[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
FILED
No. 04-16721
U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
March 15, 2006
D. C. Docket No. 96-01738 CV-RWS-1 THOMAS K. KAHN
ATLANTA JOURNAL AND CONSTITUTION,
USA TODAY,
Plaintiffs-Appellees,
versus
THE CITY OF ATLANTA DEPARTMENT OF AVIATION,
Defendant-Appellant.
________________________
No. 04-16723
________________________
D. C. Docket No. 96-01847 CV-RWS-1
USA TODAY, a division of Gannett Satellite
Information Network ("GANSAT"), Inc.,
NEW YORK TIMES COMPANY,
d.b.a. The New York Times,
Plaintiffs-Appellees,
versus
CITY OF ATLANTA DEPARTMENT OF AVIATION,
Defendant-Appellant.
________________________
Appeals from the United States District Court
for the Northern District of Georgia
_________________________
(March 15, 2006)
Before DUBINA, MARCUS and COX, Circuit Judges.
COX, Circuit Judge:
These consolidated cases arise out of a dispute between the City of Atlanta
Department of Aviation (“the Department”), on one hand, and publishers of The
Atlanta Journal-Constitution, USA Today and The New York Times newspapers
(“the publishers”) on the other hand. In 1996, the Department, which operates
Atlanta Hartsfield-Jackson Airport, sought to implement a plan regulating the
design, placement, rental, and allocation among publishers of newsracks in the
airport. The publishers filed suit, opposing the plan on First Amendment grounds.
For a time, the district court enjoined implementation of the Department’s
newsrack plan. See Atlanta Journal & Constitution v. City of Atlanta Dep’t of
Aviation (“AJC I”), 6 F. Supp. 2d 1359, 1363, 1366 (N.D. Ga. 1998). The
Department appealed the injunction; and, ultimately, the en banc court affirmed
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the portions of the injunction that restrained the Department from forcing
publishers to use newsracks bearing advertisements for other products and from
granting unbridled discretion to those persons responsible for selecting which
publications may be placed in newsracks or which publishers may continue to
maintain newsracks at the airport; vacated that portion of the injunction that
prevented the Department from charging the publishers a rental or use fee that was
revenue-raising; and remanded the case with instructions to the district court to
allow the Department to formulate a plan consistent with the modified injunction.
Atlanta Journal & Constitution v. City of Atlanta Dep’t of Aviation (“AJC IV”),
322 F.3d 1298,1312 (11th Cir. 2003) (en banc). The en banc court also said that
the district court should consider any claim the Department might have for fees
that it had been enjoined from collecting. Id.
On remand, the Department pursued a claim for restitution of the fees it had
been unable to collect because of the injunction. And the publishers petitioned the
district court for attorneys’ fees and costs pursuant to 42 U.S.C. § 1988. The
Department brings this appeal attacking the judgment of restitution in its favor and
the award of attorneys’ fees and costs for the publishers. We conclude that the
district court did not abuse its discretion in computing the restitutionary award or
in awarding attorneys’ fees and costs. We therefore affirm.
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I. FACTUAL & PROCEDURAL BACKGROUND
In 1996, in preparation for the Summer Olympic Games, the Department
formulated a plan to regulate the sale of newspapers through newsracks in Atlanta
Hartsfield-Jackson Airport. Had it been implemented, the 1996 plan would have
governed the placement and allocation among publishers of newsracks in the
airport, required use of Department-provided newsracks that displayed
Department-selected advertising, and charged the publishers rent of $20.00 per
newsrack per month. The publishers filed a lawsuit in federal district court
challenging the 1996 plan on First Amendment grounds, and they were granted a
preliminary injunction against its implementation. The preliminary injunction was
subsequently clarified, modified and extended in duration.
In July 1997, the Department moved to dissolve the preliminary injunction
and filed a new plan to be implemented once the injunction was dissolved. The
1997 plan proposed a rent of $32.40 per month for the use of Department-owned
newsracks and $27.40 per month for placement of publisher-owned newsracks. In
October 1997, while the preliminary injunction was still in force, the parties filed
cross-motions for summary judgment concerning the 1996 plan. In June 1998, the
district court denied the Department’s motion to dissolve the preliminary
injunction and declined to consider the 1997 plan because it found that the 1997
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plan was not properly at issue in the litigation. AJC I, 6 F. Supp. 2d at 1364-66.
