The Honor able Thoma s M. Rose, United States District J udg e for the Southern District * of Ohio, sitting by

desig nation. NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 07a0061n.06 F iled: Janu ary 24, 2007 No. 06-1381 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT

BRONCO’ S ENTERTAI NMENT, L TD. and ) RAWS ONVI L L E L AND COMPANY, I NC., ) ) Pla int if fs -A pp e lla nts , )

) v. ) ON APPEALFROM THE U NI TED ) STATES DI STRI CT COURT FOR THE CHARTER TOWNSHI P OF VANBU REN, ) EASTERN DI STRI CT OF MI CHI GAN ) A T D E T R O IT Def endant- Appellee

. ) Be fo re : BO GG S , C h i ef

J u d ge; C OO K, C i rc u i tJ u d ge a n d R OS E , Di s t ri ct J u d ge * Ros e , D istri c t Judg e . Pl a int if fs /App e lla

nts B ro nc o’ s Ente rt a inm e nt, L td. and Raws on vil le L and Company , I nc. appe al the district cour t’s denia l of pre vailing pa rty status and the re sulting de nia l of a tto rn e y fe e s f or the ir c ha lle ng e to c ert ain a du lt s pe e c h li c e ns ingpr ov isi on s in De fe ndant /A pp ell ee C hart er To wns hi p o f Van Buren ’s c od e of o rdi nan ces. Bron co’s En ter ta inm e nt, L td. and Raw s o nville L and Company , I nc. lost on some of their c laims but obtained a judg ment striking down two pr ovision s o f Van Bure n’s local lice nsing or dinance . For the re asons indicated below, we RE VE RSE and REMAND

. I. BACK GR OUND This c ase is be fore this c ourt for the third time. The underlying matter is a civil rig hts actionbroug ht by Plaintiffs Bronc o’s Enter t ai nment, L td. and Rawsonville L and Company , I nc. (the “P l ai n t i ffs”) ag ainst the Charter Township of Va

n Bur en (the “Township”) alleg ing that the Township’s licensingand z oning ordinance s violated t he F irst and Four teenth Amendme nts. The Plaintiffs planned to open a topless bar in Va

n Bur en Township. The United States District Court f or the Easter

n District of Michig an initially dismiss ed the

a c tio n f or la c k o f s tand ing

. Th e Pla int if fs a pp e a le d. On

a pp e a l, t his c ourt su sta ine d th e ir

ri g ht t o challeng e the c onstitut ionality of the Township’s lice nsing a nd zoning ordinanc es. Bronco’s Entertainment, Ltd. v. Charter Tow nship of Van Buren , 2 9 F e d. Ap p’ x. 31 0, 20 02 WL19 39 32 (6 th Cir. Feb. 5, 2002) (“

Br on c o’ s I ”). On re mand, the Dist ri ct Court entere d judgme nt for the Township on the merits and The Plaintiffs ag ain appealed. This court affirmed in part and reve rsed in par t. Br on c o’

s E nte rta inm e nt, Ltd. v. Charter Township of V a n B u r en , 421 F.3d 440, 443 ( 6th Cir. 2005) (“Bronco’s I I ” )

. It explained: We are not persuade d that the township’s site plan and “s p ec i al ” approval require ments operate as prior restraints that violate the F irst Amendment. Site plan approva l is a g ener ally

applicable require ment that does not seek to lim it speech, a nd the “ sp e c ia l” app rov al pr oc e ss i s su bje c t to pr oc e dura l sa fe g ua rd s th a t a de qu a te ly protec t ag ainst censor s h i p . Nor a re w e per suaded that the L iquor Control Com mis sio n’ s r e qu ir e me nt of a “ top le ss a c tiv ity pe rm it” a ff

e c ts this c a se [sin c e it a pp lie s o nly

in c ounti e s w itha

po pu latio n o f 9 5, 00 0 o r l e ss, and W ay ne c ounty ( w h e r e V anB u r e nis lo c a te d ) h a s mo r e th an9 5 , 0 0 0 p e o p le ]. We are satisfied, moreove r, that the township’s g eog raphic restric tions on se xua lly or ie nte d bu sin e sse s are a ime d at th e se c on da ry e ff e c ts o f s uc h b us ine sse s, are n ar ro wly

