Binta B. Ex Rel. S.A. v. Gordon , 710 F.3d 608 ( 2013 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 13a0072p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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BINTA B., by her next friend S.A.; AIDEN L.
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and NAKIA L., by their next friend S.L.;
SARAI R. and AMBER R., by their next friend -
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Nos. 10-6005/12-5532
T.R.; GUNNAR U., by his next friend M.U.,
Plaintiffs-Appellees, ,>
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v.
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DARIN GORDON, in his official capacity as
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Deputy Commissioner and Director of the
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Bureau of TennCare; MARK EMKES, in his
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official capacity as Commissioner of the
Tennessee Department of Finance and -
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N
Administration,
Defendants-Appellants.
Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
No. 3:79-cv-3107—John T. Nixon, District Judge.
Argued: January 25, 2013
Decided and Filed: March 20, 2013
Before: SILER, SUTTON, and McKEAGUE, Circuit Judges.
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COUNSEL
ARGUED: Michael W. Kirk, COOPER & KIRK, PLLC, Washington, D.C., for
Appellants in 10-6005 and 12-5532. Christopher E. Coleman, TENNESSEE JUSTICE
CENTER, Nashville, Tennessee, for Appellees in 10-6005 and 12-5532. ON BRIEF:
Michael W. Kirk, Charles Cooper, Derek L. Shaffer, COOPER & KIRK, PLLC,
Washington, D.C., Linda A. Ross, OFFICE OF THE TENNESSEE ATTORNEY
GENERAL, Nashville, Tennessee, for Appellants in 10-6005. Michael W. Kirk, Nicole
J. Moss, Adam R.F. Gustafson, COOPER & KIRK, PLLC, Washington, D.C., Linda A.
Ross, OFFICE OF THE TENNESSEE ATTORNEY GENERAL, Nashville, Tennessee,
for Appellants in 12-5532. Christopher E. Coleman, Gordon Bonnyman, Jr.,
TENNESSEE JUSTICE CENTER, Nashville, Tennessee, Kenneth W. Zeller, AARP
FOUNDATION LITIGATION, Washington, D.C., for Appellees in 10-6005.
Christopher E. Coleman, Gordon Bonnyman, Jr., TENNESSEE JUSTICE CENTER,
1
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Nashville, Tennessee, William H. Farmer, James W. White, JONES HAWKINS &
FARMER, PLC, Nashville, Tennessee, for Appellees in 12-5532.
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OPINION
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McKEAGUE, Circuit Judge. Congress and the Supreme Court have made it
abundantly clear that the aim of 42 U.S.C. § 1988 “is not for the purpose of aiding
lawyers. The purpose of th[e] bill is to aid civil rights.” 122 CONG. REC. 33,314 (Sept.
29, 1976) (remarks of Sen. Kennedy); Farrar v. Hobby, 506 U.S. 103, 115 (1992)
(“awards under § 1988 were never intended to produce windfalls to attorneys . . . .”).
Yet, Congress’ allowance for fees under § 1988 occasionally is misunderstood and
misused. The original petition for fees in this case, for example, yielded requests for dry
cleaning bills, mini blinds, and health insurance. Though these requests were later
dropped after being challenged, they exemplify the overcompensation some attorneys
are apt to seek in litigation of this type—decades long class actions involving thousands
of hours of work, numerous iterations of consent decrees, and years in-between spent
enforcing and defending prior successes.
There are two sides to these attorney-fee debates, and we must honor both of
them. On the one hand, § 1988 plays a critical role in “ensur[ing] that federal rights are
adequately enforced,” and attorneys have every right to be compensated for any fees and
expenses they reasonably incur. Perdue v. Kenny A. ex rel. Winn, 130 S. Ct. 1662, 1671
(2010). On the other hand, these cases can all too easily become a way of life for the
attorneys involved, and consequently over time it can become increasingly unclear, for
both the attorneys and the courts, precisely what work falls within the ambit of § 1988.
This case presents us with an opportunity to clarify the standards for when time spent
defending or enforcing a prior consent decree is compensable under § 1988.
The State here challenges the district court’s determination that plaintiffs were
prevailing parties under § 1988, its conclusion that several categories of work performed
by plaintiffs’ counsel were “reasonably expended” on the litigation, and its
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20% reduction in the fee award. For the reasons that follow, we affirm the award for
work involving review of the Governor’s proposal, we vacate the award for fees
involving work in John B., Ware, and Daniels, and we vacate and remand the overall
percentage reduction, and the award for work involving Rosen, the HAT injunction,
opposing plaintiff-intervenors, work categorized as public relations, negotiating with
legislators, negotiating with the Governor, and analyzing the soft-limits initiative.
I.
A. History Leading to the Appeals in 10-6005 and 12-5532
This case has been ongoing for over thirty years. For purposes of these
consolidated appeals, the relevant facts are as follows. In 1979, Pearl Bailey and Cluster
Daniels filed a complaint under 42 U.S.C. § 1983 on behalf of present and future
Medicaid recipients alleging that Tennessee’s medicaid program violated the
requirements of the Medicaid Act, 42 U.S.C. § 1396, et seq., and the Due Process Clause
of the Fourteenth Amendment. In March of 1983, Donna Owens, Agnes Denton, Ollie
Johnson, Gaynell Grier and Dorothy Cantrell were granted leave to intervene as
plaintiffs. Later that year, plaintiffs’ counsel notified the court and the state that Pearl
Bailey, one of the two original plaintiffs, had died. In 1984, Nannie Breeden and
Carolyn Fitts were granted leave to intervene as plaintiffs. On January 4, 1985, the
district court certified a subclass under FED. R. CIV. P. 23. That subclass was Tennessee
Medicaid recipients “who have not been notified when claims for Medicaid payments
. . . have been denied, or have not been notified of the reasons for denial of payment, or
have not been notified of their fair hearing rights.” App. 490. Thus, at the time the
class was certified, Daniels, Grier, Cantrell, Owens, Denton, Johnson, Breeden, and Fitts
were in the class and had all been named as class representatives.
Over the course of the next several decades, the parties attempted to resolve their
disputes through various consent decrees and revisions to those decrees. The first decree
was entered into in 1986, then another in 1992. In January 1994, Tennessee converted
its traditional Medicaid program to a managed care program called TennCare. Under
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TennCare, the state contracts directly with private managed care contractors to provide
healthcare to TennCare recipients. The contractors are required by contract to comply
with previously mandated notice and hearing requirements.
In 1995, five class members filed motions to modify the 1992 consent decree
alleging the TennCare program was being administered in a manner inconsistent with
the 1992 decree and federal law. The caption on plaintiffs’ motion stated it was being
brought by “Cluster Daniels, ET AL., Plaintiffs, and C.J. by his next friend, C.S.; [and
three other individuals identified with initials], as representative class members . . . .”
App. 192. The State opposed the substance of the motions with several affidavits. The
captions on the State’s affidavits similarly listed “C.J., by his next friend, C.S.,” and
others, as “representative class members.” The affidavits argued that the bulk of the
“named plaintiffs’” grievances, including C.J.’s, had been resolved, but did not
expressly contest C.J.’s role as a “representative class member.” App. 617-23, 659-62.
On May 15, 1996, the district court partially granted the motions filed by C.J. and
the other named representatives and ordered the State to submit proposed modifications
to the 1992 consent decree that would comport with the Medicaid Act and constitutional
due process requirements. On August 26, 1996, the court entered an order approving the
State’s proposed modifications. The order’s caption listed “C.J. by his next friend, C.S.”
as a “representative class member[].” App. 510.
In 1998, class counsel notified the district court that plaintiffs Daniels and
Breeden died. Thus, as of that date, as far as any of the parties were aware, the
representative class members remaining in the litigation were Greer, Cantrell, Owens,
Denton, Johnson, Fitts, and possibly C.J. and the other minors listed as representatives
during the 1995-96 action.
The consent decree was again revised in 1999 and 2000. In March 2003, the
parties entered negotiations to revise the 2000 consent decree, and to discuss three other
ongoing class action lawsuits involving different aspects of TennCare’s administration.
On October 1, 2003, the district court finally approved and entered the Revised Consent
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Decree (Modified) in this case (“2003 Consent Decree”). App. 353.1 According to the
court, the 2003 Consent Decree “contain[ed] the strongest due process protections” yet.
Grier v. Goetz, 402 F. Supp. 2d 876, 937 (M.D. Tenn. 2005).
The 2003 Consent Decree also stated that the State would continue to “have
primary responsibility for monitoring and enforcing compliance” with the consent decree
and “the regulations and laws incorporated herein.” However, it also set forth several
monitoring functions for plaintiffs’ counsel, including document inspection for
“monitoring compliance with this order,” and “inspect[ing] the operation of any state
agency” involved with implementation of the decree. App. 389-90. The 2003 Consent
Decree also awarded plaintiffs attorney’s fees as the prevailing parties under 42 U.S.C.
§ 1988. App. 391. Accordingly, in a later order, the district court awarded plaintiffs
$628,123.47 in fees and expenses based on the parties’ jointly agreed-upon resolution
as to those fees and expenses.
A few months after entering the 2003 Consent Decree, the State announced plans
to restructure TennCare in light of severe state budget problems. The State’s proposal
admitted that changes in the program may require revising the consent decrees in this
and the other ongoing cases. These changes included eliminating non-Medicaid
eligibility categories and disenrolling a large number of adults and children from the
program should the State’s requested proposal not be adopted. App. 808-09.2
1
There were consent decrees in at least two of the other cases, including John B. v. Goetz (dealing
with “the requirements for the Medicaid Early and Periodic Screening, Diagnosis, and Treatment program
in Tennessee”), and Rosen v. Comm’r of Fin. and Admin. (dealing with “requirements related to due
process rights for persons applying for TennCare or being disenrolled from TennCare”). The issues in
Rosen are related to the issues here, which the State previously characterized as addressing “due process
requirements related to denials, reductions, suspensions, terminations, or delays in service delivery.” App.
757. Plaintiffs’ counsel in this case was also involved in Rosen.
2
After the State announced its plans to reconfigure the system, the district court in Rosen enjoined
the State against proceeding with the disenrollments. This Court reversed that decision. Rosen v. Goetz,
129 F. App’x 167 (6th Cir. 2005) (per curiam). On remand, the district court again enjoined the State from
beginning the disenrollment process. On appeal, this Court reversed again. Rosen v. Goetz, 410 F.3d 919(6th Cir. 2005) (per curiam) (Rosen II). As noted by this Court in Rosen II, the State and plaintiffs, along
with two hospital associations and several hospitals, had recently entered into a Memorandum of
Understanding (MOU), the terms of which would have allowed for continuing medical coverage for up
to 100,000 persons. In part, the MOU was conditioned on (1) approval of the funds by the legislature,
(2)timely and favorable rulings in the Rosen case, and (3) modifications to the 2003 consent decree in this
case. Rosen, 410 F.3d at 925.
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Shortly after the state announced its proposal, the district court granted a motion
allowing several other plaintiff-intervenors from the Rosen action to intervene in this
case for limited purposes. The plaintiff-intervenors (all of whom were subject to
disenrollment under the State’s plan) ultimately supported the State’s motion to modify
the 2003 Consent Decree since granting the motion to modify would have potentially
allowed 100,000 people to remain covered by TennCare.
On June 15, 2005, the State officially filed its motion to revise the 2003 Consent
Decree. As summarized by the district court, the State’s motion contained 34 separate
requests for modification and/or clarification of the 2003 Consent Decree relating
primarily to prescription drugs, benefit limits, and the TennCare appeals process. After
several days of hearings on the motion, the court ultimately granted the motion in part
and denied it in part. Grier, 402 F. Supp. 2d at 882 (“2005 Revised Consent Decree”).
