Petition for Writ of Certiorari — Rodriguez-Freytas v. New York City Transit Authority

04-973 JAN 18 2905

OFFICE OF THE CLERK

In The

Supreme Court of the United States

*

JESSICA RODRIGUEZ-FREYTAS,

Petitioner,

V.

NEW YORK CITY TRANSIT AUTHORITY,

Respondent.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Second Circuit

PETITION FOR A WRIT OF CERTIORARI

LEON FRIEDMAN

Counsel of Record

148 East 78th Street

New York, N.Y. 10021

(212) 737-0400

Attorney for Petitioner

Jessica Rodriguez-Freytas

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

- QUESTIONS PRESENTED

1. Should this Court’s decision in Buckhannon Board

and Care Home, Inc. v. West Virginia Department of Health

and Human Resources, 532 U.S. 598 (2001) be applied to

financial settlements, as held by the Second Circuit in this

case and by the Seventh Circuit decision in Petersen v.

Gibson, 372 F.3d 862 (7th Cir. 2004), or is the Buckhannon

rule inapplicable to financial settlements, as held by the

Ninth Circuit in Barrios v. California- Interscholastic

Federation, 277 F.3d 1128 (9th Cir. 2002).

2. Is a Magistrate Judge’s signed endorsement and

resolution of a dispute between the parties concerning the

terms of a financial settlement a sufficient judicial impri-

matur to satisfy the Buckhannon rule?

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED. ................. piiivcnietaanns i

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STATUTES INVOLVED IN THIS CASE................... 1

SPLAT RADAROI h OE ERM CAPSED ccc scnsccancsnntstcsssctecnsssacnes 2

SOO iain svssditavcnliingianaeanga aan 2

PROCEDURAL BACKGROUND...............ccceeeeeeeeeeeee 4

The Second Circuit Decision ...2..............sscccccsesscsses 8

REASONS FOR GRANTING THE WRIT.................. 9

I. THE DECISION BELOW MISCONTRUED

THIS COURT’S DECISION IN BUCKHAN-

NON BY APPLYING ITS RATIONALE TO A

FINANCIAL SETTLEMENT WHERE THE

RULE HAS NO APPLICATION...................... 9

A. The Buckhannon Decision ................0ce008 9

B. Inapplicability of Buckhannon to Finan-

CE TIN acs cv ciccnsniitichiintenecaseasacteeecuce 14

II. THE MAGISTRATE JUDGE’S SIGNED AP-

PROVAL OF THE SETTLEMENT AMOUNT

PROVIDES THE REQUIRED JUDICIAL

SLE PARR ECP lin asianndscanigcianstsanmneminanmaalninabiee 19

COCR hal FIN oniccncicntasssnncinchancinenonmeunaneananelas 23

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TABLE OF AUTHORITIES

Page

CASES

America Disability Association, Inc. v. Chmielarz,

- ge fii) fen. Lo | RE eemrnerene 22

Barrios v. California Interscholastic Federation,

Be ee ee I A BED ccntincssnncccnnsenacenccatosonnesnce 4,18

Buckhannon Board and Care Home, Inc. v. West

Virginia Department of Health and Human Re-

sources, 532 U.S. 598 (2OOL).............ccccscccccccscsccsees passim

Chemical & Atomic Workers International Union v.

Department of Energy, 288 F.3d 452 (D.C.Cir.2002)......... 22

Hewitt v. Helms, 482 U.S. 755 (1987) ..................ccceeeeee 7,14

Kokkonen v. Guardian Life Insurance Company of

I Tee Gee COE I kncacdncenstecnssstnsnstinncsinniccenen 16

Nadeau v. Helgemoe, 581 F.2d 275 (1st Cir. 1978) ........... 10

Petersen v. Gibson, 372 F.3d 862 (7th Cir. 2004) ................ 4

Roberson v. Giuliani, 346 F.3d 75 (2d Cir. 2003).............. 21

Smyth v. Rivero, 282 F.3d 268 (4th Cir. 2002) .............. vaae 22

Truesdell v. Philadelphia Housing Authority, 290

I I a eee eciannaiigiannainitie 22

United States v. Miami, 664 F.2d 435 (5th Cir.

lt al aetenlhaipinenbinbebibbint 12

STATUTES

i oeanusssedtmadouandomeeian 1

I a saaecaemansilleiely 2

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1

PETITION FOR A WRIT OF CERTIORARI

Jessica Rodriguez-Freytas (“Rodriguez-Freytas”) re-

spectfully prays that a writ of certiorari issue to review the

judgment and opinion of the United States Court of Ap-

peals for the Second Circuit on April 27, 2004.

4

v

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Second Circuit is reported at 95 Fed.Appx. 392 (2d Cir.

2004) and is reproduced in Appendix A at App. 1-5. The

opinion of the District Court for the Eastern District of

New York is unreported and is reproduced in App. B at

App. 6-8.

s

Vv

JURISDICTION

The opinion of the United States Court of Appeals

Court for the Second Circuit was issued on April, 27, 2004.

A timely motion for rehearing was filed on May 10, 2004.

The Second Circuit denied the motion for rehearing on

October 18, 2004. This Court has jurisdiction under 28

U.S.C. § 1254(1).

rs

v

STATUTES INVOLVED IN THIS CASE

42 U.S.C. § 2000e-5(k); “In any action or proceeding

under this subchapter the court, in its discretion, may

allow the prevailing party, other than the Commission or

- the United States, a reasonable attorney's fee (including

expert fees) as part of the costs, and the Commission and

2

the United States shall be liable for costs the same as a

private person.”

42 U.S.C. § 1988: “Proceedings in vindication of civil

rights. In any action or proceeding to enforce a provision of

sections 1981, 198la, 1982, 1983, 1985, and 1986 of this

title, title 1X of Public Law 92-318 [20 U.S.C.A. § 1681 et

seq.], the Religious Freedom Restoration Act of 1993 [42

U.S.C.A. § 2000bb et seq.], the Religious Land Use and

Institutionalized Persons Act of 2000 [42 U.S.C.A. § 2000cc

et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C.A.

