# Petition for Writ of Certiorari — S-1 & S-2 ex rel. P-1 & P-2 v. State Board of Education > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_0208%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1994 - **Citation:** 513 U.S. 876 ## Text WY —-—— 94 227 AUG - 11994 No, SAFICE OF THE CLERK In The Supreme Court of the United States October Term, 1994 SJ S1 AND 82, ET AL., Petitioners, V. STATE BOARD OF EDUCATION OF NORTH CAROLINA, ET AL., Respondents. + On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Fourth Circuit PETITION FOR A WRIT OF CERTIORARI o Amy L. Wax, Esa. *A. FRANK JOHNS, Esa. 580 Massie Road BootH, HARRINGTON, JOHNS Charlottesville, Va. 22903 AND CAMPBELL (804) 924-7815 239 Edgeworth Street Greensboro, N.C. 27401 BRIAN WoLeMAN, Eso. (910) 275-9567 Public Citizen Litigation Group *Counsel of Record 2000 P Street N.W. for the Petitioners Suite 700 Washington, D.C. 20036 (202) 833-3000 COCKLE LAW BRIEF PRINTING CO., (800) 225-6964 OR CALL COLLECT (402) 342-2831 QUESTION PRESENTED Whether, following the dismissal of their lawsuit brought under 42 U.S.C. 1983, petitioners qualified as “prevailing parties” entitled to an award of attorneys’ fees under 42 U.S.C. 1988, where the suit was the “cata- lyst” for a change in state law that provided them with the relief they sought. ii PARTIES TO THE PROCEEDINGS The parties to the proceedings in this Court and before the court of appeals when it rendered the judg- ment that is sought to be reviewed are: petitioners S1 and $2, who were 10-year-old children with disabilities at the time this action was filed in district court on August 2, 1985; petitioners Pl and P2, their parents; respondent Barbara Tapscott, the appointed chairman of respondent North Carolina State Board of Education, and the suc- cessor to C.D. Spangler, Jr. who was the chairman at the time of filing of the complaint; respondent State Board of Education of North Carolina. The parties to the proceedings before the district court and the court of appeals in its previous decision in this case included petitioners and respondent North Car- olina State Board of Education as well as: the Asheboro City Board of Education; C.D. Heidgerd, a hearing officer employed by the city board; and C.D. Spangler, Jr. who was the chairman of the State Board of Education at the time of filing of the complaint. ili TABLE OF CONTENTS Page Question Presented for Review .................... i I NII os ince cig ce dene cans ii pe Pere eeereeee ree eee eeeeeees iv 20 e ks Sond 1 vb ve kes S04 905 1 ee icab gens ese ve sesedecneeteuns 2 Statutory Provisions Involved.................-.4.. 2 NS oh edad ay ch vse edeseavesaes 3 Reasons For Granting The Petition................. 11 LE GT EERE TIE TES a ae ES ee 24 iV TABLE OF AUTHORITIES Page CASES: American Council of the Blind v. Romer, 992 F.2d 249 (10th Cir.), cert. denied, 114 S. Ct. 184 (1993) ..18, 19 Baumgartner v. Harrisburg Housing Authority, 21 AO ek | rrr 18, 19, 20, 21, 22 Bonnes v. Long, 559 F.2d 1316 (4th Cir. 1979) ........ 18 Citizens Against Tax Waste v. Westerville City School, 965 P.20 25> (Sh Cie. TORS. 06s cieues 10, 18, 21, 22 Craig v. Gregg County, Texas, 988 F.2d 18 (5th Cir. | aS Pam yeni Gemener Patan on eto YS are My ene 18 Dawson v. Pastrick, 600 F.2d 70 (7th Cir. 1979)....... 18 DeMier v. Gondles, 676 F.2d 92 (4th Cir. 1982) ....... 18 Dunn v. The Florida Bar, 889 F.2d 1010 (11th Cir. 1989), cert. denied, 498 U.S. 811 (1990)............ 23 Farrar v. Hobby, 113 S. Ct. 566 (1992)............ passim Garcia v. Guerra, 744 F.2d 1159 (5th Cir. 1984), cert. denied, 471 US. DOGS Gees osc ns sc ave nen vives 18, 23 Gerena-Valentine v. Koch, 739 F.2d 755 (2d Cir. 1984) .... 18 Guglietti v. Sec’y of HHS, 900 F.2d 397 (1st Cir. i ETT eT CTE Serre rye Lore rer rrr eee 23 Hanrahan v. Hampton, 446 U.S. 754 (1979)............ 15 Hensley v. Eckerhart, 461, U.S. 424 (1983) ............ 15 Hewitt v. Helms, 482 U.S. 755 (1986).............. 13, 14 Lads Trucking Co. v. Bd. of Trustees, 777 F.2d 1371 £8 Sor erry er rere rrr ere 18 a | Vv TABLE OF AUTHORITIES - Continued Page Luethje v. Peavine Sch. Dist., 872 F.2d 352 (10th Cir. I cack dna s ce cuavit ced eidoeas nits eine 18 Maher v. Gagne, 448 U.S. 122 (1980) .........-..---- 14 Maloney v. Marietta, 822 F.2d 1023 (11th Cir. 1987) ..9, 22 Martin v. Heckler, 773 F.2d 1145 (11th Cir. 1985)..... 18 Nadeau v. Helgemoe, 581 F.2d 275 (1st Cir. 1978) ..... 18 Paris v. HUD, 988 F.2d 236 (1st Cir. 1993) Ere eS ARN ele fie 10, 18, 20, 21, 22, 23 Perket v. Sec’y of HHS, 905 F.2d 129 (6th Cir. 1990) .... 18 Public Citizen Health Research Group v. Young, 909 pe BR a Som | re yer eee 18 Rhodes v. Stewart, 488 U.S. 1 (1988)................ 8, 14 S1 ex rel. P1 v. Spangler, 650 F. Supp. 1427 CRT WO eons ia have haccegs ta bvnchsausiaess ye S1 ex rel. P1 v. Spangler, 832 F.2d 294 (4th Cir. 1987) ...2, 6 Taylor v. Ft. Lauderdale, 810 F.2d 1551 (11th Cir. Si av ches 5s RAS eNO LORS CREAR EER EASA DD. 22 Texas State Teachers Ass’n v. Garland Indep. Sch. Dist., MBP U.S. FER CEFOE) «ov ches ccvessatccceeses 9, 12 Truax v. Bowen, 842 F.2d 995 (8th Cir. 1988) ......... 18 United States v. Munsingwear, Inc., 340 U.S. 36 je wrete annem a hee rer ener ig Pee ere ee 7 Watkins v. Fordice, 7 F.3d 453 (5th Cir. 1993) sae e ieee Ga kare aan aa hes 18, 20, 21, 22 Wheeler v. Towanda Area Sch. Dist., 950 F.2d 128 (3d i SON ee ie epee (eee oes Se awd aig, 18, 20 Williams v. Alioto, 625 F.2d 845 (9th Cir. 1980), cert. denied. 460 US. 1018 (4981)... .. «6.60.5 9, 22 vi TABLE OF AUTHORITIES —- Continued Page STATUTES: er : ON OO OU 6 os 0ccaseaedevusixes bavuuskeays 3 EE ED oo be bo ok 400000005560 chek See e Rees 3 I Es db 5 Coos 6500040 bS ORES es bee e Res 4,7 es EE ss) d's go 6 8 an von 664s caeened ne rereel 2 an ine eto 066s kia Abba ees Cana eee Orel 4 I Ss win 06-v 46.0040 5.039 G6s enn hee eeee 19 a ee en Si ee 4 Bs SEs 8K ven we vendhscenes cueuesseeaavua passim N.C. Gen. Stat. 115C-116 (as amended, 1988 & PN vcuvsene ee eas 0000400 0uusee eee eae y a MISCELLANEOUS: S. Kep. No. 94-1011, 94th Cong., 2d Sess. (1976)..... 15 H.R. Rep. No. 94-1558, 94th Cong., 2d Sess. (1976) .... 16 OSERS Letter Ruling (OSERS 1987) .................. 5 No. 94-___ “ In The Supreme Court of the United States October Term, 1994 7 S1 AND S82, ET AL., Petitioners, STATE BOARD OF EDUCATION OF NORTH CAROLINA, ET AL., Respondents. 9 On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The Fourth Circuit + PETITION FOR A WRIT OF CERTIORARI ¢ Petitioners S1 and S2, by and through their parents and guardians ad litem, P1 and P2, and P1 and P2 individ- ually, petition for a writ of certiorari to review the opin- ion and judgment of the United States Court of Appeals for the Fourth Circuit, sitting en banc, entered in the above-entitled proceeding on April 4, 1994. + OPINIONS BELOW The opinion and judgment of the court of appeals, sitting en banc, is reported at 21 F.3d 49. App., infra, 1a-6a. The opinion and judgment of the panel of the court of appeals, which was reversed by the court sitting en banc, is reported at 6 F.3d 160. App., infra, 7a-38a. The order and memorandum opinion of the United States District Court for the Middle District of North Carolina awarding attorneys’ fees to petitioners, entered on March 30, 1992 (App., infra, 39a-48a), is unpublished. The earlier opinion and judgment of the court of appeals is reported at 832 F.2d 294. The opinion and judgment of the district court, which was vacated by the court of appeals, is reported at 650 F. Supp. 1427. JURISDICTION The judgment of the court of appeals was entered on April 4, 1994. On June 7, 1994, Chief Justice Rehnquist extended the time within which to file a petition for a writ of certiorari to and including August 2, 1994. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1) STATUTORY PROVISIONS INVOLVED The following statutory sections are reprinted in the Appendix to this petition at 55a-58a: 42 U.S.C. 1988; N.C. Gen. Stat. Sections 115C-116 (d), (h), (i), and (j) (as amended, 1988) and Sections 115C-116 (d), (h) and (j) (as amended, 1990). ee Let STATEMENT OF THE CASE 1. Petitioners S1 and S2 are disabled children of P1 and P2, their parents and guardians. Petitioners seek reversal of the court of appeals’ en banc decision that they are not “prevailing parties” in their action under 42 U.S.C. 1983 against respondents North Carolina Board of Education and its chairman, and thus are not entitled to attorneys’ fees against respondents under 42 U.S.C. 1988. When this action began, petitioners S1 and S2 were enrolled in the Asheboro, North Carolina city schools. P1 and P2 enrolled their children in private schools with special programs for the disabled for the 1983-1984 school year. In subsequent years, however, the parents demanded that the school district provide a free, appro- priate, individualized educational program for their chil- dren as required by the individuals with Disabilities Education Act, 20 U.S.C. 1400, et seq., formerly known as the Education of the Handicapped Act, and the Education for All Handicapped Children Act. The parents also requested tuition reimbursement from the city school authorities for the 1983-1984 school year, claiming that the school district violated the IDEA by failing to notify them of their children’s right to a publicly funded educa- tion for that period. App., infra, 9a. Although the children were soon placed in an appropri- ate public school program designed to meet their educational needs, the parents’ claim for tuition reimbursement was refused. Petitioners then demanded a “due process hearing” from local school authorities, as provided under N.C. Gen. Stat. Section 115C-116, which was enacted pursuant to 20 U.S.C. 1415(b) of the IDEA. The hearing officer refused to hear the parents’ claim on the ground that he lacked author- ity to award tuition reimbursement under the version of Section 115C-116 in force at that time. The state education agency denied the parents’ petition to amend state regula- tions to confer authority upon the hearing officer to make a binding award of reimbursement to remedy the local school board’s violation of federal law. App., infra, 9a-10a. 2. Petitioners then filed suit under 42 U.S.C. 1983 in federal district court against the city board of education, the local hearing officer, the state board of education, and the state chairman of the board. They alleged that the local hearing officer, in refusing to hear their claim for tuition reimbursement, and the state board, in refusing to amend or reinterpret state procedures to allow an award of tuition reimbursement by officers authorized to hear parents’ claims, had violated petitioners’ procedural rights under the IDEA and its implementing federal regu- lations. App., infra, 10a-11a. Petitioners sought to recover their 1983-1984 tuition expenses, or, in the alternative, “a declaration that the state rules preventing hearing offi- cers from deciding tuition reimbursement claims violated the parents’ rights under federal law, an order enjoining [the state chairman] and the state board from promulgat- ing and enforcing those rules, and an order compelling the city board and its hearing officer to conduct a hearing on [their] reimbursement claim.” They also sought costs and attorneys’ fees under 42 U.S.C. 1988, 20 U.S.C. 1415(e), and 29 U.S.C. 794a. App., infra, 11a. Based on its interpretation of the IDEA as requiring States to provide an administrative hearing at which par- ents could obtain relief in the form of tuition reimburse- ment, the district court granted petitioners’ motion for summary judgment on the claims for injunctive and declaratory relief. S1 ex rel. P1 v. Spangler, 650 F. Supp. 1427 (M.D.N.C. 1986). It ordered the city board and its hearing officer to conduct a hearing on petitioners’ claims for reimbursement and to award relief if appropriate. It also enjoined the state board and its chairman from applying North Carolina law to bar the award of reimbursement in hearings on claims under the IDEA. App., infra, 11a. 3. Respondents appealed to the Fourth Circuit. On June 17, 1987, while the appeal was pending, the Office of Special Education and Rehabilitative Services (OSERS) of the United States Department of Education (DOE), which supervises federal grants-in-aid under the IDEA, issued a Letter Ruling in which it specifically endorsed the posi- tion taken by the district court in this case. In the ruling, OSERS agreed with the court that the IDEA requires states to authorize hearing officers to order tuition reim- bursement as a remedy for violations of the statute. App., infra, 12a; see also id. at 49a-54a. 4. Shortly thereafter, petitioners agreed to a settle- ment with the city board of education under which the board agreed to pay petitioners’ accrued tuition expenses and its assessed portion of attorneys’ fees in exchange for petitioners’ agreeing to dismiss all claims against the city board and city officials with prejudice. The state board and chairman were not parties to the agreement. See App., infra, 11a-12a; id. at 46a n.5. Following the settlement, the court of appeals dis- missed petitioners’ remaining claims against the state respondents. S1 ex rel. P1 v. Spangler, 832 F.2d 294 (4th Cir. 1987). Although the court declined to decide whether petitioners’ settlement with the city board rendered the case moot as against the state defendants “in strict consti- tutional case or controversy terms,” it concluded that it nonetheless “should treat [the] appeal as moot for pru- dential reasons.” 832 F.2d at 297. The court explained that because they had received full reirabursement on their claims for tuition, petitioners no longer had a “present need” for an injunction authorizing state hearing officers to decide their tuition claims. Ibid. The court acknowledged the possibility that peti- tioners, who continued to use .1e city’s educational ser- vices, might yet take advantage of a change in state mandated procedures to obtain redress for claimed viola- tions of the IDEA in the future. It believed, however, that that prospect was not “sufficiently realistic” to warrant the issuance of an injunction. The court also noted that its refusal to rule on the request for injunctive relief against the State would allow it to avoid deciding the difficult constitutional question of whether the Eleventh Amend- ment would permit the court to enjoin the processes of a state administrative agency. Finally, the court expressed the belief that a ruling on the matter would soon become unnecessary because it was likely that the State of North Carolina would alter its hearing procedures in response to the opinion expressed in the OSERS’ June 17, 1987, letter ruling. 