Court Opinion

ID: 7837952
Source: CourtListenerOpinion
Date Created: 2022-09-08 00:00:25.489637+00
Date Added: 2024-06-11T15:54:35.490128
License: Public Domain

Case: 21-50360   Document: 00516462743      Page: 1    Date Filed: 09/07/2022

          United States Court of Appeals
               for the Fifth Circuit                            United States Court of Appeals
                                                                         Fifth Circuit

                                                                       FILED
                                                               September 7, 2022
                             No. 21-50360
                                                                  Lyle W. Cayce
                                                                       Clerk

   Bahia Amawi

                                    Plaintiff— Appellee/Cross-Appellant,

                                versus

   Ken Paxton, in his official capacity as Attorney
   General of Texas,

                                  Defendant— Appellant/Cross-Appellee,

   _______________________________

   John Pluecker; Obinna Dennar; Zachary Abdelhadi;
   George Hale;

                                                      Plaintiffs—Appellees,

                                versus

   Board of Regents of the University of Houston System;
   Trustees of the Klein Independent School District;
   Trustees of the Lewisville Independent School
   District; Board of Regents of the Texas A&M
   University System,

                                                               Defendants.
Case: 21-50360      Document: 00516462743            Page: 2   Date Filed: 09/07/2022

                                      No. 21-50360

                   Appeal from the United States District Court
                        for the Western District of Texas
                    USDC Nos. 1:18-CV-1091, 1:18-CV-1100

   Before King, Jones, and Duncan, Circuit Judges.
   Edith H. Jones, Circuit Judge:
          Plaintiffs brought suit challenging a Texas law, which was later
   amended so as to moot their claims before the merits were adjudicated.
   Nevertheless, the district court determined that their fleeting success in
   obtaining a preliminary injunction rendered them “prevailing parties” under
   42 U.S.C. § 1988. We disagree, and accordingly REVERSE and REMAND
   the judgment.
                                BACKGROUND
          Plaintiffs are five sole proprietors who filed suit to overturn Texas’s
   House Bill 89 (H.B. 89), which prohibited state governmental entities from
   contracting with companies that “boycott Israel.” TEX. GOV’T CODE ANN.
   § 2270.001, et seq. These proprietors had either lost contract opportunities
   or, in one case, signed a “No Boycott of Israel” verification “against his
   conscience” because of H.B. 89. Plaintiffs sought a preliminary injunction
   against the statute’s enforcement. Before the district court held a hearing on
   the motion, Texas legislators voted out of committee a new bill, House Bill
   793 (H.B. 793), that would make H.B. 89 inapplicable to sole proprietorships.
   Despite this development, the district court granted Plaintiffs’ preliminary
   injunction. Amawi v. Pflugerville Indep. Sch. Dist. (Amawi I), 373 F. Supp. 3d
   717 (W.D. Tex. 2019). In its opinion, the court determined that Plaintiffs
   demonstrated a likelihood of success in showing that H.B. 89 is
   unconstitutional. Id. at 742–58.

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                                    No. 21-50360

          Only twelve days later, Texas Governor Greg Abbott signed H.B. 793
   into law after it had passed in the legislature by a veto-proof majority. The
   Attorney General moved this court to stay the preliminary injunction
   pending appeal, arguing that Plaintiffs’ claims were moot. This court agreed
   and granted the stay. A merits panel later “vacate[d] the preliminary
   injunction and remand[ed] th[e] case to the district court to enter an
   appropriate judgment dismissing the complaints[,] . . . leav[ing] only
   attorney’s fees to be decided on remand.” Amawi v. Paxton (Amawi II),
   956 F.3d 816, 822 (5th Cir. 2020).
          On remand, Plaintiffs moved for approximately $850,000 in
   attorneys’ fees and costs under 42 U.S.C. § 1988 against the Attorney
   General.    The Attorney General countered that Plaintiffs were not
   “prevailing parties” within the meaning of § 1988 and, thus, were not
   entitled to attorneys’ fees. The district court held, however, that Plaintiffs
   were “prevailing parties,” but it reduced the requested amount in certain
   respects. Amawi v. Pflugerville Indep. Sch. Dist. (Amawi III), No. 1:18-CV-
   1091-RP, 2021 WL 1226569, at *2–6, *7–10 (W.D. Tex. Mar. 31, 2021). The
   parties filed a joint proposed order, which calculated the attorneys’ fees in
   accordance with the court-ordered reductions. The Attorney General then
   noticed an appeal. The next day, the district court entered the proposed
   order without change, awarding $341,515 in attorneys’ fees and costs.
                           STANDARD OF REVIEW
          This court reviews an award of attorneys’ fees for abuse of discretion,
   reviewing factual findings for clear error and legal questions de novo. LifeCare
   Mgmt. Servs. LLC v. Ins. Mgmt. Adm’rs, 703 F.3d 835, 846 (5th Cir. 2013)
   (citation omitted). “[T]he characterization of prevailing party status for
   awards under fee-shifting statutes such as § 1988 is a legal question subject
   to de novo review.” Romain v. Walters, 856 F.3d 402, 405–06 (5th Cir. 2017)

