Amicus Curiae Brief — Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health and Human Resources

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No. 99-1848 DFC 18 200

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In the

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BUCKHANNON BOARD AND CARE

HOME, INC.; THE WEST VIRGINIA

. RESIDENTIAL BOARD AND CARE

HOME ASSOCIATION: and on behalf

of all others similarly situated,

Petitioners.

Vv.

WEST VIRGINIA DEPARTMENT OF HEALTH

AND HUMAN RESOURCES. ef a/..

Respondents

i ae

On Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

>

BRIEF AMICUS CURIAE OF PACIFIC LEGAL

FOUNDATION IN SUPPORT OF RESPONDENTS

+

M. REED HOPPER

Counsel of Record

Pacific Legal Foundation

10360 Old Placerville Road.

Suite 100

Sacramento, California 95827

Felephone: (916) 362-2833

Facsimile: (916) 362-2932

Counsel for Amicus Curiae

Pacific Legal Foundation

NBEST AVAILABLE COPY

i

QUESTION PRESENTED

Is the “catalyst theory” available for the recovery of

attorney's fees under federal fee-shifting statutes?

TABLE OF CONTENTS

Page

QUESTION PRESENTED ............... Serrerrir i

TABLE OF AUTHIORITEBS 0). ccccccvescesecsesenseuuan iil

IDENTITY AND INTERESTS OF AMICUS CURIAE ....... l

STATEMENT OF THE CAGE... cccccveccncnscssussenunn 2

SUMMARY OF THE ARGUMENT. .............00 00005 3

ARIIUIGEINT ... occ cccccecceceeseeesue see 4

|. THE “CATALYST THEORY” IS

FUNDAMENTALLY UNFAIR .... 00.6.0 00sec eens 5

A. Voluntary Change of Behavior Is Not a

ON tS 6

B. The “Catalyst Theory” Compounds the Inequity

in the Enforcement of the Fee-Shifting Statutes .... 8

C. The “Catalyst Theory” Does Not Fairly Balance

the Rights of Che FEUGSS .. wo vccccscccoussusunes 9

ll. THE “CATALYST THEORY” IS BAD PUBLIC

POLICY .. wc vccccsecveecacensan enue 10

A. A Voluntary Change in Behavior Catalyzed by

Litigation May Itself Be Illegal ................ 10

B. The “Catalyst Theory” Engenders Confusion

and Unnecessary Litigation ................45. 12

C. The “Catalyst Theory” Discourages Voluntary

AMOR oc ccccsescccvcsesssueu nue 14

Ill. THE “PREVAILING PARTY” STANDARD OF

FARRAR IS SUFFICIENT TO DETER MOST

VIOLA TOONS on cccccccccccecseccesseeeeuenneen 15

eo oF! 6: Tit )h”!!U!tt”t~—~— 19

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iii

TABLE OF AUTHORITIES

Cases

Buckhannon Board and Care Home, Inc. v.

West Virginia Department of Health

and Human Resources, 2000 U.S. App.