832 F.2d at 297-298. Thus, the court vacated the district court’s order and remanded with directions to consider petitioners’ request for attorneys’ fees and to dismiss the remainder of the action as moot. Id. at 298-299. See United States v. Munsingwear, Inc., 340 U.S. 36 (1950). 5. In 1988, following the court of appeals’ dismissal of petitioners’ action, the North Carolina Genera] Assem- bly enacted amendments to Section 115C-116 ihat expressly authorized hearing officers to conduct hearings regarding reimbursements for violations of federal law, but retained to the state board of education, rather than to hearing officers, the authority to make reimbursement decisions final. See App., infra, 57a-58a; see also id. at 13a. OSERS objected to the revised statute and threatened to withdraw $5 million in federal education funds if the State did not comply with the requirements of the IDEA by June 30, 1990. Ibid. In July 1990, the North Carolina State General Assembly finally revised Section 115C-116 to grant administrative hearing officers the authority to make binding findings of fact and conclusions of law regarding violations of the IDEA. Those decisions were enforceable by the state board through the award of appropriate monetary relief, including reimbursement for tuition. App., infra, 13a. See also N.C. Gen. Stat. 115C-116(h), (j) (1990), App., infra, 55a-56a. 6. Following this legislative development, the dis- trict court awarded attorneys’ fees under 42 U.S.C. 1988 and 20 U.S.C. 1415(e) against the state respondents in the amount of $30,143.18. App., infra, 4a, 48a. The court based the award on its finding that petitioners’ lawsuit led to “federal pressure” being brought to bear on North Caro- lina, which in turn resulted in the amendment of Section 115C-116 to comply with federal law. App., infra, 13a-14a; see also id. at 44a-45a. 7. On appeal, a panel of the court of appeals, with Judge Wilkinson dissenting, affirmed the attorneys’ fees award. App., infra, 7a-38a. The panel majority rejected the state’s contention that “post-mootness events never can serve to establish § 1983 plaintiffs as prevailing parties for § 1988 attorney fee award purposes.” The court rea- soned that, in contrast with Rhodes v. Stewart, 488 U.S. 1 (1988), this case was not one in which “the mooting events made it impossible for the plaintiffs to prevail in the most basic sense of realizing any of the benefits sought in the action.” App., infra, 14a. The court found that petitioners qualified as prevailing parties because their lawsuit, although not resulting in a formal judgment in their favor on the merits, had “influenced the OSERS Letter Ruling and thereby its policy ina significant way,” which in turn had prompted the State to bring about the change in its hearing procedures that petitioners desired. App., infra, 16a-17a. The court of appeals also rejected the state’s reliance on a passage in the recently decided case of Farrar v. Hobby, 113 S. Ct. 566 (1992). There, this Court stated in dictum that, to qualify as a prevailing party, a civil rights plaintiff “must obtain an enforceable judgment against the defendant from whom fees are sought * * * or compa- rable relief through a consent decree or settlement.” 113 S.Ct. at 573. The court of appeals concluded that the Farrar dictum should not be read as “reject[ing] the cata- lyst theory of prevailing party status,” explaining that the validity of that theory was not at issue in the case, and that Farrar had relied on several prior decisions that “had either expressly or tacitly recognized the catalyst theory’s viability.” App., infra, 23a; id. at 20a-24a.! In his dissent, Judge Wilkinson asserted that the panel majority’s decision embracing “a broad ‘catalyst theory’ of attorneys’ fees recovery” could not be recon- ciled with this Court’s statements in Farrar. App., infra, 27a-28a. Judge Wilkinson also stated that the catalyst theory of fee recovery “conflicts with the plain language of § 1988 itself,” because individuals “must prevail in their status as parties, not in their role as agents of reform.” Id. at 3la-32a. In Judge Wilkinson’s view, this Court’s cases should be interpreted as requiring that, to prevail for § 1988 purposes, parties must “succeed on the merits of a claim.” That is because the lawsuit must “materially alter the legal relationship between plaintiffs and defendants,” ibid. (quoting Texas State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-793 (1989)), and such an alteration is not possible unless “the plaintiff , 1 The panel majority put forward an alternative basis for awarding attorneys’ fees to petitioners: that a vacatur of a favor- able judgment following a dismissal on appeal for prudential mootness should not affect a plaintiff's entitlement to attorneys’ fees as a prevailing party. The court relied on cases decided by other courts in which plaintiffs were awarded fees after a pre- liminary injunction was vacated as moot when the defendant’s voluntary compliance afforded the plaintiff the sought-after relief. App., infra, 25a n.3. See, e.g., Maloney v. Marietta, 822 F.2d 1023 (11th Cir. 1987); Williams v. Alioto, 625 F.2d 845 (9th Cir. 1980), cert. denied, 450 U.S. 1012 (1981). In those cases as in this one, the panel majority noted, the court’s order was not reversed on the merits; thus, the vacatur here should not be regarded as barring an award of attorneys’ fees. 10 becomes entitled to enforce a judgment, consent decree, or settlement against the defendant.” App., infra, 32a (quoting Farrar, 113 S. Ct. at 574). Judge Wilkinson fur- ther explained that, by permitting voluntary remedial action to be the basis of attorneys’ fees awards, applica- tion of the doctrine would have the effect of discouraging such action on the part of public officials. App., infra, 35a-36a. Judge Wilkinson found unpersuasive decisions of other courts of appeals that had reaffirmed the catalyst theory following the Court’s decision in Farrar, conclud- ing that those cases “do not come to terms with the inconsistency between Farrar and the catalyst theory.” See App., infra, 28a n.2 (citing Paris v. HUD, 988 F.2d 236 (1st Cir. 1993) and Citizens Against Tax Waste v. Westerville City School, 985 F.2d 255 (6th Cir. 1993)). 8. On October 21, 1993, the Fourth Circuit granted the state respondents’ petition for rehearing en banc. App., infra, 5a. In a per curiam opinion, a majority of seven judges of the court, with six judges dissenting, reversed the decision of the panel majority and vacated the district court’s award of attorneys’ fees to petitioners. The court adopted in full the dissenting panel opinion of Judge Wilkinson. It briefly reiterated the conclusions of that opinion that 1) a person cannot be a “prevailing party” under 42 U.S.C. § 1988 without having obtained “an enforceable judgment, consent, decree, or settlement giving some of the legal relief sought,” and that 2) follow- ing the decision in Farrar, a lawsuit’s role as a catalyst for extra-judicial changes in a defendant’s conduct “cannot suffice to establish [a] plaintiff as a prevailing party.” App., infra, 5a. 11 Six judges dissented, endorsing the view expressed in Judge Phillips’ majority opinion for the panel and adopting that opinion as their own. App., infra, 6a. ¢ REASONS FOR GRANTING THE PETITION In overturning the district court’s award of attorneys’ fees in this case, the Fourth Circuit, sitting en banc, adopted an interpretation of 42 U.S.C. 1988 that dramati- cally narrows the grounds for fee awards to plaintiffs seeking to vindicate federal civil rights. The Fourth Cir- cuit’s categorical rejection of the well-established and widely-accepted “catalyst” theory under Section 1988 represents a misreading of the language of the statute, is contrary to legislative history that directly addresses the question, and conflicts with the interpretation of that provision by every other court of appeals to consider the issue. Moreover, there is nothing in this Court’s cases, including its recent decision in Farrar v. Hobby, 113 S. Ct. 566 (1992), that warrants the Fourth Circuit’s restrictive view of the scope of the term “prevailing party” in Sec- tion 1988. Resolution of the conflict in the courts of appeals on the question presented by this case is of great importance to the application of Section 1988 as well as other federal statutes that permit the award of attorneys’ fees to “pre- vailing parties.” It is not uncommon for plaintiffs, as a result of a lawsuit, to benefit from a defendant’s cessation of challenged conduct or a legislative reaction mandating such a change. The court of appeals ruled, however, that a plaintiff can qualify as a “prevailing party” only if his 12 lawsuit results in a formal judgment or settlement in his favor. Thus, attorneys’ fees are not available if, in response to the plaintiff’s legal challenge, the defendant voluntarily alters his conduct or takes other action to remedy the claimed violations, where that action is not mandated by judicial order or decree. Adoption of the Fourth Circuit’s rule to bar an award of fees in such circumstances would significantly circumscribe the avail- ability of attorneys’ fees under federal fee shifting stat- utes, and would contravene Congress’s intent by depriving many deserving litigants of fees despite their success in vindicating federal civil rights as a direct result of legal action. 1. The court of appeals sitting en banc, in adopting Judge Wilkinson’s dissenting panel opinion, decided that the catalyst theory of fee recovery “conflicts with the plain language of § 1988 itself.” According to Judge Wilk- inson, a “prevailing party,” must achieve success by vir- tue of “a court’s authority,” and not by any other means. Judge Wilkinson’s restrictive view is not the best reading of Section 1988. A party “prevails” in a lawsuit if it obtains the requested remedy as a result of prosecuting its claim. As other courts of appeals have recognized, once the conditions of causation and substantial benefit to the plaintiff are satisfied, there is no need for the additional requirement that there be a favorable judg- ment in the case, or that the change in conduct or law be judicially mandated or formalized by judicial decree. In Texas State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792 (1989), the Court stated that, for attorneys’ fees to be available under Section 1988, a lawsuit must 13 materially alter the “legal relationship” between plaintiffs and defendants. The Fourth Circuit’s unduly restrictive construction of the language of Section 1988 ignores the fact that a change in the “legal relationship” between the parties to a lawsuit can be brought about by a number of means that do not require a court judgment or order - including a legislative enactment, a change in administra- tive practice or rules, or the implementation of an announced intent to cease or alter the objectionable con- duct. The lawsuit in this case altered the “legal relation- ship” between petitioners and respondents, despite the absence of a formal judgment in petitioners’ favor, because it resulted in a change in the procedures that the state respondents must accord petitioners when challeng- ing school authorities’ compliance with the IDEA. This Court has in a number of cases implicitly or explicitly endorsed the “catalyst theory” of attorneys’ fees awards by recognizing that a favorable final judg- ment is not a necessary prerequisite to achieving the status of a “prevailing party.” In Hewitt v. Helms, 482 U.S. 755, 761 (1986), the Court expressly acknowledged a “catalyst theory” of attorneys’ fee recovery (referred to in that case as the “equivalency” doctrine) as a basis for prevailing party status. The court explained that in civil litigation, the judicial decree is not the ends but the means. At the end of the rainbow lies not a judgment, but some action (or cessa- tion of action) by the defendant that the judg- ment produces * * * [ - that is,] the settling of some dispute which affects the behavior of the 14 defendant towards the plaintiff. * * * If the defen- dant, under the pressure of the lawsuit, pays over a money claim before the judicial judgment is pronounced, the plaintiff has “prevailed” in his suit, because he has obtained the substance of what he sought. Likewise in a declaratory judgment action: if the defendant, under pres- sure of the lawsuit, alters his conduct (or threat- ened conduct) towards the plaintiff that was the basis for the suit, the plaintiff will have pre- vailed.[2] Similarly, in Maher v. Gagne, 448 U.S. 122, 129 (1980), the Court stated that “[n]othing in the language of § 1988 2 Nevertheless, this case is unlike Hewitt v. Helms, 482 U.S. 755, 763 (1987), and Rhodes v. Stewart, 488 U.S. 1, 3-4 (1988) (per curiam), in which the plaintiffs were denied attorneys’ fees in actions seeking injunctions against prison policies because they were no longer in custody and thus could not reap any benefit from changes in those policies. Cf. App., infra, 14a (panel opin- ion distinguishing Rhodes v. Stewart). In particular, petitioners’ situation differs from that of the petitioner in Hewitt v. Helms, in which the Court held that a former prisoner who had been released on parole could not take advantage of the “catalyst” theory to achieve prevailing party status because the change in prison rules that allegedly was prompted by his lawsuit did not provide him with any redress. See 482 U.S. at 763-764. In con- trast, there is no question that petitioners in this case received a concrete benefit —- over and above the tuition reimbursement from the city board - from the change in hearing procedures brought about by the revision in state law. Since petitioners S1 and S2 continued to be entitled to receive a free appropriate public education as mandated by the IDEA, the right to seek relief in the form of tuition reimbursement for any future viola- tions of federal law by the local school district was of continuing value to them. 15 conditions the [court’s] power to award fees on full litiga- tion of the issues or on a judicial determination that the plaintiff’s rights have been violated.” The Court in that case expressly rejected the view that a settlement — with- out a judgment on the merits —- is insufficient to accord “prevailing party” status under Section 1988. In so decid- ing, the Court quoted from a passage in the Senate Report accompanying the enactment of Section 1988, which stated that “for 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.” Id. at 129, quoting S. Rep. No. 94-1011, 94th Cong., 2d Sess. 5 (1976). See also Hanrahan v. Hampton, 446 U.S. 754, 756-757 (1979) (per curiam) (recognizing, in reliance on the legislative reports, that a person may “in some circumstances be a ‘prevailing party’” if his rights are vindicated “without formally obtaining relief.”); Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (“Plaintiffs may be considered ‘prevailing parties’ for attorney’s fees purposes if they succeed on any signif- icant issue in litigation which achieves some of the bene- fit the parties sought in bringing suit.”). The House Report on the federal attorneys’ fees stat- ute is even more explicit on the issue central to this case, stating that: [t]he phrase “prevailing party” is not intended to be limited to the victor only after entry of a final judgment following a full trial on the merits. * * * If the litigation terminates by con- sent decree, for example, it would be proper to award counsel fees [citations omitted]. A “pre- vailing party” should not be penalized for seek- ing an out-of-court settlement, thus helping to Ce 16 lessen docket congestion. Similarly, after a com- plaint is filed a defendant might voluntarily cease the unlawful practice. A court should still award fees even though it might conclude, as a matter of equity that no formal relief, such as an injunction, is needed. H.R. Rep. No. 94-1558, 94th Cong., 2d Sess. 7 (1976) (emphasis added). The House Report thus explicitly endorses treating cases in which a defendant’s “voluntary compliance” affords plaintiffs the requested remedy no differently than cases in which plaintiffs obtain relief through judicial action in the form of a favorable judg- ment on the merits, a settlement, or a consent decree. According to the Fourth Circuit, however, these cases should be treated differently: although fees are available in the event of a formal settlement or consent decree, they would be barred if a lawsuit terminates because of a defendant’s voluntary compliance with the plaintiff’s plea for relief. See App., infra, 35a-36a (Judge Wilkinson, dissenting) (rejecting the “catalyst theory” because it “expressly recognizes ‘voluntary actions taken by a defendant’ as a proper basis for a fee award.”). As the unequivocal statements in the House Report make clear, however, the statute was never intended to be interpreted in this manner. The Court’s decision in Farrar v. Hobby, supra, is not to the contrary. The Court in that case did not consider or rule on the validity of the “catalyst” theory in the context of an extrajudicial change in the defendant's conduct that afforded the plaintiffs relief. Rather, the issue in Farrar was whether a fee award of $280,000 to a plaintiff who had won only a dollar in a suit seeking $17 million was 17 reasonable given the plaintiff's nominal success. In the course of a general discussion of Section 1988’s require- ments, the Court stated that, to be a prevailing party, a plaintiff “must obtain at least some relief on the merits of his claim.” 113 S. Ct. at 573. The Court explained that a plaintiff must obtain an “enforceable judgment against the defendant,” or “comparable relief through a consent decree or settlement,” and went on to state that “a plain- tiff prevails when actual relief on the merits of his claim materially alters the legal relationship between the par- ties by modifying the defendant’s behavior in a way that directly benefits the plaintiff.” Ibid. These comments should not be construed as ruling out the award of attorneys’ fees when relief is obtained by methods other than judicial decree. Although Farrar states that prevailing party status may be achieved by a judgment on the merits or through settlement or a con- sent decree, the context indicates that the list need not be exhaustive. The Court put forward a more general formu- lation, gleaned from its prior attorneys’ fees cases, that would allow an award in the absence of a formal judg- ment: that fees can be appropriate where the relief obtained “alters the legal relationship between the par- ties * * * in a way that directly benefits the plaintiff.” 113 S. Ct. at 573. In any event, Farrar did not claim to decide whether a party could “prevail” without a favorable judgment on the merits (since the plaintiff in that case had obtained such a judgment), and did not discuss the legislative history or analyze other pertinent materials bearing on the proper resolution of that particular issue. Thus, the decision in Farrar cannot fairly be read as 18 definitively foreclosing the catalyst theory of fee recov- ery. 2. a. Application of the “catalyst” theory to determine whether a party seeking attorneys’ fees is a “prevailing party” is a firmly entrenched doctrine that has been rec- ognized by every court of appeais, including the Fourth Circuit, prior to the decision in this case. In addition, the court of appeals’ decision here is in direct conflict with post-Farrar decisions in four other courts of appeals that have continued to apply the catalyst theory to uphold awards of attorneys’ fees to plaintiffs who, by dint of filing a lawsuit under Section 1983, have obtained some sought-after relief without a final judgment in their favor. See Baumgartner v. Harrisburg Housing Authority, 21 F.3d 541 (3d Cir. 1994); Paris v. HUD, 988 F.2d 236 (ist Cir. 1993); Watkins v. Fordice, 7 F.3d 453 (5th Cir. 1993); Citizens Against Tax Waste v. Westerville City School, 985 F.2d 255 (6th Cir. 1993). In addition, another court of appeals has endorsed the “catalyst” theory following Farrar, but denied attorneys’ fees for reasons unrelated to the val- idity of the theory. See American Council of the Blind v. 3 See, e.g., Public Citizen Health Research Group v. Young, 909 F.2d 546 (D.C. Cir. 1990); Nadeau v. Helgemoe, 581 F.2d 275 (1st Cir. 1978); Gerena-Valentine v. Koch, 739 F.2d 755 (2d Cir. 1984); Wheeler v. Towanda Area Sch. Dist., 950 F.2d 128 (3d Cir. 1991); Bonnes v. Long, 599 F.2d 1316 (4th Cir. 1979); DeMier v. Gondles, 676 F.2d 92 (1982); Garcia v. Guerra, 744 F.2d 1159 (5th Cir. 1984), cert. denied, 471 U.S. 1065 (1985); Perket v. Sec’y of HHS, 905 F.2d 129 (6th Cir. 1990); Dawson v. Pastrick, 600 F.2d 70 (7th Cir. 1979); Truax v. Bowen, 842 F.2d 995 (8th Cir. 1988); Lads Trucking Co. v. Bd. of Trustees, 777 F.2d 1371 (9th Cir. 1985); Luethje v. Peavine Sch. Dist., 872 F.2d 352 (10th Cir. 1989); Martin v. Heckler, 773 F.2d 1145 (11th Cir. 1985). 19 Romer, 992 F.2d 249 (10th Cir. 1993), cert. denied, 114 S. Ct. 184 (1993); see also Craig v. Gregg County, Texas, 988 F.2d 18 (5th Cir. 1993).4 In Baumgartner v. Harrisburg Housing Authority, 21 F.3d at 546-548, a group of public housing tenants sued the local housing authority claiming that a plan for reno- vating certain public housing facilities violated federal housing statutes. While the lawsuit was pending, the local authority revised its renovation plan with the ten- ants’ approval, after which the district court dismissed the case on the plaintiffs’ motion. In reversing the district court’s denial of attorneys’ fees, the court of appeals applied a two-part test for prevailing party status: “whether plaintiffs achieved some of the benefit sought in the lawsuit, even though the plaintiff does not ulti- mately succeed in securing a favorable judgment,” and 4 In American Council of the Blind, a charitable organization challenged a Colorado statute regulating solicitation by chari- ties in the State. Before the court could rule on the merits of the suit, the Colorado legislature passed amendments changing some of the requirements in the statute, and the lawsuit was eventually dismissed by agreement of the parties.. The court of appeals upheld a denial of attorneys’ fees based on the district court’s finding that the lawsuit did not prompt the statutory changes and that, in any event, those changes did not “mate- rially alter” the specific statutory provisions to which the plain- tiffs had objected in their lawsuit. 992 F.2d at 251. Craig concerned a challenge under Section 5 of the Voting Rights Act, 42 U.S.C. 1973c, to a county districting plan. The districting plan was subsequently revised in response to objec- tions by the Department of Justice. Although embracing the “catalyst” analysis, the court of appeals denied attorneys’ fees because there was no evidence that the county revised its redis- tricting plan in response to the plaintiffs’ lawsuit. 988 F.2d at 21. 20 whether “there is a causal connection between the litigation and the relief from the defendant.” 21 F.3d at 546 (quoting Wheeler v. Towanda Area Sch. Dist., 950 F.2d 128, 131 (3d Cir. 1991)). The court expressly rejected the claim that this Court’s decision in Farrar abrogated the “catalyst” theory as a basis for awarding fees under Section 1988. 21 F.3d at 547-548. Similarly, in Watkins v. Fordice, 7 F.3d at 456-457, the Fifth Circuit upheld an award of attorneys’ fees to plaintiffs who had filed suit seeking to enjoin elections in Mississippi under the federal Voting Rights Act. Before the court could act on the claim, the state legislature passed a new redistrict- ing plan that satisfied the plaintiffs’ demands for the maxi- mum number of electable black majority districts, which mooted the plaintiffs’ claims. Although there was no final judgment favorable to plaintiffs, the court of appeals ruled that they qualified as prevailing parties because “the goals of the lawsuit were achieved” and plaintiffs’ lawsuit was found by the district court to be a “motivating factor” in the enactment of the new redistricting plans. 7 F.3d at 456-457. rhe plaintiffs in Paris v. HUD, 988 F.2d at 237, filed suit claiming that an income mixing scheme for allocating units in a public housing project violated federal housing statutes and the Constitution. While the lawsuit was pending, Congress passed a statute prohibiting the type of income mixing scheme used by HUD, and specifically referred to the Paris litigation in explaining the need for the statute. HUD then voluntarily abandoned the income mixing scheme at issue in the case to conform to the statutory mandate, and the district court dismissed the suit. The First Circuit reversed the district court’s denial of attorneys’ fees under Section 1988. It explained that, despite the absence of a final judgment in their favor, Dee 21 plaintiffs qualified as “prevailing parties” in that their lawsuit could be “fairly characterized as a catalyst” of the Congressional amendment that led to the abandonment of the income mixing scheme challenged in their suit. 988 F.2d at 241. Finally, in Citizens Against Tax Waste v. Westerville City School, 985 F.2d at 257-258, an association of property owners filed suit under 42 U.S.C. 1983, claiming that a school board’s policy requiring prior approval for per- sons to speak at board meetings violated the First Amendment. While the case was pending the board revised its policy, and the court subsequently dismissed the case as moot. The court of appeals held that an award of attorneys’ fees under Section 1988 was appropriate because the plaintiffs’ suit had brought about a revision in the school board’s policy, and the plaintiffs had mate- rially benefitted from the change. 985 F.2d at 257-258. b. In Paris, Baumgartner, Watkins, and Citizens Against Tax Waste, legislative action or the defendants’ voluntary change in conduct brought plaintiffs the bene- fits sought in their lawsuit, and led to the dismissal of their court action before final judgment could be ren- dered. In this case, petitioners’ suit against the state respondents was dismissed on grounds of prudential mootness prior to the legislative changes that brought petitioners the requested relief. As Judge Wilkinson him- self concedes, App., infra, 28a n.2, the factual differences among these cases is without significance to the funda- mental question they present, on which the Fourth Cir- cuit is at odds with her sister circuits. Under the standard articulated by Judge Wilkinson and the en banc majority 22 in adopting his opinion, the plaintiffs in Paris, Baum- gartner, Watkins, and Citizens Against Tax Waste, would not be entitled to attorneys’ fees because none of them had obtained a formal settlement, consent decree, or final judgment in their favor.> Likewise, there is no doubt that the award of attorneys’ fees to petitioners would have been upheld in the four circuits discussed above, since petitioners fulfilled all the requirements for attorneys’ fees as set forth in those cases. See, e.g., Watkins, 7 F.3d at 456; Baumgartner, 21 F.3d at 547; Citizens Against Tax 5 Judge Wilkinson expressed a willingness to distinguish three “voluntary compliance” cases cited by the panel majority, see App., infra, 30a-31a n.3, in which the plaintiffs succeeded in obtaining a preliminary injunction based on the probability of success on the merits, which injunction was subsequently dis- solved after the defendants complied by ceasing the unlawful conduct. See App., infra, 25a n.3 (citing Maloney v. Marietta, 822 F.2d 1023 (11th Cir. 1987); Taylor v. Ft. Lauderdale, 810 F.2d 1551 (11th Cir. 1987); Williams v. Alioto, 625 F.2d 845 (9th Cir. 1980), cert. denied, 450 U.S. 1012 (1981)). Judge Wilkinson suggested that an award of attorneys’ fees in those cases might be appro- priate on the theory that the dissolution of an injunction — where that injunction was based on a determination that the defendant had engaged in unlawful conduct — would not deprive the plaintiffs of prevailing party status. He refused to accept the panel majority’s contention, however, (App., infra, 30a-3la n.3 and note 1, supra) that the instant case, in which a favorable district court decision had been vacated as moot, should receive analogous treatment. Based on Judge Wilkinson’s discussion, there is no reason to believe that the en banc majority would extend prevailing party status to the plaintiffs in Paris, Bau- mgartner, Watkins, and Citizens Against Tax Waste, who had never obtained a preliminary injunction or any other ruling in their favor. Se = Sih aks ‘AES Rin, ire Aa 23 Waste, 985 F.2d at 257-258; Paris, 988 F.2d at 241.6 First, petitioners achieved the goals of their lawsuit against the state respondents, and the legal action was a “significant catalyst” in bringing about the requested change in state law and in respondents’ conduct. The district court made a factual finding of a “distinct causal connection between the harm [petitioners] sought to rectify by bringing suit and the ultimate revision of North Carolina General Stat- utes 115C-116 to conform to federal law.” App., infra, 44a. That factual finding was not found to be erroneous by the court of appeals panel, App., infra, 16a-18a, and, although briefly questioned by Judge Wilkinson, id. at 30a, ulti- mately was not disturbed by the en banc court. Id. at 3a-5a. In addition, the revision in state law prompted by petitioners’ suit brought about a clear change in the “legal relationship” between petitioners and the state respondents. That change provided petitioners with a concrete benefit by assuring them that they could seek a binding award of tuition reimbursement through the ® As the panel opinion for the court of appeals noted, see App., infra, 19a-20a, petitioners’ claims also satisfied the requirement, imposed by some courts of appeals, that the requested change in the defendants’ conduct be “required by law,” in the sense that the legal basis for the action not be “groundless or frivolous.” See, e.g., Dunn v. The Florida Bar, 889 F.2d 1010, 1015 (11th Cir. 1989), cert. denied, 498 U.S. 811 (1990): Guglietti v. Sec’y of HHS, 900 F.2d 397, 401 (1st Cir. 1990); Garcia v. Guerra, 744 F.2d 1159, 1162 (5th Cir. 1984), cert. denied, 471 U.S. 1065 (1985); see also Paris, 988 F.2d at 241. Here, petitioners’ claims were far from frivolous; the DOE itself agreed that the state statutory change authorizing hearing officers to award reimbursement was required by the terms of the IDEA itself. 