Dupuy v. Samuels

• Decision Date: 09 September 2005
• Docket Number: No. 04-4294.,04-4294.
• Citation: 423 F.3d 714
• Parties: Belinda DUPUY, Pilar Berman, Norman Berman, et al., Plaintiffs-Appellees, v. Bryan SAMUELS, Director, Illinois Department of Children and Family Services, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

423 F.3d 714

Belinda DUPUY, Pilar Berman, Norman Berman, et al., Plaintiffs-Appellees, v. Bryan SAMUELS, Director, Illinois Department of Children and Family Services, Defendant-Appellant.

No. 04-4294.

United States Court of Appeals, Seventh Circuit.

Argued June 9, 2005.

Decided September 9, 2005.

COPYRIGHT MATERIAL OMITTED

Robert E. Lehrer, Lehrer & Redleaf, Edward W. Feldman (argued), Miller, Shakman & Hamilton, Chicago, IL, for Plaintiffs-Appellees.

Erik G. Light (argued), Office of the Attorney General, Chicago, IL, for Defendant-Appellant.

Before BAUER, RIPPLE and MANION, Circuit Judges.

RIPPLE, Circuit Judge.

The plaintiffs brought this action under 42 U.S.C. § 1983, on behalf of themselves and a class of similarly situated individuals, against the Director ("Director") of Illinois' Department of Children and Family Services ("DCFS") for due process violations. After the plaintiffs secured a preliminary injunction against the Director, they sought an interim award of attorneys' fees. The district court granted the plaintiffs attorneys' fees and costs. For the reasons set forth in the following opinion, we now reverse the district court's award of attorneys' fees.

I BACKGROUND

A. Facts

A more thorough rendition of the facts underlying this case is available in our opinion addressing the merits of the district court's preliminary injunction. See Dupuy v. Samuels ("Dupuy III"), 397 F.3d 493 (7th Cir.2005). For the purposes of this opinion, the following description shall suffice.

The plaintiffs are child-care workers and foster parents who had been indicated, in reports maintained on DCFS' State Central Register ("Central Register"), as perpetrators of child abuse or neglect. They brought this suit against the Director of DCFS on behalf of themselves and other similarly situated individuals. The plaintiffs sought injunctive relief on the ground that DCFS procedures for investigating and reporting allegations deprived them of due process of law. See 42 U.S.C. § 1983.

The district court granted the plaintiffs' request for a preliminary injunction. See Dupuy v. McDonald ("Dupuy I"), 141 F.Supp.2d 1090 (N.D.Ill.2001). In Dupuy I, the district court found that a number of the DCFS policies that the plaintiffs had challenged were "not constitutionally adequate." Id. at 1134. However, rather than enter specific relief, the court afforded the parties sixty days in which to develop constitutionally adequate procedures.

The parties later negotiated changes to DCFS policies in court-mediated sessions. At the same time, DCFS itself also drafted new procedures for assessing the credibility and relevancy of the information obtained during an investigation of suspected child abuse. Specifically, the new draft procedures required DCFS employees to consider all evidence, both inculpatory and exculpatory, in an investigation into a suspected incident of child abuse.

After this process was completed, the district court issued an order directing specific relief and resolving the remaining disputes between the parties. R.443. With respect to the standard for assessing evidence of suspected child abuse, the district court found DCFS' new draft policies to be a salutary improvement and directed DCFS to continue weighing all evidence in determining whether a report should be indicated for child abuse.

The district court also found that due process required some form of formal appeals process before an indicated report was recorded on the Central Register. Therefore, the court ordered a limited telephonic administrative review ("the administrative conference") prior to the entry on the Central Registry of any indicated finding of child abuse.

The district court also ordered more rapid post-deprivation hearings for child-care workers; specifically, the court ordered that child-care workers who timely requested an appeal would be entitled to a hearing and a final decision within thirty-five days. The district court specified which members of the plaintiffs' class would be entitled to the administrative conference and the expedited hearings.

The parties appealed, and this court affirmed in part and reversed in part the district court's injunction. See Dupuy III, 397 F.3d at 515.

B. District Court Fee Proceedings

In February 2004, the plaintiffs filed a petition for attorneys' fees. See 42 U.S.C. § 1988. Specifically, they asked for an award of $3,228,673, an amount equal to the fees and expenses that had been incurred through March 2002.

