Court Opinion

ID: 2974748
Source: CourtListenerOpinion
Date Created: 2015-09-22 17:22:46.1254+00
Date Added: 2024-06-11T15:33:21.002821
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                                             File Name: 06a0470p.06

                        UNITED STATES COURT OF APPEALS
                                         FOR THE SIXTH CIRCUIT
                                           _________________

                                                       X
                                                        -
 TIM DILAURA; DF LAND DEVELOPMENT L.L.C.;

             Plaintiffs-Appellants/Cross-Appellees, -
 APOSTOLATE FOR THE EUCHARISTIC LIFE,
                                                        -
                                                        -
                                                            Nos. 05-2482/2506

                                                        ,
          v.                                             >
                                                        -
                                                        -
                                                        -
 TOWNSHIP OF ANN ARBOR; ANN ARBOR TOWNSHIP

                                                        -
 ZONING OFFICIAL; ANN ARBOR TOWNSHIP ZONING

           Defendants-Appellees/Cross-Appellants. -
 BOARD OF APPEALS,
                                                        -
                                                       N
                        Appeal from the United States District Court
                       for the Eastern District of Michigan at Detroit.
                No. 00-70570—Bernard A. Friedman, Chief District Judge.
                                          Argued: November 2, 2006
                                 Decided and Filed: December 27, 2006
        Before: MERRITT and MOORE, Circuit Judges; COLLIER, Chief District Judge.*
                                             _________________
                                                   COUNSEL
ARGUED: Robert Charles Davis, O’REILLY, RANCILIO, NITZ, ANDREWS & TURNBULL,
Sterling Heights, Michigan, for Appellants. G. Christopher Bernard, BODMAN LLP, Ann Arbor,
Michigan, for Appellees. ON BRIEF: Robert Charles Davis, O’REILLY, RANCILIO, NITZ,
ANDREWS & TURNBULL, Sterling Heights, Michigan, Robert L. Bunting, Oxford, Michigan, for
Appellants. G. Christopher Bernard, James J. Walsh, BODMAN LLP, Ann Arbor, Michigan, for
Appellees.
                                             _________________
                                                 OPINION
                                             _________________
        KAREN NELSON MOORE, Circuit Judge. Plaintiffs Tim DiLaura (“DiLaura”), DF Land
Development, L.L.C., and Apostolate for the Eucharistic Life (collectively “the plaintiffs”) appeal
the district court’s order granting the plaintiffs attorney fees and costs. The plaintiffs argue that the
district court abused its discretion in ordering a sixty-percent reduction from the amount

        *
           The Honorable Curtis L. Collier, Chief United States District Judge for the Eastern District of Tennessee,
sitting by designation.

