Dennis v. Chang
| Decision Date | 21 January 1980 |
| Docket Number | Nos. 77-4019,78-1337 and 78-1338,78-1336,78-2751,s. 77-4019 |
| Citation | 611 F.2d 1302 |
| Parties | Hanako DENNIS, Arthur Schmidt, Clyde C. Teixeira, Individually and on behalf of all persons similarly situated, Plaintiffs-Appellees, v. Andrew CHANG, in his capacity as Director, Department of Social Services and Housing, State of Hawaii, and Department of Social Services and Housing, State of Hawaii, Defendants-Appellants. Mary PEREZ, Penelope Torres, Sharleen Lee and Danielle Von Hiram, Individually and on behalf of all persons similarly situated, Plaintiffs-Appellees, v. Andrew CHANG, in his capacity as Director, Department of Social Services and Housing, State of Hawaii, and Department of Social Services and Housing, State of Hawaii, Defendants-Appellants. Marjorie A. LYNCH and Roxanne Montalvo, Individually and on behalf of all persons similarly situated, Plaintiffs-Appellees, v. Andrew CHANG, in his capacity as Director, Department of Social Services and Housing, State of Hawaii, and Department of Social Services and Housing, State of Hawaii, Defendants-Appellants. Claudia FORTUCCI, Individually and on behalf of all persons similarly situated, Plaintiffs-Appellees, v. Andrew CHANG, in his capacity as Director, Department of Social Services and Housing, State of Hawaii, and Department of Social Services and Housing, State of Hawaii, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Charleen M. Aina, Honolulu, Hawaii (argued), Ronald Y. Amemiya, Honolulu, Hawaii, on brief, for defendants-appellants.
Norman K. K. Lau, Honolulu, Hawaii, for plaintiffs-appellees.
Appeal from the United States District Court for the District of Hawaii.
Before BROWNING, CHOY and HUG, Circuit Judges.
Officials of Hawaii's Department of Social Services and Housing challenge the attorneys' fee awards made to prevailing plaintiffs in four section 1983 class actions alleging equal protection and statutory violations in the administration of Hawaii's Medicaid and AFDC programs. 1 Plaintiffs in all four cases were represented by the Legal Aid Society of Hawaii (LASH), a non-profit public interest corporation partially funded by the State of Hawaii. The fee awards were made pursuant to the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988. 2 We conclude that appellants' objections to the awards are without merit.
Appellants' contention that the Eleventh Amendment prohibits awards of attorneys' fees against state officials acting in their official capacities has been rejected by the Supreme Court in Hutto v. Finney, 437 U.S. 678, 98 S.Ct. 2565, 57 L.Ed.2d 522 (1978). The Court stated:
Congress has plenary power to set aside the States' immunity from retroactive relief in order to enforce the Fourteenth Amendment. When it passed (section 1988), Congress undoubtedly intended to exercise that power and to authorize fee awards payable by the States when their officials are sued in their official capacities. Id. at 693-94, 98 S.Ct. at 2575.
Section 1988 applies to " 'all cases pending on the date of enactment' ". Id. at 695 n.23, 98 S.Ct. at 2576 n.23 Quoting H.R.Rep. No. 94-1558, 94th Cong., 2d Sess., at 4 n.6 (1976). Since these four cases fall in that category, the awards are not barred by the Eleventh Amendment. 3
While appellants concede the awards are not barred merely because appellees' counsel is a legal services organization providing free legal representation, 4 they argue that attorneys' fees should not have been awarded in these cases because of the source of LASH's funding and the nature of LASH's program commitment.
As to the source of LASH's funding, appellants point out that the State of Hawaii supports LASH through direct annual appropriations, 5 and argue that the "double payment" LASH would receive from an award of attorneys' fees constitutes a "special circumstance" that would render the fee awards unjust. See S.Rep. No. 94-1011, 94th Cong., 2d Sess., at 4 (1976), U.S.Code Cong. & Admin.News, p. 5909, Quoting Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968). They argue further that even if some fee award were appropriate, the district court abused its discretion by not reducing the amount awarded to reflect the proportion of state funding received by LASH, Citing Gagne v. Maher, 594 F.2d 336, 345 (2d Cir. 1979), Cert. granted, --- U.S. ----, 100 S.Ct. 44, 62 L.Ed.2d 30 (No. 78-1888, Oct. 2, 1979).