The district court later concluded, “Out of Defendants’ thirty-four (34) requests
for modification, Plaintiffs did not object to three (3) requests, and the Court granted
these three (3) requests and two (2) additional requests without limitation. The vast
majority of the remaining twenty-nine (29) requests were either granted with severe
limitations or denied in their entirety.” Grier v. Goetz, No. 3:79-3107, slip op. at 4
(M.D. Tenn. Aug. 13, 2009). The court also noted in its decision on the State’s motion
to modify that “[a]lthough the Court has granted many of Defendants’ requests for
modification, it has denied or limited certain requests relating to the appeals process in
order to adequately protect the due process rights of TennCare enrollees. Without these
protections, this Court is concerned that the rights of the plaintiff class may be severely
restricted. As a result, the necessity of the underlying goal of the Decree has in no way
diminished.” Grier, 402 F. Supp. 2d at 937.3
In January 2006, plaintiffs’ counsel moved for attorney’s fees pursuant to
42 U.S.C. § 1988. The State opposed the motion but did not argue that there was no
3
During all of the litigation over the 2003 Consent Decree, none of the parties noticed that in the
meantime, several of the named class representatives had either died or disenrolled from TennCare. This
potentially important detail was not revealed until several years later when the State filed the appeal now
under review.
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proper plaintiff before the court. The district court granted plaintiffs’ motion for fees
and held that they were “entitled to reasonable attorney’s fees and expenses for (1)
partially prevailing in defending and revising the 2003 Consent Decree, and (2)
successfully monitoring implementation and enforcement of the 2003 Consent Decree.”
Grier v. Goetz, 421 F. Supp. 2d 1061, 1080 (M.D. Tenn. 2006). The court reserved
judgment on what “reasonable” fees would be.
In March 2007, plaintiffs filed a detailed fee request seeking fees for work
performed from November 1, 2003 (just after entry of the 2003 Consent Decree) to
January 31, 2007. The State opposed the request, but only on the basis that the fees were
excessive. It again did not argue that there was no proper named plaintiff before the
court.
In August 2009, the district court issued its order awarding plaintiffs over
$2.57 million in fees and expenses for litigation leading up to the 2005 Revised Consent
Decree. Grier v. Goetz, No. 3:79-3107, slip op. at 2 (M.D. Tenn. August 13, 2009).
Plaintiffs had originally requested a lodestar amount of $3,313,458.00, but the district
court reduced the award by twenty percent on account of plaintiffs’ “limited” success
“relative to the breadth of Defendants’ requests [to modify the 2003 consent decree] and
the scope of the litigation.” Id. at 49-51. The court noted that there was “no dispute that
Plaintiffs in this case are the prevailing party, and thus entitled to attorneys’ fees under
42 U.S.C. § 1988[,]” and thus “[t]he main issue before the Court is what adjustment, if
any, is required given that the Plaintiffs only partially prevailed.” Id. at 11.
After the district court denied the State’s motion to alter or amend the award, the
State timely noticed an appeal to this Court, which was docketed as No. 10-6005.
B. Proceedings in No. 10-6005
Soon after filing its notice of appeal to this Court, the State sent a letter to
plaintiffs’ counsel indicating that the Sixth Circuit’s clerk’s office contacted the State
about who the plaintiffs-appellees were in this case. After some investigation, the State
realized that none of the six individuals previously “appointed” by the court as class
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representatives remained alive or enrolled in TennCare. As indicated above, Bailey,
Daniels, and Breeden had all died, and plaintiffs counsel had notified the court of those
deaths in 1983 and 1998. But the State also discovered that Cantrell died in 1994, Grier
died in 2003, and Fitts moved to Alabama in 2005. According to the State, that did not
leave anyone as a named plaintiff.4
The next day, plaintiffs’ counsel sent a letter to the Sixth Circuit clerk indicating
that C.J. (Julian Caster), who had appeared on several pleadings as a “representative
class member” in the mid-1990s, was the named representative who should appear on
the docket.
Subsequently, the State filed in this Court a motion for summary vacatur of the
district court’s orders and a request for remand. The motion argued for the first time that
“there is no named Plaintiff-Appellee before this Court who has been permitted to
intervene in this action and has been certified as an adequate and appropriate class
representative such that he or she might properly defend the attorneys’ fee award.”
09/30/10 Def’s Mot. at 4. The State further argued that “unless and until a new class
member seeks and is granted leave to intervene as a Plaintiff and is certified as an
adequate and appropriate class representative by the district court in accordance with
Rule 23(c)(4), the court below may not even consider, much less grant, the attorneys’
fee motion . . .” 09/30/10 Def’s Mot. at 4.
This Court denied the State’s motion, explaining that the issue should first be
raised in the district court under FED. R. CIV. P. 62.1 and FED. R. APP. P. 12.1
notwithstanding the pendency of the appeal. Goetz v. C.J. by C.S., No. 10-6005, at 2
(6th Cir. Nov. 8, 2010) (order denying motion for summary vacatur). The order advised
4
With respect to the other original named representatives, Owen, Denton, and Johnson, the State
argues that while they were granted leave to intervene, “[i]t does not appear that these three were ever
treated as class representatives by either the district court or Class Counsel, but in any event two of the
three have died (in 1996 and 2005, respectively), and the third lost her eligibility for TennCare and thus
left the class and the litigation in 1995.” Appellant’s Br. in 12-5532 at 3 n.2. The State’s argument is not
entirely accurate. After Owens, Denton, and Johnson were granted leave to intervene, they were named
as class representatives on the motion to intervene filed by Nannie Breeden and Carolyn Fitts. App. 174.
But because of the timing of their deaths or disenrollment, their status does not influence the outcome in
this case.
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that “[i]f the district court certifies that it is inclined to vacate or modify the award of
fees and costs or that the state has raised a substantial issue, the state may then move this
court to remand under Rule 12.1.” Id.Heeding these instructions, the State filed a motion in the district court requesting
an indicative ruling that the court would grant inquiry into possible certification of a new
class representative and vacatur of the fee award on the ground that the fee had not been
awarded to a “prevailing party.” On August 31, 2011, the district court issued an order
stating that the motion raised substantial issues warranting further proceedings on
remand. Grier v. Goetz, No. 3:79-cv-3107, at 5 (M.D. Tenn. Aug. 31, 2011) (order).
Accordingly, the State filed a motion to remand in this Court, which was
granted—remanding the case “to the district court for consideration of the defendants’
motion to vacate the fee award.” C.J. by C.S. v. Gordon, No. 10-6005, at 2 (6th Cir.
Nov. 7, 2011) (order granting motion to remand).5
C. District Court Proceedings on Remand and Appeal in Case No. 12-5532
On remand, plaintiffs filed a motion to add new class representatives. R. 1746.
The State filed a motion to summarily vacate the fee award and for leave to take
discovery into whether any newly proposed class member can adequately protect the
interests of the class. R. 1757. The State argued that as a matter of law there is no such
thing as “implicit” certification of a class representative and thus C.J., by and through
his next friend C.S., could not be a class representative because he never properly
intervened and was never certified.
The district court first took up the State’s argument that there can be no implicit
certification of a class representative, but ultimately did not expressly rule on this issue.
Rather, it summarily held that “Defendants’ efforts to have the 2009 fee award to
Plaintiffs summarily vacated have fallen short. The cases to which they cite for the
5
Briefing in the State’s initial appeal, case No. 10-6005, continued notwithstanding the pendency
of the State’s motion below. Briefs in 10-6005 were filed in March, April, and May 2011, which was prior
to the district court’s decision on whether it would hear the issues related to class representation and the
fee award.
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notion that, as a matter of law, the award must be vacated do not, upon close inspection,
mandate that result.” Grier v. Goetz, 2012 WL 1393057, at *6 (M.D. Tenn. April 23,
2012).
With respect to the State’s request to conduct discovery on the role of C.J. and
C.S. in the litigation, the court stated that such discovery was unwarranted because
plaintiffs were not seeking to add C.J. or C.S. as class representatives, and in any event,
“the issue before the Court is the validity of a fee award granted to Plaintiffs in 2009.”
Id. at *7. In further explaining its ruling on the discovery issue, the court stated that it
found merit in the assertion that the prevailing party for purposes of the fee award is the
class as a whole rather than a particular class representative or attorney. Id. at *8.6
The State timely appealed. The appeal was docketed as 12-5532. The two
appeals were consolidated for argument.
II.
“A district court’s determination of prevailing-party status for awards under
attorney-fee-shifting statutes—such as 42 U.S.C. § 1988—is a legal question that [this
court] reviews de novo.” Radvansky v. City of Olmsted Falls, 496 F.3d 609, 619
(6th Cir. 2007). We review a district court’s award of attorney fees under 42 U.S.C.
§ 1988 for an abuse of discretion. Reed v. Rhodes, 179 F.3d 453, 469 n.2 (6th Cir.
1999). A district court abuses its discretion when it “relies upon clearly erroneous
factual findings, applies the law improperly, or uses an erroneous legal standard.” Wikol
ex rel. Wikol v. Birmingham Pub. Sch. Bd. of Educ., 360 F.3d 604, 611 (6th Cir. 2004).
III.
Defendants initially argue that the fee award was improper because there was not
an adequate named class representative after June 3, 2005, which was when named
representative Carolyn Fitts moved to Alabama. As of that date, defendants argue, all
6
The district court’s order also granted Plaintiffs’ motion to add class members, including Binta
B. The State did not appeal that ruling.
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of the named representatives had either died or left the class and the litigation. Thus,
according to defendants, without an adequate named representative, there could not have
been a prevailing party, and the 2009 fee award was therefore improper.
One of the prerequisites for class certification under FED. R. CIV. P. 23 is that the
“representative parties” can sue on behalf of the class only if they “fairly and adequately
protect the interests of the class.” FED. R. CIV. P. 23(a)(4). In this case, at the time the
district court certified the class in 1985, several named representatives satisfied this
requirement, including Carolyn Fitts.
But a district court’s responsibilities with respect to Rule 23(a) do not end once
the class is certified. As we noted in Barney v. Holzer Clinic, Ltd., 110 F.3d 1207, 1214
(6th Cir. 1997), even after certification, so long as a district court retains jurisdiction
over the case, the court must still inquire into the adequacy of representation and
withdraw class certification if adequate representation is not furnished. Id. (quoting
Grigsby v. N. Miss. Med. Ctr., Inc., 586 F.2d 457, 462 (5th Cir. 1978)). Generally,
decertification would be precipitated by a motion by the defendants specifically
challenging the named representatives’ qualifications as representatives of the class.
See, e.g., In re Se. Milk Antitrust Litig., 2011 WL 3205798, at *1 (E.D. Tenn. July 28,
2011) (considering defendants’ motion to decertify the class based on failure to meet
Rule 23(a)’s requirements); Tate v. Hartsville/Trousdale Cnty., 2010 WL 4822270, at
*1 (M.D. Tenn. Nov. 22, 2010) (same); Bradberry v. John Hancock Mut. Life Ins. Co.,
222 F.R.D. 568, 570 (W.D. Tenn. Aug. 13, 2004) (same); Thompson v. Cmty. Ins. Co.,
2004 WL 5345144, at *1 (S.D. Ohio Sept. 20, 2004) (same).
But in this case, defendants never questioned the adequacy of the named
plaintiffs until 2010—long after the district court approved the 2005 Revised Consent
Decree and after entry of the 2009 fees award. When defendants finally raised the issue,
they asserted in part that Carolyn Fitts had been disenrolled from TennCare in 2005
when she moved to Alabama. According to defendants, this meant she had withdrawn
from the class and the litigation and was presumably therefore not an adequate class
representative. Appellant Br. in 10-6005 at 6. But apart from an affidavit submitted by
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defendants confirming that Fitts had moved to Alabama and been disenrolled from
TennCare, there is nothing in the record supporting defendants’ conclusion that Fitts
withdrew from the class and the litigation or had otherwise been found by the district
court to be an inadequate named representative.