                                                         1
Nos. 05-2482/2506              DiLaura et al. v. Township of Ann Arbor et al.                    Page 2

recommended by the magistrate judge’s Report and Recommendation. The defendants Township
of Ann Arbor, Ann Arbor Township Zoning Official, and Ann Arbor Township Zoning Board of
Appeals (collectively “the defendants”) cross-appeal, arguing that the district court erred in ruling
that the plaintiffs were entitled to any costs or fees because they were not prevailing parties.
        Because the district court was within its discretion in finding that the plaintiffs were
prevailing parties, but abused its discretion in reducing the fees and costs by sixty percent, we
AFFIRM in part and REVERSE and REMAND in part the district court’s judgment granting
attorney fees and costs to the plaintiffs in the amount of $72,214.24.
                                         I. BACKGROUND
         As this is the third time that these parties have come before our court, there is a long history
behind this case. DiLaura, as a member and Executive Director of the Apostolate for the Eucharistic
Life, received a charitable donation of real estate in the Township of Ann Arbor for hosting guests
for religious prayer and contemplation. In conjunction with this proposed use, DiLaura planned on
providing complementary food and overnight accommodations for approximately eight guests
throughout each week.
       DiLaura sent a letter to the zoning official asking whether the plaintiffs’ proposed property
use under the donation was prohibited by the defendants’ zoning ordinance. The zoning official
responded that DiLaura was prohibited under the zoning laws from using the property in the way
in which he proposed. DiLaura filed an application for a variance, but the zoning board of appeals
denied the variance application.
        The First Amended Complaint was brought under 42 U.S.C. § 1983, and alleged violations
of, inter alia, the plaintiffs’ right to free exercise of religion under the First Amendment of the
United States Constitution and the Religious Freedom Restoration Act. U.S. CONST. amend I; 42
U.S.C. § 2000bb et seq. (“RFRA”). The district court granted the defendants’ motion to dismiss for
lack of subject matter jurisdiction, holding that the plaintiffs lacked standing and that the plaintiffs’
claims were not ripe.
        In DiLaura v. Ann Arbor Charter Twp., 30 F. App’x 501, 505-07 (6th Cir. 2002)
(unpublished opinion) (“DiLaura I”), we concluded that the plaintiffs did have standing and that
their claims were ripe for review. Although we disagreed with the district court’s reasoning, we
agreed that there was no First Amendment violation. Id. at 508. However, we concluded that the
plaintiffs’ RFRA claim was still valid. Although parts of RFRA had recently been declared
unconstitutional by the Supreme Court while DiLaura I was on appeal, Congress enacted the
Religious Land Use and Institutionalized Persons Act, 42 U.S.C. § 2000cc et seq. (“RLUIPA”),
which amended RFRA. DiLaura I, 30 F. App’x at 507. Thus, we remanded to the district court to
determine whether the defendants were violating the plaintiffs’ rights under RFRA as amended by
RLUIPA. Id. at 510.
        After DiLaura I, on November 14, 2002, the plaintiffs filed a Second Amended Complaint,
formally claiming a violation under RLUIPA. On December 16, 2002, the township board of
trustees, on the recommendation of the planning commission, granted the plaintiffs a conditional
permit to operate a bed and breakfast. Although the defendants asserted that they would not enforce
it, a bed and breakfast permit requires that the permitee charge guests a fee and prohibits serving
alcohol or meals other than breakfast and light snacks. These restrictions, if enforced, would
interfere with the plaintiffs’ plan to provide services for free and to serve lunch, dinner, and
communion wine.
        On remand from DiLaura I, the district court granted summary judgment in favor of the
plaintiffs, concluding that the defendants’ bed and breakfast proposal violated RLUIPA. While
Nos. 05-2482/2506                  DiLaura et al. v. Township of Ann Arbor et al.                              Page 3

acknowledging that the defendants were not going to enforce the bed and breakfast provisions at the
present time, the district court stated that it had “to look at what [the bed and breakfast ordinance]
says and take it [as] exactly what [the defendants] could do.” Joint Appendix (“J.A.”) at 838 (Mot.
Hr’g on Cross-Mot. for Summ. J. (“Hr’g”) at 27). The district court did not formally grant an
injunction, but, rather, stated on the record that the defendants could never enforce the bed and
breakfast provisions against the plaintiffs. The defendants appealed, and we affirmed. DiLaura v.
Twp. of Ann Arbor, 112 F. App’x 445, 446 (6th Cir. 2004) (unpublished opinion) (DiLaura II).
       This brings us to the issue before us today. After DiLaura II, the plaintiffs requested
attorney fees and costs associated with litigating this case. The magistrate judge issued a Report and
Recommendation concluding that the plaintiffs were entitled to attorney fees and costs in the amount
of $178,535.61. The district court found that the plaintiffs were prevailing parties, but reduced the
award by sixty percent to $72,214.24. The parties cross-appealed to this court; we have jurisdiction
over their appeals under 28 U.S.C. § 1291.
                                        II. PREVAILING PARTIES
         We review a district court’s determination of prevailing party status for clear error. Knology,
Inc. v. Insight Commc’ns Co., 460 F.3d 722, 726 (6th Cir. 2006). The defendants argue that the
plaintiffs are not entitled to any attorney  fees or costs, because they do not qualify as “prevailing
parties” under 42 U.S.C. § 1988(b).1 Section 1988(b) provides, in pertinent part, that in an action
to enforce provisions under RFRA or RLUIPA “the court, in its discretion, may allow the prevailing
party . . . a reasonable attorney’s fee as part of the costs . . . .” Prevailing party status is a “statutory
threshold” which must be crossed before there is any consideration of a fee award. Tex. State
Teachers Ass’n v. Garland Indep. Sch. Dist., 489 U.S. 782, 789 (1989). This threshold is crossed
when “the plaintiff has succeeded on ‘any significant issue in litigation which achieve[d] some of
the benefit the parties sought in bringing suit’ . . . .” Id. at 791-92 (alteration in original) (quoting
Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir. 1978)). See also Deja Vu of Nashville, Inc. v.
Metro. Gov’t of Nashville & Davidson County, Tenn., 421 F.3d 417, 420 (6th Cir. 2005), cert.
denied, 126 S. Ct. 2916 (2006).
        “‘[T]he touchstone of the prevailing party inquiry must be the material alteration of the legal
relationship of the parties.’” Farrar v. Hobby, 506 U.S. 103, 111 (1992) (quoting Garland, 489 U.S.
at 792-93). A material alteration requires that “[t]he plaintiff [] obtain an enforceable judgment
against the defendant from whom fees are sought, or comparable relief through a consent decree or
settlement.” Id. (citations omitted). The relief must directly benefit the plaintiff “at the time of the
judgment or settlement.” Id. In contrast, “[w]here the plaintiff’s success on a legal claim can be
characterized as purely technical or de minimis, a district court would be justified in concluding that”
the plaintiff is not a prevailing party under the statute. Garland, 489 U.S. at 792. Further, the
change in the relationship between the parties must be court ordered—if a party’s change in position
is purely voluntary, then there is no prevailing party. Buckhannon Bd. & Care Home, Inc. v. W. Va.
Dep’t of Health & Human Servs., 532 U.S. 598, 605 (2001).
        The defendants make two overlapping arguments in defense of their position that the
plaintiffs are not prevailing parties. First, the defendants argue that their change in position was
purely voluntary, that the district court did not order the defendants to do anything, and, therefore,
under Buckhannon, the plaintiffs are not prevailing parties. We cannot agree with the defendants’
characterization of their actions as voluntary. To the contrary, if the defendants’ actions in this case
were voluntary, they would not have appealed the district court’s decision in DiLaura II. The