24 state hearing process for any violation of their rights under the IDEA. See note 2, supra. Thus, were it not for the en banc court’s rejection of the catalyst theory, petitioners would have secured the attorneys’ fees that both the district court and the Fourth Circuit panel awarded to compensate petitioners for their sustained efforts to enforce federal law over almost ten years. This Court should grant review to reconcile the conflicting views of the courts of appeals and to resolve the important question of whether a plaintiff can recover attorneys’ fees when a lawsuit is the “catalyst” for the relief the plaintiff seeks. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted. Amy L. Wax, Esa. *A. FRANK JOHNS, Esq. 580 Massie Road BooTtH, HARRINGTON, JOHNS Charlottesville, Va. 22903 AND CAMPBELL (804) 924-7815 239 Edgeworth Street Greensboro, N.C. 27401 (910) 275-9567 *Counsel of Record for the Petitioners BRIAN Wo LeMaAn, Esq. Public Citizen Litigation Group 2000 P Street N.W. Suite 700 Washington, D.C. 20036 (202) 833-3000 i 3 i q y : la APPENDIX S-1 AND S-2, By and Through their parents and Guardians Ad Litem, P-1 AND P-2; P-1 and P-2, Individually, Plaintiffs-Appellees, V. The STATE BOARD OF EDUCATION OF NORTH CAROLINA; Barbara Tapscott, Chairman, State Board of Education of North Carolina, Defendants-Appellants, and C.D. Heidgerd, Hearing Officer, Asheboro City Board of Education; The Asheboro City Board of Education; Mary Smitherman, Defendants. No. 92-1525. United States Court of Appeals, Fourth Circuit. Argued March 8, 1994. Decided April 4, 1994. Parents of handicapped students brought action under § 1°83 seeking tuition reimbursement and injunc- tive and declaratory relief with respect to state board of education’s refusal to allow hearing officers to award tuition reimbursement. The United States District Court for the Middle District of North Carolina, Frank W. Bull- ock, Jr., Chief Judge, 650 F.Supp. 1427, granted summary judgment for parents, and appeal was taken. The Court of Appeals, 832 F.2d 294, found that parents’ settlement with city board of education mooted appeal and remanded. On remand, the District Court, awarded parents attorney fees against state board, and appeal was taken. The Court of Appeals, 6 F.3d 160 affirmed. Upon granting petition for 2a rehearing en banc, the Court of Appeals held that: (1) plaintiff cannot be considered prevailing party under § 1988 except by virtue of having obtained enforceable judgment, consent decree, or settlement giving some legal relief sought in § 1983 action; (2) “catalyst theory” is no longer available to establish plaintiff’s status as prevail- ing party; and (3) dismissal of appeal on mootness grounds operated to vacate judgment below and pre- vented parents from being found prevailing parties by virtue of postdismissal events. Reversed. Ervin, Chief Judge, and K.K. Hall, Phillips, Mur- naghan, Hamilton, and Michael, Circuit Judges, dissen- ted. ARGUED: Edwin Marion Speas, Jr., Sr. Deputy Atty. Gen., North Carolina Dept. of Justice, Raleigh, NC, for appellants. A. Frank Johns, Jr., Booth, Harrington, Johns & Campbell, Greensboro, NC, for appellees. ON BRIEF: Lacy H. Thornburg, Atty. Gen. of NC, North Carolina Dept. of Justice, Raleigh, NC, for appellants. Before ERVIN, Chief Judge, and RUSSELL, WID- ENER, HALL, PHILLIPS, MURNAGHAN, WILKINSON, WILKINS, NIEMEYER, HAMILTON, LUTTIG, WIL- LIAMS, and MICHAEL, Circuit Judges, sitting en banc. Reversed by published per curiam opinion. Judges RUSSELL, WIDENER, WILKINSON, WILKINS, NIEMEYER, LUTTIG, and WILLIAMS voted to reverse the district court. Chief Judge ERVIN and Judges K.K. HALL, PHILLIPS, MURNAGHAN, HAMILTON, and MICHAEL voted to affirm the district court. sae ADIL Nase! eaten Sabet MN a BE isch, cbaaiagsineniniahetete ngs dap Ra re 3a OPINION PER CURIAM: Plaintiffs, parents of handicapped students enrolled in the Asheboro, North Carolina schools, filed this 42 U.S.C. § 1983 action in 1986 against the Ashebore City Board of Education, the State Board of Education of North Carolina, and the chairman of the State Board, C.D. Spangler, Jr. Plaintiffs alleged that defendants had vio- lated the Education of the Handicapped Act (“EHA”), 20 U.S.C. § 1400 et seq., by refusing to authorize hearing officers to decide tuition reimbursement claims and to order reimbursement in appropriate cases. Plaintiffs therefore sought tuition reimbursement and injunctive and declaratory relief. In December 1986, the district court granted plaintiffs’ motion for summary judgment on their claims for declaratory and injunctive relief against all the defendants, reasoning that the EHA required that state hearing officers possess the authority to decide tuition reimbursement claims. See S-1 v. Span- gler, 650 F.Supp. 1427 (M.D.N.C.1986). While the appeal of the district court’s ruling was pending, plaintiffs and the City Board reached a settle- ment agreement under which the City Board would pay the parents’ tuition expenses for their children and also pay plaintiffs’ attorneys’ fees. The State Board and Span- gler were not parties to this settlement agreement: accordingly, the parents did not dismiss any of their claims against the state defendants. Nonetheless, on appeal, a panel of this court held for prudential reasons that the settlement mooted the appeal because it gave da plaintiffs the reimbursement they sought. See S-1 v. Span- gler, 832 F.2d 294, 296 (4th Cir.1987). This court therefore vacated the district court’s summary judgment order and remanded for a determination of plaintiffs’ entitlement, if any, to attorneys’ fees from the state defendants. Id. at 298 and note 3. After this court directed the district court to “dismiss the remainder of the action as moot,” id. at 298, the Office of Special Education and Rehabilitative Services of the United States Department of Education (“OSERS”) informed the State that federal education funds would be withdrawn if the State did not amend its law to authorize hearing officers to decide parents’ reimbursement claims. Although the State had amended its special education law in 1988 to permit hearing officers to recommend tuition reimbursement decisions to the State Board, OSERS objected to the 1988 amendments on the ground that hearing officers still lacked the authority to make binding decisions regarding reimbursements. In July 1990, almost three years after plaintiffs’ claims had been declared moot, the State responded to OSERS’ threat by enacting legislation giving administrative law judges the authority to make binding decisions, subject to appeal, regarding a child’s special education needs. See 1990 N.C.Sess.Laws ch. 1058 (July 28, 1990). Shortly after North Carolina’s amendment of its hear- ing procedure, the district court considered the propriety of awarding attorneys’ fees to plaintiffs. On March 30, 1992, the district court assessed $30,143.18 in attorneys’ fees against the state defendants under 20 U.S.C. § 1415(e) and 42 U.S.C. § 1988. On appeal, a panel of this court affirmed the district court’s award of attorneys’ ee ee ee 5a fees. See S-1 & S-2 v. State Bd. of Educ., 6 F.3d 160 (4th Cir.1993). Judge Wilkinson dissented. See S-1, 6 F.3d at 168-72. On October 21, 1993, the court granted the state defendants’ petition for rehearing en banc. Upon a review of the record and the briefs, and following oral argument, a majority of the court voted to reverse the district court’s award of attorneys’ fees. The court holds the following: 1. A person may not be a “prevailing party” plain- tiff under 42 U.S.C. § 1988 except by virtue of having obtained an enforceable judgment, consent decree, or set- tlement giving some of the legal relief sought in a § 1983 action. Farrar v. Hobby, __ U.S. __, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992). ees eee ee eT . eee ea 2. The fact that a lawsuit may operate as a catalyst for post-litigation changes in a defendant’s conduct can- not suffice to establish plaintiff as a prevailing party. “Catalyst theory,” allowing that result, is no longer avail- able for that purpose, see Farrar, ___ U.S. at __, 113 S.Ct. ) at 573-74, and cases such as Bonnes v. Long, 599 F.2d 1316 (4th Cir.1979), which applied that theory, are overruled. 3. Here, the dismissal on appeal of an action under 42 U.S.C. § 1983 for prudential reasons as moot operates to vacate the judgment below, see United States v. Mun- singwear, Inc., 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950), and prevents the plaintiffs from being found prevailing parties by virtue of post-dismissal events. The plaintiffs therefore are not entitled to an award of attorney fees under 42 U.S.C. § 1988. 3 ; : : § q 4 : 6a The court adopts as its own the dissenting panel opinion of Judge WILKINSON. S-1, 6 F3d at 168-72. Judges RUSSELL, WIDENER, WILKINSON, WILKINS, NIEMEYER, LUTTIG, and WILLIAMS agree to the fore- going parts of this opinion and its holding to reverse the district court. Chief Judge ERVIN and Judges HALL, PHILLIPS, MURNAGHAN, HAMILTON, and MICHAEL respect- fully dissent. They would hold that the district court properly awarded attorneys’ fees in this case for the reasons expressed in the majority opinion of the panel. They therefore adopt Judge PHILLIPS’ majority opinion of the panel as their own and would adopt it as the opinion of the en banc court. S-1, 6 F.3d at 160-68. The judgment of the district court is accordingly REVERSED. Bek T, LRN MM BAE NL aa a AIM IS i A Mil wt er i ate i Tome Cina 7a S-1 and S-2, By and Through their parents and Guardians Ad Litem, P-1 and P-2; P-1 and P-2, Individually, Plaintiffs-Appellees, V. The STATE BOARD OF EDUCATION OF NORTH CAROLINA; Barbara Tapscott, Chairman, State Board of Education of North Carolina, Defendants-Appellants, and C.D. Heidgerd, Hearing Officer, Asheboro City Board of Education; the Asheboro City Board of Education; Mary Smitherman, Defendants. No. 92-1525. United States Court of Appeals, Fourth Circuit. Argued Oct. 29, 1992. Decided Sept. 21, 1993. Rehearing En Banc Granted, Opinion Vacated Oct. 21, 1993. Parents of handicapped students sought tuition reim- bursement and injunctive and declaratory relief with respect to state board of education’s refusal to allow hearing officers to award tuition reimbursement. The United States District Court for the Middle District of North Carolina, Frank W. Bullock, Jr., Chief Judge, 650 F.Supp. 1427, granted claims, and appeal was taken. The Court of Appeals, 832 F.2d 294, found that settlement with city board of education mooted action. On remand, the parents sought attorney fee award as prevailing par- ties. The District Court, Bullock, Chief Judge, awarded 8a attorney fees to parents, and appeal was taken. The Court of Appeals, Phillips, Circuit Judge, held that postmoot- ness events could serve to establish § 1983 plaintiffs as prevailing parties for purposes of attorney fee award. Affirmed. Wilkinson, Circuit Judge, filed dissenting opinion. Edwin Marion Speas, Jr., Sr. Deputy Atty. Gen., North Carolina Dept. of Justice, Raleigh, NC, argued, (Lacy H. Thornburg, Atty. Gen. of North Carolina, on brief), for defendants-appellants. A. Frank Johns, Jr., Booth, Harrington, Johns & Campbell, Greensboro, NC, argued, for plaintiffs-appel- lees. Before ERVIN, Chief Judge, and PHILLIPS and WILKINSON, Circuit Judges. OPINION PHILLIPS, Circuit Judge: The essential issue presented is whether following dismissal of an action under 42 U.S.C. § 1983 for pruden- tial reasons as moot, the § 1983 plaintiffs may yet be found prevailing parties by virtue of post-dismissal events and therefore entitled to an award of attorney fees under 42 U.S.C. § 1988. In this appeal by the State of North Carolina from such an award, we find no error and affirm. Mech marcas Yard tlre CLiBs bin tec ib etaPaie Seb Biola 9a I When this action began, S1 and S2 were handicapped children enrolled in the Asheboro, North Carolina city schools. In the fall of 1983, after notifying the principal at the children’s public school of their intentions, their par- ents enrolled them at their own expense in a private school for one-half of each school day to receive special education services. The following school year, the parents demanded that the Asheboro City Board of Education (City Board) provide the children with an individualized education program comparable to that provided at the children’s private school or, alternatively, provide transportation and tuition for the children to continue at the private school for the 1984-85 school year. The parents premised their demand on the Education of Handicapped Act (EHA), which the parents claimed the City Board was violating by failing to provide their children with the “free appropriate public education” guaranteed by the Act, 20 U.S.C. § 1412(1). The parents also demanded tuition reimbursement for the 1983-84 school year, claim- ing that the city schools failed to notify them during that school year of their federal right to receive free special education services as required by the EHA. The City Board eventually placed the children appro- priately in the city school system, but the City Board refused the parents’ tuition reimbursement claim for the 1985-84 school year and for the period during the fall of 1984 before the City Board and parents negotiated a placement. When the City Board denied their tuition 10a reimbursement claim, the parents demanded a “due pro- cess hearing” pursuant to N.C.Gen.Stat. § 115c-116, a statute enacted pursuant to the EHA, 20 U.S.C. § 1415(b)(2). The appointed hearing officer, however, declared that he lacked authority to award tuition reim- bursement, or make findings of fact attendant to a tuition reimbursement claim, and so refused to hear the parents’ complaint. The parents then petitioned the North Caro- lina State Board of Education (State Board) to