Even though defendants are not asking us to dismiss this case on mootness
grounds, the Supreme Court’s explanation of the mootness doctrine as applied to class
action plaintiffs is instructive. In Sosna v. Iowa, 419 U.S. 393, 395-96 (1975), Carol
Sosna challenged an Iowa law requiring individuals to reside in Iowa for one year prior
to seeking a divorce. Sosna brought the suit as the named representative of a class of
similarly situated individuals. Id. at 399. By the time Sosna’s case reached the Supreme
Court, she had long satisfied the residency requirement and also obtained a divorce; thus,
as the Court acknowledged, if she had sued only on her own behalf, the case would have
been moot and required dismissal. Id.However, rather than dismissing the case, the Court held that “[w]hen the District
Court certified the propriety of the class action, the class of unnamed persons described
in the certification acquired a legal status separate from the interest asserted by [Sosna].”
Id. On this basis, the Court reasoned that “[a]lthough the controversy is no longer alive
as to . . . Sosna, it remains very much alive for the class of persons she has been certified
to represent.” Id. at 401. The Court further noted that this analysis shifts the focus from
whether the case is justiciable to Rule 23's fair and adequate representation requirement.
Addressing this requirement, the Court concluded that even though Sosna’s personal
claim may be moot, she still adequately protected the interests of the class because it was
“unlikely that segments of the class [Sosna] represent[ed] would have interests
conflicting with those she . . . sought to advance.” Id. at 403.
While Sosna is first and foremost an Article III determination, we can distill from
its reasoning that a named class representative may still adequately represent the class,
for purposes of Rule 23, even if the representative’s personal claims have become moot,
at least until such time that there is a determination that the representative is no longer
adequate. Applying these principles to this case, the fact that Fitts moved to Alabama
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and was disenrolled from TennCare does not inexorably lead to the conclusion that she
was not an adequate class representative under Rule 23. Because defendants never
raised the issue of Fitts’ adequacy below, no court ever passed on that question.
Defendants have not established that Fitts was not an adequate representative at all times
relevant to this appeal, thus she remained a named representative of the class when the
district court approved the 2005 Revised Consent Decree and when it entered the 2009
fee award, and we reject defendants’ argument that there was no prevailing party.
IV.
Having addressed defendants’ argument that there was no party to prevail under
42 U.S.C. § 1988, we turn next to their argument that plaintiffs did not prevail as
contemplated by that same statute. The crux of defendants’ argument is that it was the
defendants, not plaintiffs, who prevailed when the district court permitted many of
defendants’ requested modifications to the 2003 Consent Decree and subsequently
approved the 2005 Revised Consent Decree. By contrast, the district court found that
with respect to the 2005 Revised Consent Decree, while plaintiffs’ victory was only
partial, “[t]he vast majority of the [defendants’] . . . requests were either granted with
severe limitations or denied in their entirety.” Grier v. Goetz, No. 3:79-3107, slip op.
at 4 (M.D. Tenn. August 13, 2009). The court also noted that “[a]lthough the Court has
granted many of Defendants’ requests for modification, it has denied or limited certain
requests relating to the appeals process in order to adequately protect the due process
rights of TennCare enrollees. Without these protections, this Court is concerned that the
rights of the plaintiff class may be severely restricted. As a result, the necessity of the
underlying goal of the Decree has in no way diminished.” Grier, 402 F. Supp. 2d at 937.
42 U.S.C. § 1988(b) permits the court, in its discretion, to allow the “prevailing
party” in a federal civil rights action “a reasonable attorney’s fee as part of the costs.”
Congress enacted the statute as an exception to the general rule in our legal system that
parties are required to pay their own attorney’s fees “in order to ensure that federal rights
are adequately enforced.” Perdue v. Kenny A. ex rel. Winn, 130 S. Ct. 1662, 1671
(2010).
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 14
“Prevailing party” is a legal term of art designating “one who has been awarded
some relief by the court . . . .” Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of
Health and Human Res., 532 U.S. 598, 603 (2001). The Supreme Court has stated that
in providing for fees under § 1988, “Congress intended to permit the . . . award of
counsel fees only when a party has prevailed on the merits.” Hanrahan v. Hampton,
446 U.S. 754, 758 (1980) (per curiam).
Over time, “prevail[ing] on the merits” has been distilled to “succeed[ing] on any
significant issue . . . which achieves some of the benefit the parties sought in bringing
suit,” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983), “the settling of some dispute
which affects the behavior of the defendant towards the plaintiff,” Hewitt v. Helms,
482 U.S. 755, 761 (1987), and resolution of the dispute in a way that materially alters
the legal relationship of the parties. Texas State Teachers Ass’n v. Garland Indep. Sch.
Dist., 489 U.S. 782, 792 (1989). Importantly for purposes of this case, the Court has
explained that the required material alteration of the parties’ legal relationship can come
by way of a settlement agreement “enforced through a consent decree . . . .”
Buckhannon, 532 U.S. at 604 (citing Maher v. Gagne, 448 U.S. 122, 129 (1980)).
The Court has also concluded that “the prevailing party inquiry does not turn on
the magnitude of the relief obtained.” Farrar v. Hobby, 506 U.S. 103, 114 (1992). Thus,
as we have previously noted, “A plaintiff crosses the threshold to ‘prevailing party’
status by succeeding on a single claim, even if he loses on several others and even if that
limited success does not grant him the ‘primary relief’ he sought.” McQueary v.
Conway, 614 F.3d 591, 603 (6th Cir. 2010) (quoting Tex. State Teachers Ass'n, 489 U.S.
at 790–91).
There is no dispute here that plaintiffs were prevailing parties under the
2003 Consent Decree. In fact, that agreement actually enshrined plaintiffs’ prevailing
party status. See 2003 Consent Decree, App. 391 (“Plaintiffs are prevailing parties for
purposes of their entitlement to an award of attorneys’ fees under 42 U.S.C. § 1988 for
legal services rendered by their counsel in connection with these proceedings.”). The
real question here is what impact the 2003 decree has on plaintiffs’ prevailing party
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 15
status going forward, especially where plaintiffs’ efforts are concentrated on defending
that decree from substantial modification by defendants. Are plaintiffs required to
reestablish their prevailing party status and a material alteration of the parties’ legal
relationship with each new iteration of the consent decree? Or alternatively, can
plaintiffs rely on their earlier prevailing party status, and only be required to show that
the work they performed was otherwise compensable because it was in some way spent
defending the earlier award?7 We look to Supreme Court and Sixth Circuit precedent
for answers to these questions.
In Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S.
546, 549 (1986), the citizens’ council filed suit under the Clean Air Act to compel the
state to establish a vehicle emission inspection program as required by the Act.8 The
parties entered into a consent decree in 1978 establishing the state’s duties in
implementing the program. The state was slow to implement the plan, and over the
course of the next five years, the citizens’ council took various steps to defend the
original decree and get the state to follow through on its agreement.
Ultimately, the citizen’s council sought fees for work performed after the
1978 consent decree, in particular, for its work in monitoring compliance, commenting
on the regulations, and defending the original decree at the EPA hearings. Id. at 550-53.
The Supreme Court upheld the fee award for these activities. The Court
explained that counsel’s work after the decree was “as necessary to the attainment of
adequate relief for their client as was all of their earlier work in the courtroom which
7
There is a distinction in this case between fees for time defending the earlier consent decree and
fees for time spent monitoring defendants’ compliance with the earlier consent decree. While defendants
claim to be challenging both, and their opening brief generally challenges fees for monitoring work, they
specifically only challenge certain categories of work spent defending or enforcing the decree, and though
our review of those categories reveals that defendants may have erroneously included some monitoring
hours in these categories, it is clear the thrust of defendants’ argument involves work spent defending or
enforcing the decree and not monitoring. Accordingly, we focus our inquiry on the requirements for
compensation for defending or enforcing a decree, not monitoring compliance with it.
8
The Court explained that the CAA fee-shifting provision and § 1988 should be interpreted in the
same manner. 478 U.S. at 560. The CAA provision read: “The court, in issuing any final order in any
action brought pursuant to subsection (a) of this section, may award costs of litigation (including
reasonable attorney and expert witness fees) to any party, whenever the court determines such award is
appropriate.” 42 U.S.C. § 7604(d).
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secured [plaintiffs’] initial success in obtaining the consent decree.” Id. at 558.
Additionally, the Court discussed the detailed nature of the consent decree and explained
that:
[p]rotection of the full scope of relief afforded by the consent decree was
thus crucial to safeguard the interests asserted by [plaintiffs]; and
enforcement of the decree, whether in the courtroom before a judge, or
in front of a regulatory agency with power to modify the substance of the
program ordered by the court, involved the type of work which is
properly compensable as a cost of litigation under [the CAA]. In a case
of this kind, measures necessary to enforce the remedy ordered by the
District Court cannot be divorced from the matters upon which
[plaintiffs] prevailed in securing the consent decree.
Id. at 558-59 (emphasis added).
Even though the Court’s holding was not specifically based on prevailing party
status under § 1988, we have employed similar reasoning in two § 1988 cases.
In Glover v. Johnson, 934 F.2d 703, 715 (6th Cir. 1991), we permitted the
plaintiffs to rely on an earlier fee award as the basis for their prevailing party status
going forward. There the district court entered orders in 1979 and 1981 directing the
defendants to remedy equal protection violations. Id. at 706. In 1985, the court found
defendants in contempt for not abiding by the earlier orders and awarded fees to
plaintiffs as prevailing parties. Id. The 1985 award also stated that plaintiffs would be
entitled to post-judgment fees for work to enforce the earlier awards. Id. at 715. In
1989, the plaintiffs were partially successful after filing a contempt motion in an effort
to get the defendants to comply with the court’s earlier orders. The district court
awarded fees to the plaintiffs for their work on the 1989 contempt motion. Id. at 715.
This Court in part concluded that the plaintiffs were entitled to fees for work done in
pursuing the 1989 contempt action because “plaintiffs may rely on the trial court’s 1985
order to establish that they are prevailing parties and, pursuant to that order, plaintiffs
have succeeded on a significant issue.” Id.Seven years after Glover, in Hadix v. Johnson, 143 F.3d 246, 256 (6th Cir. 1998),
we relied on Glover and affirmed that “when plaintiffs seek fees for compliance
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 17
monitoring, plaintiffs are not required to again establish prevailing party status, nor is
the award dependent upon the outcome of an appeal.” Id., aff’d in part, rev’d in part on
other grounds, 527 U.S. 343 (1999). Plaintiffs sought fees for three sets of issues:
(1) work performed that resulted in a voluntary dismissal on appeal; (2) work performed
in opposing defendants’ motion to terminate the district court’s supervisory jurisdiction;
and (3) work performed in having defendants’ held in contempt—a decision that we later
reversed on appeal. Hadix, 143 F.3d at 257-58.