§ 2000d et seq.], or section 13981 of this title, the court, in

its discretion, may allow the prevailing party, other than

the United States, a reasonable attorney's fee as part of

the costs, except that in any action brought against a

judicial officer for an act or omission taken in such officer’s

judicial capacity such officer shall not be held liable for

any costs, including attorney’s fees, unless such action was

clearly in excess of such officer’s jurisdiction.”

S

STATEMENT OF THE CASE

Introduction

This case involves the proper application of this

Court’s decision in Buckhannon Bd. and Care Home, Inc.

v. West Virginia Department of Health and Human Re-

sources, 532 U.S. 598 (2001). That case overturned the so-

called “catalyst” theory in injunctive cases and held that a

party is not a “prevailing party” entitled to attorneys fees

under the applicable civil rights statutes unless there was

a “judicially sanctioned change in the legal relationship of

the parties,” 532 U.S. 605. Such a “judicially sanctioned

change” includes a judgment or a consent decree.

3

Buckhannon was a case where a party sought injunc-

tive relief against a specific governmental practice, the

practice was changed prior to trial, and the case was

dismissed on the grounds of mootness. Since there was no

judicial participation of any kind in the final outcome and

no continued judicial supervision (as in a consent decree),

this Court held that the plaintiff was not a prevailing

party entitled to fees. When a case seeking injunctive

relief is resolved without judicial involvement, it is diffi-

cult to determine whether the law suit actually brought

about the final result, this Court held.

The same legal principles should not apply when the

suit involved only monetary relief. Once the parties reach

a financial settlement in a case, there is no further occa-

sion for a court to participate in the case unless and until

a request for fees is made. There is no basis or need for

continued judicial supervision and hence no “consent

decrees.” Parties simply do not ask the court to approve a

financial settlement that they themselves have agreed is a

fair one. The court has no interest in telling one party or

the other whether the financial agreement is fair. Thus a

court has no occasion to “approve” a financial settlement

in a signed consent decree. Unlike a situation where

injunctive relief if agreed upon and a court must supervise

the non-financial agreement, nothing must be supervised

once payment is made.

In addition, the parties are often reluctant to include

the specific amount of a financial settlement in a publicly-

filed decree. That makes it even less likely that the court

will have any opportunity to review the financial settle-

ment.

4

However, a judgment can be made on the fairness of

the settlement at a later time — when a request for fees is

made by the plaintiff. A court should then consider what

the plaintiff had sued for and what it received. A court can

easily make a judgment (on the later application for fees)

whether a party had “prevailed” and is therefore entitled

to fees.

Thus none of the considerations that led to the Court’s

conclusion in Buckhannon necessarily apply when a

financial settlement is involved.

There is also a split in the Circuits on this issue. Two

Courts of Appeal have applied Buckhannon to financial

settlements: the Second Circuit decision appealed from

here and the Seventh Circuit decision in Petersen uv.

Gibson, 372 F.3d 862 (7th Cir. 2004). But the Ninth Circuit

came to the opposite conclusion in Barrios v. California

Interscholastic Federation, 277 F.3d 1128 (9th Cir. 2002).

For these reasons, certiorari should be granted to resolve

the Circuit split and toe examine the implications of Buck-

hannon for financial settlements.

Finally, there was sufficient judicial participation in

this case because of the magistrate judge’s determination

and signed approval of the final settlement amount.

,

v

PROCEDURAL BACKGROUND

This action for employment discrimination under Title

VII and Section 1983 was commenced on August 18, 1999.

The complaint broadly alleged that the defendant New

York City Transit Authority (“NYCTA”) had established a

policy and practice of removing pregnant train operators

5

from active work shortly after learning that the individual

was pregnant, even if the female train operator was not

disabled or incapacitated from performing her functions in

any way (Second Circuit Joint Appendix “JA” at 5-6). The

plaintiff had been removed from her position shortly after

she informed the NYCTA that she was pregnant. She lost

many weeks of salary and benefits as a result of the policy.

Shortly after the complaint was filed, plaintiff’s

counsel informed defendant that the case could be settled

for approximately the amount of back pay lost by plaintiff

because of the discriminatory policy, plus an appropriate

amount for emotional distress. The actual demand was for

back pay (roughly $17,000) plus $25,000 for emotional

_ distress. That was the exact amount it was finally settled

for. (JA-24-25).

The parties engaged in considerable discovery in the

case, and there were many disputes that had to be re-

solved by the Magistrate Judge assigned to the case,

Magistrate Judge Joan Azrack.

At one point Magistrate Judge Azrack who was called

for and held a settlement conference on January 3, 2001

(see Docket Entry 17, JA-3). At that conference, after

considerable discussion back and forth before the Magis-

trate Judge, the parties agreed to settle the case for five

months back pay plus $25,000 for emotional distress

damages, with attorneys fees to be determined by the

Court. (JA-15). An issue arose whether five months meant

21 weeks or 22 weeks. The parties exchanged many letters

on the subject (JA-11-18) and ultimately the issue was left

to the Magistrate Judge, who had supervised the settle-

ment conference, to decide. She endorsed the following on

one of the letters: “Counsel for Plaintiff has agreed to be

bound by my view. As such I find its twenty-one (21)

weeks.” (JA-19). Thus the total amount agreed to was

$16,518.60 for back pay, plus $25,000 for emotional dis-

tress damages for a total of $41,518.60. (JA-17).

On being informed of the settlement, the District

Court issued an order as follows, dated February 5, 2001:

1. The action is hereby dismissed with preju-

dice, as the parties have settled it pursuant

to a separate agreement.

2. Plaintiff’s rights to apply for counsel fees

and costs are reserved and are not waived

by this stipulation or in, the settlement

agreement. (JA-20)

Thereafter, plaintiff's made a timely request for

counsel fees (JA-21). All of the counsel fee papers were

submitted to Magistrate Judge Azrack (to whom the fee

application was referred) by March 9, 2001 (JA-21-43). No

decision on fees was made before the Buckhannon case

was decided.