rule either that the hearing officer had authority to hear their claim or, alternatively, to amend the State regulations enacted pursuant to the EHA to confer such authority on him. The State Board denied the parents’ petition. The parents then filed suit under 42 U.S.C. § 1983 against the City Board, the State Board and the chairman of the State Board, C.D. Spangler, Jr., alleging the depri- vation of procedural rights secured by the EHA and applicable federal regulations, 34 C.F.R. § 104.31 et seq. Relying primarily on School Committee of Burlington v. Department of Education, 471 U.S. 359, 105 S.Ct. 1996, 85 L.Ed.2d 385 (1985), the parents alleged that the City Board, acting by and through its duly appointed hearing officer, had deprived them of procedural rights secured by federal law when it refused to decide their tuition reimbursement claim. The parents further alleged that the State Board and Chairman Spangler had deprived them of federally guaranteed procedural rights when it refused to interpret or amend State regulations to permit the hearing officer to decide their tuition reimbursement claim. The parents sought to recover tuition expenses from the City Board or, in the alternative, the following: a lla declaration that the State rules preventing hearing offi- cers from deciding tuition reimbursement claims violated the parents’ rights under federal law, an order enjoining Spangler and the State Board from promulgating and enforcing these rules, and an order compelling the City Board and its hearing officer to conduct a hearing on this particular reimbursement claim. The parents also sought costs and attorneys’ fees from all defendants, under 42 U.S.C. § 1988 and 29 U.S.C. § 794a. On December 31, 1986, the district court granted the parents’ motion for summary judgment on the claims for injunctive and declaratory relief, concluding that the EHA required a state administrative hearing at which parents could receive tuition reimbursement as appropri- ate relief for violations of the Act. S-1 v. Spangler, 650 F.Supp. 1427 (M.D.N.C.1986). On the same day, the dis- trict court issued an order directing the City Board and its administrative hearing officer to conduct a hearing on the parents’ claim for reimbursement, enter findings of fact and conclusions, and, if appropriate, award reimburse- ment; and enjoining Spangler and the State Board from further interpreting North Carolina law in a manner inconsistent with the court’s interpretation of the EHA. Spangler, the State Board, the City Board, and the admin- istrative hearing officer appealed the district court’s deci- sion. On September 24, 1987, while that appeal was pend- ing, the parents and the City Board agreed to a partial settlement of the case. Under the terms of this settlement agreement, which the district court approved by order entered the same day, the parents agreed to a voluntary dismissal with prejudice of all their claims against the 12a City Board, in return for the City Board’s agreement to pay their accrued tuition expenses. The State Board and its Chairman were not parties to the settlement agree- ment, and the parents did not dismiss any of their claims against them. In light of these developments, we held for pruden- tial reasons that the appeal was moot. In so doing, we explained that: We do not believe that the issues raised in this appeal require immediate resolution because they are capable of repetition yet likely to evade review. Our conclusion is based in large part on a June 17, 1987 Letter Ruling, issued after submission of this appeal by the Office of Special Education and Rehabilitative Services (OSERS) of the United States Department of Education, which has super- visory authority over federal grant-in-aid monies issued to the states under the EHA. The Letter Ruling expressly endorses the holding of the dis- trict court in this action, that the EHA requires states to authorize their hearing officers both to decide parents’ tuition reimbursement claims and to order reimbursement where the conditions of Burlington are satisfied. Given OSERS’s specific dis- approval of the State Board’s current procedures, we doubt that the precise conduct allegedly viola- tive of federal procedural rights will recur; instead, we would suppose that any remaining doubt about the propriety of the current North Carolina pro- cedures will be resolved shortly without judicial interference. We assume, for the purposes of this analysis, that the State Board and its Chairman will comply in good faith with the OSERS Letter Rul- ing. S-1 & S-2 v. Spangler, 832 F.2d 294, 298 (4th Cir.1987). CO OTST ee ree 13a We therefore vacated the order of the district court from which the state defendants had appealed, and remanded with directions to determine “whether and in what amounts attorney’s fees should be recoverable against the state defendants,” and “to dismiss the remain- der of the action as moot.” Id. (emphasis supplied). Our assumption about the state defendants’ likely compliance with the OSERS Letter Ruling was, as it turned out, too sanguine — at least for a time. In 1988 the North Carolina General Assembly did amend Section 115c-116 to allow an administrative law judge presiding over a due process hearing to recommend a decision to the State Board. Yet the final decision remained with the Board, or with two of its members designated to make the decision. 1988 N. C. Sess. Laws ch. 1079 (July 8, 1988). For this reason, OSERS objected to the revised stat- ute, and threatened to withdraw some $5 million in fed- eral education funds if the State did not comply with federal law by June 30, 1990. Through legislation speci- fically enacted to preserve these federal funds, the Gen- eral Assembly again amended Section 115c-116 so that an administrative law judge’s findings of fact and conclu- sions of law would become final unless appealed to the State Superintendent of Public Instruction. If there was such an appeal, the Superintendent could appoint a disin- terested educator to enter final findings of fact and con- clusions of law. 1990 N.C.Sess.Laws ch. 1058 (July 28, 1990). On March 30, 1992, the district court filed a mem- orandum opinion and order which awarded $30,143.18 in attorneys’ fees to the parents, reasoning that “by virtue of Plaintiff’s complaint sufficient federal pressure was 14a brought to bear on the State of North Carolina that Sec- tion 115c-116 was amended to comply with federal law.” The State Board now appeals this decision, arguing that actions taken after this court declared the parents’ claim moot cannot serve as a basis for declaring them prevail- ing parties, that the amendments in question do not sup- port such a determination, and that the OSERS letter opinion was not in response to the parents’ claims and was unimportant if it was. I] At the outset, we reject the State’s apparent conten- tion that post-mootness events never can serve to estab- lish § 1983 plaintiffs as prevailing parties for § 1988 attorney fee award purposes. Rhodes v. Stewart, 488 U.S. 1, 109 S.Ct. 202, 102 L.Ed.2d 1 (1988), upon which the State relies for this position, does not support any such abso- lute rule. In that case, it was belatedly realized that before the district court had entered a declaratory judgment in favor of two State prison inmates claiming unconstitu- tional prison conditions, one had died and the other had been paroled. Because this constitutionally mooted the action, the Supreme Court, where the mooting circum- stances were first realized in the course of reviewing an attorney fee award made to the two plaintiffs, held that neither could be found a prevailing party since neither could realize any benefit from the judgment on the merits. Id. at 3, 4, 109 S.Ct. at 202, 203 This obviously does not stand for the proposition that once mooting of a § 1983 action occurs, the plaintiffs in the action can never be prevailing parties on the basis 5s edie Pe 15a of later out-of-court developments. Mooting may have that effect, as it did in Rhodes where the mooting events made it impossible for the plaintiffs to prevail in the most basic sense of realizing any of the benefits sought in the action. But it need not. Whether it does or not is deter- mined by making the established causation-centered test of prevailing party status applied in such cases as Bonnes v. Long, 599 F.2d 1316 (4th Cir.1979) (Bonnes I). As formu- lated in that decision, the test requires an inquiry [that] is properly a pragmatic one of both fact and law that will ordinarily range out- side the merits of the basic controversy. Its ini- tial focus might well be on establishing the precise factual/legal condition that the fee claimant has sought to change or affect so as to gain a benefit or be relieved of a burden. With this condition taken as a benchmark, inquiry may then turn to whether as a quite practical matter the outcome, in whatever form it is real- ized, is one to which the plaintiff fee claimant’s efforts contributed in a significant way, and which does involve an actual conferral of bene- fit or relief from burden when measured against the benchmark condition. Id. at 1319. In applying this test we have held that “to get a truer picture of a plaintiff’s success [courts] should look out- side the final judgment to voluntary actions taken by a defendant so long as those actions are causally connected to the litigation.” Spencer v. General Elec. Co., 894 F.2d 651, 662 (4th Cir.1990). And if the inquiry so conducted reveals that the § 1983 action acted as a catalyst for a defendant’s actions ultimately favorable to the plaintiff, 16a the requisite causal connection may be found on that basis. DeMier v. Gondles, 676 F.2d 92, 93 (4th Cir.1982). In making its determination that plaintiffs here were prevailing parties, the district court carefully and speci- fically applied the Bonnes I test as elaborated in Spencer and DeMier. In reviewing that decision, we start with deference to that court’s “ringside view of the relevant conduct of the parties and of the underlying legal dis- pute,” Alexander v. Cheverly, 953 F.2d 160, 162 (4th Cir.1992), and proceed on the basis that “[i]n view of the specter of satellite litigation over attorneys’ fees, appel- late review of lower court decisions in this area, appro- priately, is limited.” Id. at 161. Our review reveals no error in the court’s decision. The § 1983 action in behalf of S-1 and S-2 claimed that North Carolina’s 1985 due process procedures violated the EAHCA in ways that deprived them of benefits to which that statutory program entitled them. The district court’s December, 1986 judgment in the parents’ favor provided the basis for the OSERS Letter Ruling issued in response to an inquiry respecting a similar situation in June 1987.! While the district court’s decision may not have “prompted OSERS to issue an official policy state- ment” as the district court explained, it certainly shaped or at least influenced the OSERS Letter Ruling and thereby its policy in a significant way. With OSERS thus essentially adopting the parents’ position and promising ! The OSERS Letter Ruling was in response to the inquiry of a Vermont attorney whose clients had been denied reimburse- ment because the Vermont state reviewing officer had held she had no authority to grant such relief. is Sad 17a to enforce it, that the State would eventually provide the due process amendments the parents sought became almost a foregone conclusion. As the parents argue and the district court implicitly recognized, the chain of causation between the § 1983 action’s commencement, the district court’s original deci- sion in the parents’ favor, the OSERS Letter Ruling and the State’s eventual compliance with it was in no way affected by our mooting of the underlying § 1983 action for prudential reasons. Indeed, our opinion finding the action moot recognized and was in part based on the recognition that this causal chain would remain intact, and that OSERS would probably force the State to comply if it refused to do so. The State urges that its unwillingness to make those changes the parents and OSERS sought, and the fact that it eventually made them only to preserve federal educa- tion funding, should be taken as indications that the parents’ suit played no part in the State’s actions. “To be pragmatic,” the State argues, “a dead lawsuit has no motivational value compared to $50,000,000 (sic).” Of course, what the State refuses to acknowledge here is that the parents’ lawsuit was at least partly responsible for OSERS threatening to withdraw the federal education funding. To begin with, the parents’ suit and its success in the district court must have alerted OSERS to the State’s non- complying position, perhaps focusing federal attention on the State earlier than it otherwise would have occurred. More crucially, though, the district court’s opin- ion clearly played a major causative role in the OSERS 18a Letter Ruling and thereby the Department of Education’s policy position. Both the timing of the district court’s opinion and the text of the Letter Ruling itself confirm the opinion’s import. In responding to the initial inquiry which prompted the Letter Ruling, OSERS on November 3, 1986 indicated that since “the matter you present will require a substan- tial review of legislative history and case law, as well as a thorough analysis of policy implications for each of the other states,” OSERS would need sixty days to provide a substantive response. On December 31, 1986, the district court handed down its opinion on precisely the issue OSERS was deciding. The Letter ruling, issued by OSERS on June 17, 1987, relied heavily on the decision by the district court. Over a third of the text of response was devoted to a discussion of this decision, and OSERS con- cluded that “[t]he court’s reasoning in the Spangler deci- sion is sound. . . . OSERS concurs with the reasoning adopted by Judge Bullock in his Spangler decision and shares his opinion that EHA-B requires States to autho- rize its hearing officers to decide reimbursement claims in an impartial due process proceeding .. . ” Given these causal links between the parents’ suit and OSERS’ actions, the State’s insistence that it changed position only to preserve federal funding amounts essen- tially to an admission that the parents’ suit did signifi- cantly impact State law, achieving through OSERS pressure what it had originally and successfully sought in the district court. The State’s position as now stated only underscores the fact that it would not have changed without the federal pressure, and thus would not have ameliorated its position without the parents’ suit. 19a Finally, the State contends that even if the parents’ suit was a significant causal factor in the 1988 and 1990 legislation, the legislation itself was not “required by law,” and thus under Dunn v. The Florida Bar, 889 F.2d 1010, 1015 (11th Cir.1989), cert. denied, 498 U.S. 811, 111 S.Ct. 46, 112 L.Ed.2d 22 (1990), the parents were not prevailing parties for purposes of attorneys’ fees. The State’s argument that the legislation was not required by law is essentially that 20 U.S.C. § 1415(b)(2) provides that parents “shall have an opportunity for an impartial due process hearing” and that “[n]o hearing conducted pur- suant to the requirements of this paragraph shall be con- ducted by an employee of such agency or unit involved in the education or care of the child.” The State’s position is that because the Board of Education is composed of “constitutional officers” and not “employees,” the provi- sions of § 1415(b)(2) were improperly applied and the changes the State made were not “required by law” as Dunn held necessary. In Dunn, however, the Eleventh Circuit explained what it meant in “required by law” by referring to a pair of earlier Fifth Circuit cases. In these, the Fifth Circuit held that “appellants need only show that the action taken by the appellees was ‘not a wholly gratuitous response to an action that in itself was frivolous or groundless.’ (citation omitted). A claim is not frivolous if it is arguably supported by case or statutory law.” Garcia v. Guerra, 744 F.2d 1159, 1163 (5th Cir.1984), cert. denied, 471 U.S. 1065, 105 S.Ct. 2139, 85 L.Ed.2d 497 (1985). “[A] plaintiff who brings an action that has no colorable, or even reasonable, likelihood of success on the merits is not entitled to recover attorney’s fees if the defendant simply 20a complies with the plaintiff’s demands and moots the case for reasons that have nothing to do with the potential merit of the suit. Whether activated by economic, politi- cal, or purely personal concerns, a defendant may choose voluntarily to make the change sought in the suit rather than undergo protracted and expensive litigation.” Hen- nigan v. Ouachita Parish School Bd., 749 F.2d 1148, 1153 (5th Cir.1985). Clearly, the State did not voluntarily make any changes to avoid litigation in this case; and just as clearly, the changes the parents and OSERS sought and that the State made were at least “arguably supported by case or statutory law” so as not to be frivolous claims on the parents’ part. Whether State Board members are “consti- tutional officers” or “employees” hardly seems to impinge upon their impartiality, which is the concern of § 1415(b)(2). For purposes of attorneys’ fees, the State’s changes were “required by law,” or made in response to a colorable claim. Itt Since we heard oral argument in this appeal, the Supreme Court has decided Farrar v. Hobby, __ U.S. __, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992), in which it was held that plaintiffs who had won only a dollar from one of six defendants in a suit seeking seventeen million dollars were “prevailing parties” under § 1988, but that a fee award of $280,000 was unreasonable given their only nominal success. In its general discussion of prevailing party status, the Court explained that teh tn inst Mee ibe De ee ee ew ee ernaninenshts sient 21a to qualify as a prevailing party, a civil rights plaintiff must obtain at least some relief on the merits of his claim. The Plaintiff must obtain an enforceable judgment against the defendant from whom fees are sought. Hewitt, supra, 482 U.S., at 760, 107 S.Ct., at 2675, or comparable relief through a consent decree or settlement, Maher v. Gagne, 448 U.S. 122, 129, 100 S.Ct. 2570, 2574, 65 L.Ed.2d 653 (1980). Whatever relief the plaintiff secures must directly benefit him at the time of the judgment or settlement. See Hewitt, supra, 482 U.S., at 764, 107 S.Ct. at 2677. Otherwise the judgment or settlement cannot be said to “affec[t] the behavior of the defendant toward the plaintiff.” Rhodes, 488 U.S., at 4, 109 S.Ct., at 203. Only under these circumstances can civil rights litigation effect “the material alteration of the legal relationship of the parties” and thereby transform the plaintiff into a prevailing party. [Texas State Teachers Ass’n v.] Garland [Indep. Sch. Dist.], supra, 489 U.S. [782], at 792-793, 109 S.Ct. [1486], at 1493 [103 L.Ed.2d 866 (1989)] [(1989)]. In short, a plaintiff “prevails” when actual relief on the merits of his claim materially alters the legal relationship between the parties by mod- ifying the defendant’s behavior in a way that directly benefits the plaintiff. (emphasis added). Id. at, 133 S.Ct. at 573. In a post-argument filing at our request, the State contends that in this passage - particularly the empha- sized portions — the Supreme Court has now rejected the “catalyst theory” of “prevailing party” status, as recog- nized and applied, for example, in our Bonnes I, DeMier, and Spencer decisions, and now in Part II of this opinion. Under Farrar’s plain dictate, says the State, a § 1983 22a claimant can now be found a prevailing party only if his action terminated in an “enforceable judgment against the defendant . . . or [produced] comparable relief through a consent decree or settlement.” Here, continues the State, there has been neither a consent decree nor a settlement, and the only judgment obtained against the State-defendants was vacated on mootness grounds and therefore is not enforceable. We disagree. We do not believe that, properly read, Farrar rejects the catalyst theory of prevailing party sta- tus. If the one sentence in Farrar that specifies “enforce- able judgment, consent decree, or settlement” is lifted out of context and treated as being all the Court said on the subject, it surely could be read as at least an oblique death-knell for the catalyst theory. But the context as defined by the actual issue before the Farrar Court and by what else the Court said on the subject belies any such drastic reading. Given the importance that the catalyst theory long has had in prevailing party doctrine under 42 U.S.C. § 1988, we would expect that if the Court intended to hold it no longer a viable theory it would address the issue head-on in a case in which it was dispositive.? That 2 And with a careful elaboration of reasons rather than the cryptic passage of dicta which the dissent says we should read as a “decision that controls this case,” Dissenting Op. at 172. The implausibility of reading that much into it is best illustrated by the very form and extent of the dissent’s effort to demonstate why we should. Rather than simply resting on the plain text of the passages, which we are told at the start suffices, see id. at 167, the dissent is then largely and lengthily devoted (Part II, with sub-Parts A, B. C and D), to explaining why catalyst theory is ; { 3 i 23a was not so in Farrar. The theory’s viability was not an issue in Farrar, where plaintiffs had obtained a final judg- ment, and therefore had no need to invoke “catalyst” theory. The issues in Farrar were simply whether (1) a claimant who recovers only nominal damages can ever be considered a “prevailing party”, and (2) if so, whether the hefty fee award there at issue could be upheld as a “reasonable” one under § 42 U.S.C. § 1988. The Court never mentioned the catalyst theory, and the passage upon which the State relies occurs, as dicta, in a general discussion of “prevailing party” status. Furthermore, several earlier decisions of the Court that were cited in Farrar as authoritative on the general issue of prevailing party status, see id.__ U.S. at __, 113 S.Ct. at 572-73, had either expressly or tacitly recognized the catalyst theory’s viability, or reserved decision on its exact contours. See Hanrahan v. Hampton, 446 U.S. 754, 758, 100 S.Ct. 1987, 1989, 64 L.Ed.2d 670 (1980) (per curiam) (noting legislative history which “indicates that a person may in some circumstances be a ‘prevailing party’ bad theory that should be discarded. Id. at 168-71. The sugges- tion must be that all this was implicit in the Farrar dicta, for otherwise the position it advances is flatly foreclosed by long- settled circuit (and general) precedent. But the Farrar Court, of course, never intimated that it was engaged in any such thor- oughgoing reexamination of catalyst theory. Were it to do so, it is just such an explanation as the dissent gratuitously offers in this case that we would expect - and, with all respect, are entitled to expect - when the Court is about something as important as the dissent claims for it here. We think we show respect rather than disrespect for the Court and its processes, and for the values of stare decisis, when we act on that expecta- tion. 24a , mf without having obtained a favorable ‘final judgment ... or “without formally obtaining relief”); Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983) (case remanded specifically to consider whether claimant's “lawsuit was not a catalyst” for achieving favorable result on issue actually decided against claimant); Kentucky v. Graham, 473 U.S. 159, 165 n. 9, 105 S.Ct. 3099, 3104 n. 9, 87 L.Ed.2d 114 (1985) (“we express no view as to the nature or degree of success necessary to make a plaintiff a prevailing party”); Hewitt v. Helms, 482 U.S. 755, 763, 107 S.Ct. 2672, 2677, 96 L.Ed.2d 654 (1987) (“[w]le need not decide the circum- stances, if any, under which this ‘catalyst’ theory could justify a fee award”). We do not believe that had the Court intended in Farrar to abrogate a theory this well- established, it would have cited without comment these earlier decisions which, as a matter of course, recognized its existence and utilization. Finally, we note that this view of Farrar’s non-impact upon the catalyst theory is shared by three other circuits which, since that decision, have had occasion to apply the theory with explicit awareness of Farrar’s discussion of prevailing party doctrine. See Paris v. U.S. Dept. of Hous- ing & Urban Dev., 988 F.2d 236, 241 (1st Cir.1993) (fee award upheld on basis that plaintiff’s suit, though unsuc- cessful on only issue litigated, was “fairly characterized as a catalyst”, citing Farrar’s discussion); Citizens Against Tax Waste v. Westerville City School, 985 F.2d 255, 258 (6th Cir.1993) (denial of fee award reversed because justified on catalyst theory; district court error excused on basis that Farrar “was not available . .. at the time [of] its decision”); Craig v. Gregg County, 988 F.2d 18, 21 (5th ne a P did Wavikiend saben take» tei, 25a Cir.1993) (difficulty created by Farrar language noted, but found overcome by “[a] more precise reading” which contemplated continued viability of catalyst theory). We therefore reject the State’s contention that Farrar has made it no longer proper to find prevailing party status on a catalyst theory, and we therefore stand on our application of that theory in Part II of this opinion. 3 The contention might also be rejected on the alternative basis that the finding of prevailing party status here is not dependent upon availability of the catalyst theory in the first place. As indicated in Part II, the plaintiff here did actually obtain an enforceable judgment against the state defendants on the critical issue litigated. And as further indicated there, we do not believe that the later vacatur of that judgment upon our dismissal of the appeal as moot for prudential reasons should have any effect on the plaintiffs’ entitlement to a fee award as prevailing parties. The critical reference point for assessing pre- vailing party status in a fully litigated case is upon entry of the primary judgment on the merits of the case. A later appellate reversal or vacatur of such a favorable judgment on the merits obviously requires reversal or re-examination of a prevailing party determination based upon it. But not one, such as that here, which was not on the merits. Cf. Maloney v. Marietta, 822 F.2d 1023 (11th Cir.1987) (preliminary injunction in voting rights case vacated as moot following voluntary compliance by defen- dants; fees properly awarded to plaintiffs as prevailing parties); Taylor v. Ft. Lauderdale, 810 F.2d 1551 (11th Cir.1987) (same, where City passed mooting ordinance following entry of pre- liminary injunction); Williams v. Alioto, 625 F.2d 845 (9th Cir.1980), cert. denied, 450 U.S. 1012, 101 S.Ct. 1723, 68 L.Ed.2d 213 (1981) (same, where police voluntarily ceased enjoined con- duct while preliminary injunction on appeal). The dissent’s contention that the vacatur for mootness here should be thought to wipe out the “enforceable judgment” for fee award purposes, Dissenting Op. at 168, has an ironic and illogical twist worthy of note. Our dissenting brother joined in 26a IV Having found no error in the district court’s deter- mination that the parents were prevailing parties entitled under 42 U.S.C. § 1988 to attorneys’ fees, we affirm. AFFIRMED. WILKINSON, Circuit Judge, dissenting: I cannot subscribe to the majority’s evisceration of the Supreme Court’s decision in Farrar v. Hobby, __ U.S. __, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992). The language of Farrar is plain: “[T]o qualify as a prevailing party .. . [t]he plaintiff must obtain an enforceable judgment . . . or comparable relief through a consent decree or settle- ment.” Id. at _. , 113 S.Ct. at 573. “Whatever relief the plaintiff secures must directly benefit him at the time of the judgment or settlement.” Id. (emphasis added). “Only under these circumstances can civil rights litigation effect ‘the material alteration of the legal relationship of the the panel decision that directed vacatur of the judgment against the state defendants on mootness grounds, but that remanded with express directions for a determination whether fees should be awarded. See 832 F.2d at 298. Unless we are prepared to believe him capable of cruel hoax — which obviously we aren’t — this must indicate that he didn’t at the time think the vacatur would make fee award inappropriate. Even if Farrar in the interval were read to require an “enforceable judgment” (or settlement), nothing in that opinion touches the question of the effect of a mootness vacatur on such a judgment once obtained. The exact language in Farrar is “obtain an enforceable judg- ment;” it doesn’t add “that is still in effect at the time of fee award.” If the Farrar passage deserves the literal reading for precedential purposes that the dissent claims for it, it deserves that reading throughout. an ee ee ae eee. ee ae > ale lian. 27a parties’ and thereby transform the plaintiff into a prevail- ing party.” Id. (emphasis added). “No material alteration of the legal relationship between the parties occurs until the plaintiff becomes entitled to enforce a judgment, con- sent decree, or settlement against the defendant.” Id. at __, 113 S.Ct. at 574 (emphasis added).! Each of the above statements is now rendered meaning- less by the majority’s direction to district courts to “look outside the final judgment” and beyond “the merits of the basic controversy” in awarding attorneys’ fees under § 1988. Majority Op. at 164. With respect, the resemblance between the Supreme Court’s view of fee recovery and that of the majority quite eludes me. Farrar states that without a demon- strated legal entitlement, plaintiffs cannot be deemed to have prevailed. The majority states that, notwithstanding Farrar, vague “catalyst” theories of causation continue to control who is a prevailing party under 42 U.S.C. § 1988. There is no way, however, that Farrar and a broad “catalyst theory” of 1 The majority discards as “dicta” and dismisses as “cryp- tic” this extended discussion on the part of the Supreme Court whose meaning could not be more clear. See Majority Op. at 166-67 n. 2. We are entitled to disregard it, the majority says, because the Supreme Court failed to utter the words “catalyst theory” in the course of its discussion or to elucidate its reason- ing in a manner sufficiently “careful” to satisfy the majority. See id. The majority makes no attempt to reconcile the Supreme Court’s opinion with the continued existence of “catalyst the- ory.” With all respect, this is a nervy course - while a circuit court is necessarily entrusted with the interpretation and appli- cation of Supreme Court pronouncements, it is not empowered, sua sponte, to set them aside. 