Court Opinion

ID: 194574
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:20:21+00
Date Added: 2024-06-11T15:10:29.786159
License: Public Domain

March 4, 1993     UNITED STATES COURT OF APPEALS

                      FOR THE FIRST CIRCUIT

                                           

No. 92-1763

                      ANTONIA PARIS, ET AL.,

                      Plaintiffs-Appellants,

                                v.

                  U.S. DEPARTMENT OF HOUSING AND
                    URBAN DEVELOPMENT, ET AL.,

                      Defendants-Appellees.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                 FOR THE DISTRICT OF RHODE ISLAND

           [Hon. Ernest C. Torres, U.S. District Judge]
                                                      

                                           

                              Before

                    Torruella, Circuit Judge,
                                            

                  Bownes, Senior Circuit Judge,
                                              

                    and Stahl, Circuit Judge.
                                            

                                           

     John W. Dineen,  with whom  Yesser, Jessup &  Green, was  on
                                                        
brief for appellants.
     Herbert E. Forrest, Federal Programs Branch, Civil Division,
                       
Department  of Justice,  with  whom Stuart  M. Gerson,  Assistant
                                                     
Attorney General,  Lincoln C. Almond, United  States Attorney and
                                    
William G. Kanter, Attorney, Appellate  Staff, were on brief  for
                 
appellee U.S. Department of Housing and Urban Development.
     Nora J.  Mann, with  whom Leigh  A.  McLaughlin and  Gilman,
                                                                 
McLaughlin  &  Hanrahan,  were  on brief  for  appellee  Corcoran
                       
Management Co., Inc.
                                           

                          March 4, 1993
                                           

          TORRUELLA, Circuit  Judge.  This case  requires that we
                                   

decide whether a party who loses on the only litigated claim, but

achieves   the  relief   sought  as   a  result   of  intervening

congressional action prior to  a ruling by the district  court on

the remaining grounds in  the complaint, can nevertheless recover

attorney's  fees.   We  hold  that,  in  appropriate  cases,  the

district court may award  attorney's fees.  Because we  find this

to be  such a case, we  reverse the district court  ruling to the

contrary, and remand for action consistent with this opinion. 

                               I  

                           BACKGROUND1
                           BACKGROUND
                                     

          Appellants,  a  group  of  very  low  income  families,

challenged a  tenant selection  scheme at  the Chad Brown  public

housing  project in Providence, Rhode Island.  In the late 1970s,

the Department of Housing  and Urban Development ("HUD") and  the

Providence  Housing Authority  ("PHA") hired  Corcoran Management

Co.,  Inc. ("Corcoran")  to  supervise the  modernization of  the

project.    In  order to  achieve  an  economic  mix of  tenants,

Corcoran, with HUD's approval, attempted to implement a plan that

would  skip-over very low income families on the waiting list and

settle higher income families first.  

          In 1986, appellants  sought declaratory and  injunctive

relief against both HUD and Corcoran.  The complaint alleged that

HUD's adoption  of the income  mixing scheme violated  the United

States Housing Act of 1937  ("Housing Act"), 42 U.S.C.   1437  et
                                                                 

                    

1  The facts underlying this case are detailed at  Paris v. Dept.
                                                                 
of  Housing &  Urban Development,  843 F.2d  561 (1st  Cir. 1988)
                                
("Paris I").  
         

seq. (Supp. 1992); the Fair Housing Act, 42 U.S.C.   3601 et seq.
                                                                 

(1977 & Supp.  1992); and  the Due Process  and Equal  Protection

Clauses of  the Constitution of  the United  States.   Appellants

also  brought a claim against Corcoran under 42 U.S.C.   1983 for

violation  of  their  civil  rights  on  the same  statutory  and

constitutional grounds.  The district court granted a preliminary

injunction  based  on  the  Housing  Act  claim.    We  reversed,

expressly leaving  the other  issues open for  resolution by  the

district court.  Paris I, 843 F.2d at 574 n.20.  
                        