On May 29, 2001, this Court issued its decision in

Buckhannon. Counsel for the NYCTA immediately wrote

to Magistrate Judge Azrack, bringing that case to her

attention and suggesting that no fees should be awarded.

Plaintiff’s fee counsel responded to that letter on June 12,

2001 (JA-49).

On September 14, 2001, Magistrate Judge Azrack

“rejected defendant’s argument that Buckhannon applied.

“The instant case does not present a situation analogous to

that in Buckhannon. Here there was court approval of the

settlement. Indeed Judge Gleeson so ordered the settle-

ment on January 9, 2001. In addition at settlement an

issue arose regarding how much back pay plaintiff was

due. Both sides agreed to be bound by my recommenda-

tion. I thus resolved the dispute on February 8, 2001.” (JA-

58). The Court reviewed the fee petition and recommended

that $14,712.50 in attorneys fees be awarded as well as

$407.61 in costs.

Defendant NYCTA then filed objections to the Report

and Recommendation only with respect to the Buckhan-

non issue, not with respect to the amount of fees awarded.

On October 15, 2001, the District Court adopted the

Report and Recommendation in its entirety and granted

the amount determined by Magistrate Judge Azrack.

The District Court noted:

I agree with Judge Azrack that Buckhannon is

inapposite. Buckhannon was a decision involving

a declaratory judgment action which became

moot upon passage of a law by the state legisia-

ture of West Virginia. Here the claim is for money

damages under Title VII and § 1983, and thus the

case falls outside of Buckhannon’s holding. It is

well-established that settlements achieved with ex-

tensive judicial involvement-in cases failing under

the civil rights statutes can properly lead to an

award of counsel fees at the discretion of the dis-

trict judge. [citing Hewitt v. Helms, 482 U.S. 755,

760]. (JA-68-69) (App. 6-7)

* The order issued by Judge Gleeson did not “so order” the settle-

ment but merely noted that a settlement had been entered into. See JA-

10.

re

8

The Court also noted that the case “was settled after

more than a year of discovery supervised by Judge Azrack. |

Judge Azrack oversaw the settlement negotiations and

made a finding on the number of weeks of back pay to be

paid to the plaintiff as part of the settlement.... I con-

clude that this level of judicial involvement satisfies

Buckhannon’s requirement of a ‘judicial imprimatur’ for

the purpose of awarding attorney’s fees.” (JA-69) (App. 7).

The Court then rejected a motion for reconsideration

brought by defendant. (JA-71-72). An appeal was then

taken to the Second Circuit.

The Second Circuit Decision

The Second Circuit concluded that Buckhannon did

apply to bar the award of fees.

The instant case was ... settled by an agreement

negotiated by the parties. Although Ms. Rodriguez-Freytas

received a monetary award pursuant to that settlement, it

is uncontested that, as in Needletrades, “[t]he district

court never granted [her] any relief on the merits,” nor did

“the district court order a consent decree or endorse, or

retain jurisdiction over, [the] settlement agreement.” 336

F.3d at 206. According to Buckhannon, she cannot be

considered a prevailing party, and is therefore not entitled

to attorney’s fees.

A timely motion for rehearing was filed on May 10,

2004. It was denied by the Second Circuit on October 19,

2004.

Sd

9

REASONS FOR GRANTING THE WRIT

I. THE DECISION BELOW MISCONTRUED

THIS COURT’S DECISION IN BUCKHANNON

BY APPLYING ITS RATIONALE TO A FINAN-

CIAL SETTLEMENT WHERE THE RULE HAS

NO APPLICATION

A. The Buckhannon Decision

The Buckhannon case dealt with situations where

declaratory or injunctive relief was sought against a

governmental practice or policy. If the government

changes its policy while the case was pending (as West

Virginia did in that case) and the case was then dismissed

on the grounds of mootness, this Court held that the

plaintiff would not be entitled to fees under a “catalyst”

theory.

Thus the Buckhannon decision did not involve a

settlement of any kind. It involved voluntary action on the

part of the defendant (a department of the State of West

Virginia) to arrange for amendment of the law challenged

in that case. At that point the action was dismissed on the

ground of mootness. Everything the Court said with

respect to settlements — as opposed to dismissals on moot-

ness grounds — is therefore dicta.

The whole thrust of the original “catalyst” theory,

repudiated by the Court in Buckhannon, was that volun-

tary action by a government defendant to change a policy

or practice after a law suit was brought could be attributed

to the pressure of the lawsuit, entitling the plaintiff to

“prevailing party” status. In one of the first uses of the

term, the First Circuit noted: “it is often explained that

when plaintiff’s lawsuit acts as a ‘catalyst’ in prompting

defendants to take action to meet plaintiff’s claims,

10

attorney's fees are justified despite the lack of judicial

involvement in the result.” Nadeau v. Helgemoe, 581 F.2d

275, 279 (1st Cir. 1978). Under those circumstances, a

court must make certain guesses as to the relationship

between the law suit and the voluntary change in conduct

by the defendant in order to award fees.

But, as noted below, these considerations simply do

not apply when a law suit is brought for money damages, an

enforceable settlement agreement is signed, and substantial

amounts are paid. The “guesswork” involved in such situa-

tions simply does not exist.

Second, the discussion of this Court throughout the ©

Buckhannon decision was with respect to consent decrees,

not financial settlements. (As noted below, the only discus-

sion with respect to financial settlements was in a concur-

ring opinion of Justice Scalia and his comments support

our position that financial settlements are not covered by

the Buckhannon rule: “It is true that monetary settlements

and consent decrees can be extorted as well, and we have

approved the award of attorney’s fees in cases resolved

through such mechanisms.” 121 S.Ct. at 1847 (Scalia, J.,

concurring) (emphasis added)). Thus the Court noted the

issue in the case as follows:

The question presented here is whether this term

[prevailing party] includes a party that has failed

to secure a judgment on the merits or a court-

ordered consent decree, but has nonetheless

achieved the desired result because the lawsuit

brought about a voluntary change in the defen-

dant’s conduct. We hold that it does not. 121

S.Ct. at 1838. (emphasis added).

