Ufo Chuting of Hawaii, Inc. v. Smith

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UFO CHUTING OF HAWAII, INC., a 

Hawaii corporation; K.M.B.S.,

INC., a Hawaii corporation d/b/a

Kaanapali Tours,

Plaintiffs-Appellants,

v.

ALLAN A. SMITH, in his capacity as

Chair of the Board of Land and

Natural Resources, State of

Hawaii, and Acting Director of the No. 05-16545

Department of Land and Natural

Resources, State of Hawaii;  D.C. No.

CV-03-00651-SOM

STEPHEN THOMPSON; ED

UNDERWOOD, in his capacity as OPINION

Administrator, Division of Boating

and Ocean Recreation, Department

of Land and Natural Resources,

State of Hawaii,*

Defendants-Appellees,

UNITED STATES DEPARTMENT OF

COMMERCE; NATIONAL MARINE

FISHERIES SERVICE,

Defendants-Intervenors-Appellees.



*Pursuant to Fed. R. App. P. 43(c)(2), Allan A. Smith is substituted for

Peter T. Young as Acting Chair of the Board of Land and Natural

Resources and Director of the Department of Land and Natural Resources,

State of Hawaii; Ed Underwood is substituted for Richard Rice as Admin-

istrator, Division of Boating and Ocean Recreation, Department of Land

and Natural Resources.

15277

15278 UFO CHUTING OF HAWAII v. SMITH

Appeal from the United States District Court

for the District of Hawaii

Susan Oki Mollway, District Judge, Presiding

Argued and Submitted

June 6, 2007—Honolulu, Hawaii

Filed November 28, 2007

Before: David R. Thompson, Marsha S. Berzon, and

Richard C. Tallman, Circuit Judges.

Opinion by Judge Tallman

15280 UFO CHUTING OF HAWAII v. SMITH

COUNSEL

Dennis Niles, Paul, Johnson, Park & Niles, Wailuku, Hawaii,

for the plaintiffs-appellants.

William J. Wynhoff, Deputy Attorney General, Department of

the Attorney General, State of Hawaii, Honolulu, Hawaii, for

the defendants-appellees.

UFO CHUTING OF HAWAII v. SMITH 15281

OPINION

TALLMAN, Circuit Judge:

UFO Chuting of Hawaii, Inc. and K.M.B.S., Inc. (collec-

tively “UFO”) appeal the district court’s summary judgment

in favor of Defendants, the State of Hawaii and the United

States as Intervenor (collectively “State”). We have jurisdic-

tion under 28 U.S.C. § 1291, and we affirm. We hold that

UFO’s right to operate vessels under its federal maritime

coasting licenses does not preempt Hawaii law prohibiting

parasailing off the coast of Maui during limited portions of

the year to protect mating humpback whales. Because UFO

does not qualify as a “prevailing party,” the district court did

not abuse its discretion in denying UFO’s motion for attor-

ney’s fees.

I

UFO operates a commercial parasailing business offering

parasailing excursions to adventure seekers off the coast of

Maui and the Big Island of Hawaii. Parasailing is an “activity

in which an individual is transported or carried aloft by a

parachute, sail, or other material attached to a towline which

is towed by a vessel.” Haw. Code R. § 13-250-5. The United

States Coast Guard inspects and licenses UFO’s two vessels

—the M/V UFO and the M/V CASEY ANN—to carry up to

twelve passengers in the “coastwise” trade between McGre-

gor Point and Lipoa Point on the western coast of Maui. A

portion of this area is located within the “Maui Humpback

Whale Protected Waters.” See Haw. Code R. § 13-256-112.

Between December 15 and May 15 of each year, when

humpback whales are mating, bearing calves, and caring for

their young, Hawaii state law prohibits any person from “op-

erat[ing] a thrill craft, or engag[ing] in parasailing, water sled-

ding, or commercial high speed boating, or operat[ing] a

motor vessel towing a person engaged in water sledding or

15282 UFO CHUTING OF HAWAII v. SMITH

parasailing on the west and south shore of Maui.” Haw. Rev.