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   (citation omitted).       The fee applicant bears the burden of establishing
   entitlement to an award. Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S. Ct.
   1933, 1941 (1983).
                                        DISCUSSION 1
           In any action under 42 U.S.C. § 1983, “the court, in its discretion,
   may allow the prevailing party . . . a reasonable attorney’s fee as part of the
   costs.” 42 U.S.C. § 1988(b). “The touchstone of the prevailing party
   inquiry must be the material alteration of the legal relationship of the parties
   in a manner which Congress sought to promote in the fee statute.” Tex. State
   Tchrs. Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792–93, 109 S. Ct.
   1486, 1494 (1989). “Such a material alteration must have the ‘necessary
   judicial imprimatur.’”         Dearmore v. City of Garland, 519 F.3d 517, 521
   (5th Cir. 2008) (emphasis in original) (quoting Buckhannon Bd. & Care Home,
   Inc. v. W. Virginia Dep’t of Health & Hum. Res., 532 U.S. 598, 605, 121 S. Ct.
   1835, 1840 (2001)). In other words, there must be a “judicially sanctioned

           1
             We briefly address a jurisdictional argument raised by one Plaintiff, who contends
   that the order from which the Attorney General appeals—the order granting in part and
   denying in part Plaintiffs’ fee motions—is not a final decision under 28 U.S.C. § 1291
   because “the District Court had not yet decided on the final amount of recoverable
   attorneys’ fees.” We disagree.
            In assessing finality, “we examine the language and nature of an order, along with
   the district court’s intent.” Sw. Elec. Power Co. v. Certain Underwriters at Lloyd’s of London,
   772 F.3d 384, 387 (5th Cir. 2014) (collecting cases). We “look not to terminology, but to
   the substantial effect of the order.” Hewlett-Packard Co. v. Quanta Storage, Inc., 961 F.3d
   731, 742 n.7 (5th Cir. 2020) (quoting McCoy v. La. State Bd. of Educ., 345 F.2d 720, 721
   (5th Cir. 1965) (per curiam)). The district court’s order finding Plaintiffs to be “prevailing
   parties” effectively ended the litigation. Additionally, though it left the precise amount to
   be calculated by the parties “[t]o ensure accuracy,” the court reduced the award to a “sum
   certain” by providing an exact formula. Amawi III, 2021 WL 1226569, at *7–10. Whatever
   task remained after the district court’s order was purely ministerial, and the court entered
   the joint proposed order without change. Accordingly, the order was final and there is no
   jurisdictional barrier here.

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                                    No. 21-50360

   change in the legal relationship of the parties.” Buckhannon, 532 U.S. at 605,
   121 S. Ct. at 1840.
          The Supreme Court holds that “[p]revailing party status . . . does not
   attend achievement of a preliminary injunction that is reversed, dissolved, or
   otherwise undone by the final decision in the same case.” Sole v. Wyner,
   551 U.S. 74, 83, 127 S. Ct. 2188, 2195 (2007). But the Court reserved the
   question presented in this case—“whether, in the absence of a final decision
   on the merits of a claim for permanent injunctive relief, success in gaining a
   preliminary injunction may sometimes warrant an award of counsel fees.”
   Id. at 86, 127 S. Ct. at 2196. This circuit has answered that question in two
   cases that recognize a narrow basis for attorneys’ fees arising from the
   Supreme Court’s hypothetical. As will be explained, our cases do not
   ultimately support these Plaintiffs’ request.
          Before the Supreme Court’s seminal opinion in Buckhannon, the Fifth
   Circuit recognized what was known as the “catalyst theory” for discerning
   “prevailing parties.” See, e.g., Foreman v. Dallas County, 193 F.3d 314, 319-
   20 (5th Cir. 1999). Under that theory, a plaintiff was a “prevailing party” if
   he proved “(1) that the relief sought by plaintiff was in fact obtained, and
   (2) that the suit itself caused the defendant to alter its conduct.” Id. at 320
   (citing Pembroke v. Wood County, 981 F.2d 225, 230 (5th Cir. 1993)). Long
   before that, this court had concluded that mootness does not alter
   “prevailing party” status because “[a]ll that is required is that the plaintiff
   obtain the primary relief sought.” Doe v. Marshall, 622 F.2d 118, 120
   (5th Cir. 1980). In Doe, the only relief plaintiff obtained before mootness was
   a preliminary injunction. Id. See also Staley v. Harris Cnty., Tex., 485 F.3d
   305, 314 (5th Cir. 2007) (en banc). Plaintiffs contend that the Doe standard
   applies, and the preliminary injunction here conferred “prevailing party”
   status because they ultimately obtained the primary relief sought. But
   Plaintiffs’ position ignores important developments succeeding Doe.