         1
           According to Rule 54(d) of the Federal Rules of Civil Procedure, costs are to be awarded as “of course” to
the prevailing party. Although costs are part of the ultimate award that plaintiffs seek, the debate between the parties
focuses on attorney fees under 42 U.S.C. § 1988.
Nos. 05-2482/2506                   DiLaura et al. v. Township of Ann Arbor et al.                                 Page 4

plaintiffs did not obtain full relief in this case until the district court announced, and this court
affirmed, that the defendants could not enforce the bed and breakfast permit limitations against the
plaintiffs. Thus, the defendants’ actions were not completely voluntary.
        Second, the defendants argue that the grant of summary judgment in the plaintiffs’ favor was
only a technical or symbolic victory, and, thus, under Farrar v. Hobby, the plaintiffs are not
prevailing parties. They argue that the rule is that “a plaintiff who does not obtain relief in the form
of a money judgment, an enforceable declaratory judgment or an injunction is not a prevailing party
under Section 1988.” Br. of Defs.-Appellees/Cross-Appellants at 24. According to the defendants,
because the district court’s grant of summary judgment in favor of the plaintiffs did not include one
of these forms of relief, the plaintiffs are not prevailing parties.
        The defendants’ argument rests on an erroneous view of the law. They do not cite any cases
stating that a party must obtain a money judgment, an2 enforceable declaratory judgment, or an
injunction before it is entitled to prevailing party status. As explained above, if the party points to
success on a significant issue leading to a material legal alteration between the parties, then that
party has crossed the “statutory threshold” into prevailing party status. Although a money judgment,
an enforceable declaratory judgment, or an injunction will indicate such an alteration between the
parties, these are not the only ways in which such a changed relationship may manifest itself. The
case at bar provides an example.
         Here, the district court granted the plaintiffs’ motion for summary judgment, and stated on
the record that the defendants could not enforce their ordinance against the plaintiffs’ proposed use
of the property. The district court explained that it was not granting an injunction because “the relief
[the plaintiffs were] asking for in effect is [the defendants] not enforcing their ordinance. I’m going
to grant that. That’s your motion for summary judgment.” J.A. at 836 (Hr’g at 25). While the
district court declined to label the relief “injunctive,” the effect of its order granting summary
judgment materially affected the legal relationship between the parties in that after the district
court’s judgment was rendered, the threat of enforcement no longer existed. The plaintiffs’ victory
was not merely technical or symbolic, and the district court’s determination that the plaintiffs were
prevailing parties was not clearly erroneous.
                                             III. FEE REDUCTION
A. Standard of Review
        We review for abuse of discretion a district court’s determination of the attorney fees due
under § 1988, affording “substantial deference” to the district court’s decision. Deja Vu, 421 F.3d
at 423. Abuse of discretion “exists only when a district court ‘relies upon clearly erroneous factual

