794 F.3d 828
7th Cir.2015Background
- Plaintiff (guardian of Walter Cerajeski) sued under the Fifth Amendment claiming Indiana’s Unclaimed Property Act allowed the state to keep interest on abandoned property without compensation.
- This court previously held the statute unconstitutional as a taking without just compensation and reversed, directing that the plaintiff was entitled to interest as damages.
- After remand, Indiana amended its Unclaimed Property Act to provide interest on valid claims, and moved to dismiss the suit as moot.
- The district court dismissed the case as moot and denied the plaintiff’s request for attorneys’ fees for the appellate work that produced the judgment.
- On appeal the Seventh Circuit held the plaintiff was a prevailing party (the appellate judgment produced the statutory change and compensation) and reversed the denial of fees, remanding for the district court to determine a reasonable fee amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff is a "prevailing party" entitled to fees for the successful appeal | Appellant argued this court’s judgment created a material alteration in legal relationship and thus she prevailed | State argued amendment mooted claim and plaintiff is not prevailing; also raised Eleventh Amendment and §1983 personhood defenses | Court: Plaintiff is a prevailing party because the appellate judgment produced the change that secured her relief; remanded to calculate fees |
| Whether voluntary statutory amendment by state moots fee claim or defeats prevailing-party status | Judgment preceded amendment; relief resulted from enforcement of court judgment, not pre-judgment concession | State argued post-judgment amendment moots case and prevents fee award | Court: Amendment does not defeat prevailing-party status where judicial decision compelled the change; fee award appropriate |
| Whether the claim was properly brought under §1983 to trigger §1988 fee statute | Plaintiff’s complaint invoked §1983 and incorporated it into takings count | District court thought takings claim was asserted directly under the Constitution and not §1983; defendant also argued state actors are not "persons" under §1983 for this relief | Court: Complaint sufficiently invoked §1983; §1988 applies to award attorneys’ fees |
| Sovereign immunity / Eleventh Amendment and whether state actors are "persons" | Plaintiff contended relief and fee award are permissible under §1983 as judgment compelled compensation | State argued Eleventh Amendment bars damages and officials sued in official capacity are not §1983 persons | Court: Even if those defenses existed, plaintiff had obtained a judgment that changed law and produced relief; fee award proceeds (substantive immunity questions not resolved on appeal) |
Key Cases Cited
- Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) (equitable relief generally unavailable to enjoin a taking without compensation)
- Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001) (prevailing-party status requires enforceable judgment or court-ordered change; rejected "catalyst" theory)
- Hewitt v. Helms, 482 U.S. 755 (1987) (voluntary action by defendant after suit can justify fee award when suit produced the relief)
- National Rifle Ass’n of Am. v. City of Chicago, 646 F.3d 992 (7th Cir. 2011) (appellate judgment can make plaintiff prevailing party for fee purposes)
- Zessar v. Keith, 536 F.3d 788 (7th Cir. 2008) (statutory amendment before decision can moot case and preclude prevailing-party treatment)