[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR TH E ELEV ENTH C IRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 03-12113 DECEMBE R 16, 2003
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 99-01676-CV-ORL-19-DAB
CLAUD IA SMA LBEIN, as co-personal representative
of the E state of P aul Sm albein,
EDWA RD MIL LIS, as co-personal representative
of the E state of P aul Sm albein,
Plaintiffs -App ellants,
versus
CITY OF D AYT ONA BEA CH,
GAR Y A. S AUL T, Off icer,
T. A. P ERK INS, O fficer,
individu ally and in their offic ial capacity,
DAVID M. WILLIS , Officer,
BRU CE M . MCB RIDE , Officer , individu ally,
Defen dants-A ppellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(December 16, 2003)
Before CARNES, BARKETT and DUHE *, Circuit Judges.
*
Honorable John Malcom Duhe, United States Circuit Judge for the Fifth Circuit, sitting
by designation.
PER CURIAM:
Claudia Smalbein and E dward Millis, pe rsonal re presenta tives of th e Estate
of Paul Smalbein, appeal the denial of their motion for an award of statutory
attorney’s fees following a settlement agreement on their claims with the City of
Daytona Beach and Police Officers Gary A . Sault, T.A. Perkins, David M . Willis,
and Bruce M. McBride (collectively, “Daytona Beach Defendants”). Smalbein and
Millis filed their motion for fees pursuant to 42 U.S.C. § 1988 (b),1 which allows
for a fee a ward to the “prev ailing par ty” in suits b rough t for the v indication of civil
rights. In respon se, the City of Day tona Be ach requ ested an e videntiar y hearing to
determin e the mer its of Pau l Smalb ein’s 42 U .S.C. § 1 983 claim s in orde r to
establish w hether S malbein and M illis were e ligible for § 1988 (b) attorn ey’s fees.
The Magistrate Judge recommended that the motion for attorney’s fees be granted
but that the evidentiary hearing be denied. The district court denied both the
motion for attorn ey’s fees an d eviden tiary hearin g. Becaus e we fin d that Sm albein
and Millis are prevailing parties under 42 U.S.C. § 1988, we reverse the district
court’s denial of the motion for attorney’s fees and remand for the purpose of
1
§ 1988 (b) provides that:
In any action or proceeding to enforce a provision of sections . . . 1983 . . . of this
title . . . the court, in its discretion, may allow the prevailing party . . . a
reasonable attorney’s fee as part of the costs . . . .
2
holding an evide ntiary hea ring on the awa rd of atto rney’s fee s and co sts to
Smalb ein and M illis per the te rms of th e parties’ se ttlement ag reemen t.
I. BACKGROUND
Paul Smalbein, the original plaintiff, filed a ten-count complaint against the
City of Daytona Beach, the City of Daytona Beach Police Department, and various
police of ficers. Sm albein alleg ed that his constitutio nal rights under th e First,
Fourth, Eighth, and Fourteenth Amendments and the Civil Rights Act of 1871, 42
U.S.C . § 1983 , were v iolated fo llowing his arrest in a night clu b parkin g lot.
Specific ally, Sma lbein claim ed that he was de prived o f his due process rights, his
right to be free of excessive force, and the right to reasonable medical care under §
1983. He also alleged state law claims of false imprisonment, battery, and
intention al infliction of emo tional distr ess. The compla int was la ter amen ded to
allege eleven counts and named Claudia Smalbein and Edward Millis as plaintiffs
after the death of Paul Smalbein.2
After mediation, the parties reached a settlement agreement whereby the
City of Daytona Beach agreed to pay Smalbein and Millis $25,000. All issues
raised in the amended complaint were settled except for payment of attorney’s fees
and taxa ble costs, a nd the p arties jointly noticed th e district co urt of the ir
2
We note that Paul Smalbein’s death was unrelated to the facts of this case.
3
agreement. The district court dismissed the case with prejudice and referred any
dispute as to the attorney’s fees and costs to the Magistrate Judge for a report and
recommendation. The court later amended its order and dismissed the case without
prejudic e until the D aytona B each City Council appro ved the s ettlement.