LEXIS 720 (4th Cir. 2000) (unpublished) ........... 2

Christiansburg Garment Co. v. Equal

Employment Opportunity Commission,

ee cect ees eceerdedevevcees 8

City of Mesquite v. Aladdin’; Castle, Inc.,

Ee 17-18

Farrar v. Hobby, 506 U.S. 103 (1992) ........... passim

Gwaltney v. Chesapeake Bay Foundation, Inc.,

eee ce eecseceeséecsoeess 15

Mooney v. Holohan, 294 U.S. 103 (1935) .............. 6

Morris v. City of West Palm Beach,

194 F.3d 1203 (1ith Cir. 1999)...............2.24.. 5

National Mining Association v. United States

Army Corps of Engineers, 145 F.3d 1399

eee ed ee eececccedecesceces 11

Northeastern Florida Chapter of the

Associated General Contractors of

America v. City of Jacksonville,

eee eke cereccecccceocees 17

Parham v. Southwestern Bell Telephone

Company, 433 F.2d 421 (8th Cir. 1970) ........... 4-5

Rochin v. California, 342 U.S. 165 (1952) ............. 6

iv

TABLE OF AUTHORITIES—C ontinued

Page

S-1 and S-2 v. The State Board of Education

of North Carolina, 6 F.3d 160 (4th Cir. 1993) .... 12-14

United States v. Concentrated Phosphate

Export Assn., Inc., 393 U.S. 199 (1968) ............ 17

United States v. W. T. Grant Co.,

SGD nc ccduuscoudundeeendenne 17-18

United States Constitution

eR a nee eae eikae 16

Statutes

Gee SE cccuccnsécdadenedenteandéunaeenas 6

SAPO, ccccccsédcceéonceceneenessésdesen 2

Ds cccuditesannidatwecetunskabesenwen 4

i MO coccdeducccasennebusadauseabeds 2

Di Ltisdiddvadceddéenauiatsandneanddaunaieade 4

Rules of the Supreme Court

DGS ceccccvcsccensscecdencecutes l

i bcctdaéedbscusbsbetsaaseensedenenaaena l

Miscellaneous

Gregory C. Sisk, The Essentials of the Equal

Access To Justice Act: Court Awards of

Attorney's Fees for Unreasonable Government

Conduct (Part One), 55 La. L. Rev. 217 (1994) ...... 13

H.R. No. 1558, 94th Cong., 2d Sess. at 7 (1976)......... 7

v

TABLE OF AUTHORITIES—C ontinued

Page

Joel H. Trotter, The Catalyst Theory of Civil

Rights Fee Shifting After Farrar v. Hobby,

80 Va. L. Rev. 1429 (1994) ..............4.. 8, 16-19

S. Rep. No. 1011, 94th Cong., 2d Sess. at 5 (1976)....... 7

————— eee ===.

IDENTITY AND INTERESTS

OF AMICUS CURIAE

Pursuant to Supreme Court Rule 37,' Pacific Legal

Foundation (PLF) respectfully submits this Brief Amicus

Curiae in Support of Respondents, West Virginia Department

of Health and Human Resources, ef a/. Written consent for

amicus participation in this case was granted by counsel for all

parties and lodged with the Clerk of this Court.

Pacific Legal Foundation is a nonprofit, tax-exempt

organization incorporated to litigate important matters of public

interest. PLF has thousands of supporters nationwide and

advocates a balanced approach to dealing with public interest

issues. PLF supports the concept of limited government and

believes public policies should reflect a careful assessment of

the social and economic costs and benefits involved.

Governmental action, including the application of prudential

standards in the courts, should be fair and evenhanded.

This case requires this Court to address whether the

“catalyst theory” of fee awards, created by the lower courts, is

viable under Supreme Court precedent. This is an issue of great

public import because that theory requires public and private

defendants to pay substantial attorney’s fees without a

determination of the merits of the lawsuit or an enforceable _.

order. This Court’s determination will either encourage or

discourage voluntary settlement of significant cases under

federal civil rights and environmental laws. PLF litigates such

cases and will be directly affected by this determination. A

consideration of a broad spectrum of perspectives, including

those of the Pacific Legal Foundation, is, therefore, warranted.

' Pursuant to Supreme Court Rule 37.6, Amicus Pacific Legal

Foundation states that no counsel for a party to this action authored

any portion of this brief and that no person or entity, other than

Amicus, made a monetary contribution to the preparation or

submission of this brief.

2

PLF has a long history of amicus participation in this Court and

believes its public policy perspective on this issue will provide

a helpful and necessary viewpoint in this case.

STATEMENT OF THE CASE

Buckhannon Board and Care Home, Inc., operates a care

home for elderly people requiring assistance in their daily

living. The home failed a fire inspection because it housed

residents incapable of self-preservation, in violation of West

Virginia law. Buckhannon brought an action for declaratory

relief, arguing the law violated the federal Fair Housing

Amendments Act (FHAA), 42 U.S.C. §§ 3601, ef seg., aru the

Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12101,

et seq. While the action was pending, West Virginia changed

the state law to delete the self-preservation requirement. This

change in state law mooted the case.

Although the law was not changed through an enforceable

order, Buckhannon claimed it was entitled to attorney’s fees as

a “prevailing party” under the so-called “catalyst theory.”

Under that theory, Buckhannon argues, “it obtained the relief it

sought through the defendants’ voluntary conduct because it

filed this action and brought to the state’s attention the flaws in

the law” and so should be deemed a “prevailing party.”

Buckhannon Board and Care Home, Inc. v. West Virginia

Department of Health and Human Resources, 2000 U.S. App.

LEXIS 720 (4th Cir. 2000) (unpublished).

The Fourth Circuit held, under circuit and Supreme Court

precedent, that to qualify as a “prevailing party,” the plaintiff

must, through the litigation, “obtain an enforceable judgment

. or comparable relief through a consent decree or settle-

ment.” /d. Arguing a conflict among the circuits, Buckhannon

petitioned the Supreme Court to consider whether the “catalyst

theory” is viable. This Court granted review.

