Initiative & Referendum Institute v. United States Postal Service

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 1, 2015 Decided July 17, 2015

No. 14-5089

INITIATIVE AND REFERENDUM INSTITUTE, ET AL.,

APPELLANTS

v.

UNITED STATES POSTAL SERVICE,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 1:00-cv-01246)

Arthur B. Spitzer argued the cause for appellants. With

him on the briefs was David F. Klein.

Marina Utgoff Braswell, Assistant U.S. Attorney, argued

the cause for appellee. With her on the brief were Ronald C.

Machen Jr., U.S. Attorney at the time the brief was filed, and

R. Craig Lawrence, Assistant U.S. Attorney.

Before: BROWN, KAVANAUGH, and PILLARD, Circuit

Judges.

Opinion for the Court filed by Circuit Judge

KAVANAUGH.

2

KAVANAUGH, Circuit Judge: In 1998, the U.S. Postal

Service promulgated a regulation that, among other things,

barred the collection of signatures on petitions at post office

sidewalks that run alongside public streets. Those post office

sidewalks are known as perimeter sidewalks, and are

indistinguishable from adjacent public sidewalks. Several

nonprofit organizations that collect signatures in order to

place initiatives or referenda on state ballots challenged the

regulation on First Amendment grounds. In 2005, this Court

held unconstitutional the regulation’s ban on signature

collection on perimeter sidewalks. Shortly thereafter, the

Postal Service amended its regulation to correct the

constitutional defect identified in this Court’s decision.

The plaintiff nonprofit organizations subsequently

applied for attorney’s fees under the Equal Access to Justice

Act. That Act authorizes fees for parties that prevail in

litigation against the United States, unless the Government’s

position was substantially justified. The District Court denied

the fee application on the ground that the plaintiffs were not

prevailing parties under the Act. This appeal followed.

Although the question is close, we conclude that plaintiffs

were prevailing parties. Therefore, we reverse the judgment

of the District Court and remand the case for further

proceedings.

I

A 1998 U.S. Postal Service regulation barred, among

other things, the collection of signatures on petitions at post

office perimeter sidewalks. See 39 C.F.R. § 232.1(a), (h)(1)

(1998). The regulation was “posted at a conspicuous place”

on all Postal Service property. Id. § 232.1(a). Violations

were punishable by fine, imprisonment, or both. Id.

§ 232.1(p).

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The plaintiffs here are several nonprofit organizations.

They draft petitions to place initiatives and referenda on state

election ballots. To get an initiative or referendum on the

ballot, it is generally necessary to obtain a certain number of

signatures. To help collect the necessary signatures, members

of the nonprofit organizations stand on the perimeter

sidewalks of post offices.

In 2000, plaintiffs sued to challenge the Postal Service’s

ban on collecting signatures on perimeter sidewalks. Both

sides eventually moved for summary judgment. At a hearing

on those motions in 2002, the Postal Service announced a

change in policy. The Postal Service stated that it would not

enforce the prohibition against collecting signatures on

petitions at post office perimeter sidewalks.

In deciding the summary judgment motions, the District

Court “relied on defendant’s changed position” and granted

summary judgment to the Postal Service. Initiative &

Referendum Institute v. U.S. Postal Service, No. 00-1246, at 1

(D.D.C. Dec. 31, 2003). In addition, the court ordered the

Postal Service to issue a bulletin notifying postmasters of its

new policy permitting the collection of signatures on petitions

at perimeter sidewalks. The Postal Service complied with that

order.

Plaintiffs appealed, and in 2005 we reversed the District

Court’s judgment. See Initiative & Referendum Institute v.

U.S. Postal Service, 417 F.3d 1299, 1318 (D.C. Cir. 2005).

We stated that Section 232.1(h)(1)’s ban on signature

collection on those sidewalks was unconstitutional. Although

the Postal Service had directed postmasters not to enforce the

regulation on perimeter sidewalks, we concluded that the

regulation was not reasonably susceptible to an interpretation

4

that excluded perimeter sidewalks from its scope. By its own

terms, the regulation applied to “all real property under the

charge and control of the Postal Service.” 39 C.F.R.

§ 232.1(a). Moreover, the regulation as written – not the

Postal Service’s non-enforcement policy – was posted in post

offices. We reasoned that the Postal Service’s policy of not

enforcing the regulation on perimeter sidewalks could not

“alone temper the regulation’s chill of First Amendment

rights.” Initiative & Referendum Institute, 417 F.3d at 1318.

We recognized, however, that the Postal Service could cure

the constitutional defect by amending the regulation to permit

the collection of signatures on petitions at perimeter

sidewalks. We remanded for further proceedings consistent

with our opinion.

After this Court issued its 2005 decision, the Postal

Service amended its regulation to allow the collection of

signatures on petitions at perimeter sidewalks. See 39 C.F.R.

§ 232.1(a)(ii) (2006). In a later challenge, the District Court

and this Court upheld the amended regulation. See Initiative

& Referendum Institute v. U.S. Postal Service, 685 F.3d 1066,

1074 (D.C. Cir. 2012).

Plaintiffs then applied for attorney’s fees under the Equal

Access to Justice Act. They sought fees incurred before this

Court’s 2005 decision. The Act authorizes fee awards to

parties that prevail in litigation against the United States,

unless the Government’s position was substantially justified.

See 28 U.S.C. § 2412(d)(1)(A). The magistrate judge

recommended denying the fee application on the ground that

plaintiffs were not prevailing parties under the Act. The

District Court agreed. The District Court concluded that

plaintiffs “did not gain any court-ordered relief from the D.C.

Circuit’s 2005 decision” because that decision “did not

compel the Postal Service to amend the 1998 Regulation.”