* * *

11

[We] have held that settlement agreements en-

forced through a consent decree may serve as the

basis for an award of attorney’s fees.... Al-

though a consent decree does not always include

an admission of liability by the defendant, see,

e.g., id., at 126, n.8, 100 S.Ct. 2570, it nonethe-

less is a court-ordered “chang[e] [in] the legal rela-

tionship between [the plaintiff] and the defendant.”

... These decisions, taken together, establish that

enforceable judgments on the merits and court-

ordered consent decrees create the “material al-

teration of the legal relationship of the parties”

necessary to permit an award of attorney's fees.

Id. at 1840. (emphasis added)

But a “consent decree” involves equitable action of

some kind, not an agreement only to pay money damages.

The definition of “consent decree” found in Black’s Law

Dictionary (1979 ed. at 370) makes this point clear.’

Consent decree. Agreement by defendant to cease

activities asserted as illegal by government (e.g.,

deceptive advertising practices as alleges by

F.T.C.). Upon approval of such agreement by the

court the government’s action against the defen-

dant is dropped. Also a decree entered in an eq-

uity suit on consent of both parties; it is not

properly a judicial sentence, but is in the nature

of a solemn contract or agreement of the parties,

made under the sanction of the court, and in ef-

fect in admission by them that the decree is a

just determination of their rights upon the real

* This Court in Buckhannon specifically relied upon the Black’s

Law Dictionary definition of “prevailing party,” in arriving at its

decision, 121 S.Ct. at 1839. It seems appropriate to use the same

dictionary source to determine other aspects of that decision.

12

facts of the case, if such facts had been proved. It

binds only the consenting parties; ‘and is not

binding upon the court. (emphasis added)

The cases discussing “consent decrees” usually focus

on the need for continued judicial oversight and possible

contempt proceedings, elements that are completely

absent when a financial settlement is made. See e.g.,

United States v. Miami, 664 F.2d 435, 439-440, 441 (5th

Cir. 1981) (en banc): “Because the consent decree does not

merely validate a compromise but, by virtue of its injunc-

tive provisions, reaches into the future and has continuing

effect, its terms require more careful scrutiny.” (Rubin, J.

concurring)

The chief concern of this Court in Buckhannon was

that cases without merit would be resolved by the gov-

ernmental actor, because the defendant may be concerned

about possible liability for fees at a later time. The plain-

tiff would then come hat-in-hand with a demand for fees.

The Court focused on what it called the “‘merit’ re-

quirement of our prior cases” before fees can be awarded. 121

S.Ct. at 1841. It also noted that filing a nonfrivolous suit

that escapes a motion to dismiss should not entitle a

person to fees. “This is not the kind of legal merit that our

prior decisions ... have found necessary.” Id. at 1840

(emphasis added).

This Court reasoned that without an actual finding on

the merits by a decision-maker (a judgment) or without a

court-sanctioned consent decree supervising the settle-

ment, no fees can be awarded. There was a danger that,

without judicial involvement or oversight in the final

settlement involving claims for injunctive or declaratory

relief, a defendant would be forced to pay counsel fees

13

when a nonfrivolous but nevertheless meritless claim was

brought. The Court explained: “We cannot agree that the

term ‘prevailing party’ authorizes federal courts to award

attorney's fees to a plaintiff who, by simply filing a non-

frivolous but nonetheless potentially meritless lawsuit (it

will never be determined), has reached the ‘sought-after

destination’ without obtaining any judicial relief.” 121

S.Ct. at 1841.

The danger that the Court was concerned about was

that governments (in Section 1983 actions or employers in

Title VII cases) would agree to afford injunctive relief in

cases which had no merit, or that they would refuse to

change their conduct because they were afraid that they

would then be responsible for fees. The Court noted:

Petitioners discount the disincentive that the

“catalyst theory” may have upon a defendant’s

decision to voluntarily change its conduct, con-

duct that may not be illegal. “The defendants’ po-

tential liability for fees in this kind of litigation

can be as significant as, and sometimes even

more significant than, their potential liability on

the merits,” Evans v. Jeff D., 475 U.S. 717, 734,

106 S.Ct. 1531, 89 L.Ed.2d 747 (1986). 121 S.Ct.

at 1842.

The Court was also concerned with the problem of

administering the catalyst theory. It noted that courts

would be required to engage in complicated analysis of a

defendant’s conduct. “Among other things, a ‘catalyst

theory’ hearing would require analysis of the defendant’s

subjective motivations in changing its conduct, an analysis

that ‘will likely depend on a highly fact-bound inquiry and

may turn on reasonable inferences from the nature and

timing of the defendant’s change in conduct.’.... [a court

14

would be required‘to determine] whether the claim was

colorable rather than groundless; whether the lawsuit was

a substantial rather than an insubstantial cause of the

defendant’s change in conduct; whether the defendant’s

change in conduct was motivated by the plaintiff’s threat

of victory rather than threat of expense.” 121 S.Ct. at

1843.

The use of language such as “defendant’s change in

conduct” indicates that the Court was concerned only with

injunctive relief, i.e., a change of policy or practice. It was

not focusing on the payment of financial settlements,

which can hardly be called a “change in conduct.”

B. Inapplicability of Buckhannon to Financial

n Settlements

None of the considerations mentioned by the Court in

rejecting the catalyst theory apply when a substantial

financial settlement is made. This Court had previously

noted in Hewitt v. Helms, 482 U.S. 755 (1987) about a |

monetary settlement: “If the defendant, under the pres-

sure of the lawsuit, pays over a money claim before the

judicial judgment is pronounced, the plaintiff has ‘pre-

vailed’ in his suit, because he has obtained the substance

of what he sought,” 482 U.S. at 761. In view of this Court’s

focus only on consent decrees in injunctive actions in

Buckhannon, and in view of Justice Scalia’s concurring

opinion, this language still has validity. Buckhannon’s

reasoning, rationale and holding therefore cannot be

applied to the present case where only a financial settle-

ment is involved.

