Zarcon v. NLRB ( 2009 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
__________
No. 08-2330
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Zarcon, Inc. and *
Donald W. Jones, *
*
Appellants, *
* Appeal from the United States
v. * District Court for the
* Western District of Missouri.
*
National Labor Relations Board, *
*
Appellee. *
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Submitted: February 13, 2009
Filed: August 27, 2009
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Before RILEY, SMITH, and SHEPHERD, Circuit Judges.
SHEPHERD, Circuit Judge.
Zarcon, Inc. and its attorney, Donald W. Jones (collectively “Zarcon”), appeal
the district court’s1 denial of their request for attorney’s fees and the denial of the their
motions to propound requests for admissions and conduct further discovery. We
affirm.
1
The Honorable Richard E. Dorr, United States District Judge for the Western
District of Missouri.
I.
While investigating Zarcon for unfair labor practices in 2000 and 2001, the
National Labor Relations Board (NLRB) interviewed a former supervisor of Zarcon
in a manner that may have violated Missouri Ethics Rule 4.2.2 In 2005, two years
after the underlying enforcement proceedings were concluded, Zarcon requested the
name of the former supervisor and a copy of the affidavit (“Affidavit”) taken during
his interview by the NLRB. The NLRB denied the requested information. In April
2006, Zarcon filed a lawsuit to compel disclosure under the Freedom of Information
Act (“FOIA”) in the United States District Court for the Western District of Missouri.
As the litigation proceeded, the NLRB produced a number of the requested
documents, but not the Affidavit. In November 2006, the district court granted the
NLRB’s motion to stay discovery, and denied Zarcon’s motion to propound requests
for admissions and to conduct other reasonable discovery. The NLRB then moved for
summary judgment, which Zarcon opposed. Before the district court ruled on the
summary judgment motion, the NLRB produced the Affidavit, which Zarcon accepted
on the condition that it be permitted to file a request for court costs and attorney’s fees
incurred while pursuing the Affidavit.
On December 31, 2007, after Zarcon had requested attorney’s fees but before
the district court had ruled on the request, President George W. Bush signed into law
the “OPEN Government Act of 2007,” Pub. L. No. 110-175, 121 Stat. 2524 (2007).
The OPEN Government Act amended in part 5 U.S.C. § 552(a)(4)(E), to clarify that
a complainant in a FOIA suit is eligible for an award of attorney’s fees even if the
2
Rule 4.2 states: “In representing a client, a lawyer shall not communicate about
the subject of the representation with a person the lawyer knows to be represented by
another lawyer in the matter, unless the lawyer has the consent of the other lawyer or
is authorized to do so by law or a court order.”
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complainant has not obtained a final judicial resolution of the matter but has instead
“obtained relief through . . . a voluntary or unilateral change in position by the agency,
if the complainant’s claim is not insubstantial.” 5 U.S.C. § 552(a)(4)(E)(ii).
Prior to the passage of the OPEN Government Act, two circuit court decisions
extended Buckhannon Board & Care Home, Inc. v. West Virginia Department of
Health and Human Resources, 532 U.S. 598 (2001), to requests for attorney’s fees
under FOIA. See Union of Needletrades, Indus. & Textile Employees, AFL-CIO v.
INS (“UNITE”), 336 F.3d 200, 201, 203-07 (2d. Cir. 2003); Oil, Chem. & Atomic
Workers Int’l Union v. Dep’t of Energy (“OCAW”), 288 F.3d 452, 453-57 (D.C. Cir.
2002). Buckhannon rejected the “catalyst theory” of awarding attorney’s fees under
the Fair Housing Amendments Act (FHAA) and the Americans with Disabilities Act
(ADA), under which a party was deemed to have prevailed and be eligible for an
award of costs if he or she could show that the litigation had caused the other party to
settle in a favorable manner even though “no judicially sanctioned change in the
relationship of the parties” had occurred. 532 U.S. at 600-01, 605. Section
552(a)(4)(E)(ii) overruled UNITE and OCAW’s extension of Buckhannon to FOIA
suits. See Or. Natural Desert Ass’n v. Locke, 572 F.3d 610, 616-18 (9th Cir. 2009).
Determining that Buckhannon applied to FOIA suits pending at the enactment of the
OPEN Government Act, the district court concluded that to apply FOIA’s new fee-
shifting provision to Zarcon’s pending request for fees would be impermissibly
retroactive and rejected Zarcon’s request.
II.
FOIA provides that a district court “may assess against the United States
reasonable attorney fees and other litigation costs reasonably incurred in any [FOIA]
case . . . in which the complainant has substantially prevailed.” 5 U.S.C.
§ 552(a)(4)(E)(i). The last time this court addressed the meaning of “substantially
prevailed” in FOIA’s attorney’s-fee provision, we interpreted it under the “catalyst
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theory.” See Miller v. U.S. Dep’t of State, 779 F.2d 1378, 1389 (8th Cir. 1985) (“[A
FOIA] claimant . . . [need not] have received a favorable judgment in order to have
prevailed.”).