28a attorneys’ fees recovery can be reconciled.? I shall first address the particulars of this case, and then turn to a broader critique of the catalyst theory upon which the majority rests its case. i, Plaintiffs in this case fall short of meeting the rule laid down in Farrar. They obtained a judgment on the merits of their claim, but that judgment is no longer enforceable. The judgment’s vacatur on appeal renders it a legal nullity. See S-1 v. Spangler, 832 F.2d 294 (4th Cir.1987). Farrar is explicit on this point: “[t]he plaintiff 2 The cases from other circuits cited by the majority are no more persuasive in resuscitating catalyst theory. With all due respect, those cases fail to come to grips with Farrar’s ruling that “{nJo material alteration of the legal relationship between the parties occurs until the plaintiff becomes entitled to enforce a judgment, consent decree, or settlement against the defendant.” ___ U.S. at __, 113 S.Ct. at 574. Paris v. HUD, simply ignores Farrar’s requirement of a legal victory, citing the case only in passing. 988 F.2d 236, 238 (1st Cir.1993). Citizens Against Tax Waste v. Westerville City School quotes Farrar’s standard in a footnote, but nonetheless invokes Farrar in support of a pure catalyst theory to reverse a district court denial of fees. 985 F.2d 255, 258 and n. 3 (6th Cir.1993). In sum, the cases cited by the majority do not come to terms with the inconsistency between Farrar and catalyst theory. I would not follow their example. Finally, in Craig v. Gregg County, the court acknowledged the conflict between Farrar and catalyst theory, but skirted the issue by finding as a matter of fact that plaintiff had not been a catalyst for the county’s reconfiguration of a voting precinct. 988 F.2d 18, 21 (5th Cir.1993) (“A more precise reading of Farrar ... might suggest that a party may prevail [via catalyst theory],” (emphasis added) but plaintiff “has not shown that his suit caused [the defendant’s change in conduct].”). 29a must obtain an enforceable judgment against the defendant from whom fees are sought.” ___ U.S. at __, 113 S.Ct. at 573 (emphasis added). Plaintiffs certainly have prevailed against the City Board via their settlement, but the State Board has not settled and there is no judgment remaining against it. In crediting plaintiffs’ vacated judgment against the State Board, the majority effectively deprives the state defendants in this case of their right to an appeal. And by adopting a porous standard for prevailing party status - that a plaintiff’s position be “arguably supported by case or statutory law,” Majority Op. at 165 - the majority subjects these defendants to liability for attorneys’ fees without offering them the opportunity to refute the claims asserted against them. There is a virtue in the recognition that the vindication of legal rights is the proper end of all litigation. Without an enforceable judg- ment or settlement, however, it becomes difficult to dis- cern what legal rights of plaintiffs have been violated or vindicated. This court properly recognized in its earlier decision that defendants had raised a constitutional issue of real “difficulty and sensitivity” involving “the power of the federal courts, acting within the constraints of the eleventh amendment, to interfere by injunction with the internal process of a state administrative agency.” Span- gler, 832 F.2d at 298. The defendants in this case continue to insist that their view of the Individuals with Disabil- ities Education Act is the legally correct one. The majority never says otherwise — in its view all that is required to award attorneys’ fees against these defendants is for plaintiffs to state a “colorable claim” Majority Op. at 166. 30a The majority attempts to explain away plaintiffs’ fail- ure to secure an enforceable judgment by writing off as “dicta” the rule laid down in Farrar, Majority Op. at 167. The majority instead clings to a broad catalyst standard for recovery of attorneys’ fees under 42 U.S.C. § 1988. The causal story recounted by the majority in this case dem- onstrates the tenuous connection between a lawsuit and changes in conduct that will suffice to subject defendants to liability for attorneys’ fees under catalyst theory. Plain- tiffs are found here to have been a “catalyst” for changes made by the State because (1) OSERS agreed with plain- tiffs’ legal position in a Letter Ruling in an unrelated case, and (2) the State amended its laws three years after plaintiffs’ case was mooted, in response to the threatened loss of five million dollars in federal funding. Even under the expansive standards of catalyst the- ory, this evidence of causation is astonishingly thin. Plaintiffs’ lawsuit lost whatever force it had as a catalyst the day it was mooted by this court. I do not understand how moot lawsuits, in which the possibility of relief against a party is by definition foreclosed, continue none- theless to function as catalysts for change and for the recovery of attorneys’ fees. In this sense, the majority has stood finality on its head — the “prevailing party” stan- dard in 42 U.S.C. § 1988 requires that we consult the confines of a case, not plumb the legal hereafter.* 3 The “voluntary compliance” cases cited by the majority, see Majority Op. at 167 n. 3, are easily distinguishable from the instant case. The cases relied on by the majority reflect only the principle that when a plaintiff is successful in obtaining a pre- liminary injunction based on its probability of success, the defendant’s voluntary cessation of unlawful conduct need not ~~ II. Quite apart from the difficulties of applying catalyst theory to this particular case, | cannot agree with the majority’s vocal endorsement of catalyst theory as a means of determining prevailing party status under § 1988. The problems with that theory are prodigious. A. First, the catalyst theory of fee recovery conflicts with the plain language of § 1988 itself. Section 1988 allows awards of reasonable attorneys’ fees to a “prevailing party,” not simply to anyone who influences a change in behavior or policy. 42 U.S.C. § 1988 (emphasis added). deprive plaintiffs of prevailing party status. That is quite differ- ent from our case, where the change in conduct occurred in response to a third-party’s view after we declared the lawsuit moot, where we have never adjudged the state’s conduct to be unlawful, and where we explicitly credited defendants with raising a complex question of federal law which we then declined to address. The inappropriateness of an attorney’s fee award against defendants in this latter set of circumstances should be apparent. The majority purports to see some inconsistency between my position here and my joining the earlier remand to the district court to determine whether fees should be awarded. See id. The very terms of the remand presupposed, however, that the basis for any award would return here for review. Further, the earlier decision itself emphasized that “[b]y remanding we of course express no view on the parents’ entitlement to costs and attorney’s fees against the state defendants.” 832 F.2d at 298 n. 3. I make no apologies for following a Supreme Court deci- sion that has issued between the last appeal and the disposition of this one. Indeed, if the majority believed Farrar to be persua- sive authority, it presumably would follow it too. 32a For individuals to recover fees, they must prevail in their status as parties, not in their role as agents of reform. And to prevail for § 1988 purposes, parties must succeed on the merits of a claim. Farrar, _ U.S. at ___, 113 S.Ct. at 573. In other words, success must be something but- tressed by a court’s authority or required by a rule of law. The lawsuit must materially alter the “legal relationship” between plaintiffs and defendants. See Texas State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-93, 109 S.Ct. 1486, 1493, 103 L.Ed.2d 866 (1989). Farrar makes plain that “[n]Jo material alteration of the legal relation- ship between the parties occurs until the plaintiff becomes entitled to enforce a judgment, consent decree, or settlement against the defendant.” ___ U.S. at __, 113 S.Ct. at 574. B. Second, catalyst theory ignores the Supreme Court’s recent decisions. The majority says it is inconceivable that Farrar ever intended to disturb something so “well-estab- lished” as the catalyst theory for the recovery of attor- neys’ fees. Majority Op. at 167.4 Far from overturning a 4 In this context, the majority’s reference to Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1923, 1939, 76 L.Ed.2d 40 (1983), as being a “case remanded s, ecifically to consider whether claimant’s ‘lawsuit was not a catalyst’ for achieving a favorable result,” Majority Op. at 167, is anything but an endorsement of catalyst theory. That case involved an award to a “partially prevailing plaintiff” who had actually obtained a judgment on the merits. Hensley, 461 U.S. at 426-28, 103 S.Ct. at 1935-36. The issue of prevailing party status simply was not raised. OE AD MEAs 6 1 ind ag elma iis = AMI a on. “well-established” theory, however, Farrar’s specification of judgments, consent decrees, and settlement agree- ments as the exclusive avenues to prevailing party status under § 1988 follows from prior Supreme Court caselaw. Before Farrar, the Court had noted a supposed fourth avenue. In Hewitt v. Helms, 482 U.S. 755, 760-61, 107 S Ct. 2672, 2675-76, 96 L.Ed.2d 654 (1987), the Court observed that a § 1988 fee award could be justified if a lawsuit produced a voluntary “change in conduct” by a defen- dant that redressed a plaintiff's grievance. With this lan- guage, however, the Court did not endorse catalyst theory; it specifically reserved judgment on that question. 482 U.S. at 763, 107 S.Ct. at 2677. Nor did the Court's language extend the ways to attain prevailing party sta- tus beyond the three situations later listed in Farrar. Far- rar’s inclusion of settlements between parties encompasses both monetary settlements and agreements to a change in conduct. See Farrar, ____ U.S. at __, 113 S.Ct. at 573; see also Hewitt, 482 U.S. at 760, 107 S.Ct. at 2675. A plaintiff securing such a settlement can certainly be deemed to have prevailed in the absence of a formal judgment. See Hewitt, 482 U.S. at 761, 107 S.Ct. at 2676. Farrar merely clarified Hewitt by stressing that a volun- tary change in conduct must be formalized in a legally enforceable settlement agreement to transform a plaintiff into a prevailing party for purposes of § 1988. Other cases have similarly clarified Hewitt. For exam- ple, Hewitt stated that the change in a defendant's con- duct must redress a grievance. 482 U.S. at 761, 107 S.Ct. at 2676. Cases since Hewitt have narrowed this idea of griev- ance to make it a legal grievance. See Garland, 489 U.S. at 792-93 (focusing on the change in “legal relationship”); 34a Rhodes v. Stewart, 488 U.S. 1, 3-4, 109 S.Ct. 202, 203, 102 L.Ed.2d 1 (1988) (per curiam) (holding that plaintiffs did not prevail when they were no longer in custody and judgment provided them with no legal relief). In other words, the change in conduct must be enforceable in court, not merely gratuitous. Farrar’s specification of the three avenues by which a party can prevail for § 1988 purposes does no more than continue the process of refining Hewitt. In its embrace of catalyst theory, the majority not only ignores Farrar, it bucks a clear decisio- nal trend. C. Third, the catalyst theory of fee recovery engenders confusion and unnecessary litigation. By providing a clear rule for achieving prevailing party status, Farrar promises to reduce litigation over attorneys’ fees. The majority’s concern over the “specter of satellite litiga- tion,” is well-founded, Majority Op. at 164, but the cata- lyst theory adopted by the majority then proceeds to exacerbate that very problem. Too frequently, legal battles over attorneys’ fees merely add another round of pro- tracted litigation to what already has been protracted litigation on the merits of a claim. Compare Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 1941, 76 L.Ed.2d 40 (1983) (“A request for attorney’s fees should not result in a second major litigation.”). 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 diffi- cult to discern. Farrar’s crucial insights are that the refuge 35a 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. The majority’s standards for fee recovery under cata- lyst theory fail to chart a clear course through this liti- gious fog. We are told that the catalyst inquiry is “a pragmatic one of both fact and law that will ordinarily range outside the merits of the basic controversy . . . to whether as a quite practical matter the outcome, in what- ever form it is realized, is one to which the plaintiff fee claimant’s efforts contributed in a significant way.” and that “[courts] should look outside the final judgment to voluntary actions taken by a defendant so long as those actions are causally connected to the litigation.” Majority Op. at 164 (citations omitted). How far outside the merits should courts look? What is a significant contribution? When is a lawsuit causally connected and when is it not? What is the meaning of “in whatever form” an outcome is realized? The majority does not provide any guidance - only criteria that invite further litigation. In contrast to the majority’s approach, Farrar’s clear rule ensures that parties deserving attorneys’ fees will obtain them without forcing district courts to untangle a web of supposed causal connections to determine whether a party pre- vailed. D. Finally, catalyst theory discourages public officials from taking initiatives to revise out-moded ordinances or to improve institutional conditions, because such theory 36a expressly recognizes “voluntary actions taken by a defen- dant” as a proper basis for a fee award. Majority Op. at 164. 