tailored to ser

ve a substantial g overnme nt interest, and lea ve open alternative channe ls for er o ti c e xp r e s s io n . An d we se e nothing unconstitutional about a 18 2- da y land us e mor a tor ium

a do pte d b y

the towns hip ; the mor a tor ium wa s p ut i n place for a

proper purpose a

nd not for suppre ssion of the plaintiff’s spee ch. We c o n c l u d e , h o w e v e r , t h a tt h e t o w n s h i p ’ s s y s t e mo f l i c e n s i n g s e xua lly oriented businesse s is unc onstitut ional insofar as it authorizes discretionar y denial of a li c e n s e w i t h o u tp r o v i d i n g f o r a c c e l e r a t e d

j u d i c i a l r e v i e w . A b s e n tana p p r op ri a te j u d i c i a l r e v i e w p r o c e d

u r e , w e ar e c o mp e l l e d

t o s e v e r a n d i nv a l i d a t e t h e d i s c r e t i o n aryde nia l f e atur e of the lic e ns ingor din anc e . T he re st of the or din anc e wi ll b e le ft int a c t.Id. The c ourt specif ically held that two par

ts of the Township’s licensingordinanc e g ave the licensing officia ls too much discretio n t o b e co n sistent with the First Amendment abse nt an

acc eler ated- revie w provi s i o n . Parag raph 22- 403(i)(7) “re quires a judg ment as to whethe r an applicant [for a

sexually -oriente d-business license ] who has be en connec ted with a sexually oriented business during the past y ear ‘has de monstrated an ina

bility to operate or mana g e a sex ually oriented business premises in a peace ful and law-abiding manner .’” Id. at 449 (quoting Van B uren Code of Ordinanc es § 22-403( i)(j)). Subsec tion 22-403(j) “a uthorizes denial of a lice nse if ‘the chief of po lic e de te rm ine s th a t the a pp lic ant is p re se ntl y

un fi t to op e ra

te a se xua lly or ie nte d b us ine ss d

ue to the applicant’s overa ll criminal record, reg ardle ss of t he date of any criminal convic tion.’” Id. at 448 (quoting Van B uren Code of Ordinanc es § 22-403(

j)). Relying on a

s ev er ab i l i t y

clause in the licensing ordinanc e, the c ourt struck down these two provisions but upheld the rest of the or dinance

. Id. at 449. On Octobe r 10, 2005, bac k in the district court, the Plaintiffs and the Township both moved fo r atto rn e y ’s fe e s p ur su ant t o 4 2 U .S. C. § 19 88 . T he Pla int if fs re qu e ste d a

tot a l of $5 41 ,2 57 .5 0 in fee s and an a dditional $376 in ex penses. The district court re fer red the dueling fe e re quests to a Mag istrate Judge w ho issued a Report a nd Recommendation that both fee re quests be denie d. Reg ardingthe plaintiffs’ f ee r equest, the Ma g istrate Judge r easone d: Plaint if f in th is c a s e is n o t e n ti tl e d

to a tt o r n e y f e e s b e c a u s e h e is n o t t

he preva iling party

. He failed to preva il on any signific ant issue in the ca se. Plaintiff lost on the merits on all issues in the di strict court and only succe eded on having two portions of an ordina

nce se vere d from the whole . The e ntire ordinanc e wa s not struck down. Simpl y put, Plainti ff ha s not obtained a judicially s an ctioned cha

ng e in the le g a l r e latio ns hip of

the pa rt ie s, or e ve n th a t a

le g a l r e latio ns hip e xists

. Over the Plaintiffs’ objections, the district court adopted the Ma g istrate Judge’ s Report andRe c omm e nd a tio n in its e nti re ty . T he Pla int if fs no w a pp e a l. Th e To wnship did no t f ile a c ro ssappea l and, in its response t o t h e Magistrate J udg e’s Repor t and Recommendation, concede d that it i s n ot e nti tle d to fe e s. The Plaintiffs ar g ue that they are a pre vailing party beca use two sections of the ordinanc e that the y c ha lle ng e d we re str