We held that plaintiffs were entitled to fees for work that resulted in the
voluntary dismissal and for work opposing the motion to terminate supervisory
jurisdiction. That work, we explained, “qualifie[d] as compensable post-judgment
compliance monitoring because plaintiffs sought to protect the remedy ordered by the
District Court . . . so many years ago.” Id. at 258. We also stated that when counsel
requests fees for unsuccessful legal work unrelated to compliance monitoring or
protecting a remedy, the test to be applied would be “whether the issues in the post-
judgment litigation are ‘inextricably intertwined with those on which the plaintiff
prevailed in the underlying suit or whether they are distinct.’” Id. at 257 (quoting
Jenkins v. State of Mo., 127 F.3d 709, 717 (8th Cir. 1997)). When the issues are
intertwined, we stated, plaintiffs would be entitled to fees regardless of their success.
Id. Only if the issues were distinct would plaintiffs have to be successful in order to
recover. Id. Employing this rule, we did not permit fees for the third category of work
(the contempt action that was later reversed) because “[g]iven the lack of any remedial
order, plaintiffs’ counsel’s efforts might best be characterized as a failed attempt to
expand the remedy.” Id. at 258 (citing Ustrak v. Fairman, 851 F.2d 983, 990 (7th Cir.
1988)).
Delaware Valley, Glover, and Hadix suggest that plaintiffs here can rely on their
prevailing party status from the 2003 Consent Decree as a basis for a fee award for work
performed defending that decree from defendants’ attack regardless of their lack of
complete success. Hadix, 143 F.3d at 257. Were this the case, plaintiffs here would not
have had to prevail, i.e., obtain a material alteration of the legal relationship, in the
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 18
2005 Revised Consent Decree in order to be considered a prevailing party under § 1988.
But the intervening Supreme Court decision Buckhannon requires a brief pause before
drawing this conclusion.
In Buckhannon, the plaintiff sought declaratory and injunctive relief to bar
enforcement of a West Virginia statute. 532 U.S. at 601. With the State’s agreement,
the plaintiff obtained a court-ordered preliminary injunction pending resolution of the
case. Id. Ultimately, the State voluntarily repealed the statute and the district court
denied the case as moot. Id. at 598. Plaintiffs later sought fees on the basis that after
they filed suit, the state voluntarily eliminated the requirement plaintiffs had sued about.
The Court rejected this “catalyst theory” of prevailing party status, explaining that “[a]
defendant’s voluntary change in conduct . . . lacks the necessary judicial imprimatur
. . . .” Id. at 605. A defendant's voluntary transformation, the Court reasoned, does not
amount to “a judicially sanctioned change” in the legal relationship between the plaintiff
and defendant, as required to establish prevailing-party status. Id. at 604-05.
Buckhannon makes clear that, at least initially, a judicially sanctioned change in
the parties’ legal relationship, including through a consent decree, is required for
prevailing party status. Id. at 604. But Buckhannon does not resolve the issue of
whether litigation defending a prior judicially sanctioned change, e.g., a consent decree,
must likewise result in a judicially sanctioned material alteration of the parties’ legal
relationship in order to be compensable under § 1988. And in fact, the Delaware Valley
decision (allowing recovery for work defending a consent decree from collateral attack
in hearings before a government agency) seems to counsel against drawing such a hard
line in the post consent-decree context. Accordingly, three of our sister circuits have
rejected a rigid application of Buckhannon to post-decree work.
In Johnson v. City of Tulsa, 489 F.3d 1089, 1108 (10th Cir. 2007), the Tenth
Circuit held that fees may be awarded for reasonable measures to enforce a consent
decree even when those efforts do not produce a court order or judgment. The court
rejected the argument that Buckhannon overturned or limited Delaware Valley, noting
that Buckhannon did not even mention Delaware Valley. Id. at 1108. Instead, the court
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concluded that post-decree compensation may be appropriate whenever plaintiffs’
counsel protects “the fruits of the decree,” for example by protecting the decree’s
mechanisms for dealing with an ongoing problem, even if the defendants’ actions in
ultimately complying with the decree were voluntary. Id. at 1109.
Similarly, in Prison Legal News v. Schwarzenegger, 608 F.3d 446, 452 (9th Cir.
2010), the Ninth Circuit concluded that fees for post-settlement-agreement monitoring
were compensable after Buckhannon even if the monitoring did not produce a court
order.9 The court reasoned that its own precedent dictated such a result and “[i]n
Buckhannon, the Court did not mention, much less over-rule, Delaware Valley.” Id.; see
also Balla v. Idaho, 677 F.3d 910, 917-18 (9th Cir. 2012) (affirming Prison Legal News
and stating, “Buckhannon speaks to the case where there never has been judicially
ordered relief. Delaware Valley speaks to the case where there has been judicial relief,
though the monitoring work is subsequent to the judicial order and produces no new
order.”); Cody v. Hillard, 304 F.3d 767, 773 (8th Cir. 2002) (relying on Buckhannon to
conclude that a consent decree can establish prevailing party status, but holding that the
post-decree compliance monitoring in that case was compensable under the “inextricably
intertwined” test established in its prior case, Jenkins).
In contrast to Johnson, Prison Legal News, Balla, and Cody, in Alliance to End
Repression v. City of Chicago, 356 F.3d 767 (7th Cir. 2004), the Seventh Circuit applied
Buckhannon’s limitations more rigidly in the post-decree context. In Alliance, the
parties entered into a consent decree in 1981. Id. at 768. The decree did not vest any
monitoring or enforcement responsibilities in the plaintiffs or their attorneys. Id.Twenty years later, after two failed contempt proceedings, a failed opposition to
defendants’ motion to modify the decree, and a failure to monitor the defendants’
9
Post-settlement-agreement litigation (as opposed to post-consent decree) is not at issue in this
case, but there is a question whether settlement agreements can even be the basis of prevailing party status.
See Buckhannon, 532 U.S. at 604 n.7 (“We have . . . characterized the Maher opinion as also allowing for
an award of attorney's fees for private settlements . . . . But this dictum ignores that Maher only ‘held that
fees may be assessed ... after a case has been settled by the entry of a consent decree.’ Private settlements
do not entail the judicial approval and oversight involved in consent decrees. And federal jurisdiction to
enforce a private contractual settlement will often be lacking unless the terms of the agreement are
incorporated into the order of dismissal.”) (internal citations omitted).
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 20
compliance with the decree, the plaintiffs sought attorney’s fees. Id. at 769. The
plaintiffs relied on Delaware Valley in asserting that the 1981 consent decree gave them
prevailing party status and thus they were entitled to ongoing attorney’s fees for filing
contempt actions and opposing changes to the decree regardless of the results obtained.
Id. at 769.
The court found it significant that the plaintiffs’ claims for fees were based in
part on a fictional “duty” they claimed arose from the original decree, even though the
decree itself imposed no such duty. Id. at 772. But ultimately, the court concluded that
“if [post-decree work] does not produce a judgment or order, then under the rule of
Buckhannon it is not compensable.” Id. at 771. Alliance did not make clear the extent
to which the decision depended upon the fact that the consent decree in the case did not
vest plaintiffs with any duties to defend or monitor compliance. And a broad rule that
no post-decree work is compensable absent a court order would seem to conflict with
Delaware Valley, which permitted fees for plaintiffs’ monitoring work following a
consent decree.
And in fact, the Alliance court recognized that Delaware Valley was not helpful
to the plaintiffs because the Delaware Valley plaintiffs “were at least partially
successful” in the post-judgment proceedings, whereas in Alliance, there had been
“nothing but loss—a million dollars’ worth of legal services poured down the drain.
There was not even a disappointing partial success, as there would have been if the City
had moved to dissolve the decree and the plaintiffs had fended off dissolution yet had
not averted a substantial modification.” Id. at 769-70.
We agree with the circuits noting that Buckhannon did not discuss Delaware
Valley. Yet, we are hesitant to conclude from that observation that Buckhannon has no
import in the post-decree context. In fact, the rationale underlying Buckhannon’s
limitations in the pre-decree or pre-judgment context—avoiding fact-intensive and time-
consuming satellite litigation—suggests that we should also accord it some weight in the
post-decree context. The real question is how much work it should do given these
contextual differences, i.e., before there has been any judicially-sanctioned material
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 21
alteration of the parties’ legal relationship or after such an alteration. Even after a
consent decree, does Buckhannon completely foreclose fee recovery unless there is
another judicial order materially altering the parties’ legal relationship that essentially
re-qualifies the plaintiffs for fees under § 1988?
We conclude that reading Buckhannon as completely precluding fees absent a
subsequent material alteration in the parties’ relationship goes too far. However,
requiring that work spent defending or enforcing a decree must result in a court order or
agency determination that at least “secure[s] [plaintiffs’] initial success in obtaining the
consent decree,” Delaware Valley, 478 U.S. at 558, seems to give proper effect not only
to Buckhannon, but also to Delaware Valley and more recent § 1988 decisions from the
Court. See, e.g., Sole v. Wyner, 551 U.S. 74, 78 (2007) (rejecting § 1988 fees for a
successful preliminary injunction after a later permanent injunction was denied, and
explaining “A plaintiff who achieves a transient victory at the threshold of an action can
gain no award under [§ 1988] if, at the end of the litigation, her initial success is undone
and she leaves the courthouse emptyhanded.”).
Accordingly, we conclude that an earlier judicially sanctioned change in the
parties’ legal relationship through a consent decree can be the basis of a plaintiff’s
prevailing party status for purposes of § 1988. Hadix, 143 F.3d at 256. After that initial
determination, plaintiffs are not again required to establish prevailing party status in the
conventional sense of requiring a judicially-sanctioned material change in the legal
relationship of the parties. Tx. State Teachers Ass’n, 489 U.S. at 792; Buckhannon,
532 U.S. at 604-05 (emphasis added). However, that does not mean that plaintiffs will
be able to recover for all post-consent-decree work regardless of whether they are
successful. Instead, consistent with Delaware Valley and Buckhannon, any action by a
plaintiff to defend or enforce a prior consent decree must be “necessary to enforce” the
prior order and result in a subsequent court order or agency determination that at the
very least “secure[s] [plaintiffs’] initial success in obtaining the consent decree.”
Delaware Valley, 478 U.S. at 558-59. Compensation for post-consent decree work
cannot be based on a defendants’ voluntary change in behavior, Buckhannon, 532 U.S.
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at 604-05, nor can it be based on a total loss, e.g., where a motion to modify is granted
in whole and plaintiffs have not retained any protections of the prior decree. Sole, 551
U.S. at 78.
This is not only consistent with the Supreme Court’s § 1988 decisions, but also
with the notion that the purpose of § 1988 is not to generate “satellite” disputes over
fees. City of Burlington v. Dague, 505 U.S. 557, 566 (1992); see also Hensley, 461 U.S.
at 437 (asserting that a fee request “should not result in a second major litigation.”). As
we observed in McQueary, “fact-based and speculative inquiries into why government
bodies altered their conduct . . . tend to ‘distract . . . from,’ not further, § 1988's goal of
encouraging adequate representation for civil rights plaintiffs . . . and waste scarce
judicial resources on questions ‘which [are] almost impossible to answer . . . .’”
614 F.3d at 598 (quoting Tex. State Teachers Ass’n, 489 U.S. at 791) (internal citation
omitted). Accordingly, even in the post-consent-decree context, courts should not be
charged with having to determine a “defendant’s subjective motivations in changing its
conduct . . . .” Buckhannon, 532 U.S. at 609.
Moreover, § 1988 was not enacted to create a cottage industry for class action
attorneys that would grant them “lifetime income by bringing and losing a series of
actions to enforce the decree and charging the expense to the City and thus to the
taxpayers.” Alliance, 356 F.3d at 773 (“The class-action device is not intended to be a
lawyers' gravy train.”); see also Hensley, 461 U.S. at 446 (Brennan, J., concurring and
dissenting) (“Congress also took steps to ensure that § 1988 did not become a ‘relief
fund for lawyers.’”) (quoting 122 Cong. Rec. 33,314, remarks of Sen. Kennedy); Farrar,
506 U.S. at 115 (“fee awards under § 1988 were never intended to produce windfalls to
attorneys . . . .”) (internal quotation and citation omitted).
