Clаudia SMALBEIN, as co-personal representative of the ESTATE OF Paul SMALBEIN, Edward Millis, as co-personal representative of the Estate of Paul Smalbein, Plaintiffs-Appellants, v. CITY OF DAYTONA BEACH, Gary A. Sault, Officer, T.A. Perkins, Officer, individually and in their official capacity, David M. Willis, Officer, Bruce M. McBride, Officer, individually, Defendants-Appellees.
No. 03-12113.
United States Court of Appeals, Eleventh Circuit.
Dec. 16, 2003.
353 F.3d 901
Marie Hartman, Daytona Beach, FL, Jeffrey Kurtz Green, Katz & Green, Palm Coast, FL, Michael John Walker, R. Matthew Miles & Assoc., P.A., Daytona Beach, FL, for Defendants-Appellees.
PER CURIAM:
Claudia Smalbein and Edward Millis, personal representatives of the Estate of Paul Smalbein, appeal the denial of their motion for an award of statutory attorney‘s fees following a settlement agreement on their claims with the City of Daytona Beach and Police Officers Gary A. Sault, T.A. Perkins, David M. Willis, and Bruce M. McBride (collectively, “Daytona Beach Defendants“). Smalbein and Millis filed their motion for fees pursuant to
* Honorable John Malcom Duhé, United States Circuit Judge for the Fifth Circuit, sitting by designation.
I. BACKGROUND
Paul Smalbein, the original plaintiff, filed a ten-count complaint against the City of Daytona Beach, the City of Daytona Beach Pоlice Department, and various police officers. Smalbein alleged that his constitutional rights under the First, Fourth, Eighth, and Fourteenth Amendments and the Civil Rights Act of 1871,
After mediation, the parties reached a settlement agreement whereby the City of Daytona Beach agreed to pay Smalbein and Millis $25,000. All issues raised in the amended complaint were settled except for payment of attorney‘s fees and taxable costs, and the parties jointly noticed the district court of their agreement. The district court dismissed the case with prejudice and referred any dispute as to the attorney‘s fees and costs to the Magistrate Judge for a report and recommendation. The court later amended its order and dismissed the case without prejudice until
Thereаfter, Smalbein and Millis filed a motion for attorney‘s fees under
After approval by the City of Daytona Beach and disbursement of the $25,000 to Smalbein and Millis, the district court incorporated the settlement agreement by reference into its order of dismissal and retained jurisdiction for the enforcement of its terms. Smalbein and Millis re-filed their motion for attorney‘s fees, аnd the Daytona Beach Defendants responded again with a request for an evidentiary hearing on the merits of the
II. STANDARD OF REVIEW
The proper standard for an award of attorney‘s fees is a question of law that we review de novo. Loggerhead Turtle v. County Council, 307 F.3d 1318, 1322 (11th Cir.2002) (citing Barnes v. Broward County Sheriff‘s Office, 190 F.3d 1274, 1276-77 (11th Cir.1999)). Any factual findings made relevant to that question are reviewed for clear error. Id. (citing Head v. Medford, 62 F.3d 351, 354 (11th Cir.1995)). A district court‘s decision on whether to award attorney‘s fees is reviewed for abuse of discretion. Id.
III. DISCUSSION
Under the “American Rule,” United States courts follow “‘a general practice of not awarding fees to a prevailing party’ in a suit.” Buckhannon Board & Care Home, Inc., v. W. Va. Dept. of Health & Human Res., 532 U.S. 598, 602 (2001) (quoting Key Tronic Corp. v. United States, 511 U.S. 809, 819 (1994)). However, where Congress has given courts “explicit statutory authority” under “fee-shifting” statutes, they may award attorney‘s fees to the prevailing party. Id. Under
It is now established that in order to be considered а prevailing party under
The Supreme Court has also held that a federal court may have jurisdiction to enforce the terms of a private settlement agreement where a court has embodied the agreement in a dismissal order or has speсially retained jurisdiction over it. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 381-82 (1994). In applying this precedent, we have held in this Circuit that even where there has been no formal entry of a consent decree following a settlement agreement, a district court may still award attorney‘s fees to the prevailing party as long as: (1) it has incorporated the terms of the settlement into the final order of dismissal or (2) it has explicitly retained jurisdiction to enforce the terms of the settlement. American Disability Ass‘n v. Chmielarz, 289 F.3d 1315, 1320 (11th Cir.2002). Under either option, the district court “clearly establishes ‘judicially sanctioned change in the legal relationship of the parties,’ as required by Buckhannon, because the plaintiff thereaftеr may return to court to have the settlement enforced.” Id. A formal consent decree is unnecessary because the incorporation of the settlement into a court order or the explicit retention of jurisdiction over the terms of the settlement are the “functional equivalent of an entry of a consent decree.” Id.