uc k d ow n. Th e Pla int if

fs a lso argue that, s inc e the y are pr e va ili ngpa

rt ie s, the y are e nti tle d to a tto rn e y ’s fe e s. II. JU RI SDI CT ION A d istri c t c ourt re ta ins jur isd ic tio n to a dd re ss a c la im fo r a tto rn e y ’s fe e s e ve n a ft e r i t ha s f ull y resolved the merits of a c ase. See D eja Vu of Nashvill e, In c. v. Me t ropolitan Government of Nashville & Davidson County, Tennessee , 421 F.3d 417, 419 (6th Cir. 2005), cert. de nied , 1 26 S. Ct. 2916 (2006). Fur

ther, the district c ourt’s final or der a ddress i n g at t o rney ’s fe es is a fina l jud g me nt. See M

cCain v. De t r o i t II A uto Financing Center , 378 F.3d 561, 562 ( 6th Cir. 2004). Plaintiffs’ appea l was timely filed and this cour

t has subject matter

jurisdiction to h ea r t h e appe al of the district cour

t’s final judg ment pursuant to 28 U.S.C. § 1291. III . STA ND AR

D O F RE VI EW A district court’s de terminati o n o f p reva iling par ty status is reviewe d for c lear err or. DiLaura v. Towns hip of Ann Arbor , Nos. 05-2482 & 2506, 2006 WL 3780596 at * 2 (6th Cir. Dec

. 2 7 , 2 0 0 6 ) ( ci t i n g Knology, Inc., v . Insight Communications Co., L .P. , 460 F.3d 722, 726 ( 6th Cir. 2006)). A finding is c lear ly err oneous when the revie wing court “ is left with the definite a nd firm conviction that a mistake has been c ommitt ed.” United States v. Vasque z , 3 52 F .3 d 1 06 7, 10 70 (6 th C i r. 2 0 0 3 ) ( ci t i n g An de rso n v . Ci ty of B esse me r Ci ty

, N. C. , 4 7 0 U

. S

. 5 6 4 ( 1 9 8 5 ) )

. S a i d an o t h e r w ay, a judg ment is rever sible if it resolves issues in a cle arly err oneous manne r. IV . DI SCU SSIO N“ Th e Sup re me Court ha s r e je c te d a ‘c e ntr a l is su e te st’ wh ic h w ou ld r e qu ir e a pa rt y to 1 succe ed on the main issue of the litigation to be c onsidered ‘ preva iling.’” Ph e lan v . B e ll , 8 F.3d 369, 373 (6th Cir. 1993) (c iting, inte r a lia , Texas State Teache rs Association v. Garland Indepe ndent School District , 489 U.S. 782, 790 (1989)). The Plaintiffs ar g ue that they wer e p re v ai l ing pa

rties and a

re e ntitled to attorney ’s fe es purs ua nt t o 4 2 U .S. C. § 19 88 . Wh e n a c a se is bro ught u

nd e r 4 2 U .S. C. § 19 83 , a s th is o ne wa s, section 1988 provides that the court mus t aw ard attorney ’s fe es whe re the plaintiff pre vails and specia l c ircumstance s are absent. Deja Vu , 421 F.3d at 420. I n this case, none of the pa rties ar g ue that sp e c ia l c ir c ums tanc e s e xist. A cour t mus t co n duct a two- part inquiry to determine whether

an aw ard of

attorney ’s fe es under se ction 1988 is appropr iate: first, whether the m oving party is a ‘pre vailing pa rty ’; and sec ond, wh e the r t he mov ingpa

rt y ’s vic tor y wa s su ff ic ie nt t o ju sti fy

a fe e award of a par

tic ula r a mou nt. D.L.S., Inc. v . City of Chat tanooga , 149 F.3d 1182, 1998 WL344046 at *3 (6th Cir. Ma y 28, 1998) (c i t i n g Farrar v. Hobby , 506 U.S. 103, 114 (1992)). I n this case, the c ourt nee d only addre ss whether the Plaintiffs a re preva iling par

ties. I f they

are pr e va ili ngpa

rt ie s, the matte r sh ou ld be re mand e d to t he dis tr ic t c ourt

fo r a de te rm inatio n a s to t h e am o u n t of attorne y ’s fe es that is justified by their victory

