2nd Circut U.S. Court of Appeals
___ F.2d ___, 2003 U.S. App. LEXIS 20042 (2nd Cir. 2003)
September 30, 2003
This important case tackles the critical issue of what constitutes a “prevailing party” under 42 U.S.C. §§ 1983 & 1988 where the parties resolved their dispute through a private settlement agreement when the district court retained enforcement jurisdiction. In a decision that may have far reaching implications for other fee generating cases, the second circuit court of appeals found that the district court’s retention of jurisdiction carried sufficient “judicial approval” of the settlement to award attorney’s fees.
The plaintiffs brought an action pursuant to 42 U.S.C. § 1983 against defendants mayor social services commissioner of New York City, New York State commissioners of public assistance and health departments, asserting that the system for investigating joint applications for food stamps and public assistance violated the federal Food Stamp Act. The district court held the city’s investigation process did not violate federal law and the plaintiffs’ claim seeking monetary damages from the state officers in their official capacity was constitutionally barred. As a result, the plaintiffs and the city officials entered into a private settlement agreement resolving the remaining six claims. The United States District Court for the Southern District of New York denied plaintiffs’ motion for attorneys’ fees and the plaintiffs subsequently appealed.
The plaintiffs’ motion for fees was denied on the ground that plaintiffs were not “prevailing parties” under the standard espoused in the recently decided Buckhannon v. W. Va. Dep’t Health & Human Serv., 532 U.S. 598 (2001). In Buckhannon, the U.S. Supreme Court redefined the meaning of “prevailing party” to include the achievement of some “material alteration of the legal relationship of the parties” that must be judicially sanctioned. Sufficient judicial imprimatur includes judgment on the merits and settlement agreements pursuant to a court ordered consent decree. In the present case, the district court recognized that the settlement agreement was a material change in the legal relationship between plaintiffs and the city officials. But, the court held that its continuing jurisdiction to enforce the agreement did not constitute a judicial sanctioning of an alternation of the parties’ legal relationship so that the plaintiffs could be considered “prevailing parties”. The circuit court disagreed and concluded that the district court’s retention of jurisdiction carried sufficient judicial approval of the agreement to support an award of attorneys’ fees. Because the district court retained jurisdiction under the approved procedures, it gave judicial sanction to a change in the legal relationship of the parties.
The court held that the district court’s retention of jurisdiction over the Agreement in this case provides sufficient judicial sanction to convey “prevailing party status” on the plaintiffs. Because the district court wrongly concluded that plaintiffs were not prevailing parties, it did not consider whether the plaintiffs’ argument regarding the amount of their fee demand was compensable. The court remanded the case to the district court to specifically consider the issue of plaintiff compensation.
The case may be accessed through electronic research services (LEXIS or WESTLAW) or by going to the Second Circuit Court of Appeals website at www.ca2.uscourts.gov. (KM)
Filed in Tags: Legal Representation
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