ARC v. Edward T. Schafer , 83 F.3d 1008 ( 1996 )

___________
No. 95-1496
___________
Association for Retarded *
Citizens of North Dakota; *
Lindley Black, by his father, *
Sidney Black; Bradley Cossett, *
by his mother, Denise Cossett; *
Richard Schneiderhan, by his *
mother, Elmira Schneiderhan; *
Naomi Jordison, by her father, *
Timothy Jordison; Kelli *
Moriarty, by her mother, *
Jacquelyn Moriarty; Phillip *
Dechant, by his mother, Lois *
Dechant, on behalf of *
themselves and all others * Appeal from the United States
similarly situated, * District Court for the
* District of North Dakota.
Plaintiffs - Appellees, *
*
v. *
*
Edward T. Schafer, Governor of *
the State of North Dakota; *
Charles Mertens; Wanda *
Kratochvil; Dr. Jon Rice; *
Sam Ismir; Sandi Noble; Reuben *
Guenthner; Wayne Sanstead; *
Gary Gronberg; Henry Wessman; *
Gene Hysjulien; Yvonne Smith, *
*
Defendants - Appellants. *
___________
Submitted: October 16, 1995
Filed: May 15, 1996
___________
Before McMILLIAN, LOKEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
___________
LOKEN, Circuit Judge.
This is a class action challenging the State of North Dakota's
programs and facilities for the mentally retarded. The district
court issued a broad permanent injunction in 1982, and we affirmed.
Association for Retarded Citizens v. Olson, 561 F. Supp. 473 (D.N.D. 1982),
aff'd, 713 F.2d 1384 (8th Cir. 1983). However, in 1991 we held that the
Eleventh Amendment as construed in Pennhurst State Sch. & Hosp. v.
Halderman, 465 U.S. 89 (1984), precludes those portions of the injunction
that enforced state law, and we remanded for consideration of whether the
State now complies with federal law. Association for Retarded Citizens v.
Sinner, 942 F.2d 1235 (8th Cir. 1991). In remanding, we noted:
[T]he State argue[s] that Pennhurst requires this action be
terminated because the State is now in compliance with all
federal constitutional and statutory requirements. In support
of its position, the State has offered affidavit evidence . .
. that all systemic constitutional violations that may have
existed at the start of this litigation have been eliminated.
Although appellees have contested some of these assertions, our
review of the record suggests that the State has presented a
prima facie case of current compliance, particularly under the
changed legal environment of Youngberg [v. Romeo, 457 U.S. 307
(1982),] and Pennhurst.
942 F.2d at 1240.
On remand, after broadly defining plaintiffs' rights under federal
law, the district court appointed a Panel of Special Masters "to receive
and evaluate such evidence as the parties present" and to file a report
with the court concerning the State's motion to terminate the injunction.
After nine months of hearings, the Panel recommended that the injunction
be terminated and the case dismissed. The district court adopted the
Panel's Report in its entirety and directed entry of judgment dissolving
all outstanding injunctive orders. However, the court also awarded
plaintiffs substantial costs, attorney's fees, and expert fees for their
work in opposing the State's motion to terminate the injunction. The State
appeals, contesting $202,335.15 of the amount awarded. Concluding that the
contested services were not
-2-
reasonably expended by the prevailing party, as required by Hensley v.
Eckerhart, 461 U.S. 424 (1983), we reverse.
I.
In federal civil rights litigation, "the court, in its discretion,
may allow the prevailing party, other than the United States, a reasonable
attorney's fee as part of the costs." 42 U.S.C. § 1988(b). There can be
no doubt that plaintiffs initially prevailed in this lawsuit. See ARC v.
Olson, 713 F.2d at 1395-96, reducing the initial attorney's fee award. The
State paid substantial fee awards for the period 1980 through 1992. At
issue here are fee requests for 1993-1994, a period following the district
court's appointment of the Special Masters Panel. The State has paid
$113,835.65 of the amounts requested without objection. It appeals the
award of additional claims for $124,405 in attorney's fees and $77,931.15
in costs and expert fees.
