Labotest, Inc. v. Bonta
| Decision Date | 19 July 2002 |
| Docket Number | No. 01-56318.,01-56318. |
| Parties | LABOTEST, INC., a California corporation; Frank O. Brown, Plaintiffs-Appellants, v. Diana BONTA, RN; Director, Department of Health Services of the State of California; Kathleen Connell, Controller of the State of California; J. Alan Cates, Chief of the Medi-Cal Fraud Prevention Bureau of the State Department of Health Services, State of California, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Patric Hooper, Hooper, Lundy & Bookman, Inc., Los Angeles, CA, for the plaintiffs-appellants.
Patricia Nagler, Deputy Attorney General, Los Angeles, CA, for the defendants-appellees.
Kyungah Suk, Deputy Attorney General, Los Angeles, CA, for the defendants-appellees.
Appeal from the United States District Court for the Central District of California, Robert J. Kelleher, Senior Judge, Presiding. D.C. No. CV-00-05788-RJK.
Before HALL, SILVERMAN, and RAWLINSON, Circuit Judges.
Plaintiffs Frank Brown, M.D., and Labotest (collectively "Labotest") sued the California Department of Health Services ("DHS") under 42 U.S.C. § 1983 following DHS's imposition of administrative sanctions. Prior to trial, the parties entered into two stipulations, the first of which lifted two of the three sanctions, and the judge signed two attached orders, the second of which incorporated the first stipulation into the court's final order. DHS and Labotest filed cross-motions for summary judgment on the third remaining sanction, which the district court decided in DHS's favor. Ultimately, the parties entered into a settlement agreement which they presented to the court for its approval. It provided that the first stipulation for the lifting of sanctions was to remain in effect.
Labotest then moved for attorney's fees as the prevailing party under 42 U.S.C. § 1988, which motion the district court denied. We hold that a plaintiff who succeeds in obtaining a court order incorporating an agreement that includes relief the plaintiff sought in the lawsuit is not a mere catalyst — he is a prevailing party for attorney's fees purposes.
DHS, which administers California's Medicaid program, Medi-Cal, investigated Labotest for suspected Medi-Cal fraud. As a result of its investigation, DHS imposed three administrative sanctions: It suspended Labotest from the Medi-Cal program, withheld all Medi-Cal payments to Labotest, and disenrolled Labotest from California's "PACT" program. PACT is California's family Planning, Access, Care, and Treatment waiver program, which "provide[s] comprehensive clinical family planning services" to low income families. Cal. Welf. & Inst.Code § 14132(aa). After unsuccessfully appealing DHS's imposition of sanctions through state administrative appeals, Labotest filed a federal class action complaint against DHS, its director Linda Bonta, and two other state officials not involved in this appeal. The complaint alleged deprivation of due process and violation of federal laws and regulations under 42 U.S.C. § 1983. Numerous forms of declaratory and injunctive relief were sought, including repeal of the three administrative sanctions.
Prior to trial, on August 3, 2000, the parties submitted to the court a stipulation bearing their signatures and a proposed order for the judge to sign. The stipulation stated that DHS would reinstate Labotest in the Medi-Cal program and lift all remaining Medi-Cal withholding sanctions, resolving two of the three administrative sanctions imposed. The stipulation deferred resolution of the remaining sanction, Labotest's disenrollment from the PACT program, which the parties agreed to try to resolve informally. The order, which the district court signed, merely removed the scheduled hearing from the district court's calendar.
On February 6, 2001, the parties submitted to the court a second stipulation and order. The second stipulation, also bearing the parties' signatures, provided that Labotest would withdraw its motion for class certification, and the only issues remaining before the court were Labotest's PACT disenrollment and attorney's fees. As to the latter, the second stipulation stated that "[t]he issue of plaintiff's entitlement to attorney's fees, if any is not determined by this Agreement." The proposed order accompanying it provided that the August 3, 2000 stipulation and order "shall be deemed to be part of any final order in this case," and that resolution of the remaining PACT issue would be resolved by cross-motions for summary judgment. The judge signed the order.
On March 12, 2001, the district court heard argument on the pending cross-motions for summary judgment concerning Labotest's PACT disenrollment. On April 30, 2001, the district court granted DHS's motion for summary judgment and denied Labotest's, agreeing with DHS that imposition of the third administrative sanction was appropriate. The court also approved the parties' joint settlement agreement, which provided in part that the August 3, 2000 stipulation, by which DHS agreed to lift the other two sanctions, was to remain in effect. Labotest sought its attorney's fees and costs, except for the amounts associated with adjudication of the PACT issue, on which it did not prevail. The district court denied Labotest's request, and Labotest appeals this denial of attorney's fees.
This court's jurisdiction is premised on 28 U.S.C. § 1291. "A district court's decision to deny attorney's fees is reviewed for an abuse of discretion." United States v. One 1997 Toyota Land Cruiser, 248 F.3d 899, 903 (9th Cir.2001). "An abuse of discretion occurs if the district court based its decision on an erroneous legal conclusion or a clearly erroneous finding of fact." Andrew v. Bowen, 837 F.2d 875, 877 (9th Cir.1988). "Any elements of legal analysis and statutory interpretation that figure in the district court's attorney's fees decision are reviewed de novo." Barrios v. California Interscholastic Fed'n, 277 F.3d 1128, 1133 (9th Cir. 2002).
"In the United States, parties are ordinarily required to bear their own attorney's fees — the prevailing party is not 10204 entitled to collect from the loser." Buckhannon Bd. & Care Home v. West Virginia Dept. of Health & Human Res., 532 U.S. 598, 602, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). In some instances, however, Congress has authorized prevailing parties to recover their attorney's fees. One such instance is 42 U.S.C. § 1988, which authorizes a "prevailing party" in a civil rights action to recover attorney's fees. See 42 U.S.C. § 1988(b) ().
A § 1983 plain...
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