In accord with this principle, the Supreme Court has limited fee awards in several
instances. See, e.g., Perdue, 130 S. Ct. at 1676 (restricting fee enhancements for
superior attorney performance because although “Section 1988 serves an important
public purpose by making it possible for persons without means to bring suit to vindicate
their rights . . . unjustified enhancements that serve only to enrich attorneys are not
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 23
consistent with the statute's aim.”); Dague, 505 U.S. at 566-67 (disallowing a fee
enhancement for the risk involved with taking a case under a contingency fee
agreement); Sole, 551 U.S. at 78 (disallowing fees for successful permanent injunction
where later permanent injunction denied); Hensley, 461 U.S. at 433 (explaining that the
fee award should be limited to the scope of plaintiffs’ success).
On the other side of the coin, if defendants know that a court order is going to
trigger fees, this creates some incentive to resolve a post-decree skirmish without
dragging out the litigation. Indeed, as noted by the Tenth Circuit in Johnson, “the decree
itself can spell out what efforts by plaintiffs’ counsel are to be compensated. Indeed, the
amount of litigation on the subject suggests that explicit provisions in consent decrees
would be a boon for all concerned . . . .” 489 F.3d at 1109; see also Buckhannon,
532 U.S. at 609 (explaining that given a defendant’s potential liability even after a
voluntary change in conduct, there is “a strong incentive to enter a settlement agreement,
where [a defendant] can negotiate attorney’s fees and costs.”)
In sum, plaintiffs may rely on a prior consent decree that materially altered the
parties legal relationship as the basis for establishing prevailing party status under
§ 1988. Hadix, 143 F.3d at 256. But in order to recover fees for work performed
enforcing or defending that prior decree, plaintiffs have to show that the work was
“necessary to enforce” the prior decree or judgment and resulted in a court order or
agency determination that at the very least “secured [plaintiffs’] initial success in
obtaining the consent decree.” Delaware Valley, 478 U.S. at 558-59.
In this case, the 2003 Consent Decree established that plaintiffs were prevailing
parties under § 1988. App. 391. Moreover, counsel’s work defending the 2003 decree
resulted in a court order (the 2005 Revised Consent Decree) that at least in part secured
their initial success in the 2003 Consent Decree. Several examples will suffice to make
the point.
In its motion to modify, defendants sought to preclude appeals involving provider
inaction, but the district court denied the portion of these modifications that would have
deprived the enrollee of the right to notice and a hearing. Grier v. Goetz, 402 F. Supp.
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2d 876, 917, 918 (M.D. Tenn. November 15, 2005). Similarly, defendants wanted to
discontinue paying for medical services or prescriptions pending an enrollee’s appeal for
denial of prior authorization or coverage (something that the 2003 Consent Decree
specifically required). The court denied this modification as to certain ongoing or
unlimited prescriptions, stating “the State or its contractor must comply with Paragraph
C(8) of the 2003 Consent Decree, requiring continuation or reinstatement of benefits
pending an appeal.” Id. at 919-20. Defendants also sought to deny payment during a
pending appeal if the enrollee failed to pay the co-payment, but the court denied this
modification as well. Id. The court also denied defendants’ attempt to prohibit enrollee
appeals when the item or service sought has not been ordered or prescribed by a
provider. Id. at 924. It similarly refused defendants’ effort to modify the 2003 Consent
Decree to shift the burden of proving medical necessity for a service to the provider,
where the 2003 decree contained a presumption that the provider’s judgment was
correct. Id. at 928. Further, defendants attempted to modify the 2003 Consent Decree’s
time limitations for filing and resolving medical appeals. Id. at 931. The court denied
the request in part, explaining that “[t]he State has not shown that the 2003 Consent
Decree’s overall thirty-one-day time-line for expedited appeals is unreasonable or
unduly burdensome, nor has the State provided an alternative time-line that is suitably
tailored to [the] circumstances.” Id. at 932. Finally, defendants requested complete
termination of the 2003 Consent Decree, but the court also denied this request,
concluding that “the protections afforded by the Decree are essential . . .,” and that
“‘continuing enforcement and supervision of the consent decree [is] essential to
achieving the [2003 Consent Decree's] purposes and protecting plaintiffs' rights.’” Id.
at 938 (quoting Heath v. DeCourcy, 992 F.2d 630, 634 (6th Cir. 1993)).
We agree with the district court that plaintiffs’ success in opposing modification
of the 2005 decree was clearly limited. But “the prevailing party inquiry does not turn
on the magnitude of the relief obtained.” Farrar, 506 U.S. at 114. Instead, plaintiffs’
limited success goes to the reasonableness of the fee award. Id. (“the most critical factor
in determining the reasonableness of a fee award is the degree of success obtained.”)
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(internal quotations omitted). Accordingly, we next address the reasonableness of the
fee award in light of plaintiffs’ limited success.
V.
Defendants next challenge the reasonableness of the district court’s $2.57 million
award to plaintiffs. In particular, they question whether the district court abused its
discretion in its determination regarding several categories of work plaintiffs claim were
reasonably expended opposing modification of the 2003 Consent Decree, and whether
the court erred by reducing the fee award by only twenty-percent. We hold that it erred
in both respects.
1.
Reasonable attorney’s fees under § 1988 should be calculated according to the
prevailing market rates in the relevant community. Mo. v. Jenkins by Agyei, 491 U.S.
274, 285-86 (1989). “A court should compensate the plaintiff for the time his attorney
reasonably spent in achieving the favorable outcome, even if ‘the plaintiff failed to
prevail on every contention.’” Fox v. Vice, 131 S. Ct. 2205, 2214 (2011) (quoting
Hensley, 461 U.S. at 435).
A “court's initial point of departure, when calculating reasonable . . . fees, is the
determination of the fee applicant's ‘lodestar,’ which is the proven number of hours
reasonably expended on the case by an attorney, multiplied by a reasonable hourly rate.”
Isabel v. City of Memphis, 404 F.3d 404, 415 (6th Cir. 2005) (citing Hensley, 461 U.S.
at 433). “The district court . . . should exclude from this initial fee calculation hours that
were not ‘reasonably expended.’” Hensley, 461 U.S. at 434 (quoting S. Rep. No. 94-
1011, at 6 (1976) (“counsel for prevailing parties should be paid, as is traditional with
attorneys compensated by a fee-paying client, for all time reasonably expended on a
matter.”) (internal quotations omitted)). This means that “[c]ounsel for the prevailing
party should make a good faith effort to exclude from a fee request hours that are
excessive, redundant, or otherwise unnecessary,” and thus “[h]ours that are not properly
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 26
billed to one's client also are not properly billed to one's adversary pursuant to statutory
authority.” Id. at 434. (quotations omitted).
“Generally, the trial judge's exercise of discretion in statutory fee award cases is
entitled to substantial deference, especially when the rationale for the award was
predominantly fact-driven.” Adcock-Ladd v. Sec’y of Treas., 227 F.3d 343, 349 (6th Cir.
2000) (citing Hensley, 461 U.S. at 437). “Although the trial court's discretion in fee
award cases sweeps broadly, it is not absolute.” Id. The district court still must “provide
a concise but clear explanation of its reasons for the fee award.” Hensley, 461 U.S. at
437. “We affirm unless the court's ruling is based on an erroneous view of the law or on
a clearly erroneous assessment of the record.” Isabel, 404 F.3d at 415.
After the initial lodestar calculation, the district court has discretion to adjust the
award based on relevant considerations “peculiar to the subject litigation.” Adcock-
Ladd, 227 F.3d at 349. The factors which the district court may consider in determining
such adjustments include the twelve listed in Johnson v. Ga. Highway Express, Inc., 488
F.2d 714, 717-19 (5th Cir. 1974). See Hensley, 461 U.S. at 434 n.9 (stating that district
courts may rely on the Johnson factors). The “most critical factor [in the adjustment
calculation] is the degree of success obtained.” Id. at 436.
In this case, defendants do not specifically challenge the number of hours as such
(11,525 in total) or the hourly billing rates. They only challenge the district court’s
determination regarding the categories of work that were “reasonably expended” on the
litigation, and the court’s twenty-percent reduction. In particular, defendants challenge
the district court’s inclusion of plaintiffs’ monitoring activities,10 counsel’s work on
other cases, work performed on an unsuccessful motion for preliminary injunction, work
10
As stated above, see supra note 8, we are not deciding the extent to which monitoring
compliance with an earlier consent decree is compensable. Though defendants’ brief on appeal broadly
challenges fees for “monitoring activities” awarded to plaintiff, it is not specific as to precisely what
monitoring activities they are challenging. Moreover, in its fee award, the district court divided its analysis
of plaintiffs’ work into two distinct categories: (1) work performed defending the 2003 Consent Decree
and (2) work performed monitoring the Consent Decree. (08/13/09 Order, Page ID # 15810). It then
subdivided those two categories into eight subcategories. Defendants’ appeal specifically challenges only
four of those eight subcategories, and the thrust in each of those subcategories is work spent defending or
enforcing the consent decree.
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 27
performed opposing intervenors, and counsel’s work conducting policy analysis,
political negotiations, and lobbying. Appellant’s Br. at 38-54. We will discuss each in
turn.
2. Counsel’s work on other cases
a. work in Rosen
Defendants assert that plaintiffs’ counsel’s work on several other cases was not
reasonably expended opposing defendants’ requested modifications to the 2003 Consent
Decree. Plaintiffs’ counsel were also counsel in another class action, Rosen v. Goetz.
The Rosen case involved “requirements related to due process rights for persons
applying for TennCare or being disenrolled from TennCare.” App. 757.11 In Rosen,
plaintiffs’ counsel had already conducted some discovery, including taking the
depositions of the Commissioner and Assistant Commissioner of TennCare, Darin
Gordon and J.D. Hickey respectively. R. 1442-1, 1442-2 (documenting depositions
taken 03/08/05 and 03/10/05).
Plaintiffs’ counsel were ultimately unsuccessful in the Rosen litigation, but in
order to accommodate defendants’ request to expedite the proceedings in this case, the
parties agreed to forgo written discovery, plaintiffs agreed to withdraw interrogatories
and document requests, and the parties agreed to use “all or part of transcripts of
depositions and testimony taken in Rosen v. Goetz during the proceedings through April
7, 2005 . . . .” App. 851; see also App. 829-32 (attorney for TennCare discussing that
the discovery in Rosen could be used in this case); App. 837-838 (defendants’ attorney
discussing “urgent time pressure” to have a hearing in this case and also stating he
agreed that much of the discovery in Rosen was relevant, “useful,” and “transferable”
to the issues in this case, but also stating the focus in this case—modifying specific
decree provisions—was different from Rosen, which focused on whether disenrollments
11
As here, there was a consent decree that resulted from the Rosen litigation. See Rosen v. Tenn.
Comm’r of Fin. & Admin., 288 F.3d 918, 921 (6th Cir. 2002) (describing the litigation leading to the
consent decree).
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 28
were warranted). Ultimately, plaintiffs’ fee request included 2,110.9 hours for work
defendants claim plaintiffs performed in Rosen.
