De Young v. Brown

                                        64

Argued and submitted January 16, 2020; decision of Court of Appeals affirmed,
   and case remanded to circuit court for further proceedings May 6, 2021


                    James B. De YOUNG,
                   a resident of Damascus,
                    Respondent on Review,
                                v.
                        Kate BROWN,
                    in her official capacity
                   as Governor of Oregon;
                     and State of Oregon,
                    Petitioners on Review,
                              and
                  CLACKAMAS COUNTY,
                  a political subdivision of
                     the State of Oregon,
                   Defendant-Respondent,
                              and
                        DAMASCUS,
                  a municipal corporation,
                          Defendant.
          (CC 16CV12583) (CA A162584) (SC S067385)
                                    

    Court of Appeals awarded plaintiff attorney fees based on his success in
obtaining a Court of Appeals ruling in De Young v. Brown, 

, 

 (2019), that the 2016 vote to disincorporate the City of Damascus was
invalid. State defendants petitioned the Supreme Court for review, arguing that
the Court of Appeals erred in allowing plaintiff’s request for fees under the substantial benefits theory for equitable fee awards. Held: Plaintiff acted in a representative capacity to the benefit of others and the benefit to all residents of the
state when he obtained the Court of Appeals’ decision clarifying how the legislature may make referrals to voters on matters of local government structure;
that benefit was sufficiently substantial to support an award of fees under the
substantial benefit theory. Thus, the Court of Appeals did not err in awarding
plaintiff fees under the substantial benefit theory.
    The decision of the Court of Appeals is affirmed, and the case is remanded to
the circuit court for further proceedings.



    En Banc
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   On review from the Court of Appeals.*
   Philip Michael Thoennes, Assistant Attorney General,
Salem, argued the cause and filed the briefs for petitioner on
review Kate Brown. Also on the briefs were Ellen Rosenblum,
Attorney General, and Benjamin Gutman, Solicitor General.
   Tyler Smith, Tyler Smith & Associates PC, Canby, argued
the cause and filed the brief for respondent on review.
   Kristian Spencer Roggendorf, The Zalkin Law Firm,
Evergreen, Colorado, filed the brief for amicus curiae Oregon
Trial Lawyers Association.
   BALMER, J.
   The decision of the Court of Appeals is affirmed, and the
case is remanded to the circuit court for further proceedings.




______________
   * 

, 

 (2019).
66                                         De Young v. Brown

         BALMER, J.
         This case concerns attorney fees awarded by the
Court of Appeals following its decision in De Young v. Brown,

, 

 (2019) (De Young I). The question before this court is a narrow one—namely, whether the
Court of Appeals erred in allowing plaintiff’s petition for
attorney fees under the “substantial benefit” theory. For the
reasons explained below, we hold that the Court of Appeals
did not err, and, thus, we affirm.
          Plaintiff De Young was a city councilor and resident
of the City of Damascus. Defendants are Kate Brown, in her
official capacity as Governor, and the State of Oregon. We
refer to defendants, collectively, as “the state.” In De Young I,
the Court of Appeals considered the validity of an effort to
disincorporate the City of Damascus. In a 2013 election, the
residents of the city had voted on a referral from the city
council to disincorporate the city. Although a majority of
those participating in the election voted in favor of disincorporating, the number fell short of the absolute majority
for disincorporation required by law. See ORS 221.610 (2013)
(requiring affirmative vote of a “majority of the electors of
the city” to disincorporate). Subsequently, in 2015, the legislature passed House Bill (HB) 3085, which referred to the
voters of Damascus the decision whether to disincorporate
and specifically provided that a majority of those voting,
rather than an absolute majority of the city’s electors, would
be sufficient to disincorporate. That legislative referral
appeared on the ballots of residents of the city as Measure
93 in the May 2016 election.
         Prior to the 2016 election, plaintiff sought declaratory and injunctive relief, seeking to enjoin the scheduled
disincorporation vote. He alleged that HB 3085 violated the
city charter, state statutes, and the Oregon Constitution. The
trial court denied plaintiff’s request to enjoin the election,
and the city residents subsequently voted to disincorporate.
Following the election, the city paid its debts, transferred its
assets to Clackamas County, surrendered its charter, terminated or transferred its employees, and, essentially, ceased to
exist. Plaintiff continued his lawsuit, seeking a declaration
that the vote had violated various statutory and constitutional
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requirements and, therefore, the city had not been validly
disincorporated. The trial court granted summary judgment
in favor of the state, declaring Measure 93 valid.
          Plaintiff appealed, renewing his arguments that
Measure 93 violated state statutory and constitutional provisions. The Court of Appeals ultimately agreed with plaintiff on his statutory argument, holding that ORS 221.610
and ORS 221.621 (2013) provided the only means by which a
city could disincorporate and that, because Measure 93 had
not complied with those statutes, it was invalid. De Young I,

. Because it disposed of the case on
statutory grounds, the Court of Appeals did not reach plaintiff’s constitutional argument. 

