US v. Miscellaneous Pornographic Magazines, 80 C 3593

• Decision Date: 11 June 1982
• Docket Number: No. 80 C 3593,80 C 5753 and 80 C 5566.,80 C 3593
• Parties: UNITED STATES of America, Plaintiff, v. MISCELLANEOUS PORNOGRAPHIC MAGAZINES, etc., Defendant. YOURSTYLE PUBLISHERS, INC., Plaintiff, v. Donald T. REGAN, et al., Defendants. UNITED STATES of America, Plaintiff, v. VARIOUS ARTICLES OF MERCHANDISE, SCHEDULE # 125, Defendant.
• Court: U.S. District Court — Northern District of Illinois

541 F. Supp. 122

UNITED STATES of America, Plaintiff, v. MISCELLANEOUS PORNOGRAPHIC MAGAZINES, etc., Defendant.

YOURSTYLE PUBLISHERS, INC., Plaintiff, v. Donald T. REGAN, et al., Defendants.

UNITED STATES of America, Plaintiff, v. VARIOUS ARTICLES OF MERCHANDISE, SCHEDULE # 125, Defendant.

Nos. 80 C 3593, 80 C 5753 and 80 C 5566.

United States District Court, N. D. Illinois, E. D.

February 11, 1982.

Supplemental Memorandum Opinion June 11, 1982.

Joseph Schuman, Foss, Schuman & Drake, Chicago, Ill., for plaintiff YourStyle Publishers, Inc.

Joan B. Gotschall, Kenneth A. Kroot, Chicago, Ill., for Amicus Curiae Chicago Lawyers' Committee for Civil Rights Under Law.

Robert T. Grueneberg, Patrice M. Scully, Asst. U. S. Attys., Chicago, Ill., for the United States.

MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

On October 13, 1981 this Court rendered its memorandum opinion and order (the "Opinion," 526 F.Supp. 460) in these three consolidated actions involving allegedly pornographic materials seized in 1980 by the United States Customs Service. After the government had reported on its compliance with Section 2 of the Opinion¹ the Court entered final judgment in the three actions. On November 16, 1981 YourStyle moved under 28 U.S.C. § 2412 ("Section 2412") for an award of attorneys' fees and expenses in addition to costs.² For the reasons stated in this memorandum opinion and order YourStyle's motion could be granted only in part if at all, but further briefing by the parties is required in any event.

YourStyle invokes each of two subsections of Section 2412 permitting attorneys' fee awards to the "prevailing party" in any litigation with the government. Section 2412(b) provides:

The United States shall be liable for such fees and expenses to the same extent that any other party would be liable under common law or under the terms of any statute which specifically provides for such an award.

Section 2412(d)(1)(A) provides for an award in any non-tort action:

unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

Because the latter provision poses the somewhat easier legal problems it will be dealt with first in this opinion.

Under Section 2412(d) the Court must first determine that the government's adversary is the "prevailing party." Then fees are to be awarded unless the limiting language quoted in the preceding paragraph of this opinion applies. YourStyle cannot succeed on the latter ground.

Analysis of the Opinion discloses that YourStyle could be found the "prevailing party" only in the limited sense discussed later in this opinion. But in any case the Court cannot find in good conscience that the other statutory condition has been satisfied. As H.R.Rep.No.96-1418, reprinted in 1980 U.S.Code Cong. & Ad. News 4984, 4989, 4990 (hereafter cited "Report at 2989, 4990") put it:

Where the Government can show that its case had a reasonable basis both in law and fact, no award will be made.... The standard, however, should not be read to raise a presumption that the Government position was not substantially justified, simply because it lost the case. Nor, in fact, does the standard require the Government to establish that its decision to litigate was based on a substantial probability of prevailing. Furthermore, the Government should not be held liable where "special circumstances would make an award unjust." This "safety valve" helps to insure that the Government is not deterred from advancing in good faith the novel but credible extensions and interpretations of the law that often underlie vigorous enforcement efforts. It also gives the court discretion to deny awards where equitable considerations dictate an award should not be made.

Again a reading of the Opinion makes plain that the United States has met the test that insulates it from liability for fees. Its position in the litigation was certainly "substantially justified."³ Section 2412(d) thus brings YourStyle to a dead end.

As for Section 2412(b), its opaque language has led the parties to opposite conclusions. In part it was intended to apply the "American Rule"—with its limited exceptions —to the federal government as a losing litigant. Report at 4987, 4996. In that respect neither the "bad faith" or any other recognized exception to the American Rule can even arguably apply here.⁴ According to the United States that should be the end of the matter.