          In the  summer of 1988, Congress passed  the Stewart B.

McKinney Homeless  Assistance Amendments Act  of 1988.   This law

prohibited public  housing agencies from by-passing  the order of

the  waiting  list for  the  purpose of  assisting  higher income

families first.2  The Conference Report stated that, "[w]hile the

conferees affirm  the principle of income mix in assisted housing

projects,  this  amendment (which  is necessary  in light  of the
                                                                 

decision in Paris v. HUD, 843 F.2d 561) makes it clear that lower
                                      

income families  on a  waiting list  may not be  skipped over  in

                    

2  The act provided in relevant part:  

            Sec.  1001.     Income  Eligibility   for
            Assisted  Housing.   (b) CLARIFICATION.--
            Section 6(c)(4)(A) of  the United  States
            Housing   Act   of   1987    (42   U.S.C.
              1437d(c)(4)(A)) is amended by inserting
            before  the  semicolon  at  the  end  the
            following:   "and shall not permit public
            housing agencies to  select families  for
            residence in an order different  from the
            order on the waiting list for the purpose
            of  selecting  relatively  higher  income
            families for  residence."   Pub.  L.  No.
            100-628,   1001(b), 102 Stat. 3263.

                               -3-

order to help a higher income family first."  H.R. Conf. Rep. No.

1089,  100th Cong.,  2d  Sess. 91-92  (1988),  reprinted in  1988
                                                           

U.S.C.C.A.N. 4450, 4475-76 (emphasis supplied).  HUD and Corcoran

amended  the income  mixing plan  to conform  to  these statutory

changes.    Appellants moved  for  a  voluntary dismissal  having

achieved  their goal.    The district  court  dismissed the  suit

without reaching the other legal issues in the case.

          In 1990,  appellants moved for an  attorney's fee award

against  HUD under the Equal  Access to Justice  Act ("EAJA"), 28

U.S.C.     2412(d)(1)(A), and  the  Fair Housing  Act,  42 U.S.C.

  3613(c)(2).   Appellants  similarly sought  fees from  Corcoran

under the Civil  Rights Attorney's  Fees Awards Act  of 1976,  42

U.S.C.    1988, and  the Fair  Housing Act.   The  district court

rejected  the claim under  the EAJA finding  that appellants were

not "prevailing  parties" and  that the government's  position in

the  litigation  was  "substantially   justified."    It  refused

recovery under the Fair Housing Act and   1988, reasoning that it

could  not award fees pursuant to those statutes unless the party

prevails on those claims.  Since appellants voluntarily dismissed

the action  before the court  considered those issues,  the court

denied the fee request. 

                                II

                            EAJA CLAIM
                                      

          A party seeking  attorney's fees under    2412(d)(1)(A)

of the EAJA must demonstrate that it is  a "prevailing party" and

                               -4-

that   the   government's   position   was   not   "substantially

justified."3   The  prevailing party  inquiry under  the EAJA  is

consistent with that  under other federal fee-shifting  statutes.

Texas State  Teachers Ass'n v. Garland  Independent School Dist.,
                                                                

489 U.S. 782, 784 (1989); Guglietti v. Secretary of HHS, 900 F.2d
                                                       

397, 398 (1st  Cir. 1990).  In general, the  court looks for some

"material alteration of the legal relationship  of the parties in

a  manner which Congress sought  to promote in  the fee statute."

Texas Teachers, 489 U.S. at 792-93; see also Farrar v. Hobby, 113
                                                            

S. Ct. 566, 572-73 (1992).   We have identified two main  avenues

by which a party may  demonstrate the changed legal relationship.

The party either must enjoy bottom-line success in the litigation

or  act  as   a  catalyst  in  causing  the  desired  alteration.

