Peter v. Jax

• Decision Date: 22 April 1999
• Docket Number: B,No. 273,No. 98-3268,No. 877,E,877,273,98-3268
• Parties: (8th Cir. 1999) Joan Peter; Sarah Peter, a minor, by and through her parent and natural guardian Joan Peter; Krista Westendorp; Douglas Westendorp; Aaron Westendorp, a minor, by and through his parents and natural guardians Krista Westendorp and Douglas Westendorp, Appellants, v. Christine Jax, Commissioner of Minnesota Department of Children, Families and Learning; Jesse Ventura, Governor, State of Minnesota; Independent School District,uffalo, Minnesota; Independent School District,dina, Minnesota. Appellees. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 829

187 F.3d 829 (8th Cir. 1999)

Joan Peter; Sarah Peter, a minor, by and through her parent and natural guardian Joan Peter; Krista Westendorp; Douglas Westendorp; Aaron Westendorp, a minor, by and through his parents and natural guardians Krista Westendorp and Douglas Westendorp, Appellants, v. Christine Jax, Commissioner of Minnesota Department of Children, Families and Learning; Jesse Ventura, Governor, State of Minnesota; Independent School District, No. 877, Buffalo, Minnesota; Independent School District, No. 273, Edina, Minnesota. Appellees.

No. 98-3268

United States Court of Appeals FOR THE EIGHTH CIRCUIT

Submitted: April 22, 1999

Filed: August 13, 1999

As Amended: Sept. 20, 1999

Rehearing and Rehearing En Banc

Denied Sept. 30, 1999^*

Appeal from the United States DistrictCourt for the District of Minnesota. [Copyrighted Material Omitted] Before BOWMAN, Chief Judge, ROSS and MAGILL, Circuit Judges.

ROSS, Circuit Judge,

Disabled students, Sarah Peter and Aaron Westendorp, and their parents (appellants) appeal from an order of the district court ¹ denying them attorney's fees under 42 U.S.C. 1988 against the Governor of Minnesota and the Commissioner of the Department of Children, Families and Learning (the State). Peter v. Wedl, 18 F. Supp.2d 1002 (D. Minn. 1998). We affirm.

BACKGROUND

Some of the background of this litigation is set forth in Peter v. Wedl, 155 F.3d 992 (8th Cir. 1998). Relevant to this fee dispute is the following. In July 1996, appellants brought an action under 42 U.S.C. 1983 against their school districts and the State, alleging that Minn. R. 3525.1150 (the rule) barred provision of on-site paraprofessional services at religious schools in violation of their rights to free speech, free exercise of religion, and equal protection under the First and Fourteenth Amendments, as well as under the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. 1400-1491o (1994) and state law. The rule required that school districts provide special education services "at a neutral site," which included nonreligious private schools, but not religious schools. See Minn. Stat. 123.932, subd. 9.

Appellants filed a motion for a preliminary injunction enjoining enforcement of the rule, relying on, among other cases, Zobrest v. Catalina Foothills Sch. Dist., 509 U.S. 1 (1993). In Zobrest, the Supreme Court held that the Establishment Clause did not bar a school district from providing a student with a sign-language interpreter at a religious school. The State opposed the motion and moved to dismiss, relying on, among other cases, Aguilar v. Felton, 473 U.S. 402 (1985), in which the Supreme. Court held that the Establishment Clause barred public school teachers from providing remedial education services in a religious school. The school districts also filed various motions.

In March 1997, the district court denied injunctive relief, granted in part and denied in part appellees' motions to dismiss, and granted a motion for summary judgment against appellants on their IDEA claims. Peter v. Johnson, 958 F. Supp. 1383, 1400 (D. Minn. 1997), rev'd in part, Peter v. Wedl, 155 F.3d at 1002.

On June 23, 1997, the Supreme Court decided Agostini v. Felton, 521 U.S. 203 (1997). In Agostini, the Court expressly overruled Aguilar and held that the Establishment Clause did not bar provision of publicly-funded remedial services at religious schools.

On June 24, 1997, the State wrote appellants' counsel, proposing putting the litigation "on hold" until June 27 while it reviewed Agostini. However, on June 26, appellants brought a new motion for preliminary injunction based on Agostini. Later that day, the State faxed a letter to appellants expressing surprise on receiving the motion in light of its June 24 letter. The State also advised appellants that after review of Agostini the Commissioner no longer intended to "enforce Minn. R. 3525.1150 to prevent school districts from providing special education services on-site at sectarian schools." The State indicated it would work with the state board of education to repeal the rule to the extent it was inconsistent with Agostini, but noted that school districts retained the discretion to determine whether to provide special education services at private schools. In letters of July 11 and 22, the State reiterated its position that "because of Agostini, the State will no longer enforce the rule as limited to neutral sites" and that the school districts had the responsibility for provision of special education services. In its July 11 letter, the State also advised appellants that only the state board of education had the authority to change the rule and the Commissionercould not "dictate the outcome of the rulemaking process," which could take several months.