. Shortly after the
Court of Appeals decision was issued, the legislature passed
Senate Bill (SB) 226 (2019) “to cure any defect in the procedures, and to ratify the results” of the 2016 disincorporation
vote. Or Laws 2019, ch 545, § 4(1). The legislature gave this
court original jurisdiction to determine the validity of the
substantive provisions of that law, id. § 4(2), which we did
in City of Damascus v. State of Oregon, 

, 

 (2020). In that case, we concluded that “SB 226 is valid
and that it accomplishes what the legislature intended, i.e.,
it gives effect to the 2016 vote by the city’s residents to disincorporate.” 

.
          Following the Court of Appeals’ decision in
De Young I but prior to the issuance of this court’s decision
in City of Damascus, plaintiff petitioned that court for an
award of attorney fees and costs in the De Young I litigation,
amounting to a little over $40,000. Plaintiff argued that he
was entitled to fees because he was the prevailing party and
because he sought “to vindicate important constitutional
rights, and was not seeking a pecuniary gain for himself
other than to protect the statutory and constitutional rights
of those in Damascus who wanted the law to be followed.”
The state objected to the award of attorney fees, arguing
that, “because [plaintiff] prevailed on statutory and not constitutional grounds, [Court of Appeals case law] forecloses
any attorney fee award.” Plaintiff filed a reply asserting
that, contrary to the state’s argument, the court’s inherent
equitable power to award attorney fees does not require a
finding of a constitutional violation.
68                                                   De Young v. Brown

         The Court of Appeals framed the threshold issue as
“whether a plaintiff must prevail on a constitutional issue in
order for us to exercise our inherent equitable power to award
attorney fees.” De Young v. Brown, 

, 

 (2019) (De Young II). The Court of Appeals explained
that “[t]he inherent equitable power to award attorney fees
was first recognized in Oregon in Gilbert [v. Hoisting & Port.
Engrs., 

, 

 (1963), aff’d as modified, 

, 

, cert den, 

 (1964),]” and that
recovery of fees was “limited to cases … in which equitable
relief would in effect be denied or severely inhibited unless
the plaintiff who prevails in the suit is awarded attorneys’
fees.” De Young II, 

 (internal citations and
quotation marks omitted).
         The Court of Appeals held ultimately that “the vindication of a constitutional right has never been required by the
Supreme Court in awarding attorney fees under a court’s equitable powers,” and that “[t]he ‘substantial benefit’ theory …
is a form of the equitable attorney fee doctrine that does not
require the vindication of a constitutional right.” 

. The
Court of Appeals described the “substantial benefit” theory as:
     “allow[ing] equitable attorney fees where there is a representative or derivative suit brought for the benefit of
     the entire organization or where there are other circumstances in which equitable relief would in effect be denied
     or severely inhibited unless the plaintiff who prevails in
     the suit is awarded attorneys’ fees. The action must confer
     a ‘substantial benefit’ on others.”

 (internal citations and quotation marks omitted). The Court of Appeals agreed with plaintiff that his litigation had directly benefitted the residents of Damascus
by holding that the legislative referral and the resulting
disincorporation election failed to comply with state statutes and that it also had “potentially” conferred an indirect
benefit on other residents of the state “in regard to how the
legislature makes referrals to voters.” 