Stat. § 200-37(i). Together with Hawaii Revised Statute

§ 200-38(c), state law, in effect, prohibits parasailing activity

in all navigable waters surrounding Maui between December

15 and May 15 of each year.

On July 9, 2004, the United States District Court for the

District of Hawaii granted UFO’s motion for summary judg-

ment on the basis that the federal Marine Mammal Protection

Act (“MMPA”) preempted Hawaii state law. See UFO Chut-

ing of Haw., Inc. v. Young, 327 F. Supp. 2d 1220 (D. Haw.

2004).1 The district court granted UFO’s motion for a perma-

nent injunction barring enforcement of the parasailing provi-

sion on September 29, 2004. The State appealed.

Subsequent to the district court’s published decision, Presi-

dent George W. Bush signed into law the Fiscal Year 2005

Omnibus Appropriations Bill, Pub. L. No. 108-447, § 213,

118 Stat. 2809 (2004) (“Omnibus Bill”). Section 213 of the

Omnibus Bill provides:

[N]othwithstanding any other Federal law related to

the conservation and management of marine mam-

mals, the State of Hawaii may enforce any State law

or regulation with respect to the operation in State

waters of recreational and commercial vessels, for

the purpose of conservation and management of

humpback whales, to the extent that such law or reg-

ulation is no less restrictive than Federal law.

1

In its ruling, the district court reasoned that the MMPA expressly pre-

empted the parasailing provision by prohibiting the State from enforcing,

or attempting to enforce, any state law related to the taking of marine

mammals within Hawaii. UFO Chuting of Haw., Inc., 327 F. Supp. 2d at

1222-23 (discussing the implications of 16 U.S.C. § 1379(a)). As an alter-

native holding, the district court concluded that the parasailing provision

actually conflicted with a substantive right granted by the MMPA, allow-

ing vessels to come within 100 yards of humpback whales. Id. at 1229-30

(discussing Pub. L. No. 103-238, 1994 Stat. 1636).

UFO CHUTING OF HAWAII v. SMITH 15283

A day later, the State filed a motion to stay the permanent

injunction and asked the district court to indicate whether it

would entertain a motion under Federal Rule of Civil Proce-

dure 60(b) should we issue a remand order. On December 13,

2004, before the injunction went into effect, the district court

indicated that it would grant a Rule 60(b) motion because of

the intervening change in the law. The district court also

granted the State’s motion to stay the permanent injunction.

We issued a limited remand on January 10, 2005, and the dis-

trict court granted the State’s Rule 60(b) motion on March 31,

2005. The district court then vacated its prior judgment and

entered summary judgment in favor of the State. However,

because the district court failed to address UFO’s Commerce

Clause arguments, it granted UFO’s motion for reconsidera-

tion on May 5, 2005, and issued an amended order granting

summary judgment in favor of the State, now rejecting UFO’s

claim that the MMPA preempted state law. On July 7, 2005,

the district court granted the State’s motion for summary

judgment on all remaining issues, rejecting UFO’s last claim

that its right to engage in coastwise trade under federal license

preempts the parasailing restriction (as well as other Com-

merce Clause claims). See UFO Chuting of Haw., Inc. v.

Young, 380 F. Supp. 2d 1160 (D. Haw. 2005).

The district court then denied UFO’s motion for attorney’s

fees, costs and expenses. The court reasoned that UFO was

not the “prevailing party” because the permanent injunction

never went into effect. Consequently, UFO never received a

direct benefit from the temporary relief granted by the court.

UFO timely appeals both rulings.

II

We review de novo the district court’s grant of summary

judgment. Flint v. Dennison, 488 F.3d 816, 825 (9th Cir.

2007). We view the facts in the light most favorable to UFO

and draw all reasonable inferences in its favor. Id. at 825-26.

15284 UFO CHUTING OF HAWAII v. SMITH

A

[1] UFO contends that its Coast Guard license—

authorizing it to carry up to twelve passengers in coastwise

trade—preempts Hawaii’s ban on parasailing because the

license grants UFO a federal right of maritime passage that

actually conflicts with Hawaii’s seasonal ban. See Young v.

Coloma-Agaran, 340 F.3d 1053, 1055 (9th Cir. 2003)

(describing the three ways federal law may preempt state law,

including when state law actually conflicts with federal law).

