Gagne v. Maher, No. 503

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Writing for the Court: Before WATERMAN, FEINBERG and VAN GRAAFEILAND; FEINBERG; Garth's
• Citation: 594 F.2d 336
• Parties: Virginia GAGNE, Individually, and on behalf of all others similarly situated, Plaintiff-Appellee-Cross-Appellant, v. Edward W. MAHER, Commissioner of Social Services, Defendant-Appellant. ocket 78-7414.
• Docket Number: No. 503,D
• Decision Date: 09 March 1979

Page 336

594 F.2d 336 Virginia GAGNE, Individually, and on behalf of all others
similarly situated, Plaintiff-Appellee-Cross-Appellant,
v.
Edward W. MAHER, Commissioner of Social Services, Defendant-Appellant. No. 503, Docket 78-7414. United States Court of Appeals,
Second Circuit. Argued Jan. 19, 1979.
Decided March 9, 1979.

Page 338

Edmund C. Walsh, Asst. Atty. Gen., Hartford, Conn. (Carl R. Ajello, Atty. Gen., Paul M. Shapiro, Asst. Atty. Gen., Hartford, Conn., of counsel), for defendant-appellant.

David C. Shaw, Hartford, Conn. (Legal Aid Society of Hartford, County, Inc., Joan Pilver, Hartford, Conn., of counsel), for plaintiff-appellee-cross-appellant.

Before WATERMAN, FEINBERG and VAN GRAAFEILAND, Circuit Judges.

FEINBERG, Circuit Judge:

This case raises interesting questions regarding application of the Civil Rights Attorney's Fees Awards Act of 1976 (Fees Act), which amended 42 U.S.C. § 1988. Defendant Edward W. Maher, Commissioner of Social Services of the State of Connecticut, appeals from an order of the United States District Court for the District of Connecticut, 455 F.Supp. 1344 (1978), Chief Judge T. Emmet Clarie, awarding attorneys' fees of $3,012.19 to the Legal Aid Society of Hartford County, Inc., the attorneys for plaintiff Virginia Gagne, to be paid by appellant Commissioner in his official capacity out of state funds. ¹ The State asserts that the award of attorneys' fees in the circumstances of this case is not authorized by the Fees Act and, in any event, is barred by the Eleventh Amendment. Plaintiff cross-appeals, arguing that the award was too low. For reasons given below, we affirm the judgment of the district court on the State's appeal, and remand for further consideration on plaintiff's cross-appeal.

I

Virginia Gagne, a working recipient of Aid to Families with Dependent Children (AFDC), commenced the underlying action that gave rise to the fee award in January 1975. On behalf of herself and others similarly situated, plaintiff alleged that Connecticut's policies and procedures for determining work-related expenses used in computing AFDC benefits violated the United States Constitution and the Social Security Act.

In the original complaint, plaintiff sought a declaratory judgment that Connecticut's regulations regarding maximum work-related transportation and lunch allowances contravened federal statutes and the United States Constitution, an injunction requiring defendant to take into account all reasonable work-related expenses in computing AFDC benefits and an order requiring defendant to notify affected class members of their right to reapply for benefits. In May 1975, while discovery was taking place in the action, defendant amended his regulations to provide expressly for deduction of all reasonable work-related expenses. In September 1976, plaintiff filed an amended complaint, alleging that the new policy as implemented still resulted in routine disallowance of expenses in excess of the standard allowances and that the State had not adopted reasonable procedures to notify AFDC recipients of their right to deduct work-related expenses. The parties negotiated a settlement in early 1977, and the district court entered a consent decree in March 1977. In this settlement defendant agreed to allow AFDC recipients to prove that they incurred work-related expenses in excess of standard allowances, to double the standard allowance for transportation expenses, to recompute the standard allowances

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annually using cost of living data and to notify all working recipients of their rights with respect to the work-related expense deduction.

The district judge viewed the consent degree as a victory for plaintiff and held, over the objections of the State, that she was entitled to a fee award under the Fees Act. Finding that such an award against the State would not violate the Eleventh Amendment, the judge granted plaintiff's attorneys' fees of $3,012.19.