. Ci ti

z e n s A ga in s t T

a xW a s tev. W esterville City School District , 985 F.2d 255, 258 ( 6th Cir. 1993). A p la int if f i s a pr e va ili ngpa

rt y wh e n a c tua l r e lie f on the me ri ts of his or he r c la im m a te ri a lly alters the le g al re lationship between the parties by modifying the defe ndant’s beha vior in a wa

y that direc tly benef its the plaintiff. Farrar , 506 U.S. at 111-12. To obtain a mater ial alteration in the lega l relationship, a plaintiff “must obtain an enfor cea ble judgme nt a g ainst the defe ndant from whom fe es

ar e s o u g h t o r

c o mp ar a b le r e li e f thr o u g ha

c o n s e n t d e c r e e o r

s e tt le me n t.” Id. at 111 (c itations

1 omitted).The Supreme Court and t his court have routinely aff orded pr evailingparty

status to plaintiffs who obtained c onsiderably less than a f

ull victory . I n Farrar , for e x ample, a pla intiff suing unde r

se c tio n 1 98 3 s ou g ht $ 17 mil lio n in dama g e s f

ro m a state g ov e rnme nt b ut r e c e ive d o nly $1 in

no min a l da

ma g e s. 50 6 U .S. a t 10 7. Th e Sup re me Court he ld t hat th e pla int if

f ne ve rt he le ss wa s a preva iling par

ty , rea soning that “a plaintiff ma y demand pa

y ment for nominal damag es no l ess than he may demand pa

y ment for millions of dollars in compensatory damag es.” Id. at 113. I n a no the r e xamp le , th is c ourt a pp lie d th e same law t o d e te rm ine wh e the r a par ty is a pr e va ili ngpa

rt y to a n Ind ivi du a ls With Di sa

bil iti e s In E du c a tio n A c t ( “ I DE A” ) c a se a s it do e s to section 1988 case s. Phelan , 8 F.3d at 373. This c ourt held that a pare nt suing under the I DEA wa s

a pr e va ili ngpa

rt y wh e n th e c ourt ha d he ld that the de fe nd ant sc ho ol ad min ist rator mus t w or

k w ith her to de velop a ne w Individualiz ed Educ ation Plan for her disabled son but ref

used to order

the defe ndant to adopt the par ticular plan that she had propose d and wa s the primar y fo cus of the litigation. Id. at 374. Simi larly , in Da mb ro t v . Ce ntral M ic hig an Un iv e rsi ty , a fo rm e r ba sk e tba ll c oa c h a nd so me of his play ers c halleng ed a sc hool’s hara ssment policy afte r the school f ired the c oach f

or violating the po lic y . 55 F .3 d 1 17 7, 11 80 (6 th C ir . 1 99 5) . T he c ourt re je c te d th e c oa c h’ s F ir st- Am e ndme ntba se d w ro ng fu l- te rm inatio n clai m but he ld t hat th e ha ra ssm e nt p oli c y

its e lf wa s unc on sti tut ion a l. Id. I t held that the play ers we re pr evailingparties en t i t l ed to attorney ’s fe es under section 1988,

rea soning that “[t] he vindication of r ights unde r the F irst and Four teenth Amendme nts, whether or not such rig hts had b ee n i n fr inge d upon, constitutes relief suc h the Plaintiffs should be deeme d preva iling par

ties.” Id. at 1192. Ag ainst this lega l backg round, the Plaintiffs i n this case a re pr evailingparties. The relief

so ug ht b y the Pla int if

fs wa s a de c larator

y jud g me nt t

hat f our s e c tio ns of

the Va n B ur e n T ow ns hipThe township adva nced the first two of these arguments only befor e the district cour