On July 31, 1997, appellants and the State stipulated to entry of a preliminary injunction. On August 5, the court entered a preliminary injunction enjoining enforcement of the rule "insofar as it prohibits provision of special education services to Plaintiffs Sarah Peter and Aaron Westendorp on the premises of a private religious school." In October 1997, the state school board changed the rule so that it no longer prohibited provision of special education services at religious schools, explaining the change was necessary to comply with Agostini. The district court then dismissed the claims against the State as moot.

In September 1997, the Peters entered into a settlement agreement with their school district in which the district agreed to rescind policies that prohibited provision of paraprofessional services at religious schools and to pay $31,000, which included attorney's fees. However, the Westendorps' school district refused to provide such services, maintaining it did not provide the services at any private school. The Westendorps then moved for a preliminary injunction requiring the school district to provide paraprofessional services at a religious school. The district court thereafter denied injunctive relief and granted summary judgment against the Westendorps' remaining constitutional and state law claims against the district, and they appealed.

While the Westendorps' appeal was pending, appellants filed an application in the district court for attorney's fees against the State under 42 U.S.C. 1988, ² seeking $272,494.80 in fees and expenses, including over $62,000 for fee litigation. Appellants contended they were prevailing parties under Farrar v. Hobby, 506 U.S. 103 (1992), because they obtained relief on the merits of their claim against the State. In the alternative, appellants contended they were prevailing parties because their lawsuit was the catalyst for the change in the State's position.

The district court denied the fee application. The court held that appellants were not prevailing parties under Farrar because the relief obtained by the consent injunction and stipulation did not materially benefit them, as Farrar required, noting it was the school district's responsibility to provide the requested paraprofessional services. See Id. at 111. The court also held that appellants were not prevailing parties under a catalyst theory of recovery, finding that the State changed its position because of Agostini, not because of the lawsuit. In any event, the court concluded even if appellants were prevailing parties, it would deny attorney's fees because of special circumstances, including that until the Supreme Court's decision in Agostini, the State was obligated to follow Aguilar.

DISCUSSION

Under 42 U.S.C 1988(b), a district "court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs." We review the denial of fees for an abuse of discretion. Jenkins v. Missouri, 127 F.3d 709, 713 (8th Cir. 1997) (en banc). However, "the question of prevailing party status, a statutory term, presents a legal issue for decision, which we review de novo." Id. at 713-14.

In the district court, the parties disputed whether Farrar or the catalyst theory should apply to determine prevailing party status. Under Farrar, a plaintiff must obtain "some relief on the merits of his claim . . . against the defendant from whom fees are sought," either through an enforceable judgment or comparable relief. Farrar, 506 U.S. at 111. The catalyst theory is an "alternative to the Farrar approach in cases where the defendant voluntarily granted the requested relief, rendering the lawsuit moot[,]" if the lawsuit was the cause of the remedial action and defendant's compliance was not gratuitous. Tyler v. Corner Constr. Corp., 167 F.3d 1202, 1205 (8th Cir. 1999). In. Tyler, this court, noting some confusion in our cases, held that courts should apply "the principles outlined in Farrar to determine prevailing-party status in cases that result in settlement." Id. In light of Tyler, the parties concede, and we agree, that the Farrar principles are applicable.

We turn now to those principles. Appellants argue the consent injunction and stipulation automatically make them prevailing parties under Farrar. We disagree. Although under Farrar, a plaintiff must obtain relief on the merits through an enforceable judgment, a consent decree, or a settlement, that is not enough. In addition, the relief must "materially alter[] the legal relationship between the parties by modifying the defendant's behavior in a way that directly benefits the plaintiff." Farrar, 506 U.S. at 111-12. The Court also emphasized "[w]hatever relief the plaintiff secures must directly benefit him at the time of the judgment or settlement." Id. at 111. The Court explained that it is "[o]nly under these circumstances can civil rights litigation effect 'the material alteration of the legal relationship of the parties' and thereby transform the plaintiff into a prevailing party." Id. (quoting Texas State Teachers Ass'n. v. Garland Indep. Sch. Dist., 489 U.S. 782, 792-93 (1989)). "Otherwise the judgment...