In finding that it could not properly review the 1997 plan, the district court found
that the pleadings had not been amended to put the 1997 plan at issue and that
discovery on the constitutionality of the 1997 plan might be necessary. Id.
In July 2000, after court-ordered mediation and other settlement
negotiations failed to resolve the case, the district court ruled on the cross-motions
for summary judgment. The district court declared the 1996 plan unconstitutional
and issued a permanent injunction that barred the Department from:
(1) forcing publishers to use newsracks bearing
advertisements for other products;
(2) requiring publishers to pay a fee that was not tied to
the Department’s costs in administering the newsrack
plan but was instead revenue-raising; and
(3) vesting unbridled discretion in the person or persons
responsible for selecting which publications may be
placed in newsracks or which publishers may continue to
maintain newsracks at the airport.
See Atlanta Journal & Constitution v. City of Atlanta Dep’t of Aviation (“AJC
II”), 107 F. Supp. 2d 1375, 1384 (N.D. Ga. 2000).
The Department appealed, contending that the 1996 plan was constitutional
in all respects. A three-judge panel of this court affirmed the district court but
noted that its holding on the second prong of the injunction (dealing with the fees
charged publishers) was dictated by circuit precedent that the court might consider
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revisiting en banc. Atlanta Journal & Constitution v. City of Atlanta Dep’t of
Aviation (“AJC III”), 277 F.3d 1322, 1329 (11th Cir. 2002).
The court did rehear the case en banc. In February 2003, the en banc court
affirmed the district court on the first and third prongs of the injunction but
reversed as to the second prong, holding that the Department could charge
licensing fees that were revenue-raising because the Department was acting in a
proprietary capacity, rather than a regulatory capacity. AJC IV, 322 F.3d 1298.
The en banc court decided that “the Department can impose a profit-conscious fee
on the use of newsracks in the Airport, but . . . the discretion surrounding such fee
must be restrained through procedures or instructions designed to reduce or
eliminate the possibility of viewpoint discrimination.” Id. at 1312. The cases
were remanded to the district court for formulation of a plan incorporating these
restrictions. The court said: “Upon remand, the district court should not be
precluded from considering the City’s claim, if any, for lost revenues from
enjoined fees that we have determined were constitutionally permissible . . . .” Id.
On remand, the Department submitted a new newsrack plan to the district
court. The district court found that this new 2003 plan was not violative of the
permanent injunction, as modified by the Eleventh Circuit’s en banc opinion. The
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district court then addressed the Department’s request for restitution and the
publishers’ requests for attorneys’ fees and costs.1
The district court granted the Department restitution for the rent it was
prevented from collecting because of the injunction, calculated at $15 per
newsrack per month (the $20 rental fee in the 1996 plan minus a $5 “cost
recovery” fee because the publishers provided the newsracks themselves rather
than using racks provided by the Department), plus simple interest at 7% per
annum. Atlanta Journal & Constitution v. City of Atlanta Dep’t of Aviation (“AJC
V”), 347 F. Supp. 2d 1310, 1318 (N.D. Ga. 2004). The restitution ordered was:
$240,072.60 from The Atlanta Journal & Constitution; $18,771.60 from The New
York Times; and $90,801.39 from USA Today. Id.
The district court also found that the publishers were “prevailing parties”
under 42 U.S.C. § 1983 and awarded the publishers attorneys’ fees and costs
pursuant to 42 U.S.C. § 1988. However, the court limited these awards to 80% of
the fees and costs incurred, in consideration of the fact that the Department had
prevailed on the issue of whether it could charge revenue-raising rental fees. Id. at
1
The Department requested back rent for the period during which the injunction was in force.
The Department sought restitution based on three rental rates: $20 per newsrack per month from July
1, 1996 to July 31, 1997 plus interest (based on the 1996 plan); $27 per newsrack per month from
August 1, 1997 to September 30, 2003 plus interest (based on the 1997 plan); and $30 per newsrack
per month from October 1, 2003 plus interest (based on the 2003 plan).