.1 Applying
    1
      We recognize, of course, that the Court of Appeals’ decision in De Young I
was superseded by the legislature’s enactment of SB 226 (2019), which this court
held to be valid in City of Damascus, 

, and that the disincorporation of the city was not undone. But De Young I itself was never reversed and
stands as a valid appellate court interpretation of the statutes at issue there.
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the substantial benefit theory, the Court of Appeals allowed
plaintiff’s petition for attorney fees and costs in the amount
of about $16,000 and remanded for a determination of fees
and costs incurred in the circuit court. Id. at 532.
          The state petitioned this court for review. In its
petition, the state did not renew its argument that fees could
be recovered only for a successful constitutional challenge,
and not for a statutory one. The state instead responded to
the Court of Appeals’ substantial benefit theory, asserting
that the “beneficiaries” of the litigation were the residents of
Damascus, but a fee award against the state would be paid
by residents of the whole state—state taxpayers. The state
contended that the fee award would “spread the cost of litigation not just among those who benefitted from it, but also
to those who would not benefit from it,” contrary to the purpose of the substantial benefit theory. The state also argued
that any potential benefit from the litigation was uncertain, because of the pending City of Damascus case before
this court. In the state’s view, the substantial benefit theory does not permit an award of fees here because, “[e]ven
assuming that reincorporating Damascus would confer a
substantial benefit on those residents who opposed Measure
93, the Court of Appeals’ ruling did not confer that benefit
… [b]ecause there is still substantial uncertainty whether
Damascus will ever again exist as a city[.]”
         Plaintiff filed a response to the state’s petition for
review, arguing that the state’s articulation of the Court
of Appeals’ decision was misleading because the Court of
Appeals did not conclude, contrary to the state’s assertion,
that only the residents of Damascus benefitted from that
court’s ruling in De Young I. Rather, plaintiff noted that
the Court of Appeals considered the benefits to be “both in
regard to the direct litigation and potentially in regard to
how the legislature makes referrals to voters.” De Young II,

. Therefore, plaintiff argued, the Court of
Appeals correctly understood that its opinion in De Young I
clarified the permissible scope of legislative referrals and of
the statutes regarding disincorporation and that that clarification inured to the benefit of all Oregon residents—not just
those directly impacted by the 2015 referral. Thus, plaintiff contended, the court’s attorney fee opinion correctly held
70                                                      De Young v. Brown

that the substantial benefit theory permits the costs of the
litigation to be shared by those beneficiaries—all Oregon
residents. This court allowed review.
          Before this court, as noted, the state largely abandons the argument that it made before the Court of Appeals—
that, because plaintiff vindicated a statutory right rather
than a constitutional right, he is not entitled to fees. It also
retreats from the argument made in its petition for review
that the only beneficiaries of the litigation are the residents
of Damascus. Instead, the state argues primarily that the
Court of Appeals improperly awarded plaintiff fees under
the substantial benefit theory because any “benefit” from
the litigation is actually held in common by all residents of
the state and that such a diffuse, indirect benefit is not sufficiently substantial to justify an award of fees.2
         We agree with the state that Oregon generally
adheres to the so-called “American rule”—that the prevailing party in a civil action ordinarily is not entitled to
recover attorney fees from the losing party unless some statute or contractual provision authorizes the recovery of fees.
See Swett v. Bradbury, 

, 

 (2003)
(“Ordinarily, a court awards attorney fees to a litigant only
if a statute or contract authorizes such an award.”); Alyeska
Pipeline Service Co. v. Wilderness Society, 

, 

, 

 (1975) (describing the “American
rule”). That rule, however, is not absolute: “This court for
many years has recognized an equitable exception to the
American rule,” Crandon Capital Partners v. Shelk, 

, 

 (2007), and it is well established that
an Oregon court may use its inherent equitable power to
award attorney fees, even in the absence of a contract or
statutory scheme authorizing fees, Gilbert, 

.
       Our case law on the equitable award of attorney
fees makes clear that an award is permissible in a variety

     2
       One of plaintiff’s arguments is that the state did not preserve its substantial benefit argument regarding attorney fees. It is true that the state’s argument has evolved over the course of the attorney fee dispute, but the state has
consistently taken the position that the litigation did not confer a sufficiently
significant benefit on any group to justify an equitable award of attorney fees. We
conclude that the issue is sufficiently preserved for our review.
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of circumstances but that an award of fees does not automatically follow from a favorable outcome. Crandon, 

 (noting that, in certain “circumstances, the court
may spread the cost of litigation to avoid unjust enrichment”
(emphasis added)). This court has identified three prerequisites for a fee award under that inherent equitable authority: (1) the proceeding must be one in equity, (2) the party
requesting fees must have been the prevailing party, and
(3) the party requesting fees must have been seeking to vindicate a right that applies to others as well as the party
itself, without an overriding personal pecuniary interest.
Armatta v. Kitzhaber, 

