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Statutory Attorney's Fees An Important Way to Expand and Fund Access to Justice

March 17, 2011

Author: Bryan D. Hetherington

(Editor’s Note: In Part I of this article Bryan Hetherington, Chief Counsel of Empire Justice Center, provides guidance on who is a “prevailing party” for attorney’s fees purposes and suggestions for keeping contemporaneous time records.  Part II, which explores how to calculate a reasonable fee and develop the fee motion, will appear in the Legal Services Journal Spring issue.)

Over 50 laws allow successful litigants to collect attorney’s fees and other litigation costs from a losing party. 1  These laws were generally passed to permit poor and less powerful individuals and groups to have greater access to the courts in certain types of cases.

When legal services programs are unable to assist the majority of low income people who need representation, pursuing attorney’s fees where they are available can be an important way for legal services attorneys to expand access to justice. Statutory attorney's fees, paid by the defendant, also can serve an important role in deterring arbitrary and illegal conduct by more powerful adversaries.  They often can provide an important incentive to prompt and fair settlement of cases by increasing the potential cost of delays and unnecessary discovery.

Under many federal attorney’s fee shifting statutes, most notably 42 U.S.C. § 1988, you must demonstrate that your client is a "prevailing party" in order to be awarded fees. 2  “Generally, the Supreme Court has given a ‘generous formulation’ to the term prevailing party stating that plaintiffs may be entitled to attorney’s fees if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.”  Roberson v. Giuliani, 346 F. 3d 75, 79 (2d Cir. 2003), quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).3

Prevailing Party Determination

To be considered a prevailing party, the plaintiff must both achieve some “material alteration of the legal relationship of the parties” AND “that change must also be judicially sanctioned.”  Roberson, 346 F. 3d at 79.  Even nominal damages of one dollar are enough to be a “prevailing party".  Fassett v. Haeckel, 936 F.2d 119 (2d Cir. 1991);  Ruggiero v. Krzeminski, 928 F.2d 558 (2d Cir. 1991).  However, an award of nominal damages when significant compensatory damages were sought can show that the reasonable fee may be no fee at all.  Farrar v. Hobby, 506 U.S. 103, 118 (1992) (O’Connor, J. concurring). 4

It is clear that a party has achieved a judicially sanctioned material alteration of the legal relationship when a judgment is entered at the end of the case awarding relief to that party.  Settlements in lawsuits can also qualify a party to be a prevailing party, 5 but only if those settlements have sufficient judicial sanction.  A judgment on the merits or a consent decree qualifies.  Buckhannon Bd. & Care Home, Inc. v. W. Va., Dep’t. of Health and Human Res., 532 U.S. 598, 604 (2001). Judicial action other than a judgment on the merits or consent decree may also qualify.  Roberson, 346 F. 3d at 81. Roberson instructs us that:

  • A settlement agreement where district court retains jurisdiction for purposes of enforcement of the agreement qualifies.  Id. at 82.
  • But, the agreement must be enforceable in federal court, not just in a contact action to qualify. Id. citing Kokkonen v. Guardian Life Insurance of America, 511 U.S. 375 (1994).
  • An Order of Dismissal incorporating terms of settlement would be enforceable in Federal court and would qualify.  Id(dicta) 6

PRACTICE TIP:  Since this is a developing and tricky area, it is a good idea to consult with a litigator with experience settling cases involving attorney’s fees, before agreeing to the form of a settlement if it is other than a judgment or consent decree.

Your client can be a prevailing party even if the success achieved by the plaintiff is time limited. For example, a judgment that becomes moot because of a change of state policy after entry of judgment, qualifies as having sufficient judicial action.  Kirk v. New York State Dep’t. of Ed., 2009 WL 4280555 (W.D.N.Y. Nov. 24, 2009). Where plaintiff obtains a preliminary injunction, but ultimately loses on merits, that plaintiff is NOT a prevailing party.  Sole v. Wyner, 551 U.S. 74 (2007). However, where plaintiff obtains a preliminary injunction after the Court considers the merits, not just a preliminary injunction to maintain the status quo, and then the case becomes moot by action of the defendant, attorney’s fees may be awarded.  Haley v. Pataki, 106 F. 3d 478 (2d Cir. 1997), Trudeau v. Bockstein, 2008 WL 3413903 (N.D.N.Y. Aug. 8, 2008) (post Buckhannon)

For an award of attorney's fees under some statutes you must show more than that you are a prevailing party.  For example, under both the Federal 7 and New York State 8 Equal Access to Justice Acts (EAJA) you must show that the position of the federal or state agency was not “substantially justified" and that your client meets certain financial requirements in order to be awarded attorney’s fees.