In Buckhannon, the Supreme Court held “that the ‘catalyst theory’ is not a
permissible basis for the award of attorney’s fees under the [Fair Housing
Amendments Act of 1988], 42 U.S.C. § 3613(c)(2), and the [Americans with
Disabilities Act of 1990], 42 U.S.C. § 12205.” 532 U.S. at 610. The FHAA and ADA
permit the award of attorney’s fees to a “prevailing party.” See 42 U.S.C.
§ 3613(c)(2) (“In a civil action under [the FHAA], the court, in its discretion, may
allow the prevailing party . . . a reasonable attorney’s fee and costs.”); 42 U.S.C.
§ 12205 (“In any action or administrative proceeding commenced pursuant to [the
ADA], the court or agency, in its discretion, may allow the prevailing party . . . a
reasonable attorney’s fee[.]”). The Court in Buckhannon stated that a “judicially
sanctioned change in the legal relationship of the parties” is required before a claimant
can be a “prevailing party” eligible for an award of attorney’s fees. 532 U.S. at 605.
After noting that the phrase “prevailing party” appears in numerous federal statutes,
Buckhannon also stated that the Supreme Court “ha[s] interpreted these fee-shifting
provisions consistently . . . .” Id. at 602-03, n.4.
The D.C. and Second Circuits extended Buckhannon’s holding to FOIA’s
attorney’s-fee provision. See UNITE, 336 F.3d at 201, 203-207; OCAW, 288 F.3d
at 453-57. These two cases held that the phrase “substantially prevailed” in FOIA’s
fee-shifting provision was sufficiently analogous to “prevailing party” that
Buckhannon’s rejection of the “catalyst theory” should also apply to FOIA. See
UNITE, 336 F.3d at 207-10; OCAW, 288 F.3d at 454-57. Subsequently, Congress
passed the OPEN Government Act of 2007, which amended, inter alia, 5 U.S.C.
§ 552(a)(4)(E) to provide that: “For purposes of [FOIA], a complainant has
substantially prevailed if the complainant has obtained relief through . . . a voluntary
or unilateral change in position by the agency, if the complainant’s claim is not
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insubstantial.” 5 U.S.C. § 552(a)(4)(E)(ii). This subsection definitively established
that the “catalyst theory” applies to the recovery of attorney’s fees under FOIA.
Although we have never expressly rejected the “catalyst theory” as applied to
FOIA and one could therefore argue that applying the OPEN Government Act to this
case would not change the law in existence when it was enacted, we have extended
Buckhannon to the fee recovery-provisions of other federal statutes. See Advantage
Media, L.L.C. v. City of Hopkins, Minn., 511 F.3d 833, 836-38 (8th Cir.), cert.
denied, 128 S. Ct. 2486 (2008) (applying Buckhannon to recovery of attorney’s fees
under 42 U.S.C. § 1988); Sierra Club v. City of Little Rock, 351 F.3d 840, 845 (8th
Cir. 2003) (applying Buckhannon to Clean Water Act’s attorney-fee provision, 33
U.S.C. § 1365(d)). In addition, we have stated that “prevailing party” is “a legal term
of art” and that “Buckhannon applies broadly to fee-shifting statutes that employ the
‘prevailing party’ language . . . .” Cody v. Hillard, 304 F.3d 767, 773 n.3 (8th Cir.
2002) (quotation omitted). Although FOIA employs the term “substantially
prevailed” whereas Buckhannon construed the term “prevailing party,” we have
rejected the “catalyst theory” as applied to the Clean Water Act’s attorney’s-fee
provision, which permits a district court to awards costs “to any prevailing or
substantially prevailing party.” 33 U.S.C. § 1365(d) (emphasis added); see Sierra
Club, 351 F.3d at 845. If it were not for the passage of the OPEN Government Act,
Buckhannon and Sierra Club would compel us to reject the “catalyst theory” as
applied to FOIA. Thus, in accordance with the holdings of UNITE and OCAW, we
agree that Buckhannon’s reasoning eliminating the “catalyst theory” as a basis for
recovering attorney’s fees extended to FOIA prior to the enactment of the OPEN
Government Act.
Thus, the only question that remains is whether applying the OPEN
Government Act to this case would result in an impermissibly retroactive application
of the statute. In Landgraf v. USI Film Products, 511 U.S. 244 (1994), the Supreme
Court set forth the analysis to be used in deciding whether a statute that is silent with
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respect to the date of its application, such as the OPEN Government Act, should be
given retroactive effect:
[T]he court must determine whether the new statute would have
retroactive effect, i.e., whether it would impair rights a party possessed
when he acted, increase a party’s liability for past conduct, or impose
new duties with respect to transactions already completed. If the statute
would operate retroactively, [the] traditional presumption [against
retroactive application] teaches that it does not govern absent clear
congressional intent favoring such a result.