First, when the parties to a suit seeking only damages

or compensation come to a financial agreement, the court

15

has no role to play. It does not say to one party or the

other, “I refuse to dismiss the case because the amount of

the settlement is inadequate (or too much.)” The court

accepts the parties’ decision that the case is over. Thus

there is no occasion for any judicial approval on the

settlement. On a later fee petition the court may decide

that the amount was too insignificant for a fee award, but

that is the only time that a court is in a position to exer-

cise any judgment.

Second, it is difficult to say that a government would

pay a substantial amount of money to a plaintiff on a

meritless claim — “voluntarily change its conduct” — merely

to avoid the payment of legal fees. It may “voluntarily

change its conduct” (by passing a new law about nursing

homes) for a variety of reasons, which may have nothing to

do with the merits of the claim. It may alter its conduct

because it was cheaper or more efficient to take such steps

or because it was worried about liability or because it was

the right thing to do. But it is difficult to believe that a

government defendant would “voluntarily” pay a signifi- _

cant damage amount to a plaintiff for any reason other

than its concern about its possible liability for a larger

amount if the case went to trial.

Third, none of the uncertainty that this Court dis-

cussed in Buckhannon applies in a financial settlement. This

court noted the guesswork that applies when a government

takes non-financial steps. “whether the claim was colorable

rather than groundless; whether the lawsuit was a substan-

tial rather than an insubstantial cause of the defendant’s

change in conduct; whether the defendant’s change in

conduct was motivated by the plaintiff’s threat of victory

rather than threat of expense.” 121 S.Ct. at 1843. (empha-

sis added). But it is much easier to determine whether a

16

claim is “colorable” when a substantial financial! settle-

ment is made. All that a court must do (on a later fee

petition filed by the plaintiff) is to determine whether the

amount paid is significantly related to the amounts

claimed.

Fourth, parties rarely if ever include the amount of

the settlement in a publicly filed consent decree: “this case

is settled by the parties for $250,000. So ordered.” The

parties do not need the court’s supervision in collecting the

settlement amount. When a government entity is the

defendant, the amount will be paid after various internal

approvals are made (by a comptroller’s office, for example).

And the parties do not need the court’s assistance to collect

the amount from a governmental entity. Thus they see no

need for the court_to approve the settlement and retain

jurisdiction to insure that the amount will be paid. If the

party does not insist on such retention of jurisdiction (as in

Kokkonen v. Guardian Life Insurance Company of Amer-

ica, 511 U.S. 375 (1994), that should not be the deciding

factor on whether fees should be paid.

Finally, parties generally do not desire to have the

settlement amount disclosed in a publicly filed document.

The defendants may not want the amount disclosed

because there are other plaintiffs similarly situated who

may be bringing suit in the future. And plaintiffs may

simply wish to protect there privacy.

Thus, it seems clear that under the Buckhannon

decision, private financial settlements of the type involved

here — $41,518.60 of which $25,000 was emotional distress

damages — are not subject to the rule announced in that

case. The concern of this Court was that government

might agree to make certain changes in policy — even with

17

respect to meritless claims — in order to avoid unnecessary

litigation and to avoid unnecessary award of fees. If a

judgment was secured or a change in policy was super-

vised by the Court through a consent decree, then by

definition a claim cannot be considered meritless. Why

would government subject itself to continuous court

supervision of some change in policy if the underlying

claim had no merit?

But when substantial monetary settlements are made,

the court simply has no right of approval at that point.

Once government has paid certain funds to the plaintiff,

there is nothing to supervise, and a consent decree be-

comes meaningless. Thus the entire discussion of private

settlements and consent decrees was made only in the

context of settlements involving injunctive relief or legisla-

tive changes, as in Buckhannon itself where a government

policy was altered by legislation. The Court’s discussion

becomes meaningless where a substantial amount of

money damages was paid out by a government defendant.

This is shown by the discussion in the concurring

opinion by Justices Scalia and Thomas, whose votes were

necessary for the majority decision. Justice Scalia noted

that: “It is true that monetary settlements and consent

decrees can be extorted as well, and we have approved the

award of attorney's fees in cases resolved through such

mechanisms.” 121 S.Ct. at 1847 (Scalia, J., concurring)

(emphasis added).

Justice Scalia further noted that: “But in the case of

court-approved settlements and consent decrees, even if

there has been no judicial determination of the merits, the

outcome is at least the product of, and bears the sanction

of, judicial action in the lawsuit. There is at least some

18

basis for saying that the party favored by the settlement

or decree prevailed in the suit.” 121 S.Ct. at 1847 (Scalia,

J., concurring) (emphasis added). Justice Scalia thus

considers private financial settlements to be outside of the

rule in Buckhannon that a consent decree must be secured

before fees can be paid. The financial settlement by itself

may serve as the basis for a fee request — “settlement or

decree.”

In one case in which a private financial settlement

was made without a court order, the Court of Appeals for

the Ninth Circuit did find that the plaintiff was a prevail-

ing party. Thus in Barrios v. California Interscholastic

Federation, 277 F.3d 1128 (9th Cir. 2002), the plaintiff

brought an action under the ADA because he was not

allowed to coach a baseball team on the field in his wheel-

chair. Eventually, pursuant to an agreement between the

parties, the defendant federation allowed the coach to

resume his duties on the field and paid him $10,000 in

damages. The agreement was not court-ordered, but

nevertheless the Ninth Circuit found that Buckhannon did

not bar the payment of attorneys fees. It found that the

payment of a $10,000 damage award was a significant

victory, and the settlement agreement relating to his

coaching on the baseball field could be enforced in court. It

also found that the “district court would retain jurisdiction

over the issue of attorney’s fees, thus providing sufficient

judicial oversight to justify an award of attorney’s fees and

costs.” 277 F.3d at 1134, n.5 (emphasis added).

