Court Opinion

ID: 3033448
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:49:31.518785+00
Date Added: 2024-06-11T11:48:23.710145
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

MELINDA BENTON, Individually and        
Representative of a Class,
                  Plaintiff-Appellee,
                 v.
OREGON STUDENT ASSISTANCE                    No. 03-35975
COMMISSION; OREGON OFFICE OF
DEGREE AUTHORIZATION; ALAN                    D.C. No.
CONTRERAS, in his Official and              CV-00-06272-HO
Individual Capacities; JEFF
SVEJCAR, in his official capacity as
executive director of Oregon
Student Assistance Commission,
            Defendants-Appellants.
                                        

MELINDA BENTON, Individually and        
Representative of a Class,
                 Plaintiff-Appellant,
                 v.
OREGON STUDENT ASSISTANCE                     No. 03-36002
COMMISSION; OREGON OFFICE OF
DEGREE AUTHORIZATION; ALAN                     D.C. No.
                                            CV-00-06272-MRH
CONTRERAS, in his Official and
                                                OPINION
Individual Capacities; JEFF
SVEJCAR, in his official capacity as
executive director of Oregon
Student Assistance Commission,
             Defendants-Appellees.
                                        

                            11573
11574      BENTON v. OREGON STUDENT ASSIST. COMM’N
       Appeal from the United States District Court
                for the District of Oregon
     Michael R. Hogan, Chief District Judge, Presiding

                    Argued and Submitted
                May 4, 2005—Portland, Oregon

                      Filed August 25, 2005

     Before: Alfred T. Goodwin and Richard R. Clifton,
  Circuit Judges, and John S. Rhoades, Sr.,* District Judge.

                   Opinion by Judge Rhoades

  *The Honorable John S. Rhoades, Sr., Senior United States District
Judge for the Southern District of California, sitting by designation.
         BENTON v. OREGON STUDENT ASSIST. COMM’N     11577

                       COUNSEL

Stephen K. Bushong (argued) and Daniel J. Casey (briefed)
Oregon Department of Justice, Salem, Oregon, for
defendants-appellants-cross-appellees.

Wendell R. Bird (argued) and Jonathan T. McCants (briefed),
Bird & Loechl, LLC, Atlanta, Georgia, for the plaintiff-
appellee-cross-appellant.
11578      BENTON v. OREGON STUDENT ASSIST. COMM’N
                            OPINION

RHOADES, District Judge:

I.    Introduction

   The parties have filed cross-appeals of the district court’s
order awarding $371,362 in attorney’s fees and $70,828.84 in
costs in a case where the sole relief obtained was a judgment
in the amount of one dollar. We have jurisdiction pursuant to
28 U.S.C. § 1291, and we reverse.

II.   Background

   Melinda Benton (“plaintiff”) is a professor at a community
college in Oregon. She holds a degree from Bob Jones Uni-
versity, an unaccredited institution that emphasizes conserva-
tive values. At the time she brought this action, Oregon law
provided in relevant part:

         No person who has been warned by the Oregon
      Student Assistance Commission, through the Office
      of Degree Authorization, to cease and desist shall
      claim or represent that the person possesses any aca-
      demic degree unless the degree has been awarded to
      or conferred upon the person by a school that:

         (a) Has accreditation recognized by the United
      States Department of Education or the foreign equiv-
      alent of such accreditation . . . .

Or. Rev. Stat. § 348.609.

   Plaintiff brought this action pursuant to 42 U.S.C. § 1983.
Plaintiff brought this § 1983 action as a class action seeking
declaratory and injunctive relief. Plaintiff alleged seven
claims for violation of the federal and state constitutional
rights to free speech, free exercise of religion, due process and
          BENTON v. OREGON STUDENT ASSIST. COMM’N          11579
equal protection. These claims were predicated upon allega-
tions that the Oregon Office of Degree Authorization had
decreed that plaintiff should be fired from her position at the
college because her degree was “illegal” or face criminal
sanctions and then later decreed that plaintiff need not be fired
but must give a disclaimer regarding her degrees.

   Plaintiff initially named four defendants: the Oregon
Department of Education, the Oregon Student Assistance
Commission, the Oregon Office of Degree Authorization and
Alan Contreras, the administrator of the Oregon Office of
Degree Authorization, in his official and individual capacities.
Plaintiff later amended her complaint to drop the institutional
defendants and add two more individuals: Stan Bunn, in his
official capacity as Superintendent of Public Instruction and
Head of the Oregon Department of Education, and Jeff Svej-
car, Executive Director of the Oregon Student Assistance
Commission.

