Source: https://law.justia.com/cases/federal/appellate-courts/F2/791/447/333023/
Timestamp: 2019-08-26 00:27:11
Document Index: 186231953

Matched Legal Cases: ['§ 1988', '§ 1988', '§ 1343', 'art, 461', '§ 1332', 'art, 461']

Seaway Drive-in, Inc., Plaintiff-appellant, v. Township of Clay, Defendant-appellee, 791 F.2d 447 (6th Cir. 1986) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Sixth Circuit › 1986 › Seaway Drive-in, Inc., Plaintiff-appellant, v. Township of Clay, Defendant-appellee
Seaway Drive-in, Inc., Plaintiff-appellant, v. Township of Clay, Defendant-appellee, 791 F.2d 447 (6th Cir. 1986)
US Court of Appeals for the Sixth Circuit - 791 F.2d 447 (6th Cir. 1986)
Argued March 4, 1986. Decided May 19, 1986
Plaintiff-Appellant appeals the District Court's denial of its motion for attorney's fees under 42 U.S.C. § 1988. The underlying lawsuit involved both state law and constitutional challenges to a township ordinance regulating drive-in theaters. During the preliminary injunction proceedings, which led to settlement of the case through a consent decree, the District Court refrained from discussing the merits of some of the claims that could have given rise to an attorney's fees award under section 1988. The issue on appeal is whether the District Court erred in its holding at a subsequent hearing on the attorney's fees motion that attorney's fees could not be awarded based on those unaddressed claims because they did not raise a substantial constitutional question and were not reasonably related to appellant's ultimate success.
Appellant is a drive-in movie theater located in Clay Township, Michigan. In 1982, appellant sued appellee, Clay Township, to enjoin enforcement of section 1304(3) (h) of Clay Township Zoning Ordinance No. 25, which prohibited the showing of certain sexually explicit movies. The District Court entered a preliminary injunction against the enforcement of the ordinance on August 19, 1982. Seaway Drive-in, Inc. v. Township of Clay, No. 82-30051 (E.D. Mich. Aug. 19, 1982) ("Seaway I"). The District Court stated that appellant was likely to succeed on the merits of its first amendment challenge to the ordinance.1
In November 1982, the township enacted Ordinance 77, a comprehensive ordinance regulating drive-in theaters. On March 3, 1983, appellant initiated this action. The complaint alleged that the new ordinance violated the first, fifth and fourteenth amendments to the United States Constitution and that its application to appellant violated Michigan's Township Zoning Enabling Act, M.C.L.A. Secs. 125.271, et seq., and 125.286, et seq. The District Court preliminarily enjoined enforcement of eight of the twelve substantive provisions of the ordinance, on the basis that they violated state law when applied to appellant.2 Seaway Drive-in, Inc. v. Township of Clay, No. 83-9025 (E.D. Mich. Jan. 16, 1983) ("Seaway II"). Thus, the court did not address the constitutionality of those eight provisions. See Seaway I & II, Nos. 82-30051, 83-9025, slip op. at 5 (E.D. Mich. March 25, 1985) (fees opinion). As to the other four substantive provisions, the court first noted that appellant did not challenge two and then declined to enjoin enforcement of the other two because appellee was likely to prevail at trial on its position that the provisions were constitutionally sound and did not run afoul of state law.3
Appellant's request for fees is based on 42 U.S.C. § 1988:
The Supreme Court addressed this type of situation in Maher v. Gagne, 448 U.S. 122, 100 S. Ct. 2570, 65 L. Ed. 2d 653 (1980). Plaintiff filed a section 1983 suit challenging Connecticut's federally funded Aid to Families with Dependent Children program. The complaint alleged violation of the Social Security Act and the equal protection and due process clauses of the fourteenth amendment. Plaintiff invoked jurisdiction under 28 U.S.C. § 1343. The suit itself ultimately was settled favorably to plaintiff. Defendant argued that section 1988 did not authorize the award of attorney's fees in a section 1983 action unless section 1983 was being invoked as a remedy for a constitutional violation or for violation of a federal statute providing for the protection of civil rights or equal rights. The Court rejected such a limitation to section 1988, but noted initially that plaintiff "did allege constitutional claims which the District Court and the Court of Appeals both found to be sufficiently substantial to support federal jurisdiction under Hagans v. Lavine, 415 U.S. 528 [94 S. Ct. 1372, 39 L. Ed. 2d 577]." Maher, 448 U.S. at 128 n. 10, 100 S. Ct. at 2574 n. 10. Thus, the Court pointed out, even if defendant correctly interpreted section 1988, plaintiff still would have been entitled to fees based on her "sufficiently substantial" constitutional claims.