Thereafter, Smalbein and Millis filed a motion for attorney’s fees under §
1988 (b). In response, the Daytona Beach Defendants filed a request for an
evidentiary hearing on the merits of the § 1983 claims. Both the motion and the
request for an evidentiary hearing were denied as premature because a final
settlemen t had no t yet been r eached.
After approval by the City of Daytona Beach and disbursement of the
$25,000 to Smalbein and Millis, the district court incorporated the settlement
agreement by reference into its order of dismissal and retained jurisdiction for the
enforceme nt of its terms. Sm albein and M illis re-filed their motion for attorney’s
fees, and the Daytona Beach Defendants responded again with a request for an
evidentiary hearing on the merits of the § 1983 claims. The Magistrate Judge
recommended that the evidentiary hearing be denied because the court should not
be “entangled” in protracted litigation after the substantive issues of a case have
been resolved. The Magistrate Judge also recommended that the motion for
attorney’s fees be granted because the “significant” payment to Smalbein and
4
Millis of $25,000 and the disposal of Paul Smalbein’s § 1983 claims against the
Daytona Beach Defendants made them the prevailing party under § 1988 (b). The
district court agreed with the Magistrate Judge that an evidentiary hearing on the
merits of the § 1 983 claims w as unnecessa ry but rejected the M agistrate Judge’s
recomm endation that attorn ey’s fees b e paid.
II. STANDARD OF REVIEW
The proper standard for an award of attorney’s fees is a question of law that
we review de novo. Logg erhead T urtle v. C ounty C ouncil, 307 F.3d 1318, 1322
(11th Cir. 2002) (citing Barnes v. Broward County Sheriff’s Office, 190 F.3d 1274,
1276-77 (11th Cir. 1999)). Any factual findings made relevant to that question are
review ed for cle ar error. Id. (citing Head v. Medford, 62 F.3d 351, 354 (11th Cir.
1995)). A district court’s decision on whether to award attorney’s fees is reviewed
for abu se of disc retion. Id.
III. DISCUSSION
Under the “American Rule,” United States courts follow “‘a general practice
of not aw arding f ees to a pr evailing p arty’” in a su it. Buckhannon Board & C are
Home, Inc., v. W. V a. Dept. of Health & H uman Res., 532 U.S. 598, 602 (2001)
(quoting Key Tronic Corp. v. United States, 511 U.S. 809, 819 (1994)). However,
where Congress has given courts “explicit statutory authority” under “fee-shifting”
5
statutes, the y may aw ard attorn ey’s fees to the prev ailing par ty. Id. Under § 1988
(b), Congress enumerated § 1983 as one of these fee-shifting statutes; therefore,
Smalbein and Millis are eligible to seek an award of attorney’s fees on Paul
Smalbein’s § 1983 civil rights claims under § 1988 (b) provided that they meet the
test of being a “prevailing party.” The question here is whether Smalbein and
Millis qualify as the prevailing party when their claims were settled pursuant to an
agreement that the district court then incorporated into its order of dismissal and
over which it retained jurisdiction for the enforcem ent of its terms.
It is now established that in order to be considered a prevailing party under §
1988 (b), there must be a “court-ordered . . .‘material alteration of the legal
relationship of the parties’ necessary to permit an award of attorney’s fees.”
Buckhannon, 532 U.S. at 604 (quoting Tex. State Teachers Ass’n. v. Garland
Indep. S ch. Dist., 489 U .S. 782 , 792-9 3 (198 9)). In o ther wo rds, there must be :
(1) a situation where a party has been awarded by the court “‘at least some relief on
the merits of his claim’” or (2) a “jud icial imprimatur on the change” in the legal
relationsh ip betw een the p arties. Id. at 603, 605 (quoting Hewitt v. Helms, 482
U.S. 755, 760 (1987)). Thus, one can be a prevailing party, for example, under an
enforce able judg ment on the merits or und er a cour t-ordere d conse nt decree . Id. at
604. Either option constitutes a material alteration in the legal relationship of the
6
parties. One may be a prevailing party through formal entry of a consent decree as
to a priva te settlemen t agreem ent because the agreement has the necessary judicial
approval and oversight to be considered an alteration in the legal relationship of the
parties w arranting an awa rd of atto rney’s fee s under § 1988 (b). Mahler v. Gagne,
448 U .S. 122 , 129 (1 980).
The Supreme Court has also held that a federal court may have jurisdiction
to enforce the terms of a private settlement agreement where a court has embodied
the agree ment in a dismissa l order o r has spe cially retaine d jurisdic tion ove r it.