The district court granted these requests in full, concluding (i)
plaintiffs are still prevailing parties; (ii) the requested attorney's fees
are "the product of reasonable hours times a reasonable rate" and "there
is no need to adjust the fee"; and (iii) an award of expert fees is
expressly authorized by § 1988(c), first enacted in 1991. On appeal, the
State argues that plaintiffs are not "prevailing parties" for purposes of
this award, and also that the amount of fees awarded is unreasonable.1 We
review an award under fee-shifting statutes for "an abuse of discretion or
an
1
The State also raises other issues: that § 1988(c) does not
authorize an expert fee award because plaintiffs did not assert or
prove claims under 42 U.S.C. § 1981 or § 1981a; that the expert fee
award is not authorized under other statutes invoked by plaintiffs,
20 U.S.C. § 1415(e)(4)B), the Americans with Disabilities Act, 42
U.S.C. §§ 12101 et seq., and 29 U.S.C. § 794; and that the district
court retroactively applied § 1988(c), violating Landgraf v. USI
Film Prods., 114 S. Ct. 1483 (1994). Given our view of the case,
we need not take up these important issues.
-3-
error in implementing the governing legal standards." McDonald v.
Armontrout, 860 F.2d 1456, 1458 (8th Cir. 1988).
II.
Complex civil rights cases seldom end with the grant of a permanent
injunction. The injunction must be implemented, that process must be
monitored, and lingering or new disputes over interpretation of the decree
must often be presented to the court for resolution. These functions take
time and effort by the prevailing party's attorney. Therefore, it is
generally accepted that prevailing plaintiffs are entitled to post-judgment
fee awards for legal services necessary for reasonable monitoring of the
decree. See Stewart v. Gates, 987 F.2d 1450, 1452 (9th Cir. 1993); Garrity
v. Sununu, 752 F.2d 727, 738 (1st Cir. 1984).2
However, not all post-judgment efforts are compensable. First, when
"claims distinctly different from the underlying lawsuit" arise after
resolution of the main civil rights issues, plaintiffs must prevail on
these unrelated claims to be entitled to a fee award for the post-judgment
work. Willie M. v. Hunt, 732 F.2d 383, 386 (4th Cir. 1984). Second,
compensable post-judgment work must in any event be reasonable and
necessary, measured by the Hensley v. Eckerhart standard that requires
balancing the amount of effort against plaintiffs' overall success. Like
the Tenth Circuit, we reject the notion that fee awards "in a post-decree
monitoring setting . . . are immune from the possibility of reduction under
the principles of Hensley." Joseph A. v. New Mex. Dept. of Human Servs.,
28 F.3d 1056, 1060 (10th Cir. 1994).
The district court failed to conduct this analysis. True, the court
applied the familiar "lodestar" approach and found that the
2
The Supreme Court noted this principle in Pennsylvania v.
Delaware Valley Citizens' Council, 478 U.S. 546, 559 (1986).
-4-
number of hours and the hourly rate submitted by plaintiffs' counsel were
reasonable. But the court awarded the full amount requested without
analyzing whether plaintiffs' efforts in 1993 and 1994 were reasonable in
light of their level of success. See Hensley, 461 U.S. at 438-40. Partial
success may justify only a partial fee award. See Farrar v. Hobby, 113 S.
Ct. 566, 574-75 (1992); Craik v. Minnesota State Univ. Bd., 738 F.2d 348,
349-50 (8th Cir. 1984).
III.
We remanded this case in 1991 because some of the relief initially
afforded plaintiffs violated the Eleventh Amendment, and because the State
had made a prima facie showing that the permanent injunction should now be
terminated. On remand, the district court appointed a Panel of Special
Masters to consider the State's motion to terminate. This procedure
certainly called for reasonable post-judgment monitoring. Plaintiffs could
not simply walk away from the Panel's inquiry; the district court expected
them to participate. Thus, as in Plyler v. Evatt, 902 F.2d 273, 281 (4th
Cir. 1990), "plaintiffs' counsel were under clear obligation to make the
defensive effort," and in such situations, even largely unsuccessful
defensive efforts may be compensable. See also Hatfield v. Hayes, 877 F.2d
717, 720 (8th Cir. 1989).
However, it was up to plaintiffs to define the extent of their
participation. Plaintiffs had every reason to know, before the Panel
hearings began, the nature of the State's compliance efforts. Plaintiffs
could have acknowledged that those efforts appeared to provide full relief
and engaged in relatively passive monitoring of the State's compliance
evidence to the Panel. Instead, plaintiffs fought the State at every turn,
presenting their own slate of opposing experts and examples of alleged
class member deprivations. Given the parameters established by our remand
order, this was, in
-5-
substance, the assertion of new claims for relief. Those new claims were
unsuccessful.
The Panel received evidence from November 1992 to August 1993.
