Court Opinion

ID: 2820193
Source: CourtListenerOpinion
Date Created: 2015-07-24 19:02:04.329588+00
Date Added: 2024-06-11T09:33:54.240357
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 15-1313
KATHERINE CERAJESKI, Guardian for Walter Cerajeski,
                                         Plaintiff-Appellant,

                                v.

GREG ZOELLER, Attorney General of the State of Indiana,
 et al.,
                                       Defendants-Appellees.
                    ____________________

         Appeal from the United States District Court for the
          Southern District of Indiana, Indianapolis Division.
    No. 1:11-cv-01705-JMS-DKL — Jane E. Magnus-Stinson, Judge.
                    ____________________

       ARGUED JUNE 2, 2015 — DECIDED JULY 24, 2015
                ____________________

   Before POSNER, EASTERBROOK, and SYKES, Circuit Judges.
   POSNER, Circuit Judge. This appeal is a sequel to our deci-
sion reported at 735 F.3d 577 (7th Cir. 2013), in which we
held unconstitutional a provision of the Indiana Unclaimed
Property Act, Ind. Code §§ 32-34-1-1 et seq. (Indiana’s ver-
sion of the Uniform Unclaimed Property Act) that author-
ized the state to confiscate private property without any
compensation—let alone just compensation—to the owner.
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    The Act stated that “property” is “presumed abandoned
if the owner or apparent owner has not communicated in
writing with the holder concerning the property or has not
otherwise given an indication of interest in the property”
within a specified period varying according to the type of
property. § 32-34-1-20(c). By filing a valid claim with the
state the owner could reclaim the property at any time up to
25 years after it was delivered to the attorney general. § 32-
34-1-36. (After that, if still unclaimed, the property escheated
to the state.) But he was entitled only to his principal and not
to any interest earned on it. We held that the state’s retention
of the interest was a taking that violated the Fifth Amend-
ment’s just compensation clause (deemed applicable to ac-
tions by state governments by interpretation of the Four-
teenth Amendment’s due process clause) because the owner
was paid nothing for his lost interest.
    Our opinion concluded by stating that “the judgment is
reversed and the case remanded for further proceedings
consistent with this opinion. The plaintiff is entitled to just
compensation from the state when she files her claim to
[Walter] Cerajeski’s account [remember that the plaintiff is
his guardian], but the amount of that just compensation has
yet to be determined. The plaintiff has also sought an injunc-
tion—why we don’t know; and injunctive relief may well be
unavailable in this case. ‘Equitable relief is not available to
enjoin an alleged taking of private property for a public use.’
Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1016 (1984). The
availability and propriety of injunctive relief are other issues
to be resolved by the district judge in the first instance.”
    So the case returned to the district court. Several months
later the state, having in response to our decision amended
No. 15-1313                                                   3

its Unclaimed Property Act to provide for payment of inter-
est on property to which the owner had made a valid claim,
Ind. Code §§ 32-34-1-9.1, 32-34-1-30 (effective July 1, 2014),
moved to dismiss the suit as moot. The plaintiff, objecting,
asked the district court, pursuant to our judgment, to enter a
declaratory judgment and also to award the attorneys’ fees
incurred in prosecuting the appeal that had resulted in our
judgment. (The plaintiff is not seeking an award of fees for
any other part of the litigation in either the district court or
this court.) The district judge refused, dismissed the suit as
moot, and later denied the motion for attorneys’ fees primar-
ily on the ground that, the suit having been dismissed, the
plaintiff was not a prevailing party. The plaintiff has ap-
pealed.
    The district judge was annoyed at the plaintiff because on
remand from our court she’d asked permission to file an
amended complaint that would have converted the suit to a
class action. She did that because of intimations that the state
would, despite our decision, compensate only the plaintiff,
forcing the multitude of similarly situated creditors to bring
their own suits. But she withdrew that request (as distinct
from her request for an award of attorneys’ fees) when the
state amended the Unclaimed Property Act. For the amend-
ment mooted her federal claim for damages by entitling her
to payment by the state of the interest that she had sought in
her lawsuit.
     By amending the statute the state conceded that it owed
the interest to the plaintiff. But its concession could not de-
prive the plaintiff of her status as the prevailing party in the
litigation. Our decision had preceded the amendment of the
statute and by holding that she was entitled to damages
4                                                    No. 15-1313