t and 3 a dv anc e d th e re ma ini ngtw o b e fo re thi s c ourt

. zon i n g r e g u l a t i o n s v i o l a t e t h e F i r s tan d F o u rt e e n t hA m e n dm e n t s . T h e y o b t a i n e d ane n f or c e a ble judgme nt barringthe application of two of the provisions in the Township’s licensingordinanc e. Be fore the litigation, the Township could have denied the Plaintiffs a license if the licensing

o f f ic ia l h a d c o n c lu d e d th a t th e Pl a inti f f s h a d “ d e mo n s tr a te d an in a b il it y to o p e r a te or mana g e a sexually oriented business pr emi s es i n a pea cef ul and law- abiding manner ,” Va n Bur en Code of Or din anc e s § 22 -4 03 (i )( 7) , o r i f t he c hie f of po lic e ha d co nc lud e d that the Pla int if fs we re “ pr e se ntl y

un fi t to op e rate a

se xua lly or ie nte d b us ine ss d

ue to t he a pp lic ant’ s o ve ra ll c ri min a l r e c or d, re g ard le ss of t he date of any criminal convic tion,” id. § 22-403(j). After the litigation, the Township no long er could deny

the Plaintiffs a license for e ither r ea s o n . These c hang es mater ially altere d the leg al rela tions h ip b e tw e e n

th e g o v e r

n me n t e n ti ty

th a t e n f o r c e d th e o r d in an c e an d

th e p e o p le th a t w e re burd e ne d b y

it. The dist rict court committed a mi stake when it rea ched a contrary conclusion. The district court re asoned that, beca

use the Plaintiffs still must comply with the licensingordinanc e, they have “not obtained a judicially sanctioned chang e in the l eg al relationship of t he parties.” Howe ver, the law with which the Plainti ffs must comply is not the law which the Plaintiffs cha lleng ed bec ause the

or din anc e no lon g e r i nc lud e s tw o p rov is io ns that th is c ourt fo un d to be un c on sti tut ion a l. A s in Farrar and Phelan , th e Pla int if

fs ob ta ine d a

n e nf or c e a ble a lte ra tio n in the ir le g a l r e latio ns hip wi th the To wn sh ip w ith out ob ta ini nga ll o f t he c ha ng e s th a t th e y

so ug ht. Th e To wn sh ip m ake s f

our a rgume nts fo r a ff

ir matio n of the dis tr ic t c ourt ’s jud g me nt. F ir st, 3 the To wn sh ip argue s that no “ le g a l re latio ns hip ” e xists be tw e e n the Pla int if fs and th e Town sh ip beca use the Plaintiffs neve r actually applied for a sex ually oriented business lice nse. (Township’sResponse To Plaintiffs’ Objec tions To Mag istrate Judge Cape l’ s Rep o r t a n d Re c o mmendation.) The court’s deci s i o n i n Bronco’s I fore closes this argument since the Plaintiffs could not have had standing to sue in the first place if they had no leg al re lationshi p wi th the township. See29 Fe d. Appx. at 312 (concluding that the plaintiffs s u ffered a n injury fairly trac eable to the township’s actions eve n t h o u gh t h ey never applied for

a license ). See also Dam brot , 55 F.3d at 1192 (r e c o gn i z i n g

a l e g a l r e l a t i o n s h i p b e t

w e e n th e ba sk e tba ll- pla

y e r p la int if

fs and the de fe nd ant u

niv e rs ity

e ve n th ou g h n oth ingin t

he re c or d in dic a te d th a t any of the pla y e rs ha d vio late d or pla

nn e d to v iol a te the university ’s cha lleng ed har assment policy ). Second, the township argues that the Plaintiffs did not e ven preva il with respe ct to the two provisions that were decla red unc onstitut ional. (Township’s Response To Plaintiffs’ Objec tions.) The Plaintiffs, ac cording to the Township, challeng ed the constitutionality of sec tions 22-403(i)(7)

and 22 -4 03 (j ) o n th e g ro un d th a t th os e pr ov isi on s g a ve “ un br idl e d d isc re tio n” to t ow ns hip of fi c ia ls while this court struck down those provisions “exclusively on the issue of ‘pr ompt judicial review.’ ” Id. Ye t, “ un

br idl e d d isc re tio n” and “ pr omp t jud ic ia l re vie w” are tw o s ide s o f t he same c oin . T his

co urt h e ld th a t s e c ti o n s 2 2

- 4 0 3 ( i) ( 7 ) an d 2 2

- 4 0 3 ( j) w e r e u n c o n s ti tuti o n a l a b s e n t a p r o vision for prompt judicial review

prec isely bec au s e t h ose provisions require d “an e x erc ise of discre tion by g o v e r n me n t o f f ic ia ls