To the extent a plaintiff joins a claim under one of the statutes enumerated in H.R. 15460 with a claim that does not allow attorney fees, that plaintiff, if it prevails on the non-fee claim, is entitled to a determination on the other claim for the purpose of awarding fees. Morales v. Haines, 486 F.2d 880 (7th Cir. 1973). In some instances, however, the claim with fees may involve a constitutional question which the courts are reluctant to resolve if the non-constitutional claim is dispositive. Hagans v. Lavine, 415 U.S. 528 [94 S. Ct. 1372, 39 L. Ed. 2d 577] (1974). In such cases, if the claim for which fees may be awarded meets the 'substantiality' test, see Hagans v. Lavine, supra; United Mine Workers v. Gibbs, 383 U.S. 715 [86 S. Ct. 1130, 16 L. Ed. 2d 218] (1966), attorney's fees may be allowed even though the court declines to enter judgment for the plaintiff on that claim, so long as the plaintiff prevails on the non-fee claim arising out of a 'common nucleus of operative fact.' United Mine Workers v. Gibbs, supra, at 725 [86 S. Ct. at 1138]. H.R.Rep. No. 94-1558, p. 4, n. 7 (1976).
448 U.S. at 132, n. 15, 100 S. Ct. at 2576 n. 15. Three Justices declined to join the part of the majority opinion examining the question whether section 1988 allows an award of fees for prevailing on a federal non-civil-rights statutory claim. They found that portion unnecessary because they agreed with the majority that the complaint "alleged 'substantial' constitutional claims as defined in Hagans v. Lavine, 415 U.S. 528 [94 S. Ct. 1372, 39 L. Ed. 2d 577] (1974)." 448 U.S. at 134, 100 S. Ct. at 2577 (Powell, J., concurring). "In this case ... the complaint included a substantial constitutional claim which 'remained in the case until the entire dispute was settled by the entry of a consent decree.' " Id. (quoting the majority opinion). Thus, the concurring Justices "ha [d] no occasion to look behind the settlement agreement to evaluate further the constitutional cause of action." Id.
The test quoted from the legislative history for determining when fees may be awarded based on an unaddressed fee claim--i.e., the requirements that the fee claim be substantial and that the fee and non-fee claims arise out of a common nucleus of operative fact--is identical to that that a district court must apply when determining whether the court has pendent jurisdiction over state law claims.8 In the present case, appellant made constitutional challenges to ten of the provisions of Ordinance 77. The only jurisdiction the court could have had over the state law claims, which the court ruled were likely to be successful as to eight of the provisions, was pendent jurisdiction. If the District Court had pendent jurisdiction over the state law claims, as it presumably found that it did, then the constitutional (fee) claims were "substantial" and the fee and non-fee claims must have arisen out of a "common nucleus of operative fact." See McDonald v. Doe, 748 F.2d 1055, 1056-57 (5th Cir. 1984), reh'g denied, 753 F.2d 1075 (1985) (en banc). In other words, to hold that the constitutional claims in this case were not substantial is to hold that the District Court did not have jurisdiction over the state law claims at the time it entered the consent decree. The District Court applied a more stringent "substantiality" test than this and improperly denied the fee request.
The District Court's error was that it looked at the record at the time of the consent decree to determine, in effect, whether the constitutional claims could survive a summary judgment motion. For example, the court's finding that appellant's claim that the ordinance was enacted with the purpose of restricting speech content was insubstantial was not based on the ground that such facts, if true, would not state a claim; rather, the court based its finding of insubstantiality on the ground that a review of the record revealed no evidence that there was such an impermissible purpose. The "substantiality" test, however, does not contemplate such an inquiry into the proof behind the pleadings. A claim is insubstantial if it is "obviously without merit" or if "its unsoundness so clearly results from the previous decisions of [the Supreme Court] as to foreclose the subject and leave no room for the inference that the question sought to be raised can be the subject of controversy." Hagans, 415 U.S. at 537, 94 S. Ct. at 1379. The claim must be "so insubstantial, implausible, foreclosed by prior decisions of [the Supreme Court] or otherwise completely devoid of merit as not to involve a federal controversy within the jurisdiction of the District Court, whatever may be the ultimate resolution of the federal issues on the merits." Id., 415 U.S. at 543, 94 S. Ct. at 1382 (quoting Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666-67, 94 S. Ct. 772, 777, 39 L. Ed. 2d 73 (1974)). This test does not require the claim, in order to be substantial, to be supported by evidence.9 See also Seals v. Quarterly County Court, 562 F.2d 390 (6th Cir. 1977) (holding that if a claim is substantial enough to support jurisdiction over a pendent claim, and resolution of the pendent claim completely disposes of the controversy, fees should be awarded regardless of what the record now reveals about the validity of the constitutional claim).
The District Court, in effect, confused the substantiality requirement of pendent jurisdiction, which is mandatory, with the discretionary aspects of pendent jurisdiction. Although it is preferable for a district court to refuse to consider a pendent claim if the claim to which it is appended is dismissed before trial (e.g., pursuant to a Rule 12 or 56, Fed. R. Civ. P., motion), such a discretionary refusal to exercise pendent jurisdiction is unrelated to the mandatory "substantiality" requirement. Gibbs, 383 U.S. at 726, 86 S. Ct. at 1139 ("Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well"). Thus, a federal claim that is sufficiently substantial to support jurisdiction over a pendent claim does not become insubstantial, for such purposes, when it is subsequently dismissed before trial. In this case, the District Court, under the guise of determining whether the constitutional claims were substantial, determined that they could not survive a motion for summary judgment.10
Although the District Court did not explain why it held that appellant's success was not related to its constitutional challenges, it did cite to two recent Supreme Court cases in support of its holding. Smith v. Robinson, 468 U.S. 992, 104 S. Ct. 3457, 82 L. Ed. 2d 746 (1984); Hensley v. Eckerhart, 461 U.S. 424, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983). Neither case compels the conclusion that attorney's fees are not awardable in this case.