3

SUMMARY OF THE ARGUMENT

It is fundamentally unfair to require a party to pay

substantial attorney’s fees without any showing of wrongdoing

or legal obligation. A voluntary change of behavior is not a

concession of guilt as the so-called “catalyst theory” implies.

A defendant may change his behavior for many reasons, not all

related to the merits of the lawsuit, including simple generosity.

In such cases, there is no reason in fairness and justice why the

defendant should pay fees and costs to the plaintiff who has yet

to prove his case. It is neither fair nor just to require the pay-

ment of attorney’s fees for voluntary cessation of a legal

practice.

The expansive, court-created “catalyst theory” unduly

favors plaintiffs. That theory requires a defendant, who volun-

tarily complies, to pay hefty fees and give up his right to

continue a potentially legal practice while the plaintiff gives up

nothing and enjoys the windfall of the court’s largess at the

expense of the defendant. Such unfair treatment in the-courts

defies all sense of fair play and decency and should not be

allowed.

The “catalyst theory” is bad public policy. In some cases,

changes in conduct induced by litigation may not only be

legally unnecessary but contrary to the law, as demonstrated by

citizen suits filed under the Clean Water Act. Additionally, the

“catalyst theory” causes confusion and prolongs litigation as

courts are required to determine whether a change of conduct

was favorable to the plaintiff and induced by the lawsuit or

something else. Instead of providing a clear standard for the

award of attorney’s fees, the “catalyst theory” requires the lower

courts to tread a tenuous path of causation to determine if the

plaintiff prevailed. A legislative change. as occurred in this

case, is particularly troubling because the reasons for the change

are sure to be more political than legal. Thus, the “catalyst

theory” unduly burdens the courts and introduces unnecessary

4

uncertainty into the litigation process. Moreover, the theory

discourages voluntary compliance as defendants come to fear

that their change of conduct may result in a fee award. As a

deterrent to voluntary conduct, the “catalyst theory” may do

more public harm than good.

In contrast to the “catalyst theory,” the requirement this

Court established in Farrar v. Hobby for prevailing party status

is clear and certain. Plaintiffs who meet the Farrar standard

and become entitled to “enforce a judgment, consent decree, or

settlement” will qualify for attorney’s fees, but not in a manner

designed to penalize voluntary defendants. A plaintiff who

obtains an enforceable order is clearly more deserving of an

award of attorney’s fees than one who merely induced a change

of conduct. In addition, the Farrar standard does not deter the

plaintiff from vindicating a right but it does allow the courts to

prevent defendants from systematically avoiding fee liability by

changing their practices. Therefore, this Court should reject the

“catalyst theory” in favor of an enforceable judgment, consent

decree, or settlement.

ARGUMENT

The FHAA and ADA, under which this case was brought,

both provide:

[T]he court, in its discretion, may allow the

prevailing party, other than the United States, a

reasonable attorney’s fee and costs.

42 U.S.C. § 3613(c)(2) and 42 U.S.C. § 12205.

In Petitioners’ view, the “catalyst theory” dictates that a

party becomes a “prevailing party” when the party merely

“achieves a favorable result from the lawsuit.” Petitioner’s

Brief (Pet. Brief) at 37. That theory was created by the Eighth

Circuit in Parham v. Southwestern Bell Telephone Company,

433 F.2d 421 (8th Cir. 1970), to get around the plain language

of a fee-shifting statute. Notwithstanding the civil rights case

5

was dismissed and the plaintiff received no monetary judgment

or other judicial relief, the court held:

Although we find no injunction warranted here,

we believe Parham’s lawsuit acted as a catalyst

which prompted the appellee to take action

implementing its own fair employment policies and

seeking compliance with the requirements of Title

VII. In this sense, Parham performed a valuable

public service in bringing this action. Having

prevailed in his contentions of racial discrimina-

tion .. . Parham is entitled to reasonable attorney's

fees.

Id. at 429-30.

But this Court has never “affirmatively upheld the

application of the catalyst test.” Morris v. City of West Palm

Beach, 194 F.3d 1203, 1207 (11th Cir. 1999). In fact, the more

recent decisions of this Court are inconsistent with the “catalyst

theory.” For example, in Farrar v. Hobby, 506 U.S. 103

(1992), this Court adopted a higher standard for attorney’s fees

awards and held that a “prevailing party” is one who “becomes

entitled to enforce a judgment, consent decree, or settlement.”

Id. at 574. This ruling would seem to preclude the “catalyst

theory.” But even if that were not the intent of the Farrar

decision, as Petitioners suggest, this Court should reject the

“catalyst theory” as against public policy.