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U .S. 375 , 381-8 2 (199 4).
In applying this precedent, we have held in this Circuit that even where there has
been no formal e ntry of a c onsent d ecree follo wing a settlemen t agreem ent, a
district cou rt may still aw ard attorn ey’s fees to the prev ailing par ty as long as: (1) it
has incorporated the terms of the settlement into the final order of dismissal or (2)
it has exp licitly retained jurisdictio n to enfo rce the term s of the se ttlement.
American Disability Ass’n v. Chmielarz, 289 F .3d 131 5, 1320 (11th C ir. 2002 ).
Under either option, the district court “clearly establishes ‘judicially sanctioned
change in the legal relationship of the parties,’ as required by Buckhannon, because
the plaintiff thereafter may return to court to have the settlement enforced.” Id. A
formal consent decree is unnecessary because the incorporation of the settlement
7
into a court order or the explicit retention of jurisdiction over the terms of the
settlement are the “functional equivalent of an entry of a consent decree.” Id.
This rule is consistent with many of our sister circuits who have likewise
concluded that judicial action with sufficient judicial imprimatur other than a
judgment on the merits or a court-ordered consent decree may allow for an award
of attorn ey’s fees. See, e.g., Roberson v. Giuliani, 2003 WL 222327 80 (2d. Cir.
2003) ; Barrios v. C al. Interscholastic F ed’n, 277 F.3d 1128 (9th Cir. 2002); Oil,
Chem. & Atomic Workers Int’l Union v. Dep’t of Energy, 288 F.3d 452, 458-59
(D.C. Cir. 2002) (finding that the parties’ stipulation and order of dismissal was
not enough to “meaningfully alter the legal relationship of the parties,” but had
they don e so, Buckhannon would not prec lude an a ward o f fees); Smyth v. Rivero,
282 F .3d 268 (4th Cir . 2002) ; Truesdell v. Philadelphia Hous. Auth., 290 F.3d 159
(3d Cir . 2002) . Cf. Christina A. v. Bloomberg, 315 F.3d 990, 993 (8th Cir. 2003)
(“Buckhannon, as indicated, mak es it clear that a party prevails only if it receives
either an e nforcea ble judg ment on the merits or a con sent decr ee.”) (em phasis
added) .
In this case, the Magistrate Judge and the district court correctly concluded
that because the final settlement between the parties was incorporated by reference
into the o rder of d ismissal and the court retained jurisdiction to enforce the terms
8
of the settlement agreement, it judicially altered the legal relationship of the
parties, and thus functioned as the equivalent of a consent decree under Chmielarz.
Although the $25,000 had been paid to Smallbein and Millis, the court retained
jurisdiction to enforce all other terms in the settlement agreement including those
related to the release and discharge of all claims by both parties, 3 the promise by
Smalbein and M illis to pay any outstanding medical bills,4 the indemnification
3
The parties’ settlement agreement provides that:
Smalbein hereby forever releases and discharges [Daytona Beach Defendants],
and their past and present agents, servants, representatives, elected officials,
attorneys, and their successors, legal representatives and assigns (all the
aforementioned individuals and entities are hereinafter referred to as
“Releasees”), from any and all claims, actions, causes of action, demands, rights
damages, losses, loss of services, lost profit or income claim, punitive damage
claim, and any other claim or loss whatsoever that Smalbein now has or which
may hereafter accrue on account of or in anyway growing or arising out of
(directly or indirectly) any claim against Releasees arising out of the arrest and
detention of Paul Smalbein at anytime, or otherwise growing or arising out of any
of the facts, circumstances, or allegations as set forth in any complaint filed in the
United States District Court, Middle District of Florida, Orlando Division, Case
Number 6:99-CV 1676-ORL-19DAB. . . .
