Petersen v. Gibson, 02-4271.

• Decision Date: 16 June 2004
• Docket Number: No. 02-4355.,No. 02-4271.,02-4271.,02-4355.
• Citation: 372 F.3d 862
• Parties: Deborah PETERSEN, Plaintiff-Appellee, Cross-Appellant, v. Byron GIBSON, Officer, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

372 F.3d 862

Deborah PETERSEN, Plaintiff-Appellee, Cross-Appellant, v. Byron GIBSON, Officer, Defendant-Appellant, Cross-Appellee.

No. 02-4271.

No. 02-4355.

United States Court of Appeals, Seventh Circuit.

Argued November 4, 2003.

Decided June 16, 2004.

Rehearing and Suggestion for Rehearing En Banc Denied August 10, 2004.

Judson H. Miner (argued), Miner, Barnhill & Galland, Chicago, IL, for Plaintiff-Appellee.

James L. DeAno (argued), Norton, Mancini, Argentati, Weiler & Deano, Wheaton, IL, for Defendant-Appellant.

Before EASTERBROOK, ROVNER, and EVANS, Circuit Judges.

ROVNER, Circuit Judge.

It is rare that a trip to the hair salon leads to a date in federal appellate court, but that was the unfortunate sequel to Deborah Petersen's hair appointment at the Mario Tricoci Salon in Bloomingdale's Stratford Square Mall on June 13, 1995. Ms. Petersen, a regular customer of the salon, had an appointment to get her hair colored. All did not go as planned, however, and after three hours and two attempts to correct a botched coloring job, Petersen was left under a hair dryer while her stylist went to lunch. When the treatment began to burn her scalp and her stylist was nowhere to be found, Petersen — foils still in her hair — left the salon without paying.

The salon employees then contacted the Bloomingdale police, who dispatched Officer Gibson to the scene. He contacted Petersen and she returned to the store. Hours of discussions ensued, in which Petersen offered to pay part of the bill and the salon refused to accept less than full payment, and culminated in Gibson arresting Petersen and detaining her at the police station for two hours. The salon pursued her prosecution for seven months, at which time the state nolle prosequied her case. Petersen then sued Gibson, the salon, its employees and others. Her claims included false arrest and wrongful detention claims against Gibson under 42 U.S.C. § 1983, a conspiracy claim against all defendants; and malicious prosecution, battery and negligence claims against defendant Mario Tricoci Salon-Bloomingdale and some of its employees.

Following unsuccessful settlement efforts, the case proceeded to trial. The jury was instructed, if it found liability, to award compensatory damages in an amount that would compensate for all of the plaintiff's damages caused by the defendant. It was further instructed, however, that it could award nominal damages if it found liability but no damages as a result. The jury found that Gibson violated Petersen's constitutional rights by wrongly arresting and detaining her, that the salon was liable for malicious prosecution, and that there was no conspiracy. The jury returned a verdict of $40,000.00 in compensatory damages and $10,000.00 in punitive damages against the salon, and a $1.00 nominal damage award against Gibson. Petersen then moved for a new trial on the damages with respect to Gibson, arguing that the court erred in giving the nominal damages instruction. In granting the motion, the court first stated that it provided the instruction because it believed that a reasonable jury could have found that Gibson was not the proximate cause of the substantial part of plaintiff's damages. Dist. ct. order 1/10/02. The court further noted that there was evidence that the length of the detention was attributable to the salon defendants rather than Gibson. Id. In fact, the court declared that if the jury had returned a $1 verdict in the absence of the nominal damages instruction, the court would have let it stand. Id. Nevertheless, because there was "evidence of actual, provable injury that a reasonable jury could have attributed to Gibson," the court held that the better approach would have been to instruct the jury to assess damages in whatever amount it believed would compensate plaintiff for her injury. Id.

Faced with a new trial on the damages relating to Gibson, the parties reached a settlement in which Gibson paid $10,000.00. Petersen then sought attorney's fees against Gibson under 42 U.S.C. § 1988. In determining that fees were proper, the district court considered the tangible benefit of the $10,000 settlement, the success of the claims against the salon, and the public benefit of the action in addressing "the rarely considered but socially important sphere of the use of police power to resolve the complaints of merchants and service providers against their own customers." Dist. ct. order 12/05/02. The court then awarded $288,087.25 in fees and $20,840.03 in costs, for a total award of $308,927.28.

The only issue on appeal concerns the propriety of that award of attorney's fees and costs. Gibson contends that Petersen was not a prevailing party and is therefore not entitled to fees and costs, that any victory is merely technical or de minimis and hence an award is inappropriate, and that the amount of fees and costs is excessive even if an award was proper. Petersen has cross-appealed contending that the district court erred in reducing the hourly rate charged by her attorneys.