THE “CATALYST THEORY” IS

FUNDAMENTALLY UNFAIR

It is fundamentally unfair to require a party to pay

attorney's fees when that party has no established legal

obligation whatsoever to meet the plaintiff's demands in a

lawsuit. But this is what the court-created “catalyst theory”

requires—a defendant that changes his conduct voluntarily,

6

before a final judgment, must pay fees and costs without proof

of wrongdoing. Thus, that test penalizes innocent parties and

violates “the fundamental conceptions of justice which lie at the

base of our civil and political institutions,” Mooney v. Holohan,

294 U.S. 103, 112 (1935), and which define “the community's

sense of fair play and decency,” Rochin v. California, 342 U.S.

165, 173 (1952). Therefore, the “catalyst theory” should be

rejected.

A. Voluntary Change of Behavior

Is Not a Concession

The reasons defendants may have for changing their

behavior in response to a lawsuit are varied and do not imply

that the suit has merit or that the defendant is guilty of

wrongdoing. For example, a defendant may choose to accede

to the demands of the plaintiff because the defendant does not

want the public scrutiny the case may bring; or the cost of

litigation may be too high, even if the defendant wins the case;

or a court battle may cause undue stress; or the time and effort

of defending the case may hamper the defendant's ability to

accomplish other objectives; or the defendant may wish to

avoid the “taint of litigation.” The defendant may even concede

the case out of pure generosity.

In such cases, there is no reason in fairness and justice

why the defendant should pay attorney’s fees to the plaintiff.

But the “catalyst theory” dictates such a result. So long as the

plaintiff achieves a favorable change of behavior, Petitioners

argue, the plaintiff is entitled to fees and costs.

However, the “catalyst theory” is based on a false

assumption-that the defendant has acted illegally, whereas the

defendant has only been accused of wrongdoing. Petitioners

claim the legislative history of the Civil Rights Attorney’s Fees

Award Act, 42 U.S.C. § 1988, supports the use of the “catalyst

theory.” Pet. Brief at 33. But, that history simply demonstrates

a bias in some legislators, and cynically adopted by some

—_ —— ee

oP Re -

7

courts, that a defendant in a civil rights suit has acted

unconstitutionally without any actual showing of illegal

conduct.

[F]or purposes of the award of counsel fees, parties

may be considered to have prevailed when they

vindicate rights through a consent judgment or

without formally obtaining relief.

S. Rep. No. 1011, 94th Cong., 2d Sess. at 5 (1976) (emphasis

added).

If there is no formal relief, there has been no decision on

the merits. Without a decision on the merits, there can be no

assurance the defendant’s conduct is contrary to the law. Thus,

the defendant may have had no obligation to change the

challenged action although the defendant chooses to settle the

case. How can the plaintiff vindicate a right that may never

have been violated?

Similarly, after a complaint is filed a defendant

might voluntarily cease the unlawful practice. A

court might still . . . conclude, as a matter of equity

that no formal relief, such as an injunction, is

needed.

H.R. No. 1558, 94th Cong., 2d Sess. at 7 (1976) (emphasis

added).

The statement, “voluntarily cease the unlawful practice,”

necessarily assumes the condct of the defendant was illegal.

But in this case and others, predicated on the “catalyst theory,”

there is no finding of illegality. Until the defendant becomes

subject to an enforceable judgment, consent decree, or settle-

ment, the defendant may have no recognized legal duty toward

the plaintiff whatsoever.

If the defendant voluntarily ceases a /awful practice (which

must be assumed until! proven otherwise), it would be a travesty

8

to require the defendant to pay fees and costs. This wouid be a

windfall to the plaintiff (surely not intended by Congress) and

violate all notions of “fair play and decency.” If the purpose of

fee-shifting is to encourage the vindication of civil rights, as

Petitioners maintain, the “catalyst theory” makes no sense. In

fact, it undermines the civil rights of the defendant. A change

of behavior on the part of the defendant is not a concession of

guilt or wrongdoing. Therefore, it would be fundamentally

unfair to require the defendant to pay fees and costs on the mere

accusation of illegal conduct.

B. The “Catalyst Theory” Compounds the Inequity

in the Enforcement of the Fee-Shifting Statutes

It is a matter of record that the courts do not normally

grant attorney’s fees to prevailing defendants under the fee-

shifting statutes. This is particularly true for civil rights cases.

See Joel H. Trotter, The Catalyst Theory of Civil Rights Fee

Shifting After Farrar v. Hobby, 80 Va. L. Rev. 1429, 1436

(1994).