This rule is consistent with many of our sister circuits who have likewise concluded that judicial action with sufficient judicial imprimatur other than a judgment on the merits or a court-ordered consent decree may allow for an award of attorney‘s fees. See, e.g., Roberson v. Giuliani, 346 F.3d 75 (2d Cir.2003); Barrios v. Cal. Interscholastic Fed‘n, 277 F.3d 1128 (9th Cir.2002); Oil, Chem. & Atomic Workers Int‘l Union v. Dep‘t of Energy, 288 F.3d 452, 458-59 (D.C.Cir.2002) (finding that the parties’ stipulation аnd order of dismissal was not enough to “meaningfully alter the legal relationship of the parties,” but had they done so, Buckhannon would not preclude an award of fees); Smyth v. Rivero, 282 F.3d 268 (4th Cir.2002); Truesdell v. Philadelphia Hous. Auth., 290 F.3d 159 (3d Cir.2002). Cf. Christina A. v. Bloomberg, 315 F.3d 990, 993 (8th Cir.2003) (”Buckhannon, as indicated, makes it clear that a party prevails only if it receives either an enforceable judgment on the merits or a consent decree.“) (emphasis added).
In this case, the Magistrate Judge and the district court correctly concluded that because the final settlement between the parties was incorporated by reference into the order of dismissal and the court re-
Although holding that the parties’ settlement agreement was the equivalent of a consеnt decree, the district court nonetheless denied attorney‘s fees to Smalbein and Millis finding that the “overarching motif of
Buckhannon provides that when there is either an enforceable judgment on the merits or a settlement agreement enforced through a court-ordered consent decree, a material alteration of the legal relationship of the parties occurs, and the test to be deemed a prevailing party has been met. Utility Automation 2000, Inc., v. Choctawhatchee Elec. Coop., Inc., 298 F.3d 1238, 1248 (11th Cir.2002). Although a consent decree does not always include an admission of liability on thе merits by the defendant, it nonetheless meets the test. Buckhannon, 532 U.S. at 604 (emphasis added). “Nothing in the language of
In this case, Paul Smalbein‘s original complaint solely sought relief in the form of monetary damages for the
Notwithstanding their entitlement to fees as prevailing parties, the City of Daytona Beach argues that under the settlement agreement Smalbein and Millis must still have a trial on the merits of the
While the settlement agreement in this case is unusual, we find that the terms at issue regarding attorney‘s fees and costs are a material part of their agreement and are neither invalid nor unenforceable. We have no basis under
Accordingly, we find that the district court erred in holding that Smalbein and Millis were not the prevailing parties under
CARNES, Circuit Judge, concurring:
I agree with the Court that the settlement agreement altered the legal relationship of the parties to a sufficient extent that the plaintiff is a prevailing party for purposes of
The settlement agreement in this case is unusual. We do not often see the parties stipulate to the paymеnt of an amount in settlement of the liability issue, while at the same time agreeing to condition attorney‘s fees and costs on a decision by the district court of whether the plaintiff‘s claims had merit. That is exactly what the parties in this case did, and for good measure they also agreed to a cap of $80,000.00 on the amount of attorney‘s fees the district court could award.
Odd though it be, there is nothing illegal about this provision in the settlement agreement that the award of attorney‘s fees will be decided by the district court based upon the merits of claims for which liability has been compromised and settled by the parties. The provision is nоt void on the theory that it conflicts with
In Jeff D. the parties settled a class action lawsuit seeking injunctive relief by agreeing to virtually all of the relief the plaintiffs sought, but they also agreed that the plaintiffs would not be awarded any attorney‘s fees or costs. Id. at 722. The plaintiffs filed a motion requesting the district court to approve the settlement except for the provision denying them costs and attorney‘s fees, and to allow them to present a bill of costs and fees for consideration by the court. Id. at 723. Treating the provision barring an award of costs and fees as a mаterial part of the settlement agreement, the district court enforced that provision just as it did other parts of the settlement. The result was that even though the plaintiffs clearly were prevailing parties in the lawsuit for purposes of
The Ninth Circuit reversed and remanded to the district court for determination of reasonable attorney‘s fees, concluding that, in the absence of unusual circumstances, “a stipulated waiver of all attorney‘s fees obtained solely as a condition for obtaining relief for the class should not be accepted by the court.” Jeff D. v. Evans, 743 F.2d 648, 652 (9th Cir.1984). The Ninth Circuit based its holding on two grounds. First, the Court held that simultaneous negotiation of class action settlements and attorney‘s fees was not appropriate absent special circumstances. Id. The court‘s reasoning was that class representatives should not be faced with the choice between obtaining relief for the class through settlement but forgoing attorney‘s fees, or rejecting the offered relief for the class in the hope of eventually recovering fees that will satisfy any personal liability the class representative may have to counsel. Id.