The Supreme Court first addressed plaintiffs' argument that the unaddressed constitutional claims provided a basis for an award of fees. The Court began by noting that section 1988 is a broad grant of authority to courts to award attorney's fees to plaintiffs seeking to vindicate federal constitutional and statutory rights. The Court noted, though, that " [d]ue regard must be paid, not only to the fact that a plaintiff 'prevailed,' but also to the relationship between the claims on which effort was expended and the ultimate relief obtained." 468 U.S. at 1006, 104 S. Ct. at 3466. With regard to the specific situation of substantial, unaddressed constitutional claims, the Court reiterated "the requirement that a claim for which fees are awarded be reasonably related to the plaintiff's ultimate success." 468 U.S. at 1007, 104 S. Ct. at 3467.
The Smith decision reveals that the relationship requirement is satisfied when, had the fee claim been addressed and plaintiff prevailed on it, plaintiff would have been entitled to the same relief he received absent consideration of the fee claim. " [Section 1988] simply authorizes a district court to assume that the plaintiff has prevailed on his fee-generating claim and to award fees appropriate to that success." Id. (footnote omitted). In Smith, the Court held that the fee claims were unrelated to plaintiffs' ultimate success. The first fee claim alleged a denial of due process because the School Board refused to grant a full hearing before terminating the child's funding. The Court held that although plaintiffs succeeded in obtaining an injunction to prevent that violation, it was unrelated to their ultimate success and was unrelated to the substantive claims made in those proceedings. Plaintiffs' ultimate success depended on an interpretation of state law; and the due process remedy did not assure them that the law would be interpreted to require funding.
Smith, 468 U.S. at 1015, 104 S. Ct. at 3471.11 The Court's warning about the danger of a contrary holding, see Smith, 468 U.S. at 1015, 104 S. Ct. at 3471, was aimed at such a claim-- i.e., one where a plaintiff seeks review of an adverse agency determination on a substantive non-fee issue and seeks attorney's fees by virtue of a due process attack on the administrative proceedings themselves.
Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee. Normally this will encompass all hours reasonably expended on the litigation, and indeed in some cases of exceptional success an enhanced award may be justified. In these circumstances the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit. See Davis v. County of Los Angeles, [8 E.P.D. p 9444, at 5049 (C.D. Cal. 1974) ]. Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee. The result is what matters.
Hensley, 461 U.S. at 435, 103 S. Ct. at 1940 (footnote omitted). As noted above, appellant's fee and non-fee claims involved a common core of facts, certain of the claims were based on related theories,12 and the fee and non-fee claims were aimed at achieving the same relief.
I respectfully dissent. I agree with the result and logic expressed by United States District Judge Harvey in his memorandum opinion and order filed in the district court on March 25, 1985. In my opinion, his ruling is consistent with Smith v. Robinson, 468 U.S. 992, 104 S. Ct. 3457, 82 L. Ed. 2d 746 (1984). I would therefore affirm the district court.
Of course, if appellant's only claims arose under state law, it would not have been in federal court unless there was diversity of citizenship. See 28 U.S.C. § 1332
The trial court only reached the merits at the stage of a preliminary injunction. At that point, the case was settled by the parties with the court's consent. This fact does not affect the determination that appellant prevailed in its action. Congress did not intend to have the authority to award fees extinguished by the fact that the case was settled. See Smith v. Robinson, 468 U.S. 992, 1006, 104 S. Ct. 3457, 3466, 82 L. Ed. 2d 746 (1984). Also, so long as the party has prevailed on the case as a whole, it is entitled to fees for all time reasonably spent on the matter. Northcross v. Board of Ed., 611 F.2d 624, 636 (6th Cir. 1979), cert. denied, 447 U.S. 911, 100 S. Ct. 2999, 64 L. Ed. 2d 862 (1980). Where success is not complete, the district court should award fees in an amount that is reasonable in relation to the results obtained. Hensley v. Eckerhart, 461 U.S. 424, 440, 103 S. Ct. 1933, 1943, 76 L. Ed. 2d 40 (1983). Here, appellant was successful in permanently enjoining enforcement of eight provisions of the township ordinance
Plaintiffs also made an equal protection claim of right to a publicly financed education for the child. The Court viewed this claim as virtually identical to the Education of the Handicapped Act claim and went on to conclude that Congress did not intend to allow reliance on Sec. 1983 as a remedy for such an equal protection claim--the Act is the sole avenue and it does not provide for attorney's fees. Smith, 468 U.S. at 1009-13, 104 S. Ct. at 3468-70