Supreme Court divided over disputed civil rights attorney’s fees

ARGUMENT ANALYSIS

The court heard arguments in Lackey v. Stinnie on Tuesday morning. (Katie Barlow)

The justices on Tuesday were divided over a dispute regarding attorney’s fees for plaintiffs in civil rights cases. A federal appeals court in Richmond, Va., ruled that a group of drivers challenging a state motor vehicle law was entitled to reimbursement of their attorney’s fees because a federal district court had issued an order that temporarily barred the state from enforcing the law – and then the Virginia legislature repealed the law. During roughly 80 minutes of oral argument on Tuesday, the justices seemed skeptical of the state’s contention that they should reverse the lower court’s ruling and hold that this kind of temporary relief can never be the basis for an award of attorney’s fees.

The case has drawn wide interest from governments and groups involved on both sides of civil rights litigation. State and local governments have told the justices that upholding the lower court’s decision could discourage them from acting promptly to respond to issues raised by civil rights plaintiffs. On the other hand, groups ranging from the NAACP Legal Defense and Educational Fund to the conservative Alliance Defending Freedom urge the justices to leave the lower court’s decision in place, arguing that a ruling for the state could make it harder for civil rights plaintiffs to find lawyers.

The dispute before the justices began as a challenge to the constitutionality of a Virginia law that requires the automatic suspension of the driver’s licenses of anyone with unpaid court fines and fees. A federal district court in Lynchburg, Va., granted the challengers’ request, the state did not appeal, and then the Virginia legislature repealed the law, after which the district court dismissed the case.  

Under federal law, the “prevailing party” in some civil rights cases can recover reasonable attorney’s fees. Because the district court had ordered the DMV to reinstate their licenses, the challengers argued in this case, they were “prevailing parties” for purposes of the federal law and should be reimbursed for their attorney’s fees. The subsequent repeal of the law, they contended, did not detract from the legal significance of their victory.

After the U.S. Court of Appeals for the 4th Circuit ruled for the challengers, the state came to the Supreme Court, which agreed to take up the case earlier this year.

Representing the commissioner of the state’s department of motor vehicles, Virginia Solicitor General Erika Maley told the justices that a “prevailing party” is the party who wins a lawsuit, by obtaining either a final judgment in its favor or a decision that the defendant is “liable on the merits of one or more claims.” A temporary order like the preliminary injunction in this case, she said, does not do either of those things, but is instead a “threshold prediction of the likelihood of success” that does not provide any “enduring relief.” Maley urged the justices to adopt a “bright-line rule” that would be easy to administer, holding that a preliminary injunction “does not make a plaintiff the prevailing party.”

Justice Elena Kagan was among the justices who were skeptical. She acknowledged that a preliminary injunction only made a prediction of a likelihood of success. But, she said, “a likelihood of success is better than an unlikelihood of success, and we have to decide who’s going to pay these fees.” In this case, Kagan posited, the challengers also “get everything that they need and want in the interim period. And then the whole thing is brought to a close by the legislature saying essentially ‘we give up’ in the same way that it would in a consent decree case, even without the final imprimatur of the court.” When you “put all of that together,” Kagan concluded, “why shouldn’t fees go the other way here?”

Justice Sonia Sotomayor was similarly dubious. She noted that the money had already been spent on attorney’s fees; the question is who should pay for those fees. “And why should it be a plaintiff who has received relief, all the relief that he or she wanted … when it was the other side … who gives up and changes a regulation?” Sotomayor added that even if a plaintiff is deemed a “prevailing party,” it does not automatically get all of its attorney’s fees reimbursed. Instead, she stressed, courts have discretion to determine what fees are reasonable.

Chief Justice John Roberts wondered aloud whether the state’s rule might create perverse incentives for plaintiffs to continue litigation even after they obtain a preliminary injunction, to ensure that they can receive attorney’s fees.

Maley countered that the state’s rule is the “more judicially efficient one.” If, after a preliminary injunction is issued, a defendant believes that it is unlikely to prevail in additional litigation, it will have “a very strong incentive to settle” so that fees don’t continue to pile up.

Kagan also pressed Assistant to the U.S. Solicitor General Anthony Yang, who argued on behalf of the federal government supporting Virginia. Kagan observed that none of the lower courts use the kind of bright-line rule that Virginia and the federal government urge the justices to adopt. The issue seems to have surfaced frequently in recent years, Kagan told Yang, as people sought relief from “various kinds of COVID policies” that were then “changed or … scrapped or … abandoned in some way.” But the upshot, Kagan concluded, is that “there’s quite a lot of recent law that cuts against” Virginia and the United States from all over the country.

Representing the challengers, Brian Schmalzbach told the justices that, for purposes of recovering fees in civil rights cases, a “prevailing party” is the “winner of an unreversed favorable judgment and tangible relief from the court.” And a key factor, he added, is whether the challengers obtained a “material alteration of the legal relationship between the parties.”

That is exactly what happened in this case, Schmalzbach contended. The preliminary injunction “forced the Commissioner at gavel point to provide the relief that we requested.”

But Roberts was concerned that if a final judgment on the merits is not required to qualify as a “prevailing party,” it will be difficult for courts to determine “what constitutes prevailing.”

Maley echoed this idea in her rebuttal, telling the justices that the tests currently used in the courts of appeals “are fact-intensive and unpredictable.” These tests often lead to “a second major litigation over the availability of fees,” she said, “which in and of itself is highly judicially inefficient.”

Justice Amy Coney Barrett questioned whether plaintiffs who obtain a preliminary injunction should really be regarded as a “prevailing party.” She noted that judges are often ruling on requests for preliminary injunctions on “a very compressed time frame.” Moreover, she added, plaintiffs are only required to show “a reasonable likelihood of success” – around “51 percent.” “Why,” she asked, “is that prevailing?”

A decision is expected by sometime next summer.

This article was originally published at Howe on the Court.