Exactly the same situation applies here. There is

sufficient judicial oversight of the settlement when a party

seeks attorneys’ fees following the financial settlement.

19

Il. THE MAGISTRATE JUDGE’S SIGNED AP-

PROVAL OF THE SETTLEMENT AMOUNT

PROVIDES THE REQUIRED JUDICIAL IM-

PRIMATUR

In addition, as the District Court noted, the judicial

approval of the settlement by Magistrate Judge Azrack

and her involvement in all aspects of the settlement

satisfies this Court’s concern about the lack of judicial

approval of a settlement. “A defendant’s voluntary change

in conduct, although perhaps accomplishing what the

plaintiff sought to achieve by the lawsuit, lacks the neces-

sary judicial imprimatur on the change.” 121 S.Ct. at

1840. The Court also commented that: “Private settle-

ments do not entail the judicial approval and oversight

involved in consent decrees.” 121 S.Ct. at 1840, n.7.

The Buckhannon rule cannot mean that a private

financial settlement must be actually incorporated in a

dismissal order (the consent decree) signed by an Article

III judge before a plaintiff can be considered a prevailing

party. Magistrate Judges or District Court judges may

become intimately involved in financial negotiations of the

parties. A judicial officer often suggest compromise figures

that both parties may accept. There are many reasons why

that figure may not be contained in a publicly-filed dis-

missal order — for example, the defendant may not want to

reveal publicly what the case was settled for, because

others may be in the same position as the plaintiff. Or the

plaintiff may not wish the world to know what he or she

obtained. But under these circumstances, it cannot be said

that the private financial settlement is “meritless” or

“lacks the necessary judicial imprimatur on the change.”

It would surely be putting form over substance to say

that even if a Magistrate Judge or District Court judge

20

was totally satisfied that a financial settlement was fair

and reasonable, that a plaintiff cannot be considered a

prevailing party~unless the financial settlement was

incorporated into the final order dismissing the case.

In this case, Magistrate Azrack was intensively

involved in the negotiation and the settlement of this case,

and in fact, met repeatedly with both parties on the day of _

the settlement conference, both separately and together, in

order to achieve the settlement. Defendant’s counsel

admits in the papers filed below that settlement was

achieved “through the good offices of the Court (Azrack,

J.).” (JA-31, 32). Defendant also noted that “The parties

voluntarily settled this case in the course of a settlement

conference conducted by Magistrate Judge Azrack on

January 3, 2001” (JA-63). In another submission below,

defendant noted that settlement was “reached in the

course of a settlement conference with Magistrate Judge

Azrack on January 3, 2001,” (JA-65), it was “reached in

the Judge’s presence” as defendant admits. (JA-66).

Defendant actually expressed its thanks for her help in

this matter: It described Magistrate Judge Azrack as a

“limited-purpose ... arbitrator selected by the parties,”

(JA-66-67) and noted: “The Transit Authority very much

appreciated Magistrate Judge Azrack’s help in facilitating

the parties settling this matter.” (JA-67, n.1).

Thus, by defendant’s own admission, a judicial officer

was instrumental in arranging the settlement. Further-

more, Magistrate Judge Azrack actually signed off on the

final settlement amount: “Counsel for Plaintiff has agreed

to be bound by my view. As such I find its twenty-one (21)

weeks.” (JA-19).

21

Thus, this case did have “the necessary judicial

imprimatur on the change,” as the Supreme Court noted

in Buckhannon, 121 S.Ct at 1840. It certainly contained

sufficient “judicial approval and oversight,” id. n.7, to

insure that a defendant was not pressured into surrender-

ing in a meritless case in order to avoid paying exorbitant

counsel fees. These factors further demonstrate that the

Buckhannon rationale is inapplicable here.

The case law decided after Buckhannon supports this

analysis. Many courts have noted that a plaintiff can be a

“prevailing party” even if there is no judgment or consent

decree. The Second Circuit held in Roberson v. Giuliani,

346 F.3d 75, 81 (2d Cir. 2003) that if a court retains juris-

diction to enforce a private settlement agreement, the

plaintiff is a “prevailing partv” even if the district court

judge did not approve the settlement in any way. The

Court noted: -

Viewed in the light of Kokkonen, the district

court’s retention of jurisdiction in this case is not

significantly different from a consent decree and

entails a level of judicial sanction sufficient to

support an award of attorney’s fees. First, de-

spite the district court’s statements that it had

not specifically reviewed or approved the terms

of the settlement! agreement, the district court

retained jurisdiction to enforce the Agreement.

Under Kokkonen, when the district court re-

tained jurisdiction, it necessarily made compli-

ance with the terms of the agreement a part of

its order so that “a breach of the agreement

would be a violation of the order.” 511 U.S. at

381. Further, because the court has the general

responsibility to ensure that its orders are fair

and lawful, it retains some responsibility over

the terms of a settlement agreement as the

22

parties’ obligation to comply with the agreement

was made a part of its order.

346 F.3d at 82.

The Second Circuit noted other situations where

courts have gone beyond judgments and consent decrees.

We therefore join the majority of courts to have

considered the issue since Buckhannon in con-

cluding that judicial action other than a judg-

ment on the merits ‘or a consent decree can

support an award of attorney’s fees, so long as

such action carries with it sufficient judicial im-

primatur. See Am. Disability Ass’n, Inc. v. Chmie-

larz, 289 F.3d 1315, 1319 (11th Cir. 2002) (“[T]he

district court interpreted Buckhannon to stand

for the proposition that a plaintiff could be a

‘prevailing party’ only if it achieved one of those

two results. That reading of Buckhannon, how-

ever, is overly narrow.”);....Oil, Chem. &

Atomic Workers Int'l Union v. Deptt of Energy,

288 F.3d 452, 458-59 (D.C.Cir. 2002) (holding

that parties’ stipulation and order of dismissal

did not “meaningfully alter the legal relationship

of the parties,” but implying that had there been

such a change, Buckhannon would not preclude

an award of fees); Smyth v. Rivero, 282 F.3d 268,

281 (4th Cir. 2002) (“We doubt that the Supreme

Court’s guidance in Buckhannon was intended to

be interpreted so restrictively as to require that

the words ‘consent decree’ be used explicitly.”);

Truesdell v. Philadelphia Hous. Auth., 290 F.3d

159, 165 (3d Cir. 2002) (“We do not agree with

the District Court’s conclusion that the parties’

settlement was an inappropriate basis for an

award of attorney’s fees.”)