Guglietti,  900 F.2d at 400-01; Nadeau v. Helgemoe, 581 F.2d 275,
                                                  

278-79 (1st  Cir. 1978).  Unlike other fee-shifting statutes, the

EAJA  presents   the  additional  hurdle  of   showing  that  the

government's position was  not substantially justified.   Compare
                                                                 

42 U.S.C.   1988(b) (Civil Rights Attorney's Fees Awards Act) and
                                                                 

42  U.S.C.    3613(c)(2)  (Fair Housing  Act)  with 28  U.S.C.   
                                                   

                    

3  28 U.S.C.   2412(d)(1)(A) (Supp. 1992) provides:

            Except as otherwise specifically provided
            by  statute, a  court  shall  award to  a
            prevailing  party  other than  the United
            States  fees and  other expenses,  in any
            civil action (other  than cases  sounding
            in   tort),  including   proceedings  for
            judicial review of agency  action, unless
            the court finds that the position  of the
            United States was substantially justified
            or  that  special  circumstances make  an
            award unjust.

                               -5-

2412(d)(1)(A) (EAJA). 

          We  review the  district court's  prevailing party  and

substantial  justification  determinations  under  the  abuse  of

discretion  standard.  Pierce v.  Underwood, 487 U.S. 552, 558-63
                                           

(1988)  (substantial justification);    McDonald v.  Secretary of
                                                                 

HHS, 884 F.2d 1468 (1st Cir. 1989) (prevailing party).   When the
   

district  court  errs  with  respect  to a  purely  legal  issue,

however, our  review is de novo.  Domegan v. Ponte, 972 F.2d 401,
                                                  

406-07 (1st Cir. 1992); see also Guglietti, 900 F.2d at 399.
                                          

          For the  moment we shall postpone  consideration of the

district  court's  finding  on  prevailing  party status  because

appellants'  claim under the EAJA is  dispensed with easily under

the  substantial  justification  prong  of  the  EAJA  fee  award

inquiry.  Appellants predicate their EAJA claim  on their alleged

success  on  the  substantive Housing  Act  claim.    Because the

Housing  Act  does  not  have  its  own  fee-shifting  provision,

appellants were  forced to  seek fees under  the general  federal

fee-shifting statute, the EAJA.  HUD and Corcoran's position with

respect to the  Housing Act  was clearly justified  prior to  the

McKinney  Amendments.    Indeed,  this court  agreed  with  their

interpretation  of the Housing Act  in Paris I.   Congress' later
                                              

action does not alter  our conclusion.  Thus, the  district court

did not abuse its discretion in denying attorney's fees under the

EAJA.

                               III

                FAIR HOUSING ACT AND SECTION 1988
                                                 

                               -6-

          Unlike the  EAJA, neither  the Fair Housing  Act's fee-

shifting provision,4  nor section 1988,5 require  that appellants

demonstrate that the government's position  was not substantially

justified.   The  district court  rejected appellants'  arguments

reasoning that success  on these  claims, by which  it must  have

meant--judicial  consideration prior  to success that  mooted the

court  proceedings--was  the sine  qua non  of  an award  of fees
                                          

pursuant  to  these   statutes.    HUD  and  Corcoran   make  the

superficially appealing argument that fees cannot be awarded to a

party  who lost  on the only  issue that  was litigated.   We are

unpersuaded.

          In Maher  v. Gagne, 448  U.S. 122  (1980), the  Supreme
                            

Court considered whether  a party that sued state officials under

the Social Security Act, 42  U.S.C.    402(a)(7), 602(a)(7),  and

the Equal  Protection and Due  Process Clauses of  the Fourteenth

Amendment of the United States Constitution, but settled the case

                    

4    The  Fair  Housing Act  fee-shifting  provision,  42  U.S.C.
  3613(c)(2) (Supp. 1992) provides in relevant part:

            [T]he court, in its discretion, may allow
            the  prevailing  party,  other  than  the
            United  States,  a reasonable  attorney's
            fee and costs.   The United States  shall
            be liable for such  fees and costs to the
            same extent as a private person.