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 public officials, who may come to fear that worthwhile changes may be retroactively linked to a lawsuit and result in a hefty bill for attorneys’ fees. It is counterproductive to convert § 1988 into a penalty on state and local officials for making salutary changes. At the same time, 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 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 sim- ply “a relief Act for lawyers.” Farrar, ___ U.S. at __, 113 S.Ct. at 578 (O’Connor, J., concurring), quoting Riverside v. Rivera, 477 U.S. 561, 588, 106 S.Ct. 2686, 2701, 91 L.Ed.2d 466 (1986) (Rehnquist, J., dissenting). Catalyst theory is so open to fee awards because it assumes that enlightened social change automatically results from lawyers pursuing litigation. Unconstrained catalyst theory betrays the disquieting presumption that litigation must somehow lead the march of social pro- gress. With § 1988, however, Congress did not grant parties a license to collect fees for pursuing personal visions of the public good. Rather, § 1988 compensates 37a parties for attorneys’ fees incurred in bringing and suc- cessfully concluding lawsuits. Congress recognizes litiga- tion under 42 U.S.C. § 1983 as a desired vehicle to vindicate the violation of legal rights, not as a means of effecting social change of the generic sort. In our sysiem of government, we have looked first to elected officials to decide what change may or may not be considered enlightened. Section 1988 does not alter the basic demo- cratic premise. Congress has said that attorneys’ fees may be awarded to prevailing parties who have established legal claims. That requires a judgment, consent decree, or settlement. II]. Under Farrar, plaintiffs with valid civil rights claims will continue to have their day in court, assisted by counsel. Citizens may still “assert their civil rights,” and those who would violate such basic rights shall not “pro- ceed with impunity,” because parties retain the chance “to recover what it costs them to vindicate these rights in court.” S.Rep. No. 1011, 94th Cong., 2d Sess. 2 (1976), reprinted in 1976 U.S.C.C.A.N. 5908, 5910 (emphasis added). Farrar assures, however, that when a court awards “fees to a prevailing plaintiff, it is awarding them against a violator of federal law,” Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 418, 98 S.Ct. 694, 699, 54 L.Ed.2d 648 (1978), not against an entity that improves a facility or changes a policy on its own initiative. By contrast, a theory of fee-shifting based upon changes in conduct that judges might consider constructive transfers the evaluation of many public actions to the unaccount- able preferences of federal courts. 38a Plaintiffs in this case have not secured an enforceable judgment, consent decree, or settlement agreement. | would not award them attorneys’ fees on the basis that their mooted lawsuit may have operated as a catalyst to subsequent changes in defendants’ conduct. With all respect to my colleagues, we have in Farrar v. Hobby a Supreme Court decision that controls this case. We should follow it. 39a IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA GREENSBORO DIVISION S-1 and S-2, by and through their parents and Guardians Ad Litem, P-1 and P-2; and P-1 and P-2, Individually, Plaintiffs, ) ) ) ) ) ) C. D. SPANGLER, JR., Chairman, _) State Board of Education of North ) Carolina; THE STATE BOARD OF _) EDUCATION OF NORTH ) CAROLINA; and C. D. ) HEIDGERD, Hearing Officer, ) Asheboro City Board of Education, ) ) Defendants. MEMORANDUM OPINION (Filed March 30, 1992) BULLOCK, District Judge This final phase of lengthy litigation involves the question of whether plaintiffs are entitled to attorneys’ fees in this action under the Education for All Hand- icapped Children Act, 20 U.S.C. § 1415(e) (1991) (EAHCA),! and if they are so entitled, in what amount. For the reasons explained herein, the court finds that Plaintiffs are prevailing parties, and that they are entitled to reasonable attorneys’ fees in the amount of $30,143.18. 1 The EAHCA provides federal funding to the states so that each disabled child can receive a free appropriate public educa- tion. 20 U.S.C. § 1400 (1991). i. When this action began, S-1- and S-2 were hand- icapped students in the Asheboro City Schools. The par- ents of S-1 and S-2 decided to place them in a private educational facility on a half-day basis for the 1983-84 school year, and sought reimbursement from the school system for their tuition expenses. The Asheboro Board of Education denied this request, so Plaintiffs sought a due process hearing pursuant to North Carolina General Stat- utes § 115C-116, which was enacted pursuant to the EAHCA. At that time, Section 115C-116 allowed the State Board to select a hearing officer from its own list of approved hearing officers if a due process hearing was requested, and provided for a final decision by the State superintendent of Public Instruction. 1985 N.C. Sess. Laws ch. 412 (June 17, 1985). The hearing officer appoin- ted to hear the parents’ claim for reimbursement found that he had no statutory authority to determine or award reimbursement, so no hearing was held. The State Board of Education denied Plaintiffs’ request to confer this authority upon the hearing officer. Plaintiffs then brought this action under 42 U.S.C. § 1983 and Section 1415(e) of the EAHCA. On December 31, 1986, this court entered a memoran- dum opinion and order holding that Section 1415(b)(1)(E) of the EAHCA required Defendants Asheboro City Board of Education (“City Board”) and C. D. Heidgerd to con- duct an administrative hearing and render a decision on Plaintiffs’ claim for tuition reimbursement under the EAHCA. The court also declared that the interpretation of North Carolina law of Defendants C. D. Spangler and State Board of Education (“State Board”) violated Section 4la 1415(b)(1)(E) in that it precluded a state hearing officer from conducting an administrative hearing on the issue of reimbursement under the EAHCA and from ordering reimbursement if appropriate. The court enjoined all Defendants from further interpreting North Carolina law inconsistent with its interpretation of Section 1415(b)(1)(E). S-1 By and Through P-1 v. Spangler, 650 F. Supp. 1427, 1434-35 (M.D.N.C. 1986), vacated, 832 F.2d 294 (4th Cir. 1987). Defendants appealed this court’s decision. While the appeal was pending, the parents and the City Board (but not Defendants Spangler and State Board) agreed to a partial settlement. The United States Court of Appeals for the Fourth Circuit held that the settlement mooted the appeal because it gave the parents the reimbursement they sought; vacated this court’s order of December 31, 1986; and remanded for a determination of Plaintiffs’ entitlement, if any, to attorneys’ fees from Spangler and the State Board. S-1 v. Spangler, 832 F.2d 294, 298 (4th Cir. 1987). Also while the appeal was pending, the Office of Special Education and Rehabilitative Services (OSERS), the division of the United States Department of Educa- tion charged with overseeing the EAHCA, issued a Letter Ruling on June 17, 1987, endorsing this court’s 1986 hold- ing and specifically disapproving of the State Board’s EAHCA due process procedures. In view of this Letter Ruling, the North Carolina General Assembly amended Section 115C-116 to allow the administrative law judge presiding over the due process hearing to recommend a decision to the State Board. The final decision on the parents’ claim would rest with the State Board or two of 42a its members designated by the Board to make the final decision. 1988 N.C. Sess. Laws ch. 1079 (July 8, 1988). OSERS objected to the revised statute, claiming that it did not meet the standards set out in Section 1415 and requiring the State to comply with federal law by June 30, 1990. Threatened with the loss of some $5 million in federal education funds for failure to comply, the General Assembly again amended Section 115C-116. The amend- ment provided that the administrative law judge’s find- ings of fact and conclusions of law would become final unless appealed to the State Superintendent of Public Instruction. If appealed, the Superintendent could appoint a disinterested educator to enter final findings of fact and conclusions of law. 1990 N.C. Sess. Laws ch. 1058 (July 28, 1990). In their petition for attorneys’ fees pursuant to 20 U.S.C. § 1415(e) and 42 U.S.C. § 1988, Plaintiffs assert that they are entitled to fees because they prevailed in the underlying dispute. Defendants contend that Plaintiffs are not entitled to attorneys’ fees because they did not prevail on the merits and the amendments to Section 115C-116 were attributable to the threatened loss of fed- eral funding rather than to any action by the Plaintiffs. If. The first question to be decided is whether the Plain- tiffs are prevailing parties in this matter. Section 1415(e)(4)(B) of the EAHCA permits the court, in its discretion, to award reasonable attorneys’ fees to the parents of a disabled youth who prevail in an action under Section 1415(e). Similarly, 42 U.S.C. § 1988 entitles Ce 43a a prevailing party in an action under 42 U.S.C. § 1983 to recover costs and attorneys’ fees. The difference between this case and others that seek attorneys’ fees is that the Plaintiffs did not prevail on the merits of the underlying dispute because the Fourth Circuit vacated this court’s judgment in their favor. However, there is significant authority for the propo- sition that parties do not have to win a judgment in order to recover attorneys’ fees. “Plaintiffs may be considered ‘prevailing parties’ for attorney’s fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bring- ing suit.” Hensley v. Echerhart, 461 U.S. 424, 433 (1983) (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 [1st Cir. 1983]).? In a decision affirming and clarifying Hensley, the Supreme Court noted that “[t]he touchstone of the pre- vailing party inquiry must be the material alteration of the legal relationship of the parties in a manner which Congress sought to promote in the fee statute.” Texas Teachers Ass'n v. Garland School Dist., 489 U.S. 782, 792-93 (1989). The Fourth Circuit has outlined an analytical frame- work for determining prevailing party status. First, the court should establish “the precise factual/legal condi- tion that the fee claimant has sought to change or effect so as to gain a benefit or be relieved of a burden.” Bonnes 2 This standard applies to “all cases in which Congress has authorized an award of fees to a ‘prevailing party.’ ” Hensley, 461 U.S. at 433 n. 7 (42 U.S.C. § 1988 case); see Tice v. Botetourt County School Bd., 908 F.2d 1200, 1205 n.4 (4th Cir. 1990) (apply- ing Hensley standard to EAHCA case). 44a v. Long, 599 F.2d 1316, 1319 (4th Cir. 1979). Then, the court must evaluate “whether as a quite practical matter the outcome, in whatever form it is realized, is one to which the plaintiff fee claimant’s efforts contributed in a signifi- cant way, and which does involve an actual conferral of benefit or relief from burden when measured against the benchmark condition.” Id.; see Disabled in Action v. Mayor of Baltimore, 685 F.2d 881, 885 (4th Cir. 1982). This analysis may look beyond the resolution of a case on its merits. “[T]o get a truer picture of plaintiff’s success we should look outside the final judgment to voluntary actions taken by a defendant so long as those actions are causally connected to the litigation.” Spencer v. General Elec. Co., 894 F.2d 651, 662 (4th Cir. 1990); Child v. Spillane, 866 F.2d 691, 692-93 (4th Cir. 1989); Denny v. Hinton, 131 F.R.D. 659, 662 (M.D.N.C. 1990), aff'd, 937 F.2d 602 (4th Cir. 1991). If the plaintiff’s actions are a catalyst for a remedial change in the defendant’s actions, the plaintiff has prevailed. DeMier v. Gondles, 676 F.2d 92, 93 (4th Cir. 1982); Smith v. University of North Carolina, 632 F.2d 316, 347 (4th Cir. 1980). In this case, there is a distinct causal connection between the harm the Plaintiffs sought to rectify by bringing suit and the ultimate revision of North Carolina General Statutes § 115C-116 to conform to federal law. The Plaintiffs complained that the North Carolina due process procedures, as they existed in 1985, violated the EAHCA. This court’s December 1986 judgment for the Plaintiffs prompted OSERS to issue an official policy statement in June 1987 agreeing that the North Carolina procedure violated federal law. In July 1988, the North Carolina legislature amended the offending statute in an 45a attempt to comply with OSERS’ mandate. Having become involved in the correction of North Carolina laws as a result of this court’s 1986 judgment,3 OSERS determined that the 1988 amendment was insufficient and on July 23, 1989, demanded a further amendment to comply with the finality and impartiality requirements of the EAHCA. North Carolina approved the complying amendment in July 1990 in time to avoid the loss of federal funding for its EAHCA programs. Thus, regardless of the outcome of the underlying litigation, by virtue of Plaintiffs’ complaint sufficient fed- eral pressure was brought to bear on the State of North Carolina that Section 115C-116 was amended to comply with federal law. This is not a mere technical or de min- imis victory that would bar Plaintiffs from being prevail- ing parties. Texas Teachers Ass'n, 489 U.S. at 792; Spencer, 894 F.2d at 662. Therefore, the court finds that Plaintiffs are prevailing parties and are entitled to attorneys’ fees under 20 U.S.C. § 1415(e).4 > The OSERS Letter Ruling informs the inquirer that “this office will review all future State plans to ensure that they meet minimum due process requirements.” Letter Ruling at 2 (June 17, 1987). * Because Plaintiffs prevailed on their claim by obtaining an [sic] change in the North Carolina law enacted pursuant to the EAHCA rather than any relief or remedy on their Section 1983 claim, attorneys’ fees will be awarded only under Section 1415(e). See Smith [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_0208%3A1. Public record. Not legal advice.