Although the language of the attorney’s fees provisions of

such statutes as the FHAA and ADA is neutral on its face, the

defendant is virtually never accorded the same right to fees and

costs as the plaintiff. In fact, contrary to the plain meaning of

the acts, the courts have erected a significant barrier to the

award of attorney’s fees to prevailing defendants. Often, a

prevailing defendant may only recover fees if the underlying

action is deemed frivolous or wholly without merit. See

Christiansburg Garment Co. v. Equal Employment Opportunity

Commission, 434 U.S. 412 (1978) (acknowledging a double

standard in fee awards). This double standard for awarding

attorney’s fees is unfair enough—as well as uncalled for given

the neutral language of the statutes—but the unfairness is

compounded by the overly expansive standard applied to

prevailing plaintiffs under the “catalyst theory.” As noted

above, the “catalyst theory” holds a defendant liable to the

-_~ ee eee ——_—-—

~ ~

9

plaintiff for fees and costs even when the defendant’s change in

conduct is wholly gratuitous.

But it adds insult to injury that a defendant is all but

certain not to recover the costs of litigation even after a court

has determined that the defendant did not violate any law or

interfere with the rights of the-plaintiff. It passes understanding

to say that such blatantly unfair treatment of an innocent party

_can be squared with “fundamental conceptions of justice.”

Surely, any requirement that so dramatically favors plaintiffs,

like the “catalyst theory” of fee awards, must violate our

“community sense of fair play and decency” and should not be

countenanced.

C. The “Catalyst Theory” Does Not Fairly

Balance the Rights of the Parties

Another fact attesting to the fundamental unfairness of the

“catalyst theory” is the unequal exchange that occurs when a

defendant voluntarily complies with the demands of the plaintiff

in a lawsuit. A defendant may voluntarily change his conduct,

as established above, for varied reasons, many of which do not

go to the merits of the case. In fact, before a judicial deter-

mination of the case is made, at the point where the “catalyst

theory” comes into play, the defendant may have no legal

obligation whatsoever to change the contested behavior. So,

when the defendant voluntarily modifies the challenged con-

duct, the defendant gives up the right (often forever) to continue

offending behavior, even if the conduct were legal in all

respects.

But, under the “catalyst theory,” the plaintiff gives up

nothing in exchange. To the contrary, the plaintiff is entitled to

attorney’s fees and costs upon the defendant’s voluntary com-

pliance just as if the plaintiff had won a favorable judgment on

the merits of the suit. This is fundamentally unfair. Why should

a defendant have to give up a legal right and pay fees as well?

10

A more balanced approach would require both sides to

give something up to avoid unnecessary or prolonged litigation.

Since the defendant gives up a right to continue what may be

perfectly legal conduct, it is only fair that the plaintiff forego

something in return; namely, the award of attorney’s fees. After

all, the plaintiff has not won the case or otherwise established

an entitlement to have the challenged conduct changed.

Against the defendant, the “catalyst theory” is clearly

punitive. This may not offend one’s “sense of fair play” if the

defendant is presumed to have acted illegally, but no such

presumption is warranted. The presumption of guilt without

proof is incompatible with the concept of ordered liberty, which

the Constitution was designed to ensure, and unacceptable in

our democratic society. Nevertheless the “catalyst theory”

implies such a presumption. How else could the courts justify

imposing a fee award against an innocent party?

The “catalyst theory” simply does not square with any

reasonable “conceptions of justice” nor accord with a modern

“sense of fair play and decency.” It imposes a monetary

obligation on a defendant to pay attorney’s fees to a plaintiff

without any showing of actual wrongdoing—even when the

defendant acts against his own interests by voluntarily changing

his conduct. Therefore, this Court should adhere to the fee-

award standard enunciated in Farrar that a prevailing party is

only one who “becomes entitled to enforce a judgment, consent

decree, or settlement.” 506 U.S. at 574.

THE “CATALYST THEORY” IS

BAD PUBLIC POLICY

A. A Voluntary Change in Behavior Catalyzed

by Litigation May Itself Be Illegal

In some cases, a suit may induce, rather than deter, illegal

conduct and still require the defendant to pay fees and costs to

vx—Xx—- ~-—— — -

CO ee

— <—— — SO — 3

the plaintiff under the “catalyst theory.” The facts in National

Mining Association v. United States Army Corps of Engineers,

145 F.3d 1399 (D.C. Cir. 1998), are instructive. Under Section

404 of the Clean Water Act, the Army Corps of Engineers may

issue permits for the discharge of dredged or fill material into

the navigable waters of the United States.

In 1986 the Corps issued a regulation defining

the term “discharge of dredged material,” as used in

§ 404, to mean “any addition of dredged material

into the waters of the United States,” but expressly

excluding “de minimis, incidental soil movement

occurring during normal dredging operations.”

