Arthur Lavin v. Jon Husted, 764 F.3d 646

Background

Plaintiffs were Ohio physicians and Medicaid providers who challenged Ohio Rev. Code § 3599.45, which limited campaign contributions from Medicaid providers, as facially unconstitutional under the First and Fourteenth Amendments.
The district court denied preliminary injunctive relief and granted summary judgment for the state; on appeal this Court unanimously reversed in Lavin v. Husted and instructed entry of judgment for plaintiffs and a permanent injunction.
Plaintiffs sought $665,645.68 in attorneys’ fees under 42 U.S.C. § 1988; a magistrate judge recommended an award of $454,635.53 in fees and $6,442.03 in costs after multiple reductions.
The district court drastically reduced the award to $128,908.74 in fees and $6,315.00 in costs, cutting hours, hourly rates, and applying further percentage reductions including a 35% post-lodestar cut under Johnson/Hensley factors.
The district court’s opinion repeatedly referenced plaintiffs’ wealth, taxpayer burden, and skepticism about counsel’s motive; the Sixth Circuit found those considerations impermissible or improperly weighed and concluded the district court abused its discretion.
The Sixth Circuit vacated the fee award and remanded for recalculation before a different district judge, granting reassignment to preserve the appearance of justice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether hours billed before signing a written fee agreement are recoverable	Time spent investigating and preparing complaint/preliminary injunction (before agreement) is recoverable	Defendant relied on Ohio ethics rule requirement for written contingency agreements to justify denying pre-agreement fees	Court held pre-agreement work may be recoverable; district court erred in blanket exclusion and misapplied authority
Whether discovery and fact-finding were necessary in a facial/overbreadth First Amendment challenge	Plaintiffs argued overbreadth and chill required factual development and discovery	State argued facial challenge obviated need for extensive discovery	Court held discovery could be relevant (overbreadth requires factual showing) and district court’s across-the-board cuts were erroneous or inadequately explained
Whether district court permissibly considered plaintiffs’ wealth and taxpayer burden in reducing fees	Plaintiffs argued ability to pay and taxpayer effect are irrelevant to § 1988 fee determination	State implicitly relied on fairness/taxpayer concerns to justify cuts	Court held consideration of plaintiffs’ wealth and taxpayer burden is impermissible and tainted the fee analysis
Whether reassignment on remand was warranted due to district judge’s statements	Plaintiffs argued judge’s repeated antagonistic language created appearance of bias, requiring reassignment	State did not show reassignment unnecessary; stressed judge’s familiarity with case	Court ordered reassignment, finding appearance of partiality and that reassignment preserved justice without undue waste

Key Cases Cited

Hensley v. Eckerhart, 461 U.S. 424 (1983) (lodestar method and post-lodestar Johnson factors)
Blanchard v. Bergeron, 489 U.S. 87 (1989) (§ 1988 does not limit fee awards to work after complaint or to indigent plaintiffs)
Lavin v. Husted, 689 F.3d 543 (6th Cir. 2012) (appellate decision holding statute unconstitutional and directing judgment for plaintiffs)
Fox v. Vice, 131 S. Ct. 2205 (2011) (private litigants act as "private attorneys general" vindicating public policy)
Adcock-Ladd v. Secretary of Treasury, 227 F.3d 343 (6th Cir. 2000) (standards for lodestar and appellate review of fee awards)