   The district court denied class certification and dismissed
defendant Bunn from the case. Subsequently, the Oregon Leg-
islature amended Or. Rev. Stat. § 348.609 to provide an addi-
tional exception to the “cease and desist” requirement where
the school is “located in the United States and has been found
by the [Oregon Student Assistance Commission through the
Office of Degree Authorization] to meet standards of aca-
demic quality comparable to those of an institution located in
the United States that has accreditation, recognized by the
United States Department of Education, to offer degrees of
the type and level claimed by the person.” Or. Rev. Stat.
§ 348.609(1)(d). The district court then dismissed plaintiff’s
claims for declaratory and injunctive relief as moot in light of
the amendment to Or. Rev. Stat. § 348.609.

   Plaintiff then sought leave to amend her complaint to add
a claim for compensatory damages against defendants Svejcar
and Contreras in their individual capacities in an unspecified
amount. The district court allowed the amendment.
11580       BENTON v. OREGON STUDENT ASSIST. COMM’N
   Finally, at some point in the litigation, plaintiff unsuccess-
fully attempted to amend the complaint to add claims against
several past and present members of the Oregon Student
Assistance Commission.

   At the pretrial conference, plaintiff sought reconsideration
of the district court’s previous rulings disposing of much of
her case. The district court entertained additional briefing and
took evidence at trial but ultimately affirmed its prior sum-
mary judgment rulings. After a bench trial, the district court
found that defendant Contreras had violated plaintiff’s consti-
tutional rights. Specifically, the district court concluded that
defendant “Contreras’ application of the regulations to plain-
tiff’s degrees resulted not from an intent to achieve the goals
of the regulations, but because of bias toward the institution
from which they were received.” That finding is not chal-
lenged on appeal. The district court awarded plaintiff nominal
damages in the amount of one dollar. Although plaintiff con-
tends that she received a declaratory judgment that her rights
were violated, a review of the judgment reveals that the judg-
ment is a damages judgment only.

   Plaintiff subsequently sought attorney’s fees in the amount
of $857,278 and costs in the amount of $104,213.05. The trial
court awarded plaintiff $371,362 in attorney’s fees and
$70,828.84 in costs.

  Both plaintiff and defendants1 have filed timely notices of
appeal of the district court’s award.
  1
    Because cross-appeals were filed and for ease of reference, we will use
the terms “plaintiff” and “defendants” rather than appellee/cross-appellant
and appellants/cross-appellees. Although the judgment is only against
defendant Contreras, reference is made to “defendants” throughout the
briefs and in the district court’s fee order. Thus, the term “defendants” will
be used in this opinion.
          BENTON v. OREGON STUDENT ASSIST. COMM’N          11581
III.   Analysis

  A.    Standard of review

   We review an attorney’s fee award pursuant to 42 U.S.C.
§ 1988 under an abuse of discretion standard. See Wilcox v.
City of Reno, 42 F.3d 550, 553 (9th Cir. 1994); Corder v.
Brown, 25 F.3d 833, 836 (9th Cir. 1994). “A district court
abuses its discretion when it awards fees ‘based on an inaccu-
rate view of the law or a clearly erroneous finding of fact.’ ”
Wilcox, 42 F.3d at 553 (quoting Corder v. Gates, 947 F.2d
374, 377 (9th Cir. 1991)). “Any elements of legal analysis
which figure in the district court’s decision are, however, sub-
ject to de novo review.” Corder, 25 F.3d at 836. “[I]t is vital
that the court provide ‘some indication or explanation of how
[it] arrived at the amount of fees awarded.’ ” Cummings v.
Connell, 402 F.3d 936, 947 (9th Cir. 2005) (second alteration
in original) (quoting Chalmers v. City of Los Angeles, 796
F.2d 1205, 1213 (9th Cir. 1986), amended by 808 F.2d 1373
(9th Cir.1987)). “Moreover, when confronted with an objec-
tion on the basis of the limited nature of relief obtained by the
plaintiff, ‘the district court should make clear that it has con-
sidered the relationship between the amount of the fee
awarded and the results obtained.’ ” Cummings, 402 F.3d at
947 (quoting Hensley v. Eckerhart, 461 U.S. 424, 437
(1983)).

  B.   Plaintiff’s Entitlement to Fees

   In an action brought pursuant to 42 U.S.C. § 1983, “the
court, in its discretion, may allow the prevailing party, other
than the United States, a reasonable attorney’s fee as part of
the costs . . . .” 42 U.S.C. § 1988(b). A § 1983 plaintiff who
receives a nominal damage award is a prevailing party for
purposes of § 1988. See Farrar v. Hobby, 506 U.S. 103, 112
(1992). That does not, however, mean that such a plaintiff is
necessarily entitled to an award of fees. See Farrar, 506 U.S.
at 114 (explaining that although the “ ‘technical’ nature of a
11582       BENTON v. OREGON STUDENT ASSIST. COMM’N
nominal damages award . . . does not affect the prevailing
party inquiry, it does bear on the propriety of fees awarded
under § 1988”).

