Lyte v. Sara Lee Corp., 327

• Decision Date: 03 December 1991
• Docket Number: No. 327,D,327
• Citation: 950 F.2d 101
• Parties: 57 Fair Empl.Prac.Cas. (BNA) 746, 57 Empl. Prac. Dec. P 41,116, 60 USLW 2420 Charles LYTE, Plaintiff-Appellant, v. SARA LEE CORPORATION and Electrolux Corp., Defendants-Appellees. ocket 91-7472.
• Court: U.S. Court of Appeals — Second Circuit

Page 101

950 F.2d 101

57 Fair Empl.Prac.Cas. (BNA) 746,

57 Empl. Prac. Dec. P 41,116, 60 USLW 2420

Charles LYTE, Plaintiff-Appellant, v. SARA LEE CORPORATION and Electrolux Corp., Defendants-Appellees.

No. 327, Docket 91-7472.

United States Court of Appeals, Second Circuit.

Argued Oct. 7, 1991.

Decided Dec. 3, 1991.

Steven D. Ecker, New Haven, Conn. (Susan H. Bartholomew, Jacobs, Grudberg, Belt & Dow, P.C., of counsel), for plaintiff-appellant.

Randolph T. Lovallo, Stamford, Conn. (Curtiss, Brinckerhoff & Barrett, P.C., of counsel), for defendants-appellees.

Before MINER and MAHONEY, Circuit Judges, and MISHLER, District Judge. ¹

MINER, Circuit Judge:

Plaintiff-Appellant, Charles Lyte, appeals from an order entered in the United States District Court for the District of Connecticut (Eginton, J.) denying his motion for attorneys' fees as a prevailing party under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(k). Prior to the motion, plaintiff had accepted a Rule 68 Offer of Judgment made by defendant Sara Lee Corporation ("Sara Lee") in the action brought by plaintiff to redress a Title VII racial discrimination in employment violation. The district court entered judgment for plaintiff in accordance with the terms of the Offer, in the amount of $9,500, together with costs accrued, and dismissed the action. The district court subsequently denied plaintiff's section 2000e-5(k) motion for attorneys' fees, concluding that plaintiff was not a "prevailing party" as defined under the statute. We find that, on the facts presented, plaintiff is a "prevailing party" under the statute and is entitled to attorneys' fees. We therefore reverse and remand for determination of the attorneys' fees due plaintiff.

BACKGROUND

Plaintiff was a computer operator employed from 1979 through 1986 by defendants, Sara Lee and its wholly-owned subsidiary, Electrolux Corporation ("Electrolux"). On August 11, 1989, plaintiff filed a complaint in the district court, under the provisions of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., alleging that defendants discriminated against him in failing to provide him with training and promotional opportunities because he was black. Previously, plaintiff had obtained a Notice of Right to Sue, dated May 16, 1989, from the Equal Employment Opportunity Commission. The complaint filed by plaintiff sought back pay, including lost earnings and fringe benefits, front pay to compensate plaintiff for the losses caused by the denial of promotion, reasonable attorneys' fees and costs, and compensatory and consequential damages arising out of an alleged breach of employment contract.

On August 10, 1990, Sara Lee made an Offer of Judgment to plaintiff pursuant to Fed.R.Civ.P. 68 in the amount of $9,500 plus costs. Plaintiff accepted this offer on August 15, 1990 by filing a "Notice of Acceptance of Offer of Judgment" with the district court. The district court approved the settlement on August 24, 1990 and ordered that judgment be entered against Sara Lee in accordance with the terms of the Offer of Judgment.

On September 12, 1990, plaintiff filed an "Application for Costs, Including Attorneys' Fees," seeking a total of $15,020.68 in attorneys' fees under two theories: first, under the "prevailing party" provision of section 2000e-5(k); and second, under the provision for "costs" specifically included in the Offer of Judgment. The district court denied plaintiff's motion for attorneys' fees, concluding that plaintiff was not a "prevailing party" under the fee provision of Title VII. The district court applied the "alteration of relationship" test formulated by the Supreme Court in Texas State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-93, 109 S.Ct. 1486, 1493-94, 103 L.Ed.2d 866 (1989), finding that

the settlement in the present instance merely provides for payment of $9500.00 plus costs and dismissal of the case. This alone does not materially alter the legal relationship of the parties ... the The district court did not explicitly address plaintiff's argument that attorneys' fees constituted "costs" under the Offer of Judgment; however, since fees are awarded as "costs" under a Rule 68 offer of judgment only if the underlying statute (here section 2000e-5(k)) permits attorneys' fees as part of "costs," see Marek v. Chesny, 473 U.S. 1, 9, 105 S.Ct. 3012, 3016, 87 L.Ed.2d 1 (1985), we shall address only plaintiff's section 2000e-5(k) claim.

                present settlement neither hinders the defendant's future actions or policies, nor provides the plaintiff with any future rights.   Furthermore, since there have been no rulings by this [c]ourt, or words or actions by the defendant, to suggest that any rights of the plaintiff have been violated by the defendant, this [c]ourt cannot conclude that Lyte prevailed.  (citation omitted)
                