Moreover, Releasees agree that they will not pursue any sort of claim against
Smalbein, nor will they pursue any sort of claim against Smalbein for anything
that has occurred before the signing of this release. Releasees hereby agree that
they release and discharge Smalbein in the same manner that Smalbein has
released and discharged Releasees as set forth above.
Mutual Complete Release of Claims, May 9, 2002, at 1, 3.
4
The parties’ agreement states, in relevant part, that:
As a further consideration and inducement for this compromise settlement,
Smalbein warrants that there are no outstanding physician, hospital, or other
medical bills which were incurred as a result of the aforementioned incident, or if
there are any such medical bills outstanding, that those medical bills will be paid,
9
clause for any medically related claims, judgments, demands, or expenses which
may subsequently arise out of the arrest and detention of Paul Smalbein,5 as well as
the payment of attorney’s fees. 6
Although holding that the parties’ settlement agreement was the equivalent
of a con sent decr ee, the distr ict court n onethele ss denied attorney’s fees to
Smalbein and Millis finding that the “overarching motif of § 1988 jurisprudence”
is that “the vindication of a plaintiff’s rights on the merits of her claims is a
condition precedent to any award of attorney’s fees.” Order of District Judge,
March 25, 2003, at 10. We disagree with that determination because a party may
be considered a prevailing party under a consent decree without any admission of
liability on th e merits o f the und erlying cla ims or a requirem ent that the other pa rty
satisfied, and discharged from the settlement proceeds.
Mut. Complete Rel. of Claims at 3.
5
The settlement agreement further provides that:
Smalbein further represents and warrants that the undersigned agree to indemnify,
defend, and save harmless Releasees from any and all claims, judgments,
demands, or expenses whatsoever which any physician, health care provider,
hospital, governmental agency, Blue Cross/Blue Shield, insurance company,
medicare, medicaid, HMO, or anyone else may hereafter bring or assert on
account of any injury or damage resulting from the subject matter of the
contentions and claims above mentioned.
Id. at 3.
6
See supra note 9.
10
modify a policy, procedure or practice. All that is necessary is that some relief be
award ed by the court. 7 Buckhannon, 532 U .S. at 603 . Buckhannon does not
require explicit vindication on the merits of the claim in additio n to the parties
settlement agreement in order for Smalbein and Millis to be considered as the
prevailing party.
Buckhannon provides that when there is either an enforceable judgment on
the merits or a settlement agreement enforced through a court-ordered consent
decree, a material alteration of the legal relationship of the parties occurs, and the
test to be d eemed a prevailin g party h as been m et. Utility Automation 2000, Inc., v.
Choctawhatchee Elec. Coop., Inc., 298 F.3d 1238, 1248 (11th Cir. 2002). Although
a consent decree does no t always in clude an admissio n of liability on the m erits by
the defen dant, it no netheless meets the test. Buckhannon, 532 U.S. at 604
(emphasis added). “Nothing in the language of § 1988 conditions the District
Court’s power to award fees on full litigation of the issues or on a judicial
determination that the plaintiff’s rights have been violated . . . the Senate Report
expressly stated that ‘for purposes of the award of counsel fees, parties may be
considered to have prevailed when they vindicate rights through a consent
7
The district court would be justified in denying an award of attorney’s fees only “where
the plaintiff’s success on a legal claim can be characterized as purely technical or de minimus.”
Tex. State Teachers Assoc., 489 U.S. at 792.
11
judgment . . . .’” Mahler, 448 U.S. at 129. What is important is that under a
settlement agreement that is the functional equivalent of a consent decree, “the
plaintiff thereafter may return to court to have the settlement enforced.”
Chmielarz, 289 F .3d at 13 20. “[I]n the case of court-approved settlements and
consent decrees, even if there has been no judicial determination of the merits, the
outcome is at least the product of, and bears the sanction of, judicial action in the
lawsuit.” Buckhannon, 532 U.S. at 618 (Scalia, J., concurring). As held by the
Supreme Court, “if the plaintiff has succeeded on ‘any significant issue . . . which
achieve[d] some of the benefit the parties sought in bringing suit,’ the plaintiff has
crossed the threshold to a fee award of some kind.” Tex. State Teachers Ass’n.,
489 U.S. at 791-92 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.
1978) .