An actual conflict “occurs ‘where it is impossible . . . to com-

ply with both state and federal requirements, or where state

law stands as an obstacle to the accomplishment and execu-

tion of the full purposes and objectives of Congress.’ ” Id. at

1055-56 (alteration in original) (quoting Freightliner Corp. v.

Myrick, 514 U.S. 280, 287 (1995)).

[2] “[N]o State may completely exclude federally licensed

commerce.” Fla. Lime & Avocado Growers, Inc. v. Paul, 373

U.S. 132, 142 (1963); Young, 340 F.3d at 1056. However, a

state “ ‘may impose upon federal licensees reasonable, non-

discriminatory conservation and environmental protection

measures otherwise within their police power.’ ” Young, 340

F.3d at 1056 (quoting Douglas v. Seacoast Prods., Inc., 431

U.S. 265, 277 (1977)); see also Huron Portland Cement Co.

v. Detroit, 362 U.S. 440, 448 (1960) (stating that so long as

the federal law does not preempt state action, a state or local

regulation “requires no more than compliance with an orderly

and reasonable scheme of community regulation” (emphasis

added)); id. at 443 (“Evenhanded local regulation to effectu-

ate a legitimate local public interest is valid unless pre-empted

by federal action . . . .”).

UFO argues that conflict preemption occurs “where state

law has the effect of precluding employment of a vessel for

the single purpose for which it was designed, constructed and

licensed.” In other words, because its two vessels were

designed for parasailing, UFO contends that Hawaii cannot

UFO CHUTING OF HAWAII v. SMITH 15285

ban parasailing on the navigable waters in which its federal

license authorizes it to engage in coastwise trade. For support,

UFO cites Young, 340 F.3d 1053, and Waste Management

Holdings, Inc. v. Gilmore, 252 F.3d 316 (4th Cir. 2001).

In Young, the state of Hawaii banned all commercial ves-

sels from the Hanalei River or Hanalei Bay ocean waters at

all times of the year. 340 F.3d at 1055 (discussing Haw. Code

R. § 13-256-36). The plaintiffs operated commercial tour

boats and held a federal license from the Coast Guard autho-

rizing them to engage in coastwise trade. Id. The court agreed

with the district court and concluded that the plaintiffs’ fed-

eral license to engage in coastwise trade preempted the

Hawaii rule. The plaintiffs’ coasting license authorized them

to engage in coastwise trade, which “includes the transporta-

tion of passengers.” Id. (citing Gibbons v. Ogden, 22 U.S. (9

Wheat.) 1,214-15 (1824); see also id. (“[A] coasting license

‘entitles a vessel to employment in unrestricted coastwise

trade.’ ” (quoting 46 C.F.R. § 67.19(a))). Therefore, because

Hawaii law “completely exclude[d] the plaintiffs from con-

ducting their federally-licensed tour boat business” at all

times, it “effectively rendered it impossible for the plaintiffs

to comply with both federal and state law in order to ply their

trade.” Id. at 1057.2 Thus, federal law preempted state law

and, because there was an actual conflict, we declined to

determine whether the State had properly exercised its con-

current power to alleviate user conflicts. Id.

[3] Here, in contrast to Young, the ban on parasailing is

only in effect for five months of the year. The Hawaii statute

undoubtedly imposes a significant restriction on the ability of

2

The Hawaii Rule authorized two commercial use permits for kayaks to

operate in the same area. Id. Although the court did not address this por-

tion of the regulation in Young, the small exception for kayaks does not

undermine the court’s conclusion that this was a complete ban. The kayak

exception did not apply to the plaintiffs—who operated commercial tour

boats—and thus, as applied to their commercial tour boats, the Hawaii

Rule resulted in a complete ban.

15286 UFO CHUTING OF HAWAII v. SMITH

UFO to ply its trade, but the State has not “completely exclud-

ed” UFO from engaging in coastwise trade in the relevant

waters as it did with the year-round ban in Young.3 Moreover,

UFO has presented no evidence that it is wholly economically

infeasible to operate its business with the five-month ban, and

has therefore not shown that it cannot “comply with both fed-

eral and state law in order to ply [its] trade.”4 Id. at 1057.