5

Initiative & Referendum Institute v. U.S. Postal Service, No.

00-CV-1246, at 14 (D.D.C. Feb. 24, 2014). Rather, the Postal

Service’s subsequent amendment to the regulation constituted

“a voluntary change.” Id. at 15. Plaintiffs have appealed that

ruling. We review the District Court’s decision de novo.

Thomas v. National Science Foundation, 330 F.3d 486, 491

(D.C. Cir. 2003).

II

The Equal Access to Justice Act provides that “a court

shall award to a prevailing party other than the United States

fees and other expenses” incurred in a civil action brought by

or against the United States, “unless the court finds that the

position of the United States was substantially justified or that

special circumstances make an award unjust.” 28 U.S.C.

§ 2412(d)(1)(A).

In determining whether a fee applicant is a “prevailing

party,” this Court applies the following three-part test: “(1)

there must be a court-ordered change in the legal relationship

of the parties; (2) the judgment must be in favor of the party

seeking the fees; and (3) the judicial pronouncement must be

accompanied by judicial relief.” Turner v. National

Transportation Safety Board, 608 F.3d 12, 15 (D.C. Cir.

2010) (internal quotation marks omitted); see also Thomas v.

National Science Foundation, 330 F.3d 486, 492-93 (D.C.

Cir. 2003) (applying three-part test to analysis of “prevailing

party” under 28 U.S.C. § 2412(d)(1)(A)).

The primary question here is whether our 2005 decision

effectuated a court-ordered change in the legal relationship of

the parties. The answer is yes.

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The Supreme Court has explained that “prevailing party”

status requires a “court-ordered change in the legal

relationship” between the parties. Buckhannon Board & Care

Home, Inc. v. West Virginia Department of Health & Human

Resources, 532 U.S. 598, 603-04 (2001) (internal quotation

marks omitted); cf. also Thomas, 330 F.3d at 492 n.1

(“Buckhannon applies to the definition of ‘prevailing party’”

under the Equal Access to Justice Act.). That court-ordered

change may be brought about by, for example, an enforceable

judgment on the merits. Buckhannon, 532 U.S. at 604. 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.” Id. at 605. Importantly, a party may achieve

“prevailing party” status when the “terms of a remand [are]

such that a substantive victory will obviously follow.”

Waterman Steamship Corp. v. Maritime Subsidy Board, 901

F.2d 1119, 1123 (D.C. Cir. 1990); see also National Rifle

Association of America, Inc. v. City of Chicago, 646 F.3d 992,

994 (7th Cir. 2011) (awarding fees where, after appellate

decision, “litigation was over except for the entry of an

injunction by the district court”).

Plaintiffs here argue that they obtained a favorable, court-

ordered change – namely, this Court’s 2005 decision holding

the Postal Service’s regulation unconstitutional with respect

to collecting signatures on petitions at perimeter sidewalks.

We agree.

To be sure, by the time of our 2005 decision, the Postal

Service had already directed postmasters not to enforce the

regulation’s prohibition against collecting signatures on

petitions at perimeter sidewalks. But the Postal Service’s

non-enforcement policy alone was not good enough, we said

7

in that decision. We held that the challenged regulation still

caused an impermissible “chill” on plaintiffs’ First

Amendment rights, notwithstanding the Postal Service’s non-

enforcement policy. Initiative & Referendum Institute v. U.S.

Postal Service, 417 F.3d 1299, 1318 (D.C. Cir. 2005). The

non-enforcement policy, we explained, “is not published in

the Federal Register, is not contained in the Code of Federal

Regulations, and is not posted for public examination in post

offices.” Id. at 1317-18. And even if the non-enforcement

policy were posted for public examination, citizens “could not

confidently rely on it,” especially given its “facial

inconsistency” with the regulation’s text. Id. at 1318. In

short, we ruled that plaintiffs were entitled to relief from the

regulation regardless of how the Postal Service enforced (or

did not enforce) its regulation in practice.

The Postal Service argues that our 2005 decision

nonetheless resulted in no court-ordered change in the legal

relationship of the parties because this Court did not expressly

require the Postal Service to amend its regulation. That

argument ignores the reality of what we did.

One of two outcomes was necessary and inevitable as a

result of our 2005 decision: Either the Postal Service would

amend its regulation, or the District Court would order it to do

so. Either outcome would exclude perimeter sidewalks from

the regulation’s ban on collecting signatures on petitions. As

we have said before, a party may achieve “prevailing party”

status when the “terms of a remand [are] such that a

substantive victory will obviously follow.” Waterman, 901

F.2d at 1123. That describes this case.

In short, as a result of our 2005 decision, plaintiffs

obtained a favorable, court-ordered change in their legal

relationship with the Postal Service.

8

Plaintiffs easily satisfy the remaining two prongs of the

“prevailing party” test: They achieved a judgment “in favor

of the party seeking the fees” and a judicial pronouncement

“accompanied by judicial relief.” Turner, 608 F.3d at 15

(internal quotation marks omitted). Our 2005 decision was

“in favor” of plaintiffs – “the party seeking the fees.” Id.

And because we remanded for further proceedings consistent

with our opinion, our “judicial pronouncement” was

“accompanied by judicial relief.” Id.

***

The plaintiff nonprofit organizations are prevailing

parties under 28 U.S.C. § 2412(d)(1)(A). That said, plaintiffs

are not entitled to attorney’s fees if the Postal Service’s

position was substantially justified. We leave it to the District

Court to determine in the first instance whether the Postal

Service’s position was substantially justified. We reverse the

judgment of the District Court and remand for further

proceedings consistent with this opinion.

So ordered.