In this case, Paul Smalbein’s original complaint solely sought relief in the
form o f mone tary dam ages for the § 19 83 claim s. Und er the settlem ent agree ment,
Smalbein and Millis received monetary damages on Paul Smalbein’s § 1983
claims. This is sufficient for them to be considered the prevailing party. “[T]he
touchstone of the prevailing party inquiry must be the material alteration of the
legal relationship of the parties . . . where such a change has occurred, the degree
of the pla intiff’s ov erall succe ss goes to the reaso nablene ss of the a ward . . . n ot to
12
the availability of a fee award vel non.” Id., 489 U.S. at 792-93.
Notw ithstandin g their en titlement to fees as prevailing p arties, the City of
Dayton a Beach argues th at under the settlem ent agree ment S malbein and M illis
must still have a trial on the merits of the § 1983 claims and prove them
meritorious before they may be awarded re asonable attorney’s fees and costs. 8
Thus, we are confronted with a document that purports to be both a settlement and
not a settlement. It is clear that both parties to this agreement knew and accepted
the fact tha t the $25 ,000 w hich w as paid w as intend ed only to compe nsate
Smalbein and Millis and did not include attorney’s fees and costs. At the same
time, both parties knew and accepted the fact that attorney’s fees and costs were
8
The parties’ settlement agreement states:
The parties stipulate and agree that they will litigate whether Frederick C.
Morello, P.A. and/or Smalbein are entitled to collect attorney fees and costs under
the causes of action pled in the most recent complaint filed in the pending
litigation (referenced above). The parties stipulate that the issue of entitlement to
attorney fees and costs will be submitted to the Federal Court to determine
whether Frederick C. Morello, P.A. or Smalbein would be entitled to collect
attorney fees and costs under the causes of action last pled in the lawsuit and the
parties further stipulate to an evidentiary hearing on the causes of action last pled
to determine their merit, or lack thereof, to determine the issues of Plaintiff’s
entitlement to attorneys fees. . . .
The parties hereby agree that this matter can be heard either by the District
Court Judge, or alternatively the Federal Magistrate Judge. . . . The parties
further agree that at the trial/evidentiary hearing regarding entitlement to attorney
fees and costs, the parties can present evidence either through witness testimony
or deposition testimony. A jury trial is waived by both sides. (emphasis added)
Mut. Complete Rel. of Claims at 1-2.
13
being sought by Smalbein and Millis and conditioned an award upon the court
retaining jurisdiction in order to determin e wheth er Sma lbein’s claim s had m erit. 9
While the settlement agreement in this case is unusual, we find that the terms
at issue regarding attorney’s fees and costs are a material part of their agreement
and are neither invalid nor unenforceable. We have no basis under § 1988 (b) for
ignorin g the pro visions th at the partie s bargain ed for in an arms -length tr ansaction .
The Supreme Court has held that under the language of § 1988 and its legislative
history, “while it is undoubtedly true that Congress expected fee shifting to attract
competent counsel to represent citizens deprived of their civil rights, it [did not
render] them nonwaivable or nonnegotiable; instead, it added them to the arsenal
of remedies available to combat violations of civil rights . . . .” Jeff V. Evans v.
Jeff. D., 475 U.S. 717, 731-32 (1986) (upholding an agreement in a class action
suit that conditioned settlement upon a waiver of statutory attorney’s fees under 42
U.S.C. § 1988).
9
As stated in the parties settlement agreement:
This release, however, does not include any claim that Smalbein or Frederick C.
Morello, P.A. may have for attorney fees and costs . . . If the Federal Court
determines that Frederick C. Morellos, P.A. or Smalbein are entitled to collect
attorney fees and costs, the Federal Court will also determine the amount unless
the parties stipulate to an amount before the entitlement hearing. The Plaintiff
has agreed to limit said attorney fees to no more than $80,000.00 for the trial
court award if this settlement is approved and only the fee issues remain.
Mut. Complete Rel. of Claims at 1, 2.
14
Accor dingly, w e find tha t the district c ourt erre d in hold ing that S malbein
and Millis were not the prevailing parties under § 1988 (b), and REVERSE and
REMAND for the district court to hold an evidentiary hearing on the merits of
Smalbein’s § 1983 claims with regard to a reasonable award of attorney’s fees and
costs.
