Opinion ID: 2997098
Heading Depth: 2
Heading Rank: 2

Heading: Whether the Students Are Prevailing Parties

Text: The University next argues that, even if the district court did not err in finding the Students’ motion for costs and attorneys’ fees timely, the district court erred in concluding that the Students were prevailing parties. Classifying the Students as “prevailing parties” is significant because, in a suit brought under 42 U.S.C. § 1983, a court may award plaintiffs reasonable attorney fees as part of the costs, if they 16 No. 03-2314 are prevailing parties. 42 U.S.C. § 1988(b). “[A] plaintiff ‘prevails’ when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the defendant’s behavior in a way that directly benefits the plaintiff.” Farrar v. Hobby, 506 U.S. 103, 111 (1992). In this case, the district court found that the Students were prevailing parties because their suit altered their legal relationship with the University in two ways. First, the University established detailed criteria limiting the discretion in the allocation of mandatory student fees to various organizations, thus protecting against viewpoint discrimination. Second, the University established an appeal procedure to ensure that student fees are allocated in a viewpointneutral manner that avoids viewpoint discrimination, thus further limiting the discretion of the University. Because, however, the Students ultimately lost on their original claim that forced funding of speech through the mandatory student activity fee system violated the First Amendment, the district court concluded that they were not entitled to the full amount of attorneys’ fees. Accordingly, the district court reduced the costs and fees requested by one-half. On appeal, the University does not challenge the amount of the award. Rather, it argues that the Students were not entitled to costs and fees because they were not prevailing parties. In making this argument, the University posits that our standard of review is de novo, while the Students maintain that we review solely for clear error. The appropriate standard of review depends on the circumstances. If the question of prevailing party status involves elements of a legal analysis, then our review is de novo. Harper v. City of Chicago Heights, 223 F.3d 593, 603 (7th Cir. 2000). Conversely, if the issue is whether the plaintiff directly benefits, that “is a factual determination which we review only for clear error.” Cady v. City of Chicago, 43 F.3d 326, 329 (7th Cir. No. 03-2314 17 1994). Or, as we explained in Federation of Advertising Industry Representatives, Inc. v. City of Chicago, 326 F.3d 924, 932 (7th Cir. 2003), “[a]lthough the decision to award attorney’s fees under § 1988 lies within the district court’s discretion, when . . . an attorney’s fee award rests on the application of a principle of law, our review is de novo.” Id. In this case, because the University claims that the Students did not directly benefit from the various court rulings, as opposed to challenging the application of a principle of law, we review the district court’s decision for clear error. However, we note that even under the more searching de novo standard, our analysis, see infra, would not change. As noted, the University argues that the Students were not prevailing parties. In making this argument, the University offers several different rationales. First, the University claims that the Students did not prevail because their desire in bringing suit was to prohibit the University from collecting mandatory student activity fees and distributing those fees to organizations which engaged in political and ideological speech with which they disagreed. Quoting Cady, the University argues that determining whether a party has prevailed requires a “pragmatic assessment of the goals the plaintiffs had in mind in bringing the suit and the extent to which they achieved those ends.” 43 F.3d at 330-31. The University reasons that the Students failed to achieve their goal because “[w]hen the [Students] brought this action they were required to pay a mandatory student activity fee that could be used to fund groups with positions and views to which they objected. Now that the litigation has been concluded, [the Students] are still required to pay a mandatory student activity fee that can be used to fund groups with positions and views to which they object.” Appellee Brief at 18. Therefore, the University contends, the Students were not prevailing parties. 18 No. 03-2314 The University’s argument is misplaced. The district court did not find that the Students were prevailing parties on their original complaint’s attempt to bar the forced funding of political and ideological speech through the mandatory student activity fees. The Students clearly lost on that claim. The district court correctly denied the Students attorneys’ fees to the extent that such fees were generated from that claim. This litigation did not end with the Supreme Court’s decision, however. After losing on their first claim, the Students amended their complaint and alleged that the mandatory fee system failed to satisfy the requirement of viewpoint neutrality. As discussed below, the Students were prevailing parties on this amended complaint. First, as detailed above, in response to the district court’s 2002 holding that the University’s funding system violated the principles of viewpoint neutrality and the district court’s order allowing the University to adopt a new method, the University established detailed standards for the allocation of student activity fees. It also created an appeal process for challenges to funding decisions. The district court, however, found those policies lacking, concluding that the “discretion afforded the student government committees remained unchecked.” Fry, 96-C-0292-S, slip op. at 3. It was this revised system of funding, and not the previous system, that we considered in Southworth II. Unlike the district court, we concluded that the new guidelines sufficiently bridled the University’s discretion. We struck, however, certain impermissible factors from consideration by the University in its funding decisions. Southworth II, 307 F.3d at 592-94. Specifically, this court found impermissible the University’s consideration of the length of time an RSO