Hutchinson v. Patrick

• Decision Date: 17 February 2011
• Docket Number: No. 10–1268.,10–1268.
• Citation: 636 F.3d 1
• Parties: Catherine HUTCHINSON, by her Guardian, Sandy JULIEN, et al., Plaintiffs, Appellees,v.Deval L. PATRICK, in his Official Capacity as Governor of the Commonwealth of Massachusetts, et al., Defendants, Appellants.
• Court: U.S. Court of Appeals — First Circuit

636 F.3d 1

24 A.D. Cases 649

Catherine HUTCHINSON, by her Guardian, Sandy JULIEN, et al., Plaintiffs, Appellees,

v.Deval L. PATRICK, in his Official Capacity as Governor of the Commonwealth of Massachusetts, et al., Defendants, Appellants.

No. 10–1268.

United States Court of Appeals, First Circuit.

Heard Nov. 2, 2010.Decided Feb. 17, 2011.

Jennifer Grace Miller, Assistant Attorney General, with whom Martha Coakley, Attorney General, was on brief, for appellants.Steven J. Schwartz, with whom Kathryn Rucker, J. Paterson Rae, Center for Public Representation, Richard A. Johnston, Michael R. Dube and WilmerHale were on brief, for appellees.Jeffrey S. Follett, Brian P. Bialas, and Foley Hoag LLP on brief for AARP, Center for Law and Education, Inc., Lawyers' Committee for Civil Rights Under Law, National Consumer Law Center, Inc., National Health Law Program, Inc., Public Citizen, Inc., The Judge David L. Bazelon Center for Mental Health Law, National Disability Rights Network, Inc., Public Justice, P.C., Women's Bar Association of Massachusetts, Massachusetts Law Reform Institute, Inc., ARC Massachusetts, Inc., American Civil Liberties Union Foundation of Massachusetts, Disabilities Rights Center, Inc., Disability Law Center, Inc., Disability Rights Center, Greater Boston Legal Services, Inc., Legal Assistance Corporation of Central Massachusetts, Rhode Island Disability Law Center, Inc., South Coastal Counties Legal Services, Inc., and Western Massachusetts Legal Services, Inc., amici curiae.Before LYNCH, Chief Judge, SELYA and HOWARD, Circuit Judges.

SELYA, Circuit Judge.

This appeal requires us to consider the circumstances under which a litigant who obtains significant relief through a court-approved settlement, rather than a verdict or a formal consent decree, may achieve “prevailing party” status and, thus, become eligible for an award of attorneys' fees under a typical federal fee-shifting statute. The appeal also requires us to consider when, short of the entry of a final judgment, “prevailing party” status may attach.

These questions (and the other questions before us) arise in the following setting. After the parties reached a negotiated settlement resolving the substance of a complicated class action, the district court awarded the plaintiffs attorneys' fees and expenses totaling over three-quarters of a million dollars. The defendants appeal, asseverating that the district court improperly characterized the plaintiffs as prevailing parties; acted prematurely in arriving at that conclusion; and to add insult to injury, set the amount of the award too generously. We conclude that the district court appropriately characterized the plaintiffs as prevailing parties, that the relief obtained was sufficiently final to justify a fee award, and that the court acted within the purview of its discretion in fixing the amount. Consequently, we affirm.

I. BACKGROUND

On May 17, 2007, the named plaintiffs—several individuals with acquired brain injuries who qualify for long-term care services under the Medicaid program and two organizations devoted to their cause (the Brain Injury Association of Massachusetts and the Stavros Center for Independent Living)—filed suit to compel the defendants—various officials of the Commonwealth of Massachusetts (collectively, the Commonwealth)—to comply with Title II of the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12131–12165, section 504 of the Rehabilitation Act, 29 U.S.C. § 794(a), and the reasonable promptness provision of the Medicaid program as set forth in the Social Security Act, 42 U.S.C. § 1396a(a)(8), (a)(10)(A), by offering services and programs for individuals with acquired brain injuries in integrated community settings. The Commonwealth filed an answering motion, which triggered a spate of motion practice.

On July 13, 2007, the plaintiffs moved for class certification. They then served an array of discovery requests. The Commonwealth cross-moved to stay discovery pending a decision on class certification. The district court granted a stay.

On September 26, 2007, the court certified a class. Shortly thereafter, the parties began settlement negotiations in earnest and agreed to suspend discovery while negotiations proceeded. The talks proved fruitful and, on May 30, 2008, the parties executed a settlement agreement (the Agreement) that they described as “final” and “comprehensive.”

