Erik Autor v. Penny Pritzker , 843 F.3d 994 ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 11, 2016 Decided December 16, 2016
No. 16-5037
ERIK O. AUTOR, ET AL.,
APPELLANTS
v.
PENNY SUE PRITZKER, IN HER OFFICIAL CAPACITY AS
SECRETARY OF COMMERCE, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:11-cv-01593)
E. Brantley Webb argued the cause for appellants. With her
on the brief was Charles A. Rothfeld.
Sydney A. Foster, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
Benjamin C. Mizer, Principal Deputy Assistant Attorney
General, and Michael S. Raab and Charles W. Scarborough,
Attorneys.
Before: HENDERSON and ROGERS, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
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Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: This appeal from the denial of
attorneys’ fees under the Equal Access to Justice Act (“EAJA”),
28 U.S.C. § 2412, presents the question whether appellants’
prior appeal effectively secured them prevailing party status.
Appellants filed suit challenging the federal policy barring
federally registered lobbyists from serving on the Industry Trade
Advisory Committees. See Request for Nominations for the
Industry Trade Advisory Comms., 75 Fed. Reg. 24,584, 24,585
(May 5, 2010); Pres. Mem. on Lobbyists on Agency Bds. &
Comm’ns, 75 Fed. Reg. 35,955, 35,955 (June 23, 2010)
(hereinafter “the lobbyist ban”). The district court dismissed the
complaint for failure to state a claim. This court reversed,
rejecting two of the government’s defenses, and remanded the
case for the district court to determine whether the government’s
interest in imposing the lobbyist ban “outweighs any
impingement on Appellants’ constitutional rights.” Autor v.
Pritzker, 740 F.3d 176, 178 (D.C. Cir. 2014) (“Autor I”). In so
doing, the court noted two considerations for the district court to
address on remand. Id. at 184. Appellants contend the court
thereby made clear that they would necessarily prevail on
remand and therefore they were entitled to attorneys’ fees.
Appellants have overread Autor I, because the court
acknowledged that on remand dismissal might still be
appropriate depending on the district court’s disposition of the
government’s remaining defense. See id. Accordingly, we
affirm.
I.
Appellants are federally registered lobbyists who sued the
Secretary of Commerce and United States Trade Representative
on the grounds that the lobbyist ban violated their rights under
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the First and Fifth Amendments to the Constitution. Their
complaint alleged that the lobbyist ban “attaches an
unconstitutional condition on the exercise of the First
Amendment right to petition [the government],” Compl. ¶ 49,
and “draws an unconstitutional distinction between those who
exercise their right to petition the government and those who do
not,” id. at ¶ 53. The district court granted the government’s
motion to dismiss for failure to state a claim pursuant to Federal
Rule of Civil Procedure 12(b)(6), and appellants appealed.
This court held that the complaint stated “a viable First
Amendment unconstitutional conditions claim,” Autor I, 740
F.3d at 183, and a plausible Fifth Amendment equal protection
claim, id. at 184. The court was unpersuaded by the
government’s defenses that its freedom to choose its advisors
under Minnesota State Board for Community Colleges v.
Knight, 465 U.S. 271 (1984), foreclosed appellants’
unconstitutional conditions claim or that the lobbyist ban did
not impose an unconstitutional burden on appellants’ First
Amendment right to petition under Lyng v. International Union,
485 U.S. 360 (1988). Id. at 181, 183. The court recognized,
however, that “[t]he Supreme Court has long sanctioned
government burdens on public employees’ exercise of
constitutional rights,” id. at 183, and that “the government’s
interest in selecting its advisors . . . may justify similar
restrictions on individual rights,” id. at 183-84. The court
remanded the case to the district court to develop a factual
record and undertake the balancing of interests analysis set forth
in Pickering v. Board of Education, 391 U.S. 563 (1968). Id. at
184. In other words, inasmuch as the court was required at that
stage of the proceedings to treat the allegations of the complaint
as true, see id. at 179, 183; Atherton v. D.C. Office of the
Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009), dismissal might
still prove appropriate on remand. The court stated that on
remand the district court should inquire into the government’s
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justification for banning federally registered lobbyists, such as
appellants, while allowing other corporate employees
representing the same companies to serve on the Industry Trade
Advisory Committees, and how banning lobbyists from
committees otherwise featuring corporate representatives
“protects the ‘voices of ordinary Americans.’” Autor I, 740
F.3d at 184 (quoting Pres. Mem., 75 Fed. Reg. at 35,955).
