Opinion ID: 3033448
Heading Depth: 4
Heading Rank: 1

Heading: Benefit to the Public At Large

Text: The district court offered two reasons for its decision to award fees. First, it concluded that the public at large would benefit from plaintiff’s success on the merits. The district court stated: The court declines to credit the legislative and administrative changes that precede the judgment in this case for purposes of determining an appropriate fee award. However, the court notes the significant salutary effect achieved by this litigation in that future action by defendants, with respect to similarly situated degree recipients, will be guided by the constitutional parameters delineated by plaintiff’s efforts. In this respect, the success of plaintiff in obtaining a declaration that Contreras’ conduct in singling out plaintiff’s degree for regulation because of bias toward the viewpoints of the institution from which they were received not only serves to vindi- BENTON v. OREGON STUDENT ASSIST. COMM’N 11585 cate the harm to plaintiff, but to protect the public at large. It is true that legislative and administrative changes significantly advanced plaintiff’s cause. Nonetheless, in light of the discretion still exercised by Contreras and the Office of Degree Authorization with respect to serious minded, but unaccredited institutions, plaintiff’s victory at trial serves a significant purpose . . . . (emphasis added). Defendants contend that, in awarding fees, the district court should not have considered the public benefit derived from the judgment because of the Supreme Court’s ruling in Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001). However, Buckhannon, which considered whether a party who has failed to secure a judgment is a prevailing party, in no way undermines Justice O’Connor’s Farrar concurrence or our decision in Wilcox, which addressed distinctly different issues. In Buckhannon, the issue was whether the term “prevailing party” as used in a fee statute3 “includes a party that has failed to secure a judgment on the merits or a court-ordered consent decree, but has nonetheless achieved the desired result because the lawsuit brought about a voluntary change in the defendant’s conduct.” Id. at 600 (emphasis added). The theory that a “prevailing party” is one whose lawsuit does nothing more than bring about a voluntary change in the defendant’s conduct was known as the “catalyst theory.” As the Supreme 3 While Buckhannon did not deal with § 1988 directly, we have applied its holding to 42 U.S.C. § 1988. See Labotest, Inc. v. Bonta, 297 F.3d 892, 895 (9th Cir. 2002); Bennett v. Yoshina, 259 F.3d 1097, 1101 (9th Cir. 2001). 11586 BENTON v. OREGON STUDENT ASSIST. COMM’N Court explained in Buckhannon, a “ ‘material alteration of the legal relationship of the parties’ ” is “necessary to permit an award of attorney’s fees.” Id. at 604 (quoting Tex. State Teachers Ass’n v. Garland Indep. School Dist., 489 U.S. 782, 792-93 (1989)). While “enforceable judgments on the merits and court-ordered consent decrees create the ‘material alteration of the legal relationship of the parties’ necessary to permit an award of attorney’s fees,” id. (quoting Tex. State Teachers Ass’n, 489 U.S. at 792-93), the Court explained that the “catalyst theory” “allows an award where there is no judicially sanctioned change in the legal relationship of the parties,” id. at 605. Thus, the Supreme Court determined that a plaintiff who does not secure a judgment on the merits “but has nonetheless achieved the desired result because the lawsuit brought about a voluntary change in the defendant’s conduct” is not a “prevailing party” for purposes of awarding attorney’s fees. Id. at 600; see also id. at 605. Buckhannon did not address the issue of the factors to be applied in determining the reasonableness of an attorney’s fee award to a prevailing party. Moreover, nothing in Buckhannon suggests that, in assessing the success of a nominal damages plaintiff for purposes of determining the reasonableness of a fee award, a district court cannot consider the factors set forth in Justice O’Connor’s Farrar concurrence and our decision in Wilcox. Furthermore, although an inquiry into whether a plaintiff who is awarded only nominal damages has accomplished some public purpose or achieved some public goal so that an award of fees would be reasonable may on its face appear very similar to the inquiry under the catalyst theory, they are two separate inquiries with two separate purposes. The purpose of the catalyst theory was to confer upon a plaintiff “prevailing party” status in cases where the plaintiff failed to obtain a judgment. This theory of conveying “prevailing party” status was rejected because to be entitled to fees there must be a change in the legal relationship of the parties. See BENTON v. OREGON STUDENT ASSIST. COMM’N 11587 id. at 604. A court engages in the analysis set forth in Wilcox and Justice O’Connor’s Farrar concurrence only where the plaintiff is a prevailing party because there has been a change in the legal relationship of the parties due to the procurement of a judgment. Then, the court only engages in that analysis for the limited purpose of determining a reasonable fee award. Finally, as we recently reaffirmed, in determining the reasonableness of fees a district court should consider, inter alia, “whether the plaintiff’s success ‘also accomplished some public goal . . . .’ ” Cummings, 402 F.3d at 947 (quoting Farrar, 506 U.S. at 121-22) (O’Connor, J., concurring)). Thus, defendants’ contention that this is not an appropriate factor to consider is simply unavailing. [4] The foregoing notwithstanding, we conclude that the district court erred in awarding fees based on a finding that plaintiff’s lawsuit ultimately serves to benefit the public at large. The district court’s reasoning for awarding fees can be boiled down to the conclusion that because it found that defendant Contreras violated plaintiff’s constitutional rights, defendant Contreras will necessarily think twice before violating the rights of others in the future. However, well prior to the district court’s finding of a constitutional violation and award of nominal damages, defendant Contreras exercised his discretion under the revised version of Or. Rev. Stat. § 348.609 in plaintiff’s favor by recognizing her degree as being from an institution that met the standards of academic quality comparable to an accredited institution. Because defendant Contreras’ wrongful conduct occurred under the previous statute and because defendant Contreras voluntarily exercised his discretion under the revised statute consistent with the requirements of the Constitution, we find that the record in this case does not support the district court’s conclusion that its finding of a constitutional violation under the former version of the statute will in any way guide defendant Contreras’ future conduct. Thus, this factor identified by the 11588 BENTON v. OREGON STUDENT ASSIST. COMM’N district court does not justify the imposition of fees in this case.