As to the nature of LASH's program commitment, appellants point out that LASH is a legal aid organization dedicated to providing free legal services to the poor and that LASH has voluntarily adopted a program giving priority to civil rights litigation. They argue that since LASH has already voluntarily done what an award of attorneys' fees under the Civil Rights Attorney's Fees Awards Act was intended to encourage, a further award under the Act would be unnecessary and would not serve the purposes of the Act.
The state's arguments are not supported by the language, the legislative history, or the purposes of the Act.
The language of section 1988, Title 42, is broad and unequivocal. "In Any action or proceeding to enforce" 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" (emphasis added). While the discretion vested in the court may allow denial of an award because of circumstances peculiar to a particular case, the statutory language hardly permits the denial of an award in every suit brought against the state by a legal services organization that furnishes its services without cost, expresses a commitment to the enforcement of civil rights, and is funded by the state.
Congress was aware that these characteristics are common to legal services organizations. Congress knew that state agencies and officials would be among the civil rights defendants against whom attorneys' fees could be awarded under the Act. 6 Congress knew that civil rights plaintiffs are often represented by legal services organizations, and cited with approval a case in which plaintiff was represented by a legal services organization that was publicly funded. 7 Moreover, Congress was surely aware that one source of such public funding was the states. 8 Yet in outlining the factors to be considered in calculating attorneys' fees, Congress made no reference, directly or by implication, to the nature or source of plaintiffs' counsel's funding. 9
Most persuasive, appellants' interpretation of the statute would run counter to the statutory purpose. As appellants correctly state, Congress' purpose in authorizing fee awards was to encourage compliance with and enforcement of the civil rights laws. 10 The Fees Awards Act must be liberally construed to achieve these ends. 11 "In the civil rights area, Congress has instructed the courts to use the broadest and most effective remedies available to achieve the goals of our civil rights laws." S.Rep. No. 94-1011, Supra at 3, U.S.Code Cong. & Admin.News 1976, p. 5910.
As noted at the outset, appellants concede that attorneys' fees may be awarded under the Fees Awards Act even though plaintiffs have been represented without charge by a legal services organization. An award in these circumstances serves the purposes of the Act for two reasons: (1) the award encourages the legal services organization to expend its limited resources in litigation aimed at enforcing the civil rights statutes; and (2) the award encourages potential defendants to comply with civil rights statutes. These same considerations support an award of attorneys' fees when the legal services organization is funded by the state and the state is the defendant. 12
Even when funded by the state, legal services organizations operate on limited budgets and must allocate their resources among competing projects. Fee awards in civil rights cases encourage legal services organizations to pursue such litigation because the awards permit replenishment of the funds available for the organization's work. While LASH has a present program commitment to civil rights litigation, that commitment is not immutable. Continuation of the commitment is made more attractive by the prospect of recouping resources devoted to such suits. Moreover, attorneys' fees awards will allow LASH to expand its efforts to enforce civil rights statutes in accordance with its commitment. 13 By contrast, interpreting the Act to allow denial of attorneys' fees in suits against state officials would make such suits less attractive, a consequence inconsistent with Congressional recognition that the state is often the necessary target if civil rights are to be protected. See note 6.
The possibility that a state's potential liability for attorneys' fees may encourage it to achieve greater compliance with the civil rights laws is not diminished because the state has funded the legal services organization representing plaintiff. By contrast, if the state were led to expect a reduction in its obligations because it had contributed funds to plaintiffs' counsel, the deterrent effect of a potential fee award would be undermined. Similarly, while potential liability for attorneys' fees may encourage a state defendant to settle civil rights litigation that has been brought against it, if the state could immunize itself against a fee award by contributing to the financing of plaintiffs' counsel the state would have less incentive to settle pending litigation and more incentive to resist civil rights compliance by defending against the suit until trial.
These considerations would apply if the legal services organization involved were financed entirely by state appropriations. They apply with greater force where, as here, the state's funding is only partial. See note 5. If the state would wholly escape its obligation to pay attorneys' fees by partially funding plaintiff's...
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