equal to the unpaid interest had made her the prevailing
party. See National Rifle Association of America, Inc. v. City of
Chicago, 646 F.3d 992, 994 (7th Cir. 2011). She would not have
been the prevailing party had the state, as in Zessar v. Keith,
536 F.3d 788, 797 (7th Cir. 2008), amended its law before our
decision—that would have mooted the case and we would
have had to dismiss it for want of jurisdiction, thus not de-
ciding the merits and not ordering any relief.
    “[E]nforceable judgments on the merits … create the ‘ma-
terial alteration of the legal relationship of the parties’ neces-
sary to permit an award of attorney’s fees” under federal
statutes (in this case 42 U.S.C. § 1988(b)) that authorize such
awards. Buckhannon Board & Care Home, Inc. v. West Virginia
Dept. of Health & Human Resources, 532 U.S. 598, 604 (2001).
“[R]elief need not be judicially decreed in order to justify a
fee award under § 1988. A lawsuit sometimes produces vol-
untary action by the defendant that affords the plaintiff all or
some of the relief he sought through a judgment—e.g., a
monetary settlement or a change in conduct that redresses
the plaintiff’s grievances.” Hewitt v. Helms, 482 U.S. 755, 760–
61 (1987). That is what happened in this case. It is not a case
in which by filing a lawsuit a plaintiff prompts a change in
law—the “catalyst theory” of prevailing-party status rejected
in the Buckhannon case. 532 U.S. at 609–10. Nor is it a case
like Hewitt, in which the appellate court explicitly condi-
tioned judgment in the plaintiff’s favor on whether he could
prove that the defendants were not entitled to official im-
munity. 482 U.S. at 758.
   At the oral argument of the current appeal, the state ar-
gued that the sovereign immunity conferred on it by the
Eleventh Amendment would have barred the plaintiff’s
No. 15-1313                                                    5

claim for damages or alternatively that the defendants, being
sued in their official capacities (making this effectively a suit
against the state), aren’t “person[s]” within the meaning of
section 1983, the statute under which the plaintiff sued. The
state briefed these alternative arguments in the district court
but not in either appeal. Even if our holding in the previous
round that the plaintiff was entitled to just compensation in
a suit under section 1983 (or perhaps in any federal suit) was
incorrect and the challenge to it not waived by not being
made in our court, the plaintiff nevertheless had obtained a
judgment which compelled a change in state law that gave
her compensation equal to the damages she was seeking,
and it was a result brought about by the efforts of her law-
yers.
    The district judge had her own alternative ground, simi-
lar to the defendants’, for denying the plaintiff attorneys’
fees: that the claim of an unconstitutional taking, the claim
we upheld in rendering judgment in the plaintiff’s favor,
was brought directly under the Constitution and not under
42 U.S.C. § 1983—and 42 U.S.C. § 1988(b), the attorneys’ fees
statute on which the plaintiff bases her claim for fees, applies
by its terms only to claims brought under section 1983 (and
certain other statutes not relevant to this case). But section
1983 imposes liability on anyone “who, under color of any
statute, ordinance, regulation, custom, or usage, of any State
or Territory or the District of Columbia, subjects, or causes to
be subjected, any citizen of the United States or other person
within the jurisdiction thereof to the deprivation of any
rights, privileges, or immunities secured by the Constitution
and laws,” and one of those rights is the right to just com-
pensation for the taking of private property. Although 42
U.S.C. § 1983 isn’t explicitly mentioned in Count III of the
6                                                   No. 15-1313

complaint, which is captioned “CLAIM FOR PROSPECTIVE
RELIEF (FIFTH AMENDMENT TAKINGS CLAUSE),” par-
agraphs 1 and 11 of the complaint invoke section 1983 and
are expressly incorporated in Count III; and paragraph B, on
the last page of the complaint, also bases the takings claim
on that statute.
    We therefore reverse the judgment of the district court
and remand the case for a determination of the amount of
attorneys’ fees to which the plaintiff is entitled. We offer the
tentative view that the amount sought—$258,462.50 for
375.75 hours—is excessive, both in the amount of time for
which fees are sought and in the average hourly billing rate
($687.86). Remember that this was just time spent on the ap-
peal (the first, not the present, appeal), and the high average
billing rate implies that few junior members of the two law
firms who handled the appeal for the plaintiff could have
been assigned to work on the appeal. In fact it appears that
law-firm partners billed more than 93 percent of the total
hours billed.
    The plaintiff asks us to determine the amount of attor-
neys’ fees to which she is entitled, but we think it a task bet-
ter left to the district court. District judges have more experi-
ence than appellate judges in determining reasonable
awards of attorneys’ fees.
                                     REVERSED AND REMANDED