51 Fed. Reg. 41,206, 41,232 (Nov. 13, 1986). In

1993, responding to litigation, the Corps issued a

new rule removing the de minimis exception and

expanding the definition of discharge to cover “any

addition of dredged material into, including any

redeposit of dredged material within, the waters of

the United States.”

Id. at 1401 (emphasis in original).

For almost a decade, the Army Corps of Engineers had

maintained that it was prohibited by the Clean Water Act from

regulating “de minimis incidental soil movement.” But after

the Corps was sued by numerous environmental organizations

for not regulating small redeposits of soil, the Corps sought to

comply with the plaintiff's demand and voluntarily agreed to

regulate the very activity it had steadfastly asserted it could not

regulate. The revised Corps regulation was challenged in court

by various trade associations whose members engage in

dredging and excavation. Ultimately, the Court of Appeals for

the District of Columbia ruled the Corps had exceeded its

authority under the Clean Water Act and invalidated the revised

rule. See National Mining Association, 145 F.3d 1399.

12

That case illustrates the absurdity of the “catalyst theory.”

In response to a lawsuit a defendant may choose to comply with

the plaintiffs demands, but that compliance may not be

required or even allowed by law. How can the courts justify

awarding attorney's fees to a plaintiff who has induced conduct

that is either not required by law or itself illegal?

B. The “Catalyst Theory” Engenders

Confusion and Unnecessary Litigation

The virtue of the “prevailing party” definition given by

this Court in Farrar is clarity and certainty. In that case, this

Court held that a party prevails only when the party “becomes

entitled to enforce a judgment, consent decree, or settlement.”

506 U.S. 574. These are discreet, easily identified conclusions

to the litigation process. In contrast, however, the expansive

“catalyst theory” raises more questions than it answers and

requires further litigation to determine whether the change of

conduct was favorable to the plaintiff and was induced by the

lawsuit or some other factor.

Too frequently, legal battles over attorneys’ fees

merely add another round of protracted litigation to

what already has been protracted litigation on the

merits of aclaim .... This collateral litigation over

attorneys’ fees is often more heated, more arcane,

and over far higher monetary stakes than the

underlying lawsuit. The relationship of all of this

activity to the larger public good is becoming

increasingly difficult to discern. Farrar’s crucial

insights are that the refuge from such litigation lies

in a clearly established rule for fee recovery and that

the catalyst-based approach to fee applications has

left us utterly at sea.

S-1 and S-2 v. The State Board of Education of North Carolina,

6 F.3d 160, 171 (4th Cir. 1993) (Judge Wilkinson dissenting

opinion later adopted by en banc court on rehearing).

—

———— ee a . —~ epee eee

13

Instead of providing a clear standard for determining the

award of attorney’s fees, the “catalyst theory” requires the lower

courts to follow a gossamer thread of purported causation to

determine if a party has prevailed. A change in course dictated

by a legislative body, as in this case, is particularly troubling

because the reasons for the change are likely to be more

political than legal. Legislators may change a law that moots a

case not because the original enactment was indefensible but

because they may wish to show they are not petty or to

demonstrate their largess, or even to curry favor with the elec-

torate.

Except in rare circumstances, it would seem

presumptuous indeed for a party litigating a case

pending in the courts to contend that his or her

initiation of a lawsuit compelled [the Legislature] to

enact new legislation for his benefit. As the United

States Court of Appeals for the Fifth Circuit stated in

Milton v. Shalala, “({t}he mere possibility that [the

Legislature] acted because of an individual claimant’s

suit (or reacted to a large number of similar suits) is

too speculative in our view considering the many

influences upon members of [the Legislature] in

casting votes.”

Gregory C. Sisk, The Essentials of the Equal Access To Justice

Act: Court Awards of Attorney's Fees for Unreasonable

Government Conduct (Part One), 55 La. L. Rev. 217, 285-86

(1994).

Thus, the “catalyst theory” unduly burdens the courts and

introduces unnecessary uncertainty into the litigation process.

In addition, the “catalyst theory” encourages questionable cases.

[The] catalyst theory provides incentives for filing

marginal, even frivolous, lawsuits. Any change in

conduct by the defendant, for whatever reason, may

offer a promising payout to attorneys who file a

14

complaint, whether or not that complaint has any

ultimate legal merit. Section 1988 should not be a

license to shake down government officials, nor was

it ever intended to be simply “a relief Act for

lawyers.”

S-1, 6 F.3d at 172.

For this reason, and others, the Court should adopt the

standard enunciated in Farrar.