    In Hensley, the Supreme Court explained that “[t]he most
useful starting point for determining the amount of a reason-
able fee is the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate.” 461 U.S. at
433. After calculating this “lodestar” amount, the district
court should then determine whether “other considerations”
warrant increasing or decreasing the lodestar amount. Id. As
explained in Hensley, these “other considerations” include the
following twelve factors:

      (1) the time and labor required; (2) the novelty and
      difficulty of the questions; (3) the skill requisite to
      perform the legal service properly; (4) the preclusion
      of employment by the attorney due to acceptance of
      the case; (5) the customary fee; (6) whether the fee
      is fixed or contingent; (7) time limitations imposed
      by the client or the circumstances; (8) the amount
      involved and the results obtained; (9) the experience,
      reputation, and ability of the attorneys; (10) the “un-
      desirability” of the case; (11) the nature and length
      of the professional relationship with the client; and
      (12) awards in similar cases.

Id. at n. 3.2

   [1] Although this is the analysis generally applied by dis-
trict courts in determining fee awards, as we noted in Morales
v. City of San Rafael, 96 F.3d 359 (9th Cir. 1996), amended
by 108 F.3d 981 (9th Cir. 1997), the Supreme Court in Farrar
“held that ‘nominal damages’ cases in which the relief is de
  2
   As the Court noted, “many of these factors usually are subsumed
within the initial calculation of hours reasonably expended at a reasonable
hourly rate.” Hensley, 461 U.S. at 434 n.9.
          BENTON v. OREGON STUDENT ASSIST. COMM’N          11583
minimis are exempted from the general requirements that gov-
ern the calculation of attorney’s fees . . . .” Id. at 362. This
includes “the requirement that a lodestar first be calculated,”
id., as well as the requirement that the district court “recit[e]
the 12 factors bearing on reasonableness,” Farrar, 506 U.S.
at 115. After Farrar, the district court’s first consideration
must be whether the nominal damages plaintiff is entitled to
any fees at all.

   [2] In Farrar, the plaintiffs filed a lawsuit for $17 million
dollars against six defendants. After ten years of litigation,
they obtained a nominal damages judgment of one dollar
against one defendant. The district court nonetheless awarded
the plaintiffs $280,000 in attorney’s fees. As the Supreme
Court explained, “ ‘the most critical factor’ in determining the
reasonableness of a fee award ‘is the degree of success
obtained.’ ” Farrar, 506 U.S. at 114 (quoting Hensley, 461
U.S. at 436). “In a civil rights suit for damages . . . the award-
ing of nominal damages [ ] highlights the plaintiff’s failure to
prove actual, compensable injury.” Id. at 115. In light of the
nominal damages award, the Supreme Court concluded that
the Farrar litigation “accomplished little beyond giving peti-
tioners ‘the moral satisfaction of knowing that a federal court
concluded that [their] rights had been violated’ in some
unspecified way.” Id. at 114 (alteration in original) (quoting
Hewitt v. Helms, 482 U.S. 755, 762 (1987)). Affirming the
court of appeals’ decision reversing the district court’s award
of fees, the Supreme Court explained that “[w]hen a plaintiff
recovers only nominal damages because of his failure to
prove an essential element of his claim for monetary relief,
the only reasonable fee is usually no fee at all.” Id. at 115
(emphasis added) (internal citation omitted).

   [3] As we have noted, “Farrar therefore teaches that an
award of nominal damages is not enough” to justify an award
of attorney’s fees. Wilcox, 42 F.3d at 555. “If a district court
chooses to award fees after a judgment for only nominal dam-
ages, it must point to some way in which the litigation suc-
11584       BENTON v. OREGON STUDENT ASSIST. COMM’N
ceeded, in addition to obtaining a judgment for nominal
damage.” Id. For example, “[i]f the lawsuit achieved other
tangible results—such as sparking a change in policy or estab-
lishing a finding of fact with potential collateral estoppel
effects—such results will, in combination with an enforceable
judgment for a nominal sum, support an award of fees.” Id.
Other factors recognized by Justice O’Connor as supporting
an award of fees when the plaintiff receives only nominal
damages include “the significance of the legal issue on which
the plaintiff claims to have prevailed” and whether the suc-
cess “accomplished some public goal . . . .” Farrar, 506 U.S.
at 121 (O’Connor, J., concurring). We have approved consid-
eration of these factors. See Cummings, 402 F.3d at 947.