Id. at 280. The opinion in Landgraf attempted to reconcile the conflict between two
canons of interpreting the “temporal reach of statutes”—the presumption against
retroactivity and the rule that a “court should ‘apply the law in effect at the time it
renders its decision.’” See id. at 273 (quoting Bradley v. Sch. Bd. of City of
Richmond, 416 U.S. 696, 711 (1974)). The latter rule found expression in Bradley,
a case in which the Court held that a congressional act permitting the award of
attorney’s fees to successful civil rights plaintiffs should apply to cases pending at the
time of its enactment. 416 U.S. at 710, 721. The Landgraf opinion attempted to
harmonize the Bradley rule with the presumption against retroactivity by noting that
“[a]ttorney’s fee determinations . . . are collateral to the main cause of action,”
Landgraf, 511 U.S. at 277 (quoting White v. N. H. Dep’t of Employment Sec., 455
U.S. 445, 451-52 (1982)), and that the district court in Bradley had “even before the
enactment of [the new statute], . . . authority . . . to award fees based upon equitable
principles.” Id.
Zarcon cites to the passage in Landgraf stating that “attorney’s fee
determinations . . . are collateral to the main cause of action,” id., as proof that
attorney’s fee provisions are among those type of laws, such as law relating to purely
prospective relief, jurisdictional statutes, and some procedural rules, that do not have
retroactive effect when applied to pending suits. See id. at 273-75. However, Zarcon
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makes too much of this remark concerning the collateral nature of attorney’s fee
provisions. “The Court in Landgraf distinguished Bradley as follows: ‘In light of the
prior availability of a fee award, and the likelihood that fees would be assessed under
pre-existing theories, we concluded [in Bradley] that the new fee statute simply “d[id]
not impose an additional or unforeseeable obligation” upon the school board.’”
Summers v. Dep’t of Justice, 569 F.3d 500, 504 (D.C. Cir. 2009) (quoting Landgraf,
511 U.S. at 278). The availability of attorney’s fees under pre-existing principles,
more than the collateral nature of attorney’s fees, demonstrates why Bradley does not
undermine the presumption against retroactivity.
Unlike the fee-shifting provision in Bradley, the OPEN Government Act made
recovery of attorney’s fees possible in circumstances where they had been previously
forbidden. At the time the NLRB settled this case, our cases clearly demonstrated that
the “catalyst theory” would not be an available means of recovering costs under
FOIA. Applying the OPEN Government Act to this case would, therefore, increase
the NLRB’s “liability for past conduct, [and] impose new duties with respect to
transactions already completed.” Landgraf, 511 U.S. at 280. Given that “the statute
would operate retroactively [if applied to this case], [the] traditional presumption
teaches that it does not govern absent clear congressional intent favoring such a
result.” Id.
Zarcon points to the legislative history of the OPEN Government Act to
establish that Congress “expressly prescribed the statute’s proper reach.” Id. The
committee report on the bill states that the OPEN Government Act was intended “to
clarify that a complainant has substantially prevailed in a FOIA lawsuit, and is eligible
to recover attorney fees . . . if the pursuit of a claim was the catalyst for the voluntary
or unilateral change in position by the opposing party.” S. Rep. No. 110-59, at 6
(2007). Similarly, Senator Patrick M. Leahy, who was a sponsor of the litigation,
stated on the Senate floor that “[t]he bill clarifies that Buckhannon does not apply to
FOIA cases.” 153 Cong. Rec. S15701-04 (daily ed. Dec. 14, 2007). However, these
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statements are insufficient to overcome the default rule announced in Landgraf that
“[w]hen . . . the statute contains no . . . express command [regarding its effective
date],” it is not to be applied retroactively. 511 U.S. at 280. Thus, we reject Zarcon’s
argument that the OPEN Government Act should apply to this case. See Or. Natural
Desert Ass’n, 572 F.3d at 617 (“[T]he [OPEN Government Act] do[es] not apply
retroactively . . . .”); Summers, 569 F.3d at 504 (“[T]he [OPEN Government] Act is
silent with regard to its temporal reach; its application here would have ‘retroactive
effect’ because it would ‘increase a party’s liability for past conduct’ and there is no
evidence of a ‘clear congressional intent favoring such a result.’” (quoting Landgraf,
511 U.S. at 280)).3
III.
Finally, Zarcon appeals the denial of its motion to propound admissions and
conduct other reasonable discovery. However, as the NLRB produced the requested
documents and Zarcon withdrew its complaint pursuant to settlement of the case,
reserving only the right to seek costs and attorney’s fees, further discovery is
unneeded. “[A]n appeal must be dismissed as moot when our decision will have no
effectual relief whatever to a prevailing party.” Doe v. Pulaski County Special Sch.
Dist., 306 F.3d 616, 621 (8th Cir. 2002) (en banc) (quotation omitted). Accordingly,
as reversing the district court’s denial of Zarcon’s request for admissions and further
discovery could provide no additional relief, we dismiss this claim as moot.
IV.
Accordingly, we affirm the district court’s decision.
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3
Thus, it is unnecessary for us to address the NLRB’s additional argument that
principles of sovereign immunity also preclude retroactive application of the OPEN
Government Act.
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