7
1326. The attorneys’ fees and costs awarded by the district court were:
$678,487.80 to The Atlanta Journal & Constitution; $16,200.28 to The New York
Times; and $659,016.38 to USA Today. Id.
II. ISSUES ON APPEAL & CONTENTIONS OF THE PARTIES
The Department raises two issues on appeal: (1) whether the district court
committed reversible error in ordering restitution calculated at $15 per month per
newsrack; and (2) whether the district court committed reversible error by
awarding the publishers 80% of their attorneys’ fees and costs.
The Department argues that both the restitution and attorneys’ fee awards
rest on an erroneous factual finding by the district court–that, during the course of
the litigation, the Department could have withdrawn the 1996 plan and
implemented a new plan that addressed the constitutional problems with the 1996
plan. The Department contends that this factual finding is clearly erroneous
because it fails to account for the restrictions placed upon the Department by the
preliminary and permanent injunctions themselves, in particular the restriction
against implementation of a plan that would charge a revenue-raising fee. The
Department further argues that the attorneys’ fees and costs awarded to the
publishers were not discounted sufficiently to account for the Department’s
success on what it now argues was the main issue in the case–whether the
8
Department could charge a reasonable revenue-raising fee for use of the
newsracks.
The publishers answer that the district court did not abuse its discretion in
calculating the restitutionary award of back rent nor in awarding the publishers
80% of their attorneys’ fees and costs. They argue that the Department’s appeal is
basically a request for this court to reverse the district court’s 1998 ruling that the
Department had not put any plan other than the 1996 plan at issue in the litigation.
The publishers also contend that the Department’s continued defense of the 1996
plan in its entirety, throughout the course of the litigation, and the resulting
decision of the en banc court, affirming in part the permanent injunction,
demonstrate that there were important disputed issues other than the revenue-
raising fee in this case and that the publishers were successful in achieving
constitutional protections for themselves and others similarly situated.
III. STANDARDS OF REVIEW
Restitution is an equitable remedy. We review the district court’s decision
to grant or deny equitable relief for abuse of discretion, reviewing underlying
questions of law de novo and findings of fact upon which the decision to grant
equitable relief was made under the clearly erroneous standard. Preferred Sites,
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LLC v. Troup County, 296 F.3d 1210, 1220 (11th Cir. 2002) (citing United States
v. Gilbert, 244 F.3d 888, 908 (11th Cir. 2001)).
We also review the district court’s award of attorneys’ fees and costs for
abuse of discretion, revisiting questions of law de novo and reviewing subsidiary
findings of fact for clear error. See Dillard v. City of Greensboro, 213 F.3d 1347,
1353 (11th Cir. 2000) (citing ACLU v. Barnes, 168 F.3d 423, 427, 436 (11th Cir.
1999)).
IV. DISCUSSION
A. Restitution
The Department takes issue with what it considers to be a low restitutionary
award. It argues that it should have been awarded higher rents for periods when it
would have increased the monthly rent for newsracks but for the injunction.2 The
Department contends that the district court’s award is an abuse of discretion
because it rests on a clearly erroneous finding of fact–that the Department could
have raised the monthly rent above the rate in the 1996 plan during the course of
the litigation but did not do so.
2
The Department makes no argument on appeal about the prejudgment interest ordered by
the district court. Neither does the Department take issue with the district court’s deduction of $5
from the $20 rental rate because the publishers provided newsracks themselves rather than using
racks provided by the Department. The Department’s only complaint regarding the restitution is that
the $20 rental rate chosen by the district court is too low.
10
A review of the district court’s order reveals that it adheres to the principle
that the Department is entitled to restitution of the rent that the Department was
actually enjoined from charging, namely the $20 per month per newsrack rent
proposed by the enjoined 1996 plan. AJC V, 347 F. Supp. 2d at 1317. The district
court properly relied on Supreme Court precedent and the law of this case in
finding that this was the appropriate measure for the restitution. See id. (citing
Arkadelphia Milling Co. v. St. Louis S.W. R. Co., 249 U.S. 134, 145, 39 S. Ct. 237,
242 (1919); AJC IV, 322 F.3d at 1312).