In the district court, the parties filed a joint motion for an
extension of time and two months later informed the district
court of their intention to settle the case or file a schedule for
further proceedings. In August 2014, the Office of
Management and Budget revised the lobbyist ban to apply only
to lobbyists who serve on advisory committees in an individual
capacity. See Rev. Guidance on Appointment of Lobbyists to
Fed. Advisory Comms., Bds., & Comm’ns, 79 Fed. Reg.
47,482, 47,482 (Aug. 13, 2014). In light of this “policy
clarification,” the Department of Commerce issued an amended
“Request for Nominations for the Industry Trade Advisory
Committees.” 79 Fed. Reg. 51,552, 51,552 (Aug. 29, 2014).
On September 3, 2014, the parties filed a stipulation to dismiss
the case, with appellants stating their intention to file an
application for attorneys’ fees.
The district court denied appellants’ motion for attorneys’
fees under the EAJA on the ground that the remand in Autor I
did not ensure appellants would enjoy a substantive victory, and
thus they were not “prevailing parties” under Buckhannon
Board & Care Home, Inc. v. West Virginia Department of
Health & Human Resources, 532 U.S. 598 (2001). Autor v.
Blank, 161 F. Supp. 3d 111, 113, 117 (D.D.C. 2016).
Appellants appeal, and our review is de novo. Initiative &
Referendum Inst. v. U.S. Postal Serv., 794 F.3d 21, 23 (D.C.
Cir. 2015).
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II.
The EAJA provides that “fees and other expenses” shall be
awarded to the “prevailing party” in a civil suit brought against
the United States “unless the court finds that the position of the
United States was substantially justified or that special
circumstances make an award unjust.” 28 U.S.C.
§ 2412(d)(1)(A). These “fees” include “reasonable attorney
fees.” Id. at § 2412(d)(2)(A). In Buckhannon, 532 U.S. 598,
the Supreme Court interpreted “prevailing party” consistently
across multiple statutes, holding that to be eligible for an award
of attorneys’ fees in derogation of the “American Rule,” id. at
602, there must be a “judicially sanctioned change in the legal
relationship of the parties,” id. at 605. The Court rejected the
“‘catalyst theory,’ which posits that a plaintiff is a ‘prevailing
party’ if [the plaintiff] achieves the desired result because the
lawsuit brought about a voluntary change in the defendant’s
conduct.” Id. at 601. This court has held that
“Buckhannon applies to the definition of ‘prevailing party’
under the EAJA.” Thomas v. Nat’l Sci. Found., 330 F.3d 486,
492 n.1 (D.C. Cir. 2003). It also has adopted a three-part test
for determining whether a party has prevailed under
Buckhannon: “(1) there must be a court-ordered change in the
legal relationship of the parties; (2) the judgment must be in
favor of the party seeking the fees; and (3) the judicial
pronouncement must be accompanied by judicial relief.”
Turner v. Nat’l Transp. Safety Bd., 608 F.3d 12, 15 (D.C. Cir.
2010) (quoting District of Columbia v. Straus, 590 F.3d 898,
901 (D.C. Cir. 2010)) (internal quotation marks omitted).
Appellants do not meet this test.
Appellants seek prevailing party status on the basis that
Autor I structured the remand in a way that invalidation of the
lobbyist ban was inevitable. Specifically, they point to this
court’s “dispositive questions” for which, they maintain, “the
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government had, and has, no satisfactory answers.” Appellants’
Br. 12. And they maintain that interpreting Buckhannon not to
preclude the award of fees in their circumstances is necessary
to avoid government manipulation of the Buckhannon rule.
Neither contention is persuasive.
