Brief Fact Summary. The Plaintiffs in a class action agreed to a settlement in which they received their asked for relief in exchange for waiving their right to attorney’s fees.
Synopsis of Rule of Law. In class action suits, a prevailing party is free to waive his right to attorney’s fees, so long as the waiver is negotiated for and is approved by the district judge as part of an overall settlement plan.
Facts. Plaintiffs, a class of emotionally and handicapped children sued the state of Idaho seeking injunctive relief that would improve the treatment of institutionalized class members. One week before trial, the Defendants proposed a settlement agreement offering the Plaintiffs their asked for relief, but included a provision that the Plaintiff waive any claim to attorney’s fees or costs. The Plaintiff’s attorney, Johnson, moved for attorney’s fees following the settlement anyway, which the district court denied.
Issue. Whether attorney’s fees must be assessed when the case has settled by a consent decree granting prospective relief to the plaintiff class but providing that the defendant shall not pay any part of the prevailing party’s fees or costs. Whether a district court abuses its discretion in approving a settlement that includes a complete fee waiver.
Held. No, the Attorney’s Fees Act does not prevent a party from waiving his eligibility for fees. No, until the legislature commands that fees be paid whenever a case is settled, the court will rely on the discretion of the district courts to appraise the reasonableness of fee waivers on a case-by-case basis.
Dissent. Justice Brennan’s dissent is omitted by the casebook.
Discussion. This case can be looked at as one where the outcome was chosen at least in part because of its effect on public policy. The Supreme Court of the United States felt that a ban on negotiated waivers of attorney’s fees in exchange for a settlement on the merits would have the net effect of impeding civil rights, by reducing the attractiveness of settlement. Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health and Human Resources Citation. 532 U.S. 598 (2001).
Brief Fact Summary. On October 28, 1997, after receiving cease and desist orders requiring the closure of its residential care facilities within 30 days, Plaintiff Buckhannon Board and Care Home, Inc., on behalf of itself and other similarly situated homes and residents brought suit in federal district court against the state of West Virginia, two of its agencies, and 18 individuals. Plaintiff ultimately moved for attorney’s fees as the prevailing party following an out of court resolution of the case.
Synopsis of Rule of Law. Absent some sort of resolution on the merits, or a judicial determination altering the legal position of the parties, attorney’s fees are not warranted.
Facts. Plaintiff, which operates care homes that provide assisted living to their residents, failed an inspection by the West Virginia Office of the State Fire Marshall because some of the residents were incapable of “self-preservation” as defined under state law. On October 28, 1997, after receiving cease and desist orders requiring the closure of its residential care facilities within 30 days, Plaintiff, on behalf of itself and other similarly situated homes and residents brought suit in federal district court against the state of West Virginia, two of its agencies, and 18 individuals. Plaintiff agreed to stay enforcement of the cease-and-desist orders pending resolution of the case and the parties began discovery. The district court granted West Virginia’s motion to dismiss, finding that the 1998 legislation had eliminated the allegedly offensive provisions and that there was no indication that the West Virginia Legislature would repeal the amendments. Buckhannon then moved for attorney’s fees as the prevailing party.
Issue. Whether a prevailing party is entitled to attorney’s fees in Federal court when the prevailing party did not receive a judgment on the merits, but only prevailed because the lawsuit brought about a voluntary change in the defendant’s conduct.
Held. No. The Supreme Court of the United States affirmed the appeals court’s ruling denying the motion for attorney’s fees. Although attorney’s fees may be granted to a prevailing party following a judgment on the merits, in addition to settlement agreements enforced through a consent decree, attorney’s fees are not warranted where there has not been a judicial determination altering the legal position of the parties.
Dissent. Justice Ginsberg dissented, in which he was joined by Justices Stevens, Souter, and Breyer. His dissent stressed that fee shifting should depend on the outcome of the case, i.e. whether the prevailing party received their desired outcome, regardless of whether or not a judicial decision existed to memorialize the outcome. Esssentially, the dissent defined the term “prevailing party” in a practical sense, such clear that a party may be considered to have prevailed even when the legal action stops short of final judgment due to intervening mootness. Concurrence. Justice Scalia concurred, in which he was joined by Justice Thomas. His concurrence focuses on the fact that a prevailing party cannot be one who left the courthouse empty-handed, i.e. one must have received a judicial determination to be considered a prevailing party.
Discussion. In the United States, parties are ordinarily required to bear their own attorney’s fees so that the prevailing party is not entitled to collect from the loser. However, Congress has passed laws permitting the shifting of attorney’s fees in numerous instances. In refusing to award attorney’s fees in this instance, though, the court stressed that its decision was consistent with prior decisions refusing to award attorney’s fees where the court issued a directed verdict against one party.