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                                    No. 21-50360

          In Buckhannon, the Supreme Court rejected the “catalyst theory”
   because “[i]t allow[ed] an award where there is no judicially sanctioned
   change in the legal relationship of the parties.” Buckhannon, 532 U.S. at 605,
   121 S. Ct. at 1840.      Instead, “prevailing party” status requires “a
   corresponding alteration in the legal relationship of the parties.” Id. A
   defendant’s voluntary change “lacks the necessary judicial imprimatur on the
   change,” even if the plaintiff ultimately received its desired outcome. Id. To
   conform with Buckhannon, the Fifth Circuit replaced the “catalyst theory”
   with a three-part test. Thus, to be a “prevailing party,” the plaintiff now
   must “(1) obtain actual relief, such as an enforceable judgment or a consent
   decree; (2) that materially alters the legal relationship between the parties;
   and (3) modifies the defendant’s behavior in a way that directly benefits the
   plaintiff at the time of the judgment or settlement.” Energy Mgmt. Corp. v.
   City of Shreveport, 467 F.3d 471, 482 (5th Cir. 2006).
          While Buckhannon did not define the exact parameters of judicially
   sanctioned relief, it clarified that enforceable judgments on the merits and
   consent decrees are sufficient. 532 U.S. at 604, 121 S. Ct. at 1840. On the
   other hand, the Court later held that preliminary injunctions that are
   “reversed, dissolved, or otherwise undone by the final decision” will not
   confer “prevailing party” status. Sole, 551 U.S. at 83, 127 S. Ct. at 2195. The
   Supreme Court left it up to the circuits to apply Buckhannon and Sole to more
   ambiguous judicial actions, including preliminary injunctions that are not
   “reversed, dissolved, or otherwise undone by the final decision”—e.g., those
   that are terminated by mootness. The Fifth Circuit carefully canvassed
   circuit court decisions in Dearmore and ultimately noted that Buckhannon did
   not foreclose prevailing party status in the narrow circumstances where
   defendants voluntarily mooted a case after an adverse preliminary injunction

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                                         No. 21-50360

   precisely to avoid paying attorneys’ fees. In Dearmore, the narrow
   circumstances entailed that the plaintiff 2
           (1) must win a preliminary injunction, (2) based upon an
           unambiguous indication of probable success on the merits of
           the plaintiff’s claims as opposed to a mere balancing of the
           equities in favor of the plaintiff, (3) that causes the defendant
           to moot the action, which prevents the plaintiff from obtaining
           final relief on the merits.
   Dearmore, 519 F.3d at 524; see also id. (“Such a test satisfies Buckhannon,
   because it requires that a party obtain a judicial ruling which results in a
   material change in the legal relationship between the parties.”); Davis v.
   Abbott, 781 F.3d 207, 217–18 (5th Cir. 2015) (acknowledging the Dearmore
   test as “persuasive guidance” in reviewing district court orders that were
   “functionally similar to preliminary injunctions”). Importantly, the third
   factor is only satisfied “when the defendant moots the plaintiff’s action in
   response to a court order, not just in response to the filing of a lawsuit,” thus
   distinguishing it from the “catalyst theory.” 3 Dearmore, 519 F.3d at 524.
   Dearmore holds that the mooting of the case must be caused by the
   preliminary injunction, i.e., a judicially sanctioned order. 519 F.3d at 524
   (“The City, however, mooted the case after and in direct response to the
   district court’s preliminary injunction order.” (emphasis in original)).