Appellants rely on Waterman Steamship Corp. v. Maritime
Subsidy Board, 901 F.2d 1119 (D.C. Cir. 1990), where the court
concluded that prevailing parties are those who succeed on any
significant issue that “achieve[d] some of the benefit the parties
sought in bringing suit.” Id. at 1121 (quoting Tex. State
Teachers Ass’n v. Garland Indep. School Dist., 489 U.S. 782,
791 (1989)) (alteration in original). Although recognizing that
a “plaintiff need not prevail on the ‘central issue’ in the
litigation,” id. (quoting Tex. State Teachers Ass’n, 489 U.S. at
791), the court interpreted “‘benefit’ to mean something more
than an enhanced legal position in a proceeding that ultimately
fails to supply any material relief,” id. at 1122. A remand to an
agency or trial court for further proceedings generally will not
justify an award of attorneys’ fees. Id. at 1122-23. But see
SecurityPoint Holdings, Inc. v. Transp. Sec. Admin., 836 F.3d
32 (D.C. Cir. 2016). The court acknowledged, however, that
attorneys’ fees may be awarded where a remand is structured
“such that a substantive victory will obviously follow.” Id. at
1123. Waterman preceded Buckhannon, but this court has since
reaffirmed that such a structured remand constitutes a “‘court-
ordered change in the legal relationship’ between the parties”
that can confer “prevailing party” status under Buckhannon.
Initiative & Referendum Inst., 794 F.3d at 24 (quoting
Buckhannon, 532 U.S. at 604).
In appellants’ view, Autor I involved the type of structured
remand that Initiative & Referendum Institute held satisfied the
“prevailing party” test. Id. at 25. “Either the [government]
would amend its regulation, or the District Court would order it
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to do so.” Id. But the remand discussed in Initiative &
Referendum Institute came after the court had held the
challenged regulation was unconstitutional. Id. at 22-23 (citing
Initiative & Referendum Inst. v. U.S. Postal Serv., 417 F.3d
1299, 1318 (D.C. Cir. 2005)). Appellants’ circumstances are
not similar. Although Autor I narrowed the grounds on which
the government could defend the lobbyist ban, it did not
foreclose the possibility that the government could prevail on
the merits. The court did not reach the merits of the
government’s position “that the lobbyist ban cannot be thought
to constitute significant pressure to give up one’s status as a
paid registered lobbyist,” stating that doing so would be
“premature” given that, at this stage of the case, the court must
assume the allegations of the complaint are true. Autor I, 740
F.3d at 183 (internal quotation marks omitted). And the court
declined to undertake the Pickering analysis of appellants’ First
and Fifth Amendment challenges because the issues were
“unbriefed.” Id. at 184. In these circumstances, appellants’
suggestion that the government would have been unable to
present a meritorious defense on remand is mere speculation.
Regarding manipulation of the Buckhannon rule, appellants
contend that they and others in their position should be treated
as prevailing parties because otherwise the government can
choose to moot a case just before judgment in order to avoid
having to pay attorneys’ fees. In Buckhannon, the Court
expressed skepticism over tactical mooting fears, noting the
absence of empirical evidence and suggesting the “catalyst
theory” could just as well prolong unnecessary litigation by
deterring a defendant from voluntarily changing its conduct.
532 U.S. at 608. “Given the clear meaning of ‘prevailing party’
in the fee-shifting statutes,” however, the Court concluded that
it “need not determine which way these various policy
arguments cut.” Id. at 610. Appellants suggest that the test in
Buckhannon was shaped by its facts, where the defendants
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agreed to stay the challenged directive before any judicial ruling
on the merits, and that the Supreme Court’s reasoning supports
awarding attorneys’ fees to plaintiffs seeking equitable relief
when “the government repeals the challenged law after a court
has made rulings related to the illegality of that law.”
Appellants’ Br. 21. Further, in appellants’ view, forcing
plaintiffs to continue litigating simply to qualify for attorneys’
fees would undermine the judicial policy favoring settlements.
Here, appellants rely on Palmetto Properties, Inc. v. County
of DuPage, 375 F.3d 542 (7th Cir. 2004). In that case, the
plaintiffs’ claim became moot when the defendants amended
the challenged regulation following the district court’s grant of
partial summary judgment to the plaintiffs. Id. at 549-50. The
Seventh Circuit reasoned that awarding attorneys’ fees in this
circumstance was consistent with Buckhannon because the
defendants’ conduct occurred after a judicial determination in
the plaintiffs’ favor on the substantive merits of their claim, and
the government’s subsequent “action is most persuasively
construed as involuntary — indeed exhibiting judicial
imprimatur.” Id. at 550. Denying attorneys’ fees in such
circumstances “would contradict Buckhannon’s logic, create an
inequitable result, and promote inefficiency because plaintiffs
who have succeeded on the merits would be encouraged to rush
forward with potentially unnecessary litigation, solely to
preserve their entitlement to fees.” Id. The court
acknowledged, however, that the government was “free to moot
the case before the summary-judgment ruling, in which case the
action would have been voluntary.” Id.Palmetto is analogous to Initiative & Referendum Institute,
794 F.3d at 24-25; both cases became moot after a judicial
determination for the plaintiffs on the merits of their claims but
before the district court had entered a final judgment or order.