Responding to the Department’s argument that the rent the Department was
enjoined from collecting was not only the rent at the rate proposed in the 1996
plan but also any increased rent that the Department would have sought had it
been able to institute new plans for newspaper distribution, the district court found
that the only object of the injunction was the 1996 plan (which contained a $20 per
newsrack per month rent), not any contemplated plan that was never before the
court. In support of this finding, the district court stated that the Department could
have put a revised plan with an increased rental rate at issue in the litigation but
did not.3 Id.
3
This factual finding is not clearly erroneous; indeed, it is supported by the district court’s
1998 order denying the Department’s motion to dissolve the preliminary injunction. In that order,
the district court held that the 1997 plan was not properly before the court and all but invited the
11
Put simply, the basic problem with the Department’s argument on appeal is
that the district court did not find, as the Department asserts, that the Department’s
failure to implement a new plan prevented it from receiving restitution at a new
plan’s rate. Rather, the district court found that the Department’s failure to put a
new plan (including a new rental rate) at issue in the litigation, to be considered
(and possibly enjoined) by the court prevented it from receiving restitution at a
new plan’s rate. In order for restitution to be due, the collection of the rent must
have been thwarted by the judicial error of an unwarranted injunction. The district
court found that only the rent proposed in the 1996 plan had been enjoined. This
is not a clearly erroneous finding.
The district court also considered other factors in determining the amount of
the restitution. The district court found that allowing restitution in an amount
greater than that proposed by the 1996 plan would constitute a retroactive rate
increase to the publishers; the district court considered such an increase
inappropriate. Id. at 1317. And the district court considered (and rejected)
arguments by the publishers that the equities did not support a restitutionary award
litigants to put a new plan at issue in the litigation, even instructing them on the proper procedural
mechanisms to do so. AJC I, 6 F. Supp. 2d at 1364 (“Because Plaintiffs’ [sic] did not amend their
complaints to challenge the constitutionality of the proposed plan and Defendants did not assert a
counterclaim for declaratory judgment on the constitutionality of the proposed plan . . . the
constitutionality of the proposed plan is not ripe for review.”).
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at all or that, if restitution were ordered, it should be limited to 11% of the
publishers’ revenues–the rate paid by other vendors in the airport. In rejecting
these arguments by the publishers, the district court deferred to the holding in this
court’s en banc opinion that the $20 per month per newsrack rate was reasonable
and constitutionally acceptable.4 Id. at 1318.
All of these are appropriate considerations upon which the district court
properly based its award of restitution. It must be remembered that restitution is
an equitable remedy. The district court did not abuse its discretion in determining
that the equities dictate a restitutionary award of back rent in the amount of $15
per month per newsrack (the 1996 plan’s rental rate of $20 minus the $5 “cost
recovery” fee). Therefore, we find no error in the judgment of restitution.
B. Attorneys’ Fees & Costs
Ruling on the publishers’ motions for attorneys’ fees, the district court
engaged in a familiar three-step process: first, it determined that the publishers had
“prevailed” in the litigation; then, it calculated the “lodestar,” the number of hours
4
Reviewing the fee proposed by the 1996 plan, the en banc court stated, “the fee is facially
reasonable; it does not appear that the Department is applying monopolistic muscle to the
publishers.” AJC IV, 322 F.3d at 1309. The court found that the flat fee imposed by the 1996 plan
was not “dramatically out of proportion” to the fees that previously had been charged publishers.
Id. Thus, it is apparent that this court reviewed not only the constitutionality of a revenue-raising
fee in the abstract but also the reasonableness of the $20 per month per newsrack rent proposed by
the 1996 plan.
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reasonably expended in the legal work on the case multiplied by a reasonable
hourly rate for the services; finally, it adjusted the lodestar to account for the
results obtained by the publishers. See AJC V, 347 F. Supp. 2d at 1319 (citing
Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933, 1937 (1983)). As a part
of the third step in this process, the district court considered the Department’s
ultimate success on the issue of the permissibility of a revenue-raising fee and
therefore determined that the publishers had achieved limited success on their
claims, all of which involved a common core of facts. See id. at 1321, 1323.