   We now consider whether the district court properly con-
cluded that plaintiff here obtained “other tangible results” that
would warrant the award of attorney’s fees and costs.

  1.     Benefit to the Public At Large

  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 con-
       stitutional 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 signif-
      icant 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 Buck-
hannon Board and Care Home, Inc. v. West Virginia Depart-
ment 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 alter-
ation of the legal relationship of the parties’ necessary to per-
mit 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 judi-
cially sanctioned change in the legal relationship of the par-
ties,” 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 law-
suit brought about a voluntary change in the defendant’s con-
duct” 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 Buckhan-
non suggests that, in assessing the success of a nominal dam-
ages 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 deci-
sion 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 pur-
pose of the catalyst theory was to confer upon a plaintiff “pre-
vailing 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 rea-
sonableness of fees a district court should consider, inter alia,
“whether the plaintiff’s success ‘also accomplished some pub-
lic goal . . . .’ ” Cummings, 402 F.3d at 947 (quoting Farrar,
506 U.S. at 121-22) (O’Connor, J., concurring)). Thus, defen-
dants’ contention that this is not an appropriate factor to con-
sider 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 violat-
ing 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 conclu-
sion that its finding of a constitutional violation under the for-
mer 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.

  2.     Benefit to Plaintiff Personally

  [5] As a second basis for awarding fees, the district court
explained:

       Furthermore, even though plaintiff no longer faced
       restriction on the use of her degrees in Oregon even
       absent the judgment, her career will always be
       marked by this occurrence. Obtaining a declaration
       that her rights were violated serves an important pur-
       pose for plaintiff. She now has a judgment to point
       to in support of the trustworthiness of her education
       and her credentials.

The district court’s language suggests that plaintiff obtained
a declaratory judgment; however, she did not. It is undisputed
that the district court dismissed plaintiff’s claim for declara-
tory judgment as moot in light of the change in the statute,
and nothing in the language of the judgment itself suggests
that plaintiff was awarded declaratory relief. Moreover,
although plaintiff moved in court “to amend the judgment in
order to add the declaratory judgment language from Page
Seven of the opinion,” a review of the docket reveals that the
district court did not amend the judgment, and its refusal to
do so is not before us on appeal. The “declaration” to which
the district court refers is the district court’s conclusion in its
Findings of Fact and Conclusions of Law that plaintiff had
proven that her constitutional rights had been violated. That
conclusion did no more than support the imposition of the
nominal damages award.

    [6] As noted, to justify an award of attorney’s fees in this
case, the district court must identify “some way in which the
litigation succeeded, in addition to obtaining a judgment for
nominal damage.” Wilcox, 42 F.3d at 555. In other words, the
          BENTON v. OREGON STUDENT ASSIST. COMM’N          11589
lawsuit must have “achieved other tangible results” besides
the nominal damages judgment. Id. Here, a finding that plain-
tiff’s rights were violated was a prerequisite to the award of
nominal damages; in fact, a finding of a constitutional viola-
tion will always be present in a civil rights case where nomi-
nal damages have been awarded. See Farrar, 506 U.S. at 120
(O’Connor, J., concurring) (“Every nominal damage award
has as its basis a finding of liability, but obviously many such
victories are Pyrrhic ones.”) (quoting Lawrence v. Hinton,
937 F.2d 603 (4th Cir. 1991). Moreover, every plaintiff who
receives a nominal damages judgment will necessary have a
“judgment to point to” that shows that the plaintiff was in the
right and the defendant in the wrong. Thus, the finding that
plaintiff’s rights were violated and the accompanying judg-
ment cannot be the “something more” required for an award
of attorney’s fees and costs here.

   [7] Finally, the judgment is not, as the district court found,
evidence that plaintiff can point to “in support of the trustwor-
thiness of her education and her credentials.” Rather, the
judgment is merely evidence that the former version of O.R.S.
§ 348.609 was applied to plaintiff in a biased manner. The
evidence that plaintiff can point to regarding the legitimacy of
her credentials is the finding by defendant Contreras and the
Office of Degree Authorization made pursuant to the revised
version of the statute that Bob Jones University meets the
standards of academic quality comparable to an accredited
institution. However, given that this finding was made well
prior to the finding of liability and entry of judgment in this
case, this determination regarding the legitimacy of plaintiff’s
credentials cannot be considered a “tangible result” of this lit-
igation that would support an attorney’s fee award in this
case.

IV.   Conclusion

   The district court’s order awarding attorney’s fees and costs
is REVERSED.