee issue does not turn on the nature of a party's conduct forming the basis of the underlying cause of action.

Even when this Court has sustained an award of attorneys' fees, the determinative issue has been the unreasonableness of the position taken by the assessed party, not the nature of the acts underlying the litigation. In Koch v. Randall, 136 N.H. 500 (1992), the defendants had failed to obey a town health officer's order to remove chicken manure which was causing a nuisance. The defendants had never objected to the order, nor had they even filed an answer to a suit by neighbors seeking to enjoin them from placing manure on the property. Id. at 501-02. When the defendants committed the same offense one year later, the town filed its own lawsuit, which the defendants also failed to answer. On the first day of trial, with no answers having been filed by the defendants, the trial court accepted as admitted the plaintiffs' allegations that the defendants had acted in bad faith by intentionally placing the manure to harass their neighbors, by ignoring orders of the health officer, and by unreasonably and vexatiously prolonging the litigation. Id. at 502-03. The trial court then entered judgment for the plaintiffs pro confesso and, among other things, awarded them their legal fees. While acknowledging in passing the trial court's finding that the defendants had intentionally placed the manure in order to harass their neighbors, id. at 503, the Supreme Court expressly affirmed the award of attorneys' fees on the basis of the defendants' provocation of the lawsuits. By ignoring the orders of the health officer and failing to respond to the lawsuits with any defense, the defendants "made this [legal] action necessary, despite the

fact that they had no reasonable claim in the law.'' Id. at 503. The Court focused, therefore, not upon the nature of the defendants' underlying actions, but rather upon the fact that the defendants required that litigation go forward without presenting any reasonable claim or defense.

Indeed, since Maguire, every New Hampshire case in which an award of attorneys' fees has been sustained by the Supreme Court has involved a party's litigation misconduct:

1.Business Publications v. Stephen, 140 N.H. 140 (1995) (institution of abuse of process claim where facts and law clearly could not support the claim).

2.Daigle v. City of Portsmouth, 137 N.H. 572 (1993) (inclusion in pleadings of unsubstantiated allegations challenging the integrity, ethics and professional reputations of opposing counsel).

In summary, the Plaintiffs' claim in this case that the State should reimburse them for their legal fees on account of the State's extrajudicial conduct has no merit. There is no such exception in New Hampshire to the common law rule that each party is to bear his or her own expenses of litigation. If the Plaintiffs feel that such a rule is unfair (which it is not), their complaint lies with the Legislature, not this Court.

This Court admittedly does have the power to assess the legal fees of one party against another party, irrespective of statutory authority and even in non-common law cases, as part of the Judiciary's inherent power "to control its own proceedings, the conduct of participants, the actions of officers of the court and the environment of the court.'' State v. LaFrance , 124 NH 171, 179-180 (1983). See also, Petition of Mone , 143 NH 128 (1999); Kersevich v. Jaffrey District Court, 114 NH 790 (1974); Benton v. Dover District Court, 111 N.H. 64 (1971); State v. Moquin, 105 NH 9 (1963). This is the origin of the Court's power of sanction, which is what the Plaintiffs attempt to invoke in this case. Emerson v. Town of Stratford, 139 NH 629, 631-632 (1995). Thus, it is like the Judiciary's power of contempt, which is "a necessary incident, inherent in the very organization of all . . . courts of law or equity, independent of statute provisions.'' State v. Mathews, 37 NH 450, 453 (1839). See also, Opinion of the Justices (Marital Masters ' Contempt Powers), 138 NH 425 (1994); Opinion of the Justices, 86 NH 597, 601 (1933); Bate's Case, 55 NH 325 (1875).

On the other hand, because the Judiciary's power to sanction arises out of its need to "control its courtroom,'' it too does not extend to extrajudicial conduct. See, e.g., State v. Martina, 135 NH 111 (1991); Benton v. Dover District Court, supra. Thus, like the exception to the common law rule relating to attorneys fees, the trigger for invoking the Court's power to sanction a party by assessing it with the other party's legal fees is outrageous litigation misconduct. Again, therefore, the Plaintiffs' allegations in this case fail to state a proper cause of action.