346 F.3d at 81-82.

23

Under these circumstances, the Magistrate Judge’s

intimate involvement in the negotiations and her signed

determination that twenty-one weeks was the appropriate

settlement amount satisfied the “judicial involvement”

requirement of Buckhannon.

+

CONCLUSION

For the foregoing reasons, the writ of certiorari should

be granted.

Dated: New York, N.Y.

January 18, 2005

Respectfully submitted,

LEON FRIEDMAN

Counsel of Record

148 East 78th Street

New York, N.Y. 10021

(212) 737-0400

Attorney for Petitioner

Jessica Rodriguez-Freytas

RRS CS

App. 1

APPENDIX A

United States Court of Appeals, Second Circuit.

Jessica RODRIGUEZ-FREYTAS, Plaintiff-Appellee,

We

NEW YORK CITY TRANSIT AUTHORITY,

Defendant-Appellant.

No. 01-9443.

April 27, 2004.

Appeal from the United States District Court for the

Eastern District of New York (Gleeson, J.).

Leon Friedman, New York, NY, for Appellee.

Richard Schoolman, New York, NY, for Appellant.

Present: THOMAS J. MESKILL, JON O. NEWMAN,

and ROSEMARY S. POOLER, Circuit Judges.

SUMMARY ORDER

At a stated Term of the United Stated Court of Ap-

peals for the Second Circuit, held at the Thurgood Mar-

shall United States Courthouse, Foley Square, in the City

of New York, on the 27th day of April, 2004. |

ON CONSIDERATION WHEREOF, IT IS HEREBY

ORDERED, ADJUDGED, AND DECREED that the

judgment of said District Court be and it means is VA-

CATED AND REMANDED.

We are asked on this appeal to review a judicial award

of attorney’s fees in the context of a civil rights action that

was discontinued pursuant to a settlement agreement.

App. 2

Plaintiff-appellant Jessica Rodriguez-Freytes com-

menced this action on August 18, 1999, by filing a com-

plaint in the U.S. District Court for the Eastern District of

New York. In her complaint, she alleged that the New York

City Transit Authority (““NYCTA”), which employed her as

a train operator, “ha[d] implemented a custom, policy and

practice of removing pregnant train operators from active

work shortly after learning that the individual is pregnant

and despite the fact that the pregnant individual is not

disabled, all of which is done because such train operators

are pregnant. Similarly situated non-pregnant train

operators are permitted to continue working.” [Complaint

{ 5) The complaint alleges that this amounts to discrimi-

nation in violation of the Fourteenth Amendment to the

U.S. Constitution, 42 U.S.C. § 1983, and Title VII of the

Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e,

et seq.

The parties eventually negotiated a settlement pursu-

ant to which NYCTA would pay Ms. Rodriguez-Freytes

back pay in the amount of $16,518.60, and damages for

emotional distress in the amount of $25,000.00, for a total

of $41,518.60. Judge Gleeson subsequently issued a

“Settlement and Order of Dismissal,” which acknowledged

the settlement agreement and dismissed the action subject

to Ms. Rodriguez-Freytas’s reservation of the right to

apply for attorney’s fees.

Ms. Rodriguez-Freytes subsequently moved for an

award of attorney’s fees pursuant to 42 U.S.C. § 1988 and

42 U.S.C. § 2000e-5(k). In a Report and Recommendation,

dated September 14, 2001, Magistrate Judge Azrack found

that an award in the amount of $14,712.50 was appropri-

ate. This figure was approved by Judge Gleeson in an

Order, dated October 15, 2001 (“the October 15th Order”).

SOE TEE tt aR VO CEN Bt BEM cn OA a

App. 3

Numerous federal statutes, including § 1988 and

§ 2000e-5(k), allow courts to award attorney’s fees and

costs to the “prevailing party.” In Buckhannon Bd. and

Care Home, Inc. v. West Virginia Dept. of Health and

Human Resources, 532 U.S. 598 (2001), which was decided

shortly before the October 15th Order was issued, the

Supreme Court considered whether what is commonly

known as “the catalyst theory” may serve as a basis for

attorney's fees pursuant to these statutes. The catalyst

theory asserts that a plaintiff may be considered a prevail-

ing party in a case in which the defendant’s voluntary

action moots the lawsuit by providing the relief sought by

the plaintiff.

The Supreme Court held that the catalyst theory may

not serve as a basis of an award of attorney’s fees because

the phrase “prevailing party” does not “authorize[ ] federal

courts to award attorney’s fees to a plaintiff who, by

simply filing a nonfrivolous but nonetheless potentially

meritless lawsuit,” achieves a desired result “without

obtaining any judicial relief.” 532 U.S. at 606. Judicial

relief is relief that amounts to a “judicially sanctioned

change in the legal relationship of the parties.” Jd. at 605.

Thus, “[a] defendant’s voluntary change in conduct,

although perhaps_accomplishing what the plaintiff sought

to achieve by the lawsuit, lacks the necessary judicial

imprimatur on the change.” Id.

In Buckhannon, the voluntary action which mooted

the lawsuit was the defendant State’s unilateral decision

to repeal the regulations being challenged in the suit.