C. The “Catalyst Theory” Discourages

Voluntary Action

In S-/ and S-2, Judge Wilkinson understood that the

“catalyst theory” discourages early settlement of a suit because

of the continued risk of fees.

With its reliance on a simple chronology of events to

show causation, catalyst theory empowers courts to

award fees for any change in behavior that occurs

after the filing of a lawsuit, whether or not the court

could have ordered that change in conduct. In this

way, Catalyst theory serves to disable [defendants],

who may come to fear that worthwhile changes may

be retroactively linked to a lawsuit and result in a

hefty bill for attorney's fees.

6 F.3d at 172.

Normally, the risk of losing a case and paying out large

attorney's fees would discourage a party from prolonging a

questionable case in litigation. This is good public policy as it

serves as an incentive to voluntary action and reduces the

burden on the courts. However, the threat of the “catalyst

theory” has the opposite effect. It deters voluntary action that

may result in a fee award. As a deterrent to voluntary action,

the “catalyst theory” may do more public harm than good. For

example. the theory discourages the defendant from voluntarily

SS

\

9

15

giving more than a court could legally demand. A policy to

encourage such conduct is at work in the 60-day notice

provisions of various federal environmental statutes.

In Gwaltney v. Chesapeake Bay Foundation, Inc., 484

U.S. 49 (1987), this Court considered the purpose of the 60-day

notice requirement for citizen suits under the Clean Water Act

and determined the notice provision would serve no purpose if

the defendant could not avoid a citizen suit for past violations

by coming into compliance within the notice period. This

Court opined that the possibility of avoiding litigation,

including the assessment of civil penalties, may induce a

defendant to “take some extreme corrective action, such as to

install particularly effective but expensive machinery, that it

otherwise would not be obliged to take.” /d. at 61.

But this is a benefit of voluntary compliance that is

undermined by the “catalyst theory.” That theory discourages

early and magnanimous settlement. Therefore, the court-

created “catalyst theory” is bad public policy and should be

rejected.

THE “PREVAILING PARTY” STANDARD

OF FARRAR IS SUFFICIENT TO

DETER MOST VIOLATIONS

In addition to encouraging plaintiffs to vindicate their

rights, one of the obvious objectives of the fee-shifting statutes

is to deter illegal conduct. But the “catalyst theory” is not

required to satisfy these objectives. The Farrar standard, along

with the mootness doctrine, serves as an adequate deterreni.

Farrar raised the bar on attorney’s fees but it did not

eliminate the deterrent effect of such awards. Plaintiffs who

meet the Farrar standard, and obtain an enforceable judgment,

consent decree, or settlement still qualify for fees. The threat of

16

liability for attorney’s fees will continue to discourage illegal

conduct. Moreover, according to Trotter,

the incentive for defendants [in a civil rights case] to

alter challenged practices before a plaintiff meets

Farrar’s test should ensure the ultimate legality of

institutional behavior. Plaintiffs in those cases would

still have a damages claim for the past wrong, and

under Farrar, a defendant could not pay damages

without rendering the plaintiff a prevailing party.

Trotter, supra at 1449.

The question, however, remains whether the “catalyst

theory” is necessary to provide an added deterrent given that

voluntarily discontinued conduct could be repeated in the

future. Jd. The answer is, “no.” While voluntary action may

normally moot a case, there is an exception to the mootness

doctrine that allows a determination on the merits, notwith-

standing the defendant has voluntarily changed his conduct. In

appropriate cases, this exception serves as an added deterrent to

illegal conduct.

The mootness doctrine operates to ensure that the “cases”

and “controversies” requirement of Article III of the Consti-

tution is met and to “avoid advisory opinions on abstract

questions of law.” /d. at 1450. Therefore, to be heard, a

plaintiff must have an “ongoing personal stake” in the case. /d.

at 1450. A lawsuit may become moot if the contested law

changes, as in this case, so as to satisfy the plaintiff's claim or

render it irrelevant. /d. Or, in a suit for injunctive relief, ..e

case may be mooted if the challenged conduct or condition

expires before final review. /d. Likewise, while the suit is

pending, “an opponent may provide full relief, or the parties

may dispose of their claims through consent judgment or simple

settlement.” /d.

17

There is, however, an exception to the mootness doctrine.

Under this exception, voluntary cessation of a challenged action

may not result in dismissal of the case. Instead, a court may

choose to rule on the merits of the case, determine the legality

of the practice, and issue an injunction to prevent the defendant

from reverting back to the challenged practice. /d.