15
CARNES, Circuit Judge, concurring:
I agree with the Court that the settlement agreement altered the legal
relationship of the parties to a sufficient extent that the plaintiff is a prevailing
party for purposes of 42 U.S.C. § 1988. As a result, the plaintiff would have been
entitled to attorney’s fees but for one provision in the settlement agreement. Under
that provision attorney’s fees and costs are to be awarded only if the district court
decides after an evidentiary hearing that plaintiff’s claims had merit. The Court
correctly remands the case for that evidentiary hearing, because the attorney’s fees
provisio n in the se ttlement ag reemen t is not inv alid or un enforce able. I w rite
separately to explain in more detail wh y it is not.
The settlement agreement in this case is unusual. We do not often see the
parties stipulate to the payment of an amount in settlement of the liability issue,
while at the same time agreeing to condition attorney’s fees and costs on a decision
by the dis trict court o f wheth er the plain tiff’s claims had me rit. That is e xactly
what the parties in this case did, and for good measure they also agreed to a cap of
$80,00 0.00 on the amo unt of atto rney’s fee s the distric t court co uld aw ard.
Odd though it be, there is nothing illegal about this provision in the
settlement agreement that the award of attorney’s fees will be decided by the
district court based upon the merits of claims for which liability has been
16
compromised and settled by the parties. The provision is not void on the theory
that it conf licts with 4 2 U.S.C. § 19 88, wh ich is the atto rney’s fee s statute
applicable to 42 U.S.C. § 1983 cases. The Supreme Court’s decision in Evans v.
Jeff D., 475 U .S. 717 , 106 S . Ct. 153 1 (198 6), mak es it clear tha t the prov ision is
entirely co nsistent w ith § 198 8.
In Jeff D. the parties settled a class action lawsuit seeking injunctive relief
by agreeing to virtually all of the relief the plaintiffs sought, but they also agreed
that the pla intiffs w ould no t be awa rded an y attorney ’s fees or c osts. Id. at 722,
106 S . Ct. at 153 4-35. T he plaintif fs filed a m otion req uesting th e district co urt to
approve th e settlement excep t for the prov ision denying them costs an d attorney’s
fees, and to allow them to present a bill of costs and fees for consideration by the
court. Id. at 723, 106 S. Ct. at 1535. Treating the provision barring an award of
costs and fees as a material part of the settlement agreement, the district court
enforced that provision just as it did other parts of the settlement. The result was
that even though the plaintiffs clearly were prevailing parties in the lawsuit for
purpo ses of § 1 988, the y received no costs or attorn ey’s fees. Id. at 723-24, 106 S.
Ct. at 1535.
The Ninth Circuit reversed and remanded to the district court for
determination of reasonable attorney’s fees, concluding that, in the absence of
17
unusual circumstances, “a stipulated waiver of all attorney’s fees obtained solely as
a condition for obtaining relief for the class should not be accepted by the court.”
Jeff D. v. Evans, 743 F .2d 648 , 652 (9 th Cir. 19 84). Th e Ninth Circuit b ased its
holding on two grounds. First, the Court held that simultaneous negotiation of
class action settlements and attorney’s fees was not appropriate absent special
circums tances. Id. The court’s reasoning was that class representatives should not
be faced with the choice between obtaining relief for the class through settlement
but forgoing attorney’s fees, or rejecting the offered relief for the class in the hope
of eventually recovering fees that will satisfy any personal liability the class
represen tative may have to c ounsel. Id.
The second basis for the N inth Circuit’s Jeff D. decision was that Congress
had intended fee-shifting to be an induce ment for bringing valid civil rights cases,
and therefore “a successful section 1983 claimant ‘should ordinarily recover an
attorney’s fee un less special circum stances wo uld render su ch an awa rd unjust,’”
and no such “sp ecial circum stances” w ere prese nt in that ca se. Id. at 651 (quoting
from th e legislative history in cident to e nactmen t of § 19 88 (citatio n omitted )).
The Court remanded with instructions for the district court to award costs and
attorney’s fees to the plaintiffs, id. at 652, the same as though the settlement
agreem ent had n ot barred them.