In terms, the Agreement required the Commonwealth, over a period of years, to expand community services (residential and non-residential) for Medicaid-eligible individuals with acquired brain injuries. To this end, the Commonwealth is charged with developing several new projects and programs. The Commonwealth's responsibilities are, however, subject to its ability to secure both funding from the state legislature and necessary approvals from the federal government. With respect to these matters, the Agreement impresses an obligation on the Commonwealth to use best efforts. If the Commonwealth is unable to obtain funding or approvals and the Agreement stalls, either side may move to vacate the settlement so that the plaintiffs can litigate the case.

The Agreement contemplates that the case will remain open for a period of years while the Commonwealth performs thereunder; it authorizes dismissal of the action only after the Commonwealth has completed certain specified obligations and is found to be in “substantial compliance” with the Agreement's terms. The Agreement further provides that the district court “shall retain jurisdiction to hear and adjudicate noncompliance motions.”

Because the district court had certified a class, the Agreement required judicial approval. See Fed.R.Civ.P. 23(e). The parties jointly moved for this approval and, after a preliminary fairness hearing, the district court allowed the approval process to move forward. The court acknowledged, at the Commonwealth's urging, that the Agreement memorialized a settlement and was not tendered as a consent decree.

After the class members were notified of the proposed settlement, see Fed.R.Civ.P. 23(e)(1), the district court held a final fairness hearing. The court again noted that the Agreement “does not constitute a consent decree but is a settlement agreement of this disputed case.” The plaintiffs suggested that the court approve the Agreement by entering it as a court order, but the Commonwealth objected. The court expressed its willingness to indicate, either orally or through a written order, its finding that the Agreement represented a fair and appropriate resolution of the matter. It then asked the parties to submit a draft of a proposed order for approval of the Agreement.

On July 29, 2008, each side submitted a proposed order. The parties disagreed as to whether the court needed explicitly to retain jurisdiction as a means of facilitating subsequent enforcement of the Agreement. In an effort to achieve a meeting of the minds, the district court suggested the following language:

[T]he court approves the comprehensive settlement agreement. This case will not be closed and judgment will not enter pending compliance with the terms of the settlement agreement.

This suggestion did not please anyone. The plaintiffs feared that, without language explicitly retaining enforcement jurisdiction, the court's authority might be questioned in the event that further compliance proceedings become necessary. For its part, the Commonwealth expressed concern that the court's words might be transformed into the functional equivalent of a consent decree. The Commonwealth noted that, in the course of settlement negotiations, it had consistently maintained its unwillingness to resolve the case by means of “a document that could be functionally a consent decree.”

Faced with this impasse, the district court took the matter under advisement. On September 18, 2008, the court, acting without further input from the parties, entered a final approval order. The order states in pertinent part:

[T]he court finds that the Comprehensive Settlement Agreement is fair, reasonable, and adequate. Therefore, the court approves the Comprehensive Settlement Agreement, noting that the parties agree that this agreement does not constitute a consent decree, and that the court will retain jurisdiction over the case. The court orders that this case not be closed and that judgment not enter pending compliance with the terms of the Comprehensive Settlement Agreement.

The entry of the approval order set the stage for the developments leading to this appeal. The plaintiffs, claiming to be prevailing parties, moved for an award of attorneys' fees (including costs) in the amount of $786,123.¹ The Commonwealth disputed the “prevailing party” characterization, the timing of the motion for fees, and the reasonableness of the requested award. The district court found that the plaintiffs were prevailing parties, that fees were presently allowable, and that the amount sought was “eminently fair.” Accordingly, it awarded the plaintiffs the full amount sought. This timely appeal followed.

II. ANALYSIS

The Commonwealth prosecutes this appeal on three fronts. First it asserts that the plaintiffs are not prevailing parties and that, therefore, they are not entitled to a fee award. Second, it questions the timing of the plaintiffs' quest for fees. Its fallback position is that, even if we find its first two points unconvincing, the district court nevertheless committed an abuse of discretion in determining the size of the award. We consider these assertions sequentially.

A. Prevailing Party Status.

We review a determination of “prevailing party” status de novo. Aronov v. Napolitano, 562 F.3d 84, 88 (1st Cir.2009) (en banc); Smith v. Fitchburg Pub. Sch., 401 F.3d 16, 21 (1st Cir.2005). Fee-shifting statutes represent a departure from the historic American rule, which dictates that parties to a case normally will bear their own counsel fees and costs....