In United States v. W. T. Grant Co., 345 U.S. 629 (1953),

the government sought to enjoin a defendant from serving

simultaneously as a director of competing corporations. When

the director resigned, the defendants argued the case was moot

and should be dismissed as a matter of right. However, this

Court acknowledged the possibility that the director could

reverse his resignation, and since the case also raised an

important public policy question in antitrust law, the court

retained the case to rule on the merits.

Subsequently, this Court stated in United States v.

Concentrated Phosphate Export Assn., Inc., that “[a] case might

become moot if subsequent events made it absolutely clear that

the allegedly wrongful behavior could not reasonably be

expected to recur.” 393 U.S. 199, 203 (1968). In City of

Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283 (1982), this

Court declared it was “well settled that a defendant’s voluntary

cessation of a challenged practice does not deprive a federal

court of its power to determine the legality of the practice.” Jd.

at 289.

Trotter suggests that more recent case law, such as

Northeastern Florida Chapter of the Associated General

Contractors of America v. City of Jacksonville, 508 U.S. 656

(1993), which was decided after Farrar, indicates that the

voluntary cessation exception will be available in appropriate

cases. In Associated General Contractors, this Court applied

the exception in circumstances similar to those found in a

18

“catalyst theory” case. The defendants in that case claimed that

a challenge to a city ordinance was moot because the ordinance

had been repealed and replaced with a new version. This Court

rejected the mootness claim and instead applied the exception

for voluntary cessation under Aladdin's Castle. Thus,

[b]y invoking the exception for voluntary cessation,

a catalytic plaintiff could satisfy Farrar’s test for

prevailing party status. Upon full adjudication, the

plaintiff could obtain an enforceable judgment. The

mere ability to do so should in fact provide ample

leverage for obtaining a favorable consent decree or

settlement. In either case, the plaintiff would satisfy

Farrar and become a prevailing party entitled to

attorney’s fees, subject to certain limitations.

Trotter, supra at 1452-53.

Although a court may apply the voluntary cessation

exception, it need not do so. In W.7. Grant, this Court

explained that voluntary cessation was but “one of the factors

to be considered in determining the appropriateness of granting

an injunction against the now-discontinued acts.” 345 U.S.

629, 633. Moreover, Farrar itself carries some limitations on

the use of the voluntary cessation exception: “Whatever relief

the plaintiff secures must directly benefit him at the time of the

judgment or settlement.” Farrar, 506 U.S. at 111. As this

Court noted, “an enforceable judgment alone is not always

enough.” /d. at 117. Trotter suggests, for example, that a

plaintiff might receive a declaratory judgment that a policy is

unconstitutional on its face, but without evidence that the policy

had ever been enforced the plaintiff could not show, under

Farrar, that the judgment provided a real benefit to the plaintiff

by changing the behavior of the defendant.

a

19

Even with these limitations, however, the Farr2r standard

offers a more balanced approach to fee recovery than the

gratuitous “catalyst theory.” A plaintiff who obtains a judgment,

consent decree, or settlement is infinitely more deserving of an

award of attorney’s fees than one who merely induced a change

in conduct. Although the Farrar standard is not as advan-

tageous to plaintiffs as the court-created “catalyst theory,” it

does, as Trotter suggests, “allow courts to prevent defendants

from systematically avoiding fee liability by changing their

practices.” Trotter, supra at 1454. Therefore, this Court should

reject the “catalyst theory” of fee recovery.

CONCLUSION

The court-created “catalyst theory” is fundamentally

unfair. It requires the payment of attorney’s fees without any

showing of wrongdoing or legal obligation. Clearly, a voluntary

change of behavior is not a concession of guilt or illegality as

there are many innocent reasons for a defendant to seek early

resolution of a lawsuit, including simple generosity. Therefore,

any presumption of wrongdoing under the “catalyst theory” is

unwarranted. In addition, application of the “catalyst theory”

is bad public policy because it may induce illegal compliance,

cause confusion, prolong litigation, and discourage voluntary

change of behavior. Contrary to the “catalyst theory” that

unduly favors plaintiffs, this Court’s fee award requirement in

Farrar strikes a proper balance between the parties. Under

Farrar, a plaintiff may recover fees with an enforceable

judgment, consent decree, or settlement, and the court can

prevent systematic violations of the law.

20

For the foregoing reasons, this Court should reject the

“catalyst theory” in favor of the Farrar standard .

DATED: December, 2000.

Respectfully submitted,

M. REED HOPPER

Counsel of Record

Pacific Legal Foundation

10360 Old Placerville Road,

Suite 100

Sacramento, CA 95827

Telephone: (916) 362-2833

Facsimile: (916) 362-2932

Counsel for Amicus Curiae

Pacific Legal Foundation