. ” Bronco’s I

I , 421 F.3d at 449. Furthe r, eve n if the Plaintiffs had obtained

re lie f o n a

different g ro un d th an th e y ha d a rgue d, the dis po sit ive de te rm inate of pr e va ili ngpa

rt y status is whether the Plaintiffs r ec eived a favor able, e nforc eable judgme nt on the merits – not whether a cour t a g ree d with the specific leg al claims the plaintiffs a dvance d. See F arrar , 5 06 U. S. at 113. Third, the Township ar g ues that the Plain t i ffs are not entitled to pre vailing pa rty status beca use this court “uphe ld the vast majority of the ordina

nce, a nd stru ck d o wn onl y

two minorproce dural provisions.” The Townsh i p also argues that the Plaintiffs won a “ minor victory offse t by a major victory on behalf of Van Bur en Township.” Howeve r, the Supreme Court has reje cted the “ c e ntr a l is su e ” te st that w ou ld s up po rt thi s a rgume nt i n f

a vo r o f t he “ mate ri a l a lte ra

tio n” te st which does not support this argument. See Phelan , 8 F.3d at 373. Finally , the Township argues that the Plaintiffs did not prevail bec ause the Township cure d the constitutional defec t i n s ec t i o n s 22-403(i)( 7) and 22- 403(j) in 2002 while this liti g ation was pe nd ingby

a dd inga ne w p ro vis ion

pr ov idi ngfo r p romp t jud ic ia l r e vie w. Ho we ve r, thi s c la im i s both fac tually

inacc urate and irre levant. I t is factually

inacc urate beca

use the text of the al l eged 2002 a mendment, which is not included any

wher e in the Joi nt Appendix, i s the languag e tha t t h i s court struc k down in Bronco’s II , wh ic h wa s de c ide d in 20 05

. Con se qu e ntl y , th e towns hip ’s c la im that th e c on sti tut ion a l de fe c ts

we re “ re me die d b y

ame ndme nts wh ile thi s li tig a tio n w a s p e nd ing ” is n ot t ruthf ul. Th is c la im is ir

r e le v an t b e c a

u s e th e p la in ti f

f s in th is c a s e o b ta in e d a ju d g me nt and the township’s statutory amendment could not a lter their status a s preva iling parties. Cf. Deja Vu , 421 F.3d at 421-22 (holding that chang es in law occ urringafte r a f inal judgme nt cannot alter a plaintiff’ s status as a prevailingparty ). In Buck hannon Board & Care Home, I nc. v. W est Virginia Department of H ealth & Human Re

sources , th e Sup re me Court a ff ir me d a de nia l of a tto rn e y ’s fe e s b ut e xplic itl y distinguished a c ase in whic h , d es p i t e an interveningor subseque nt curingaction, the plaintiff

rec eived a

n enfor cea

ble judg ment that the def endant a cted unlaw fully . 532 U.S. 598, 610 (2001). IV . CO NC LU SION The de termination by

this court that sections 22-403(i) (7) a nd 22-403(j) of

the t ownship’s ordinanc e ar e uncon s t i t u tional alters the leg al re lationship between the parties. As a result, the Plaintiffs are pr evailing parties with re spect to two of t he is sues and no others. The ref ore, the districtc ourt ’s de c isi on tha t th e P lai nti ff

s are no t e nti tle d to a tto rn e y ’s fe e s is RE VE RSE D . This matter is RE M AN DE D to the district court to ca lculate the a ppropriate fee awa

rd.