Supreme Court considers attorneys’ fees awards in civil rights cases

During its second day of arguments in its new session, the U.S. Supreme Court heard arguments in a case brought by a group of Virginia drivers asking for the state to pay attorneys’ fees in an earlier case. The hearing on Tuesday may have seemed like a technical argument about civil rights lawsuits. But attorneys for both sides say the stakes are high for those seeking to vindicate civil rights—including litigants claiming religious discrimination—and for governmental entities facing lawsuits.

In the U.S. court system, the parties to litigation each bear their own attorneys’ fees, though Congress has passed several laws that shift that often heavy burden. The Equal Access to Justice Act, enacted in 1980, authorizes the award of attorneys’ fees and other expenses to certain individuals and some other entities who prevail against the federal government in some cases.

But in Lackey v. Stinnie, the Supreme Court considered the more generous Civil Rights Attorney’s Fees Awards Act of 1976, which allows a court in its discretion to give attorneys’ fee awards to the “prevailing party” in litigation. Both sides agree that a party prevails when a court enters final judgment or dismisses a case. But what about when a court orders interim relief and resulting government action makes the case moot?

In 2016, Damian Stinnie and other licensed Virginia drivers challenged the constitutionality of a state law that automatically suspended driver’s licenses of individuals who failed to pay a court debt. The challengers argued that the law violated due process by not providing them notice and an opportunity to be heard before the suspension.

A federal district court agreed and, in 2018, entered a preliminary injunction that put a hold on the law until the lawsuit could be resolved, finding the state unlikely to succeed on the merits of the case. After the court entered the injunction, the Virginia General Assembly repealed the law and reinstated the driver’s licenses of those previously suspended—effectively making the case moot.

When the challengers sought to recover attorneys fees, the district court denied the award. It ruled that under existing law, Stinnie and the others were not prevailing parties as no final judgment had been reached. A panel of the 4th U.S. Circuit Court of Appeals in Richmond, Va., upheld the ruling. Last year, the full circuit court reheard the case, overruled an existing precedent and reversed the panel’s ruling. The court joined all the other circuits in the country by finding that “the plaintiffs here ‘prevailed’ in every sense needed to make them eligible for a fee award.”

But at Tuesday’s hearing in front of the Supreme Court, justices seemed divided. Justices Neil Gorsuch and Amy Coney Barrett pressed Brian Schmalzbach, who represented the challengers, over the lack of finality in a preliminary injunction.

“A preliminary injunction is not the relief that you were seeking,” said Barrett. “It’s like a way station, it’s a Band-Aid, it’s something on the way to what you really want.” Barrett said that preliminary judgment is just a “predictive judgment that you’ll probably be the prevailing party” and did not mean that the challengers were yet the prevailing party.

Gorsuch pointed to Congress’ express authorization of attorneys’ fees in litigation under the Freedom of Information Act. “Congress spoke very clearly … in the FOIA context … And, as the federal government points out, mightn’t we expect Congress to be at least as clear when it’s authorizing fees against other parties, including states?”

Yet Justices Sonia Sotomayor and Ketanji Brown Jackson clearly sided with the challengers. Sotomayor rebuffed Virginia Solicitor General Erika Maley’s argument that the challengers never got the relief that they wanted from the court.

“Oh, but they did,” said Sotomayor. “They got interim relief. They had their licenses restored, and they had it restored without paying a fee.” Sotomayor said that all that was required to be a prevailing party was that preliminary ruling never be “reversed, dissolved, or otherwise undone by a final decision.”

The Christian Legal Society, National Association of Evangelicals, and several other religious organizations filed a brief arguing that Virginia’s position would mean that fewer victims of religious liberty and free speech violations would risk an expensive lawsuit.

Such a rule would “disincentivize defendants from early settlement and delay providing any relief, because defendants can always avoid the risk of paying a larger fee award, or any fees at all, by surrendering later,” the brief said.

As an example, the brief pointed to the protracted litigation that ensued when a high school in San Jose, Calif., de-recognized a student Fellowship of Christian Athletes chapter because of its Biblical views on marriage and gender. After the student group won the case, a court last year awarded the FCA chapter over $5.8 million in attorneys fees.

“But if Petitioner’s rule became the law of the land, plaintiffs might never have recovered fees at all,” the brief argues. “The school district could have simply allowed the student group to operate and thereby have mooted the case. And it could do that after it had forced plaintiffs’ attorneys to invest thousands of hours in the case.”

But a brief filed by a group of local and state governmental entities argued that allowing attorneys’ fees awards for interim and not final relief would discourage governments from remedying situations where fundamental rights are not being protected. It also suggested that such a move would encourage unnecessary and wasteful litigation that would impose a budgetary burden.

“Once a … plaintiff has secured a preliminary injunction, the only way for the defendant to avoid attorneys’ fees is to win the case at trial on the merits,” the brief forecasts, discouraging repeal of unwise laws or other remedial action. “Anything short of that, and the taxpayers are on the hook for the plaintiffs’ costs and fees.”

Since every circuit court of appeal has come down on the side of allowing attorneys’ fees awards after interim relief, their unanimity may encourage the Supreme Court to take their counsel. But a Supreme Court majority could still rule against lower court precedent, finding all the other courts to be wrong. A ruling in the case is likely later this year or early next year.