Forty-four witnesses testified, including eleven outside experts. The
Panel issued its Report on November 14, 1994. In recommending that the
permanent injunction be terminated and the case dismissed, the Panel
concluded:
In the space of twelve hard years, North Dakota has moved
from an embarrassing lack of appropriate attention to its
responsibilities to become a forward-looking provider of the
most promising methods and mechanisms to benefit those whom it
once ignored. To deny that recognition is to ignore volumes of
fact and countless days, months, and years of work, not to
mention expense.
* * * * *
The panel has, in its review of the record, studied plaintiffs'
assertions of federal rights violations. The panel has found
that the examples presented appear to be relatively isolated,
unconnected incidents involving oversight, common errors in
judgment, and service inconsistencies between regions. No
willful or knowing acts of abuse, neglect, or deprivation of
rights of class members have been left unaddressed. The State
has demonstrated that its system for delivering services to
persons with developmental disability no longer has inherent
within it violations of the federal constitutional and legal
rights of those so disabled.
This was a complete rejection of plaintiffs' position. Plaintiffs had
asserted that the State was not in compliance with federal law. The Panel
disagreed, in essence concluding that plaintiffs had received all the
relief to which they were entitled in the lawsuit by the time of our 1991
remand. Thus, the relative success factor in the Hensley equation suggests
that plaintiffs' fee award must be reduced to an amount that would
compensate for the limited effort required to engage in relatively passive
monitoring of the Panel proceedings. A prevailing party who aggressively
seeks a greater victory and fails is entitled to a proportionally lesser
fee award
-6-
than a prevailing party who merely defends its victory, even if the defense
is less than completely successful. See Ustrak v. Fairman, 851 F.2d 983,
990 (7th Cir. 1988).
We must also consider the other key component of the Hensley equation
-- exclusion of "hours that are excessive, redundant, or otherwise
unnecessary," 461 U.S. at 434. The State on appeal has identified numerous
examples of seemingly excessive and unnecessary work, such as the time
spent by attorneys with billing rates in excess of $100 per hour
accompanying experts on facility tours for days on end. Cf. Halderman v.
Pennhurst State Sch. & Hosp., 49 F.3d 939, 942 (3d Cir. 1995). The nature
of the Panel proceedings was described in a section of the Panel's fifty-
five page final Report entitled "The trouble with experts":
Each side's counsel [supported] the proposition that its expert
was the correct assessor for various reasons: the other's
notes were incomplete, visit too brief, methodology flawed,
experience less, education less prestigious, or preparation for
the site visit insufficiently detailed or insufficient in
scope. Endless reasons were offered for discrediting the
observations of an expert witness from a site visit: reviewing
the Individualized Education Plans of all students in the unit
first, as opposed to afterward or not at all; or talking, or
not talking, to direct care staff; talking, or not talking, to
classroom teachers, or special education directors, or parents,
or team members, or assessors, or evaluators, or case managers,
or the Qualified Mental Retardation Professional; or not
looking at the actual habilitation plans of everyone at the
site visited, or at the particular plan of a client interviewed
there; or not interviewing any client there; or not reviewing
all, or specific, work plans or training programs for clients
at a day work activity; or not comparing a client's plans
through time to note progress or lack thereof and whether the
plan adjusts according to the circumstances; or not tracking
quarterly utilization reviews of service plans.
Perhaps all this effort would have been compensable had plaintiffs
persuaded the Panel or the district court that the State continues
-7-
to violate federal law. But it was overkill in light of the State's
persuasive evidence that the time had come to end the litigation. This
necessitates a reduced fee award, because in compensating post-judgment
monitoring, we must avoid creating a framework in which "the decree
institutionalizes the attorney, as well as the system." Brewster v.
Dukakis, 786 F.2d 16, 18 (1st Cir. 1986).
We therefore conclude that the district court's fee award cannot
stand. Normally, when a fee award must be reduced, we remand for
calculation of an appropriate fee, as the Supreme Court did in Hensley.
But there is no need for that in this case. Plaintiffs have been paid for
all their post-judgment monitoring in 1992, when the Panel was appointed
and began its hearings, plus an additional $113,000 for services in 1993
and 1994. Even if plaintiffs are entitled to a reasonable expert fee,3 we
conclude that they have been fully compensated for their reasonable and
necessary post-judgment efforts following our 1991 remand.
For the foregoing reasons, that portion of the district court's
judgment awarding plaintiffs attorney's fees, expert fees, and costs in the
amount of $202,335.15 is reversed.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
3
The district court did not discuss and plaintiffs have made
no attempt to explain why their experts were necessary for
reasonable post-judgment monitoring.
-8-