S-1 ex rel. P-1 v. State Board of EducationS-1 ex rel. P-1 v. State Board of Education
Lead Opinion
OPINION
Thе essential issue presented is whether following dismissal of an action under
I
When this action began, SI and S2 were handicapped children enrolled in the Ashe-boro, North Carolina city schools. In the fall of 1983, after notifying the principal at the children’s public school of their intentions, their parents 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,
The City Board eventually placed the children appropriately in the city school system, but the City Board refused the parents’ tuition reimbursement claim for the 1983-84 school year and for the period during the fall of 1984 before the City Board and parents negotiated a placement. When the City
The parents then filed suit under
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 appropriate relief for violations of the Act. S-1 v. Spangler,
On September 24, 1987, while that appeal was pending, 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 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 agreement, and the parents did not dismiss any of their claims against them.
In light of these developments, we held for prudential 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 (OS-ERS) of the United States Department of Education, which has supervisory authority over federal grant-in-aid monies issued to the states under the EHA. The Letter Ruling expressly endorses the holding of the district court in this action, that theEHA 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 disapproval of the State Board’s current procedures, we doubt that the precise conduct allegedly violative of federal procedural rights will recur; instead, we would suppose that any remaining dоubt about the propriety of the current North Carolina procedures 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 fáith with the OSERS Letter Ruling.
S-1 & S-2 v. Spangler,
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 remainder 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
For this reason, OSERS objected to the revised statute, and threatened to withdraw some $5 million in federal education funds if the State did not comply with federal law by June 30, 1990. Through legislation specifically enacted to preserve these federal funds, the General Assembly again amended
On March 30, 1992, the district court filed a memorandum opinion and order which awarded $30,143.18 in attorneys’ fees to the parents, reasoning that “by virtue of Plaintiffs complaint sufficient federal pressure was brought to bear on thе State of North Carolina that
II
At the outset, we reject the State’s apparent contention that post-mootness events never can serve to establish
This obviously does not stand for the proposition that once mooting of a
inquiry [that] is properly a pragmatic one of both fact and law that will ordinarily range outside the merits of the basic controversy. Its initial 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 realized, is one to which the plaintiff fee claimant’s efforts contributed in a significant way, and which does involve an actual conferral of benefit 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 plaintiffs success [courts] should look outside the final judgment to voluntary actions taken by a defendant so long as those actions are causally connеcted to the litigation.” Spencer v. General Elec. Co.,
In making its determination that plaintiffs here were prevailing parties, the district court carefully and specifically 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 dispute,” Alexander v. Cheverly,
Our review reveals no error in the court’s decision. The
As the parents argue and the district court implicitly recognized, the chain of causation between the
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 education funding, should be taken as indications that the parents’ suit played no part in the State’s actions. “To be pragmatic,” the State ar
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 opinion clearly played a major causative role in the OSERS 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 substantial 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 concluded that “[t]he court’s reasoning in the Spangler decision 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 authorize 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 essentially to an admission that the parents’ suit did significantly 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.
Finally, the State contends that еven 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,
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,
Clearly, the State did nоt 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 “constitutional officers” or “employees” hardly seems to impinge upon their impartiality, which is the concern of
Ill
Since we heard oral argument in this appeal, the Supreme Court has decided Farrar v. Hobby, — U.S. -,
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 modifying the defendant’s behavior in a way that directly benefits the plaintiff, (emphasis added).
Id. at -,
In a post-argument filing at our request, the State contends that in this passage— particularly the emphasized portions—the Supreme Court has now rejected the “catalyst theory” of “prevailing party” status, as recognized 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
We disagree. We do not believe that, properly read, Farrar rejects the catalyst theory of prevailing party status. If the one sentence in Farrar that specifies “enforceable 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
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 -,
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 Housing & Urban Dev.,
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.
Having found no error in the district court’s determination that the parents were prevailing parties entitled under
AFFIRMED
Notes
. The OSERS Letter Ruling was in response to the inquiry of a Vermont attorney whose clients had been denied reimbursement because the Vermont state reviewing officer had held she had no authority to grant such relief.
. 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
. 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 cаtalyst 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 dis
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 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
Dissenting Opinion
dissenting:
I cannot subscribe to the majority’s evisceration of the Supreme Court’s decision in Farrar v. Hobby, — U.S. -,
Each of the above statements is now rendered meaningless 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
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,
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 plaintiffs 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 judgment or settlement, however, it becomes difficult to discern 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.” Spangler,
The majority attempts to explain away plaintiffs’ failure 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
Even under the expansive standards of catalyst theory, this evidence of causation is astonishingly thin. Plaintiffs’ lawsuit lost
II.
Quite apart from the difficulties of applying catalyst theory to this particular case, I cannot agree with the majority’s vocal endorsement of catalyst theory as a means of determining prevailing party status under
A.
First, the catalyst theory of fee recovery conflicts with the plain language оf
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-established” as the catalyst theory for the recovery of attorneys’ fees. Majority Op. at 167.
Other cases have similarly clarified Hewitt. For example, Hewitt stated that the change in a defendant’s conduct must redress a grievance.
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 majоrity’s concern over the “specter of satellite litigation,” is well-founded, Majority Op. at 164, but the catalyst theory adopted by the majority then proceeds to exacerbate that very problem. Too frequently, legal battles over attorneys’ fees merely add another round of protracted litigation to what already has been protracted litigation on the merits of a claim. Compare Hensley v. Eckerhart,
The majority’s standards for fee recovery under catalyst theory fail to chart a clear course through this litigious 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 whatever 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 аny 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
D.
Finally, catalyst theory discourages public officials from taking initiatives to revise outmoded ordinances or to improve institutional conditions, because such theory expressly recognizes “voluntary actions taken by a defendant” 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 óf 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 feаr that worthwhile changes may be retroactively linked to a lawsuit and result in a hefty bill for attorneys’ fees. It is counterproductive to convert
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 progress. With
III.
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 “proceed 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,
Plaintiffs in this case have not secured an enforceable judgment, consent decree, or settlement agreement. I 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 ease. We should follow it.
. The majority discards as "dicta” and dismisses as "cryptic” 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 reasoning 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 theory.” With all respect, this is a nervy course — while a circuit court is necessarily entrusted with the interpretation and application of Supreme Court pronouncements, it is not empowered, sua sponte, to set them aside.
. The cases from other circuits cited by thе 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 "[n]o 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 -,
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.
.The "voluntary compliance” cases cited by the majority, see Majоrity 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 preliminary injunction based on its probability of success, the defendant's voluntary cessation of unlawful conduct need not deprive plaintiffs of prevailing party status. That is quite different 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 positiоn here and my joining the earlier remand to the district court to determine whether fees should be awarded. See id. The veiy 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.”
.In this context, the majority’s reference to Hensley v. Eckerhart,