Supreme Court Invalidates Catalyst Theory for Court Awarded Attorneys Fee

The Supreme Court, in what some view as one of its more result-oriented decisions, has ruled that results don’t matter when it comes to court awarded attorneys fees unless there is a judgment or consent decree.

Buckhannon Board and Care Home, Inc., v. West Va. Dept. of Health and Human Resources, 121 S. Ct. 1835 (2001).  The 5-4 decision eliminates the catalyst theory as a basis for establishing “prevailing party” status in attorneys fee cases and is likely to have a major impact on public interest litigation and might well hamper effective compliance with several federal statutes which rely heavily on private enforcement.

The case involved a challenge to a state statute and was brought under the Fair Housing Act Amendments of 1988 and the Americans with Disabilities Act, both of which have a provision for awarding attorneys fees to the “prevailing party.” The decision will apply, however, to a host of federal statutes, all of which use “prevailing party” status as the threshold for entitlement to an attorneys fee. These statutes include: the Civil Rights Attorneys Fees Awards Act of 1976, the Equal Access to Justice Act, the Age Discrimination in Employment Act, the Rehabilitation Act, the Civil Rights Act of 1964 and the Voting Rights Act, to name just a few.

In Buckhannon, after the state’s motion to dismiss was denied, the legislature repealed the offending provision and the case was dismissed as moot. Plaintiff then sought fees under the catalyst theory and was denied in the district court and the Fourth Circuit.
 

The Majority Opinion

The Supreme Court, in a decision by Chief Justice Rehnquist, relied on Black’s Law Dictionary for a rigid definition of “prevailing party” as a “party in whose favor a judgment is rendered.” Having concluded that the term had a “clear meaning,” the Court went on to a brief review of legislative history of the Civil Rights Attorneys Fees Awards Act of 1976 (42 U.S.C. § 1988) and concluded that the “legislative history is clearly insufficient to alter the accepted meaning of the statutory term.”

Scalia, Thomas Concur

Justice Scalia wrote a concurring opinion, in which Justice Thomas concurred. In his opinion Justice Scalia stressed that, while court awarded attorneys fees may be a relatively recent phenomenon in American law, the concept of awarding costs to a “prevailing party” has long been part of the common law. He argued that, at the time of enactment of 42 U.S.C. § 1988, there were no cases that he was aware of using the catalyst theory to award costs to a “prevailing party.”  He asserted, although this was disputed by the dissent, that all the cases awarding costs had involved “a judicial finding –or its equivalent.”  Justice Scalia was dismissive of the dissent’s reliance on legislative history, finding it “virtually worthless” and expressed particular disdain for legislative history containing “citation of Court of Appeals cases that surely few if any Members of Congress read.”

The Dissenting Opinion

Justice Ginsburg, in dissent, summarized the Court’s ruling: “The Court today holds that a plaintiff whose suit prompts the precise relief she seeks does not ‘prevail’ … unless she also secures a court entry memorializing her victory.” She also noted that, in spite of what the Court took to be the apparent “clear meaning” of the term, the Court’s decision was contrary to long-standing Circuit precedent, and that in other instances the Court did not feel so constrained by Black’s Law Dictionary and had adopted definitions of terms that were considerably more expansive than the definition contained in Black’s.

Justice Ginsburg also pointed out that, when Congress wanted to, it knew how to devise statutory language to tightly tie fee entitlement to the existence of court ordered relief, as in the Prison Litigation Reform Act of 1995.  She stressed that the “‘catalyst rule’ … is a key component of the fee-shifting statutes Congress adopted to advance enforcement of civil rights.”

Prior to this decision, the only appellate decision finding the catalyst theory invalid was the Fourth Circuit decision in S-1 and S-2 v. State Board of Education, 21 F.3d 49, 51 (4th Cir. 1994) (en banc), which relied on a construction of the Supreme Court decision in Farrar v. Hobby, 506 U.S. 103 (1992).  Every other appellate court to consider the issue rejected the notion that Farrar had invalidated the catalyst theory.  See Morris v. City of West Palm Beach, 194 F.3d 1203 (11th Cir. 1999).

While the full impact of this ruling will not be known for some time, there is little doubt that the impact will be great. The impact will not just be in reduced funding for public interest litigation and a consequent reduced ability of individuals to find representation; the decision is also likely to have an impact on compliance with the law, at least insofar as a financial calculus enters into the determination of whether or not a company or agency should comply with statutory obligations.  Ironically, it is plaintiffs who seek only injunctive and declaratory relief who are susceptible of being mooted out. These are precisely the plaintiffs who will have the most difficulty in obtaining representation in the absence of a court awarded fee, since there is no possibility of a contingency arrangement.

For further information, contact Gerald McIntyre in the NSCLC Los Angeles office.