The second basis for the Ninth Circuit‘s Jeff D. decision was that Congress had intended fee-shifting to be an inducement for bringing valid civil rights cases, and therefore “a successful section 1983 claimant ‘should ordinarily recover an attorney‘s fee unless special circumstances would render such an award unjust,‘” and no such “special circumstances” were present in that case. Id. at 651 (quoting from the legislative history incident to enactment of
In other words, the Ninth Circuit in Jeff D. reached the same conclusion the plaintiff would have us reach in this case: a provision limiting the award of attorney‘s fees to a prevailing party is unenforceable because it is inconsistent with
In the course of reversing the Ninth Circuit‘s decision in Jeff D., the Supreme Court expressed its belief that “a general proscription against negotiated waiver of attorney‘s fees in exchange for a settlement on the merits would itself impede vindication of civil rights ... by reducing the attractiveness of settlement.” Jeff D., 475 U.S. at 732. More importantly for present purposes, the Supreme Court in Jeff D. expressly rejected the contention that either the text or the legislative history behind
As for the text of
It is also impossible to square that position with the result in Jeff D. If it is permissible for the parties to a settlement agreement to completely dispense with attorney‘s fees even though the plaintiff is a prevailing party under
The аgreement in this case, keyed as it is to the merits of the plaintiff‘s claims, is more consistent with the congressional purpose behind
There are, of course, substantial practical differences between the type of agreement in Jeff D. and the one in this case. The type of agreement before the Court in Jeff D. brings the entire litigation to a close, a blessed event in our judicial system. The type of agreement in this case merely narrows the issuеs to be litigated, which is not as much of a blessing but is better than having no agreement at all. High-low settlement agreements, which leave the merits of a case for trial but bracket the parties’ risk of litigation, are not unusual, see, e.g., Hoops v. Watermelon City Trucking, Inc., 846 F.2d 637, 639 (10th Cir.1988), and this agreement is not unlike one of those. The principal terms of the parties’ agreement in this case are that: there would be a determination of the merits of the plaintiff‘s claims, but it would be made by the judge instead of a jury; the plaintiff would receive exactly $25,000.00 in damages, regardless of what the judge determined about the merits; the defendants would pay the plaintiff attorney‘s fees if the judge determined thеre was merit to his claims; and any attorney‘s fees awarded could not exceed $80,000.00 in any event.2
However unusual it is, this settlement agreement did streamline the issues and provide an expeditious way of resolving the remaining ones by bench trial. The agreement removed from contention: the issue of whether any compensatory damages should be awarded to the plaintiff, the issue of how much those damages should be, and the issue of whether the plaintiff might be entitled to more than $80,000.00 in attorney‘s fees. And it left the determination of whether attorney‘s fees should be awarded to turn on the merits of the plaintiff‘s claims, which were to be decided by the court instead of a jury. From the judiciary‘s perspective, what the parties agreed to is not as desirable as a full settlement, but it beats a trial by jury of all liability and damages issues followed, if the plaintiff prevails, by an attorney‘s fees proceeding with no cap on the amount to be awarded.
None of this means that the district court was required to accept the settlement agreement. Rejecting it in toto probably would not have been an abuse of discretion. By the same token, the district court probably could have conditioned its acceptance of the agreement on modification of one or more of its terms, so long as the court gave the parties a choice between either going along with any modifications the court thought appropriate, or proceeding with the litigation without the agreement.
What the district court could not do about the settlement agreement without abusing its discretion is take an agreement hammered out between represented parties and delete one of its crucial terms, a term that one party bargained hard to get, without giving that party an opportunity to withdraw from the altered agreement. See Jeff D., 475 U.S. at 726 (“the power to approve or reject a sеttlement negotiated by the parties before trial does not authorize the court to require the parties to accept a settlement to which they have not agreed“). It is too late to give the parties an opportunity to back out of the agreement now, because the defendants have paid the agreed upon sum to settle the claims to the plaintiff, and as plaintiff‘s counsel has informed us, that money is gone. The only proper thing that we can do now is what the Court does, which is to remand the case for the district court to carry out the terms of the agreement that relate to attorney‘s feеs.
CARNES
UNITED STATES CIRCUIT JUDGE