[4] Nor can UFO show that the Hawaii regulation is in

actual conflict with the federal law because it “stands as an

obstacle to the accomplishment and execution of the full pur-

poses and objectives of Congress.” Young, 340 F.3d at

1055-56. By enacting section 213 of the Omnibus Bill, Con-

gress permitted the State of Hawaii to regulate the operation

of commercial vessels for the purpose of protecting humpback

whales. Although the Omnibus Bill does not address the pre-

emptive effect of federal Coast Guard licenses, it nonetheless

suggests that Congress meant the Hawaii legislation protect-

3

UFO relies heavily on a Fourth Circuit case, Waste Management Hold-

ings, Inc. v. Gilmore, 252 F.3d 316 (4th Cir. 2001), in which the court held

that a Virginia law prohibiting “commercial transport of hazardous or non-

hazardous solid waste . . . by ship, barge or other vessel upon” certain nav-

igable waters was preempted by the plaintiffs’ federal licenses. Id. at 323.

The reasoning of Waste Management is, however, unclear. The court first

mentions that the ban on “hazardous waste transport” constituted complete

exclusion, but then goes on to state that the regulation was not reasonable.

Id. at 348. It may be that the district court in this case was correct in con-

cluding that the Fourth Circuit would not have conducted the reasonable-

ness inquiry had it really thought there was a complete exclusion. Given

that the case was decided at least in part on the ground that the regulation

was unreasonable, we do not find its holding with regard to complete

exclusion particularly illuminating.

4

We recognize that there may be a point at which a seasonal ban such

as this makes it impossible for a federal licensee to ply its trade. In this

instance, UFO cannot conduct its parasailing business for five months out

of the year. A longer ban or a ban on a different type of maritime business

could result in such an economic impact to the licensee as to make opera-

tion of its business wholly infeasible. That is not the case here, and we

save for another day the question whether such an impact would lead to

preemption of a state regulation.

UFO CHUTING OF HAWAII v. SMITH 15287

ing humpback whales to continue in force, despite a known

impact on parasailing and similar commercial boating activ-

ity. We are thus especially reluctant to find a conflict with

federal purposes here.

[5] We therefore hold that Hawaii’s regulation does not

completely exclude federal licenses or actually conflict with

federal law.

B

1

[6] In Douglas, the Supreme Court made clear that, so long

as it is not in conflict with federal law, “[s]tates may impose

upon federal licensees reasonable, nondiscriminatory conser-

vation and environmental protection measures otherwise

within their police power.” 431 U.S. at 277; see also Huron

Portland Cement Co., 362 U.S. at 447 (stating that possessing

a federal license does not immunize the licensee from lawful

exercises of the state’s police power). Having examined the

proffered reasons for the Hawaii law, we hold that the para-

sailing ban is a reasonable regulation of federal licenses.

The parties dispute the level of deference the court should

give the legislature in reviewing a statute for reasonableness

that is not in actual conflict with federal law. The State con-

tends that we should apply rational basis review, while UFO

argues for a higher level of scrutiny. UFO contends that it

“[i]s the State’s burden to show [that] the [parasailing ban]

sweeps no broader than necessary to achieve its putative pur-

pose.” In support, UFO cites United States v. Locke, 529 U.S.

89 (2000), for the proposition that, “[i]n the field of coastwise

navigation, state legislation of this stripe is not presumed rea-

sonable.”

UFO misconstrues Locke. Although the Court did hold that

there is no assumption of nonpreemption when there is a “his-

15288 UFO CHUTING OF HAWAII v. SMITH

tory of significant federal presence,” id. at 108, the Court was

referring to field preemption—in which Congress leaves no

room for state regulation—not conflict preemption, in which

the question is whether compliance with both state and federal

law is possible, id. at 108-110. In other words, when states

have traditionally occupied the field, an assumption of non-

preemption still exists. Id. at 110.

Neither Huron nor Douglas defines “reasonable” in the

context of conflict preemption; nevertheless, it is clear that

when an exercise of police power does not affect a fundamen-

tal right, courts apply the same rational basis analysis

employed in equal protection inquiries. Id. at 319-20; Mass.