5  42 U.S.C.   1988 (b) (Supp. 1992) provides:  

            In any action or proceeding  to enforce a
            provision of section[]  . . . 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.

                               -7-

by  entry of  a  consent decree  prior  to determination  by  the

district  court of  whether  her constitutional  rights had  been

violated,  could  recover attorney's  fees  under  section 1988.6

The  court held that the district court's power to award fees was

not  conditioned  on  "full litigation  of  the  issues  or on  a

judicial  determination  that the  plaintiff's  rights have  been

violated."   Maher, 448  U.S.  at 129.    The Court  stated  that
                  

"Congress   intended  fees   to  be   awarded  where   a  pendent

constitutional claim is involved, even  if the statutory claim on

which the plaintiff  prevailed is  one for which  fees cannot  be

awarded  under the  Act."7   Id. at  132 n.15.   The  Maher court
                                                           

recognized that such a policy provided a perfect  balance between

the  congressional  policy  of  encouraging  suits  to  vindicate

constitutional rights and the policy against unnecessary decision

of constitutional questions.  Id. at 133.
                                 

          The  Court  did  not  intend that  the  district  court

litigate the merits of the claims once the case had been resolved

                    

6  In Maine v. Thiboutot, 448 U.S. 1, 9-10 (1980), the Court held
                        
that    1988 provides a basis  for awards for any    1983 action,
including those based  on statutory, rather  than, constitutional
violations.   In Maher, as here, the unlitigated claims were both
                      
statutory and constitutional. 

7  The legislative history accompanying H.R. 15460, a bill almost
identical to  that passed stated:   "if the claim  for which fees
may  be awarded meets  the 'substantiality' test,  see Haggans v.
                                                              
Lavine,  [415 U.S. 528 (1974)]; United Mine Workers v. Gibbs, 383
                                                            
U.S. 715 (1966), attorney's  fees may be allowed even  though the
court declines to enter judgment for the plaintiff on that claim,
so long as the plaintiff prevails on the nonfee claim arising out
of a 'common nucleus  of operative fact.' United Mine  Workers v.
                                                              
Gibbs, supra, at 725."  Maher, 448 U.S. at 133 n.15 (quoting H.R.
                             
Rep. No. 1558, 94th Cong., 2d Sess. 4 n.7 (1976)).

                               -8-

in order to decide the fee issue.  On the contrary, the Court has

cautioned  against such  wasteful  secondary  litigation.   Texas
                                                                 

Teachers, 489  U.S. at 791.   In Haggans v. Lavine,  415 U.S. 528
                                                  

(1974), the Court  developed a "substantiality" test to aid lower

courts in determining when it is appropriate for them to exercise

jurisdiction over  statutory  causes  of  action  that,  although

pendent  to  constitutional  claims  over  which  the  court  has

jurisdiction, have  no independent jurisdictional basis.   Id. at
                                                              

542.   Applied in this different context, the Haggans test serves
                                                     

as a proxy for determination on the merits of the claims once the

litigation is resolved to establish  that an attorney's fee award

is  justified.   The  threshold "substantiality"  test  conserves

judicial  resources while  continuing to require  that plaintiffs

demonstrate that their success is sufficiently related to a civil

rights victory before receiving fees under a fee-shifting regime.

          In  Smith v. Robinson, 468 U.S. 992 (1984), the Supreme
                               

Court clarified principles implicit  in Maher, by explaining that
                                             

"plaintiffs may not rely simply on the fact that substantial fee-

generating claims were made during the course of the litigation."