existed and the amount of past funding as factors in whether to fund and the level of funding an RSO could receive. Id. at 593-94. We No. 03-2314 19 also held that funding of travel grants was impermissible because the University failed to present any evidence that it had established procedures limiting the decisionmakers’ discretion for these grants. Id. at 592. In this second round of litigation, therefore, the Students were prevailing parties in two ways. First, the Students obtained a court ruling in the district court that the mandatory fee system violated the principle of viewpoint neutrality, and in response to the district court’s order, the University adopted the detailed procedures, criteria, and appeals process governing funding decisions. The University did not challenge the district court’s ruling that the original fee system violated the principle of viewpoint neutrality by granting the University unfettered discretion. Instead, in response to that ruling, the University altered the mandatory fee system and it was the district court’s decision concerning this newly adopted system that this court affirmed in part, and reversed in part. The Students thus prevailed in obtaining the protection they sought in their amended complaint—a mandatory fee system that satisfied the requirements of viewpoint neutrality—and this change resulted from a “court-ordered ‘change in the legal relationship between the plaintiff and the defendant.’ ” Buckhannon Bd. and Care Home, Inc. v. West Virginia Dep’t of Health and Human Res., 532 U.S. 598, 604 (2001) (citing Texas State Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792 (1989)). On appeal, the University does not address the fact that the system this court found constitutional was adopted only after the Students filed suit and the district court entered an order in favor of the Students. It was the district court’s order allowing the University to adopt new standards (and thus avoid a judgment against it) that caused the University to adopt the criteria and procedures upheld in part in Southworth II. The University instead claims that, since this court upheld 20 No. 03-2314 most of the newly adopted criteria, and only struck minor aspects of the new mandatory fee system, the Students were not prevailing parties. This argument, however, ignores the Students’ success in the district court in forcing the University to adopt the new funding criteria in the first place. The Students also prevailed in a second way on appeal. Although we held that most of the new criteria were valid, the criteria we found impermissible were not insignificant, as the University contends. For instance, this court held that “criteria considering the length of time an RSO has existed and the amount of past funding it has received cannot be considered viewpoint-neutral because those criteria are related to the content and viewpoint of the applying RSO, as well as based on a prior system which lacked the constitutional safeguards of viewpoint neutrality.” Southworth II, 307 F.3d at 595. Although those were only two of the many criteria established by the University, those two criteria were heavily weighted in past allocation decisions, as demonstrated by the University’s explanation during the course of this litigation that the funding decisions began by looking at the prior year’s allocations as a benchmark for current grants. Southworth II, 307 F.3d at 593. The University had also relied on these criteria to argue in Southworth II that “a group in existence for ten years would have a reasonable basis for objecting to a funding decision that treated groups with comparable requests more favorably, which had been around a much shorter time.” Id. This court rejected consideration of the length of time an RSO was in existence and the amount of past funding decisions because those criteria institutionalized viewpoint discrimination from past years. Id. at 593-94. We also held those criteria improper because they discriminated against less traditional viewpoints in favor of No. 03-2314 21 7 established parties and speech. Id. The striking of those criteria thus established a very important protection to the 8 Students’ right to a system of viewpoint neutrality. The University also argues that the Students did not obtain a direct benefit as a result of the litigation because they are still required to pay the student activity fees although they had sought an injunction ordering the University “to stop requiring students to fund campus organizations that engage in political and ideological advocacy.” Appellant’s Brief at 6. That, however, is only part of the relief the 7 This court also held in Southworth II that the University’s criterion considering the number of students benefitting from speech was impermissible to the extent it allowed the University to consider the popularity of the speech as a factor in determining funding. Southworth II, 307 F.3d at 595. But because there were also legitimate situations when the University would consider the number of students involved, for instance in assessing funding necessary for variable expenses for food or programs for attendees, this court did not strike that criterion. Id. 8 The Students also argue that they prevailed because this court held “that the mandatory fee system unconstitutionally grants the ASM Finance Committee unbridled discretion for awarding travel grants to organizations which engage in speech and expressive activities. Therefore, until such standards are adopted, the University cannot use the mandatory fees of objecting students for such travel grants.” Southworth II, 307 F.3d at 592. The University responds that by the time of this court’s decision, it had already implemented such standards, and therefore the Students did not prevail on this basis. The University, however, failed to supplement the record by providing this court with that information, and thus, on the record before this court, the Students in fact prevailed. Nonetheless, because the University does not challenge the amount of attorneys’ fees awarded, whether the Students were prevailing parties on this aspect of the case is irrelevant, since they prevailed on other portions of their case. 22 No. 03-2314 Students sought. The Students also sought an order “to stop requiring students to fund campus organizations that engage in political and ideological advocacy . . . unless or until [the University] establish[es] a system of distributing money that operates in a viewpoint neutral manner.” Record 96 at 7. (Emphasis added.) Thus, although it is true that the Students must still pay the mandatory fee, they prevailed in vindicating the constitutional guarantee that the distribution system would conform to the requirements of viewpoint neutrality. Moreover, although the University calls this merely a “moral victory,” as we explained in Southworth II, “the Students’ alleged concrete and particularized interest is an assurance that their mandatory student activity fees are distributed in a viewpoint-neutral manner.” Id. at 573. Thus, the victory was more than moral—it was one protecting “a 9 concrete and particularized interest.” 