The pivotal issue in resolving this appeal is whether Petersen is a prevailing party under § 1988. The term "prevailing party" has a narrow legal definition that may seem counter-intuitive to one who believes the party who "succeeds" is necessarily one who "prevails." As courts have made clear, "a plaintiff must obtain formal judicial relief, and not merely `success,' in order to be deemed a prevailing ... party...." Crabill v. Trans Union, 259 F.3d 662, 667 (7th Cir.2001); see also Hewitt v. Helms, 482 U.S. 755, 762, 107 S.Ct. 2672, 96 L.Ed.2d 654 (1987).

The Supreme Court has held that a prevailing party is one who has been awarded some relief by a court, as through an enforceable judgment on the merits or a court-ordered consent decree. Buckhannon Bd. & Care Home, Inc. v. West Virginia Dept. of Health & Human Res., 532 U.S. 598, 603-04, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001); Texas State Teachers Assoc. v. Garland Ind. School Dist., 489 U.S. 782, 792, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989) (at a minimum plaintiff must receive some relief on his claim before he can be said to prevail); Oil, Chemical, and Atomic Workers Intl. Union, AFL-CIO v. Dept. of Energy, 288 F.3d 452, 457 (D.C.Cir.2002) (to be eligible for attorney's fees, FOIA plaintiffs must have been awarded some relief by a court). The relief requirement emphasizes the practical impact of the lawsuit, and the Supreme Court has repeatedly held that the relief must be real in order to qualify for fees. Farrar v. Hobby, 506 U.S. 103, 110-12, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992); Buckhannon, 532 U.S. at 641 n. 13, 121 S.Ct. 1835 (Ginsburg, J., dissenting) and cases cited therein. For instance, in Rhodes v. Stewart, 488 U.S. 1, 4, 109 S.Ct. 202, 102 L.Ed.2d 1 (1988), the Court held that a plaintiff who obtains a declaratory judgment but obtains no real relief whatsoever is not a prevailing party. See also Hewitt, 482 U.S. at 761, 107 S.Ct. 2672 (judicial statement that plaintiff's rights were violated does not affect the relationship between the plaintiff and the defendant; to be a prevailing party, plaintiff must gain relief of substance). Furthermore, the Supreme Court has emphasized that the relief is actual when it changes the legal relationship between the parties. That is because

[i]n all civil litigation, the judicial decree is not the end but the means. At the end of the rainbow lies not a judgment, but some action (or cessation of action) by the defendant that the judgment produces — the payment of damages, or some specific performance, or the termination of some conduct. Redress is sought through the court, but from the defendant.

[emphasis in original] Hewitt, 482 U.S. at 761, 107 S.Ct. 2672. The mere moral satisfaction of being wronged is insufficient to trigger prevailing party status. Id. at 762, 107 S.Ct. 2672; Cady v. City of Chicago, 43 F.3d 326, 330 (7th Cir.1994) (holding that unless plaintiff "can point to a direct benefit or redressed grievance other than the `psychic satisfaction' of ending `invidious discrimination,' he does not emerge as a prevailing party"); see also Richardson v. Continental Grain Co., 336 F.3d 1103, 1106 (9th Cir.2003) (although plaintiff succeeded on a legal issue, attorney's fees unavailable because no actual relief obtained, "only the possibility of future relief").

Therefore, in determining whether Petersen has prevailed, we must examine the practical impact of the judgment. The only judgment here is the one entered after the trial. That judgment originally awarded Petersen nominal damages, which would have been sufficient under Farrar to obtain prevailing party status, but not necessarily to obtain fees. 506 U.S. at 115, 113 S.Ct. 566 (holding that nominal damages are sufficient to confer prevailing party status but noting that "[w]hen a plaintiff recovers only nominal damages because of failure to prove an essential element of his claim for monetary relief ... the only reasonable fee is usually no fee at all."). That damage award, however, was vacated on Petersen's motion, and the settlement followed. Therefore, the only judgment in this case is a determination that Petersen's rights were violated. As the Supreme Court noted in Buckhannon, however, attorney's fees are not available where plaintiff has "acquired a judicial pronouncement that the defendant has violated the Constitution unaccompanied by `judicial relief.'" [emphasis in original] 532 U.S. at 606, 121 S.Ct. 1835; Thomas v. National Science Foundation, 330 F.3d 486, 488 (D.C.Cir.2003) (quoting Buckhannon and holding that attorney's fees are unavailable where the court order declared that the disputed assessment was an unconstitutional tax, but the plaintiffs did not obtain any concrete relief). It is the settlement, not the judgment of the court, that obtained the practical relief sought by Petersen, and therefore the judgment cannot provide a basis for prevailing party statu...