Bd. of Retirement v. Murgia, 427 U.S. 307, 312 (1976).

Therefore, UFO had the burden to negate any conceivably

legitimate reason the State may have had in enacting the para-

sailing ban. See Heller, 509 U.S. at 319-20.5 UFO failed to

meet its burden.

To support the enactment of the parasailing ban, the Hawaii

legislature found that “[t]he operation of thrill craft, parasail-

ing vessels, and high-speed motorized vessels during certain

times of the year poses an unacceptable risk of harm to endan-

gered sea creatures such as migratory humpback whales and

sea turtles.” H.B. 2994, 1990 Haw. Sess. Laws 972. The legis-

lature elaborated further on the impact to humpback whales,

stating:

The legislature declares that the waters of the State

should be safe from the dangers of thrill craft, para-

sailing vessels, and high-speed motorized vessels

during the annual migration of humpback whales to

5

Under this standard, the issue is not whether there is a viable alterna-

tive use of UFO’s tow boats, but whether the ban is reasonably related to

a legitimate government interest. Because UFO has failed to raise a genu-

ine issue of material fact regarding the reasonableness of this statute, the

district court properly granted summary judgment to the State.

UFO CHUTING OF HAWAII v. SMITH 15289

Hawaii especially in Maui waters identified as criti-

cal habitats for endangered humpback whales.

Humpback whales are very acoustically oriented

mammals. Continuous traffic and constant underwa-

ter noise created by thrill craft, parasailing vessels,

and high-speed motorized vessels in near shore, shal-

low waters threaten humpback whale population

recovery by displacing the whales from their favored

habitat and further by disrupting the acoustic envi-

ronment, creating an energetic cost to the whales in

responses to these disturbances, disrupting the spe-

cies’ mating system, and threatening the survival of

calves.

Id.6

[7] UFO disputes this legislative finding, arguing that

“[i]ntuitively, at least, a 28-foot vessel whose passengers are

engaged in whale watching would seem to pose a greater risk

of impacting a whale than an identical boat towing a para-

sailor whose operator is intent on staying clear of the whales.”

However, it is not our function to question the legislature’s

intuition. See Heller, 509 U.S. at 319.7 Moreover, it is not the

“whale watching” activity that poses a threat to the whale.

Rather, high speed traffic causes underwater noise. This dis-

6

Marine biologists Mark Ferrari and Deborah Glockner testified before

the Hawaii legislature in 1990 regarding the disturbance caused by para-

sailing. They testified that “there is no question that the activities of para-

sailing and thrill craft operations have definitely displaced resting mothers

and their newborn calves away from their preferred nearshore habitat.”

“Any high speed activity such as parasailing . . . and their related activi-

ties, produce both a point disturbance at the surface of the water, as well

as an acoustic disturbance (noise pollution) underwater.”

7

UFO’s argument that the district court had a duty to determine whether

the evidence presented to the legislature met the standards set out in Dau-

bert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), was

rejected by this court in Gammoh v. City of La Habra, 395 F.3d 1114,

1126 & n.5 (9th Cir. 2005).

15290 UFO CHUTING OF HAWAII v. SMITH

turbance displaces whales from their favorite breeding

grounds, disrupting mating behavior and threatening the sur-

vival of calves. Because the parasailing ban furthers the legiti-

mate governmental purpose of protecting humpback whales,

we hold that the statute is reasonable.

2

As the State notes in its brief, the Supreme Court has not

clearly defined what constitutes “nondiscriminatory” state

regulation of a federal licensee or the standards a reviewing

court should apply. However, given its statements in Douglas,

we can infer that the Court sought to incorporate the same

standards of “nondiscriminatory” as it has applied in the con-

text of the Commerce Clause.

[8] The Commerce Clause forbids discrimination against

interstate commerce. Alaska Airlines, Inc. v. City of Long

Beach, 951 F.2d 977, 983 (9th Cir. 1991) (per curiam). In

Douglas—a case discussing when states can impose regula-

tions on federal licensees—the Court discussed discrimination

in the context of the Commerce Clause. See Douglas, 431

U.S. at 277 (stating that, in Gibbons, the Court struck down

a state statute that “allowed some steam vessels to ply their

trade while excluding others that were federally licensed”); id.