In an order issued October 21, 2004 (the "fee order" or "district court's fee order"), the district court granted in part and denied in part the plaintiffs' petition for fees. The court also ordered the Director to make an interim payment of $1,000,000. The court noted that the plaintiffs had "w[o]n a judicial order granting them relief," R.584 at 3 — relief which the court described as "substantial," "effectively permanent" and largely "unchallenged on appeal," id. at 5. Thus, because the plaintiffs were "prevailing part[ies]" as described by § 1988, the court determined that a fee award was appropriate in this case. The court also concluded that neither the Supreme Court's decision in Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001), nor this court's decisions in Alliance to End Repression v. City of Chicago, 356 F.3d 767 (7th Cir.2004), and Sonii v. General Electric Co., 359 F.3d 448 (7th Cir.2004), barred an interim award of attorneys' fees in this case.

The court did not award attorneys' fees in the entire amount which the plaintiffs had requested. The district court noted that local court rules establish a procedure for parties to share information with the goals of developing a "joint statement" concerning the amount of fees sought and identifying disputes between the parties related to fees. N.D. Ill. R. 54.3. However, because the Local Rule 54.3 process would require significant efforts both from the court and from the parties, and because the litigation had not reached a final conclusion, the court decided that it would award a reduced amount of the fees rather than engage in the Local Rule 54.3 process. Therefore, the court awarded the plaintiffs attorneys' fees in the amount of $1,000,000. The Director appealed to this court.

II ANALYSIS

A. Jurisdiction

We first must resolve the question of our jurisdiction to hear this appeal. An interim award of attorneys' fees generally is interlocutory and not appealable until the conclusion of the underlying suit on the merits. See Estate of Drayton v Nelson, 53 F.3d 165, 166-67 (7th Cir.1994). There is, however, one exception to this rule: An interim award of fees may be appealed if "the party against whom the award is made will not be able to get his money back if he prevails at the end of the case and the award is vacated then." Id. at 167.

The plaintiffs assert that the exception is inapplicable here and therefore that this court lacks jurisdiction over this appeal. From the plaintiffs' submissions to this court before oral argument, it was unclear whether they actually claimed that they would be able to repay the fee award if the Director ultimately prevailed in the underlying suit and the award were vacated. See, e.g., Appellees' Reply Br. at 3 ("There is no non-repayment risk — much less the type of substantial risk the case law refers to — because there is no reversal risk. And there is no reversal risk because the Director's appeal, on its merits, is frivolous . . . ."). At oral argument, it became clear that there is indeed a risk that the plaintiffs and their counsel will lack the financial wherewithal to repay the award should it be reversed sometime in the future. However, the plaintiffs continued to assert at oral argument that there is no risk of non-repayment because it is unlikely repayment ever will be ordered. In the plaintiffs' view, the chances are quite slim that the Director will prevail on the merits, thus requiring them to repay the fee award.

The plaintiffs' theory does not reflect accurately the reasoning behind our cases concerning the appealability of an interim fee award. "Our court has . . . [been] careful to emphasize that appeal depends on a demonstration that the money, once disbursed, is effectively beyond recall in the event of reversal at the end of the case." Constr. Indus. Ret. Fund of Rockford v. Kasper Trucking, Inc., 10 F.3d 465, 468 (7th Cir.1993); see also Palmer v. City of Chicago, 806 F.2d 1316, 1319 (7th Cir.1986) (finding jurisdiction over appeal of interim fee order when members of class to whom fee was paid "might be insolvent" or "might have disappeared" by the end of litigation), cert. denied, 481 U.S. 1049, 107 S.Ct. 2180, 95 L.Ed.2d 836 (1987).

It is clear from our cases that it is the future financial solvency of the party to whom fees are being awarded that matters in the determination whether jurisdiction exists. The parties have not brought to our attention any case explicitly finding a lack of jurisdiction on the theory that the party against whom interim fees are awarded has a very low chance of ultimately prevailing on the merits. Thus, because the plaintiffs have admitted that there is a risk they would be unable to repay the fee award in the future if so required, we find that we have jurisdiction over this appeal.

B. The Plaintiffs' Eligibility for Fees

1. Standard of Review

When reviewing attorneys' fees under § 1988, we review de novo the district court's "purely legal conclusions." Palmetto Props., Inc. v. County of DuPage, 375 F.3d 542, 547 (7th Cir.2004), cert. denied, ___ U.S. ___, 125 S.Ct. 965, 160 L.Ed.2d 899 (2005). Thus, because in this case the Director has challenged whether the district court incorrectly applied the definition of a "prevailing party," we shall review the district court's conclusions de novo. See id. We review "factual matters...