, 

 (1998);
Gilbert, 

. Where a party has met those prerequisites, this court has permitted the award of equitable attorney fees in three different circumstances: where a
party vindicates an important constitutional right applying
to all residents of the state, without personal gain to the
party, Deras v. Myers, 

, 

 (1975);
where a party creates, discovers, increases, or preserves a
common fund of money to which others also have a claim,
Strunk v. PERB, 

, 

 (2006); and
where a party’s litigation confers “substantial benefit” on
others, even if neither constitutional nor financial, Krause v.
Mason, 

, 

 (1975).
         In reviewing whether a lower court has properly
awarded fees under its inherent equitable authority, we
assess for legal error whether the fee award meets the three
prerequisites described above and comes within a qualifying circumstance. See Swett, 

 (considering
first whether plaintiffs were “disqualified from receiving an
award of attorney fees” for failing to meet one of the prerequisites (emphasis added)). See also Dennehy v. Dept. of Rev.,

, 

 (1989) (concluding that the
Tax Court erred in awarding fees because the plaintiff did
not meet several of the prerequisites). In this case, the state
argues that the Court of Appeals misapplied the “substantial benefit” test and committed legal error in awarding
plaintiff attorney fees. It asserts that the Court of Appeals
erred in holding that “the benefit conferred in this case—
both in regard to the direct litigation and potentially in
regard to how the legislature makes referrals to voters—is
72                                        De Young v. Brown

substantial enough to warrant an award of attorney fees.”
De Young II, 

.
          Unlike statutory or contractual attorney fees
awards, the purpose of awarding equitable attorney fees
is not to punish a wrongdoer or to make a plaintiff whole.
Crandon, 

. Cf. Mattiza v. Foster, 

,

 (1990) (describing the legislative history of ORS
20.105(1) “allowing for the award of attorney fees based on
the misconduct of the opposing party or attorney”). Rather,
the purpose of equitable fees is to recognize that, when a
plaintiff has vindicated the rights of others in a significant
way, equity may require that the costs of that litigation be
borne not just by the plaintiff, but also by others who have
benefitted. See Crandon, 

 (holding that the court
may award attorney fees “when it would be inequitable for
that party to bear all the costs of the litigation”). The three
circumstances that we have identified—vindication of a constitutional right, common fund, and substantial benefit—
rely on this basic premise: that fees awarded under the
court’s equitable authority “are awarded not … to make
the plaintiff whole by shifting all costs to the wrongdoer,
but instead to spread the costs among those on whose behalf
the case was brought and who benefitted from the plaintiff’s
efforts.” 

.
         Although our focus here is on whether plaintiff’s
success in De Young I conferred a “substantial benefit”
on others, the “vindication of a constitutional right” basis
for an attorney fee award is not irrelevant to our inquiry.
Despite the fact that we have not always awarded fees to
plaintiffs who have brought successful constitutional challenges, see Pendleton School Dist. v. State of Oregon, 

, 

 (2009) (declining to award fees following
successful constitutional challenge), we often have done so
when a plaintiff has vindicated an important constitutional
right that applies to all Oregonians. See Armatta, 

 (awarding fees where plaintiffs sought declaratory
and injunctive relief, arguing that a measure submitted to
and adopted by the voters was unconstitutional); Swett, 

 (same). In part, this is because we have assumed,
often without extended discussion, that the vindication of a
constitutional right likely confers a benefit on individuals
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other than the plaintiff and that such a benefit—since, after
all, it is constitutional—may well qualify as “substantial.”
We have recognized, in the constitutional context, that “[i]t
is beyond dispute that the interest of the public in preservation of the individual liberties guaranteed against governmental infringement of the constitution is even stronger”
than the interest in fair voting in union elections, which
permitted a fee award in Gilbert. Deras, 272 Or at 66. If a
plaintiff can demonstrate that the constitutional right was
sufficiently “important” and that the litigation clarified the
scope of that right, we have been more likely to conclude
that the plaintiff conferred a “substantial” benefit on other
Oregonians and that an equitable attorney fee award was
justified. Although some statutory rights may be of similar
importance to fundamental constitutional rights, when a
nonconstitutional right has been vindicated, the nature of
the benefit may be less apparent, and the beneficiaries may
need to be identified more precisely. In both instances, however, the central issue for the court is whether the nature of
the benefit conferred on those beyond the plaintiff is sufficiently substantial that it would be inequitable for the plaintiff to bear the costs alone.
         Here, the Court of Appeals’ decision in De Young I
was based on its holding that Measure 93 was invalid
because it was inconsistent with statutes regarding disincorporation elections, rather than any constitutional provision. It is clear, however, that election laws hold a special
place in the spectrum of constitutional and statutory rights.
For that reason, this court has long held that
       “[e]lection laws should be liberally construed to the
   end that the people may have the opportunity of expressing opinion concerning matters of vital interest to their
   welfare. Expression, not suppression, tends towards good
   government. The great constitutional privilege of a citizen
   to exercise his sovereign right to vote should not be taken
   away by narrow or technical construction.”
State ex rel. v. Hoss, 