9 The Students also argue that because the University in the 2001-2002 academic year applied the impermissible criteria, they were entitled to money back from the fees they paid in those years. The right to a refund, according to the Students, also demonstrates that they were a prevailing party. The University responds that the Students are not entitled to a refund because they failed to prove any instances of viewpoint discrimination. The University’s position is misplaced. As the Supreme Court explained in Southworth, a student “cannot be required to pay subsidies for the speech of other students without some First Amendment protection.” Southworth, 529 U.S. at 231. The First Amendment protection is the requirement of viewpoint neutrality which includes a requirement that the University’s discretion is fettered. Southworth II, 307 F.3d at 575-80. Thus, if the funding system provides the University with unfettered discretion it violates the mandates of the First Amendment and the University cannot force the students to fund others’ speech. See Southworth II, 307 F.3d at 593 (holding that the Students could not be forced (continued...) No. 03-2314 23 The University disagrees, arguing that, rather than having succeeded, the Students are actually in a worse position today because the Students had filed this lawsuit to prevent being forced to fund ideological and political speech with which they disagree, but now there is more money used to fund such organizations because the bar on distributions to partisan political organizations is gone. However, in making these arguments, the University focuses on the first round of litigation instead of the second. In the second round, the Students (recognizing that they would be required to fund such speech) amended their complaint and alleged that the system violated the principles of viewpoint neutrality. The Students succeeded in establishing this violation when the district court ruled that the previous funding system was unconstitutional and the University chose not to appeal this ruling. Additionally, the University claims that the Students are also worse off now (and thus not prevailing parties) because, before this litigation, the Students could have attempted to convince the University not to fund certain ideological and political speech on the grounds that the organizations’ viewpoints did not represent the viewpoints of the Students, but now they are unable to seek defunding of organizations with which they disagree. The University once again confuses the Students’ original goal, a ban on forced funding of groups the Students opposed, with their 9 (...continued) to fund travel grants until the University established criteria limiting the University’s discretion). However, because the Students never filed a motion seeking a refund following remand, it is too late to do so now. Nonetheless, the Students have established their status as prevailing parties without reference to any right to a monetary refund. 24 No. 03-2314 goal in the amended complaint—protection against viewpoint discrimination. That the Students’ previous complaint sought to bar forced funding of organizations with whose viewpoint they disagreed is irrelevant. The University presents several other arguments as to why the Students were not prevailing parties. For instance, the University contends that several of the changes the University implemented were not required by a court order, such as its abandonment of the referendum method of funding and its elimination of the previous restriction on funding of partisan political and religious activities. Thus, according to the University, under Buckhannon the Students cannot base their prevailing party status on these changes. The University is correct that in Buckhannon the Supreme Court rejected the “catalyst theory,” holding that a party is not entitled to attorneys’ fees merely because the lawsuit served as a catalyst for the change in behavior. Buckhannon, 532 U.S. at 605. Rather, as Buckhannon explained, there must be a court-ordered change in the legal relationship between the parties. Id. at 604. In this case, the University removed its prohibition of funding for partisan political and religious organizations without a court order requiring it to do so. It also eliminated the referendum without a court order. Had the only changes in the University’s behavior been to abandon the referendum and the bar on the distribution of funds to partisan political organizations and religious groups, the University might be correct that the Students were not prevailing parties. These were not, however, the only changes. As we have explained, the University substantially revised its funding system in response to a court ruling, and this court struck two significant aspects of the University’s funding criteria. Further, because the University does not challenge the amount of costs and fees, we need not detail every aspect on which the Students prevailed so as to determine the proper allocation of attorneys’ fees. No. 03-2314 25 The University also argues that the Students did not prevail because they failed to prove that the University allocated funds in a viewpoint-discriminatory way. However, as this court explained in Southworth II, “the prohibition against unbridled discretion is a component of the viewpoint-neutrality requirement.” Southworth II, 307 F.3d at 578. In their amended complaint, the Students did not argue that