           2
            The court clarified the narrowness of this exception by emphasizing that this test
   “is only applicable in the limited factual circumstances” where “a plaintiff obtains a
   preliminary injunction based on an unambiguous indication of probable success on the
   merits, which causes the defendant to moot the action, thereby preventing the plaintiff
   from obtaining final relief on the merits.” Dearmore, 519 F.3d at 526 n.4.
           3
            In Buckhannon, in contrast, the defendant changed its conduct to moot the case
   immediately after the complaint was filed. The Supreme Court deemed this conduct
   voluntary because it was not caused by any judicially sanctioned order. Buckhannon,
   532 U.S. at 600-01, 121 S. Ct. at 1838, 1840.

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                                           No. 21-50360

            Although Dearmore failed to acknowledge Doe expressly, the later
   court evidently was intending to conform prevailing party analysis with
   Buckhannon and Sole, while also preventing defendants from voluntarily
   mooting a case following an adverse preliminary injunction to avoid the
   statutory attorneys’ fee obligation. Dearmore, in practice, strikes a balance
   between Buckhannon and Doe. In light of the subsequent authorities from the
   Supreme Court and this court, we decline Plaintiffs’ request to apply Doe’s
   outdated holding. 4 Where a plaintiff’s sought-for preliminary injunction has
   been granted and the case is thereafter mooted before a final adjudication on
   the merits, Dearmore applies.
            The first two Dearmore factors are uncontested: Plaintiffs received a
   preliminary injunction based on the district court’s unambiguous indication
   of the probable success on their claim. But Plaintiffs have failed to satisfy the
   final requirement by showing that H.B. 793 was passed in direct response to
   the district court’s preliminary injunction. In fact, that almost certainly was
   not precipitated by the court’s decree. The deadline to introduce new bills
   for the 2019 legislative session was in March, while the district court issued
   the preliminary injunction at the end of April. The legislature passed the bill
   with a veto-proof majority shortly thereafter, but Plaintiffs provided nothing
   to the district court or this court evincing that the legislature had the
   preliminary injunction in mind when it completed passage of H.B. 793. And
   “[t]he mere fact that a legislature has enacted legislation that moots an
   [action], without more, provides no grounds for assuming that the legislature
   was motivated by” the “unfavorable precedent.” Am. Bar Ass’n v. FTC,

           4
               “It is a well-settled Fifth Circuit rule of orderliness that one panel of our court
   may not overturn another panel's decision, absent an intervening change in the law, such
   as by . . . the Supreme Court . . . .” Jacobs v. Nat’l Drug Intel. Ctr., 548 F.3d 375, 378
   (5th Cir. 2008).

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                                          No. 21-50360

   636 F.3d 641, 649 (D.C. Cir. 2011) (quoting Nat’l Black Police Ass’n v. District
   of Columbia, 108 F.3d 346, 352 (D.C. Cir. 1997)).
           We emphasize that Dearmore does not require inquiry into the
   subjective intent of the legislators. 5          Rather, such a showing could be
   accomplished in reference to purely objective metrics, for example, by
   establishing a compelling timeline, an outright admission, or the statutory
   language itself. See Dearmore, 519 F.3d at 520 (noting that the defendant’s
   counsel admitted to plaintiff’s counsel that the city planned to amend the
   enjoined ordinance “to address the district court’s order”); Davis, 781 F.3d
   at 217 (Texas repealed the original plan and then “adopted the district
   court’s interim plan . . . without change,” thus illustrating that the district
   court’s enjoining orders caused Texas to moot the case).                           Cf. id.
   (acknowledging legislative history insofar as it “confirms” the objective
   indicators of causation). The introduction of the ameliorative statute here,
   however, predated the district court’s action, and given the bill’s speedy
   passage through both houses and overwhelming legislative support, there is
   no basis to infer that the Texas legislature was motivated by a desire to
   preclude attorneys’ fees.
                                      CONCLUSION
           We REVERSE the judgment for attorneys’ fees, and the motion to
   dismiss for lack of jurisdiction is DENIED.

           5
              When judicial inquiry of legislative motivation “seeks to go behind objective
   manifestations it becomes a dubious affair indeed.” Flemming v. Nestor, 363 U.S. 603, 617,
   80 S. Ct. 1367, 1376 (1960); see also McQueary v. Conway, 614 F.3d 591, 598 (6th Cir. 2010).

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