Opinion ID: 379503
Heading Depth: 1
Heading Rank: 4

Heading: The District Court's Finding of Special Circumstances.

Text: 25 The district court's finding of special circumstances for the denial of an award of attorneys' fees and costs to the Loyalists and the national party is as follows: 26 In the present case, this Court declines to make any such award for several reasons. 27 First, contrary to Defendant's assertions, this Court is sensitive to the new-found unity of the State Democratic Party and the potential disruptive effect an award of attorney's fees could cause. With yet another major election in the very near future, it is to the benefit of all the parties hereto that the delicate balance as struck by the parties be maintained. 28 Second, both of the former factions, the Regulars and Loyalists, are now defunct. The record shows that the funds from the Regulars' treasury were transferred to the registry of the unified Democratic Party. Moreover, some of these funds were used to pay debts incurred by the former loyalist group. Any award of attorney's fees, under the peculiar circumstances of the present case, would produce an anomalous and inequitable result. 29 A. State Officials. The special circumstances recited by the district court involve only the Regular party officers. The court did not mention any special circumstances that would justify denial of at least a partial fees award against the governor, secretary of state, and attorney general, who were responsible for enforcing the unconstitutional statute against the Loyalists. These state officials remain in the suit as a result of the Fifth Circuit order reversing the district court judgment that dismissed the Loyalists' counterclaim against these officials. Separate counsel for these state officials approved and signed the agreed order of dismissal. 30 State officials cannot show special circumstances sufficient to prevent an award of fees merely because the officials enforced the statute in good faith compliance with their official duty, or because any award of attorneys' fees would ultimately be satisfied by the state taxpayers. Johnson v. State of Mississippi, 606 F.2d at 637. In the absence of more specific findings of special circumstances, we must remand the case back to the district court for at least a partial allocation of costs and attorneys' fees against the state officials. These officials will be liable only in their official capacity absent a showing of bad faith that would justify liability in an individual capacity. Hutto v. Finney, 437 U.S. 678, 700, 98 S.Ct. 2565, 2579, 57 L.Ed.2d 522 (1978); McNamara v. Moody, 606 F.2d 621, 626-27 (5th Cir. 1979). 31 B. Regular Party Officers. In denying an award of attorneys' fees against the Regular party officers, the district court cited two main reasons to support its decision. The first reason for denying a fees award was that an award of fees to the Loyalists and national party, and against the Regulars, would disrupt the unity of the newly merged party. The testimony at the special hearing suggests that the principal disruption feared by the Regulars might occur as follows: an award of fees to the Loyalists and national party might emphasize to the former Regulars that they had lost the litigation, and might thus destroy their illusion that both sides came out even in the merger. As a result, former Regulars might become embittered and try to separate the Regular faction from the unified party. Although we recognize that a fees award might embitter some former Regulars, we also note that the former Loyalists and the national party have apparently decided that the risk of disrupting their merged party is not great enough to outweigh their need for an award of fees. Moreover, the acrimony and expense reflected by the parties in contesting the fees issue on appeal suggests that the denial of a fees award has not itself categorically furthered party unity. Even if the denial of a fees award would tend to promote party unity, however, we conclude that the goals of the Civil Rights Act would be ill-served if we denied an award of attorneys' fees solely to preserve the illusions of those who had vigorously supported an unconstitutional statute. In reality, the Regulars suffered a defeat that became obvious when we declared the challenged registration statute unconstitutional, and especially when the agreed order of dismissal expressly recited that the statute was unconstitutional. In such situations, Congress has instructed the courts to award attorneys' fees as an incentive for parties who prevail in protecting important constitutional rights, rather than to deny such fees in order to preserve the illusions of a party who advocated the wrongful deprivation of those rights. 32 The Regulars also contended that a fees award might disrupt party unity because the party would be hard-pressed to raise the funds necessary to pay the award. We realize that the payment of a fees award will inflict hardship upon any losing party; in enacting section 1988, Congress determined that this hardship is outweighed by the need to encourage prevailing parties like the Loyalists to litigate for the protection of valuable constitutional rights. Moreover, the record in this case does not indicate that payment of the fees award will constitute an insurmountable burden upon the party. The Regulars have already completed a fund-raising campaign to pay the fees for their own attorneys during this litigation; the Regulars now have shown no sufficiently compelling reasons why the party could not launch a similar fund-raising campaign to pay the fees for the Loyalists and national party. 33 Contrary to the district court's finding, the record shows that the parties did not strike a delicate balance with regard to fees and costs when they agreed on a settlement. The agreed order of dismissal expressly reserves the question of litigation costs for resolution at proceedings then pending. The Loyalists and national party filed their motion for an award of fees and costs at the same time that the agreed order of dismissal was submitted. Riddell himself testified that during negotiations the Loyalists did not mislead the Regulars about their intent to ask for an award of attorneys' fees and costs. Record, Vol. II, at 132. 34 The second reason cited by the district court for denying an award of attorneys' fees was that such an award would be inequitable because the Regular and Loyalist factions were now defunct, and the Regulars already gave the unified party $14,000, some of which was used to pay debts incurred by the Loyalists. Contrary to the district court's reasoning, we conclude that the merger between the Regular and Loyalist factions does not render an award of attorneys' fees unfair to the Regulars, or otherwise inequitable to any party. As a result of the merger, the assets and debts of both the Regular and Loyalist factions were assumed by the unified party; thus, the $14,000 of surplus Regulars' funds were applied against the net debts incurred by the Loyalists. The effect of a fees award in this case would be to create a debt of the former Regular faction that will be assumed by the unified party and paid from unified party funds. This result is not unfair to the Regulars, who can spread their liability, and it is not otherwise inequitable because the unified party will be assuming this new debt of the Regulars in the same manner that the unified party assumed the debts of the Loyalists at the time of the merger. 35 In conclusion, the special circumstances cited by the district court in this case are insufficient to justify the denial of an award of attorneys' fees and costs to the Loyalists and the national party. We reverse the order of the district court, and remand the case for an award of attorneys' fees and costs calculated under the guidelines announced in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). The award should include an allowance for fees and costs incurred for purposes of contesting this award in the district court and on this appeal. Johnson v. State of Mississippi, 606 F.2d at 637-39. On remand the district court should devise an equitable plan for allocating payment of the award between the Regular party officers and the state officials. 36 REVERSED AND REMANDED.