, 

 (1933).
Although not included in the constitution itself, Oregon’s
election laws implement the constitutional right to vote in
all elections. See Or Const, Art II, § 2 (subject to age, residency, and registration requirements, “[e]very citizen of
74                                         De Young v. Brown

the United States is entitled to vote in all elections …”);
id. § 8(1) (“The Legislative Assembly shall enact laws to support the privilege of free suffrage [and] prescribing the manner of regulating, and conducting elections ….”). Moreover,
the issues in the underlying litigation here involved not just
laws governing elections generally, but also the concept of
home rule embodied in Article XI, section 2, and Article IV,
section 1(5), of the Oregon Constitution, which grant the
“authority of local governments to establish and modify
their political structures as they see fit.” City of Damascus,

. In City of Damascus, this court recounted the
history of the enactment of those constitutional provisions
in 1906, describing that “the primary concern of those who
advocated for the measures was that the voters of municipalities be permitted to determine the structure and organization of their own municipal governments[.]” 

.
To that end, in plaintiff’s fee petition, he asserted generally that “[a]ll of the claims made in [the complaint] related
to voting rights, constitutional rights, or statutory election
and process rights that he asserted were violated by” the
legislature. Ultimately, however, as described above, the
Court of Appeals disposed of the case not on constitutional
grounds, but on relatively narrow statutory grounds, despite
the myriad of constitutional arguments raised by plaintiff.
De Young II, 

.
         The question before us, then, is whether the Court
of Appeals erred in determining that the benefits conferred
here were sufficiently substantial that it would be inequitable for the plaintiff to bear those costs alone. The Court of
Appeals did not identify and analyze a specific benefit to persons other than the plaintiff that resulted from the underlying litigation; rather, the court stated generally that “the
benefit conferred in this case—both in regard to the direct
litigation and potentially in regard to how the legislature
makes referrals to voters—is substantial enough to warrant
an award of attorney fees.” 

. For the reasons that
follow, we agree with the Court of Appeals that the litigation
provided a sufficiently significant benefit to the people of the
state as a whole; therefore, we do not address whether the
litigation provided any additional or different benefit to the
people of Damascus.
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         To determine whether the benefits that result from
litigation are sufficiently substantial to justify an equitable
attorney fee award, it is essential to identify, as precisely as
possible, the benefits and the beneficiaries. Krause, 

 (affirming an award of fees based on the benefits
that the plaintiff shareholders’ litigation conferred specifically on the corporation and other shareholders). It is not
enough to say that, of several benefits, surely one of them
was sufficiently substantial to justify an award of fees.
Likewise, as described above, the central principle behind
both the constitutional and substantial benefit theories is
that the costs are shared among those who benefitted from
the litigation, Crandon, 

, whether those who
“benefit” are shareholders of a corporation, voters of a particular city, or the residents of the state as a whole. If the
benefit or beneficiaries have not been identified precisely,
the court cannot analyze whether the benefits were sufficiently substantial to justify a fee award.
          We do not intend to say that litigation cannot have
multiple benefits or benefit various groups differently. See,
e.g., Moro v. State of Oregon, 

, 

 (2016) (discussing the various groups of beneficiaries
of PERS litigation). With any litigation, there are ripples of
consequences for the parties and often for nonparties. Some
consequences may be beneficial, and some may not, and
it is not always possible to assess the significance of any
benefits at the close of the litigation. In the common fund
cases, the question is relatively straightforward—the litigation produces a fund from which the plaintiff’s fees may be
paid, and the costs are shared by everyone entitled to a portion of the common fund. However, in the substantial benefit cases, the litigation does not produce a fund from which
those fees can be drawn. Gilbert, 337 Or at 138 (“[T]he fact
that no money or property is involved does not detract from
the importance of the litigation.”). When litigation produces
a common fund, then those who benefit from the litigation
are those who benefit from the fund. But, without a common
fund and without a determination of the identity of beneficiaries, it is impossible to say whether an award of fees will
distribute the costs of the litigation among those who benefit
from the litigation. See Moro, 

