Litigation
May 31, 2001
Supreme Court Bucks Trend in Fees Decision
WASHINGTON - Dealing a blow to plaintiffs who sue under a vast array of federal civil rights and environmental laws, the Supreme Court on Tuesday ruled, 5-4, that attorney fees may be awarded in such suits only if they achieve some court-sanctioned action.
The court's five-member conservative majority, led by Chief Justice William H. Rehnquist, rejected the conclusion of nearly every federal circuit - including the 9th U.S. Circuit Court of Appeals - that attorney fees may be awarded under the "catalyst theory" whenever a suit brings about a "voluntary change in the defendant's conduct."
Fees should be awarded only where there is a "judicially sanctioned change in the legal relationship of the parties," Rehnquist said. Otherwise, a plaintiff could win fees just by surviving a motion to dismiss. Buckhannon Board and Care Home Inc. v. West Virginia Department of Health and Human Resources, 2001 DJDAR 5238.
The attorneys who argued the case, and several who filed amicus briefs, could not be reached for comment.
But Sarah A. Adams of Washington, D.C.'s Terris, Pravlik & Millian, who wrote an amicus brief for five environmental groups supporting the assisted-care facility, called the decision "devastating for public interest lawyers and the individuals and groups they represent under federal fee-shifting statutes."
"This is especially so in environmental cases, where frequently the only relief sought is injunctive," Adams said. "This decision creates every incentive for defendants to try to delay the litigation to give themselves plenty of time to correct the issue that was sued about, and then claim that the case is moot in order to deprive the plaintiff of attorney fees."
Writing for the four dissenters, Justice Ruth Bader Ginsburg said the decision will "impede access to court for the less well-heeled" under "scores of federal fee-shifting statutes." It also will "shrink the incentive Congress created for the enforcement of federal law by private attorneys general," Ginsburg said.
The case stemmed from the attempt by a West Virginia assisted-living facility to keep from evicting elderly residents who required nursing services.
West Virginia officials in 1996 issued orders requiring closure of the facility after fire marshals discovered that several residents were incapable of complying with the state's "self-preservation" law. That law required all residents of residential board and care homes to be capable of moving themselves from situations involving imminent danger, such as fire.
The facility filed suit in U.S. District Court for the Northern District of West Virginia against the state, several agencies and 18 individuals, contending that the "self-preservation" requirement violated the Fair Housing Amendments Act of 1988 and the Americans With Disabilities Act.
The state agreed to stay enforcement of its orders pending resolution of the case, and the parties began discovery. But in 1998, the West Virginia Legislature enacted two laws eliminating the self-preservation requirement.
The state moved to dismiss the case as moot, and U.S. District Judge Frederick P. Stamp Jr. granted the motion. The facility then requested attorney fees as the "prevailing party" under the Fair Housing Amendments Act and the Americans With Disabilities Act. The facility's lawyers contended that the suit had been responsible for repealing the self-preservation law.
But Stamp rejected the request. He cited precedent in the Richmond, Va.-based 4th Circuit, which required denial of fees unless termination of the suit was accompanied by a judgment, consent decree or settlement. A circuit panel affirmed in an unpublished and unsigned opinion.
The facility then sought Supreme Court review. Every other circuit court had accepted the "catalyst theory," including the 9th Circuit in Kilgour v. Pasadena, 53 F.3d 1007 (1995) and so the justices agreed to settle the circuit split.
In affirming the 4th Circuit, Rehnquist said that the high court's precedents have always required a judgment, consent decree or settlement to trigger the award of attorney fees to the "prevailing party."
"A defendant's voluntary change in conduct, although perhaps accomplishing what the plaintiff sought to achieve by the lawsuit, lacks the necessary judicial imprimatur on the change," Rehnquist said. Fees should not be awarded to "a plaintiff who, by simply filing a nonfrivolous but nonetheless potentially meritless lawsuit (it will never be determined), has reached the sought-after destination without obtaining any judicial relief."
The legislative history of the Civil Rights Attorney's Fees Awards Act is "at best ambiguous" on this issue, Rehnquist said. And the plaintiff's and dissenters' "policy arguments" also fail.
"We are skeptical" of arguments that the catalyst theory is necessary to prevent defendants from unilaterally mooting an action before judgment in an effort to avoid paying fees or that plaintiffs with "meritorious but expensive suits" will be deterred, he said. Such assertions are "entirely speculative and unsupported by any empirical evidence."
Finally, Rehnquist said, the catalyst theory requires "an analysis of the defendant's subjective motivations in changing its conduct," and the lower courts could not easily administer such a "fact-bound inquiry."
Ginsburg's dissent was joined by Justices John Paul Stevens, David H. Souter and Stephen G. Breyer.
Contending that the majority had misquoted court precedents, Ginsburg said that "the catalyst rule, in short, conflicts with none of our prior holdings."
"When this Court rejects the considered judgment prevailing in the Circuits, respect for our colleagues demands a cogent explanation," Ginsburg said. "Today's decision does not provide one. The Court's narrow construction of the words 'prevailing party' is unsupported by precedent and unaided by history or logic."
David Pike
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