the University engaged in specific incidents of viewpoint discrimination (beyond the prohibition of funding partisan political and religious organizations which the University later removed). Instead, the Students challenged the system for failing to comply with the constitutional prohibition against unbridled discretion. The Students succeeded on this claim, and that entitled them to prevailing party status. See, e.g., Lewis v. Wilson, 253 F.3d 1077, 1082 (8th Cir. 2001) (holding that successful facial challenge to decisionmaker’s unbridled discretion bestowed “prevailing party” status). In a final attempt to overcome the district court’s ruling that the Students were prevailing parties, the University maintains that the Students were not prevailing parties because nothing has changed: the University may still force the Students to pay the mandatory student activity fee and use that money to fund political and ideological speech with which the Students disagree, and in fact, the organizations which received funding in the past continue to receive funding. For example, WISPIRG, which previously received funding through the referendum method, still receives funds at the same, or a slightly higher, level. The only difference is that the funds are received through a different distribution mechanism. Notwithstanding the University’s claim, much has changed since the inception of this lawsuit. The University now ensures that student fees are dispersed in a viewpoint-neutral manner and, as a result of the district court’s order, it has 26 No. 03-2314 adopted detailed procedures, funding criteria and an appeal process, most of which this court upheld in Southworth II. Moreover, although the University appears to continue the level of funding of some organizations at the same level as under the previously invalid system, this court made clear in Southworth II that “consideration of the length of time an organization has been in existence and the amount of funding an organization has received in the past discriminates against less traditional viewpoints.” Id. at 594. We therefore concluded that “the University cannot consider the length of time an RSO has been in existence, nor the amount of past funding the organization has received, in assessing current funding allocations as those criteria are improperly related to the content of the speech.” Id. at 594. Contrary to the University’s view, Southworth I and Southworth II changed the status quo. Furthermore, as we explained in Southworth II, “if one RSO applied for funding following the blueprints of another RSO, i.e., similar organizational structure, similar types of activities, similar goals, and similar budgets, but received a lower amount of funding, either the RSO or any student who paid the mandatory student activity fee could present an as-applied challenge in court.” Id. Thus, the University must treat all viewpoints equally, and the Students succeeded in forcing the University to adopt funding criteria 10 and an appeals process which limit the previously unfettered discretion of the decisionmakers to assure compliance with the constitutional mandate of viewpoint neutrality. Id. 10 As we noted in Southworth II, “the appeals procedures require the Student Council to compare the grant amounts the SSFC and the ASM Finance Committee allocated to various RSOs to determine whether similar RSO applications were treated equally.” Id. at 589. No. 03-2314 27 Moreover, as the Supreme Court explained in Southworth, “[t]he whole theory of viewpoint neutrality is that minority views are treated with the same respect as are majority views.” Southworth, 529 U.S. at 235. Thus, regardless of viewpoint, each applicant should have equal access to the funds available under the comprehensive procedures set out in the University’s revised guidelines. Obviously if an application were satisfactorily approved, the applicant would have no objection. But if an application were not approved, and the applicant determined that the rejection was based on the viewpoint he hoped to use the funds to express, he may have a valid challenge within the appeals process, claiming that the decision was based upon viewpoint discrimination. For many, if not most, of the requests for funding, the applicant’s viewpoint is obvious. The decisionmakers on the SSFC and the ASM Finance Committee cannot be expected consciously to avoid recognizing the obvious. Rather, with full (or at least some) knowledge of the purpose, the decision must be made based on the objective criteria, viewpoint notwithstanding. No funding should be given or denied based on viewpoint. Of course, there are many issues that create polarizing viewpoints. The demand for a share of the allocable funds generated by the mandatory fees no doubt exceeds the supply. Thus, every request by an RSO and by others eligible will not be granted. Viewpoint neutrality obviously does not guarantee funding, but it does mandate that all viewpoints have equal access to the limited public forum, be it a pool of funding or a location for gathering and speaking. No organization should have a lock on funding, and the distribution should be determined on a periodic basis based on current applications consistent with the detailed criteria and procedures the University has formulated, which were upheld by this court. If all applicants are treated equally under the same rules, neutrality should be achieved. 28 No. 03-2314 Finally, before concluding, we note that had the University argued that the district court erred in calculating the amount of the attorneys’ fees, as well as the Students’ right to attorneys’ fees, this claim could have had merit. The district court merely split the Students’ requested amount in half, as opposed to awarding attorneys’ fees based on the fees incurred on the claims on which the Students prevailed. At oral argument, the Students’ attorney maintained that about half of the attorneys’ fees were related to work performed after remand from the Supreme Court, but failed to be specific. Because, however, the University did not challenge the calculation of the attorneys’ fees award on appeal, the fact that the Students prevailed, at least in part, is sufficient to affirm the entire award of costs and attorneys’ fees, as revised by the district court.