 (considering how
76                                         De Young v. Brown

to fund a fee award where the underlying litigation benefitted different groups of PERS members differently).
         In this case, plaintiff contends that the litigation
resulted in substantial direct benefits to him and to the residents of Damascus (among others) and indirect benefits to
all residents of the state, because of the Court of Appeals’
clarification in De Young I of local home rule authority,
including statutes regarding disincorporation and legislative referrals to local voters. The state agrees that plaintiff
succeeded in obtaining judicial “clarification of the way that
the legislature must refer election measures when it seeks
to exempt a vote from existing statutory requirements.”
However, the state disputes that this was a “direct” benefit
to plaintiff or the residents of Damascus, arguing that it
does not accrue solely to them, “but applies with equal force
to every person in the state.” More significantly, the state
asserts that “such an abstract, widely held interest cannot be
considered substantial enough to warrant an equitable fee.”
We disagree.
         Our case law does not require that each individual
who benefits from litigation receive a “substantial” benefit.
Rather, the benefit provided to the beneficiaries as a whole
must be a substantial one. Oregon courts have never held
that the size of the group benefitted determines the significance of the benefit bestowed. See Tanner v. OHSU, 

, 

, rev den, 

 (1999) (“The
fact that … our decision on the merits of [the] claims will
directly benefit only a relatively small class of persons is not
controlling. How small or large the directly benefitted class
may be is not the point …. What controls is the extent to
which the constitutional issue resolved is a matter of primary concern to the public at large.” (Internal quotation
marks omitted.)). Like class actions or actions under the
Unfair Trade Practices Act, ORS 646.605 to 646.656, permitting an award of attorney fees in some substantial benefit cases may encourage individuals to bring legal actions
to vindicate not only their own rights but also the rights of
others. See, e.g., Honeywell v. Sterling Furniture Co., 

, 

 (1990) (describing that, in the unlawful trade practices context, the “availability [of attorney
fees] assures that wronged consumers can obtain counsel
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to prosecute claims that otherwise might be impractical to
pursue because such claims would require an expenditure
of attorney time the value of which greatly exceeded the
value of the goods or services in question”). When successful
actions confer important, but individually small and widely
shared benefits, an equitable fee award can ensure that the
costs of litigation also can be shared.
         In our view, the unique relationship between the
election statutes at issue in this case and the foundational
constitutional rights of citizens to vote and of local governments to establish and modify their political structures
demonstrates that important legal rights were at stake.
Plaintiff’s success in obtaining a favorable statutory ruling
from the Court of Appeals conferred a substantial benefit
on persons other than plaintiff. As the Court of Appeals
observed, plaintiff
    “acted in a representative capacity on behalf of the City of
    Damascus and its residents to ensure that a special election to determine whether to disincorporate the City of
    Damascus complied with ORS 221.610 and ORS 221.621,
    the statutes that govern municipal disincorporation. We
    conclude that the benefit conferred in this case—both in
    regard to the direct litigation and potentially in regard to
    how the legislature makes referrals to voters—is substantial enough to warrant an award of attorney fees.”
De Young II, 

.
         We agree with the Court of Appeals that plaintiff
acted in a representative capacity to the benefit of others
and that that benefit was sufficiently substantial to support an award of fees under the substantial benefit theory. We conclude that the substantial benefit is the benefit to all residents of the state of the Court of Appeals’
decision clarifying how the legislature may make referrals to voters on matters of local government structure.3
Accordingly, we conclude that the Court of Appeals did not

     3
       Because we conclude that plaintiff’s litigation conferred a “substantial benefit” on all residents of the state, including the residents of Damascus, we need
not decide whether the “direct” effect of the litigation on Damascus residents
would, standing alone, constitute a substantial benefit for purposes of an equitable award of attorney fees.
78                                      De Young v. Brown

err in awarding plaintiff fees under the substantial benefit
theory.
        The decision of the Court of Appeals is affirmed,
and the case is remanded to the circuit court for further
proceedings.