(discussing Manchester v. Massachusetts, 139 U.S. 240

(1981), in which the Court held that a state statute that “makes

no discrimination in favor of citizens of Massachusetts and

against citizens of other States . . . may well be considered as

an impartial and reasonable regulation”).

[9] A facially neutral statute may violate the Commerce

Clause if “the burdens of the statute . . . so outweigh the puta-

tive benefits as to make the statute unreasonable or irrational.”

Alaska Airlines Inc., 951 F.2d at 983. A statute is unreason-

able or irrational when “the asserted benefits of the statute are

in fact illusory or relate to goals that evidence an impermissi-

ble favoritism of in-state industry over out-of-state industry.”

UFO CHUTING OF HAWAII v. SMITH 15291

Id.; see, e.g., Hunt v. Wash. State Apple Adver. Comm’n, 432

U.S. 333, 353-54 (1977) (overturning a facially neutral statute

that ultimately discriminated against out-of-state commerce);

Pike v. Bruce Church, Inc., 397 U.S. 137, 144-46 (1970)

(overturning an Arizona statute that prohibited local melon

growers from shipping their produce to California for packing

because the admitted purpose was to favor Arizona growers

by requiring superior quality growers to have their produce

packaged in Arizona).

[10] The Hawaii ban on parasailing is facially neutral. It

does not differentiate between residents and nonresidents, or

residents and non-citizens. Moreover, the benefits of the stat-

ute are not illusory, nor do they indicate favoritism to in-state

industries. The purpose of the parasailing ban is to protect

human safety and the environment. The legislature received

evidence that noise caused by thrill craft and parasailing ves-

sels disrupts the natural behavior of migratory humpback

whales. By banning parasailing and thrill craft activity during

the time of year in which humpback whales inhabit the waters

off Maui, the legislature advanced its legitimate purpose of

protecting the endangered species. Thus, we hold that the

parasailing ban is nondiscriminatory and does not impose an

unreasonable burden on interstate commerce.

III

[11] We review for an abuse of discretion a district court’s

determination of attorney’s fees under 42 U.S.C. § 1988.

Martinez v. Wilson, 32 F.3d 1415, 1421-22 (9th Cir. 1994). A

party is a “prevailing party” when “(1) it wins on the merits

of its claim, (2) the relief received materially alters the legal

relationship between the parties by modifying the defendant’s

behavior, and (3) that relief directly benefits the plaintiff.” Id.

at 1422.

A final judgment on the merits is not a condition precedent

to obtaining the status of a “prevailing party.” Hanrahan v.