         2
            In their petition for rehearing/rehearing en banc, the defendants cite, for the first time, a case which, they
argue, requires that a court provide a plaintiff with a monetary judgment or an injunction before the plaintiff can achieve
prevailing party status. Pet. for Reh’g/Reh’g En Banc at 10 (citing Gregory v. Shelby County, 220 F.3d 433, 447 (6th
Cir. 2000)). We note that this argument conflicts with the defendants’ earlier argument to this court that, to be a
prevailing party, the plaintiff must obtain “relief in the form of a money judgment, an enforceable declaratory judgment
or an injunction.” Br. of Defs.-Appellees/Cross-Appellants at 24. Now the defendants are arguing that only a monetary
judgment or injunction will suffice.
          Both arguments, however, are wrong. Defendants’ new argument fails because Gregory, and the case upon
which it relied, Wooldridge v. Marlene Indus. Corp., 898 F.2d 1169 (6th Cir. 1990), have both been abrogated by
Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Resources, 532 U.S. 598 (2001). Buckhannon
makes clear that all that is required to obtain prevailing party status is a judgment that is enforceable and on the merits.
Id. at 604 (“[E]nforceable 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.” (quoting Tex. State Teachers Ass’n
v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-93 (1989))). To the extent that Gregory and Wooldridge limit prevailing
parties to those parties who obtain monetary judgments or injunctions, they are abrogated.
Nos. 05-2482/2506             DiLaura et al. v. Township of Ann Arbor et al.                     Page 5

findings, applies the law improperly, or uses an erroneous legal standard.’” Id. (quoting Wikol ex
rel. Wikol v. Birmingham Pub. Schs. Bd. of Educ., 360 F.3d 604, 611 (6th Cir. 2004)).
B. The Decision to Reduce the Award Was An Abuse of Discretion
        In the case at bar, the district court abused its discretion on three levels, all of which
culminated in its decision to reduce the fees and costs awarded. First, it incorrectly concluded that
the plaintiffs were not entitled to fees for work done prior to the Second Amended Complaint,
because the plaintiffs ultimately prevailed only on their RLUIPA claim which was not raised until
the Second Amended Complaint. Second, the district court applied the wrong legal standard,
because, although it implicitly found that the case at bar was one involving a common core of facts,
it improperly treated the various claims as distinct, reducing fees based on the number of claims won
versus the number of claims lost. Third, the district court erred in finding that the plaintiffs did not
get complete relief.
       1. Relationship Between RLUIPA Claim and the Original Complaint
        One reason motivating the district court’s decision to reduce attorney fees and costs was its
conclusion that the plaintiffs did not raise their RLUIPA claim until the Second Amended
Complaint. According to the district court, “[n]one of the claims initially pled succeeded and none
of the relief initially sought was obtained.” J.A. at 302 (Order at 3).
        But in DiLaura I, we explained that in their First Amended Complaint the plaintiffs pleaded
a claim under RFRA which was amended by RLUIPA, enacted while the case was on appeal.
DiLaura I, 30 F. App’x at 507. Thus, on remand, the panel instructed the district court to adjudicate
the original RFRA claim according to the RLUIPA provisions. Id. at 510. It follows that the district
court was incorrect in its finding that none of the original claims succeeded, because, according to
DiLaura I, the panel required the RFRA claim in the First Amended Complaint to be adjudicated
as a RLUIPA claim. Even though the plaintiffs did not formally include a RLUIPA claim until their
Second Amended Complaint, it was an abuse of discretion for the district court to ignore the
decision of a panel of this court in DiLaura I, and to treat the RLUIPA claim as unconnected to the
work related to the First Amended Complaint.
       2. The District Court Applied the Wrong Legal Standard to a Case Involving a
          Common Core of Facts and Related Legal Claims
        The district court also abused its discretion in failing to state the correct legal standard
applicable when a series of related legal claims are based on a common core of facts. We recently
stated that:
       “[A] court should not reduce attorney fees based on a simple ratio of successful
       claims to claims raised. When claims are based on a common core of facts or are
       based on related legal theories, for the purpose of calculating attorney fees they
       should not be treated as distinct claims, and the cost of litigating the related claims
       should not be reduced.”
Deja Vu, 421 F.3d at 423 (quoting Thurman v. Yellow Freight Sys., Inc., 90 F.3d 1160, 1169 (6th
Cir. 1996) (citation omitted)). “‘Litigants in good faith may raise alternative legal grounds for a
desired outcome, and the court’s rejection of or failure to reach certain grounds is not a sufficient
reason for reducing the fee. The result is what matters.’” Id. (quoting Hensley v. Eckerhart, 461
U.S. 424, 435 (1983) (footnote omitted)).
Nos. 05-2482/2506                   DiLaura et al. v. Township of Ann Arbor et al.                               Page 6