18
In other words, the Ninth Circuit in Jeff D. reached the same conclusion the
plaintiff would have us reach in this case: a provision limiting the award of
attorney’s fees to a p revailing party is un enforce able beca use it is inco nsistent w ith
§ 1988, an d according ly the provision should be ig nored. Th e Ninth C ircuit’s
decision would be persuasive authority for the plaintiff’s position in this case but
for the fa ct that the S uprem e Cour t reversed it.
In the course of reversing the Ninth Circuit’s decision in Jeff D., the
Supreme Court expressed its belief that “a general proscription against negotiated
waiver of attorn ey’s fees in exchan ge for a s ettlement o n the me rits wou ld itself
impede vindication of civil rights . . . by reducing the attractiveness of settlement.”
475 U .S. at 732 , 106 S . Ct. at 154 0. More importantly for present purposes, the
Supreme Court in Jeff D. expressly rejected the contention that either the text or
the legislativ e history b ehind § 1988 is inconsis tent with attorney’s fees wa ivers in
settlemen t agreem ents. Id. at 731-32, 106 S. Ct. at 1539-40.1
As for the text of § 1988, the Supreme Court explained that the language
1
Although the Supreme Court does not expressly address “costs” as distinct from
“attorney’s fees” in its discussion of legislative intent, a later statement in its opinion indicates
that a waiver of “costs” is also permitted under § 1988. See Jeff D., 475 U.S. at 733, 106 S. Ct.
at 1540 (“To promote both settlement and civil rights, we implicitly acknowledged in Marek v.
Chesny the possibility of a tradeoff between merits relief and attorney’s fees when we upheld the
defendant’s lump-sum offer to settle the entire civil rights action, including any liability for fees
and costs.”). And, of course, there is no good reason to permit waiver or conditioning of fees but
not costs.
19
Congress used had “neither bestowed fee awards upon attorneys nor rendered them
nonwaivable or nonnegotiable,” but instead had simply “added them to the arsenal
of reme dies availa ble to com bat violatio ns of civ il rights, a goal not in variably
inconsistent with conditioning settlement on the merits on a waiver of statutory
attorney’s fees.” Id. As for legislative h istory, the S uprem e Cour t noted th at in
enacting § 1988 Congress had specifically rejected a proposal that would have
made th e award of attorn ey’s fees m andator y, and the Court r easoned that it wo uld
“strain prin ciples of s tatutory in terpretatio n to con clude tha t Cong ress inten ded to
utilize fee non-negotiability to achieve the purposes of section 1988.” Id. at 732
n.22, 106 S. Ct. at 1540 n.22. The S uprem e Cour t’s statemen ts and rea soning in
Jeff D. are flatly inc onsisten t with pla intiff’s po sition in th is case.
It is also impossible to square that position with the result in Jeff D. If it is
permiss ible for th e parties to a settlemen t agreem ent to com pletely disp ense w ith
attorney’s fees even though the plaintiff is a prevailing party under § 1988 and
regardless of the merits of the plaintiff’s claims, and we know from Jeff D. that it
is, then it must be p ermissible for th e parties to cond ition the award of attorney’s
fees on whether the plaintiff’s claims had any merit. In Jeff D. the Supreme Court
recognized as “undoubtedly true” the fact that Congress in enacting § 1988
“expected fee shifting to attract competent counsel to represent citizens deprived of
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their civil rights.” Id. at 731, 106 S. Ct. at 1539 (citation omitted). In light of that
purpose, it would be illogical to permit the parties to agree in a settlement that the
plaintiff is n ot to receiv e attorney ’s fees eve n thoug h he has been de prived o f his
civil rights , but not p ermit them to agree th at the plain tiff will rec eive fees o nly if
he can sh ow a d eprivatio n of his c ivil rights.