Id.  at  1007.   Further  examination  of  the  claims and  their
   

relationship  is required.   The  Court specifically  stated that

there was  nothing  wrong with  seeking  relief under  a  certain

statute,  or amending a complaint,  to include a  claim for which

attorney's  fees are available.   Id.  at 1009  n.12.   The court
                                     

concluded,  however,  that  where  petitioners   "have  presented

                               -9-

distinctly  different  claims  for  different  relief,  based  on

different  facts and legal theories, and have prevailed only on a

nonfee claim, they are not entitled to a fee award simply because

the other claim was a constitutional claim that could be asserted

through   1983."  Id. at 1015.  
                     

          This case  does not  present that situation;  the facts

arise from a common  nucleus of operative fact, and  the theories

are  but different  statutory  avenues to  the  same goal.    The

appellants are victims of a  happenstance that the district court

opted  to decide on the basis of  the Housing Act claim, and that

the  appeal proceeded as it did, before Congress intervened.  Nor

are  we presented  with  the situation  in  Smith, in  which  the
                                                 

Supreme  Court  held  that  one  of  the  several  statutory  and

constitutional  claims  was  the  exclusive  avenue  of  redress,

thereby  barring  recovery  under  another  fee-shifting  statute

alleged in the complaint.8

          On  the contrary, we think that the principles of Maher
                                                                 

clearly apply to the  present case.  Maher considered  one manner
                                          

in  which  cases  are  resolved without  formal  adjudication  or

                    

8  In Smith, plaintiffs asserted  claims based on state law;  the
           
Education of the Handicapped Act (EHA), 84 Stat. 175, as amended,
20 U.S.C.   1400 et seq.;  section 504 of  the Rehabilitation Act
                        
of  1973, 87 Stat. 394, as amended, 29  U.S.C.   794; and the Due
Process and Equal Protection Clauses of the Fourteenth Amendment.
The  Court  concluded  that  where  a  remedy  was  provided with
"clarity  and  precision"  under the  EHA,  a  plaintiff  may not
circumvent  that exclusive  avenue by  appeal to  other statutory
schemes.  Smith, 468 U.S. at 1021.  Congress subsequently altered
               
the Court's specific holding under the EHA to provide fees in the
Handicapped  Children's Protection Act  of 1986, Pub.  L. No. 99-
372, 100 Stat. 796, codified at 20 U.S.C.   1415 (Supp. 1992). 

                               -10-

decision  by a  court  on  all  issues  raised  by  the  parties.

Voluntary dismissal is but another way in which a plaintiff saves

judicial resources once it has achieved its desired goal.  

          After a  case is  resolved, by  whatever method, and  a

party requests attorney's fees, we look for  a "prevailing party"

within  the meaning  of  term as  spelled  out in  the case  law.

Appellants are not  a "prevailing  party" under  the merits  test

since  the court  never considered  the merits  of the  claims in

issue.  Langton v. Johnston, 928 F.2d 1206, 1224 (1st Cir. 1991);
                           

Coalition for Basic Human Needs v.  King, 691 F.2d 597, 599  (1st
                                        

Cir. 1982) (merits  test "states  the obvious, that  a party  has

prevailed if it wins the litigation").  Appellants,  however, are

a catalyst under Guglietti,  900 F.2d at 401-02, and  Nadeau, 581
                                                            

F.2d at  279-80.  To be a catalyst the party must demonstrate (1)

a causal  connection between the litigation and the relief sought

and (2) that the success was not obtained by a gratuitous gesture

of the  fee-target.  Guglietti, 900  F.2d at 401.   The suit need
                              

not be the sole cause  but must play a "provocative" role or be a

"competent producing cause."  Id.  
                                 

          The district court summarily determined that appellants

were not  catalysts because it  believed that  Congress, not  the

litigation, caused defendants to  change their income mix policy.

We think this argument is incorrect.

          The  fact  that   Congress  delivered  the  plaintiffs'

requested relief rather than the parties  sued, HUD and Corcoran,

provides no  relevant distinction.   Corcoran, HUD,  and Congress

                               -11-

are  manifestations of the same  entity, the government.   HUD is

simply an instrument  of Congress' will, and  Corcoran does HUD's

bidding.