Appellants maintain their case is similar because all that was
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left to be done was for the district court to enter a final order
memorializing “the clear thrust of” the remand in Autor I.
Appellants’ Br. 23-24. Yet appellants’ case does not fall within
this particular “special category of case that is vulnerable to
tactical mooting just before judgment.” Appellants’ Br. 20. No
judicial determination had been made on the merits of
appellants’ constitutional challenges before the government
revised the lobbyist ban. Appellants effectively ask this court
to determine both the substantive merits of their challenges in
the first instance and inquire whether the government’s revision
to the lobbyist ban was involuntary. This is the type of “second
major litigation” that courts have been cautioned to avoid in
adjudicating requests for attorneys’ fees. Buckhannon, 532 U.S.
at 609 (citing Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)).
To the extent appellants take issue with the broader impact
of Buckhannon on public interest litigation, the Supreme Court
viewed this type of argument for awarding attorneys’ fees as
falling within the scope of the “catalyst theory” and, in broadly
rejecting that theory, rejected appellants’ concerns as well. See
id. at 607-09. Although the plaintiffs in Buckhannon had not
secured interlocutory relief on appeal before their challenge was
mooted, as appellants did in Autor I, the Supreme Court
reaffirmed that “an interlocutory ruling that reverses a dismissal
for failure to state a claim ‘is not the stuff of which legal
victories are made.’” Id. at 605 (quoting Hewitt v. Helms, 482
U.S. 755, 760 (1987)). Allowing a plaintiff to “recover
attorney’s fees if it established that the complaint had sufficient
merit to withstand a motion to dismiss for lack of jurisdiction or
failure to state a claim on which relief may be granted” was a
“limited form of the catalyst theory.” Id. (internal quotation
marks omitted).
This court recently stated as much in SecurityPoint
Holdings, Inc., 836 F.3d 32, in overruling Waterman’s
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requirement that “to ‘prevail’ a party must obtain a change in
the opposing party’s ‘primary conduct,’ such as, in the agency
context, ‘relief from a restriction, grant of a benefit, imposition
of a restriction on others, etc.’” SecurityPoint, 836 F.3d at 37
(quoting Waterman, 901 F.2d at 1122); see id. 35 n.1. The court
concluded that Waterman was inconsistent with Shalala v.
Schaefer, 509 U.S. 292 (1993), which held that a remand by the
district court to an agency could constitute a “final judgment”
for purposes of a plaintiff’s “prevailing party” status if the
remand terminated the district court’s jurisdiction over the case.
Id. at 37. This type of remand was distinguishable from
“interim victories within the federal court system that are
insufficient for prevailing-party status, such as withstanding a
motion to dismiss or obtaining an interlocutory ruling that
reverses a dismissal for failure to state a claim.” Id. at 38
(internal quotation marks and brackets omitted). In the former
circumstance, the remand alone is sufficient to confer prevailing
party status because the district court had entered a favorable
final judgment even though the plaintiff may not ultimately
succeed before the agency on remand. Id. By contrast, a
plaintiff who obtains the denial of a motion to dismiss has won
only the “opportunity to continue pressing his claims in the case
originally filed. Such a ruling doesn’t compel the defendant to
alter its conduct one whit; it merely means that an attempt to
throw the case out was unsuccessful.” Id. “[A]scertaining the
prevailing party must await further developments in the case.”
Id. at 39.
Appellants’ circumstances do not warrant a different result.
Although they “achieved [a] desired result,” Buckhannon, 532
U.S. at 600, their success in Autor I “lacks the necessary judicial
imprimatur” on the merits of their challenge to the lobbyist ban
to secure the status of “prevailing party,” id. at 605. Because
appellants are not “prevailing parties” under the EAJA, it is
unnecessary to address whether the government’s position was
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substantially justified.
Accordingly, we affirm.