       In the case at bar, the district court’s statement of the applicable law is selective and, thereby,
misleading. To the extent that the standard is stated correctly, the opinion improperly applies that
standard to the facts. The district court opinion states:
         In determining a reasonable attorney fee “the district court should focus on the
         significance of the overall relief obtained by the plaintiff in relation to the hours
         reasonably expended in the litigation.” Hensley v. Eckerhart, 461 U.S. 424, 435
         (1983). Further a reduction from the lodestar is appropriate when the prevailing
         party “achieve[s] only partial or limited success.” Id. at 436.
                 In the present case, plaintiffs’ success was “partial or limited indeed.” None
         of the claims initially pled succeeded and none of the relief initially sought was
         obtained. Three years into the litigation plaintiffs asserted the RLUIPA claim, which
         did succeed, but still the remaining claims failed and no declaratory or injunctive
         relief was awarded.
J.A. at 302-03 (Order at 3-4) (alteration in original) (emphasis supplied). The district court’s
quotation from Hensley fails to recognize that the Supreme Court mandated the following: “Such
a lawsuit [one involving a common core of facts] cannot be viewed as a series of discrete claims.
Instead, the district court should focus on the significance of the overall relief obtained by the
plaintiff in relation to the hours reasonably expended on the litigation.” Hensley, 461 U.S. at 435.
        By focusing on the fact that most of the plaintiffs’ claims failed, the district court does what
Hensley specifically forbids: it analyzes a series of related legal claims based on a common core
of facts, and determines the amount of fees, not based     on the plaintiffs’ overall success, but based
on the success or failure of the individual claims.3 Because the plaintiffs ultimately prevailed on
only one of their related legal claims, the district court reduced the attorney fees and costs by sixty
percent. It is of no import that the relief came only from the RLUIPA clam, because under Hensley
“[t]he result is what matters.” Id. Thus, the district court’s reduction in fees was an abuse of
discretion.
         3. The Relief Obtained Was Complete
        The district court also erred in deciding that the “plaintiffs’ success was ‘partial or
limited. . . .’” J.A. at 302 (Order at 3). When the plaintiffs filed their First Amended Complaint,
the defendants denied them their requested use of the property. Now the plaintiffs are expressly
allowed their proposed use of the property without any application of the defendants’ zoning
ordinances. The fact that the court did not grant an injunction or declaratory judgment when it
granted the plaintiffs’ motion for summary judgment does not make the ultimate relief less complete.
                                               IV. CONCLUSION
        The parties dispute whether there was a stipulation as to the correct amount of fees and costs
due to the plaintiffs in this case if they were to prevail. We need not reach this issue at this time;
we conclude that, in this case, it is more appropriate to remand to the district court for a decision on
fees that is consistent with our opinion.

         3
           The district court opinion does not even mention the phrase “common core of facts,” but given that the portion
of Hensley from which it quotes is specific to cases involving a common core of facts, we infer that the district court
believed this to be such a case. This is certainly the more plausible position—all of the claims were based on the
defendants’ refusal to grant the plaintiffs permission to operate a religious retreat, and all of the claims were designed
to enable use of the property at issue as proposed.
Nos. 05-2482/2506            DiLaura et al. v. Township of Ann Arbor et al.                 Page 7

        For the foregoing reasons we AFFIRM the district court’s judgment that the plaintiffs are
prevailing parties, we REVERSE the district court’s judgment insofar as it reduced the fees and
costs by sixty percent, and we REMAND to the district court for further proceedings consistent with
this opinion.