          The  district  court also  relied  on  our decision  in

Guglietti,  900 F.2d  397,  to deny  appellants prevailing  party
         

status  under the  catalyst  theory.   In Guglietti,  plaintiff's
                                                   

Social Security disability benefits  were terminated.   Guglietti

sought  review of  the determination.   While  on appeal  to this

court, Congress  amended the statute  and directed that  cases on

appeal,  such as  Guglietti's,  be remanded  for a  determination

under  the new  statutory  standard.   Under  that standard,  his

benefits  were reinstated.    Guglietti obtained  attorney's  fee

under the EAJA in the district court.  On appeal, we reversed the

award.   Guglietti, 900  F.2d at 403.   We  reasoned that because
                  

plaintiff  was  just  one of  thousands  of  similar  claims, the

relationship between the litigation  and Congress' action was too

tenuous to be considered  the "provocative" cause of legislation.

Id. at  401 (relying on Hendricks  v. Bowen, 847  F.2d 1255, 1258
                                           

(7th Cir.  1988); Truax  v. Bowen,  842 F.2d  995, 997  (8th Cir.
                                 

1988)).

          This  case is  clearly distinguishable  from Guglietti,
                                                                

however.   Here the Congressional change was wrought by one case,

Paris I.    The Conference  Report specifically  states that  the
       

amendments were necessary to  change the result in Paris I.  H.R.
                                                          

Conf. Rep.  No. 1089  at  91-92, see  ante at  p.  3.   Guglietti
                                                                 

recognized that  assigning a  particular case among  thousands in

                               -12-

the context  of social securities benefits strains  the notion of

provocative cause.   To read Guglietti to  prevent attorney's fee
                                      

in the present case is to negate the possibility of ever granting

attorney's fees when Congress amends or clarifies legislation and

thereby   secures  plaintiff's  requested   interpretation  of  a

statute.  Plaintiffs would be forced to choose between litigation

and pursuing legislative changes via lobbying activities, or risk

losing  an  award of  fees.   Such  an insurmountable  barrier to

recovery  would  contravene  Congress' intent  in  enacting  fee-

shifting  statutes.   Texas Teachers,  489 U.S.  at 793.   In any
                                    

event, this case  sits at the opposite  end of the spectrum  from

Guglietti since  Congress specifically mentioned the  case in the
         

legislative  history as  being the  "necessary" force  behind its

enactment.  

          Appellants' suit  is, thus,  fairly characterized  as a

catalyst of Congress'  amendment.   The district  court erred  in

holding  to the contrary.  As such, appellants' law suit affected

a "material alteration  of the legal relationship  of the parties

in a manner which Congress sought to promote" in the fee-shifting

provisions  of  the   Fair  Housing  Act  with   respect  to  the

government,  and in     1988 with  respect  to Corcoran.    Texas
                                                                 

Teachers, 489 U.S. at 792-93.  
        

          Unfortunately this case is  not at an end.   On remand,

the  district court must determine two matters.  First, the court

must   decide  whether   appellants   raised   statutory   and/or

constitutional  claims that  pass  the "substantiality"  test  of

                               -13-

Maher  and Haggans in order to recover under the alternative fee-
                  

shifting regimes  pursuant to  unlitigated claims.9   Second, the

district  court  must  determine  the  amount  of  fees to  which

appellants are entitled  under Hensley v. Eckerhart, 461 U.S. 424
                                                   

(1983), as "the degree of the plaintiff's overall success goes to

the  reasonableness of  the  award  under  Hensley,  not  to  the
                                                  

availability of a fee award  vel non."  Texas Teachers,  489 U.S.
                                                      

at 793.  

          Reversed and  remanded for action consistent  with this
                                                                 

opinion. 
       

                    

9  As we have not heard argument on those claims we cannot answer
that question.

                               -14-