An additional reason that the Motion for Sanctions fails is that it does not allege conduct upon the State's part which is threatening to or disruptive of this Court. As noted, the power to sanction derives from the Judiciary's need to conduct its proceedings in an orderly manner. The conduct about which the Plaintiffs complain, however, allegedly "demonstrate[s] the State's callous disregard for the rights of the children and taxpayers of this State [which have] forced petitioners to continuously seek legal redress in this Court to secure their constitutional rights.'' Memorandum of Law in Support of Petitioners' Motion for Sanctions, p. 3.⁵ In other words, it is the Plaintiffs who claim to be harmed by the State's conduct, not this Court. Accordingly, there is no proper basis alleged for the Court to exercise its power of sanction and the motion must be denied.

Let us assume for the moment, however, that the exception to the common law rule that each party pays its own legal fees and/or that the Court's inherent power to sanction a litigant by imposing a legal fee assessment are not triggered only by a party's litigation misconduct. This Court would nevertheless be precluded from ordering the State to pay the Plaintiffs their legal fees on the basis of the claims that they make in this case. The essence of the State's allegedly improper conduct about which the Plaintiffs complain is its passage of a law which they claim is unconstitutional and its failure to pass other laws which they claim are constitutionally required. In other words, the Plaintiffs suggest that this Court has the power to sanction the Legislature for failing to do its job.

This is so preposterous a contention that it hardly deserves a response. Nevertheless, out of an excess of caution, I offer the following self-evident truths:

1. The Legislature possesses the "supreme legislative power'' of this State. Article 2, Part II, NH Const. Accordingly, the doctrine of Separation of Powers prevents the Judiciary from "sanctioning'' the State for the acts or omissions of the Legislature within the scope of its duties. Article 37, Part I, NH Const.

2. Article 30, Part I of the NH Constitution expressly provides that the speech and debate of the members of the Legislature "cannot be the foundation of any action in any court.'' See also , Articles 21 & 22, Part II, NH Const.

3. The Judiciary does not concern itself with the good faith or bad faith of the Legislature when judging the validity of a legislative act. See Memorandum of Eugene M. Van Loan, III In Opposition to Plaintiffs' Motion for a Procedural Order.

4. Legislators have absolute personal immunity at common law from claims against them with respect to their legislative acts. Rockhouse Mt. Property Owners Assoc. V. Town of Conway, 127 NH 593 (1986). See generally, James C. Cleveland, Legislative Immunity and the Role of the Representative, 14 NHBJ 139 (1973).

5. Unless it has waived it, the State does have sovereign immunity for claims against it involving the acts of its agents, including the Legislature. RSA 99-D:1.⁶

6.The State has not waived its sovereign immunity for claims against it arising out of the legislative acts of the Legislature. See generally , RSA 491:8 (contracts) and RSA 541-B (torts).

7. Sovereign immunity of the State with respect to the discretionary acts of its agents (which obviously include the acts of legislators in deciding what laws to pass or not to pass) is constitutional. Opinion of the Justices , 126 NH 554 (1985).

Finally, even assuming some plausible theory for the assessment of the Plaintiffs' legal fees against the State, the Plaintiffs would not be entitled to either of the legal fee awards they request. On the one hand, they ask for all of their legal fees to date. Even assuming that the claims of legislative bad faith which they make are sanctionable, the only legal fees to which the Plaintiffs would be entitled are those which were occasioned

by the State's alleged bad faith. Obviously, that would not include any fees generated prior to this Court's decision in Claremont II because none of the acts about which the Plaintiffs complain occurred before that date. ⁷ On the other hand, the Plaintiffs' request for their future legal fees has no justification whatsoever. No one is entitled to a blank check. Even if future legal fees were reimbursable, only those which are appropriate and reasonable would be eligible for reimbursement.

In summary, the Plaintiffs' Motion for Sanctions has no basis in law or in fact. It should be denied.

Respectfully submitted,

Dated: ____________, 1999 By:

Eugene M. Van Loan, III, Esquire,

as Amicus Curiae

CERTIFICATION

I, Eugene M. Van Loan, III, Esquire do hereby certify that on this date I forwarded a copy of the aforementioned Memorandum to all the parties on the attached Service List.

Eugene M. Van Loan, III

SERVICE LIST

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