Defendants concede in their opening brief that the “hearing in Rosen yielded
evidence pertaining to the fiscal crisis that, to be sure, sparked both the disenrollments
at issue in Rosen and the need to modify the consent decree in this case.” Appellant’s
Br. in 10-6005 at 45. Defendants also concede that plaintiffs used some of this evidence
in their effort to oppose the defendants’ motion to modify the 2003 Consent Decree in
this case. Appellant’s Br. in 10-6005 at 45. Yet, they argue that the Rosen action was
a completely separate case with different plaintiffs and thus counsel’s work in that
separate action should not be compensable in this case. We agree.
In Webb v. Bd. of Educ. of Dyer Cnty., Tenn., 471 U.S. 234, 242-43 (1985), the
Supreme Court upheld the denial of fees for work performed in separate proceedings.
In that case, a former school teacher challenged the termination of his employment both
before the local school board and in court. After prevailing in the judicial action by
securing a consent decree, his attorney sought fees for time spent examining witnesses
and considering and refuting opposing arguments in the school board hearings. He
argued that “the work was analogous to discovery, investigation, and research that are
part of any litigated proceeding,” and was thus “‘reasonably expended’ in preparation
for the court action.” Id. at 240, 242. The Supreme Court rejected this argument.
The Court reasoned that “[t]he time that is compensable under § 1988 is that
‘reasonably expended on the litigation.’” Id. at 242 (quoting Hensley, 461 U.S. at 433)
(emphasis added by Webb). The Court further concluded that because § 1988 allows
fees “as part of the costs” of the “action or proceeding” brought to enforce a civil rights
statute, “it is difficult to treat time spent years before the complaint was filed as having
been ‘expended on the litigation’ or to be fairly comprehended as ‘part of the costs’ of
the civil rights action.” Id. (quoting Hensley, 461 U.S. at 433; 42 U.S.C. § 1988).
Though the Court recognized that some work performed before formal litigation
may be compensable, for example drafting pleadings or developing a case theory, it
stated that in that case, the work in the administrative proceedings was clearly separable
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 29
from the litigation, and Webb had not shown it was “both useful and of a type ordinarily
necessary to advance the civil rights litigation to the stage it reached before settlement.”
Id. at 243.
One year after Webb, the Court decided Delaware Valley. That case in part held
that work spent defending a prior consent decree from the defendants’ collateral attack
on the decree in an administrative hearing was compensable because it was “‘useful and
of a type ordinarily necessary’ to secure the final result obtained from the litigation.”
478 U.S. at 561 (quoting Webb, 471 U.S. at 243). The original decree in that case had
established a geographic boundary within which the state was to implement a vehicle
inspection program. The state went to the EPA in an effort to reduce the size of the
program area. Id. at 552-53. Plaintiffs’ counsel attended the EPA hearing to defend the
original decree. The Court reasoned that “participation in these administrative
proceedings was crucial to the vindication of Delaware Valley's rights under the consent
decree,” id. at 561, because the EPA was “a regulatory agency with power to modify the
substance of the program ordered by the court,” id. at 558.
Plaintiffs’ fee request here for work related to the Rosen matter is clearly
distinguishable from the work found compensable in Delaware Valley. First, the work
in Rosen had nothing to do with efforts to defeat a collateral attack on the consent decree
before an agency with the power to modify the substance of the decree. Rather, the
decision to use the materials from Rosen was more a matter of timing and convenience
for the parties. Second, even if the Rosen materials were somehow “useful and of the
type ordinarily necessary to advance” the litigation, Webb, 471 U.S. at 243, they do not
satisfy the more primary requirements recognized in Webb that § 1988 authorizes fees
only for time reasonably expended on the litigation—in other words, time spent in this
case—or that the fees be assessed only “as part of the costs” of the civil rights “action
or proceeding”—in other words, time spent in this case. Third, as in Webb, the work
conducted in Rosen is clearly separable from the work in Grier (this case); after all, they
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 30
were two completely separate cases with two different case numbers, two different
judges, and a different group of plaintiffs. See 471 U.S. at 243.12
Moreover, we are troubled by the idea of ever permitting plaintiffs’ counsel to
receive fees for work performed in a completely separate case. Doing so could lead to
all sorts of oddities, as illustrated by this case where counsel would be permitted to
recover fees for thousands of hours of time spent litigating a case they lost. Just as it
would be ridiculous to allow counsel to collect fees for time spent drafting a brief in a
prior losing case and then recycling it in another case, it seems similarly incongruous to
allow counsel to be compensated for time spent conducting discovery in a completely
separate matter.
Further, in cases like this one where the defendant in the two actions is the same,
we would be creating an incentive for plaintiffs’ counsel to try to persuade the defendant
to use materials from a different case under the guise of convenience or cost, when in
fact it is unlikely plaintiffs’ counsel would even be permitted to duplicate its discovery
efforts in the new case. See In re Park West Galleries, Inc., Litigation, 887 F. Supp. 2d
1385, 2012 WL 3610031, at *1 (Judicial Panel on Multidistrict Litigation Aug. 23, 2012)
(discussing that in multiple actions sharing common factual questions with the same
defendant, best practices “avoid duplicate discovery . . . . and conserve the resources of
the parties, their counsel, and the judiciary.”).
Accordingly, we hold that fees under § 1988 are not recoverable for work
performed in a completely separate case, even if, as here, that case involves the same
defendant, and even if the defendant agrees to use the materials from the separate case
in the present action. If attorneys want fees for work performed in the separate action,
12
We have previously passed upon the question of fees for work spent in pre-litigation
administrative hearings and other ancillary actions in two unpublished opinions. In Cox v. Shelby State
Cmty. Coll., 194 F. App’x. 267, 277-78 (6th Cir. 2006) (per curiam), we affirmed an award of attorney's
fees including 308 hours spent in preparation for a required state formal tenure termination hearing. This
decision is consistent with the discussion in Webb, though irrelevant for our purposes here, suggesting that
work conducted pursuant to a statute requiring administrative exhaustion prior to filing suit may be
compensable. In the other case, Grand Traverse Band of Ottawa & Chippewa Indians v. Dir. Mich. Dep’t
of Nat. Res., 1998 WL 385891, at *7 (6th Cir. 1998), we affirmed a denial of fees for work in ancillary
criminal and civil proceedings on the basis that the defendants were not parties to the earlier matters, and
we doubted whether the hours in the earlier matters were “necessary or useful to the resolution” of the case
on appeal. Neither of these unpublished opinions dictates the outcome in this case.
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 31
whether for discovery or time spent drafting a brief, they can seek fees in that separate
action. This is not to say that the parties could not negotiate the amount of fees and what
work would be compensated in an action seeking to modify a consent decree. But that
did not happen in this case.
Counsel argued below that defendants’ expert miscategorized some of these
hours as “in Rosen” when in fact the hours were actually spent in this case and logged
in this case. Specifically, counsel challenged 37 entries in category six. R. 1507,
Bonnyman Decl. at 5. Our review of the record indicates that the bulk of the 2,110.9
hours were spent in the Rosen case and thus should not be allowed. Additionally, of the
37 entries counsel challenges in category six, many are ambiguous with respect to
whether they were reasonably expended in this case. See, e.g., Weitzner Decl., entry 961
(“researched legal issue”); id., entry 1457 (“reviewed discovery documents”). Those
hours should also be disallowed because counsel failed to establish that they were in fact
reasonably expended in this litigation and not in Rosen. However, there are some entries
that do correspond with actions on the docket in this case. See, e.g., Weitzner Decl.,
entry 1197 (“revised and file response to scheduling motion”). As such, we vacate the
district court’s award for the 2,110.9 hours, and remand for a determination of how many
of the 37 challenged entries in category six correspond to actions reasonably expended
in this case.
b. work in John B., Ware, and Daniels
Defendants also challenge the district court’s award for work by plaintiffs’
counsel involving several other cases.
John B. was a separate matter involving a subclass of the plaintiffs in this case.
The record shows that defendants perceived some impropriety on the part of Judge
Nixon (the district judge in this case) in the John B. case and thus filed a motion in this
case to take the deposition of the Special Master appointed in John B. R. 994.
Defendants’ rationale was that “the concerns surrounding ex parte communications in
John B. necessarily and equally extend to [this case].” App. 908. Plaintiffs’ counsel
filed a ten-page response, and the district court entered an order denying defendants’
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 32
motion. Plaintiffs sought fees for 70.4 hours of work, but it is not clear from the briefing
whether those fees solely related to the work responding to defendants’ motion or
whether it was for work in a different John B. fees category, “John B. medical treatment
issues.” See R. 1507 Bonnyman Decl. at 7. Defendants’ brief on appeal is similarly
non-specific about which John B. matters they challenge, though our review of the
record and the hours associated with both categories seem to indicate they must be
challenging both. See Weitzner Decl., Exh. B., R. 1484-1, Page ID # 12741-742.
That said, with respect to plaintiffs’ response to defendants’ motion to depose the
special master filed in this case, we cannot discern from the record how plaintiffs’
response in any way “secured [plaintiffs’] initial success in obtaining the consent
decree,” Delaware Valley, 478 U.S. at 558, or whether it was in any manner “necessary
to enforce the prior remedy ordered by the District Court.” Id. Even if defendants’
discovery had resulted in Judge Nixon’s recusal, there is no evidence that this would
have in any way affected plaintiffs’ opposition to defendants’ motion to modify, or
resulted in a different outcome relative to the 2005 Revised Consent Decree.
Moreover, to the extent defendants challenge the work categorized as “John B.
medical treatment issues,” the record similarly does not establish that this time is
compensable as necessary to enforce the prior remedy resulting in the 2005 decree.
Accordingly, we vacate the district court’s award for the 70.4 hours.
Defendants next contest 3.0 hours of fees for counsel’s work related to Ware v.
Goetz. Ware involved a subclass of plaintiffs from this matter, but with different
counsel, who successfully sought injunctive relief to enforce the due process rights
established in the 2003 Consent Decree. After an appeal in Ware, the parties agreed on
remand to consolidate several of the issues in Ware with this case. R. 1507, Bonnyman
Decl. at 10. Plaintiffs’ counsel alleges that he spent three hours consulting with the
Ware attorneys regarding “this litigation, the terms of the Consent Decree and the
implications of consolidation . . . .” R. 1507, Bonnyman Decl. at 10. While we presume
that these discussions were helpful for efficiently managing the case, there is nothing to
indicate that they in any way helped to secure plaintiffs’ success from the 2003 Consent
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 33
Decree or that they were necessary to enforce the prior order. Counsel does not claim
that the Ware plaintiffs had different theories of the case or that their involvement would
have in any way undermined the progress plaintiffs’ counsel had already made.
Accordingly, we vacate the 3.0 hours spent on the Ware matter.
Finally, defendants challenge 13.0 hours counsel spent on the Daniels matter.
As stated by the district court, Daniels was not a separate case, but the name of this case
at a previous time. In a footnote, defendants claim that “Daniels had nothing to do with
the consent decree,” Appellant’s Br. in 12-5532 at 50 n.10, and the billing entries for
these 13 hours suggest this may be correct. The entries show that these hours were spent
investigating possible violations of the 2003 Consent Decree as applied to specific
individual class members. See, e.g., Weitzner Decl., entry 485 (“conference w/ co-
counsel re. Daniels violation: terminating former SSI recipient’s TennCare”). Either
way, the record does not establish that these investigations were necessary to enforce the
prior remedy and resulted in the 2005 Revised Consent Decree. Accordingly, we vacate
the district court’s award for these 13.0 hours.