Contemporaneous Time Records

Keeping detailed, accurate and contemporaneous records of the time that you spent on a case is critical to obtaining an award of attorney's fees. Except in extraordinary circumstances, an application for attorney’s fees must be supported by contemporaneously maintained time records or the application should be denied.  Scott v. City of New York, 626 F.3d 130 (2d Cir. 2010).  Time sheets should identify each entry by date, nature of the activity (including which issue or claim it related to, if appropriate), and amount of time spent. New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1147 (2d Cir. 1983).

PRACTICE TIP:  Write time entries so that they have the activity performed [legal research] and the topic [re: preliminary injunction standard], and if they are preformed with others the names of the others, so the time entries are understandable. 9 Another Example:  the activity performed [Edit and Review] what [Mike’s draft of the statutory argument]. The Western New York Law Center’s TIME system and many commercial billing systems ask for both an activity and object of that activity in template form, and if the activity is performed with others like e-mail or telephone call, have a blank for the name(s) as well .

When keeping your time avoid Block Billing (i.e., combining several activities that took place on a single day into a single time entry that merges all the time for disparate tasks).  See e.g., Welch v. Metropolitan Life Ins. Co., 480 F. 3d 942, 948 (9th Cir. 2007).  Wise v. Kelly, 620 F. Supp. 2d 435, 450 (S.D.N.Y. 2008).

Next Issue: How to Calculate a Reasonable Fee and Develop the Fee Motion


Footnotes

1   Scott Rosenberg, General Counsel, The Legal Aid Society, prepared a chart listing the most common Federal and New York statutes that permit an award of attorney's fees to a successful litigant for the Attorney’s Fees Substantive Law and Practice Session at the 2010 NYSBA Legal Services Partnership Conference.  See http://www.empirejustice.org/assets/pdf/litigation/federal-attorney-fee-statutes.pdf

2  The standards used in cases under § 1988 are generally applicable to all Federal statutes awarding attorney’s fees to prevailing parties.  Hensley, 461 U.S. at 433 n.7.
3   The burden is higher when a defendant is prevailing party, s/he can recover fees only if plaintiff’s action was “frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith.”  Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978) (Title VII), made applicable to §1988 fees in Hughs v. Rowe, 449 U.S. 514-15 (1980).
4   The success must be on the ultimate merits of the lawsuit. It cannot just be on an evidentiary or procedural issue, Hanrahan v. Hampton, 446 U.S. 754, 758-59 (1980) (obtaining reversal of judgment directing verdict against plaintiffs is not prevailing on the merits).  But if case is brought for purpose of obtaining procedural relief, then success on procedural claims will make plaintiff a prevailing party.  See J.G. v. Board of Education of the Rochester City School Dist., 648 F. Supp. 1452 (W.D.N.Y. 1986), aff’d in relevant part, 830 F.2d 444 (2d Cir. 1987).
5   Maher v. Gagne, 448 U.S. 122, 129 (1980); Koster v. Perales, 903 F.2d 131, 134-35 (2d Cir. 1990).
6   Despite this dicta, Voluntary Dismissals under Fed.R.Civ.P 41(a) may not pass muster if this issue reaches the Supreme Court. Voluntary Dismissal is a less than ideal choice for the form of the settlement if you plan to move for attorney’s fees as a prevailing party.  It is far better to avoid the issue by simply refusing to agree to Voluntary Dismissal and insist on an Order incorporating the terms of the settlement.
7   28 U.S.C. § 2412.
8   N.Y.C.P.L.R §§ 8601(a) and 8602(d).
9   Record keeping examples see http://www.empirejustice.org/assets/pdf/litigation/time-keeping-example.pdf.

 





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