The agreem ent in this case, keyed as it is to the merits of th e plaintiff’s
claims, is m ore con sistent w ith the con gression al purpo se behin d § 198 8, whic h is
to encourage the bringing of arguably meritorious claims, than is the agreement the
Supreme Court honored and enforced in Jeff D. Under the agreement in this case,
the plaintiff will receive attorney’s fees if the claims he brought are meritorious,
while under the agreement enforced in Jeff D. the plaintiff would not. It makes no
sense to enforce a provision that detaches attorney’s fees from the merits of the
claims brought, as the Supreme Court did in Jeff D., yet refuse to enforce one that
links fees to their merits, as plaintiff would have us do. If there is to be any
difference, it ought to run the other way. Given our obligation to follow Supreme
Court decisions, howe ver, the m ost we c an do is a void the anoma ly of a reg ime in
which a Jeff D. type agreement is permitted while the type of agreement reached
in this case is not.
There are, of course, substantial practical differences between the type of
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agreement in Jeff D. and the one in this case. The type of agreement before the
Court in Jeff D. brings the entire litigation to a close, a blessed event in our judicial
system. The type of agreement in this case merely narrows the issues to be
litigated, which is not as much of a blessing but is better than having no agreement
at all. High-low settlement agreements, which leave the merits of a case for trial
but brac ket the pa rties’ risk o f litigation, a re not un usual, see, e.g., Hoops v.
Watermelon City Trucking, Inc., 846 F .2d 637 , 639 (1 0th Cir. 1 988), an d this
agreement is not unlike one of those. The principal terms of the parties’ agreement
in this case are that: there would b e a determination of the merits of the plaintiff’s
claims, bu t it would be mad e by the ju dge inste ad of a ju ry; the plain tiff wou ld
receive exactly $25,000.00 in damages, regardless of what the judge determined
about the merits; the defendants would pay the plaintiff attorney’s fees if the judge
determin ed there w as merit to his claims ; and any attorney’s fees aw arded co uld
not exce ed $80 ,000.00 in any ev ent. 2
However unusual it is, this settlement agreement did streamline the issues
and pro vide an e xpeditio us way of resolv ing the re maining ones by bench tr ial.
The agreement removed from contention: the issue of whether any compensatory
2
There was also a provision in the agreement under which the plaintiff warranted that
there were no medical bills outstanding, to pay out of the settlement proceeds any that might be,
and to indemnify the defendants against any claims that might arise against them because of
related medical bills.
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damages should be awarded to the plaintiff, the issue of how much those damages
should be, and the issue of whether the plaintiff might be entitled to more than
$80,000 .00 in attorney’s fe es. And it left the d etermination o f whether a ttorney’s
fees should be awarded to turn on the merits of the plaintiff’s claims, which were
to be decided by the court instead of a jury. From the judiciary’s perspective,
what the parties agreed to is not as desirable as a full settlement, but it beats a trial
by jury of all liability and damages issues followed, if the plaintiff prevails, by an
attorney’s fees pro ceeding with no cap on th e amou nt to be aw arded.
None of this means that the district court was required to accept the
settlement agreement. Rejecting it in toto probably would n ot have been an abuse
of discretion. By the same token, the district court probably could have
conditio ned its acc eptance o f the agre ement o n mod ification o f one or more o f its
terms, so long as the court gave the parties a choice between either going along
with any modifications the court thought appropriate, or proceeding with the
litigation w ithout the agreem ent.
What the district court could not do about the settlement agreement without
abusing its discretion is take an agreement hammered out between represented
parties an d delete o ne of its cr ucial term s, a term th at one pa rty barga ined har d to
get, without giving that party an opportunity to withdraw from the altered
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agreem ent. See Jeff D., 475 U.S. at 726, 106 S.Ct. at 1537 (“the power to approve
or reject a settlement negotiated by the parties before trial does not authorize the
court to r equire th e parties to accept a se ttlement to which they hav e not agr eed”).
It is too late to give the parties an opportunity to back out of the agreement now,
because the defendants have paid the agreed upon sum to settle the claims to the
plaintiff, an d as plain tiff’s coun sel has inf ormed us, that m oney is g one. Th e only
proper thing that we can do now is what the Court does, which is to remand the
case for th e district co urt to carr y out the te rms of th e agreem ent that rela te to
attorney’s fees.
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Claudia Smalbein v City of Daytona Beach
Court: Court of Appeals for the Eleventh Circuit
Date filed: 2003-12-16
Citations: 353 F.3d 901
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