3. Work on the preliminary injunction related to the HAT contract
Defendants next challenge the award to plaintiffs for their efforts to temporarily
enjoin the defendants from implementing a contract provision that would have reduced
the number of appeals filed by Health Assist Tennessee (“HAT”) on behalf of disabled
children. The 2003 Consent Decree required defendants not to “reduce or terminate
current contractual arrangements with private entities that assist . . . beneficiaries
through the appeal process without the agreement of the plaintiffs or prior approval of
the Court, based upon a showing that such changes will not impair access to the appeal
process for people with disabilities.” App. 385. When the 2003 decree took effect,
defendants had a contract with HAT, a private entity assisting children with TennCare
appeals. When that contract was set to expire, defendants sent HAT a new contract.
Plaintiffs’ counsel claimed that the new contract made it more difficult for HAT to
advocate for children and sought to enjoin defendants from implementing the new
contract.
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 34
The district court held a hearing on the matter at which a HAT compliance
officer and the CAO of TennCare testified. HAT’s compliance officer testified that she
was not as concerned about the contract imposing problems for HAT in its ability to
advocate, but rather that the changes would keep HAT from being able to meet its own
obligations under the 2003 Consent Decree. She also testified that HAT employees
would need guidance on how the new provisions should be applied.
After the hearing, the court ordered the two individuals to meet without attorneys
to discuss HAT’s concerns with the contract. According to the district court, during the
two-day meeting, the individuals agreed in a letter to implementation guidelines for the
new contract provision, thereby satisfying HAT’s concerns. The court treated the letter
as binding, and in so doing incorporated it into the 2007 contract. Grier v. Goetz, No.
3:79-3107, slip op. at 35-36 (M.D. Tenn. August 13, 2009).
Ultimately, the court denied plaintiffs’ request for an injunction, concluding that
“Plaintiff has failed to show that the changes violate . . . the Consent Decree because
they do not present sufficient evidence that the Contract will keep the children in
question from being able to effectively exercise their appeal rights . . . [n]or [did
Plaintiff] demonstrate that children with disabilities would be impaired from the appeals
process by the new contract amendments.” R. 1412 at 5. According to defendants,
plaintiffs’ counsel requested 344.4 hours for work related to its ultimately unsuccessful
injunction.
Under the standard we adopt today, the relevant question would be whether
counsel’s action in filing the motion for an injunction was “necessary to enforce” the
2003 Consent Decree and resulted in a court order or agency determination that at the
very least “secured [plaintiffs] initial success.” Delaware Valley, 478 U.S. at 558.
While it may be the case that plaintiffs’ counsel’s actions in filing the injunction helped
to flesh out how HAT’s contract with the state would be implemented, there was no
court order that secured plaintiffs’ success in the 2003 decree. In fact, the district court
even recognized that plaintiffs failed to show that the unexplained changes in the new
HAT contract would violate the earlier decree. Moreover, any assistance the letter
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provided was not relevant to the only court-ordered relief in this case, the 2005 Revised
Consent Decree. Thus, their unsuccessful injunction does not even fall under “the sound
and settled principle that attorneys' fees incurred in interim defeats en route to a
successful conclusion are compensable because . . . such skirmishes are indispensable
inputs into a successful conclusion of litigation.” Alliance, 356 F.3d at 771.
Accordingly, we vacate the award for these 344.4 hours.
However, in proceedings below, plaintiffs argued that defendants’ fees expert
erroneously placed 22 billing entries unrelated to the injunction into this category. R.
1507, Bonnyman Decl. at 7-8. Our review of the record indicates there may be some
merit to this assertion. See, e.g., Weitzner Decl., entry 4205 (“conferred with Marjorie
Bristol and Gordon Bonnyman re: revisions, Paragraph C(7) of Consent Decree”).
Accordingly, we remand for reassessment of the 22 contested entries in this category.
4. Work opposing plaintiff-intervenors
Defendants next argue that the district court erred by granting plaintiffs a fee
award for work opposing several plaintiff-intervenors who supported the state’s motion
to modify the 2003 Consent Decree. Unlike the other members of the plaintiff class who
faced benefit reductions or other changes to TennCare coverage, the intervenors faced
disenrollment. Modification of the 2003 Consent Decree was one condition,
memorialized in an Memorandum of Understanding (“MOU”) with defendants, that had
to be met before defendants would initiate a program potentially saving several thousand
TennCare members, including plaintiff-intervenors from disenrollment. See Rosen, 410
F.3d at 925. Counsel claims they spent 306.2 hours opposing plaintiff-intervenors,
including 17.5 hours challenging the MOU and 288.7 hours negotiating and litigating
issues arising out of plaintiff-intervenors’ intervention.
Because the intervenors took a position contrary to the plaintiffs here, it appears
as though this work is compensable as being “necessary to enforce” the 2003 Consent
Decree and resulting in a court order, the 2005 Revised Consent Decree, that at the very
least secured the initial success of the 2003 Consent Decree. Delaware Valley, 478 U.S.
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 36
at 558. But defendants claim this work is not compensable for a different reason—the
Supreme Court’s decision in Indep. Fed’n of Flight Attendants v. Zipes, 491 U.S. 754(1989).13
In Zipes, a class of female flight attendants sued Trans World Airline for sex
discrimination. The parties entered into a settlement agreement in which the airline
agreed to credit the class members with seniority. Id. at 755-56. The flight-attendants’
union intervened in the suit on behalf of those flight attendants who would be adversely
affected by the seniority given to the class members under the settlement agreement. Id.
at 757. In part, they claimed that the terms of the settlement agreement would violate
the attendants’ collective-bargaining agreement. Id. The intervenors’ challenge was
rejected, and the plaintiffs’ class requested that the unsuccessful intervenors pay
plaintiffs’ fees for having to litigate these issues. Id.The Court held that intervenors would only be liable for fees if the intervenors’
action was “frivolous, unreasonable, or without foundation.” Id. at 761. The decision
noted that it is not necessary to assess fees against “blameless intervenors” because “[i]n
every lawsuit in which there is a prevailing Title VII plaintiff there will also be a losing
defendant who has committed a legal wrong. That defendant will . . . be liable for all of
the fees expended by the plaintiff in litigating the claim against him . . . .” Id. (emphasis
added). Assessing fees against the intervenor, the Court asserted, was “not essential” to
“vindicate the national policy against wrongful discrimination.” Id. Zipes’s rationale
is rooted in two considerations. First, parties who have not been found to have violated
an individual’s civil rights should not be liable for fees. Second, making plaintiff
responsible for those fees would not destroy the incentive to sue for civil rights
violations because a prevailing plaintiff could still get fees for expenses incurred
litigating his or her claims against the defendant. Id.The Court’s decision also clearly implies that even though defendants are liable
for the successful claims against them, they are not responsible for paying for plaintiffs’
13
Zipes was a Title VII case, but the Court noted that the identical fee-shifting phrases in Title
VII § 706(k) and 42 U.S.C. § 1988 “are to be interpreted alike.” Zipes, 491 U.S. at 758 n.2.
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 37
litigation against intervenors. Id. at 761-62 (“Respondents argue that [the incentive to
sue] will be reduced by the potential presence of intervenors whose claims the plaintiff
must litigate without prospect of fee compensation.”).
Justice Blackmun picked up on this implication in his concurring opinion where
he criticized the majority for “tacitly assum[ing] that the defendant’s fee liability goes
no further” than claims “‘against him.’” Zipes, 491 U.S. at 767 (Blackmun, J.,
concurring) (quoting 491 U.S. at 761). Justice Marshall’s dissent also criticized the
majority’s assumption that intervention-related fees should be borne by the plaintiff. Id.
at 775.
Several circuits have addressed, in various factual and procedural contexts,
whether Zipes precludes a defendants’ liability for fees for plaintiffs’ expenses involving
a third-party intervenor. See, e.g., Jenkins by Agyei v. State of Mo., 967 F.2d 1248,
1250-51 (8th Cir. 1992); San Francisco N.A.A.C.P. v. San Francisco Unified Sch. Dist.,
284 F.3d 1163, 1168 (9th Cir. 2002); Rum Creek Coal Sales v. Caperton, 31 F.3d 169,
177 (4th Cir. 1994); Bigby v. City of Chicago, 927 F.2d 1426, 1428 (7th Cir. 1991).
Applied to the facts of this case, we conclude that Zipes discourages sticking
defendant with the bill for plaintiffs’ litigation against plaintiff-intervenors. The opinion
clearly implies that those costs should be borne by plaintiffs, Zipes, 491 U.S. at 761-62,
particularly in a context where making plaintiffs bear the financial responsibility for time
spent litigating against plaintiff-intervenors is not going to destroy the incentive to sue
for civil rights violations. Id. Moreover, that portion of the Zipes opinion was
specifically criticized by the concurring and dissenting opinions; yet the majority
preserved the language that a defendant would only be responsible for those claims
“against him.” Id. at 761.
It is important to recall that Congress’s intent in enacting § 1988, as an exception
to the “American Rule” that each party in a lawsuit should bear its own fees, was not to
allow plaintiffs’ counsel to recover fees for everything, see Hensley, 461 U.S. at 446(Brennan, J., concurring and dissenting) (“Congress also took steps to ensure that § 1988
did not become a ‘relief fund for lawyers.’”) (quoting 122 CONG. REC. 33,314 (Sept. 29,
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 38
1976) (remarks of Sen. Kennedy) (also stating in his remarks, “No, this bill is not for the
purpose of aiding lawyers. The purpose of this bill is to aid civil rights”); Farrar, 506
U.S. at 115 (“fee awards under § 1988 were never intended to produce windfalls to
attorneys . . . .”) (internal quotation and citation omitted). This too counsels against
making defendants here liable for fees incurred by plaintiffs in litigating against the
third-party intervenors in this case.
As with several of the other categories here, plaintiffs’ counsel argued below that
defendant miscategorized these hours and that “101 entries” in this category had nothing
to do with plaintiff-intervenors’ intervention. R. 1507, Bonnyman Decl. at 17. Our
review of the record shows that most of the time entries in this category clearly relate to
plaintiff-intervenors, and thus should be disallowed. There are, however, other entries
in this category that may have been spent on compensable tasks. See, e.g., Weitzner
Decl., entry 4125 (“reviewed draft TennCare Rule 1200-13-16 and proposed revision of
Paragraph C(7) of Consent Decree”). Accordingly, we vacate the award of fees for
these 306.2 hours and remand for further proceedings as to the 101 entries challenged
by plaintiffs.
5. Work conducting “policy analysis”
We next address defendants’ contention that the district court’s award to
plaintiffs for 672.8 hours of lobbying, policy analysis, and public relations was
erroneous. Defendants categorized plaintiffs’ hours in this way: 172.2 hours analyzing
the Governor’s TennCare reform plans, 235.3 hours engaging in public relations, 38
hours corresponding and meeting with state legislators, 215.3 hours negotiating with the
Governor regarding TennCare reforms, and 12 hours analyzing defendants’
pharmaceutical soft limits initiative. Defendants contend that these hours were not
reasonably expended “on the litigation.” Appellant Br. in 12-5532 at 54 (quoting Webb,
471 U.S. at 242). We will address each category in turn.
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 39
a. analyzing the Governor’s TennCare reform plan
The district court concluded that the 172.2 hours analyzing the Governor’s
reform plan were compensable because the plan would have changed TennCare in ways
that would have required modifying the 2003 Consent Decree, in that it proposed
reforms to the drug authorization process, limits on Medicaid eligibility, limits on
copays, and limits on services for TennCare enrollees. Grier v. Goetz, No. 3:79-3107,
slip op. at 39 (M.D. Tenn. August 13, 2009). In our view, this work was “necessary to
enforce” the 2003 Consent Decree and resulted in a court order—the 2005 Revised
Consent Decree—that secured the initial success of the 2003 Consent Decree. Delaware
Valley, 478 U.S. at 558. Reviewing the Governor’s proposal would have allowed
counsel to prepare for the merits of the litigation leading up to the 2005 Revised Consent
decree. See Little Rock Sch. Dist. v. Arkansas, 674 F.3d 990, 995 (8th Cir. 2012)
(affirming fees for research going to the merits of the litigation on the basis that “in order
to argue the merits of continued state funding, [the school district] had to research and
brief the State's history of performance of its desegregation obligations throughout this
entire thirty-year case.”). Accordingly we affirm the award for these hours.
b. public relations
With respect to the 235.3 hours spent on “public relations,” the district court
concluded that defendants miscategorized those hours as “public relations” when there
actually were no hours billed for media relations, and the hours were really devoted to
communication with opposing counsel or document review relating to compliance with
the 2003 Consent Decree. Grier v.Goetz, No. 3:79-3107, slip op. at 40 (M.D. Tenn.