However the government's construction of the new enactment as embracing only the "American Rule" (a common-law rule) would effectively read critical language out of the statute. Section 2412(b) also makes the government liable where another party would be liable "under the terms of any statute which specifically provides for such an award." On that score Report at 4996 reads:

The United States would also be liable under the same standards which govern awards against other parties under Federal statutory exceptions, unless the statute expressly provides otherwise. This subsection clarifies the liability of the United States under such statutes as the Civil Rights Attorney's Fees Awards Act of 1976, as well.

After pointing to that legislative history YourStyle is guilty of just as simplistic an approach as the government. It argues (R. Br. 4):

If fees cannot be covered under Section 1988 42 U.S.C. § 1988, the Civil Rights Attorney's Fees Awards Act of 1976 in this case, it is hard to tell what sort of "clarification" has occurred.

But the issue is not that easy. Section 1988 provides a discretionary allowance of fees to a prevailing party under a number of statutes, including relevantly Sections 1981 to 1986 (except for 1984) of Title 42. If we indulge the effective incorporation concept that seems to be implicit in Section 2412(b), the United States might readily be a losing defendant in actions that partook of the nature of Section 1981, 1982, 1985 or 1986 and thereby be subject to assessment of fees under Section 2412(b). Section 1983 however poses a more difficult question of construction. For the government to fit within Section 2412(b) in a Section 1983 action there are two possible readings:

(1) Does the United States (like any other "person" who is a defendant in such an action) have to be shown to have violated a plaintiff's rights "under color" of state law? That could occur, for instance, if its activities were intertwined with those of actual state actors in a way exemplified by Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961) or Adickes v. S. H. Kress & Co., 398 U.S. 144, 150-52, 90 S.Ct. 1598, 1604-05, 26 L.Ed.2d 142 (1970).

(2) Was it instead intended by Congress that the United States would be substituted for the State itself for Section 1983 purposes, without reference to the need to prove "state action"—an integral part of a Section 1983 cause of action?

If the former were the case YourStyle could not recover here, for the activity is solely that of the federal government, without any state component. If the latter were the case YourStyle could recover, for its claim was that the United States had violated its First Amendment rights. It must be observed however that Section 1983 extends not only to violation of constitutional rights but also to those created by a broad range of federal statutes. Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980). If the state action component of Section 1983 were eliminated for purposes of Section 2412(b) fee awards, that subsection would effectively swallow up all of Section 2412(d). In light of the far more liberal standard for allowance of fees under Section 1988, that would be an extraordinary result not lightly to be imputed to Congress.

Obviously the parties have not thought through or dealt with the considerations here, which could have a massive import for the government far beyond the confines of this case. Because of the importance of the issue, the Court will require further briefing on the intended meaning and proper application of Section 2412(b). It is also inviting amicus curiae participation by the American Civil Liberties Union and Lawyers' Committee for Civil Rights Under Law, which typify organizations that would have a major stake in the issue.

This opinion might end here. However the Court views YourStyle as entitled to the Court's views as to its potential recovery if it were concluded that Section 2412(b) in fact incorporates Section 1988 and its standards.

Accordingly the Court looks to the criteria for fee awards under Section 1988 where, as here, a plaintiff has been at most partially successful. YourStyle lost on nearly every issue it advanced. Though it ultimately won the war in the sense that the issues of Revolt magazine were released and not forfeited, the battle that resulted in the government's surrender was fought not on YourStyle's terrain but on that marked out by the Court. At most YourStyle could be deemed a prevailing party as to a very small part of the services provided by its counsel.

Our Court of Appeals has dealt with such problems on a number of occasions, most recently in Syvock v. Milwaukee Boiler Mfg. Co., 665 F.2d 149 (7th Cir. 1981), which reviewed the earlier Seventh Circuit cases in some detail. Syvock teaches that the appropriate inquiry is whether plaintiff had one or more than one claim and whether plaintiff had "essentially succeeded" (665 F.2d at 164) on the claim or claims.

YourStyle of course wanted the release of the seized materials. In that sense it was successful. But in terms of the Syvock analysis its "success" was limited indeed. As the Opinion held, YourStyle lost entirely on its contentions that:

(1) the seizure standard employed by the Customs Service under 19 U.S.C. § 1305 is unconstitutional;

(2) the government regularly seeks and obtains default judgments under Fed.R. Civ.P. 55, without the District Court having ruled

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