DISCUSSION

The Civil Rights Act of 1964 provides, in pertinent part, that in any action or proceeding thereunder "the court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee as part of the costs." 42 U.S.C. § 2000e-5(k). This provision is to be construed in the same fashion as all other "prevailing party" fee provisions in federal civil rights laws, and opinions regarding fees in cases decided under sections 1983 and 1988 therefore are authoritative in the Title VII context. See Hensley v. Eckerhart, 461 U.S. 424, 433 n. 7, 103 S.Ct. 1933, 1939 n. 7, 76 L.Ed.2d 40 (1983) ("standards set forth in this opinion are generally applicable in all cases in which Congress has authorized an award of fees to a 'prevailing party' "). While the language of the Title VII fee provision refers to the award as discretionary, a prevailing plaintiff is in fact entitled to fees "unless special circumstances would render such an award unjust" in light of the congressional goals underlying enforcement of fee awards in civil rights litigation. Id. at 429, 103 S.Ct. at 1937 (citations omitted).

The Supreme Court has recently instructed that success on any significant issue in a case which achieves "some of the benefit" sought by a plaintiff is sufficient to cross "the threshold to a fee award of some kind." Texas Teachers, 489 U.S. at 791-92, 109 S.Ct. at 1492-93 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.1978)) (emphasis added). The "touchstone inquiry" in determining whether the threshold has been crossed is whether in the course of the litigation there occurred a "material alteration of the legal relationship of the parties in a manner which Congress sought to promote in the fee statute." Id. at 792-93, 109 S.Ct. at 1493-94.

In Texas Teachers, the Court referred to its decisions in Hewitt v. Helms, 482 U.S. 755, 760, 107 S.Ct. 2672, 2675, 96 L.Ed.2d 654 (1987), and Rhodes v. Stewart, 488 U.S. 1, 109 S.Ct. 202, 102 L.Ed.2d 1 (1988), to illustrate when a material alteration of the legal relationship did not occur. Texas Teachers, 489 U.S. at 792, 109 S.Ct. at 1493. In Hewitt, plaintiffs litigated to a final judgment and lost on all of their claims; the Court found significant the fact that they did not receive any relief in the form of a settlement or consent decree. See Hewitt, 482 U.S. at 759-63, 107 S.Ct. at 2675-77 ("[r]espect for ordinary language requires that a plaintiff receive at least some relief on the merits of his claim before he can be said to prevail"). Similarly, in Rhodes, plaintiffs (prison inmates) did win injunctive relief on the merits, but in each instance either died or were released from prison before the district court ordered a change in prison regulations, thus achieving in the Court's view "no relief whatsoever." See Rhodes, 488 U.S. at 3-4, 109 S.Ct. at 203-04 (emphasis added). The Court noted that a plaintiff's success must be more than "de minimis" or "technical." Texas Teachers, 489 U.S. at 792, 109 S.Ct. at 1493 (noting that a mere "nuisance settlement" should not give rise to a "prevailing plaintiff") (citing Chicano Police Officer's Ass'n v. Stover, 624 F.2d 127, 131 (10th Cir.1980)); see also New York City Unemployed and Welfare Council v. Brezenoff, 742 F.2d 718, 724 n. 4 (2d Cir.1984).

A plaintiff involved in litigation ultimately resolved by settlement may still be A lawsuit sometimes produces voluntary action by the defendant that affords the plaintiff all or some of the relief he sought through a judgment--e.g., a monetary settlement or a change in conduct that redresses the plaintiffs' grievances. When that occurs, the plaintiff is deemed to have prevailed despite the absence of a formal judgment in his favor.

                entitled to an award of attorneys' fees.   See Maher v. Gagne, 448 U.S. 122, 129, 100 S.Ct. 2570, 2574, 65 L.Ed.2d 653 (1980) (in section 1988 case, "[t]he fact that [plaintiff] prevailed through a settlement rather than through litigation does not weaken [plaintiff's] claim to fees");  see also Koster v. Perales, 903 F.2d 131, 134-35 (2d Cir.1990) (holding plaintiffs eligible for fee award as "prevailing party" when parties entered settlement agreement which granted plaintiffs all the relief contemplated at the outset of the litigation).   In Koster, we quoted and applied the teaching of the Supreme Court in Hewitt
                

Koster, 903 F.2d at 134 (quoting Hewitt, 482 U.S. at 760-61, 107 S.Ct. at 2676 (citation omitted)).

In order to determine if a settling plaintiff is indeed a "prevailing party," "it is helpful to identify the relief sought by the plaintiff and compare it with the relief obtained as a result of the suit." Koster, 903 F.2d at 134 (citations omitted). If the relief obtained is "of the same general type" as the relief demanded in the complaint, a plaintiff may be considered to be a "prevailing party." Koster, 903 F.2d at 134-35 (citation omitted).

We find that plaintiff in the instant case is a "prevailing party" under section 2000e-5(k). Cl...