15292 UFO CHUTING OF HAWAII v. SMITH

Hampton, 446 U.S. 754, 756-57 (1980) (per curiam) (“The

legislative history of [42 U.S.C. § 1988] indicates that a per-

son may in some circumstances be a ‘prevailing party’ with-

out having obtained a favorable ‘final judgment following a

full trial on the merits.’ ” (quoting H.R. Rep. No. 94-1558, at

7 (1976)). A party has “prevailed on the merits of at least

some of (their) claims,” id. at 758, when it has obtained a pre-

liminary injunction that results in a direct and substantial ben-

efit. Williams v. Alioto, 625 F.2d 845, 847 (9th Cir. 1980) (per

curiam); see also Dahlem v. Bd. of Educ. of Denver Public

Schs., 901 F.2d 1508, 1512 (10th Cir. 1990) (“Such relief on

the merits may fall short of a formal judgment so long as it

works a material alteration of the substantial rights of the par-

ties.” (internal quotation marks and citations omitted)); Grano

v. Barry, 783 F.2d 1104, 1109 (D.C. Cir. 1986). Therefore,

when “a party . . . achieves the objective of its suit by means

of an injunction issued by the district court[, it] is a prevailing

party in that court, notwithstanding the fact that the case

becomes moot, through no acquiescence by the defendant,

while the order is on appeal.” Dahlem, 901 F.2d at 1512.8

8

This rationale is consistent with the Supreme Court’s decision in Lewis

v. Continental Bank Corp., 494 U.S. 472 (1990). There, the plaintiff

sought declaratory and injunctive relief ordering the Florida Department

of Banking and Finance to process its application to operate an industrial

savings bank in Florida. Id. at 475. After the district court granted the

plaintiff’s motion for summary judgment, but before the Department of

Banking and Finance processed the application or the Eleventh Circuit

ruled on the merits of the appeal, the State of Florida amended its statutes,

which mooted the litigation. Id. The Court held that, “[s]ince the judgment

below is vacated on the basis of an event that mooted the controversy

before the Court of Appeals’ judgment issued, Continental was not, at that

stage, a ‘prevailing party’ as it must be to recover fees under § 1988.” Id.

at 483. In doing so, the Court did not hold that a party automatically loses

its prevailing party status when the appeal becomes moot before a Court

of Appeals reaches final judgment. See id. (“Whether [the plaintiff] can be

deemed a ‘prevailing party’ in the district court, even though its judgment

was mooted after being rendered but before the losing party could chal-

lenge its validity on appeal, is a question of some difficulty, see, e.g.,

Palmer v. Chicago, 806 F.2d 1316, 1321 (7th Cir. 1986)[,] . . . [that w]e

UFO CHUTING OF HAWAII v. SMITH 15293

Having concluded that the subsequent statutory change did

not undermine UFO’s status as a prevailing party, we turn

now to the question of whether UFO received a direct and

substantial benefit from its initial award of a permanent

injunction. The entry of judgment in a party’s favor does not

automatically render that party a “prevailing party” under

§ 1988. Rhodes v. Stewart, 488 U.S. 1, 3 (1988) (per curiam).

The judgment is not the end but a means to receiving some

redress from the defendant. Id. To be considered a “prevailing

party,” the plaintiff must show that the judgment somehow

affected the behavior of the defendant towards the plaintiff.

Id. at 4; see also id. at 3-4 (“At the end of the rainbow lies

not a judgment, but some action (or cessation of action) by the

defendant that the judgment produces—the payment of dam-

ages, or some specific performance, or the termination of

some conduct.” (emphasis added)).

For instance, in Williams, the plaintiffs obtained a prelimi-

nary injunction against “pat-down” searches conducted via a

special investigative procedure known as “Operation Zebra.”

625 F.2d at 847. Before we could rule on the merits of the

preliminary injunction, Operation Zebra ended, mooting the

issue. We nonetheless upheld the plaintiffs’ status as a pre-

vailing party, stating, “[o]ur previous dismissal of the appeal

as moot and vacation of the district court judgment d[id] not

affect the fact that for the pertinent time period appellees

obtained the desired relief.” Id. at 847-48. In other words,

because the plaintiffs obtained the relief they sought—a pre-

liminary injunction preventing the appellants from continued

enforcement of “Operation Zebra”—they received a direct

benefit and qualified as a “prevailing party.” Id.

decline to resolve . . . .”). Rather, the Court reaffirmed established case

law requiring a prevailing party to obtain a direct and substantial benefit.

Because the plaintiff in Lewis never received the benefit it sought—the

right to apply to the Florida agency—it lost its status as the prevailing

party.

15294 UFO CHUTING OF HAWAII v. SMITH

[12] In comparison to Williams, UFO did not receive a

direct benefit. The permanent injunction was not the end;

rather, it was a means to achieving the end. Rhodes, 488 U.S.

at 3. Because the district court stayed the implementation of

the permanent injunction before the State had to change its

behavior—before Hawaii stopped enforcing its parasailing

ban—UFO cannot be considered the “prevailing party.”

IV

Hawaii’s reasonable and nondiscriminatory seasonal ban on

parasailing off the coast of Maui does not completely exclude

UFO from using its federal license. Entry of summary judg-

ment in favor of the State of Hawaii was proper. Because the

district court stayed its permanent injunction before UFO

received a direct benefit, UFO is not a “prevailing party”

under 42 U.S.C. § 1988. The district court therefore did not

abuse its discretion in denying UFO’s request for attorney’s

fees.

AFFIRMED.