August 13, 2009). But the district court’s conclusion is not entirely consistent with
counsel’s own explanation for these hours. While counsel asserted that none of the
hours were spent on communications with the general public, counsel also added that
this time was spent communicating with TennCare contractors on compliance issues.
R. 1507, Bonnyman Decl. at 8. Additionally, he explained that the hours were spent on
educational and training activities involving counsel from other health advocacy
organizations, and that the training was “provided cooperatively with the State as part
Nos. 10-6005/12-5532 Binta, et al. v. Gordon, et al. Page 40
of our role in implementing the Consent Decree and ensuring compliance with its
provisions.” R. 1507, Bonnyman Decl. at 8.
There is nothing in counsel’s explanation for these hours that leads to the
conclusion drawn by the district court that all of the hours were spent communicating
with opposing counsel or conducting document review. Moreover, it is clear that
counsel took on an educational role following entry of the 2003 Consent Decree, but to
the extent that the 2003 decree vests any responsibilities in plaintiffs’ counsel, it does
not go so far as to say that counsel can act as a consultant to the state and its contractors
and then get the state to pay the bill when counsel requests fees under § 1988. If
counsel’s expertise on the matters in this litigation had put him in the unique position of
being able to assist the state with implementation of its healthcare program, the parties
could have contracted for counsel to be compensated for such educational activities.
While it is apparent that educating defendants’ contractors was likely helpful for
ensuring that the 2003 Consent Decree’s provisions were properly executed, it is much
less clear how these training events in any way helped plaintiffs to prevail in defending
that decree from defendants’ motion to modify. In other words, there is no indication
in the record that these events contributed to the court order approving the 2005 Revised
Consent Decree.
However, there are a few entries that seem to be related to opposing defendants’
modifications and enforcing the 2003 decree. See, e.g., Weitzner Decl. entry 3932
(“conferred with Office of General Counsel re pharmacy Appeals”). Those hours may
still be compensable. Thus, we vacate the award for these 235.3 hours and remand to
the district court for further proceedings.
c. meetings with legislators and State officials
Defendants next contend that plaintiffs’ 38 hours spent corresponding and
meeting with state legislators should not be compensable. The district court concluded
that plaintiffs had to use those meetings to respond to “legislative requests and
overtures” regarding potential modifications to the 2003 Consent Decree, and thus the
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hours were compensable. Counsel further explained that in late 2004 and early 2005,
defendants told these legislators to urge plaintiffs’ counsel to modify the consent decree.
R. 1507, Bonnyman Decl. at 6. Counsel claims that the hours in question were spent
“respond[ing] to these overtures . . .” in an effort to “negotiate a compromise that would
preserve the protections of the Consent Decree . . . .” R. 1507, Bonnyman Decl. at 7.
A review of counsel’s hours submitted to the district court confirms that counsel
spent a substantial amount of time in late 2004 and early 2005 meeting with various
legislators, see, e.g., Weitzner Decl., entry 1155 (“meeting with Senator Henry at his
request to discuss consent decree”); id., entry 842 (“meeting with Congressman Cooper
re. waiver and state allegations r. the consent decree”), who, at least according to
counsel, were in some capacity acting as agents of the State and negotiating potential
revisions to the 2003 Consent Decree. Noticeably absent from counsel’s time entries
however is any indication that opposing counsel was ever present during these
negotiations, or even that opposing counsel was aware of and had signed off on these
alleged negotiations. Apparently, counsel realized these negotiations presented an
ethical dilemma because at several other points counsel’s time entries indicate that he
“reviewed ethics issues related to negitiations (sic), and correspondence,” and had an
“ethics discussion” with co-counsel regarding the negotiations. R. 1442-1, Page ID #
11971, 11973.
We are troubled by the idea that plaintiffs’ counsel could meet with state
legislators or other agents of the state during the course of litigation, but do so without
opposing counsel present. Only hours “reasonably expended on the litigation,” Webb,
471 U.S. at 242, are compensable under § 1988. Cf. TENN. RULES OF PROF’L. CONDUCT
4.2 (2011) (“In representing a client, a lawyer shall not communicate about the subject
of the representation with a person the lawyer knows to be represented by another lawyer
in the matter, unless the lawyer has the consent of the other lawyer or is authorized to
do so by law or a court order.”); cmt. 3 (“The Rule applies even though the represented
person initiates or consents to the communication.”).
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There is no indication in the record that opposing counsel was present at or
consented to any of these meetings, or that plaintiffs’ counsel was authorized to talk with
defendants’ agents by law or court order.
In light of these considerations, we hold that § 1988 fees for negotiations or
lobbying with the opposing party or a representative of the opposing party are
compensable only if the record shows that opposing counsel was present or that counsel
authorized the interaction. If counsel is not present, then the time was not spent “on the
litigation.” Webb, 471 U.S. at 242. Here, the record is not clear regarding whether
counsel was present or consented to the negotiations. Accordingly, we vacate the award
for these 38 hours and remand this issue for further proceedings in order to give counsel
the opportunity to show that opposing counsel was present at these negotiations or that
opposing counsel authorized the interactions.
This same fate befalls counsel’s claims for 215.3 hours spent “negotiating with
the Governor.” Although counsel maintains that of the 101 time entries that fall into this
category only nine of them were for negotiations or communication directly with the
Governor, counsel also states that the other meetings involved negotiations with defense
counsel or “intermediaries.” Because the district court summarily affirmed these hours,
we vacate and remand for further proceedings in order to determine how many of these
215.3 hours were spent negotiating with opposing counsel, as plaintiffs maintain, or
alternatively were spent negotiating with intermediaries with opposing counsel present
or with opposing counsel’s knowledge.
d. analyzing soft-limits initiative
Defendants next challenge 12 hours allegedly spent analyzing defendants’
pharmaceutical soft-limits initiative. The soft limits controversy came about as a result
of defendants’ attempt following the 2003 Consent Decree to impose a “hard” five
prescription per month limit on TennCare beneficiaries. Plaintiffs advocated using a
“soft” limit instead. Defendants ultimately conceded that the five prescription limit
would be soft rather than hard. R. 1342, Page ID # 8963. Counsel asserts that the time
spent on the soft-limits initiative was communications with defense counsel and “review
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of . . . notices related to implementation of the initiative” in order to enforce defendants’
commitment to institute the soft limits. R. 1507, Bonnyman Decl. at 9-10. Though this
initiative clearly related to the 2003 Consent Decree, it is unclear from the record
whether this work was in any way “necessary to enforce” the 2003 Consent Decree and
secure the initial success of that decree. Delaware Valley, 478 U.S. at 558.
Accordingly, we vacate the award for these 12 hours and remand to the district court for
a determination under this standard.
6. Twenty-percent reduction
Finally, in contesting the fee award below, Defendants requested a 43.5%
reduction in the lodestar amount. The district court ultimately settled on a 20%
reduction. Though the Supreme Court has acknowledged that “[t]here is no precise rule
or formula for making these determinations,” Hensley, 461 U.S. at 436, it also explained
that in lengthy civil rights litigation, the “range of possible success is vast,” and the fact
that the plaintiff is a “prevailing party . . . may say little about whether the expenditure
of counsel’s time was reasonable in relation to the success achieved.” Hensley, 461 U.S.
at 436. Further, “[i]t is essential that the judge provide a reasonably specific explanation
for all aspects of a fee determination . . . . Unless such an explanation is given, adequate
appellate review is not feasible, and without such review, widely disparate awards may
be made, and awards may be influenced (or at least, may appear to be influenced) by a
judge's subjective opinion regarding particular attorneys or the importance of the case.”
Perdue, 130 S. Ct. at 1676.
There is no question in this case that Tennessee’s fiscal crisis in 2003-2004
required a complete overhaul to the TennCare system, and thus a complete overhaul of
the protections previously won in the 2003 Consent Decree. The modifications won by
defendants in the 2005 Revised Consent Decree clearly allowed them to reform the
system in ways that at least in part addressed this fiscal crisis. This was no small
victory.
This conclusion is consistent with our review of the record, which reveals that
the district court only denied a single one of defendants’ 34 modification requests—the
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request to add a termination clause to the 2003 Consent Decree. Of the 33 other
requests, at least five were granted in whole, and the rest were granted in significant part.
For example, the district court even acknowledged that of defendants’ five requests
dealing with the prior authorization appeals process, the court “granted most” of the
requests albeit with a few limitations. Grier v.Goetz, No. 3:79-3107, slip op. at 49 (M.D.
Tenn. August 13, 2009). The court also permitted defendants to “require prior
authorization . . . as a condition of coverage for any drug or drug class so designated by
the State;” implement a five prescription per month limit; implement significant benefit
limits (granting five of the six requests in this category); refuse to consider grounds for
challenges not previously raised in appeals for service denials; implement a screening
process for claims not based on a valid factual dispute; and remedy defects in notice
requirements and missed appeal deadlines. Grier v. Goetz, 402 F. Supp.2d 876, 900-930
(M.D. Tenn. November 15, 2005). The district court also acknowledged the clear limits
on plaintiffs’ success “relative to the breadth of Defendants’ requests and the scope of
the litigation.” Grier v. Goetz, No. 3:79-3107, slip op. at 49 (M.D. Tenn. August 13,
2009).
Though the Supreme Court has recognized the difficulty in assessing fee
applications with mathematical precision, in Perdue, the Court remanded in part because
the district court did not explain why it granted a 75% enhancement “rather than 50%
or 25% or 10%.” Perdue, 130 S. Ct. at 1675. In addressing defendants’ request in this
case, the district court briefly and summarily described how defendants were largely
successful in their efforts to modify the 2003 decree, but that the success was also
limited by plaintiffs’ efforts. Ultimately, the court pronounced that a 20% reduction was
reasonable. But the court’s brief characterization of the very complex 2005 Revised
Consent Decree does not demonstrate why the court settled on 20%, as opposed to
43.5% or 60% or 70%. We conclude that under the long history of this case and in
light of the significant change in the parties’ relationship that the 2005 Revised Consent
Decree wrought, this explanation was insufficient. Accordingly, we vacate the district
court’s 20% reduction and on remand, after recalculating the fee award, the district court
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should reassess any reduction in light of these considerations, and “employ a
methodology that permit[s] meaningful appellate review.” Id. at 1676.
VI.
For the foregoing reasons, we AFFIRM the award for work involving review of
the Governor’s proposal, we VACATE the award for fees involving work in John B.,
Ware, and Daniels, and we VACATE and REMAND the overall percentage reduction,
and the award for work involving Rosen, the HAT injunction, opposing plaintiff-
intervenors, work categorized as public relations, negotiating with legislators,
negotiating with the Governor, and analyzing the soft-limits initiative.