In appealing the attorneys’ fees and costs awarded the publishers, the
Department does not take issue with the finding that the publishers were
prevailing parties, with the lodestar calculation, with the finding that the
publishers’ claims arose from a common core of facts, or with the finding that the
publishers’ success is appropriately described as “limited.” Rather, the
Department’s contention is that the district court overvalued the relief achieved by
the publishers in this lawsuit. The Department argues that the district court should
have limited the award to those fees and costs incurred by the publishers through
July 11, 1996, the date the preliminary injunction issued.5 Alternatively, the
5
The Department’s choice of the preliminary injunction date as a cut-off date for attorneys’
fees is not explained in its appellate briefs. This mid-1996 date is particularly perplexing in light of
the Department’s admission that it did not even formulate a new plan (which it maintains was
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Department argues that, even if the publishers are entitled to recover from the
Department some fees and costs that the publishers incurred after the preliminary
injunction, the district court’s decision to reduce the award of total fees and costs
of the publishers by only 20% is reversible error because it does not sufficiently
account for the importance of the issue on which the Department, not the
publishers, prevailed.
The district court found that, despite the Department’s ultimate success on
the issue of the revenue-raising fees, the publishers’ successes with respect to the
other two prongs of the permanent injunction conferred substantial public benefit.
See id., at 1322-23. We agree that the publishers “succeeded in securing . . . vital
first amendment guarantees not only for themselves but also for the public in
general.” Id. at 1323 (citing Villano v. City of Boynton Beach, 254 F.3d 1302,
1308 (11th Cir. 2001)). The publishers were successful in resisting the
Department’s plan to unconstitutionally force them (and other newspaper
publishers) to display Department-determined advertising on the newsracks in the
airport. Plaintiff publishers were also successful in protecting themselves and
constitutional but was never considered by any court) until 1997. As discussed below, the
Department continued to assert and litigate the constitutionality of all aspects of the 1996 plan well
beyond the imposition of the preliminary injunction. Thus, we reject the Department’s invitation
to limit its liability for the publishers’ fees and costs to those incurred in the preliminary injunction
stage of the litigation.
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other newspaper publishers from the unconstitutionally boundless discretion of a
Department official who, under the 1996 plan, would have determined which
publishers could use which (if any) newsracks in the airport. As the district court
recognized, we consider vindication of a constitutional right against a municipal
defendant an important measure of success. See Villano, 254 F.3d at 1307. Thus,
we agree with the district court that the publishers’ success was significant.
In further support of the fee award, the district court found that the
Department continued to litigate the constitutionality of all aspects of the 1996
plan well beyond the imposition of the preliminary injunction. See AJC V, 347 F.
Supp. 2d at 1325-26. The district court found that the Department’s belated
claims that it had been willing to compromise on all issues except the revenue-
raising fee are belied by the record. That finding has support in the record. At no
point in the litigation, in the district court or in this court, did the Department
concede that any aspect of the 1996 plan was improper or that any prong of either
injunction issued by the district court was valid. The en banc court explicitly
acknowledged these facts. AJC III, 277 F.3d at 1326 n.1 (“The City has never
officially withdrawn any aspect of the 1996 plan, never represented that it has
abandoned this [mandatory advertising] aspect of the plan, nor conceded that it
unconstitutionally compelled speech.”). The district court considered the
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Department’s litigation strategy to be “stubborn and contentious,” AJC V, 347 F.
Supp. 2d at 1323; and the district court found that, by continuing to litigate all
aspects of the 1996 plan in the district court and on appeal, the Department was
“largely responsible for the long duration of the litigation and mounting attorneys’
fees.” Id. at 1326. We cannot say that these findings are clearly erroneous.
In light of the constitutional successes achieved by the publishers on behalf
of themselves and others and the litigation tactics of the Department, we hold that
the district court did not abuse its discretion in ordering the Department to pay
80% of the publishers’ attorneys’ fees and costs.
V. CONCLUSION
The judgment awarding restitution is affirmed and the judgment awarding
attorneys’ fees and costs is affirmed.
AFFIRMED.
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