II

Before us, the State continues to oppose the fee to plaintiff's lawyers. We turn first to the question whether Congress intended to authorize an award of attorneys' fees in this situation. In Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975), the Supreme Court held that only Congress can authorize an exception to the usual American rule that attorneys' fees are usually not recoverable by the winning party in litigation in federal courts. Congress thereafter amended 42 U.S.C. § 1988 in the Fees Act, Pub.L. No. 94-559, 90 Stat. 2641 (1976), to permit a federal court to award attorneys' fees to a prevailing party in suits brought to enforce certain civil rights acts, among them 42 U.S.C. § 1983. The Fees Act provides in relevant part:

In any action or proceeding to enforce a provision of sections 1981, 1982, 1983, 1985, and 1986 of this title, title IX of Public Law 92-318, or in any civil action or proceeding, by or on behalf of the United States of America, to enforce, or charging a violation of, a provision of the United States Internal Revenue Code, or title VI of the Civil Rights Act of 1964, 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 supplied.)

We explained the purpose of this Act in Mid-Hudson Legal Services, Inc. v. G & U, Inc., 578 F.2d 34, 36 & n.2 (2d Cir. 1978):

In order to encourage compliance with certain civil rights laws Congress has often authorized recovery of attorneys' fees by plaintiffs who, through their private suits under such statutes, act as private attorneys general by enforcing federal policy. E. g., Title VIII of the Civil Rights Act of 1968, 42 U.S.C. § 3612(c); the Equal Employment Amendments of 1972, 42 U.S.C. § 2000e-16(b). In accordance with this approach, prior to Alyeska many federal courts had exercised their traditional equity powers to award attorneys' fees under the Reconstruction Civil Rights Acts. . . . The aim of § 1988, therefore, was to regain consistency in the application of fee shifting under the civil rights acts.

See also S.Rep.No. 1011, 94th Cong., 2d Sess. (1976), reprinted in (1976) U.S.Code Cong. & Admin.News, p. 5908 (Senate Report).

The State contends that under the language of the Act quoted above, plaintiff is entitled to attorneys' fees only if she was the prevailing party on her constitutional claims, since the Fees Act does not authorize fees for successful claims under the Social Security Act. Appellant argues that Congress did not intend to authorize fee awards when plaintiff joins a constitutional claim with such a statutory claim and then the entire case is settled without a judicial determination that plaintiff had a meritorious constitutional claim. The State further argues that plaintiff cannot be viewed as the prevailing party on any claim because she received very little of the relief requested, most of the terms of the consent degree did not change existing practices and any changes that were brought about by the consent decree would have been adopted by the State on its own initiative anyway.

Although the Fees Act and its legislative history do not specifically state that attorneys' fees are authorized in this precise situation, the statements of Congressional intent lead us to that conclusion. The Senate Report indicates that attorneys' fees should be awarded in a wide variety of situations, including consent judgments, and cites, among other authorities, Kopet v. Esquire Realty Co., 523 F.2d 1005 (2d Cir.

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1975). ² In that case, 523 F.2d at 1008, and in Blau v. Rayette-Faberge, Inc., 389 F.2d 469 (2d Cir. 1968), we indicated in analogous situations that counsel fees could be awarded whenever plaintiff's efforts confer benefits on the class, including those obtained through settlement. In addition, the House Report on the Fees Act directly addressed the situation in which plaintiff joins a constitutional claim with a non-fee statutory claim:

To the extent a plaintiff joins a claim under one of the statutes enumerated in (the Fees Act) with a claim that does not allow attorney fees, that plaintiff, if it prevails on the non-fee claim, is entitled to a determination on the other claim for the purpose of awarding counsel fees. . . . In some instances, however, the claim with fees may involve a constitutional question which the courts are reluctant to resolve if the non-constitutional claim is dispositive . . .. In such cases, if the claim for which fees may be awarded meets the "substantiality" test, see Hagans v. Lavine, (415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974)); United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (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 non-fee claim arising out of a "common nucleus of operative fact."

H.R.Rep.No. 1558, 94th Cong., 2d Sess. at 4 n.7 (1976) (Citations omitted). See also Kimbrough v. Arkansas Activities Association, 574 F.2d 423 (8th Cir. 1978).

Given the legislative intent to authorize award of attorneys' fees to the prevailing party in settled cases and to avoid unnecessary decision of constitutional issues, we think it clear that Congress intended the test set forth in the House Report to govern the award of attorneys' fees in suits that are settled as well as in those that proceed to a judgment on a "non-fee" claim. The State's interpretation of legislative intent would encourage plaintiffs to try cases in which reasonable settlement offers have been received, merely to ensure a fee award. Cf. Parker v. Matthews, 411 F.Supp. 1059, 1062 (D.D.C.1976), aff'd sub nom. Parker v. Califano, 182 U.S.App.D.C. 322, 561 F.2d 320 (1977). In view of the legislative history, we cannot attribute such an intent to Congress. Thus we conclude that once it has been determined that plaintiff...