Buckhannon, however, has been read by our Circuit to be

applicable to situations in which a lawsuit is mooted by

bilateral voluntary action, such as the conclusion of a

settlement agreement among the parties which disposes of

App. 4

all issues raised by the suit. Thus, Union of Needletrades,

Industrial and Textile Employees v. INS, 336 F.3d 200, 206

(2d Cir.2003), involved a situation in which the parties

“jointly reported [to the court] that they had ‘settled all of

the substantive issues in the case.” We held that even

though the plaintiff “may have accomplished the objective

it sought to achieve by initiating” the lawsuit, “its failure

to secure either a judgment on the merits or a court-

ordered consent decree renders it ineligible for an award of

attorney's fees under Buckhannon.” Id.

The instant case was also settled by an agreement

negotiated by the parties. Although Ms. Rodriguez-Freytas

received a monetary award pursuant to that settlement, it

is uncontested that, as in Needletrades, “(t]he district

court never granted [her] any relief on the merits,” nor did

“the district court order a consent decree or endorse, or

retain jurisdiction over, [the] settlement agreement.” 336

F.3d at 206. According to Buckhannon, she cannot be

considered a prevailing party, and is therefore not entitled

to attorney’s fees.

We therefore vacate the October 15th Order. We are,

however, sensitive to the fact that the settlement agree-

ment in this case was negotiated pre-Buckhannon, when it

would have been reasonable for Ms. Rodriguez-Freytas to

believe that she was entitled to an award of attorney’s

fees. In the interests of fairness, we therefore remand this

action to the district court with instructions that it afford

the parties an opportunity to re-negotiate the settlement

agreement in the form of a consent decree over which the

district court would retain jurisdiction for the purpose of

enforcement. Should either of the parties decline this

opportunity, Ms. Rodriguez-Freytas should be given the

option to either: (1) cancel_the settlement agreement and

Ae. CPN aOR allie eters 39 he

App. 5

proceed toward an adjudication on the merits or (2) con-

firm the settlement agreement and forgo the attorney’s

fees awarded to her by the October 15th Order.

Accordingly, for the reasons set forth above, the

judgment of the District Court is hereby VACATED AND

REMANDED.

App. 6

APPENDIX B

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

JESSICA RODRIGUEZ FREYTES,

Plaintiff,

-against-

NEW YORK CITY TRANSIT AUTHORITY,

Defendant.

ORDER

October 15, 2001

99-CV-4974 (JG)

JOHN GLEESON, United States District Judge:

In a Report and Recommendation dated September

14, 2001. Magistrate Judge Joan M. Azrack recommended

that the plaintiff in the above action, settled on January 3,

2001, be awarded attorney’s fees under 42 U. S.C. § 1988

and 42 U.S.C. § 2000e-5 (k). For the reasons briefly dis-

cussed below, I adopt Judge Azrack’s Report and Recom-

mendation in its entirety. A copy of the Report and

Recommendation, familiarity with which is assumed, is

attached. ;

Defendant objects to the recommended award of

attorney’s fees on the grounds that plaintiff is not a

“prevailing party” for attorney’s fees purposes, under the

Supreme Court’s recent decision in Buckhannon v West

Virginia Department of Health and Human Resources.

532 U.S. 598, 121 S.Ct. 1835 (2001). I agree with Judge

Azrack that Buckhannon is inapposite. Buckhannon was

a decision involving a declaratory judgment action which

App. 7

became moot upon passage of a law by the state legisla-

ture of West Virginia. Here, the claim is for money dam-

ages under Title VII and § 1983. and thus the case falls

outside Buckhannon’s holding. It is well established that

settlements achieved with extensive judicial involvement

in cases falling under the civil rights statutes can properly

lead to an award of attorney’s fees at the discretion of the

district judge. See Hewitt v Helms, 482 U.S. 755, 760

(1987) (Scalia, J.) (“It is settled law, of course, that relief

need not be judicially decreed in order to justify a fee

award under § 1988.”)

This case was settled after more than a year of discov-

ery supervised by Judge Azrack. Judge Azrack oversaw the

settlement negotiations and made a finding on the number

of weeks of back pay to be paid to the plaintiff as part of

the settlement’ (Exhibit 5 to Defendant’s Objections,

Letter of Richard Schoolman, Special Counsel for the

Defendant, dated February 8, 2001) (“I find it’s twenty one

(21) weeks.”) (Written and signed by Judge Azrack, Febru-

ary 8, 2001)). I conclude that this level of judicial involve-

ment satisfies Buckhannon’s requirement of a “judicial

imprimatur for the purpose of awarding attorney's fees.

121S. Ct. at 1840.

‘ The majority opinion in Buckhannon implicitly acknowledges

that a judicial finding can support an award of attorney’s fees. See 121

S. Ct. at 1842 n.9; see also id. at 1858 n. 11 (Ginsburg, J. dissenting)

(“It nonetheless bears attention that .. . a plaintiff could qualify as the

‘prevailing party’ based on a finding or retention of jurisdiction.”).

App. 8

Plaintiffs motion for award of attorney’s fees is

granted.

So Ordered. /s John Gleeson

Dated: October 15, 2001

App. 9

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

THURGOOD MARSHALL U.S.COURT HOUSE

40 FOLEY SQUARE NEW YORK 10007

Roseann B. MacKechnie CLERK

At a stated term of the United States Court of Appeals for

the Second Circuit, held at the Thurgood Marshall United

States Courthouse, Foley Square, in the City of New York,

on the 18th day of October two thousand four.

JESSICA RODRIGUEZ-FREYTES,

Plaintiff-Appellee,

V.

NEW YORK CITY TRANSIT AUTHORITY,

Defendant-Appellant. -

A petition for panel rehearing and a petition for rehearing

en banc having been filed herein by the appellant New

York City Transit Authority.

Upon consideration by the panel that decided the appeal,

it is Ordered that said petition for rehearing is

DENIED.

It is further noted that the petition for rehearing en banc

has been transmitted to the judges for the court in regular

active service and to any other judge that heard the appeal

and that no such judge has requested that a vote be taken

thereon.

For the Court,

Roseann B. MacKechnie, Clerk By:

Motion Staff Attorney