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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2001
- **Citation:** 532 U.S. 598

## Text

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No. 99-1848 DFC 18 200
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In the

Supreme Court of the United States —_|

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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

- sd

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

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9

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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.

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0372%3A14. Public record. Not legal advice.